On Friday July 29, 2011, the U.S. Court of Appeals for the Federal Circuit ("Federal Circuit") rendered its decision on the appeal by Myriad Genetics, Inc. ("Myriad") of the lower court decision in Ass'n for Molecular Pathology v. U.S. Patent and Trademark Office ("PTO") (No. 2010-1406), which had held that fifteen claims directed to isolated DNA molecules or to methods of use are patent-ineligible under 35 U.S.C. § 101.   The Federal Circuit, in an opinion by Judge Lourie, separately analyzed "isolated DNA" claims and two different categories of method of use claims, reversing the lower court decision with respect to the "isolated DNA" claims and one of the method claims and affirming the lower court decision as to a second group of the method claims.

The claims to isolated DNA molecules are directed to molecules encoding the BRCA1 or BRCA2 proteins—certain mutations of which are implicated in many cases of breast and ovarian cancer—and fragments of those DNA molecules.  The Federal Circuit, in overruling the lower court decision, relied on the chemical and structural differences between native DNA and isolated DNA.  For instance, isolated DNA is cleaved from the native chromosomal segments on either side of it, lacks histone complexes present in native DNA, and may also include only coding portions of the gene or exons (i.e., a cDNA molecule).  The Federal Circuit also rejected the PTO's recommendation to limit patentability of DNA to only cDNA molecules and the lower court plaintiffs' argument reducing the comparison between native and isolated DNA solely to its information content.  In holding that claims to isolated DNA are patentable subject matter, the Federal Circuit noted that its decision is entirely consistent with the longstanding practice of the PTO.  

One of the challenged method claims was directed to a cell-based assay for screening putative cancer therapeutics, which includes steps of "growing a transformed eukaryotic host cell containing an altered BRCA1 gene causing cancer in the presence of a compound suspected of being a cancer therapeutic" and "determining" the rate of cell growth in the presence or absence of the compounds.  The Federal Circuit held that both of the recited steps are transformative under the machine-or-transformation test.  The "growing" step involves the manipulation of the cells and their growth medium, and the "determining" step involves the manipulation of the cells to assess their growth rates.  The Federal Circuit also rejected the lower court plaintiffs' argument that this method claim preempted all screening methods, noting that the claim was "tied to specific host cells transformed with specific genes and grown in the presence or absence of a specific type of therapeutic," and "tied to measuring a therapeutic effect on the cells solely by changes in the cells' growth rate."  This subject matter was therefore found to be patentable.

The remaining challenged method claims covered methods of "analyzing" or "comparing" a patient's BRCA sequence with the normal, or wild-type, sequence to identify the presence of cancer-predisposing mutations.  Because "the step of comparing two DNA sequences is the entire process claimed," the Federal Circuit held that these method claims were directed to abstract mental processes that could be carried out by "mere inspection alone," and therefore were patent ineligible under the machine-or-transformation test.  The Federal Circuit dismissed Myriad's position of narrowly defining these claimed steps as inherently requiring certain transformative steps of extracting DNA and sequencing the extracted DNA.

In a concurring opinion, Judge Moore separately identified her rationale for the patentability of isolated cDNA sequences, short fragments of genes, and longer gene fragments that include most or all of the isolated gene sequence.  With regard to the latter only, Judge Moore placed significant weight on past practice of the PTO in upholding the eligibility of patent claims directed to "isolated DNA."  Absent such history, Judge Moore indicated that she might have reached the opposite conclusion with respect to longer gene fragments that include most or all of an isolated gene sequence.  Judge Moore soundly criticized the positions asserted by the PTO in its briefing, asserting that the "government's position in this case calls into question the validity of an unknown number of patents and claims and upsets the settled expectations of some of our most innovative industries."

In his dissent, Judge Bryson asserted that "merely isolating the products of nature by extracting them from their natural location and making those alterations attendant to their extraction does not give the extractor the right to patent the products themselves."  As such, for both shorter and longer isolated gene fragments (i.e., other than cDNA), Judge Bryson concluded that this subject matter is not patentable under section 101.