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US Senate Hearings Consider Bipartisan Proposal to Change Patent Laws; Could Have Big Impact on Dx

NEW YORK (GenomeWeb) – A US Senate panel will today begin hearings on a proposal to write new patent legislation that could greatly expand eligible subject matter.

The hearings, to be held today, June 5, and June 11 by the Senate Judiciary Subcommittee on Intellectual Property, will address the topic of patent eligibility and a bipartisan draft bill released May 22 by its chair, Sen. Thom Tillis, R-N.C., and ranking member, Sen. Chris Coons, D-Del.

The draft bill contains changes to several sections of the statutes covering patent law: it provides a legal definition for the term "useful" and states that inventions need only be useful, and not "new," as stated in the current statute. The draft bill also adds a provision that overturns judicial exceptions to patentable subject matter created by the Supreme Court over the last decade, in cases including Association for Molecular Pathology v. Myriad Genetics, Inc., Mayo Collaborative Services v. Prometheus Laboratories Inc., and Alice Corp. v. CLS Bank International. Together, the opinions in those cases have excluded patents from covering abstract ideas, laws of nature, and natural phenomena.

If signed into law as written, the bill would have a major impact on the diagnostics industry. "People in the diagnostics industry will be getting more patents," said Arti Rai, a legal scholar at Duke University who studies patent law. Though she doesn't foresee a flood of patent suits on the medical side of the industry, "I think it'll almost certainly lead to more lawsuits in software" related to diagnostic tests, she said. "Software is just litigious. It's not just the software, per se, it's also the fact that a lot of tests are going to be looking at so many genes and using software to do so."

The bill would also raise the cost of defending patent suits and take away a procedural tool for companies to fight overly broad patents, according to Alex Moss, an attorney at the Electronic Frontier Foundation, an organization that is opposed to the proposed changes. Moss will testify at today's hearing.

Proponents of patent law reform, including Hans Sauer, deputy general counsel for intellectual property at the Biotechnology Innovation Organization, a trade group representing pharmaceutical and diagnostics firms, said that the legislation will bring the US patent system in line with that of major trading partners, including the European Union, Canada, Japan, and China. He added that the Supreme Court's actions have created an unpredictable environment for companies using their patents as instruments to raise funds or forge partnerships with other firms.

"The notion of what it means to be a product of nature isn't fixed and it's still changing. That's very bad for investment and innovation because you operated under a risk that you could not foresee." Sauer is slated to testify at Wednesday's hearing.

But the American Civil Liberties Union and AMP, who together brought the case against Myriad that invalidated patents on human genes, said the bill "threatens to take us back to a time of greater uncertainty regarding patent eligibility," according to a letter the organizations sent to Tillis and his colleagues.

"The draft legislation, if enacted, would authorize patenting products and laws of nature, abstract ideas, and other general fields of knowledge," the ACLU letter states. "Most troublingly, the legislation would permit patenting of human genes and naturally occurring associations between genes and diseases … Further, it will stymie competition for developing and improving diagnostic and medical tests and increase the cost and hinder advancement of targeted therapeutics involving genomic markers."

Yesterday, the ACLU and AMP announced that 169 other organizations had signed on to their opposition letter, including ARUP Laboratories, the Broad Institute, and the New York Genome Center, as well as testing companies including Ambry Genetics, GeneDx, NeoGenomics Laboratories, and Invitae.

"This draft legislation puts patents before patients and contradicts the entire concept of precision medicine," said Tara Burke, senior director of public policy and advocacy at AMP.

Politics and policy

Moss, the EFF attorney, suggested that the draft bill is the result of an "unholy alliance between tech patent licensing companies and forces upset about the loss of gene patents, heavily supported by trial attorneys," that is presenting a deeply divided Congress the opportunity to work together in a bipartisan manner (the draft bill also has support from representatives of both parties on the House Judiciary Committee.)

But the issue of new patent legislation "has been percolating ever since those Supreme Court decisions," Rai said. "A lot of people, myself included, would say that the case law is kind of a mess." In an attempt to address lawsuits about "junky" patents, the Supreme Court performed "major surgery" in this area of the law, she said. "It's probably fair to say the Supreme Court overcorrected, or at least they didn't take care in a way that didn't lead to overcorrection," Rai added.

Legal scholars, patent attorneys, corporate lawyers, and even federal judges have criticized the court's recent decisions in patent cases.

In April, Congress indicated it would pursue a legislative solution to the alleged policy problems created by the Supreme Court, when Tillis and his colleagues released a draft outline of their goals in reforming US patent law. That outline preserved many of the concerns and concepts the Supreme Court had been worried about, Rai said, but was "more articulate than the Court has been." Still, the language didn't go far enough for some.

Now, the new draft bill has greatly expanded what could be eligible for patent protection in the US. "For the most part, this draft is fairly dramatic in terms of overruling all of the Supreme Court case law and not retaining many of the concerns that animated the court," she said.

"We believe this draft framework represents a true balance that will restore integrity, predictability, and stability to our nation's patent system, while also preventing the issuance of overly broad patents," Tillis said in a statement accompanying the May release of the draft bill.

But Rai said that broad laws of nature with some immediate application would probably be patent eligible under the draft bill. "The distinction of what constitutes basic research and what has immediate usefulness is pretty unclear in a lot of medical science," she said. "A lot of these laws of nature can be applied immediately. If the only requirement is that it has some usefulness, whatever the law of nature or abstract idea is, that's not going to be a difficult hurdle."

Moss echoed Rai's sentiment about the blurriness between research and invention. Many patents, either in software or diagnostics, cover the idea of getting to a result, she said, "and often the claim is broad enough to cover various ways of getting [to that result.]"

"This change would make it easier to get those patents and sustain them in court," she said. What's more, the Supreme Court's Alice decision provided defendants in infringement suits an early opportunity to challenge the patents' validity.

"It means anybody who might get sued is going to have a much harder time to clear their name, even if the patent is something really basic," Moss said, adding it also would raise the costs of defending patent suits.

While the witness lists for the first two days of testimony have been released, the Senate subcommittee holding the hearings has not yet announced the list of witnesses for June 11.

"After the hearings, we will take the feedback from the witnesses across the range of the IP world and hopefully introduce legislation in the coming weeks," said Adam Webb, press secretary for Tillis. "Once a bill is introduced, we will work to build support for the legislation."