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In Australia, Gene Patents Also Subject of High Court Struggle

19 April 2013 1:50 pm
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Australia's Federal Court Building in Melbourne

The U.S. Supreme Court isn't the only high court considering a precedent-setting case on patenting human genes. Australia's Full Federal Court this week began proceedings in an appeal of an earlier decision that upheld the validity of breast cancer diagnostic tests developed by Myriad Genetics—the same tests that were the subject of oral argument before the U.S. high court earlier this week.

The Australian legal jousting comes as that nation's policymakers pursue a trio of initiatives that could have far-reaching implications for how Australia handles biomedical patents, including those on human genes. On 2 April, a draft report on pharmaceutical patents that calls for limiting the reach of intellectual property (IP) was unveiled. On 5 April, the government released an independent government review of health and medical research that argues for allowing human gene patents. And on 15 April, a new law that updates the country's patent system came into effect, but it mostly sidesteps the gene patenting issue.

Amid this flurry of activity, many eyes are on the court case, which focuses on the validity of patents held by Myriad and Melbourne-based Genetic Technologies Ltd. that cover isolated genetic sequences linked to breast and ovarian cancer. Myriad has used sequences on the BRCA1 and BRCA2 genes to develop a diagnostic test over which it or its international representatives have held a potentially lucrative monopoly. But many researchers and ethicists believe that the patents should be invalidated, arguing that the company has not actually "invented" anything new and that the patents hobble research and pose ethical concerns.

"The cases raise philosophical and ethical issues about the commercialization of the human body," says attorney Rebecca Gilsenan of the firm Maurice Blackburn in Sydney. She is leading the appeal of February's Federal Court judgment upholding Myriad's Australian patent 686004 on the BRCA1 gene. "It also exposes practical concerns around gene patents, including access to the gene mutation for research and testing purposes," she says. Gilsenan helped launch the challenge to the patents in 2010 on behalf of Cancer Voices Australia, a nonprofit group, and breast cancer survivor Yvonne D'Arcy.

In February, Federal Court Justice John Nicholas found that the patents were valid, disappointing the litigants and opponents of gene patenting. Although the court ruled that human genetic material is not patentable—there is "no doubt that naturally occurring DNA and RNA as they exist inside the cells of the human body cannot be the subject of a valid patent," Nicholas wrote in his opinion—it concluded that the process of isolating the BRCA1 gene from the human body required human intervention. Thus, the isolated gene sequences represent an invention and are patentable, the court found.

But Gilsenan believes that "we have a good basis to appeal the decision. … The court was correct in making the finding that genetic material in the body is not patentable."

As with the case before the U.S. Supreme Court, Australian opponents of gene patenting argue that it discourages research by placing financial and legal hurdles in front of scientists who are seeking to work with patented biological material. They also claim that patenting poses a risk to patient access to products, such as diagnostics and therapeutics, if patent holders seek to wring financial benefits from a monopoly.

In fact, Australia's test case was a response to a letter that Genetic Technologies wrote in 2008 to the eight public laboratories using Myriad's diagnostic test, informing them it would be asserting its patent rights and insisting on performing all future tests itself. The company later backed down in the face of intense public opposition.

"This [patent] would not have been an issue if Myriad and Genetic Technologies had remained strategically sensitive," notes Julian Clark, head of business development at the Walter and Eliza Hall Institute of Medical Research in Melbourne.

The institute itself holds more than 200 patents, and Clark says that they accelerate research and publication. "Patents are essential to development of pharmaceuticals, diagnostics and processes,'' he says, reflecting the general opinion of the biotech industry. He says that it takes AUD $20 million to $30 million to commercialize a diagnostic test.

A major and wide-ranging government review of the future of Australian health and medical research reinforces Clark's position. Released by Health Minister Tanya Plibersek, Strategic Review of Health and Medical Research in Australia—Better Health Through Research, known as the McKeon Review, recommended strengthening the country's IP system and argued against outlawing patents on human genetic material.

Brendan Shaw, chief executive of biotechnology industries group Medicines Australia, welcomes the report: "It reinforces the importance of having a strong, stable IP system that allows companies to recoup their costs and commercialize new medicines and vaccines".

In contrast, like other proponents of gene patenting, Shaw slams a draft report released for comment on 2 April by the Pharmaceutical Patents Review Panel, which will hand down its final report on 30 May.

The draft makes clear that the three panelists would like to see a reduction in the 5-year extensions granted on pharmaceutical patents about to expire. They are also concerned about a practice known as "evergreening," in which companies expand patent protections around a specific medicine—there might be 20 or more patents around a specific drug—in order to delay the entry of competing generic drugs onto the market.

IP attorney Tania Obranovich of the firm Davies Collison Cave in Melbourne generally agrees with Shaw's views. As a small nation competing in an international playing field, she says, Australia needs a strong IP system that is consistent with obligations under international agreements. And if the Full Federal Court overturns the Myriad patents, she adds, Australia could become out of step with the rest of the world, which generally allows patenting of genetic material (assuming the U.S. Supreme Court upholds Myriad's patents).

"That would create uncertainty for companies and for researchers who are doing research and trying to commercialize and bring medicines to the market," she says. "Also there would be an issue as to whether Australia was breaching international obligations under TRIPS, the World Trade Organization's trade-related aspects of intellectual property rights system, as well as the Australian-U.S. Free Trade Agreement."

In a legislative attempt to reconcile pro- and antipatent positions, the Australian Parliament last year passed amendments to the nation's patent law. That law, The Intellectual Property Laws Amendment (Raising the Bar) Act, came into effect earlier this week.

But while it streamlines patent and trademark procedures, raises the standards on patent eligibility, and improves trademark and copyright enforcement, it does not deal with what IP legal expert Luigi Palombi calls "the elephant in the room"—the patentability of genetic material. Instead, the act attempts to sidestep the issue by establishing exemptions that give scientists free access to patented "inventions," including genetic material, for research.

But Palombi says that language is "going to have zero effect" in practical terms, because if the research leads to a potential commercial product, the developer would still have to pay royalties to the original patent holder. Such "reach through" rights have been controversial in other nations, with critics arguing that they stifle innovation and create unearned windfalls for patent holders.

For Palombi, a fundamental question is whether a patent regime established in the 17th century to reward mechanical inventions can be adapted to 21st century genetic science. His answer: No. "We have to look at other options outside the patent system," says Palombi, who advised on the original lawsuit against Myriad and Genetic Technologies.

He argues for the creation of a "genetic sequence right." It would provide a more limited property right that would reward the discoverers of genetic materials that could be used in the development of diagnostics, therapeutics, and medicines—but not give them a monopoly on their use. To establish such a system, he sees a role for international bodies like the World Health Organization and the nonprofit Bill & Melinda Gates Foundation, which could help broker sharing agreements.

The chief executive officer of the nonprofit advocacy group Cancer Council Australia in Sydney, oncologist Ian Olver, also questions the efficacy of the existing IP system in bringing medical products to market. He also fears that the system helps boost prices on patented tests or medicines, making them unaffordable for some patients.

For Olver, the matter of equity of access will grow along with the potential of targeted therapy and so-called personalized medicine. Such advances are based largely on discovering mutated genes and their products, he notes, and "issues over the ability to patent or not to patent genes should be sorted before the flood gates open."

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