Myriad Down Under - The Federal Court of Australia has a message for the US Supreme Court: "You were wrong (with respect)!"

© Robert Johnson 

The Federal Court of Australia has recently published its judgment in the case of D'Arcy v Myriad Genetics Inc.: while the issues examined by the Australian court mirror those considered by the US Supreme Court in its landmark decision last year (Association for Molecular Pathology v Myriad Genetics), the outcome certainly does not. In its decision, published on the 5th of September, the Federal Court of Australia openly criticized the Supreme Court's opinion, endorsing, instead, the conclusions reached in the partly-reversed Federal Circuit's decision. The judges found the relevant claims of Australian Patent No 686004 to be patentable, as within the meaning and boundaries of section 6 of the Statute of Monopolies. The dispute primarily concerned the patentability of nucleic acid sequences that have been isolated from the cell nucleus.

The judgment starts with an indication of the theoretical approach of the court to the interpretation of s 6 of the Statute of Monopolies, a provision that is almost 400 years old. First, the judges noted that, in order to define whether an invention is patentable, the interpreter should not focus on the verbal or linguistic meaning of the words 'manufacture' or 'manner of manufacture' (see National Research Development Corporation v Commissioner of Patents), but on whether the invention 'is a proper subject' for a monopoly, in accordance with the principles developed for the application of s 6. The court also warned against the use of metaphors, observing that they can 'blind the eye of the mind by oversimplification': in particular, it took issue with the representation of the process of isolation of the nucleic acid as equivalent to the creation of a metaphorical microscope enabling one to see into a gene and view the exon sequence in the subject person. Finally, it listed the principles and considerations relevant to the applicability of s 6 of the Statute of Monopolies:

First, the boundaries of the conception of patentability are not dictated only by deductive logic from the linguistic premises formulated in the scientific knowledge of a particular age; rather, the boundaries must be such as to be apt to encompass the development of science and technology, and human ingenuity. This explains the broadening concept of patentability since the first quarter of the 17th century.
Secondly, human intervention that creates an artificial state of affairs that has some discernible effect is essential.
Thirdly, whilst notions of utility, ingenuity and invention have their place after one concludes that the claim is within the field of s 6, such notions also inform the context of analysis of patentability by assisting in describing the claims to processes or products that are claimed new results of principles carried into practice through human intervention and that create some claimed useful result by involving an artificial state of affairs.
Fourthly, 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.
Fifthly, the distinction between discovery of a scientific principle or fact and a deployment of such to a useful end by a procedure is real.

After discussing the scientific background of the invention, the court examined the decision of the primary judge, according to which, Myriad's patent did not concern genetic information per se, but isolated chemical composition, thus advancing no claim in relation to 'naturally occurring DNA and RNA as they exist in cell'. The court engaged in, essentially, a reconstruction of the fine line between discovery and invention: inter alia, the court observed that the distinction between the two concepts is primarily concerned with the creative dimension of an invention ('the suggestion of an act to be done, an act which results in a new product, or a new result, or a new process or a new combination for producing an old product or an old result', according to Reynolds v Herbert Smith & Co Ltd), and that an invention that super-adds something to the existing knowledge is patentable, with the fine line being embodied by the existence of an enabling disclosure that departs from what the public already knows (Hill v Evans).

The most interesting part of the decision, however, concerns the court's discussion of the decisions of the Supreme Court and of the Federal Circuit in the similar US case. The analysis moved from the observations made by the High Court in Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd, where their Honors noted that, in the US, 'composition claims to a naturally occurring deoxyribonucleic acid (DNA) segment, focusing on the genetic information encoded in two genes associated with certain cancers, have been held to claim subject matter falling within the exception [to patentability], even though such important and useful genes had never before been located, or isolated from surrounding genetic material' (emphasis added). Then the court turned its attention, in particular, to the decision of the Federal Circuit, reversed, in part, by the landmark decision of the Supreme Court. It found that Judge Lourie, who had delivered the opinion for the Court of Appeals for the Federal Circuit, had properly identified (i) the economic significance of the isolated genes as diagnostic tools, (ii) the distinction between products/laws of nature and products of man, (iii) the difference, in chemical structure and potential use, between naturally occurring and isolated DNA sequences. The court explained that the reasoning of the Federal Circuit, which distinguished between a product and the information contained therein, was 'consistent with patent law, and persuasive', as well as in line with the teaching of National Research Development Corporation v Commissioner of Patents.

The judges established that Myriad's claims concern tangible materials, specifically isolated chemicals, whose structure, uses or functions are different from those of the chemicals in situ. They added that genetic code, in itself, is not claimed in the patent, noting the distinction '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'. In particular, they highlighted that, while the gene that contains the mutation exists in nature, it cannot be used to identify the mutation until it is isolated, a situation that, according to the court, 'reflects a difference between the gene in its natural state and after isolation'.

Tackling the different interpretation given by the US Supreme Court, the judges critically observed that the US decision erred in (i) relying on an analysis of similarities/differences in the location and order of the nucleotides, rather than in the chemical structure, (ii) interpreting Myriad's claim as directed to information contained in the genetic sequence, (iii) finding that the isolated nucleic acid was a product of nature. The relevant passages are reproduced below:

It is difficult to reconcile that Court’s endorsement of the reasoning in Chakrabarty, with its rejection of isolated nucleic acid as eligible for patentability. With respect, the Supreme Court’s emphasis on the similarity of ‘the location and order of the nucleotides’ existing within the nucleic acid in nature before Myriad found them is misplaced. It is the chemical changes in the isolated nucleic acid which are of critical importance, as this is what distinguishes the product as artificial and economically useful. 

[...] Following Chakrabarty and NRDC, the isolated nucleic acid has ‘markedly different characteristics from any found in nature’; Myriad did not merely ‘separate that gene from its surrounding genetic material’. It should make no difference that in Chakrabarty there was an “addition” (of the plasmids) to the natural product (the bacterium); this is not the appropriate test. Myriad’s claim, properly considered is not, as the US Supreme Court considered, concerned ‘primarily with the information contained in the genetic sequence [rather than] with the specific chemical composition of a particular molecule’.

The reasoning of Lourie and Moore JJ of the Federal Circuit is persuasive. It accords with the High Court’s reasoning in NRDC and Microcell. The US Supreme Court accepted that cDNA is patentable. It rejected the isolated nucleic acid of claim 1 because it accepted wrongly, with respect, that the isolated nucleic acid is a “product of nature”. In any event, that exclusion is not in accordance with the principles of patent law in Australia and has been specifically rejected as a reason for exclusion in NRDC.

Thus, the court concluded that Myriad's claim is a patentable invention and the proper subject of letters patent. The isolated nucleic acid 'has resulted in an artificially created state of affairs for economic benefit', and the related invention is as worthy of reward as inventions that use other synthetic versions of DNA (e.g. cDNA, which the US Supreme Court held to be patentable, as a non-naturally occurring DNA sequence, due to the removal of the non-expressing portion of the sequence).

Pre-natal diagnostic claims employing conventional DNA techniques held unpatentable under Myriad

In Ariosa Diagnostics Inc. v Sequenom Inc., the US District Court for the Northern District of California held that several claims of a US patent disclosing a method to detect the presence of paternally inherited DNA of fetal origin (cffDNA), through the screening of maternal serum or plasma, do not constitute eligible subject matter and are invalid under 35 USC 101.

In 2011, Ariosa had filed a declaratory judgment action, seeking a declaration that its non-invasive prenatal test 'Harmony' did not infringe US Patent No. 6,258,540, exclusively licensed by Sequenom from Isis Innovation Ltd. Sequenom had filed a counterclaim for infringement, seeking a preliminary injunction against Ariosa. The court had denied the motion for a preliminary injunction, but the Federal Circuit had vacated the court's order, remanding the case for further proceedings and directing the court to examine subject matter eligibility of the asserted claims in light of the Supreme Court’s recent decision in Association for Molecular Pathology v Myriad Genetics Inc. Both Ariosa and Sequenom had filed motions for summary judgment of whether claims 1, 2, 4, 5, 8, 19-22, 24 and 25 of the '540 patent were drawn to patent-eligible subject matter.

The independent claims at issue in the case were the following:

1. A method for detecting a paternally inherited nucleic acid of fetal origin performed on a maternal serum or plasma sample from a pregnant female, which method comprises amplifying a paternally inherited nucleic acid from the serum or plasma sample and detecting the presence of a paternally inherited nucleic acid of fetal origin in the sample.
24. A method for detecting a paternally inherited nucleic acid on a maternal blood sample, which method comprises:
removing all or substantially all nucleated and anucleated cell populations from the blood sample,
amplifying a paternally inherited nucleic acid from the remaining fluid and
subjecting the amplified nucleic acid to a test for the Paternally [sic] inherited fetal nucleic acid.
25. A method for performing a prenatal diagnosis on a maternal blood sample, which method comprises:
obtaining a non-cellular fraction of the blood sample
amplifying a paternally inherited nucleic acid from the non-cellular fraction and
performing nucleic acid analysis.

The court highlighted that, although the patent law has a wide scope (Diamond v. Chakrabarty), 'laws of nature, natural phenomena, and abstract ideas are not patentable' (Mayo Collaborative Servs. v Prometheus Labs. Inc.). Then it proceeded to examine the case law of the Supreme Court on subject matter eligibility:

• in Funk Bros. Seed Co. v. Kalo Inoculant Co., the Supreme Court held that 'patent cannot issue for the discovery of the phenomena of nature', explaining that the aggregation of specific strains of bacteria in a product, in light of the absence of harmful effects to the properties of either, does not constitute eligible subject matter;
• in Gottschalk v. Benson, the Supreme Court ruled that a method for converting binary-coded decimal numerals into pure binary numerals was ineligible subject matter, as the formula was an abstract idea and would have conferred a patent on the underlying algorithm itself;
• in Parker v Flook, the court stated that a mathematical formula 'cannot support a patent unless there is some other inventive concept in its application'; even if the claim does not wholly preempt the formula and discloses it as a solution for a specific purpose, it remains ineligible for patent protection;
• in Diamond v Diehr, instead, a process that employed a well-known mathematical equation was deemed patentable, as the claim merely sought 'to foreclose from others the use of that equation in conjunction with all the other steps in their claimed process';
• in Bilski v Kappos, dealing with a patent application claiming a procedure for instructing buyers and sellers of commodities in the energy market on how to best deal with price fluctuations, the Supreme Court ruled that the concept of hedging is an unpatentable abstract idea;
• in Mayo v Prometheus, the court rejected the patentability of a process that helped doctors determine whether a given dosage of thiopurine drug was too low or too high, relying on the presence of certain metabolites in the blood, as the claim merely recited a law of nature;
• in Association for Molecular Pathology v Myriad Genetics Inc., concerning claims directed towards the human genes BRCA1 and BRCA2 and related diagnostic tests, the Supreme Court held that 'a naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated, but that cDNA is patent eligible because it is not naturally occurring'.

In the case decided by Judge Susan Illston, the parties agreed on the fact that neither cffDNA, nor its discovery in maternal plasma or serum is patentable, because its presence is a natural phenomenon. The court thus identified the key issue: 'whether the steps of the claimed methods in the ’540 patent, applied to that natural phenomenon, are sufficient to render the claims patentable'. Ariosa argued that the limitations embedded in the claims essentially applied well-understood, routine, and conventional activity to the natural phenomenon. The court agreed, noting that Ariosa had proved that the amplification and detection of DNA sequences in plasma or serum was well known by 1997, as confirmed by Sequenom's own expert. Thus, '[b]ecause the claimed processes at issue - apart from the natural phenomenon of paternally inherited cffDNA - involve no more than well-understood, routine, conventional activity, previously engaged in by those in the field, they are not drawn to patent eligible subject matter and are invalid under § 101'.

Judge Susan Illston
© Jason Doly/The Recorder

The judge dismissed Sequenom's arguments aimed at drawing a distinction between patentability of cffDNA, not permitted, and of its use, allegedly allowed. The decision noted that the Supreme Court has never stated that the use of a naturally occurring phenomenon in patentable. To the contrary, it has clarified that only an innovative or inventive use is entitled to patent protection: such use cannot rely on the simple addition of conventional steps to a non-eligible subject matter. Further, citing Flook, the court held that 'use of a newly discovered natural phenomenon, law of nature, or abstract idea will not render a claim patentable if the use of that natural phenomenon, law of nature or abstract idea is the only innovation contained in the patent'. Applying this reasoning to the case, the judge found that paternally inherited cffDNA does not become patentable just because the claims assert that it can be detected using conventional methods.

Relying on the recent judgment in Myriad, the court held that:

[E]ven though Myriad involved composition claims rather than method claims, that decision also supports the Court’s conclusion. The claims in Myriad gave the patentees the exclusive right to isolate the BRCA1 and BCRA2 genes. Although the Supreme Court was not presented with method claims, the Court explained "[h]ad Myriad created an innovative method of manipulating genes while searching for the BRCA1 and BRCA2 genes, it could possibly have sought a method patent. But the processes used by Myriad to isolate DNA were well understood by geneticists at the time of Myriad’s patents". Similarly, had the inventors of the ’540 patent created an innovative method of performing DNA detection while searching for paternally inherited cffDNA, such as a new method of amplification or fractionation, those claims would be patentable. But, the claims presently before the Court simply rely on processes to detect DNA that - as Sequenom concedes - were conventional techniques by those in the field at the time of the invention.

Evaluating the risk that the claims may preempt the underlying natural phenomenon, judge Illston accepted Ariosa's arguments, observing that preemption is not only triggered by the absence of practicable alternative methods, but also by the lack of commercially viable alternatives. In this perspective, although practicable alternatives for detecting cffDNA existed, the court found that Sequenom's failure to provide evidence of the existence of commercially viable alternative methods suggested that 'the claims at issue pose a substantial risk of preempting the natural phenomenon of paternally inherited cffDNA', supporting the court's conclusion on the unpatentability of the asserted claims.