In a comprehensive decision exceeding 1470 paragraphs, Justice Beach planted another flag in the multijurisdictional commercial battle between Sequenom, Inc. and Ariosa Diagnostics, Inc. for non-invasive pre-natal diagnosis (Sequenom, Inc. v Ariosa Diagnostics, Inc.  FCA 1011). This decision also confirms that when compared to the US, Australia remains a patent friendly jurisdiction for inventions related to the application of gene-based technologies. More particularly, Australia is friendly when it comes to patent eligibility of gene-based technology.
Australian Patent Number 727919 to Sequenom, Inc. claims a priority date of 4 March 1997 and is broadly directed to prenatal diagnosis by detecting fetal nucleic acids in such non-cellular components of a maternal blood sample. In particular, the Patent is directed to a method for detecting the presence of a nucleic acid of fetal origin in a maternal serum or plasma sample.
The first respondent, Ariosa Diagnostics, is the manufacturer of the Harmony Test and licenses the test to third parties (remaining respondents in the present proceedings). Sequenom claimed that the Harmony Test infringed most of the claims of the Patent. Ariosa cross-claimed that the Patent was invalid on a slew of grounds including lack of inventive step, lack of utility, lack of fair basis, insufficiency, false suggestion or misrepresentation, and lack of manner of manufacture. Unsurprisingly, there are many interesting aspects in this case. This article will focus on manner of manufacture.
By the priority date, pre-natal testing for potential fetal abnormalities focused on examination of DNA found in fetal cells. It was known that several different fetal cell types were present in maternal blood during pregnancy. These fetal cells had the potential to be used for prenatal testing. Isolation of fetal cells from maternal blood was problematic as these cells occurred only rarely in maternal blood. By the priority date, there existed a need to provide a means of allowing analysis of the fetal genome without the need for invasive testing.
The inventors discovered, using standard and routine techniques, that fetal DNA could not only be detected from fetal cells in the blood of pregnant women, but also that cell-free fetal DNA (cffDNA) could be detected in the plasma and serum of pregnant women. Saliently, the cell-free portion of the maternal blood (i.e. serum or plasma) was treated as a laboratory waste product and was therefore routinely discarded.
The Patent Claims
The Patent has four (4) independent claims. Claim 1 is deceptively succinct:
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 fetal origin in the sample.
Claim 22 is directed to a method of performing a prenatal diagnosis which includes detecting a nucleic acid of fetal origin in the non-cellular fraction and thus providing a diagnosis based on the presence, quantity, and/or sequence of fetal nucleic acid.
Claim 25 encompasses a method claim directed to performing prenatal diagnosis on a maternal blood sample by removing all nucleated and anucleated cells from the sample and testing the remaining sample fetal nucleic acid.
Claim 26 is directed to a method of performing a prenatal diagnosis on a maternal blood sample which includes obtaining a non-cellular fraction of the blood sample and performing nucleic acid analysis on the fraction.
The validity challenge
The thrust of Ariosa’s validity challenge on the grounds of lack of manner of manufacture is that the relevant claims are in substance a mere discovery, namely, that cffDNA is present and can be detected in the plasma or serum of pregnant women. In Ariosa’s view, the end result of each claim is not an artificially created state of affairs in accordance with authority set out by the High Court in National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252 (NRDC).
Applying laser precision analysis using precedent from the High Court from NRDC and D’Arcy v Myriad Genetics Inc (2015) 258 CLR 334 (Myriad), Beach J rejected emphatically Ariosa’s argument on all counts.
The analysis of patent eligibility of gene-based technology
Beach J noted that the concept of manner of manufacture is to be developed on “a case-by-case basis and is not susceptible to any verbal formula in lieu of the phrase “manner of manufacture”” (supra at paragraph 345). Pursuant to Myriad, two necessary criteria for determining manner of manufacture are whether the invention as claimed is for a product made, or a process producing an outcome as a result of human action; and whether the invention as claimed has economic utility. These criteria can be applied to investigating patent eligibility of gene-based technology.
As a first step, Beach J held that the claims of the Patent fall within the principles of NRDC and affirmed in Myriad, whilst not falling within the impermissible product claims rejected in Myriad. Indeed, his Honour did not consider that at issue was a new class of claim involving a significant new application of, or extension to, the concept of “manner of manufacture”.
Fundamental to the distinction between Myriad and the present case was that the Patent did not include claims to the product or presence of cffDNA, but rather the claims were to a method by which the discovery of the existence of cffDNA can be put to practical use. As Beach J determined in Meat & Livestock Australia Limited v Cargill, Inc  FCA 51: “A method claim cannot sensibly be characterised as a claim to information. It is a claim to inter-alia the application of information.” Moreover, citing Myriad, “the application of a naturally occurring phenomenon to a particular use may be a manner of manufacture if it amounts to a new process or method of bringing about an artificially created state of affairs of economic significance.”
Having resolved that the claims are not the type rejected in Myriad, the next step was to resolve the manner of manufacture issue by identification of the substance of the invention, which depends on the construction of the claims in light of the specification and the prior art. Beach J determined that the invention was predicated on the discovery of the presence and utility of cffDNA. Thus, a new method of detection of fetal DNA was invented, which unlike previously disclosed methods involves the human mediated analysis of cell free DNA in the cell free component of maternal blood to distinguish between maternal and fetal DNA in an artificially isolated maternal plasma or serum sample extracted from a pregnant female.
Accordingly, the invention was found to be an artificially created state of affairs, at least in part due to the fact that without human action, any cffDNA cannot be detected in maternal blood. That is, the artificially created state of affairs is the detection of cffDNA in the tested sample. By contrast, in Myriad the isolated nucleic acid were to genetic information and, in the High Court’s view, could not be said to have been made by human action.
To the question of economic utility, Beach J found that it could not be said that the present invention was “essentially non-economic”, but provides a significant advantage over existing fetal DNA detection methods available at the priority date and therefore in itself possessed economic utility.
His Honour’s conclusion regarding patent eligible subject matter are best summarized by the following passages:
In my view the claimed invention falls clearly within the concept of manner of manufacture described by the High Court in NRDC, satisfies the first two criteria identified in Myriad at  and is therefore patentable. (supra at paragraph 503)
The Patent does not simply claim the discovery of cffDNA in maternal blood. Rather, it claims a new and inventive practical application of the discovery comprising a method requiring human action to detect, in an artificially created sample of maternal plasma or serum, a DNA sequence as being of fetal rather than maternal origin. And prior to the invention, no-one had worked or was working a method comprising the detection of cffDNA in plasma or serum samples extracted from pregnant females. (supra at paragraph 526)
This position is in concordance with the UK Court’s determination regarding patentable subject matter of the same technology in the corresponding litigation in Illumina, Inc v Premaitha Health Plc  EWHC 2930 (Pat).
U.S. Approach not Persuasive
As part of their argument, Ariosa pressed that the corresponding U.S. patent was held invalid on the basis that the claims were directed to patent-ineligible gene-based technology applying the test set down by the U.S. Supreme Court in Mayo. Ariosa went a step further to suggest that Beach J should follow the U.S. decision and suggested that Myriad was in harmony with the U.S. position. Needless to say, Beach J did not find this argument persuasive. The majority of the U.S. Court in the corresponding litigation considered that the method or process recited by the claims of the patent in suit was not new and useful, and in particular the practice of the method claims did not result in an inventive concept that transformed the natural phenomenon of cffDNA into a patentable invention. In his Honour’s view, this conclusion is problematic, and is a result of the U.S. Court’s dissection of the claims into their constituent parts, which is contrary to NRDC and Myriad and thus has no place under Australian law.
On the issue of patent eligible subject matter, Beach J found that the invention as claimed in the relevant claims and namely all the independent claims is a manner of manufacture and is thus a patentable invention. The challenge on the other grounds of validity failed with the exception of claim 26, which was held invalid for lack of fair basis.
By performance of the Harmony Test in Australia and performance of the test in the U.S. on samples collected in Australia, Ariosa and other respondents were held to infringe all the independent claims (and other relevant claims) at issue with the exception of claim 26.
Undoubtably, the Myriad decision created shockwaves for many in industry and the intellectual property fraternity in Australia. To some of us, the practical significance of the Myriad decision was tempered by the fact that the Human Genome Project had effectively curtailed broad patent protection for gene sequences. Moreover, the Court in Myriad was clear that patent eligibility of gene-based technology was to be determined on a case-by-case basis against the authority set down in NRDC. As a result, the Australian position is that claims directed to applications of genetic technologies that are of economic utility and are a result of human action are patent eligible subject matter. The U.S. Supreme Court denied Sequenom’s petition to challenge the decision from the Federal Circuit and as such, patent protection in the U.S. for this breakthrough technology is irretrievably lost. It is hoped that recent movements to change the U.S. position on patentable eligible subject matter by legislative action will yield a sensible and pragmatic approach analogous to that of Australia and the UK with respect to patent eligibility of this technology.
Since this article was written, Ariosa Diagnostics, Inc. filed an Application for Leave to Appeal to the Full Bench of the Federal Court of Australia. The grounds for appeal are not yet known. We will keep you posted.
Please contact the author, Hedie Meka PhD, if you have any questions.