The recent interlocutory decision in Scidera, Inc. v Meat and Livestock Australia Limited (No 2) [2025] FCA 1236 considered a novel question in Australian patent law: can a method claim that does not result in a product be infringed where not all steps are performed within the patent area?

For now, the question remains unanswered. The case raises complex issues of claim construction and statutory interpretation, which the Court considered inappropriate for summary determination and more properly resolved at trial.

Background
The proceeding arose from an interlocutory application by Zoetis seeking summary dismissal of all infringement claims against it.

The patent in suit, owned by Scidera, is directed to the use of a method or system to identify or infer a trait of a bovine subject from a nucleic acid sample of the bovine subject. The method comprises identifying in the nucleic acid sample an occurrence of at least three single nucleotide polymorphisms (SNPs) wherein each of the at least three SNPs satisfies particular requirements.

Zoetis was alleged to have provided genomic selection services in Australia for identifying bovine traits of economic interest in beef and dairy cattle, using high density SNP Chips to perform SNP testing of genetic material.  Scidera alleged that these activities constituted direct infringement of the asserted method claims.

Zoetis sought summary dismissal on the basis that, although biological samples were collected in Australia, the key step of SNP testing was performed in the United States, with results subsequently sent back to Australia. That is, the essential step of SNP testing was conducted outside the patent area and therefore there is no infringement of the claims.

Relevant law
Section 13 of the Patents Act 1990 (Cth) provides that a patent gives the patentee the exclusive rights, during the term of the patent, to exploit the invention and that a patent has effect throughout the patent area.

The “patent area” is defined in Schedule 1 to include Australia, the Australian continental shelf, the waters above the Australian continental shelf, and the airspace above Australia and the Australian continental shelf.

The Key Question: Must all essential integers of a method claim be performed in Australia
Justice Rofe identified the central issue at [96] as:

“whether all the essential integers of a claimed method or process must be performed within the patent area for there to be infringement of said method or process claim that does not result in a product.”

A critical step to answering this question is claim construction.

The parties disputed the construction of the feature of claim 1 which reads as follows “identifying in the nucleic acid sample an occurrence of at least three single nucleotide polymorphisms (SNPs).”

Zoetis construed this feature as requiring a physical act of conducting SNP testing on a nucleic acid sample in order to identify the SNPs in the sample. On this view, the essential step of the
claimed method occurred exclusively outside the patent area.

Therefore, Zoetis argued for a strict approach that s 13 of the Patents Act requires that performance of all the essential integers of the method claim must occur within the patent area. It contended that because a key step of the claimed method (i.e. genetic analysis of a bovine sample) is performed in the US, the performance of that step could not give rise to infringement.

Scidera advanced a construction of claim 1, in that the above feature is not limited to conducting a physical test on the nucleic acid sample and that “the SNPs can also be identified indirectly by examining a polypeptide encoded by a particular gene where the polymorphism in that gene is associated with an amino acid change in the polypeptide.” This construction formed part of Scidera’s argument that relevant aspects of the claimed method were carried out in Australia.

Furthermore, Scidera advanced a broad interpretation that the Patents Act does not require that all the essential integers of a claimed method be performed within the patent area for infringement to occur. Relying on UK authorities,¹ Scidera submitted that an “in substance” approach should be adopted, whereby infringement may arise if the method is effectively “in substance” carried out within Australia despite some elements occurring offshore.

The Decision
The Court dismissed Zoetis’ application for summary dismissal, allowing the infringement claims to proceed to trial.

Justice Rofe was critical of Zoetis’ narrow approach to claim construction and expressed a preliminary preference for Scidera’s broader interpretation of claim 1. However, her Honour noted that adopting Scidera’s construction rendered the territorial infringement question “less clear cut”.

Importantly, the Court declined to determine the novel legal question at the interlocutory stage. The issues raised, including claim construction, the identification of essential integers, and the territorial scope of infringement, were considered to involve complex questions of fact and law warranting full consideration and detailed submissions at trial.

In relation to the UK authorities, while no definitive ruling was made as to the applicability of the “in substance” approach, her Honour posits that there may be an arguable case that the approach may align with a construction of “exploit” which gives effect to the object clause of the Patents Act, that is, that the Australian patent system “remain adaptable and fit-for-purpose” and “provide […] benefits [that] are achieved through incentivising innovation and the dissemination of technology […]”.

Although the decision does not resolve the key question, it underscores the difficulty of applying territorial limits on infringement to modern, cross-border life sciences technologies.

The trial is expected to provide useful guidance on how Australian courts will approach method claims where different steps are performed in different jurisdictions, particularly in sectors such as genomics and pharmaceuticals where different steps of a method are routinely performed in different countries.

For more information in relation to this decision, please contact Catrina Olivera or Daniel McKinley.

[1]Illumina, Inc v Premaitha Health Plc [2017] EWHC 2930; MenasheBusiness Mercantile Ltd v William Hill Organisation Ltd [2003] 1 All ER 279

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