BACKGROUND TO THE INQUIRY
This chapter provides a brief description of the broader context in
which the inquiry occurred, including:
- the events surrounding the attempted enforcement of rights
relating to patents for the so called 'breast cancer genes', BRCA1 and BRCA2,
by Genetic Technologies Ltd (Genetic Technologies) in Australia; and
- previous and current inquiries into issues relevant to gene
To frame the analysis and discussion in following chapters, this chapter
also provides an outline of:
- the definition of and rationale for the patent system;
- the nature of patent rights;
the criteria for the grant of a patent; and
- processes for challenging the validity of patents.
The BRCA1 and BRCA2 gene patents
The gene patents inquiry was instigated largely in response to concerns
arising from attempts by Genetic Technologies in 2002-03 and 2008 to enforce
its patent rights over the BRCA1 and BRCA2 genes (the BRCA genes) in Australia.
The BRCA gene patents relate to methods and materials used to isolate
and detect mutations in two genes that may indicate a predisposition to certain
cancers, notably breast cancer and ovarian cancer. The patent holder is an
American company, Myriad Genetics Ltd (Myriad), which has granted Genetic Technologies
the exclusive rights to BRCA1 and BRCA2 testing in Australia. Associate Professor
Judy Kirk, Director, Familial Cancer Service, Westmead Hospital, explained the
significance of the BRCA genes:
...[Some] families have an inherited fault in a gene which puts
them at an incredibly high risk of developing breast and ovarian cancer, and
prostate cancer in the men. The two genes that we test in these families are
known as BRCA1, the breast cancer 1 gene, and BRCA2...These are genes that we all
have and these sequences are in every human being. They are normally involved
in cell growth...We will not all have an identical BRCA1 gene. But some of
us...will have a fault or a mutation that is big enough to cause a problem with
the protein that that gene makes. Those are the people who are at very high
risk of cancer. If we can identify those high-risk individuals we have a great
deal to offer them in terms of cancer screening and cancer prevention and even
Attempted enforcement of rights over BRCA genes by Genetic Technologies
In 2002-03 and 2008, Genetic Technologies sought to enforce its rights
in relation to the BRCA genes in Australia. As is discussed below, the grant of
a patent gives a patentee exclusive rights to exploit their patented invention,
which means that they can prevent other parties from using or exploiting that
invention. In the case of the BRCA genes, Genetic Technologies wrote to
research bodies and other entities seeking to prevent these entities from
engaging in any further testing for the BRCA genes. For example,
representatives of the Peter MacCallum Cancer Centre (PMCC) advised that in
both 2002-03 and 2008 the Centre had received 'cease and desist' letters from Genetic
Technologies. The letters instructed PMCC to stop conducting BRCA testing and
refer all future samples to Genetic Technologies for testing.
Ultimately, however, Genetic Technologies dropped its legal demands in
relation to testing for the BRCA genes. In a report to shareholders on 9 July
2003, Genetic Technologies noted that it was not seeking to enforce its rights
over the genes and stated that the BRCA genes 'are our gift to the Australian
Similarly, in relation to the attempt in 2008, Genetic Technologies announced
that it had reviewed its decision to assert its rights over the testing, and
had 'resolved to immediately revert to its original decision to allow other
laboratories in Australia to freely perform BRCA testing'.
In relation to the 2008 demands, the Committee understands that state
health departments negotiated with Genetic Technologies following the issuing
of the 'cease and desist' letters. While the inquiry did not receive any
definitive account of Genetic Technologies' reasons for withdrawing its
demands, a number of reasons were suggested. These included that:
- there was widespread public and professional criticism of Genetic
Technologies for seeking to enforce its rights, and the company wished to avoid
further negative publicity;
- Genetic Technologies' purported gifting of the test to the
Australian people in 2002-03 may have rendered the enforcement of its rights
- negotiations with health departments may have indicated that the
demands and/or the patents would be legally contested on certain grounds;
- the Australian Competition and Consumer Commission (ACCC) was
considering, or had instituted,
an investigation into whether the matter raised issues of anti-competitive
In correspondence to the Committee, the ACCC advised that, in response
to Genetic Technologies' attempt to enforce its rights over the BRCA testing in
2008, the Commission had begun to consider concerns that the attempt by Genetic
Technologies to withdraw access to its intellectual property rights raised
issues under section 46 of the Trade Practices Act 1974 (TPA),
which relates to misuse of market power. In determining this question, the ACCC
- whether Genetic Technologies had market power in a market
concerning the provision of testing services for susceptibility to breast
cancer by way of its exclusive licence over the patents;
- whether Genetic Technologies took advantage of any market power
or had taken advantage of its exclusive licenses; and
- if Genetic Technologies had taken advantage of its market power,
whether it was for the purpose of eliminating, or substantially damaging, its
However, following advice that Genetic Technologies had decided not to
seek to enforce its rights over the BRCA patents, the ACCC advised that it was
not ultimately required to form a view as to whether Genetic Technologies had
breached section 46 or any other provision of the TPA.
The attempts by Genetic Technologies to enforce its rights over the BRCA
genes in Australia highlighted significant concerns about the potential impacts
of gene patents on the healthcare industry, particularly in terms of medical
research and the delivery of healthcare (as reflected by this inquiry's terms
of reference). Despite the withdrawal of Genetic Technologies' demands, there
has been much public discussion and debate about the potential for the BRCA or
other gene patents to adversely impact on these areas both now and in the
future. These issues are fully considered in Chapter 3.
AUSTRALIA'S PATENT SYSTEM
An understanding of the operation of Australia's patent system is
fundamental to any consideration of the issues around gene patents and their
effect on the matters described by the inquiry's terms of reference: healthcare,
medical research and the health and wellbeing of Australians.
The legislation which governs the patent system in Australia is the Patents
Definition of a patent
A patent is a private property right granted by the Crown to the
inventor of a product, method or process in a field of technology.
A patent allows the patent holder to prevent others from exploiting the
invention, and so to maximise the commercial potential of the invention for the
duration of the patent. In simple terms, a patent grants a monopoly to the
Purpose of the patent system
Unlike many Acts, the Patents Act 1990 (the Act) does not
specifically set out any objects (objectives). However, as noted in the 2004 Australian
Law Reform Commission report, Genes and ingenuity: gene patenting and human
health (the ALRC report), the goal of the patent system is 'fundamentally
The patent system seeks to encourage the availability of new and useful technologies
to society through the incentive of a monopoly to commercially exploit an
invention for a given period, usually 20 years.
The patent system further promotes innovation through encouraging the
diffusion of knowledge, as it is a condition of the grant of a patent that the inventor
is required to publicly disclose their invention. This ensures that others can
utilise and build on an innovation to further develop new and useful technologies.
Mrs Fatima Beattie, Deputy Director-General, IP Australia, summarised
the rationale of the patent system in the following way:
The objective of Australia's patent system is to benefit
Australia by stimulating industrial innovation and encouraging technology
access and transfer. The system rewards inventors with a period of exclusivity
to prevent others from exploiting their invention in return for disclosing their
invention to the public. Diffusion of knowledge in the public domain helps to
facilitate research in emerging fields of the patented invention.
Nature of patent rights
Scope of patent rights
As noted above, the grant of a patent gives the patent holder a monopoly,
or exclusive rights, over an invented product or process. In relation to a
product, the Act defines the term 'exploit' as:
- the making, hiring, selling or otherwise disposing of the
- offering to make, sell, hire or otherwise dispose of the product;
- the use or import of the product; and
the keeping of the product for any of the above purposes.
In relation to a process, the term 'exploit' is defined as using the
process or method to do any of the acts outlined above in respect of a product
resulting from such use.
A patent holder might seek to exercise their patent rights in any number
of the ways described above in seeking to maximise the profit potential of
their patent. It is also common for patent holders to enter into a licence
agreement with a third party to allow that party to exploit an invention in
certain ways. Such agreements may be entered into exclusively or concurrently
with a number of parties. As noted above, the patent holder for the BRCA gene
patents is an American company, Myriad, which has granted exclusive rights to
Genetic Technologies for the exploitation of those patents in Australia.
Limits on patent rights
Despite the theoretical breadth of patent rights, in practice a patent
does not grant an absolute right to exploit an invention in any way the
inventor may choose. The ALRC report explains:
A patent holder may have to satisfy regulatory requirements
in order to exploit the patented product or process; for example, a patented
pharmaceutical compound may need approval under the Therapeutic Goods Act
1989 (Cth) before it can be marketed lawfully and sold as a treatment for a
particular condition. Similarly, the use of a patented invention is subject to
the general law; for example, the components required to manufacture a car may
be the subject of many patents, but the car must still be used in accordance
with motor traffic laws.
Further, and of particular significance to the inquiry, a patent holder's
rights might also be limited or constrained by operation of certain provisions
of the Act, pertaining to compulsory licences and Crown use.
These are discussed in more detail in Chapter 5.
In Australia, it is uncertain as to whether a research exemption exists
in relation to the patent system. This issue is discussed in more detail in
Requirements for grant of a patent
The Act contains a number of criteria or requirements for patentability
of an invention under Australian law. Together, these criteria establish a
threshold for the patentability of an invention. The Act provides that an
invention will be patentable if, inter alia, it:
- is a 'manner of manufacture';
- is novel;
- involves an inventive step;
- is useful; and
- the details of the invention are sufficiently well disclosed or
Manner of manufacture
The Act requires that an invention be a 'manner of manufacture'.
This relates to the question of what can be the subject matter of a patent. Put
simply, it means that a patent must relate to 'an artificial state of affairs':
a product, process or method that arises through some form of 'human
intervention with nature to bring about some physical change'.
The Act does not define 'manner of manufacture' but merely states that
an invention must be a 'manner of manufacture within the meaning of section 6
of the Statute of Monopolies', a law from 1623 pertaining to monopolies.
The decision not to specifically define the term in the Act reflects a view at
the time of its creation that it would be 'difficult to draft a definition that
would adequately reflect the body of law that had progressively fleshed out the
concept of a manner of manufacture'.
Moreover, a number of reviews of Australia's patent system preceding the
passage of the Act had concluded that the 'manner of manufacture' test should
be retained because its flexibility allows it to respond to or encompass new
developments in technology or human ingenuity.
Prior to 1959, judicial interpretations had driven a significant evolution of
the term 'manner of manufacture' in respect of the scope of patentable subject
matter. Along with the extension of the term to include processes as well as
products, a number of general and specific classes of unpatentable inventions
had been identified, including:
- a general prohibition on the patenting of intellectual
information and conceptions, such as business schemes, instructions,
mathematical formulae, discoveries and principles of nature; and
- specific prohibitions on the patenting of certain subject matter,
such as methods for medical treatment of humans and living matter.
However, in 1959, the basis of the current legal conception of the term
'manner of manufacture' was established by the High Court case National
Research Development Corporation v The Commissioner of Patents (the NRDC
In simple terms, the court endorsed a more expansive definition of 'manner of
manufacture', whereby patentability is determined by reference to the policy
intent of the (then) Act rather than by application of a strict definition.
The ALRC report provides the following summary of the present approach to
interpreting 'manner of manufacture':
For an invention to be a 'manner of manufacture', as
interpreted in NRDC, it must belong to the 'useful arts' rather than the 'fine
arts'; it must provide a material advantage; and its value to the country must
be in the field of economic endeavour. However, judicial interpretation has
also recognised a number of categories of subject matter that will fail to
satisfy the test. These include mere discoveries, ideas, scientific theories
and laws of nature.
IP Australia identified the following principles from the NRDC case:
the distinction between discovery (which is unpatentable) and invention
is very fine;
it is the practical application of information to a useful end
that takes a discovery into the realm of 'manufacture';
- 'manner of manufacture' should not be rigidly defined: its
purpose is to encourage national development in 'excitingly
unpredictable fields'; and
- an invention is patentable if it gives rise to an 'artificially created state
of affairs' in the 'field
of economic endeavour'.
A second significant element in the approach of Australian courts in determining
whether an invention is a 'manner of manufacture' is that the Act contains few
specific limitations on patentable subject matter. These are:
- human beings and the biological processes for their generation;
- plants and animals, and the biological processes for the
generation of plants and animals.
A number of judicial comments have indicated that the absence of express
statutory exclusions has been influential in the willingness of courts to
accept broader subject matter as a manner of manufacture.
Together, the NRDC case and the lack of express prohibitions on patentability
in the Act have had an expansive effect on the limits of patentable subject
matter in Australia:
The lack of express statutory exceptions combined with the
breadth of the NRDC judgment has enabled courts to remove the fetters
that may otherwise prevent new developments from being patentable. The result
has been a piecemeal erosion of formerly perceived classes of excluded subject
matter. NRDC itself rejected the former exclusion of patents for
horticultural and agricultural methods. Subsequent decisions declared patents
valid for computer programs and methods of medical treatment for humans with
the result that a number of formerly excluded classes of subject matter are now
regarded as patentable. Patents are granted for computer programs, computer
implemented systems used in business, living plants, animals, genetic materials
and recombinant DNA techniques.
In relation to gene patents in particular, the IP Australia submission advises:
Despite the long judicial history, to date no court decision
in Australia has considered specifically whether isolated and purified gene
sequences are proper subject-matter for patents. In the absence of Australian
precedents, IP Australia has turned for guidance to decisions and practice
relating to chemical compounds.
Discovery v invention
In the context of genes and genetic materials, the requirement that an
invention be a manner of manufacture assumes particular importance in relation
to a longstanding distinction between inventions and discoveries under the law,
and this issue was raised in numerous submissions to the inquiry.
Patent law recognises only 'inventions' as being patentable;
'discoveries' are not patentable. Evidence to the inquiry revealed strong
differences of opinion over IP Australia's current practice of accepting
isolated or purified genetic sequences as 'inventions'. This issue is discussed
in detail in Chapter 4.
'Contrary to law' and 'generally
The Statute of Monopolies provides that a patent may not be granted on
the grounds that a new manner of manufacture is 'contrary to law' or otherwise
'generally inconvenient'. The Advisory Council on Intellectual Property (ACIP)
options paper on patentable subject matter explains:
Section 6 of the Statute of Monopolies provides that patents
are only available for manners of new manufacture that are 'not contrary to law
nor mischievous to the state by raising prices of commodities at home or hurt
of trade or generally inconvenient'. This results in a definition of invention
that goes beyond technological development and includes social and economic
However, the ACIP paper notes that under Australian law it is currently unclear
whether inventions can be excluded from patenting on public policy grounds, such
as for being 'generally inconvenient':
Arguably, patents may also be refused on public policy
grounds where the grant of a patent would be 'generally inconvenient'. This
arises from the reference to section 6 of the Statute of Monopolies in
the definition of invention. Unlike the other exclusions, general inconvenience
forms part of the definition of invention rather than a category of inventions
to be excluded from patentability. However, its meaning and its ongoing
application is unclear.
The availability of general exclusions such as on the grounds that an
invention is 'generally inconvenient' is the subject of an inquiry by ACIP into
patentable subject matter. The issue of general and specific exclusions to
patentable subject matter and the ACIP review are discussed in Chapter 5.
A claimed invention must be novel or not previously known. This question
relates to the issue of whether there has been previous publication or use of an
The requirement for 'novelty' is simply understood as ensuring that a
patent is only granted for an invention that is truly new, in the sense of being
not previously known in a given field of knowledge. This means that, at the
time of application for a patent, the details of the invention must not have
been 'published or made publicly available through use anywhere in the world'.
Whether an invention is novel is judged by a comparison with the state
of knowledge in the field relevant to the invention, which is referred to as
the 'prior art base'.
A claimed invention must involve an 'inventive step'. This question relates
to the level of ingenuity required for an invention to be granted a patent.
The requirement that an invention involve an inventive step is
fundamental to the patent system, as it ensures that a monopoly is not awarded
for knowledge that was obvious or that would have been available at the time of
the patent application.
Whether an invention involves an inventive step is judged by a
comparison with the state of knowledge in the field relevant to the invention,
which is referred to as the 'prior art base'. The prior art base includes
information in a document, or information made publicly available by doing an
act, anywhere in the world; and 'common general knowledge' in the relevant art
The element of inventive step was relevant to a number of issues raised
by submitters and witnesses in relation to gene patents.
IP Australia submitted that there are in total four opportunities for
the validity of a patent to be tested under the Act:
- each application is examined by IP Australia before it may be
accepted or refused (examination);
- each accepted application may be opposed before grant by any
party, including the Minister (opposition);
- applications may be re-examined before grant at the discretion of
the Commissioner of Patents, and the patent must be re-examined after grant on
request from any person in an approved form, including the Minister (re-examination); and
- post-grant, the validity of a granted patent can be challenged in
the courts by any party, including the Minister (revocation).
The evidence to the inquiry concerning the testing of the validity of
patents mainly concerned the examination stage of the patent process. The main
requirements of patent examination were described above.
Revocation of granted patents
Evidence concerning post-grant challenges to patents (revocation) highlighted
that this is a time-consuming and costly process that is usually only pursued
by commercial interests.
The Committee heard claims that there is a significant number of patents
of questionable quality currently in force, and there was therefore some
consideration of the possibility of challenging granted patents through
post-grant opposition in the courts—that is, by seeking their revocation.
It is important to understand that, under the Act, a grant of a patent
by the Commissioner of Patents (the Commissioner) does not guarantee or
necessarily imply that a patent is legally valid.
This means that the revocation of a patent may always be sought, and in fact
the patent system is premised on the idea that patents may or will be tested
through legal proceedings. Once a patent is granted, a person may apply to the
Commissioner to have the patent revoked. The grounds for any such application are
set out in section 59 of the Act, with the most relevant for the purposes of
the inquiry being that the 'invention is not a patentable invention' (section
59(b)). This ground encompasses all the aspects of validity set out in sections
18(1) and (2), including that the invention:
- is not a manner of manufacture;
- lacks novelty; and
- is obvious (that is, does not meet the inventive step requirement).
The Commissioner must determine an application in accordance with the
Patents Regulations 1991. Decisions of the Commissioner may be appealed to the
Federal Court by any party.
Obstacles to seeking revocation of patents
through the courts
The evidence of many submitters and witnesses pointed to the expense of
opposing patents through the courts, given the complex technical and legal
aspects of the patent system. As noted above, the grant of a patent does not guarantee
that all the requirements of patentability are satisfied, so in fact the patent
system is premised on the idea that questionable patents may or will be tested
in the courts. Dr Hazel Moir explained that '[no] application which the patent office
accepts can be assumed to be valid until it has been tested [in the courts]'.
However, the Committee heard that there are relatively few court
challenges to granted patents, except in cases where there are sufficient
commercial motives and resources involved. Dr Luigi Palombi explained:
...the real problem is that we have no efficient way of testing
the validity of these patents. It costs millions of dollars, it costs a lot of
time, and you need to be a very sophisticated litigant to actually test the
validity of these patents...It is also very difficult for non-profit, charitable
organisations, such as the Cancer Council, to run the risk of litigation. Under
the rules in Australia, if you sue and you lose you have to pay the costs, even
if lawyers were to do that case for free.
Dr Palombi noted that a pro bono offer to test the validity of
the BRCA patents in Australia had been refused by the Cancer Council Australia
due to concerns about the potential cost-exposure of the legal proceedings. Dr
Palombi observed that 'the whole system is stacked against anyone other than
the patentee'. 
The submission of the South Australian Government also pointed to the
apparent under-use of the legal system to challenge patents, even in cases
where patents are of questionable quality. This is probably attributable to the
complexity and high cost of the system. The submission also pointed to other
factors, noting in particular that patent insurance is available to patent
holders to cover the costs of defending a challenge to a patent's validity. In
relation to revocation proceedings, the patent system therefore contains
significant disincentives to potential challengers of patents.
Mr Richard Hamer, Member, Business Law Section, Law Council of Australia
(LCA), observed that legal challenges to patents are more common where large
commercial interests are at stake. In the case of pharmaceutical patents, for
example, generic-drug companies are proactive in challenging patents thought to
contain any weaknesses. While smaller companies are unlikely to mount
challenges, industry associations or other concerned groups have funded patent
challenges. However, the LCA was not aware of any specific challenges to gene
Mr Hamer noted that in many cases it is uneconomic, given the potential costs
and risks of litigation, for patent holders to undertake legal action, even where
they are aware of certain patent infringements.
Some evidence suggested that, in many cases, threat of legal action is secondary
to intentions to enter into licence agreements—that is, the threat of legal
action is used strategically to persuade another party to negotiate a licence
agreement in order to avoid expensive and time-consuming legal battles.
However, this raises the prospect that such threats could lead to such agreements
being entered into even when based on unmeritorious claims, simply because a
party cannot risk the expense of court proceedings.
Professor Peter Drahos advised that in practice very few patents are challenged
in the courts:
...it is important to remember that very few patents are ever
litigated. The litigation rates in the United States are less than two per cent;
that is the most active litigation system in the world. In most other
countries, it is less than one per cent. So relying on courts to reform the
patent system is fairly futile, actually.
Given the expense of challenging patents through the courts, some
submitters and witnesses suggested that the Government should consider funding
a public interest litigation to challenge the validity of gene patents, particularly
in relation to the question of whether human genes and genetic material should
be regarded as patentable subject matter. Dr Palombi advised:
If a test case were to be brought I think that it would be
completely appropriate for the Commonwealth to fund the litigation to resolve
what is going to happen to the patents that have already been granted. We are
probably going to need a court decision to make it clear as to whether or not
these patents are valid or whether the claims over isolated biological
materials are valid.
The Committee notes that, on 8 June 2010, Maurice Blackburn Lawyers
representing Cancer Voices Australia and Ms Yvonne D’Arcy commenced proceedings
in the Federal Court of Australia, seeking to invalidate the BRCA patents in Australia.
This is discussed further in Chapter 4.
Re-examination of patents
The Act provides a discretion to the Commissioner to re-examine an
application and a granted patent on an own-motion basis.
A third party may not initiate any such re-examination until a patent has been
granted. However, once granted, re-examination of a patent must be conducted if
a request is received from the patentee or a member of the public (unless there
are other proceedings pending);
or by a court (section 97(3)).
On re-examination of a patent specification, the Commissioner must
report on whether the claim, when compared with the prior art base:
is not novel; and
- does not involve an inventive step.
Following requirements for informing an applicant of any adverse decision,
the Commissioner may refuse to grant or revoke a patent. Any such decision by
the Commissioner may be appealed to the Federal Court.
Dr Matthew Rimmer suggested that the re-examination process could provide
a more affordable and thus accessible means of challenging the validity of
Once the patent is granted, it then becomes very difficult to
challenge the validity of the patent in terms of the costs and expenses
associated with that. The United States regime has been making much greater use
of re-examination of patents once they are granted. The Public Patent
Foundation, which is a civil society organisation, has been particularly good
of late in bringing re-examination requests against critically important
patents such as, for instance, the BRCA1 and BRCA2 patents and some of the
Wisconsin Alumni Research Foundation's stem cell patents. So some are keen on
re-examination as a less expensive means of assessing the validity of patents.
Some are interested in postgrant opposition proceedings in relation to the
validity of patents. It is a big problem at the moment, because the current
environment really allows patent trolls to flourish, because parties in most
instances will be willing to pay a licence fee rather than necessarily take
International patent system
The Committee heard that the patent system is relatively uniform across
a number of countries, following many years of efforts to harmonise
intellectual property systems. This has occurred as an aspect of international
cooperation in the areas of economic and trade development.
A number of submissions to the inquiry raised issues related to the international
system of patent law. In particular, a number of stakeholders contended that
certain reforms to Australia's patent system could place Australia in breach of
its international obligations. The potential for reform of Australia's domestic
patent system to create breaches of its international obligations was
identified in the ALRC report, which observed:
...[Proposed reforms to the patent system] may have
implications for Australia's obligations under multilateral agreements dealing
with patents and other intellectual property laws, and under bilateral free
trade agreements with other states, including the free trade agreement recently
concluded with the United States.
Australia is a party to a number of international legal instruments
relating to intellectual property, which together reflect the ongoing
harmonisation of the systems of the signatories. Australian domestic law has given
effect to significant provisions of these agreements, including:
The Paris Convention for the Protection of Industrial Property 1883 is
the principal international agreement on intellectual property. In relation to
patents it provides, inter alia, for mutual recognition of the rights of the
nationals of signatory states.
Patent Cooperation Treaty
The Patent Cooperation Treaty 1970 allows a patent to be filed
simultaneously in multiple jurisdictions by filing a single international
application in one country. Determining the validity of the patent remains the
responsibility of each national patent office.
The Budapest Treaty on the International Recognition of the Deposit of
Microorganisms for the Purposes of Patent Procedure 1977 establishes an international
system for the deposit of microorganisms relating to patent applications.
The Agreement on Trade-Related Aspects of Intellectual Property Rights
1994 (TRIPS Agreement) establishes, inter alia, the minimum standard of patent
protection that each member of the World Trade Organization (WTO) must provide
under its national laws. Domestic law may augment any such standards as long as
this does not affect the operation of other provisions of the TRIPS Agreement.
The TRIPS Agreement was the main focus of submissions to the inquiry on Australia's
international obligations. A number of aspects of the Agreement were highlighted
as being relevant to gene patents, and particularly the question of whether
human genes and genetic materials should be expressly prohibited under the Act:
- a requirement that member states make patent protection available
for any inventions, whether products or processes, in all fields of technology;
- provision for optional exclusions from patentability that may be
adopted by member states; and
- a right for member states to provide limited exceptions to patent
rights, including public policy exceptions, so long as such exceptions do not
unreasonably conflict with the normal exploitation of a patent, and do not
unreasonably prejudice a patent holder's rights.
There was significant disagreement amongst some submitters and witnesses
concerning the extent to which the TRIPS Agreement prevents Australia from
expressly prohibiting or otherwise treating gene patents differently under the
Act. This issue is discussed in more detail in Chapter 4.
Australia-United States Free Trade
In addition to the agreements outlined above, any reform of Australia's
patent system may also have to take into account obligations or constraints arising
from bilateral trade agreements with other countries. In particular, the Australia-United
States Free Trade Agreement (AUSFTA), entered into on 18 May 2004, contained a
number of provisions pertaining to aspects of the patent system, including:
exclusions from patentability;
- revocation of patents;
Crown use and compulsory licensing; and
- the requirement of 'usefulness' for patentability.
The ALRC report notes that AUSFTA may be significant for any suggested
reform of Australia's patent system: '[in cases where] the AUSFTA reflects
existing Australian law or practice, the agreement may act as a constraint on
Previous and current inquiries relevant to gene patents
The Committee notes that a number of previous inquiries have reported on
both particular and general issues relevant to its inquiry into gene patents.
The Committee acknowledges these efforts and was able to draw on this work to
inform its own considerations. Notable completed inquiries include:
IPAC review of Australia's patent
The report Patents, innovation and competition in Australia was
presented to the Government on 29 August 1984. It was produced by the
Industrial Property Advisory Committee (IPAC), chaired by Mr John Stonier. This
report was influential in informing the policy underlying the development of
the Patents Act 1990.
IPCRC report on competition and
intellectual property law
The Review of intellectual property legislation under the Competition
Principles Agreement (the Ergas Report) was presented to the Government on
30 September 2000. It was produced by the Intellectual Property and
Competition Review Committee (IPCRC), chaired by Mr Henry Ergas.
The Ergas report concluded that intellectual property laws and
competition policy are 'largely complementary' on the basis that the former
promotes innovation, 'which is a key form of competition'. However, it
acknowledged that a tension exists between the two because of the potential for
exclusive rights to promote anti-competitive behaviour:
It must also be recognised that the rights granted by the
intellectual property laws can be used for anti-competitive ends. This occurs
when the rights are used to claim for the creator not merely a share of the
efficiency gains society obtains from the creation, but also super-normal
profits that arise from market power unrelated to the creation.
The Ergas report concluded that the threshold for obtaining a patent
should be higher, on the basis that monopolistic rights can excessively affect
competition if granted to inventions that are not truly innovative.
The recommendations of the Ergas report (and an earlier ACIP Review of the
Enforcement of Industrial Property Rights (patent enforcement))
were partially implemented in the Patents Amendment Act 2001.
Australian Law Reform Commission
report on gene patenting and human health
The report Genes and ingenuity: gene patenting and human health
(the ALRC report) was presented to the government on 29 June 2004. As per usual
practice, a broad-based expert advisory committee was established to provide
the ALRC with general advice and assistance with the report.
The ALRC report concluded that it was too difficult to expressly
prohibit patents on genetic sequences due to the 'hard and inconvenient fact'
of the number of patents that had been granted on genetic sequences since the
Finding that there was no case for 'radical overhaul of the patents system',
the ALRC's recommendations were based on the view that 'it was far preferable
to focus on reforms that would directly address the existing problems and make
the system work better'.
The report contained 50 recommendations, which focussed on three areas.
- to the extent that gene patents highlighted any deficiencies in
the patenting system, correcting systemic weaknesses in the patent system;
improving the patent system in general, including a suite of reforms
directed at the practices of IP Australia; and
- ensuring the appropriate use and exploitation of gene patents,
particularly in the three sectors on which the ALRC was instructed to focus: research,
biotechnology and healthcare.
The recommendations of the ALRC report served as an important reference
point for much of the evidence received by the present inquiry in submissions
ACIP reviews relating to patent law
ACIP has completed a number of reviews with particular reference to
patent law, including:
- review of Crown use provisions for patents and designs (November
- review of patents and experimental use (October 2005).
At the time of writing, there are also relevant inquiries being
conducted by ACIP and IP Australia.
ACIP review of patentable subject
ACIP is conducting a review of patentable subject matter. The review
website notes that in recent years a variety of concerns have been raised about
the sorts of things that can be patented in Australia, and draws attention to
the findings of the ALRC report that the 'manner of manufacture' test is
ambiguous and obscure. The review will include consideration of:
- the appropriateness and adequacy of the 'manner of manufacture'
test as the threshold requirement for patentable subject matter under
Australian law; and
- the historical requirement that an invention must not be
The review released an options paper in September 2009, with responses
to be provided by 13 November 2009. The Committee understands that the final
report will be provided to Government in late 2010.
IP Australia review of the patent
IP Australia advised that it is conducting a review of the patent
system, which is being undertaken in the context of the innovation review the Government
initiated late in 2008.
A number of consultation papers identifying areas of proposed reform have been
released as part of this process.
The purpose of the review is to:
- reduce barriers in the innovation landscape for researchers and
- improve certainty about the validity of granted patents; and
- allow patent claims to be resolved faster.
Department of Innovation, Industry, Science and Research and IP
IP Australia is progressing a package of reforms to the
Australian patent system. The package is comprehensive, covering a range of
proposals that would result in increased thresholds for patentability and to
bring Australia into alignment with other jurisdictions.
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