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The Big Fight


New York Southern District Court Judge Robert Sweet made headlines in March 2010 when he invalidated patents held by molecular diagnostics company Myriad Genetics on the BRCA1 and BRCA2 genes. In a 152-page decision in the case of Association for Molecular Pathology et al. v. the United States Patent and Trademark Office et al., Sweet excoriated what he called the "lawyer's trick" that gave Myriad — and other companies holding gene patents — the right to patent something that exists in nature. Sweet rejected the defendants' argument that the BRCA1/2 patents were issued not on genes as they exist in nature, but as isolated bits of DNA that were altered from their natural state. "It is concluded that DNA's existence in an 'isolated' form alters neither this fundamental quality of DNA as it exists in the body, nor the information it encodes," Sweet wrote. "Therefore, the patents at issue directed to 'isolated DNA' containing sequences found in nature are unsustainable as a matter of law and are deemed unpatentable subject matter."

"[The patenting of genes is] not anybody owning snippets of people," says Gary Cohen, vice president of bioethics, law, and policy for diagnostics developer Foundation Medicine. "Notwithstanding that, people still visualize this stuff as scientists or universities or companies owning pieces of them. No one likes the sound of it — it's not an accurate legal or scientific description of what's happening, but as an emotional and visceral description, that's the way the public thinks about it and it's understandable that people can get worked up about it."


Sweet's decision rocked the research community and the biotech industry. Myriad immediately appealed to the US Court of Appeals for the Federal Circuit, saying it had grounds to have the decision overturned. The American Civil Liberties Union and the Public Patent Foundation, which are representing the plaintiffs, cheered Sweet's decision.

But who is right? What could it mean for the biotech industry if Sweet's decision is upheld? Suddenly gene patents have become a hot topic of conversation, and all eyes are now firmly fixed on the appeals court.

To patent or not?

When the US Patent and Trademark Office was first asked whether it would grant patents on isolated DNA sequences, there was already a body of law and a history of administrative practice of granting patents for comparable inventions, says Hans Sauer, deputy general counsel for intellectual property at the Biotechnology Industry Organization. Though DNA had never been patented, patents had been granted on medicinal or industrial substances that were originally isolated from natural sources. "The rule has always been that you can't get a patent for something that's already in preexisting technology. Are people already using it, or is it known or published in some way? Is something like it already in the public domain, so that what you're claiming is really only such a small difference that it's obvious it's also unpatentable?" Sauer asks.

But merely finding something new is not enough to get a patent, either, he adds. The USPTO requires, in part, that the substance being claimed be in some different, isolated, or purified form. "Those are the signal words that say that the compound may have existed in an impure natural state before, but you're now claiming the isolated and purified form that didn't, in that way, exist before," Sauer says. "So your technical contribution was to identify the compound and to be the first to isolate it." For example, a researcher cannot patent the mold or fungi from which an antibiotic is synthesized, but can patent the antibiotic that results from the manipulation of that natural source.

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When it comes to patenting genes, the question gets even more complicated. In the 1990s, many businesses and universities began to sequence stretches of the genome. "They had the sequencers going 24/7, and people were pulling out all kinds of expressed sequence tags, and partial sequences, and expressed sequence fragments that nobody really knew what they did," Sauer says. "They knew these fragments were expressed, they knew they were part of genes that were expressed in plants or animals, but nobody knew what the full gene was and nobody knew what the full gene did." When these researchers went to the patent office to protect their discoveries, they were asked what the utility of these sequences would be. The USPTO stated that these sequences had to be useful for more than just discovering the underlying gene, as many researchers claimed. "It's not enough to just purify and isolate something. That doesn't get you a patent," Sauer adds.

Jennifer Camacho, a patent attorney with Boston law firm Greenberg Traurig, says the current controversy surrounding gene patents stems from the question of whether DNA isolated from other molecules constitutes something new. Laws of nature like gravity, and natural phenomenon like lightning, cannot be legally patented. "The DNA exists in your cell, it's there, it's naturally occurring, it's not something that's manmade. The question is, is that patentable subject matter?" Camacho asks. "For many years, it's been the view that an isolated gene — something that's been taken out of your body, it's been isolated from other genes, it's been purified from other cell components — in fact, is patentable. It doesn't exist like that in nature, as an isolated gene. Once you isolate it, once you break the chemical bonds with other DNA, the
PTO guidelines and new laws view these genes as a category as something that is patentable."


Biotechnology is advancing exponentially, Camacho says, and perhaps one reason the gene patent issue is now coming up more often — despite what seems to be established patent law — is that more genes are being patented, and there is currently very little relevant case law to establish whether those claims should still be upheld.

The Myriad case is a prime example. In 1990, a team of researchers led by Mary-Claire King at the University of California, Berkeley, published a gene they said was associated with an increased risk of breast cancer — BRCA1. In 1994, three years after Myriad was founded, Mark Skolnick and his colleagues at Myriad and at the University of Utah, National Institutes of Health, and McGill University isolated BRCA1 and applied for a patent on the gene. "The BRCA gene in its isolated form is … new and has new utility, which in its isolated form is able to perform [that which] it cannot perform in its native or natural genomic state," says Richard Marsh, executive vice president, general counsel, and secretary at Myriad.

ACLU attorney Chris Hansen, however, argues that "human genes are not patentable because they are not invented by -human beings — they are invented by nature or God, not people. … One way to say it is common sense — if you talk to anyone at the dinner table and say to them, 'Do you know that human genes are patented?' Almost everyone will say to you, 'That makes no sense at all, that can't be right.' It is right and at the same time it's wrong — it shouldn't be possible to patent human genes." Though the ACLU disagrees with Myriad's claim to the genes, the general consensus among experts is that the patents were awarded correctly according to patent law.

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In addition to Myriad's patents on the genes themselves, the company also holds a method patent. Here is where the question becomes a little fuzzier, says BIO's Sauer. "The issue in this case isn't just a claim to the DNA molecule, but also claims to ways of using them. Myriad's method claims are drafted in general, abstract terms — quite broad — and so there it's a little less clear what the court is going to do with these claims because the law has changed in that area and the court is going to ask whether these claims are too abstract to be patentable."

In cases like Prometheus v. Mayo and Bilski v. Kappos, the Supreme Court has said that for a method patent to be valid, it must pass the "machine or transformation test." The method must utilize a machine, apparatus, or device that is specifically suited to that method. For example, patent attorney Camacho says, you cannot get a patent for a method that uses an ordinary knife to make a peanut butter and jelly sandwich, but if you had a three-bladed knife suited only to making peanut butter and jelly sandwiches and did a great job with it, that would qualify as a specific machine. The other part of that test — transformation — requires that the method cause a change in the state of being or functionality of something, Camacho says. "Determining a drug dosage where you take blood at various times from a patient to determine which is the right dosage — something like that where you're actually changing the composition of the blood, you're taking it out of the body, you're making a determination based on it — that sort of transformation is something that has been seen as patentable," she adds.

Some of the controversy in the older, broader method patents is that simply seeing the difference between a wild-type gene and a mutant one may not be enough to constitute a transformation under the new standard set by the Bilski case. Indeed, ACLU's Hansen says his organization believes Myriad's method -patents are invalid because they constitute protection for the act of "looking at a gene," which is not patentable. Myriad's Marsh, however, says that "there's no question that once you isolate DNA there's two transformations — one is you have to physically take it out of a body to be able to sequence it, and the process of sequencing is a further transformation of the native DNA. We believe our method claims satisfy this."


For many, the patent argument has transcended matters of law. Some say that patenting genes is necessary to keep the biotech industry innovative and to present companies with an incentive to come up with newer and more effective diagnostics. Others say there is sufficient evidence to show that incentive isn't necessary for the development of diagnostics, and that there are plenty of companies who are willing to do the work even if they risk losing out on the IP stability.

"We know in the case of [the BRCA] patents, at the time Myriad was looking for those genes, many other labs all over the world were also looking for those genes and many of those labs had already announced that if they were the first ones to find those genes, they would not patent them," Hansen says. "So we know the genes would have been identified even if there had been no patent incentive. We also know it would have been commercialized — there are many labs all over the country today looking at human genes to see if they can increase your risk of various diseases, and in many instances those labs are doing work on genes that haven't been patented or where the patent has been made available to the public."

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Myriad's Marsh doesn't dispute the fact that the genes would have eventually been discovered, regardless of Myriad's involvement. However, he says, finding a gene and developing a diagnostic are only part of the work needed to create a successful test. Since 1994, when the patent was first filed, until about 2005, Myriad spent $500 million not just on research and development of its BRACAnalysis test, but also on educating patients, marketing the test, educating physicians as to its use and necessity, and working with insurance companies to cover the cost of testing, Marsh says. "For 10 years, we lost money. It wasn't until 2005 that we finally operated at a profit as to BRCA analysis," he adds. "Myriad would never have done that without the promise of the patent system." Today, he says, Myriad has tested more than 500,000 women, and most insurance carriers cover about 90 percent of the $3,000 testing cost. Marsh compares Myriad and companies like it to pharmaceutical companies that always patent new drugs in order to have a period of exclusivity where they can recoup the money they spent to develop and market the drug.

Indeed, BIO's Sauer says that because of Myriad's marketing, many people know that there is a genetic test for breast cancer, while fewer people know about other tests on the market.

Robert Cook-Deegan, director of the Duke University Institute for Genome Sciences and Policy's Center for Genome Ethics, Law, and Policy, says patents may help companies to get a product on the market. "I think where I finally come out on this is that gene patents set up an incentive for putting goods and services on the market that might be difficult to get onto the market otherwise," he says. "I think that might be true in diagnostics — that hasn't been true up till now, but it might be true in the future."

Whither research?

The more pressing question for the research community, however, is not whether companies have an incentive to develop commercial products, but whether the companies' ability to patent genes will get in the way of research.

Cook-Deegan says he hasn't seen much of a discouraging effect on researchers caused by gene patents, and that while some have been reluctant to report data that might step on patented toes, for the most part companies filing suit against researchers for doing basic research is uncommon. In 1998, University of Pennsylvania researcher Arupa Ganguly received a letter from Myriad informing him that his research was infringing on the company's BRCA patents as Ganguly's lab was providing diagnostic testing services. Myriad offered the lab a limited license to do single mutation tests, and the company has not -enforced its patents since that time.

"Over 7,000 articles have come out on BRCA, and most of those articles entail infringement because they would have been done in the US or somewhere where there are patent rights. And yet nobody's been sued," Cook-Deegan says. "So I don't think we can say for sure that nobody was affected — that there was no chilling effect — but I don't think there's very strong evidence that the chilling effect was very strong."

Marsh says that if a researcher found a novel mutation arising from the company's diagnostic that he wanted to study at greater length in order to determine what it would mean for a woman's risk of breast cancer, not only would the company not enforce the patent, it would most likely pay for the research. "The most important thing people need to realize is that Myriad is where it is today -because people did research on -BRCA testing," he says. "We applaud the research because that was the very information we used to inform physicians that patients need to get tested, and convinced insurance companies to cover the cost of testing. … The concept that patents inhibit research is baseless and without foundation."

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Indeed, BIO's Sauer says research may be stifled if the patents are not upheld. Although BIO doesn't have many diagnostic companies in its membership, it nonetheless takes the position that Myriad's patents should be upheld because of the ripple effects the court's decision in that case could have on all of biotech.

"If you get a new sequence of, hypothetically, a chickpea variety that you found somewhere in Central Asia, and you found this chickpea and it grows on very acidic soil, high aluminum, where no other chickpeas grow and where, in fact, little else grows, and you find in that chickpea a gene that confers resistance and allows the chickpea to grow on this higher acidic, aluminum-rich soil, that can be very valuable," Sauer says. "The assumption might be that you can use that gene to transfer it to other plants, make a transgenic plant that will grow, and that could be a very valuable discovery, but you don't know what's going to end up happening. … At the time you get the patent, you have no idea whether your gene patent will protect a diagnostic, or whether it will protect a half-a-billion dollar drug, or whether it will protect something else."

While the debate over gene patents has been driven by diagnostics in general and Myriad in particular, Sauer says, very little attention is being given to the other areas of industry and research that would be affected by the court's decision. "We're usually debating gene patents in the context of diagnostics and we're giving relatively little attention to the importance of gene patents in the therapeutic context, or in the agriculture context, or in the context of industrial biotechnology. There aren't a lot of grants in some of these areas, but there could be a lot of value in some of their discoveries."

Companies that make up BIO's membership tell Sauer that they worry their patents will go away simply because of the narrow focus on diagnostics. "The problem we have with the Myriad lawsuit at bottom is that it reaches so far, and that in its efforts to get a single company in its crosshairs, the ACLU does not care what else they take down as long as they can get at this particular problem and this particular company. We think it would be really unfair to strike down patents on cucumber genes that some company is working on just because you complain about Myriad's marketplace behavior," Sauer says. In addition, he says, small university spin-off companies with a few employees and several months of money in the bank don't have a lot of business assets, and a little intellectual property can help make such a company a success. "To take away these companies' patents, you're -really hurting them and you're doing so even if they are companies that work in something other than diagnostics. So the lawsuit is overbroad in its ambition," Sauer adds.

In the end, most experts agree that the patent system needs to change in order to accommodate the reality of rapidly advancing science. Sauer suggests that the US follow Europe's lead — Europe has already written into law an exemption from infringement for researchers doing basic studies on patented material. Even though US companies say they won't enforce their patents on researchers, it should be made a rule, he says.

Whither patients?

More important than the rights of companies, some say, are the rights of patients. The ACLU has made patient rights a central point in its case against the Myriad patents. The plaintiffs include six women who say they haven't been able to get adequate BRCA testing because of Myriad's patents. ACLU's Hansen says this is why breast cancer awareness organizations and the American Medical Association are on the plaintiffs' side. "Myriad's monopoly has impeded women's health," Hansen says. "Suppose you get back a result from Myriad and you have a mutation — one of the options is to get a radical mastectomy, and most women would like to make sure the lab got it right, and Myriad won't allow that." Women who receive "inconclusive results" from Myriad, Hansen says, have nowhere else to go before possibly having to make a decision to have a mastectomy or a hysterectomy.

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Myriad's Marsh disputes this claim, saying that Myriad's test is the industry's "gold standard" and that women desiring a second opinion do have other choices. There are many institutions, both in the US and abroad, that will do testing on specific mutations for women who would like a confirmation of their results. The University of Chicago, the University of California, Los Angeles, and Yale University are just a few of the places where women can get another test done. The cost, typically a few hundred dollars, is a bit higher than what a patient with health insurance might pay out of pocket for Myriad's test, and is unlikely to be covered by an insurance carrier.

Duke's Cook-Deegan says gene patents do limit choices for patients in the sense that only one company will have the right to develop and commercialize a medical diagnostic for a certain disease. "It means that you live or die with the quality of that particular provider," he says. "One would expect something to be good in return for [a patent]. In the social contract, you would give out patents if you're getting something good in return for the social cost of restricted access and higher prices, and one would expect that what you're getting is either a product on the market that wouldn't otherwise get there, or higher quality products, or things that get there faster than they otherwise would."

In general, Cook-Deegan adds, when it comes to diagnostics, the evidence that patents cause harm isn't compelling. But the evidence that there has been a "tangible social benefit" is also very weak. In addition, he says, every lab makes mistakes. "We actually haven't heard very many complaints about the quality of testing at Myriad and although I will say we've heard of some mistakes, the folks that we talk to in the clinical world don't say that Myriad doesn't do a good job of testing. They say they do a pretty good job of testing — they just don't like having to go to one service," he says.

As a partial remedy for this situation, BIO's Sauer points to the efforts of US Congresswoman Debbie Wasserman Schultz (D-Fla.) who has proposed an amendment to the patent reform act that would create a provision whereby patients who find themselves in the situation of having only one diagnostic provider to choose from because of a patent, can have their test confirmed by another lab without that facility facing the threat of patent infringement.

The future beckons

In the future, the focus needs to be on the patient, and how laws can be written to maximize benefit for people undergoing medical challenges, say Foundation Medicine's Cohen and the company's CEO Michael Pellini. In the oncology space, Cohen says, "increasingly, it's obvious to researchers and scientists that giving a physician information about one or two or three genes may be useful, but it's hardly comprehensive. It hardly enables a physician practicing in an area that's evolving all the time to fully understand what's happening within a tumor, not superficially, but at the genetic level."

What's really needed, Cohen and Pellini say, are comprehensive diagnostics that offer clinicians a complete view of what's going on with a patient — the very heart of personalized medicine — but the current patent system is slowing this process. "Given that each piece of information may be associated with intellectual property claims, what happens when you aggregate all of that information into a comprehensive test — at least conceptually — is you're aggregating surrounding bits of intellectual property," Cohen says. "You have to look at each patent on its own and determine whether it's valid, whether your business plans include a challenge to validity [and] whether there's a licensing opportunity that will -allow for the development of these new comprehensive personalized medicine diagnostics, while at the same time respecting intellectual property rights." It's not that the patent system is wrong, he adds. It's simply that the patent system has to catch up to the science.

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"The irony is that there's an ongoing debate around protection around a single gene, when in reality, where the world of cancer treatment and diagnostics is going touches on a much more comprehensive assessment of each individual's tumor," Pellini says. "In many ways, we have to reframe the discussion from that of a focus around a single gene, a single mutation, to something that's a much broader discussion around a complete profile of one's cancer." Until now the development of this kind of diagnostic hasn't really been hampered, but a new system is needed to make sure it doesn't become a problem, he adds.

Duke's Cook-Deegan says the solution lies in allowing gene patents, but making them much narrower than they are now.

Greenberg and Traurig's Camacho says that no matter how the Myriad case is resolved, patent lawyers are already taking care to advise their clients in ways that could avoid such pitfalls in the future. "As a patent lawyer what I'm now trying to do is focus the claim more on the specific application — for example, having a sequence that's tagged with a label, or a single-stranded sequence that's immobilized on an array that you could use for a probe, or something like that," she says. "The question is whether an isolated DNA sequence is patentable, and even if you say it isn't patentable, that doesn't answer … the next generation of claims."

Now all eyes rest on the appeals court as it decides the future of Myriad's patents, and by extension, possibly those of the entire biotech industry. As of this writing, the court had not yet made a decision. Most experts say that Judge Sweet's ruling will be overturned at least in part. Myriad's Marsh says he's "cautiously optimistic." The ACLU's Hansen declined to speculate on the case's outcome. Both sides have the option of appealing to the Supreme Court if they don't like the appeals court's decision.

However the case is decided, Camacho says the ruling is likely to provide some clarity as far as case law goes, and could lead to a legislative push toward changing patent law. "I think we're going to see something from the court that may provide clarity one way or another, and that might quiet it down from a patent law standpoint, but it may not quiet the question," she says. n

GenomeWeb Poll

How do gene patents affect your work?
39% Patents don't affect my work.
17% I avoid working on anything that has been patented.
16% I am wary of publishing on anything that could be patented.
26% I try to patent my work myself.

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