Don’t hit the panic button
On October 7, 2015, the High Court of Australia (the country’s most senior court) unanimously ruled that isolated naturally-occurring nucleic acids are not patentable subject matter. This decision overturned the earlier ruling of the Federal Court of Australia and the unanimous decision of the full Federal Court. The case results from a legal challenge to Myriad’s Australian patent number 686004 from breast cancer survivor Yvonne D’Arcy.
Under Australian law, patent eligibility is guided by the principles of the High Court’s decision in National Research Development Corporation (NRDC) v Commissioner of Patents in 1959. In that landmark decision, it was held that subject matter was considered patent-eligible if it was “an artificially created state of affairs” having “economic significance”.
In reaching its decision, the High Court agreed with D’Arcy’s arguments that the relevant claims to isolated naturally-occurring nucleic acids were directed to “information embodied in the arrangement of nucleotides” and that “this information is not made by human action”. As a result, it was considered that the isolated naturally-occurring nucleic acids defined in the relevant claims did not represent an artificially created state of affairs, and were therefore not patentable.
In the corresponding US Supreme Court Myriad case, a finding that isolated naturally-occurring genes were not patentable was interpreted by the US Patent and Trademark Office as extending to all isolated biological material, and preliminary reports by some Australian attorneys suggest that there is no reason why Australian law will not follow suit and exclude all isolated naturally-occurring material from patentability. Moreover, it has also been reported that the High Court decision goes further than the US Myriad decision because artificially synthesised nucleic acids, such as complementary DNA (cDNA), may also be excluded from patentability.
The Myriad ruling consists of three separate decisions: the majority decision by Chief Justice French and Justices Kiefel, Bell and Keane; and two minority decisions, one by Justices Gageler and Nettle, and another by Justice Gordon. Generally speaking the reasoning of a minority judgment insofar as it differs from the majority judgment would not be relied on for setting precedent law because one assumes that the majority did not agree with the minority reasoning. The discussion below considers predominantly the majority decision.
The intent of the Myriad action
In reaching an understanding of how the Myriad decision should be interpreted, it may be useful initially to consider the intent of the Australian High Court appeal.
In her special leave submission to the High Court, D’Arcy stated that “the applicants intended this to be a test case on the patentability of human genes”. This is reaffirmed in D’Arcy’s written submission to the High Court, which states: “This appeal presents the question whether an isolated human gene is a patentable invention, being a manner of manufacture within the meaning of s18(1)(a) of the Patents Act 1990 (the Act)”. Nothing in D’Arcy’s submission relates to the patentability of isolated biological material other than human genes.
Given that all isolated naturally-occurring material became patent-ineligible after the US Supreme Court’s Myriad ruling, the Institute of Patent and Trademark Attorneys of Australia (IPTA) made a submission to intervene in this case and submitted affidavits from senior patent attorneys (including the author of this article) and scientists indicating that excluding isolated naturally-occurring biological material from patentability would adversely affect the Australian biotechnology industry.
In her reply to IPTA’s intervention application, D’Arcy stated at paragraph 21 that “no question concerning the patentability of ‘other material isolated from nature’ arises on the facts of the present case”. Accordingly, D’Arcy’s appeal had no intention of challenging the patentability of anything other than isolated human genes.
The intervention application by IPTA was ultimately rejected by the High Court, and therefore it is reasonable to assume that D’Arcy’s position, namely that the case relates only to the patentability of human genes, was accepted by the High Court. Support for this view is provided at paragraph 37 of the majority decision, which states that “This court is not concerned in this appeal with ‘gene patenting’ generally but whether the invention as claimed in claims 1 to 3 falls within the established concept of manner of manufacture”.
Isolated biological material other than nucleic acids
In coming to its decision the High Court followed NRDC and considered the artificialness and economic significance of the defined nucleic acid sequences. In this respect, the majority decision identified that the essential integer of the claimed invention is “information” rather than an isolated chemical product, since the nucleic acid sequence is used in a genetic diagnostic screening test. The majority decision also states that the specified mutations or polymorphisms, ie, the information, has “nothing to do with the person who isolates the nucleic acid bearing the mutant sequence”.
Therefore, the majority decision found that the “information” defined by the disputed claims was identical whether isolated or not and that the information had not been made by Myriad. On that basis the High Court found that the isolated sequences did not satisfy the artificialness requirement of the “manner of manufacture” test.
Regarding the second requirement for determining patentable subject matter, namely economic significance, the majority decision states:
“The economic significance necessary to the patentability of an ‘artificially created state of affairs’ in the sense used in NRDC is not demonstrated by stating that the artificially created state of affairs is a step along the way to a process or method itself claimed as an artificially created state of affairs of economic significance.”
This statement is pivotal in understanding the position of the majority decision because it forms a nexus between the “artificialness” required for patentable subject matter and the “economic significance” of an invention. As the economic significance of the Myriad patent resides in conducting a genetic screening test (a process), the “step along the way to a process”, namely the isolation of the nucleic acid sequence, was found to be insufficient to make the isolated sequence itself (which is not sold and therefore does not have a direct economic benefit) a manner of manufacture.
“In coming to its decision the High Court followed NRDC and considered the artificialness and economic significance of the defined nucleic acid sequences.”
The above analysis has important implications in determining the scope of the High Court’s ruling. First, it is reasonable to interpret the majority decision insofar as it relates to the requirement for “artificialness” as being limited to isolated biological matter where the essential integer of the claimed invention relates to sequence information and, in particular, nucleic acid sequences that are used in genetic screening tests and other applications that rely on a review of the relevant sequence information. This would not be the case for an isolated naturally-occurring protein, or an isolated naturally-occurring nucleic acid sequence capable of use as a medicament or even an isolated microorganism, because such isolated materials do not relate to “information” in the sense described by the High Court.
Moreover, these types of isolated biological materials can be sold. In other words, their state of being isolated provides a direct economic significance rather than a “step along the way” to economic significance. And finally, the state of being isolated is linked to their utility. Accordingly, rather than information, an isolated naturally-occurring medicament is a product that has been made by human activity and therefore should satisfy the requirement of patentability in view of the Myriad decision.
The conclusion detailed in the preceding paragraph is consistent with both (i) the intent of the appeal which, as described above, never contemplated the patentability of isolated biological material other than human genes; and (ii) paragraph 37 of the majority decision, ie, whether the invention as claimed falls within the established concept of manner of manufacture (supra).
Finally, if the High Court had intended that its decision be interpreted to include biological material other than isolated naturally-occurring genes, it is logical that it would have mentioned such material in its ruling. Consistent with this view is the statement made in relation to cDNA in paragraph 89. However, no mention of biological material other than nucleic acid sequences is made in any of the rulings.
For all the reasons provided above, it seems clear that the Myriad decision cannot be determinative in relation to excluding from patentability isolated biological material other than isolated naturally-occurring nucleic acid sequences where the relevant sequence information is considered to be an essential part of the claimed invention, such as inventions directed to genetic diagnostic testing.
What about cDNA?
There have been a number of reports that the majority decision to exclude isolated naturally-occurring gene sequences extends to cDNA. This is based on paragraph 89 of the decision, which states in relevant part: “That characteristic (ie, the information which is an essential element of the invention claimed) also attaches to cDNA, covered by the claims, which is synthesised but replicates a naturally-occurring sequence of exons.”
In my view, this paragraph extends only to cDNA that is used for genetic diagnostic testing and similar applications that rely on a review of the relevant nucleic acid sequence information. This is clear because paragraph 89 makes mention of cDNA with specific reference to the invention of the patent-in-suit. In particular, paragraph 89 states “the existence of that information which is an essential element of the invention as claimed”, where the terms “that information” relate to “the information stored in the nucleotides coding for the mutated or polymorphic BRCA1 polypeptide”.
The “coding for” language simply means that the mutations and/or polymorphisms reside in the exons of the BRCA gene. Therefore, the cDNA derived from the genomic BRCA gene will also include the mutations and polymorphisms associated with a predisposition for cancer.
However, that will not always be the case. As indicated at paragraph 108, mutations and polymorphisms can also occur in introns. A cDNA derived from such a gene could not be used in a genetic diagnostic assay and, as a result, would not have the same information as the genomic DNA from which it is derived. Accordingly, the cDNA will contain distinct information that results from a human action and not be subject to the statements of paragraph 89, and therefore be patent-eligible.
It is also correctly stated at paragraph 102 that “although the introns do not encode a polypeptide or protein, they contain information which helps regulate and execute the cell’s response to the information encoded in the exon”. Therefore, 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. As cDNA lacks the intron information it logically represents information that has been made as a result of a human action.
Moreover, the removal of introns has advantages that permit more efficient expression of proteins. Accordingly, in cases where genomic DNA and cDNA ultimately code for the same protein, the information contained in these different nucleic acid molecules is nonetheless distinct.
There are also instances where differential splicing of exons in genomic DNA is required for protein expression, eg, the generation of antibodies. Production of antibodies is further complicated by the process of somatic hypermutation (ie, random mutations introduced in the DNA to increase antibody affinity), which occurs after the rearrangement of various antibody genes. Exon rearrangement and somatic hypermutation that occurs for a particular antibody cannot be predicted.
Given the diversity of information that exists between genomic DNA and cDNA it would be illogical for this decision to be interpreted broadly as excluding all cDNA from patentability.
The Australian High Court Myriad decision has resulted in some observers ‘hitting the panic button’ and demanding immediate legislative change. However, a reasoned review of the decision suggests that it should be applied very narrowly and, if that occurs, its impact on the Australian biotechnology industry will be limited. At this stage IP Australia, the country’s IP office, is considering the decision with a view to revising its examination guidelines. Once the guidelines have been revised, the IP community will have a better understanding of the impact of the Myriad decision.
Grant Shoebridge is a partner at Shelston IP. He can be contacted at: grantshoebridge@shelstonip.com
