Australia: the Myriad case

What are the issues at stake in the case?

The most significant aspect of this case is that it is the first time an Australian judicial authority has decided whether genetic subject matter is patent-eligible.

Although it has long been the case that IP Australia has granted patents on isolated genes, genetic sequences, DNA, RNA, proteins and the like, this practice has been based on a precedent set by a late 1950s Australian High Court decision (known as the NRDC case) handed down long before anyone even really understood genetic technologies, let alone how they might be commercially utilised.

There was widespread concern that a decision in favour of the applicant to remove genetic subject matter from patent-eligibility might hobble the highly innovative Australian life sciences industry, commercially isolate Australia as a destination for new medical treatments, set Australia apart from accepted IP standards in other parts of the world, and open the floodgates to an extension of the decision to other essentially chemical subject matters such as microbially derived drugs or medically effective drugs isolated or extracted from the environment.

What did the court office decide?

A single judge of the Federal Court decided that the decision in NRDC (National Research Development Corporation v Commissioner of Patents [1959] HCA 67; 102 CLR 252) remains good law, and that since the isolated genetic sequences claimed in the Myriad patent were an ‘artificially created state of affairs’, they constitute patent-eligible subject matter.

Nicholas J highlighted the very sweeping scope allowed to him under this precedent stating that, even if ‘an isolated nucleic acid ... may be assumed to have precisely the same chemical composition and structure as that found in the cells of some human beings’, in the absence of human intervention, naturally occurring nucleic acid does not occur outside the cell, and ‘isolated’ nucleic acid does not exist inside the cell, and it is thus itself an ‘artificial state of affairs’.

The applicants did not challenge that the subject matter of the claims in suit had either a ‘discernible effect’ or ‘utility in a field of economic endeavour’—the other two requirements of patent-eligible subject matter set down by the NRDC decision.

Importantly, from a global perspective, the judge distinguished this case from the US Court of Appeals decision in The Association for Molecular Pathology & Ors v US Patent & Trademark Office and Myriad Genetics Inc 689 F3d 1303 (2012)—a parallel matter awaiting a decision by the Supreme Court of the US, stating that: the evidence in each case was different; the law as between the US and Australia is different; and so too is the constitutional setting in which patent legislation operates in the US when compared to that in Australia.

He also distinguished the situation from wellknown British cases relating to similar issues.

Is there anything unusual about the case?

The most unusual aspect of the case from an Australian perspective was not the decision itself, but rather the fact that the applicant was a non-profit organisation that banded together with other interested parties including professionals providing pro bono services with a view to changing the tide of Australian patent law and practice primarily on moral grounds.

The case was commenced in the courts against the backdrop of a number of government-directed enquiries, all of which ultimately concluded that it was inappropriate to exclude genetic subject matter from patent-eligibility.

“The legal tenets argued were very narrow, and the judge’s decision soundly based on a long-standing precedent of the most superior Australian court.”

One of the enquiries was conducted by a Senate Standing Committee that considered, from late 2011 into early 2012, whether a Private Member’s Bill seeking to exclude genetic subject matter and a potentially extensive list of related chemical subject matter should be passed by the Australian Parliament. The shadow of well-known, long-standing, conservative lobbyists has been cast long over all these activities including the court case.

Do you think there will be an appeal?

The respondents were awarded costs by the judge: this may mitigate any appeal by the applicant. In fact, Cancer Voices Australia, one of the primary applicants, was deregistered by this Australian Securities and Investments Commission as an operating entity in late 2012, and only its separately registered South Australian and New South Wales-based arms remain in operation.

Presumably there is no financial connection between these remaining arms and Cancer Voices Australia which would enable the respondent to recoup the costs awarded. With the prospect of what might be a public relations disaster for the respondents, it seems unlikely that costs will be sought against the other applicant, Mrs Yvonne D’Arcy, a cancer sufferer herself.

One might imagine, however, that the respondents’ position might harden if an appeal was lodged by the applicants. The decision itself, moreover, left little scope for an appeal as the legal tenets argued were very narrow, and the judge’s decision soundly based on a long-standing precedent of the most superior Australian court.

What grounds might form the basis of an appeal?

There was little evidence led by either party, and much of what was offered was indisputable scientific fact. Argument was essentially limited to the correct application of long-standing law.

While the court went to some lengths to consider the state of the law in other commercially significant and highly respected IP jurisdictions, for a variety of precedent-based reasons, and since overseas decisions carry no weight in Australian law, it was ultimately a straightforward matter for the judge to dismiss the relevance of these other potential influences. The only foreseeable basis for an appeal would be that the judge got the law wrong, but that seems unlikely.

What implications does the case have for the industry in Australia and internationally?

The outcome of the case is that the law and practice surrounding the patenting of genetic subject matter in Australia maintains the status quo.

It is possible that the aforementioned well-known, long-standing, conservative lobbyists may seek to have another crack at having the patent statute amended to exclude what they consider to be morally controversial subject matter, but the weight of both judicial and educated opinion would seem to be against them, as is the current political climate in Australia, which is far more focused on political polls and personalities than substantive issues.

Internationally, although Australian judicial opinion is reputed to be widely respected, each jurisdiction will need to make its decision, if required, in the context of its own national patent statute and precedent which, as Nicholas J was at pains to point out, is different from that in Australia at least in the US and in the UK.

Karen Sinclair is a principal at Watermark Intellectual Asset Management in Melbourne. She can be contacted at k.sinclair@watermark.com.au