06 September 2014

Australian Court Backs Patents on Isolated Genes

D'Arcy v Myriad Genetics Inc [2014] FCAFC 115 (5 September 2014)

Isolated jeansA special expanded bench of five judges of the Federal Court of Australia has thumbed its collective nose at the US Supreme Court, finding that isolated genetic material is patent-eligible in Australia, and that (‘with respect’, of course) the emphasis of the US’ top court (in Association for Molecular Pathology v Myriad Genetics, Inc. 569 U.S. ___) ‘on the similarity of “the location and order of the nucleotides” existing within the nucleic acid in nature … is misplaced.’  The decision upholds the ruling of a single judge of the court, handed down in February 2013.

The unanimous judgment of the Australian court expresses a preference for the approach taken by Judges Lourie and Moore in the US Court of Appeal for the Federal Circuit (CAFC), who focussed on the differences between the isolated and naturally occurring DNAs.  Under Australian law, the court has stated, ‘the analysis should focus on differences in structure and function [of the isolated molecule] effected by the intervention of man and not on the similarities’ (at [155]).

Furthermore, the Australian court noted that, contrary to the dissenting position adopted by Judge Bryson in the CAFC, and by the US Supreme Court, the subject matter of the claims in the Myriad patent is ‘a compound; a nucleic acid. It is not a claim to information’ (at [210]).  Thus, even if the ‘information content’ of the isolated genetic material is, in some sense, unchanged, this does not determine patent-eligibility:

What is being claimed is not the nucleic acid as it exists in the human body, but the nucleic acid as isolated from the cell. The claimed product is not the same as the naturally occurring product. There are structural differences but, more importantly, there are functional differences because of isolation. (At [212])

In short, Australian law differs from US law – in Australia, claims directed to isolated genetic materials are patent-eligible.

Basis for Patent-Eligibility of Isolated Genes

The genesis of the Full Federal Court’s decision on Myriad’s claim to isolated ‘BRCA1’ genes lies in the 1959 decision of the Australian High Court in National Research Development Corporation v Commissioner of Patents (‘NRDC’) [1959] HCA 67, which is without doubt one of the greatest and most prescient judgments to have been delivered anywhere in the English-speaking world.  It is a decision that not only laid the groundwork for a consistent approach in Australia to patent-eligibility in the face of rapidly evolving technologies for over 50 years, but which also influenced the law in other countries including (until the ‘Europeanisation’ of its patent laws in 1977) the UK – in which the Australian law itself originated.

The guiding principle established by the High Court in NRDC was essentially that the question of whether or not new subject-matter is eligible for patenting should not be constrained by the example of what was previously considered patentable, but rather by whether or not the invention ‘consists in an artificially created state of affairs’ (i.e. something which, but for human intervention, would not exist), having economic significance (i.e. that it ‘belongs to a useful art as distinct from a fine art’).

Patent law, by its very nature and purpose, must inevitably address the development of new technologies that will not have been foreseen by lawmakers, along with rapid advances with which legislative changes cannot possibly keep pace.  The elegance and simplicity of the ‘NRDC principle’ lies in summing up the approach to be taken in all cases in a completely technology-neutral manner.  Most other countries (the US especially, in recent times) can only dream of having guidance that is so clear, and has been so consistently applied.

Recent Developments in the Law

Of course, the law moves on, and the Myriad court also considered the most recent, and most directly-relevant, High Court ruling on patent-eligibility, i.e. last year’s decision on methods of medical treatment in Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd [2013] HCA 50.  That majority in that case affirmed that: ‘if a process which does not produce a new substance but nevertheless results in “a new and useful effect”’, so that the new result is ‘an artificially created state of affairs providing economic utility, it may be considered a “manner of new manufacture”’ and, thus, eligible to be patented.

Importantly, as the Myriad judgment explains (at [128]), High Court Justices Crennan and Kiefel, in Apotex v Sanofi

…did note that in Association for Molecular Pathology v Myriad Genetics, Inc, 596 US 12-398 (2013), the United States Supreme Court had focussed on the genetic information encoded into genes associated with certain cancers, and had held that composition claims to a naturally occurring DNA segment fell within the exception to patentability. However, their Honours added the observation that this conclusion was reached ‘even though such important and useful genes had never before been located or isolated from surrounding genetic material’. With respect, that observation draws the important distinction between the newly isolated gene and the information it contains.  (Emphasis in original.)

Newsflash: Australian Judges Are Actually Quite Clever!

Judges are sometimes derided as being ‘out of touch’, or lacking the necessary specialist knowledge to make appropriate decisions in some of the cases that come before them.  Patent law, in particular, presents a unique nexus of legal, technical, commercial and policy issues, providing numerous opportunities for a court to get things ‘wrong’.  Commentators have not recently been backwards in coming forward with criticisms of the US Supreme Court in this respect (see, e.g., Ignorance Is Not Bliss: Alice Corp. v. CLS Bank International on the IP Watchdog blog).

While I do not really know whether such scathing criticisms of US Justices are justified, I do know that here in Australia we are immensely fortunate to have many judges sitting on our federal court benches who are highly intelligent, well-informed and thoughtful.

One of our most experienced patent judges is Justice Annabelle Bennett.  Of course, Justice Bennett presided over much of the Apple/Samsung dispute in Australia, and I expect that it is actually a considerable loss to our jurisprudence that she will not now issue any decisions on some of the novel issues that arose in those cases.  I have seen Justice Bennett at work twice in recent months – at the Full Court appeal hearing in the Research Affiliates case, and just last month at a Full Court appeal by Watermark client Regency Media Pty Ltd against the first instance decision in MPEG LA v Regency.  On both occasions I witnessed a woman of formidable intellect, quite easily capable of unravelling the most experienced of barristers at the slightest sign of a loose thread in their case!

Some Judges Even Know Sciencey Stuff!

The other thing to know about Justice Bennett is that she was a scientist before she was a lawyer.  In fact, she has a PhD in biochemistry from the University of Sydney.  After graduating with a law degree from the University of New South Wales, Dr Bennett (as she then was) went on to practise as a barrister, specialising in intellectual property law.  She is also no stranger to the commercial and policy concerns around patents in the life sciences, having served on government committees including the Genetic Manipulation Advisory Committee, the Biotechnology Task Force and the Gene Patenting Advisory Committee of the Australian Law Reform Commission.  Justice Bennett has also served as a Director of the Sydney Children's Hospital and Neuroscience Research Australia, is a former president of the Australian Academy of Forensic Sciences, and current Chair of the National Health and Medical Research Council.

There is no doubt in my mind that Justice Bennett is the primary author behind the unanimous opinion of the Full Court in the Myriad case – the judgment itself is an object lesson in both the law and the science underpinning the decision.  Those who would criticise the judgment on either count will be, for the most part, far less qualified or knowledgeable than its likely author!

Critics’ Lies and Misrepresentations

Of course, the inevitable criticism of the Full Court decision has already commenced.  I have written in the past of my belief that the moral objections of those who oppose the patenting of genetic technologies should be taken seriously, and that this is an important discussion with which all interested parties should engage.  But I have also written of the cynical and exploitative manner in which some of the (largely faceless) people behind the campaign to end ‘gene patenting’ have gone about their project.

Sadly, for those who would be willing to engage in reasonable debate, the campaign of lies and misinformation is continuing, as is immediately apparent from an early report of the Full Court’s decision in the Australian media.

The report leads with the emotionally-manipulative claim that ‘cancer survivors and advocates are devastated’ and fearful that the decision ‘will lead to higher costs for patients in need of potentially life-saving tests.’  While I do not doubt the reality of people’s emotional responses, the fact that they believe that the decision changes anything suggests that they have been misled as to what the case is actually about. 

As for any changes to the costs of testing, this is a complete misrepresentation, because the challenge to the Myriad patent has only ever been about the claims directed to isolated genetic material.  The patent also includes specific claims directed to the use of the genes in methods of testing for the BRCA mutation, and these claims have never been the subject of any attack on eligibility in Australia.

Sally Crossing, of Cancer Voices Australia, is reported as saying ‘[t]his news is not good for cancer research, especially in the promising field of targeted therapies, or for people affected by any cancer.’  This is completely untrue.  Quite aside from anything else, since April 2012 the Australian patent law has contained an express exemption from infringement for acts done ‘for experimental purposes relating to the subject matter of the patent’.

Rebecca Gilsenan, the principal lawyer at Maurice Blackburn acting for Yvonne D'Arcy, reportedly ‘said the patent was granted on a gene that was exactly the same inside as it was once it had been isolated, save for the fact it was not in the body.’  This is a lie.  The judgment explains in great scientific and legal detail precisely why this is an incorrect statement which does not accord with physical and chemical reality.  As I noted above, the person who most likely wrote the judgment is far more highly qualified in all relevant respects than Ms Gilsenan, and in my view it is disrespectful of her to simply deny the court’s findings of fact and law.

Finally, ‘intellectual property consultant’ Luigi Palombi is reported as disparaging the decision for being ‘based on technicalities springing from another court decision in 1956,’ which is ‘more than 50 years old, and has nothing to do with biotechnology.’  He is, of course, referring to NRDC (and either he, or the reporter, meant to say 1959).  It is disingenuous, at best, to say that the NRDC decision relates to ‘technicalities’.  As I explained above, NRDC goes to the very heart of the underlying basis of patent law, and is as relevant today as it was in 1959.

In any event, Palombi conveniently ignores the Full Federal Court’s further discussion of the relevance of last year’s Apotex v Sanofi decision of the High Court, which is less than one year old, and relates to a similar field of technology.

If opponents of patents relating to genetic and other biotechnologies wish to have a meaningful public debate about the law, then they really need to stop resorting to these kinds of lies and misrepresentations.  Denying reality has not thus far resulted in any change to the law, and is unlikely ever to do so.

Conclusion – What Next?

It seems certain that an application will be made for special leave to appeal the Full Federal Court decision to the High Court.  I think that the most likely outcome is that such an application would be denied.  The issues have now been considered, and unanimously decided, by six judges of the Federal Court of Australia (the original judge, and the five members of the Full Court).  There does not appear to be any real argument open that all of those judges have made an error of law.  There is a small chance that the High Court could take the case in order to settle the matter once and for all, in which event the likely outcome is that the Full Court judgment would be affirmed.

Meanwhile, I think we can expect to see a further push in parliament for legislative change.  Previous attempts to draft effective legislation have not met with support, however it is likely that the proponents of change will have learnt from that experience.

For now, however, nothing has changed in Australia.  Claims to isolated genetic materials remain patent-eligible (although, these days, many would most likely fail for lack of novelty or inventive step).  No new doubts have been raised as to the validity of the many patents granted on this type of subject matter in the past.  And Australian women at sufficient risk will continue to have access to affordable genetic testing under our universal healthcare system.

It is a funny thing, but in all the time the Australian Patent Office has been granting patents covering isolated genes, the sky has not fallen in.  Nor does it show any sign of doing so today.


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