Government Signals Reforms to Address Concerns Over Gene Patents

Category: Intellectual Property, Technology & Data
Date: 31 July 2013
Author: Hunt & Hunt - Genuine People
Our article "Raising the bar? The new patent law reforms and their impact on patentability of genetic material" ("August article"), published in the August 2011 issue of the AIPLB, explored upcoming reforms to Australian patent laws by the Intellectual Property Laws Amendment (Raising the Bar) Bill 2011 ("Bill") in the context of gene patents. In particular, we discussed the litigation in the US and in Australia over patents of two genes that are associated with the development of breast and ovarian cancer1("BRCA genes"). The BRCA litigation raises a number of issues canvassed in a growing list of inquiries and reports over recent years on gene patents by the Australian Law Reform Commission2, the Senate Community Affairs Reference Committee3, the Australian Council for Intellectual Property (ACIP)4, and the Senate Legal and Constitutional Affairs Legislation Committee5. Towards the end of November last year the Government released a Response Paper6 in reply to the recommendations made in these reports. In this article, we will provide a legislation and litigation update, and examine how the Response Paper seeks to address community concerns and public health access issues in the area of gene patents.

Legislative update

Since the August article, the Bill has passed through both houses of Parliament unamended, and the consequential ("Raising the Bar Act") received Royal Assent on 15 April 2012. While most of the provisions in the Act will commence on 15 April 2013, the following two patent infringement exemptions immediately came into force:
  1. Regulatory approval exemption (for non-pharmaceutical patents) to allow activities that would otherwise be an infringement of a patent, if the activities are for the sole purpose of obtaining regulatory approval to enter the market upon expiry of a patent
  2. Experimental use exemption to allow patents to be exploited for a primarily experimental purpose.

BRCA patent litigation update

Myriad Genetics Inc continues to make headlines in the US in the ongoing litigation on the validity of the BRCA patents. Since the August article, the US federal Court of Appeals overturned a 2010 District Court decision that invalidated the BRCA patents. While the biotechnology industry breathed a brief sigh of relief, the American Civil Liberties Union and Public Patent Foundation appealed to the Supreme Court. On 26 March 2012, the US Supreme Court overturned the appeals court's decision and has remitted the Myriad Case to the appeals court for reconsideration. The Supreme Court applied a recent decision in Mayo Collaborative v Prometheus Laboratories Inc 9 ("the Prometheus Case"), where claims relating to a method of blood test were not patentable as they were not more than "natural relations". In that case, the Supreme Court held that patentable materials must be more than a law of nature or a process that recites a law of nature. The question that remains is whether the same principle in the Prometheus Case applies to the BRCA patents '€“ the former being a patent of diagnostic methods and the latter being gene patents. In Australia, the Federal Court hearing on the same BRCA patents was held in late February this year.10 The pending decision of Nicholas J is much awaited by the biotechnology industry, health service providers, and cancer patients alike.

Government response paper on gene patents

The topic of gene patents and its impact on public health is an area that until now has not been directly addressed by the Government. The Response Paper suggests that the major focus of the next wave of patent reform after the Raising the Bar Act will centre around genetic and biotechnology patents. Senator Kim Carr, the Minister for Innovation, Industry, Science and Research has stated that the government's approach in the Response Paper is designed to give confidence to investment in biotechnology investment while also ensuring that "patients will not be denied reasonable access to affordable treatments and essential diagnostic tests through inappropriate use of the Patents Act".11 We have extracted some significant points from the Response Paper.

No special legislative test for patents relating to genetic materials

The Response Paper has accepted the ALRC recommendation against excluding genetic materials and technologies, or methods of diagnostic, therapeutic or surgical treatment, from patentable subject matter. The Government agreed with the ALRC that "patent applications relating to genetic materials and technologies should be assessed according to the same legislative criteria for patentability that apply to patent applications relating to any other type of technology". In addition, the Government has stated that it considers the current examination guidelines published in the Australian Patent Office Manual of Practice and Procedure apply sufficiently to inventions involving genetic materials and technologies. In doing so, the Response Paper puts another nail in the coffin of the much criticised Patent Amendment (Human Genes and Biological Materials) Bill 2010 (No 2) (Cth), which sought to broadly prohibit the patenting of biological and genetic materials. However, this issue remains live in the political arena with Labor MP Melissa Parke's recent announcement on the imminent introduction of a similar private members bill to ban patents on genes.12

Patents should not lead to patients being denied reasonable access to healthcare

The Government has accepted recommendations by the Senate and ACIP to introduce a statement of objectives into the Patents Act 1990 (Cth). In particular, the Response Paper singles out the Government's intention to clarify that a patent should not lead to patients being denied reasonable access to health care. A statement of objectives will be influential on patent examiners and the courts when public access health issues are raised in the context of the proposed "wholly offensive" invention exclusion.
  • Re-define patentable subject matter using clear and contemporary language
Patent practitioners will know that one component of the current test for patentability in s 18(1)(a) of the Patents Act 1900 (Cth) requires an invention to be a "method of manufacture" within the meaning of section 6 of the Statute of Monopolies 1623. Aside from being written in archaic English, the Statute of Monopolies did not in fact define "method of manufacture"13. While the test has been clarified by case law, it overlaps with the other tests of novelty, inventive step and usefulness. Both the ALRC and ACPI have recommended legislative intervention. In accepting these recommendations, the Response Paper gave specific recognition to health-related patents. The Response Paper noted that any reform to the test of patentability will take into account the role of patents in commercialising health research, and the need to provide industry with certainty balanced against strong public concern about affordable access to health care.

Exclude from patentability inventions that are "wholly offensive"

In the August 2011 article, the authors noted that a research exemption is insufficient to cover the range of public health access issues that do not fall neatly within the definition of "experimental use". We considered that the Act failed to acknowledge the ACIP recommendation to exclude from patentability inventions that are wholly offensive to an ordinary, reasonable and fully informed member of the public. The Response Paper has now accepted this recommendation. While it remains to be seen what type of inventions will be caught by this exclusion, the ACIP envisions that examples include a patent for a genetically modified mouse that is highly susceptible to cancer and patents relating to stem cells that involve the destruction of human embryos.14

Government may intervene if a gene patent adversely impacts medial research or cost-effective healthcare

Though the Response Paper has rejected the direct use of government funds and purchasing power to control the costs of health care related gene patents, it is possible that governments may exercise broad legal interference with patent holder rights in certain circumstances. The Response Paper has accepted "in principle" that where gene patents may have an adverse impact on medical research or cost-effective healthcare, Commonwealth or State governments should have the legal option to:
  1. oppose an existing patent application
  2. make a complaint to the ACCC where there is evidence of potential restrictive trade practices
  3. exploit or acquire the patent under Crown use and acquisition provisions or
  4. apply for the grant of a compulsory licence.
The Government has flagged the National Health and Medical Research Council (NHMRC) and the Medical Advisory Committee as the appropriate bodies to provide technical and economic advice on health-related inventions. In addition, the Government has signalled a review of existing compulsory licensing provisions under the Patents Act 1990 (Cth) to ensure access is given when the public benefit demands it. [*]
    Patents granted as a result of publicly funded research should benefit the public
While over half of human health-related research in Australia is either wholly or partially funded by the Government15, the ALRC has pointed out the need to clarify ownership, use and commercial exploitation to ensure that publicly funded research results in a public benefit. The Response Paper has accepted a number of recommendations made by the ALRC, including a review by the NHMRC and Australian Research Council (ARC) on the existing guidelines on publicly funded research to:
  1. provide guidance on the meaning of "public benefit"
  2. assist organisations in determining the appropriateness of commercialising research results and
  3. identify appropriate approaches to exploiting IP rights in certain circumstances.

Conclusion

It is clear from the Response Paper that the Government has attempted to balance community and public health access concerns against patent holder rights and commercial consideration for the biotechnology industry. How the balance is struck and the practical effect on the key stakeholders remains to be determined. While no date has been set for the legislative mechanisms to commence work, the Government has indicated that there will be a public consultation process for the resulting draft legislation. Interested parties should keep a close eye on the window period to make submissions to Parliament. In the interim, the pending Federal Court decision in relation to the BRCA patents will cause further impact on stakeholders.