Myriad Decision Places Biotech at a Crossroads

The US District Court for the Southern District of New York shocked the patent community recently when, in the face of conventional wisdom, it ruled that isolated DNA sequences are not patentable. A diverse group of plaintiffs won the case attacking patents controlled by Myriad Genetics on summary judgment because of the District Court judge's application of the century-old "product of nature" doctrine. Regardless of the outcome on appeal, the Myriad case will have a broad and lasting significance for the life sciences industry.

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The crux of the case is the patentability of isolated DNA. The US Patent and Trademark Office, courts, and most commentators have long accepted that DNA, when isolated and distinguished from its natural form, can be patented. The suit challenged the validity of several Myriad patents relating to the BRCA1 and BRCA2 genes, which are strongly correlated to the occurrence of breast, ovarian, and prostate cancer, and methods for evaluating cancer risk by comparing a patient's DNA with the BRCA½ sequences.

Resurrecting the "product of nature" doctrine articulated by the Supreme Court more than a century ago, District Court Judge Sweet ruled that isolated DNA sequences are not patentable. The Court applied a test requiring compositions derived from nature to possess "markedly different characteristics" from the natural material, and "possess a new or distinctive form, quality or property." According to the Court, purification of a composition, "without more," cannot make it patentable. The court opined that isolated DNA is not markedly different from native DNA sequences, and rejected the historically accepted position that distinctions between the two are sufficient to meet the "markedly different" test.

The court also held that certain method claims involving analyzing and comparing patient DNA with BRCA½ DNA sequences were unpatentable as mental processes. Although the DNA used in the method must be isolated from patients, that step was not recited in the claims. The court used similar reasoning to invalidate claims for screening candidate cancer drugs by measuring their effect on cells containing the BRCA1 cancer gene.

In its recent Bilski decision, the Supreme Court held that certain method claims were unpatentable as abstract ideas. Although the Bilski decision is not directly on point, comments in the Supreme Court's opinion regarding abstract ideas and mental processes, coupled with a vigorous public-policy critique of gene patents, suggest that Myriad may have a difficult time on appeal.

The Myriad decision is not binding on other courts. However, the Federal Circuit Court of Appeals or the US Supreme Court may adopt some or all of the Myriad Court's reasoning. Because of this uncertainty, organizations involved with gene patents should proactively position their patents to meet the legal standards set forth in Myriad.

Patent owners should use strategic patent management practices such as tailoring claims and method recitations to withstand a Myriad-like test, amending pending claims, and using alternative methods of IP protection. Even if Myriad is ultimately reversed, these steps will strengthen the patent holder's patent portfolio. At the same time, patent licensees may want to re-evaluate the strength of the licensed patents in light of Myriad and consider whether to continue paying license fees or challenge the validity of the patents.

The goal of the plaintiffs in the Myriad case is to drive down the cost of cancer diagnostic tests and expand research efforts. Reducing healthcare costs is a crucial public priority, but many fear that the wholesale invalidation of gene patents will stifle investment in the development of new tests and drugs, preventing future advances in medicine. This landmark case, however, will continue to provoke widespread debate and concern.

Michael A. Gollin is a partner and the author of Driving Innovation and Rae Fischer is an attorney, both at Venable LLP, Washington, DC, 202.344.4000, magollin@venable.com,rfischer@venable.com