In this update, we focus on two recent significant decisions: the decision in the Australian case of Peterson v Merck Sharp & Dohme (Aust) Pty Ltd (No 6) [2013] FCA 447 and the decision of the US Supreme Court in Association for Molecular Pathology v Myriad Genetics, Inc, 569 US_(2013).

Peterson v Merck Sharp & Dohme

In the most recent iteration of the Vioxx proceedings, Justice Jessup was asked to approve a settlement scheme for the remaining group members in the pharmaceutical class action. Rejecting the proposed settlement scheme, his Honour held that the proposal which had been agreed between the parties was not "fair and reasonable" as is required by the Court. This determination was made predominately on two grounds:

  • First, the settlement scheme did not properly take into account any differences in the strength of each of the individual group member's claims (including the fact that some group members would have had independent risk factors for the injury, while others would not); and
  • Second, the payment of the proposed lump sum amounts to all group members without adequate discretion would constitute a windfall gain for those group members who did have other risk factors for injury and injustice for those group members who did not.

Justice Jessup's decision reiterates the need for any class action settlement scheme to be in the interests of all of the group members. Absent this requirement, it is clear that the Court will not act as a rubber stamp of a settlement scheme, even where the parties reach agreement.

Association for Molecular Pathology v Myriad Genetics

A few months after the Federal Court of Australia held in Cancer Voices Australia v Myriad Genetics Inc [2013] FCA 65 that isolated naturally occurring nucleic acid constituted "an artificially created state of affairs" and is patentable subject matter, the US Supreme Court has handed down its decision in the similar US case. The US Supreme Court has ruled that isolated naturally occurring DNA is not patentable subject matter, but that cDNA is.

An appeal has been filed in Australia and is expected to be heard in August 2013. While there is no direct precedent created by the US decision, it is still likely to be referred to by the Australian parties. We will keep you updated on any further decision in Australia.

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