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Jun 18, 2013

A Myriad of Winners

Industry stands to benefit from Supreme Court gene-patenting decision.

A Myriad of Winners

Supreme Court decision has a silver lining for the biotech industry with fall-out predicted to be far less than feared. [© Fineas - Fotolia.com]

  • The U.S. Supreme Court made winners out of both sides in the closely watched case over the patenting of isolated human genetic sequences—including diagnostics developers and the broader biotech industry, which had feared the worst.

    True, the high court gave 20 medical associations and individual doctors led by the Association for Molecular Pathology (AMP) a key victory in overturning Myriad Genetics’ seven patents related to its discovery of the precise location and sequence of breast cancer susceptibility genes BRCA 1 and 2.

    But in their unanimous decision, the justices also held that companies can patent composite DNA (cDNA) and other synthetic genetic material not meeting the “product of nature” exemption from patentability under 35 U.S.C. § 101.

    “cDNA is the commercially most important form of DNA used in biotechnology. [Thursday’s] decision offers urgently needed certainty for research-driven companies that rely on cDNA patents for investment in innovation,” declared the Biotechnology Industry Organization (BIO) in a statement that also criticized the court for upending Myriad’s BRCA 1 and 2 patents.

    Four lawyers who represent diagnostic and biotech clients said test developers will still be able to protect their inventions through increased use of method patents and patents for new applications of gene knowledge.

    “The implications for this decision may not be as far reaching in the biopharma industry as some have speculated,” Lisa A. Haile Ph.D., J.D., a partner with DLA Piper U.S. and co-chair of its global life sciences practice, said in a statement.

    For one thing, Dr. Haile noted, most patentees with gene patents have claims that include cDNA, claims that will remain valid. And science has come a long way from when Myriad patented the BRCA genes, given the rise of synthetic biology.

    “Most diseases, and therefore therapies, are based on much more than just gene sequences,” she said. “So while the decision will impact certain gene-based diagnostics directly, the biotech industry will not likely be significantly altered.”

    Agreeing is Paul M. Rivard, J.D., an attorney with Banner & Witcoff: “With the shift in research away from the use of whole genes, I don’t expect the decision will be too detrimental to the biotech industry.”

    “It will be interesting to see whether and how the decision is applied to other inventions involving purification of naturally occurring materials where the isolation imparts new properties to the material,” Rivard told GEN.

    Tim Worrall, a partner in Dorsey & Whitney, told GEN the decision will prompt many test developers to rethink how they make patent claims. They should strive, he said, to protect their IP without keeping their technologies to themselves.

    “You’ll have to be much more nuanced in your patent strategy,” Worrall said. “You will need very specific claims that are directed to specific nuanced aspects of the technology, and methods. Some companies are deciding that they want to keep everything proprietary and not tell anyone. Whether or not you can have a diagnostic test that does that, I think is questionable.”

    AMP and co-plaintiffs—assisted by the American Civil Liberties Union (ACLU) and Public Patent Foundation—successfully argued that Myriad’s patents were invalid because human genes are unpatentable “products of nature, laws of nature and/or natural phenomena, and abstract ideas or basic human knowledge or thought” under Section 101.

    BRCA 1 and BRCA 2 are among some 4,000 genes protected by patents. “The ruling will certainly impact a large number of issued patents—in particular, claims that encompass both cDNA and naturally occurring DNA are most vulnerable,” Michael J. Belliveau, Ph.D., J.D., a partner in Clark & Elbing, told GEN.

    With the U.S. Patent and Trademark Office (USPTO) unlikely to overturn existing claims, challenges to existing patents will likely arise case-by-case—for example, if competitors seek access to a rival company’s patented diagnostic technique using isolated DNA.

    “I don’t know if this is going to trigger a large number of lawsuits,” Dr. Belliveau said. “If you’re the patent owner and you know that you have a patent that likely isn’t going to withstand scrutiny, you would just give permission to the competitor to use the technology.”

    With more companies set to offer genetic tests as a result, the price of existing genetic diagnostic tests can be expected to fall short-term. Myriad’s BRACAnalysis test costs $3,340. Pathway Genomics said in August will launch its own BRCA test "at a substantially lower cost than the competition" as part of its Hereditary Cancer DNA Insight(SM) test, which will also be competitively priced, spokesperson Terri Somers told GEN. Pathway is but one firm making such claims related to BRCA1/2 testing.

  • Case Closed?

    Two key co-plaintiffs see no need for new litigation over the remaining gene patents.

    “I don’t think that an affirmative lawsuit needs to be brought of the type that we brought in light of this ruling,” Susan Park, senior staff attorney with the ACLU Women's Rights Project and co-counsel on the case, said during a conference call by the co-plaintiffs with reporters. “In light of this ruling, a lot of scientists in the field will feel comfortable moving forward with activities, even if technically they may infringe on patents that are out there, because this ruling makes such a strong statement about the invalidity about patent claims on isolated DNA.”

    Agreeing with Park was Roger Klein, chair of AMP’s professional relations committee: “Given this opinion and having reviewed a number of these types of patents, our members have a strong basis for believing that many of those patents are in fact invalid, and I suspect then that they’ll be willing to go ahead and proceed in testing patients,” he said.

    Another co-plaintiff added he’ll do just that. “We’re planning to work with the presumption that we’re going to be able to go ahead with offering our full panel of breast cancer risk genes to provide more accurate risk assessment for women, and for that matter men who come from high-risk breast and ovarian cancer families,” said Harry Ostrer, M.D., director of genetic and genomic testing at Montefiore Medical Center.

    Dr. Ostrer, who is also a professor at Albert Einstein College of Medicine of Yeshiva University, said during the case that Myriad blocked his lab from conducting BRCA testing due to a license agreement signed by the company and previous employer New York University in 1998. Myriad unsuccessfully challenged his standing to sue when he changed jobs.

    Gerry J. Elman, editor of Biotechnology Law Review (a journal published by GEN publisher Mary Ann Liebert Inc.), correctly notes that the long litigation over the BRCA gene patents presented an opportunity missed by both sides to achieve their stated goals: establishing ownership—Myriad—and expanding access to lower-cost testing for more people—AMP and co-plaintiffs.

    As he noted in a 2011 article and again Friday, the Supreme Court in eBay Inc. v. MercExchange (2006) allowed eBay and customers to use the “Buy it Now” feature covered by a MercExchange patent. The court reasoned that the same four-factor test used for deciding an injunction instead of money damages should apply to U.S. patent infringement—a test that includes “public interest.” Ellman says public interest could similarly justify licensing use of the molecular tests.

    “There should be second opinion testing. There should be a way that the test can be offered at different prices or for testing different things. All of those are very valuable dialogues to have. But the solution isn’t to say, ‘This shouldn’t be patentable subject matter,’” Ellman told GEN.

    But as GEN noted last year, a licensing system like the one that lets radio stations play Beyoncé is less likely to work in patent-reliant industries like molecular diagnostics, where test developers long ago concluded they can make much more money through patents. With courts unwilling to force compulsory licensing, the opportunity still exists for USPTO or another entity to expand access to genetic testing—especially to underserved patients—through voluntary licenses that offer incentives attractive for industry, such as extended patent exclusivity periods or faster reviews of claims, as well as attractive to hospitals or universities.


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