18 September 2016

Does Australia Have a (US-Style) Two-Step Test for Patent-Eligibility?

Two StepsIn its Mayo/Myriad/Alice series of cases, the US Supreme Court has established a two-step test in order to determine whether a claimed invention defines patent-eligible subject matter or not.  In the first step, the claims are examined to determine whether they are ‘directed to’ a patent-ineligible concept, i.e. an abstract idea, law of nature or natural phenomenon.  If not, then the subject matter of the invention is eligible for patenting.  Otherwise, the analysis proceeds to step two, in which the claims are further analysed to determine whether or not they comprise some additional element, or combination of elements, that is ‘sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.’

In contentious cases the focus has generally fallen upon the second step of the analysis.  This is not surprising, considering that the reason these cases are contentious in the first place is because they are typically those in which the claims appear on their face to encompass ineligible subject matter, e.g. abstract ideas in the case of computer-implemented inventions such as in Alice, or natural phenomena such as the isolated DNA in Myriad or the presence of metabolites in blood samples in Mayo.  It might be said in such cases that ‘the vibe’ of the claim is that it looks like it might be ineligible, and that it is therefore necessary to proceed to step two in order to determine whether or not this initial impression is correct.

However, two recent decisions of the US Court of Appeals for the Federal Circuit (CAFC) confirm that the first step of the Mayo/Myriad/Alice framework is not merely a formality, but must be given proper consideration.  Enfish, LLC v. Microsoft Corp. (Fed. Cir. 2016) [PDF, 605kB] concerned software-implemented methods and systems operating on a new and more efficient database format.  The court found at the first step of the Alice analysis that the claims were not directed to an abstract idea, on the basis that ‘[s]oftware can make non-abstract improvements to computer technology just as hardware improvements can’ and that it is ‘relevant to ask whether the claims are directed to an improvement to computer functionality versus being directed to an abstract idea’.  In McRO, Inc. v. Bandai Namco Games America Inc. (Fed. Cir. 2016) [PDF, 341kB] the court found that claims directed to generating automated lip-synchronization and associated facial expressions for 3D animated characters (e.g. in video games) were, similarly, not abstract, and patent-eligible at the first step of the test.

It should not come as any great surprise that the first step of the Alice framework actually has some teeth.  The test is supposed to apply to patent claims in all fields of technology, and clearly there are very many patents and applications that relate to wholly uncontentious subject matter for which patent-eligibility is barely a consideration.  In all such cases, the claims are effectively passing at the first step of the test.  The surprise, for many, is that the CAFC has finally started to recognise and apply this reality in relation to computer-implemented inventions.

This raises the question of whether there is an analogous process that takes place in Australia.  As a practical matter, I believe that there is, however it has not been explicitly set out by the courts, and it remains an unacknowledged aspect of examining patent claims for eligibility.  This is unfortunate, because the existence of an implicit step in the eligibility analysis is an obstacle to consistency and objectivity in the assessment of patent claims.

11 September 2016

Recombinant DNA Technology and Extensions of Patent Term – ‘Swiss-Style’ Claims Continue to Confuse

Swiss-style climb!A recent decision by the Administrative Appeals Tribunal of Australia has addressed the question of whether a patent directed to a second or subsequent medical use of a known pharmaceutical substance can be eligible for an extension of term, in the particular case that the substance is produced using recombinant DNA technology: AbbVie Biotechnology Ltd Commissioner of Patents [2016] AATA 682 (‘AATA decision’).  In deciding that so-called ‘Swiss-style claims’ can support an extension of term (assuming that all other requirements are satisfied), the AATA has reversed the finding of a Delegate of the Commissioner of Patents that such patents are not eligible for term extensions: AbbVie Biotechnology Ltd [2015] APO 45.  (Never fear if you are unfamiliar with the meaning of the terms ‘recombinant DNA technology’ and/or ‘Swiss-style claims’ – I explain further below.)

In Australia, the normal maximum term of a patent, i.e. 20 years from its original filing date, can be extended by up to five years in the case of certain pharmaceutical products, to compensate for the time that is typically required to complete trials and obtain the regulatory approvals necessary to actually commence marketing of a commercial drug.  For an original medical use of a substance, the availability and duration of any extension of term depends upon when a product including the substance is first listed on the Australian Register of Therapeutic Goods (ARTG).  Generally, extensions are available only for patents covering the pharmaceutical substances themselves – patents on methods of making or using the substances are not extendible.  The one exception to this rule relates to the use of recombinant DNA technology in the production of a pharmaceutical substance.

AbbVie Biotechnology Ltd (‘AbbVie’) owns a number of Australian patents relating to a pharmaceutical substance known as adalimumab, which is produced by a process of recombinant DNA technology.  This drug is marketed under the name HUMIRA, and is supplied in the form of an injectable solution for the treatment of a number of diseases.  It was originally approved, and listed on the ARTG on 10 December 2003, for treatment of rheumatoid arthritis.  It was subsequently demonstrated to be effective for the treatment of rheumatoid spondylitis, Crohn’s disease and ulcerative colitis, and these additional indications were added to the ARTG on 10 August 2006, 29 June 2007 and 23 July 2013 respectively.  AbbVie has patents covering these further medical uses of HUMIRA, each of which includes ‘Swiss-style’ claims.

AbbVie applied to the Australian Patent Office to extend the terms of its three further medical use patents.  The Delegate determined that they were not eligible for extensions of term, even if the extension applications had been filed in time (which he found they were not, because the applications should have been based upon the original 2003 listing on the ARTG, not the 2006, 2007 and 213 listings).  On appeal, the AATA reversed the first aspect of the Delegate’s findings, deciding (wrongly, in my view) that Swiss-style claims can form the basis for an extension of patent term.

04 September 2016

The Limitations of Patents in a Globalised Economy

GlobalisedAdvances in information technology, transport and communications, along with the implementation of multinational trade agreements, have resulted in a great acceleration in cross-border movement of goods, services, technologies and capital over the past few decades.  Patents, on the other hand, continue to exist as rights having only national scope.  Even within the European Union, which has established a highly-integrated single internal market, and where the European Patent Organisation provides a mechanism for central examination and grant of European patents, ongoing maintenance and enforcement of granted rights remains a matter for the national patent offices and courts.  (This will change once the Unitary Patent and Unified Patent Court come into effect, however since the ‘Brexit’ vote the timetable for their implementation is uncertain.)

The potential difficulties with the limited national scope of patents are illustrated by a recent Australian Federal Court decision, Load and Move Pty Ltd v Container Rotation Systems Pty Ltd [2016] FCA 843

In broad terms, Load and Move is an Australian company that owns Australian patents, and which found itself in competition with other Australian companies (including Container Rotation Systems) to supply products to overseas customers (specifically, in Eritrea) that Load and Move believed may be covered by its patents.  Container Rotation Systems (CRS) promotes and sells its products via its website, www.containerrotationsystems.com, which can, of course, be accessed from anywhere in the world with an internet connection.

The potentially infringing products, as it turns out, are manufactured at the same Chinese factory that makes the products for Load and Move.  Profits from the supply of the products no doubt accrue to the Australian competitors, however the products themselves are shipped directly from China to Eritrea, and thus never enter or leave Australian territory.

In these circumstances, it is understandable that Load and Move might feel, at least on some moral level, that its rights are being infringed, and that there ought to be something it could do to prevent competitors operating out of its own home market of Australia from ‘stealing’ business through the expedient of conducting all material (though not operational or financial) activities overseas.

However, ‘feeling’ wronged, and actually being legally wronged, may be two entirely different things.  In this case, the court found that it was not ‘objectively reasonable’ for Load and Move to believe that it had any right to relief in respect of the activities of CRS and other competitors in directing the overseas manufacture and supply, notwithstanding that they were operating out of Australia.

28 August 2016

Can an Early-Stage Embryo Without a Father Be Considered ‘Human’?

BlastocystUnder subsection 18(2) of the Australian Patents Act 1990, ‘human beings, and the biological processes for their generation, are not patentable inventions’.  An account of the legislative history of this exclusion may be found in the Patent Office decision Fertilitescentrum AB and Luminis Pty Ltd [2004] APO 19 at [13]-[25], which demonstrates that it was essentially the result of a political compromise between a push to exclude all genetic material and life forms from patentability, and the status quo of having no express exclusions in the Act. 

The government of the day rejected a broad exclusion on the basis that ‘it is impossible to foresee what inventions there will be in the future’ and that ‘a Patents Act which is not flexible enough to deal with the unforeseen would not serve the inventors, the public or the Government.’ 

Included with ‘the unforeseen’, however, are scientific developments that challenge the very category of ‘human’.  A Delegate of the Commissioner of Patents has recently had to deal with the question of whether the creation of a blastocyst via parthenogenetic activation of a human oocyte falls within the exclusion of subsection 18(2): International Stem Cell Corporation [2016] APO 52

No need to worry if you did not understand that last sentence.  I have done the background reading, and here is what it means in plain English.  What the inventors at International Stem Cell Corporation (ISSCO) did was to:
  1. extract an immature human egg cell (an ‘oocyte’) from the ovary;
  2. employ a technique to artificially activate the oocyte without requiring fertilisation (a process known as ‘parthenogenesis’); and
  3. allow the activated oocyte to develop to an early stage of cell division called a ‘blastocyst’.
The point of all this is to enable the production of human stem cells matched to the woman from whom the oocyte was taken.  Therapies based on the use of stem cells are considered extremely promising for the treatment of various forms of degenerative disease, diabetes, heart disease and numerous other conditions. 

As ISSCO stated in its 2007 press release announcing the breakthrough, ‘parthenogenetic stem cell lines that are genetically related to the recipient may overcome rejection problems and thus may have the potential to give significant therapeutic benefit to patients.’  Furthermore, ‘parthenogenetically-derived stem cells provide an alternative to embryonic stem cells derived from fertilized embryos or from somatic cell nuclear transfer (SCNT) technology.’  These latter techniques are highly controversial, because they involve the use of potentially viable human embryos.

What, then, is the status of a parthenogenetic blastocyst?  If it qualifies as ‘human’, then it, and the processes by which it is created, fall within subsection 18(2), and are therefore unpatentable in Australia.  Fortunately for ISSCO, and for the many patients who may ultimately benefit from continued substantial investment in these types of biotechnology, the Australian Delegate found that this is not the case.

21 August 2016

After US Loss, Sequenom Takes Its Patent Battle With Ariosa Down-Under

PregnantOne of the many benefits of genetic testing is the ability to carry out prenatal diagnosis of genetic disorders, most notably including (but certainly not limited to) Downs Syndrome.  This can be particularly valuable when one or both parents are known to be carriers of a genetic mutation such that the baby may be at significant risk of developing a serious condition or abnormality.  The conventional method of obtaining foetal DNA in order to conduct such tests is via amniocentesis, which is an invasive procedure in which a small amount of amniotic fluid is sampled from the amniotic sac surrounding the developing foetus using a needle.  Unfortunately, amniocentesis presents a risk to both foetus and mother.

A test that would enable screening of foetal DNA in a noninvasive manner would therefore be an important breakthrough.  Fortunately, just such a breakthrough was made in 1997 at Oxford University, when researchers Stephen Wainscoat and Dennis Lo discovered the presence of cell-free foetal DNA (cffDNA) in maternal blood serum, and developed techniques to isolate this DNA for testing.  Their discovery led to the grant of patents in a number of countries, including US patent no. 6,258,540 and Australian patent no. 727,919.  Oxford University, through its commercialisation arm Isis Innovation (now renamed as Oxford Innovation, for sadly obvious reasons), licensed the technology exclusively to US company Sequenom, Inc.

Last year, the US Court of Appeals for the Federal Circuit (CAFC) found the US patent to be invalid on the basis that the claimed invention was essentially the discovery of the pre-existing, but hitherto unknown, natural phenomenon of cffDNA being present in maternal blood: Ariosa Diagnostics, Inc.v. Sequenom, Inc. (Fed. Cir. 2015).  The claims were therefore considered to be directed to ineligible subject matter under the standards established by the US Supreme Court in its Myriad and Mayo decisions.  The CAFC subsequently declined to rehear the case en banc.  However a number of the Federal Circuit judges, including Judge Linn on the original panel, and Judges Lourie and Dyk in the decision refusing en banc rehearing, indicated that they felt bound by the Supreme Court precedents, but did not agree with the result in this case.  Judge Newman went further, stating her view that the case had been wrongly decided, and was distinguishable from the facts in Myriad and Mayo.

Many observers therefore felt that the Sequenom case was ripe for review by the Supreme Court, which would then have an opportunity to further develop and clarify its Myriad and Mayo guidance.  However, on 27 June 2016 the Supreme Court denied Sequenom’s petition, sealing the US patent’s demise once and for all.

However, in the meantime (on 7 June 2016) Sequenom has commenced proceedings in the Federal Court of Australia, also against Ariosa Diagnostics, Inc, for infringement of the equivalent Australian patent.  This raises the question of whether the invention that was found ineligible for patent protection in the US may nonetheless be upheld under Australian law.  This will be the second time in recent history (the other being the Myriad BRCA breast cancer gene case) that subject-matter eligibility has been considered for corresponding patents in the US and Australia.

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