In a widely awaited decision, a panel for the Federal Circuit in Association for Molecular Pathology et al. v. USPTO and Myriad Genetics has held that (1) composition claims to isolated DNA molecules are patent-eligible subject matter, (2) Myriad’s method claims containing “comparing” and “analyzing” DNA sequence steps are patent-ineligible subject matter, but (3) Myriad’s method-of-screening claim involving transformed cells is patenteligible subject matter. This follows the Supreme Court vacating the original Federal Circuit panel decision, and remanding the case for reconsideration in light of Mayo Collaborative Services v. Prometheus, Inc. 566 U.S.___, 132 S. Ct. 1298 (2012). The holdings of the new decision largely track those set forth in the prior panel decision.

Judge Lourie wrote the majority opinion, with a concurring opinion from Judge Moore and a partial dissent from Judge Bryson. The panel agreed on all issues, except for whether an isolated DNA sequence is patent-eligible subject matter.

First, the court unanimously held that only one plaintiff, Dr. Harry Ostrer, had standing to challenge the validity of the Myriad patents. He was the only plaintiff subject to affirmative patent enforcement actions by Myriad, and the only plaintiff who had alleged an actual intention to engage in infringing BRCA clinical testing activities.

Second, the panel unanimously agreed that, in light of Mayo, method claims containing “comparing” or “analyzing” DNA sequence steps are not patent-eligible subject matter because these steps are mere “abstract mental processes.” The claimed methods, for example, involve “comparing” a first BRCA sequence to a second BRCA sequence and determining whether a difference in the sequences indicates a somatic alteration, which the Federal Circuit recognized as analogous to the Mayo “determining” step rejected as not “transformative” by the Supreme Court. The court also rejected Myriad’s attempt to read into the method claims any “transformative” steps, such as DNA extraction and gene sequencing.

Third, the panel unanimously held that the claimed method of screening potential cancer treatments involving transformed cells was patent-eligible subject matter. Although the claimed method does not comprise any “transformative” steps, Judge Lourie indicated that the transformed host cells named in the claim, which had been manipulated to contain foreign genes, are not naturally occurring, but instead are man-made creations.

Finally, the panel unanimously agreed that cDNA is patent-eligible subject matter because an isolated cDNA sequence does not occur in nature.

However, the panel split on whether claims to isolated DNA molecules corresponding to natural sequences are patent-eligible. In the majority opinion, Judge Lourie wrote that “isolated DNA is a tangible, man-made composition of matter defined and distinguished by its objectively discernible chemical structure” and constitutes patent-eligible subject matter under 35 U.S.C. §101. Judge Lourie stated that isolated DNAs are not found in nature, since they have been removed from their native cellular and chromosomal environment. He reasoned that isolated DNAs have been manipulated chemically not to contain certain covalent bonds found in their native counterparts. Judge Lourie rejected the argument that isolated DNAs are not “markedly different” from native DNAs since they share the same nucleotide sequence and thus the same information.

Judge Moore concurred in the result regarding natural DNA sequence claims, but offered different reasoning in support. Judge Moore did not agree that isolated DNAs are chemically different molecules based on the absence of covalent bonds. Judge Moore divided the composition claims into three categories – isolated cDNAs, isolated short BRCA gene fragments, and isolated long or full length BRCA genes. While Judge Moore agreed that cDNA molecules are patent-eligible subject matter based on the chemical differences from native DNAs, she acknowledged that for the other two categories, the isolated DNA molecules share the same sequence or portions of the same sequence as the native DNA molecules. For the isolated short DNAs, Judge Moore pointed to their unique utility as probes or primers. For isolated long or full length DNAs, Judge Moore relied upon the United States Patent and Trademark Office’s recognition of the patentability of isolated DNAs, and public policy considerations associated with the settled expectations of intellectual property owners. As in her prior concurring opinion, she called for Congress to address the issue.

Judge Bryson dissented with regard to patentability of isolated BRCA gene claims. Judge Bryson’s dissent criticized Judge Lourie’s reliance on the absence of certain covalent bonds in isolated DNA molecules as the reason for why the claimed molecules differed from native DNA molecules. Judge Bryson argued that for the isolated BRCA gene claims, the isolation or extraction process results in a molecule with the same sequence and same functionality as its naturally occurring counterpart, which “does not result in the creation of a human invention.”

It will be interesting to see if this decision is the final word on patentability of isolated DNA, either by the Federal Circuit or the Supreme Court, or whether further proceedings are forthcoming.