{"id":3306,"date":"2021-07-01T23:36:50","date_gmt":"2021-07-01T23:36:50","guid":{"rendered":"https:\/\/www.jamesandwells.com\/australias-full-federal-court-diagnoses-an-outcome-not-a-product\/"},"modified":"2021-07-01T23:36:50","modified_gmt":"2021-07-01T23:36:50","slug":"australias-full-federal-court-diagnoses-an-outcome-not-a-product","status":"publish","type":"post","link":"https:\/\/www.jamesandwells.com\/au\/australias-full-federal-court-diagnoses-an-outcome-not-a-product\/","title":{"rendered":"Australia\u2019s Full Federal Court Diagnoses an Outcome, not a Product"},"content":{"rendered":"<h6>On appeal, the Full Court of the Federal Court of Australia (Middleton, Nicholas, and Burley JJ) has re-confirmed that diagnostic methods are patentable in\u00a0<em><a href=\"http:\/\/www.austlii.edu.au\/cgi-bin\/viewdoc\/au\/cases\/cth\/FCAFC\/2021\/101.html\">Ariosa Diagnostics, Inc v Sequenom, Inc.<\/a><\/em>[1]<\/h6>\n<p>The decision is the latest in a long running, multi-jurisdictional dispute between the parties concerning the validity and infringement of claims to non-invasively diagnosing the sex, for example, of a foetus from the blood of a pregnant female.<\/p>\n<h6>Validity<\/h6>\n<p>Claim 1 of AU patent no. 727919 had exceptional breadth:<\/p>\n<p>A detection method performed on a maternal serum or plasma sample from a pregnant female, which method comprises detecting the presence of a nucleic acid of foetal origin in the sample.<\/p>\n<p>The toothless grounds of sufficiency of description and fair basis under the pre-Raising the Bar version of the\u00a0<em>Patents Act 1990<\/em>\u00a0were disposed of in short measure and on conventional bases.<\/p>\n<p>The real validity issue turned on whether such a diagnostic method was for a manner of manufacture (patentable subject matter). Whilst the Full Court delved fully into Australian High Court authority in\u00a0<em>D\u2019Arcy v Myriad<\/em>[2] and the watershed decision in NRDC,[3] ultimately the principles stated by Fletcher Moulton LJ in 1909 in\u00a0<em>Hickton\u2019s Patent Syndicate<\/em>[4] were applied \u2013 \u201cif there is invention in the idea plus the way of carrying it out then is it good subject-matter for Letters Patent\u201d.<\/p>\n<p>In this case the invention resided in the observation that cell free foetal DNA (cffDNA) is to be found in maternal plasma (or serum), coupled with the explanation of how to extract the cffDNA from the plasma or serum.[5] On that basis the diagnostic method claim, despite its exceptional breadth, was held to be patentable.<\/p>\n<p>We pause here to admire the enduring beauty of Australian law on patentable subject matter \u2013 specifically that a 100-year-old decision commenting on the patentability of the steam engine can have direct application to the patentability of a diagnostic method involving the amplification of genetic material.<\/p>\n<p>Our US colleagues may despair (or perhaps rejoice) at the fatal blow wielded on diagnostic method claims by the Supreme Court\u2019s decision in\u00a0<em>Mayo<\/em>[6] which required the patentee to establish that fragmented claim integers themselves resurrected a patent ineligible concept. That process of fragmentation has been specifically rejected by Australian authorities, which have held that an invention cannot be separated \u201cinto discrete parts\u201d for analysis.[7]<\/p>\n<h6>Infringement<\/h6>\n<p>The Full Court did, however, partially reverse the findings of the lower court in relation to infringement, instead determining that the appellant did not infringe the patented method by sending a subject\u2019s blood sample from Australia to the USA for performance of the diagnostic method, before informing the subject in Australia of the results obtained from that performance.[8]<\/p>\n<h6>Information is not a product. Apparently.<\/h6>\n<p>The decision on validity was entirely conventional. Diagnostic methods remain patentable in Australia, and the threshold for disclosure for pre-Raising the Bar applications is very low.[9]<\/p>\n<p>The author was, however, challenged by the finding on infringement and respectfully opines that the lower court\u2019s ultimate finding should have been upheld.<\/p>\n<p>In its reasoning, the Full Court noted that s.13 of the\u00a0<em>Patents Act 1990<\/em>\u00a0provides that \u201ca patent gives the patentee the exclusive rights\u2026 to exploit the invention.\u201d<\/p>\n<p>As defined, \u201cexploit, in relation to an invention, includes:<\/p>\n<p>(a) where the invention is a product\u2013make, hire, sell or otherwise dispose of the product, offer to make, sell, hire or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things; or<\/p>\n<p>(b) where the invention is a method or process\u2013use the method or process or do any act mentioned in paragraph (a) in respect of a product resulting from such use.\u201d<\/p>\n<p>The Full Court acknowledged that the \u201cinfringement aspect of the appeal turns on the correct understanding of the words in (b) of the definition of \u201cexploit\u201d\u201d,[10] and also noted that the statute did not provide a definition for the term \u201cproduct\u201d.[11]<\/p>\n<p>Initially the Full Court attempted to resolve this ambiguity by reference to a dictionary definition for \u201cproduct\u201d as being either \u201ca thing produced by any action or operation, or by labour; an effect or result\u201d or \u201csomething produced; a thing produced by nature or by a natural process\u201d, before\u00a0<em>reading down<\/em>\u00a0that definition in light of the reference to \u201cmake, hire, sell or otherwise dispose of the product\u201d to infer a reference only to\u00a0<em>tangible<\/em>\u00a0things.[12] On that basis, the Full Court held that \u201cinformation\u201d is not tangible, is not a product, and is instead an outcome.<\/p>\n<p>Respectfully, this seems to ignore the commercial reality of the field of diagnostics \u2013 where neither the subject\u2019s blood sample, nor the amplified genetic material obtained from performance of the method have any intrinsic value. The entire value proposition lies in the promise by the vendor of providing information obtained from the method steps. The author believes that it was open to the Full Court to contemplate that non-tangible things, effects or results (such as information) were products within that term\u2019s dictionary meaning that resulted from the use of the inventive method.<\/p>\n<p>Secondly, in further justification for its position, the Full Court held that \u201cthe definition of \u201cexploit\u201d in sch 1 is conditioned upon a requirement in each of (a) and (b) that the exploited product or method must be \u201can invention\u201d\u201d.[13] By reference to authority that a \u201cclaim to mere information is not patentable\u201d the Full Court decided therefore that \u201cwe do not consider that the word \u201cproduct\u201d in para (b) of the definition of \u201cexploit\u201d should be interpreted as extending the patentee\u2019s monopoly to information which could not itself constitute patentable subject matter since it would have the unintended and odd consequence of permitting the patentee to obtain patent protection in respect of subject matter that has long been held to be unpatentable\u201d.[14]<\/p>\n<p>An alternative reading of para (b) would note that the reference to \u201cproduct\u201d is not limited to any\u00a0<em>patentable<\/em>\u00a0product arising from the inventive method. Rather, it relates to a product\u00a0<em>simpliciter<\/em>. The link to para (a) is merely shorthand to draw in the \u201cany act\u201d referred to therein. Further, extending patent protection to information obtained from a patentable method does not collide with the established authorities. As opposed to the \u201cmere intellectual information\u201d in\u00a0<em>Grant<\/em>,[15] or the \u201cmere information\u201d in\u00a0<em>Encompass<\/em>,[16] in this case information is obtained as a result of chemically amplifying tangible material by a method that the same court has already held to be patentable. In a similar example to that cited by the Full Court,[17] the detection of amplified Y chromosome specific nucleic acid of foetal origin in the sample could at once cause the observer to state \u201cit\u2019s a boy!\u201d. The positive or negative determination of that information is intrinsic to the patentable method performed.<\/p>\n<p>Beyond the analysis given above, we also note that the use of the word \u201cincludes\u201d in the definition of \u201cexploit\u201d implies that the definition is not exhaustive, an aspect that does not appear to have been considered by the Full Court. The author believes that it would have been open to the Full Court to extend the exploitation rights to precisely the circumstance considered on appeal \u2013 namely where a licensee (Sonic or Clinical) in Australia had derived commercial benefit from the patented method merely by sending the sample offshore.<\/p>\n<p>We would not be surprised to discover that either party is seriously considering requesting special leave of the High Court of Australia to appeal the decision.<\/p>\n<p>&nbsp;<\/p>\n<p>[1] \u00a0[2021] FCAFC 101.<br \/>\n[2]\u00a0<em>D\u2019Arcy v Myriad Genetics Inc<\/em>\u00a0[2015] HCA 35.<br \/>\n[3]\u00a0<em>National Research Development Corporation v Commissioner of Patents<\/em>\u00a0(1959) 102 CLR 252.<br \/>\n[4]\u00a0<em>Hickton\u2019s Patent Syndicate v Patents and Machine Improvements Company Ltd<\/em>\u00a0(1909) 26 RPC 339.<br \/>\n[5] [2021] FCAFC 101, [153].<br \/>\n[6]\u00a0<em>Mayo Collaborative Services v. Prometheus Laboratories, Inc.<\/em>, 566 U.S. 66 (2012)<br \/>\n[7] [2021] FCAFC 101, [155], [159].<br \/>\n[8] [2021] FCAFC 101, [270].<br \/>\n[9] Applications for which examination was requested before 15 September 2013.<br \/>\n[10] [2021] FCAFC 101, [256].<br \/>\n[11] [2021] FCAFC 101, [259].<br \/>\n[12] [2021] FCAFC 101, [260].<br \/>\n[13] [2021] FCAFC 101, [268].<br \/>\n[14] [2021] FCAFC 101, [269].<br \/>\n[15]\u00a0<em>Grant v Commissioner of Patents<\/em>\u00a0[2006] FCAFC 120, [32].<br \/>\n[16]\u00a0<em>Encompass Corporation Pty Ltd v InfoTrack Pty Ltd<\/em>\u00a0[2019] FCAFC 161, [94].<br \/>\n[17] [2021] FCAFC 101, [267].<\/p>\n","protected":false},"excerpt":{"rendered":"<p>On appeal, the Full Court of the Federal Court of Australia (Middleton, Nicholas, and Burley JJ) has re-confirmed that diagnostic methods are patentable in\u00a0Ariosa Diagnostics, Inc v Sequenom, Inc.[1] The decision is the latest in a long running, multi-jurisdictional dispute between the parties concerning the validity and infringement of claims to non-invasively diagnosing the sex,&#8230;<\/p>\n","protected":false},"author":8,"featured_media":586,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":""},"categories":[242,248,255],"class_list":["post-3306","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ip-update-au","category-life-sciences-au","category-patents-au","insight-resource-articles-au"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Australia\u2019s Full Federal Court Diagnoses an Outcome, not a Product - James &amp; 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