On April 15, 2013, the Supreme Court will hear the oral arguments for one of the most highly anticipated patent law cases of last year: Association for Molecular Pathology, Inc, et al. v. USPTO, et al. The one and only question before the Supreme Court is whether isolated DNA containing all or portions of the BRCA1 and BRCA2 (Breast Cancer Susceptibility Genes 1 and 2) gene sequences are patentable under 35 U.S.C. § 101. This turns on whether the isolated DNA is just like the native DNA found in the human body, or whether it is transformed into a different compound by isolating it under lab conditions.
The case has had a protracted history reaching back to 2009. The American Civil Liberties Union (ACLU) and the Public Patent Foundation (PUBPAT) initially filed a lawsuit against Myriad Genetics, Directors of the University of Utah Research Foundation (UURF) and the United States Patent and Trademark Office (USPTO), claiming that patents on BRCA1 and BRCA2 violated 35 USC § 101 (the patentable subject matter statute), as well as Article 1, Section 8, Clause 8 of the US Constitution and the First and Fourteenth Amendments. On March 29, 2010, United States District Court for the Southern District of New York concluded that the isolated DNA is not “markedly different” from native DNA because both shared the same function of conveying information and had the same nucleotide sequence. Thus BRCA1 and BRCA2 were held to be unpatentable. The District Court also invalidated Myriad’s method patents, and dismissed the constitutional claims against the USPTO based on the doctrine of constitutional avoidance.
The US Court of Appeals for the Federal Circuit reversed the District Court’s decision on July 29, 2011, on the grounds that isolated DNA has a markedly different chemical structure than the native DNA, regardless of its underlying function. With regard to the method patents, the Federal Circuit agreed with the District Court that method of comparing/analyzing sequences claimed only abstract mental processes, but held that the method of screening potential cancer therapeutics were patentable.
Around the same time, the Supreme Court was in the process of deciding another high profile diagnostic patent case, Mayo v. Prometheus, which involved the method of determining optimum dosage levels of thiopurine drugs for treating autoimmune diseases. In a unanimous ruling, the Supreme Court invalidated this process patent because it merely set forth natural phenomena in the form of correlations between thiopurine metabolites in the blood and the drug dosage. In light of the Prometheus decision, the Supreme Court instructed the Federal Circuit to reconsider their holding of Association for Molecular Pathology, Inc v. Myriad Genetics, Inc. The Federal Circuit again invalidated Myriad’s method of comparing gene sequences to identify mutations correlating with a predisposition for breast/ovarian cancer, but affirmed its ruling that isolated DNA can be patented because “they are obtained in the laboratory and man-made, the product of human ingenuity”. On November 30, 2012, the Supreme Court agreed to hear the case during its current session.
Underlying Policy Concerns
While the Supreme Court’s previous ruling in Prometheus does not directly speak to the composition claims presently before the Court, the ruling could be highly influential. It highlights once again the Supreme Court’s repeated policy concerns over “[the] risk [of] disproportionately tying up the use of the underlying natural laws, [and] inhibiting their use in the making of further discoveries” and hesitation to grant patents to those “drafting effort[s] designed to monopolize the law of nature itself.” The Supreme Court previously expressed such concerns in Bilski v. Kappos, where the Court was concerned that business method patents, the “basic tools for further business innovation,” could cause businesses that come up with new and improved ideas and methods unnecessary litigation fears. The same underlying policy concerns are at issue in Myriad, precisely because of Myriad’s documented enforcement efforts to exclude others from using its diagnostic tests and potentially tying up the market for personalized medicine.
Since the 1990s, Myriad has sent numerous cease and desist letters to researchers at the University of Pennsylvania School of Medicine, the National Cancer Institute, the Yale Diagnostics Laboratory, and Oncormed, one of its competitors. Myriad has in fact initiated litigation against the University of Pennsylvania School of Medicine and Oncormed for patent infringement. Myriad’s enforcement efforts have blocked efforts by other research institutions and scientists to improve upon the patent. Yet again, doesn’t patent law unquestionably grant this monopoly to all patent holders? One could argue that Myriad is simply enforcing its patents, and nothing more.
On the international front, Myriad has had mixed luck with gene patents. In 2004, The European Patent Office revoked Myriad’s patents. However, Myriad recently landed a major win in Australia, where the BRCA1 patent was upheld on February 15, 2013. It has been reported that Myriad’s exclusive licensee, Genetic Technologies Limited (also a co-defendant in the Australia case), was adamant about giving away its patent rights to health care providers without charging royalties. This case has been recently appealed. There is no question that the Supreme Court is closely watching the case unfold in Australia, since both cases were brought by advocacy groups and involve the patentability of the same BRCA1 gene.
The Federal Circuit, in its second opinion, flatly rejected any looming policy implications for Myriad’s actions. The court stated that “It is not about whether individuals suspected of having an increased risk of developing breast cancer are entitled to a second opinion. Nor it is about whether the University of Utah, the owner of the instant patents, or Myriad, the exclusive licensee, has acted improperly in its licensing or enforcement policies with respect to the patents. The question is also not whether it is desirable for a company to hold a patent or license covering a test that may save people’s lives, or for other companies to be excluded from the market encompassed by such a patent…”
Looking Ahead at the Supreme Court’s Options
At the Supreme Court, however, this case will likely be decided, at least in part, by policy concerns related to fostering innovation and the possible dark side of diagnostic monopolies. Myriad’s purposeful exclusion of other health professionals (and thus potential at-risk patients) from obtaining access to diagnostic testing could prove to be fatal to its patent claims. This is where the Federal Circuit and the Supreme Court are likely to differ; for the Federal Circuit, this is just another case about patent eligibility, but the Supreme Court must consider the bigger picture involving the interplay between industry, patent ownership, and general public welfare.
At the same time, the Court should recognize the importance of patent protection for rapid innovation and investment. It is too simplistic to assume that researchers engage in scientific pursuits only for the public good — or for scholarly satisfaction. Indeed, by many accounts the biotechnology industry soared after the Diamond v. Chakrabatry decision and passage of the Bayh-Dole Act in 1980, which greatly incentivized research institutions to profitably engage and collaborate with the industry over patents derived from living organisms. If the Supreme Court decides against the patentability of genetic information in Myriad, the Court could create uncertainty and disincentives for investment within the biotechnology industry.
Perhaps a more compelling policy argument may be found in Judge Moore’s concurrences in both Federal Circuit decisions. Judge Moore points out that it has been the policy of the USPTO to issue gene patents for a long period of time, recently bolstered by the Utility Examination Guidelines issued in 2001. These Guidelines specifically state that “an inventor’s discovery of a gene can be the basis for a patent on the genetic composition isolated from its natural state”, as long as the inventor “discloses a specific, substantial, and credible utility” for such a gene. The USPTO explicitly refused to seek guidance from Congress on this matter while formulating the Guidelines. Judge Moore noted that by holding such patents to be invalid, the Supreme Court would negatively affect the “settled expectations” and “extensive property rights” afforded to the industry by the USPTO. Moreover, the USTPO’s expertise in the patent field speaks volumes. However, as the dissent in the Federal Circuit decisions points out, the USPTO has no rule-making authority, and as the District Court initially noted, is bound by Supreme Court precedent.
Regardless of the Supreme Court’s ultimate decision, the national debate the Myriad case has sparked about gene patenting and its ramifications has shifted from a purely legal and theoretical perspective to a more inclusive and pragmatic one including scientists, health professionals and patients’ views and expectations. In fact, on January 10, 2013, the USPTO held a roundtable on genetic diagnostic testing as a follow-up to a public hearing on genetic diagnostic testing. As a result, the USPTO has heard from a variety of stakeholders in this debate. Dr. James Watson, co-discoverer of the DNA’s double helix structure, has filed an amicus brief in this case, as well as Dr. Eric Lander, a key leader of the Human Genome Project. Both argue against the patentability of human genes. SCOTUSblog, which provides leading online coverage of the Supreme Court, even recently featured a Gene Patenting Symposium, which drew commentary from various prominent legal scholars and scientists.
Perhaps due to this vigorous debate the biotech industry will no longer take the validity of gene patents for granted and will critically examine its licensing and enforcement practices. However, it is questionable whether the biotech industry can be expected to strike the right balance between commercializing patentable diagnostic tests and making scientific knowledge widely available for everyone through compulsory licensing or creation of a fair use exception. The Supreme Court’s renewed interest in taking on high-profile patent cases might signal a sea change for such patent holders in the future. However, the ideal solution, urged by all courts involved in the case, would be for Congress to step in to further define the contours of gene patentability. Rather than establish a blanket prohibition against gene patents, Congress could grant an exemption to health care providers to use the tests for secondary opinions without payment, or extend the scope of the experimental use exception. This would prove to be immensely challenging for the industry to adapt to, since it is already dealing with the many ramifications of the recent patent reform. However, the Supreme Court will probably not leave the policy concerns solely to the Congress and will likely keep in mind the patients’ side of the story as it prepares to hear the case.