Patent & Trade Mark

Results of the Senate Enquiry into Gene Patenting – Implications on 'gene patents' and patents in general in Australia

Date: 01 December 2010
Author: Karin Innes
On 26 November 2010, the report of the Senate Community Affairs References Committee (the Committee) relating to the patenting of human genes and genetic materials was released.  The report, two years in the making, summarises the findings of the Committee which received over 50 submissions from interested parties.  The Committee was requested by Senate to consider the impact of gene patents on healthcare, medical research and the health and wellbeing of Australians, broadly outlined in the following terms of reference:
 The impact of the granting of genes of patents in Australia over human and microbial genes and non-coding sequences, proteins, and their derivatives, including those materials in an isolated form, with particular reference to:
(a) the impact which the granting of patent monopolies over such materials has had, is having, and may have had on:
(i) the provision of costs of healthcare;
(ii) the provision of training and accreditation for healthcare professionals;
(iii) the progress in medical research; and
(iv) the health and wellbeing of the Australian people;
(b) identifying measures that would ameliorate any adverse impacts arising from the granting of patents over such materials, including whether the Patents Act 1990 should be amended, in light of any matters identified by the inquiry; and
(c) whether the Patents Act 1990 should be amended so as to expressly prohibit the grant of patent monopolies over such materials.
FB Rice not only provided written submissions to the Committee concerning the terms of reference, but was directly involved as a witness in the public hearing held in Melbourne in August last year to garner opinions on issues of gene patenting relevant to the terms of reference.
At over 170 pages, the report is lengthy reading.  However, the substance of the report can be distilled down to 16 recommendations, the more pertinent of which are discussed below.

Recommendation 1 - Expanding collection of data concerning genetic testing

This recommendation proposes that the Government support and expand on the collection of data, research and analysis concerning genetic testing in Australia.  The recommendation appears to address frustrations experienced by the Committee in their ability to make definitive conclusions based on the lack of comprehensive, systematic and accessible data and information regarding the impacts and use of gene patents.  In particular, the Committee acknowledges that while they heard of a number of cases where the provisions of healthcare or the conduct of medical research in Australia had allegedly been impeded, the evidence did not show that gene patents were systemically leading to adverse impacts in these areas.

Recommendation 2 - Patent Register

This recommendation proposes that the Government conduct a public consultation and feasibility study regarding the establishment of a transparency register for patent applications to track the use of patents dealing with genes and genetic material.  The intention is that companies would be required to disclose patent holdings in designated subject areas in order to overcome some of the issues relating to accessibility of information regarding gene patents which may act as barriers to research and innovation. 
The proposal appears to be reminiscent of the so-called United States Food and Drug Administration (FDA) “Orange Book” requirement in the United States which provides a mechanism whereby Patentees can alert third parties to the existence of patents which they purport cover small molecule compounds, formulations and uses.  The Orange Book, while good in theory, has been met with criticism in the United States.  The operation of a patent register directed to so-called “gene patents” raises a number of issues, for example, who would be responsible for overseeing such a register?  Is this the responsibility of IP Australia?  Who makes the determination as to what patents should be listed?  Would such a register extend to all uses of genetic material, for example therapeutic uses or diagnostic uses?  What are the implications if a patent owner fails to list their patent on the register?

Recommendation 3 - Private Members Bill

This recommendation proposes that the Senate refer the Patent Amendment (Human Genes and Biological Materials) Bill 2010 to the relevant Senate Committee for inquiry.  The Private Member’s Bill was introduced by Senators Helen Coonan, Bill Heffernan, Rachel Siewert and Nick Xenophon last week1.  The Bill proposes to amend the Patents Act 1990 (the Act) to include an express prohibition that “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” are not patentable.  This recommendation has been accepted and submissions on the proposed amendment must be received by 25 February 2011.

Recommendations 6-10 - Amendments to the Patents Act 1990 relevant to all technologies

These recommendations advocate amendments to the Act concerning the criteria for meeting the patentability requirement for inventive step, notably, removing the limitation that “common general knowledge” is confined to Australia, and the requirement that a prior art document must be one in which a person skilled in the art could have reasonably been expected to have “ascertained” (this is the first part of the three pronged test of “ascertained, understood and regarded as relevant” currently used to assess whether a document qualifies as prior art for inventive step).  Such amendments are clearly directed to raising the inventive step threshold in Australia.  This amendment appears to be prompted by submissions that the inventive step threshold in Australia is lower than in comparable jurisdictions, which is in part due to the definitions of “common general knowledge” and “prior art base”. 
Further amendments are proposed to the Act to introduce descriptive support requirements, mandating that a patent claim be enabled across its entire scope (a departure from the current requirements and more akin to United States practice requirements) and further, that the patent specification include sufficient information to allow the skilled addressee to perform the invention without undue experimentation.  These proposed amendments are presumably directed to finding means by which a patent claim can be invalidated on a ground other than lack of novelty or inventive step.  In view of recent Federal Court and High Court decisions in Australia, it has become increasingly difficult for patent examiners to raise an objection on "section 40 issues" such as lack of sufficiency or lack of fair basis.  The proposed amendments appear to address concerns regarding “overly broad” patent claims being granted in Australia and the intent again appears to bring Australia’s requirements for patentability into conformity with other jurisdictions.
Finally, amendments are proposed to provide that an invention will only satisfy the requirement of “usefulness” in circumstances where a patent application discloses a “specific, substantial and credible” use.  This later wording appears to be borrowed from the utility guidelines under patents law in the United States.  In essence, the recommendation is aimed at "raising the bar" in relation to the evidence required to show the utility of a claimed invention. 

Recommendations 11 and 12 - Crown Use and compulsory licence provisions

Recommendation 12 addresses the Crown Use provisions and requests that the Act be amended to clarify the circumstances under which the Crown Use provisions may be employed.  Historically, the Crown Use (and compulsory licensing) provisions are a poorly understood and utilised area of Patent law.  The intent of the Crown Use provisions are to allow the government to use, or authorise others to use, a patented invention, without permission of the patent owner provided that the use is for services of the Commonwealth, a State or a Territory.  Typically, the patent owner receives some remuneration for that use.
With respect to the issue of compulsory licenses addressed under recommendation 12, the sentiment appears to be that the scope of the “reasonable requirements of the public test” on which the grant of a compulsory licence may be based is unclear and that some reform is needed taking into consideration its interaction with the Trade Practices Act 1974.  Although the Act was amended in 2006 to provide that a compulsory license may be granted where the Patentee has been found guilty of any proscribed anti-competitive conduct under the Trade Practices Act 1974, there is some suggestion that in practice, the competition based test may be of little effect. 

Recommendation 13 - Research Exemption

This recommendation addresses the requirement for a broad research exemption to the Act.  This is a vexed issue and has been the subject of several consultation papers, the most recent being the IP Australia report “Exemptions to patent infringement” published in March 2009.  Of the proposed recommendations, this is the one, in our view which more appropriately addresses the issue of gene patenting rather than the proposed Member’s Bill discussed above.  The Act does not currently provide any express exemption for research or experimental use and it is unclear whether a defence of research or experimental use is available under Australian law (because it has not been tested in the courts).  This is inconsistent with the widespread belief by research institutions that such an exemption exists. 

Recommendations 14 and 15 - Anti-avoidance and object provisions

These recommendations request that the Government consider amending the Act to include “anti-avoidance” and “object provisions” to assist courts and patent examiners with the interpretation and application of the Act.  The committee seems to think that these "would assist the court and patent examiners in interpreting and applying the Act".
In our opinion, the recommendations by the Committee in substance generally appear reasonable and the focus appears to be on providing more transparency.  Furthermore, proposed amendments to the Act are intended to bring the requirements for patentability into conformity with overseas jurisdictions and have broader implications across all patented technologies, not just gene patents.  Nevertheless, the new Senate Inquiry resulting from Recommendation 3 will ensure further uncertainty in the short term for the biotechnology industry regarding patentable subject matter in Australia.
1  FB Rice has published a commentary on the proposed Bill on the website.
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