There is extraordinary complexity and optimization underlying even comparatively ‘simple’ organisms. These powerful biological products and processes provide a great opportunity for humans; developing, building on and incorporating these naturally occurring solutions in the form of biotechnology has the potential to improve lives, increase lifespan and treat disease.

This Biotechnology can result in intellectual property of substantial value; however, the ethical distinction between a true invention in this field and the exploitation of some existing form of life per se has long been debated. While the importance of defining patentable biotechnology is widely accepted, the manner in which this occurs differs considerably between jurisdictions. In this context, there have recently been significant developments in the patentability of inventions relating to biological material and medical treatment. Here we provide a summary of the latest position in Australia and New Zealand, and an analysis of the comparison between this and the position of the United States and Europe.

Australia and New Zealand

Legislation in Australia and New Zealand defines patentable subject matter as any ‘manner of manufacture’ according to the Statute of Monopolies. In both jurisdictions, the Australian High Court judgement of National Research Development Corporation v Commissioner of Patents1 (‘NRDC‘) is authority for what constitutes a manner of manufacture. As per NRDC, patentable subject matter is any ‘artificial state of affairs’ with ‘economic utility’, with a possible exception for where this would be ‘generally inconvenient’. This definition has been considered to allow a flexible judicial approach to the definition of patentable subject matter, suitable to deal with the changing nature of technology.

It is well-established practice in Australia and New Zealand that isolated biological material is patentable subject matter.‘Isolated’ is interpreted broadly as a state requiring human intervention. So, for example, pure cultures of microorganisms, and purified antibodies or nucleic acids, are patentable in Australia and New Zealand. This approach has been the subject of legislative consideration in recent years, with an Australian Law Reform Commission (ALRC) report recommending against parliamentary intervention to alter it. A further Private Member’s Bill  which sought to specifically exclude from patentability biological material that is ‘substantially identical’ to the material as it occurs naturally (even if it is in isolated or purified form) was not passed.

However, the patentability of isolated nucleic acids is currently being challenged in the courts in a series of Australian cases involving Myriad Genetics Inc (Myriad).

In Cancer Voices Australia v Myriad Genetics Inc2 (‘Cancer Voices‘), the Federal Court of Australia determined the validity of three claims, all directed to isolated nucleic acids encoding variants of the human gene BRCA1, which variants are associated with an increased risk of breast and ovarian cancer. In D’Arcy v Myriad Genetics Inc3 (‘D’Arcy‘) an appeal from Cancer Voices focusing on a single claim was decided by the Full Federal Court. Both the Federal Court and the Full Court accepted that human intervention is necessary to produce an isolated nucleic acid, and it is therefore an artificial state of affairs, as per NRDC. Since the ‘economic utility’ of the claim was not in dispute, it was determined at first instance, and unanimously upheld on appeal, that nucleic acids in isolated form are patentable subject matter under Australian law. Notably, as per D’Arcy, arguments that an isolated BRCA1 nucleic acid encodes the same information as the corresponding native human gene were not considered relevant, since the claim was directed tothe isolated nucleic acid itself, with its particular chemical, structural, and functional properties, not to the information embodied in its nucleotide sequence.

It has recently been announced that an appeal to the High Court of Australia fromD’Arcywill be heard,and so Australia will soon have High Court authority on this issue. The outcome of this greatly anticipated case will presumably have implications for isolated biological materials more broadly, and so will either settle or overturn long-established practice in Australia.

Under the TRIPS agreement, an international agreement overseen by the World Trade Organisation to ensure minimum standards of IP protection in member states, member states may exclude methods of medical treatment from patentability; Australia is one of the jurisdictions internationally which has not done so. In this regard, Australian practice has evolved substantially in the last 50 years. In Joos v Commissioner of Patents4 the High Court determined that a ‘cosmetic’ treatment of hair and nails was patentable, overturning the previous practice disallowing patents for any form of treatment of the human body. Subsequently, inAnaesthetic Supplies Pty Ltd v Rescare Ltd5 (‘Rescare’) the Full Federal Court determined that there was no legal basis for allowing cosmetic treatment but not therapeutic treatment of the human body to be patented, and this was affirmed inBristol‐Myers Squibb Company v FH Faulding & Co. Ltd.6 The recent High Court decision of Apotex Pty Ltd v Sanofi‐Aventis Australia Pty Ltd7 (‘Apotex’) confirmed that methods of medical treatment are patentable subject matter in Australia, and so this issue is now judicially settled.

In contrast to practice in Australia, New Zealand case law has evolved to consider methods of medical treatment as ineligible for patenting. In Wellcome Foundation Ltd v Commissioner of Patents8 (‘Wellcome’), the Court of Appeal held that patents for methods of medical treatment were not allowable in New Zealand on ethical grounds, finding that this should be considered ‘generally inconvenient’ and that such inventions were therefore not a manner of manufacture according to the Statute. In Pharmaceutical Management Agency Ltd v Commissioner of Patents9(‘Pharmac’) the judges expressed doubt that the generally inconvenient provision should be relied upon by the judiciary, but in Pfizer Inc. v The Commissioner of Patents10 the Court of Appeal rejected Pharmac on this issue and affirmed theWellcome approach. The exclusion of methods of medical treatment from patentability has recently been given statutory basis under section 16 of the New Zealand Patents Act 2013.However, ‘Swiss-style’ patent claims (e.g. those in the form “The use of compound X in the manufacture of a medicament for the treatment of disease Y”) and those directed to in vitro (e.g. diagnostic) techniques are allowable in New Zealand, as per Pharmac, as are those directed to purely cosmetic methods.

United States

Similar to Australia and New Zealand, US patent legislation  provides a broad statutory definition of patentable eligible subject matter, and specific practice has been determined by case law. Several recent Supreme Court cases have established non-statutory exclusions from patentability, which has had major implications for biotechnology.

As in Australia, the patent-eligibility of isolated nucleic acids was tested in the US by a series of cases involving Myriad.At first instance,11 in contrast to Australia, the district court rejected Myriad’s claims to isolated BRCA genes under the rationale that such material is not ‘markedly different’ from corresponding material as it exists ‘in nature’. However, on appeal to the Federal Circuit, in a minority judgement (2:1) it was held that an isolated nucleic acid is markedly different to natural material.12The Supreme Court referred the case back to the Federal Circuit for consideration in view of its decision in Mayo (see below); in response an almost identical ruling was issued.13 Finally, on appeal, the Supreme Court unanimously reversed the ruling, and held that an isolated nucleic acid with identical sequence to a human gene is not patentable subject matter (although cDNA is patentable).14

In Mayo Collaborative Services v Prometheus Laboratories Inc15 , referred to above, the US Supreme Court assessed a patent claim to a method involving monitoring levels of a drug (6-thioguanine) in a patient’s blood, and using this information to determine whether a higher or lower dose of the drug was required for effective treatment of a disease (an immune-mediated gastrointestinal disorder). It was held that this was a claim to a ‘natural law’, i.e. the human body’s metabolism of the drug, and that such subject matter is excluded from patentability.

The Mayo and US Myriad decisions have had major implications for biotechnology patents in the US, and (in conjunction with Alice Corporation Pty Ltd CLS Bank International 134 S Ct 2347 (2014) dealing with software patents) have led to a detailed review of practice relating to patentable subject matter by the United States Patent and Trade Marks Office (USPTO). This process is ongoing, with ‘interim guidance’ released. Meanwhile, inventors and IP professionals are dealing with a substantial lack of certainty regarding both existing US biotechnology patents, and the prosecution of new applications. Notably, however, in the interim guidance it has been clarified that there is no broad exclusion of the patentability of methods of medical treatment in the US; so, for example, a claim to therapeutic treatment of a human using a biological compound remains patentable subject matter in the US, even if the compound itself is not.

Europe 

Compared to the other jurisdictions discussed here, provisions within European legislation regarding patentable subject matter are more detailed. Under article 53 of the European Patent Convention, ‘methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practised on the human or animal body’ are excluded from patentability (but not products for use in these methods). Meanwhile, under rule 27 in relation to article 52, ‘biological material which is isolated from its natural environment or produced by means of a technical process even if it previously occurred in nature’, is patentable subject matter.

Conclusions 

In summary, recent developments in Australia and New Zealand have consolidated practice relating to the patentability of subject matter in the life sciences; however, the pending Australian High Court appeal from Myriad could potentially overturn this with respect to isolated biological material. In the US, newly defined non-statutory exclusions have placed biotechnology in a state of considerable uncertainty. In comparison, the clear statutory provisions of the European Patent Convention may seem appealing. It is notable then, that the development of more detailed definitions of patentable subject matter within legislation has been considered and so far rejected in Australia, with an Industrial Property Advisory Committee (IPAC) report favouring the present approach, and suggesting that specific legislative provisions ‘would be likely to prove a very slow, blunt and inefficient instrument’.