The Myriad decision

The Supreme Court on June 13 issued its decision on Association for Molecular Pathology v. Myriad Genetics. The case was of great interest because we covered it in class this semester. To understand the case, I read more than a dozen articles or commentaries on the decision: in addition to the decision itself, the most useful were a same day report by Jason Rantanen of the PatentlyO blog and this week’s analysis by John Conley of the Genomics Law Report.

The case centered on Myriad’s discovery of two genes (BRCA1 and BRCA2) linked to a greater inherited risk of breast cancer. In an opinion written by Clarence Thomas, the Supreme Court held unanimously that Myriad was not allowed to patent isolated DNA but was allowed to patent composite DNA (cDNA).

As the slip opinion reported:

At issue are claims 1, 2, 5, 6, and 7 of U. S. Patent 5,747,282 (the ’282 patent), claim 1 of U. S. Patent 5,693,473 (the ’473 patent), and claims 1, 6, and 7 of U. S. Patent 5,837,492 (the ’492 patent).

and specifically whether these claims are patentable under 35 U. S. C. §101::

§ 101 - Inventions Patentable:
Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

The difficulty of the case (as with any patent case the Supreme Court is willing to accept) is trading off two conflict policy goals. As Thomas wrote:

patent protection strikes a delicate balance between creating “incentives that lead to creation, invention, and discovery” and “imped[ing] the flow of information that might permit, indeed spur, invention.”

From the opinion, it’s clear that this case sets a key precedent for DNA patenting, building upon the seminal Diamond v. Chakrabarty (1980) and last year’s Mayo v. Prometheus.

Diamond v. Chakrabarty was the first case to allow DNA patenting, in this case for a new organism created by GE microbiologist who created a new oil-degrading microbe. In retrospect, it doesn’t seem controversial at all, but the case was narrowly decided by a 5-4 margin, with the two conservative judges joined by three swing justices (vs. the four liberal justices).

Last year, in the Prometheus case, a unanimous SCOTUS held that “Laws of nature, natural phenomena, and abstract ideas are not patentable.”.

Despite efforts by Myriad to argue otherwise, in this case the court agreed with plaintiffs that isolating DNA corresponded to “laws of nature”. In this regard, they seemed heavily influenced by the opinion of William Bryson, the dissenting justice in a 2-1 decision favoring Myriad at the U.S. Court of Appeals for the Federal Circuit.

However, all three appeals justices (and all seven SCOTUS justices) agreed with Myriad’s argument that the cDNA is manmade and thus entitled to patent protection. As Thomas wrote:

the lab technician unquestionably creates something new when cDNA is made. cDNA retains the naturally occurring eons of DNA, but it is distinct from the DNA from which it was derived. As a result, cDNA is not a “product of nature” and is patent eligible under §101…

What was particularly instructive was the final (III) section of Thomas’ opinion, which begins: “It is important to note what is not implicated by this decision.” If DNA patents are invalid, two related patent areas are not.

Myriad did not assert any method claims: if it had, it appears the court would have upheld them. Similarly, the case did not consider any applications (of the unique DNA knowledge Myriad developed). As appeals justice Bryson noted, Myriad both “was in an excellent position to claim applications of that knowledge. Many of its unchallenged claims are limited to such applications.”

What is unresolved is the business impact of this decision. On the one hand, Myriad’s lead attorney told Bloomberg “We have a very strong patent estate around the BRCA test,” protected by 24 patents. However, as Bloomberg (and others) noted, the plaintiffs and many other private and university entities will be offering BRCA-based tests. Presumably these competing approaches will test the validity (or effectiveness) of Myriad’s patent barriers.

A second key issue is how the decision will impact university research, Rantanen (writing at PatentlyO) suggests two possible outcomes:

In terms of the effects on my friends here at the University, I can see at least two consequences. First, it may allow researchers more freedom to engage in whole-genome sequencing because they won't need to deal with a multitude of isolated DNA patents for individual sequences. On the other hand, because early-stage research on newly discovered DNA sequences cannot be patented, it may encourage companies - and perhaps universities - to pursue greater secrecy over those early stage discoveries. Social research norms may cut against this - particularly in universities - but there may be some increased pressure, particularly at the margins, towards secrecy of potentially valuable inventions.

Finally, there is some question as to how long the cDNA distinction will last. Forbes quoted biochemist and IP attorney Brenda Jarrell as disputing the court’s finding that “cDNA is not a product of nature.” When this argument is made in a future case, it’s possible that the justices will reconsider where they have drawn the line between nature and invention.

That points to the final (and best) part of the entire Slip opinion, the concurrence by Antonin Scalia:

I join the judgment of the Court, and all of its opinion except Part I–A and some portions of the rest of the opinion going into fine details of molecular biology. I am unable to affirm those details on my own knowledge or even my own belief.

Although Scalia relied on the same distinction between natural and manmade used by the other eight justices, he did not feel qualified (nor necessary) to deliver a two page tutorial on molecular biology. Some would count this as an all-too-rare example of humility by any member of the high court.

Myriad: does it matter?

Today marks the Supreme Court hearings in the Myriad patent case. It is no exaggeration to say this is the most closely watched life science patent case in more than a decade.

In one sense, the case has the potential to be as significant as Diamond v. Chakrabarty. That is the 1980 Supreme Court decision that (to quote a 2005 review) “held that a live, man-made microorganism is patentable subject matter” under the patent code.

There is more than a little posturing on both sides. The patients’ rights, open IP crowd is promulgating op-eds in the Washington Post and Los Angeles Times asserting that no company “should own our DNA”. Not surprisingly, the news pages of the New York Times are promoting sympathetic stories on the anti-IP crowd.

In response, the CEO of Myriad Genetics submitted an op-ed to Forbes and letters hoping to rebut these op-eds. The argument is summed up by the title of the Forbes piece: “We're Not Patenting Your Genes, But Our Research.”

We used the HBS case on Myriad in my Innovation Management class at KGI this semester. The students really enjoyed it. It provided very interesting discussion questions at the intersection of genomic medicine, patent law and public policy. It didn’t hurt that this is a high-profile unsettled question of the law.

For the legal issues, a great place to start is the PatentlyO blog. For example, a December 3 article listed the conventional wisdom among legal scholars. A February 11 article lists the questions to be addressed by the two parties:

1. Are human genes patentable?
2. Did the court of appeals err in upholding a method claim by Myriad that is irreconcilable with this Court's ruling in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012)?
3. Did the court of appeals err in adopting a new and inflexible rule, contrary to normal standing rules and this Court's decision in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007), that petitioners who have been indisputably deterred by Myriad's "active enforcement" of its patent rights nonetheless lack standing to challenge those patents absent evidence that they have been personally threatened with an infringement action?

The arguments on each side were highlighted in an August 17 summary of the appeal at the Genomics Lab Report, as well as a blog posting the same day on Derek Lowe’s “In the Pipeline” blog.

However, probably the most interesting article was in my Sunday morning paper here in San Diego, by Bradley Fikes, the longtime biotech reporter who’s one of the few North County Times reporters after it was acquired last year by the San Diego Union. His lead on the Union story captures it all:

No matter which way the Supreme Court rules on the Myriad Genetics BRCA breast cancer gene test patenting case, the importance of such patents is diminishing over time. Biotechnology is moving beyond patents derived from naturally occurring gene sequences. The most important biotech patents nowadays are becoming synthetic gene and RNA sequences, proteins and other indisputable contrivances of human ingenuity.

The article highlights the important pioneering efforts of Craig Venter (now in San Diego) who competed with the Human Gene Project.

In the long run, will Myriad matter? The experts consulted by Fikes think not, for two reasons. First, the relevant patents are expiring and thus at some point won’t be enforced anyway. Second, the IP strategies of biotech companies are getting more sophisticated, emphasizing synthetic organisms rather than isolated DNA strains from natural organisms. Meanwhile, as the New York Times reports, Myriad’s latest business model is using trade secrets for its database.

So in the end, this may be tempest in a teapot. In a decade or two, the industry will have moved on, and the patent lawyers will need something else to debate.