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McEvoy, Brandon --- "Policy Prevails in the Patentability of Isolated Genes" [2017] WAStuLawRw 8; (2017) 1 Western Australian Student Law Review 130


Brandon McEvoy[*]

Patents—Manner of Manufacture—Patentability of Genes—Pharmaceutical Industry—Policy Considerations

For a patent to be valid, it must be an invention which, among other things, is a ‘manner of manufacture’. The grant of a patent gives the patentee the exclusive right to exploit the invention. The patent system seeks to reward innovation by granting a monopoly, whilst encouraging future invention and research. Patent rights within the pharmaceutical industry are a contentious issue vis-à-vis the exploitation of the patent system to drive up the price of consumer pharmaceuticals and impeding future research. D’Arcy v Myriad Genetics Inc limits the protection of the patent system by considering a policy and legislative-oriented approach to the patent requirements of s 18(1)(a) of the Patents Act 1990 (Cth).


An invention is patentable for the purposes of a standard patent if it meets the requirements set out in in s 18(1)(a) of the Patents Act 1990 (Cth) (‘Patents Act’). Section 18(1)(a) requires that an invention be a manner of manufacture within the meaning of s 6 of the Statute of Monopolies.[1] National Research Development Corporation v Commissioner of Patents[2] (‘NRDC’) is the leading Australian case on the meaning of manner of manufacture. The NRDC interpretation of ‘manner of manufacture’ requires that the relevant invention produce an end result that is an artificially created state of affairs of utility in a field of economic endeavour.[3]

The High Court of Australia’s decision in D’Arcy v Myriad Genetics Inc[4] (‘D’Arcy’) expanded the law with respect to patentability set out in s 18(1)(a). Ms Yvonne D’Arcy appealed the decision of the Full Court of the Federal Court of Australia that molecules bearing a sequence of nucleotides coding for a BRCA1-polypeptide gave rise to a patentable invention if the sequence carried certain mutations or polymorphisms indicative of susceptibility to breast cancer.[5] Myriad Genetics Inc (‘Myriad’) contended that the isolation of the mutated BRCA1 gene satisfied the manner of manufacture requirements for the purposes of the patent system. The High Court unanimously overturned the decision of the Federal Court, determining that the isolated BRCA1 gene sequence did not qualify as a manner of manufacture for the purposes of s 18(1)(a) of the Patents Act.

This article considers the impact of that decision, and the decision in NRDC, on research investment and the dissemination of knowledge. Furthermore, it considers the impact on research and knowledge of the policy extensions for patent applications for ‘new classes of cases’ as seen in D’Arcy. Ultimately, the full impact of D’Arcy will be determined in time, as more cases are brought in its wake.


The requirements for patentability have been subject to considerable debate and expansion. Essentially, ‘there is no exhaustive or positive definition of invention’.[6] Section 18(1)(a) of the Patents Act states that:

[...] an invention is a patentable invention for the purposes of a standard patent if the invention, so far as claimed in any claim:

(a) is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies.

Based on s 6 of the Statute of Monopolies,[7] for an invention to be patentable it must be a ‘manner of manufacture’.[8] The seminal Australian case on the meaning and application of ‘manner of manufacture’, NRDC, involved the discovery of a method for applying chemicals to soil such that it killed weeds and left crops intact. The chemicals used in the process were already well-known. The basis of the patent application was for the method of applying the chemicals in a way that had never been done before. National Research Development Corp were successful in their appeal to the High Court of Australia, and letters patent were granted.

That decision propounded a set of principles for the limitation of the kinds of ‘advances’ in technology that can be deemed patentable.[9] The principles derived from NRDC can be characterised as ‘product or process’ and ‘economic utility’.[10] The High Court concluded that an invention is a ‘manner of manufacture’ where it gives rise to an artificially created state of affairs producing an economically useful result.[11] NRDC continued to refer to the Statute of Monopolies, asking whether the invention was the proper subject of letters patent according to that statute.[12] However, it also emphasised the flexibility of the ‘manner of manufacture’ test, allowing for the unpredictability of future inventions.[13] The judgment provided that any physical phenomenon was capable of being patented – an invention need not be a ‘thing’ in the sense of an article.[14]

A Product or process

The ‘product or process’ test is effectively a consideration of ‘whether the invention as claimed is for a product made, or a process producing an outcome as a result of human action’.[15] For an invention to constitute a product or process, it must produce or consist of an ‘outcome, which can be an “artificially created state of affairs”’.[16] An artificially created state of affairs is best identified by some ‘physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation’.[17]

The product or process that is artificially created must be ‘something more than a mere discovery’.[18] For something to be ‘sufficiently artificial’, it must be regarded as different from nature.[19] What is ‘essential to the concept of manner of manufacture’ is that the claim has a ‘quality of inventiveness, which distinguishes it from a mere discovery...or law of nature’.[20] For example, in D’Arcy, the isolated BRCA1 gene was characterised as a mere discovery, because it was an isolation of something occurring naturally. Myriad’s attempt at claiming a patent can be compared to a person uprooting a plant and placing it in a pot and claiming, ‘I have invented this plant’. That action would clearly not satisfy the manner of manufacture test.

B Economic utility

Additionally, there is the requirement of economic utility for the satisfaction of the ‘manner of manufacture’ test. Not only does an invention require some form of artificiality, it must lead to ‘an economically useful result’.[21] For example, in NRDC, the herbicide had an economically useful result by ‘provid[ing] a remarkable advantage...[for] the cultivation of the soil for the production of its fruits’.[22] NRDC further described ‘economic utility’ as being present where the invention is of industrial, commercial, or trading character, is a useful art, and is not a fine art. A fine art might be properly protected by copyright, which does not focus on the utility of a work. Although fine art is useful in the sense that it might be enjoyed for the sake of sensory pleasure, to be patentable, an invention must provide some kind of economic use or advantage.


The plurality of the High Court of Australia in D’Arcy articulated several new factors to be considered when inquiring as to whether an invention is a ‘manner of manufacture’, for the reason that ‘a new class of claim involves a significant new application or extension of the concept of “manner of manufacture”’.[23] The Court expanded on what may be deemed a ‘manner of manufacture’ in the context of advancing technology; the patent application sought to significantly extend the concept itself. The Court’s considerations included statutory consistency,[24] coherence with the existing law,[25] and the legislature’s role.[26]

A The flexibility of ‘manner of manufacture’

On one hand, the guidelines for determining ‘manner of manufacture’, established in NRDC, have been praised as ‘flexible’.[27] The adaptability and flexibility of the basic requirements have benefited Australia, ‘provided patents are granted for real innovation...[because] there is no conflict between patents and competition from the welfare economics perspective’.[28] This flexible approach ‘stimulates inventive activity that usually would have been more costly to induce by other means’.[29] When the law is construed, ‘we need to ensure that the boundaries of patentable subject matter are fluid enough to encompass scientific and technological breakthroughs’.[30] The benefit of fluidity is that it accounts for future developments unthought-of of by the legislature.

An example of the flexibility of the NRDC approach is demonstrated by the application of that decision in other cases. That case has stood the test of time and has lent itself to application in several modern cases involving recent advances in technology. For example, in CCOM Pty Ltd v Jiejing Pty Ltd,[31] the requirement of ‘manner of manufacture’ was applied to a program where keyboard operations were used to retrieve Chinese characters. In that case, ‘the Court relied upon the principles enunciated in the NRDC decision and found an artificially created state of affairs with economic significance’.[32] The NRDC principles have also been successfully applied in numerous incidences, ranging from business methods[33] to medical treatment.[34] The fact that principles from 1959 can be applied, not only to future technology, but to realms of technology substantially different from horticulture, demonstrate the flexibility of the patent system through the ‘living’ nature of ‘manner of manufacture’.

B The boundaries of ‘manner of manufacture’

Despite the benefits of flexibility discussed above, the NRDC requirements must have boundaries for an effective patent system to exist. Considering that the patent criteria must apply universally to all potentially patentable subjects:

[t]he continuing debates on whether methods of medical treatment, business systems and genes should be patentable subject matter demonstrate that there is no universal acceptance of an approach that would accept that anything under the sun invented by man is patentable.[35]

Although NRDC’s approach to assessing patentability with specific regard to manner of manufacture is flexible, it does not constitute an acceptance of everything created by man as patentable. The guidelines have inherent boundaries that are demonstrated by cases such as D’Arcy. D’Arcy makes it clear that subject matter is not patentable where it is a mere discovery, as opposed to some ‘manner of manufacture’ as defined in NRDC.

C The impact of the ‘manner of manufacture’ requirement on invention and innovation

The impact of the traditional guidelines on the application of the ‘manner of manufacture’ requirement, from an investment perspective, is positive. The guidelines provide for a very broad scope for patentable subject matter, in line with the Australia-United States Free Trade Agreement.[36] The fact that the guidelines allow for consideration of such broad subject matter as being patentable – such as software, business methods, and biotechnology –– encourages investment into research. Research is incentivised by the protection afforded by the patent system’s flexibility, because if a person is spending considerable amounts of money on creating something previously unthought of, they can take solace in the flexible application of ‘manner of manufacture’ to future technology and unexplored innovations.

This may seem contrary to the decision Myriad received –– they were not afforded protection, despite spending considerable amounts of time and money on research. However, as stated above, the ‘manner of manufacture’ requirements must have some boundaries, and Myriad was inappropriately seeking protection under the patent system.

D An evaluation of the NRDC interpretation of ‘manner of manufacture’

The NRDC requirements are flexible enough to provide protection for future technology, but impose suitable boundaries to limit grants of patents. The principles are applied by a plethora of patent cases.[37] Furthermore, the fact that the legislature did not drastically change the definition of invention from the now-repealed Patents Act 1952 (Cth) in the 1990 version of the Act demonstrates an acceptance by the legislature of the application of ‘manner of manufacture’, as propounded in NRDC.[38] The acceptance of NRDC’s approach has been indirectly heralded by the Intellectual Property and Competition Review Committee, in that the first limb of the patent system’s flexibility is a result of the formulations of NRDC.[39]

The flexibility present in the test for ‘manner of manufacture’ rewards research by demonstrating that the judiciary is open to considering questions as to genuine applications for patent protection for new technology, whilst keeping the patent system limited enough such that ‘land grabs’ like Myriad’s do not succeed.[40] Likewise, it incentivises the dissemination of knowledge by ensuring that the patent system retains its values by not bending to the will of a company attempting to patent something naturally occurring.[41] The incentivisation of knowledge dissemination is not first-hand –– it lies in the fostering of the ability of other researchers and innovators to utilise the processes for further research, without being improperly impeded by the judiciary placing limitless patents in the hands of one company. By refusing to grant a monopoly over the gene discussed in D’Arcy, the High Court has allowed for the continued use of the BRCA1 genes for other research by other individuals, thus aiding the dissemination of scientific knowledge.[42] It is in the best interests of the scientific community that this approach was adopted. Medical researchers are able to use the isolated BRCA1 gene, and indeed other isolated genes, for other scientific research without worrying about patent infringement. This has the potential to keep costs down by allowing all sectors of the scientific community to develop new technology without needing to pay licence fees. Ultimately, the development of further knowledge is in the public interest; everyone will benefit from improvements to health stemming from new discoveries. To that end, the NRDC requirements successfully draw a balance of stimulating research by rewarding the patentee without limiting the potential for the dissemination of knowledge.


The other factors that D’Arcy considered should be applied to classes of claims that involve a ‘significant new application or extension of the concept of “manner of manufacture”’. This proviso grounds the Court’s application to select cases, rather than drastically changing NRDC’s formula. The Court in D’Arcy was reluctant to provide a blanket ‘yes-or-no’ approach to the inherent patentability of genes – hence the consideration of policy and a consistent rejection of such generalisations.[43] It remains to be seen whether genes might be patentable in different circumstances, or if policy will dictate that such subject matter remains off-limits to the patent system.

A The trade-off between policy objectives

D’Arcy considers whether patentability would be consistent with the purposes of the Patents Act by contemplating whether the granting of monopoly would have ‘potentially chilling effects on innovation’.[44] The Court factored policy considerations into their decision because of the possible ‘flow-on consequences for the balance that the Act seeks to strike’.[45] If there were a significant risk that granting a patent would result in a debilitation of the balance, the decision should ‘weigh against inherent patentability’.[46]

These policy considerations are rooted in the tension present in the inherent trade-off between ‘encouraging and rewarding inventors without impeding advances and improvements by skilled, non-inventive persons’.[47] The intended effect of placing these considerations within the scope of the ‘manner of manufacture’ principles is to emphasise and improve this balance.

B From the perspective of scientific researchers

In D’Arcy, Justice Gordon proposed the hypothetical of a researcher who may be researching the same BRCA1 gene.[48] Should that researcher happen to isolate the same gene, they would effectively be infringing the patent. To grant a patent to Myriad would be to seriously impact investment in further research by limiting the ability of other research companies to undertake work –– there would be no point in other persons investing in further research, if that research would result in a breach of patent. If research abilities were limited because of potential infringement of patent, the impact on the dissemination of knowledge would be severely limited. The two ideologies are inherently intertwined and the patent system is created to maintain the two.[49] On the one hand, without patent protection, there would be no point in research because one would not be free to exploit the result of that research or invention. On the other hand, if blanket patents are granted with respect to discoveries and naturally occurring ‘things’, it would not work to reward further research or dissemination of knowledge –– in fact, it would do the opposite by fettering the abilities of future innovators.

By introducing policy considerations, the Court properly ensured the patent system remains effective with respect to the furthering and dissemination of knowledge, whilst also ensuring that investment in research is rewarded – not in the eyes of Myriad, but from the perspective of the entire medical community, and indirectly, the public.[50]

It is imperative that courts give weight to policy considerations, as they did in D’Arcy, with respect to the application of the ‘manner of manufacture’ requirement in novel cases. If the patent had been granted, the monopoly would have given Myriad the

capacity to exclude the scientific community from contributing to the development and improvement of related [...] technology [...] challenging the widely accepted therapeutic benefits from "open science" and information sharing.[51]

Had the Court accepted the application, the patent system would essentially be working to limit the dissemination of knowledge.

C Legislative history

Myriad argued that the failed reforms to the patent legislation with regard to gene patenting indicated an intention by the legislature to not exclude gene patenting from the ambit of the patent system.[52] However, the Court stated that the scope of the decision applied only to a number of Myriad’s specific claims , and not gene patenting as a whole.[53] This may be indicative of an alignment of the Court’s views with the legislature, in that gene patenting as a whole should not be outlawed.[54] The ultimate effect of this consideration of legislative history increases the flexibility of the patent system.[55]


Although D’Arcy does not drastically impact the NRDC requirements, its entire impact is yet to be felt. Time will tell whether the principles stipulated in the judgment will enshrine D’Arcy v Myriad as a modern Darcy v Allein.[56] In any case, D’Arcy embodies an application of the NRDC requirements to a novel kind of circumstance and foreshadows the difficulties bound to be faced by the patent system as a result of technology furthering areas of research. The decision indicates the High Court’s current position on the patentability of genes and provides a point of first reference for any similar cases to be brought in the future, of which there will no doubt be many as medical science advances.

The immediate impact of the decision prevents a de facto monopoly over the BRCA1 gene sequence, such that to include the gene within the ‘manner of manufacture’ scope would be to extend it conceptually – a decision best left in the hands of the legislature.[57] However, the dicta of the plurality has already been referenced in a Federal Court case. The effect of the citation was to denounce an application of D’Arcy, in that the claim for patent over the software in question was not ‘a new class of case’.[58] Although yet to be tested, the decision has been lauded by some in that it ‘may make it less likely that patents over genetic information will facilitate data hoarding and an information monopoly’.[59] Furthermore, the High Court has been credited for setting Australian law at odds with jurisdictions such as Europe and China, where isolated gene sequences are currently patentable.[60] The patentability of isolated gene sequences clearly presents problems with respect to incentivising, and even allowing, essential medical research.

In terms of policy, the direct implications of the D’Arcy judgment have limited the potential for ‘data hoarding’, thus promoting the dissemination of information. This may also incentivise other organisations to invest in valuable research regarding the BRCA1 gene for other areas of medical study. In essence, the extension of the original NRDC criteria in D’Arcy for new classes of cases only works to incentivise investment in research and promotes the dissemination of knowledge. The only real loser is Myriad, in that their investment in the research was not rewarded –– but it is not the job of the patent system to reward all research, just research which results in an artificially created state of affairs of economic significance.[61]

On the genetic research level, the influence of D’Arcy will be felt first-hand. It is yet to be considered whether the influence will span across other areas of innovation with the same gusto.


The ‘traditional’ patent requirements of NRDC have stood the test of time –– they have been applied in cases for nearly 60 years, standing up to legislative reform and review.[62] Further, they have demonstrated their strength through flexibility, in that they have been applied to a variety of different inventions and innovations.

The impact of D’Arcy, however, is yet to be completely felt. By critical assessment of D’Arcy’s extension of the patent criteria, it is clear that the impact on research investment and knowledge dissemination in the field of genetic research is relatively positive, as other companies are free to use the BRCA1 gene to conduct other research and thus disseminate that scientific knowledge without fear of the patent system being used against them. The only negative impacts will be felt by Myriad, who would have spent huge amounts of money on the research in the attempt to have the gene patented –– but, considering the potential negative impacts on the patent system should their claim have succeeded, is it really that negative?

It is ultimately unclear whether the extension of the patent requirements for new classes of cases will incentivise and reward investment in research or the dissemination of knowledge. Perhaps if the question is asked in five years, we could reach a more substantiated conclusion.

[*] Brandon is a fourth year Bachelor of Laws student at Curtin University.

[1] Statute of Monopolies 1624 (Imp).

[2] [1959] HCA 67; (1959) 102 CLR 252.

[3] Ibid 271.

[4] (2015) 89 ALJR 924.

[5] Ibid.

[6] Ibid [220] (Gordon J).

[7] Statute of Monopolies 1624 (Imp).

[8] See Patents Act 1990 (Cth) s 18(1)(a).

[9] National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252; Patents Act 1990 (Cth) s 18(1)(a).

[10] National Research Development Corporation v Commissioner of Patents [1959] HCA 67; (1959) 102 CLR 252, 275 (Dixon CJ, Kitto and Windeyer JJ).

[11] Ibid.

[12] Ibid 268–9 (Dixon CJ, Kitto and Windeyer JJ).

[13] Ibid 271 (Dixon CJ, Kitto and Windeyer JJ).

[14] Ibid 276 (Dixon CJ, Kitto and Windeyer JJ).

[15] D’Arcy v Myriad Genetics (2015) 89 ALJR 924, [28] (French CJ, Kiefel, Bell and Keane JJ).

[16] D’Arcy v Myriad Genetics (2015) 89 ALJR 924, [6] (French CJ, Kiefel, Bell and Keane JJ) citing National Research Development Corporation v Commissioner of Patents [1959] HCA 67; (1959) 102 CLR 252, 276–7.

[17] Grant v Commissioner of Patents [2006] FCAFC 120; (2006) 154 FCR 62, [32] (Heerey, Kiefel and Bennett JJ).

[18] D’Arcy v Myriad Genetics (2015) 89 ALJR 924, [126] (Gageler and Nettle JJ).

[19] Ibid.

[20] Ibid [131] (Gageler and Nettle JJ).

[21] Ibid [22] (French CJ, Kiefel, Bell and Keane JJ).

[22] National Research Development Corporation v Commissioner of Patents [1959] HCA 67; (1959) 102 CLR 252, 275 (Dixon CJ, Kitto and Windeyer JJ).

[23] D’Arcy v Myriad Genetics (2015) 89 ALJR 924, [28] (French CJ, Kiefel, Bell and Keane JJ).

[24] Ibid.

[25] Ibid.

[26] Ibid [25] (French CJ, Kiefel, Bell and Keane JJ) citing Diamond v Chakrabarty [1980] USSC 119; (1980) 447 US 303, 315 (Burger CJ).

[27] Intellectual Property and Competition Review Committee (‘IPCRC’), Parliament of Australia, IPCRC Report (2000), 146–9.

[28] Ibid 138.

[29] Ibid. Other means include protection through trade secrets and government subsidization.

[30] Brad Sherman, ‘Before the High Court: D’Arcy v Myriad Genetics’ [2015] SydLawRw 6; (2007) 37 Sydney Law Review 135, 136.

[31] [1994] FCA 1168; (1994) 28 IPR 481.

[32] Andrew Stewart et al, Intellectual Property In Australia (LexisNexis, 5th ed, 2014) 372.

[33] Grant v Commissioner of Patents (2006) 154 IPR 62.

[34] Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd [2013] HCA 50.

[35] Ann Monotti, ‘The Scope of ‘Manner of Manufacture’ under the Patents Act 1990 (Cth) after Grant v Commissioner of Patents(2006) 34 Federal Law Review 461, 467.

[36] Australia-United States Free Trade Agreement, signed 18 May 2004, (entered into force 1 January 2005) art 17.9.1.

[37] The NRDC principles have been cited, considered, and applied in over 50 cases – some of which are from different jurisdictions such as New Zealand.

[38] The only change made was in reference to a ‘new’ manner of manufacture, which arguably only applies to inventiveness, and does not impact on the original NRDC reading of ‘manner of manufacture’. See, eg, N V Philips Gloeilampenfabrieken v Mirabella International Pty Ltd [1995] HCA 15; (1995) 183 CLR 655.

[39] IPCRC, Parliament of Australia, IPCRC Report (2000), 149.

[40] Some have described the patent attempt as a ‘land grab’ - see Catherine Logan, ‘Isolated Genetic Material: invention or land grab?’ (2014) 27 Australian Intellectual Property Law Bulletin 284.

[41] When considering Gordon J’s hypothetical, the ultimate effect of granting a patent to Myriad may have been to impede the dissemination of scientific knowledge.

[42] Note, however, that this does not limit the application of D’Arcy to scientific knowledge.

[43] D’Arcy v Myriad Genetics (2015) 89 ALJR 924, [29] (French CJ, Kiefel, Bell and Keane JJ).

[44] Ibid [28] (French CJ, Kiefel, Bell and Keane JJ).

[45] Ibid [29] (French CJ, Kiefel, Bell and Keane JJ).

[46] Ibid.

[47] Lockwood Security Products v Doric Products [No 2] [2007] HCA 21; (2007) 235 CLR 173, 194 (Gummow, Hayne, Callinan, Heydon and Crennan JJ).

[48] D’Arcy v Myriad Genetics (2015) 89 ALJR 924, [259] (Gordon J).

[49] Consider Lockwood Security Products v Doric Products [No 2] [2007] HCA 21; (2007) 235 CLR 173, 194 (Gummow, Hayne, Callinan, Heydon and Crennan JJ).

[50] Consider the ethical expectations in the medical community to disseminate knowledge. See Tim Vines, ‘Hippocratic Obligation to Shareholder Profit?’ (2014) Journal of Law and Medicine 797, 805.

[51] Thomas Faunce, ‘Myriad Voices Against Gene Patents in the High Court’ (2015) 23 Journal of Law and Medicine 322, 327.

[52] D’Arcy v Myriad Genetics (2015) 89 ALJR 924, [36] (French CJ, Kiefel, Bell and Keane JJ).

[53] Ibid [37] (French CJ, Kiefel, Bell and Keane JJ).

[54] Note the failed attempts at introducing patent exclusions such as the Patents Bill 1990 (Cth) and the Patent Amendment (Human Genes and Biological Materials) Bill 2010 (Cth).

[55] Note the case-by-case nature of the application of the patent requirements.

[56] [1669] EngR 186; (1602) 74 ER 1131. Darcy v Allein is an early landmark case that is authority for the improper grant of monopoly. Queen Elizabeth granted a monopoly to Edward Darcy, giving him the sole right to import playing cards. The monopoly was successfully challenged by the defendant, Thomas Allein. Further discussion of that case is beyond the scope of this article.

[57] D’Arcy v Myriad Genetics (2015) 89 ALJR 924, [28] (French CJ, Kiefel, Bell and Keane JJ).

[58] Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177, [115] (Kenny, Bennett and Nicholas JJ).

[59] Faunce, above n 51, 328.

[60] Ibid.

[61] National Research Development Corporation v Commissioner of Patents [1959] HCA 67; (1959) 102 CLR 252.

[62] Consider, for example, the IPCRC report and the enactment of the current Patents Act over the former 1952 version.

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