In an interesting development, contrary to the finding of the US
Supreme Court in a similar case in the United States, the
Australian Federal Court in D'Arcy v Myriad Genetics Inc.
 FCAFC 115 has unanimously upheld a previous Federal
Court decision that isolated gene sequences are
As in the United States, the case in this matter involved a
Myriad Genetics patent over an isolated, but naturally occurring,
BRCA1 gene, which is used in diagnostic testing for breast
and ovarian cancer. Australia does not allow patents to be granted
over naturally occurring things, unless there is "human
intervention that creates an artificial state of affairs".
Although the appellants in this case contended that isolated
nucleic acids are not materially different to naturally occurring
nucleic acids and are hence products of nature that cannot form the
basis of a valid patent, the respondents disagreed and argued that
isolated nucleic acids in fact do differ from nucleic acids found
in human cells chemically, structurally and functionally.
Ultimately, the Court applied the principals of the NRDC case
[National Research Development Corporation v Commissioner of
Patents (1959) 102 CLR 252] and agreed with the respondents,
holding that: "The isolated nucleic acid, including cDNA, has
resulted in an artificially created state of affairs for economic
benefit. The claimed product is properly the subject of letters
The Court took the view that a person whose skill and effort has
led to the isolation of DNA which is commercially useful should be
able to be rewarded by grant of a patent which would not be the
case if it would be held that patents of this nature are inherently
Reactions to the outcome of this case have been balanced.
Proponents of the Court's findings are of the view that patents
are necessary to offset the high cost of development of such
technologies and drive continued research and innovation.
Antagonists, on the other hand believe that such patents will limit
research and development into genetic testing and treatments for
genetic diseases and furthermore, make diagnostic testing for
genetic diseases prohibitively expensive for patients. However,
most countries, including Australia, provide for experimental use
exemptions to patented subject matter, so the impact of such a
court decision on basic research and development is likely to be
limited. Furthermore, should such research and development on the
patented subject matter give rise to an independently patentable,
but infringing invention, there are mechanisms available to the
patentee of the new invention to enable use of their invention.
These mechanisms include voluntary or compulsory licensing.
In fact, the impact of both the Australian Federal Court
decision and the conflicting US Supreme Court decision which held
that isolated gene sequences are not patentable are unlikely to be
particularly significant for Myriad in respect of their current
BRCA1 and BRCA2 diagnostic testing per
se, since Myriad's major patents on the BRCA1 and
BRCA2 genes will start expiring in 2014 and the field of
technology has moved beyond the types of diagnostic tests that
these patents cover. The company executives have indicated that
they intend to develop new technologies and diversify beyond the
breast cancer test.
An interesting effect of the decision by the US Supreme court to
disallow patents for isolated gene sequences may be that biotech
companies will start to rely less on patents and more on trade
secrets. For example, Myriad used to share gene sequences and
mutations on a National Institutes of Health public database and
cooperate with academic scientists on analysis of mutations, but
now focusses on the development of its own database. It may be
argued that the reliance on trade secrets for protection of such
inventions may in fact stifle innovation more than patenting such
inventions, in that such information may be kept out of the public
domain as long as the company desires maintaining the
confidentiality of the information. Patents on the other hand,
require an enabling disclosure of the invention and provide for a
limited period of monopoly. This coupled together with the
experimental use exemption from infringement and various licensing
options may in fact facilitate innovation rather than stifle
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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