On July 29, 2011, the U.S. Court of Appeals for the Federal Circuit issued its decision in Association for Molecular Pathology v. Myriad Genetics, Inc.,1 a case that has been closely watched by the biotechnology community. The Federal Circuit affirmed the district court’s ruling that at least one plaintiff has standing to challenge the validity of Myriad’s patents and further affirmed that most of the method claims in question are invalid. However, the Federal Circuit reversed the district court’s ruling that Myriad’s composition claims, which are drawn to isolated DNA molecules and complementary DNAs (cDNAs), are unpatentable under § 101.

Background of the Case

In the 1990s, scientists at Myriad Genetics were the first to sequence the human breast cancer-related genes BRCA1 and BRCA2. Subsequently, Myriad scientists were the first to identify the genetic basis of BRCA1 and BRCA2-related cancers and Myriad became the first company to provide diagnostic BRCA testing to women. In 1994, Myriad began filing a series of patent applications claiming “isolated DNA” sequences that encode the BRCA1 and BRCA2 proteins, as well as methods of using such sequences to screen for, and detect, BRCA mutations and alterations in patient samples.

Plaintiffs filed suit against Myriad in 2009, alleging that 15 claims in seven patents were drawn to patent-ineligible subject matter under § 101. The composition claims in question were drawn to isolated DNA molecules and cDNAs that encode the human BRCA proteins. The method claims were drawn to methods of screening for, or detecting, alterations in BRCA genes. An additional method claim in question was drawn to a method of screening potential cancer therapeutics by comparing the growth rates of transformed cells.

In his decision,2 Judge Sweet of the U.S. District Court for the Southern District of New York ruled that the plaintiffs had all established Article III standing to bring a declaratory judgment suit to challenge the validity of Myriad’s patents. Judge Sweet also ruled that all of the composition and methods claims in question were unpatentable, stating that isolated DNAs are “products of nature” under § 101 that are not “markedly different” from native DNA molecules, and further concluded that the method claims only comprised abstract, mental steps, rendering them unpatentable under § 101.

The Opinion of the Federal Circuit – Majority Opinion by Judge Lourie

Jurisdiction: The Federal Circuit affirmed the district court’s ruling that the plaintiffs had standing in view of the Declaratory Judgment Act and the “all-the-circumstances” test established by the Supreme Court in MedImmune Inc. v. Genentech.3 However, the Federal Circuit affirmed this decision on much narrower grounds, stating that only one plaintiff, Dr. Harry Ostrer of the New York University School of Medicine, had established standing. The Federal Circuit concluded that the district court failed to limit its jurisdictional holding to “affirmative acts by the patentee directed at specific Plaintiffs.”

Method Claims: The Federal Circuit also affirmed the district court’s ruling on all but one of Myriad’s method claims, concluding that they are directed to patent-ineligible, abstract mental processes that fail the “machineor- transformation” test.4 The Federal Circuit rejected Myriad’s argument that the claimed DNA molecules must be “extracted” from a human sample and “sequenced” in order to be “compared” or “analyzed,” as these limitations were not included in the claims at issue.

By contrast, the Federal Circuit unanimously reversed the district court’s ruling that a method claim directed to “comparing” the growth rate of transformed host cells was patent-ineligible, concluding instead that the claim comprises the transformative steps of “growing” host cells and then “determining” the growth rate of the cells. The Federal Circuit asserted that each step required physical manipulation of the cells and was central to the purpose of the claimed method.5

Composition Claims: By a 2-1 majority, the Federal Circuit also reversed the district court’s ruling that Myriad’s composition claims were patent-ineligible “products of nature” under § 101. In reaching this judgment, the Federal Circuit looked primarily at the decisions in Chakrabarty6 and Funk Brothers,7 concluding that isolated DNA molecules are patentable because they are “markedly different” from DNA that exists in nature and, therefore, have a distinctive chemical identity and nature of their own.

The Federal Circuit rejected the “magic microscope” test presented by the government acting in its role as amicus curiae. The Federal Circuit stated that such a test does not account for the existence of molecules in the body as separate chemical entities. As such, the “magic microscope” envisioned by the government could, potentially, focus on a portion of any protein in the body and, thereby, render that portion unpatentable, even though that portion does not naturally exist in an isolated form.

Finally, the Federal Circuit based its reversal on the longstanding practice of the USPTO, which has issued over 2600 patents claiming “isolated DNA,” granted over 40,000 DNA-related patents and further asserted its belief that isolated DNA molecules are patent-eligible in the Utility Examination Guidelines published in 2001. The Federal Circuit maintained that, if the law regarding the patentability of isolated DNAs is to be changed, the decision must be made by Congress.

Concurring Opinion of Judge Moore

In her concurring opinion, Judge Moore joined Judge Lourie on the issues of standing and the patentability of the method claims. However, Judge Moore wrote separately to address different issues with respect to the patentability of isolated DNA molecules. Using the principles of Chakrabarty and Funk Brothers to determine whether a claim falls into the “law of nature” exception of § 101, Judge Moore regarded claims to cDNAs as the easiest to analyze, as cDNAs do not exist in nature and have a distinctive name, character and use. She further reasoned that the claims drawn to smaller isolated DNA molecules (those having at least 15 nucleotides) find added use as primers and probes, which distinguishes them functionally from native DNA molecules.

Interestingly, Judge Moore stated that if she were “deciding this case on a blank canvas,” she might conclude that claims to isolated, full-length genes are not patentable subject matter. However, Judge Moore found such compositions patentable in view of the substantial historical background of isolated DNA claims in the USPTO and Congress, as well as the settled expectations of the biotechnology industry. Judge Moore joined Judge Lourie in comprehensively rejecting the government’s “magic microscope” test and concluding that a change in policy with regard to the patentability of isolated DNA sequences should arise from Congress rather than the courts.

Dissenting Opinion of Judge Bryson

In the dissenting opinion, Judge Bryson disagreed with the majority ruling that Myriad’s composition claims to isolated DNA molecules are patent-eligible under § 101. Judge Bryson concluded that the only material changes made to isolated genes are those necessary for the extraction of the native gene from its natural environment. Thus, he concluded that isolated genes are not “materially different” from native genes and are not patentable. Judge Bryson compared genes with a “new mineral found in the earth” or a “new plant found in the wild” and noted that the Supreme Court in Chakrabarty indicated that such minerals or plants were unpatentable.

Judge Bryson also disagreed with the majority’s characterization of isolated genes as “new molecules,” focusing on their opinion that a different material is produced when chemical bonds are cleaved to create an isolated gene. By contrast, Judge Bryson argued that “there is no magic to a chemical bond that requires us to recognize a new product when a chemical bond is created or broken, but not when other atomic or molecular forces are altered.”

Judge Bryson further discussed the various costs and barriers that he believes this case will present to the biotechnology industry, concluding that “this may well be one of those instances in which “too much patent protection can impede rather than ‘promote the Progress of Science and useful Arts.’”8 Finally, Judge Bryson indicated that the previous practices of the USPTO are not entitled to significant weight, reasoning that the USPTO lacks substantial rule-making authority regarding issues of patentability. He further asserted that the Guidelines issued in 2001 were “perfunctory,” and concluded that the government’s position as amicus curiae substantially undermined the USPTO’s views on the patentability of isolated genes.