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Myriad Prepared to Make Small IP Sacrifice to Aussies in Light of Landmark US Patent Case

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Originally published Oct. 4.

This article was updated Oct. 5 with additional comments from Luigi Palombi on the likelihood that the Australian anti-gene patenting case could continue if Myriad's '004 patent is revoked.

By Turna Ray

In deciding to surrender a key patent — No. 686004, which covers certain BRCA1 mutations — to the Australian government, it seems Myriad may be preparing to sacrifice a small slice of its IP holdings in a secondary market in order to avoid any erosion of its position in the landmark US case challenging seven of its BRCA gene patents.

Earlier this year, after a US federal district court ruled that several of Myriad's BRCA patents covering its flagship BRACAnalysis test did not meet the criteria for patentable subject matter, a cancer patient group challenged Myriad's '004 patent in Australian federal court. Plaintiffs bringing the Australian challenge against Myriad have structured their arguments similar to plaintiffs in the US court case and are arguing that isolated gene sequences are not markedly different from naturally occurring DNA, and therefore are not patentable (PGx Reporter 06/16/10).

In the US case, Association for Molecular Pathology et al. vs. the United States Patent and Trademark Office et al., Myriad is in the midst of challenging the lower court's determination in the US Federal Circuit Court of Appeals, maintaining that district court Judge Robert Sweet had an erroneous reading of prior case law in deeming cDNA not patentable (PGx Reporter 06/23/10).

The Australian case challenging the '004 patent is being brought against patent holders Myriad, Centre de Recherce de Chul in Canada, and the Cancer Institute in Japan and exclusive license holder Genetic Technologies by plaintiffs Cancer Voices Australia, the law firm Maurice Blackburn, and breast cancer patient Yvonne D'Arcy. However, before this case could get off the ground, Jones Day, the law firm representing Myriad, sent a letter to the plaintiffs dated Aug. 13 in which it offered to "gift Australian Patent No. '004 to the people of Australia."

However, Myriad made it explicit in the letter, obtained by PGx Reporter, that the gesture "does not constitute an admission that the patent is invalid." Now, the Commissioner of Patents in Australia will have to decide whether to accept Myriad's offer or deny it. If the commissioner does not accept Myriad's offer, the case challenging its '004 patent, seeking to answer the larger question of whether isolated genes are patentable, will continue.

"Myriad's objective in surrendering the subject patent [in Australia] is to bring the proceedings to a premature end," Luigi Palombi, director of the Genetic Sequence Right project at the Australian National University and a gene patenting scholar, told PGx Reporter last week. Palombi has issued supporting statements on the side of plaintiffs and against Myriad's patents.

If the '004 patent is revoked, however, then the Australian case ends there, unless the plaintiffs decide to refile their lawsuit with Myriad's other BRCA patents. "But even if they do this, it will be a matter for the court to approve such a move," Palombi said. "And although it sounds like a possible solution there are complications because Myriad is not the sole owner of these other BRCA patents."

Australian Patent No. 691331, covering a "method for diagnosing a predisposition for breast and ovarian cancer," and Patent No. 691958 for a "17q-linked breast and ovarian cancer susceptibility gene," list Myriad, the US Department of Health and Human Services, and the University of Utah as co-owners. "So, enlarging the scope of the legal challenge will involve bringing the US government into the litigation as a party," Palombi said.

Before the plaintiffs brought the court case against Myriad in Australia, a moral debate on the impact of gene patents on patient access began when Genetic Technologies in 2008 asked several Australian labs to stop performing a test for BRCA1 and BRCA2. After the uproar this caused among patient groups and researchers, the company recanted and allowed BRCA testing to continue.

Although the Australian lawsuit deals specifically with the '004 patent, as in the US court case, a positive outcome on the side of the plaintiffs would effectively do away with patents on isolated gene sequences.

"While an adverse Australian Federal Court ruling is not binding on a US court, it may have some persuasive effect on the issue of the patentability of isolated biological materials [that] are identical or substantially identical to what exists in nature," said Palombi, who has provided testimony on gene patenting to the Australian Senate Committee, which is investigating the impact of such patents on access to medical testing.

Essentially, by prematurely giving up the '004 patent in Australia, Myriad wants to make sure that US judges won't be influenced by the decision of higher courts outside the country that may decide that isolated DNA is the same as naturally occurring DNA.

However, if the Australian litigation stops with the surrender of the '004 patent, it will likely not materially affect Myriad's business in the country, since it will still have the two other patents, '331 and '958, related to BRACAnalysis.

Myriad didn't respond to queries about its decision to give up the rights to the patent in Australia. To investors, Myriad has been putting forth a brave front regarding the US litigation, and has said it is confident that the district court's decision invalidating its patents will be overturned upon appeal. Even if it loses, Myriad has said that only a fraction of patents would be impacted and that its ability to profit from BRACAnalysis sales would be not materially harmed (PGx Reporter 09/22/10).

However, the surrender of '004 in Australia suggests that despite Myriad's confident exterior, the company is taking extremely cautious steps to minimize any negative impact in the US anti-gene patenting case.

Myriad's stock has been steadily declining since the gene-patenting suit was filed last year. A 52-week average of the company's stock price in the US shows a high of $29.84 on Sept. 21, 2009, and a low of $14.11 on July 30. In the weeks following Myriad's offer in August to surrender its Australian BRCA patent, The company's stock price has remained around $16. In midday trading on Oct. 4, Myriad's stock was in the range of $16.25 to $16.64.

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