Don’t feed the 'patent trolls'

My mother’s family hails from Shepparton in the Goulburn Valley in Victoria. In 1873 the blacksmith, John Furphy, set up a forge in the town, and produced a range of farm machinery. He was awarded a Victorian colonial patent in respect of a “grain-stripping machine” in 1882. The invention won first prize at the Grand National Show in 1884, and enjoyed great popularity at agricultural fairs. Patent law has become unrecognisable since the time of John Furphy. Once the province of mechanical inventions and chemicals, patent law has expanded in its scope to cover all sorts of biological inventions.

Over the past few decades, the patent system has grown progressively until “anything under the Sun” that is made by man has been considered patentable. In the 1980 case of Diamond v Chakrabarty the Supreme Court of the United States held by a slim majority that a new strain of bacteria - useful in breaking down crude oil - was patentable.

Subsequently, patent protection was extended to traditionally bred plants, hybrid plants and genetically modified crops. Patent law also enveloped the animal kingdom. After it was recognised that polyploid oysters could constitute patentable subject matter, patents were sought in respect of the Harvard Oncomouse, model organisms, and methods to clone animals such as Dolly the sheep.

The prohibition against patenting methods of human treatment has been lifted in a number of western jurisdictions.

Patents have thus been sought for medical devices, surgical techniques and diagnostic tests, as well as research tools, pharmaceutical drugs and personalised medicine. More recently, patents have been granted in respect of human tissues, genes, stem cells and somatic nuclear cell transfer (so-called “therapeutic cloning”).

There remain few taboo inventions under patent law. Perhaps only human cloning and animal-human hybrids remain clearly outside the scope of patentable subject matter.

The limits of patentable subject matter have even been stretched to accommodate frontier technologies such as bioinformatics, proteomics, pharmacogenomics, nanotechnology and synthetic biology.

Recently the J. Craig Venter Institute filed a patent application in 2006 in respect of a “minimal bacterial genome”. He maintained that such research into synthetic biology could produce alternative energy solutions. However the ETC Group - a Canadian group opposed to biotechnology - has complained that such work poses ethical and environmental concerns about the use of biodiversity to build new life forms.

The Australian Law Reform Commission and The Advisory Council on Intellectual Property

Despite the passion of the public debate over patenting life, the Australian Parliament has taken little action in respect of intellectual property and biotechnology.

In December 2002, the Federal Attorney General, The Honourable Daryl Williams, commissioned the Australian Law Reform Commission to undertake a review of intellectual property rights over genes and genetic and related technologies, with a particular focus on human health issues. This inquiry was prompted in particular by concerns about the impact of patents held by biotechnology companies such as Myriad Genetics and Genetic Technologies Limited in respect of genetic testing and non-coding DNA.

The Australian Law Reform Commission released an issues paper in July 2003, a discussion paper in January 2004 and a final 678-page report in June 2004, which was tabled in Parliament in August 2004. The final report contained 50 recommendations. The key recommendation was that the Australian government should recognise a statutory defence under patent law for the experimental use of an invention. The Advisory Council on Intellectual Property conducted an independent inquiry into the desirability of this, and concluded that there should be a research exemption.

Unfortunately, four years later, the Australian Parliament has not paid much heed to the modest recommendations of the Australian Law Reform Commission and the Advisory Council in Intellectual Property. The Coalition government did not even implement the recommendation to enact a statutory defence for experimental use.

The Howard Cabinet was sympathetic to the position of the pharmaceutical and biotechnology industries, which promoted the need for strong protection for patents. This was certainly in the debate over pharmaceutical drug patents and ever greening during the Australia-United States Free Trade Agreement of 2004. The Howard Cabinet was loath to be involved in a public debate over the ethics of patenting life.

As a result, Australian scientists conducting basic research in both the public and private sectors are vulnerable to litigation for patent infringement. Consequently, frontier research being conducted in Australia in the fields of biotechnology, information technology, nanotechnology and green technology - funded in part by the public purse - could be jeopardised by the predations of “patent trolls” from both Australia and overseas.

A patent system for the 21st century

Despite its encouragement for long-term policy thinking in the recent 2020 Summit, the new Labor Government has not revealed its law reform priorities regarding intellectual property. Arguably, Australian science and industry would benefit from the development of a 21st century patent system. I would make five recommendations.

First, there is a need to reconsider the prevailing view that “anything under the Sun” made by man is patentable subject matter. Greater efforts should be made to preserve and conserve what Justice Stephen Breyer of the Supreme Court of the United States called the “storehouse of knowledge” - the public domain and the intellectual commons. As the judge noted: “Patent law seeks to avoid the dangers of overprotection just as surely as it seeks to avoid the diminished incentive to invent that under protection can threaten.”

Second, there is a need to improve the capacity of patent offices in dealing with applications for new technologies, especially in biotechnology and adjacent fields. The criteria for patentability should be applied strictly in respect of new technologies. Not only should the requirement for utility be strengthened, but patent offices and courts should apply the tests for novelty and inventive step in a stringent fashion. There should be greater creativity and problem-solving abilities attributed to a “person skilled in the art” to ensure that the patent system rewards more than merely nominal improvements to the scientific knowledge and art in the public domain.

Third, there is a need for greater post-grant review of patent applications. “Patent trolls” should not be allowed to flourish and hold public and private investors in research and development to ransom. There needs to be greater scope for challenging patent applications by civil society and public interest groups, such as the Public Patent Foundation.

Fourth, given the expansion of the scope of patentable subject matter, there is a need in turn to broaden the range of exceptions to patent infringement. As recommended by law reform bodies, there should be a broad statutory defence in respect of experimental use. The Australian Law Reform Commission noted that the lack of a research exemption “has the potential to result in under-investment in basic research, and to hinder innovation if researchers become concerned that their activities may lead to legal action by patent-holders”.

Finally, there is a need for patent law to take notice of larger concerns about bioethics and human rights. The High Court judge, Justice Michael Kirby, was instrumental in the drafting of the new UNESCO Universal Declaration on Bioethics and Human Rights 2005. The recitals recognise that “ethical issues raised by the rapid advances in science and their technological applications should be examined with due respect to the dignity of the human person and universal respect for, and observance of, human rights and fundamental freedoms”. The declaration emphasises the need for informed consent and benefit-sharing in respect of both public and commercial genetic research.

Such recommendations will not only help resolve the existing disputes over intellectual property and biotechnology, but they will better prepare patent offices, courts and legislatures in the regulation of the next generation of frontier inventions and pioneer technologies - such as synthetic biology.