Sunstein Kann Murphy & Timbers LLP: Court Brings Cheer to Biotech World With Strong Backing For Gene Patents

By Nancy C. Wilker, a member of our Life Sciences Practice Group

The biotechnology and pharmaceutical industries felt equal measures of relief and vindication from the Federal Circuit's recent decision that isolated DNA molecules continue to be patentable subject matter.  The case examined seven patents held by Myriad Genetics, Inc., which dominates the U.S. market for screening women for breast cancer.

In Assoc. for Molecular Pathology v. U.S. Patent and Trademark Office, widely known as the  Myriad Genetics case, the Federal Circuit held that isolated DNA molecules are patentable subject matter because they are not products of nature.  On the other hand, certain diagnostic screening methods using the DNA sequences are not patentable subject matter, since they failed the "machine or transformation" test.

The court reversed the most controversial portions of a federal judge's 2010 ruling that, as we discussed at the time, deeply unsettled the biotech industry. That judge had held that isolated DNA corresponding to genomic DNA sequences are unpatentable products of nature, and that Myriad's method claims were unpatentable because they disclosed no meaningful transformation.

Myriad's patents at issue cover two genes, BRCA1 and BRCA2, that are frequently mutated in women with a propensity to develop breast cancer.  A coalition of patients, physician groups, and the American Civil Liberties Union sued Myriad, asserting that the patents were invalid under Section 101 of the patent act as being drawn to unpatentable subject matter. Under that statute, a  patent may be obtained for "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof."

Oddly enough, even though the U.S. Patent Office has granted patents covering isolated DNA claims for the past 30 years, the Department of Justice's amicus brief supported the district court judge's holding that genes were not patentable subject matter.

The Federal Circuit saw fit to provide a primer on how genes are found in nature and how the information contained within them is utilized by the cell to make a protein.  First, the court noted that the Supreme Court, in Funk Brothers (1948) [enhanced version available to lexis.com subscribers / unenhanced version available from lexisONE Free Case Law] and Diamond v. Chakrabarty (1980) [enhanced version / unenhanced version], contrasted unpatentable compositions having characteristics similar to those found in nature, with patentable compositions that have "markedly different characteristics" conferred by human intervention.

Applying that test to Myriad's patent claims, the court observed that the isolated BRCA1 and BRCA2 DNA molecules are "cleaved" from native DNA. As such, they qualify as man-made patentable subject matter because they have a markedly different chemical identity from genetic molecules that exist in nature. Patent practitioners should note that the court distinguished "isolated" from "purified" DNA, implying that the latter might not be patentable under Section 101.

The court rejected the "magic microscope" criterion for patentability of DNA molecules suggested by the Department of Justice. The DOJ had contended that, if one could see the claimed substance inside a cell by use of  a magic microscope, that substance should not be patentable. This analogy, says the court, fails to credit the importance of chemical manipulations. Isolation requires human intervention, not mere visualization.

The Federal Circuit laid emphasis on the tradition of eligibility of DNA claims for patents: Since the public has relied on the patentabiity of such claims for the last 30 years, any drastic change in policy should come from Congress, not from the courts.

Turning to Myriad's method claims, the Federal Circuit relied on the Supreme Court's decision in Bilski v. Kappos (2010) [enhanced version / unenhanced version] to find that all but one of those claims fail the machine-or-transformation test. "Comparing" or "analyzing" BRCA sequences, as called for by Myriad's method claims, was not patentable subject matter because these steps were not transformative and covered only abstract, mental steps. 

The Federal Circuit distinguished Myriad's method claims from those the court considered in Prometheus Laboratories v. Mayo Collaborative Services (2010) [enhanced version / unenhanced version]. In that decision, the Federal Circuit found that "administering" a drug was a transformative step that supported patent eligibility.

On the other hand, the sole Myriad claim covering a method for using the DNA sequences to screen for new cancer therapeutics was held patentable because the claim included the transformative steps of (a) "growing" transformed cells in the presence or absence of a potential cancer therapeutic and (b) "determining" the growth rates of the cells.

The fate of method claims in biotech cases remains in flux given the Supreme Court's recent grant of certiorari in Prometheus.  In the meanwhile, patent applicants can improve the chances that their diagnostic-method claims will survive Section 101 scrutiny by including active transformational steps. Mere observational comparisons will not suffice. The non-mental step of "growing" made all the difference in Myriad.

Given the controversy surrounding the patenting of human genes, this case is no doubt headed for the Supreme Court.  However, with the Federal Circuit's well-reasoned opinion, the biotech and pharmaceutical industries have some measure of comfort that, if DNA claims go down, it will not be without a fight. 

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