Patent Eligibility Down Under

I have just returned from a longish trip to Australia where I had the honour of being invited to speak at two co-ordinated roundtable discussions, the first at the Melbourne offices of the lawyers Minter Ellison and the second in the Sydney offices of the patent attorneys F B Rice. The agenda, largely the same on both occasions, began with an invitation to me to predict where, on the question of patentability, the EPO is likely to go in the next five years.

Since these were private events, and moreover conducted under the Chatham House rules, I cannot reveal what I or anyone else said. But in preparing for the discussions my attention was firmly engaged by some recent Australian jurisprudence since the “whither EPO on patentability” was prompted by both the US Supreme Court and the Australian High Court Myriad decisions. Well, I knew the US case and had heard American friends express various degrees of displeasure about that and Alice Corp and their consequences but, while I knew of the Australian Myriad decision, I had not read it till now. Doing so on a flight from Cairns to Melbourne was, to say the least, an interesting experience.

First, the process by which the Australian High Court arrived at its decision was curious. In Australia as in the USA, the question was whether Myriad could be allowed a claim to an isolated nucleic acid. The US Supreme Court held that was not patentable subject-matter because, as is well-known, US patent law contains an implicit exception to patent eligibility for laws of nature, natural phenomena, and abstract ideas. Australian law has no such provision but, as did English law in the past, provides that a claimed invention is patentable if it is a “manner of manufacture” within section 6 of the Statute of Monopolies 1624. Prior to Myriad, the test for deciding that had been established in NRDC v. Commissioner for Patents as whether that the subject matter of the claims was directed to an artificial state of affairs and in a field of economic endeavour.

So you might think that the question here was whether the act of isolating a nucleic acid was, or produced, an artificial state of affairs – but not so. The seven members of the High Court, disagreeing with the first instance judge and all five first appeal judges of the Full Federal Court, held that NRDC was not the last word and that several policy-related considerations should also be assessed which, in this case, pointed against patentability. I find two of these considerations surprising, if not troubling.

The first was that such decisions are best left to legislators which, in the Australian context is pretty extraordinary because the Australian parliament had as recently as 2013 considered and rejected the possibility of legislating to exclude gene patenting. And moreover this begins to approach the “leave it to politicians” approach which, as I’ve suggested before, is worse than the courts making the difficult decisions.

The second surprising policy consideration was that allowing Myriad-type claims would have a “chilling effect” on innovative research beyond the scope of the patent. That suggestion is surely extraordinary. In Europe we have seen that it is perfectly possible to use the requirement of industrial applicability to prevent one party monopolising a field of research because a research programme is not per se industrial exploitation. Could our Australian friends not use the NRDC requirement that a “manner of manufacture” (which seems to require a product or process) be in “a field of economic endeavour” (which suggests industrial applicability) to achieve the same result?