Despite not being specifically excluded under s18 of the Australian Patents Act, technology utilising embryonic stem cells (ESCs) is not able to be patented in Australia.

With the technology forming a critical pillar of regenerative medicine and therefore having the potential to help realise treatments for some of the world’s most wicked diseases, and since Australia has such a strong reputation for cutting edge biological invention, why is this so?

The story of modern regenerative medicine begins in 1998, in the laboratories of Jamie Thompson at the University of Wisconsin. Working on rhesus monkeys, Thompson’s group showed for the first time that you could program ESCs to differentiate into pluripotent cells.

This gave rise to one of the key pillars of regenerative medicine – the ability to replenish cells in degenerative disorders. The breakthrough also brought with it a small, but growing minority who began to voice more loudly their objections to such use. Primarily, these objections arose from the need to use spare embryos donated from couples undergoing IVF.

These ethical and political concerns intertwined with the patentability of ESCs in Australia in an unexpected way.

The legislative framework

In Australia, section 18(2) of the Patents Act specifically excludes the patentability of ‘humans and biological processes for their generation’. The amendment was introduced during the Patents Bill 1990 by conservative catholic senator, Brian Harradine, almost as an after-thought.

In the second reading of the Bill, the Hon Simon Crean, the Minister for Science and Technology was sufficiently concerned by the absence of comment from the Opposition to voice his opinion. Stating that ‘flexibility was needed’, Mr Crean pointed out numerous scientific advances that were not anticipated by the preceding Patent Acts and suggested that the amendment should not be viewed as restricting patentability. Yet the repercussions of the hurried exclusion, incorporating concerns along the political, theological and ethical spectrum, while not explicitly defining what constitutes a ‘human being’, are felt even today, over 20 years later.

Why Australian patent applications are rejected

A quick review of recent patent applications claiming methods or uses of ESCs reveals numerous applications that have lapsed due to failure to gain acceptance. This is because, based on a 2004 decision of the Commissioner of Patents , they automatically trigger a s18(2) exclusion from patentability on the basis that an ESC can only be created in a process that involves the establishment of human life via a fertilized ovum, no matter how early. A review of these objections reveals that the IP Australia takes a hardline stance on patents directed to the utilisation or generation of ESCs, regardless of whether embryos are created, destroyed or arise from surplus Assisted Reproductive Technology embryos.

Yet given that the initial consternation arising from Senator Harradine’s conservatism was an objection to the potential destruction of embryos, and with the passage of time, it is interesting to reflect on whether or not such a hardline stance would hold up in a challenge to the Commissioner of Patents refusal to progress patent applications directed to ESCs.

A 2016 challenge did marginally move the goalposts: if the patent claims relate to parthenotes and parthenogenesis, IP Australia considers them no longer to fall under the umbrella exclusion of s 18(2). Parthenogenesis, in which researchers use chemicals to induce the egg to begin developing as if it had been fertilized. The egg—called a parthenote—behaves just like an embryo in the early stages of division. However, because it contains no genetic material from a father, it cannot develop into a viable fetus. This result was achieved by the patent applicant taking the issue to a hearing – a high stakes step which might have resulted in more weight to the Commissioner’s decision to reject applications under s18(2) rather than a relaxation of the position.

Time for a more modern approach?

In 2001, President George W Bush introduced restrictions on federal funding for research involving embryonic stem cells. This meant that projects that did not utilize already derived stem cell lines would not be eligible for funding. In a move meant to circumvent these restrictions, California voters in 2004 voted 59% in favour of the establishment of the California Institute for Regenerative Medicine (CIRM), a $3 billion dollar stem cell research agency. Unlike Australia, politicians struck while the stem cell iron was hot, and built on the optimism generated by early stem cell research. Fast forward to 2021 and California is now an international hub for regenerative medicine. The majority of CIRM’s research grants have been awarded to universities like Stanford, USC and UCLA, where researchers have made significant advances in stem cell research.

It has been over 20 years since the modern regenerative medicine story started, and ESC research is moving into clinical phases all over the world, including in Australia. Research has progressed from merely identifying these cells,[5] to now knowing how to replicate the intrinsic cues to trigger the differentiation of ESCs to beating heart cells.[6] Perhaps it is time to again revisit the exclusion from a legal and judicial perspective. Drawing inspiration from the words of Bruce Lehman, the former Commissioner of the USPTO, we are not patenting life – we are patenting technology.

If you would like to discuss the patentability generally in stem cells, or have a more specific query about embryonic stem cell technology, contact us.

[1] C Limon, ‘Human beings as non-patentable inventions’ in Yoriko Otomo and Edward Mussawir (eds), ‘Law and the Question of the Animal: A Critical Jurisprudence’, 57.

[2] Commonwealth, Parliamentary Debates, Senate, 16 October 1990, 2954 (Simon Crean, Minister for Science and Technology).

[3] Fertilitescentrum AB and Luminis Pty Ltd. (2004) (APO 19)

[4] International Stem Cell Corporation [2016] APO 52

[5] Martin, G. R. Proc. Natl Acad. Sci. USA 78, 7634–7638 (1981) and Evans, M. J. & Kaufman, M. H. Nature 292, 154–156 (1981).

[6] Murray, C. E. & Keller, G. Cell 132, 661–680 (2008).

Welcome to the first article in our five-part Spotlight Series on one of the most exciting frontiers of scientific research and innovation, regenerative medicine.

Throughout this series, we will find out more about what regenerative medicine encompasses, its historical origins, recent advances in the lab and the clinic, the current standard of care, and look over the horizon to what the future holds for the sector.

What is regenerative medicine?

Regenerative medicine refers to the field of study harnessing the body’s innate ability to repair, restore or establish normal function due to damage or impairment, whether through birth, disease, trauma or aging. The appeal of regenerative medicine lies in the potential to utilise normal repair mechanisms within our body to restore function to a damaged organ, or to treat previously incurable diseases such as cancer.

“Regenerative medicine is the process of creating living, functional tissues to repair or replace tissue or organ function lost due to age, disease, damage, or congenital defects. This field holds the promise of regenerating damaged tissues and organs in the body by stimulating previously irreparable organs to heal themselves. Regenerative medicine also empowers scientists to grow tissues and organs in the laboratory and safely implant them when the body cannot heal itself.”

The National Institutes of Health (NIH) in 2006

Stem cell therapies are the most well-known arm of regenerative medicine, however the field also includes other cell therapies (such as CAR T cell therapies), genetic therapies, nanotechnology and biomedical engineering, and reprogramming of cells and tissue.

Experts in the field come from a plethora of backgrounds and expertise. Biomedical engineers and computer scientists might come together on how to generate 3D-printed biologically compatible scaffolds to be implanted into a site of injury, in order to promote formation of new tissue and cell regeneration. Clinicians and stem cell scientists could collaborate on an autologous stem cell therapy, from isolating appropriate adult stem cells from an individual, treating or activating the stem cells in the laboratory and re-injecting the stem cells to the same individual at a site of injury to repair damage. Developmental biologists are working on how to reprogram embryonic stem cells to grow tissues and organs in the lab, and provide an avenue for thousands of people waiting on an organ transplant list.

The future is bright

Regenerative medicine has truly come to the forefront in the last decade. Perhaps the superstar of the sector is chimeric antigen receptor (CAR) T-cell therapy, including Kymriah ® for treating leukemia (by Novartis) and Yescarta ® for treating lymphoma (by Gilead Sciences), both of which received FDA Approval in the U.S.A. in 2017. CAR T-cell therapies isolate T cells (a type of immune cell) from a patient suffering from cancer, genetically edit these T cells in the lab so that the T cells express a CAR, and transplant the edited CAR T-cells back into the patient. The T cells now express CARs, which are cell surface receptors that target cancer cells, thereby bringing the CAR-T cell into contact with the cancer cells so that the CAR-T cells can kill the cancer cells. CAR-T cell therapies have taken the biotechnology industry by storm, resulting in a number of large mergers and acquisitions of regenerative medicine companies, and an increasingly competitive and dense patent landscape.

On the other hand, relatively established cell therapies such as bone marrow transplantation have matured and is expected to be a US$15 billion market by 2027. The surge is thought to be driven by the growing prevalence of cancer and anemia patients, who have compromised bone marrow and require transplanted stem cells to repair and replace the injured cells.

The regenerative medicine sector globally is projected to develop into a US$120 billion market by 2035 (UK Cell and Gene Therapy Catapult, AusBiotech 2018 report). A recent draft strategic roadmap released by a consortium of leading companies in the regenerative medicine landscape in Australia suggests that proper investment and development of our manufacturing capabilities would translate to at least AUD$6 billion in revenue and 6,000 new jobs for Australia in the same timeframe.

Australia remains one of the leaders in basic research for the regenerative medicine sector, ranking 10th in the world for publications (2nd when adjusted on a per capita basis). Proper buy-in and investment from industry and the government at this key turning point would lead to a significant boost to the Australian regenerative medicine ecosystem, as well as early access to ground-breaking therapies for patients.

In the next part of the series, we discuss the historical origins of regenerative medicine.

AusBiotech has released a draft strategic roadmap for a new regenerative medicine Catalyst, and is now seeking sector feedback from those interested in the future of regenerative medicine in Australia.

On 29 July 2021, AusBiotech released for comment a draft roadmap for Australian regenerative medicine (RM), with the aim of developing strategic goals, objectives and priority actions for a national RM sector ‘catalyst” collaboration body, the Catalyst Body.

We welcome the impetus of the seven consortium members of the Regenerative Medicine Catalyst Project in seeking to advance the development and earlier access to ground-breaking regenerative medicine therapies for Australian patients.

The draft roadmap states:

“Our vision is that Australian patients have access to world-class regenerative medicine therapies sustained by a thriving Australian RM industry. 

Our mission is to create an end-to-end world-class value chain that can discover, develop, and distribute regenerative medicine, while creating jobs, commercialising research, and exporting Australian therapies to the world.

An excellent summary of the strategic plan is provided in Figure 1 on page 8 of the draft roadmap, outlining priority actions to build stakeholder engagement and encourage investment within the sector, establish forward-looking regulatory pathways, and develop the requisite manufacturing capability needed to accelerate growth in regenerative medicine therapies.

The underlying theme of the draft roadmap is that the vision and mission will only be achieved through collaboration, with a call for greater coordination and cooperation concluding the draft roadmap.

The Australian RM sector is invited to comment on the draft roadmap by Friday, 13 August 2021 by providing feedback to Camille Shanahan, National Projects Manager – Regenerative Medicine.

We look forward the RM sector’s input on this important initiative.

The Full Court of the Federal Court of Australia has now confirmed that a non-invasive diagnostic test for prenatal conditions is patentable subject matter in Australia.

The decision in Ariosa Diagnostics, Inc v Sequenom, Inc [2021] FCAFC 101 contains useful guidance for industry and is significant in that it diverges from the result before the US Court of Appeals for the Federal Circuit (the US Supreme Court declined to hear an appeal) where the majority found the counterpart US patent to be ineligible for patent protection.


Sequenom surprisingly found cell free foetal DNA (cffDNA) in the blood plasma and serum of pregnant women. This discovery allowed: (a) genomic testing of a foetus without invasive testing such as inserting a needle through a mother’s abdomen or cervix (which increases the risk of miscarriage); and (b) more reliable quantitative or qualitative diagnostic testing of a foetus (improving existing methods that may give significant false positive or negative rates). On the basis of this discovery, Sequenom obtained grant of Australian Patent No. 727919 (the Patent) with claim 1 in the following terms:

“A detection method performed on a maternal serum or plasma sample from a pregnant female, which method comprises detecting the presence of a nucleic acid of foetal origin in the sample.”

Ariosa conducts a non-invasive prenatal test that analyses cell free DNA in plasma of pregnant women, to estimate the risks of foetus genetic disorders (Harmony Test). Ariosa licensed Sonic Health Ltd and Clinical Laboratories Pty Ltd to conduct the Harmony Test in Australia. Sequenom claimed this infringed it’s Patent. Arisoa cross-claimed that Sequenom’s Patent was invalid on various grounds.

Manner of Manufacture (the Australian term for “patentable subject matter”)

As part of its challenge to the validity of the Patent on the ground of lack of patentable subject matter, Ariosa submitted that:

  1. Each claim of the Patent involves the detection of what is naturally occurring; being a mere discovery of a law of nature.
  2. The leading authority of the High Court of Australia, D’Arcy v Myriad Genetics Inc [2015] HCA 35 (Myriad), required the Full Court to look at the “end result” of each claim to see if there was an artificial effect and that the end result of each claim of Sequenom’s Patent was mere information.
  3. No claim in Sequenom’s Patent was for a new method of detection (e.g. the ccfDNA was detected and extracted using well known methods) or a new method of applying the detection of ccfDNA in maternal plasma or serum (e.g. methods to analyse the ccfDNA such as genetic disorder markers, PCR, gel electrophoresis and fluorescent labelling techniques were well known).

The only new subject matter was that ccfDNA is detectable in maternal serum or plasma samples – maternal plasma was routinely thrown away by investigators researching non-invasive prenatal diagnosis.  Arisoa submitted that “detection” of the ccfDNA is no different from the discovery that cffDNA is detectable.

The tension between mere discovery vs. invention

The Full Court referred to previous judicial considerations about the difficulties finding the line between discovery and invention. The Full Court distilled three points of emphasis from the relevant authorities (at [114]) which can be summarised as follows:

First, the distinction between mere discovery and an invention lies in its practical application to a useful end.

Second, it is important that the invention is considered as a unitary concept, and not segregated into parts. The invention may still be patentable if the combined effect of an idea and its application in a well-known way is patentable subject matter.

Third, a patentable invention can be an abstract idea put to a useful end (even if the way of putting it to that useful end is obvious or well known).

Distinguishing Myriad

In Myriad, the High Court of Australia held that naturally-occurring DNA sequences, even when extracted from the native cell nucleus and isolated by human involvement, cannot be validly made the subject of patent protection in Australia (see our analysis here). In this decision, the Full Court considered that Myriad could be distinguished on the basis that the disputed patent claims in that case were directed to a product (the isolated BRCA1 gene sequences).    

The Full Court cited Gordon J’s comments in Myriad (at [136]):

“In my opinion, invention may lie in the idea, and it may lie in the way in which it is carried out, and it may lie in the combination of the two; but if there is invention in the idea plus the way of carrying it out, then it is good subject-matter for Letters Patent.”

Gordon J’s reasoning in Myriad distinguished the invalidity of claims to the isolated BRACA1 sequence themselves, and the validity of claims (such as claim 4 of the patent in Myriad) directed to a method of using specific mutations or polymorphisms to suggest a predisposition to breast cancer and ovarian cancer. In Myriad, it was not disputed that if the BRCA1 gene was isolated and found to have specified mutations which indicated malignancies, then that was patentable subject matter.

Claim 1 in Sequenom’s Patent was directed to a method involving the application of a means for identifying and discerning between maternal and foetal nucleic acid. Not unlike claim 4 in Myriad, Seqeunom’s Patent claimed a process used to convey some useful information, the Full Court holding (at [159]):

“Here, the invention as claimed carries into effect an idea that the presence of information within the naturally occurring code of a person will be useful. By a process of detection that information is yielded up. The claim construed as a whole necessarily involves an artificially created state of affairs yielding an outcome that is of economic utility.”

The correct identification of the invention

Ultimately the Full Court considered that (at [153]):

“[The invention] lies not in the mere observation that cffDNA is to be found in maternal plasma (or serum), but in the explanation as to how that knowledge may be unlocked for others to use it (that is, the explanation of how to extract the cffDNA from the plasma or serum). It is the idea coupled with a practical means of application that makes the invention.”

The invention was not, as Arisoa sought to characterise it, the mere observation of cffDNA in maternal plasma or serum. The invention ‘unlocked’ that knowledge for others to use; it was a new means by which foetal DNA may be detected, other than by dangerous invasive techniques, or using methods with poor diagnostic capability.


Before Ariosa’s Australian licensees, Sonic and Clinical Laboratories, started conducting the Harmony Test in Australia, they would collect blood samples from pregnant women in Australia, and send them to Ariosa in the United States. Ariosa them conducted the Harmony Test and sent written test result reports back to Sonic/Clinical in Australia.

A question for the Full Court was whether this ‘send out’ model infringed Sequenom’s exclusive rights to ‘exploit’ the invention claimed in the Patent. Were the test results mere information, or a ‘product’ within the definition of ‘exploit’? The invention in Sequenom’s Patent was a ‘method’ or ‘process’, and ‘exploit’ for the purposes of the Act includes ‘doing any act […] in respect of a product resulting from [using the method or process]’. The Full Court rejected the primary judge’s characterisation that the reports were ‘products resulting from such use’ captured by the meaning of ‘exploit’.   

It was not necessary for a method or process to result in a product, provided it can be commercially exploited (at [266] and [269]):  

“In our view, a construction of the word “product” in the context of the definition of “exploit” which recognises that not all methods or processes will led [sic] to a product resulting from their use is to be preferred.”

“The fact that such information is derived from a patentable process or method cannot render the information itself patentable.”

So Sonic and Clinical did not infringe Seqeunom’s Patent by sending specimens to Ariosa in the United States for the purposes of the undertaking the Harmony Test in that jurisdiction. Sonic and Clinical did, however, infringe Seqeunom’s Patent when they undertook the Harmony Test in Australia.

Take Aways

Key take aways from this decision include:

  1. Diagnostic methods remain patent-eligible in Australia and this decision highlights the distinction between the treatment of method and product patent claims in Australia.
  2. ‘Discoveries’ of nature may be patentable in Australia, if the patent claims a process or method that uses that discovery in some new and commercially valuable way (even if the techniques involved are not themselves new or non-obvious). In other words, the combination of an ‘unknown idea’ and ‘known practical application of the idea’ can be patentable.
  3. Where an Australian patent claims a diagnostic method, it is possible that third parties could subject test samples taken from Australian patients to the patented diagnostic method in jurisdictions where there is no patent protection, and then deliver the results to Australian patients without infringing the Australian patent.

 It is still possible for Ariosa or even Sequenom to make an application for special leave to appeal the Full Court’s decision to the High Court of Australia. We will keep you updated of any further important developments. If you have any questions about how this case relates to your patent strategy for Australia, please get in touch. 

Approximately 90% of new pharmaceutical substances in phase I clinical trials do not gain marketing approval. 

The market entry cost for those that do is estimated to be between US $1-3 billion. A patentee gains no or little return on this investment until marketing approval is achieved, and delays reduce the effective patent term.

It is easy to see why patent term extension (PTE) is so important to companies developing and commercialising new pharmaceutical substances. The recent decision of a Delegate of the Commissioner of Patents, Ono Pharmaceutical Co., Ltd. et al [2020] APO 43 (Ono, available here), concerns PTE.

PTEs: what and why? 

In Australia, PTEs aim to compensate a patentee for the delay between filing a patent application covering a pharmaceutical substance and receiving regulatory approval for marketing that pharmaceutical substance, i.e. when the pharmaceutical substance is included on the Australian Register of Therapeutic Goods (ARTG). PTE aims to provide an effective patent term that is approximately in line with that available in other fields of technology. In Australia, an effective patent term is estimated to be 15 years. PTE achieves this by extending the patent term by up to 5 years, thereby improving the return on investment. Importantly, as the delegate notes in Ono, PTEs are intended to encourage the development of new pharmaceutical substances. 

Ono is not new law. Instead, Ono confirms precedent set by G. D. Searle [2008] APO 31 (Searle), an earlier decision by a Delegate of the Commissioner of Patents, and is consistent with Pfizer Corp v Commissioner of Patents (No 2) [2006] FCA 1176 (Pfizer). Ono and Searle considered a single patent covering two pharmaceutical substances, each falling within the scope of the claims but each having a different ARTG inclusion date, and which was the correct date for calculating PTE. Because the two pharmaceutical substances are covered by the same patent, the patent application filing date is the same. However, the ARTG inclusion dates were different. Therefore, the PTE calculated based on the later ARTG inclusion date would provide a longer patent term, which would be to Ono’s benefit.

Broader is not always better 

In refusing the PTE request, at [45], the delegate concluded that:

As such, the application for an extension of term does not comply with requirements as the extension request, relying as it does on [the later regulatory approval], has not been made on the basis of the good on the ARTG with the first regulatory approval date…that falls within the scope of claim 3 of the patent…

In other words, the PTE must be requested and calculated based on the earliest pharmaceutical substance included on the ARTG and falling within the scope of the claims. Ono’s PTE application based on the pharmaceutical substance with the later ARTG inclusion date was refused because it did not satisfy this requirement.

Although not the focus of this article, it is important to note, as the delegate did at [31]-[33], that the PTE scheme makes no distinction as to the owner or sponsor of a pharmaceutical substance with the earliest inclusion on the ARTG. The earliest inclusion on the ARTG falling within the scope of the claims of the patent may be that of the patentee or of a third party.

Many patentees (and their patent attorneys) may have found Ono’s argument attractive. However, Ono’s arguments focussed on PTE policy in relation to the patentee, whereas the delegate viewed the balance of PTE policy between public and patentee benefits. Accordingly, the delegate focussed on PTE policy applying to new pharmaceutical substances being made to the public, irrespective of their source, while the narrower version proposed by Ono focussed on new pharmaceutical substances made by the patentee.

It is worth noting that the patent in question is a divisional patent. Its parent patent had PTE granted, because its claims only covered one pharmaceutical substance. Accordingly, the patentee has obtained some compensation for the delay in bringing its pharmaceutical substance to market.

Ono has appealed the delegate’s decision to the Federal Court of Australia to be heard by Beach J, and it will be interesting to see how the court interprets this aspect of PTE legislation. However, given the existing guidance of Pfizer, it seems unlikely that the appeal will succeed.

Key considerations 

Ono reinforces several principles patentees should take into account when seeking patent coverage for pharmaceutical substances, including:

  • PTE should be considered during examination, and certainly before the deadline for filing a divisional application
  • advise your patent attorney as soon as possible when a patent covers a commercial embodiment of a pharmaceutical substance
  • claim separate commercial embodiments of the patentee’s pharmaceutical substance in separate divisional applications
  • where claims capture a third party, potentially competitor, commercial embodiment of a pharmaceutical substance, be aware that any PTE will be calculated from the earliest marketing approval date irrespective of the owner/sponsor
    • if unintentional, it may be possible to narrow the scope of the claims
    • if intentional, accept that any PTE may be shorter than that based on a claim covering only the patentee’s commercial embodiment of a pharmaceutical substance
  • if possible, keep a divisional application pending