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Swine Still Soaring: Federal Circuit Judge Expresses Sympathy for Myriad Analysis
Back in March, we headlined our discussion of the district court judgment in the Myriad case “Pigs Fly.” Guess what?—they’re still aloft. On August 4, in a highly technical patent case that, appropriately enough, involved “porcine virus DNA,” one Federal Circuit judge—dissenting Judge Timothy B. Dyk—suggested that he might agree with the basic principle of the Myriad holding: that isolated DNA sequences are not necessarily patentable.
Judge Dyk’s comments were a bolt out of the blue, as he raised an issue that had not been addressed by the parties or the lower court. Because he is a member of the court that will decide Myriad in the next year or so, Judge Dyk’s comments might be more significant than the district court opinion itself. (The case is Intervet Inc. v. Merial Ltd., Fed. Cir. 8/4/2010.)
European Court Issues Gene Patent Ruling Against Monsanto—A Myriad Connection?
In another significant international development, on July 6, the Court of Justice of the European Union (more commonly known by its old name, the European Court of Justice or ECJ) ruled against Monsanto Technology LLC (pdf) in its suit against an Argentine company called Cetera and several other parties.
The Court sat in a 13-member Grand Chamber, which is eurojargon for “really big deal,” and issued a ruling which leaves gene patents essentially intact but warns national courts to construe them carefully. (Travel advisory aside: If you ever have a chance to visit the Court in Luxembourg, do. Its magnificently robed judges sit in medieval splendor in a hideous modern building. Lawyers (usually several per case), robed almost as magnificently, read long and pompous arguments that are translated into many languages. The judges, apparently having already decided the case, ask no questions and seem to pay no attention. The rulings are logically convoluted and delivered in baroque language. Everyone seems immensely pleased with the spectacle.)
Myriad Gene Patent Litigation Goes Down Under
On Tuesday, June 9, 2010, several plaintiffs, including a breast cancer patient and a cancer advocacy group, sued in a Sydney, Australia federal court to invalidate Myriad Genetics’ patents on the breast cancer susceptibility genes BRCA-1 and 2. According to published reports and comments by Australian patent law experts, the suit substantially tracks the much-publicized one filed in New York by the American Civil Liberties Union. In particular, this suit is also a frontal attack on the Myriad patents, seeking a judgment that genes in isolation from the body are products of nature and thus not patentable inventions.
The factual background in Australia seems a bit different. Myriad has granted an exclusive license to perform BRCA gene tests to a Melbourne company called Genetic Technologies Limited, which is a co-defendant in the case. But GTL has been reported to have “gifted” its patent rights to health care institutions, and not to charge royalties. Nonetheless, the plaintiffs’ lawyers have expressed concern about the possibility of GTL exploiting their monopoly as in the U.S., where the tests cost over $3,000. They note that on two earlier occasions GTL sent letters to hospitals telling them to stop testing. A number of Australian sources have also worried aloud about the implications of the patents for medical research.
Myriad Genetics Appeals Ruling Invalidating Gene Patents
Just over two months ago, in a widely publicized decision we characterized as “a nearly complete victory for the plaintiffs and their supporters,” a district court judge in New York invalidated a number of Myriad Genetics’ patent claims, including the company’s patents on isolated DNA sequences in the BRCA1 and BRCA2 genes (i.e., “gene patents”).
Yesterday, to absolutely nobody’s surprise, the defendants in the case, including Myriad, filed a notice of appeal (pdf) with the district court. Next stop is the Court of Appeals for the Federal Circuit. It has been just over a year since the lawsuit was first filed with the district court, and a safe guess would be that it will take roughly the same amount of time for the Federal Circuit to reach a decision, which is itself likely to be followed by an appeal to the Supreme Court. More than anything else, this appeal should serve as a reminder that there is still a long way to go before this litigation is finally resolved.
Is an IPO the Right Thing for Your Company?
This commentary in the Genomics Law Report’s ongoing series Bench to Market is contributed by David W. Dabbs, Robinson, Bradshaw Hinson, P.A.
You just spent the last five years of your life working virtually 24/7/365 to build your company into one of the most respected firms in its field. Three years ago you barely could raise enough money to fund payroll and rent. Now you barely have enough time to run your business because of all the meetings with investment banking firms that want to talk about taking your company public. You hear rumors about competitors going public, and your outside investors and board members tell you to strike while the iron is hot.
You wonder what it would be like to run a public company and how it will affect your lifestyle. Based on the valuation ranges under discussion, your net worth (on paper at least) makes you feel like you just won the lottery. Serious people are saying that you could be the “next Google,” and you wonder what that would be like. You imagine yourself ringing the bell on the New York Stock Exchange.
You decide to have dinner with an old college friend, who is the chief financial officer of a public company, to share your news (against the advice of counsel). What she says makes you think.
You ask her how much stock you should sell in your IPO, and she tells you that you will be told not to sell any stock. You wonder why, especially given that your private equity investor plans to sell part of its investment, and she tells you that public investors will view the sale of stock by you as a sign that you do not believe in the future of your own company. You ask her why the same rules don’t apply to your outside investor, and she laughs and tells you that they just don’t.
Betting on Bilski: The Supreme Court and Biotechnology Patents
There is a two-part question that we are frequently asked these days: “When is Bilski going to be decided and what’s the decision going to be?”
The first part of that question is easy to answer. Bilski will be decided soon. Need something more specific? Bilski will be decided sometime between today and the end of June or beginning of July, when the Supreme Court’s current term ends.
The second part of the question involves predicting the future. We’re happy to take a shot at that, but only after a few caveats. First, these predictions are for entertainment purposes only. Betting on Supreme Court decisions is illegal in most states and several foreign countries, so don’t. Second, pay no attention to alleged inside information about what the Court is going to do or when it’s going to do it. There are no credible Supreme Court leaks—the Court is tighter than Putin’s old KGB (or his new FSB). Third, remember that it takes the votes of four justices for the Court to take a case. So we can presume that at least four justices wanted to say something about Bilski. But we don’t yet know what that might be. With those disclaimers, let’s proceed to the prognostication.
WARF Reexamination Takes Another Bite Out of Biotech Patents
Two months ago, the Myriad gene patent litigation generated a slew of national and international coverage. We said, “Pigs Fly: Federal Court Invalidates Myriad’s Patent Claims.” “Is the DNA patent dead?” asked CNN. Wired (apparently answering CNN) declared the “End of Gene Patents Will Help Patients, Force Companies to Change.” Everyone, it seemed, either had an opinion on what the Myriad decision meant for the future of biotechnology or was looking for somebody who did.
It’s not surprising that the Myriad litigation has dominated the headlines. The ACLU’s challenge to Myriad Genetics was a first-of-its-kind frontal attack on gene patents. But with Myriad now on appeal to the Federal Circuit, and a final resolution to that particular piece of litigation likely several years away, a variety of other legal developments are slowly but surely reshaping the biotechnology patent landscape. In the next few years, while frontal attacks such as Myriad are likely to occupy the press and policymakers, those interested in forecasting the future of biotechnology patents will be paying equally close attention to the various collateral attacks on gene, protein, association, diagnostic, and other biotechnology patents and claims.
The Unexpected Impact of Genetics on the Business World
Recent advances in genetic science are remarkable. In 2003 the first full human genome was sequenced after 13 years of work at a cost of over $3 billion. Today, the cost to sequence any individual’s entire genome is approaching $1,000. Genetic tests for specific genes linked to cancer and other diseases exist today and many more are being developed. We hear of a new era of “personalized medicine” in which drugs and therapies will be prescribed based on the individual patient’s specific genes.
All of this may seem to have little direct relevance to companies outside of biotechnology. However, the development of genetic knowledge and technology already has spawned new laws, regulations and patent uncertainties that impact almost all businesses in some way.
Privacy and Nondiscrimination. The federal Genetic Information Nondiscrimination Act of 2008 (GINA) represents the most comprehensive effort to date to regulate the use of genetic information. GINA initially only prohibited health insurers and group health plans from using genetic information to deny coverage or set payment rates. Another section, which just became effective in November 2009, affects all private and public employers with more than 15 employees.
SACGHS Chair: Put Patients Before Patents
This afternoon, the journal Genetics in Medicine released an online-only supplement analyzing the relationship between gene patents and genetic testing. The bulk of the issue is devoted to a series of 8 case studies surrounding 10 clinical conditions. The case studies were undertaken over the past several years by researchers at Duke University’s Center for Public Genomics, and were led by Robert Cook-Deegan.
The Case Studies. Those who have been following the gene patenting debate for the past few years may recognize the case studies. They were released in largely their current form in March 2009 as a lengthy appendix to the draft report on “Gene Patents and Licensing Practices and Their Impact on Patient Access to Genetic Tests” (pdf) prepared by the Secretary’s Advisory Committee on Genetics, Health and Society (SACGHS).
The SACHGS report has since been finalized and, as we have discussed, was submitted to HHS Secretary Kathleen Sebelius with a series of recommendations, including exemptions to patent infringement liability for clinical care and research. If adopted, those recommendations would significantly reshape the gene patent and licensing landscape.
More Myriad: Moving Beyond Single Gene Patents
Unless you have been living under a rock – or, if you hail from the Northeast, living under water – Monday’s decision in Association for Molecular Pathology v. USPTO is no longer new news. Previous coverage from the Genomics Law Report (here and here) reviews Judge Sweet’s opinion and its implications.
Moving Beyond Single Gene Patents. Much of the discussion following the decision has centered on what effect the invalidation of Myriad’s gene patents – should that decision be affirmed by a higher court and extended to other similar patents – will have on scientific and commercial innovation.
In many ways, that issue is at the center of the policy debate surrounding Sweet’s opinion and, more generally, the appropriateness of certain biotechnology patents. It’s a question that’s difficult to answer prospectively, but Andrew Pollack’s piece in The New York Times succinctly makes an important point about an emerging reality in the biotechnology industry.
…[T]he [biotechnology] industry is already moving to a period of somewhat less dependence on DNA patents for its sustenance. Diagnostic laboratories, for instance, are shifting from testing individual genes to testing multiple genes or even a person’s entire genome. When hundreds or thousands of genes are being tested at once, patents on each individual gene can become a hindrance to innovation rather than a spur.
