5 September 2014
Practice Groups:
IP Litigation
IP Procurement and
Portfolio
Management
Breaking News – Full Federal Court Confirms
Patentability of Isolated Genes
By Jane Owen, Tim Francis, Alex Dunlop and Sharon Joseph
Yvonne D'Arcy v Myriad Genetics Inc & Anor (5 September 2014)
A five-judge bench of the Full Court of the Federal Court of Australia (Full Court) has
today unanimously decided that Myriad Genetics Inc's (Myriad) patent covering the
isolated BRCA1 gene (Patent) is patentable subject matter in Australia.
The Full Court elected not to follow the reasoning of the U.S. Supreme Court, when it
found in 2013 that certain claims of a closely related U.S. Patent of Myriad were invalid,
as the claim to isolated nucleic acid was a claim to a "product of nature" and not
patentable subject matter.
The key issue for determination by the Full Court under Australian law was whether the
invention in the Patent - which claimed isolated nucleic acids, including isolated DNA and
RNA - constitutes a 'manner of manufacture' for the purposes of section 18(1)(a) of the
Patents Act 1990 (Cth) (Act). The nucleic acids claimed in the Patent (Invention) are
naturally occurring materials that have been 'isolated', which essentially means that they
have been extracted from cells obtained from the human body and purged of other
biological materials with which they were associated.
At first instance, Justice Nicholas found that the Invention constituted a 'manner of
manufacture' and, therefore, the Patent was valid. The Federal Court of Australia (Court),
therefore, dismissed the application to revoke the Patent. The Full Court agreed with the
trial judge's finding that the Patent was valid and dismissed the appeal.
The Full Court confirmed that the test for whether an invention was a manner of
manufacture turned on whether it resulted in an artificial state of affairs providing a new
and useful effect that is of economic significance, which is the test set out in the National
Research Development Corporation Case1 (NRDC Case).
Background
The claims of the Patent relate to isolated nucleic acid coding for mutant or polymorphic
BRCA1 gene. These mutations in the BRCA1 gene can serve as indicators of a woman's
risk of developing breast cancer, among other things.
In the first instance decision, the Court said that there were three considerations that
supported its finding that the Invention was a 'manner of manufacture':
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
The Australian High Court has indicated in the NRDC Case that the concept of
what constitutes a 'manner of manufacture' has a 'broad sweep', to encompass
developments in technology that are, by their nature, often unpredictable.

Because the DNA and RNA in the Invention does not naturally exist outside of
human cells – but requires human intervention in order to exist – it is an artificially
created state of affairs.
National Research Development Corporation v Commissioner of Patents ("NRDC case") [1959] HCA 67; (1959)
102 CLR 252 (16 December 1959)
Breaking News – Full Federal Court Confirms Patentability of Isolated
Genes

It would be a very odd result if a person whose skill and effort culminated in the
isolation of a DNA sequence could not be independently rewarded by grant of a
patent because the isolated sequence was held to be inherently non-patentable.
At first instance the Court did affirm that naturally occurring DNA and RNA as they exist
inside the cells of a human body are not patentable. However, it also pointed out that the
Court was not required to ask whether a composition of matter is a "product of nature" for
the purpose of deciding whether or not it constitutes patentable subject matter.
The Full Court has reiterated that view in delivering its reasons in Court, finding that:
"…the isolated nucleic acid, including cDNA, has resulted in an artificially created
state of affairs for economic benefit. The claimed product is properly the subject
of letters patent."
Next Steps – Further Appeal Possible
Either party may seek special leave to appeal the Full Court's decision to the High Court
of Australia.
Impact on Gene Patenting
Unless this decision is successfully appealed, it will stand to affirm that isolated genetic
material of the type in the Patent can be a manner of manufacture capable of patent
protection. More broadly, this decision appears to support the proposition that, where
human intervention is required to isolate an otherwise naturally occurring substance or
organism from its usual surroundings and chemical associations, the isolated material
could constitute patentable subject matter.
We have also previously written about the first instance decision and its potential impact
of this dispute on gene patenting here.
Authors:
Jane Owen
jane.owen@klgates.com
+61.2.9513.2327
Tim Francis
tim.francis@klgates.com
+61.2.9513.2334
Alex Dunlop
alex.dunlop@klgates.com
+61.3.9205.2062
Sharon Joseph PhD
sharon.joseph@klgates.com
+61.3.9205.2151
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Breaking News – Full Federal Court Confirms Patentability of Isolated
Genes
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