Category Archives: high court

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

Another look at Myriad and the patentability of “genes”

Towards the end of last year, a unanimous decision of the Full Federal Court of Australia in D’Arcy v Myriad Genetics Inc [2014] FCFCA 115, found in favour of Myriad and upheld the first instance decision of the Federal Court that isolated nucleic acids are patentable in Australia.

The position put forward by the appellant D’Arcy was that a sequence of naturally occurring DNA and RNA, even in isolated form, are products of nature that cannot form the basis of a valid patent.

Myriad argued successfully that the sequence of DNA responsible for coding the BRCA1 gene that it had succeeded in isolating from the cell’s nucleus was a patentable “manner of manufacture” under section 18 of the Patents Act 1990 (Cth).  Myriad’s argument centred on an assertion that the isolated nucleic acid differs from nucleic acid found in a human cell chemically, structurally and functionally and the isolation of the nucleic acid will lead to an economically useful result.

However, far from the finding of the Full Court putting this issue to rest, D’Arcy’s application to appeal the finding of the Full Court was successful, meaning that the High Court of Australia will be considering the issue. According to the solicitors for D’Arcy this is scheduled to take place in April 2015.

The decision to allow the appeal is an important one for a number of reasons:

  • firstly, it is clear that the High Court considers this question to be one of such importance as to require a serious reconsideration and a definitive resolution from Australia’s highest court, especially as the decision to allow the appeal was given in the face of the unanimous decision of the judges of the Full Court of the Federal Court and the judge of the Federal Court at first instance;
  • secondly, it potentially opens the door for the High Court to take a view on the patentability of isolated nucleic acids in Australia which conforms with that in the USA, where an isolated gene sequence is not currently patentable; and
  • finally, the flow-on effects to the biotechnology industry in Australia will be of serious concern, both in terms of the revenue potential of patents, as well as the funding of research and development into this area if a return on that investment will be difficult to obtain.

In its media release of 13 February 2015 on the successful application to appeal, Maurice Blackburn, the solicitors for D’Arcy, stated that the issue “has enormous significance for access to genetic testing, research and the development of treatments for diseases suffered by millions of Australians.” While this statement is intended to demonstrate reasons why the High Court should overturn the decisions of the lower courts, to me it could also be used to support the Full Court’s decision. If researchers are not able to patent the isolated nucleic acids which are the fruits of considerable scientific endeavour and effort, would the impetus to carry out this research and development exist? The failure of research in this area would indeed have significance on access to genetic testing in that the testing would not be available.

The media release further states that the issue for consideration by the High Court “raises a number of ethical, philosophical and legal questions about the commercialisation of the human body” and indeed it does. However, in my view, and, it seems, in the few of the Full Court, these are issues for the consideration of Parliament and not the High Court.

While I fully appreciate that the statements in this media release are not legal argument, they do serve to paint a useful picture of the way that these issues are considered outside of a legal forum. Written submissions are already being made to the High Court by the parties in this matter, and the Institute of Patent and Trade Mark Attorneys of Australia has sought leave to intervene as amicus curiae, and so we wait with baited breath for its decision.

Elizabeth Campbell