By Clint Jasper9 February 2018
Australia's cattle industry has scored a win against the US-based owners over a patent application it feared would put the brakes on improvement in Australia's cattle herd.
The Federal Court rejected the patent application, saying it was unclear in its scope, that it failed to adequality describe what the invention was, and whether there was an industrial application for it.
Meat and Livestock Australia spends hundreds of millions of dollars on genetic research in cattle, and feared the patent application threatened Australian farmers' access to important genomic testing.
The Australian cattle industry is on the cusp of using the powerful tool to achieve rapid improvements in meat quality, disease resistance and even cutting methane emission in cattle.
As more farmers adopt genomic testing, it is on the verge of becoming affordable across the industry.
"There's many things that we're trying to do, and genomics, particularly for those hard to measure traits is crucial for us to be able to make good breeding advancements," said Victorian angus breeder Tom Gubbins.
"Any pigs that get their nose in the trough, so to speak, are going to make it more expensive for the people on the ground who are trying to make a real difference to the value proposition of breeding cattle."
American companies Cargill USA and Branhaven LLC lodged an application for a patent that described a way of finding valuable genetic traits in cattle using DNA.
In 2016, Meat and Livestock Australia opposed that application, but was unsuccessful, so it took the further step of appealing the decision in the Federal Court.
In a Federal Court hearing last year, MLA argued the patent did not meet any of the requirements to be valid under Australian law.
On Friday, Justice Jonathan Beach said while he was unconvinced of many of those arguments, on three points he was.
"Accordingly I would uphold MLA's appeal to this extent," he wrote.
The court has asked Cargill USA and Branhaven to file amendments to their patent application consistent with Justice Beach's judgement.
"I will not, however make any final orders until Branhaven has been given the opportunity to consider whether to apply or amend any of the claims to address the concerns I have expressed in these reasons," he wrote.
In a statement, MLA said "both parties are due to return to court in 21 days to address the Court on the issue of amendment of the patent application.
"MLA will continue to pursue every option to protect the genetic advancement of Australia's beef herd."
Shelston IP principal Grant Shoebridge told the ABC the decision may not end up in MLA's favour.
"I think although technically this is a victory for MLA, I think ultimately it will be a loss, and it remains to be seen whether they will appeal this decision.
"I think the main point here is that given that the judge has made a clear indication about how he thinks the claim should be amended to address the lack of clarity, ultimately it will be amended."
Luigi Palombi, formerly of the Australian National University, believed the decision vindicated MLA's opposition to the patent application.
"MLA has successfully opposed the patent being granted.
"What the court said today was that it is invalid in its current form."
Dr Palombi said whether the patent applicants can overcome the Federal Court's rejection was a matter of speculation.
"It depends on whether amendments are filed and what happens to those amendments."
Who are Cargill USA and Branhaven?
Cargill USA is a sprawling private US agribusiness with annual revenue totalling around $US110 billion last financial year.
Through its Australian subsidiary, Cargill Australia, it owns 50 per cent of Australia's second largest meat processor Teys, but the Australian arm did not actively defend the appeal in the Federal Court.
Little is known about Branhaven, which described itself in press releases as a "private holding company".
Branhaven bought biotechnology company Metamorphix Inc in 2011 after it declared bankruptcy.
The company holds the patent for BeefGen genomics (DNA) tools in the United States.
During last year's hearing, Branhaven was represented by law firm K&L Gates.
K&L Gates is now pursuing their former client in the Supreme Court for unpaid legal bills, and has sought freezing orders and injunctions on the patent application until it retrieves the money it alleges it is owed.
Senator Barry O'Sullivan indicated in 2016 he would push for a Senate inquiry into the matter, but nothing has happened since.