The High Court’s decision in Myriad – the outcome and its potential impacts

In the decision handed down by the High Court on 7 October 2015 in D’arcy v Myriad Genetics Inc [2015] HCA 35, the High Court overturned the judgments of six members the Federal Court and found in favour of the applicant.

While delivered in three separate judgments, the finding of the High Court was unanimous: isolated nucleic acids are unpatentable in Australia. The judgment turns on its head decades of established precedent with respect to the rules for establishing what is patentable subject matter, and could have serious ramifications for the biotechnology industry in Australia.

Background

The case against Myriad was brought by Yvonne D’arcy, a breast cancer survivor, and was aimed at having Myriad’s patent for the gene sequence which codes for mutations in the BRCA1 protein, which are indicative of susceptibility to breast and ovarian cancer, revoked. Darcy and her supporters’ position was that, as a sequence of naturally occurring DNA and RNA, even in isolated form, is a product of nature, it cannot form the basis of a valid patent.

The Court’s Finding

Only the first three claims of the Myriad patent in suit were at issue in the appeal. Each of the disputed claims was directed to a product, being an isolated nucleic acid coding for a mutant or polymorphic BRCA1 polypeptide. None of claims 1 to 3 was restricted to any particular application of the claimed nucleic acids (eg, their use in screening tests for cancer susceptibility).

The High Court noted that Myriad’s claims focused on the information conveyed in the claimed compounds, which information underlies the utility of the claimed nucleic acids in cancer screening. Importantly, their Honours noted that the information was not “made” by any human action, but merely “discerned”.

By the rules established in the seminal NRDC case, the High Court assessed whether the claims of the patent fell within the boundaries of patentable subject matter; namely, did the Myriad patent claim a “manner of manufacture”? Since NRDC, it has been accepted in Australia that in assessing patentability it is relevant to ask whether claims are directed to a product or process that has been made by human intervention (“an artificial state of affairs”) and have economic utility. However, in Myriad the High Court moved away from the established principle, explaining that this alone is not a sufficient test. Indeed, in the High Court’s view such a test may represent an overly narrow approach where a new application or extension of patent eligibility is at issue.

The Court propounded a list of other factors that should be considered in such cases, including:

  • whether the invention as claimed would give rise to a new field of monopoly protection with negative effects on innovation and have a “chilling effect” on activities beyond those the subject of the patent’s monopoly;
  • whether to accord patentability would enhance or detract from the coherence of the law relating to patentability;
  • considerations of international law and Australia’s obligations under it; and
  • whether according patentability in such a case would involve law-making of a type which should be done by the legislature.

Chilling Effect

Their Honours considered that the three claims in suit in the Myriad patent did not meet the threshold requirement to be patentable subject matter. In finding this, the Court considered that a “chilling effect” would be the outcome of Myriad’s claims, because use of the generic term “isolated nucleic acid” meant that the boundaries of the claimed monopoly were elusive. This outcome of the chilling effect was described by the High Court as leading to an “exorbitant and unwarranted defacto monopoly”, one of the practical consequences of which would be that a person carrying out a genetic test would not know until it was done whether or not the Myriad patent had been infringed. That is, the person’s DNA which was subject to the test may or may not have contained the relevant BRCA1 mutations.

Something that the Court did not consider though, was whether the changes to the “patentable subject matter” test for consideration of all new applications would in itself provide a chilling effect on innovation in the biotechnology sector.  Given the level of investment required at the R&D stage to reap the rewards of a patentable invention in biotechnology, this new test of patentability for new applications could put a dampener on the sector.

It is interesting too that the Court did not mention the research exception under Australia’s patent law, which means that a “chilling effect” would not occur with respect to the use of the claimed isolated nucleic acid used for research purposes, which was presumably one of the reasons for bringing the case.

Legislative Consideration and International Law

The Court also considered the law-making arm of the expanded test to be influential; to affirm the patentability of an isolated nucleic acid would require the Court to consider questions of public policy and conflicting interests which Parliament is better equipped to address.  However, in two senate enquiries in recent years the outcomes supported maintaining the patentability of isolated nucleic acid molecules. If Parliament wishes to allow isolated nucleic acid molecules to be patentable in light of this case, the High Court has effectively asked the Parliament to spell this out in the legislation.

In this context, the Parliament would no doubt consider the laws of other countries (the EU and China, importantly, still allow isolated nucleic acid molecules to be patented) and Australia’s position under TRIPS and under the recently negotiated TPP.

The Practical Effects

From a practical point of view, in terms of isolated nucleic acid molecules this decision is likely to have relatively little impact on patentability since the sequencing of the genome has effectively barred new patent claims directed to isolated nucleic acid molecules on the grounds of lack of novelty.  Accordingly, it is other “products of nature” type patents for which this decision may lead to more serious consequences.

In the meantime, the High Court has called into the question the validity of thousands of issued Australian patents and IP Australia have advised that granted patents containing nucleic acid sequence claims will not be re-examined unless requested by a third party.

In terms of BRCA1, the case did not invalidate any of Myriad’s claims for a diagnostic use of an isolated nucleic acid, so Myriad’s monopoly on its use in diagnostics remains intact. It therefore appears, that in spite of the stated claims of the D’acry camp the real effect of this case is that it has created a huge amount of uncertainty for the Australian biotechnology and pharmaceutical sectors, which could undermine future investment and innovation.

Elizabeth Campbell