Application of patent law to stem cell technologies

15.32 On one view, the patenting of inventions involving stem cell technologies does not raise issues different from those raised by the patenting of other human biological material, such as genetic sequences. From another perspective, the patenting of inventions involving stem cell technologies should be treated differently from other inventions involving human biological material because:

• the material at issue has been derived from a human embryo, and embryos have a special status because of their potential to develop into a human being; or

• the capacity of stem cells to develop into various tissue types justifies the application of special rules.

Australia

15.33 As discussed in Chapters 6 and 7, s 18 of Patents Act 1990 (Cth) (Patents Act) provides that a ‘patentable invention’ under Australian law is one that is a ‘manner of manufacture’, is novel, involves an inventive step, is useful, and is not expressly excluded from patentability under the Act. As a general matter, inventions involving biological materials may be patented if they have been isolated from their natural state.^[51] IP Australia has indicated that human cell lines are patentable on this basis.^[52]

15.34 However, s 18(2) of the Patents Act excludes ‘human beings and the biological processes for their generation’ from patentability under Australian law. It has been suggested that this provision may prevent patent protection being available for inventions involving human embryonic stem cells.^[53] The Act does not define ‘human beings’ or ‘biological processes for their generation’ and, to date, there has been no judicial consideration of this provision.

Legislative history of s 18(2) of the Patents Act

15.35 Parliamentary debates in 1990 surrounding the adoption of s 18(2) provide little guidance as to whether this provision was intended to cover inventions involving human embryonic stem cells. This is not surprising because the ability to isolate human embryonic stem cells was not announced until 1998.

15.36 Section 18(2) was based on a proposal made by Senator Brian Harradine during parliamentary debate of the Patents Bill 1990 (Cth) (Patents Bill). The proposed amendment originally provided that inventions involving ‘human life forms’, ‘genetic manipulations of the human species’ and ‘trans-species procedures involving human cells’ would not be patentable.^[54] Foreshadowing the amendment, Senator Harradine indicated that he was concerned that insufficient consideration was being given by Parliament to ‘the possibility of patenting new forms of animal life’,^[55] and that the Australian Patents Office (as it then was) might grant patents on a human or a genetically-modified human.^[56] The Senate Standing Committee on Science, Industry and Technology altered Senator Harradine’s proposal during its consideration of the Patents Bill. A majority of the Committee supported Senator Harradine’s proposal in principle but was concerned about the proposal’s apparent breadth and ambiguity. It agreed instead on the formulation of s 18(2) as it now appears in the Patents Act.^[57]

15.37 Little consideration was given to the meaning of the term ‘human beings’ during the parliamentary debates,but the debates provide some assistance as to the intended scope of the term ‘biological processes for the generation of human beings’. Senator Harradine indicated that ‘techniques for cloning an embryo at the four-cell stage’—a reference to the technique of ‘embryo splitting’—would be an example of the type of invention prohibited by s 18(2).^[58] The Opposition suggested that s 18(2) would preclude patenting of inventions involving ‘in-vitro fertilisation and cloning for reproductive purposes’.^[59] The Government did not elaborate on the intended scope of the provision, except to note that it did not represent ‘a change in policy in relation to the patentability of life forms’.^[60]

IP Australia’s current practice

15.38 Section 18(2) has been interpreted narrowly by IP Australia. IP Australia’s Manual of Practice and Procedure (the Manual) indicates that, while the precise scope of the provision is unclear, certain inventions are ‘clearly encompassed’^[61] by the exception, including:

• human beings, foetuses, embryos or fertilised ova;

• methods of in vitro fertilisation or cloning methods that generate human beings; and

• processes—beginning with fertilisation and ending with birth—that are wholly biological and result in a human being.^[62]

15.39 The Manual also sets out the inventions that IP Australia regards as being ‘clearly outside’ the scope of s 18(2), namely ‘human genes, tissues and cell lines’, which will be patentable if the requirements for patentability set out in the Patents Act are satisfied.^[63] In its submission to the Andrews Report, IP Australia explained that its interpretation is based on ‘a widely accepted view that human genes, cell lines and tissues are not regarded as human beings’.^[64] IP Australia indicated that a human cell line may meet the statutory requirements for patentability because:

[it] is different from naturally occurring cells in the human body. It is capable of continuous propagation in an artificial environment by continual division of the cells, unlike naturally occurring cells which die after a limited number of divisions.^[65]

15.40 IP Australia has stated that what constitutes a human being or the biological processes for the generation of a human being may be ambiguous.^[66] In its submission to this Inquiry, IP Australia outlined its approach when determining whether s 18(2) is applicable to a particular invention:

Although IP Australia’s position will no doubt change as the technology evolves, the organisation’s current interpretation [of s 18(2)] is that anything which has an inherent capability to mature and become a human being should be excluded. According to this, the more complex the subject matter, the more likely it is to be excluded … complexities arise for subject matter such as fertilised ovum, stem cells, foetuses, genetically modified animals containing human genes, and humans treated with animal tissue.^[67]

15.41 As a matter of practice, IP Australia has developed a policy by which patent applications that might fall within this ‘grey area’ must be referred to supervising examiners, who then discuss the matter with a Deputy Commissioner.^[68] The ALRC understands that inventions involving human embryonic stem cells are currently covered by this policy.

Approaches in other jurisdictions

15.42 Other jurisdictions have also addressed the issue of whether patent protection should be available for stem cell technologies and have adopted different conclusions.

United States and Canada

15.43 Like Australia, consideration of the patentability of stem cell technologies in the United States and Canada has focused upon whether inventions involving stem cell technologies fall within the scope of an exclusion from patentability for inventions involving human beings.

15.44 Until recently, there was no express prohibition in United States law equivalent to s 18(2) of the Patents Act. However, it has been a long-standing policy of the United States Patent and Trademark Office not to grant such patents.^[69] In January 2004, the United States Congress passed appropriations legislation that included a provision prohibiting the use of any funds made available under the legislation to ‘issue patents on claims directed to or encompassing a human organism’.^[70] Representative Dave Weldon, who originally proposed the provision, indicated that patents on embryonic stem cells would not be covered by the ban.^[71] However, United States researchers and biotechnology organisations have suggested that the scope of the provision is unclear and they will oppose attempts to include such a prohibition in future budgets.^[72]

15.45 In Canada, the Canadian Biotechnology Advisory Committee (CBAC) recommended that the Patent Act 1985 (Canada) be amended to include a provision that: ‘No patent shall be granted on human bodies at any stage of development’.^[73] CBAC indicated that the proposed provision should be narrowly construed and was not intended to prevent patent claims being granted with respect to stem cell lines, (adult) cell lines or DNA sequences as ‘these are removed from a multi-cellular precursor of the human body (except for the zygote) and thus do not comprise a human body at any stage of development’.^[74]

Europe

15.46 The European Patent Office (EPO) and the European Group on Ethics in Science and New Technologies have considered the patentability of stem cell technologies under the European Parliament’s Directive on the Legal Protection of Biotechnological Inventions (EU Biotechnology Directive)^[75] and the European Patent Convention (EPC).^[76] These institutions have adopted different positions on the patentability of these technologies, and in particular human embryonic stem cells.

15.47 The EPO has interpreted the ordre public or morality exclusion in art 53(a) of the EPC as preventing the patentability of human embryonic stem cells.^[77] In 1999, the EPO granted a patent to Edinburgh University that related to a method of using genetic engineering to isolate animal stem cells—including embryonic stem cells—from more differentiated cells in a cell culture.^[78] The patent was opposed.^[79] Among other matters, opponents argued that the claims encompassed human stem cells, including human embryonic stem cells and the genetic modification of such cells, because the term ‘animal’ in the claims could be interpreted as including humans.^[80]

15.48 The Opposition Division of the EPO held that the patent did not comply with art 53(a) of the EPC because it involved uses of human embryos for industrial and commercial purposes.^[81] The Opposition Division, therefore, required the patent to be amended to exclude human and animal embryonic cells from the scope of the claims.^[82] Since 1999, no further patents relating to human embryonic stem cells appear to have been granted by the EPO.^[83]

15.49 In May 2002, the European Group on Ethics in Science and New Technologies published a report that considered issues surrounding the patentability of inventions involving stem cells.^[84] Unlike the EPO, the EU Stem Cell Report did not interpret the EU Biotechnology Directive (and the corresponding provisions of the EPC) as precluding all inventions involving human embryonic stem cells from patentability.^[85]

15.50 The position adopted in the EU Stem Cell Report as to the patentability of stem cell technologies under European law is as follows:^[86]

• Isolated stem cells that have not been modified do not fulfil the legal requirements for patentability, particularly the requirement of industrial application. Further, unmodified stem cell lines should not be patentable because the cell lines may have a large range of undescribed uses, which could result in the grant of overly broad patents.^[87]

• Stem cell lines that have been modified by in vitro treatments, or genetically modified so that they have acquired characteristics for a specific industrial application, may satisfy the requirements for patentability.^[88]

• Patents on inventions involving stem cells should be granted only if the application refers to a specific and sufficiently accurately described stem cell line and its industrial application.

• Patenting processes involving human stem cells, regardless of the source of the cells, does not raise any specific ethical obstacles if the requirements for patentability are otherwise satisfied.^[89] However, patent applications claiming stem cell technologies may require specific ethical evaluation; for example, by ‘advisory panels of independent experts’ established for such purposes.^[90]

United Kingdom

15.51 In April 2003, the United Kingdom Patent Office (UK Patent Office) issued a Practice Note setting out its general approach to patent applications claiming stem cells derived from human embryos and processes involving human embryonic stem cells.^[91] The Practice Note indicates that each patent application will be assessed on its merits, but goes on to provide as follows:

• processes for obtaining stem cells from human embryos are not patentable because the Patents Act 1977 (UK) provides that uses of embryos for industrial or commercial purposes are not patentable inventions;^[92]

• ‘human totipotent cells’ are not patentable because they have the potential to develop into an entire human body, and the human body at its various stages of its formation and development is excluded from patentability under the Patents Act 1977 (UK);^[93]

• ‘human embryonic pluripotent stem cells’ will be patentable if such inventions satisfy the statutory criteria for patentability because such stem cells do not have the potential to develop into an entire human body; and

• the commercial exploitation of inventions involving human embryonic pluripotent stem cells is not, as a general matter, contrary to public policy or morality in the United Kingdom.^[94]

15.52 The Practice Note has adopted an interpretation of the EPC and EU Biotechnology Directive—as implemented in the Patents Act 1977 (UK)—that differs from the opinions of both the EPO and the EU Stem Cell Report in some respects. Unlike the EPO, the UK Patent Office will grant patents on inventions claiming certain types of embryonic stem cells. Further, in determining which types of embryonic stem cells are eligible for patent protection, the UK Patent Office has drawn a different distinction to the EU Stem Cell Report: the UK Patent Office distinguishes between types of cells on the basis of their potential to develop into an entire human being, rather than according to whether the cell lines are modified or unmodified.

Submissions and consultations

15.53 DP 68 proposed that IP Australia should develop examination guidelines consistent with the Patents Act, Patents Regulations 1991 (Cth) (Patents Regulations) and existing case law, to explain how the criteria for patentability apply to inventions involving stem cell technologies.^[95] The ALRC considered that the guidelines would clarify the patentability of such inventions under Australian law, including the application of s 18(2) of the Patents Act to inventions involving stem cell technologies.

15.54 A wide range of submissions and consultations expressed support for the proposed examination guidelines.^[96] The Human Genetics Society of Australasia suggested that ‘it is important to develop guidelines to avoid the difficulties that have been encountered with the validity of gene patents’.^[97] The Walter and Eliza Hall Institute of Medical Research considered that guidelines would ensure consistency in the examination of inventions involving stem cell technologies.^[98] Other submissions suggested guidelines would assist researchers and biotechnology organisations in understanding the patentability of particular inventions in this area of technology.^[99]

15.55 Two submissions expressed the view that, in addition to the proposed guidelines, amendments to the Patents Act are required to clarify the patentability of stem cell technologies.^[100] Dr Matthew Rimmer submitted:

There remains a need for the Federal Government to revise s 18(2) of the Patents Act 1990 (Cth). The current provision is a legislative aporia—it is a puzzle and a mystery that it is difficult to decode. The [ALRC] should seize the opportunity to offer a legislative solution. Problems could arise in respect of the judicial interpretation of section 18(2), if the ambiguity of the provision is left unresolved. It is possible that a court could read the provision narrowly, and conclude that stem cell technologies were not patentable subject matter in the jurisdiction of Australia.^[101]

15.56 Rimmer and the Australian Centre for Intellectual Property in Agriculture suggested that the distinction drawn by the UK Patent Office between totipotent cells and pluripotent stem cells should ‘be codified in legislative form’.^[102]

15.57 Some submissions commented on the types of stem cell technologies that should be patentable. A few submissions supported the patentability of processes involving stem cell technologies—including processes related to the isolation, cultivation and differentiation of stem cells—but expressed concern about the grant of patent rights over stem cells per se.^[103] Other submissions did not draw this distinction, but commented generally that patents are important to encourage investment in stem cell research and the development of therapeutic applications for stem cells.^[104]

15.58 If examination guidelines for stem cell technologies were to be adopted, a small number of submissions emphasised the importance of engaging in consultations as part of the process for developing them.^[105] However, other submissions suggested that examination guidelines relating specifically to stem cell technologies were not necessary, or that consideration of these issues was premature.^[106]

15.59 A few submissions considered that patents on stem cell technologies raised ethical issues and that there should be greater scope within patent law to address ethical concerns related to the patenting stem cell technologies.^[107] The place of ethical concerns in the patent system is discussed further in Chapter 7.

ALRC’s views

15.60 The patenting of stem cell technologies raises a number of issues. These include: uncertainty about how patent law will apply to inventions involving stem cell technologies; ethical concerns about the patenting of inventions involving human biological material, particularly embryos; objections to research involving human embryos; and the circumstances under which such research is conducted (if it is permitted at all). It is important to distinguish between these various issues and, in particular, between concerns directed to the conduct of stem cell research and those directed to the patenting of inventions that may be developed in the course of research.

15.61 Uncertainty currently exists about the application of the requirements for patentability to stem cell technologies. To address this, the ALRC considers that IP Australia should develop clear examination guidelines setting out the types of inventions involving stem cell technologies that it regards as patentable and, to the extent that any inventions involving stem cell technologies may not be patentable, the basis on which patent protection may not be available. Guidelines are desirable for similar reasons to those set out in Chapter 8 in support of the development of guidelines for the examination of biotechnological inventions generally. In the remainder of this chapter, the proposed guidelines are called the Stem Cell Examination Guidelines,

15.62 It is unclear from IP Australia’s Manual exactly how Australian patent law is applied to inventions involving stem cells, particularly human embryonic stem cells. However, patent applications claiming stem cell technologies have been filed with IP Australia, and in some cases patents have been granted. It would assist potential applicants in understanding the scope of patent protection available under Australian law if IP Australia’s approach with respect to inventions relating to stem cells were articulated more clearly. The ALRC agrees with IP Australia’s suggestion that the proposed guidelines should be included within the Manual in order to maintain all instructions on patent examination practices in a single source.^[108]

15.63 Although the primary responsibility for developing the proposed Stem Cell Examination Guidelines should lie with IP Australia, that body should consult with the NHMRC and other relevant stakeholders before adopting any guidelines in final form. The Stem Cell Examination Guidelines should be consistent with the Patents Act, Patents Regulations and existing case law. However, the ALRC recognises that the final interpretation of the Act and the Regulations lies with the courts, which may ultimately reject an interpretation adopted by IP Australia.

15.64 In developing the guidelines, the UK Patent Office’s Practice Note provides a worthwhile model. The distinctions drawn by the UK Patent Office between totipotent and pluripotent cells may provide a helpful way to approach the application of s 18(2) of the Patents Act to inventions involving embryonic stem cell technologies. Distinguishing between types of cells on the basis of their potentiality is preferable to the approach adopted in the EU Stem Cell Report of distinguishing between modified and unmodified stem cell lines. The EU Stem Cell Report does not explain why isolated human biological material may constitute a patentable invention under European law,^[109] but an isolated stem cell line requires an additional step—that is, further modification—in order to be patentable. It appears that the distinction between modified and unmodified stem cells lines is a response to concerns about access to patented stem cell technologies and the effect of broad claims in stem cell patents. The ALRC considers that it is preferable to address any problems relating to the exploitation of stem cell technologies directly, if necessary (see below).

15.65 The ALRC does not favour amendments to the Patents Act that would expressly address the patentability of inventions involving stem cell technologies. As discussed in Chapters 6 and 7, the requirements for patentability in the Patents Act are nearly all technology-neutral and are therefore capable of adapting to new technologies as they arise. Technology-specific exceptions affect the flexibility of the current statutory framework. Further, such provisions may conflict with Australia’s obligations under the Agreement on Trade-Related Intellectual Property Rights.^[110] The express exclusion of inventions involving stem cell technologies—or a subset of such inventions—is also likely to have an adverse effect on research in this burgeoning field.^[111] Moreover, the emergent state of stem cell science and the uncertainty about its potential applications must be borne in mind. Specific amendments to the Patents Act that address the patentability of inventions involving stem cell technologies are unlikely to be sufficiently flexible to adapt to future scientific developments.

15.66 Existing provisions in the Patents Act may be used in appropriate circumstances to reject patent applications claiming human embryonic stem cells or related processes in particular. The Commissioner of Patents has a discretion to refuse a patent application claiming an invention whose use would be contrary to law.^[112] Because it is an offence under s 10 of the Research Involving Human Embryos Act to use an excess ART embryo without a licence from the NHMRC Licensing Committee (unless the use falls within a statutory exemption), inventions involving human embryonic stem cells lines that are derived from the use of an excess ART embryo without a licence, or in breach of the conditions in any such licence, could fall within the ‘contrary to law’ provision in the Patents Act. Similar considerations could apply to inventions involving human embryonic stem cell lines derived from non-excess ART embryos.^[113] Further, as discussed in Chapter 6, the incorporation of the Statute of Monopolies 1623 into the definition of ‘invention’ in the Patents Act may provide a basis for excluding from patentability inventions that are ‘generally inconvenient’.^[114]

15.67 In the ALRC’s view, amendments to the Patents Act to address ethical concerns about the patenting of stem cells are not required as an additional layer of ethical consideration. Objections to the patenting of inventions involving embryonic stem cells are often founded on ethical concerns about the conduct of research involving embryos and embryonic stem cells, rather than the grant of patent protection over these inventions. As described above, regulation of embryo research is the subject of Commonwealth, state and territory laws, which themselves draw a delicate balance between competing interests, taking ethical considerations into account.