By Brian P. O'Shaughnessy, Thomas G. Southard
This article first appeared in the Licensing Executives Society (U.S.A & Canada), Inc.'s Insights Newsletter┬á- June 18, 2013
The U.S. Supreme Court's June 13, 2013 decision in Association for Molecular Pathology v Myriad Genetics affirms the patent eligibility of DNA and its uses, but holds that finding "an important and useful gene and separating that gene from its surrounding genetic material is not an act of invention." In a case that has profound implications for the life sciences industry, the Court ruled last week that complementary DNA (cDNA), derived of human intervention, is patent eligible subject matter; but that unaltered DNA, merely by its isolation from the human genome, is not patent eligible. "Groundbreaking, innovative, or even brilliant discovery does not by itself satisfy the ┬ž101 inquiry."
While many in the life sciences industry questioned the wisdom of the ruling, it provides meaningful reassurance in its balanced approach and limited scope. Given the complexity and commercial implications, the Court rendered a surprisingly concise decision that deftly balanced undue restriction on natural phenomena and promoting the progress of the useful arts.
Myriad Genetics identified and isolated the BRCA1 and BRCA2 genes, which it found useful in the diagnosis of hereditary breast and ovarian cancer. Myriad obtained a number of patents on various aspects of those genes, and methods of using them. Among them were a handful of composition claims to the isolated, native BRCA genes, as well as cDNA analogues, or synthetic sequences stripped of non-coding regions (introns). Myriad used the genetic information from its research to develop and commercialize its highly successful BRACAnalysis┬« test, which identifies those at risk of developing breast or ovarian cancer.
The Supreme Court held that the naturally occurring (native) DNA, albeit isolated, is a product of nature not made patent eligible merely by isolation; and consequently Myriad's claims covering only the isolated, native BRCA1 and BRCA2 genes are invalid. The Court reasoned that Myriad's discovery ÔÇô the precise location and nucleotide sequence of the BRCA1 and BRCA2 genes ÔÇô falls within the "law of nature" exception to patenting, since, according to the Court, Myriad did not create or alter either the genetic information encoded in those genes or the structure of the DNA. The Court concluded that finding the location of the BRCA1 and BRCA2 genes did not render the genes "new . . . composition[s] of matter" under Section ┬ž101 of the patent law.
The Court rejected Myriad's argument that isolating DNA from the human genome requires severing chemical bonds and creating a non-naturally occurring molecule, which had been relied upon below by the Federal Circuit. Writing for a unanimous Court, Justice Thomas observed that Myriad's claims were not expressed in terms of chemical composition, nor did they rely on the chemical changes that resulted from the isolation of a particular section of DNA. The Court gave little deference to the USPTO's longstanding practice of granting patents to such DNA, agreeing with the U.S. Solicitor that PTO practice was "not a sufficient reason to hold that isolated DNA is patent-eligible."
In a substantial victory for the biotechnology industry, and for Myriad in particular, the Court upheld patentability of Myriad's cDNA claims. "cDNA does not present the same obstacles to patentability as naturally occurring, isolated DNA segments." The Court reasoned that while cDNA retains the naturally occurring exons of native DNA, "the lab technician unquestionably creates something new when cDNA is made." As such, cDNA is not a "product of nature", and is patent eligible under ┬ž101.
In a rare limiting disclaimer, the Court expressly noted what is not implicated by its decision. The Court noted that it did not have before it either method claims directed to the manipulation of DNA, or claims to new applications of knowledge about the BRCA1 and BRCA2 genes. The Court took special note that "Myriad was in an excellent position to claim applications of that knowledge." And that "[m]any of its unchallenged claims are limited to such applications." Further, the Court said it was not considering the patentability of DNA of altered nucleotide sequence, noting that deliberate alteration "presents a different inquiry, and we express no opinion about the application of ┬ž101 to such endeavors." The Court was "merely hold[ing] that genes and the information they encode are not patent eligible under ┬ž101 simply because they have been isolated from the surrounding genetic material."
While Myriad might appear to be a blow to innovation, the Court was careful to confine its scope. Its affirmation of patent eligibility for new forms and uses of DNA is especially encouraging. And, one is left to ponder its import as it pertains to applications of genetic knowledge, particularly diagnostic methods such as Myriad's BRACAnalysis┬« test. Did the Court mean to also confine the sweep of its decision in Mayo Collaborative Svcs v Prometheus Labs, Inc., 132 S.Ct. 1289 (2012), which did address patent eligibility of diagnostic methods?
In both Myriad and Prometheus, the Court took special note that, at bottom, all inventions involve some aspect of a law of nature or natural phenomena; and in Myriad that "too broad an interpretation of this exclusionary principle would eviscerate patent law." Thus, the Court acknowledged that an effective patent system must strike a delicate balance between creating incentives for innovation and impeding the flow of information required for further invention.
Nonetheless, Myriad will have profound affect on the biotechnology industry. Thousands of outstanding patent claims cover isolated, native DNA, and are now at risk or at least of diminished value; and the USPTO has already issued interim guidelines directing the rejection of claims to naturally occurring nucleic acids. Affected IP owners must now reassess portfolios, and revise claim strategies going forward. As in all things from the Supreme Court, the implications to both industry and innovation will take time to sort out.
The authors are both Shareholders, RatnerPrestia, Washington, DC. Mr. O'Shaughnessy is Regional V.P., USA, of the Licensing Executives Society (USA & Canada), Inc. The opinions and views expressed herein are those of the authors alone, and are not necessarily those of either RatnerPrestia or LES (USA & Canada).