Australia remains a gene-patent friendly jurisdiction

When the Australian High Court ruled against the patentability of isolated naturally occurring genes in the Myriad decision, a number of commentators believed that the decision would ultimately invalidate claims directed to methods involving the practical application of genes. A recent Federal Court decision, however, has confirmed that claims directed to methods involving the correlation of gene sequences to a particular trait in cattle are patent eligible subject matter in Australia.

Background

This case concerns an appeal of an unsuccessful Patent Office opposition, by Meat & Livestock Australia Limited (MLA) and Dairy Australia Limited against Australian patent application 20102022253 (the 253 Application), in the name of Branhaven LLC and Cargill, Inc., directed to animal genomics and the genetic improvement of livestock. The claims relate to methods of identifying beneficial traits in cattle using gene sequence analysis, and specifically the identification of single nucleotide polymorphisms (SNPs).

Gene-based patentable subject matter

The principal attack on the 253 Application involved arguments and evidence that the claims did not define patent eligible subject matter. At the outset, the Judge, Beach J., made it clear that the case did not merely involve the discovery of a correlation between genotype and phenotype. Rather, the Court considered this to be the starting point for the analysis rather than the finishing point in relation to determining patentability.

The submissions made by MLA relied heavily on the findings of the High Court in the Myriad decision. The Court, however, ultimately found these submissions unpersuasive on the basis that the Myriad decision centred on the patentability of claims defining isolated naturally occurring gene sequences per se rather than methods of using gene sequences. The Court therefore concluded that the reasoning of the Myriad decision did not assist MLA. In support of this conclusion, Beach J. indicated that there was no suggestion in the Myriad decision that claims to methods involving the practical application of gene sequences could be dismissed as being, in substance, patent ineligible naturally occurring genetic information.

Patent eligible subject matter under Australian law is required to be an artificially created state of affairs having economic significance. As the claims of the 253 Application cover practical applications of identifying SNPs from a bovine nucleic acid sample and their association with a trait of interest, the Court found that the claims were directed to artificial subject matter resulting from human action, rather than something that exists in nature per se. The decision also makes it clear that it is inappropriate to focus on individual elements of claims, such as SNPs and their association with a particular trait – these being naturally occurring phenomena. For these reasons the claims were found to be “within the plain vanilla concept” of patentable subject matter.

Chilling effect on innovation

MLA further submitted that the claims if granted would have a chilling effect on future research in the livestock industry in Australia contrary to the interests of the Australian public. The “chilling effect” on innovation was one of a number of “other factors” considered by the High Court in the Myriad decision as being important considerations in determining patent eligible subject matter.

In rebutting MLA’s arguments, the Judge identified an Australian granted patent, listing MLA’s experts as the inventors (the AV/Goddard patent) and stated that “if MLA’s chilling effect point was good, then the AV/Goddard patent would be an example par excellence”.

The Judge also clarified that the breadth of claims per se is not indicative of a lack of patentable subject matter. A complaint about the breadth of claims is something that arises under other grounds of invalidity, such as a lack of clarity or a failure to define the invention. The Court concluded that none of the “other factors”, point against patentability – they all consistently point in one direction, namely patentability.

The misaligned Australia/US position on gene-based patentable subject matter

MLA also submitted that as a matter of coherency with US law, the claims should be held to be invalid based on a lack of patentable subject matter having regard to decisions in the US, which have rejected claims to methods of diagnosis based on discoveries or principles of nature; For Example, Mayo Collaborative Services v Prometheus Laboratories, Inc. 566 US 66 (2012) and Ariosa Diagnostics Inc. v Sequenom, Inc. 788 F3d 1371 (3d Cir 2015). These submissions were rejected by the Court for three reasons. Firstly, the Judge found that he could not determine coherency with foreign law generally by only considering cherry-picked jurisprudence from one jurisdiction. Thus, consistency with one foreign jurisdiction might produce inconsistency with another foreign jurisdiction. Secondly, the Court found it necessary to apply an evolving concept of patent eligible subject matter in the context of Australian legislation and Australian conditions, not any foreign law approach. Thirdly, the Judge pointed out that the US approach accepts that a method involving the application of a “law of nature” may be patent eligible.

Notable, Beech J said nothing in relation to the US Ariosa Diagnostics Inc. v Sequenom, Inc decision as the corresponding Australian case has been set down before him for August 2018.

Conclusions

Ultimately, the single ground upon which MLA succeeded was that of lack of clarity. The Judge, however, provided a specific indication as to how claim 1 and analogous claims could be amended to render the claims valid. This strongly suggests that the amendments will be allowed, and the patent application granted.

The significance of this Federal Court decision is twofold. Firstly, given the nature of the claims, the 253 Application, once it is granted, may significantly impact the use of genomic analysis in the Australian livestock breeding industry. Secondly, and perhaps more importantly, the decision provides certainty in relation to the patentability of claims defining practical applications of gene sequences, including methods of genetic screening.  In this regard, the decision potentially foreshadows the outcome of the Sequenom and Ariosa case, concerning the patentability of genetic testing methods.