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By guest blogger Doug Calhoun

In a decision: delivered on 15 February 2013, nearly a year after the oral hearing, Federal Court of Australia Justice John Nicholas held that the Myriad Genetics patent for “An isolated nucleic acid coding for a mutant or polymorphic BRCA1 polypeptide … ” was an invention under Australian patent law.

The case was solely about whether or not the isolated nucleic acids claimed were “manners of manufacture” as required under the Australian Patents Act 1990. It was not about policy issues, such as access to medicines, or what the law ought to be in future. I discussed these issues in an earlier post:

The governing case on the interpretation of the words ”manner of manufacture” in Australia (and in New Zealand) is the 1959 decision of the High Court (Australia’s highest appeal court) in the case of National Research and Development Corporation v Commissioner of Patents (NRDC). NRDC was about a patent application that claimed a process for selectively eradicating weeds using a herbicide of known chemical composition.

In reaching its decision that the process claims were indeed patentable, the High Court took an innovative approach.

The words “manner of manufacture” originated in the 1623 English Statute of Monopolies.

The High Court observed that the intention of patent legislation is to protect inventions – and what would constitute an invention in 1959 was well beyond the imagination of the English Parliament of the 17th century. In order to interpret the words in a contemporary context they should not be given a literal meaning – rather they should be interpreted to ask the question: “is this an artificially created state of affairs in an economic field?”

Justice Nicholas reviewed the NRDC decision and then considered how it should be applied in this case:

86 There are three important points that emerge from these passages. First, the Court identified the question that must be addressed for the purpose of determining whether or not subject matter is patentable, viz. “[i]s this a proper subject of letters patent according to the principles which have been developed for the application of s. 6 of the Statute of Monopolies?” Secondly, this question involves a conceptual inquiry as opposed to a consideration of the etymology of the expression “manner of manufacture”. Thirdly, the concept of manner of manufacture has a “broad sweep” intended to encourage developments that are by their nature often unpredictable.

 

88 It is apparent from this passage that a product that consists of an artificially created state of affairs which has economic significance will constitute a “manner of manufacture”.

103 There are two further points to be made concerning NRDC. First, it is important to note that NRDC does not require the Court to ask whether a composition of matter is a “product of nature” for the purpose of deciding whether or not it constitutes patentable subject matter. NRDC recognises that it may be unhelpful to approach the problem in this way. I think this is especially so in the field of biotechnology in which micro-organisms play a critical role in the development, manufacture and use of diagnostic and therapeutic products and techniques. And second, NRDC does not require the Court to ask whether a micro-organism is “markedly different” to something that already exists in nature for the purpose of deciding whether it constitutes patentable subject matter (cf. Chakrabarty at 310).


Justice Nicholas observed what the claims did not cover, in spite of the submissions of Cancer Voices to the contrary:

76 First, the disputed claims are not to genetic information per se. They claim tangible materials. Much emphasis was placed by the applicants [Cancer voices] upon the informational character of DNA as a storehouse of genetic information. But the disputed claims are not to information as such. They could never be infringed by someone who merely reproduced a DNA sequence in written or digitised form.

77 Secondly, because each of the claims is to an isolated chemical composition, naturally occurring DNA and RNA as they exist in cells are not within the scope of any of the disputed claims and could never, at least not until they had been isolated, result in the infringement of any such claim.

The substance of the decision is set out in four paragraphs:

106 Accordingly, the issue in this case turns upon whether an isolated nucleic acid, which may be assumed to have precisely the same chemical composition and structure as that found in the cells of some human beings, constitutes an artificial state of affairs in the sense those words should be understood in the present context. There are three considerations which lead me to think that it does.

107 First, in explaining the concept of manner of manufacture as one involving the creation of an artificial state of affairs, it is apparent that the High Court in NRDC was deliberate in its use of very expansive language. Not only did the High Court emphasise the “broad sweep” of the concept involved, it also made clear that metaphorical analysis may not be helpful in determining whether or not something constitutes patentable subject matter.

108 Secondly, in the absence of human intervention, naturally occurring nucleic acid does not exist outside the cell, and “isolated” nucleic acid does not exist inside the cell. Isolated nucleic acid is the product of human intervention involving the extraction and purification of the nucleic acid found in the cell. Extraction of nucleic acid requires human intervention that necessarily results in the rupture of the cell membrane and the physical destruction of the cell itself. And purification of the extracted nucleic acid requires human intervention that results in the removal of other materials which were also originally present in the cell. It is only after both these steps are performed that the extracted and purified product may be properly described as “isolated” in the sense that word is used in the disputed claims.

109 Thirdly, as Dann’s Patent demonstrates, the isolation of a particular microorganism may require immense research and intellectual effort. In that case, it was only as a result of an intensive research effort that the isolated micro-organism in question could be made available for use in the manufacture of the new antibiotic.It was fortuitous for the patentee that it was its employees who were first to isolate the new micro-organism and first to deploy it in the manufacture of the new drug. That will not always be so. It would lead to very odd results if a person whose skill and effort culminated in the isolation of a micro-organism (a fortiori, an isolated DNA sequence) could not be independently rewarded by the grant of a patent because the isolated micro-organism, no matter how practically useful or economically significant, was held to be inherently non-patentable. In my view it would be a mistake, and inconsistent with the purposes of the Act, not to give full effect in such situations to the broad language used by the High Court in NRDC.


Justice Nicholas, after completing the reasons for his decision also referred to the various reviews conducted in Australia and the enquiry and bill not passed in the Australian Senate. He pointed out that none of these had any bearing on his decision – he had to interpret patent law as it now existed.

The applicants who sought to revoke the Myriad Australian patent have 21 days to appeal the decision.

Justice Nicholas also commented upon the US cases considering the validity of the US patents equivalent to the one he was considering:

134 On 30 November 2012, the US Supreme Court announced that it would hear an appeal in the Myriad case. The US law in relation to the patentability is therefore not likely to be settled until the Supreme Court reaches it own decision on the issue.

135 In any event, it seems to me that the Myriad decision does not provide any direct assistance to either side in the present case. I say this for two reasons. First, the law in Australia is different. I must apply the law as explained in NRDC. It must also be recognised, especially as the Myriad case heads to the US Supreme Court, that the constitutional setting in which patent legislation operates in the US is quite different to that in which patent legislation operates in this country: Grain Pool of Western Australia v Commonwealth of Australia (2000) 202 CLR 479 at paras [28]-[32]. Secondly, the evidence in the Myriad case was not the same as the evidence in the present case. And at least in relation to the matter of covalent bonds, I have taken a different view of the facts to that taken by Judge Lourie.

For more on the first and second US Federal Court of Appeal Cases see my earlier posts here and here:

The date set for the oral hearing before the US Supreme Court is 15 April 2013. A decision can be expected by the end of June 2013 when the court’s 2013 term ends.

And in an interesting twist, if the US Supreme Court says “no” to gene patents, will the Australian negotiators of the Trans Pacific Partnership agreement insist on a change to the IP chapter so that isolated nucleic acids are eligible for patents in the US?