Can infringement be avoided by performing part of a diagnostic method claim in another jurisdiction?

In a recent interlocutory decision, the Federal Court of Australia considered the novel question of whether infringement of a process claim that does not result in a product (e.g., a diagnostic method) requires all the essential integers to performed entirely within the patent jurisdiction.

Drawing on UK authorities that have previously considered the same question, Rofe J in Scidera, Inc. v Meat and Livestock Australia Limited (No 2) [2025] FCA 1236 essentially answered "it's complicated", with the issue now to be explored further at trial. In the meantime, the decision suggests that the "in substance" approach to infringement arising from UK authorities may be palatable to the Australian courts and aligns with the objects of the Patents Act 1990 (Cth) (Act).

Background

The relevant claims are directed to: "A method for identifying a trait of a bovine subject from a nucleic acid sample of the bovine subject, comprising identifying in the nucleic acid sample an occurrence of at least three single nucleotide polymorphisms (SNPs) …". The method allows for identification of bovine traits that are desirable for the beef industry (e.g., marbling, tenderness and quality grade).

The patentee, Scidera, Inc., alleged that Zoetis Australia infringed its diagnostic method claims by collecting biological samples from Australian cattle and sending it to Zoetis Inc. in the United States for SNP testing, with the results being transmitted back to Australia for interpretation. Zoetis Australia submitted that, because the SNP testing is conducted outside Australia, there can be no infringement because all essential steps of the claimed method must occur within the patent jurisdiction.

Claim construction

Bovine Kat

Despite seemingly being settled in an earlier trial relating to the same patent (Meat & Livestock Australia Limited v Cargill, Inc (No 2) [2019] FCA 33), the issue of claim construction was relitigated in Scidera. Zoetis contended that the claim integer "identifying in the nucleic acid sample an occurrence of at least three single [SNPs]" requires a physical act of SNP testing, and that the feature of the method being "for identifying a trait" imposes a purpose limitation, such that the identification of the relevant trait is not an essential feature of the claim and, as a result, the claimed method was performed entirely outside Australia.

Rofe J provisionally rejected this construction, preferring the construction proffered by Scidera, Inc., which aligned with that settled in Cargill: "Claim 1 claims a method for identifying a trait, such that in addition to the identification of the at least three SNPs, there is a step of identifying or drawing an inference about the trait of interest". In particular, the Court criticised Zoetis Australia's construction for impermissibly disaggregating the claim integers.

The "in substance" approach to infringement

Scidera, Inc. relied on UK authorities demonstrating that infringement can occur even when an essential method step has been performed outside the patent jurisdiction to advance an "in substance" approach to assessing infringement (Illumina, Inc v Premaitha Health Plc [2017] EWHC 2930 (Pat) and Menashe Business Mercantile Ltd v William Hill Organisation Ltd [2003] 1 All ER 279). In contrast, Zoetis Australia argued against this approach on the basis it is not written into the Act, and in any case, the substance of the invention was performed in the United States.

While her Honour did not make any definitive ruling on the applicability of the "in substance" approach under Australian law, Rofe J did posit that the object clause introduced into the Act in 2020 could weigh in favour of its application. Rofe J also drew a comparison with the Full Court's findings in Ariosa Diagnostics, Inc v Sequenom, Inc [2021] FCAFC 101, which confirmed that diagnostic method claims are patentable in Australia but in that case were not infringed because all the essential elements of the claim were performed outside Australia.

Where to next?

Given the complexity of the question of law, Rofe J did not consider it appropriate to summarily dismiss Scidera's infringement allegations, and the matter will be formally addressed at trial. However, the interlocutory decision heralds some interesting discussions to follow, and leaves the door open to an "in substance" approach to infringement in Australia. Stay tuned for further updates!