Originally Published on Forbes.com - May 22, 2013.
The U.S. Supreme Court heard oral arguments last month in the matter of Association for Molecular Pathology v. Myriad Genetics, a curious case that does not bode well for America’s biotechnology industry and could overturn 30 years of U.S. patent policy.
This case has been orchestrated by the American Civil Liberties Union (ACLU), representing a coalition of public interest petitioners. Ostensibly, the ACLU wants to drive down the cost of health care in the United States by eliminating patent protection for so-called “gene patents” held by Myriad Genetics. The ACLU would like us to believe that gene patents are fundamentally wrong – and that they are blocking the development of personalized medicine.
At issue is whether the composition-of-matter claims in patents owned by Myriad are eligible for patent protection. These patents are based on the discovery that mutations of two gene sequences – BRCA1 and BRCA2 – increase some women’s susceptibility to breast or ovarian cancer. The inventors filed for patents and Myriad raised and spent more than $500 million to develop genetic screening tests.
As we await the Supreme Court’s decision, which is expected next month, here are four curiosities to be aware of in the case.
Curiosity #1: The Obama Administration’s Position on Gene Patents
The Obama administration has decided to weigh in largely on the side of the ACLU, despite a longstanding policy of the U.S. Patent and Trademark Office (USPTO) in favor of gene patents.
In fact, the USPTO has granted thousands of patents on DNA sequences – like those in the BRCA mutations – since 1982. USPTO guidelines state that compositions of matter derived from genetic material “can be the basis for a patent” where the particular gene (a molecule) is “isolated from its natural state and processed through purifying steps that separate the gene from other molecules naturally associated with it.”
The Obama administration has taken a slightly different position than the ACLU, saying that some of Myriad’s claims are patentable while others are not. At the oral arguments, Solicitor General Donald Verrilli argued that isolated DNA should be off limits because it is a product of nature, while some of Myriad’s claims to “complimentary DNA” (cDNA) are permissible because cDNA can be synthesized. The logic of this compromise position is deeply flawed because isolated DNA can also be synthesized. Moreover, cDNA is simply a condensed version of genetic DNA; it can just as well be considered “more isolated DNA.”
Even if the Court adopts the Solicitor General’s compromise position, it still opens a Pandora’s Box of questions about the limits of this new doctrine. Gene patents are part of a larger class of biotechnology patents – perhaps more than 100,000 – that have likewise enjoyed long-standing USPTO and judicial approval. A brief submitted by the industry group BIO identifies numerous other biotech inventions that could be ensnared by prohibiting the patenting of isolated biological materials: stem cells, vaccines (derived from live viruses), antibiotics (isolated from bacteria), insulin, human growth hormone and a slew of industrially or therapeutically useful enzymes.
Curiosity #2: The Questions Raised by the Supreme Court During Oral Arguments
The questions raised by several members of the Court during oral arguments suggest that the distinction between isolated DNA and isolated cDNA was not foremost in their minds. Justice Sotomayor, for example, posed a hypothetical question about baking cookies from natural materials and asked whether she could get a patent on salt or flour. Justice Kagan asked whether the first person who found the liver should have gotten a patent on it. Justice Breyer was preoccupied with the possibility that isolated BRCA genes could actually exist in nature through some freak happenstance.
It is hard to make any predictions based on the Supreme Court’s reductio ad absurdum approach to patent law issues. However, for the past several years, the Supreme Court has been trying to rein in the scope of patents. Judicial activism has resulted in whole classes of inventions being declared ineligible for patent protection.
The Court’s 2012 decision in Mayo v. Prometheus sent shockwaves through the intellectual property community by invalidating patents on medical diagnostic methods, invoking a rarely used judicial doctrine to bar patents that essentially claim an abstract idea, law of nature or inhibit the use of natural laws in making further discoveries.
The Myriad case threatens to hack away yet another class of inventions from patent protection. A decision in favor of the petitioners in this case could bar future patents on a host of biological materials and invalidate thousands of already issued patents.
Curiosity #3: The ACLU’s Argument that Gene Patents Increase Medical Costs
Even if the Court decides that some or all of Myriad’s claims are ineligible for patent protection, it is not at all clear whether the social policy objective of reducing health care costs would be achieved.
Many gene patents are based on discoveries from the 1990s, and the 20 years of patent protection for these inventions will soon expire. (Even if they survive this litigation, Myriad’s patents will expire by late 2015.) Thus, the post-patent marketplace – rather than a victory for the ACLU – will largely determine the cost of genetic testing in the future.
Curiosity #4: Barring Gene Patents Contradicts the Government’s Stance on Free Trade Negotiations
In negotiating NAFTA, as well as in talks currently underway with countries like Japan for a Trans-Pacific Partnership (TPP), the U.S. Commerce Department insisted that other countries broadly define patentable subject matter and provide patent protection for diagnostic methods and isolated biological materials – at the same time the Supreme Court unravels patent protection for these categories of inventions at home.
All in all, a loss for Myriad may have serious unintended consequences for other inventions derived from biological materials and create a disincentive for future investments in biotechnology research.