Company ABC is a biotechnology related company. It created a new organism by doing the genetic manipulation with the traditional existing organism. Advice on the patentability of such genetic manipulation.

In 1972, Anand Chakrabarty, a microbiologist, researcher to the General Electric Company filed a patent application in relation to a bacterium from the genus pseudomonas containing therein, at least two stable energy generating plasmids, each of the said plasmids providing a separate hydrocarbon degradative pathway. It was a man-made, genetically engineered bacterium capable of breaking down multiple components of crude oil. It was asserted that because of this property, which is possessed by no naturally occurring bacteria, the invention could treat oil spills. The patent claims were of three types: First process claim for the method of producing the bacteria Second, claims for an innoculam comprised of a carrier material floating on water such as straw and the new bacteria, and Third, claims to the bacteria itself. The Patent Examiner allowed the claims falling into the first two categories, but rejected the claim for bacteria. The decision rested on two grounds: That microorganisms are products of nature, and That as living things, they are not patentable subject-matter. Later, the Patent Office Board of Appeals reiterated the examiners' decision on the ground that micro-organisms do not fall within the ambit of patentable subject matter since they are living things. Moreover the Court of Custom and Patent Appeals emphasized that this issue was not whether the claimed bacterium was living or inanimate but whether, it constituted an invention made by human intervention. The Court reaffirmed that the bacterium was not a handiwork of nature rather it was Charabarty's own invention. The four statutory categories of inventions, which can be granted patents are process, machine, manufacture and composition of matter. Therefore, on the question as to in which category would the invention fall, the Supreme Court held that Genetically Engineered oil consuming bacterium could be categorized either as composition of matter or a manufacture. The court read the term manufacture in accordance with its dictionary definition, to mean the production of articles for use from raw or prepared materials by giving to these materials, new forms, qualities, properties or combinations whether by hand labour or by machinery. The court obviously turned back to legislative intent of the drafters of the US Patent Act to ascertain the rationale behind using general and broad terminology "any composition of matter" or "manufacture." According to the court, this selection of broad language suggested that the drafters' goal was to stimulate innovation in a wide range of then unknown technologies and scientific fields, a goal that would be frustrated if Congress was repeatedly required to amend the statute so as to explicitly delineate new categories of patentable inventions. The court observed that the legislative history of the Patent Act connotes that the patentable subject matter includes "anything under the sun that is made by man." Chakrabarty simply shuffled genes, changing bacteria that already existed. The widest interpretation by the court, let the broadest amplitude to patentability to the living subject matter. After this historic decision, the US biotech industry flourished and numerous patents have been granted on human made higher life forms such as transgenic crops, mice, fish, cows etc. TRIPs supported the argument for patenting of microorganism in Article 27.3 of TRIPs. It excludes two specific classes of subject matter from patentability: Diagnostic, therapeutic and surgical methods for the treatment of human and animal; and Plants and animals other than microorganism and essentially biological processes for the production of plants or animal other than no biological and microbiological processes. TRIPS allow patenting of the microorganism, however does not define microorganism leaving on member states to formulate their own standards relating to it. Indian Patent Act, 1970 through its Section 3 allows the patenting of microorganism and microbiological processes to be patentable. Therefore, India does not allow patenting of microorganism already in the nature, however genetically modified versions of the same microorganism that result in enhancement of its known efficacies are patentable.