Gene Patents in Australia: A Game Theory Approach

Gene patent validity is one of the most controversial issues in patent law. In Australia, the question of whether to eliminate human gene patents has reached both Parliament and the federal courts. Opponents of gene patents argue that gene patents increase the cost of healthcare and impede progress in genetic research. Proponents respond that gene patents are essential incentives for the biotech industry, and that Australia has an obligation to recognize them under the WTO-administered Treaty on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”). Because patents require inventors to publically disclose their discoveries, Australia’s rejection of the gene patent system would allow Australian companies to benefit from these disclosures without compensating the patent holder–implicating industries and legal regimes far beyond its borders. Australia has the power to decide whether gene patents are valuable to its citizens. This comment represents the controversy as a game between Australia and the rest of the developed world, where it “cooperates” if it continues to respect gene patent rights and it “defects” if it declares genes unpatentable. From Australia’s perspective, the immediate economic benefits of eliminating gene patents may outweigh its costs. However, the long-term costs of eliminating gene patents may be unacceptable to proponents of gene patents. In addition, impending advances in genetic sequencing technology will render gene patents economically insignificant, regardless of whether gene patents are a beneficial policy decision. An international solution, which incentivizes cooperation or punishes defection, is necessary for rational state actors to recognize gene patents. Ultimately, this paper proposes three potential solutions to this problem: A) starting a new intellectual property regime for human genes, B) creating a specialized patent regime for human genes, and C) incentivizing individual governments to fund research through public, non-commercial sources