Exclusions from patentability on social or ethical grounds

7.43 Gene patenting raises many social and ethical concerns, including concerns about the social impact of gene patents on the conduct of research and the provision of healthcare; and ethical concerns, including those about sharing the benefits of genetic research; consent to the use of genetic material in research that leads to commercial outcomes; and indigenous issues.^[68]

7.44 It has been suggested that the patent system should provide avenues for addressing these concerns, for example, by including social and ethical considerations in the assessment of gene patent applications.

7.45 The following material examines the extent to which social and ethical considerations may be taken into account under existing Australian patent law and the law of other countries, and discusses whether the patent system is an appropriate vehicle through which to address these concerns.

Australian law

7.46 The Patents Act does not contain an explicit mechanism to allow social and ethical considerations to be taken into account by patent examiners in assessing the patentability of a particular invention. The Act may, however, include an indirect means for this to occur.

7.47 As discussed in Chapter 6, s 18 of the Patents Act states that a patent may be granted for a ‘manner of manufacture’ within the meaning of s 6 of the Statute of Monopolies.^[69] Section 6 of that Statute provides that an invention should ‘be not contrary to the law, nor mischievous to the state by raising prices of commodities at home, or hurt of trade, or generally inconvenient’.

7.48 It is arguable that the term ‘generally inconvenient’ includes social and ethical considerations within its scope.^[70] Decisions of the High Court and the Federal Court contain obiter dicta suggesting that the ‘generally inconvenient’ exception incorporates public policy considerations and may provide a basis upon which the grant of a patent could be refused.^[71] However, Australian courts have generally declined to rely solely upon matters of public policy or ethics under this exception in considering whether an invention is inappropriate subject matter for the grant of a patent. The courts have suggested that such issues are for Parliament to determine, not judges.^[72]

7.49 Further, as a matter of practice, it appears unlikely that ethical considerations are considered by Australian patent examiners in their assessment of whether an invention constitutes a ‘manner of manufacture’. IP Australia’s Manual specifically notes that:

matters of ethics or social policy are not relevant in deciding whether particular subject matter is patentable … it is for Parliament, not the courts or the Patent Office, to decide whether matters of ethics or social policy are to have any impact on what is patentable.^[73]

Other jurisdictions

7.50 In contrast to the Australian position, a number of overseas jurisdictions expressly permit an invention to be excluded from patentability on social or ethical grounds.^[74] Article 27(2) of the TRIPS Agreement provides that member States may exclude inventions from patentability if prevention of the commercial exploitation of an invention is necessary to protect ‘ordre public or morality’ including ‘to protect human, animal or plant life or health or to avoid serious prejudice to the environment’.^[75]

7.51 European law provides an exclusion from patentability on the basis of ‘ordre public or morality’ in similar terms to the TRIPS Agreement. The exclusion is set out in art 53(a) of the European Patent Convention (EPC)^[76] and is replicated in art 6(1) of the European Parliament’s Directive on the Legal Protection of Biological Inventions (EU Biotechnology Directive).^[77]

7.52 In addition, the EU Biotechnology Directive provides that certain inventions presumptively fall within the ambit of the exclusion from patentability on the grounds of ordre public or morality.^[78] Those inventions are: (a) processes for cloning human beings or for modifying the germ line identity of human beings; (b) uses of embryos for industrial or commercial purposes; and (c) processes for modifying the germ line identity of animals that are likely to cause them suffering without substantial medical benefit to humans or animals, and also the animals resulting from such processes.^[79] This list of inventions is not, however, intended to be exhaustive.^[80]

7.53 The terms ‘ordre public’ and ‘morality’ are not defined in either the EPC or the EU Biotechnology Directive. An EPO Board of Appeal has indicated that the concept of ‘ordre public’ covers ‘the protection of public security and the physical integrity of individuals as part of society’, as well as ‘the protection of the environment’.^[81] Further, the concept of morality is said to be ‘related to the belief that some behaviour is right and acceptable whereas other behaviour is wrong, this belief being founded on the totality of accepted norms which are deeply rooted in a particular culture’.^[82]

7.54 Despite the seemingly broad scope given to the concepts of ordre public and morality under European patent law, the exception has been very narrowly applied.^[83] The Examination Guidelines for the EPO indicate that the art 53(a) exclusion is likely to be invoked only in ‘rare and extreme cases’ in order to exclude from protection inventions ‘likely to induce riot or public disorder, or to lead to criminal or other generally offensive behaviour’ such as letter-bombs and anti-personnel mines: ‘A fair test to apply is to consider whether it is probable that the public in general would regard the invention as so abhorrent that the grant of patent rights would be inconceivable’.^[84]

7.55 In Howard Florey/Relaxin,^[85] the Opposition Division of the EPO specifically rejected the relevance of the exception to a patent claiming a genetic sequence encoding human H2-preprorelaxin. The decision was affirmed by an EPO Board of Appeal, which further held that materials isolated from the human body were outside the scope of the ordre public or morality provision as a matter of interpretation.^[86]

7.56 The EPO has indicated that determining whether a patent is contrary to ordre public or morality requires ‘a careful weighing up’ of competing interests.^[87] A recent report on the impact and management of intellectual property rights in the United Kingdom healthcare sector commented that such a ‘utilitarian (benefit/detriment) approach’ means that it is unlikely a challenge on ordre public or morality grounds would succeed.^[88] Indeed, the ordre public or morality exclusion has been raised successfully in only two known cases—one involving a hairless mouse used to test hair growth products, the other involving the cloning of a fused human and pig cell.^[89]

7.57 Provisions permitting the exclusion of inventions from patent protection on ethical or social policy grounds also exist in patent statutes enacted by the United Kingdom (implementing the EPC and EU Biotechnology Directive),^[90] Japan^[91] and New Zealand.^[92] To date, consideration of the scope of these exclusions by courts and patent offices or in academic commentary has been very limited. Such provisions have rarely been invoked with any success.^[93]

7.58 Nonetheless, in Canada, the Ontario Report recommended that the Canadian Government consider amending the Patent Act 1985 (Canada) to include an ordre public or morality clause.^[94] The Ontario Report suggested that ‘such a mechanism appropriately modified from the European experience would grant the Commissioner of Patents the ability to reject patents on processes, products and techniques which are deemed to violate Canadian morals and ethics’.^[95] In New Zealand, a review of the Patents Act 1953 (NZ) by the Ministry for Economic Development recommended that the Act be amended to include a provision in similar terms to the European ordre public or morality exception.^[96]

Ethics and the patent system

7.59 There are widely differing views about the relevance of social and ethical considerations in the assessment of patents. One view is that patents form part of an economic system for encouraging investment in research and that the patent system should be concerned primarily with assessing the inventiveness and utility of new inventions.^[97] Social and ethical concerns are separate issues to be dealt with by other means.^[98]

7.60 Further, it has been argued that the patent system may not be an effective mechanism for dealing with social and ethical considerations because it was not designed to address such issues.^[99] In a 2002 report, the Organisation for Economic Co-operation and Development Working Party on Biotechnology Report (OECD Report) stated that it was generally agreed that ‘in cases where fundamental ethical decisions are at stake, the debate needs to take place in society at large rather than in the patent offices, which have no special authority in moral matters’ and that intellectual property law is ‘fashioned primarily to promote inventiveness and the disclosure of advances in technology’ and cannot be easily reformed to operate as an ethico-legal instrument of public policy.^[100]

7.61 These views have been challenged on the basis that any system that affects the interests of individuals or groups—as the patent system does—cannot be socially or ethically neutral.^[101] A number of general arguments have been made for dealing with social and ethical concerns through patent laws, which may be applicable in the context of gene patents. These include the following:

• Decisions made by patent examiners are affected by the values and social interests of the community of which they are a part. Therefore, social and ethical considerations are implicitly and unavoidably part of the patent process.^[102]

• The patent system exists to serve the public interest: considerations of public purpose should be fundamental to the patent granting process.^[103]

• Patents create incentives for research and investment, and the availability of a patent may affect the types of products and processes that are developed. Patent systems should bear some responsibility for ensuring that the research they encourage is consistent with the public interest.^[104]

• The incentives that patents create may provide a useful mechanism for dealing with any social and ethical problems raised by the use of patented inventions. Thus, it may be effective to regulate the adverse consequences of patents through the laws that create these incentives, rather than by creating a separate set of rules.^[105] Alternatively, the patent system might be used to bolster existing regulation of conduct in other areas.^[106]

7.62 If the patent system is to address social and ethical considerations, there is a variety of ways in which this might be achieved. Some mechanisms may be more suitable than others, depending upon the nature of the social or ethical concerns at issue and, in particular, whether they relate to the grant of a patent covering a genetic invention or to the way in which such patents are exploited.

7.63 The Patents Act contains mechanisms that might be used indirectly to address social or ethical concerns about the manner in which patent rights are exploited. For example, the compulsory licensing provisions may be invoked where the reasonable requirements of the public with respect to a patented invention are not being satisfied.^[107] This might include circumstances in which access to a patented medical genetic technology is not being provided equitably.

7.64 However, the material below focuses on reforms intended to allow social and ethical considerations to be assessed as part of the process for granting patents—that is, to allow inventions to be excluded from patentability on social or ethical grounds.

Options for exclusion on social or ethical grounds

7.65 One option would be to introduce an ordre public or morality exclusion similar to provisions in European patent law discussed above. Such exclusions are generally applicable to inventions involving all types of technologies.

7.66 Another approach would be to introduce mechanisms to address specific social or ethical concerns raised by genetic inventions. In particular, it has been suggested that patent applicants should be required to demonstrate that prior informed consent to the use of genetic materials has been obtained before a patent for an invention involving such genetic material will be granted.

7.67 This requirement was initially proposed in connection with inventions based on natural genetic resources to bolster the operation of national laws implementing the Convention on Biological Diversity^[108]—in particular, its provisions relating to consent and benefit sharing arrangements. The application of a consent requirement for the patenting of inventions involving biological material of human origin has also been considered as a means of ensuring compliance with established ethical standards for research involving humans.^[109]

The role of patent examiners

7.68 Suggestions that the patent system should deal with social and ethical concerns raise questions about how such decisions should be made, and by whom. Some approaches would require patent examiners to consider whether a patent application should be rejected on ethical or social grounds as part of the examination process.

7.69 However, it has been suggested that patent examiners lack the training and expertise to make decisions of this kind.^[110] For example, the OECD Report concluded that:

In the absence of commonly agreed criteria for making moral judgments as to the application of new technology, therefore, it is difficult to apply morality provisions … In addition, the patent system is meant primarily to regulate competition, and patent examiners are not in a position to define or even interpret the basic values of society.^[111]

7.70 Patent examiners could be assisted in assessing the social and ethical considerations involved in patent applications by guidelines developed by an authoritative body. However, there are no international precedents for the development of guidelines by which to assess the social and ethical implications of gene patents, or patents generally. This may indicate that, given the breadth of potential social and ethical considerations of relevance to inventions in different technological fields, the drafting of guidelines in this area may be impracticable.

An ethical advisory body

7.71 Another option would be to refer patent applications that raise social or ethical considerations to a specialised body that could provide guidelines or advice on these issues, or make determinations itself.^[112]

7.72 Reviews of the patent legislation in New Zealand and Canada recommended that specialised bodies, outside the patent office, could assist patent examiners in assessing patent applications for compliance with applicable moral standards.^[113] In relation to the ethical aspects of patenting inventions involving human stem cells, the European Group on Ethics in Science and Technologies proposed that ethics review of patent applications by an independent advisory body should be incorporated into the patent examination process.^[114]

7.73 In Australia, the review of patent applications involving genes, genetic material and genetically modified organisms by a committee with bioethical expertise was proposed in 1990.^[115] This proposal, for an additional layer of review of patent applications, was criticised in Parliament on the basis that it would increase uncertainty^[116] and further complicate the operation of the patent system.^[117]

7.74 There are Australian precedents for the establishment of ethics advisory bodies in other regulatory regimes. For example, the Gene Technology Ethics Committee, provides advice to the Gene Technology Regulator and the Gene Technology Ministerial Council on ethical issues associated with gene technology.^[118]

Submissions and consultations

7.75 In DP 68, the ALRC stated that it did not support amending the Patents Act to expand the circumstances in which social and ethical considerations may be taken into account in decisions about granting patents. Rather, the ALRC suggested that social and ethical concerns should be addressed primarily though direct regulation of the use or exploitation of a patented invention.^[119]

7.76 A range of submissions and consultations expressed support for the approach proposed by the ALRC.^[120] In particular, submissions commented that social and ethical considerations would be better addressed through direct regulation of the use or exploitation of genetic inventions.^[121] Submissions highlighted the difficulties involved in incorporating social or ethical considerations into the Australia patent system and questioned the appropriateness of the Patent Office making determinations that were better left to the legislature.^[122] Others commented on the practical difficulties inherent in requiring patent examiners—who are specialists in scientific and technical fields—to assess social or ethical considerations.^[123]

7.77 In contrast, other submissions suggested that social and ethical considerations should be taken into account in assessing gene patent applications^[124] and criticised the ALRC’s reluctance to address ethical and public policy considerations within the framework of the patent system.^[125] Many of these submissions recognised that if social and ethical considerations were to be taken into account in assessing patent applications, Australian patent law and practice would need to change to facilitate this.

7.78 The possibility of amending the Patents Act to include an ordre public or morality exclusion from patentability was raised in some submissions.^[126] Others suggested that the Patents Act should be amended to include ‘public interest and social impact criteria’ in the assessment of patent applications.^[127] A number of submissions supported the establishment of an expert committee to assess and advise on ethical considerations arising from patent applications.^[128] Some submissions suggested that patent examiners should be provided with training on ethical and social matters,^[129] or advocated the development of guidelines to assist examiners in the assessment of social and ethical issues.^[130]

7.79 Three submissions proposed that the Patents Act be amended to include a requirement for patent applications to ‘disclose evidence of consent from the source where an invention is based on biological material of human origin or where the invention uses such material’.^[131] The Centre for Law and Genetics commented that imposing such a requirement would serve to reinforce the value placed on compliance with ethical standards in research involving humans,^[132] and would be consistent with proposals that have been advanced in connection with patenting natural genetic resources.^[133] These submissions acknowledged that such a requirement might be controversial and present some administrative difficulties for the Patent Office, but did not consider these issues to be insurmountable.^[134]

ALRC’s views

7.80 It is arguable that the ‘generally inconvenient’ proviso included in the ‘manner of manufacture’ requirement in s 18 of the Patents Act already provides some limited basis upon which social and ethical considerations may be relevant to the patentability of a genetic invention under Australian law.^[135] However, the ALRC does not believe that the Patents Act should be amended to expand the circumstances in which such considerations are taken into account in decisions about granting patents.

7.81 In the ALRC’s view, there is no compelling case for amending the Patents Act to allow expressly for the exclusion of particular subject matter from patentability on social or ethical grounds. If such a provision were to be included in the Act, an obvious model would be an exclusion from patentability on the grounds of ordre public or morality, as found in some European countries and as permitted by the TRIPS Agreement. Yet, adopting such a provision in Australia would not address the particular concerns expressed about the patentability of genetic materials or technologies. In Europe, the difficulties in applying the exclusion have led to a very narrow interpretation of the provision, and it has had no discernible impact on the granting of gene patents in those jurisdictions.

7.82 Patent offices and examiners have no special authority in philosophical or moral matters. Examiners are chosen for their expertise in particular scientific and technical fields. For example, examiners who assess patent applications for genetic materials and technologies must have qualifications in the field of biochemistry.^[136] It may be possible to provide examiners with training in social and ethical matters but they will not necessarily be the individuals best suited to making assessments on such grounds. Further, given the breadth of potential social and ethical considerations of relevance to inventions in different technological fields, it may not be possible to provide them with the training or guidelines necessary to assess the social and ethical implications of all new inventions. Where the use or exploitation of new inventions gives rise to social or ethical concerns, it may be argued that decisions belong in the political arena and should not be taken by individuals whose training and experience is primarily scientific and technical in nature.

7.83 The establishment of a new ethics advisory body may be a better mechanism for addressing social and ethical concerns than leaving them to individual patent examiners. However, such a mechanism would inevitably add to the cost and complexity of the patent system. Any determination about the possible social and ethical implications of a particular invention is likely to be contested and new review or appeal mechanisms may be needed.^[137] Given that only a small proportion of patent applications can be expected to have contentious social or ethical implications, ethics assessment of all patent applications seems unlikely to be the most efficient or effective form of regulation. Reform to permit inventions to be excluded from patentability based on the views of patent examiners or some new ethics advisory body would thus have uncertain consequences for the efficiency of the patent system.

7.84 The ALRC’s view is that social and ethical concerns can be addressed most effectively through direct regulation of the use and exploitation of patented inventions (or through regulation of research activities that lead to the development of inventions), rather than by excluding a particular subject matter from patentability, or imposing additional conditions on the grant of a patent. There are, for example, many more direct ways to encourage the ethical conduct of human genetic research than requiring proof of informed consent as part of the patent application process.^[138] Attempting to adapt the patent system to address issues of research ethics, consent or benefit-sharing would be likely to create undesirable complexity. Further, any new exclusion from patentability that is not covered by internationally accepted ordre public or morality grounds may conflict with Australia’s international obligations, including those under the TRIPS Agreement.

7.85 Arguments about the relevance of social and ethical considerations tend to be directed towards two quite different outcomes: either that particular subject matter should not be patentable because the invention is objectionable and its use should be curtailed or prohibited; or that particular subject matter should not be patentable because the invention is beneficial and its use should be promoted.

7.86 In the ALRC’s view, it is better in the former case to regulate the use of the invention directly than to address the ethical or social concerns by excluding the subject matter from patentability. To exclude such an invention from patentability does not prevent the inventor from using the ‘objectionable’ technology, although it might have the incidental effect of encouraging secret use and limiting the dissemination of the technology. Thus, intervening at the point of patentability does not address the mischief that is said to arise from the invention. An example is human embryonic stem cells—these can generally be patented but their derivation and use in research is carefully controlled by federal, state and territory legislation, as well as guidelines and standards issued by the National Health and Medical Research Council.^[139]

7.87 In the latter case—where an invention is seen as beneficial and access is to be encouraged—somewhat different considerations apply, but the ALRC here too has come to the view that it is generally better to regulate use of the patented invention than to exclude the subject matter from patentability. Those who argue for an exclusion from patentability in order to promote broad access to the invention generally do so because the granting of a patent over the invention, with its concomitant monopoly rights, enables the patent holder to limit use of the invention through restrictive licensing practices or charging excessive prices. But this is to take a short term view. In the longer term, the inability to patent a particular type of technology (for example, research tools or diagnostic genetic tests) may have negative implications for research and development in that field. The net outcome might be to reduce access to that technology in the longer term.

7.88 Social and ethical considerations relating to access can be better addressed by specific measures to facilitate the use of particular patented inventions, both through the patent system and by other means. For example, research on a patented invention can be promoted by a new experimental use exemption (see Chapter 13); and exploitation of a patent can be promoted by better utilisation of the Crown use (Chapter 26) and compulsory licensing provisions (Chapter 27) of the Patents Act. Solutions such as these allow for a targeted response to existing and emerging problems in the field of genetic materials and technologies. This is unlikely to be achieved by the categorical exclusion of such inventions from patentability.