SCOTUS: Human Genes Cannot Be Patented. Is This the End or Beginning of Genetic Research?

by JD Supra Perspectives
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"Since the decision will allow more people to use the isolated genes in testing, one would think that could create a possible positive impact in making personalized medicine more affordable." —Chuck Hauff partner at Snell & Wilmer LLP

"The interesting question is how will this affect ancillary industries, such as those in natural antibiotics or nanotech, both of which rely on patenting natural products. These products are isolated from nature and their eligibility is now in question..." —Dr. Jorge A. Goldstein, founding partner at DC-based Sterne, Kessler, Goldstein & Fox

For a Legal Perspective on today's much-anticipated U.S. Supreme Court "Myriad" decision that naturally occuring substances (and, specifically, human genes) are not patentable, we turned to IP attorneys writing on JD Supra:

Q: What does the Myriad decision mean for research? Will companies forego this type of research if they cannot patent it?

"...patent law is all about balance.  If you want to spur invention, you need to give inventors two things:  incentive and knowledge. But the two are in tension. Broader patent protection means more incentive; narrower patent protection means a greater knowledge base. The Court’s role is to balance them."

Gideon Schor Gideon Schor, litigation partner at Wilson Sonsini Goodrich & Rosati: "You know you’re living in the end of days when both the ACLU and the Wall Street Journal praise the same Supreme Court decision. What’s the larger meaning? The Court struck a balance that a broad spectrum of interests can at least live with, if not embrace. And patent law is all about balance. If you want to spur invention, you need to give inventors two things: incentive and knowledge. But the two are in tension. Broader patent protection means more incentive; narrower patent protection means a greater knowledge base. The Court’s role is to balance them. The brief that we filed on behalf of Dr. Eric Lander in the case suggested a balance – isolated genomic DNA is patent-ineligible, while cDNA is patent-eligible – that the Court adopted. We also know that the science cited in our brief was likely persuasive to the Court: At oral argument, three Justices referred to our brief in questioning Myriad’s counsel. So the Court was apparently struck by the thirty years of scientific papers we cited showing that isolated genomic DNA fragments are found naturally occurring both in cells and outside the cell (e.g., in sputum, stool, urine, and cell-free blood).  The science was so strong, in fact, that the real question was not whether the Court would reverse the Federal Circuit (which had held, contrary to all the science, that isolated genomic DNA fragments are not naturally occurring) but rather whether the Court would issue a broad or a narrow holding. In the event, the Court’s holding was careful, and its language was spare."
Eli Loots Dr. Eli Loots, partner at Knobbe Martens: “One of the most important implications of this decision is that it pushes what constitutes patentable subject matter further along the development chain. Essentially, companies are encouraged to push the development process further along before obtaining a patent. Companies may be waiting until they have something closer to a final product before they file, since a final product will be significantly different from the original naturally occurring substance. To some extent, delaying actually helps the development process because when you push things further down the process, the products become more distinguished and you can actually end up with more products.”
Randy V. Clower Dr. Randy Clower, associate at Phillips Lytle LLP: “Of biotechnologies most likely to enjoy market success, a large percentage disproportionately emanate from university research and their cognate spin-offs. The monetary fragility of these embryonic-stage companies imparts the categorical need for patent protection, i.e., to attract investors. As such, the holding in Myriad, however narrow, will indeed impact the biotech industry if for no other reason than the inevitability of waning investor confidence. Going forward, moreover, biotechnologies relating to stem cells, gene therapy and personalized medicine will be confronted with uncertainties ascribed to the ensuing litigation over “intragenic cDNA” a non sequitur in the scientific community.”

"This decision certainly has the potential to open up research avenues that were previously foreclosed by Myriad's patents..."

Charles Hauff Jr. Chuck Hauff, partner and Intellectual Property group leader at Snell & Wilmer LLP: "I don't think that companies will forego this type of biomedical research as a result of this decision. The Court's protection of cDNA is still something of value for biotech companies. The decision still allows companies to pursue some protection in this space and specifically notes that methods and applications of knowledge are not implicated.

There was a sense that Myriad's patents blocked helpful research in other areas that were unrelated to the BRCA1 and BRCA2 gene patents. This decision certainly has the potential to open up research avenues that were previously foreclosed by Myriad's patents. We will see if allowing others access to this information will spur even greater innovation."

Elizabeth Howard Dr. Elizabeth Howard, partner and co-chair of the Life Sciences group at Orrick, Herrington & Sutcliffe LLP : "The really interesting question is ‘How far does this go and what is really going to be the fall out from this decision?' I don’t think we know the answer to that yet. What is relatively clear is that any claim to an isolated naturally occurring compound is open to challenge as patent ineligible. The decision will not be confined in its impact to isolated DNA.  It could be applied to anything that is naturally occurring like a chemical that is purified but no different than the chemical in its native state. Another important question is ‘Will this have an effect on antibody claims?’ If antibodies are naturally occurring and they are isolated from a naturally occurring cell that has been exposed to an antigen, is that going to be rendered patent ineligible? I see some potential battles brewing here."

Q: If a company came to you with an idea that involved research on naturally occurring substances, how would you advise them to structure their process to produce something that could be patented?

"Where before companies were racing to patent their discoveries, now, they may want to wait a little later…”

Eli LootsEli Loots: “If the invention you are seeking to patent is nothing more than a discovery, you may want to wait to file a patent until you have something more akin to an invention. The decision essentially says that in order to be patent eligible, you really need a stronger story as to why your invention takes something from its natural state and turns it into something that is actually an invention.

The real obstacle here, especially for biotech, is that companies want to raise money. Typically, as soon as they isolate the gene or peptide, they normally file a patent and go out and present what they’ve found in order to raise money. This decision could change that process. Companies may want to keep early discoveries confidential and that may impact their ability to raise capital. Where before companies were racing to patent their discoveries, now, they may want to wait a little later.”

Charles Hauff Jr.Chuck Hauff: "Typical strategies will still be used from a research perspective. Researchers will use the same processes to determine precisely what genetic sequences give rise to potential medical conditions. What will happen is that patent practitioners will draft patent applications in a very different way. The Court ruled that if you haven't added enough to the naturally occurring substance, then your research is patent ineligible. For example, the Court in Prometheus has not said exactly how much is enough with respect to certain diagnostic methods, but I expect to see continued activity in this area. Again, the research will be the same, but the patent application will be drafted in a very different way in light of Myriad and Prometheus."

Randy V. ClowerRandy Clower: “Assert claims to an application of the naturally occurring substance. Method claims would be very valuable, notwithstanding Prometheus.”

 

Elizabeth HowardElizabeth Howard: “I would direct them to find a useful and practical use for their product in a new application of that compound. If it’s truly a newly discovered compound then there should be a new use for that compound; of course, they’d still have to worry about whether that use was obvious. They are still bound by all of the other traditional patent requirements. The main point is that after you identify the compound with the desired quality or activity, you have to keep the research going. You can’t just isolate it and hand it off to someone else to find a use for it.”

Q: Myriad and companies like it have been asserting these types of patents in litigation for some time. What happens to the judgments that Myriad has already recovered for infringement of this patent??

"...it's important to note that the patents were not struck in total--just those specific patent claims that were related to the isolated genes and synthetic cDNA."

Eli LootsEli Loots: “The decision noted that a number of claims are still valid. To the extent any of the decisions or license agreements were based on the still valid claims then there wouldn’t much change. To the extent that the settlements are based on these invalidated patents, people will begin revisiting those agreements to see what there options are.“

Charles Hauff Jr.Chuck Hauff: "It really depends on the nature of those previous decisions and settlements. I suspect there will be some individuals that will challenge whether those payments will need to continue to be made in light of the decision. However, it's important to note that the patents were not struck in total--just those specific patent claims that were related to the isolated genes. So it really depends on what was and was not the subject of those judgments to determine what the impact of the decision will be."?

Q: Will this decision have any affect on the price of medical care?

"Any time you remove one of these barriers, you open up competition and you could see a short term decrease in cost..."

Randy V. ClowerRandy Clower: "Depends. If a wave of copycat companies enter the genomics/biotech market, then prices will decrease, but quality will be a concern. However, costs may rise as dissemination of new advances may be stymied.

 

Charles Hauff Jr.Chuck Hauff: "It's certainly possible. One of the major objections that gave rise to this litigation was Myriad's aggressive enforcement against hospitals and universities for use of the gene and the high price of the test. Since the decision will allow more people to use the isolated genes in testing, one would think that could create a possible positive impact in making personalized medicine more affordable."

Eli LootsEli Loots: “Any time you remove one of these barriers, you open up competition and you could see a short term decrease in cost. It’d be the same type of decrease you’d see when the patent expired on its own. However, in the long run, companies won’t be as incentivized to pursue these technologies. There is likely some short-term benefit but probably at some long-term expense since fewer discoveries will likely be developed in the future. All of this is balanced by the fact that you can still patent new inventions but its just going to be further down the pipeline. There are also some clear approaches that could be used to address the issues raised in the case, but it will likely mean an increase in cost. In addition, the longer timeline may make it more difficult for smaller companies and biotech startups.”

Elizabeth HowardElizabeth Howard: “There were conflicting pieces of evidence in the case regarding what effect this change would have on price and what impact it would have on the market. It may make certain diagnostics less expensive.  However, I would be surprised if it had a material effect on the cost of medical care because there are so many factors that drive price. It’s definitely good news for diagnostic companies but I am unclear what, if any, effect this will have on the market.”

Q: Any other perspective on today's Myriad decision?

"The chilling effect on the biotech industry will be measured by degree rather than possibility..."

Randy V. ClowerRandy Clower: “Those who feel that Myriad, in concert with Prometheus (and Bilski), is or will not be impactful, are naive. The chilling effect on the biotech industry will be measured by degree rather than possibility. Supported by my answer to your question above on the impact on research.”

 

Jorge Goldstein, Ph.D. Dr. Jorge A. Goldstein, founding partner at DC-based Sterne, Kessler, Goldstein & Fox: “This will not affect the portion of the biotech industry that deals with the production of therapeutic proteins,  either natural proteins (such as interferons) and certainly not artificial proteins (such as humanized or chimeric antibodies). This portion of the industry patents genes or gene fragments in recombinant  vectors or in transgenic  cells, and uses these recombinant  forms to produce the proteins. All of such recombinant genes are eligible under the decision, since they are artificial constructs incorporating genes. These constructs can be found in transgenic plants, animals and microbes, so these will not be affected. And the methods of producing proteins from transgenic organisms will not be affected either.

It will not affect gene therapy industries since they also rely on recombinant vectors (artificial constructs) or methods of use for genes.

It will possibly affect the genetic diagnostics industry to the extent they wish to patent unlabeled or unmodified genomic fragments. However if they label the isolated genes by attaching artificial labels (like fluorescent probes)  they can patent the labeled genes and will not be affected. And if they get carefully  drafted patents so the methods of diagnosis are not simply natural correlations (as they were found ineligible in Prometheus v Mayo) they can also get methods of diagnosis patented.

The interesting question is how will this affect ancillary industries, such as those in natural antibiotics or nanotech, both of which rely on patenting natural products. These products are isolated from nature and their eligibility is now in question. The Court said nothing about  precedents such as Parke Davis that upheld , 100 years ago, the eligibility of purified  adrenaline as a composition of matter.  The Myriad case today did not deal with “purified” genes, only “isolated’ genes. This is critical in that the parties stipulated that  isolated did not mean purified. So, there is still hope that if interpreted properly, today’s decision will not preclude the eligibility of purified natural materials, such as purified antibiotics or purified nanotubes. Remains to be seen and I think that after today it will be an uphill struggle.”

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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