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US Supreme Court Strikes Down Gene Patents but Allows Patenting of Synthetic DNA

NEW YORK (GenomeWeb News) – The US Supreme Court today unanimously ruled that human genes are not patentable, but synthetic DNA, or cDNA, is patent eligible because it does not occur naturally.

The decision, written by Justice Clarence Thomas, was hailed by the plaintiffs in the case, Association for Molecular Pathology et al. v. Myriad Genetics, who view it as a victory for patients seeking greater access to genetic testing and researchers aiming to develop new molecularly guided personalized treatments.

"Today, the court struck down a major barrier to patient care and medical innovation," Sandra Park, senior staff attorney with the ACLU Women's Rights Project, said in a statement this morning. "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."

Though the decision invalidates patents covering the BRCA1 and BRCA2 genes, which underlie Myriad Genetics' BRACAnalysis test, the firm noted in a statement after the decision that "many of Myriad's unchallenged claims are method claims applying knowledge about the BRCA1 and BRCA2 genes."

"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," said Myriad President and CEO Peter Meldrum.

The ruling that cDNA is patentable also is being viewed as favorable to Myriad by some industry observers.

William Quirk, an analyst with investment firm Piper Jaffray, called the ruling "a clear victory for Myriad." He said the court's decision to leave cDNA patents intact "means it will be very unlikely for competitors to introduce competing tests short of using whole-genome sequencing, in our opinion. There are schools of thought suggesting genomic DNA as a probe, but we have not seen scientific evidence to back up that claim."

However, Ross Muken, an analyst with ISI, noted, "By stating that naturally occurring DNA is not patent eligible, theoretically someone could sequence the naturally occurring BRCA genes. This leaves a loophole through which NGS-based tests could challenge future tests."

The stock market reacted favorably to the news, sending Myriad's shares up 10 percent to $37.31 in early afternoon trade on the Nasdaq.

Some market observers have said that gene patents are critical for the life sciences industry to attract necessary investment and advance innovative products. "The [Supreme Court's] decision could have long-term consequences on incentives for creating new medical diagnostics and personalized medicine," Tim Worrall, biotech patent attorney and a partner at Dorsey and Whitney, said in a statement.

However, ACLU's Park today cited analysis conducted by the Secretary's Advisory Committee on Genetics, Health, and Society, which found that exclusive licensing of gene patents are not critical to spur investments to discover gene-disease associations or launch new tests, and cited several examples where multiple tests exists for a gene marker that has been non-exclusively licensed.

The Supreme Court heard arguments in the case two months ago, and the justices appeared to be particularly interested in how invalidating or upholding patents on isolated gene sequences, or even cDNA, could impact innovation.

In the ruling today, the Supreme Court wrote, "Myriad did not create or alter either the genetic information encoded in the BRCA1 and BRCA2 genes or the genetic structure of the DNA. It found an important and useful gene, but groundbreaking, innovative, or even brilliant discovery does not itself satisfy [35 USC section 101]. … Finding the location of the BRCA1 and BRCA2 genes does not render the genes patent eligible."

It further said that cDNA, because it isn't a product of nature, is patent eligible. "cDNA does not present the same obstacles to patentability as naturally occurring, isolated DNA segments," the court wrote in its opinion.

The decision runs counter to the US Patent and Trademark Office's policy of granting patents on isolated gene sequences for three decades and presents a shift in patent law. However, it does fall in line with the US government's position, as represented by the Department of Justice, that although the act of isolating DNA sequences doesn't make it sufficiently different from native DNA to make it patent-eligible, cDNA is man-made, doesn't exist in nature, and therefore is worthy of patent protection.

The court's ruling leaves open the use of cDNA for various purposes. Although most test developers have maintained that cDNA is not critical to providing genetic testing as the technology has advanced, synthetic DNA is still critical to the drug development process.

The plaintiffs in the case, represented by the American Civil Liberties Union and the Public Patent Foundation, had challenged patents on isolated BRCA1 and BRCA2 gene sequences held by Myriad.

Harry Ostrer, a medical geneticist at Albert Einstein College of Medicine and a plaintiff in the case, said during a call hosted by the ACLU that now with gene patents invalidated, labs will be able to openly compete to provide testing for BRCA1 and BRCA2 gene mutations, and this will bring down the cost of testing. Myriad charges around $4,000 for its BRACAnalysis test that gauges mutations in BRCA1 and BRCA2 associated with risk of familial breast and ovarian cancer.

Myriad had sent a letter to Ostrer's lab at New York University in 1998 offering to license the BRCA patents, which he said had prevented him from performing the test at NYU. Ostrer said that the ruling essentially eliminates sole-source providers for genetic tests, and enables other labs to improve upon existing testing methods.

For one of the plaintiffs, the American College of Medical Genetics and Genomics, however, the ruling didn't go far enough.

"While this is indeed, great news, our preferred outcome would have gone even further and found that that any form of a gene is not patentable because it is the information content that is naturally occurring regardless of whether its genomic or cDNA," ACMG President Gail Herman said in a statement. "It is ACMG's long-standing position that genes and their mutations are naturally occurring substances that should not be patented. On behalf of both patients and genetics health professionals, we applaud the decision that human genes are not patentable and hope that this will eventually include cDNA also."

But, according to Biotechnology Industry Organization President and CEO Jim Greenwood, the ruling is "a troubling departure from decades of judicial and Patent and Trademark Office precedent supporting the patentability of DNA molecules that mimic naturally-occurring sequences. In addition, the Court's decision could unnecessarily create business uncertainty for a broader range of biotechnology inventions," he said in a statement.

The ACLU first brought the lawsuit against Myriad in 2009 in New York federal district court, where Judge Robert Sweet invalidated seven of Myriad's patents claiming isolated gene sequences, complementary DNA, and diagnostic methods. Reasoning that isolated gene sequences were products of nature, he invalidated those claims, noting that the information of interest in terms of diagnosing disease contained in isolated DNA is exactly the same as the information in native DNA. In that decision, Sweet also invalidated Myriad's patents on diagnostic methods and on complementary DNA that researchers have synthesized to use as probes in diagnostic testing.

Myriad appealed this decision in 2011 and 2012 in the Federal Circuit Court of Appeals, which resulted in a two-to-one decision upholding the company's patents on isolated genes and cDNA, and invalidating all but one method patent. Both times, Judge William Bryson partly agreed with the other two judges, Alan Lourie and Kimberly Moore, by invalidating Myriad's method patents and upholding cDNA patents, but disagreed that isolated gene sequences were patent eligible.

After the first CAFC hearing, the plaintiffs appealed to the Supreme Court, but at that time the court remanded the case back to the CAFC, asking them to review the case in light of its decision in another case, Mayo v. Prometheus. The Supreme Court in Mayo v. Prometheus emphasized that "an application of a law of nature … to a known structure or process may [deserve] patent protection," but in order to transform a law of nature into something worthy of a patent, the applicant "must do more than simply state the law of nature while adding the words 'apply it.'"

However, after the CAFC last year issued essentially the same decision as it did in 2011, the Supreme Court decided to take up the case in November.

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