By Turna Ray
A US District Court's ruling that seven patents held by Myriad Genetics on BRCA 1 and BRCA 2 genes are invalid has resulted in exultation from gene patent opponents and handwringing from the biotechnology industry about the deleterious impact of the decision. But the fight is really just beginning.
In a 152-page decision, New York Southern District Court Judge Robert Sweet ruled this week in Association for Molecular Pathology et al. vs. the United States Patent and Trademark Office et al. that Myriad's BRCA patents conferring susceptibility to breast and ovarian cancer are invalid on statutory grounds.
Sweet determined that isolated DNA containing BRCA1/2 gene sequences, as described in Myriad's patents, is not markedly different from gene sequences naturally occurring in the body in function or in the information they contain.
"Therefore," Sweet determined, "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 under 35 USC Section 101," the portion of the US patent code that describes what is eligible for patent protection. "Similarly, because the claimed comparisons of DNA sequences are abstract mental processes, they also constitute unpatentable subject matter under Section 101."
However, this decision is hardly set in stone and currently doesn't impact the status of existing gene patents or marketed genetic tests. Myriad said that it will appeal the district court decision, and legal experts believe that the case will likely reach the Supreme Court.
The Biotechnology Industry Organization was quick to point out that the district court ruling was only an "initial" determination. “The ruling … is only a preliminary step in the legal process that does not affect how the USPTO evaluates patent applications relating to DNA-based inventions," BIO said in a statement.
BIO and other industry groups have asserted that if isolated DNA is deemed unpatentable, it would destroy the biotech industry. In his decision, however, Sweet said these concerns are "unfounded" because his decision is "based on the unique properties of DNA that distinguish it from all other chemicals and biological molecules found in nature." Furthermore, Myriad has told investors that even if the 15 claims in the seven contest patents are deemed invalid, this would not "materially impact" the company's business or BRACAnalysis revenues [see PGx Reporter 03-10-2010].
"While we are disappointed that Sweet did not follow prior judicial precedent or Congress' intent that the Patent Act be broadly construed and applied, we are very confident that the Court of Appeals for the Federal Circuit will reverse this decision and uphold the patent claims being challenged in this litigation," said Myriad Genetics CEO Peter Meldrum in a statement issued in the wake of the district court decision.
The appeals process, which will take a year or more, will take place in the Federal Court of Appeals in Washington, DC, which exclusively hears patent challenges. The district court's decision comes ahead of a pending Supreme Court decision, Bilski v. Kappos, which, depending on how the Justices rule, may impact Sweet's application of the "machine-or-transformation" test to the method claims in Myriad's patents [see PGx Reporter 11-18-2009].
Daniel Ravicher, executive director of the Public Patent Foundation, which along with the American Civil Liberties Union represents the plaintiffs, countered critics who said that Sweet applied the law incorrectly by calling his decision "well thought out" and "very deliberate."
"This is not just some new judge who doesn't know anything," Ravicher told Pharmacogenomics Reporter. "At the end of the day, [Sweet] came up with the right legal standard according to Diamond v. Chakrabarty," a 1980 Supreme Court decision that held genetically modified micro-organisms to be patentable. "The only reason isolated genes are useful to society is because they do represent what is in the body. So there isn't any difference" between DNA inside the body and isolated DNA, Ravicher said. .
The case, originally filed just under a year ago by the ACLU and PUBPAT on behalf of scientific organizations representing numerous medical professionals, researchers, women's health groups, and individual women, alleged that the BRCA gene patents held by the University of Utah Research Foundation and exclusively licensed to Myriad "stifle research that could lead to cures and limit women's options regarding their medical care." Specifically, the lawsuit challenged the patentability and constitutionality of Myriad's patents on the BRCA1 and BRCA2 genes, linked to increased hereditary risk for breast and ovarian cancer [see PGx Reporter 05-13-2009].
At a Feb. 2 hearing at the New York Southern District Court, Sweet heard summary judgment motions from the ACLU and Myriad. Concurrently, the USPTO argued that the judge should dismiss the ACLU's charges against it on the basis of "constitutional avoidance," which recommends that courts attempt to decide a case on statutory grounds first before interpreting the Constitution [see PGx Reporter 02-24-2010].
In his ruling this week, the judge granted a partial summary judgment to the plaintiffs, invalidating Myriad's patents on statutory grounds and, as such, not addressing the constitutional charges against the defendants. Additionally, the judge denied Myriad's summary judgment motion and granted the USPTO's request to dismiss the allegations against it.
Robert Cook-Deegan, director of Duke University's Center for Genome Ethics, Law & Policy, called the district court's decision "game changing … at least for now." According to Deegan, this is the first time a judge has ruled on the validity of gene patents applied to diagnostics that are based on genetic information extracted from the human body. Previous cases have dealt with gene patents as they relate to using DNA to make drugs.
Unraveling a 'Lawyer's Trick'
The determination that isolated DNA is not markedly different from DNA in the body represents the crux of the district court's decision. Also instrumental is Sweet's judgment that the very nature of DNA makes it markedly different from chemical compounds that are patentable.
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Approximately 20 percent of the human genome has been patented, and most gene association patents have been awarded on the premise that the purification of DNA from the body makes it a patentable chemical compound. But Sweet is not convinced by this practice, noting that some have called it a "'lawyer's trick' that circumvents the prohibitions on the direct patenting of the DNA in our bodies."
Myriad's case rested on the argument that isolated DNA is a patentable chemical compound. The company's argument relies heavily on Parke-Davis v. H.K. Mulford, a 1911 district court decision that found that an adrenaline compound that had been isolated and purified from animal supernal glands was patentable. According to Sweet's reading, however, the ruling judge in that case found the adrenaline compound patentable not because it was different from prior art by the process of purification, but because it was a different chemical substance than previously found in prior art.
"The opinion, read closely, fails to support [Myriad's] conclusion" that Parke-Davis establishes that purification of a natural product makes it patentable, Sweet found. Furthermore, in the judge's view, Myriad "fails to acknowledge the unique characteristics of DNA that differentiate it from other chemical compounds."
Sweet cites Myriad's own expert in pointing out the dual nature of DNA molecules as both chemical structures and as "carriers of information." The biological function of DNA — encoding information that directs the function of other molecules in the body — is precisely what makes it unlike any other chemical compound, he said.
"The information encoded in DNA is not information about its own molecular structure incidental to its biological function, as is the case with adrenaline or other chemicals found in the body," he stated. "Rather, the information encoded by DNA reflects its primary biological function: directing the synthesis of other molecules in the body —namely, proteins."
Myriad has pointed out in materials submitted to the court that there are differences between isolated DNA and DNA inside the body, and as such recommended that the court focus on the differences instead of the similarities between the two.
Sweet struck down Myriad even on this count, saying considerations of "novelty" are "irrelevant" for applying 35 USC Section 101, and pointed out that both the Supreme Court and the Federal Circuit have determined that analysis of patent claims under section 101 must be evaluated after considering the claimed invention "as a whole."
Skill or Invention?
Ultimately, in the judge's view, the process of identifying specific segments of chromosome 17 and 13 associated with breast and ovarian cancer and then isolating these gene sequences does not constitute a process of invention, as Myriad claims.
"The identification of the BRCA1 and BRCA2 gene sequences is unquestionably a valuable scientific achievement for which Myriad deserves recognition but that is not the same as concluding that it is something for which they are entitled to a patent," Sweet wrote. "Even though it may have been the product of skill, it certainly was not the product of invention."
As precedence, the district court cites Funk Brothers Seed Co. v. Kalo Inoculant Co., a 1948 case in which the Supreme Court deemed that the patentees' discovery of a strain of bacteria allowing plants to fix nitrogen from the air without restricting other bacteria from doing the same was “the work of nature" and not patentable. While the discovery of the bacteria strain, similar to Myriad's process of gene association discovery and sequencing, required "skill and considerable labor," in the end, it required only the application of "techniques well-known to those skilled in the art," Sweet held.
Applying the "machine-or-transformation" test as set forth in the Federal Circuit decision in Bilski v. Kappos, Sweet further deemed Myriad's method claims of "analyzing" and "comparing" gene sequences as mental processes not meeting the transformation test set forth in Bilski.
In the pending Supreme Court case Bilski, justices are in the process of deciding to what extent they will uphold or overturn a Federal Circuit Court's decision that a so-called machine-or-transformation test is necessary to determine patentability. Under the machine-or-transformation test, a process must either be tied to a particular machine or apparatus or transform an article into a different state in order to be patentable.
The Justices' comments during a November hearing suggest they are struggling to narrowly uphold a lower court's machine-or-transformation test and minimize the impact to other sectors, mainly the technology and medical device industries [see PGx Reporter 11-18-2009].
Legal analysts knowledgeable of the process expect the Supreme Court's decision to be delivered soon. If the Supreme Court rules more narrowly than the Federal Circuit, it will impact Sweet's application of the "machine-or-transformation" test to Myriad's patents.
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However, Jennifer Gordon of the law firm Baker Botts is not convinced that Bilski will necessarily have a broad impact on the biotechnology industry. "Bilski is so centered on the business method patent, some of us who are in the biological area aren't sure whether we're going to get much guidance at all from the Supreme Court," said Gordon, who along with several other lawyers at Baker Botts crafted an amicus brief on behalf of BIO in support of Myriad's opposition to the ACLU's motion for summary judgment.
Rather than Bilski, Gordon believes another case, Prometheus v. Mayo, would provide more guidance to higher courts with regard to the validity of Myriad's patents.
"I think the Southern District Court failed to recognize that there [are] a lot of transformative steps that go into analyzing a DNA sequence," Gordon said. "I think that's where the Southern District Court broke with the precedent that's already been set in the Prometheus case — that you can't just look at a breast tissue sample and know whether it contains a normal or mutated sequence."
The Federal Circuit court's decision last year in Prometheus v. Mayo found that diagnostic claims using a correlation occurring in nature — in this case involving methods for identifying metabolites of a drug for gastrointestinal disorders — were patentable. However, in his application of Prometheus to Myriad's patents, Sweet disagreed with Myriad's claims that analyzing and comparing gene sequences are transformative processes in the same way as gauging metabolite levels in patient samples in Prometheus.
In Prometheus, "the act of determining metabolite levels was itself construed to include the extraction and measurement of metabolite concentrations, such as high pressure liquid chromatography," Sweet writes in his decision. "In contrast, the language of the method claims-in-suit and the plain and ordinary meanings of the terms 'analyzing' and 'comparing' establish that the method claims in suit are directed only to the abstract mental processes of 'comparing' and 'analyzing' gene sequences."
Sweet "seems to dismiss" Myriad's application of sequencing techniques to DNA samples "into this category of extra solution activity or data gathering," Gordon observed. "Whereas in the Prometheus case, where a metabolite had to be analyzed, the Federal Circuit recognized that there is a quite a lot of transformational chemistry that goes into that sort of analysis.
"I believe the federal circuit will view DNA sequencing the same way," Gordon said.
Sweet's 'Slippery Slope'
From the moment the ACLU and PUBPAT decided to challenge the patentability of genes through Myriad's BRCA patents, industry groups have held that such a move would obliterate the biotechnology industry, discourage investment, and stifle innovation.
By distinguishing the patentability of genes in the context of diagnostic testing from that of drug development, Sweet asserted in his decision that because DNA is so distinct in nature from all other patentable chemical compounds that invalidation of Myriad's claims to isolated DNA would not negatively impact the biotechnology industry.
"Myriad and many of the amici suggest that the invalidation of the patents-in-suit will result in the decimation of the biotechnology industry," the judge wrote, referencing Myriad's claim that invalidating gene association patents would also widely annul patents to chemical compounds, such as the anticancer drug Taxol (paclitaxel).
"The conclusions reached in this opinion concerning the subject matter patentability of isolated DNA, however, are based on the unique properties of DNA that distinguish it from all other chemicals and biological molecules," Sweet wrote in a footnote to his decision. "As a result, Myriad's predictions for the future of the US biotechnology industry are unfounded."
Duke's Cook-Deegan said it is significant that the case is about diagnostics, as opposed to DNA as a vehicle for producing therapeutic proteins. "[In] all the case law up until now, this is the first time anybody has brought up a gene patent in the context of DNA diagnostics that has actually gotten to a judge," Cook-Deegan said. "I think that's why he was so concerned with products of nature in his decision. You don't even get to the patent criteria; he's saying that this is not patent eligible."
This distinction made by Sweet, if upheld, will likely impact the diagnostics industry, but to what degree is currently anyone's guess. According to Discover Magazine's 80s Beats blog, the biotech industry is built on more than 40,000 gene patents. However, since the USPTO is unlikely to change its patent process based on this initial ruling, the blog foresees no impact on the biotech industry in the short term.
Baker Bott's Gordon believes Sweet is "on a slippery slope" with his determination, and is on the side of BIO in her estimation that if this decision is upheld, it could have a far-reaching impact on the industry.
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"He seems to think that he has put DNA safely in a category by itself, that it's like no other chemical compound, but the reality is that a variety of naturally occurring materials can serve as markers for disease," she noted. "So, I think he was trying to compartmentalize this so he doesn't run afoul of precedent that involves non-DNA-type chemical compounds. But I'm not sure that he can compartmentalize that way.
"Then you ask, 'Are you on a slippery slope? Will other things be deemed to have some kind of information content for the purpose of diagnosing a disease and will those things become unpatentable?'"
According to Gordon, method claims describing how a certain chemical compound correlates with a disease state have been made in the past. For example, in the 2006 case LabCorp v. Metabolite, the Supreme Court decided to uphold the Federal Circuit's ruling that Metabolite could patent its discovery of the correlation between homocysteine levels and vitamin B deficiency.
In that case, the Federal Court's decision was maintained because the Supreme Court decided by a vote of five-to-three to dismiss the case, finding that a writ of certiorari was improperly granted. The three dissenting justices argued that the Supreme Court should have heard the case, and wrote an opinion asserting that a natural correlation between two substances in the body is an unpatentable natural phenomenon.
"Certainly, method claims that involve some kind of biomarker for telling you whether you have a disease or the potential for a disease, those are out there in patents," Gordon said. "But, I guess to this judge's thinking, a purified natural substance that could be used as a therapeutic would somehow throw it in the markedly-different-than-it-exists-in-nature bucket, and still be patent eligible.
"I don't know if you can cut off the thinking there," Gordon said.
In its amicus brief in support of Myriad, BIO states that "striking down patents on isolated nucleic acids will not only do immeasurable harm to patients and our domestic biotechnology industry, but will have dramatic repercussions throughout the medical field."
Although BIO has asserted that there is little evidence showing that gene patents harm access to diagnostic tests or bar researchers from access to materials, the organization has not provided an estimate of how widespread the impact of the court's ruling would be in terms of loss of revenue and investment.
Myriad has tried to reassure jittery investors by pointing out that regardless of the outcome of the case, the company's revenues for BRACAnalysis and other products will not be impacted. Myriad's Meldrum recently pointed out to investors that the company has in total 23 patents covering BRACAnalysis. No matter what the outcome of the ACLU/PUBPAT lawsuit, "the other 16 patents are preserved and give this company a very strong intellectual property base," he said.
However, since the lawsuit against Myriad challenges the very concept of gene patenting, it is unclear what impact a ruling in favor of the plaintiffs might have on the remainder of Myriad's patent portfolio or on gene patents held by other firms. On March 30, the day after Sweet issued his decision, biotech stocks on Nasdaq closed down 4 percent from the prior day's close.
Cook-Deegan characterized Sweet's decision a "bombshell," but noted that through the appeals process, he could envision a situation where a higher court maintains Myriad's patents but in a much narrower form. Cook-Deegan led a research team that gathered public comments and provided the case studies for a controversial HHS advisory committee report on gene patenting.
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The report, finalized earlier this year, by the HHS Secretary's Advisory Committee on Genetics, Health, and Society recommended that HHS Secretary Kathleen Sebelius advocate a statutory exemption for genetic researchers and commercial test developers from gene patent infringement liability.
How Will It End?
Based on comments from Myriad and from counsel representing the plaintiffs, an appeal of the decision seems imminent. And before the definitive legal word is spoken on the patentability of gene association patents, the battle will likely be complicated, ugly, and lengthy.
"This one's big and complicated," Cook-Deegan said. "And this is a kind of surprise start to the whole process. I really didn't expect this" far-reaching of a decision from the district court.
Although the patent systems in the US and Europe are entirely different, a challenge from European researchers to Myriad's BRCA patents within the European Patent Office went on for seven years, resulting in the EPO deciding to maintain but narrow the company's patent claims for the BRCA1 gene (see related story).
PUBPAT's Ravicher laid out several possible scenarios for where things can go after the district court determination.
"Myriad could appeal, saying that the Judge got it wrong on Section 101. Then, we [the plaintiffs] would respond and say the Court got it right," Ravicher said. "But if the [appeals] court rules that the [district] court got it wrong on 101, then we can appeal the dismissal of the USPTO" and reinstate the constitutional claims.
"The only reason those claims were dismissed is because the judge ruled for us on Section 101 and if you reverse him on that, then our constitutional claims against the USPTO should be reinstated," Ravicher said.
Ultimately, in the Federal Court of Appeals, where the case will be heard next, if there is a reversal of the district court's decision, then it could be sent back to Sweet, Ravicher said. He highlighted the likelihood that at some point "the losing side will petition the Supreme Court to take the case."
Then, in the rosy afterglow of the win — a victory that although preliminary was widely thought to be highly improbable — Ravicher envisioned a quicker and far more unlikely end to the legal battle with Myriad.
"I mean, Myriad could … admit that they're wrong, admit that these patents are invalid and undeserved, and simply drop the case and walk away," Ravicher said. "They could do the right thing."