Sunstein Kann Murphy and Timbers: Supreme Court Stands to Reshape Patent Law for the Life Sciences

Sunstein Kann Murphy and Timbers: Supreme Court Stands to Reshape Patent Law for the Life Sciences

By Nancy Wilker, Ph.D. A member of the Life Sciences Practice Group

Two thousand thirteen may end up being the year of life sciences patent law at the Supreme Court. In the last three months, the court has agreed to hear three biotech/pharma cases, the outcomes of which will have sweeping implications for the industry.

1. Soybean seeds

In Bowman v. Monsanto Co. [enhanced version available to subscribers] case, the issue is whether self-replicating technologies-here, patented plants and seeds-should be exempt from the doctrine of patent exhaustion.

Monsanto invented genetically modified soybeans that resist certain herbicides. Bowman, a farmer, after purchasing seeds from a Monsanto agent under license, bred the genetically modified plants that germinated from the patented seeds with plants that did not. He obtained progeny that were herbicide-resistant.

Monsanto alleged that Bowman's herbicide-resistant progeny were not covered by the license and thus infringed the patent. Bowman argued that Monsanto's patent rights were exhausted upon germination of the patented seeds, and did not extend to their progeny.

Under the doctrine of patent exhaustion, once an unrestricted, authorized sale of a patented article occurs, the patent holder's exclusive rights to control the use and sale of that article are exhausted, and the purchaser is free to use that article without further restraint under patent law.

Both a federal court in Indiana and the Federal Circuit disagreed with Bowman's take. Now the Supreme Court will decide whether there should be an exception to the exhaustion doctrine for self-replicating technology.

2. Human genes

In the Myriad Genetics case, formally known as Association for Molecular Pathology v. United States Patent and Trademark Office [enhanced version available to subscribers], the court will address this simple question: Are human genes patentable?

In an opinion that clearly anticipated Supreme Court review, Judge Sweet of the Southern District of New York held, as we reported, that DNA is a naturally occurring substance and for that reason is unpatentable subject matter.

The Federal Circuit, in an opinion that we also analyzed, reversed that ruling. It held that, in view of clear structural distinctions between natural and isolated DNA, the latter is indeed patentable.

The Supreme Court is now taking up the question.

3. Reverse payments

In Federal Trade Commission v. Watson Pharmaceuticals, Inc. [enhanced version available to subscribers], the court will enter the roiling debate over the legality of so-called "reverse payments," those made by a pioneer drug company to a generic company in settlement of a patent challenge. In exchange for the payment, the generic company agrees to refrain from selling a generic version of the drug for a period of time.

As we've reported, there is a split of opinion among federal courts of appeal. The Second, Eleventh and Federal Circuits have upheld reverse payments, while the Third and Sixth Circuits, as well as the Federal Trade Commission, and assert that such payments violate the antitrust laws.

By the end of the Supreme Court's term, in June, decisions in all three cases will be handed down. They are likely to leave a major impact on the life sciences industry.

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