Patents for Genes in Australia and the USA

Judgments have recently been delivered in cases in Australia and the USA with different results in relation to the complex and sometimes emotive area of patents for genes.

In Cancer Voices Australia v Myriad Genetics Inc Nicholas J in the Federal Court of Australia in a judgment delivered on 15 February 2013 upheld a patent of Myriad Genetics for isolated DNA. In the United States, in Association for Molecular Pathology et al v Myriad Genetics Inc et al, the US Court of Appeals for the Federal Circuit in a judgment of the Court delivered by Justice Thomas held that the isolated DNA was not patentable.

The DNA in question represented a substantial medical breakthrough in testing for breast and ovarian cancer. As described by the US Court:

“Myriad discovered the precise location and sequence of what are now known as the BRCA1 and BRCA2 genes.  Mutations in these genes can dramatically increase an individual’s risk of developing breast and ovarian cancer….Before Myriad’s discovery of the BRCA1 and BRCA2 genes, scientists knew that heredity played a role in establishing a woman’s risk of developing breast and ovarian cancer, but they did not know which genes were associated with those cancers”.

Myriad used its discovery to develop medical tests, and filed patent applications for the isolated DNA.

The Patent Claims

The claims in the Myriad patents in the USA and Australia respectively are in similar, but not identical, terms and claim for isolated DNA. The claims in the US are briefer and are:

1. “An isolated DNA coding for a BRCA1 polypeptide, said polypeptide having the amino acid sequence set forth in SEQ ID No: 2”.
2. “The isolated DNA of claim 1, wherein said DNA has the nucleotide sequence set forth in SEQ ID No: 1”.

In both Australia and the USA the issue was, generally, whether isolated DNA, a naturally occurring gene, could be the subject of a patent. The legislation in the two countries, however, is not identical, and the questions to be answered are not necessarily the same. In an earlier decision in the US Supreme Court, the Myriad patent was upheld, but the case was referred for further argument. Justice Nicholas was aware that the US case was proceeding and in his judgment noted:

“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….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 from that in which patent legislation operates in this country…. Secondly, the evidence in the Myriad case was not the same as the evidence in the present case…at least in relation to the matter of covalent bonds…”

Manner of Manufacture

In Australia, the key issue to determine validity of the claims was whether they constitute patentable subject matter that is a manner of manufacture within the meaning of Section 6 of the Statute of Monopolies in accordance with Section 78(a) of the Patents Act 1990 (Cth). This somewhat quaint wording is also reflected in the definition of “invention” in Schedule 1 of the Patents Act which defines an invention to mean:

“…any manner of new manufacture the subject of letters patent and grant of privilege within Section 6 of the Statute of Monopolies, and includes an alleged invention”.

Nicholas J explains these concepts as follows:

“…the expressions ‘manner of manufacture’ and ‘manner of new manufacture’ are not employed in the Act to literally describe what subject matter may qualify for patent protection. Rather, they are expressions that bring into play principles and concepts which have been developed over many years to ensure that patent law keeps up with advances in industry and technology”.

Referring to the decision of the High Court of Australia in the NRDC case^[1] Nicholas J observed that:

“A product that consists of an artificially created state of affairs which has economic significance will constitute a ‘manner of manufacture’”.

Applying the principles in the NRDC case, Nicholas J found in relation to claims for isolated nucleic acid that:

“In the context of biological material, an artificial state of affairs may manifest itself in different ways. Physical properties of the naturally occurring material may have changed as a result of it having been isolated. But even if the physical properties of the material have not changed, the removal of the material from its natural environment and its separation from other cellular components may still give rise to what might reasonably be described as an artificial state of affairs”.

His Honour accordingly concluded that although “There is no doubt that naturally occurring DNA and RNA as they exist inside the cells of the human body cannot be the subject of a valid patent” the claims for isolated DNA and RNA that are “extracted from cells obtained from the human body and purged of other biological materials with which they were associated” are patentable subject matter.

Naturally Occurring Things

In the judgment of the US Supreme Court the key issue was whether the claims of the Myriad patent came within an exception to Section 101 of the US Patent Act, which permits a patent for:

“Whoever invents or discovers any new and useful…composition of matter, or any new and useful improvement thereof, may obtain a patent therefor…”

The exception, as explained in the judgment is:

“We have ‘long held that this provision contains an important implicit exception [:] Laws of nature, natural phenomena and abstract ideas are not patentable….We must apply this well‑established standard to determine whether Myriad’s patents claim any ‘new and useful…composition of matter’, …or instead claim naturally occurring phenomena”.

The judgment notes:

“It is undisputed that Myriad did not create or alter any of the genetic information encoded in the BRCA1 and BRCA2 gene. The location and order of the nucleotides existed in nature before Myriad found them. Nor did Myriad create or alter the genetic structure of DNA. Instead, Myriad’s principal contribution was uncovering the precise locations and genetic sequence of the BRCA1 and BRCA2 genes within chromosomes 17 and 13. The question is whether this renders the genes patentable.

To be sure, it found an important and useful gene, but separating that gene from its surrounding genetic material is not an act of invention.

Ground-breaking, innovative or even brilliant discovery does not by itself satisfy the…enquiry”.

The Supreme Court did go on to observe that it is important to note that the claims did not relate to any method, or to any new applications of the gene, or to the patentability of DNA in which alterations had been made to genetic code.

The CIE Report

A substantial contribution to the debate on gene patents in Australia has been made by the Centre for International Economics which in May released a comprehensive Report Economic Analysis of the Impact of Isolated Human Gene Patents.

The Report notes that there are varying views on the merits of isolated human gene patents and that critics are concerned about how they might limit the accessibility and inflate the price of healthcare and diagnostic services.

The key findings of the Report in relation to the economic impact of these patents are:

• Patent activity related to isolated human gene sequence patents has declined dramatically since the completion of the Human Genome Project in 2003.  Current patent activity focuses most on modified gene sequences or method only claims.
• Measurable economic impacts associated with isolated human gene sequence patents are small in terms of royalty and fee income that is attributable to the patent.
• The real value in patents lies in their role in incentivising innovation and the public-private partnerships that are required to bring new human gene based medicines and diagnostics to market that ultimately improve health outcomes.
• Reflecting changes in patent activity, increasingly the patents involved are those that are not isolated human gene sequence patents.

The Future in Australia

The judgment of Nicholas J is on appeal to the Full Federal Court of Australia. Accordingly, it remains to be seen whether isolation of a gene may be sufficient to render the gene the subject of a patent in Australia or whether, notwithstanding the observations of Nicholas J, the Full Court may follow reasoning similar to the US Supreme Court.