1. @watermark Biotechnology and Patentable Subject Matter: Sailing Into Unchartered Waters Dr Tania Obranovich B.Sc. (Hons), Ph.D., LL.B., Dip IPP (IPTA) Special Counsel © watermark

2. Classes of Subject Matter Natural Products - nucleic acid (eg. genes) - non-nucleic acid (eg. proteins, chemicals, cells) Diagnostic Methods Methods of Treatment

3. Biotechnological Subject Matter Challenges to Patentability 1.Compositions US: Myriad AU: Myriad 2.Diagnostic Methods US: Prometheus and Alice (and Sequenom) 3.Methods of Treatment US: Application of Myriad and Prometheus precedents AU: Apotex

4. Myriad Litigation Mutations in BRCA1 and 2 genes linked to high risk of developing breast cancer and ovarian cancer - Claims granted to the isolated BRCA genes - Claims granted to the diagnostic methods Patents judicially challenged - US : gene claims and diagnostic claims - AU : gene claims

5. Natural Products US Myriad Litigation 2 Federal Circuit Court decisions upheld the patent eligibility of genes US Supreme Court invalidated the claims on the ground that isolated DNA is a product of nature and therefore not patent eligible The Myriad decision reversed decades of US precedent: US patent law now at odds with most other jurisdictions Court clarified that nucleic acids in which the order of the nucleotides has been altered do remain patentable cDNA remains patentable In terms of DNA, the decision has a relatively small practical impact due to novelty issues/genome publication Impact of decision on non-DNA biologics is the big problem

6. USPTO Examiner Guidelines Natural product includes, but is not limited to: chemicals derived from natural sources (e.g., antibiotics, fats, oils, petroleum derivatives, resins, toxins, etc.); foods (e.g., fruits, grains, meats and vegetables); metals and metallic compounds that exist in nature; minerals; natural materials (e.g., rocks, sands, soils); nucleic acids; organisms (e.g., bacteria, plants and multicellular animals); proteins and peptides; and other substances found in or derived from nature

7. USPTO Examiner Guidelines only claims “directed to” a law of nature, natural phenomenon or abstract idea which is not “markedly different” to its natural counterpart are problematic “markedly different” - assessment of structural and functional or other differences - combinations of elements considered as a whole and not individually - claim viewed as a whole does not “tie up” the whole field “functional” - synergism of individual elements, new therapeutic outcomes, stability, improved efficacy - small structural difference may lead to a significant functional differences If not “markedly different”, the Examiner then considers whether the claim recites something significantly more than the natural product (fairly subtle distinction) Some examples of non-patentable subject matter under the old guidelines are indicated as patentable under the current guidelines (eg. methods of treatment, natural product formulated with a preservative)

8. Natural Products AU Myriad Litigation 2 Federal Court decisions upheld the patent eligibility of genes High Court focussed on the informational content of DNA and invalidated the claims directed to the isolated BRCA DNA on the ground that the information is a product of nature and therefore not patent eligible BUT Focus is now on substance over form High Court has therefore also held that cDNA is not patentable

9. Natural Products AU Examination Guidelines The following molecules are no longer patent eligible -Isolated naturally occurring human and non-human nucleic acid molecules whether coding or non-coding; and -cDNA, synthetic nucleic acids, probes, primers and isolated interfering/inhibitory nucleic acids which merely replicate the genetic information of a naturally occurring organism Subject matter that remains patent eligible: -recombinant and isolated proteins; -pharmaceuticals and other chemical substances; -methods of treatment -methods of applying herbicides; and -applications of computer technology.

10. Diagnostic Methods US Prometheus Litigation The technology related to the relationship between a patient’s level of a drug metabolite and the indication of a need to adjust the patient’s drug dosage. Claims held to define a natural law and to not do significantly more than to simply describe this natural relationship and to provide a bare instruction to “apply it”. Once the natural law is set aside (being the metabolite levels), the other steps add nothing specific to the laws of nature other than what is well-understood, routine, conventional activity (prior to the filing date, the steps of administering the drug and determining metabolite levels were already routinely performed) There is a view that this case should actually have been decided on novelty and inventive step

11. Diagnostic Methods US Prometheus Litigation Appending conventional steps, specified at a high level of generality, to laws of nature, natural phenomena and abstract ideas cannot make those laws patent eligible. Claims which cover every substantial practical application of the natural principle will not be patent eligible. Once the natural law is removed, the claim must not merely recite well understood features or conventional or routine steps

12. Diagnostic Methods USPTO Examiner diagnostic guideline examples have been rescinded but not replaced yet. Why? so far no change re USPTO diagnostics patent eligibility practice under new guidelines recent judicial decisions seem to have made things worse diagnostic correlations are regarded as an abstract idea/law of nature

13. Recent US Decisions on Patentable Subject Matter Myriad II Litigation (Myriad v Ambry) Decision handed down 2 days after new Guidelines issued Claim (parsed) A method of screening germline DNA for an alteration of a BRCA1 gene comprising comparing the germline sequence from a subject with a wild-type gene wherein a difference in sequence indicates an alteration and wherein the comparison is performed using gene probe hybridisation

14. Recent US Decisions on Patentable Subject Matter Myriad II Litigation (Myriad v Ambry) Held: screening method not patent eligible because it recites an abstract idea −comparison of sequences to identify a mutation is an abstract idea −the recitation of a specific method of screening adds no further inventive concept to the method −Alice decision applied and not Prometheus (surprisingly) Alice: eliminate the natural phenomenon and see if what’s left is new Prometheus: the claims should not cover every substantial practical application of the natural principle/eliminate the natural phenomenon and see if what’s left was conventional to perform

15. Recent US Decisions on Patentable Subject Matter Myriad II Litigation (Myriad v Ambry) court noted that the claims were not limited to specific mutations nor to any specific purpose for doing the comparison (eg. diagnosis) → would these features have made a difference? there is a view that the claim should have been found patent eligible because it recites a simple screening method but then failed for lack of inventive step unofficial view is that had it not been Myriad involved, the decision may have been different

16. Recent US Decision on Patentable Subject Matter Sequenom Litigation (Aria Diagnosis v Sequenom) Non-invasive test for Down’s Syndrome Claim (parsed) A method of detecting, in maternal serum, paternally inherited nucleic acid comprising amplifying a paternally inherited sequence in a sample and detecting the presence of paternally inherited nucleic acid.

17. Recent US Decisions on Patentable Subject Matter Sequenom Litigation (Aria Diagnostics v Sequenom) Cell free DNA which has been amplified is no different to naturally occurring DNA (Alice test) → not patentable Sequenom argued that the claims did not preclude others from detecting paternal DNA by other methods (Prometheus test) → argument rejected Appeal has upheld decision but Justice Linn expressed the view that: Such “broad language” excludes Sequenom’s patent from having the “protection it deserves”. “But for the sweeping language in the Supreme Court’s Mayo opinion, I see no reason, in policy or statute, why the breakthrough invention should be deemed patent ineligible,” he added. Application filed for “en banc” review of appeal decision

18. Recent US Decision on Patentable Subject Matter Sequenom Litigation (Aria Diagnostics v Sequenom) En Banc review refused FC took the position that it’s hands were tied by Prometheus Application for leave to appeal to Supreme Court may be sought But surprisingly FC believes that diagnostics should be patentable Several Judges were very open and specific in their criticism of the Supreme Courts Prometheus decision Judges proposed solutions and also refinements to Prometheus and recommended that Supreme Court rethink its stance One judge suggested a specific claim format which might circumvent Prometheus

19. Diagnostic Methods - Australia Remain patent eligible No suggestion of challenge to the patent eligibility of diagnostic methods

20. Methods of Treatment Australian Apotex Litigation A new use for the off-patent drug Leflunomide: method of treating psoriasis Held: Methods of treatment are patentable subject matter Despite moral issues, the use of a pharmaceutical drug cannot be considered non-economic United States There was momentary doubt after Myriad and Prometheus that methods of treatment not patentable Supreme Court has since confirmed patentability

21. Europe Isolated natural products patentable - European Biotechnology Directive Treatment methods and diagnostics must be pursued as “use” claims but are otherwise patentable No sign of judicial or legislative challenge to the patent eligibility of biotechnology

22. Strategy (especially for diagnostics) - US Buy time and hope for change (legislative or judicial) 1.Pursue narrower claims directed to something of commercial value and then file further patent applications (divisional, continuation or CIP) 2.Examples of narrowing claim amendments (for natural products, the bar is now lower) −recite a novel molecule or combination of elements −link a diagnostic method with a treatment step (note: divided infringer issue) −create a device out of a diagnostic −claim a natural product in the context of a formulation (eg. stabilizing molecule, PEG, albumins, nanoparticle, preservative, etc.) −make a slight change to structure which modifies stability profile, effectiveness, etc. −introduce more specific features into diagnostic claims which ensure that all conceivable means of performing invention are not covered and that claim recites more than just conventional and routine steps −Jepson claim?

23. Strategy - US Buy time and hope for change 3.Slow down prosecution by filing RCE or Notice of Appeal 4.When is the right time to patent a diagnostic under the new regime? −at the point of identifying a correlation alone may be to soon −wait until you have a better idea of other parameters −include extensive fallback positions 5.Isolated Natural Product −difficult to patent, per se, but not too much extra seems to be required to achieve patent eligibility −there is a view that few innovator companies will go through the regulatory hurdles, without patents in place, and will therefore pursue patented “modified” products. Generics may find it difficult to argue that a bridging (equivalency) study to a modified product is all that is needed when seeking approval for the unmodified product.

24. Strategy - Australia Nucleic acid molecules mostly not patentable anyway due to novelty problems claim a composition which includes the nucleic acid molecule (eg. a formulation) claim a molecule fused to a non-naturally occurring DNA molecule or a non-DNA molecule not clear how much modification to a naturally occurring DNA molecule is enough to overcome function over form test Hybrid/chimeric fusion molecules ??

25. Thank you Contact: Dr Tania Obranovich 613 98191664 t.obranovich@watermark.com.au www.watermark.com.au © watermark Biotechnology & Patentable Subject Matter – Feb 2016