The biotech industry breathed a collective sigh of relief in the wake of the U.S. Court of Appeals for the Federal Circuit’s decision on July 29, 2011 in Association for Molecular Pathology et al v. U.S. Patent and Trademark Office et al.1.  The Federal Circuit (“CAFC”) reversed a lower court decision2 strongly criticized in the biotech community, and upheld the validity of patent claims directed to isolated DNA and screening for potential cancer therapeutics.  The CAFC did, however, affirm the lower court’s holding that method claims directed to “comparing” or “analyzing” DNA sequences were not valid.

This case appealed a decision by the U.S. District Court for the Southern District of New York, which held, inter alia, that defendant Myriad’s U.S. patents directed to isolated DNA sequences and methods of comparing/analyzing DNA sequences were invalid.  The lower court reasoned that isolated DNA was not patent-eligible subject matter because isolated DNA retains the same nucleotide sequence as the native DNA and does not have any markedly different characteristic from non-isolated DNA. The lower court’s decision contradicted long-standing U.S. law and stunned the biotechnology industry, which was built on the understanding that isolated DNA and methods of use were patent-eligible subject matter.3

Background:

Myriad’s technology is based on the discovery and isolation of the BRCA1 and BRCA2 genes, including numerous mutations thereof, and their use in diagnosing increased risk of developing breast and ovarian cancers using positional cloning techniques.  The technology is further directed to use of these genes to discover therapeutic agents to treat cancer and to determine appropriate treatment plans for patients.

Myriad’s patents in question cover the aforementioned technology, and have claims to the isolated DNA sequences and to methods of comparing or analyzing a patient’s BRCA1 and BRCA2 sequences to identify whether the patient has cancer-predisposing mutations.  Myriad’s patents further cover methods of screening for potential cancer therapeutics.

A third party laboratory began providing services using Myriad’s patented technology until patent infringement accusations were brought by Myriad.

The Lawsuit:

The initial lawsuit, which was filed by numerous plaintiffs, including the American Civil Liberties Union, argued that isolated and unmodified DNA is not a patent-eligible subject matter under Section 101 of the Patent Law, 35 U.S.C. § 101, because it is a product of nature and is not markedly different from native (non-isolated) DNA. In particular, plaintiffs sought to invalidate fifteen claims from seven Myriad patents.

In contrast, Myriad argued that isolated DNA is indeed patent-eligible, because it a non-naturally occurring composition of matter.

35 U.S.C. § 101 defines what subject matter is eligible for patenting: “[w]hoever invents or discovers any new and useful process, machine, manufacture or composition of matter, or any new and useful improvement thereof, may obtain a patent thereof…”  The Supreme Court has created three exceptions to the foregoing: laws of nature, physical phenomena and abstract ideas are not patentable subject matter.

Contrary to the longstanding law, the lower court agreed with the plaintiffs.  The lower court held that isolated DNA does not have markedly different characteristics from native (non-isolated) DNA and therefore was not patent-eligible subject matter. The lower court’s decision held all of the challenged claims to be invalid.

The Appeal:

The CAFC rejected the lower court’s holding that isolated DNA does not have markedly different characteristics, stating that “the patent eligibility of isolated DNA is not negated because it has similar informational properties to a different, more complex natural material that embodies it.”4 The CAFC held that isolated DNAs are new chemical entities having a markedly different chemical structure compared to native DNAs, and therefore qualify under Section 101 as patent-eligible subject matter.

The CAFC further stated that for over 29 years the USPTO has issued patents directed to isolated DNA molecules, the Utility Examination Guidelines issued in 2010 have affirmed the USPTO’s position that isolated DNA molecules are patentable, and Congress has not indicated that the USPTO’s position is inconsistent with Section 101. The CAFC asserted that the lower court’s decision attempts to overturn the foregoing, and that any decision to exclude DNA inventions from patentability must come from Congress and not the Courts.

The CAFC’s panel of three judges held as follows, inter alia:

  1. The composition claims to “isolated” DNA molecules are indeed patent-eligible subject matter under 35 U.S.C. § 101, because the molecules as claimed do not exist in nature;
  2. The claims to methods for comparing DNA sequences, to determine whether a patient’s DNA had mutations that increased the risk of cancer, are not patent-eligible subject matter under 35 U.S.C. § 101, because the claims cover only abstract, mental steps and do not include transformative steps because a comparison can be accomplished by inspection alone.  The Court indicated that the transformative step requirement would have been met if these claims included a step of “determining” the sequence of BRCA genes, such as by isolating the genes from a blood sample and sequencing them;
  3. The claim to a method for screening potential cancer therapeutics via changes in cell growth rates is indeed patent-eligible subject matter under 35 U.S.C. § 101, because of the recited transformative steps required by the claim; and
  4. Declaratory judgment jurisdiction was satisfied by one plaintiff.  In finding jurisdiction, the Court noted that a plaintiff with an actual and immediate intent to engage in the allegedly infringing activity can have standing even many years after the receipt of a demand letter asserting the patent monopoly.

The Future:

It is expected that one or more parties will request an en banc rehearing of the case in front of all of the CAFC’s judges.  An appeal to the U.S. Supreme Court is likely to follow.