EXPRESS PROHIBITION OF GENE PATENTS
This chapter addresses term of reference (c), which directs the
Committee to consider whether the Patents Act 1990 (the Act) should be
amended so as to expressly prohibit the grant of patent monopolies over human
genes and genetic materials.
The focus of this chapter is on arguments that, notwithstanding the
current practice of granting patents claiming human genes and genetic material
in Australia, gene patents do not satisfy the requirements of patentability
under the Act, and so should be expressly prohibited. It also considers issues
around the effectiveness of, and possible alternatives to, this approach.
The analysis in the previous chapter of impacts arising from gene
patents is also relevant to arguments for an express prohibition on gene
patents, and to the conclusions at the end of this chapter.
As noted in Chapter 2, the Act provides a specific exclusion for human
beings and the methods of their reproduction; a number of general grounds of
exclusion, such as 'contrary to law' and 'generally inconvenient; and a
discretion granted to the Commissioner of Patents to refuse a patent
application for other types of inventions. However, the Act does not specifically
exclude the patenting of genetic materials.
An express exclusion on gene patents in Australia has been considered
previously. It was considered in relation to the Patents Bill 1990, but not supported
by the Senate Standing Committee on Industry, Science and Technology. The
amendment would have excluded genes, genetic material and genetically modified
organisms from patentability.
An amendment to the Act of similar effect was proposed by the Democrats'
Senator Natasha Stott-Despoja in 1996 and 2001; and re-tabled in 2002 without
any subsequent consideration. The proposed amendment provided that 'naturally
occurring genes, gene sequences, or descriptions of the base sequence of a
naturally occurring gene or gene sequence would not be regarded as novel or
inventive for the purposes of section 18 [of the Act]'.
A number of submitters and witnesses supported a recommendation that the
Act be amended to expressly prohibit the grant of monopolies over human genes
and gene patents. These groups generally represented stakeholders in the
research, healthcare, health advocacy and public health sectors. In contrast,
other groups did not support any such recommendation. These groups generally
represented stakeholders in the intellectual property (IP) sector, such as IP
regulators and patent attorneys, and commercial entities such as biotechnology
and pharmaceutical companies.
Types of gene patents
An isolated or purified genetic sequence for which a use has been
identified may be regarded as an invention for the purposes of the Act, and may
therefore be patentable (providing all other requirements for patentability are
met). The Department of Innovation, Industry, Science and Research (DIISR) and
IP Australia submission noted:
Australia's current patents law does not give IP Australia
any basis in law to refuse to patent genes, nucleic acid or protein sequences
defined by their corresponding DNA sequence solely because the patent relates
to these areas of technology. As such, IP Australia has granted patents over
isolated and purified gene sequences, when other requirements for patentability
under the Patents Act are met.
IP Australia advised that it has granted patents over a wide range of
human genes and genetic material, and noted that patent claims may relate to a
product, a process for making a product and to a method of making or using a product.
In relation to gene patents, typical product claims include:
- an isolated gene sequence per se;
- an isolated protein encoded by the gene sequence;
- vectors harbouring the isolated gene sequence;
- cell lines transformed with the vectors or sequence;
- recombinant protein expressed from the cell lines;
- antibodies produced using the sequence or fragments of the
- probes comprising the sequences or fragments;
- vaccines and compositions comprising the sequence or protein; and
- kits comprising the sequence or specific primers or fragments of
Typical method claims include:
- use of the gene or protein sequence to diagnose or prognose
disease or disorders associated with the gene;
use of the sequence and/or protein as a therapeutic to treat a
disease or disorder associated with the gene
- methods of identifying molecules that modulate or interact with
the gene wherein the methods are directly based on the use of the sequence; and
- a gene therapy using the sequence.
Extension of patent law to human genes and genetic materials
As described in Chapter 2, the principles for determining the
patentability of any given subject matter under the Act were laid down in 1959 in
National Research Development Corporation v The Commissioner of Patents (the
A patent may only be granted for an 'invention', which is defined as 'any
manner of new manufacture'. A 'policy-oriented approach' is adopted in
considering whether a particular invention is a manner of new manufacture. In
summary, for an invention to be a manner of manufacture:
- it must belong to the useful arts (as opposed to the fine arts);
- it must provide a material advantage; and
- its value to the country must be in the field of economic
The precedents in the NRDC case have established a 'flexible and
permissive approach to patenting new technologies in Australia',
which has allowed the extension of patent protection to subject matter that has
historically been excluded from such protection, including methods of medical
treatment, living organisms, computer software, and biological and human genes
and genetic materials. The Advisory Council on Intellectual Property (ACIP)
options paper on patentable subject matter observes that 'patenting in each of
these fields has been controversial'.
Judicial interpretation of the Act
regarding non-patentable subject matter
In addition to the NRDC case principles, Australian courts have
expressed a general reluctance to 'read in' further exclusions to patentable
subject matter on the basis of ethical or policy considerations.
Dr Hazel Moir pointed to historical and legal factors as the basis of this
reluctance of courts to exclude certain subject matter from patentability. Dr
Moir explained that, at the time the Act was drafted and presented to
parliament, it was agreed that the Act would not list specific exclusions on
patentable subject matter, despite awareness and acknowledgment of traditional
classes of unpatentable subject matter. Dr Moir explained:
The Patents Act 1990 resulted from a review of the
patents act that was commissioned by the Fraser government and reported to the
Hawke government. The Intellectual Property Advisory Committee put forward this
report, which had a number of recommendations in it [as to whether or not
certain subject matter should be patentable. However, the committee]...recommended
against adopting a European type system that listed exclusions—things that
could not be patented. [At] no point in the parliamentary debate was there any
disagreement between the major parties over the legislation that the government
brought, and the legislation the government brought specified no exclusions.
They accepted the recommendation of the committee that it was not useful to go down
the European track and list the exclusions.
Dr Moir explained that, despite the agreement that the Act would not
contain specific exclusions, in negotiating the passage of the Act through the
Senate a specific exclusion on human beings and the methods for their
reproduction was included to win the support of the then balance of power
holder, Senator Brian Harradine.
The Committee heard that the inclusion of the specific exclusion on
human beings and the methods for their reproduction has had a significant and
unintended impact on the interpretation of the Act in the courts. On the basis
of this single exclusion, courts have reasoned that parliament did not therefore
intend that any other subject matter, such as human genes and genetic
materials, should be excluded (that is, should be non-patentable).
Given the history of the development and passage of the Act as outlined above,
Dr Moir considered that this interpretation of the Act was out of keeping with
the intent of parliament at the time the Act was passed:
Today's patent system has emerged from a series of decisions
by judges, often in settling disputes between private parties, and with no
input on the public impact. Since 1990 a view seems to have developed among
Australian judges that if something is not expressly excluded from the Patents
Act 1990, then parliament did not intend to exclude it...
Parliament did not say that they wanted to throw out long-standing
presumptions that you cannot patent maths and you cannot patent methods of
medical treatment. But our courts have done that.
In addition to the factors outlined above, Professor Peter Drahos
submitted that restrictions on patentable material in the Act were also prone
to erosion by the 'development of patent claim drafting techniques to overcome
publicly mandated restrictions on patentability'.
The Committee heard that, notwithstanding the allowing of gene patents
by IP Australia, the validity of the patenting of human genes and genetic
material has not been considered by Australian courts:
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.
Professor Ian Olver, the Chief Executive Officer of Cancer Council
Australia, also observed that there was no definitive legal statement on gene
patents from the courts:
The difficulty is that there are a lot of precedent cases
overseas but to date they have only been resolved on technicalities and not on
this very basic issue of whether patent law was ever meant to apply to
discoveries of natural substances rather than inventions and protecting the
International and national
Association of Medical Pathology
and Others v The United States Patent and Trademark Office and Myriad Genetics,
Inc and Others (USA)
The Committee notes that, since the inception of its inquiry into gene
patents (11 November 2008), a legal challenge to the validity of the BRCA gene
patents has been decided in the US District Court for the Southern District of
New York, Association of Medical Pathology and Others v The United States
Patent and Trademark Office and Myriad Genetics, Inc and Others (the MPO
case). The MPO case directly considered the question of whether genetic
materials in an isolated form are patentable as 'inventions', or are in fact
mere 'discoveries' over which patents cannot as a matter of law be granted.
This was a central issue in evidence submitted to the inquiry regarding the
inherent patentability of genes and genetic material.
The MPO case was filed on 12 May 2009; the final judgement was handed
down on 29 March 2010. Judge Robert Sweet found in favour of the parties
challenging the US Patent and Trademark Office (USPTO) approach to granting
patents over genetic material. In simple terms, the court ruled that Myriad's
patents claiming (a) isolated BRCA gene sequences and (b) methods for comparing
or analysing BRCA gene sequences to diagnose a predisposition for breast cancer
In relation to isolated gene sequences, Judge Sweet found that:
DNA represents the physical embodiment of biological
information, distinct in its essential characteristics from any other chemical
found in nature. It is concluded that DNA's existence in an 'isolated' form
alters neither this fundamental quality of DNA as it exists in the body nor the
information it encodes. Therefore, the patents at issue directed to 'isolated DNA'
containing sequences found in nature are unsustainable as a matter of law and
are deemed unpatentable subject matter...
In relation to the method claims, Judge Sweet found that the claimed
comparisons of DNA sequences were unpatentable because they were in fact 'abstract
The Committee notes that the outcome in the MPO case is significant for
the Australian patent system, given that it considered the same BRCA gene
patents as are currently valid in Australia. More generally, the case was
centred upon elements of patent law and practice that are significantly
comparable across the two jurisdictions.
However, the Committee received advice from the USPTO that the decision
in the MPO case is not at this stage binding on the USPTO, and that its
examination policy has not changed in response to the decision. Accordingly,
the USPTO 'continues to issue patents directed to isolated genes, proteins and
their derivatives that meet patentability requirements under the United States
patents laws'. In the event that a final decision is delivered on the case in a
higher court, such as the US Court of Appeals for the Federal Circuit or the US
Supreme Court, the USPTO advised that it would 'conform its policy to that
On 29 October 2010, in an appeal to the MPO decision being heard in the
US Court of Appeals for the Federal Circuit, the US Department of Justice
indicated, in an amicus curiae submission to the court, that the US
Government had altered its policy to reflect the US District Court's finding
that isolated genetic materials are a product of nature and not an 'invention'.
It was not clear whether and, if so, when the USPTO would implement the revised
On 17 November 2010, a group of members of the House of Representatives
and senators announced that they would be introducing a private member's Bill
into the federal Parliament, intended to prevent the patenting of human genes
and biological materials existing in nature. The Bill, the Patent Amendment
(Human Genes and Biological Materials) Bill 2010, would amend the Act to
'reinforce the distinction between discovery and invention and...apply that
distinction by expressly excluding from patentability biological materials
which are identical or substantially identical to those existing in nature,
Accordingly, Item 3 of the Bill would, inter alia, repeal existing subsection
18(2) of the Act and substitute the following provision:
(2) The following are not patentable inventions:
(a) human beings, and the
biological processes for their generation; and
(b) biological materials including
their components and derivatives, whether isolated or purified or not and
however made, which are identical or substantially identical to such materials
as they exist in nature.
The Committee notes that, due to the timing of the Bill's introduction,
the inquiry did not explicitly consider the specific formulation of the
proposed amendment. However, it did consider in broad terms the proposal for an
express prohibition relating to 'biological materials that are identical to
those that are identical or substantially identical to those that exist in
nature' (see paragraph 4.58).
Should the Patents Act 1990 be amended so as to expressly prohibit
the grant of patent monopolies over human genes and genetic materials?
Many individuals and groups that supported an amendment to the Act to
expressly prohibit gene patents did so on the basis that inventions involving
genes and genetic materials do not satisfy the requirements for patentability
under the Act. In particular, it was claimed that human genes and genetic
materials are not patentable subject matter because they are discoveries, and not
capable of being an invention (that is, a 'manner of manufacture').
Discovery v invention
Genes and genetic materials as
As noted in Chapter 2, patent law traditionally holds that, whereas an
invention may be patentable, a 'mere' discovery is not patentable, 'because no
knowledge or ingenuity has been applied to produce a new and useful thing'.
The IP Australia Patent examiners manual explains:
Discoveries having no way of...[being carried] into effect...have
traditionally been regarded as not per se patentable, because they do not
exhibit the requirements of a manner of manufacture.
The majority of the objections to the granting of gene patents on the
grounds that they do not satisfy the requirements of patentability were based
on the view that human genes and genetic materials are 'discoveries' rather
than 'inventions'. It was claimed that, being discoveries, human genes and
genetic materials in fact fall outside the scope of patentable subject matter.
However, the Committee heard that the distinction between an invention
and a discovery in law was recognised as being both imprecise and potentially misleading.
Mrs Fatima Beattie, Deputy Director-General, IP Australia, explained that the
application of human ingenuity to a discovery could result in an 'invention'
for the purposes of Australia's patent law:
The courts have...recognised that the distinction between
discoveries, which are not patentable, and inventions can be extremely fine.
However, if ingenuity has been applied to a discovery to produce a new and
useful result, it is an invention and may be patentable. A practical application
of information to a useful end translates a discovery into an invention because
a step is taken from [merely] knowing to being able.
Isolated or purified
This reasoning takes on a particular significance in the context of patents
involving human genes and genetic materials, and indeed other naturally
occurring substances or chemicals. Whereas a naturally occurring substance or
chemical is not patentable, a claim to the isolated or purified substance or
chemical may be an invention because it is considered to involve an
artificially created state of affairs. The IP Australia Patent examiners
...the discovery of a microorganism, protein, enatiomer or
antibiotic in nature can be claimed in its isolated form or as substantially
free of (perhaps, specified) impurities. Also, a gene can be claimed as the
gene per se (as long as the claim does not include within its scope the native
chromosome of which the gene forms part) or as the recombinant or isolated or
With particular reference to genetic materials:
...DNA or genes in the human body are not patentable, however,
a DNA or gene sequence which has been isolated from the human may be
Ms Lexie Press, a Senior Examiner of Patents with IP Australia, expanded
on the distinction between naturally occurring genes and isolated or purified
Genes do not exist as discrete entities in the human body or
in nature...[but] are part of our entire complement of genomic DNA. In
isolating a gene sequence, it becomes a discrete entity usually maintained in a
vector, where it can be replicated easily and manipulated easily. So, in a
sense, it may be analogous to what we have in our human body, but it is
something quite different when it is in an isolated form.
Mr Richard Hamer, Member, Business Law Section, Law Council of Australia
(LCA), also commented on how an isolated or purified gene sequence or chemical
compound is distinguishable from one found in its naturally occurring state:
As a principle you can get a patent for isolating something
which has never been isolated before. The isolated compound is something that
you can do something with—something that you cannot do when it is in the body.
For example, you can use an isolated gene sequence in a test kit. You cannot
use it in a test kit when it is in the patient's body. It is capable of uses
that are not there in the body and that is because it has been isolated. It is
also different chemically because it is separated from the other components.
IP Australia also stressed that the isolation or purification of a
genetic sequence is not of itself sufficient for it to be capable of being
adjudged an invention. Mrs Beattie advised that a specific use for the isolated
sequence must also be identified:
...for a patent to be [potentially] granted over a gene
sequence, the applicant must disclose a new and practical use for the sequence.
Typically, this will include evidence of the association of the sequence with a
particular disease and its use as a diagnostic or therapeutic.
Objections to genes and genetic
materials as 'inventions'
Dr Luigi Palombi strongly rejected IP Australia's contention that there
is no basis in Australian law for it to refuse to grant a patent over human
genes and genetic materials, on the grounds that the recognition of isolated or
purified gene sequences potentially as inventions was an improper application
of the law:
...Australian patent law does give IP Australia a clear basis
to refuse to grant a patent on gene sequences because gene sequences...are not
inventions but are discoveries. Patents are only about inventions. The problem
is that IP Australia have for 20 years deliberately ignored the law so that now
we are faced with an enormous problem and requiring the parliament to impose an
express ban on this illicit practice.
Dr Moir observed that a great deal relied on the semantics of the
invention/discovery distinction, in that if it were not accepted that the
isolation or purification of a gene sequence allowed it to be classified as an
'invention' then it would clearly not be patentable under Australian law.
Dr Palombi pointed to the opinions of many scientists rejecting as 'semantics'
or 'absurd' the contention that an isolated or purified gene sequence could be
regarded as an invention.
For example, he cited the view of Professor Ian Frazer:
...there is no more invention in isolating and characterising
biological material that exists in our bodies, using existing research
techniques, than in collecting and arranging a set of postage stamps.
Similarly, Professor Olver observed:
Natural genes are part of your body. There is no invention in
genes that are taken out of your body but that have the same look and the same
function as when they were in your body.
Professor David Bowtell, Director of Research for the Peter MacCallum
Cancer Centre (PMCC), also stressed that an isolated gene sequence is the same
as that which occurs in the body:
The isolated gene is still DNA and it still has the same
sequence [as the gene occurring in the body]...It is just another piece of DNA in
In his submission to the inquiry, Senator the Hon. Bill Heffernan also
rejected the view that isolated gene sequences could as a matter of law
constitute an invention.
The Committee has been advised that the BRCA 1 human gene is
natural. It exists in all humans. That some people have mutations in this gene
that predispose them to breast and ovarian cancer is also natural. Accordingly,
it must be the case that neither the BRCA 1 human gene nor the mutations to
this gene nor the genetic sequence of the gene or the amino acid sequence of
the proteins that are coded for by the gene (including any mutations) can be
patentable. I ask the Committee to accept that a naturally occurring phenomenon
cannot be patented in Australia as the law stands at present. As Justice Heerey
said in Rescare: '[taxol] is a naturally-occurring compound and thus is
The Committee should understand that the isolation of the
BRCA 1 human gene does not change what it is or the genetic information it
contains. It merely changes its physical state by removing it from the human
...an isolated or purified biological material which is
identical or substantially identical to what exists in nature is not an
invention. The characterisation of a naturally occurring biological material is
a mere discovery.
Dr Moir argued that to classify a gene sequence as an invention simply
on the basis that it has been isolated or purified is an inherently artificial
and spurious form of reasoning:
Yes, the distinction between a discovery and an invention can
be very fine. [However, it]...does not appear to be fine in this case; it merely
seems to be a matter of spin. If you add the words 'isolated' and 'purified'
then information that is no different to information occurring in nature
suddenly shifts from being a discovery to an invention...
...[The question is:] do the words 'isolated' and 'purified'
suddenly convert the information that exists in the gene that is there in
nature from a discovery into an invention? I would argue that they do not.
In addition, Dr Moir observed that the terms 'isolated' and 'purified' were
historically derived from the patenting of chemicals. She suggested there is
little evidence that any such refining of genetic materials is taking place,
and that the importing of these terms from a different field of technology is:
...credited with a number of oddities in the way in which genes
are now treated in the patent system, including the reliance on structural
elements rather than the essential function or 'information' nature of gene
In answer to criticisms of treating isolated genetic materials as
inventions, Medicines Australia submitted:
Medicines Australia believes that statements such as, 'the
fiction argued by proponents of gene patents is that once they remove a gene
from its natural environment...they have a [patentable] invention', highlight a
troubling confusion among some policy makers about how, and on what types of
subject matter patents are granted in Australia.
Such confusion is always unhelpful. However, when it becomes
the basis for changes to existing law, confusion can be disastrous.
IP Australia defended and attempted to clarify the distinction between
naturally occurring substances and isolated and purified substances and its
application to gene patents. It acknowledged that gene patents are treated in
an analogous way to chemical patents, observing that 'in the absence of
Australian precedents IP Australia has turned for guidance to decisions and
practice relating to chemical compounds'.
Mrs Beattie explained:
Patent claims take two primary forms—to the product or
method. In the case of chemicals the claim to the product is to the chemical
molecule or combination of molecules. Gene patents take the same form. In the
gene patent a claim to an isolated gene sequence, per se, for which a practical
use is identified is a claim to a chemical molecule; a nucleic acid molecule to
be precise. Patents claiming chemical products have been the subject of
national sensitivity for hundreds of years as they tend to relate to medicines
and food and, until [the Agreement on Trade-related Aspects of Intellectual
Property Rights (TRIPS)], were treated differently by different countries.
Further, IP Australia observed that Australia's patent system has
evolved over time in keeping with international developments, statutory and
court-made law and scientific and technological developments, and that patent
protection has been extended to 'substances and materials isolated from nature
since at least 1924'.
Mrs Beattie offered a number of historical examples:
...Australia's patent system has [long] regarded as inventions
substances isolated from nature, both flora and fauna, for which a practical
use has been identified. By way of actual examples I provide in evidence: a
patent granted in 1920 for substances isolated from Australian flora for use in
dyeing wool, cotton et cetera; and a patent granted in 1924 for a substance
isolated from mammalian pancreas or glands of fishes and other sources which
relieves the cardinal symptoms and signs of diabetes. In both of these examples
a patent was granted over the isolated substance and the method of isolation...
Chemical inventions such as isolated human gene sequences for
which a practical use is identified have not been treated differently because
they are derived from the human body. IP Australia has applied over 100 years
of patenting practice and precedent to its examination of applications for gene
At the hearings in Canberra on 18 May 2010 and 15 June 2010, IP
Australia addressed numerous individual patents which were identified by
Senator the Hon. Bill Heffernan both in his submission and questioning directed
to IP Australia representatives.
IP Australia's responses to these individual patents indicated that it
considered its current approach to the granting of gene patents over isolated
genetic materials for which a novel use has been identified as being consistent
with the body of Australian patent case law.
Ethical objections to gene patents
Beyond semantic and legal questions concerning the invention/discovery
distinction, a number of submitters and witnesses expressed more fundamental or
ethical concerns about the patenting of genes, on the basis of their being
natural substances and/or parts of the human body. Dr Gillian Mitchell,
Director of the Familial Cancer Centre at the Peter MacCallum Cancer Centre
(PMCC), commented that 'the DNA is part of what we are. The basis of our
submission is that we cannot understand how we can patent something that is
part of us'.
Similarly, Ms Sally Crossing, Chair of Cancer Voices NSW, stated that,
'as an ethical principle, we do not believe that genes, as natural parts of the
human body, should be patentable'.
Dr Graeme Suthers, Chair of the Genetic Advisory Committee at the Royal College
of Pathologists of Australasia (RCPA), described gene patenting as being wrong
in both principle and practice.
IP Australia responded to ethical concerns over the patenting of genes by
observing that Australia's patent system is 'technology neutral'. Accordingly,
the courts and patent examiners do not generally apply or interpret the law as
mandating ethical considerations in relation to the granting of patents in
respect of any particular subject technology:
Gene related inventions are not made unlawful under any
existing Australian regulations, and courts have been reluctant to refuse
patentability on the ground of generally inconvenient, believing it is best
left to parliament to decide whether matters of ethics or social policy are to
have any impact on what is patentable.
The National Health and Medical Research Council (NHMRC) expressed the
view that there is no need to introduce express exemptions for genetic material
into the Act based on ethical considerations.
To the extent that ethical objections were implicitly or explicitly
grounded in the view that the granting of gene patents equates to the granting of
ownership or control of an individual's genes, IP Australia stressed that,
given the requirements of patentability, human genes and genetic materials
occurring in their natural state—that is, in the body—are not patentable. It
stated that '[a patent is not granted]...over a human gene. It is [granted] over
the isolated human gene sequence for which a practical use has been identified'.
Further, IP Australia noted that the grant of a patent does not confer
any right of ownership or control of an individual's genes:
A patent over a gene sequence does not equate to ownership of
that sequence. A patent is a right to restrain others from using or exploiting
the claimed invention without the patentee's
permission; it does not confer ownership of the physical material as it
exists in the body. A patent on an isolated gene sequence does not impinge on
the freedom of the individual to use their own DNA.
The Intellectual Property Committee of the Law Council of Australia
supported the position of IP Australia:
The ethical issues which have been raised appear to the
Committee to be based largely on misconceptions as to the nature of patent
protection. For example, the assertion that a patent gives the patentee
'ownership' of a gene is incorrect as a matter of law: there is a fundamental distinction
between a patent which protects an invention as a form of intellectual property
and the physical property in genetic material.
Similarly, the concern that someone can patent something
which is 'part of nature' misconceives a basic principle of patent protection.
Patent protection can only validly extend to that which is new and non-obvious.
Impacts of express prohibition on gene patents
In general terms, supporters of an express prohibition on gene patents
proposed that the prohibition should apply to human genes and genetic materials
per se, and not to downstream uses involving such materials. Dr Gerard Cudmore
from the Department of Industry and Investment (New South Wales), commented:
...downstream uses of sequence data should remain open to the
possibility of patenting...[We] believe there is a need, particularly in the
context of medical research, to clarify what can and cannot be patented clearly
through IP Australia to minimise any confusion and that there should be
adequate training of patent officers to ensure that downstream patents are
appropriately narrowly defined.
Similarly, Dr Anna Ronan, a clinical geneticist from the Hunter Genetics
...the [testing] technology is improving all the time, and the
technology is subject to patent and that is subject to competition...[Testing] has
gotten much better obviously, and much quicker. That is how it should be. I
just do not see why they need to actually patent the description of the human
component that the test is based on.
More specifically, some groups called for a prohibition covering
'biological materials'. Dr Palombi (and Cancer Council Australia) suggested
that 'the Patents Act 1990 be amended to...ban the patenting of biological
materials that are identical or substantially identical to those that exist in
Senator the Hon. Bill Heffernan also called for an express prohibition:
I urge the Committee to consider, as an option, the express
prohibition of the patenting of isolated biological materials which are
identical or substantially identical to those that exist in nature.
Furthermore, I urge it to consider the possibility of an
express prohibition of diagnostic, therapeutic and surgical methods for the
treatment of humans.
DIISR and IP Australia warned that an express prohibition on
patentability of 'isolated nucleic acid molecules from humans' would have 'far-reaching
The supplementary submission from these bodies was particularly critical of the
calls for the broader prohibition on 'biological materials' or on 'all
substances isolated from nature', given the likely effect of this on healthcare
and medical research and innovation:
IP Australia does not support the broad exclusion proposed...to
'biological materials...which are identical or substantially identical to those
that exist in nature'...Such a broad exclusion would capture a large proportion
of healthcare inventions in the biotechnology and pharmaceutical industries as
well as in other industries. Under the proposed exclusion these inventions,
although novel, useful and involving an inventive step, would no longer benefit
from patent protection. Such exclusion would adversely affect access to
affordable future healthcare innovations, the competitiveness of Australia's
biotechnology industry and reduce investment in Australian research and
development. For example, under the proposed approach inventions such as Gardasil
(the cervical cancer vaccine) would not be patentable in Australia but would be
in other jurisdictions, which could have negative consequences for access and
price in the Australian marketplace.
In concluding that it did not support an express prohibition on gene
patents, the ALRC's 2004 report also expressed concerns that this approach
could adversely impact on investment in Australia's biotechnology industry:
[A prohibition on patenting of genetic materials]...would
represent a significant and undesirable departure from accepted international
practice with respect to genetic inventions, and may adversely affect
investment in the Australian biotechnology industry.
A number of groups expressed particular concern about the effect of an
express prohibition on innovation more generally. Medicines Australia
Medicines Australia believes that the formulation of
proscriptive categories of subject matter which are to be excluded from
patentability is a crude 'on/off' switch, which has the potential to stifle
entire fields of innovation.
Noting the broad range of materials described in the inquiry terms of
reference, Xenome commented:
This is an exceptionally broad scope...[which] encompasses
facets of many industries within Australia—not only the medical and
biotechnology fields but also the agricultural and brewing fields to name a
few. Indeed, if the full spectrum of materials listed...were deemed to be
non-patentable, it would have extremely negative effects on a large number of Australian
companies and would drastically undermine emerging industries such as
The ALRC concluded in its 2004 report that there are 'overwhelming
practical impediments to expressly prohibiting gene patents', given the number
of gene patents that have been granted. The report concluded that, 'if there
had been a time to recommend that gene sequences should not be patentable, that
time had long since passed.
Dr Palombi disagreed with these assessments of the scope and likely
impacts of an express prohibition on gene patents on innovation:
...[Opponents of an express prohibition argue] that somehow
the sky is going to fall in on the biotechnology industry or on medical and
scientific progress if you make this incremental step. I say that actually it
will do the exact opposite. By banning these sorts of patents on those very
limited types of claims, these claims of these materials, you are actually
opening up the door to further innovation because you are maximising the
ability of scientists to freely use these materials...so that they can make an
invention. That is what we want. We want them to make these sorts of massive
leaps in technology, not grant patents over elementary processes and
non-inventive applications such as diagnostics.
Commenting on the effect of the suggested prohibition on existing
patents, Dr Palombi observed:
If you were to impose a ban on the isolated biological materials,
it would not invalidate the entire patent; it would simply invalidate the
claims to those types of materials. So you still leave it completely open for
people to come along and develop new and inventive ways of using those
Effectiveness of express prohibition on gene patents
A number of submitters and witnesses suggested that an express prohibition
on isolated genetic materials would be ineffective.
Declining number of gene patents
The Committee heard arguments from those opposed to an express
prohibition on gene patents that this approach is unnecessary because,
irrespective of the actual or potential adverse impacts of overly broad or
inappropriate gene patents granted in the past, the quality of gene patents has
improved such that similarly defective patents are not being granted today.
The ALRC submission acknowledged that overly broad or inappropriate gene
patents have previously been granted. However, it argued that the granting of
such 'unfortunate' patents is characteristic of new fields of technology in
general, and is not therefore a specific or unique feature of gene patents:
...every new wave of scientific inventions places stress on the
patent system as examiners try to come to grips with the new science and
technology. Inevitably, some inappropriate and overly broad patents are granted
in the first flush of applications, but then the system settles down as
examiners become more expert in understanding the nature, complexities and
boundaries of the new field.
Pointing to the limited duration of patent monopolies (in most cases 20
years), the ALRC considered that problems arising from overly broad or
inappropriate patents are 'transient' in nature. Given that many of the
'unfortunate' patents granted in the 1980s and 1990s are coming to an end, the
ALRC considered a proposal to ban gene patents as being effectively
The submission from Pfizer Australia supported the ALRC's view:
...as patent offices worldwide have gained experience with
genetic technologies, the patents now granted are much more specific than the
early gene patents...Since the patent term is 20 years from the date when the
priority application is filed, many of the early, broad patents are nearing the
end of their patent life.
The Committee heard that the declining number of gene patents is also a
function of the way in which the requirements for patentability such as
'inventiveness' apply to claimed inventions. Dr Trevor Davies, from the Institute
of Patent and Trade Mark Attorneys of Australia (IPTMAA), noted that it is
important to keep in mind that patents are granted according to the standards of
knowledge and technical ability at a given time. Thus the threshold of
inventiveness is subject to change as knowledge and technology advance in a
given subject area, and what is considered to be an inventive step at one point
in time may not necessarily be regarded as such at a later point in time (notwithstanding
that the patent continues to be in force). Dr Davies observed that '[as]
technology evolves, then what is considered to be inventive now might be quite
different from what was considered inventive five or 10 years ago'.
Pfizer Australia also considered that the thresholds for patentability are
increasingly a barrier to the grant of gene patents:
As knowledge of genetics has grown—particularly with the
publication of the Human Genome in 2001—the number of patents on individual
genes has dropped sharply. This is because the threshold for 'novelty' and 'inventiveness'
at the heart of the patent system is now very much higher than it was when the
first gene patents were issued...
On this issue, IP Australia submitted:
With the successful completion of the Human Genome Project
and further rapid advances in sequencing technology, it is increasingly
unlikely that a competent patent examiner would now approve an application for
patent rights over a pure gene sequence. As Dr Ségolène Aymé of the (French)
National Institute for Health and Medical Research Institute stated last year,
when the European Parliament was considering this matter:
'Nowadays, identifying new genes is very obvious, and all the
methods are well-established, so it should not be patentable anymore. What is
patentable is the inventive process—if you can describe how to use a gene for a
specific purpose—but not the gene itself'.
Mrs Beattie also noted that, due to the increase of knowledge in the
field of genetic science, a claim relating to isolated gene sequences may fail
on the basis that it lacks novelty. She observed that 'because the genome has
been published, for example, the gene sequences per se are now published, therefore
they would not necessarily pass the novelty requirements'.
However, despite the increasing threshold of inventiveness in relation
to gene patents, Mr John Slattery, a consultant with Davies Collison Cave,
observed that it was still possible that an isolated nucleotide sequence would
justify the grant of a patent through meeting the requirements for
patentability in terms of novelty, inventive step and usefulness.
Finally, it was suggested that the number of patents on isolated or
purified genetic materials per se is declining because claims are increasingly
related to downstream uses of genetic information. Pfizer, for example, noted
that gene patents 'are increasingly granted to biotechnologies rather than on
isolated genes themselves'.
In more general terms, Dr Chris Dent, a senior research fellow with the
Intellectual Property Research Institute of Australia (IPRIA), noted that
'[recent] research suggests that...the patenting of genetic inventions may be on
Professor Andrew Christie noted that a specific exclusion on genes was
an alternative for the Committee to consider; however, he did not feel that
such an approach would be successful.
Dr Moir felt that an express prohibition would continue to be undermined by the
expansive approach of the courts on the question of patentable subject matter,
and that further exclusions and strategies would need to be employed.
The ALRC concluded in its 2004 report that a specific exclusion may fail
to prevent patenting of genetic materials because 'many pure and isolated
genetic sequences do not exist in exactly the same form in nature'.
The Committee notes that this would be a relevant consideration in determining
whether a substance was 'identical or substantially similar to those that occur
in nature' according to the terms of the express prohibition as recommended by
Mr Hamer advised that the LCA disagreed with the proposal for an express
prohibition, on the grounds that this approach would be likely to increase the
level of legal disputes and therefore uncertainty in the patent system:
To the extent that [an express prohibition]...is proposed we
disagree with it...The reasons are that having exceptions or special treatment of
particular forms of intellectual property...creates disputes, it results in
people trying to find loopholes, it creates inconsistencies and it is unfair.
Despite the fact that as lawyers you might say we like disputes, in this capacity
we are trying to avoid it.
DIISR and IP Australia also expressed concerns about the effect of the
suggested prohibition on the administration of the patent system, arguing that
Australia should maintain a 'technology neutral' patent system:
This technology neutral approach contributes to reduced
complexity and cost of providing a national patent system and has inherent
flexibility to accommodate patenting of new and emerging areas of technology.
Barriers to express prohibition on gene patents
Consistency with international
As noted in Chapter 2, the patent system is relatively uniform across a
number of countries, following many years of efforts to harmonise intellectual
property systems. Mr Slattery was concerned that the prohibition of gene
patents 'would constitute a move away from harmonisation of Australia's patent
laws with the patent laws of other major jurisdictions, particularly the US and
In terms of international practice relating to biological materials and
isolated gene sequences in particular, IP Australia advised:
Internationally all developed countries and our major trading
partners, including the European Union, the US, UK, Japan, Korea and emerging
economies of India and China, allow patenting of isolated biological materials,
including isolated human gene sequences for which a practical use is
identified. This is reflective of a principle underpinning the Australian
federal patent system since its inception in 1904—that patents should be
available for all products and processes that have a practical use.
Ms Deborah Monk, from Medicines Australia, advised that a prohibition on
gene patents in Australia could affect its competitiveness in relation to the
...at the moment we are facing enormous challenges in
continuing to bring clinical research to Australia. Our near neighbours India
and China, and other countries such as Brazil and those in Eastern Europe, are
able to do that research as well as we can and have been able to for many
years. They can start their clinical research faster. They have large patient
populations that they can get into clinical trials, so they can complete the
research faster. They can do it cheaper. We are losing our competitive edge. If
we have a situation where our intellectual property protection in Australia is
eroded in some way or is less robust than it is in other markets then that will
be another reason why the headquarters of pharmaceutical companies will not
send the research to Australia. There is a very strong view that we need to
maintain consistency with other developed markets around the world with respect
to our intellectual property protection.
However, the ACIP options paper on patentable subject matter notes that,
despite a fairly high degree of conformity in the approach of various countries
to defining patentable subject matter, there are observable differences in the
approaches of those countries to interpreting such definitions:
These outcomes suggest that courts account for national
interests when interpreting 'invention', beyond the literal wording of any
test. The varying definitions of invention, together with explicitly legislated
exclusions create considerable variation in patentable subject matter in
Compliance with international
A common objection to an express prohibition on gene patents was that
this would place Australia in breach of its international obligations. Two
international agreements were identified as being of particular relevance:
- Agreement on Trade-Related Aspects of Intellectual Property
Rights (TRIPS Agreement); and
- Australia-United States Free Trade Agreement (AUSFTA).
Article 27(1) of the TRIPS Agreement provides that patents shall be available
for any inventions and that the patent rights shall be enjoyable 'without
discrimination as to the place of invention, the field of technology and whether
products are imported or locally produced'.
IP Australia advised that this required Australia to maintain a 'technology
neutral' patent system:
A key feature of patent systems worldwide is that they must
be technology neutral in compliance with the TRIPS Agreement...In particular, the
TRIPS Agreement requires patents to be made available in all fields of
technology without discrimination. IP Australia therefore assesses applications
for gene patents by applying the same patentability requirements as for all
other applications, irrespective of their technological field.
Objectors to an express prohibition on gene patents were concerned that:
...excluding the possibility of patents for gene technology may
comprise unjustifiable discrimination against a field of technology that is
offensive to TRIPS-defined international patent norms.'
In contrast, the ALRC's 2004 report noted that, although TRIPS prohibits
discrimination, it is possible to differentiate between fields of technology. The
allowable extent of any such differential treatment is, however, uncertain:
The non-discrimination provision places constraints on the
degree to which gene patents may be singled out for special treatment—for
example, through new exclusions from patentability or defences to claims of
infringement. However, the extent of these constraints is not clear.
Dr Matthew Rimmer noted that the possibility for differentiation under
TRIPS could potentially support an express prohibition on gene patents:
...I would disagree with the interpretation that [DIISR and IP
Australia]...place upon article 27[(1)] of the TRIPS Agreement. There has been
one big WTO decision on the interpretation of article 27, which ...says that one
cannot discriminate against technologies but one can differentiate between
The Committee also heard debate on whether Australia could legislate an
express prohibition on gene patents on the basis of certain grounds on which
TRIPS allows exclusions to patentability. The ACIP options paper on
The TRIPS Agreement thus provides a general principle that
inventions in a field of technology are eligible for patent protection.
Excluding an invention from patentability is an exception to that rule and must
fall into one of the exceptions allowed for by the TRIPS Agreement.
The exceptions with apparent relevance to gene patents include:
- an exclusion to protect public order (ordre public) or
morality as a result of commercial exploitation in a member's territory (Art.
27(2)); this article is replicated in AUSFTA Article 17.9.1; and
- an exclusion from patentability for methods of diagnostic,
therapeutic and surgical treatment of humans (Article 27(3)(a)); this article
is replicated in AUSFTA Article 17.9.2(b).
In relation to the public order exemption, IP Australia advised that in
overseas jurisdictions this has been 'narrowly interpreted' and would not in
its view 'be able to be used to limit patentability of genetic materials'.
In relation to the exclusion for methods of diagnostic, therapeutic and
surgical treatment of humans, IP Australia advised that Australia does not
currently rely on this article to exclude any subject matter from
patentability. However, it believed that any changes to Australia's patent law
to implement this exclusion 'would require careful consideration of the full
impact on innovation in Australia, trade with overseas countries, and transfer
and access to medical technologies'.
Further, DIISR and IP Australia regarded the application of the
exclusion to isolated genetic materials as problematic, insofar as it applies
only to methods and not products:
[These Articles]...give Australia the ability to exclude
certain subject matter from patentability should it wish to exercise that right.
The exclusion is confined to 'diagnostic, therapeutic and surgical methods for
the treatment of humans or animals'. Therefore, Australia could, should it wish
to do so, exclude such methods from patentability, but it could not rely on
those Articles to exclude products such as isolated human gene sequences from patentability.
It is also not clear whether the Articles could be relied on to exclude a
diagnostic method to treat humans if the method contains a product as an integral
In response to IP Australia's views, Dr Rimmer commented:
IP Australia and the department of industry may speculate on
the scope of the exemptions under articles 27(2) and 27(3), but I do not
necessarily share their conclusions. I think article 27(2) could be read quite
broadly to include gene patents as a kind of exclusion of genes from the scope
of patentable subject matter. Indeed, the Canadian position in not allowing
patents on higher life forms suggests that that is a possibility with the regime.
Professor Drahos also did not agree that TRIPS would necessarily act as
a barrier to excluding gene patents. He noted that it had not prevented other
countries excluding certain subject matter:
...it has not stopped countries like India, for example, from
inserting specific exclusions in relation to the patenting of pharmaceutical
compounds...it certainly has not stopped other countries.
The RCPA noted that the exception for diagnostic tests had been narrowly
construed, and called for the interpretation of this exclusion to be reviewed:
It appears this has generally been interpreted by IP officers
to refer to diagnostic tests performed on a person's body, but not to
diagnostic procedures where a sample is removed from the body and tested in a
laboratory...The RCPA considers that the interpretation of what constitutes a
diagnostic test should be revisited.
As indicated above, AUSFTA replicates the TRIPS requirements for
non-discrimination and grounds for exclusion of patentable subject matter. IP
Australia advised that, in addition, AUSFTA imposes an obligation on Australia
and the US to pursue harmonisation of their patent systems:
The agreement does require both parties to seek to reduce
differences in law and practices between their respective systems and
participate in international patent harmonisation efforts. [However, there is]...flexibility
to implement the agreement in a way that reflects the interests of our domestic
interest groups and Australia's
legal and regulatory environment.
Given this obligation, IP Australia commented that any proposed changes
to Australia's patent system, such as an express prohibition on gene patents,
would require 'consideration of Australia's obligations under the USFTA' and an
assessment of potential impacts on:
exports to the US;
- inward technology transfer from the US; and
trade with the US more generally.
Alternatives to express prohibition on gene patents
The Committee notes there was strong support among submitters and
witnesses—generally but not exclusively from those who did not support an express
prohibition on gene patents—for a broader suite of measures to address any
actual or potential adverse impacts of gene patents.
Many submitters observed that reforms to the patent system generally
would improve outcomes in relation to gene patents and the areas of concern to
the inquiry. The submission of Professor Diane Nicol and Dr Jane Nielsen urged
the Committee to avoid 'focussing on the single issue [of express prohibition
of gene patents]'. Instead:
...the Community Affairs Committee...should take a more expansive
approach, both with regard to the issue of how patentable subject matter should
be dealt with in the Patents Act 1990 and also with regard to the
exploration of other legal and policy options for dealing with any potential
adverse consequences resulting from gene and related patents on healthcare,
research, innovation and the health and wellbeing of Australians.
Dr Graeme Suthers observed that the ethical issues in relation to gene
patents are also relevant to the patent system in general:
Genetics is the hot potato for the moment, but the issues
that are captured in the ethics story are not peculiar to genetics. If indeed
there is a case for having some broader consultation about patenting issues,
then it should apply to other patents and not just genetic patents.
The ACIP options paper on patentable subject matter comments:
Many of the issues raised in submissions to the Senate
reflect concerns cited generally across the patent system. Stakeholders expressed
concerns over the width of patents, access to technology, use of patented inventions
in research, and the ability of the system to distinguish between patentable and
unpatentable subject matter. The context of the gene patent inquiry is
important. It concerns the health and wellbeing of Australians. Patents in that
field present some unique challenges. However, many of these issues apply to
the patenting of other technologies as well.
Dr Kwanghui Lim, from IPRIA, noted that it would be desirable to ensure
that changes to the patent system are done 'in a way that is coherent and
consistent with [the patent system as a whole]'.
The ALRC also supported a systemic approach in its 2004 report on genetic
The ALRC was not directed to undertake a general review of
the patent system in Australia. Nevertheless, it became apparent that often it
was neither possible nor appropriate to suggest amendments directed exclusively
at the patenting of genetic materials and technologies in legislation of
general application...To the extent that gene patents highlighted any deficiencies
in the patenting system generally, the ALRC considered it preferable to craft
solutions aimed at correcting systemic weaknesses, in order to ensure that the
system remains sufficiently robust to anticipate and respond to future
The necessity for such an approach was emphasised by Professor Drahos:
If I have one message for the committee it is that thinking
about improving patent quality, whether it is in the area of biotechnology or
any other area, requires an integrated strategy. You do not fix the problem of
tax evasion with a single amendment to the Tax Act, and you are not going to
fix the problem of patent quality with a single amendment to the Patents Act.
The submission of the Swedish National Council on Medical Ethics
outlined how discrete elements of the patent system can operate to restrict the
nature and breadth of patents claiming human genes and genetic material in
relation to a product or a process:
...product protection of genetic diagnostic tests would only be
approved on rare occasions if the criterion inventiveness were to be strictly
implemented. A strict implementation of the criterion usefulness would
counteract patents on DNA sequences as research tools. Product protection would
not be possible to apply to the use of DNA sequences in gene therapy since the
link between gene and disease is already known [ie is obvious].
Dr Rimmer noted that there was a 'great consensus' across a number of
submissions to the inquiry, concerning the 'need for modernisation and reform
of the patent regime'.
Professor Drahos noted that many countries are interested in and undertaking
patent reform processes, suggesting that the issues examined by the inquiry are
of global relevance.
DIISR and IP Australia also referred to reform efforts in other jurisdictions,
and to the nature and range of measures being considered:
There are solutions proposed in other jurisdictions to
address community concerns about gene patents that strike a balance between the
need for genetic research, prosperity of the biotechnology industry and access
to innovations in health care. Such measures include strong patentability
criteria, public education, a research exemption, access to compulsory
licensing, and guidelines for the licensing of genetic inventions.
IP Australia advised that it was currently pursuing a 'patent reform
package' to strengthen Australia's patentability criteria. Beyond this, it felt
that existing provisions of the Act—notably the crown use and compulsory
licensing provisions—are also generally sufficient and available to deal with
any adverse impacts on healthcare or medical research arising from gene
Submitters and witnesses in favour of implementing a suite of reforms to
address the issues of concern to the inquiry often referred the Committee to
the conclusions and recommendations of previous inquiries relevant to the patent
system and/or to gene patents in particular (these were listed in Chapter 2,
and include the ALRC inquiry into gene patents and the current ACIP review of
patentable subject matter). Mr Slattery submitted:
...the implementation of the recommendations of these reports
is appropriate and important, and will go a long way towards addressing many of
the concerns which the general public seem to have in relation to the matters
raised in the terms of reference.
Similarly, Professor Christie noted:
Many of the concerns expressed by stakeholders to this
Inquiry about patents for genetic inventions are valid and significant. What is
important for this Committee to recognise is that a number of other inquiries
have addressed, or are addressing, the issues at the heart of these concerns.
Furthermore, those other inquiries have identified, or will identify, the
changes needed to remedy these concerns. Thus, the appropriate action for the
government is to implement the recommendations of those inquiries as soon as
The Committee notes that the question of whether there should be an
express prohibition on gene patents requires the weighing of a number of
factors to determine how to achieve the best possible outcomes for healthcare,
medical research and the health and wellbeing of Australians more broadly.
The Committee first considered whether the purported benefits of patent
protection in relation to gene patents are outweighed by the actual and
potential adverse impacts on healthcare and medical research. As indicated in
the conclusions set out in Chapter 3, the poor quality and scope of available
evidence did not allow the Committee to come to a definitive conclusion in
relation to this question. Much of the evidence on adverse impacts was restricted
to generalised and/or anecdotal accounts. However, there were clearly some significant
cases of adverse impacts arising from gene patents in Australia and overseas,
and the Committee also noted that there is obvious and significant potential
for adverse impacts arising from gene patents in the future, given the way in
which genetic science continues to develop. The difficulty of assessing the
purported benefits and adverse impacts of gene patents regarding the question
of whether the Act should contain an express exemption underlies the importance
of the Committee's recommendations in Chapter 3, concerning improved data
collection on, and transparency of, the patent system.
In relation to the issues considered in this chapter, much of the
evidence received in submissions and hearings went to the question of the
distinction between inventions and discoveries under patent law. This
distinction is critical because the law does not allow a 'mere discovery' to be
patented. The Committee heard that, for the purposes of the Act, isolated or
purified genetic materials for which a use has been identified may be
recognised as inventions. This approach was defended by IP Australia as
being consistent with the principles of Australian patent law laid down by the
High Court, international practice and the application of patent law principles
in analogous fields of technology.
The Committee heard strong criticisms of this current approach on the
basis of what might be termed literal or common-sense objections. A number of
submitters and witnesses characterised the recognition of isolated genes and
genetic materials as 'inventions' as being a purely semantic rather than
substantial distinction, given the fact that a gene sequence in an isolated or
purified form is apparently often, if not usually, identical to the same sequence
occurring in its natural state.
The Committee recognises that the argument against the recognition of
genetic materials as inventions is forceful in that it employs a common-sense
application of language, and also connects to some of the broader ethical
concerns that apply to the patenting of naturally-derived products, be they
human or otherwise. In a similar way, the ALRC 2004 report conceded that 'there
are attractive arguments for the view that such materials should not have been
treated as a patentable subject matter'.
However, the Committee recognises also that technical or legal distinctions may
be and commonly are valid, despite not reflecting the everyday or common
meaning of the language they employ.
Despite this, in the Committee's opinion, there is substantial doubt
that IP Australia's approach to the granting of patents over genes
conforms with the general prohibition in law on the patenting of a discovery or
product of nature. While the Committee acknowledges IP Australia's defence of the
current approach as being analogous to other classes of patents, such as
chemical products, the Committee strongly rejects the reasoning which says
that, for the purposes of the Patents Act 1990 (the Act), genetic
information that is isolated from its naturally occurring state in the human
body may be classed as an invention, and therefore properly be the subject of a
patent (where the other requirements of patentability are satisfied). The
Committee considered this objection to be the strongest justification for
recommending that the Act be amended to include an express prohibition.
In terms of the impacts of an express prohibition on gene patents, the
Committee notes that virtually all submitters and witnesses supported the
maintenance of patent protection for so-called downstream uses of genetic
information. That is, supporters of an express prohibition wanted it to apply
only to genetic information per se. In some cases, a broader prohibition on
biological materials was proposed. It was claimed that this approach would not
unduly disrupt existing patents, and would promote research and innovation in
the healthcare and medical research sectors by removing the disincentives and
barriers associated with the existence of gene patents (as outlined in the Chapter
Conversely, opponents of express prohibition emphasised concerns that
this approach would have far-reaching impacts on existing patents and on research
and innovation across many different fields of technology. In relation to the healthcare
and medical research sectors in particular, it was said that an express
prohibition on gene patents would remove important incentives for research and
innovation in fields such as biotechnology and pharmaceuticals (as outlined in Chapter
The Committee notes that the consequences of an express prohibition on
gene patents would be undoubtedly complex. Some groups argued that the nature
and extent of potential impacts of this approach would be relatively uncertain
in relation to healthcare and medical research. This is because, for example,
while research institutions may experience added expense, delay and/or
uncertainty arising from the existence of the patent system, many such institutions
also rely on income from the patent system to fund their work; and for others
patent protection provides an incentive for investment in research and
In addition to the uncertainty of how an express prohibition might affect
the healthcare and medical research sectors, the Committee notes arguments
relating to how effective such a prohibition would be in a legal sense. First, it
was argued that there is potential for this approach to lead to higher levels
of litigation, cost, uncertainty and possibly unfairness as patent system
actors seek to promote and/or protect their interests on the terms of any new
exclusion introduced into the Act. Second, it was argued that the history of
patent law has been characterised by the incremental expansion of the scope of
patentable subject matter, and an express prohibition could be undermined by
creative patent drafting and such practices. The Committee therefore remained
unsure as to the extent to which an express prohibition could by itself achieve
sufficient certainty in terms of future development of the law through the
courts and IP Australia.
The Committee also heard arguments that an express prohibition on gene
patents is unnecessary due to the declining number of gene patents. Arguments
about the number of gene patents granted in the past, and likely to be granted
into the future, were considered in detail in the previous chapter.
Opponents of an express prohibition on gene patents contended that the
occurrence of overly broad or inappropriate patents is a common phenomenon in
relation to new and emerging technologies, and that such low-quality patents are
less likely to occur today given the greater experience and expertise of patent
offices. It was also argued that gene patents are less likely to be granted
today because the thresholds of patentability in relation to the elements of
novelty and inventiveness are more difficult to achieve, given the maturing of
knowledge and technology in the field of genetics.
The Committee notes its previous conclusions that it was not convinced
of a substantial decline in the number of gene patents, or that future
developments in genetic science will not continue to form the basis of
substantial numbers of patent claims relating to human genes and genetic
materials into the future. However, the Committee does accept that some of the
poor quality patents issued in the past were likely due to patent offices' relative
inexperience with genetic technologies, and certain recommendations in the
following chapter are relevant to this issue.
In relation to the thresholds of patentability, the Committee accepts
that the thresholds of patentability for novelty and inventiveness—being
relative to the state of knowledge and technology at the time a patent
application is made—would today possibly prevent claims that were in the past
sufficiently novel and innovative to deserve patent protection. However, the
Committee was not convinced that patentability thresholds are otherwise
operating sufficiently well to ensure that overly broad or inappropriate
patents are not being granted in relation to human genes and genetic products.
These issues are discussed in detail in Chapter 5, and a number of
recommendations are made to address these issues around patent quality.
In relation to potential barriers to creating an express prohibition on
gene patents, despite the possible difficulty of fashioning legislative provisions
that would be sufficiently precise, effective and of enduring effect, the Committee
does not agree with the view that it is not feasible or necessarily possible to
expressly prohibit gene patents, as the ALRC concluded in its 2004 report. Nor
did the Committee regard the need for compliance with international agreements
such as TRIPS to be insurmountable if Australia were to seek to enact a prudent
exclusion for gene patents. The Committee believes that Government should not
feel prevented from enacting express exemptions of certain subject matter in
future where this is justified by sufficient evidence. In the event that the
Government decided to pursue an express prohibition, the Committee considers
that it would be appropriate to discuss and promote this reform in relevant
international forums relating to trade and the patent system.
However, the Committee concluded that there would need to be a very
clear case and significant social and political consensus on the need for such
a change. The totality of the submissions and evidence to the inquiry shows
that there are legitimate and sometimes finely balanced arguments on both sides
of the debate. Given this, the Committee believes it is critical to improve the
extent and quality of interaction with the patent system by Government, as well
as its understanding of the principles underpinning the operation of the patent
system. As noted in the previous chapter, this is critical to ensuring that
governments are aware of how effectively the patent system is operating and
delivering the benefits expected in return for the grant of patent monopolies.
In addition to the recommendations in Chapter 3 going to better accumulation of
data on patents, a number of recommendations in the following chapter are
intended to ensure that governments are informed about and engaged with the
patent system, particularly in relation to the challenges thrown up by new and
Finally, the Committee notes a strong consensus among opponents of an
express prohibition on gene patents that the concerns which formed the basis of
the Committee's inquiry can be more effectively addressed through a range of
responses directed not at gene patents per se but at improving the operation of
the patent system more generally. The Committee was encouraged to consider the
conclusions and recommendations of a number of previous inquiries into gene
patents or the patent system as the basis for its own conclusions and
recommendations in this report.
In light of the factors and analysis outlined above, and despite its
concern with the current practices of IP Australia around application of the
invention-discovery distinction to isolated genetic materials, the Committee determined
that it would not recommend at this stage that the Patents Act 1990 be
amended to include an express prohibition on human genes and genetic products.
The Committee's decision was based, first, on recent international and
national legal developments relating to the patentability of genes. In the US,
the courts have rejected the patenting of isolated genes on the basis that they
are in fact products of nature or 'mere discoveries', and this policy has been
confirmed by the US Department of Justice (see below paragraphs 4.132 and 4.133).
In Australia, a similar challenge to the BRCA gene patents has commenced. If
the court were to find, as in the US, that isolated genetic materials are 'mere
discoveries' and therefore not patentable subject matter, there may be less
need for an express prohibition on gene patents, as was considered under term
of reference (c); particularly if the recommendations of this report are also
Second, the Committee's decision not to recommend an express prohibition
on gene patents at this stage recognises the announcement that the Patent
Amendment (Human Genes and Biological Materials) Bill 2010 (the Bill) would be
introduced to the Senate in late November 2010 (see below paragraphs 4.134 and
4.135), which contains an express prohibition in specific terms. While the
Committee would support an amendment to the Act to ensure that isolated genetic
materials are not classed as an invention and therefore patentable, the
Committee acknowledges that there are many issues which require further
investigation in relation to the Bill, such as the likely impacts,
effectiveness and scope of an express prohibition relating to 'biological
materials' as is proposed.
As noted above, the Committee's decision not to recommend an express
prohibition at this stage was influenced by international and national
developments relating to the invention-discovery distinction and its
application to isolated genetic materials. Since the inception of its inquiry, this
very issue has been considered in the MPO case in the US.
The judgement in the MPO case ruled that Myriad's BRCA gene patents were
invalid, largely on the basis that the claims to isolated genetic sequences did
not constitute an invention as a matter of law. On 29 October 2010, the US
Department of Justice indicated that the US federal government had altered its
policy to reflect the US District Court's finding on this issue (although it
was not clear whether the USPTO would implement the revised policy). The
Committee understands that, in the event that this ruling is mirrored in the judgement
of a higher court, it will become binding on the practices of the USPTO. In
such circumstances, and assuming there was no change to the Act in the
meantime, the Committee would expect that the Government and IP Australia will
act quickly to update Australian patent law and practice to conform with the US
approach, particularly given evidence concerning the importance that IP
Australia places on international harmonisation of patent systems and
Australia's obligations under AUSFTA.
The Committee notes also that, on 8 June 2010, a challenge to the
validity of the BRCA patents in Australia was launched in the Federal Court by
Maurice Blackburn Lawyers, Cancer Voices Australia, and a Brisbane woman with
breast cancer, Yvonne D'Arcy.
The Committee understands that, as with the US MPO case, the Australian case
will focus on the fundamental question of whether or not an isolated gene
sequence is an 'invention' as a matter of law and therefore patentable in the
Australian jurisdiction. In the event that the Federal Court decision follows
the MPO case, and assuming there was no change to the Act in the meantime, IP
Australia will be required to adjust its approach to conform to that decision.
The Committee further notes that, on 17 November 2010, a group of
members of the House of Representatives and senators announced that they would
be introducing a private member's Bill into the federal Parliament, intended to
prevent the patenting of human genes and biological materials existing in
nature. The Committee notes that, if the Patent Amendment (Human Genes and
Biological Materials) Bill 2010 were passed, this would effectively override
the significance of the abovementioned cases in relation to the
invention-discovery distinction and the granting of patents over human genes
and genetic materials (assuming, of course, that the amendment was effective in
terms of its intended scope and impacts).
The Committee believes that the introduction of the Bill to the Senate
will provide a further, and much-needed, opportunity for the arguments and
questions around the impacts and effectiveness of an express prohibition on
gene patents to be considered. The Committee agreed that a Senate inquiry into
the Bill should be undertaken, with a focus on the specific terms of the proposed
amendments and the implications of their implementation for human health and
other potentially affected fields of innovation. The Committee notes that its
inquiry has served a valuable purpose in bringing the issue of gene patenting
to the light of public interest and attention, and provides a sound basis on
which a targeted inquiry into the Bill can build. In recognition of the
seriousness and complexity of the issues around the issue of expressly
prohibiting gene patents, as outlined in this report, the Committee would
expect that the Senate will ensure the time allowed for an inquiry into the
Bill is sufficient to ensure due consideration of relevant issues and the
arguments of potentially affected interests.
In consideration of the developments outlined above, the Committee
intends to maintain a watching brief over the area of gene patents. As part of
this watching brief, the Committee will continue to monitor the progress and
outcomes of the US and Australian cases relating to the patenting of isolated
genetic materials, as well as the progress of the Patent Amendment (Human Genes
and Biological Materials) Bill 2010 through the federal Parliament.
The Committee recommends that the Senate refer the Patent Amendment
(Human Genes and Biological Materials) Bill 2010 to the relevant Senate
committee for inquiry and report.
Despite the Committee's decision not to recommend an express prohibition
on gene patents at this point, the next chapter makes a number of recommendations
for measures to ameliorate any adverse impacts arising from gene patents. The
rationale behind many of these is to raise the thresholds of patentability such
that, despite there being no direct prohibition on gene patents, the number of
gene patents being granted would necessarily be reduced, and the quality of
those that are granted will be greatly improved. Yet other recommendations seek
to ensure that the Government utilises existing options under the Act to
ameliorate the impacts of gene patents on healthcare, where these arise; to
ensure that research is not impeded by the patent system; and to institute a
mechanism for external and objective assessment of the patent system and the
performance of IP Australia.
The Committee notes that the recommendations in the next chapter (as
well as those elsewhere in this report), would not be rendered obsolete or less
effective in the event that the express prohibition contained in the Patent
Amendment (Human Genes and Biological Materials) Bill 2010 became law. The
Committee's recommendations are not directed at gene patents per se, but at
patents and the patent system more generally, and many of these are based on
patent reform recommendations for which there has been widespread and
longstanding support. Indeed, the Committee notes that, in the event that
Parliament agrees to legislate an express prohibition on biological materials
as proposed, the recommendations in this report relating to information and
data collection could be critical to ensuring that the intended effects and
benefits of the prohibition on gene patents are able to be assessed into the
future. The recommendations in this report would also ensure that gene patents
relating to isolated genes (if these continue to be granted) or to the
downstream uses of genes (to which the Committee believes gene patents should
and would be restricted if the invention-discovery distinction were being
properly applied) are of high quality, and thus clearly justified in both
social and economic terms.
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