In a landmark ruling, the High Court has found that a patent claiming a particular gene sequence is invalid. The decision in D’Arcy v Myriad Genetics Inc  has reformulated the approach to the question of what constitutes ‘patentable subject matter’ under Australian patent law, but what does it mean for the biotechnology industry and Australian patent law more broadly?
On 7 October 2015, all seven judges of the High Court overturned the unanimous decision of a rare five-judge bench of the Full Federal Court and held that an isolated nucleic acid, coding for a mutant BRCA 1 protein, was not a ‘patentable invention’ under the Australian Patents Act. This article highlights the key points from the High Court’s decision and suggests some implications of a wider test for patentability in Australia.
...in the mid-1990s when biotechnology companies engaged in a hotly-contested race to sequence genes. Myriad Genetics Inc (Myriad), a US-based biotechnology company was part of a research group that identified the gene sequences linked to breast and ovarian cancer, including the BRCA-1 genes. Myriad, among others, then applied to patent the gene sequences in the US and internationally, including in Australia (the Patent).
...in 2010 when Cancer Voices Australia and Yvonne D’Arcy (a breast cancer survivor) (the Applicants) commenced revocation proceedings in the Federal Court that challenged the first three claims of the Patent (out of 30 claims in total), which claimed isolated gene sequences coding for a mutant BRCA-1 protein (the Claims).
At first instance, Nicholas J of the Federal Court upheld the Claims, concluding that an ‘artificial state of affairs’ existed in the isolated form of the gene sequences and recognised Myriad’s ‘immense research and intellectual effort’.
Undeterred by the outcome, the Applicants appealed to the Full Federal Court but were again unsuccessful. The enlarged bench (that is, five judges instead of three) emphasised the artificiality of the isolated gene sequences which they held led to an economically useful result in treating breast and ovarian cancer.
In what appeared an uphill battle, the Applicants appealed to the High Court and were ultimately successful, securing a favourable decision from a unanimous High Court, thus overturning the decisions of six Federal Court judges.
The sole argument raised by the Applicants was that the Claims were not ‘patentable subject matter’. The test for patentable subject matter has, to date, been laid out by the High Court in the 1959 NRDC decision,requiring an invention to create ‘an artificial state of affairs’ and be economically useful.
In this decision, the High Court judges essentially reinvented the test for patentable subject matter, holding that the Full Federal Court’s application of the NRDC approach was ‘unduly narrow’ and concluding that the Claims in Myriad’s patent did not meet the threshold requirement. Despite arriving at the same conclusion, three separate judgements were delivered.
The majority enunciated the following points in their decision (French CJ, Kiefel, Bell and Keane JJ).
First, the majority held that the Claims were novel types of claims in a new field of invention and therefore required special consideration. As NRDC was never intended to be confined to a ‘verbal formula‘, the test for patentability needed to take into account policy considerations (departing from the position of the Full Federal Court) including moral and social implications, as well as the larger purpose of the Patents Act . Where a new class of claims was weighed down by negative policy implications, such as potentially stifling innovation or conflicting with the purpose of the Patents Act, the majority considered that it is not the role of the court but that of Parliament to decide the issue of patentability. This appears to suggest that if Parliament wishes for claims of this type to be patentable, this should be spelled out in the legislation.
Second, the majority found that the ‘essential element of the invention claimed’ was not the isolated nucleic acid itself, but the information in the genetic sequences it contained. Myriad did not create this information, rather it exists in the individual – the isolated nucleic acid contains the same information as that contained in the DNA of the person from whom it is isolated. Myriad had employed well-known processes of DNA extraction and isolation to discern the information and the information itself could therefore not be considered a manner of new manufacture.
Third, the boundaries of the monopoly were ‘elusive’ because the Claims were so broad as a result of the potentially large number of gene sequences that the patent covered. The risk of infringing the Claims would create a ’chilling effect‘ on innovation.
Fourth, their Honours reflected upon the approach that was adopted in Apotex  which held that methods of medical treatment were patentable in Australia, and concurred that rejecting the claims would not affect the coherence of the law.
Gageler and Nettle JJ, revived the threshold question of whether the Claims were inventive. Their Honours also focused on whether the essence of the claimed invention was a sufficient ‘distance from nature’ to lift the purported invention from a mere discovery, finding that it was not.
Gordon J’s reasoning did not focus on the broader policy considerations favoured by the majority, but rather on the steps that Myriad actually took leading to the claimed invention. In this context, Her Honour concluded that Myriad ‘did not create, make or alter any of the nucleic acid sequence’ and that Myriad’s sole contribution was working out facts that already existed. Her Honour also clearly set out the practical consequences of upholding the Claims – that a person carrying out a genetic test would not know until it was done whether or not the Claims were infringed; the person’s DNA may or may not contain the relevant BRCA1 mutations.
Technological advancements are a part of the biotechnology industry. In this regard, the decision provides some reprieve to patentees as the High Court (unlike the US Supreme Court) did not make a proscriptive statement about gene patents generally, but limited its decision to the specific Claims. The High Court stressed that the decision does not extend to the other claims of the Patent based on Myriad’s BRCA1 research (which were not pressed in this case), such as screening methods used to detect mutations and proteins embodying the mutations.
However, existing patents for genetic sequences may now be vulnerable to attack. Although IP Australia’s approach to date has been to allow such patents, it has issued a statement that the examination of patent applications claiming nucleic acid sequences is suspended while it considers the implications of the High Court decision.
Given that the High Court has concluded that gene patents are a matter for Parliament, we may see this issue gain more traction in the legislature.
One of the reasons that the Applicants commenced litigation was because the alleged cost of breast cancer screening in Australia was too high, as a result of Myriad’s monopoly and the exclusive licence awarded to Genetic Technologies Ltd, a Melbourne-based biotechnology company. It remains to be seen whether the Applicant’s victory will have any impact on the costs of breast cancer screening in Australia, especially in light of its limitation to the Claims in question and not the broader claims using the BRCA1 gene.
On the other hand, the decision creates uncertainty in respect of proposed claims for inventions in new fields of technology. It appears to require the Patent Office or courts to take into account questions of policy in determining patentability, but does not provide clarity on:
The High Court’s decision may well act as a catalyst for revocation actions claiming a lack of patentable subject matter in this field of technology. It may ultimately be up to Parliament to legislate in this area, as suggested by the High Court, to provide greater clarity.
  HCA 35.
 Under s18(1)(a) of the Patents Act 1990 (Cth), a claimed invention must be ‘a manner of manufacture’ within the meaning of section 6 of the Statute of Monopolies.
National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252.
D’Arcy v Myriad Genetics Inc  HCA 35 at  per French CJ, Kiefel, Bell and Keane JJ.
 Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd (2013) 253 CLR 284.
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