Abstract
I. Introduction
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On September 14, 2014 the Federal Court of Australia decided in D'Arcy v. Myriad Genetics 7 that individual, isolated genes from a human genome—like Myriad's—were patent eligible subject matter. This stands in direct contrast to a U.S. Supreme Court case, Ass'n for Molecular Pathology v. Myriad Genetics, Inc., 8 decided in 2012, which declared Myriad's isolated genes were not patent eligible.
The differences between these two holdings stemmed from how each country's law defines patent eligible subject matter. The U.S. does not consider isolated genes patent eligible because they are products of nature or mere discoveries. 9 The Australian court did not view the isolated genes as mere discoveries because the court focused on the functions and inventive uses for the claimed genes rather than the genes themselves. 10 Also, each court viewed Myriad's claimed isolated genes differently as to whether the claims were directed toward chemical embodiments or genetic coding information. 11
II. Australian and U.S. Considerations for Natural Phenomena as Patent Eligible Subject Matter
As scientists and engineers exploit natural processes in innovative ways, the boundaries of what is patent eligible is constantly reevaluated. In Australia, the law that defines these boundaries derives from Section 6 of the British Statute of Monopolies (“Section 6”), 12 which grants monopolistic protection to “any manner of new manufactures.” 13 Section 6 was “subsumed,” but not directly copied, into the modern Australian Patents Act 1990. 14 Specifically, the Patents Act 1990 allows patenting for any invention that is “a manner of manufacture within the meaning of section 6 of the Statute of Monopolies.” 15
The Australian High Court (“High Court”) construed “manner of manufacture” in the seminal case, National Research Development Co. v Commissioner of Patents (“NRDC”). 16 The High Court explained that Section 6's purpose is to encourage investment and innovation in unpredictable and dynamic fields through monopolistic protection. 17 Thus, any attempt to “state the ambit of [Section] 6 of the Statute of Monopolies by precisely defining ‘manufacture’ is bound to fail.” 18
Although the High Court interpreted Section 6 broadly, the NRDC opinion notes that an innovation consisting of “pure discovery” is not a patent eligible “manner of manufacture.” 19 But, the Australian Patent Office and courts may allow patenting of a discovered natural product if it serves a new and useful purpose. 20 Thus, while pure discoveries are not patent eligible, patenting natural products and phenomena is not necessarily barred. 21
Natural products are patent eligible if the inventor demonstrates a new and useful function for the natural product. 22 The High Court in NRDC interpreted Section 6 to require that the invention be “an artificially created state of affairs, leading to an economically useful result.” 23 Australian patent eligibility considerations thus focus on whether the natural material is used for a beneficial new purpose, rather than on the natural material itself. 24 Because the patentability requirements emphasize the product's use, a discovery can receive patent protection even if it is not significantly different from its natural form. 25
In the U.S., Section 101 of the Patent Act (“§ 101”) controls patent eligibility. 26 Under § 101, any new and useful “process, machine, manufacture, composition of matter and any new and useful improvement thereof” is eligible for patent protection. 27
To ensure flexibility with new technology, the U.S. Supreme Court (“the Court”) has repeatedly emphasized that Congress intended § 101 to be broad and permissive. 28 U.S. courts, however, do find that § 101 has limits. 29 Some claims fall into categories that are not patent eligible, including those on products of nature. 30 American jurisprudence prohibits patenting naturally occurring products regardless of how “groundbreaking” their discovery was, or how ingenious the product's use. 31 The Court restricts patent protection for natural phenomena for reasons including that these materials are the basic tools of science and should thus be “free to all.” 32
Yet, U.S. courts have recognized that almost all inventions are derived from natural products and phenomena. 33 Thus, “too broad an interpretation of this exclusionary principle could eviscerate patent law.” 34 To avoid this problem, U.S. courts have recognized that transforming a natural product into a “markedly different” form can convert the material into patent eligible subject matter. 35 For example, in Diamond v. Chakrabarty, the Court upheld patent protection for a strain of bacteria containing an unnatural number of cell plasmids because the scientists transformed the natural bacteria through human manipulation, i.e., selective crossing. 36
Australian and U.S laws also differ over whether claimed methods and processes that embody natural principles are patent eligible. In the U.S., claims directed solely to natural principles and laws—for example, pure mathematical formulas—are not patent eligible for reasons including preemption of their use. 37 However, the Court has stressed that the application of a natural principle to a new and useful process might constitute patent eligible subject matter. 38
The U.S. Supreme Court summarized the test of patent eligibility in its recent case, Alice Corp. Pty. v. CLS Bank Int'l, 39 by citing to an earlier case, Mayo Collaborative Services v. Prometheus Labs., 40 for guidance on the rule. First, the courts must determine whether the claims at issue are directed to one of those patent ineligible concepts: abstract ideas or laws of nature. 41 If so, the courts must then consider if there is an “inventive concept” that transforms the “nature of the claim” into patent eligible material. 42
The Court has cautioned that applicants cannot backdoor the natural principles exclusion by limiting the claim's scope to a “particular technological environment or adding insignificant postsolution activity.” 43 Also, the Court has stated that the claim must do more than simply state the law of nature and add the words “apply it.” 44
As of this writing, the patent eligibility of diagnostic methods has not yet been challenged in Australian courts. 45 Yet, the trend in Australian law is toward a “continual widening” of the concept of manner of manufacture. 46 For example, in Apotex Pty Ltd. v Sanofi-Aventis Australia Pty Ltd., 47 the primary issue to be decided was if “methods of medical treatment of human beings, including surgery and the administration of therapeutic drugs” were patent eligible. 48 The patent at issue claimed a method of using a known drug to prevent or treat psoriasis,” a new or “secondary” use of the drug at the time of patenting. 49 The patent challenger claimed that the use of the drug to treat psoriasis was a natural correlation, and therefore not a proper “manner of manufacture.” 50
The High Court recognized that the scope of “manner of manufacture” has continually widened to adapt to dynamic growth in science and technology. 51 The court thus affirmed that if the natural correlation claimed is “artificially” and “economically” used, it might fall within Section 6's manner of manufacture. 52 With medical methods, the economic use prong requires showing the process has some commercial or industrial application, such as sales to patients or hospitals. 53 The artificial use requirement focuses on if there is some human-derived application of the process, such as using the chemical to improve a patient's health. 54 Applying these considerations, even methods incorporating known natural principles can receive patents if they are used in a novel manner for commercial exploitation. 55
III. The Myriad Decisions
The doctrinal differences concerning patent eligibility allow some scientific inventions to be patent eligible in Australia that are not in the U.S. This divide is embodied in how each country's courts evaluated Myriad's isolated gene patents. 56
In the U.S., after receiving cease-and-desist letters, several research institutions and genetic diagnostic testing agencies became frustrated with Myriad's patented control of the BRCA genes. 57 These institutions joined a collective of women who felt disadvantaged due to the high prices of cancer screening under the patent, advocacy groups, and doctors to seek a declaratory judgment of invalidity for Myriad's patents. 58
The Court of Appeals for the Federal Circuit reversed the district court's ruling that the isolated BRCA genes were not patent eligible because they covered products of nature. 59 The court thus held that both the isolated DNA and cDNA were patent eligible. 60 The Federal Circuit, focusing on the chemical nature of DNA and cDNA, found that the separation of these molecules from the genome made them “markedly different” enough from their natural form to receive protection. 61
The Federal Circuit also ruled that Myriad's method claims comparing the isolated BRCA genes to a “wild type” gene were not patent eligible. 62 The court noted the language of the claims all involved only “analyzing and comparing certain DNA sequences.” 63 Thus, the methods as drafted fell outside the scope of § 101 because they merely claimed an abstract process that could be performed entirely in the mind of the scientist analyzing the genes. 64 Also, the court noted that Myriad could not make its methods patent eligible by limiting the nucleotide comparison to just the BRCA genes or the identification of specific mutations. 65
On appeal, the U.S. Supreme Court held that isolated genes are not patent eligible because they are merely products of nature and pure discoveries. 66 In addition, the scientists used well-known procedures to isolate the BRCA genes from the human genome. 67 The Court acknowledged that Myriad's discoveries of the genes' exact locations have significant utility and involved arduous scientific work. 68 But, the court emphasized, “groundbreaking, innovative, or even brilliant discovery does not by itself satisfy the § 101 inquiry.” 69
As for the argument that the isolated BRCA genes were different chemical embodiments than the gene on the genome, the Court held that “severing” the isolated gene, thereby creating a “nonnaturally occurring molecule,” does not allow for patent eligibility. 70 The Court noted that Myriad's claims were not “expressed in terms of chemical composition, nor do they rely in any way on the chemical changes that result from the isolation of a particular section of DNA.” 71 Also, the Court illustrated its rationale by explaining that if the claim was for the chemical composition, then a competitor could avoid infringement by simply tacking on extra nucleotides. 72 The court believed Myriad was “concerned primarily with the information contained in the genetic sequence, not with the specific chemical composition of a particular molecule.” 73
In contrast to the isolated BRCA genes, the Court held that cDNA 74 created from the RNA expressed from the BRCA genes was patent eligible. 75 The Court explained that the cDNA was significantly transformed from the naturally occurring DNA because scientists manipulated and, in effect, removed sections (introns) from the genomic DNA to create the cDNA. 76
In Australia, laboratories were already offering BRCA genetic screenings before Myriad obtained its Australian patents in 1998. 77 In 2002, Myriad entered the Australian market through a “somewhat forced” partnership with Australian DNA laboratory giant, Genetic Technologies, Inc. 78 Concern over isolated BRCA gene patents in Australia grew when Genetic Technologies announced it would be enforcing Myriad's patents against both public and private labs. 79
The Australian suit arose in 2010 when a non-profit group, Cancer Voices of Australia, and a breast cancer survivor from Brisbane, Yvonne D'Arcy, challenged the validity of the BRCA patent's validity. 80 NRDC's interpretation of “manner of manufacture” guided the Australian primary judge's decision. 81 The court found that the isolated genes were “artificial” when compared to the genomic DNA when they were isolated from the genome, and had significant “economic utility” as shown by their cancer screening use. 82 The court explained that, unlike in the U.S., no specific consideration exists for whether the composition of matter is a “product of nature,” or whether the claimed invention is “markedly different” from something that already exists in nature. 83
On appeal, the Australian Federal Court, sitting as a full court, focused on the function and inventive purposes of the claimed gene and affirmed patent eligibility. 84 The Australian Federal Court reclarified that although a mere discovery is not patent eligible, a “manner of manufacture,” defined as “an artificially created state of affairs” leading to “an economically useful result,” is. 85
Applying the NRDC test, the court stated that “the economic benefit of the claimed invention is not in issue.” 86 For the artificial state of affairs aspect, the petitioner asserted that because the isolated gene would still code for the BRCA1 polypeptide, the gene sequence had no artificial function or use after isolation. 87 The court clarified, however, that the question for whether something is patent eligible “is whether it consists of an artificially created state of affairs, not whether it produces or fails to produce an artificial effect.” 88 “The ‘artificial effect’ or ‘artificial state of affairs’ to be considered in this case is the isolated nucleic acid itself, [which is] removed from its natural environment and from the cellular components that enable it to function in vivo.” 89 The court found a difference between the nucleic acid sequence as it occurs in nature, which “can code for the polypeptide due to its existence within the cell” through transcription and translation, and the isolated nucleic acid “removed from the cellular environment,” which cannot code for the polypeptide without further human intervention. 90 The court also cited evidence of structural differences, such as “the addition of a cap and poly-A tail to naturally occurring mRNA, absent in isolated mRNA, which chemically alters that nucleic acid.” 91
Unlike the U.S. Supreme Court, the Australian court treated the patent claims as directed to chemical entities and focused on the chemical differences between the isolated genes and the genome. 92 The court noted there is a difference “between a claim to an isolated nucleic acid comprised in part of a sequence of nucleotide bases and a claim to a written sequence of nucleotides which may be identical to the corresponding sequence in the natural cell.” 93 The court believed reading the claim as encompassing the genetic information embodied in the nucleotide sequences “ignores the language of the claim” and traditional claim interpretation methods. 94 The court again cited evidence that the genetic code is not functionally a “static sequence of nucleotides,” but part of a larger, more-complicated protein-generating process. 95
The court considered the isolated BRCA genes as material derived from naturally occurring material, not a product of nature itself. 96 The court recognized that the gene that contains the cancerous mutation does exist in nature. 97 Until the isolation, however, it could not be used to identify the mutation. 98 Once it was isolated, the presence of the cancerous mutation could not be determined without comparison to the tables in the patent. 99 The court found that this reflected a difference between the gene in its natural state and after isolation. 100
As for cDNA, the petitioner asserted that cDNA is not patent eligible because it corresponds “precisely to the mRNA sequence and to the exons of the genomic DNA.” 101 However, the court stated that “in nature, a continuous exon sequence of DNA coding for the polypeptide (cDNA) does not exist.” 102 The court found that cDNA is different than genomic DNA because of the inclusion of introns and exons in genomic DNA. 103 The court recognized that mRNA, which is translated from genomic DNA, does exist with similarities to cDNA, but it is not the same molecule as the created cDNA. 104 Because the petitioner recognizes that cDNA is artificially generated, 105 the court found that it was patent eligible subject matter. 106
In the conclusion of its opinion, the court claimed that the U.S. Supreme Court and the U.S. Federal Circuit's dissenting opinions applied inaccurate logic and facts in reaching their conclusions. 107 For a particular example, the court cited and agreed with Federal Circuit Judge Moore's statement that “it is not the chemical change alone, but that change combined with the different and beneficial utility which leads me to conclude that small isolated DNA fragments are patentable subject matter.” 108
IV. Recent Challenges to Genetic Patents: In RE BRCA1- & BRCA2-Based Hereditary Cancer Test, Sequenom, and the Australian High Court's Review of the Myriad Decision
Myriad had its patents again challenged as ineligible subject matter in the case In re BRCA1- & BRCA2-Based Hereditary Cancer Test Patent Litig. 109 Here, the lower court held Myriad's composition claims of DNA primers (“short, synthetic, single-stranded DNA molecules that bind specifically to intended target nucleotide sequences”) were patent ineligible products of nature. 110 Myriad claimed that the primers were patent eligible because they were synthetically replicated and because the primers' single-stranded DNA cannot be found in the human body. 111 The court responded that “neither naturally occurring compositions of matter, nor synthetically created compositions that are structurally identical to the naturally occurring compositions, are patent eligible.” 112 The court pointed out that most of BRCA's isolated genes were synthetically made. 113 For the single-stranded argument, the court discounted that the single strand was “markedly different” enough from the genomic DNA, and pointed to Myriad, where even short isolated genes were not patent eligible. 114
Myriad also argued that the sequences, when extracted as primers, have a fundamentally different function than when they are part of the DNA strand. 115 This line of reasoning was part of why the Australian Federal Court held Myriad's isolated gene patents as patent eligible. 116 The U.S. court, however, was not convinced that the genomic DNA performed a different function than the primers, concluding both sets of DNA serve to bind to complementary nucleotide sequences. 117 The court interpreted the Supreme Court's Myriad decision to hold “DNA structure with a function similar to that found in nature can only be patent eligible as a composition of matter if it has a unique structure, different from anything found in nature.” 118 Because the U.S. Federal Circuit found the genomic and primer DNA to have the same function, and the primers did not have a “markedly different structure,” the primers were patent ineligible. 119
Myriad's diagnostic methods were also challenged in this case. 120 The claims at issue described comparing genetic sequences by either “1) hybridizing a BRCA gene probe and 2) detecting the presence of a hybridization product,” or “1) amplification of the BRCA1 gene and 2) sequencing of the amplified nucleic acids.” 121 The court found these claims, as a whole, to be directed to abstract mental processes, which are patent ineligible. 122 The court held that Myriad's process steps were drawn to conventional activities that were well-understood and uniformly employed by those working with DNA at the time Myriad applied for its patents. 123
The U.S. Federal Circuit also recently clarified the patent eligibility test for inventions based primarily on discovery in Ariosa Diagnostics, Inc. v. Sequenom, Inc. 124 The patent in Sequenom claimed a method of amplifying cffDNA (“a naturally occurring non-cellular fetal DNA that circulates freely in the blood stream of a pregnant woman”) taken from a sample of maternal plasma or serum for prenatal diagnoses of fetal DNA. 125 Applying the Mayo test as stated in Alice, 126 the court stated that it was undisputed that the method started and ended with natural phenomena—starting with cffDNA in maternal blood and ending with paternally inherited cffDNA. 127
Because the claim was directed toward natural phenomena, the court thus turned to the second issue, “whether the claim contains an inventive concept sufficient to ‘transform’ the claimed naturally occurring phenomenon into a patent-eligible application.” 128 In doing so, the court held “for process claims that encompass natural phenomenon, the process steps are the additional features that must be new and useful.” 129
Considering the composition claims first, the court found the claimed method's steps to amplify the cffDNA to be “well-understood, routine, and conventional activity” at the time of invention. 130 “The only subject matter new and useful as of the date of the application was the discovery of the presence of cffDNA in maternal plasma or serum.” 131 The court recognized that the discovery of the cffDNA was “revolutionary” to the field, but, citing Myriad, “[g]roundbreaking, innovative, or even brilliant discovery does not by itself satisfy the § 101 inquiry.” 132 Thus, the claims lacked the requisite “inventive steps” to transform the natural phenomenon of cffDNA into a patentable invention. 133 The court thus emphasized that the patent eligibility test for methods derived primarily from discovery is whether the application steps themselves are “inventive concepts.” 134
The U.S. Federal Circuit in Sequenom also addressed preemption of natural phenomena as it relates to testing for patent eligibility. 135 The patent holder argued that because many other uses for cffDNA exist besides those claimed in their patent, the patent does not preempt all uses of cffDNA and is therefore patent eligible. 136 The court dismissed this argument and instead held that “while preemption may signal patent ineligible subject matter, the absence of complete preemption does not demonstrate patent eligibility.” 137 The court believed that the Mayo test eliminates any preemption concerns when it leads directly to a finding of ineligible subject matter, and therefore preemption as a fact is not necessary to the inquiry. 138
In Australia, the High Court has granted review of the Federal Court's isolated BRCA genes decision. 139 At the hearing for certiorari, the High Court seemed concerned about three major issues that arose in the lower courts' decisions. 140 The petitioners argued that Australian law should adopt the U.S.'s markedly different standard as derived from Chakrabarty, while the appellee believed the lower courts correctly applied the standard of assessing if the product has an “artificial” function compared to the natural function. 141 Also, the appellants believed that the Federal Court incorrectly identified the function of the isolated BRCA genes. 142 Rather than the natural genomic function of “protein production” compared to the isolated gene's function of detecting mutation only, the petitioners argued that the actual “economic function” is in the coding principles attached to the nucleotides. 143 The appellants argued that both the isolated genes and the genomic DNA have this same function. 144
In addition, the parties differed over the complexity and actual differences between the structures of the genomic DNA and the isolated DNA. 145 While Myriad argued that the isolation procedure is a complex process that results in a very different molecule than the genomic DNA, the appellants believed the process is banal, resulting in a simply a snippet from the larger molecule. 146
Overall, the High Court of Australia does seem concerned with the Federal Court's Myriad decision. The international trend toward “patent harmonization” may be influencing the High Court to align itself with other countries that consider the isolated genes patent ineligible—like the U.S. 147 The petitioners have stipulated that cDNA is patent eligible, which is interesting, because most scientific endeavors actually use cDNA, instead of isolated genes. 148
V. Conclusion
Although the U.S. and Australian considerations for patent eligible subject matter differ, both countries' courts agree that patents should only reward invention. Australia's requirement that a natural product be used in an economic and artificial way exemplifies that the purpose of patents is to encourage innovation. U.S. law also demands an artificial application of natural phenomena to receive patent protection. However, because Australian law stresses that the natural product's function and use, not the material itself, must be artificial, the Australian courts took a more permissive view to the patent eligibility of Myriad's isolated BRCA genes. The U.S. Supreme Court, however, considered isolated genes as mere discoveries, essentially unchanged from their natural forms. Thus, the U.S. courts found Myriad's isolated BRCA genes to be patent ineligible subject matter.
This concept also played out in how the courts viewed the claims: the Australian courts considered them directed to chemical embodiments, while the U.S. courts regarded them as directed to natural correlations and information. These differing approaches to patent eligible subject matter potentially could have significant effects on scientific research and innovation going forward.