News from Abroad: Australian High Court Has Ruled in Myriad Gene Patent Case

McDonnell Boehnen Hulbert & Berghoff LLP

[author: Karen Sinclair]

The Australian High Court yesterday unanimously overturned six lower court judges and dismissed some very careful reasoning to not only follow the U.S. Supreme Court in invalidating claims to the BRCA1 and 2 gene sequences, but also to go further to rule out the patent-eligibility of cDNA.  The Court bought the same 'substance over form' argument that was successful at the U.S. Supreme Court, but has heavily overlaid matters of public policy on the law to come to its decision.

The summary of the decision overwrites the application of the seminal 1959 Australian decision in NRDC as follows:

'This Court in National Research Development Corporation v Commissioner of Patents("NRDC") held that the terminology of "manner of manufacture" taken from s 6 of the Statute of Monopolies was to be treated as a concept for case-by-case development13. It thereby mandated a common law methodology for its application. It did not confine that methodology to the use of any verbal formula in lieu of "manner of manufacture". Nor, in the case of a new class of claim, did the decision of the Court in NRDC preclude consideration of policy factors informed by the purpose of the Act and considerations of coherence in the law.' (emphasis added)

The lead decision comments:

Identification of the subject matter of the claims as a class of chemical compounds is the premise upon which the Full Court's conclusion is based. It is a premise which, with respect, elevates form over substance to the detriment of the developmental function entrusted to the Court as explained in NRDC and reflected in the continuing use of the "manner of manufacture" formula in s 18(1)(a) of the Act.

The code in the invention as claimed refers to the sequence of nucleotides which, in a cellular environment, can ultimately be translated into the BRCA1 polypeptide. That sequence can properly be described as "information", the ordinary meaning of which includes125:

"Without necessary relation to a recipient: that which inheres in or is represented by a particular arrangement, sequence, or set, that may be stored in, transferred by, and responded to by inanimate things".

Used in that sense, the information stored in the sequence of nucleotides coding for the mutated or polymorphic BRCA1 polypeptide is the same information as that contained in the DNA of the person from which the nucleic acid was isolated. It is the existence of that information which is an essential element of the invention as claimed. The product is the medium in which that information resides. That characteristic also attaches to cDNA, covered by the claims, which is synthesised but replicates a naturally occurring sequence of exons.

Some commentators are of the view that policy considerations have been allowed to influence the bench.  The Australian Government's Department of Health has made anti-patent noises in the past, and of course, the Australian Minister for Trade just had a significant win against the US in the TPP negotiations in respect of the US contention that data protection for biologics needed to be mandated at 12 years.  The affordability of medical care in this country has become a significant political focus, and this, despite the new Prime Minister's focus on innovation and science, may hold medical science back in this country.

In addition, there's a passage that strongly infers that leaving  Government to legislate on patent-eligibility is a thing of the past in Australia:

'The proposition that a broad statutory concept applies to a new class of case on the boundaries of existing judicial development of that concept requires consideration of the limits of judicial law-making inherent in common law methodology.  Where an affirmative application of the concept is likely to result in the creation of important rights as against the world, to involve far-reaching questions of public policy and to affect the balance of important conflicting interests, the question must be asked whether that application is best left for legislative determination.'

The Court appears to go on to answer its own 'question' in a long exposition on whether it is the courts or the parliament which should decide patent-eligibility, opining:

In Australia, the Parliament has left it to the courts to carry out a case-by-case development of a broad statutory concept according to the common law method in a representative democracy.

Given the history of this matter, and the long debate in Australia including in public senate hearings and in government commissioned reports on so-called 'gene patenting', this is a surprising outcome.

The full decision can be found here.

Ms. Sinclair is a Principal at Watermark.

This article was reprinted with the author's permission.

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McDonnell Boehnen Hulbert & Berghoff LLP

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