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July 2013
by Amy Swinderman  |  Email the author

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WASHINGTON D.C.—"A naturally occurring DNA segment is a product of nature and not patent-eligible merely because it has been isolated," the U.S. Supreme Court has ruled in Association for Molecular Pathology (AMP) v. Myriad Genetics, a landmark case questioning the practice of gene patenting.  
 
But in delivering the opinion on June 13, Justice Clarence Thomas added: "cDNA (complementary DNA), which is synthesized from a messenger RNA (mRNA) template in a reaction catalyzed by the enzymes' reverse transcriptase and DNA polymerase] is patent-eligible because it is not naturally occurring."  
 
Both sides claimed a victory in the mixed ruling, which most legal experts expected. Proponents of the validity of gene patents argued that they encourage investment in biotechnology and promote innovation in genetic research by keeping technology "out in the open." Opponents believe gene patents stifle innovation by disincentivizing companies from conducting cancer research, limit options for cancer patients who may be seeking genetic testing and are not valid because genetic information is not invented, but rather, produced by nature.  
 
The case, originally heard in the Southern District Court of New York, challenged the validity of gene patents in the United States—specifically, whether Myriad, a company spun out of the University of Utah in 1994 whose business model was to exclusively offer diagnostics testing services for the BRCA breast cancer genes, could claim patents covering isolated DNA sequences, methods to diagnose propensity to cancer by looking for mutated DNA sequences and methods to identify drugs using isolated DNA sequences.  
 
The AMP—which was joined by several patient advocacy groups and individual patients, and represented by the American Civil Liberties Union (ACLU) and the Public Patent Foundation (PUBPAT)—argued that Myriad's patent claims were invalid on the grounds that they are not patentable subject matter under §101 of Title 35 of the U.S. Code, that the isolated genes are unpatentable products of nature, that the diagnostic method claims are mere thought processes which won't yield any real-world transformations and that its drug- screening claims were just describing the basic processes of doing science.  
 
Myriad defended the validity of its patents because the U.S. Patent and Trademark Office (USPTO) issues patents for genes as "isolated sequences" in the same way it issues patents for any other chemical compound, since the isolation of the DNA sequence renders it different in character from that present in the human body. The company also argued that its BRACAnalysis diagnostic test was patentable subject matter.  
 
The Southern District Court of New York ruled that all the challenged claims were not patent-eligible. Myriad then appealed to the Federal Circuit Appeals Court. The Circuit Court overturned the previous decision in part, ruling that isolated DNA that does not exist alone in nature can be patented and that the drug screening claims were valid and confirmed in part, finding the diagnostic claims unpatentable.  
 
The AMP appealed to the Supreme Court, which granted certiorari and remanded the case to the Federal Circuit. When the Federal Circuit did not change its opinion, the ACLU and PUBPAT in September 2012 filed a petition for certiorari with the Supreme Court with respect to the second Federal Circuit Decision. The high court agreed to hear the AMP's appeal in November 2012.
 
Not wishing to leave any of its decision up to creative interpretation, the court stressed, "It is important to note what is not implicated by this decision."  
 
"First, there are no method claims before this court. Had Myriad created an innovative method of manipulating genes while searching for the BRCA1 and BRCA2 genes, it could possibly have sought a method patent. But the processes used by Myriad to isolate DNA at the time of Myriad's patents 'were well understood, widely used and fairly uniform insofar as any scientist engaged in the search for a gene would likely have utilized a similar approach,' and are not at issue in this case," the court ruled.  
 
"Similarly, this case does not involve patents on new applications of knowledge about the BRCA1 and BRCA2 genes," the court continued. "Nor do we consider the patentability of DNA in which the order of the naturally occurring nucleotides has been altered. Scientific alteration of the genetic code presents a different inquiry, and we express no opinion about the application of §101 to such endeavors."
 
Ultimately, "we merely hold that genes and the information they encode are not patent eligible under §101 simply because they have been isolated from the surrounding genetic material," the court concluded.  
 
All of the justices joined in the majority opinion, with the exception of Justice Antonin Scalia, who concurred only in part, particularly with the portions 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," Scalia wrote. "It suffices for me to affirm, having studied the opinions below and the expert briefs presented here, that the portion of DNA isolated from its natural state sought to be patented is identical to that portion of the DNA in its natural state; and that cDNA is a synthetic creation not normally present in nature."
 
 
Reacting to the decision, Peter Meldrum, president and CEO of Myriad, issued this statement: "We believe the court appropriately upheld our claims on cDNA, and underscored the patent eligibility of our method claims, ensuring strong intellectual property protection for our BRACAnalysis test moving forward."  
 
Myriad's stock rose more than 10 percent following the news, ending June 13 down $1.91 to close at $32.01. The decision is not expected to have a significant impact on the company's business, as it holds more than 500 valid and enforceable claims on 24 different patents for its test.  
 
The ACLU also claimed a victory, calling the decision "a victory for civil liberties, scientific freedom, patients and the future of personalized medicine."  
 
"Today, the court struck down a major barrier to patient care and medical innovation," stated Sandra Park, senior staff attorney with the ACLU Women's Rights Project. "Myriad did not invent the BRCA genes and should not control them. Because of this ruling, patients will have greater access to genetic testing and scientists can engage in research on these genes without fear of being sued."  
 
Although the decision represents a major reversal in longstanding patent policy in the United States—and most patent experts agree that the court ruled as expected—there is little consensus on the implications the decision will have for the biotechnology industry, according to Bay Area-based venture capital firm Burrill & Co.
 
"Already, at least one competitor has seen an opening in the decision. DNATraits, a division of Houston-based genomics and genetics testing company Gene By Gene, following the ruling said that it will offer testing for the BRCA1 and BRCA2 genes in the United States for $995. That compares to around $4,000 for the Myriad test," Burrill notes.
 
Speaking on behalf of the biotechnology industry, the Biotechnology Industry Organization (BIO) said the decision provides needed certainty to research-driven companies that rely on cDNA patents, but other parts of the court's decision could "unnecessarily create business uncertainty for a broader range of biotechnology inventions."  
 
"The United States is now the only developed country to take such a restrictive view of patent eligibility, signaling an unjustified indifference towards our global economic and scientific leadership in the life sciences," the organization said in a statement.
 
 
Dr. Lisa Haile, partner and co-chair of DLA Piper's Global Life Sciences sector, opines that the decision's implications may not be as far-reaching in the biopharma industry as some have speculated.  
 
"Our understanding of genomics and of genetic-based disease has come a long way since the BRCA genes were patented," Haile says. "Today, most diseases and accompanying therapies are based on much more than just full-length gene sequences. That is, while the decision will impact certain gene-based diagnostics directly, the biopharma industry will not likely be significantly altered. Synthetic DNA sequences made in the lab and not naturally occurring are not only useful but commonly used in diagnostic tests, so such tests will be unaffected by this decision."  
 
George Yu, an attorney at the law firm Schiff Hardin, notes that many companies with therapeutic products don't necessarily use isolated sequences, but many of the companies that do use isolated nucleic acid sequences don't want these sequences patentable.  
 
"Myriad, because it is a diagnostics company, will probably be affected more than a biotech company which makes actual drugs," Yu says. "Despite the relatively limited commercial impact of this decision, it is still an important decision philosophically as to the patentability of naturally occurring molecules. It is interesting to see how the court views this issue, specifically how it draws the line between cDNA and isolated DNA. The practical results of the decision are that companies like Myriad marketing genetic diagnostics will seek other approaches to maintain exclusivity of their diagnostics, and the $3,000 BRCA test will likely be much less expensive."  
Code: E071301

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