Should Genes Be Patentable? Australia's Landmark Review and Its Lasting Legacy

Should Genes Be Patentable? Australia's Landmark Review and Its Lasting Legacy

In 2004, the Australian Law Reform Commission (ALRC) published Discussion Paper 68: Gene Patenting and Human Health. It was a landmark moment in Australian IP policy — a comprehensive, government-mandated examination of whether the patent system, as then designed, adequately served the public interest in the context of human genetic material. More than two decades later, the questions it raised remain alive and contested, shaping debates about genomics, AI, and the boundaries of what can be owned.

This article explores the ALRC's inquiry, its key recommendations, and the subsequent legal and technological developments that make it more relevant than ever.

What Is a Gene Patent?

A gene patent — more precisely, a patent claiming isolated genetic material or sequences — is a patent over a DNA sequence that has been isolated, purified, or otherwise prepared in a form not found in nature. The classic argument for patentability was that the act of isolation produced a product distinct from naturally occurring DNA: a purified, characterised sequence with specific industrial utility.

Through the 1980s and 1990s, patent offices in the United States, Europe, and Australia granted tens of thousands of patents covering human gene sequences. By the early 2000s, it was estimated that approximately 20% of the human genome was subject to patent claims of some kind. This raised profound questions: if a company holds a patent on a gene sequence associated with breast cancer risk, can it prevent other laboratories from testing for that sequence? Can it prevent researchers from studying the gene's function?

The BRCA Controversy: The Case That Made Gene Patents Real

No controversy made these questions more concrete than the BRCA1 and BRCA2 patents held by Myriad Genetics, a US company. BRCA1 and BRCA2 are genes in which certain mutations significantly increase the risk of hereditary breast and ovarian cancer. Myriad held patents covering these gene sequences and used them to enforce a monopoly on BRCA genetic testing, charging prices that many patients, clinicians, and health systems considered prohibitive and restricting the development of alternative or improved testing methods.

The Myriad patents became the focal point of an international debate about whether gene patents served the public interest or impeded it. In Australia, this controversy directly informed the ALRC's 2004 inquiry.

The ALRC's 2004 Inquiry: Key Questions

The ALRC's Discussion Paper 68 examined a wide range of issues, including:

• Patentable subject matter: Should isolated human genetic sequences be patentable at all? Does isolation constitute sufficient invention, or is it a discovery of a naturally occurring phenomenon?

• The research exemption: Australian patent law (unlike the law of some other countries) did not, at the time, include a statutory exemption for research use of patented inventions. The ALRC examined whether a statutory research exemption was needed to protect scientific research from the chilling effects of gene patents.

• Crown use provisions: The Patents Act 1990 (Cth) includes provisions allowing the Crown (government) to use patented inventions in certain circumstances. The ALRC examined whether these provisions were adequate to protect the public interest in access to genetic testing through the public health system.

• Compulsory licensing: Should the government have power to compulsorily license gene patents in the public interest — for example, to ensure affordable access to diagnostic testing?

• Impact on diagnostic testing access: Were gene patents in practice causing Australian patients and health services to pay more, or to forego testing, compared to what would be available in an unencumbered market?

Key Recommendations

The ALRC's final report (published in 2004 as Report 99: Genes and Ingenuity) made several significant recommendations:

• Statutory research exemption: The ALRC recommended that Australia enact a statutory exemption permitting use of patented inventions for research purposes, subject to defined limits. This recommendation was not fully implemented for many years — Australia finally introduced a limited experimental use exemption in the Patents Act, though its scope remains narrower than the ALRC envisaged.

• Crown use clarification: The Crown use provisions should be clarified and potentially broadened to ensure that public health agencies could provide genetic testing services without fear of patent infringement.

• Compulsory licensing: Existing compulsory licensing provisions should be reviewed to ensure they were available and workable as a response to situations where gene patents restricted access to essential medical services.

• Patent office guidelines: IP Australia should develop guidelines on the patentability of genetic materials, to provide greater certainty for applicants and examiners.

The High Court's Answer: D'Arcy v Myriad Genetics [2015] HCA 35

The question the ALRC examined in policy terms was ultimately resolved, in a significant degree, by Australia's highest court. In D'Arcy v Myriad Genetics Inc [2015] HCA 35, the High Court of Australia held unanimously that isolated nucleic acid sequences — including the BRCA1 and BRCA2 sequences — are not patentable subject matter under Australian law.

The High Court's reasoning engaged with the concept of "manner of manufacture" — the foundational test for patentable subject matter in Australia, derived from the Statute of Monopolies 1623. The majority held that a claim to an isolated DNA sequence that encodes a naturally occurring protein does not represent a manner of manufacture. The isolation of the sequence does not create a new substance with new properties; it merely makes accessible a naturally occurring sequence. Allowing such claims would, in the majority's view, give the patent holder rights over the information content of the gene — information that exists in every human cell and was discovered, not invented.

This decision effectively ended gene sequence patents in Australia for naturally occurring sequences, aligning Australian law with US law following the US Supreme Court's decision in Association for Molecular Pathology v Myriad Genetics (2013).

Current Relevance: AI, Genomics, and the Next Frontier

The ALRC's 2004 inquiry anticipated debates that are now more urgent than ever. Artificial intelligence is transforming genomics: machine learning models trained on vast genomic datasets are producing unprecedented insights into disease risk, drug response, and therapeutic targets. These models — and the methods they use — raise new questions about patentable subject matter, research exemptions, and the public interest in access to genomic insights.

Consider: if an AI system analyses genomic data and identifies a novel biomarker for disease risk, is the resulting method patentable? If the training data included information derived from individuals without explicit consent for commercial IP purposes, does that affect the patent's legitimacy? How do patent rights in AI-generated genomic insights interact with privacy law, research exemptions, and the principle that scientific discoveries are not patentable?

These questions do not yet have clear answers in Australian law. But the analytical framework developed in the ALRC's 2004 inquiry — balancing innovation incentives against public access, research freedom, and the limits of patentable subject matter — remains the right starting point for addressing them.

Practical Takeaways for Life Sciences and Genomics Businesses

• Naturally occurring sequences are not patentable in Australia. Following D'Arcy v Myriad, claims to isolated naturally occurring nucleic acid sequences are not valid. IP strategy in genomics must focus on methods, applications, and inventive combinations.

• Methods of using genomic data remain patentable. Computational methods for analysing genomic data, diagnostic methods using specific genetic insights, and therapeutic applications of genomic knowledge can still attract patent protection — as illustrated by cases like Scidera v MLA.

• Research exemptions are narrow in Australia. Researchers and biotech companies should not assume broad research use exemptions protect them. Seek advice before using patented methods or technologies in your research pipeline.

• Monitor AI and genomics patent developments. The intersection of AI and genomics is generating new IP questions at a rapid pace. Staying ahead of the legal landscape is a competitive necessity for companies in this space.

Conclusion

The ALRC's 2004 Discussion Paper on Gene Patenting and Human Health was ahead of its time. Its questions — about the limits of patentable subject matter, the public interest in access to genetic information, and the adequacy of research exemptions — were answered in part by the High Court in 2015 and are being reopened by the genomics-AI revolution. For businesses, researchers, and policymakers operating in the life sciences, understanding this history is not optional — it is the foundation for navigating what comes next.

If your business operates in genomics, biotechnology, diagnostics, or AI-driven life sciences, specialist IP advice is essential. Contact Stellar IP Law to discuss how to protect your innovations in this rapidly evolving landscape.