21 November 2015

Patented ‘Frankenfish’ Finally Granted FDA Approval

Salmon SushiOn 19 November 2015, the US Food and Drug Administration (FDA) approved, for the first time, a genetically engineered food animal.  Of course, there have previously been many genetically engineered food plants approved for production and consumption, such as Monsanto’s ‘Roundup Ready’ crops.  And animals have been genetically engineered and commercialised for other purposes, such as the Harvard OncoMouse for use in cancer research.

The animal in question is a fish.  More precisely, it is a genetically engineered salmon, developed by a company called AquaBounty Technologies under the brand name AquAdvantage.  AquaBounty claims that its salmon grow to full size in half the time of ‘regular’ salmon (18 months, as opposed to three years), are larger, require 25% less feed, and grow at a 1:1 ratio of feed mass to body weight. 

Of course, the positive spin on this is that farming AquAdvantage fish is more sustainable than other forms of salmon production.  However, the primary beneficiaries, at least initially, would be the producers who are able to grow and bring to market more fish in less time at lower cost.  If, that is, they can convince the consuming public to buy a product that has been emotively labelled ‘frankenfish’ by its detractors.

08 November 2015

The ‘Exhausting’ Topic of International Patent Rights

International TravelImagine that you are travelling overseas, and you see a product on sale for a much lower price than in your home country.  It is a genuine article – not a cheap knock-off – but the market in the country you are visiting simply will not bear the same cost as in your affluent home nation.  The manufacturer can maintain this price disparity because the product is patented in every country in which it is sold.

So, if you buy the lower-priced product, should you be allowed legally to take it home, or should the manufacturer be able to use its patent rights in your home country to block you from bringing it in, or to require you to pay an additional royalty for the privilege of doing so?  Probably you would feel that, having bought the product legally, you should be entitled to do whatever you wish with it, and that the manufacturer should have no further say in the matter.

Now imagine that you are not just a consumer, but that you own a retail store.  You realise that you could buy 1000 of the product at the lower price, import it back into your home country, and then sell it at a profit of $100 per unit while still undercutting the recommended retail price of the same product being sold into your local market by the manufacturer.  Should the manufacturer be able to use its patent rights to prevent you from engaging in this sharp business practice, or are you merely using your initiative to legitimately enhance competition back home?

Finally, suppose that the product in question is a drug used in the treatment of HIV/AIDS, which is a significant public health issue in poorer regions of the country in which you are travelling.  Do you think that makes any difference?

The above scenarios all address the issue of international patent exhaustion, i.e. whether or not the sale of a product patented in one country automatically nullifies (i.e. ‘exhausts’) the patentee’s rights in all other countries in which it holds equivalent patents.  Unless you are already familiar with this area of the law, you might be surprised to learn that the answer is generally ‘no’.  A patent-owner can, in principle, enforce its rights – via an injunction, or requirement to pay a royalty – every time one of its products is transferred to a new jurisdiction in which it holds a relevant patent.  This is different from the ‘rule’ that applies within a single jurisdiction, where the first sale of a product generally relieves the patentee of further rights.

Should there be a similar ‘rule’ of international exhaustion?  I think not – or, at least, not yet.  But it is a question that is currently up for consideration by a US appeals court.

01 November 2015

Can What You Say In Patent Examination Be Held Against You in Court?

Ore wagonsImagine that you have applied for a patent on an improved iron ore wagon.  During examination, you wanted to distinguish your invention from pre-existing ore wagons.  You therefore explained that your wagon has ‘an internal ridge’ that reinforces the side wall, and is ‘integrally formed within the side wall’, and you amended your claim to include this ‘integrally formed’ language.  You also noted that this particular structure has the advantage that only one metal plate is required for construction, because ‘the ridge or ridges are achieved through bending and not through welding or any other connections or fasteners.’

Flash forward to a few years later, and you are in court arguing that one of your competitor’s iron ore wagons infringes your patent.  However, the competitor’s product has an internal ridge that is initially made separately from the side wall, and subsequently attached, e.g. by welding or riveting.  The court therefore has to decide whether this structure falls within the scope of the terminology ‘integrally formed within the side wall’.

This is, in a nutshell, the question that recently came before Justice Nicholas in the Federal Court of Australia (Bradken Resources Pty Ltd v Lynx Engineering Consultants Pty Ltd [2015] FCA 1100).  Interestingly, it raises four separate issues:
  1. whether the term ‘integrally formed’, in and of itself, excludes the two-step constructions;
  2. whether the amendment of the claims to include the ‘integrally formed’ language during examination informs interpretation of the term;
  3. whether the applicant’s accompanying explanation of the advantages of the claimed structure should be taken into account when interpreting ‘integrally formed’; and
  4. whether the patentee is now barred (or, in legal parlance ‘estopped’) from making a different argument in court to the one it made during examination.
To put it another way: to what extent can what the applicant did and said during examination of the application be held against it in a court of law?

The short answer is ‘somewhat’, but to nowhere near the extent it would be in some other jurisdictions, and in particular the United States.  And – spoiler alert – no, ‘integrally formed’ does not include something made in two parts and then joined together!

18 October 2015

Proposed Australian Examination Practice Gives Narrow Interpretation to High Court’s Myriad Ruling

NarrowsIP Australia has opened a consultation on proposed changes in examination practice in light of the High Court’s ruling in D'Arcy v Myriad Genetics Inc [2015] HCA 35.  Although many people had feared (or hoped, depending upon their particular predilections) that the Australian Patent Office would follow the lead of the USPTO, and take a broad view of the High Court’s judgment, it is clear from the proposed examination practice that this will not be the case.

Indeed, it would be difficult for IP Australia to take any narrower view of the implications of the Myriad decision than the one it is proposing (except, perhaps, in relation to cDNA).  The Patent Office accepts that the High Court’s judgment establishes that ‘a claim to an isolated nucleic acid that merely represents information coding for a polypeptide is not patent eligible’, and has therefore concluded that the following are not patent-eligible:
  1. naturally occurring human and non-human nucleic acid sequences encoding polypeptides or functional fragments thereof - either isolated or synthesised;
  2. cDNA; and
  3. naturally occurring human and non-human coding RNA - either isolated or synthesised.
However, the Patent Office proposes that it will continue to treat claims directed to pretty much everything else, not addressed directly by the High Court’s decision, as patent-eligible.  This includes other forms of isolated, naturally-occurring DNA such as regulatory DNA and non-coding DNA.

This is in stark contrast to the USPTO’s response to the corresponding decision of the US Supreme Court in Association for Molecular Pathology v. Myriad Genetics, Inc, which the US Office treated as affecting the patent-eligibility of all claims directed or relating to natural products.  Initial guidance from the USPTO suggested that this would even include new and useful combinations of natural substances (using gunpowder as an example).  Updated guidance issued in December 2014 improved the situation somewhat, by clarifying the process by which claims ‘directed to’ excluded subject matter should not be subject to rejection if they recite additional elements that amount to ‘significantly more’ than the exclusion.  Even so, it remains clear that a claim which recites ‘nothing more’ than an isolated natural product generally cannot be patented at the USPTO, whereas many such claims will continue to pass muster under the proposed Australian practice.

09 October 2015

Australian High Court Nukes Biotech Industry from Orbit: “It’s the Only Way to be Sure”

Nuclear explosionThe High Court of Australia has followed the US Supreme Court in unanimously declaring that naturally-occurring DNA sequences – even when extracted from the cell nucleus and isolated by human intervention – cannot, in themselves, be validly the subject of patent protection.  In particular, all seven High Court judges found that claims 1-3 of Myriad Genetics’ Australian patent no. 686004, each of which is directed to isolated nucleic acid molecules corresponding with the BRCA mutation associated with increased breast cancer risk, are invalid because they do not define a patent-eligible ‘manner of manufacture’ under Australian law: D'Arcy v Myriad Genetics Inc [2015] HCA 35.

In arriving at this ruling, the High Court has reversed the decisions of six Federal Court judges – one at first instance (Cancer Voices Australia v Myriad Genetics Inc [2013] FCA 65), and five more on appeal to a full bench of the Federal Court (D’Arcy v Myriad Genetics Inc [2014] FCAFC 115) – all of whom found that nucleic acids, once extracted from a cell and isolated from a complete DNA molecule, are artificially-created products that are chemically, structurally and functionally different from their natural counterparts, and thus patent-eligible.

Furthermore, in reversing last year’s decision of the Full Federal Court, the High Court has (retroactively) made a liar of Australia’s Trade Minister, Andrew Robb.  For months, Mr Robb has been telling anyone who will listen that Australia does not need to extend ‘data exclusivity’ for biologic drugs, because this country provides more extensive patent protection for biological materials than some others.  This line has been followed primarily for the benefit of the US negotiators of the Trans-Pacific Partnership Agreement (TPP), who initially wanted the agreement to mandate a minimum 12 years’ data exclusivity. 

As recently as 6 October 2015, following finalisation of the TPP after seven years of negotiations, Mr Robb was talking up Australia’s patent system as a key factor in reaching agreement on the contentious issue of data exclusivity for biologics.  Yet, the very next day, the High Court dropped its nuclear bombshell on that argument, by not only replicating the action of the US Supreme Court in declaring isolated naturally-occurring DNA to be unpatentable, but going further in extending this to synthesised biologics – including cDNA – that essentially embody the same ‘information’ existing in the naturally-occurring biological molecule.

Just to be clear, nobody – not even Myriad Genetics – cares that three Australian patent claims directed to the isolated DNA comprising the BRCA mutations have specifically been declared invalid.  Quite aside from anything else, the patent has expired, having reached the end of its 20-year term on 11 August 2015.  There are also probably very few people who would be greatly concerned that isolated naturally-occurring DNA sequences are not patentable in Australia.  It is now widely regarded that the completion of the human genome project, along with the relative ease, speed and low-cost of gene sequencing nowadays, has largely rendered such claims unpatentable for lack of novelty or inventive step anyway.

The larger concern with the Australian High Court’s decision for the entire biotechnology industry is likely to be its focus on the information content of the naturally-occurring DNA as ‘an essential element of the invention as claimed’.  This reasoning will create significant uncertainty as to the circumstances under which any product – whether wholly, or partially, synthesised, and including cDNA – which essentially exists to provide a ‘medium’ for naturally-occurring information, may continue to be regarded as patent-eligible in Australia.

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