Expert Comment: Myriad’s loss means gene patents advance to next level.
May 18, 2010 | On Monday, March 29, 2010, the United States District Court for the Southern District of New York delivered a serious blow to human gene patent holders. The opinion, the first round in the closely followed Association for Molecular Pathology v. United States Patent and Trademark Office (widely known as the ACLU v. Myriad Genetics case), invalidates several patents with claims covering genes associated with breast cancer. The result surprised many in the biotechnology industry because the broad holding, if upheld on appeal, would eliminate future gene patenting as well as effectively make existing gene patents invalid.
The United States Patent Office (USPTO) has issued several gene patents giving extensive control over BRCA1 and BRCA2 beast cancer genes to Myriad Genetics and the University of Utah Research Foundation. The patents also contained some broad claims to diagnostic methods. The patents prevent others from testing for these genes or developing alternative tests, which makes it practically impossible for women to use another company or get an outside second opinion about test results. Myriad thus is the only laboratory in the United States where commercial diagnostic testing can be performed. Moreover, the tests are expensive — Myriad has charged a relatively high rate (over $3,000) for the tests, which places them out of the reach of many.
The patents covering the BRCA1 and BRCA2 genes are not unusual or unique. The USPTO takes the position that genes are chemical compounds, albeit complex ones, and thus qualify for potential patenting as compositions of matter. And while a naturally occurring product as it exists in nature cannot be patented, the USPTO has allowed patents on naturally occurring products that have been purified, isolated, or otherwise altered. For this reason, gene patents have been issued in the U.S. for decades. The National Institute of Health estimates the number of patents in the United States that cover “isolated” or “purified” genes to be around 20% of all human genes. These include genes that have been associated with forms of cancer, Alzheimer’s, and other diseases.
Last year, the American Civil Liberties Union (ACLU) decided to challenge the validity of Myriad’s gene patents and in so doing, attacked the legitimacy of all gene patents issued to date (see, "Patent Rights and Civil Wrongs", Bio•IT World, Jul 2009). The ACLU filed a lawsuit in federal court in New York on behalf of several individuals, medical professionals, and advocacy organizations. Among the named defendants were the United States Patent and Trademark Office (USPTO), which had granted the patents, and Myriad Genetics, the company in control of the patents.
The ACLU was smart. They chose a very sympathetic group of plaintiffs. Among them was a patient who was unable to obtain a second opinion on her breast cancer analysis test, a patient who could not get Medicaid to cover the cost of her test, and a patient who submitted a blood sample to Myriad which her insurance company informed her it would cover, but then Myriad allegedly would not accept that particular insurance coverage.
The ACLU’s suit attacked both the patentability of human genetic sequences, and at least some form of diagnostic method claims. In hopes of winning the case before it went to trial, the plaintiffs filed a motion for summary judgment, asserting that human genetic sequences and the scientific enquiry of looking at a gene or comparing two genes constitute natural phenomena, laws of nature and abstract ideas, none of which are patentable. The defendants opposed countered with a cross-motion for summary judgment seeking a declaration that the patent claims were valid. The USPTO also moved for dismissal of the constitutional claims.
The March 29th decision surprised many when the court granted the ACLU’s motion for summary judgment seeking to invalidate the patents in question. Many commentators, for a variety of both procedural and fact-specific reasons, believed a summary judgment victory to be “the longest of longshots” because gene patents had been granted for some time, and the high threshold that must be met for a summary judgment victory. Summary judgment is appropriate only when “no rational jury could find in favor of the nonmoving party because the evidence to support its case is so slight [and] there is no genuine issue of material fact”. Despite this, the court held the patents invalid—essentially saying the case wasn’t even a close call.
In a thorough 156-page analysis, the judge relied on U.S. Supreme Court precedent to determine that the purification of a natural product, without more, could not transform it into patentable subject matter. Since the isolated DNA being claimed was not “markedly different” from native DNA, the patent claims were held to be invalid. This decision, if upheld by the Federal Circuit Court of Appeals or the U.S. Supreme Court, will prevent the U.S. Patent and Trademark Office from issuing similar gene patents in the future, and will potentially invalidate similar claims in many existing patents.
Creativity of Innovation
This is only round one of the fight. The case undoubtedly will be appealed to the Federal Circuit Court of Appeals, and the losing side in that arena is likely to seek review by the United States Supreme Court. Given the Supreme Court’s recent interest in the area of patentable subject matter (see, "Diagnosing Bilski," Bio•IT World, Jan 2010), the odds are good that the issue of gene patentability will ultimately be resolved in the nation’s highest court.
The impacts of the final decision will be significant for pending patent applications, patents already granted, and future research. If the plaintiffs prevail in their attempt to invalidate these gene patents, the USPTO has indicated that it would revise its patent examination policies to prevent applicants from obtaining gene patents in the future. Applicants would still be able to get patents directed to genetic material, but would have to show that their claimed invention had “markedly different characteristics” from native DNA. This weakened patent protection will require more creativity to retain exclusivity and attract capital. In anticipation, applicants with currently pending applications should examine their current claims and consider adding claims to inventions with “markedly different characteristics”, if possible. If the decision is upheld, then the chances of having at least some of the claims survive are greatly improved.
Such a decision also would adversely impact a significant number of gene patents that have already been issued. However, as there is great variation in the style and scope of claims, not all claims directed to genetic material will be invalid. Thus, it is possible that only some of the claims in a particular patent may be invalid. Each patent claim would have to be analyzed individually to determine whether it was directed to patentable subject matter.
Finally, if patent protection for human genes is weakened, this could be a market changer for future research and development involving genes. The biotechnology industry has invested considerable money into gene patents and the loss of protection could be detrimental, possibly pushing future R&D to universities. The impact could easily reach beyond the diagnostic testing realm and may affect any company whose research is dependent wholly on extracting a product’s active ingredients from an animal or plant discovery.
The recent uncertainty over patentable subject matter has already been felt by the biotechnology industry. Reports indicate that some investors are hesitant to commit millions of dollars to R&D for new diagnostic tests and drugs given the current uncertainty in the law protecting method and gene patents. Regardless of which side remains standing, a final decision on who ultimately owns the rights to genes will provide the biotech industry, researchers, and patients with the certainty they crave. However, as the biotechnology industry has demonstrated time and again, it is the creativity of innovation—not legal certainty—that ultimately drives development. •
W. Edward Ramage is chair of the Intellectual Property Group at Baker Donelson. Claire Cowart Haltom is a health care attorney at Baker Donelson. They can be reached at email@example.com.