Widespread dissatisfaction in US with Supreme Court’s patentable subject matter tests

The USPTO has published a report on its public review of the rules patent eligible subject matter under US law – what we would call a “manner of manufacture”.[1]

The Report does not appear to be the US Commissioner’s recommendations, but rather the results of consultations with the public.

As the Report notes, it is widely accepted in the USA that the Supreme Court’s decisions between 2010 to 2014 in Bilski, Mayo, Myriad and Alice have substantially altered what is patentable subject matter under US law and what not. The most dramatic effects being experienced by the life sciences and computer-related technologies.

While some submissions considered that it would sufficient to let the common law process of evolution unfold or the Commissioner could take administrative action to alleviate the effects of the Supreme Court’s decisions, “a majority, however, recommended legislative change”:

According to these participants, the Court’s precedent is having such a harmful impact on innovation and business development that a legislative solution is critical. ….

There appears to have been rather less uniformity about what the legislative solution should be.

  1. Some submissions called for a legislative requirement only that the claim be for a technological or useful art, without a requirement for “newness”.
  2. Some submitted that the requirement should be something having a practical application.
  3. Some submissions argued that express legislated exceptions should replace the Supreme Court’s common law exceptions. AIPLA for example contended for an exception:

    A claimed invention is ineligible … only if the claimed invention as a
    whole exists in nature independent and prior to any human activity, or
    can be performed solely in the human mind.

  4. Some submissions called for the legislation to make it clear that patent eligibility is a separate requirement to the other requirements such as novelty and obviousness, and to be considered separately from those requirements.
  5. Several commentators thought that the problem of “pre-emption”[2] could be addressed by introducing a specific exemption from infringement for research.

Our High Court in its own Myriad decision managed to adopt an even more alarming approach to patentable subject matter notwithstanding that Parliament had introduced an explicit research defence in s 119C. While it would appear likely to be some time before a clear solution emerges in the USA, maybe these developments should also give us pause for thought, given how enthusiastically the Patent Office and, under its guidance, the Full Court has jumped on the Alice type bandwagon, albeit drawing on the even more curious European approach.

Lid dip: Patently-O

Patent Eligible Subject Matter: Report on Views and Recommendations from the Public (pdf)[3]

  1. Patents Act 1990 s 18(1)(a)  ?
  2. That is, “concerns that patents on foundational technological tools may stifle scientific progress by tying up the basic building blocks of human ingenuity”.  ?
  3. For a rather more humorous take, see IP Musings.  ?

IP Australia consults on patenting genetic material post Myriad

Following the High Court’s ruling that Myriad’s claims for isolated DNA relating to BRCA1 were not patentable subject matter, IP Australia has released a “consultation” on how it proposes to treat patent applications claiming genetic material.

The Commissioner considers that the High Court’s ruling excludes from ‘manner of manufacture’ a claim “to an isolated nucleic acid that merely represents information coding for a polypeptide is not patent eligible.”

Accordingly, at this stage, IP Australia contemplates rejecting as not manners of manufactures claims to:

  • Naturally occurring (human) nucleic acid sequences encoding polypeptides or functional fragments thereof -either isolated or synthesised
  • Naturally occurring (non-human) nucleic acid sequences encoding polypeptides or functional fragments thereof – either isolated or synthesised
  • cDNA
  • Naturally occurring human and non-human coding RNA – either isolated or synthesised

On the other hand, IP Australia considers the following could be patent subject matter:

  • Naturally occurring isolated regulatory DNA (e.g. promoters, enhancers, inhibitors, intergenic DNA)
  • Isolated non-coding (e.g. “Junk”) DNA
  • Isolated non-coding RNA (e.g. miRNA)
  • Naturally occurring isolated bacteria
  • Naturally occurring isolated virus Isolated polypeptides
  • Synthesised/modified polypeptides
  • Isolated polyclonal antibodies
  • Chemical molecules purified from natural sources (e.g. new chemical entities, antibiotics, small molecules) Isolated cells Isolated stem cells
  • Probes
  • Primers Isolated interfering/inhibitory nucleic acids (e.g. antisense, ribozymes)
  • Monoclonal antibodies Fusion/chimeric nucleic acids
  • Transgene comprising naturally occurring gene sequences
  • Vectors/microorganisms/animals/plants comprising a transgene

The Commissioner is interested in receiving comments on her proposed practice by 30 October 2015.

Myriad’s BRCA1 claims – take 2

As previously noted, the High Court has unanimously ruled that Myriad’s 3 claims for isolated nucleic acids for the BRCA1 gene that codes for specific mutations and polymorphisms are invalid.[1]

Claim 1 was:

An isolated nucleic acid coding for a mutant or polymorphic BRCA1 polypeptide, said nucleic acid containing in comparison to the BRCA1 polypeptide encoding sequence set forth in SEQ.ID No:1 one or more mutations or polymorphisms selected from the mutations set forth in Tables 12, 12A and 14 and the polymorphisms set forth in Tables 18 and 19.

Claims 2 and 3 were subsidiary claims for narrower formulations.

The sole issue in the case was whether claims 1 to 3 of Myriad’s patent were a “manner of manufacture” within the meaning of s 18(1)(a) of the Patents Act – what the American’s refer to as subject matter or patentable subject matter. There was no challenge to the novelty or inventive step of the claim – the basis on which the corresponding patent was rejected in Europe.

There was also no challenge to claims 4 – 30, which Gordon J at [191] and [257] characterised as applications of the isolated gene sequences to various purposes such as a probe (claim 4), vectors (claims 5 – 7), methods of producing mutant or polymorphic BRCA1 polypeptides (claims 8 – 9), preparations and uses of polypeptides (claims 10 – 16) and methods of diagnosis (claims 17 – 30).

Previously, this question fell to be determined according to the principles declared in the “watershed” NRDC case. All 3 sets of reasons acknowledged the continued relevance of that decision, but appear to have qualified its teaching in potentially far-reaching ways.

French CJ, Kiefel, Bell and Keane JJ

The majority judgment was delivered by French CJ, Kiefel, Bell and Keane JJ.

A narrow approach

At one level (one might hope the right level), their Honours’ judgment can be seen as focusing very specifically on the singular nature of Myriad’s claim. Thus, at [6], their Honours said:

Despite the formulation of the claimed invention as a class of product, its substance is information embodied in arrangements of nucleotides. The information is not “made” by human action. It is discerned. That feature of the claims raises a question about how they fit within the concept of a “manner of manufacture”. As appears from s 6 of the Statute of Monopolies, an invention is something which involves “making”. It must reside in something. It may be a product. It may be a process. It may be an outcome which can be characterised, in the language of NRDC, as an “artificially created state of affairs”. Whatever it is, it must be something brought about by human action. ….

In their Honours’ conception, that was not the case here. The judgment continues at [6]:

The requirement, in each claim, that the sequence in the isolate bear specified mutations or polymorphisms raises the same problem in a particular way. Satisfaction of that integer depends upon a characteristic of the human being from whom the nucleic acid is isolated, a characteristic which is not shared by all human beings. It has nothing to do with the person who isolates the nucleic acid bearing the mutant sequence.

That is, nothing was “made”. Rather, the gene sequence with the relevant mutation(s) and/or polymorphism(s) was made in the individual from whom the genetic material had been extracted. “All” that Myriad did was whittle that genetic material down to identify whether or not the relevant mutation or polymorphism was present.[2]

Further, at [8]:

…. The size of the class of the products as defined is large. No upper limit was suggested in argument. The boundaries of the class are not defined by a limiting range of chemical formulae. There is a real risk that the chilling effect of the claims, on the use of any isolation process in relation to the BRCA1 gene, would lead to the creation of an exorbitant and unwarranted de facto monopoly on all methods of isolating nucleic acids containing the sequences coding for the BRCA1 protein. The infringement of the formal monopoly would not be ascertainable until the mutations and polymorphisms were detected. Such a result would be at odds with the purposes of the patent system.[3]

One might wonder how one works out whether or not the “monopoly” that would arise would be “exorbitant and unwarranted”. The size of the class claimed seems problematic, the “chilling effect” also might be thought something that flows from the grant of any patent. Why for example would that be any more of a problem than for the patents granted originally over compounds such as omeprazole or rosuvastating or any number of other drugs?

Moreover, the problem of infringement loomed very large. No-one could know in advance whether or not what they were doing would infringe. It would depend on whether a relevant mutation or polymorphism was present in the individual from whom the genetic material was extracted. One might say, of course, that one would not be at risk of infringing unless one was looking for the BRCA1 sequence. One might also say, at least up until today, that there was no bar to patenting omeprazole or rosuvastatin or any other chemical substance just because one had found a specific use for it such as treating disease A when, after the compound had been discovered, someone else might be precluded from investigating its use, surprisingly, to treat disease B.[4]

The problem seems particularly to come back to the nature of the claim as being tosomething generated in an individual naturally and independently of any action by the patentee.

Wider ramifications

French CJ, Kiefel, Bell and Keane JJ did not just declare that claims 1 to 3 were not patentable subject matter. Their Honours went on to explain the principles that should be applied in future.

First, their Honours accepted at [18] that the NRDC test was still the appropriate question:

“Is this a proper subject of letters patent according to the principles which have been developed for the application of s 6 of the Statute of Monopolies?”

As I tell my patents class students, that provides us with an awful lot of guidance! Their Honours continued:

That question is to be answered according to a common law methodology under the rubric of “manner of manufacture” as developed through the cases, but consistently with “a widening conception of the notion [which] has been a characteristic of the growth of patent law.” That widening conception is a necessary feature of the development of patent law in the 20th and 21st centuries as scientific discoveries inspire new technologies which may fall on or outside the boundaries of patentability set by the case law which predated their emergence.

So far, still so good; particularly the recognition of the need for the concept to continue developing.

The “common law methodology” is further explained in [5] – [7] and troubled French CJ in Apotex v Sanofi. The first point appears to be, if the claim falls within an existing recognised class of patentable subject matter, it is a manner of manufacture. If it is a new class, however, “policy factors informed by the purpose of the Act and considerations of coherence in the law” need to be considered. Moreover, there are limits in judicial law-making “inherent in common law methodology”:

Where an affirmative application of the concept is likely to result in the creation of important rights as against the world, to involve far-reaching questions of public policy and to affect the balance of important conflicting interests, the question must be asked whether that application is best left for legislative determination. The patentability of nucleotide sequences derived from human DNA is in that category. The inherent patentability of the invention as claimed would powerfully imply patentability of any claim for an isolated nucleic acid coding for a specified polypeptide.

Notwithstanding 50+ years of the Courts successfully applying the NRDC formula, this High Court is plainly very uncomfortable with that role.

For those 50+ years since NRDC, we had been thinking there were 2 (or 3) requirements for patentable subject matter:

  1. Whether the invention as claimed is for a product made, or a process producing an outcome as a result of human action; and
  2. Whether the invention as claimed has economic utility.[5]

French CJ, Kiefel, Bell and Keane JJ confirmed that requirements 1 and 2 are still necessary. As foreshadowed in paragraph [6], however, their Honours said that requirements 1 and 2, while necessary, are not in themselves sufficient.[6] Other factors must be taken into account. At [28], their Honours laid out four further considerations:

  1. Whether patentability would be consistent with the purposes of the Act and, in particular:
    1. whether the invention as claimed, if patentable under s 18(1)(a), could give rise to a large new field of monopoly protection with potentially negative effects on innovation;
    2. whether the invention as claimed, if patentable under s 18(1)(a), could, because of the content of the claims, have a chilling effect on activities beyond those formally the subject of the exclusive rights granted to the patentee;
    3. whether to accord patentability to the invention as claimed would involve the court in assessing important and conflicting public and private interests and purposes.
  2. Whether to accord patentability to the invention as claimed would enhance or detract from the coherence of the law relating to inherent patentability.
  3. Relevantly to Australia’s place in the international community of nations:
    1. Australia’s obligations under international law;
    2. the patent laws of other countries.
  4. Whether to accord patentability to the class of invention as claimed would involve law-making of a kind which should be done by the legislature.

The new, additional factors 1, 2 and 4 above were described as the most important in the balancing process the inquiry envisaged by their Honours.[7]

Having regard to these considerations, French CJ, Kiefel, Bell and Keane JJ declared at [94]:

Although it may be said in a formal sense that the invention as claimed, referring to isolated nucleic acids, embodies a product created by human action, that is not sufficient to support its characterisation as a manner of manufacture. The substance of the invention as claimed and the considerations flowing from its substance militate against that characterisation. To include it within the scope of a “manner of manufacture” involves an extension of that concept, which is not appropriate for judicial determination. Further, to include this class of claim within that concept would not contribute to coherence in the law as was the case in Apotex. Nor do Australia’s international obligations and the differently framed patent laws of other jurisdictions, which were referred to earlier in these reasons, support the conclusion that this class of claim should fall within the concept.

The “substance of the invention” and the considerations flowing

In the decision of the Full Federal Court under appeal, it had been pointed out that isolated DNA was in fact man made – it didn’t occur in nature. French CJ, Kiefel, Bell and Keane JJ, however, considered that was to elevate form over substance. So at [90], their Honours accepted a submission from the appellant:

“Myriad’s claims are simply not expressed in terms of chemical composition, nor do they rely in any way on the chemical changes that result from the isolation of a particular section of DNA. Instead, the claims understandably focus on the genetic information encoded in the BRCA1 and BRCA2 genes.”

That characterisation, so far as it emphasises the focus of the claims on genetic information, is applicable to the claims in this case and, contrary to the view of the Full Court, should be accepted.

At [93], their Honours then emphasised:

When proper regard is paid to their emphasis on genetic information, the subject matter of the claims lies at the boundaries of the concept of “manner of manufacture”. That it does lie at the boundaries is further evidenced by the odd consequence that if the claims are properly the subject of a patent, the patent could be infringed without the infringer being aware of that fact. That consequence coupled with the very large, indeed unquantified size of the relevant class of isolated nucleic acids, all of which bear the requisite information, raises the risk of a chilling effect upon legitimate innovative activity outside the formal boundaries of the monopoly and risks creating a penumbral de facto monopoly impeding the activities of legitimate improvers and inventors.

The characterisation of the claims as “information”[8] has some affinity for Gordon J’s approach, discussed briefly below, ruling that the claims were to a mere discovery rather than invention. As discussed above under A narrow approach, this seems to flow from the singular nature of the claims in suit with the consequent uncertainties, particularly for infringement.

An extension of the concept

How do you tell that Myriad’s claim involved an extension of the concept of manufacture?

It is true that no court in Australia had ruled on the patentability of isolated gene sequences until the Myriad litigation. However, the Patent Office has been granting patents for ‘man made’ microbes since 1976 and for isolated genetic material since 1995. The legislative history showed that Parliament rejected an attempt to exclude genetic material from patentable subject matter when passing the 1990 Act. A further attempt to exclude human genetic material was rejected in the Senate in 2011. Two inquiries by Government agencies in the 2000s had also endorsed the status quo and recommended against exclusion. Indeed, the Government of the day had publicly announced its acceptance of the ALRC’s recommendation not to exclude isolated genetic materials from patentability. French CJ, Kiefel, Bell and Keane JJ said at [37]:[9]

This Court is not concerned in this appeal with “gene patenting” generally, but with whether the invention as claimed in Claims 1 to 3 falls within established applications of the concept of manner of manufacture. If it does not, then the question is one of inclusion not exclusion. The legislative history cannot be read as impliedly mandating the patentability of claims for inventions relating to isolated nucleic acids coding for particular polypeptides. The legislative history does not assist the Court in answering the question posed in this appeal.

Contribute to coherence

[Apotex][apotex] had (more or less) upheld the status of methods of medical treatment as patentable subject matter. That contributed to coherence because there was no rational basis to distinguish between patenting medical products and patenting methods of treatment.

Here, arguable, the nature of the claim as already discussed means it is impossible to assess the risks of infringement in advance. That presumably does not promote coherence. Their Honours also focused on the broad range of what was claimed and the potential impacts on future researchers. As already discussed, it may be difficult to distinguish those aspects from claims to other chemical compounds.

Gageler and Nettle JJ

Given the length of this post already, I shall only comment briefly on the remaining judgments.

Like French CJ, Kiefel, Bell and Keane JJ, Gageler and Nettle JJ considered at [125] that “an artificial state of affairs” and “economic utility” were necessary requirements for patentable subject matter, but not sufficient.

Also like French CJ, Kiefel, Bell and Keane JJ, Gageler and Nettle JJ stated at [144] that the question of patentable subject matter must be looked at as a matter of substance rather than form.

Invoking Microcell and Philips v Mirabella, their Honours considered at [133] that patentable subject matter involved a threshold inquiry of “inventiveness”.

Products of nature therefore did not qualify as at [136] they lacked the necessary quality of inventiveness. Gageler and Nettle JJ considered that Myriad’s claims were properly characterised as merely claims to products of nature.

Earlier at [128], Gageler and Nettle JJ had said:

Regardless, however, of the amount of labour involved or the differences between the product and the raw natural material from which it is derived, it is necessary that the inventive concept be seen to make a contribution to the essential difference between the product and nature.

Then, at [134], their Honours said:

Here, the essence of claim 1 is the correlation between the incidence of cancer and the presence of the specified mutations and polymorphisms in the mutated BRCA1 gene. Such ingenuity as that entails consists in the idea of examining an isolated fragment of a patient’s naturally occurring DNA constituted of the BRCA1 gene for the presence or absence of the specified mutations and polymorphisms. The subject matter of the claim does not make any contribution to the inclusion of the specified mutations and polymorphisms in the mutated BRCA1 gene. Their presence or absence in or from it is the result of the isolated BRCA1 gene being part of the naturally occurring DNA from which the sequence is isolated. To adopt and adapt the reasoning in NV Philips’ Gloeilampenfabrieken Application, it is “the inevitable result of that which is inherent in the [DNA]”.[10]

Like the reasons of French CJ, Kiefel, Bell and Keane JJ, this passage emphasises that Myriad did not itself make, or cause to be made, the relevant material. Rather, it was generated in the human body independently of any action by Myriad.

Thus, Gageler and Nettle JJ said at [139]:

…. the BRCA1 gene is not patentable as such because it is a naturally occurring phenomenon which lacks the quality of inventiveness necessary to qualify as a manner of new manufacture.

Gordon J

Gordon J at [222] – [225] specifically rejected D’Arcy’s argument that “naturally occurring things, or products or phenomena or principles of nature are excluded as a proper subject matter of a patent.” These were too vague, malleable and imprecise to be useful tools.

Instead, her Honour focused on the role isolation of the nucleic acid played: it simply allowed identification of the presence, or absence, of naturally occurring mutations or polymorphisms. Gordon J then advanced five reasons why the claims did not qualify as patentable subject matter:

  1. The claim is to multiple products, not a single product: [231]-[239];
  2. Although Myriad claims a class of chemical compounds as a product, it cannot delineate the bounds of its claim by reference to chemical composition: [240]-[243];
  3. Myriad did not create, make or alter the characteristic, the code: [244]-[249];
  4. There is no idea, concept or principle embodied in a manner of new manufacture: [250]-[258]; and
  5. The claim is too broad: [259]-[264].

Points 1, 2 and 5 focus on the sheer number and variety of compounds or sequences which were embraced. So at [241] and [242], her Honour recorded that Myriad could not identify the boundaries of the claims:

…. it is not possible for Myriad to record all of the various chemical compounds (or products) that might be produced by isolating an individual’s nucleic acid. For example, as Myriad accepted during argument, the claim is to an “extremely wide number” of chemical compounds where the compound formulae would vary according to the number of sequences extracted but the compound would nevertheless contain one or more of the specific mutations or polymorphisms.

As has been seen, changes in chemical composition are not limited to variation in the number of nucleotides. So, although the claimed product is a chemical compound, Myriad did not and cannot delineate the bounds of the class of compounds by reference to the chemical composition of the class of the claimed product. Instead, Myriad sought to delineate the boundaries of the claim by reference to what it described as the “characteristics identified within the claim” – the specific mutations and polymorphisms, represented by the code.

I am not sure why delineation by class of compound would be any more precise than the method chosen by Myriad – if you know, please leave a comment.

Under point 5, her Honour also pointed out the concern that no-one could know in advance whether they infringed or not and, if the role of the claim, is to identify the boundaries of the monopoly, that does rather cause a problem.

Under point 4, Gordon J referred to the nature of invention as discussed in the Hickton Patent Syndicate case:

In my opinion, invention may lie in the idea, and it may lie in the way in which it is carried out, and it may lie in the combination of the two; but if there is invention in the idea plus the way of carrying it out, then it is good subject-matter for Letters Patent. (Gordon J’s emphasis)

Her Honour considered that claims 1 to 3 failed to qualify because they did not carry out Myriad’s discovery that certain mutations or polymorphisms indicated increased risk of breast cancer. Gordon J said:

[254] Here, having located the BRCA1 gene and identified its nucleic acid sequence, Myriad’s idea, concept or principle is that specific mutations or polymorphisms in that sequence suggest a predisposition to breast cancer and ovarian cancer.

[255] How then is that idea carried out in claim 1? It is not. It is not and could not be carried out – as claim 1 suggests – by creating a product comprising isolated nucleic acid from a patient which contains the identified characteristic in any one of its many forms. As has been seen, Myriad does not claim the methods by which it isolates the nucleic acid or the methods by which it identifies the sequence of the patient’s nucleic acid. Myriad does not claim the characteristic. Claim 1 is not a claim to the idea, concept or principle.

Gordon J contrasted these claims to claim 4 which used the discovery to create a probe to test for the presence or absence of mutations. That was an invention. So analysed, claims 1 to 3 might be seen to be ‘mere’ discoveries’ rather than an application or now to offend against the enablement and sufficiency requirements.

Some other scary thoughts

First, it is not entirely clear from the decision whether cDNA is patentable subject matter as the US Supreme Court accepted. French CJ, Kiefel, Bell and Keane JJ said at [73]:

Nor, as previously noted, are the claims subject to any process?based limitation involving the breaking up and physical stitching together of the sequences comprising the isolated nucleic acids which are the products the subject of the claims. The “conceptual” stitching together, which may be regarded as the ordered compilation of information defining the relevant sequence, falls outside the claims entirely. The claims encompass molecules comprising isolated nucleic acids containing coding nucleotides arranged in the same sequence as appears in the DNA from which they were derived, whether or not introns and other non-coding sections have been removed from the relevant stretch of that DNA.

That might leave room for debate that cDNA could qualify. Also, the exclusion of introns or other “non-conding regions” might ameliorate the “chilling effects”. Gageler and Nettle JJ, however, at [116] characterised the claims as claiming “the uninterrupted sequence of nucleotides without introns”, i.e., cDNA. According to Gordon J at [283], the parties agreed that, if the claims were not patentable subject matter, they would not be saved where they extended to cDNA.

Philips v Mirabella!

Dr Patentology has called Philips the second worst ever patent judgment by the High Court. No argument from me. Turns out, we’re both wrong. At least 6 judges of the current High Court consider it good law[11] and appear to use it as their touchstone of patent principles.

I would say we need legislative reform but, as the Angel of Lake said, “Before you choose your wish son You better think first ….”

D’Arcy v Myriad Genetics Inc [2015] HCA 35

  1. According to Gordon J at [205] a “mutation” is a variation in a gene sequence “private to an individual or that indiviual’s immediate family.” In contrast, at [207] a “polymorphism is a genetic variant which has arisen in a distant common ancestor and is therefore not unique to an individual or that individual’s immediate family. Forty per cent of women in the general female population have one or more polymorphisms in the BRCA1 gene that are not found in the remaining 60 per cent of the population.”  ?
  2. Gageler and Nettle JJ also focused on this point at e.g. [162]. See also Gordon J at [248].  ?
  3. Citing Cornish, Llewellyn and Aplin for the final conclusion.  ?
  4. Of course, these days, s 119C would probably provide one with a defence to infringement, at least for the research into the possible use.  ?
  5. In fact, the Full Federal Court in Grant has told us there is a the third requirement: a physical transformation of something. Arguably, that was not in issue in Myriad as the isolated gene sequence was physically different to the unisolated genetic material in the human body to an extent.  ?
  6. Insofar as the claim falls within existing concepts of “manner of maufacture” as it has been developed through the cases, their Honours said at [28] requirements 1 and 2 “will also ordinarily be sufficient.” (emphasis supplied)  ?
  7. The survey of foreign laws didn’t really help as it was only the USA following the US Supreme Court’s Myriad decision that appears to have ruled out patent protection for isolated genetic material.  ?
  8. Optimistically hoping it was the claim to “information” rather than just genetic information which was important.  ?
  9. Gageler and Nettle JJ took a similar position at [171]. Nicholas J reviewed the legislative history at [113] – [123] in Cancer Voices.  ?
  10. A different Philips case, which their Honours read as endorsed by NRDC: (1954) 71 RPC 192 at 194, quoted in NRDC (1959) 102 CLR 252 at 279.  ?
  11. In addition to Gageler and Nettle JJ, see French CJ, Kiefel, Bell and Keane JJ at [12].  ?

High Court to review patenting of isolated genes in Australia

According to a media release by Maurice Blackburn,[1] the High Court has granted Ms D’Arcy special leave to appeal the decision that Myriad’s BRCA patent for isolated genes is patentable subject matter, as a manner of manufacture, in Australia.

At first instance, Nicholas J upheld the patentable subject matter of the patent. His Honour’s decision was affirmed by a Full Bench of the Federal Court.

The transcript of the special leave application is not yet up.

Lid dips: Phillips Ormonde Fitzpatrick and Dr Summerfield.

D’Arcy v Myriad Genetics Inc.

  1. The law firm representing Ms D’Arcy the appellant. The High Court’s summary (pdf) of Results of Special Leave applications confirms the grant.  ?

Isolated genes still patentable in Australia

A Full Bench of the Federal Court of Australia (Allsop CJ, Dowsett, Kenny, Bennett & Middleton JJ) have dismissed the appeal in the Myriad litigation; upholding Nicholas J’s ruling that isolated genes and isolated gene sequences are patentable subject matter in Australia.

Kim Weatherall has pointed out this is a different result to the ruling in the USA but, given the illogicality of the US Supreme Court’s position (e.g. here and here), surely that is no bad thing.

D’Arcy v Myriad Genetics Inc [2014] FCAFC 115

Alice corp

The Full Federal Court has reserved its decision in Research Affiliates’ appeal; the Commissioner’s appeal in RPL Central is still pending.[1]

In the USA, Alice Corp. had a patent for a computerised method of reducing “settlement risk”, a type of escrow arrangement: the 10 judges in the Federal Circuit Court of Appeals came up with 5 different opinions of which Justice Newman memorably said:

[The 5 judgments have] propounded at least three incompatible standards, devoid of consensus, serving simply to add to the unreliability and cost of the system of patents as an incentive for innovation. With today’s judicial deadlock, the only assurance is that any successful innovation is likely to be challenged in opportunistic litigation, whose result will depend on the random selection of the panel.

Now, the US Supreme Court has agreed to try to sort it out.

ALICE CORPORATION PTY. LTD. V. CLS BANK INTERNATIONAL, ET AL., Docket No. 13–298 (Supreme Court 2013) via Patently-O

  1. The Full Court has also reserved in Cancer Voices re isolated DNA (although one might think there’s little scope for that to get up after Apotex v Sanofi.  ?

Patentable subject matter reform

IP Australia has issued an Issues Paper on the proposed amendments to the Patents Act:

(1) to insert an “objects” clause; and

(2) to exclude from patentable subject matter inventions which it would be “offensive” to commercially exploit.

These plans arise out of a recommendations made by ACIP which the Government announced it accepted. The consultation now is on the wording to implement those policies.

An objects clause

The consultation paper proposes 2 alternative “objects” clauses:

Option 1

…. the purpose of the legislation as being to provide an environment that promotes Australia’s national interest and enhances the well-being of Australians by balancing the competing interests of patent rights holders, the users of technology, and Australian society as a whole.

Option 2

the purpose of the patent system is to provide an environment that enhances the well-being of Australians by promoting innovation and the dissemination of technology and by balancing the competing interests of patent applicants and patent owners, the users of technology, and Australian society as a whole.

Now, one could very well wonder what possible help either of these statements might give a court if they were enacted. The consultation paper even notes that the Parliamentary Draftsman is rather ambivalent about the value of objects clauses in general:

Some objects provisions give a general understanding of the purpose of the legislation…Other objects provisions set out the general aim or principles that help the reader to interpret the detailed provisions of the legislation.

The first option is what ACIP proposed. ACIP considered its proposal a simplified version of the Objects identified in art. 7 of TRIPS:

The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.

The consultation paper thought that Option 1 does not sufficiently recognise the economic and social welfare concerns of patent law and did not sufficiently recognise the interests of patent applicants as well as patent owners (formerly known in Olde English as patentees). As the consultation paper explains:

The economic goals of the patent system are to promote economic growth, trade and investment by encouraging innovation and the dissemination of knowledge and technology.

The patent system encourages innovation by giving patentees a period of market exclusivity in which to recoup their development costs through commercialisation of their inventions. In exchange, patentees are required to disclose the details of their inventions to the public. The patent system contributes to social welfare by providing Australians with access to new technologies and developments that otherwise would not have occurred and that improve our quality of life (for example new pharmaceuticals and medical technologies and improvements to safety and waste management technologies).

However, the patent system will only meet its economic goals if the positive effects of the patent system in stimulating investment in innovation and providing society with access to new technology are balanced against the potential negative effects of patents restricting access to follow-on innovation and increasing costs, and so restricting supply of new patented technologies.

This is better, at least the first 2 paragraphs (if one bears in mind that economists – to the extent they accept the role of patents – think of the market exclusivity as providing an incentive rather than a “reward”). The third paragraph is rather more ambivalent.The danger the third paragraph raises is that it could be used as a basis for excluding something from patentability because someone might use the patent to raise prices or the other evils identified. But, while there are some provisions in the Patents Act that address, or attempt to deal with, these issues, in many respects they seem more properly the territory of (take a deep breath) competition law.

Offensive commercial exploitation

What the consultation proposes is a new exclusion to be added to s 18:

…  for an invention the commercial exploitation which would be wholly offensive to the ordinary reasonable and fully informed member of the Australian public.

Wholly offensive?

Apparently, the test of the ordinary reasonable and fully informed member of the Australian public is intended to ensure that the exclusion is “applied in a consistent, predictable and neutral manner”. However, it is also proposed to assist the Commissioner by explicitly empowering the Commissioner  in his or her discretion to seek “non-binding” advice on ethical matters.

What seems to trigger the exclusion commercial exploitation in an wholly offensive way rather than at the specific subject matter itself. At what point is the appropriateness of the commercial exploitation determined? Will it be enough that the invention could be exploited in an wholly offensive way? The BRCA controversy erupted when Myriad announced it was going to start charging licence fees for its products. Would the ordinary, reasonable and fully informed Australian have considered its patent wholly offensive before that announcement? This rather suggests that the problem falls within the second type issue identified by ACIP: about how the patent is used, are better dealt with through Crown Use and other compulsory licence arrangements.


If you have views you want to inflict, they should be submitted by 27 September 2013.

Find the issues paper here.

Myriad wins Down Under

Nicholas J has ruled that Myriad’s patent for isolated gene sequences relating to BRCA1 are patentable subject matter for the purposes of Australia’s Patents Act 1990.

Claim 1 of the Patent (No. 686004 entitled “In vivo mutations and polymorphisms in the 17q-linked breast and ovarian cancer susceptibility gene”) is for:

An isolated nucleic acid coding for a mutant or polymorphic BRCA1 polypeptide, said nucleic acid containing in comparison to the BRCA1 polypeptide encoding sequence set forth in SEQ.ID No:l one or more mutations or polymorphisms selected from the mutations set forth in Tables 12, 12A and 14 and the polymorphisms set forth in Tables 18 and 19.

At [70], Nicholas J explained the scope of this claim:

Claim 1 extends to isolated DNA, RNA and cDNA that has a BRCA1 polypeptide encoding sequence as shown in SEQ ID No.1 with one or more of the mutations or polymorphisms specified in the relevant tables.

To qualify as patentable subject matter in Australia s 18(1)(a) prescribes that the claimed invention must be a “manner of manufacture”.

This term, much to the chagrin of modernising law reformers, derives from s 6 of the Statute of Monopolies 1623. In the “watershed” NRDC ruling in 1959, Dixon CJ, Kitto and Windeyer JJ declared that the meaning of “manner of manufacture” is not to be derived as a matter of mere etymology. Rather it poses a question:

“Is this a proper subject of letters patent according to the principles which have been developed for the application of s. 6 of the Statute of Monopolies?”

and in answering that question, it must be recognised that the concept has a “broad sweep” intended to encourage developments that are by their nature unpredictable. Hence, their Honours indicated the processes at issue in that case were patentable subject matter because they led to, or resulted in, an artificially created state of affairs, that had some discernible effect, which had economic significance.  A very teleological approach from the supposed patron saints of strict legalism!

Nicholas J found that the isolated gene sequences claimed in Myriad’s patent were an artificially created state of affairs having economic significance.

His Honour at [105] rejected Myriad’s first line of defence claiming that there was a change in chemical structure simply by the process of isolating the gene sequence. Rather, more generally, the nucleic acid or gene sequence in its isolated form was sufficient to qualify as an artificially created state of affairs:

First, the concept of patentable subject matter is expressed in very expansive language.

Secondly, at [108] the nucleic acid did not exist in isolated form in the cell:

in the absence of human intervention, naturally occurring nucleic acid does not exist outside the cell, and “isolated” nucleic acid does not exist inside the cell. Isolated nucleic acid is the product of human intervention involving the extraction and purification of the nucleic acid found in the cell. Extraction of nucleic acid requires human intervention that necessarily results in the rupture of the cell membrane and the physical destruction of the cell itself. And purification of the extracted nucleic acid requires human intervention that results in the removal of other materials which were also originally present in the cell. It is only after both these steps are performed that the extracted and purified product may be properly described as “isolated” in the sense that word is used in the disputed claims.

Thirdly, at [109] isolating the substance could require “immense research and intellectual effort”.

In that case, it was only as a result of an intensive research effort that the isolated micro-organism in question could be made available for use in the manufacture of the new antibiotic. It was fortuitous for the patentee that it was its employees who were first to isolate the new micro-organism and first to deploy it in the manufacture of the new drug. That will not always be so. It would lead to very odd results if a person whose skill and effort culminated in the isolation of a micro-organism (a fortiori, an isolated DNA sequence) could not be independently rewarded by the grant of a patent because the isolated micro-organism, no matter how practically useful or economically significant, was held to be inherently non-patentable. In my view it would be a mistake, and inconsistent with the purposes of the Act, not to give full effect in such situations to the broad language used by the High Court in NRDC.

His Honour had earlier noted at [75] that, while the isolated substances contained genetic information, the patent did not claim information per se, rather, it was for a substance. Furthermore, at [76] because the claim was limited to the gene sequences in isolated form, it did not cover or extend to the naturally occurring DNA or RNA.

Nicholas J also noted that it was longstanding practice for the Commissioner to grant patents over gene sequences. Both ACIP (pdf) and the ALRC had recommended that this not be changed. The Government had announced (pdf) it accepted those recommendations and Parliament had implemented a different range of measures through the Raising the Bar Act, especially by introducing an explicit experimental use exception in s 119 C and the extension of the usefulness requirement by the introduction of new s 7A which was likely to affect the patentability of ESTs or expressed sequence tags.


Cancer Voices Australia v Myriad Genetics Inc [2013] FCA 65

Mayo v Prometheus

Last week, the US Supreme Court unanimously rejected the patentability of Prometheus’ “diagnostic”, characterising it as an impermissible attempt to patent a law of nature.

Claim 1 of the Patent was:

A method of optimizing therapeutic efficacy for treatment of an immune-mediated gastrointestinal disorder, comprising:

“(a) administering a drug providing 6-thioguanine to a subject having said immune-mediated gastrointestinal disorder; and

“(b) determining the level of 6-thioguanine in said subject having said immune-mediated gastrointestinal disorder,

“wherein the level of 6-thioguanine less than about 230 pmol per 8×108 red blood cells indicates a need to increase the amount of said drug subsequently admin istered to said subject and

“wherein the level of 6-thioguanine greater than about 400 pmol per 8×108 red blood cells indicates a need to decrease the amount of said drug subsequently ad ministered to said subject.”

The Supreme Court characterised that part of the claims dealing with the relationship between concentrations of certain metabolites in the blood with the effectiveness of particular dosages as a law of nature, which was unpatentable. The additional features did not overcome that exclusion as they were in effect already well-known and practised. In his Honour’s overview, Breyer J explained the rationale:

[The cases] warn us against up holding patents that claim processes that too broadly preempt the use of a natural law. Morse, supra, at 112– 120; Benson, supra, at 71–72. And they insist that a process that focuses upon the use of a natural law also contain other elements or a combination of elements, sometimes referred to as an “inventive concept,” sufficient to ensure that the patent in practice amounts to signifi cantly more than a patent upon the natural law itself. ….

We find that the process claims at issue here do not satisfy these conditions. In particular, the steps in the claimed processes (apart from the natural laws them selves) involve well-understood, routine, conventional activity previously engaged in by researchers in the field. At the same time, upholding the patents would risk dis proportionately tying up the use of the underlying nat- ural laws, inhibiting their use in the making of further discoveries.

Patently-O has a more substantive consideration: Natural Process + Known Elements = Normally No Patent. The Commissioner of Patents has issued new guidelines indicating his understanding here; and criticisms have been propounded here and here.

The Supreme Court subsequently remitted the Myriad “gene patent” case to the Federal Circuit and Patently-O thinks their patent is going down too.

Our law is in many respects rather different. Section 18(2) of the Patents Act contains an exclusion from patentability only for human beings and the processes for their generation. Under s 18(1) and (1A), however, a patentable invention must be a “manner of manufacture within the meaning of s 6 of the Statute of Monopolies”.

In the ‘watershed’ NRDC case, the High Court confirmed that a ‘mere’ discovery was not a manner of manufacture, but an application of a discovery in a field of economic endeavour would be. A ‘mere’ discovery being “some piece of abstract information without any suggestion of a practical application of it to a useful end” at [8].

On this approach, Prometheus’ patent appears to have moved beyond the ‘mere discovery’ stage. The question might be, therefore, whether the additional integers were obvious or, may be, we have moved into Microcell territory: nothing but “nothing but a claim for a new use of an old substance” (see NRDC at [7].

A role for that approach was preserved (reinstated?) under the 1990 Act by the High Court in Phillips v Mirabella. Now, given the overlap between the Mirabella court’s analysis and the statutory requirements for novelty and inventive step (or an innovative step), that raises a whole set of issues. First, there is a question whether Mirabella would be decided the same way given the High Court seemed to have cut the legs out from under it in Advanced Building Systems – although, as the Full Federal Court pointed out in BMS v Faulding, Advanced Buidling Systems was decided under the 1952 Act and distinguished Mirabella on the grounds that the 2 Acts were different.

In trying to make sense of that, the Full Court went on to find that the “lack of newness” must be apparent on the face of the specification. As that appears to depend on the text of the specification, the approach taken by the US Supreme Court might not be open: the Faulding court found the dosage type regime a manner of manufacture although, in the end, it failed the novelty test.

In Arrow v Merck, Gyles J struck down a dosage regime on the grounds that it lacked subject matter. On appeal, the Full Court upheld invalidity, but only on grounds of lack of novelty and inventive step. Subsequently, Gyles J also accepted that the lack of subject mater ground could not be made out if it was necessary to resort to extrinsic evidence.

I guess we’ll see where the Myriad litigation in Australia takes us in due course.

Mayo Collaborative Services v. Prometheus Labs., Inc. (Supreme Court 2012) (pdf)


Gene patents

The Commonwealth Senate’s Community Affairs committee tabled its report into the patenting of genes towards the end of last month.

After commenting on the still continuing cases (in both the USA and here), the Committee noted:

The Committee will continue to monitor these important international and national legal developments, and notes that these cases may bring greater clarity to the application of the invention-discovery distinction to isolated genetic materials. As part of its watching brief on this area, the Committee may wish to revisit this issue if the area remains problematic following the outcomes of these cases.

The, after referring to the private members bill (see below), the Committee recommended:

The Committee believes that the introduction of the Bill to the Senate will provide a further, and much-needed, opportunity for the arguments and questions around the impacts and effectiveness of an express prohibition on gene patents to be considered. The Committee is of the view that a Senate inquiry into the Bill should be undertaken, with a focus on the specific terms of the proposed amendments and the implications of their implementation for human health and other potentially affected fields of innovation. The Committee notes that its inquiry into gene patents has served a valuable purpose in bringing the issue of gene patenting to the light of public interest and attention, and provides a sound basis on which a targeted inquiry into the Bill can build. Accordingly, Recommendation 3 of the report requests that the Senate refer the Bill to a relevant Senate Committee for inquiry and report.

Then, there are a bundle of recommendations:

  • increase the threshold requirements of patentability (improve patent quality);
  • reduce the scope of patent claims;
  • reinforce mechanisms and policies by which governments can and should intervene with the rights of patent holders; and
  • assist judicial interpretation of the Act and establish an external accountability and quality control mechanism for the patent system.

Recommendation 9 appears directed at the Lockwood No 1 ruling:

5.175    The Committee recommends that the Patents Act 1990 be amended to introduce descriptive support requirements, including that the whole scope of the claimed invention be enabled and that the description provide sufficient information to allow the skilled addressee to perform the invention without undue experimentation.

Recommendation 16 called for the establishment of a patent audit committee.

Patentology commented here.

In the same week, Senators Heffernan, Coonan, Stewart and Xenophon and introduced their private members’ bill, Patent Amendment (Human Genes and Biological Materials) Bill 2010, which (according to the Parliamentary bills summary) is intended prevent the patenting of biological materials which are identical or substantially identical to materials as they exist in nature.

As Patentology reports here, it has been referred to the Senate’s Legal and Constitutional Affairs Committee for inquiry. Your comments are requested by 25 February 2011 and the Committee is scheduled to report by 16 June 2011.

In a different environment, the US Justice Department, perhaps surprisingly, filed an amicus brief in the Myriad appeal supporting the District Court’s conclusion that the patent was invalid.