Patentable subject matter: where to from here for biotechnology?

Dianne Nicol (University of Tasmania) & Jane Nielsen, “Patentable subject matter: where to from here for biotechnology?”

Although the patentable subject matter requirement had traditionally been interpreted as setting a low threshold to patenting, it has become a live issue in more recent times, particularly in the areas of information technology and biotechnology. Supreme Court decisions from the United States have significantly narrowed patent-eligible subject matter. The Supreme Court was particularly concerned that the patent claims in issue in those cases were apt to preempt abstract ideas, laws of nature and natural phenomena, which have long been held to be patent ineligible. In the context of biotechnology inventions, the well canvassed decision in Association for Molecular Pathology v Myriad Genetics, Inc (AMP) invalidated Myriad Genetics’ claims to isolated nucleotide sequences which are linked with hereditary forms of breast cancer.

The courts in Australia were also recently given the opportunity to re-evaluate the scope of patentable subject matter in that jurisdiction. In D’Arcy v Myriad Genetics, Inc (D’Arcy), the most recent Australian High Court decision in this patentable subject matter saga, the Court invalidated what were essentially the same claims in Myriad’s Australian patent as those invalidated in the USA in AMP. The essence of the Court’s decision was that the isolated nucleotide sequences as claimed did not fall within the concept of manner of manufacture under s 18(1)(a) of the Patents Act 1990 (Cth), as interpreted in National Research Development Corporation v Commissioner of Patents (NRDC). In coming to its decision, however, the Court reminded us that there can be no rigid formulation of the manner of manufacture requirement, but rather that a range of factors must be taken into account.
In Europe, in contrast, there has not been the same flurry of activity relating to patentable subject matter. This is particularly the case for biotechnological patents because provisions in the European Biotechnology Directive (particularly Article 5) make it difficult for legal actions seeking to invalidate nucleotide sequence claims on the subject matter ground to be brought in countries that have implemented the Directive into their domestic patent legislation.

This paper will provide a brief discussion of the jurisprudence in the USA and Australia, and the differing responses taken by the patent offices in each jurisdiction, with the US Patents and Trademarks Office initially taking a very broad interpretation, which has since been narrowed and the Australian Patent Office first taking a very narrow approach, which was subsequently broadened.
These decisions have been heralded as freeing researchers and providers of diagnostic testing services from the Myriad fetters, but the reality might be very different. In the Australian context, at least, our empirical research suggests that patents claiming nucleotide sequences had not been particularly problematic for researchers or diagnostic testing laboratories prior to the High Court decision in D’Arcy. And by the time that the D’Arcy decision was handed down, the relevant patent had already expired. Ironically, though, the post-patent landscape may become more restrictive, in Australia and elsewhere. One reason is that Myriad has been able to amass very significant datasets of nucleotide sequence information that arguably permits it to draw more accurate conclusions on its diagnostic tests than other providers, particularly for those sequences that fall into the category of ‘variants of unknown significance’. These datasets are protected by trade secrecy and are virtually impossible to access other than with Myriad’s consent.

Trade secrecy is enjoying rapid ascendancy, particularly in regional fora in terms of the importance attributed to the strength of protection it provides. This raises a question as to the consequences of the rising predominance of trade secrecy over patent law, and the extent to which we should be focusing on its scope to a greater extent, perhaps, than the scope of patentable subject matter. It is conceivable that one of the most important consequence of the subject matter cases in Australia and the USA is that they have ushered in trade secrecy as an increasingly significant weapon in the intellectual property armory of inventors in this field.

It is still the case that patents will continue to be granted and enforced in biotechnology, although the precise boundaries of patentable subject matter remain to be drawn. In reality, the subject matter requirement is only the tip of the iceberg in the patent scope and validity conversation. All of the other patent criteria remain on the table. Challenges to patent protection in the gene editing area illustrate the point well. The emergence and rapid uptake of CRISPR Cas-9 genome editing technology has paved the way for a flurry of patent applications, and a raft of impending legal disputes. The path to open science is far from clear post-Myriad.

This paper will briefly consider these new challenges in light of the Myriad set of decisions, and conclude that fresh nuances to the patent debate in biotechnology will continue to emerge for the foreseeable future.