Ariosa Diagnostics, Inc v Sequenom, Inc

Case [2021] FCAFC 101

FEDERAL COURT OF AUSTRALIA

Ariosa Diagnostics, Inc v Sequenom, Inc [2021] FCAFC 101

Appeal from: Sequenom, Inc. v Ariosa Diagnostics, Inc. [2019] FCA 1011
File numbers: VID 875 of 2019
VID 879 of 2019
VID 910 of 2019
Judgment of: MIDDLETON, NICHOLAS AND BURLEY JJ
Date of judgment: 18 June 2021
Catchwords:

PATENTS – standard patent claiming method for detection of presence of foetal DNA in maternal plasma or serum – validity – infringement

PATENTS – validity – whether manner of manufacture within the meaning of s 18(1)(a) of the Patents Act 1990 (Cth) – whether patent claimed a mere discovery of a naturally occurring phenomenon or a method involving a practical application of that discovery – claims disclose a manner of manufacture

PATENTS – validity – lack of sufficiency – whether claims directed to multiple methods – whether each method needs to be sufficiently described – whether specification enables skilled addressee to produce something within each claim – claims sufficiently described

PATENTS – validity – lack of fair basis – construction of specification and claims – whether real and reasonably clear disclosure in specification of what is claimed – whether specification only discloses a method for detecting foetal DNA known in advance to be of maternal origin – where examples in specification are expressed to not limit the scope of the invention – claims fairly based

PATENTS – infringement – where claimed method performed outside of jurisdiction – whether information resulting from use of claimed method can be characterised as a “product” within definition of “exploit” in Schedule 1 of the Patents Act 1990 (Cth) – appeal against infringement findings allowed in part
Legislation:

Acts Interpretation Act 1901 (Cth) s 15AA

Convention on the Grant of European Patents arts 52(2)-(3)

Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth)

Patents Act 1990 (Cth) ss 13, 18(1)(a), 40(2)(a) and 40(3)

Patents and Designs Act 1907 (UK)

Statute of Monopolies 1624 (21 Jac c 3) s 6

Blanco White, Patents for Inventions (4th ed, 1974)

Macquarie Dictionary (3rd ed, 1997, Sydney)
Cases cited:

Aerotel Ltd v Telco Holdings; Mcrossan’s Application [2007] RPC 7

Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; 239 CLR 27

Anaesthetic Supplies Pty Limited v Rescare Limited [1994] FCA 304; 50 FCR 1

Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd [2013] HCA 50; 253 CLR 284

Apotex Pty Ltd v Warner-Lambert Company LLC (No 2) (Apotex (No 2)) [2016] FCA 1238; 122 IPR 17

Ariosa Diagnostics Inc. Sequenom, Inc. 788 F3d 1371 (3d Cir 2015)

Aristocrat v Commissioner of Patents [2020] FCA 778; 382 ALR 400

Boulton v Bull (1795) 1 H Bl 493 at 492; 126 ER 651

Calidad Pty Ltd v Seiko Epson Corporation [2020] HCA 41; 34 ALR 577

Cancer Voices Australia v Myriad Genetics Inc [2013] FCA 65; 99 IPR 567

CCOM Pty Ltd v Jiejing Pty Ltd [1994] FCA 396; 51 FCR 260

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Ariosa Diagnostics, Inc v Sequenom, Inc [2021] FCAFC 101
Case
[2021] FCAFC 101
Decision Date

CaseChat Overview and Summary

In the case of Ariosa Diagnostics, Inc v Sequenom, Inc, the dispute centred on the validity and infringement of a standard patent related to a method for detecting the presence of foetal DNA in maternal plasma or serum. The case was heard in the Federal Court of Australia. The primary issues before the court were whether the patent claims constituted a manner of manufacture within the meaning of section 18(1)(a) of the Patents Act 1990 (Cth), whether the claims were sufficiently described and fairly based, and whether the claimed method was performed outside of the jurisdiction in a manner that amounted to infringement.

The court examined whether the patent's claims were directed to a mere discovery of a naturally occurring phenomenon or if they involved a practical application of that discovery. It found that the claims disclosed a manner of manufacture and were not simply a discovery of a natural phenomenon. The court also determined that the claims were sufficiently described and fairly based, as the specification enabled a person skilled in the art to produce something within each claim. The court further held that the information resulting from the use of the claimed method could be characterised as a "product" within the definition of "exploit" in Schedule 1 of the Patents Act 1990 (Cth).

The appeal against the infringement findings was allowed in part. The court found that the primary judge's reasoning in respect of each of the asserted claims was sound, but the appeal concerning the "send out" model was upheld.

The final orders required the parties to confer and file an agreed minute of orders, including as to costs, reflecting the reasons of the Court within 14 days. If the parties could not agree, specific submissions were to be filed and served within set timeframes. Any outstanding issues were to be determined on the papers unless otherwise requested.

Orders

Orders of the court

1. The parties confer and within 14 days file an agreed minute of orders, including as to costs, reflecting the reasons of the Court, or, in default of agreement:

(a) within 14 days of the date of these orders, the appellants are to file and serve submissions of no more than 5 pages in support of their draft form of orders;

(b) within 14 days thereafter, the respondent is to file and serve submissions of no more than 5 pages in response; and

(c) within 7 days thereafter, the appellants are to file and serve any submissions in reply of no more than 2 pages.

2. Unless otherwise requested, any outstanding issues between the parties be determined on the papers.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

There are divided views as to whether the correct spelling is “foetus” or “fetus” (and its derivatives). In these reasons we adopt the former. 2. BACKGROUND COMMON GENERAL KNOWLEDGE The primary judge commenced his judgment with a glossary of some relevant terms in the field of prenatal diagnosis and then set out a summary of the common general knowledge in the fields of foetal medicine and molecular genetics as at the priority date. He found that the relevant person skilled in the art to whom the patent is addressed is a team comprising a person with experience in foetal medicine and in particular an interest in prenatal screening and diagnosis, and a person with experience in standard molecular genetics techniques, preferably including some practical experience of the techniques involved in laboratory-based genetic analysis of patient samples in a clinical context. The findings that he made in respect of these subjects are not challenged on appeal. The following matters are relevant background to understanding the disclosure of the patent and have been extracted from the glossary of terms and the primary judge’s findings of common general knowledge as at the priority date.2.1 Blood It was known in the field that foetal cells were present in the mother’s blood. Plasma makes up 55% of the blood. It contains water, blood plasma proteins (including clotting factors), minerals and dissolved nutrients and waste products. Serum is the name given to plasma which has had the clotting factors removed. Whole blood can be separated by centrifugation into three layers: (a) the upper plasma layer; (b) the “buffy coat” layer which contains leukocytes and thrombocytes; and (c) the lower layer which contains the erythrocytes which may be depicted as follows:2.2 Foetal DNA “Cell free DNA” is non-cellular DNA (i.e. DNA that is outside a cell). “Cell free foetal DNA” (cffDNA) is non-cellular DNA from a foetus. The idea that foetal cells might be present in the mother’s blood had been first proposed in 1969. The possibility of being able to access whole foetal cells by taking a maternal blood sample was of great interest because it would allow analysis of the foetal genome to be carried out without the need for invasive testing, which typically involved extracting a sample with a needle inserted through a mother’s abdomen or cervix, and the problems associated with those invasive techniques such as an increased risk of miscarriage. Instead, all that would be needed was a blood sample from the mother’s arm. As a result, a substantial amount of work was carried out in this area through the 1980s and the 1990s. By the priority date it was known that several different types of foetal cells were present in maternal blood during pregnancy, and that these foetal cells had the potential to be used for prenatal testing. From at least the late 1980s there was research being done by a number of groups on processes of recognition and enrichment of foetal cells. The aims of this research included investigating the use of foetal cells isolated from maternal blood to provide a non-invasive means of diagnosis of Down syndrome, to determine the blood type of the foetus and enable the pregnancy to be managed accordingly, to provide a way to determine the sex of the foetus (which would be useful when trying to identify foetuses with possible sex-linked disorders), and to diagnose single gene disorders. However, isolating foetal cells was not easy because they were known to occur only rarely in maternal blood and were vastly outnumbered by maternal cells in the sample.2.3 Genetic disorders

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The primary judge dealt with a number of disputes arising in the context of the infringement allegations. Leaving aside the issue concerning the construction of claim 14, which we have addressed in section 5.4.3 above, the appeal, insofar as it concerns infringement, is limited to a challenge to the primary judge’s infringement finding in relation to the so called “send out” model for obtaining results from the testing performed by the appellants.7.2 The decision of the primary judge The primary judge noted that the respondent alleged that the Harmony Test conducted by Ariosa in the United States and licenced to Sonic and Clinical in Australia fell within the scope of claims 1, 2, 3, 5, 6, 9, 13, 14, 22, 23, 25 and 26 of the patent. The primary judge found that the Harmony Test analysed the cell free DNA present in the plasma of pregnant women to provide an estimate of the risk that the foetus was carrying an autosomal aneuploidy, and at the election of the patient it could also provide an estimate of the risk that the foetus was carrying a sex chromosome aneuploidy, and a determination of the sex of the foetus (at [1162]). The primary judge found that Sonic and Clinical had used the Harmony Test in Australia; in the case of Sonic, since September 2015, and in the case of Clinical since March 2016. He also found that they had been licensed to use the Harmony Test by Ariosa. After considering disputed questions of construction, the primary judge expressed his conclusions in respect of each of the relevant claims, finding all but invalid claim 26 to be infringed by the use of the Harmony Test by each of Ariosa, Sonic and Clinical (at [1459]). This finding is not challenged on appeal. In findings that are now challenged, his Honour concluded that the “product” of the use of the impugned Harmony Test was the results of that test. They were typically communicated in writing as a report, either in electronic or paper form. A sample of such a report was included in the appeal book, and shows results for a foetus with a gestational age of 10 weeks, 3 days. The report provides an estimated level of risk of trisomy 21, a probability level (for example, less than 1/10,000 (0.01%)) and a recommendation such as “review results with patient”. However, the case as we understood it to have been presented before the primary judge did not turn on whether or not there was a physical output of the test results or whether that physical output was a “product”. Rather, the question was whether or not the information produced from the tests amounted to “a product resulting from such use”, being the output of the method of the invention claimed. As much is apparent from the primary judge’s reasons at [1475], where his Honour refers to obtaining results, including in electronic or paper form. The infringement finding challenged by the appellants relates to a period of time before Sonic and Clinical performed the Harmony Test in Australia themselves. Between June and October 2015 (in the case of Sonic) and between December 2014 and March 2016 (in the case of Clinical), the appellants operated a “send out” model whereby they collected blood samples from pregnant women in Australia and sent those samples to Ariosa in the US. Ariosa then conducted the Harmony Test in the US and provided the results, in the form of a report made available by a file sharing platform, to Sonic and Clinical in Australia.

Ratio Decidendi

Legal Principle Established

After defending the primary judge’s reasoning in respect of each of the asserted claims, the respondent turns to the “other factors” identified by the plurality in Myriad at [28] and contends that, to the extent that it is necessary to apply them, the primary judge correctly considered that they pointed in favour of patentability.4.4 Consideration Fundamental to the appeal is the contention that what is claimed is a mere discovery of a naturally occurring phenomenon, and not a method involving a practical application that goes beyond the discovery itself. Here, the appellants identify the discovery as the fact that cffDNA from maternal plasma or serum was a source of foetal DNA. They submit that there is no artificially created state of affairs arising from the invention as claimed. Furthermore, they submit that the “end result” of each claim results in information only, being the detection of cffDNA. The appellants rely substantially on the decision in Myriad in support of their appeal. For an invention to be patentable, it must meet the relevant requirements of the Act including s 18(1)(a) which requires that the invention, as claimed, be a manner of manufacture within the meaning of s 6 of the Statute of Monopolies. Schedule 1 to the Act defines “invention” as “any manner of new manufacture the subject of letters patent and grant of privilege within s 6 of the Statute of Monopolies, and includes an alleged invention”. This element of patentability was considered in NRDC, Apotex and more recently in Myriad. According to NRDC, as explained in Myriad, the relevant question to be posed is: “Is this a proper subject of letters patent according to the principles which have been developed for the application of s 6 of the Statute of Monopolies?” (Myriad at [18] (plurality), citing NRDC at 269). The common law has developed standards by which patentable subject matter may be assessed by reference to the determination of what is a manner of manufacture. In NRDC Dixon CJ, Kitto and Windeyer JJ emphasised the long-established requirement that a patentable invention must involve more than mere discovery of a scientific fact or law of nature. However, at 263-264 they counselled caution in too quickly using such distinctions, quoting Frankfurter J in the United States Supreme Court decision Funk Bros. Seed Co v Kalo Inoculant Co (1948) 333 US 127 at 134, 135 (92 Law Ed 588, at 591), where his Honour said:It only confuses the issue ... to introduce such terms as ‘the work of nature’ and the ‘laws of nature’. For these are vague and malleable terms infected with too much ambiguity and equivocation. Everything that happens may be deemed ‘the work of nature’, and any patentable composite exemplifies in its properties ‘the laws of nature’. Arguments drawn from such terms for ascertaining patentability could fairly be employed to challenge almost any patent. Their Honours continued in NRDC at 264:The truth is that the distinction between discovery and invention is not precise enough to be other than misleading in this area of discussion. There may indeed be a discovery without invention – either because the discovery is of some piece of abstract information without any suggestion of a practical application of it to a useful end, or because its application lies outside the realm of “manufacture”. But where a person finds out that a useful result may be produced by doing something which has not been done by that procedure before, his claim for a patent is not validly answered by telling him that although there was ingenuity in his discovery that the materials used in the process would produce the useful result no ingenuity was involved in showing how the discovery, once it had been made, might be applied. The fallacy lies in dividing up the process that he puts forward as his invention. It is the whole process that must be considered: and he need not show more than one inventive step in the advance which he has made beyond the prior limits of the relevant art.