Late last month the federal appeals court responsible for patent matters reversed a lower court decision that had threaten to eliminate all “gene patents.” In the case of Association for Molecular Pathology v. Myriad Genetics a three-judge panel of the Court of Appeals for the Federal Circuit (CAFC) overturned (in part) a New York federal district court decision from last April. The district court suit had been brought by several medical societies, physicians and individual cancer patients, seeking to invalidate several so-called “gene patents” held by Myriad Genetics and the University of Utah.
Two of three judges concluded that isolated DNA molecules were indeed patentable subject matter. Judge Lourie, writing for the majority, found that isolated DNA was not merely a purified product of nature. The majority rejected a “magic microscope” argument advanced by the plaintiffs, who basically argued if you could see DNA, then it is a product of nature and, hence, not appropriate subject matter for a patent.
Judge Lourie disagreed and concluded that the claimed DNA sequences had markedly different chemical structures compared to the DNA found in our bodies. However, the panel did affirm the district court’s decision to revoke certain analytical method claims –on narrow grounds. On the assay claims, the CAFC panel concluded that the claimed methods failed to recite any “transformative” steps and were so broad as to read on purely mental steps.
The patents at issue in the case were based on the discovery that certain mutations in two gene sequences, BRCA1 and BRCA2, in some individuals were correlated with a heightened susceptibility to breast cancer. Once these sequences were identified, the inventors also realized the isolated DNA could be used to construct screening assays for the mutations and therapeutics. The inventors filed for patents on these discoveries.
The attorneys representing the plaintiffs, the ACLU Foundation and the Public Patent Foundation, challenged seven of the patents for claiming subject matter not eligible for patent protection. The challenged patents cover both isolated DNA derived from the BRCA1 and BRCA2 gene sequences as well as diagnostic methods for determining a patient's predisposition to breast cancer based on identification of certain mutations in BRCA genes extracted from patients and screening tests for new therapeutics.
The federal district court decision by Judge Sweet of the southern district of New York to revoke all of the patent claims had surprised much of the patent community because it was contrary to the longstanding practice of the Patent and Trademark Office in issuing gene patents as well as to practice of other government agencies like the NIH in seeking and obtaining patents on DNA sequences. Basically, Judge Sweet adopted the argument advanced by ACLU Attorney Hensen: “Genes isolated from the human body are no more patentable than gold extracted from a mountain.” However, this legal reasoning ran contrary to a large body of case law that biological materials, such as proteins, hormones and even stem cells can be patented in their isolated form.
The case took a surprising turn last October when the U.S. Department of Justice decided to throw the Patent Office under the bus (on the issue of isolated DNA) and weighed in on the side of those seeking to erase gene patents. At the oral hearing in the appeal, the government made its argument by way of a “magic microscope” test. According to the government’s test, if an imaginary microscope could focus in on the claimed DNA molecule as it exists in the human body, the claim covers unpatentable subject matter.
Judges Lourie and Moore of the CAFC panel ultimately rejected this reasoning as flawed. “The ability to visualize a DNA molecule through a microscope, or by any other means, when it is bonded to other genetic material, is worlds apart from possessing an isolated DNA molecule that is in hand and usable. . . . The government’s microscope could focus in on a claimed portion of any complex molecule, rendering that claimed portion patent ineligible, even though that portion never exists as a separate molecule in the body or anywhere else in nature, and may have an entirely different utility.”
With regard to the analytical method claims, the CAFC panel affirmed the district court’s decision that the method claims were invalid – but on somewhat different grounds. The judges noted that the method claims were so broad as to merely recite steps of “comparing” or “analyzing” two gene sequences. For example, Judge Lourie pointed to one claim that recited a method for screening a tumor sample by “comparing a first BRCA1 sequence from a tumor sample and a second BRCA1 sequence from a non-tumor sample, wherein a difference in sequence indicates an alteration in the tumor sample.” He rejected this claim as reciting “nothing more than the abstract mental steps” necessary to compare two different nucleotide sequences.
The CAFC panel’s treatment of the method claims was very much in line with the recent U.S. Supreme Court decision in Bilski v. Kappos, which invalidated certain “business method “ patent claims because they were simply “abstract ideas.”
Even though Myriad’s method claims were revoked, the CAFC decision distinguished similar method claims that were found to pass muster in Prometheus Labs., Inc. v. Mayo Collabarative Servs., where the CAFC recently did find transformations in assay steps. Judge Lourie noted that Myriad’s claims did not include the step of “determining” the sequence of BRCA genes by, e.g., isolating the genes from a blood sample and sequencing them, or any other necessarily transformative step.
Thus, the Myriad opinion broadly hints that those claiming biotech analytical methods can avoid a similar fate by reciting more concrete transformative steps, such as biopsying blood or tissue, removal of DNA from biopsied cells, separating the particular sequences of interest and preparing the isolated sequences for analysis to detect mutations.
Lurking between the lines of Myriad decision is the problem of the cost of genetic assays. According to the plaintiffs, the $3,000 price tag charged by Myriad for the full assay, effectively puts the test out of the reach for most Americans whose health plans will not fully cover the test. The Justice Department’s position to support the plaintiffs may have been driven by factors far removed from patent practice -- the looming costs of personalized medicine as universal health care goals clash with federal budget cuts.
However, the ability to charge monopoly prices is at the core of the patent system, which is designed to reward for a limited period of time those who add to mankind’s knowledge. The monopoly price also provides an incentive for others to find alternatives to the patented invention. In fact, Myriad’s revenues are a far cry from the billions of dollars that many drug patents reap annually for their owners in the pharmaceutical industry. Judge Lourie’s decision in the Myriad case stays true to these principles: “Changing course years after the fact will only serve to punish those companies who made the reasonable decision to invest large amounts of time and money into the identification, isolation, and characterization of genes.”
Of course, the CAFC panel’s decision in the Myriad case may not be the last word on whether isolated DNA is patentable. The parties will in all likelihood seek rehearing en banc before all twelve of the judges of the CAFC. After that, the U.S. Supreme Court may very well have its own opinion on the government’s “magic microscope” argument.
- Tom Engellenner
This posting is an adaptation of my recent analysis in IPLaw 360. This blog is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.
