Patentability of genes in Australia  

The High Court is expected to deliver its much anticipated decision in D'Arcy v Myriad Genetics later this year determining whether isolated nucleic acid is patentable in Australia.

Ms D'Arcy's appeal from the Full Federal Court's decision to the High Court was heard over two days on 16-17 June 2015.  Our analysis of the Full Court's decision is available here.

The key issue for the High Court to determine is whether isolated nucleic acid is a manner of manufacture, a necessary requirement in order to constitute a patentable invention under Australian patent law.  The established test for determining whether a product is a manner of manufacture was set down by the High Court in National Research Development Corporation v Commissioner of Patents(1959) (NRDC).  In NRDC, the High Court held that a product is a manner of manufacture if it is an artificially created state of affairs with economic value. The question is whether the chemical, structuraland functional differences between naturally occurring nucleic acids and isolated nucleic acids are sufficient enough to render Myriad's claimed nucleic acids an "artificial state of affairs"?

In 2013, the US Supreme Court unanimously held in Association for Molecular Pathology v. Myriad Genetics, Inc. 569 US 12-398 (2013) that “a naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated.”

The High Court's decision in the Australian Myriad gene patent battle will provide clarity as to whether genes are patentable in Australia and whether greater protection for these molecules is afforded to pharma and biotech companies in Australia than currently provided in the US.

Does the Commonwealth have clean hands?

The Commonwealth continues its fight in the Federal Court of Australia to recover over $60 million in compensation from Sanofi-Aventis.  The Commonwealth's claim arises from reimbursements it paid to Sanofi under the PBS for its branded clopidogrel drugs during 2007 to 2010 while injunctions prevented Apotex's generic clopidogrel drugs from entering the market.  The injunctions, which were eventually determined by the Full Federal Court to have been wrongly granted when Sanofi's patent was invalidated, meant that the Commonwealth continued to pay more for Sanofi's clopidogrel products than it would have if Apotex's generic versions were available.  The Commonwealth is now claiming compensation pursuant to the undertakings as to damages provided by Sanofi as quid pro quo for its injunctive relief.  Apotex discontinued its claim for damages against Sanofi after reaching a settlement late last year.  

The payment of compensation pursuant to an undertaking as to damages is an equitable remedy and, as the equitable maxim goes, he who comes to equity must come with clean hands.  In a recent interlocutory decision of Justice Nicholas (Commonwealth of Australia v Sanofi-Aventis [2015] FCA 384), Sanofi was granted leave to amend its points of defence, allowing Sanofi to argue at trial that it would be unreasonable or inequitable to allow the Commonwealth's compensation claim in circumstances where Apotex's generic clopidogrel products would not have been PBS listed without infringing copyright Sanofi's product information.  Sanofi is expected to argue that if Apotex had unclean hands, they would also dirty the Commonwealth's.

The Commonwealth filed its claim for compensation in the Federal Court in April 2013 and a hearing date has not yet been fixed.