• The Full Federal Court has unanimously confirmed that isolated nucleic acids, either DNA or RNA, are patentable in Australia.
• The decision is in contrast to the recent decision of the US Supreme Court, which held a naturally occurring DNA segment is not patentable because it has been isolated.
• The decision does not change the law in Australia but will be welcomed by the biotechnology industry for the certainty it provides.
A specially constituted five-member bench of the Full Court of the Federal Court of Australia has unanimously upheld the 2013 decision of Justice Nicholas at first instance 1. You can read more about the first instance decision here: that isolated nucleic acids, either DNA (e.g. genomic DNA or cDNA) or RNA, are patentable in Australia 2.
The patent at issue is directed to mutations in the breast cancer gene BRCA1, which is associated with an increased risk of breast cancer, and a diagnostic test to detect the presence of the BRCA1 gene. Only the claims directed to nucleic acids were considered. The case has attracted significant media attention due to the policy, social and moral issues at play.
The Full Court was of the view that the claimed nucleic acid is not the same as a naturally occurring nucleic acid as there were structural, ‘but, more importantly, there are functional differences because of isolation’ 3. Consistent with principles established by the High Court 4, the Full Court held that the claimed isolated nucleic acid, including but not limited to cDNA, resulted in an artificially created state of affairs for economic benefit and therefore constituted proper subject matter of a patent. By its removal from the genome and the cell (i.e. its natural environment and the cellular components that enable it to function in vivo) the Full Court held that the claimed nucleic acid is itself an artificially created state of affairs.
While the Full Court stressed that the chemical and physical makeup of the isolated nucleic acid rendered it not only artificial but also different from its naturally occurring counterpart, there was only limited discussion on what the exact structural differences were. The only expressly recited example given of a structural difference between naturally occurring and isolated nucleic acid - naturally occurring mRNA has a 5’ cap and a 3’ poly-A tail whereas isolated mRNA does not 5 - would not seem to apply in all cases, as mRNA can be isolated from a cell containing these 5’ and 3’ additions. However, it appears the functional differences arising from isolation, such as the ability of isolated nucleic acids to be used as primers in diagnostic screening, was persuasive.
The Full Court’s decision diverges from the position in the United States where the Supreme Court recently invalidated Myriad’s equivalent US patent claims on the basis that an isolated DNA segment is a ‘product of nature’ and therefore excluded from patentability 6. Myriad’s DNA claim fell within the ‘law of nature’ exception and was therefore not patentable. cDNA on the other hand is patent eligible because it is not naturally occurring. In arriving at its decision, the US Supreme Court found the claims were not expressed in terms of chemical composition, nor do they rely on the chemical changes resulting from the isolation of a particular DNA section. Instead, the claims focussed on the genetic information encoded in the BRCA1 and BRCA2 genes.
Notwithstanding the fact that the law in the United States requires the application of different tests to assess patentability, the decision of the Full Federal Court of Australia stands in stark contrast to the conclusion and supporting reasoning of the US Supreme Court. For example, the Full Court stated that the principles of patent law in Australia do not support an exclusion from patentability on the basis that something is a ‘product of nature’. Further, the Full Court noted the subject matter of the claims was to a compound, i.e. a nucleic acid, not a claim to information. Finally, the Full Court stated that the US Supreme Court’s emphasis on the similarity of ‘the location and order of the nucleotides’ between the claimed isolated nucleic acid and the nucleic acid in nature was misplaced. Instead, the emphasis should be on the chemical changes in the isolated nucleic acid.
In Europe, patenting of a gene sequence isolated from the human body is permitted under the Biotech Directive, even if the structure of the gene is identical to that of a natural element, so long as the other requirements for patentability are met, such as industrial application 7. Although what constitutes ‘isolated’ is not defined, the term has been narrowly construed by the English High Court as meaning separated from other molecular species in the form of a purified DNA fragment 8.
However, in the context of a claim to a product incorporating an isolated gene sequence, the Court of Justice of the European Union has held, albeit in a case with very specific facts 9, that the protection conferred for such products only extends to circumstances where the incorporated gene sequence retains the capability of performing ‘the function for which it was patented’, effectively limiting the scope of the Biotech Directive. Unlike Europe, the patentability of products incorporating isolated gene sequences in Australia is not currently limited to products in which the ‘isolated’ DNA performs its function.
Clearly this decision has the greatest impact on existing cases where patentees can breathe a sigh of relief knowing their claims are not now open to invalidity on the ground of lack of patentable subject matter. The impact on new filings will be limited as it was already difficult to secure claims in Australia to isolated nucleic acids that have a naturally occurring counterpart in view of the sequencing of the human genome and the rapid expansion of the prior art base due to second generation sequencing of the genomes of other organisms.
While the diagnostics industry is likely to welcome the Full Court’s decision, the decision will impact upon a broad range of industries. The effect of a contrary decision is already been felt in the US, where the US Supreme Court’s decision has resulted in the USPTO issuing guidelines to its examiners to scrutinise claims not only to isolated nucleic acids, but also to a natural product including chemicals derived from natural sources (e.g., antibiotics, fats, oils, petroleum derivatives, resins, toxins, etc.); foods (e.g., fruits, grains, meats and vegetables); metals and metallic compounds that exist in nature; minerals; natural materials (e.g., rocks, sands, soils); nucleic acids; organisms (e.g., bacteria, plants and multicellular animals); proteins and peptides; and other substances found in or derived from nature 10. Therefore, companies in industries as diverse as agriculture, industrial chemistry and biotechnology will be relieved by the findings of the Full Court.
Although the Australian Parliament does not currently propose a change in law to exclude isolated nucleic acids from patentability, there are still ways for healthcare consumers and researchers to access these technologies in certain circumstances.
For example, certain acts for experimental purposes are exempt from infringement, including acts which are aimed at improving or modifying the invention 11. The Australian Patents Act also provides a compulsory licensing scheme which is available if it can be proven that the patentee has failed, without good reason, to satisfy the reasonable requirements of the public and the applicant has tried for a reasonable period to obtain a licence on reasonable terms 12.The Commonwealth or a State may also exploit an invention for the services of the Commonwealth or a State without infringement (although it is questionable whether this would include use of healthcare related patents) 13. In addition, in 2013, the Australian Patent Office released a consultation paper on a proposal to exclude from patentability inventions ‘the commercial exploitation of which would be wholly offensive to the ordinary reasonable and fully informed member of the Australian public.’ 14 IP Australia is yet to release a response to the submissions received last year.
For the moment, the law in Australia as regards the patentability of isolated nucleic acids remains unchanged. Consequently, the scope of patent protection available for genetic material is broader in Australia than in other jurisdictions such as the United States and the European Union. The decision has drawn criticism from many in the community who are concerned it will restrict access to targeted therapies for cancer sufferers and some are calling for legislative change 15. It is possible that an attempt to amend the Australian Patents Act to exclude various genetic materials from patentability will be made in response to this decision, however, there have been several such attempts over the years, all of which have failed16.
Given the public importance of this decision, it seems likely that special leave to appeal to the High Court will be sought (and indeed it has been reported that an application seeking special leave will be filed). If leave to appeal is granted, it seems unlikely that the High Court will find that isolated nucleic acids ought to be excluded from patentability in the absence of legislative change.
This article was written by Adam Denley, Senior Associate, Freehills Patent Attorneys, Chelsea Roche, Associate (admitted in England and Wales), Herbert Smith Freehills and Mark McLennan, Solicitor, Herbert Smith Freehills, Melbourne, Australia.
1 Cancer Voices Australia v Myriad Genetics Inc  FCA 65
2 D’Arcy v Myriad Genetics Inc  FCAFC 115
3 D’Arcy v Myriad Genetics Inc  FCAFC 115 at 
4 See National Research Development Corporation v Commissioner of Patents  HCA 67
5 D’Arcy v Myriad Genetics Inc  FCAFC 115 at 
6 Association for Molecular Pathology v Myriad Genetics Inc 596 US 12-398 (2013)
7 Article 5(2) of Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 on the legal protection of biotechnological inventions
8 Monsanto Technology v Cargill international  EWHC 2257 (Pat)
9 Case C-428/08, Monsanto Technology LLC v Cefetra BV and Others
11 Section 119C(2)(c) of the Patents Act 1990 (Cth)
12 Section 133 of the Patents Act 1990 (Cth)
13 Section 163 of the Patents Act 1990 (Cth)
14 IP Australia, Patentable Subject Matter: Consultation on an objects clause and an exclusion from patentability, July 2013
16 See for example, Patent Amendment (Human Genes and Biological Materials) Bill 2010 (Cth)