AMP v. Myriad Genetics: the end of the beginning

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Jack Bierig

July 2013—The most remarkable fact about the June 13 decision of the Supreme Court in Association for Molecular Pathology v. Myriad Genetics, ___ U.S. ___ (2013), is that both sides are proclaiming victory. The physicians and geneticists who challenged efforts to enforce patents on the BRCA1 and BRCA2 genes are elated that the Court has squarely held that “a naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated.” (Opinion, at 1). Conversely, Myriad Genetics and its allies in the biotech community see themselves as having prevailed because the Court ruled that synthetically created DNA—or complementary DNA (cDNA)—“is patent eligible because it is not naturally occurring.” Id.

So which side is right? In my opinion, it is far too early to tell. A host of issues remain to be played out in a variety of forums—the United States Patent and Trademark Office (PTO), the courts, Congress, and the negotiating table. This article examines three of these issues:

• The practical effects of the holding that genes and the information they encode are not patentable;
• The possible aftermath of the ruling that cDNA is patent eligible; and
• The patentability of methods used in genetic testing and next-generation sequencing, and the patentability of DNA that has been radiotagged or otherwise altered for use as probes or primers.

At this point, however, one conclusion seems clear: Contrary to what might at first blush appear, the Supreme Court has not replicated the long-lost DNA of King Solomon and announced a splitting of the baby that will produce a definitive resolution of the matters at issue.

Naturally occurring DNA

Of the two definitive holdings of the Supreme Court, the first is that extracted, native DNA cannot be patented. It is that holding that forms the basis of the claim to victory by the Association for Molecular Pathology and its co-plaintiffs. That claim is certainly justified in two respects. The position of the plaintiffs that no one can own human genes has been vindicated. Moreover, researchers and clinicians are now free to use naturally occurring DNA without fear of a patent infringement lawsuit.
But at least three issues must be of concern to those who side with the plaintiffs.

The first is the possibility of legislative modification of the decision. The relevant holding of the Court is that, under the Patent Act as currently written, naturally occurring DNA is not eligible for patent protection. There is nothing, however, to prevent the biotech industry from asking Congress to try to amend the Patent Act so as to permit the patenting of such DNA.

Indeed, the Supreme Court explicitly foresaw this possibility. Specifically, in its brief to the Court, Myriad Genetics noted that, in 2001, the PTO had stated that human genes are patentable—and that, in reliance on that pronouncement, hundreds of millions of dollars had been invested in genetic research. Myriad argued that the courts should not upset the reliance of the biotech industry through a judicial interpretation of the Patent Act that overturned the PTO position. This argument proved persuasive to at least one of the three judges of the Court of Appeals. (See Assn. for Molecular Pathology v. U.S. P.T.O., 689 F.3d 1303, 1343-47 [Fed. Cir. 2012] [Moore, J., concurring].)

By contrast, the Supreme Court brushed off the reliance argument in a footnote (Opinion, at 16, n. 7):

Particularly given the statement by the Court that concerns about the reliance interests of holders of genetic patents “are better directed to Congress,” it is quite possible that the fight over the patentability of isolated, native DNA will move from the courts to the legislature. And, of course, no one can predict how the issue might play out in Congress.

Second, an issue now arises regarding the impact of the Supreme Court’s decision on existing licenses to use naturally occurring DNA. As just noted, the PTO had, for more than a decade, issued thousands of patents on extracted human genes. Moreover, the Federal Circuit had upheld these patents. Id. Faced with these facts and with the uncertainties and high costs of patent infringement litigation, some institutions took licenses under which they obligated themselves to pay royalties for the right to use genetic material on which a patent had been issued.

The holding of the Supreme Court that naturally occurring DNA is not patentable does not automatically invalidate these licenses. Rather, the continuing vitality of each such license depends on the specific wording of the document. Does the license contain a provision calling for termination if genetic patents are generally invalidated—as they were in Myriad Genetics? Does the license provide for termination in the event of invalidation of the specific patent? (For now, only the patents on the BRCA1 and BRCA2 genes have been specifically struck down). Or does the license make no provision for early termination?

The termination provisions of each license will have to be individually examined. The correct interpretation may be murky, particularly if a specific license includes rights to cDNA, methods of genetic testing, or other items whose status under the Patent Act is less than clear. In any event, insofar as the obligation to pay royalties under existing contracts survives the decision in Myriad Genetics, the goal of reducing the costs of genetic testing will, at least to some degree, be thwarted.

Third, and relatedly, to what extent will the decision of the Supreme Court actually result in fulfillment of the plaintiffs’ hopes for lower cost, more accessible genetic testing? Here, it should be recalled that patents are not the only intellectual property in Myriad Genetics’ arsenal. Specifically, over the many years in which it enforced its patents, Myriad gained an enormous amount of information about various mutations in the BRCA1 and BRCA2 genes—information that might be critical in identifying less common mutations.

Myriad is likely to take the position that, because of the potential diagnostic value of its data bank regarding these genes, that bank is a protectable trade secret that it will not share with any other diagnostic laboratory. Certainly, nothing in the recent decision speaks to the trade secrets issue. Thus, insofar as decisions are made to send specimens to Myriad because of Myriad’s unrivaled database, the objective of reducing the cost of genetic testing may not be realized to the degree hoped for by the plaintiffs in the case. More generally, if the holders of patents on other genes have developed databases with significant diagnostic value, the decision in Myriad Genetics might not have the hoped-for effect of significantly reducing the costs of genetic testing.