Section 27 of the America Invents Act, passed on September 16, 2011, requires the USPTO to conduct a study on genetic testing and provide Congress with recommendations for providing confirmatory genetic diagnostic testing where those tests or the information needed to conduct those tests are covered by patents and exclusive licenses.1 Confirmatory genetic diagnostic testing is “the performance of a genetic diagnostic test, by a genetic diagnostic test provider, on an individual solely for the purpose of providing the individual with an independent confirmation of results obtained from another test provider’s prior performance of the test on the individual.”2

Congress directed the USPTO to study four areas: (1) the impact that the current lack of independent second opinion testing has had on the ability to provide the highest level of medical care to patients and recipients of genetic diagnostic testing, and on inhibiting innovation to existing testing and diagnoses; (2) the effect that providing independent second opinion genetic diagnostic testing would have on the existing patent and license holders of an exclusive genetic test; (3) the impact that current exclusive licensing and patents on genetic testing activity has on the practice of medicine, including but not limited to: the interpretation of testing results and performance of testing procedures; and (4) the role that cost and insurance coverage have on access to and provision of genetic diagnostic tests.3

This September, four years after this initial mandate, the USPTO released a report on its findings.4In its report, the USPTO evaluated the availability of confirmatory testing with regard to the Supreme Court’s recent rulings in Mayo and Myriad, which effectively changed the legal landscape of patents covering gene-based diagnostics.5 Due to this new legal backdrop, the USPTO noted that it is extremely unlikely that patents will be able to impose significant barriers to the availability of genetic testing, let alone confirmatory testing.6

The USPTO came to four main conclusions, first revealing that the evidence they had was not only sparse, but also at times contradictory.7 First, demand for confirmatory genetic testing is very small, and for some tests the need can already be met by several sources.8 Second, the USPTO found that providing confirmatory genetic testing would not have a significant negative impact on the existing patent and license holders of an exclusive genetic test.9 Because demand for confirmatory testing is so small, lost profits associated with it would be comparatively small. Further, where an exclusive licensee already has the right to exclude others from conducting the primary test, there will be little economic harm done by an independent entity doing a confirmatory test, provided that independent entity does not attempt to unlawfully enter the market for primary testing. Third, due to the findings in Myriad10 and Mayo,11 the impact exclusive licensing and patents has on genetic testing activity will likely become moot. The underlying correlations between gene mutations and their medical effects are now likely going to be unpatentable subject-matter, making genetic diagnostic tests using those methods and materials non-infringing.12 Finally, the USPTO found that the availability of insurance does play a role in the decision to have confirmatory testing done, especially when the cost of the test is substantial.13

The USPTO concluded its report by stating that due to the findings of Myriad and Mayo, Congress does not need to take any immediate action with respect to confirmatory genetic diagnostic testing.14 Multiple providers are now able to enter the business of providing genetic testing without the potential of infringement, meaning patent and license exclusivity will not impede the availability of and access to these tests. However, this public availability could also lead large commercial entities to stop developing and marketing tests due to the risk of not being able to recoup their investments.15 In closing, the USPTO left Congress with three recommendations for the future: (1) continue to monitor confirmatory testing for barriers to access; (2) create a mechanism to facilitate sharing test results across providers to improve testing and analytic quality; and (3) consider the importance of cost and insurance on any policy discussions of confirmatory genetic diagnostic testing.16

For the biotech industry, this report merely confirms and reinforces the Supreme Court’s rulings inMayo and Myriad. While the USPTO was given an opportunity to inform Congress on the appropriate policy decisions to help the biotech industry in the aftermath of this new legal landscape that are considered by many to be an emotional response to a nonexistent problem, it instead chose a more cautious route. Mayo and Myriad and the USPTO’s conclusions in this report could lead many entities, large and small, to forgo research and development that in the past has lead to major medical breakthroughs and instead find other ways of preserving their exclusivity and funding their investments.