Will Australia follow the US and prohibit the patenting of inventions defining principles of nature?
Published on 24 Aug, 2016
In the last five years, patents directed to biologically derived inventions have been successfully challenged in the US and Australia on the basis of lack of patentable subject matter. In 2013 and 2015, the highest judicial authorities in the United States[i] and Australia[ii] respectively ruled against the patentability of isolated human genes, claimed in a patent owned by Myriad Genetics Inc., and useful for determining susceptibility to breast and ovarian cancers. Further, in 2012 the US Supreme Court ruled that an invention directed to a diagnostic assay defining a “relationship” between the concentrations of blood metabolites and response to a therapeutic drug, claimed in a patent owned by Prometheus Laboratories Inc., was not patentable because it represented a “principle of nature” (the Prometheus decision)[iii]. Despite the unanimity of the Supreme Court in the Prometheus decision, its impact on the validity of claims directed to relevant diagnostic assays would only become apparent through its interpretation by the lower Courts – and this involved a patent owned by Sequenom Inc.
Sequenom v. Ariosa in the United States
The precedent set by the US Supreme Court in the Prometheus decision caused controversy in June 2015 because it resulted in the U.S. Court of Appeals for the Federal Circuit upholding a ruling of the District Court of California that invalidated a patent, owned by Sequenom, Inc. (Sequenom), covering a non-invasive prenatal test. Specifically, the inventors of the patent-in-suit (US6,258,540) discovered that the cell-free fractions of a pregnant woman’s blood (serum and plasma) contain surprisingly large amounts of cell-free fetal DNA (cffDNA). Traditionally, this portion of the plasma or serum was discarded as medical waste. This groundbreaking discovery led to the development of a non-invasive method to determine a number of fetal characteristics and abnormalities, such as Down syndrome. Significantly, Sequenom’s invention was described by Judge Linn of the U.S. Court of Appeals as “truly meritorious” and “ground breaking” and one for which he could find no reason, in policy or statute, should be deemed to be patent ineligible.[iv] Biotechnology lawyer and commentator, Kevin E. Noonan cast perspective over the decision by describing it as tantamount to a disaster[v]. The adverse ruling by the Court also prompted Christopher M. Holman, a law professor at the University of Missouri-Kansas City to say, “[i]t’s hard to imagine patents on diagnostics surviving if that approach is taken”. Thus, the impact of the Appeal Court’s decision on inventions directed to diagnostic or prognostic assays reliant on a method involving a natural principal or relationship was considered devastating to the US biotechnology industry.
Sequenom’s petition for en banc re-hearing of the Appeal Court’s decision was denied. More surprisingly, given the comments of Judge Linn, the US Supreme Court added insult to injury by denying certiorari to Sequenom. This means that the decision of the US Court of Appeals to reject patentability for a revolutionary prenatal test will stand. This is ironic given that the Supreme Court has expressed concerns that without patents for certain inventions there would be no incentive for companies to invest in those fields. For example, during oral argument for the Supreme Court Myriad case, Justice Scalia asked: “Why would a company incur massive investment . . . if it cannot patent?”[vi] Further, in the Prometheus case, Justice Breyer worried that “discovering natural laws is often a very expensive process” with “lots of investment to be protected.”[vii] IP commentators generally were dismayed and critical of the decision of the Supreme Court not to revisit the Prometheus decision. In particular Gene Quinn, the editor of IPWatchdog, bemoaned that the US biotechnology industry would continue to suffer the consequences of the US Supreme Court’s ignorance on the issue of patent eligibility[viii].
Sequenom v. Ariosa in Australia
The Sequenom case has recently become active in the Australian Federal Court. In June 2016, Sequenom initiated infringement proceedings in the Australian Federal Court in relation to their prenatal assay patent. Sequenom claimed that Ariosa Diagnostics (Ariosa) and Sonic Healthcare, Australian Clinical Labs (Sonic Healthcare) use of the Harmony non-invasive prenatal test (supplied by Ariosa) infringes its patent. It is almost certain that Ariosa and Sonic Healthcare will cross claim for invalidity of Sequenom’s patent under the ground of lack of patentable subject matter, along the same lines as was done successfully in the US. If that happens, the Australian Sequenom case could, as it has in the US, have a greater impact than the Myriad decision.
Of particular relevance to the Australian Sequenom case are comments made by the Federal Court previously, when it considered the patentability of isolated genes in Myriad’s patent. The Federal Court stated that expressions such as “the work of nature” or “the laws of nature” are not found in the statute; nor are they useful tools of analysis when considering patent eligible subject matter. This seems to be a clear departure to the approach adopted in the US case.
Of further relevance is that, in 2013 the Australian High Court confirmed the patent eligibility of methods of medical treatment[ix]. This would arguably also include methods of diagnosis and therefore favour Sequenom’s position. Moreover, the Australian High Court in the Myriad decision affirmed the principles of patentability in Australia as being:
- Whether the invention as claimed is for a product made, or a process producing an outcome as a result of human action; and
- Whether the invention as claimed has economic utility[x].
Arguably, Sequenom’s prenatal assay produces an outcome as a result of human activity – the diagnosis. Also, the assay clearly has economic utility. Accordingly, Ariosa and Sonic Healthcare may face a much greater hurdle to invalidate Sequenom’s Australian patent than that faced in the US case.
What the Australian case is likely to depend on is the approach the Australian Court takes in interpreting the claimed subject matter of Sequenom’s patent. In the US case, the Supreme Court took a two-step approach to determine whether the claimed subject matter was patent eligible. The first step involved making a determination that the claims were directed to naturally occurring subject matter, namely cffDNA. In the second step, the US Court considered whether the additional elements of the claims, namely the methods of detecting cffDNA, were of sufficient inventive concept to “transform” the defined naturally occurring phenomenon into patent-eligible subject matter. This two-step approach has been criticised for conflating patentable subject matter and inventive step requirements. It remains to be seen whether the Australian Courts will adopt this two-step approach or rather consider the defined subject matter more holistically. The fact that the Australian Federal Court was extremely critical of the US Supreme Court’s approach in the Myriad case may provide a clue as to the Federal Court’s approach to the interpretation of Sequenom’s claims.
The potential “spanner in the works” for Sequenom may result from an approach adopted by the Australian High Court in the Myriad decision in which the determination of whether or not a particular claimed invention is patentable is a matter of substance and not form. Thus a critical aspect of the Australian Sequenom case will be a determination of the “substance of the claims” and this is currently a highly contentious issue in Australian law.
As the Australian proceedings have recently commenced, given the typical timeline for Australian litigation, it is likely that a decision in this case will issue around the end of 2018 or the beginning of 2019.
Intellectual property professionals should remain vigilant regarding laws relating to inventions directed to naturally occurring material and/or principles of nature. In the US, at this stage, the relevant laws are of greatest concern. However, updated USPTO guidelines provide a useful resource for applicants and reflect the USPTO’s current approach in determining patent eligibility for life science technologies. In Australia, the applicable laws are in a state of flux and will continue to evolve as a result of ongoing judicial consideration. As the issue of patentable subject matter has become an attractive revocation target for patents directed to biologically derived inventions, it is likely that patent applicants in the life sciences field will face uncertainty regarding patentable subject matter eligibility for some time to come.
[i] Association for Molecular Pathology et al. v. Myriad Genetics, Inc., et al. No. 12-398 (569 U.S. June 13, 2013).
[ii] D’arcy v Myriad Genetics Inc & Anor  HCA 35
[iii] Mayo Collaborative Services v. Prometheus Laboratories, Inc. 566 U.S. (2012)
[iv] Ariosa Diagnostics Inc et al v Sequenom, Inc et al June 12, 2015
[vi] Transcript of Oral Argument at 12, Myriad, 133 S. Ct. 2107 (No. 12-398).
[vii] Transcript of Oral Argument at 16, Prometheus, 132 S. Ct. 1289 (No. 10-1150).
[viii] Supreme Court denies cert. in Sequenom v. Ariosa Diagnostics, IPWatchdog June 27 2016
[ix] Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd  HCA 50 4 December 2013 (Apotex v Sanofi–Aventis).
[x] D’arcy v Myriad Genetics Inc & Anor  HCA 35 at paragraph 28.
This article was first published in the Life Sciences Intellectual Property Review