Senate Inquiry rejects Gene Patent Amendment Bill

After over one hundred written submissions, two days of hearings and two extensions of time in which to report, the Senate Legal and Constitutional Affairs Legislation Committee Report into the Gene Patent Amendment Bill 2010 was tabled in the Senate on 21 September 2011. The Committee made one recommendation, namely that the Senate should not pass the Bill.

Originally, the Gene Patent Amendment Bill 2010 proposed an amendment to the Patents Act 1990 which would exclude 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”. Strong criticism that the terms “components”, “derivatives” and “substantially identical” would introduce uncertainty into the patent system resulted in the proposed amendment being narrowed. The new proposed amendment excluded “biological materials whether isolated or purified or not and however made which are identical to such materials as they exist in nature” 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.

In arriving at its recommendation, the Committee considered a number of key issues. These issues and the findings of the Committee are summarised below.

The distinction between discovery and invention

Those in support of the Bill argued that, if enacted, it would reinforce the distinction between discovery and invention in the Patents Act. However, it was clear from the evidence submitted to the Senate Inquiry that the proposed amendment would not clarify this distinction. In fact, there was evidence to suggest that, if enacted, the Bill would make the distinction between discovery and invention more obscure and, as a result, generate uncertainty within the patent system.

The Committee considered that a more preferable approach to distinguishing between discovery and invention was a recommendation made in a report by the Advisory Council on Intellectual Property (ACIP), published in February 2011. This recommendation proposed that the law currently applied by the Courts in relation to patentable subject matter – namely, that a patentable invention must be an “artificially created state of affairs” in the field of economic endeavour – be codified in the Patents Act.

The Committee also regarded favourably the proposed changes in the Raising the Bar Bill 2011 which recommended a range of “technology neutral” changes to the Patents Act including raising the threshold for inventive step and increasing the disclosure and support requirements for patent specifications.

Access to treatments, diagnostics and methods for healthcare

The Committee indicated in their Report that there was no evidence that patents were adversely impacting on the provision of healthcare in Australia. Moreover, it was clear from a number of submissions that enactment of the Bill would not resolve the issue that initiated the gene patent debate: namely, the potential enforcement of patent rights relating to tests to determine susceptibility to breast cancer by BRCA1 and BRCA2 gene testing. In fact, evidence was submitted that excluding biological materials from patentability would potentially have significant adverse consequences for healthcare in Australia, including delays in accessing diagnostic tests, medicines and treatments. The evidence submitted also suggested that the Bill would limit access to clinical trials for Australian patients as well as reduce investment in medical research and development in Australia.

Freedom to research

The proponents of gene patent reform argued that the Bill would provide certainty for scientists conducting research on biological material. However, the Committee did not agree with this view.

The Committee believed that a preferable approach to providing certainty for researchers was a general research exemption as proposed in the Raising the Bar Bill. This proposed exemption would result in research and experimental activities relating to patented inventions being exempt from infringement.

Investment in Research and Development

On the basis of the evidence submitted to the Inquiry, the Committee concluded that patents directed to biological materials have not hindered research, particularly medical research. In fact, evidence was presented indicating that patents had in fact encouraged and contributed to research and development activities by, for example, attracting investment funds.

The Committee concluded that the Bill would have significant implications for a broad range of industries including healthcare, pharmaceuticals, agriculture, food manufacturing and biotechnology. Coupled with the imprecise language of the Bill, the Committee believed that it would potentially discourage investment in research and development and encourage litigation by those seeking to clarify patent rights.

It was also indicated in the Report that without certainty in relation to patent protection for biological materials, companies would have less incentive to develop and commercialise new products for the Australian market or, alternatively, a greater incentive not to publicly disclose inventions.

Ethical considerations

The Committee was cognisant of the fact that the patenting of biological material may be challenged on ethical grounds. However, the Committee considered that the proposal in the ACIP Report for an exclusion to the grant of patents which would be perceived as unethical by the community was preferable to a broad exclusion of biological material.

International considerations

Both sides of the gene patent debate have used Australia’s obligations under the TRIPS agreement (which requires patenting in all fields of technology) to support their arguments. On the one hand, the proponents of gene patent reform argue that as isolated biological materials are not “inventions”, excluding such subject matter from patentability would not contravene Australia’s obligations under the TRIPS agreement. On the other hand, those opposed to the Bill argued that isolated biological materials represent an artificially created state of affairs and therefore can be considered inventions. Accordingly, excluding such material from patentability would contravene Australia’s obligations under the TRIPS agreement.

Ultimately, the Committee believed that enacting the Bill would potentially breach Australia’s obligations under the TRIPS agreement.

Dissenting Report

A dissenting view expressed by Senators Heffernan, Siewert and Xenophon (staunch supporters of gene patent reform) was also included in the Report. The dissenting view makes reference to a range of perceived potential problems in the Australian patent system. However, it is clear from the evidence submitted during the Senate Inquiry that the Bill would not provide solutions to these perceived problems. A more rational view and one that was expressed consistently by the majority of the Committee is that a number of technology-neutral recommendations by the ACIP Report and the Raising the Bar Bill will be more effective in addressing the perceived problems with the current Australian patent system.

Conclusion

The Committee agreed that that although the Bill was “well intentioned” it did not represent an effective solution to any potential or perceived problems that may be caused by the patenting of biological material. In fact, the Committee believed that if the Bill was enacted it would result in a large number of adverse consequences across the patent system which would impact a range of industries and healthcare sectors.