Is the gene patent debate fuelling change to the Australian patent system for all technology?

We previously reported that the Australian biotechnology/pharmaceutical patent landscape was in a state a flux. At that time, we were awaiting the recommendations of a Senate Inquiry into the patenting of genes and biological materials. Since then, the recommendations of that Inquiry have been made public. In addition, there have been a number of other significant developments that we believe will inevitably result in significant changes to the patent system in Australia.

Senate Committee on Community Affairs Inquiry into Gene Patents

It is now 12 months since we summarised the issues involved in the Senate Committee on Community Affairs Inquiry into the patentability of genes and other biological material in this journal. On 26 November 2010, the Committee’s report was finally released.

The Report makes 16 recommendations directed to improving patent quality and the operation of the patent system. Most significantly, the report makes no recommendation that the Patents Act 1990 be amended to expressly prohibit the patenting of genes/biological materials.

Interestingly, many of the recommendations appear to go beyond the terms of reference of the Inquiry because they relate to all technology areas. Briefly, the recommendations include increasing the threshold requirements for patentability and increasing the support requirements for claims – presumably in an effort to bring Australia’s patentability standard into line with Europe and the United States. Recommendations were also made in relation to reinforcing mechanisms and policies by which the Australian Government can, and should, intervene with the rights of patent holders in relation to compulsory licences. Many of the recommendations were made in view of concerns raised that costs associated with the current patent system outweighed its economic and social benefits.

Specifically, the Report recommends expanding the prior art base to be considered when assessing whether a claimed invention meets the “inventive step” requirement for patentability. Currently, the inventive step test requires that the disclosure of the prior art directly lead the person skilled in the art to the invention with a reasonable expectation of success (emphasis added). The proposed amendment to this test is whether it is “obvious for the skilled person to try a suggested approach, alternative or method with a reasonable expectation of success” (emphasis added). This proposal appears to introduce some degree of routine experimentation in order to arrive at the claimed invention.

In response to concerns that very broad patent claims were being accepted, the Committee recommended more stringent requirements for “support” for claims by introducing a requirement that a patent claim be enabled across its entire scope and that the description in the patent specification provide sufficient information to allow the skilled addressee to perform the invention without undue experimentation. This seems to mirror the support requirements in the United States and Europe.

One of the terms of reference for the Inquiry was to consider the impact of gene patents on progress in medical research. Although no direct evidence was produced showing that gene patents were inhibiting research, the Committee made a recommendation that a broad research exemption be codified in the Patents Act. The proposed research exemption would apply to acts done for experimental purposes relating to the subject matter of the invention that do not conflict with the normal exploitation of a patent – for example, how an invention works, determining validity and seeking an improvement.

It was clear that not all of the Senators involved with the Inquiry fully supported the recommendation not to exclude genes and biological materials from the Patents Act because two days before the Committee’s report was made public, a private member’s Bill in support of a broad-reaching amendment to the Patents Act 1990 to prohibit patenting of genes and biological materials was introduced into the Senate by Senator Bill Heffernan, a staunch supporter of banning gene patents. The Bill proposed to amend the Patents Act 1990 by expressly excluding from patentability“biological materials including their components and derivatives, whether isolated or purified or not and however made, which are identical or substantially identical to such materials as they exist in nature” (emphasis added).

The Committee also made a recommendation that a Senate inquiry into the amendment Bill be undertaken (Senate Inquiry into the Patent Amendment (Human Genes and Biological Materials) Bill 2010).

Senate Inquiry into the Patent Amendment (Human Genes and Biological Materials) Bill 2010

Over one hundred submissions were received by this second Senate inquiry, the majority of which criticised the proposed amendment on the basis that the terms “components” “derivatives”, and “substantially identical” as used in the amendment lack clarity and would introduce a great deal of ambiguity into what would be considered patentable subject matter. For example, it is not clear as to how much a protein would have to differ from naturally-occurring material to fall outside the scope of the term “substantially identical” and/or “derivative”. In response to this criticism, the proponents of gene patent reform altered the proposed amendment to read “biological materials whether isolated or purified or not and however made which are identical to such materials as they exist in nature” (emphasis added); where biological materials”, is defined as including DNA, RNA, proteins, cells and fluids including their components; and “identical” means a biological material which is structurally and functionally identical and where any structural change or difference is immaterial to its function. We believe that despite this attempt to make the proposed amendment more palatable, if implemented it would nonetheless introduce substantial ambiguity into the Australian biotechnology patent landscape as well as threaten to exclude from patentability inventions that, on the face of it, seem eminently suited to patentability – for example, genetically-altered microbial enzymes for use in cleaning.

Originally, the Committee was due to report its recommendations in June 2011. However, since that time the Committee has been granted two extensions of time in which to report. Some commentators have suggested that the extensions are necessary because the Committee is unable to reach consensus on any recommendations. This appears to be a likely scenario, as it is well known that a number of the Senators involved are uncompromisingly in support of gene patent reform while others do not support the proposed amendment. The new deadline for reporting is 21 September 2011 and the recommendations are eagerly awaited.

ACIP Report on Patentable Subject Matter issued 16 February 2011

Following the 2004 Australian Law Reform Commission (ALRC) report on gene patenting and human health in which it was reported that the key concept of patentable subject matter in Australia was ambiguous and obscure, the Minister for Innovation, Industry, Science and Research asked the Advisory Council on Intellectual Property (ACIP) to conduct a review into the appropriateness and adequacy of the manner of manufacture test. The terms of reference for the review asked the ACIP to inquire, report and make recommendations to the Australian Government on patentable subject matter.

The Report of the ACIP was released on 16 February 2011 and included a number of key recommendations:

(a)   codification of the established principles of patentability by amendment of the Patents Act 1990 to include a statement of the law currently applied by the Courts – namely, that a patentable invention must be an “artificially created state of affairs” in the field of economic endeavour;

(b)   maintenance of the current exclusion from patentability of human beings and biological processes for their generation;

(c)   amendment of the Patents Act 1990 to include a general exclusion from patentability of inventions whose commercial exploitation would be wholly offensive to the Australian public; and

(d)   inclusion in the Patents Act 1990 of a statement of objectives outlining the purpose of the Act so that any test for patentable subject matter must support the objectives of the patent system.

The release of the ACIP Report followed the Report of the Senate Community Affairs Committee Inquiry into the impact of patenting of human genes and biological materials. Significantly, it is noteworthy that the ACIP Report specifically states: “we do not recommend the introduction [into the legislation] of a specific exclusion to prevent the patenting of human genes and genetic products”.

Intellectual Property Laws Amendment (Raising the Bar) Bill 2011

In June 2011, Senator Kim Carr, the Minister for Innovation, Industry, Science and Research introduced into the Senate the Intellectual Property Laws Amendment (Raising the Bar) Bill 2011. This has added to the momentum of the push towards change in the Australian patent system – which now seems almost inevitable. This Bill contains no specific recommendations in relation to patentable subject matter, such as proposals to exclude biological inventions. However, like the ACIP report, the Bill includes a number of proposed amendments which aim at increasing the quality of granted patents. Accordingly, biological inventions which are currently eligible for protection may not meet the higher threshold for patentability if the proposed amendments are implemented.

The scope of the proposed reforms is extensive. However, it is relevant to note that there is considerable overlap between the reforms of this Bill with the recommendations of the ACIP report. Most notably, the reforms include proposed amendments directed at increasing the inventive step threshold and increasing the description and support requirements in a patent specification.

The intent of increasing the description and support requirements is to reduce the likelihood that the patentee is granted a monopoly extending beyond the information disclosed in the patent specification. Under the proposed reforms, it will also be necessary for patent attorneys to ensure that all of the claims are fully enabled across their scope.

There is also a proposed amendment requiring that provisional applications “disclose the invention in a manner which is clear enough and complete enough for the invention to be performed by the person skilled in the relevant art”.
Some commentators have suggested that if these reforms are introduced, there will be a heavy burden placed on Australian patent attorneys because the amount of time, and therefore the cost, involved in the preparation of specifications will be increased. However, we believe that as the reforms are directed to bringing the Australian patent system into line with Europe and the US, jurisdictions with which Australian patent attorneys are familiar, any necessary changes in drafting practice will not be overly onerous.

Summary

It has been over three years since the gene patent debate was initiated in Australia as a result of a Melbourne-based company, Genetics Technologies, deciding to charge licensing fees to conduct tests for determining susceptibility to breast cancer based on mutations in genes BRCA-1 and BRCA-2. Three years on, it seems that the debate is far from being resolved. Nevertheless, it appears that change to the Australian patent system is inevitable and that these changes will most likely impact all patentable technology areas.