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Ariosa Diagnostics, Inc v Sequenom, Inc [2021] FCAFC 101

The Full Court of the Federal Court of Australia has confirmed that Sequenom’s diagnostic method of detecting fetal DNA in maternal blood is eligible for patent protection in Australia.  The decision highlights the different approaches taken by Australian, European and US authorities when it comes to assessing the patentability of diagnostic methods.

However, the Full Court also found that Sequenom’s patent was not infringed by the importation of results from tests conducted overseas on the basis that the results were information and not a product that could be exploited.

The technology

Sequenom’s patent stemmed from the discovery of cell-free fetal DNA (cffDNA) in maternal blood serum and blood plasma by two researchers from Oxford University. The discovery enabled the development of a non-invasive prenatal test using maternal blood samples. 

The test could be used to determine the gender of an unborn baby, and its susceptibility to certain genetic conditions. Prior to the inventors’ discovery, obtaining a prenatal sample for testing typically involved inserting a needle through the mother’s abdomen or cervix. 

The patent

Claim 1 of Sequenom’s patent defines:

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.

In the first instance decision, the Federal Court of Australia found that the use of the “Harmony” prenatal diagnostic test by Ariosa Diagnostics Inc, and by its licensees, Sonic Healthcare Limited and Clinical Laboratories Pty Ltd, infringed certain claims of Sequenom’s patent. On appeal, Ariosa challenged the validity of the claims and the finding of infringement.

Validity

Ariosa argued that the primary judge erred in finding that the claimed method is a “manner of manufacture” as required under the Patents Act because what is claimed is a mere discovery of a naturally occurring phenomenon. In a related submission, Ariosa contended that, properly understood, the end result of each claim is mere information.  The human-mediated “detection”, Ariosa argued, is no different from the discovery that cffDNA is detectable. Ariosa submitted that in substance there is no application of the discovery by simply claiming the detection of what has been discovered to exist. 

In support of their arguments, Ariosa cited D’Arcy v Myriad Genetics Inc [2015] HCA 35, in which the High Court found that claims defining isolated nucleic acids encoding mutant or polymorphic BRCA1 polypeptides were in substance directed to naturally occurring genetic information, which is not patentable subject matter.

The Full Court rejected Ariosa’s approach, finding that it disaggregated the discovery of cffDNA in maternal plasma or serum from the method used to harness that discovery. Although fetal nucleic acid occurs in nature, the Full Court found that the substance of the invention is not cffDNA itself, but the identification of that particular nucleic acid as a part of a method:

Unlike the position in Myriad, claim 1 is not, as a matter of substance, directed to genetic information, but to a method involving the practical application of a means for identifying and discriminating between maternal and foetal nucleic acid. Although foetal nucleic acid occurs in nature, the substance of the invention is not cffDNA itself, but the identification of that particular nucleic acid as a part of a method. It is impermissible to disaggregate the integers of the method to point only to the cffDNA as the “invention”. Identification of the substance of the invention does not involve disregarding material aspects of the claim language. The invention as claimed is not merely output, but the detection process which yields an output. This is the very type of subject matter considered to fall on the correct side of the line between discovery of a scientific fact or law of nature and invention (at [155]).

Their Honours observed that an invention may reside in an abstract idea that is put to a useful end, even though the way of putting it to that end can be carried out in many useful ways, all of which are otherwise known. While the mere discovery of a natural phenomenon is not eligible for a patent, the practical application of that discovery may very well be patentable subject matter.

The Full Court concluded that the invention defined by claim 1 of Sequenom’s patent ”falls firmly within the concept of a manner of manufacture as that term is to be understood having regard to the authorities, being an artificially created state of affairs of economic utility” (at [166]).

Ariosa’s other grounds of attack, namely, that the claims were invalid for lack of sufficiency and lack of fair basis, were also unsuccessful.

Infringement

Before conducting the Harmony Test in Australia, Ariosa’s Australian licensees, Sonic Healthcare and Clinical Laboratories, collected blood samples from pregnant women in Australia and sent those samples to Ariosa in the US. Ariosa then conducted the Harmony Test in the US and provided the results, in the form of a report made available by a file sharing platform, to Sonic Healthcare and Clinical Laboratories in Australia. 

The exclusive rights of a patentee to exploit an invention will ordinarily be infringed by importing the product of a patented process, even when that process is carried out overseas. This is because Australia’s Patents Act defines the term “exploit” as including:

where the invention is a method or process – use the method or process or do [acts including importing] in respect of a product resulting from such use.

The primary judge found that the method was infringed when it was performed in Australia, which was not in dispute in the present case. However, the primary judge also found that Sonic Healthcare’s and Clinical Laboratories’ “send out” model amounted to an infringement of Sequenom’s claims because it used a method that would have infringed the claims if conducted in Australia.

The Full Court disagreed, noting that the Patents Act does not provide a definition of the term “product”. Their Honours preferred a construction of the word “product” in the context of the definition of “exploit” which recognises that not all patented methods or processes will lead to a product. The Full Court observed that the broad definition applied by the primary judge could have consequences that are not sensible – a person who has heard the outcome of the Harmony Test, which may be as simple as “it’s a girl!”, and who then flies to Australia with that information may infringe the patent by importing that outcome.

The Full Court also noted the incongruity that would result from extending the patentee’s monopoly to encompass test results that are not them themselves patentable:

A claim to mere information is not patentable …. The fact that such information is derived from a patentable process or method cannot render the information itself patentable. In those circumstances, we do not consider that the word “product” in para (b) of the definition of “exploit” should be interpreted as extending the patentee’s 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 (at [269]).

Accordingly, because the imported test results are themselves information, and not a “product” as such, Sonic Healthcare’s and Clinical Laboratories’ send out model did not infringe Sequenom’s patent.  

Final comments

The Full Court’s decision highlights the different approaches taken by Australian, European and US authorities when it comes to assessing the patentability of diagnostic methods.  The corresponding patent application was found to be valid in the UK (Illumina, Inc v Premaitha Health Plc [2017] EWHC 2930), albeit under a different eligibility test, but was deemed invalid by the US Court of Appeals for the Federal Circuit (Ariosa Diagnostics, Inc. v Sequenom, Inc. 788 F.3d 1371 (Fed. Cir. 2015)).

In Australia, courts will construe a claim in its entirety, rather than considering each feature individually. While the mere discovery of a natural phenomenon may not be eligible for a patent in Australia, the practical application of that discovery may very well be, even where the application uses known methods.

The decision also confirms that not all patented methods will give rise to a “product” that can be exploited in an infringing act.

Ariosa and Sequenom have the option of applying for special leave to appeal the decision to the High Court. 

Authored by Karen Heilbronn Lee, PhD and Michael Christie, PhD

In July 1969 the United States of America put two men on the moon. Years later in 2011, the then Prime Minister of Australia, Julia Gillard, stood before US Congress and recalled the same moon-landing memory and with acquiescence wept that “Americans could do anything!” Today, the US seems to have entered, what was once described in an episode of Seinfeld as, “Bizzaro world” – Donald Trump is in the White house and, even more astonishingly, researchers are unable to protect what have been described judicially as “truly meritorious” and “ground breaking” innovations in the diagnostics and personal medicine space. Today it is Australia that reigns supreme over the US, as the Federal Court in Sequenom, Inc. v Ariosa Diagnostics, Inc. [2019] FCA 1011 (27 June 2019) confirmed that a non-invasive method of detecting fetal characteristics and abnormalities is patent eligible subject matter in Australia!

The set up

The inventors of the patent-in-suit, Australian Patent No 727919, in the name of Sequenom, Inc., discovered that the cell-free fractions of a pregnant woman’s blood contain surprisingly large amounts of cell-free fetal DNA (cffDNA). Traditionally, this portion of the plasma or serum was discarded as medical waste. This pioneering discovery led to the development of the claimed non-invasive method to determine fetal characteristics and abnormalities, such as Down syndrome. Ariosa Diagnostics Inc, who sought to revoke Sequenom’s Patent, conducts and licenses others to conduct a non-invasive prenatal diagnosis test, marketed under the name “Harmony”, which Sequenom claims infringes their patent.

The significance of the Australian Sequenom decision has been fuelled by the corresponding US case where the claims of the Sequenom’s patent were found to be patent ineligible because they were held to be directed to naturally-occurring matter. The ensuing detrimental impact on US diagnostics industry has subsequently resulted in a proposal for changes to the patentable subject matter legislation, which is currently being considered by US congress.

Issues and findings

Under Australian law, patent eligibility is guided by the principles of the High Court’s decision in National Research Development Corporation v Commissioner of Patents(‘NRDC’) [1959] HCA 67. In that landmark decision, it was held that subject matter was considered patent eligible if it was “an artificially created state of affairs” having “economic significance”.

Ariosa’s case relied heavily on the approach that proved successful in the US, namely that the claims cover a mere discovery, that being the presence of cffDNA, which can be detected in the plasma or serum of pregnant women, and that the end result of each claim is not an artificially created state of affairs. Ariosa further submitted that the claims involve nothing more than the use of well-known techniques to detect cffDNA in maternal blood.

Ariosa also suggested that the Court should follow the US position, which they suggested was in harmony with the Australian Myriad decision. Judge Beach’s response was an emphatic, “I hardly think so”. In fact, in considering the Australian High Court Myriad decision, Beach J emphasised the difference between the gene product claims considered in Myriad and the method defined in the claims of Sequenom’s patent. In particular, he stated that “in nature, the presence of cffDNA in the maternal blood has not and cannot be detected without human action. Accordingly, unlike the claims considered in Myriad, the invention claimed adds to human knowledge and involves the suggestion of an act to be done which results in a new result, or a new process”.

The Court also agreed with Sequenom that the substance of the claimed method is distinct to simply the identification of a natural phenomenon, namely the presence of cffDNA in maternal blood. This, the Judge said, is made clear by the patent specification, which explains that the invention offers a new approach for non-invasive prenatal diagnosis, which only occurs through human intervention and provides a significant advantage over existing fetal DNA detection methods, thus producing a result possessing economic utility.

Consistency with foreign law

Given the intense spotlight that has illuminated patentability issues in the US for diagnostic methods in recent times, the consistency of the Australian decision and the corresponding UK proceedings between Ariosa and Sequenom (Illumina, Inc v Premaitha Health Plc[2017] EWHC 2930), will likely go unnoticed. Those, however, looking for controversy in the conflicting Australian/US findings should look no further than Judge Beach’s swatting away of the issue by stating that the conclusion reached in the US decision is problematic because of the US Court’s dissection of the claims into their constituent parts, which is contrary to Australia’s NRDC and Myriad decisions, – end of story.

Conclusions

This decision, and the recent decision in Meat & Livestock Australia Limited v Cargill, Inc [2018] FCA 51, make it clear that claims directed to practical applications of naturally-occurring phenomena, including gene sequences, used in methods of diagnosis and prognosis are patent eligible subject matter in Australia. This will come as a welcome relief to the diagnostics and personal medicine industry and can be considered as “one small step” forward for Australian patent law but also, hopefully, “one giant leap” that influences beneficial change to the patent eligibility laws in the US.