A district court judge in the United States has ruled that patents should not have been awarded over the breast and ovarian cancer genes BRCA1 and 2.

The decision raises serious concerns about whether patents should be awarded on human and other genes and proteins found in nature.

It is the first time a court has found patents on genes unlawful and calls into question the validity of patents now held on about 2,000 human genes.

The case, brought by the American Civil Liberties Union (ACLU), was prompted by the actions of patent owner Myriad Genetics who claims the exclusive right to test for BRCA1 and BRCA2.

The tests show whether a woman is more susceptible to developing breast and ovarian cancer.

ACLU attorney Chris Hansen said: "Today's ruling is a victory for the free flow of ideas in scientific research."

Myriad Genetics charges women in the US around $3,700 for the test and the company does not allow second opinions.

The exclusive licence for the tests in Australia is owned by Genetic Technologies Limited which has "gifted" its intellectual property rights to Australian institutions and does not impose royalties here.

In 2003 and 2008, however, Genetic Technologies Limited sent legal letters to Westmead Hospital and the Peter MacCallum Cancer Institute in Victoria to cease testing for the BRCA1 and 2 genes.

In the district court in New York, Judge Robert Sweet found that certain respects of the seven patents awarded over the human genes are invalid.

Judge Sweet found that removing the gene from its natural environment, the body, is not sufficiently different to what is found in nature, therefore such processes are a "discovery" and not an "invention", making any patent invalid.

On the diagnostic side, the judgment also says the use of the gene material in the test does not make the test patentable.

There is no transformation that happens to the biological materials themselves that means the company can claim an "invention" and therefore be awarded a patent over the genes.

Myriad Genetics has yet to announce whether it will appeal the decision.

In Australia, a Senate inquiry into gene patents is expected to report in June.

It has heard evidence from both sides of the argument including from Australia's biotech industry, which says any moves to ban patents on genes will be disastrous for investment and the biotech industry as a whole.