Australia: High Court of Australia goes cold on patentability of isolated nucleic acid

Last Updated: 18 October 2015
Most Read Contributor in Australia, August 2016

In a highly anticipated decision, the High Court of Australia has unanimously determined that an isolated nucleic acid (coding for mutations in the BRCA1 gene, associated with breast and ovarian cancers) does not qualify as proper subject matter for patent protection, overturning previous decisions of the Federal Court of Australia (D'Arcy v Myriad Genetics Inc [2015] HCA 35).

Although the Myriad patent has recently expired, the decision has great significance generally in relation to the patentability of isolated genetic material.

The challenge to Myriad's patent

The BRCA1 gene, when mutated, is thought to be responsible for at least 80% of cases of familial breast and ovarian cancers. Myriad Genetics Inc (Myriad) succeeded in isolating the nucleic acid of the BRCA1 gene from the environment in which it naturally occurs in human cells, allowing screening for the mutations, and was granted a patent in Australia.

Breast cancer survivor Yvonne D'Arcy sought to invalidate claims 1 to 3 of Myriad's patent, which covered isolated nucleic acids.

The basis of the challenge was that claims 1 to 3 did not satisfy the test for patentable subject matter under Australian law. The High Court agreed. The extent of D'Arcy's victory is surprising given that the trial judge and a special five member panel of the Federal Court on appeal had unanimously determined that claims 1 to 3 of the Myriad patent were patentable subject matter.

Assessing patentability involves policy considerations

In order to be patentable, the claimed invention must be "a manner of manufacture within the meaning of section 6 of the Statute of Monopolies" (section 18(1)(a) of the Patents Act). Since the Statute of Monopolies is an English statute dating back to 1623, Australian courts have had to stretch the meaning of this phrase to keep up with technological developments. In the Myriad case, the High Court has held that this phrase can only be stretched so far.

The High Court held that the Federal Court's earlier decisions were based on an unduly narrow characterisation of the effect of the decision in NRDC, the key High Court authority on the "manner of manufacture" concept. In that case, two key elements in determining whether an alleged invention is a "manner of manufacture" were whether the invention:

  • resulted in an "artificially created state of affairs"; and
  • produced an economically useful result.

In the Myriad case, the High Court held that these two requirements are not a mechanistic test conferring a presumption of patentability. If these two criteria are met, the subject matter may be patentable, but other relevant factors must be considered, in particular:

  • consistency with the purposes of the Act – including whether allowing patentability:
    • "could give rise to a large new field of monopoly protection with potentially negative effects on innovation";
    • "could... have a chilling effect on activities beyond those formally the subject of the exclusive rights granted to the patentee" – for example, the High Court specifically refers to the risk of inhibiting researchers;
    • "would involve the court in assessing important and conflicting public and private interests and purposes";
  • the coherence of the law relating to inherent patentability
  • whether the extension of patentability to the particular subject matter "would involve law-making of a kind which should be done by the legislature".

The international context, including interaction with patent law in other jurisdictions and Australia's international obligations, was also a relevant consideration.

The concern about the potential "chilling effect" on research activities is surprising given that the Australian Parliament recently introduced a statutory defence to infringement for experimental research. In fact, it could be said the High Court's decision strays into territory that many would regard as the province of the legislature. Indeed, this was a point made by the special five member appeal bench of the Federal Court.

Myriad's patent at the boundary of Australian patent law

An isolated nucleic acid, as claimed in Myriad's patent, is a sequence of nucleotides derived from DNA or RNA that has been removed from its naturally occurring cellular environment. It is obtained by processes involving extraction and purification of the DNA from the cell (importantly, these are known processes and did not form part of the claimed invention). The isolated nucleic acid bears the DNA sequence of the molecule that existed within the cellular environment, but is no longer part of the structure that fits within the cell nucleus. All of the nucleic acids claimed in the patent will possess a gene sequence or portion of a sequence, either derived from or substantially similar to that of a natural BRCA1-encoding gene.

The High Court held that, when the proper emphasis is placed on the role of genetic information in the claims, the Myriad claims were at the boundary of the concept of manner of manufacture. Even though what was claimed was a result of human endeavour, to include it in patentable subject matter would involve an extension of the concept which was "inappropriate for judicial determination".

The Myriad decision's implications: more challenges, and more uncertainty

The Myriad decision moves the law in Australia regarding patentable subject matter away from that in Europe (where isolated nucleic acids are patentable) and towards the United States (where the US Supreme Court recently held that Myriad's claims over isolated DNA were unpatentable). In some respects, it might have gone further than the US Supreme Court.

While the Myriad case was limited to the claims covering the isolated nucleic acid, the ruling will have significant consequences for many Australian patents covering genetic material which could now be challenged. Like the Myriad patent itself, many patents in the field will include claims to products and processes extending well beyond isolated genetic material, and may therefore withstand challenge.

However, the free rein given by the High Court to the inclusion of wide-ranging policy considerations in the assessment of patentable subject matter introduces some uncertainty into the law – at least until we see how the Patents Office, and the Federal Court, respond to the Myriad decision. For example, the way in which the decision will be applied in cases involving genetic material other than human DNA, and subject matter less emotive than cancer screening, remains to be seen.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

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