A recent decision by the High Court of Australia found that genes are not patentable inventions. In the case, Myriad Genetics owned a patent covering mutations they had discovered in the BRCA1 gene. Myriad discovered that patients with those gene mutations had a higher incidence of developing breast cancer. The patent had claims that listed the specific nucleic acid sequence of the mutant BRCA1 genes. Myriad developed diagnostic tests that used the mutant nucleic acid sequences to predict the likelihood of a patient developing breast cancer.

This case started when a cancer survivor in Australia, Yvonne D’Arcy sued to challenge the validity of the claims. She argued that the patent claims were actually directed to “information embodied in the arrangement of nucleotides” instead of gene molecules themselves. She then argued that this gene information, which covered the sequence of the mutant genes, was not a product of human action.

In order for an invention to be patentable in Australia, it needs to be the product of human action. Ms. D’Arcy lost in the first Federal Court, and also at an appeal to the full Federal Court. Both of these courts found that genes which were isolated or purified from a person are a result of human action. The courts reasoned that these isolated genes were not the same as what exists in the human body, and were discovered by the human action of isolating them.

...while isolating the DNA encoding the mutant gene may have involved human action, it was the information stored in the nucleic acids making up the mutant gene that was really being patented.

Ms. D’Arcy appealed to the High Court, which is similar to the Supreme Court in the United States. The High Court took the case, and on October 7, 2015 ruled unanimously that the claimed invention "did not fall within the concept of a manner of manufacture.” The High Court reasoned that while isolating the DNA encoding the mutant gene may have involved human action, it was the information stored in the nucleic acids making up the mutant gene that was really being patented. And, according to the High Court, that information was not the product of human action. It was the product of the nature of genes. The High Court therefore found for Ms. D’Arcy and invalidated the patent claims on the BRCA1 genes.

A very similar result has already occurred in the United States. On June 13, 2013, the U.S. Supreme Court found that the U.S. versions of Myriad’s patents covering BRCA1 mutant genes were unpatentable. The Supreme Court found that isolated DNA, such as claimed in Myriad’s BRCA1 gene patent, was not patentable because the claimed subject matter was a product of nature. Although the U.S. Supreme Court noted that isolated DNA encoded the same information as the DNA in situ, the Court did not find that the gene claims were merely “information” as in Australia. Instead they found that the claimed genes were unpatentable products of nature.

...they found that the claimed genes were unpatentable products of nature.

In some ways the Australian case seems more narrow, since the rationale used by the High Court was that the “information” content of the patented gene was actually the invention, and not the isolated gene molecule itself. According to the Australian High Court, the information was not a product of human interaction. If that is the rationale, then the Australian decision may not easily be extended to other natural chemical compounds which don’t carry information.

This contrasts with the U.S. Supreme Court rationale which found that the mere act of isolating or purifying the BRCA1 genes was not enough to differentiate it from the genes as they occurred in nature. This led to the broader holding in the U.S. that products merely isolated from nature, without significantly more inventive input, are not patentable inventions.

In the U.S., the Myriad decision has already had far-reaching effects on the ability of companies to patent naturally-derived biological discoveries. Any product derived from nature, no matter how tangentially, is now subject to strong scrutiny and rejection by the U.S. Patent Office (USPTO). Well-known, valuable medications, such as antibiotics discovered in living organisms are argued to be unpatentable by the USPTO because the original antibiotic compounds were found in nature. The business model of looking to natural resources for drug candidates has been greatly eroded because pharmaceutical companies know that any compound discovered this way cannot be patented.

Any product derived from nature, no matter how tangentially, is now subject to strong scrutiny and rejection by the U.S. Patent Office...

It seems very likely that courts in other countries are watching these results. It’s also likely that patients and patient’s rights groups will continue to bring challenges, like those brought in the U.S. and Australian cases, to gene-based patents as a way to reduce the cost of diagnostic tests, which they argue are overpriced due to exclusion of lower-priced competition by the patent protection. On the other hand, diagnostic companies, such as Myriad, will continue to argue that they will have little incentive to spend the millions of dollars required to develop and validate these tests if competitors can copy them as soon as they are launched.

It remains to be seen if this new decision in Australia will be extended as it was in the U.S. to prevent virtually any product found in nature from being patented. We will have to watch and see how future cases in Australia interpret this new case, and also how the rest of the world begins to analyze patents covering gene-based inventions. Other than the U.S., and now Australia, most other countries still allow patents on genes. So we can expect to see additional challenges as the rest of the world grapples with the issues presented in these cases.

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[Mike Fuller is the Co-Managing Partner of intellectual property law firm Knobbe Martens' San Diego office and chair of the firm’s biotech practice group. Follow his additional analysis and commentary here.]