D'Arcy v. Myriad Genetics Inc & Anor [2015] HCA 35

The High Court of Australia today handed down its decision in D’Arcy v Myriad, deciding once and for all that isolated nucleic acids do not define patent-eligible subject matter in Australia.

Following a five-judge unanimous decision of the Full Federal Court to allow Myriad’s claims to isolated genetic material, the High Court granted Ms D’Arcy Special Leave to appeal the decision on the grounds that the Full Court erred in its finding that isolated nucleic acids define a manner of manufacture within the meaning of s 6 of the Statute of Monopolies, as required by section 18(1)(a) of the Patents Act 1990 ("the Act"). We refer you to our articles of 5 September 2014 and 13 February 2015 for a more detailed overview of these decisions.

As foreshadowed in our article of 16 June 2015, the High Court appears to have confined its decision specifically to the patentability of the claims in suit, directed to isolated nucleic acids, including cDNA. The unanimous decision was delivered in three separate judgements, the majority stating that the Court “is not concerned in this appeal with "gene patenting" generally, but whether the invention as claimed in Claims 1 to 3 [of Australian Patent No. 686004, owned by Myriad Genetics] falls within established applications of the concept of manner of manufacture”.

The test for “manner of manufacture” was defined by the High Court in National Research Development Corporation v Commissioner of Patents (NRDC), and requires that the claimed invention involves an artificially created state of affairs in a field of economic utility.

The key issue before the High Court was whether isolated nucleic acids constitute an artificially created state of affairs. In this regard, the majority (French CJ, Kiefel, Bell and Keane JJ) set the tone of the judgment at [6], stating:

As appears from s 6 of the Statute of Monopolies, an invention is something which involves "making". It must reside in something. It may be a product. It may be a process. It may be an outcome which can be characterised, in the language of NRDC, as an "artificially created state of affairs". Whatever it is, it must be something brought about by human action. The requirement, in each claim, that the sequence in the isolate bear specified mutations or polymorphisms raises the same problem in a particular way. Satisfaction of that integer depends upon a characteristic of the human being from whom the nucleic acid is isolated, a characteristic which is not shared by all human beings. It has nothing to do with the person who isolates the nucleic acid bearing the mutant sequence.

In reaching their decision, the majority rejected the reasoning of the Full Federal Court that isolated nucleic acids should not be treated differently to any other claim to a chemical compound, stating at [88]:

Identification of the subject matter of the claims as a class of chemical compounds is the premise upon which the Full Court's conclusion is based. It is a premise which, with respect, elevates form over substance to the detriment of the developmental function entrusted to the Court as explained in NRDC and reflected in the continuing use of the "manner of manufacture" formula in s 18(1)(a) of the Act.

The majority accepted the argument by the Appellant that none of the chemical, structural or functional differences between isolated nucleic acids and nucleic acids in the cellular environment play any part in the definition of the invention as claimed. The Court considered that the claims at issue did not relate to an artificially created state of affairs because the information stored in the sequence of nucleotides was an essential element of the invention as claimed, and that information is the same information as that contained in the DNA of the person from which the nucleic acid was isolated. The majority also extended this reasoning to cDNA on the basis that, although synthesised, cDNA replicates a naturally occurring sequence of exons.

The High Court’s decision marks a dramatic departure from the Australian Parliament’s position on “gene patents” in recent years. The Act only expressly excludes from patentability “human beings and biological processes for their generation”, and in 2010 the Patent Amendment (Human Genes and Biological Materials) Bill 2010, which sought to exclude not only DNA and RNA, but all biological entities from patentability, failed to pass after the Senate Legal and Constitutional Affairs Legislation Committee (SLCALC) recommended against the Bill because:

[The] proposed amendments in the Bill, which are focused on addressing a specific issue, could have a large number of unintended consequences across the entire patent system with indeterminate impacts on a range of industries and sectors.

The Australian Law Reform Commission (ALRC) also issued a report on gene patenting in 2004, in which it recommended that changes to the patentability of genetic materials were not necessary at that time. A number of other reports have emerged in recent years addressing the issue of gene patenting and rejecting the need for legislative reform.

Notably, there was no explicit exclusion from patentability of genetic material in the otherwise wide-ranging reforms to the Act introduced by the recent “Raising the Bar” amendments.

In considering the relevance of the legislative history to the issue at hand, the majority stated at [7] that:

The proposition that a broad statutory concept applies to a new class of case on the boundaries of existing judicial development of that concept requires consideration of the limits of judicial law-making inherent in common law methodology. Where an affirmative application of the concept is likely to result in the creation of important rights as against the world, to involve far-reaching questions of public policy and to affect the balance of important conflicting interests, the question must be asked whether that application is best left for legislative determination. The patentability of nucleotide sequences derived from human DNA is in that category. The inherent patentability of the invention as claimed would powerfully imply patentability of any claim for an isolated nucleic acid coding for a specified polypeptide.

The High Court majority considered that the legislative history did not imply that inventions relating to isolated nucleic acids coding for particular polypeptides were necessarily patentable, and that judicial consideration on a case-by-case basis of whether the claimed invention involves an artificially created state of affairs is required.

Today’s decision brings Australia’s position on isolated DNA and RNA in line with that of the United States, while representing a marked deviation from major trading partners such as Europe and the US on the issue of patentability of cDNA.