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

IP 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.

Not a Surprising Outcome

I cannot say that I am at all surprised by IP Australia’s response to the High Court’s ruling in Myriad.  Along with the Department of Innovation, Industry and Science (within which it sits), IP Australia has long been a strong advocate of allowing patents on isolated natural products in appropriate circumstances, subject to satisfying the other criteria for patentability.  As the Commissioner of Patents, Fatima Beattie, told the Senate Legal and Constitutional Committee inquiry into the Patent Amendment (Human Genes and Biological Materials) Bill 2010:

…an invention can be created not simply by construction but also by deconstruction. You can create a new invention by deconstructing an existing, big molecule because the new, smaller molecule has different properties, a different structure and a different utility. That is why it is considered an invention. Then you look at the criteria in terms of: is it worthy of a patent? For example, today an isolated gene sequence would still be eligible for a patent because it would be considered an invention. However, the requirements for an 'inventive step' and novelty are much harder to satisfy now because of the maturity of the art and the amount of prior art that is available now to the examiner when they are examining the application.

In taking this position, IP Australia has not always enjoyed the support of other departments within the Australian government.  While granting patents might have positive impacts on innovation, it may have negative repercussions in other portfolios, such as on the cost of healthcare.  Thus, at the same Senate hearing, the Secretary of the Department of Health and Ageing, Jane Halton, stated:

We do not accept the logic that says that, if you divide something that occurs in nature, then a subcomponent of what occurred can then be patented. We accept that you should be able to patent techniques and we accept that you should be able to patent all those things around it but not something that is actually a natural thing—in this particular case, a gene, a protein or what have you. And we do not accept the extension of a logic that says, from chemistry, for example, that, if you have a large molecule and you divide that molecule, it becomes something new and therefore it is an invention.

The fact that IP Australia would now be reluctant to shift its position any further than absolutely necessary, in view of the High Court’s decision, should therefore not come as a great surprise to anyone.

Subject Matter that Remains Patent-Eligible

According to the proposed examination practice, all of the following will continue to be regarded as patent-eligible:

1. naturally-occurring isolated regulatory DNA (e.g. promoters, enhancers, inhibitors, intergenic DNA);
2. isolated non-coding (e.g. ‘junk’) DNA;
3. isolated non-coding RNA (e.g. miRNA);
4. naturally occurring isolated bacteria;
5. naturally occurring isolated virus;
6. isolated polypeptides;
7. synthesised/modified polypeptides;
8. isolated polyclonal antibodies;
9. chemical molecules purified from natural sources (e.g. new chemical entities, antibiotics, small molecules);
10. isolated cells;
11. isolated stem cells;
12. probes;
13. primers;
14. isolated interfering/inhibitory nucleic acids (e.g. antisense, ribozymes);
15. monoclonal antibodies;
16. fusion/chimeric nucleic acids;
17. transgene comprising naturally occurring gene sequences; and
18. vectors/microorganisms/animals/plants comprising a transgene.

Of course, the fact that such things are considered eligible for patenting does not mean that they will be patentable in any particular case.  Patent claims will continue to be examined for novelty, inventive step, sufficient support within the description, and utility (including the relatively new requirement, under section 7A, that a specific, substantial and credible use for the claimed invention is disclosed in the specification).

What About cDNA?

The proposed practice appears to treat all cDNA (i.e. complementary DNA – a synthesised molecule comprising relevantly the same genetic information as naturally-occurring DNA from which it is ultimately derived) as ineligible for patent protection.  This is, perhaps, where the greatest uncertainty lies in the interpretation of the High Court’s ruling.

The key passage in the majority judgment, in relation to cDNA, is at paragraph [89]:

It is the existence of that information which is an essential element of the invention as claimed. The product is the medium in which that information resides. That characteristic also attaches to cDNA, covered by the claims, which is synthesised but replicates a naturally occurring sequence of exons. (Emphasis added.)

To my mind, this passage goes no further than to establish that cDNA is ineligible for patenting in circumstances where a corresponding claim to isolated DNA would not be patent-eligible.  IP Australia’s proposed practice will exclude only isolated DNA according strictly with the facts of the Myriad case, i.e. ‘naturally occurring human and non-human nucleic acid sequences encoding polypeptides or functional fragments thereof’.  It is illogical that the exclusion of cDNA would be broader than this.  Surely the exclusion should be limited to cDNA which replicates a naturally-occurring sequence of exons corresponding with human and non-human nucleic acid sequences encoding polypeptides or functional fragments thereof?

Australian biotechnology specialist patent attorney Grant Shoebridge has argued (if I understand him correctly) for an even more limited interpretation of the cDNA exclusion in the Myriad judgment, extending only to ‘certain cDNA that is used for genetic diagnostic testing and similar applications that rely on a review of the relevant nucleic acid sequence information.’  On this interpretation, ‘an isolated cDNA that is used to express a protein or peptide contains different information to that which is contained within a cell because the introns, and the information they contain, have been removed’, and should therefore be patent-eligible.

No doubt there will be submissions on this point in response to IP Australia’s consultation.  I will therefore be watching with interest to see whether this particular aspect of the proposed practice is refined in the final examination guidelines.

Conclusion – Examination On-Hold Pending Final Practice

IP Australia is inviting interested parties to comment on the proposed practice by 30 October 2015.  Comments may be sent to the secretariat for the Patents Consultation Group (PCG) at mdb-patents-consultation-group@ipaustralia.gov.au.

The consultation period is relatively short, and I expect that a final settlement of the practice following consideration of submissions will also be fairly quick.  Until the practice is finalised, examination of patent applications containing claims directed to technology that could be impacted by the High Court's decision is on-hold.

Tags: Australia, Biotechnology, Genetic technology, Patent Office, Patentable subject matter