News from Abroad -- Australia Reigns Supreme over U.S. in Patenting Diagnostic Methods

    By Grant Shoebridge* --

In July 1969, as a young boy, I watched in awe, along with the rest of world, as the United States of America put two men on the moon.  Years later in 2011, the then Prime Minister of Australia, Julia Gillard, stood before U.S. Congress and recalled the same moon-landing memory and with acquiescence wept that "Americans could do anything!"  Today, the U.S. seems to have entered, what was once described in an episode of Seinfeld as, "Bizzaro world" -- Donald Trump is in the White House and, even more astonishingly, researchers are unable to protect what have been described judicially as "truly meritorious" and "ground breaking" innovations in the diagnostics and personal medicine space.  Today, it is Australia that reigns supreme over the U.S., as the Federal Court in Sequenom, Inc. v Ariosa Diagnostics, Inc. [2019] FCA 1011 (27 June 2019) confirmed that a non-invasive method of detecting fetal characteristics and abnormalities is patent eligible subject matter in Australia!

Background

The inventors of the patent-in-suit, Australian Patent No 727919, in the name of Sequenom, Inc., discovered that the cell-free fractions of a pregnant woman's blood contain surprisingly large amounts of cell-free fetal DNA (cffDNA).  Traditionally, this portion of the plasma or serum was discarded as medical waste.  This pioneering discovery led to the development of the claimed non-invasive method to determine fetal characteristics and abnormalities, such as Down syndrome.  Ariosa Diagnostics Inc, who sought to revoke Sequenom's Patent, conducts and licenses others to conduct a non-invasive prenatal diagnosis test, marketed under the name "Harmony", which Sequenom claims infringes their patent.

The significance of the Australian Sequenom decision has been fueled by the corresponding U.S. case where the claims of Sequenom's patent were found to be patent ineligible because they were held to be directed to naturally-occurring matter.  The ensuing detrimental impact on U.S. diagnostics industry has subsequently resulted in a proposal for changes to the patentable subject matter legislation, which is currently being considered by US Congress.

Issues and findings

Under Australian law, patent eligibility is guided by the principles of the High Court's decision in National Research Development Corporation v Commissioner of Patents('NRDC') [1959] HCA 67.  In that landmark decision, it was held that subject matter was considered patent eligible if it was "an artificially created state of affairs" having "economic significance".

Ariosa's case relied heavily on the approach that proved successful in the U.S., namely that the claims cover a mere discovery, that being the presence of cffDNA, which can be detected in the plasma or serum of pregnant women, and that the end result of each claim is not an artificially created state of affairs.  Ariosa further submitted that the claims involve nothing more than the use of well-known techniques to detect cffDNA in maternal blood.

Ariosa also suggested that the Court should follow the U.S. position, which they suggested was in harmony with the Australian Myriad decision.  Judge Beach's response was an emphatic, "I hardly think so".  In fact, in considering the Australian High Court Myriad decision, Beach J emphasised the difference between the gene product claims considered in Myriad and the method defined in the claims of Sequenom's patent.  In particular, he stated that "in nature, the presence of cffDNA in the maternal blood has not and cannot be detected without human action.  Accordingly, unlike the claims considered in Myriad, the invention claimed adds to human knowledge and involves the suggestion of an act to be done which results in a new result, or a new process".

The Court also agreed with Sequenom that the substance of the claimed method is distinct to simply the identification of a natural phenomenon, namely the presence of cffDNA in maternal blood.  This, the Judge said, is made clear by the patent specification, which explains that the invention offers a new approach for non-invasive prenatal diagnosis, which only occurs through human intervention and provides a significant advantage over existing fetal DNA detection methods, thus producing a result possessing economic utility.

Consistency with foreign law

Given the intense spotlight that has illuminated patentability issues in the U.S. for diagnostic methods in recent times, the consistency of the Australian decision and the corresponding UK proceedings between Ariosa and Sequenom (Illumina, Inc v Premaitha Health Plc[2017] EWHC 2930), will likely go unnoticed.  Those, however, looking for controversy in the conflicting Australian/U.S. findings should look no further than Judge Beach's swatting away of the issue by stating that the conclusion reached in the U.S. decision is problematic because of the U.S. Court's dissection of the claims into their constituent parts, which is contrary to Australia's NRDC and Myriad decisions -- end of story.

Conclusions

This decision, and the recent decision in Meat & Livestock Australia Limited v Cargill, Inc [2018] FCA 51, make it clear that claims directed to practical applications of naturally-occurring phenomena, including gene sequences, used in methods of diagnosis and prognosis are patent eligible subject matter in Australia.  This will come as a welcome relief to the diagnostics and personal medicine industry and can be considered as "one small step" forward for Australian patent law but also, hopefully, "one giant leap" that influences beneficial change to the patent eligibility laws in the U.S.

* Dr. Shoebridge is a Principal with Shelston IP.

Comments

[Atari Man]

Nice to know that at least some jurisdictions still get this right.

Can we get Judge Beach appointed to the CAFC?

[Greg DeLassus]

Haven't we seen this movie before. I can remember when the AU Federal Court upheld Myriad's claims even after the SCotUS tanked them. Then along came the AU Supreme Court and reversed the AU Federal Court, tanking the claims as well. How certain are we that this represents a real break with U.S. craziness? I am still waiting to see whether the other shoe does or does not drop.

[Shaklain Khurshid]

In nature, the presence of cffDNA in the maternal blood has not and cannot be detected without human action that's really a wonderful interpretation so it may qualify as patentable subject matter.

But at the same time what was the thought process of the inventors or what prompted them to think of the said cffDNA being present in the maternal blood to be evaluated since the technique used to diagnose cffDNA is well known and the said cffDNA is a resultant of an in vivo process.

[R. Allison]

You may have a point in your analysis, but you had to somehow tie President Trump to the problems with the patent system. Why not discuss your issue without unnecessarily adding your political point of view. Please remember that not everyone agrees with your snarky comments.

[Paul Cole]

Most sincere thanks to Dr Shoebridge.

In the UK, a 9th Edition of the CIPA Guide to the Patents Acts is in preparation for publication at the end of 2019, and our attention has been drawn to Sequenom Australia just in time for a mention in Section 001 to be included.

The decision is of added weight because it is the result of full trial with expert evidence and cross-examination which was not available to the Federal Circuit judges who considered the corresponding US case. In any sane regime, the Australian outcome would be of great persuasive authority in the US because of the forensic testing to which the evidence was subjected and the opportunity for the trial judge to write a more fully informed and balanced opinion.

It is particularly unfortunate that this landmark decision did not arrive in time to be taken into account in the en banc petition in Athena.

[Skeptical]

I have to wonder at the wishful thinking of Mr. Cole's:

"In any sane regime, the Australian outcome would be of great persuasive authority in the US"

While there is certainly something to be learned by engaging in comparative analysis of patent cases in different legal regimes, and certainly not withstanding any accommodations made by engaging in certain treaties (and any ensuing enacting legislation, given that treaties by themselves are generally NOT self-enacting in US law), it is a step TOO FAR to denigrate any type of lack of automatic "effect" of a case in one Sovereign to any case (related or not) in another Sovereign.

Perhaps this is merely "picking a nit," and if so, feel free to ignore this (as well as the nit).