This is an update to our post last week on “The Thorny Problem of Patentable Eligible Subject Matter: Australia.” Today, September 5, the Full Court of the Federal Court of Australia (Full Court) handed down its decision in Yvonne D’Arcy v Myriad Genetics Inc, unanimously holding that isolated DNA and RNA are patent eligible subject matter.

The case involved Australian Patent No 686004 (Patent) covering the BRCA1 gene. Claim 1 recites:

An isolated nucleic acid coding for a mutant or polymorphic BRCA1 polypeptide, said nucleic acid containing in comparison to the BRCA1 polypeptide encoding sequence set forth in SEQ.ID No:1 one or more mutations or polymorphisms selected from the mutations set forth in Tables 12, 12A and 14 and the polymorphisms set forth in Tables 18 and 19.

The key issue for the Full Court was whether the claimed isolated nucleic acids, including isolated DNA and RNA, constituted a “manner of manufacture” under section 18(1)(a) of the Patents Act (1990) (Act) which provides:

… an invention is a patentable invention for the purposes of a standard patent if the invention, so far as claimed in any claim.

(a) is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies; and (b) when compared with the prior art base as it existed before the priority date of that claim: (i) is novel; and (ii) involves an inventive step; and (c) is useful; and (d) was not secretly used in the patent area before the priority date of that claim by, or on behalf of, or with the authority of, the patentee or nominated person or the patentee’s or nominated person’s predecessor in title to the invention.

At first instance, Justice Nicholas found that the Patent valid holding that the claimed invention constituted a “manner of manufacture.” The Federal Court of Australia dismissed the application to revoke the patent. The Full Court agreed with Justice Nicholas finding that the Patent was valid and dismissed the appeal. The Full Court confirmed the test set out in National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252 (NRDC) for determining whether or not an invention constitutes a manner of manufacture. Specifically, according to the test, an invention is a manner of manufacture if it resulted in an artificial state of affairs providing a new and useful effect that is of economic significance. In concluding its decision, the Full Court stated:

This case is not about the wisdom of the patent system. It is about the application of Australian patent law, as set out in the Act and as developed by the courts since the Statute of Monopolies.

It is not about whether, for policy or moral or social reasons, patents for gene sequences should be excluded from patentability. That has been considered by the ALRC and by Parliament and has not occurred. It is not a matter for the court, but for Parliament to decide. Parliament has considered the question of the patentability of gene sequences and has chosen not to exclude them but to make amendments to the Act to address, in part, the balance between the benefits of the patent system and the incentive thereby created, and the restriction on, for example, subsequent research.

Interestingly, the Full Court had some strong criticism of the U.S. Supreme Court’s decision in Association for Molecular Pathology v. Myriad Genetics, Inc. stating:

The U.S. Supreme Court rejected the claim over isolated nucleic acids for much the same reasons as those pressed by the applicant in this case. It is difficult to reconcile that Court’s endorsement of the reasoning in Chakrabarty, with its rejection of isolated nucleic acid as eligible for patentability. With respect, the Supreme Court’s emphasis on the similarity of ‘the location and order of the nucleotides’ existing within the nucleic acid in nature before Myriad found them is misplaced. It is the chemical changes in the isolated nucleic acid which are of critical importance, as this is what distinguishes the product as artificial and economically useful.

The fact that, hypothetically, if the isolated DNA sequence were replaced into the cell it would express the same proteins is irrelevant. Following Chakrabarty and NRDC, the isolated nucleic acid has ‘markedly different characteristics from any found in nature;’ Myriad did not merely ‘separate that gene from its surrounding genetic material.’ It should make no difference that in  Chakrabarty there was an “addition” (of the plasmids) to the natural product (the bacterium); this is not the appropriate test. Myriad’s claim, properly considered is not, as the U.S. Supreme Court considered, concerned ‘primarily with the information contained in the genetic sequence [rather than]with the specific chemical composition of a particular molecule.’

The reasoning of Lourie and Moore JJ of the Federal Circuit is persuasive. It accords with the High Court’s reasoning in NRDS and Microcell. The U.S. Supreme Court accepted that cDNA is patentable. It rejected the isolated nucleic acid of claim 1 because it accepted wrongly, with respect, that the isolated nucleic acid is a “product of nature.” In any event, that exclusion is not in accordance with the principles of patent law in Australia and has been specifically rejected as a reason for exclusion in NRDC.