Ariosa not in harmony with the Federal Court on patentability

What you need to know

• In Australia, claims to diagnostic methods which lead to the detection of naturally occurring genetic material are patentable.
• Where a diagnostic method claimed in a patent is performed in Australia, it will infringe the patent.
• Where the input for a diagnostic method is obtained in Australia, the diagnostic method is performed overseas and the results of the method are imported into Australia, such conduct will not infringe the patent.

What you need to do

• If you are employing diagnostic methods which may be patented, consideration should be given to whether it is feasible to conduct the methods abroad so as to minimise the risk of patent infringement.
• Companies that are patenting diagnostic methods should: 

• consider if there are alternative methods of formulating their claims to prevent materials being acquired in Australia but then the method being conducted overseas;

• ensure that they have patents in all potentially relevant jurisdictions so that infringement proceedings can be commenced in all jurisdictions where the diagnostic method is conducted; and

• adapt claims in each jurisdiction to take account of differences in patentable subject matter requirements.

Background

Sequenom is the patentee of Australian patent no. 727919 (the Patent). The Patent concerns non-invasive prenatal diagnostic methods for detecting cell-free foetal DNA (cffDNA) in the blood plasma or serum of pregnant women. As a result, the Patent teaches that a maternal blood sample can enable genomic testing on the foetus thereby avoiding the risks associated with conventional invasive techniques.

Claim 1 of the Patent claims:

"A detection method performed on a maternal serum of plasma sample from a pregnant female, which method comprises detecting the presence of a nucleic acid of foetal origin in the sample."

In 2016, Sequenom brought a claim against Ariosa Diagnostics Inc. and its licensees (together, the Appellants) alleging that Ariosa's prenatal diagnostic test, the Harmony Test infringed certain claims of the Patent.

The Harmony Test involved the testing of maternal blood samples to identify particular foetal DNA sequences so as to screen for genetic conditions. The conditions screened for include, chromosomal abnormalities, gender, as well as monitoring for pregnancy associated conditions.

The Harmony Test was conducted under license in Australia by Sonic Healthcare and Clinical Laboratories. However, for a period of time, the Appellants operated a "send out" model whereby blood samples collected in Australia were sent to Ariosa in the US. The Harmony Test was conducted in the US and the results were given in a report which was sent to Sonic Healthcare and Clinical Laboratories in Australia.

The Appellants cross-claimed for revocation on multiple grounds including that the relevant claims did not consist of patentable subject matter.

At first instance, Justice Beach held that the Patent was valid and a number of claims infringed, including in the period where the "send out" model was in operation. These findings were appealed to the Full Court of the Federal Court of Australia.

The decision

Patent eligibility: manner of manufacture?

One of the requirements in the Patents Act 1990 (Cth) is that the claims of a patent must be to a "manner of manufacture" within the meaning of section 6 of the Statute of Monopolies. The High Court has interpreted this requirement to require the patent to claim an artificial state of affairs of economic utility.

The Appellants contended that the Patent claimed "a mere discovery of a naturally occurring phenomenon", being that cffDNA was detectable in maternal blood plasma or serum. The Appellants argued that the claimed method did not involve a practical application that went beyond the discovery itself and, as a result, there was no "artificially created state of affairs" arising from the claims.

In rejecting the Appellants' argument, the Full Court distinguished the case from that of Myriad. Myriad involved claims to a naturally occurring product, being the isolated BRCA1 gene sequence.

By contrast, the Patent in issue did not claim the genetic information itself. Rather the Patent claims were directed to a diagnostic method which provided a new means of discriminating between maternal and foetal DNA and the identification of the particular nucleic acid of foetal origin. The method could not be achieved without significant human involvement. As such the claimed method involved an artificially created state of affairs satisfying the 'manner of manufacture' test and meeting the requirements for patentable subject matter.

Infringement

On appeal, the Appellants challenged Justice Beach's conclusion that the "send out" model infringed the Patent.

It is an infringement of a patent to "exploit" the invention. Exploit includes, where the invention is a method or process, using the method or process or, amongst other things, using or importing a product resulting from a method or process.

Justice Beach concluded that a "product" resulting from the use of a method or process covered "anything resulting from the patented method that can be commercially exploited." Therefore, the results of the Harmony Test were a "product" resulting from the use of the claimed method. In these circumstances, the import of the test results and use of those results in Australia infringed the Patent.

The Full Federal Court disagreed. By considering the use of the word "product" in the definition of "exploit" in the Patents Act, the Court held that the product must result from the use of the method or process such that the method or process must be one that manufactures the product. As such, the term "product" should be restricted to tangible things.

The Court also concluded that it was impermissible to interpret "product" as "extending the patentee's monopoly to information which could not, by itself, constitute patentable subject matter". Given the results of the Harmony Test was mere information, those results were not a "product" within the definition of exploit.

Since the diagnostic method was not performed in Australia and the reports imported into Australia simply contained information (rather than a product of the method), there was no infringement by adopting the "send out" model.

Conclusion

The Full Court held the Patent to be valid, and infringed by carrying out the Harmony Test in Australia. However, the export of the blood sample for testing abroad and import of the results of the testing into Australia, did not infringe the Patent.

The decision confirms that diagnostic methods which provide information regarding naturally occurring phenomena can be the subject of a patent in Australia. However, not every method yielding information will be patentable, and each case must be considered on its merits.

The position overseas is not necessarily consistent with Australia

Equivalent patents to that considered in this case were held invalid in the US, although valid in the UK. This presented particular challenges to Sequenom's access to recourse as it was unable to pursue infringement proceedings for use of the Harmony Test in the US.

In reaching its decision, the Full Court noted that there was no real prospect of falling out of step with the international community due to the disparate approaches taken abroad. The Court further noted that the jurisprudence developed overseas in recent years diverges from that identified in the line of authorities in Australia. Thus, it remains important to consider jurisdictional differences when evaluating patent claims, particularly those involving naturally occurring genetic material.

Authors: Jasmin Collins, Graduate; and Nina Fitzgerald, Partner.