Biotech Values

[DewDiligence]

Judge Rules Against MYGN in BRCA1/2 Patent Case

[Oddly, the lead plaintiff in the case is the ACLU.]

http://www.businessweek.com/news/2010-03-29/myriad-loses-ruling-over-breast-cancer-gene-patents-update1-.html

›March 29, 2010, 8:20 PM EDT
By Susan Decker and Thom Weidlich

March 29 (Bloomberg) -- Myriad Genetics Inc. lost a U.S. court ruling over its patents for a way to detect inherited breast cancer in a decision that may lead to other challenges to gene-related patents.

U.S. District Judge Robert Sweet in New York ruled the patents invalid today, saying they “are directed to a law of nature and were therefore improperly granted.” The judge sided with the American Civil Liberties Union, which sued on behalf of groups including the Association for Molecular Pathology and American College of Medical Genetics.

“This is ground-breaking,” said Barbara Caulfield, a patent lawyer with Dewey & LeBoeuf in Palo Alto, California, who submitted arguments against the patents on behalf of the March of Dimes. “Now all naturally occurring gene patents are invalid by the reasoning of this opinion. [I doubt that such a blanket assertion will turn out to be correct.] This is really a sea change for patents in life sciences.”

Myriad makes a widely used test for detecting breast cancer. Medical groups say Myriad’s tight control over use of the genes has discouraged scientists from exploring other options for breast-cancer screening. The trade group for biotechnology companies argued that the challenge to the Myriad patents may hinder investment in research.

Patents aren’t allowed for rules of nature, natural phenomena or abstract ideas, although the U.S. Patent and Trademark Office has said genes can be patented if they are “isolated from their natural state and purified.”

Gene Sequencing

Myriad, based in Salt Lake City, said its patents cover how to sequence the gene to identify its components, and using that sequence to look for mutations to determine if the woman has a higher risk of developing breast cancer. The genes are known as BRCA1 and BRCA2.

Sweet said that Myriad simply identified something that occurred in the body, and that the comparisons of DNA sequences are “abstract mental processes” and neither are eligible for patent protection.

“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 ruled.

Patent Eligibility

The case hinged on the baseline question of whether certain gene-related inventions were eligible for patent protection and didn’t look further into the specifics of whether Myriad’s work met other criteria for a patent, such as that it was novel or non-obvious.

“The principal that an isolated gene is the same as a gene is a broad principal and may have an impact on other gene patents,” [note the use of the word “may,” which was absent from the assertion I questioned in the annotation above] said Christopher Hansen, a lawyer for the ACLU, who said he was “delighted” with the decision. Hansen said about 20 percent of human genes are patented.

The case is sure to be appealed to a court in Washington that specializes in patent law, and most likely to the Supreme Court. Officials with Myriad didn’t immediately return queries seeking comment. Myriad dropped as much as 12 percent after the close of regular trading. The shares were down 23 cents to $24.90 on the Nasdaq Stock Market before Sweet released his opinion.

The patents “consist essentially of looking at genes,” the groups challenging Myriad said in a filing. The groups contend the patents inhibit testing and limit women’s options in medical care. The case has been closely watched by the biotechnology industry and various medical groups.

Alternative Tests

Caulfield, who is former general counsel for Affymetrix Inc., which makes instruments to analyze genes, said the ruling, if upheld on appeal, would spur research into alternative tests, such as for new mutations of genes.

“If people want to own a gene, they can create them synthetically,” said Caulfield. “You can own a synthetic creation of a gene, but you can’t create one that’s naturally occurring or the test for it. If you had a particular test that did a search for mutations plus genes, you could patent the test, just not the simple comparison.”

Edward Reines of Weil Gotshal in Silicon Valley, who represents biotechnology companies, disagreed and said it could hurt investment into genetic research.

“So much of the area of genetic discovery requires people working hard,” he said. “It’s hard to find a genetic solution to a health problem, but it’s easy to copy. You can’t rely on academic curiosity. Motivating incubators around this country is something we want to do.”

Years of Litigation

He said today’s decision sets the stage for years of litigation to determine where the line is between what’s eligible for patents and what is not. [I concur.]

In granting the patents, the PTO went beyond what was allowed in a 1980 Supreme Court decision credited with opening up the biotechnology industry, ACLU said in court filings. It has the support of the American Medical Association and the American Society for Human Genetics.

Biotechnology Industry Organization, the trade group of biotech companies that supported Myriad in the case, is reviewing the decision, Stephanie Fischer, a spokeswoman for the group, said.

The judge did throw out claims that the patent office acted outside its authority in granting the patents. The judge said that, were an appeals court or the Supreme Court affirm his decision, the patent office would “conform its examination policies” to the court rulings.

The case is Association for Molecular Pathology v. U.S. Patent and Trademark Office, 09cv4515, U.S. District Court for the District of New York.‹