In a decision1 published today, the Full Federal Court of Australia has dismissed an Appeal against the Federal Court decision2of Justice Nicholas and thereby affirmed the patent eligibility of isolated nucleic acids.
The Appeal was heard by a specially convened panel of five (5) Federal Court judges consisting of Chief Justice Allsop and Justices Dowsett, Kenny, Bennett & Middleton.
The Appellant submitted that isolated nucleic acid is not materially different to cellular nucleic acid and that naturally occurring DNA and RNA, even in isolated form, are products of nature that cannot be a “manner of manufacture” and hence cannot form the basis of a valid patent. This argument failed to convince the Full Federal Court that isolated nucleic acids are not patentable subject matter.
In dismissing the Appeal, the Full Federal Court stressed that its role was not to determine whether “gene patenting” is wise, ethical or socially responsible but to determine whether claims to isolated nucleic acids are proper subject matter for Letters Patent under Australian law.
The Full Federal Court generally affirmed the reasoning of Nicholas J that claims to isolated nucleic acids are indeed directed to an artificial state of affairs providing a new and useful effect of economic significance and firmly within the meaning of a “manner of manufacture” as set out in the landmark NRDC decision3. The only matter where the Full Federal Court differed from Nicholas J was the veracity of the “broken chemical bonds” argument in support of a chemical or structural difference between isolated nucleic acids and nucleic acids in their natural state. Nicholas J had dismissed this argument in the context of the decision of Lourie J in the corresponding US Federal Circuit decision4. Although this issue was not determinative in either the decision of Nicholas J or the Appeal, the Full Federal Court differed from Nicholas J on this point and suggested that indeed this constituted a real structural difference between isolated nucleic acids and cellular nucleic acids.
This issue was also part of a larger discussion regarding the corresponding litigation in the USA, where in its Myriad decision5, the US Supreme Court ultimately decided that only cDNA was patent eligible. While mindful of the differences between US and Australian law, the Full Federal Court was highly critical of the Supreme Court Myriad decision, stating that “The US Supreme Court rejected the claim over isolated nucleic acids for much the same reasons as those pressed by the appellant 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”.
This Decision by the Full Federal Court of Australia maintains the status quo in Australia, namely that isolated nucleic acids and other molecules that have naturally-occurring counterparts are indeed a manner of manufacture and hence patentable subject matter. This decision could ultimately be appealed to the High Court of Australia but only if the High Court grants special leave to appeal. In the meantime, Australia remains a stable and predictable jurisdiction for the biotechnology and related industries. This is in sharp contrast to the USA where the Supreme Court’sMyriad decision has led to sudden change and great uncertainty, particularly in relation to how the United States Patent Office examines patent applications directed to isolated nucleic acids, proteins and other molecules that have naturally-occurring counterparts.