Pigs Fly: Federal Court Invalidates Myriad’s Patent Claims
Late on the afternoon of Monday, March 29, 2010, Judge Robert W. Sweet of the United States District Court for the Southern District of New York issued a jaw-dropping summary judgment ruling (pdf) in Association for Molecular Pathology v. USPTO that invalidates certain of Myriad Genetics’ patents related to the BRCA 1 and 2 breast and ovarian cancer susceptibility genes. In a post written immediately after the release of the opinion, Dan gave a thorough summary of the ruling. Our objective here is to offer a bit more depth on what the ruling means—and what it doesn’t mean. On the one hand, Judge Sweet’s order is radical and astonishing in its sweep. On the other, it will be some time before we have any idea what impact it will ultimately have.
We should first disclose that one of us (John) has a dog in this fight, albeit a small one. In 2003, (along with biologist and patent lawyer Roberte Makowski), John published an article in the Journal of the Patent and Trademark Office Society entitled Back to the Future: Rethinking the Product of Nature Doctrine as a Barrier to Biotechnology Patents (pdf). In that article, Roberte and John laid out an argument for challenging Myriad-style patents on “isolated” genes as claiming products that are only trivially different from the naturally-occurring versions. Judge Sweet cited this article and, in several parts of his opinion, followed the roadmap it created. So, if you oppose the Myriad patents, you’re welcome; if you like them, we’re sorry.
What Summary Judgment Means. As Dan noted, and John first wrote last fall, it is rare for plaintiffs to win on summary judgment. For either side to receive summary judgment, it must show that there are no disputed issues of fact that require a trial to resolve, and that, on the undisputed facts, the law mandates judgment in its favor. This standard is especially hard for a plaintiff to meet, since it bears the burden of proof at trial. At the summary judgment stage, a defendant can usually create an issue of fact and thereby avoid summary judgment just by saying “they have the burden of proof at trial, and a jury might not believe them.” Although this is an unusual case in that the basic facts—most notably Myriad’s patent claims and the fundamental biology and genetics that makes possible those claims—really are not in dispute, a summary judgment ruling for the plaintiffs nonetheless sends a clear message about how strong this particular judge thought their case was—and how weak he thought Myriad’s was.
The Road to Invalidation. The court broke Myriad’s patent claims into two major groups: (i) those claiming isolated DNA sequences and (ii) those claiming methods for comparing or analyzing gene sequences to identify the presence of mutations corresponding to a predisposition to breast or ovarian cancer (p. 2). Both sets of patents were rejected under Section 101 of the Patent Act, which enumerates the permissible categories of patentable subject matter: processes, machines, manufactures, and compositions of matter. As the judge noted, a long history of cases forbids claims on laws of nature, abstract ideas, and natural phenomena, which include products of nature.
Isolated DNA Sequences. The claims to DNA sequences in isolation were held to be insufficiently distinct from naturally occurring genes in the body—the product of nature version. This conclusion embodied several critical steps. First, the court emphasized that whether a patent applicant claims patentable subject matter is a free-standing inquiry, separate from the determination of whether the invention also satisfies the standards of novelty, utility, and non-obviousness. In other words (and contrary to arguments often made by patent lawyers), you cannot prove that something is a patent-eligible, human-made invention—and not a product of nature—by showing how new and useful it is. It either is patentable subject matter or it isn’t.
Having established this principle, the court went to assess just how different an “isolated” gene would have to be to avoid characterization as a product of nature. Myriad defined “isolated” in its patents as “substantially separated from other cellular components which naturally accompany a native human sequence [such as] human genome sequences and proteins” (p. 92). Myriad relied heavily on some cases going back to the early twentieth century—especially one involving purified adrenaline—to argue that this was enough of a difference.
The judge disagreed, strongly. He went back even further, to nineteenth-century cases involving line fibers and wood pulp, as well as later cases involving such things as pure tungsten, and concluded that “purification of a product of nature, without more, cannot transform it into patentable subject matter. Rather, the purified product must possess ‘markedly different characteristics’ in order to satisfy the requirements” (p. 121).
Not Markedly Different. Myriad’s isolated genes failed this test. In his search for “markedly different characteristics,” Judge Sweet focused—and this is the most radical part of the opinion—on the critical functional property of a gene, whether in the body or in isolation: its ability to carry the information sufficient and necessary to code for a protein.
DNA represents the physical embodiment of biological information, distinct in its essential characteristics from any other chemical found in nature. It is concluded that DNA’s existence in an ‘isolated’ form alters neither this fundamental quality as it exists in the body nor the information it encodes (pp. 3-4).
And again:
In light of DNA’s unique qualities as a physical embodiment of information, none of the structural and functional differences cited by Myriad between native BRCA1/2 DNA and the isolated BRCA1/2 DNA claimed in the patents-in-suit render the claimed DNA ‘markedly different.’ This conclusion is driven by the overriding importance of DNA’s nucleotide sequence to both its natural biological function as well as the utility associated with DNA in its isolated form. The preservation of this defining characteristic of DNA in its native and isolated forms mandates the conclusion that the challenged composition claims are directed to unpatentable products of nature. (p. 125).
Why is this so radical? Since the inception of gene patenting a generation ago, patent lawyers have taken the position that genes are just chemicals. Their information-carrying function is irrelevant to their patentability, the lawyers say. Because genes are chemically different in isolation, at least in a literal sense, they can’t be considered products of nature. The USPTO and the courts, including the Federal Circuit (the patent court of appeals), have uniformly acquiesced. Now a federal court has said that, no, genes aren’t just chemicals—precisely because they carry information. Genetic exceptionalism has become a principle of law, at least in Judge Sweet’s court.
Next Go the Process Claims. Myriad’s process claims got even less respect. In just a few pages, out of 156 in total, the court concluded that they all failed the Federal Circuit’s “machine or transformation” test for method claims. (This test comes from the recent Bilski case. Although the Supreme Court will soon issue its own opinion in Bilski, the machine or transformation test is the law unless and until the Supremes order otherwise.) Judge Sweet found that none of the methods were tied to any particular machine, nor did they bring about a tangible transformation of anything. Rather, “because the claimed comparisons of DNA sequences are abstract mental processes, they also constitute unpatentable subject matter” (p. 4).
Judge Sweet also added that, even if the claims were construed in such a way that they constituted “physical transformations associated with isolating and sequencing DNA, they would still fail the ‘machine or transformation’ test under §101 for subject matter patentability.” (p. 147).
Taking it to the Next Level. Where do we go from here? Myriad will surely appeal to the Federal Circuit (it has a right to that appeal), a process that could take a year or more. It is possible that the District Court’s judgment invalidating the Myriad patents will be stayed, or suspended, during that appeal. Judge Sweet’s order will not affect any patents not directly involved in the case, nor be binding on any other court, and it is highly unlikely that the USPTO will change its gene patent examination standards just because of this decision.
Then it will be up to the Federal Circuit. Our initial guess is that the court will end up affirming Judge Sweet on some or all of the process claims, but will cut way back on his broad attack on gene patents. But that decision is way down the road and, of course, will be informed by what the Supreme Court decides to do with Bilski. Even farther down the road is an appeal from the Federal Circuit to the Supreme Court, where all bets would be off.
To summarize, as breathtaking as this opinion may be, its legal effect is currently very limited. Another federal district judge would be free reach exactly the opposite conclusion tomorrow (if another comparable case were pending, which it isn’t). Things won’t get serious (legally) until the Federal Circuit rules, since its opinion will bind all federal courts except the Supreme Court.
Practical Implications. With the decision only hours old, the headlines are already starting to roll in. “The End of Gene Patenting?” “Judge Rejects Patents on Genes.” “Judge Nullifies Gene Patents.” While it is clear that this decision is headline news, it is equally important not to overstate either its legal significance or its likely practical effect. The limited legal reach of the opinion—unless and until it is upheld by a higher court—has been discussed above. Less certain is its practical effect, including how businesses, clinicians and patients may change their behavior in response to the ruling.
As a recent report on gene patents (pdf) from the Secretary’s Advisory Committee on Genetics, Health and Society (SACGHS) emphasized, the existing gene patent landscape has created considerable uncertainty as to how and by whom many genetic and other diagnostic tests may be performed. That uncertainty prompted SACGHS to recommend a pair of exemptions from patent infringement liability: one for genetic testing for “patient care purposes” and another for the “use of patent-protected genes in the pursuit of research.”
It would, of course, be incredibly risky to rely on the SACGHS recommendations—which are only recommendations, and not binding law—to justify otherwise infringing activities for, as we wrote last month, there is a very long road from advisory committee recommendation to Congressional legislation. Similarly, it would be mistake to view a District Court decision as paving the way to ignore all of Myriad’s BRCA patents, let alone providing the ability to disregard gene patents more broadly. This opinion may stick, but it is at least as likely that it won’t.
Of course, just because something would be risky, legally speaking, does mean that it won’t happen. It’s within the realm of possibility that commercial or even non-commercial (e.g., academic or research) laboratories could take Judge Sweet’s opinion as an invitation to challenge Myriad’s monopoly of BRCA1/2 testing head on. (Isaac Ro and Jeff Ares, of equity research firm Leerink Swann, however, think that a commercial challenge would be unlikely to succeed (pdf) given the combined strength of Myriad’s current commercial position and its remaining, unchallenged BRCA patent portfolio.) Risky or not, there is a possibility that Judge Sweet’s opinion will prove in time to have let the gene patent horse out of the barn in a way that cannot easily be undone, even by a subsequent reversal at a higher court. For the moment, however, we do not foresee this decision producing any radical changes in commercial, clinical or other activity surrounding Myriad’s BRCA patents, or gene patents more broadly.
In the broader policy debate surrounding gene and biotechnology patents, however, this decision is the latest, unmistakable shot across the bow of gene patent holders, particularly those such as Myriad Genetics that have developed businesses around patent-protected genetic tests supported by exclusive rights in underlying gene patents. As we wrote last summer, and as the SACGHS report pointed out in detail, there is a coming crisis at the intersection of multiplex genetic testing and whole-genome sequencing and biotechnology patents, particularly gene patents. This decision is sure to intensify the public policy discussion surrounding the appropriateness of gene patents, and ratchet up the media and public attention paid to the issue.
But to what practical effect? It seems unlikely that this decision, at least for the moment, will make Congress any more likely to take up the Supreme Court’s longstanding invitation—recently reiterated by SACGHS—to sort out the whole biotech patent area. In fact, it might make legislators even more reluctant to act, on the (erroneous) assumption that the courts have everything under control. Biotechnology businesses and investors are similarly unlikely to use this decision as the basis for significant departures from their current approaches with respect to gene patents.
What everybody will undoubtedly be doing is waiting and watching, closely, to see what comes next. The patentability of genes—as well as the broader issues of biotechnology commerce and access to and development of genetic tests that today’s opinion touches upon—is an issue that has long demanded a clearer resolution. To that chorus of voices we can now add Judge Sweet in the Southern District of New York. This is an important step—but only a step—along the road to resolving that issue. Next stop, in all likelihood: the Supreme Court’s decision in Bilski.
Well, this certainly is a Sweet ruling.
Excellent (and timely!) post, but calling this legal support for genetic exceptionalism implies a greater scope to the ruling than what it seems to address or was intended to address. In focusing on the information content of DNA, the judge appeared to be making a distinction between different types of biological molecules rather than the different types of information on which the debate of genetic exceptionalism has been focused. Additionally, it seems to me that this ruling did not even need to rely on any unique characteristics of DNA, but rather Judge Sweet had already determined that it was not patentable material prior to digressing on that tangent. In citing ample case law and even going on to question some of the reasoning in the Parke-Davis (adrenalin) case, he could still have held that native and isolated DNA are not markedly different without distinguishing between DNA and other naturally occurring chemicals.
On the commercial side, what are the odds that Myriad and other gene patent holders will aggressively attempt to fight future patent infringement for diagnostic and research purposes? The legal costs of challenges and the potential for additional patent invalidations would seem to make it less than incredibly risky for researchers and competitors to go ahead and offer competing services. In my view, the gene patent holders would be better off competing based on the quality and cost of their tests rather than based on patents for things that their customers are (potentially) producing hundreds of billions of every day. I also think that it is highly unlikely that gene patents will continue to be upheld for diagnostic purposes, especially in relation to direct sequencing. Although it will be interesting to see how this plays out in a few years in the context of gene therapy…
Do you know how this affects patents on genes and natural products from other organisms?
Jonathan – It is my understanding that the ruling directly pertains only to the few patents that were specified in the case. However, its indirect ramifications could be much more far-reaching. If upheld, it would set a precedent for the invalidation of gene patents (though not necessarily natural products) across the board. Patents on whole organisms that are created or modified with gene splicing or other techniques (e.g. Monsanto’s portfolio) would likely still be safe. After all, a potato with a jellyfish gene is markedly different from what occurs in nature.
On the subject of non-human biotechnology patents, I think the most basic answer is, as Austin points out, that this decision only applies to the patents specifically challenged. Even then, it only applies – for the moment – in the Southern District of New York. It would be a mistake to read too much into it at this point in time woith respect to other biotechnology patents, whether pertaining to humans or otherwise.
Of course, depending on how this all ultimately plays out, it’s possible that some elements of the decision (if it were upheld as is, which is unlikely) could have broader applicability. In particular, DNA’s apparently unique “physical embodiment of information” characteristic, as well as the broader product of nature discussion, could have implications for non-human biotechnology.
However, it’s possible that any narrowing of the ruling on appeal could result in a limitation of the holdings to human gene patents, for instance because of the unique policy issues associated there (the “genetic exceptionalism” argument again).
So, could it apply to non-human biotechnology? Yes. How will it apply? Unknown. As much as we’d all like clearer answers, for the moment we don’t even know how it will apply to human biotechnology patents.
*Great* analysis.
Very hard to imagine Judge Sweet’s ruling won’t get reversed at least in the assertions that cDNA is not “markedly different” from DNA found in nature.
It seems significant that Judge Sweet is the first judge to come to gene patents from diagnostics rather than DNA as a way to produce a therapeutic or DNA in a vector or some other clearly transformed state. His arguments about the informational role of DNA have strong intuitive appeal. The fact that diagnostics are useful only to the degree that the “isolated DNA” has the same sequence as the native DNA make it hard to argue that “isolated” is doing any meaningful work–the heart of his composition of matter claims analysis. Those arguments are a hurdle to those who use the “DNA is just a molecule” rejoinder. And the process claims are probably toast under any reading of Bilski unless the Supreme Court creates a test that seems more expansive than their oral questions would suggest is likely to emerge in their eagerly awaited decision.
Next steps will tell us more.
Really?
Don’t you mean that the decision of a circuit court would bind all courts in the circuit?
Bruce -
The Federal Circuit is different from other geographically-focused Federal appellate courts in that its decisions within the bounds of its subject-matter jurisdiction (which includes patents) are binding throughout the U.S. Thus, a Federal Circuit opinion in Myriad would be binding unless the Supreme Court or Congress decided to weigh in.
Oh, yes, I remember that now. Thank you.
Fortunately Judge Sweet’s analysis only has “intuitive” appeal, if any. Deeper reflection shows it to be fatally flawed and the CAFC will reverse him in toto.
This ruling is in the best interests of science and those who wish to advance it for humanity’s benefit. What’s breathtaking is the fact that companies ever were allowed to patent DNA in the first place. It never made sense that patent law on ‘created’ organisms was applied to DNA that existed millenia before someone decided to look closely at it.
http://bioblog.biotunes.org/bioblog/2010/03/30/a-good-day-for-science-and-medicine/
http://bioblog.biotunes.org/bioblog/2009/11/15/myriad-genetics-did-not-create-the-brca-gene-evolution-did/
Myriad is a victim of the practice of the patent attorneys to construct as broad claims as possible. This practice, degenerated to the point of encroaching into non-patentable areas, has the unintended effect of weakening the soundness of the claims, and thus actually weakens the IP protection. It is time for patent attorneys to understand this, and the decision in Myriad’s case should serve as a wake up call.
In the name of “entrepreneurship” courts have been sympathetic to the wild constructions of the “intellectual property lawyers” Ever since subsequent rulings overturned the initial SCOTUS decision denying the validity of the method of “shift register” which actually was an attempt at patenting a mathematical equation and the subsequent forays into trivial programing patents, I have been amazed at the length the patent industry has gone to try to claim credit for what “God created” (Substitute nature if you want) My thinking in my first law school patent law class was if these guys get away with it eventually it will lead to the patenting of such things as the “binomial theorem” and other mathematical facts of nature. Not sure this is not what happened with DNA patenting. I actually welcome this decision as a refreshing return to reality.
Thanks for the commentary. I have read the complete judgment and I think it does a great job of summarizing the issues and laying the groundwork for further argument at higher judicial levels.
Quick query, can the next higher court simply uphold the decision by refusing to allow an appeal, and if so would that be absolutely the end of this round?
I did not quite follow the judge’s argument about vitamin B12. He seemed to be saying that in that particular case purified B12 from one source was substantially different than impure B12 from a different source and hence patentable. I’m unfamiliar with the case in question, but from reading this judgment I have the sense that the B12 patent should have been revoked and the judge was doing a bit of dodging to avoid saying so.
Hypothetical: If I have my genome sequenced by Complete Genomics or Illumina at my own expense, and look at the raw data myself in the BRCA genes, does that infringe on the Myriad patents either on my part or the sequencing company’s? What if the company analyzes those genes for me (which they supposedly are prepared to do in a commercial setting)? Does it matter whether they know anything about my risk of cancer? If this infringes, then does that not make complete genome sequencing completely indefensible for all patented genes, which is clearly an absurd and impossible situation? And would not Complete and Illumina already be in infringement since their whole genomes are already commercially available?
(Disclaimer: I have profited from Myriad shares in the past, though have no current stake in the company).
Thomas Kepler and colleagues at Duke have an interesting paper on BRCA1 claims in genomics.
http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6WG1-4YK2F2W-1&_user=10&_coverDate=03%2F10%2F2010&_alid=1278817083&_rdoc=1&_fmt=high&_orig=search&_cdi=6809&_sort=r&_docanchor=&view=c&_ct=1&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=168bdc49d93947be822620d8f5b414a8
Superb article. Thank you once again for the lucid explanation of points of law (not an easy task). I cannot reiterate enough the importance of the judgment and the contribution of your article towards shaping our IPR laws in a more humane and just manner.
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