13 Oct 2011

Senate Committee recommends against banning gene patents

by Deborah Polites, Richard Hoad

The Bill proposes a ban not just on patenting human genes, but a wide range of biological materials.

The Senate appears likely to reject the proposal to exclude "biological materials" from patentable subject matter in Australia, following a recommendation from the Senate Legal and Constitutional Affairs Legislation Committee.

On 21 September 2011, the Committee delivered its report on the Patent Amendment (Human Genes and Biological Materials) Bill 2010. Recommending that "the Senate should not pass the Bill", the Committee expressed concern that the Bill could have "a large number of unintended consequences across the entire patent system with indeterminate impacts on a range of industries and sectors". Three Senators, all of whom had originally sponsored the Bill, disagreed with this majority decision of the Committee and released a separate dissenting report.

The Bill proposed to amend section 18 of the Patents Act (which defines the subject matter that can be protected by a patent). Currently section 18 includes a provision that human beings and biological processes for their generation are not patentable. Under the key amendment, this exclusion would be extended to add that "biological materials including their components and derivatives, whether isolated or purified or not and however made, which are identical or substantially identical to such materials as they appear in nature" are not patentable. "Biological materials" would be defined to include DNA, RNA, proteins, cells and fluids.

The proposed amendments would change the patent landscape in Australia dramatically. Biotechnology is a core area of activity for many research organisation in Australia, and the proposed changes would profoundly affect the viability of such work. The Bill contains no transitional provisions limiting the restriction to future patents and so also has the potential to invalidate the many existing patents in Australia that include genetic material as part of their subject matter.

Submissions opposing the Bill highlighted that, while much of the public debate has focused on whether human gene sequences ought to be patentable, the proposed biological materials exception in the Bill is far broader. For example, the Bill would affect the patentability of genetically modified plants, with the potential to inhibit developments in an area that has become very valuable to Australian agriculture. In its report, the Committee acknowledged that this was a concern:

"The evidence received by this Committee indicates that this exclusion is likely to have significant implications for a broad range of sectors and industries in Australia including healthcare, pharmaceuticals, agriculture, food manufacturing and biotechnology. Extensive enquiries… have not revealed any persuasive evidence that would justify this type of broad exclusion from patentability for all biological materials."

The Report also notes that "there was no evidence received by the committee that patents on human genes or biological materials are systematically leading to adverse impacts in the provision of healthcare in Australia." Nor, says the Report, would excluding biological materials from patentability impact upon freedom to research (an issue which is addressed in separate draft legislation currently before the Parliament).

Opponents to the Bill also believed that the drafting of the amendments (and, in particular, the inclusion of words and phrases such as "derivative" and "substantially identical") would result in further uncertainty in the Act as to what subject matter is patentable. The Committee agreed with this concern and noted that the uncertainty could inhibit research and development and result in increased litigation.

In light of the Committee's recommendation, it now seems unlikely that the Senate will pass the Bill, although supporters of the Bill have indicated in the media that they will continue to pursue the issue.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.