Yesterday, in the landmark decision of D’Arcy v Myriad Genetics Inc, the High Court of Australia unanimously invalidated isolated gene sequences as patentable subject matter within the meaning of the Patents Act 1990 (Cth).
The majority of the High Court found that the ‘useful’ part of the gene was the information it encoded and not its molecular structure. The Court held that isolation of the gene by altering its molecular structure did not fall within the meaning of the test for patentability under Australian law, which requires an invention to be something which would not otherwise exist but for human intervention. This is because what Myriad had done to alter the BRCA1 gene did not alter the information it encoded by it, meaning it was ‘not chemically, structurally and functionally different to what occurs in nature’.
In arriving at that conclusion, which has been publicly lauded as a win for cancer patients and medical research, Chief Justice French expressed concern at the ‘size of the class of products’ which Myriad had claimed in their BRCA1 patent. His Honour believed there was a ‘real risk’ that upholding the claim would ‘lead to the creation of an exorbitant and unwarranted de facto monopoly on all methods of isolating nucleic acids’. His Honour considered this to be ‘at odds with the purposes of the patent system’ bearing in mind that the technology could be used in the future for entirely different medical procedures.
It is clear from their reasoning that the High Court has considered the ‘chilling effect’ that a grant of monopoly rights can have on legitimate innovation and research. These issues were raised in the US Supreme Court, which also excluded isolated genes from patentability under their law. The effect of the High Court’s decision is that Australian patent law is now consistent with one of our biggest trading partners, but its effect on growth and investment in the biotechnology sector is yet to be seen. Some academics have also predicted a global policy shift towards increasing resources available to medical researchers as a result of the High Court’s decision, when considering the effect the US and Australian decisions may have on a current gene patent challenge in Canada.
But that may not be the end of the gene patent debate in Australia. In his reasons, Chief Justice French put the onus back onto the Australia government to legislate on the interpretation of the Patents Act, as His Honour believed that ‘far-reaching questions of public policy’ that considered ‘encouragement of industry, employment and growth’ when balanced against ‘rewarding legitimate innovators and inventors’ may be ‘best left to legislative determination’. The Australian Parliament has considered amendments to the Patents Act on the subject of gene patents in the past and declined to specifically exclude gene patents from eligibility under the Patents Act. Instead, Parliament chose to raise the threshold test for patentability to prevent patents over genes that were not sufficiently inventive, novel or useful. The intended effect of the amendments was to monitor the implications of gene patents for research and healthcare, while simultaneously allowing for their commercialisation, however, they were criticised by some policy-makers for being too narrow to have any practical effect. As some commentators have warned, international pharmaceutical and biotechnology companies could now push for further legislative reform to nullify the effect of the High Court’s decision.
As Ms D’Arcy claims, the effect of the decision on cancer patients is that the costs of the BRCA1 test are lowered due to competition offered by a diversity of diagnostic centres able to perform the test. The decision also allows medical research to be performed that utilises the BRCA1 gene without the threat of a patent infringement claim or license fee hanging over the head of researchers. Biotech companies, like Myriad Genetics, must now look to downstream products like gene tests and DNA arrays derived from the BRCA1 sequence to remain profitable in the Australian biotechnology industry, which may see growth from US based investment as a result of the now-consistent patent policy in place.