On June 13, 2013, the United States Supreme Court brought an end to the long and drawn-out legal battle over the question of whether isolated gene sequences are eligible subject matter for patent protection. In Association for Molecular Pathology v. Myriad Genetics1 the U.S. Supreme Court reached a rare unanimous decision. Breaking with decades of U.S. Patent & Trademark Office (USPTO) practice, and showing no deference to the USPTO, the Court held that an isolated DNA molecule is not patent-eligible subject matter, if its nucleotide sequence is identical to a naturally occurring gene sequence. In contrast, an isolated DNA molecule with a sequence that is different from any naturally occurring gene sequence, such as a complementary DNA (cDNA), expressly remains patent-eligible.
The case began with Myriad's identification and sequencing of the two breast cancer-causing genes BRCA1 and BRCA2. Based on the DNA sequence of these identified genes, Myriad developed diagnostic tests for detecting mutations in BRCA1 or BRCA2 that can drastically increase the carrier's risk of developing breast or ovarian cancer. Myriad obtained a number of patents based on this work, and then asserted these patents against other entities, which also offered genetic testing of BRCA gene status in patients. By forcing competitors to stop performing BRCA genetic testing, Myriad established a dominant position in the BRCA genetic testing market.
A medical doctor, whom Myriad forced to stop offering BRCA genetic testing to his patients using another genetic diagnostic laboratory, together with medical patients and advocacy groups, brought a declaratory judgment action alleging that Myriad's patents were invalid under Section 101.2 The District Court ruled for the petitioners based on its conclusion that Myriad's composition claims were directed to products of nature. Myriad appealed, and the Federal Circuit reversed. The Supreme Court granted a petition for certiorari, vacated the judgment, and sent the case back to the Federal Circuit to decide anew in view of the Supreme Court's decision in Mayo v. Prometheus.3 On remand, the Federal Circuit held that isolated gene sequences and cDNAs were patent-eligible subject matte.4 The Supreme Court again granted a petition for certiorari and finally concluded this legal battle with a decisive decision on June 13, 2013.
At issue in the case are nine composition claims from three different patents.5 Representative claims are directed (1) to an isolated DNA coding for a BRCA1 polypeptide having a specified amino acid sequence, (2) to an isolated cDNA sequence encoding such a BRCA1 polypeptide, and (3) to an isolated DNA having at least 15 nucleotides of a DNA encoding such a BRCA1 polypeptide. Three claims of U.S. Patent No. 5,747,282 can serve as illustrative examples:
- An isolated DNA coding for a BRCA1 polypeptide, said polypeptide having the amino acid sequence set forth in SEQ ID NO:2.
- The isolated DNA of claim 1, wherein said DNA has the nucleotide sequence set forth in SEQ ID NO: 1.6
- An isolated DNA having at least 15 nucleotides of the DNA of claim 1.
The first type of claim (claim 1) covers a naturally occurring gene sequence containing both exons and introns, as well as a cDNA sequence, coding for a BRCA1 polypeptide. The second type of claim (claim 2) covers only a specific cDNA sequence coding for a BRCA1 polypeptide. And the third type of claim (claim 3) covers any DNA sequence containing at least 15 nucleotides from DNA coding for a BRCA1 polypeptide. Thus, the third type of claim would cover variants or fragments (even very small fragments) of a naturally occurring gene sequence containing both exons and introns or a variant or fragment of a cDNA sequence.
The issues before the Supreme Court: whether an isolated DNA molecule with the same nucleotide sequence as a naturally occurring DNA sequence is patent-eligible under Section 101; and whether a cDNA, i.e. a DNA molecule with a sequence encoding the same polypeptide as a naturally occurring gene sequence but lacking any non-coding intron sequences, is patent-eligible under Section 101.7
If valid, these patent claims would give Myriad the right to exclude all competitors from isolating or PCR amplifying the BRCA1 or BRCA2 genes, or even any small section of these genes containing at least 15 nucleotides, from an individual, or to synthesize these genes, or sections of these genes, in the laboratory. Because isolation or amplification of the BRCA1 and BRCA 2 genes, or sections thereof, is required for genetic testing of individuals for the presence of cancer-predisposing mutations in these genes, the patent claims at issue, if valid, would effectively provide Myriad with a monopoly over genetic testing of BRCA1 and BRCA2 carrier status and the determination of associated hereditary cancer risks.
Section 101 defines patent-eligible subject matter as "any [invented or discovered] new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof."8 Moreover, the U.S. Supreme Court held previously that this broad definition of patent-eligible subject matter does not encompass "laws of nature, natural phenomena, and abstract ideas," reasoning that these are "basic tools of scientific and technological work" that cannot be patented.9
The unanimous 9:0 decision all but ensures that the Supreme Court will not change direction in the foreseeable future. Only Congress may change course by enacting new legislation overriding the holding. In reaching its decision, the Court was guided by the overarching policy goal of having a system of patent protection that achieves the right balance between creating incentives for invention, discovery, and investment on one hand, and allowing the free flow of information necessary for invention and discovery on the other hand.10 With respect to the questions before it, the Court drew a clear line in the sand. The Court held that an isolated DNA molecule with a sequence that is identical to a naturally occurring gene sequence is not patent-eligible subject matter, because it is a product of nature and therefore it is not a "new . . . composition[s] of matter," as required by Section 101.11 In contrast, a cDNA is patent-eligible, because it is created by a person in the laboratory and its DNA sequence is not naturally occurring if the gene from which the cDNA is derived contains introns.12,13
It is important to note that the Supreme Court did not express any opinion on whether a cDNA or non-naturally occurring variant of a gene sequence may satisfy other statutory requirements of patentability,14 including novelty and non-obviousness.15
Are proteins encoded by genes or cDNAs patent-eligible subject matter?
The Supreme Court did not directly answer this important question, limiting its analysis to DNA molecules, and an answer is not immediately apparent. It could be argued that a protein should be analyzed in an analogous fashion as the DNA molecules encoding it. Thus, if the amino acid sequence of a claimed protein or peptide is identically present in the amino acid sequence of a naturally occurring protein, then the claimed protein or peptide is a product of nature and hence not patent-eligible subject matter. However, such an analysis would be superficial and perhaps too simplistic since it ignores fundamental differences between DNA, having a nucleotide sequence, and a protein, having an amino acid sequence. For example, a main function of a DNA sequence encoding a protein is to carry its informational content, i.e. the sequence information encoding a polypeptide with a specific amino acid sequence. This function as a carrier of information remains the same even if only a fragment of the DNA is present. In contrast, the main function of the amino acid sequence of the encoded protein is not to carry informational content, but to fold into a protein that can fulfill a certain biological function within a cell. In this case, if only a fragment of the protein is present, this fragment may have a very different, even the opposite function in a cell as compared to the full length protein, e.g., it may act as an inhibitor of the full length protein. Is such an artificially created inhibitory fragment of the encoded protein still a patent ineligible product of nature, simply because its amino acid sequence is naturally occurring within the context of the natural full length protein, or is it a patent-eligible "new . . . composition[s] of matter," because it has a completely different biological function than the natural full length protein? These and related questions await the interpretation of the Myriad decision by the courts, in particular the Federal Circuit.
What are the implications of the decision?
As an initial matter, the many patent claims allowed by the USPTO in the past two decades, which are directed to isolated DNA sequences that are indistinguishable from naturally occurring DNA sequences, are likely to be challenged or simply ignored by parties intending to use the claimed sequences. Such composition of matter claims are now presumed invalid based on the Myriad decision.
In practice, this means that licensees should look closely at any licenses based exclusively on such composition of matter claims. If a license is based on a combination of such now invalid composition of matter claims and other types of claims that may or may not remain valid after Myriad, such as claims to an encoded protein, the licensee may seek to renegotiate the license terms. Furthermore, competition in the area of gene-based diagnostic tests and personalized medicines may increase and costs for such tests may decrease, making them more widely affordable to patients. On the other side of the equation, licensors, who rely on such now invalid composition of matter claims, are likely to lose royalty stream from affected licenses.
The impact of the Myriad decision on the biotech industry as a whole is likely to be relatively minor in the long term. First, in the current post-genomic era, new composition of matter claims directed to naturally occurring DNA sequences are unlikely to be granted by the patent office. With the completion of the Human Genome Project a decade ago,16 essentially all of human genomic sequences are in the public domain and thus prior art. In addition, the genomes of many other organisms have also been sequenced and published in the past decade. Thus, any claim directed to a naturally occurring gene sequence is unlikely to pass the novelty bar required for patentability. As a consequence, the majority of patents affected by the Myriad decision are likely patents that issued from applications with effective filing dates more than a decade ago, and hence their remaining patent life is relatively short. As an example, all of Myriad's patents at issue in this case expire no later than 2015.
Second, owners of patents or patent applications affected by the Myriad decision have ways to avoid or at least mitigate its negative impact. These strategies are discussed below.
Third, the Myriad decision does not foreclose patenting of all DNA sequences, but only of DNA sequences that occur in nature. cDNAs and other DNA molecules that were generated in the laboratory and have a non-naturally occurring nucleotide sequence are still patent-eligible subject matter. Thus, already issued patent claims directed to such patent-eligible DNAs remain valid after Myriad and patent applicants can continue to pursue such claims in new or pending applications. Furthermore, claims directed to methods of using a DNA molecule (even one with a naturally occurring DNA sequence) and claims directed to new applications of knowledge gained about a DNA molecule (even one with a naturally occurring DNA sequence) are not affected by the Myriad decision.17 For example, many patent owners with claims that are invalidated by the Myriad decision are likely to have other claims, such as method of use claims, which remain valid. Thus, their overall patent protection and market position may be weakened somewhat, but still in force based on the remaining claims.
This assessment is supported by Myriad itself, which after the Supreme Court's decision announced that it has "more than 500 valid and enforceable claims in 24 different patents conferring strong patent protection for its BRACAnalysis® test."18
Fourth, the Myriad decision is unlikely to deter future investment in the biotech industry because the overall level of risk or uncertainty added by the Myriad decision seems very moderate. Very few biotech companies are likely to rely entirely on composition of matter claims of the type that has been invalidated by the Myriad decision. Most companies affected by the Supreme Court's decision are likely to have a much more diversified patent portfolio, including claims directed to cDNAs and methods of use that remain valid. These claims will in most cases be sufficient to maintain a similar level of patent protection as before the Myriad decision, especially since "cDNA is the commercially most important form of DNA used in biotechnology," as stated by Jim Greenwood, the President and CEO of the Biotechnology Industry Organization (BIO).19 BIO also declared that the Supreme Court's decision "offers urgently-needed certainty for research-driven companies that rely on cDNA patents for investment in innovation."20
But will investors be deterred by a perceived risk that the Supreme Court will continue to reduce the scope of patent-eligible subject matter in the biotech arena and show no deference to years or even decades of PTO practice? It seems very unlikely. The Supreme Court took pains to emphasize the narrow scope of the Myriad holding. As if in an effort to calm nervous stakeholders, the Court stressed in the last sentence of the opinion that the Court "merely hold[s] that genes and the information they encode are not patent-eligible under §101 simply because they have been isolated from the surrounding genetic material."21 However, if the Supreme Court continues to narrow the scope of patent-eligible subject matter, as it relates to the biotech industry, and a trend in this direction becomes apparent, then investor confidence may be severely shaken, leading to a reduction in investment capital, so vital for the biotech industry.
What can patent owners do to mitigate negative consequences of the Myriad decision?
Owners of patents with claims relating to DNA sequences should review their patent portfolios to determine if the validity of any claims is called into question by the Myriad decision and whether other claims in the portfolio, which are not affected by the Myriad decision, remain. If the patent owner determines that other claims cannot compensate for the loss of Myriad-type claims, then the following options should be considered to mitigate the damage.
The patent owner may, for example, file a reissue application at the USPTO. Patent reissue allows the patent owner to correct various errors in a patent if the error renders the patent partially or wholly inoperative or invalid. For example, a patent reissue within two years of issuance may remedy a situation in which a patent does not cover all the disclosed inventions. While anytime during the life of a patent, a reissue may narrow the scope of the patent. Thus, the patent owner could use a reissue application to obtain amended claims that are not invalidated by the Myriad decision and yet cover subject matter valuable for commercial exploitation. For example, if a patent includes a broad claim similar to Myriad's claim 1 of Patent No. 5,747,282, which covers isolated DNA molecules with naturally occurring gene sequences as well as a cDNA, but the patent does not include a more narrow claim, which covers only a cDNA (such as Myriad's claim 2 of Patent No. 5,747,282), then a patent reissue could amend the claims to cancel the broad claim (which is invalidated by Myriad) and introduce the narrower cDNA claim (which is not affected by Myriad).
Biotech companies active in nucleic acid-based applications, such as diagnostics or personalized medicine, should also reconsider their patent application prosecution and claim drafting strategies. It is important to note that the Supreme Court expressly excluded from the reach of its holding any method claims, such as method of use claims, as well as claims directed to DNA molecules with sequences that are altered compared to naturally occurring DNA sequences.22 Thus, going forward, patent applicants should avoid any claims encompassing DNA molecules with naturally occurring nucleotide sequences. Furthermore, applicants should instead focus on claims directed to cDNAs, new applications of knowledge about the nucleic acids of interest (i.e. method of use claims), and to nucleic acids, which have a nucleotide sequence that is different from any naturally occurring nucleic acid.
Will other segments of the biotech industry be affected?
There are other segments of the biotech industry that likely will be affected by the Myriad ruling. For example, companies trying to commercialize recent discoveries in the field of microRNAs (miRNAs). MicroRNAs are small RNA molecules that are naturally expressed in cells, including human cells, and that in recent years have been found to play important roles in the regulation of many cellular processes, as well as in development and disease.23 Thus, therapeutic and diagnostic exploitation of miRNAs in various major disease areas, e.g., cancer and cardiovascular disease, has become a hot pursuit in the biotech industry.
In the past six years, there has been a wave of issued patents covering various aspects of miRNA technology. A significant number of these patents include claims directed to an isolated nucleic acid molecule, which may have the sequence of a miRNA isolated from living cells, including human cells. Hence, these claims are directed to a nucleic acid molecule with a naturally occurring sequence and the validity of such claims may be called into question by the Myriad holding.
Another segment of industry that may be affected are companies attempting to isolate new natural compounds with therapeutic activity, e.g. from exotic plants or deep sea organisms. A major contribution of these companies is to identify and purify these new compounds from their natural source, and to show their therapeutic value. Claims directed to the natural compounds themselves may be affected by the Myriad decision, even though this is not clear-cut and it will depend on how broadly the decision is interpreted by U.S. courts in the future. One aspect that needs to be considered in this context is whether the Supreme Court's holding on "isolated" DNA molecules with naturally occurring sequences is applicable to "purified" natural compounds derived from plants or other organisms. In the Myriad case at the Federal Circuit, from which the appeal to the Supreme Court was taken, the Federal Circuit expressly distinguished "isolated" DNA from "purified" DNA.24 Importantly, the Federal Circuit also distinguished "isolated" DNA from "purified" natural compounds that are purified from a physical mixture, i.e. the natural source, which contains the compound. The purified compound results in the identical molecule as present in the natural source, but in its purified form it has new useful properties commercially and therapeutically. Such purified, therapeutically useful natural compounds, e.g., antibiotics or small hormones, such as adrenaline, have in the past often been found to be patent-eligible subject matter. Will the Myriad decision change this?
The answer awaits the Federal Circuit's interpretation of the Myriad holding, but the answer may be "no" considering the clear distinction drawn by the Federal Circuit between "isolated" and "purified" and the Supreme Court's emphasis that the Myriad decision "merely hold[s] that genes and the information they encode are not patent eligible under §101 simply because they have been isolated from the surrounding genetic material."25
Thus, while the Supreme Court's decisive decision brought an end to the long and drawn-out legal battle over the question of whether isolated gene sequences are eligible subject matter for patent protection, some questions remain unanswered. Most importantly for patent practitioners, the decision provides enough guidance to allow us to assist applicants to take steps to mitigate or avoid negative consequences of the decision.
Originally printed in CIPA Journal