Patentable Subject Matter in Australia

On 7 October 2015, the High Court of Australia unanimously held that isolated nucleic acids are not a manner of manufacture under Australian law. 

This is somewhat surprising and overturns the previous unanimous decision of the Full Federal Court of Australia, which upheld the initial Federal Court judgement. The decisions of the Full Federal Court held that isolated nucleic acids are a manner of manufacture as an “an artificially created state of affairs in a field of economic endeavour” that are a result of human intervention.

The test for patentable subject matter in Australia has long been that set out in the National Research Development Corporation v Commissioner of Patents (“NRDC“) case (1959).  That is, patentable subject matter is an ‘artificially created state of affairs’ in a field of economic endeavour.  The Full Federal Court concluded that an isolated nucleic acid sequence involved human intervention and was therefore an artificially created state of affairs.  However, the High Court took a different approach and concluded that the sequence information content of isolated nucleic acids is not “made” by humans but is instead naturally-occurring.  According to the High Court, isolation was the only man-made aspect of the invention, which they held was not sufficient to constitute “an artificially created state of affairs” as required by NRDC.

In D’Arcy v Myriad Genetics, the High Court cautioned against a formulaic application of the principles in the NRDC case.  The question of whether a new class of invention is patentable should be decided on a case-by-case basis, having regard to 6 key factors:

  • Could patentability give rise to a large new field of monopoly protection with potentially negative effects on innovation?
  • Could patentability have chilling effects on activities beyond the exclusive rights granted to a patentee?
  • Would according patentability involve assessing important and conflicting public and private interests and purposes?
  • Would according patentability enhance or detract from the coherence of the law relating to patentability?
  • Is according patentability consistent with Australia’s obligations under international law and the patent laws of other countries?
  • Does according patentability involve law-making which should be done by the legislature?

The High Court decision clearly highlights that  isolated nucleic acids are not a manner of manufacture, and therefore are not patentable subject matter.  The Court criticised the characterisation of isolated nucleic acids as a class of artificial chemical compounds as “elevating form over substance”.  The Court considered that the information stored in the nucleic acids coding for mutant or polymorphic BRCA1 polypeptide was an essential element of the claims in issue and concluded that information was the same as the information contained in the DNA of a person from which the nucleic acids were isolated.  Unlike the corresponding US Supreme Court’s Myriad decision, there was no decision by the High Court that cDNA or other nucleic acids sufficiently altered  by human intervention would constitute patentable subject matter.  It remains to be seen how this decision is interpreted by the Australian Patent Office and the existing holders of Australian patents to isolated nucleic acid sequences.

D’Arcy v Myriad Genetics has implications for the definition of patentable subject matter in Australia. While NRDC remains a relevant precedent, satisfying the criteria in NRDC alone is now unlikely to make contentious subject matter patentable.  This includes inventions relating to other naturally occurring substances, as well as business methods and computer-implemented inventions.  This decision suggests that broader policy factors will also need to be considered.  Rather than clarifying the position, the refining of the NRDC test and the focus on the “substance” or “essential element” of the invention in the decision may introduce uncertainty as to the scope of “patentable subject matter” in Australia.

by Sarah Herbert

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