In D'Arcy v Myriad Genetics Inc [2015] HCA 35 (D'Arcy v Myriad) the High Court of Australia has unanimously held (by way of three separate judgments: majority decision (French CJ, Kiefel, Bell, and Keane JJ) and two concurring decisions (Gageler and Nettle JJ; Gordon J) that claims to isolated nucleic acids coding for mutations or polymorphisms of the BRCA1 gene, do not meet the requirements of a 'manner of manufacture' within the meaning of the Patents Act 1990 (Cth) (Act) and are therefore not a patentable invention in Australia.

The High Court's decision overturned Justice Nicholas' decision at first instance, and a unanimous decision of an expanded bench of five judges of the Full Federal Court of Australia. The earlier decisions had held that the isolated nucleic acid sequences in question were indeed 'manners of manufacture' on the basis that they were 'artificially created states of affairs' providing 'economic benefit', following the criteria identified in the longstanding High Court authority on patentable subject matter in Australia,National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252 (NRDC).

In D'Arcy v Myriad, the majority of the High Court rejected the primary judge and the Full Court's application of the principles propounded in NRDC, stating that they rested upon an unduly narrow characterisation of the effect of that decision. The majority held that, properly characterised in accordance with substance rather than form, the subject matter of Myriad's claims was to the 'genetic information' of the nucleotide sequences which coded for mutated or polymorphic BRCA1 polypeptides, rather than to classes of chemical compounds. Based on this construction, their Honours held the claims in issue were not within the established boundaries of the concept of a 'manner of manufacture' as developed through case law.

The majority held that where such a new class of claim involves a significant new application or extension of the concept of 'manner of manufacture', the following factors, including those derived from the NRDC decision (being the first two factors listed below), may be relevant to determining whether that concept should be extended by judicial decision to include that class of claim, including:

  1. Whether the invention as claimed is for a product made, or a process producing an outcome as a result of human action.
  2. Whether the invention as claimed has economic utility.
  3. Whether patentability would be consistent with the purposes of the Act; in particular:
    • Whether the claimed invention could give rise to a large new field of monopoly protection with potentially negative effects on innovation
    • Whether the claimed invention could have chilling effects on activities beyond those within the formal scope of the claims, and
    • Whether according patentability would require the court to assess important and conflicting public and private interests and purposes.
  4. Whether according patentability to the claimed invention would enhance or detract from coherence of the law relating to inherent patentability.
  5. Factors relevant to Australia's place in the international community:
    • Australia's international legal obligations, and
    • The patent laws of other countries.
  6. Whether according patentability would involve law-making of a kind which should be done by the legislature.

The majority noted with respect to the first factor that the genetic information was not modified by mere isolation and was not 'made' by human action.

The majority of the High Court held that, in the circumstances, the above wider considerations militated against characterising the claimed invention as a 'manner of manufacture.' The majority stated that if the 'claims are properly the subject of a patent, the patent could be infringed without the infringer being aware of that fact. That consequence coupled with the very large, indeed unquantified size of the relevant class of isolated nucleic acids, all of which bear the requisite information, raises the risk of a chilling effect upon legitimate innovative activity outside the formal boundaries of the monopoly and risks creating a penumbral de facto monopoly impeding the activities of legitimate improvers and inventors.'

The majority held that to include the claimed invention within the scope of the concept of 'manner of manufacture' would involve an extension of that concept, which is a matter for the legislature and not appropriate for judicial determination.

This decision brings the law in relation to the patentability of isolated nucleic acids in Australia in line with the position in the US. However, it is a marked deviation from the law of many of Australia's other major trading partners.