Patent eligibility restrictions hit life sciences and tech

After years of issuing rulings limiting what can be patented, the Supreme Court turned its attention squarely toward patent eligibility in the life sciences and technology fields.

Overturning a 30-year practice by the U.S. Patent & Trademark Office of awarding patents on isolated DNA sequences, the court in June declared that Myriad Genetics’ patents on two human genes linked to a higher risk of breast cancer were invalid.  That decision came on the heels of a 2012 ruling that a certain personalized medicine test for determining proper drug dosages was a patent-ineligible “law of nature.”  Just two years earlier, the court affirmed the rejection of a method patent application on a process for hedging losses in the energy industry.

“There’s a clear one-way trend toward narrowing patent eligibility,” says Morrison & Foerster partner Matthew Kreeger, “and there’s no reason to think that will change.”

The Myriad decision in particular has raised concerns in the life sciences sector about the validity of patents on naturally occurring substances that are used in pharmaceuticals, says Morrison & Foerster partner Catherine Polizzi, who counsels Genentech and other prominent organizations.  For example, it’s now unclear whether a compound like the one used to make the anti-cancer drug paclitaxel—which was isolated from the bark of the Pacific yew tree in the 1960s—could get patent protection today.

Whether such discoveries would still be patentable will likely become clearer over the next few months, as the USPTO issues rules detailing how it will apply the court’s decision.  Subsequent lower court decisions could narrow the ruling’s impact by limiting its application only to patents on isolated human DNA.

But the Supreme Court appears to have adopted the widespread belief that the PTO has been issuing too many low-quality patents, says Kreeger.  And that could set the stage for more decisions limiting patent eligibility in other sectors.  Many believe the Supreme Court is likely next year to take up an appeal of the CLS Bank v. Alice Corp. decision, in which the Federal Circuit was deeply divided on the appropriate standards for determining which software patents are valid.

Limitations on patent eligibility could prompt some companies to protect their innovations as trade secrets, rather than patents, Kreeger says.  However, that might be problematic in certain sectors—such as pharmaceuticals—where many products could be readily reverse-engineered.

Polizzi says the Myriad decision means smart patent drafting is more important than ever, particularly in biotech.  The court said that patents on cDNA—DNA that has been synthesized in a laboratory and is not naturally occurring—are still valid.  Patent applicants should show how they’ve altered a naturally occurring product to make it different.

“Creative solutions are more important than ever, and that requires strong interface between IP lawyers and scientists,” says Polizzi.  “There really are no shortcuts.”