Rapid changes resulting from personalized medicine, including the ability to use individual patient biomarker data to generate a tailored treatment, are transforming healthcare. New business structures are evolving in the healthcare marketplace to meet the need for integrating diagnostic data to deliver individualized patient treatment. Diagnostic and therapeutic businesses are forming increasingly complex contractual arrangements and partnerships to deliver improved treatment to patients.

At the same time, patent issues in the field of personalized medicine have become more complex. One group of Supreme Court decisions (Prometheus and Myriad) has restricted the types of claims that can be granted by the US Patent Office, while leaving other claim types intact. Despite the complexity introduced into the patent process by these decisions, the need to protect inventions in personalized medicine will drive more and more patenting. In many cases, these patents are critical to provide the security that businesses need in order to invest in the promising new treatments heralded by personalized medicine.

Another recent Supreme Court decision (Limelight) has clarified that infringement of a multi-step method patent only occurs when a single party performs all steps of the patent’s claim or else directs or controls a combination of entities who perform all steps of the patent. Therefore, in the case of a personalized medicine patent having a diagnostic step and a therapeutic step, proving infringement requires evidence that a single entity performed both steps or that one entity controlled or directed others to perform the steps. The increasing level of collaboration across diagnostic and therapeutic business entities heightens the risks that such partnerships may be viewed as a single actor for purposes of patent infringement.

Charting a safe course for personalized medicine requires careful consideration of the patent issues. When businesses form new contractual arrangements or partnerships to incorporate diagnostic information for the purpose of selecting a treatment approach for an individual patient, one step they can take is to incorporate provisions addressing how infringement defense will be handled and indemnification provisions to clarify who bears the risk of infringement liability. Another step they can take is to perform a freedom to operate assessment in order to identify patent risks up front before launching a new line of service. Taking these steps may help to avoid unexpected barriers to delivering on the promise of personalized medicine.

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