Gene patents challenged in court

In the midst of a legal battle to determine the enforceability of patents covering genetic material in Australia, Genetic Technologies (ASX:GTG) has negotiated a new settlement in a separate case involving non-coding DNA.

Cancer Voices Australia and US-based Myriad Genetics are facing off in court over Myriad's patent for the BRC1 gene mutation, a strong indicator of breast cancer risks.

The trial, which commenced on Monday, marks the first time an Australian court has considered whether isolated human genes are patentable. The hearing is expected to last around a week.

The legal complaint was first filed in 2010 by Cancer Voices Australia and Yvonne D'Arcy, a woman who has breast cancer. Maurice Blackburn Lawyers is representing the complainants.

The case was lodged after GTG, which has the exclusive right to the BRCA1 and BRCA2 genes in Australia under license from Myriad, revealed in 2008 that it would start enforcing this exclusive by preventing other labs from conducting BRCA1 testing.

While the company soon reversed course in the face of stiff opposition, health groups are concerned about the impact gene patents might have on future medical research. The trial could set a precedent for future Australian gene patent cases.

The legality of Myriad's BRCA1 and BRCA2 patents has also been challenged in the US, and was overturned in 2010, but this decision was later reversed on appeal. The case may be heard in the US Supreme Court.

GTG has separately been taking action to enforce its own patent relating to the use of non-coding DNA sequences as markers for mutations associated with genetic disorders.

On Tuesday, GTG revealed it had settled an infringement lawsuit it had filed in the US against a group of companies associated with Sonic Healthcare Limited (ASX:SHL).

This was the second settlement GTG had negotiated regarding the patent this month, with the company announcing an agreement with Eurofins STA Laboratories in early February.

Both these suits formed part of a major patent enforcement program that commenced in 2010 and has so far spanned three rounds. The company is still involved in patent cases with seven of the ten parties it sued in the third round.

While GTG has not disclosed the terms of individual settlements, it revealed it has so far earned $73 million in contracted revenue from licenses to the technology.

It was the company's move to enforce its non-coding DNA patent in 2002 that led to the cross-licensing deal with Myriad which grants it the Australian rights to BRCA1.

Time will tell whether the court's decision in the gene patent case will have any impact on the enforceability of GTG's non-coding DNA patent.

Genetic Technologies (ASX:GTG) shares fell 3.85% in Tuesday's trading to $0.125.