First-to-file (§ 3): The most significant change is from a “first-to-invent” system to a “first-to-file” system. Until now, it has been possible for
inventor A to challenge the application of inventor B, who filed an earlier application for the same invention, based on evidence that inventor A had actually invented first.

Under current law, such disputes are resolved in Patent Office proceedings called interferences, which are decided under complex rules that take into account who first conceived of the invention, who first reduced it to practice, and whether the competing parties were continuously diligent in their respective efforts to reduce to practice. The interference proceeding will be eliminated by the AIA legislation, and the entity that presently conducts those proceedings, the Board of Patent Appeals and Interferences, will be renamed the Patent Trial and Appeal Board (§ 7). Assuming all other requirements are met, the first inventor to file an application on the invention will be granted the patent. This provision “harmonizes” the United States patent system with those in other countries and will take effect 18 months from the enactment date.

“Prior commercial use” as a defense to infringement (§ 5): An accused infringer will have a valid defense if they can prove their own good faith commercial use of the infringing device or method at least one year before the earlier of either (a) the effective filing date of the patent or (b) the date the subject matter of the patent was publicly disclosed by the inventor. This section is effective on the date of enactment and applies to any patent issued on or after that date.

False patent marking actions (§ 16): Only the United States or “a person who has suffered a competitive injury as a result” of false marking (e.g., marking a product with an expired patent) may bring a suit on that basis. So-called qui tam actions (also known as whistleblower suits) based on false marking will be eliminated. Only the United States may recover statutory damages, and a person suffering competitive injury may recover “damages adequate to compensate for the injury.” This provision is effective for cases pending on or commenced on or after the date of enactment.

Study on genetic testing for second opinions (§ 27): As Dan wrote in June, the Director of the United States Patent & Trademark Office will be required to conduct a study on “effective ways to provide independent, confirming genetic diagnostic test activity where gene patents and exclusive licensing for primary genetic diagnostic tests exist.” This provision is effective immediately on enactment, and a report and recommendations to the House of Representatives and the Senate are due nine months from the bill’s date of enactment. As Myriad, Prometheus and other litigation with implications for personalized medicine patents continue to wend their way through the legal system, the study presents the government – and particularly the Patent Office – with a timely opportunity to once again weigh in on the merits of gene patents, in particular their effect on diagnostic testing and medical care.

Some Additional provisions: For those interested in digging deeper into the AIA, here a few other changes the new legislation will bring about:

• Numerous adjustments to post-grant review and reexamination, intended to encourage these processes and thereby decrease patent litigation (§ 6);
• Adjustment to rules regarding third-party submissions before issuance (§ 8);
• Fee-setting authority for the USPTO and changes to fees (§§ 10-11), including the creation of a “micro entity” category of inventor (entitled to pay 25% of certain fees) as a subset of the small entity (entitled to pay 50% of certain fees);
• Prohibition on patents claiming tax “reducing, avoiding, or deferring” strategies (§ 14) and on patents on human organisms (§ 33); and
• Prohibition on joinder of defendants solely on the basis that each defendant is accused of infringing the same patent(s), which is intended to restrict the litigation activities of so-called non-practicing entities (or, as they are less politely known, “patent trolls”) (§ 19).

As a practical matter, many of the changes described above – including the switch to first-to-file – will take some time to be implemented by the Patent Office (see timeline below, which comes from the PTO’s website) and should not be expected to dramatically alter the number or nature of patent issuances or challenges in the short-term. As for the hotly contested (see here, here and here for a sampling of views) economic impact of the AIA, including its effect on small inventors, if that debate is ever settled (unlikely given the myriad confounding factors) it will be years in the future.

Allison Williams Dobson is an attorney, scientist and lecturer in the Norfolk, Virginia area and is a regular GLR contributor.

But First: The Federal Circuit Has Denied the Plaintiff’s Motion for Rehearing in Myriad: This week, the Federal Circuit issued a one-word order—“Denied”—turning down both parties’ requests for rehearing by the three-judge panel that decided that case originally. The parties now have 90 days to file a certiorari petition asking for Supreme Court review.

This news is not surprising considering the Federal Circuit’s most recent treatment of patent-eligible subject matter under § 101 of the Patent Act. On August 31, 2011, another 2-1 divided panel issued its opinion (three very strong opinions, really) in Classen Immunotherapies, Inc. v Biogen Idec (pdf).

The majority finds that two of the three method patents in dispute claim subject matter that is patent-eligible under § 101. However, the court also emphasizes repeatedly that the two patents “may not” meet the other requirements for patentability imposed by §§ 102 (novelty), 103 (nonobviousness), and/or 112 (adequate written description). The thrust of the majority’s message is becoming a familiar mantra–the statutory role of § 101 is to act as a “coarse eligibility filter”–a gateway to the real tests–and not the “final arbiter of patentability.”

Method Patent Recap. Remember that in Bilski, the Supreme Court indicated that the proper inquiry in method patent cases is focused on whether the claims cover abstract processes (unpatentable) or specific applications of processes (patentable), and expressed particular concern about method patents that preempt all uses of an abstract process.

Two other cases involving biotech method claims, Prometheus and Myriad, have come before the Federal Circuit since the Supreme Court’s decision in Bilski. The Myriad method claims were split into two groups–therapeutic screening claims were found valid but methods of “comparing or analyzing” genetic information were invalidated on the basis that they recited “nothing more than the abstract mental steps.”

In Prometheus, which currently awaits Supreme Court review, the Federal Circuit has now twice upheld the patentability of a method of administering a drug, determining the level of the drug in a patient’s bloodstream, and then adjusting the dosage accordingly to maximize therapeutic efficacy. With these parallel cases in mind, we turn to the broad scope of subject matter in the methods claimed by Classen.

Classen in Brief. Classen involves claims to methods of optimizing immunization schedules in order to lower the risk of developing chronic immune-mediated disorders. There are 230 total claims in the three patents in suit. A representative claim in the ’139 and ’739 patents, which survived, states a method of immunizing a mammal, including the following steps:

1) screening information on immunization schedules and the occurrence of chronic immune-mediated disease,

2) comparing the results from different schedules and identifying the lower risk schedule, and

3) administering the vaccine on that lower risk schedule.

The third patent (‘283), now invalidated by the court, essentially claims only steps 1 and 2 above–reviewing and comparing information to determine whether there is an immunization schedule that correlates with lower risk of developing chronic disease.

Classen sued a number of companies for infringing its patents in various aspects of their vaccination research. The defendants include Biogen Idec, GlaxoSmithKline, Merck, Chiron, and Kaiser Permanente. Strikingly, Classen alleged that a physician infringes the ‘283 patent simply by reviewing the literature on immunization schedules, even when no change in practice occurs after the review. In fact, the Federal Circuit opinion says, “Classen states that Merck induces direct infringement by parents when Merck provides and physicians distribute the book ‘What Every Parent Should Know About Vaccines’, because the book advises parents to understand vaccines and vaccination schedules.” This ‘283 patent did not survive Federal Circuit scrutiny in either round of review.

Abstract idea or specific application? In 2006, a federal district court judge in Maryland held all three patents invalid under § 101 “because they are directed to the ‘abstract idea’ that there is a relation between the infant immunization schedule for infectious diseases and the later occurrence of chronic immune-mediated (non-infectious) disorders.” On first appeal to the Federal Circuit, in 2008, the court strictly applied the machine-or-transformation test (then the Federal Circuit’s exclusive test; demoted to non-exclusive status by the Supreme Court in Bilski) and found the claims lacked a transformative step. Thus, it affirmed the district court’s holding that all three patents were invalid.

Now on remand from the Supreme Court after Bilski, Judge Newman writes for the majority, joined by Judge Rader. The opinion reiterates language from Bilski: “The §101 patent-eligibility inquiry is only a threshold test.” She stresses that §§ 102, 103, and 112 must also be considered to determine patent validity. This serves as the backdrop for the court’s change of position.

The majority now says that the third step above, administering the vaccine on the lower risk schedule, is sufficient to move the ‘139 and ‘739 patents “from abstract scientific principle to specific application” and thus gets these claims past the “coarse filter” of § 101. The opinion also cites a recent Federal Circuit computer case (Research Corporation) for the proposition that if the specified method is “functional and palpable,” the claims are drawn to statutory subject matter.

By contrast, the third patent, which is missing the final immunizing step, is abstract. “The abstraction of the ’283 claim is unrelieved by any movement from principle to application.” The majority also likens the ‘283 patent to the invalidated method claims of Myriad, concluding that:

Methods that simply collect and compare data, without applying the data in a step of the overall method, may fail to traverse the section 101 filter.

The patent challengers argued that the first steps are purely mental ones, and alleged that “any immunizing step is simply conventional activity.” They pointed out that the Supreme Court has indicated that insignificant post-solution activity may be insufficient to transform an unpatentable principle into a patentable process.

Unpersuaded, the majority cites a case from 1969 (Prater) for the proposition that “the presence of a mental step is not of itself fatal to §101 eligibility.” The opinion then returns to Research Corporation for three final points–the role of 101 as a “coarse eligibility filter,” a showing of how §§ 102, 103, and 112 could have successfully been argued instead of 101 to invalidate the claims, and the idea that commercial application of the technology is an indicator of patent-eligibility.

The dissent. A dissenting opinion authored by Judge Moore (who also wrote a 31-page explanation in Myriad of why isolated DNA is patentable) expresses outrage at the preemption of “the scientific method” by Classen’s claims. She reaches the same conclusion as in the original Federal Circuit review–that all three patents are invalid under § 101 for reciting patent-ineligible subject matter. Her emphasis is on the “staggering” claim breadth:

No limitations exist on the type of drug to immunize with, the schedules that should be used for the immunization, the type of chronic immune disorder to look for, or any limitation on the control group. It is hard to imagine broader claims. It is harder to imagine a more conceptually abstract claim in the immunization area.

Classen’s 227 other claims do name many of the specifics in the paragraph above–particular immunogens, schedules, and disorders. Classen urged that even if the representative claims are deemed to be unduly broad, the other claims are more specific and cannot be characterized as “abstract.”

But the court focuses on the representative claims for its analyses, and for Judge Moore this case is “not even close.” The claims impermissibly monopolize the scientific method, an abstract principle, and she sees the ‘139 and ‘739 claims as merely reciting the same steps as the ‘283 claims, but in reverse order.

Judge Moore also questions the majority’s use of the “functional and palpable” test, pointing out that it sounds very close to the now-rejected “useful, concrete, and tangible” test set out in the 1998 State Street Bank case. Indeed, the Supreme Court in Bilski advised against reliance on any single generalized test for patentable subject matter, making it more and more difficult to predict the result of a § 101 challenge.

But that’s not all. An interesting twist in this case is that all three judges appear to agree that none of the representative claims are likely to pass muster when the necessary additional sections of the patent act (102, 103, and 112) are applied. Very early in the majority opinion, the court notes that 1984 and 1991 studies for optimizing vaccination schedules are cited in the patents themselves. Because they include every aspect of the representative claims, these references appear to offer a much stronger basis for challenging the patents under § 102 (anticipation) and/or § 103 (obviousness).

However, those issues are not properly before the court, the opinion says. To drive home this point, Judge Rader also delivers a separate five-page opinion entitled “Additional Views,” joined by Judge Newman. The loud-and-clear message is that the recent onslaught of patent challenges based on subject matter under 101 is becoming tiresome. That well is usually going to be dry, he writes, and challengers need to look to the other sections of the Patent Act. Or as we have written here at GLR, get back to “nibbling around the edges.” That is, use the stringent requirements of those substantive sections–novelty, nonobviousness, full enablement, and definiteness of claim scope–as the preferred weapons for shooting down exceptionally broad claims or other subject matter that seems inappropriate for patent protection.

Judge Rader credits the broad view of patentable subject matter in the U.S. with fostering innovation in this country. By avoiding new categorical exclusions under § 101, he says, the courts promote a “hospitable” environment for research and patenting, and encourage preferential innovation investment in the United States. Citing specific cases and events in the past few decades, he writes that “while Europe imposed eligibility restrictions, the U.S. embraced strong patent protection.” As a result, Judge Rader says, the United States has become the “world leader in biotechnology invention,” but would lose this edge if new restrictions were imposed at the § 101 threshold.

The “safe harbor” provision of 35 USC 271(e). Classen alleged direct infringement of its patents by Biogen Idec and GlaxoSmithKline because both companies participated in studies of the relationship between certain childhood vaccinations and the development of type 1 diabetes (one of any number of chronic immune-mediated disorders), including studies of whether timing of vaccination influences risk.

The district court awarded the accused infringers summary judgment in their favor under the “safe harbor” provision of the Hatch-Waxman Act, section 271(e) of the Patent Act, which created an exception for activities “solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.”

The Federal Circuit now reverses this determination, finding that “as enacted and intended, and as judicially interpreted,” the exception is limited to activities related to “pre-marketing approval of generic counterparts of patented inventions, before patent expiration.” Activities related to submission of information to the FDA “long after regulatory approval” do not qualify for this exception, the opinion says.

Judge Moore’s dissent also disputes the majority on this application of 271(e). Instead, she cites the 2005 Supreme Court opinion in Merck v. Integra Lifesciences, which seems to support a broader interpretation of the 271(e) exception to include any activities related to developing information required from the putative infringers by law or regulation.

Common threads. The consistent point among all of the recent method cases decided by the Federal Circuit is that mental steps, such as reviewing, comparing, analyzing, screening, selecting, and determining, will not be enough for patentability without at least one added step of tangible activity–the “specific application” in Classen.

A possible inconsistency arises in just how specific that application step must be to carry claims past the § 101 threshold. Both the Supreme Court and the Federal Circuit assure us that there is no one-size-fits-all test for this determination. The courts are thus forced to evaluate on a case-by-case basis, which in turn leads to a discrepancy of judicial viewpoints. Ironically, the resulting uncertainty could actually encourage more challenges based on § 101, rather than settling the matter as the Federal Circuit now purports to do.

As we noted several months ago, the Supreme Court will soon have its own shot to weigh in on these issues when it hears Prometheus during its next term (that case is currently scheduled for argument on December 7), and possibly a second time should it decide to grant the inevitable Myriad appeal.

The Plaintiffs’ Petition. Two things are interesting about the plaintiffs’ petition from a procedural standpoint. First, the ACLU lawyers requested rehearing by the three-judge panel that decided the case earlier this summer, not en banc rehearing by all members of the court. (But a majority of the judges of the full court could still decide to rehear the case en banc; they could do so if they found that the case “involves a question of exceptional importance.”) Second, the plaintiffs have asked for rehearing on only two of the issues they lost: that isolated genes are proper subject matter for product patents, and that only one of the named plaintiffs—Dr. Harry Ostrer, formerly of NYU—has standing to bring the case. The plaintiffs did not challenge that portion of the panel’s decision that upheld—unanimously—Myriad’s patents on a method of screening potential cancer therapeutics.

On the product patent issue, the plaintiffs contend that the panel failed to give proper consideration to “whether the DNA fragments claimed in these patents are products of nature.” In support of this conclusion, they argue two points: First, they emphasize that the 2-1 majority’s focus on the chemical structure of isolated genes was misplaced, because the patent claims at issue talk about function. While isolated DNA might be literally different from naturally occurring DNA at a structural level, they argue, it is functionally identical, and thus properly characterized as products of nature. Their second point is that “DNA fragments identical to those claimed in the patents appear in the body.” Specifically, “nature breaks the covalent bonds that hold together the full chromosome” during meiotic recombination, cell replication, and double-stand breakage. Hence, Judge Lourie’s reliance on “cleavage” to distinguish isolated DNA fragments from products of nature was misplaced.

Standing and Myriad’s Petition. With respect to standing, the plaintiffs argue that at least two other named plaintiffs—the American College of Medical Genetics, of which Dr. Ostrer is a member, and Yale geneticist Ellen Matloff—are engaged in ongoing controversies with Myriad and thus have standing.

Adding these plaintiffs could prove critical, since the sole argument raised in Myriad’s petition is that Dr. Ostrer does not have standing. The original Federal Circuit opinion found that he had standing because of a controversy related to his work at NYU. As we reported, however, at the time that opinion was issued Ostrer was in the process of moving to Albert Einstein College of Medicine. Myriad now points out that the move is complete and argues, that since Ostrer’s controversy with Myriad was based entirely on his employment at NYU, the controversy is now moot. Since the standing requirement is ongoing, if the court agreed that Ostrer no longer had standing, and if it refused to find that the ACMG or Matloff or any other plaintiff had standing, then it would have to dismiss the case. (By the way, Myriad is trying to have it both ways: it asks the court to dismiss the case for lack of standing but not to withdraw its previous opinion as legal precedent.)

Tactically, the plaintiff’s petition is a little hard to understand. It makes sense to ask the court to revisit the product and method patents decisions—especially the product issue, since it was 2-1, with a strong dissent—but why not ask the whole Federal Circuit, instead of just the original panel? Perhaps their decision was to target Judge Moore, who agreed that isolated DNA is patentable, but took 31 additional pages to say why. The thinking may be that, since she didn’t sign on to Judge Lourie’s reasoning, she can be persuaded to change her mind entirely. It was also essential to raise the standing issue, since Ostrer, on whom the whole case currently depends, may be on thin ice. But again, why not raise this issue for the whole Federal Circuit?

Myriad’s approach makes more obvious sense. Having won most of the contested issues, why not stick with the original panel? Also, Myriad’s lawyers probably concluded that the substantive issue they lost—the patentability of a method of analyzing and comparing normal and mutant DNA sequences—was unwinnable. The standing issue was a closer call. If the panel rehears the case, Dr. Oster’s case might well be found to be moot. But Myriad would then risk having the generally favorable opinion withdrawn and the case simply dismissed. Why do anything to jeopardize what was, for the most part, a win?

What’s the next step? The Federal Circuit will rule, presumably fairly quickly, on the petitions for rehearing, and could also decide on its own to take the case en banc. “Cert” petitions seeking Supreme Court review would follow either a denial of rehearing or the Federal Circuit’s decision following rehearing.

For the most part, the Federal Circuit’s 2-1 decision returned the law to the state it was in before District Judge Sweet’s opinion turned things upside-down last March.  Although full of interesting rhetoric, the court’s three lengthy opinions (a total of 105 pages) are less remarkable for what they decide than for what they invite higher authorities—the Supreme Court and the Congress—to decide down the road.

First, the scorecard.  The court’s judgment—that is, the holding, or outcome—was joined by Judges Lourie and Moore.  A third member of the panel, Judge Bryson, dissented in part, meaning that he joined only a portion of the judgment (more on that below) and disagreed with another part.

The majority held as follows:

1. On the threshold procedural question of standing, the district court’s ruling was affirmed, with one plaintiff (Dr. Harry Ostrer) having sufficient standing to challenge Myriad’s patent claims.
2. Isolated genes, cDNAs and partial isolated gene sequences are patentable subject matter under § 101 of the Patent Act.  Consequently, the district court’s judgment invalidating all of Myriad’s product claims to BRCA genes and fragments was reversed in its entirety.
3. Myriad’s claims to methods of screening potential cancer therapeutics by analyzing growth rates of cells with altered BRCA genes in the presence or absence of the treatments were also held to be directed to patentable subject matter, so the district court’s judgment of invalidity was reversed here as well.
4. Myriad’s claims to methods of analyzing BRCA gene sequences and comparing those with cancer-predisposing mutations to normal or wild-type gene sequences were held not to be directed to patentable subject matter.  The district court’s decision was thus affirmed with respect to these claims.

Counting up the votes. Judge Lourie wrote the so-called “opinion of the court” that announces the judgment and gives the rationale.  Judge Moore wrote a concurring opinion, meaning that she joined all aspects of the judgment.  She also agreed with Judge Lourie’s reasoning with respect to the method claims and the patentability of isolated cDNA sequences.  However, she had a slightly different reason for upholding the patentability of DNA sequences, and decided to explain her thinking at some length (31 pages!).  Finally, Judge Bryson joined in the judgment with respect to the method claims and the patentability of longer sequences of cDNA.  However, he voted against the patentability of all isolated DNA sequences as well as very short cDNA sequences, and would thus have affirmed the district court on that specific point.  His somewhat more succinct opinion (19 pages) explains his thinking.  Since he was in the minority on this point, his opinion does not have the force of law.

So, for those keeping score at home, here is how the judges came down on each issue:

1. Standing: 3-0, since one plaintiff has standing to challenge Myriad’s patents, the case can proceed.
2. cDNA: 3-0, cDNA is patentable (although for smaller cDNA molecules, the vote was 2-1, with Bryson dissenting).
3. Method claims: 3-0, with therapeutic screening claims upheld and comparing or analyzing claims invalidated.
4. Isolated DNA: 2-1, isolated DNA is patentable.

The majority’s rationale. With the bookkeeping out of the way, let’s take a look at how the judges reasoned their way through Myriad.

The plaintiffs’ standing.  After opening with a genetics tutorial, the Lourie opinion addressed the very technical but nonetheless critical issue of standing.  As we discussed after the Myriad oral argument, standing is a constitutional question, and it boils down to whether the plaintiffs have a sufficiently direct and immediate interest in the outcome to be proper parties to file the case.  Had the court found no plaintiffs to satisfy the threshold standing requirement, it would have dismissed the case without ever reaching the patent issues.  The court found that there was standing, but it was very close.

Only one plaintiff—Dr. Harry Ostrer of (for the moment; more on that below) NYU Langone Medical Center—was held to have standing.  That was because he alleged that Myriad forced him to stop offering BRCA clinical testing more than ten years ago by threatening infringement litigation, and that he remained ready, willing, and able to resume testing if the patents were held invalid.  One plaintiff with standing was enough for the court to proceed to the merits.

It should be noted, however, that last Wednesday, just before the Federal Circuit released its opinion, counsel for Myriad submitted a letter to the court (pdf) alleging that Dr. Ostrer’s impending move from NYU to Albert Einstein College of Medicine deprives Dr. Ostrer, and thus the Myriad plaintiffs, of standing.  While the Federal Circuit apparently did not see enough in Myriad’s last-minute letter to alter its standing analysis, the letter points out, correctly, that the standing requirement is an ongoing one which must continue to be met at all points during the appellate process.  As Myriad heads through subsequent appeals (discussed below), the issue of the plaintiffs’ standing to maintain their challenge will continue to loom in the background.

Turning to the product claims (the so-called “gene patents”), Judge Lourie reviewed more than 100 years of cases dealing with all kinds of substances with natural precursors or analogs.  He identified—correctly, in our view—the two key authorities as the Supreme Court’s opinions in Chakrabarty (holding genetically engineered bacteria to be patentable subject matter) and Funk Brothers (holding unpatentable an inoculum that combined bacterial species not known to co-exist in nature).  He concluded that the test was whether the claimed substances were “markedly different—have a distinctive chemical identity and nature”—from the naturally-occurring version.

The patentability of DNA.  cDNA sequences presented the easiest question for the court.  Even Judge Bryson agreed that cDNA is generally patentable, since it is a human-made molecule and the body does not naturally contain DNA in exactly this form (with introns spliced out).  However, as discussed below, Judge Bryson would have ruled differently with respect to particularly short sequences (as few as 15 base pairs) of cDNA.

When it came to the product claims, the real controversy concerned isolated genes and sequences in DNA form.  The district court had focused on the similarity in function and information content between natural and isolated genes, downplaying the chemical and structural differences that patent lawyers and the USPTO had always relied on.  As Judge Sweet wrote last year (pdf):

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.

Sixteen months later, Judge Lourie came down on the other side, focusing on the “cleaving” of isolated DNA out of its chromosomal environment as conclusive evidence of its fundamentally different nature.  (Curiously, he claimed that “cleaving” DNA from its chemical environment is fundamentally different from “isolating” a substance from an impure environment, which has sometimes been held insufficient to support patentability.)

The arguments about whether isolated DNA is sufficiently distinct from its natural counterpart are well-known, and neither side has an absolutely compelling case.  It seems to come down to an economic value judgment, and the Lourie and Moore opinions both reflect this reality.  Both majority judges put great emphasis on the dangers of upsetting thirty years (and 2,654 isolated DNA patents, by Judge Lourie’s count) of what Judge Moore called “settled expectations and extensive property rights.”  Both counseled deference to Congress, while Judge Lourie was “particularly wary” about a lower court expanding on an exception to patentability (the product of nature doctrine) that comes out of Supreme Court case law, not the Patent Act itself.

The method claims.  The judgments from the court on both categories of method claims were unanimous, as noted above.  Recall from our previous articles that the state of the law (such as it is) on methods generally is reflected in the Supreme Court’s confused and confusing 2010 decision in Bilski v. Kappos.  That case focuses on whether a method patent claims abstract processes (unpatentable) or specific applications (patentable), and expresses particular concern about method patents that preempt all uses of an abstract process.  In addition, Bilski held that the Federal Circuit’s machine-or-transformation (MoT) test could not be used exclusively, but could be an “important clue” to patentability.

In Bilski, the Supreme Court declined to provide any guidance for the proper application of the MoT test in a biotechnology context.  However, earlier this summer the Supreme Court agreed to review the Federal Circuit’s decision in Prometheus v. Mayo, which has twice upheld the patentability of a method of administering a drug, determining the level of the drug in a patient’s bloodstream, and then adjusting the dosage accordingly to maximize therapeutic efficacy.

Myriad’s analysis and comparison claims failed the test completely, earning a solid “F” from the Federal Circuit.  Judge Lourie wrote that such claims lack any “necessarily transformative step” and, in the end, “recite nothing more than the abstract mental steps necessary to compare two different nucleotide sequences.”

Myriad’s claim on a method of screening potential cancer therapeutics, on the other hand, was “not so manifestly abstract as to claim only a scientific principle.”  It also passed the still-breathing MoT test, since it involves the “transformative” steps of growing host cells in the presence or absence of a cancer therapeutic and then determining and comparing their growth rates.”  This was viewed as fundamentally different from simply comparing two DNA sequences.

Returning to the unpatentable claims to the analysis and comparison of DNA sequences, it is striking how much Judge Lourie emphasized the semantics of patent claim-drafting.  With Prometheus undoubtedly on their minds, Myriad’s lawyers had argued that this method actually did involve transformation.  They pointed out, for example, that here, just as in Prometheus, there was a “determining” step—in this case, of “the sequence of BRCA genes by, e.g., isolating the genes from a blood sample and sequencing them.”  Judge Lourie noted, though, that this step, while described elsewhere in the patent, was not part of the claims, by which patentable subject matter must be exclusively judged.  In Prometheus, by contrast, the determining step was in the claims.

It is hard to read this as anything but an invitation to patent lawyers to bring methods as abstract as Myriad’s within the ambit of patentable subject matter simply by putting more (perfunctory?) technical detail in the claims themselves.  As we have written previously, if clever draftsmanship is all that is ultimately required to satisfy the MoT test in many instance, the courts will have created “a potentially enormous opening through which to push all manner of personalized medicine patents replete with diagnostic, measurement, correlation and other interpretive or mental steps.”

The isolated DNA dissent. Judge Bryson argued in the same terms as the majority about the isolated DNA clams, and then reached the opposite conclusion.  Taking on Judge Lourie’s cleaving argument, he wrote that “there is no magic to a chemical bond that requires us to recognize a new product when a chemical bond is altered or broken.”  Agreeing with the district court about the paramount importance of the information content of genes, he concluded that “what is claimed in the BRCA genes is the genetic coding material, and that material is the same, structurally and functionally, in both the native gene and the isolated form of the gene.”

Perhaps more significantly, Judge Bryson also reached the opposite conclusion with respect to the economic implications of invalidating Myriad’s patents.  The—to him—“breathtakingly broad” claims to cDNA and DNA sequences as short as 15 nucleotides led Judge Bryson to look beyond the possibility of overturning biotechnology’s “settled expectations” and to the future effect of “a thicket of patents.”  This patent thicket, at least to Judge Bryson, presents “a significant obstacle to the next generation of innovation in genetic medicine—multiplex tests and whole-genome sequencing.”  He made a further point that we can confirm on the basis of our own experience: that “the costs involved in determining the scope of all those patents [in the thicket] could be prohibitive.”

Judge Bryson also departed from his colleagues in declining to give any deference to the USPTO’s 30-year practice of allowing isolated gene patents, on the grounds that it had never done any serious analysis of the subject matter issue.  Judge Bryson’s argument was buttressed by the Department of Justice’s amicus brief last fall, which advocated a dramatic departure from the PTO’s prior gene patent practice, as well as by a citation to an article by one of us (John) detailing the PTO’s limited review of these issues.

What happens next in Myriad? Since both Myriad and the plaintiffs both won and lost, both parties are eligible to seek further review, and both probably will.  One possibility is to ask the Federal Circuit for en banc review by all of its active judges (currently ten) sitting together.  This is relatively rarely granted, but more often in the Federal Circuit than in other federal courts of appeals because of its judges’ penchant for split decisions and major disagreements about fundamental doctrine.  So it is a real possibility.

After review en banc, or sooner if that appeal is not granted, both parties could petition for certiorari (cert), or further review, by the Supreme Court.  The Court grants cert in fewer than 100 cases in most years, denying the vast majority of cert petitions.  However, the Court has taken more patent cases in recent years, and this is an important one, with obvious economic and scientific implications, so it is a promising candidate.

But—remember that the Court already has Prometheus on its docket, which could settle the methods questions present in Myriad.  Among the possibilities here (yes, that was a reference to Monty Python’s Spanish Inquisition skit) are: (1) the Court takes the whole Myriad case; (2) it takes only the product claims issues, assuming that the method issues will be settled—at least for future cases—by Prometheus; (3) it takes Myriad and consolidates it wholly or in part with Prometheus, which would likely delay both cases until the 2012 term; or (4) it denies cert in Myriad and lets the Federal Circuit’s ruling stand as is.  All we can know for sure is that Myriad, still, likely has quite a ways to go before a final resolution.

What does the Myriad decision mean for the real world? First and foremost, this opinion restores—at least for the time being—the gene product patent world to the state it was in before the district court’s bolt out of the blue last spring.  So one reaction is, move along, people, nothing to see here.  But we emphasize at least for the time being.

As we said, this case has miles to go before it sleeps.  And it was a 2-1 decision, so the anti-gene patent position is neither crazy nor hopeless.  Judge Lourie ended up making a very debatable call (on how different isolated genes are from their natural counterparts) on which reasonable minds can differ.  Judge Moore was sufficiently dissatisfied with Judge Lourie’s reasoning that she took 31 pages to explain her own, ultimately (in our view) adding very little.

So there remains a high probability that there will be more said about the patentability of (in particular) isolated DNA sequences, probably by the courts (either the Federal Circuit en banc) or the Supreme Court, and possibly by Congress (if they ever manage to fix their debt ceiling distractions).

That said, how much difference will the final product patent decision in this case really make?  Myriad’s own product patents will begin to expire in 2014.  By the time Myriad wends its way through all available appeals, the biotechnology industry and clinical geneticists may have, collectively, innovated their way around the patents held by companies like Myriad.

Recall Judge Bryson’s fears about the impact on whole-gene sequencing.  Are those fears justified?  Judge Lourie repeatedly stressed cleaving the claimed isolated gene out of its natural environment.  Whatever you think of that argument in the context of the isolation of single genes, do present and forthcoming whole-genome sequencing technologies require the same cleavage?  In other words, do/will those technologies infringe patents on isolated DNA sequences using the analysis presented in Myriad?  That question has yet to be fully and formally asked, and will almost assuredly not be addressed by the Myriad litigation.  Which means that, whatever the outcome in this case, patent litigators with Ph.D.s in genetics should remain gainfully employed for the foreseeable future.

We should also look beyond the threshold question of patentability under Section 101.  As we have written previously, the real action on gene product patents is occurring under other sections of the Patent Act that deal with novelty, non-obviousness, and the written description requirement.  These sections’ requirements have been repeatedly tightened, with an overall effect of “nibbling around the edges” of gene patents, as we have put it.  The Myriad court’s reference to all of these sections—none of which is in play here—underscores the point that passing the subject matter test barely gets you out of the batter’s box, let alone to first base.

We have also written (e.g., here) that the disposition of method claims, in Myriad but also in Prometheus and other cases, will ultimately prove more important to the personalized medicine industry.  This case—unanimously—invalidates some of the broadest diagnostic method claims.  But even that rejection comes across as relatively toothless, given that Judge Lourie offered a roadmap for the alert patent lawyer to reword such claims so that they might survive.  That’s good news for those who might profit from broad method claims, cause for concern for those who might be inhibited by them, and a clear reminder that plenty more work (and, likely, litigation) is yet to come.

Ultimately, as Myriad pushes into its third year, our advice remains the same as before: keep watching—not just Myriad, but Prometheus as well, which is running slightly ahead on a parallel track—and know that, while the debt ceiling may yet cave in around us, whether the pigs will ultimately rule the gene patent sky remains to be seen.

Patent Reform Legislation Passes House. Several months after the U.S. Senate passed patent reform legislation that would make sweeping changes to America’ patent system, including a switch from a first-to-invent to a first-to-file system for awarding patents, the U.S. House of Representatives finally followed suit yesterday, passing a similar piece of legislation by a vote of 304-117. The version passed by the House, while similar to that passed by the Senate, contained a number of last-minute amendments (pdf).

One change of particular relevance to the personalized medicine community was the removal of a proposed safe harbor for second opinion genetic diagnostic testing, which was replaced by a requirement that the U.S. Patent and Trademark Office (USPTO) investigate the relationship between genetic diagnostic tests, gene patents and exclusive licenses. The USPTO would be given nine months to complete its investigation and to return to Congress recommendations for ensuring the availability of second opinion genetic diagnostic testing. (The USPTO study on genetic diagnostic testing was not included in the bill passed by the Senate in March.)

With both the House and the Senate having now passed patent reform legislation, the next step appears to be a House-Senate conference to resolve inconsistent provisions in the two bills, although according to The Hill it is unclear how soon such a conference will take place.

UK Government Pulls Plug on Human Provenance Project. Nearly two years after the Human Provenance Project was first unveiled (to substantial scientific criticism), the government agency responsible for the project, the UK Border Agency, has finally pulled the plug. The project would have used DNA and isotope analysis of tissues from asylum seekers in an attempt to evaluate their nationality and render immigration decisions. After a wave of criticism following the program′s announcement, and after spending more than $300,000 on screening, the UK Border Agency has scrapped the program in its entirety.

As we wrote back in 2009, the poorly conceived project threatened to disrupt what has been—in both the UK and in the United States—a slow and delicate process to craft legislation, regulation and policies that promote genomic science and the use of personalized genomic data while addressing concerns over the potential misuse of those data. As we wrote then, “with so much genomic science and policy yet to be written, even minor developments produce outsized effects, which makes the potential consequences of the Border Agency’s project so worrisome.”

Thankfully, the UK Border Agency quickly paused the project following initial concerns and, nearly two years later, it appears that no lasting damage has been done. Still, the Human Provenance Project should serve as a reminder to governments worldwide of the need to carefully and publicly vet state-directed personal genomics programs prior to their implementation.

Roundup of tweets from the intersection of genomics, personalized medicine and the law:

• Combined w/ this week’s GenomeQuest announcement (http://bit.ly/kCp0j2) & it’s clear clinical, commercial WGS is here. Now.
• Omicia releases genome annotation software (incl. for clinical/commercial applications) http://bit.ly/l1XpJ6 HT @neandrothal @EricTopol
• FDA report on challenge of monitoring imported food, drugs (http://1.usa.gov/mmWpgd) hints at > difficulty monitoring info-based Dx/devices.
• Study: FDA device clearance times rose 37% since 2006: http://bit.ly/jRxrrV Other news: FDA device studies criticized: http://bit.ly/jGVBH0
• FDA accused of focusing too much on safety (http://bo.st/mCCad9) & of doing too little: http://bit.ly/il4maZ Damned if you do…
• Finally responding to this @genomesunzipped thread. Agree w/ @dkgppc re: need for more data: http://bit.ly/mERhg8 Any ideas how to collect?
• The beat(down) goes on: FDA accused of being a “wet blanket” & “crushing innovation” by MA senator: http://bo.st/kTWrmk
• GLR Post: Prometheus Returns to the Supreme Court, Medical Method Patent Speculation Intensifies: http://bit.ly/kqnDWP
• MT @danielg280: Doing a Webinar 6/21 on legal issues re healthcare & social media w/ @healthblawg http://bit.ly/l2SFvY
• High-level explanation from @wilbanks why for patents, unlike copyrights, transparency is priority #1: http://bit.ly/mRqJAv
• Great idea. MT @RyanMFierce: NC wants to help cash-strapped biotechs w/ $100M in loans http://bit.ly/mau3Gj cc @GlenCaplan
• Still, for efforts like the Human Provenance Project, it can be difficult to unring the bell: http://bit.ly/kRciNK
• $300K too late, but right decision. RT @NatureNews: UK immigration cancels DNA screening programme http://goo.gl/fb/YwQ49
• “The 3 letter word for-the gene FOR something-is the most dangerous word in genetics.” http://bbc.in/mKTY1P HT @eurogene
• MT @matthewherper @ivanoransky @charlesornstein: Despite FDA Criticism, Cancer Drugs Reach Pts Sooner In US Than Europe http://bit.ly/msJTuL
• RT @SampleGW: New Consortium Aims to Streamline Accreditation, Proficiency Testing: http://bit.ly/lBJBLD
• Let’s just hope we do better than MSWord. RT @FierceHealth: Patient rights, safety at heart of #EHR track changes debate http://htl.li/5jkIR
• RT @SampleGW: Medicare to Cover Pathwork Diagnostics’ Tissue of Origin IVD Nationwide: http://bit.ly/kIIOmW
• Well said, @23andMe: “research is a two-way process, where participants are valued as partners in sci. discovery.” http://bit.ly/lgWLrW
• GLR Post: Update: Proposed Second Opinion Safe Harbor for Genetic Diagnostic Testing Withdrawn: http://bit.ly/kOX7qx
• ACLU-led coalition opposes proposed safe harbor for 2nd opinion Dx testing, citing “unintended harms”: http://bit.ly/lJKrqL
• Not only co. to shift focus, at least for moment. MT @RyanMFierce 95% of @Knome revenue from R&D, 5% from customers. http://bit.ly/lFwPow
• House debate on patent reform bill delayed until (at least) next week: http://bit.ly/jtbjY1
• RT @dgmacarthur: New community forum for @CompleteGenomic users: http://bit.ly/kHoys3 Just signed up – interested to see how active it gets.
• GLR Post: DTC Genetic Testing and the FDA: is there an end in sight to the regulatory uncertainty? http://bit.ly/koxrjn
• GLR Post: House Introduces Patent Reform Proposal to Permit 2nd Opinions in Genetic Diagnostic Testing http://bit.ly/j5DeWl
• AdvaMed’s “competitiveness policy” urges creation of “office of medical innovation policy” w/in White House: http://bit.ly/iqXXv9 Good idea.
• “Med-tech CEOs storm Capitol Hill”: http://bit.ly/iBBJNz by @MassDevice Seem unlikely to hear Shuren’s plea for mercy
• Meanwhile, @dgmacarthur @lukejostins & I wonder when DTC regulatory uncertainty might end: http://bit.ly/lxLKda
• CDRH Director Shuren says criticism is affecting hiring, slowing agency: http://bit.ly/maZddr HT @dgmacarthur
• Ion Torrent ($LIFE) expects 400bp reads by year end, $1K genome beginning of ’13: http://bit.ly/kf3tVZ @InSequence
• Update on Noblegen’s “optipore” sequencing tech; targeting clinical seq tests, ’14 debut: http://bit.ly/m55KhH @InSequence
• RT @BVBigelow: BioNanomatrix Moves HQ and nano-scale molecular analysis tech to San Diego’s diagnostics cluster. http://bit.ly/iA2JHx
• RT @RyanMFierce: Broad Institute’s planned expansion roughly the size of two Wal-Mart stores. Wow. http://bit.ly/lCBlsf by @BBJNewsroom
• RT @DailyNewsGW: NIH Awards $200M for New CTSA Sites: http://bit.ly/lO3pdA
• Twin’s rare disease diagnosed, cured. Another “win” for whole-genome seq: http://bit.ly/kuxupr by @Erika_Check HT @drgitlin
• RT @PGxReporter: MDx/PGx Highlights from ASCO 2011: http://bit.ly/mJSwL1
• GLR Post: House Introduces Patent Reform Proposal to Permit 2nd Opinions in Genetic Diagnostic Testing http://bit.ly/j5DeWl
• RT @JohnCFierce: Cancer collaborations are all the rage – but you already knew that. http://bloom.bg/jyuqHA by @robertlangreth
• The “strangest biotech of all” ($UTHR) by @matthewherper, incl a look at its comic book annual report (really): http://onforb.es/lNfZ9w
• RT @dgmacarthur: MT @westr Illumina launching 5M-variant whole-genome genotyping array – the Omni5 – focus on rare variants: bit.ly/ilnaL2
• RT @ldtimmerman: Getting ready for debate on open source bio w/ @sagebio founder Stephen Friend, MIT’s Phil Sharp http://bit.ly/jshQ77
• +1. RT @neandrothal: Chrome extension soon? MT @dgmacarthur: update to handy @SNPTips FireFox plugin for @23andMe data: http://bit.ly/iCDxuP
• The perfect Father’s Day gift? It’s probably not a paternity test: http://bit.ly/iG1QJ9 by @SampleGW
• Here’s more from @23andMe on the breakdown of their database: http://bit.ly/lfldx2 Note that not entire 100K have opted in for research.
• DTC company @23andMe continues to reposition itself, emphasizing reasearch database (now 100K): http://bit.ly/mNnJPF
• Following @phylogenomics for tweets from #synbio5, including current coverage of @geochurch’s talk.
• RT @dgmacarthur: Serious congrats to @markgfh, who won both the European Best Cancer Reporter award & Royal Statistical Society prize today!
• Beginning w/ improved understanding of heterogeneity. RT @FierceBiotech @MaverickNY: changing cancer research paradigm. http://bit.ly/mtJc4y
• RT @JohnCFierce: My take on E&Y’s annual biotech report: It’s tough out there, says Giovannetti http://bit.ly/mm2pN3
• MT @Knome: Today we announce the launch of kGAP 2.0, the 2nd ver. of our #genome interpretation engine http://ow.ly/5hfR7
• RT @genomesunzipped: New Interpretome website provides many handy tools for analysing your @23andMe data: http://bit.ly/lHd2Yw
• RT @LifeSciVC: Welcome my Atlas partner @JFFormela to the Twittersphere. He will undoubtedly have blazing content & sharp wit to add
• RT @westr: 23andMe’s customer breakdown by ethnicity, via @CeCeLMoore http://tinyurl.com/3h5zcv8
• RT @GenCounsNews: Update on advanced degree task force for genetic counselors, including a webinar later this summer http://bit.ly/ilBTHD
• & SEC. Still, can be done. RT @elainewestwick: suspect IP/secrecy concerns a challenge re: Twitter/biotech http://bit.ly/kTWx63 @ldtimmerman
• Brief recap from last week’s MDMA meeting, including familiar FDA criticism from Senator Hatch: http://bit.ly/jwEzdv by @FierceMedDev
• Commons Principles from @Sagebio posted: http://bit.ly/jHEAp2 Ambitious, essential & endorsement-worthy. Add your voice.
• Congrats to @KeonaHealth, Sarda Tech (my dad’s new venture) & others on NC IDEA innovation grants: http://bit.ly/mKsgJd
• Exciting news. RT @neandrothal @NextBio: blog is back w/ a screenshot of upcoming new public site! http://wp.me/pmGXL-e6
• DTC genetic testing company @Lumigenix: “our response to a recent letter from the FDA”: http://bit.ly/lzfL6o
• “I joined GenomeQuest b/c they offer technology to make whole genome dx avail. to patients today-not 10 yrs from now.” http://bit.ly/jR2gVx
• Why Twitter matters for biotech, by @ldtimmerman: http://bit.ly/kTWx63 No surprise, lawyers even slower to adopt Twitter.
• Post by @eurogene on breast feeding, IQ, genetic testing & DTC: http://bit.ly/lGjrDp Comments from @23andMe or @ExistenceG?
• $0.02 from @matthewherper on @patientslikeme tool to match patients to trials using Clinicaltrials.gov: http://onforb.es/m3VmVw
• RT @dgmacarthur: Congrats to @genomesunzipped colleague Don Conrad on his new Nat Genet paper on human mutation rates: http://bit.ly/mhyXgu
• RT @drjonboyg: Raised in this wk’s In Our Time: was germ theory or cracking genetic code biggest leap in human health? http://bit.ly/mkY7p8
• Will need more than 31 senators. RT @NatureNews: NIH finds a few new friends in budget chill http://goo.gl/fb/mfM8O
• RT @westr: “Consumer Genetics Conference Wrap-up – Most Interesting Moments?: http://bit.ly/m5BStq #CGC2011″ -via @wimufi
• MT @mary_carmichael: @dgmacarthur Screenshots don’t do it justice. Key is in use: easy to navigate, cross-ref diff types of content.
• Privacy vs. efficacy driving debate over opt-in or opt-out approach to state EHR systems: http://bit.ly/fD5mF8
• GLR Post: News Roundup: Perception Gaps and Progress in Personalized Medicine: http://bit.ly/kWv9nn
• Company for Shuren? “Health Canada upbraided for inspections of medical devices.” http://bit.ly/l4Kw9e
• RT @BiotechPatent: FDA takes ‘first step’ toward greater regulatory certainty around nanotechnology http://1.usa.gov/jipVTX
• Drugmakers’ Commitment to Personalized Rx Growing Despite Barriers, PhRMA CEO Says: http://bit.ly/jBcQ73 by @PGxReporter
• RT @dgmacarthur: Screenshots of the $ILMN iPad personal genome browser (HT @BioITEditor): http://bit.ly/k06xA9 Surprisingly amateurish.
• RT @genome_gov: Cool 7/18 meeting: Using crowdsourcing for scientific innovation @ NIH’s Natcher auditorium (also webcast) http://qoo.ly/4z7
• FDA ruling on $OREX’s Contravene obesity drug risks driving scarce R&D resources from important field, says @LifeSciVC: http://bit.ly/la5nsi
• RT @cwhogg: Wireless dominates patents for heart, glucose monitors http://tinyurl.com/3ur7jmz
• RT @scotthensley: Curious to see how it’ll work. RT @phrma: Forthcoming @US_FDA Facebook page that will answer ppl’s questions about drugs
• #ASCO11 wrap-up from @ldtimmerman for those (read: all of us) who had difficulty following all of the news: http://bit.ly/kDFaA2

The patents at issue in Prometheus involve a method of administering a drug (specifically thiopurine drugs used to treat gastrointestinal and other autoimmune diseases), measuring the drug’s level in a patient’s body, and then adjusting the dosage of the drug. The Supreme Court will hear the case this fall and should (see below) issue a ruling by next summer, thus drawing to a close a legal journey that began more than three years ago in a California district court.

The Path of Prometheus. In March of 2008, a California district court invalidated a pair of patents (U.S. Patent No. 6,355,623 and No. 6,680,302) exclusively licensed to Prometheus Laboratories, holding that the claimed inventions were not patentable subject matter under Section 101 of the Patent Act. The district court’s ruling was overturned by the Federal Circuit on September 16, 2009. The Federal Circuit ruled that the claimed methods satisfied the machine-or-transformation (MoT) test used to decide whether particular methods qualify as patentable subject matter under Section 101.  The court held specifically that the administration and measurement steps worked a sufficient transformation of the body to satisfy the MoT test.

On the losing end of the Federal Circuit’s first decision, Mayo Medical Laboratories promptly applied to the Supreme Court for review (the technical term is a writ of certiorari). The Supreme Court took up the appropriateness of the MoT test for method patents in the summer of 2010 in Bilski v. Kappos. In Bilski, the Supreme Court issued a narrow opinion, holding that the MoT test was not the exclusive test for evaluating method patents but failing to issue any broader guidance, including for the biotechnology industry. Almost immediately thereafter, the Supreme Court granted certiorari in Prometheus, vacated (set aside) the Federal Circuit’s decision and ordered that the case be reconsidered by the Federal Circuit in light of Bilski (remand).

At the Supreme Court’s request, the Federal Circuit reconsidered Prometheus and, to nobody’s surprise, reached exactly the same result on December 17, 2010, upholding the ‘623 and ‘302 patents as valid under Section 101.

Prometheus, LabCorp and Personalized Medicine. The patents at issue in Prometheus are important in large part because they point to the very heart of the practice of personalized medicine. In many cases, patented diagnostic methods can play an essential role in delivering the appropriate treatment (in the appropriate dose or form) to a patient in the most efficient manner.

In each of its decisions, the Federal Circuit held that the patents at issue in Prometheus are valid because a method of treatment to “ameliorate the effects of an undesired condition” is “always transformative,” thus clearing the bar to patentability under Section 101.

As we commented following the Federal Circuit’s most recent ruling, the broad interpretation of the MoT test embodied by the Federal Circuit in Prometheus leaves:

a potentially enormous opening through which to push all manner of personalized medicine patents replete with diagnostic, measurement, correlation and other interpretive or mental steps, provided that the claim language can be framed as describing a “method of treatment.”

In its petition to the Supreme Court (pdf), Mayo struck a similar note, arguing that “the case concerns whether a patentee can monopolize basic, natural biological relationships.” It then presented this question to the Supreme Court for review:

Whether 35 U.S.C. § 101 is satisfied by a patent claim that covers observed correlations between blood test results and patient health, so that the claim effectively preempts all uses of the naturally occurring correlations, simply because well-known methods used to administer prescription drugs and test blood may involve “transformations” of body chemistry.

In making its case against the Prometheus patents, Mayo’s petition for certiorari places considerable emphasis on a 2006 Supreme Court dissent—Labcorp v.Metabolite (pdf)—in which the Court granted certiorari and then “dismissed as improvidently granted” a case also involving patents claiming biomedical associations (in LapCorp, a process for diagnosing vitamin deficiencies).

LabCorp was dismissed on procedural grounds (the patents in question were not specifically examined by the lower courts for patentability under Section 101) over the vigorous dissent of three justices. The dissent was written by Justice Breyer (the only one of the three dissenting justices still on the Court, following the recent retirements of Justices Souter and Stevens), who argued that a “technical procedural objection” should not have prevented the Supreme Court from addressing a more fundamental question: do the patents at issue “amount to an invalid effort to patent a ‘phenomenon of nature’?”

Not only would the dissenting justices in LabCorp have answered that question, they would have answered it in the affirmative, finding that the patents describe “an unpatentable ‘natural phenomenon’” that, at most, “simply described the natural law at issue in the abstract patent language of a ‘process.’” Patents like those in LabCorp, argued the dissent, could “raise the cost of healthcare while inhibiting its effective delivery.”

Mayo focused heavily on LabCorp to no avail during each of its trips through the Federal Circuit, as well as in its previous certiorari petition to the Supreme Court. Will the Supreme Court prove a more receptive audience this time around?

The Significance of the Court’s Cert Grant. At this point we know only one thing for sure:  at least four justices (the minimum needed to take a case) are sufficiently interested in Prometheus to want to give the case a closer look.

Why? One explanation could be that the Court—which still includes the LabCorp dissent’s author, Justice Breyer—is ready to make a statement about the appropriate boundaries of biomedical method patents. (A possible signal: Justice Breyer referenced LabCorp while describing both the benefits and costs of patents in his dissent (joined by Justice Ginsburg) in the recent Supreme Court case Stanford v. Roche (pdf).) The emphasis on preemption in the statement of the question presented to the Supreme Court for review in Prometheus also tracks the Court’s major concern in the Bilski opinion, which worried that the business method claims at issue in that case would foreclose all uses of a basic process.

For those, including Mayo, who find the Prometheus claims to be overly broad, the case thus presents an obvious opportunity for the Supreme Court to extend its anti-preemption logic to biomedical claims. But the Court could easily reach the opposite result and uphold in full the Prometheus patents.

Either way, speculating on possible outcomes and effects is grossly premature. The Court granted review in LabCorp but, despite the emphasis Mayo and others place on Breyer’s dissent, never reached a decision. And the Court’s last opportunity to clarify the state of biomedical patents, Bilski, is regarded almost universally as a lost opportunity, a case that ended up producing more confusion than clarity.

In the end, a substantive decision of any sort would likely represent a step forward for the Court’s jurisprudence in the area of biomedical patents. The need for improved clarity, perhaps more than any other issue, was at the crux of the LabCorp dissent, where Justice Breyer wrote that any decision on the merits, irrespective of its substance, would “help diminish legal uncertainty” and “permit those in the medical profession better to understand the nature of their legal obligations.”

With the Supreme Court’s grant of certiorari in Prometheus it is clear that the opportunity is there for the Supreme Court and, for at least four justices, the interest as well. But whether the Court will ultimately clarify—let alone change—the law regarding biomedical method patents remains anyone’s guess.

What’s Next for Biomedical Patents? Finally, keep in mind that, when it comes to biomedical patents, the action is not only at the Supreme Court. The Federal Circuit heard oral argument in the Myriad gene patent litigation in April but has yet to release its highly-anticipated opinion. Nor has the Federal Circuit issued a decision in Prometheus’s sister case, Classen v. Biogen IDEC, which received identical grant, vacate and remand treatment from the Supreme Court following Bilski. And, of course, the possibility of Congressional patent reform remains on the table.

As we look to the future of biomedical patents, it is clear that myriad opportunities exist to evaluate, as Judge Breyer urged in LabCorp, “whether the patent system, as currently administered and enforced, adequately reflects the careful balance that the federal patent laws embody.”

Which leaves us with only one simple question: who will take up that challenge, when will they do so, and what decision will they reach? Stay tuned.

Initially offered by Representative Debbie Wasserman Schultz (D-FL) in April, the amendment surfaced again this past week in the Manager’s Amendment to H.R. 1249 (pdf), the House’s attempt at patent reform legislation.

As news of the proposed amendment spread, it generated a flurry of activity on Capitol Hill. The American Civil Liberties Union (ACLU), the group largely responsible for coordinating the plaintiffs in the Myriad gene patent litigation, spearheaded the charge. An ACLU-led coalition wrote in opposition to the proposed amendment (pdf), arguing that the proposed second opinion safe harbor “would fail to block all patent holder objections to [second opinion] testing, fails to address the many other limitations on scientific research arising out of the issuance of [gene patents], and risks allowing gene patent holders to argue that Congress implicitly endorses the validity of such patents.” The group was joined in its efforts by the American Medical Association, the Association for Molecular Pathology (the first named plaintiff in Myriad) and others, who collectively lobbied Rep. Wasserman Schultz and her colleagues to avoid creating “unintended harms to patients, medical professionals and genetic researchers.”

Rep. Wasserman Schultz evidently agreed with the concerns raised by the ACLU and others, submitting a new amendment to H.R. 1249 (pdf) this afternoon that eliminates the second opinion safe harbor in its entirety. Without Rep. Wasserman Schultz’s support, the original second opinion safe harbor proposal should be quickly removed from the patent reform legislation, allowing the ACLU and others who opposed the amendment to breathe a sigh of relief.

Reexamining the Role of Second Opinion Testing. In the safe harbor’s place is a charge to the Director of the U.S. Patent and Trademark Office (PTO) to “conduct a study on effective ways to provide independent, confirming genetic diagnostic test activity where gene patents and exclusive licensing for primary genetic diagnostic tests exist.”

The study would include an examination of (1) the impact a lack of second opinion testing has on patient care, (2) the effect that the availability of second opinion testing would have on existing rights-holders, (3) the impact current exclusive licensing practices have on the practice of medicine and (4) the effect of cost and insurance coverage on access to genetic diagnostic tests. The report would be due to the Judiciary Committees of both the House and Senate within 9 months from the legislation’s enactment and would include recommendations for establishing the availability of appropriate second opinion genetic diagnostic testing.

While there is no guarantee that Rep. Wasserman Schultz’s revised amendment will be passed by the House, or even that Congress will succeed in passing patent reform legislation in any form, if the new amendment does pass there will be plenty for the PTO to investigate. Although the issue of second opinion testing was discussed last year by the now-defunct Secretary’s Advisory Committee on Genetics, Health, and Society (SACGHS) as part of its controversial report on Gene Patents and Licensing Practices and Their Impact on Patient Access to Genetic Tests (pdf), many questions would benefit from a second, closer look.

Key questions meriting further investigation include:

• how frequently confirmatory genetic diagnostic testing currently occurs in areas where a lack of patents and/or non-exclusive licensing permits multiple test providers;
• what manner of safe harbor provision would encourage providers to actually offer second opinion testing in areas where patents and/or exclusive licensing present patients with only a single (or limited) testing option; and
• the effect of a safe harbor provision for second opinion testing on the ongoing gene patent debate (as embodied in Myriad), as well as the larger conversation concerning the proper role of intellectual property in personalized medicine innovation.

Most importantly, if further study does indicate that a safe harbor or other similar mechanism to enable second opinion diagnostic testing would be beneficial, the PTO and Congress will need to spend more time carefully crafting a legislative solution that eliminates—or at least dramatically reduces—the uncertainty attached to the most recent safe harbor proposal. Otherwise, despite its best intentions, Congress could inadvertently muddle the personalized medicine patent landscape in a way that restricts—rather than enhances—patient access to genetic tests.

Following its passage in the Senate, the legislation promptly stalled in the House of Representatives and, several months and numerous committee hearings later, that is where it remains. Fierce lobbying and political maneuvering have thrown multiple key provisions of the reform legislation into doubt. Leading areas of debate include the constitutionality of a proposed change from a “first-to-invent” to a “first-to-file” patent system and a provision that would allow the patent office to retain user fees to fund its own operations.

While it remains unclear whether patent reform will actually occur, the latest round of legislative wrangling has introduced one proposal of particular interest to Genomics Law Report readers. Among 86 pages of proposed amendments (pdf) to H.R.1249 (the House version of the patent reform legislation) offered earlier this week is a provision that, if adopted, would provide an infringement safe harbor for second opinion genetic diagnostic testing.

Permitting Second Opinions in Certain Genetic Diagnostic Testing. Introduced as part of the Manager’s Amendment (pdf) submitted by Representative Lamar Smith (R-TX), the proposal is conceptually simple. It would create a new Section 287(d) under the Patent Act to establish a safe harbor for second opinion genetic diagnostic testing providers, much like the safe harbor that already exists at Section 287(c) for medical practitioners’ performance of medical activities.

Under certain conditions (more on those below),  performing a genetic test “solely for the purpose of providing the individual with an independent confirmation of results” previously obtained from a patented diagnostic test would not subject the second opinion test provider to infringement liability under the Patent Act. The safe harbor provision would not actually define second opinion testing as non-infringing behavior—the act of performing the second opinion test could still constitute infringement under Section 271 of the Patent Act—but it would eliminate the normal infringement remedies (Sections 281, 283, 284 and 285) from the patent owner’s arsenal.

The actual legislative proposal, of course, is slightly more complex. Here is the full text:

Sec. 27. PERMITTING SECOND OPINIONS IN CERTAIN GENETIC DIAGNOSTIC TESTING

(a) IN GENERAL. – Section 287 of title 35, United States Code, is amended by adding at the end the following:

(d)(1) With respect to a genetic diagnostic test provider’s performance of, or offering to perform, a confirming genetic diagnostic test activity that constitutes infringement of a patent under section 271(a) or (b) of this title, the provisions of section 281, 283, 284 and 285 of this title shall not apply against the genetic diagnostic test provider with respect to such confirming genetic diagnostic test activity.

(2) For the purposes of this subsection:

(A) The term “confirming genetic diagnostic test activity” –

(i) means the performance of a patented genetic diagnostic test, by a genetic diagnostic test provider, on an individual solely for the purpose of providing the individual with an independent confirmation of results obtained from another test provider’s prior performance of the test on the individual, where such prior test was performed by, or under license from, the owner of the patent that is infringed by the acts specified in paragraph (1), and where independent confirmation of the prior test is not available from another test provider under a license from the patent owner; but

(ii) does not include –

(I) the performance of a patented genetic diagnostic test on an individual for the purpose of monitoring or reconfirming the individual’s medical or genetic status over time, for therapeutic treatment selection or determining responsiveness to treatment, and for other purposes that require repeated genetic diagnostic testing of the individual;

(II) the use of a patented machine or article of manufacture in violation of such patent;

(III) the use of a patented composition of matter that is commercially available to the genetic diagnostic test provider; and

(IV) the practice of a patented process other than the process of testing claimed in the patent owner’s patent referred to in paragraph (I).

(B) The term “genetic diagnostic test provider” means any person or entity that performs a confirming genetic diagnostic test activity, and includes a clinical laboratory or other health care entity at which, on behalf of which, or in association with which the confirming genetic diagnostic test activity is conducted, such as a nursing home, hospital, university, medical school, health maintenance organization, group medical practice, or medical clinic.

(C) The term “patented genetic diagnostic test” means a patented diagnostic method that is specific to the detection of a mutation or a pattern of mutations of one or more particular genes in an individual, as well as the use of a patented composition of matter, or the practice of a patented use of a composition of matter, where such composition of matter is specific to and necessary for the practice of the diagnostic method and is not commercially available to the genetic diagnostic test provider. When performed in the course of a confirming genetic diagnostic test activity, such term is not limited to the particular embodiments of the patented diagnostic method or composition of matter that were practiced by or under the authority of the patent owner in providing the prior genetic diagnostic test.

(D) The term “independent confirmation” is not limited to the replication of the results of a prior genetic diagnostic test, and includes providing the individual with information that is not otherwise available from the provider of such prior test and that affirms, clarifies, disproves, corroborates, or otherwise aids the individual in interpreting the results of such prior test, including in instance where such results were inconclusive.

(3) The infringer shall have the burden of establishing the limitation on remedies under paragraph (1), including the production of contemporaneous documentary evidence proving, or tending to prove, that the diagnostic test activity meets the definition of a confirming diagnostic test activity under paragraph (2)(A) at the time the confirming diagnostic test activity was performed.

(b) EFFECTIVE DATE. – The amendment made by subsection (a) shall take effect on the date of the enactment of this Act and shall apply to confirming diagnostic test activity performed on or after such date.

A Safe Harbor’s Uncertain Waters. A close examination of the text reveals that, however simple its intent, if passed as drafted the second opinion safe harbor would leave genetic testing developers and providers, patent holders and courts with considerable uncertainty about the safe harbor’s appropriate interpretation and application.

Perhaps the easiest way to identify many of the unclear and (likely) controversial provisions of the second opinion safe harbor provision is to read the amendment proposed by Rep. Smith side-by-side with the amendment-to-the-amendment (pdf) proposed by Representative Debbie Wasserman Schultz (D-FL) who, as Patent Docs notes, first offered the second opinion safe harbor amendment on the House floor in April.

An examination of the first three amendments suggested by Rep. Wasserman Schultz reveals the high degree of uncertainty and controversy embedded in the current second opinion safe harbor proposal:

WS Amendment #1. As proposed by Rep. Smith, Section 287(d)(2)(A)(i) limits a “confirming genetic diagnostic test activity” subject to the safe harbor protections to those situations where independent confirmation is “not available from another test provider under a license from the patent owner.” That would seem to close the safe harbor except when there was, in fact, only a single licensed provider of a particular test (as is currently the case with Myriad Genetics and its diagnostic test for mutations in the BRCA1 and BRCA2 genes). The safe harbor would appear to be inapplicable in any scenario in which there were two providers.

It is unclear, however, whether this would be the case even if both “test providers” offered the exact same test using the exact same laboratory procedures (would that even be a truly confirmatory test?) or if the multiple test providers were controlled by a common entity. Also uncertain is when a test would be considered “available” for purposes of the safe harbor provision. Would the requirement of availability require that the test be “affordable and readily accessible to the patient” or simply “available in some form, to some patients at some price”?

Rep. Wasserman Schultz addresses these concerns in her own amendment by simply striking the requirement that the test be unavailable except from the sole test provider, which would appear to broaden the provision to apply even in situations where the patents were licensed on a non-exclusive basis to multiple genetic testing providers.

WS Amendment #2. Rep. Smith’s version of the safe harbor provision would also not apply where a genetic diagnostic test was used for “therapeutic treatment selection” (Section 287(d)(2)(A)(ii)(I)). While that term is not defined, it could be interpreted broadly to exclude from the second opinion safe harbor any genetic diagnostic test the results of which could cause a new or modified clinical course of care.

Such a reading would dramatically limit the scope and relevance of the safe harbor, since most patients, providers and payers are likely to pursue a second opinion only in those situations where a different test result would alter the course of the patient’s care.

In her own amendments, Rep. Wasserman Schultz’s proposal simply strikes the “therapeutic treatment selection” limitation.

WS Amendment #3. In addition to the “therapeutic treatment selection” exception to the safe harbor, Section 287(d)(2)(A)(ii)(I) would also exclude genetic tests “for the purpose of monitoring or reconfirming the individual’s medical status over time” or for any other purpose that required “repeated genetic diagnostic testing.” The presumed intent is to avoid depriving the rights-holder (the patent owner or its licensee) from serving as the first option for any re-testing conducted later in time.

Rep. Wasserman Schultz’s proposal retains this language, but provides an exception-to-the-exception that would permit an infringing genetic diagnostic test to take advantage of the safe harbor, even for repeated diagnostic testing, if the test “utilizes different technologies or has performance characteristics that are sufficiently different from the patented tests that the results can provide information not provided by the patented test.”

The goal would appear to be the encouragement of second opinion testing using non-identical genetic tests (“different technologies or…performance characteristics”), although it is unclear whether this would operate in conjunction with Rep. Wasserman Schultz’s first amendment to prevent the developer of a separate and patented diagnostic test from enforcing its rights when its test was performed following any previous diagnostic test covering the same condition.

All told, Rep. Wasserman Schultz offers ten amendments to the language proposed by Rep. Smith, including this “Rule of Construction”:

The amendment made by subsection (a) [the second opinion safe harbor amendment] shall not be construed to reflect any expression by the Congress with respect to the patentability of genetic material or genetic diagnostic testing.

Will Congress Intervene in the Gene Patent Controversy? It remains highly uncertain whether Congress will manage to pass any patent reform legislation during its current session. Furthermore, should patent reform become a reality, there is no guarantee that the second opinion exemption will be retained. The safe harbor for genetic diagnostic testing was not included in the version of the legislation the Senate passed in March and, even if the House manages to include the provision in its version of the legislation, it could easily be removed during the reconciliation process.

Finally, even if Congress is ultimately able to reach an agreement, the questions about how to interpret and apply a second opinion safe harbor are unlikely to end there. They would almost certainly carry over from Congress to the courts if and when companies and individuals begin seeking shelter in the new safe harbor, should it ever materialize.

Despite these several barriers to the adoption of a second opinion safe harbor for genetic diagnostic testing, the possibility that change could come to the personalized medicine patent landscape should not be entirely ignored.

It is no coincidence that the safe harbor proposal comes just one year after the now-defunct Secretary’s Advisory Committee on Genetics, Health, and Society (SACGHS) published its controversial report on Gene Patents and Licensing Practices and Their Impact on Patient Access to Genetic Tests (pdf). In that report, SACGHS found that “when there is a patent-enforcing sole provider [of a genetic test], patients cannot obtain independent second-opinion testing” and, as a result, recommended several statutory changes, including “the creation of an exemption from liability for infringement of patent claims on genes for anyone making, using, ordering, offering for sale, or selling a test developed under the patent for patient-care purposes.”

And Rep. Wasserman Schultz’s “Rule of Construction” notwithstanding, the safe harbor proposal must also be viewed as a direct Congressional reply to the ongoing and widely publicized Myriad gene patent litigation. The Myriad litigation was initiated more than two years ago by a diverse group of plaintiffs, including several women seeking genetic testing for mutations linked to breast and ovarian cancer. The plaintiffs’ complaint (pdf) included the allegation that Myriad Genetics’ patents and licensing practices operated to prevent women from “obtaining information about their health risks from anyone other than” Myriad, including denying women access to second opinion testing. As the Myriad litigation enters its third year, some members of Congress are undoubtedly feeling pressure to address the effects of gene patents in the practice and development of personalized medicine using more expeditious means.

[Update, 6/16: The American Civil Liberties Union (ACLU), the group largely responsible for coordinating the Myriad litigation, is leading a group of organizations in opposition to the proposed amendment (pdf). The ACLU-led coalition argues that the proposed second opinion safe harbor “would fail to block all patent holder objections to [second opinion] testing, fails to address the many other limitations on scientific research arising out of the issuance of [gene patents], and risks allowing gene patent holders to argue that Congress implicitly endorses the validity of such patents.” The group urges Congress to reject the amendment to avoid creating “unintended harms to patients, medical professionals and genetic researchers.” According to the ACLU’s letter, the American Medical Association has also written separately to Congress to oppose the amendment. The swift response from organizations like the ACLU, the AMA and others suggests that the second opinion safe harbor may be closer to becoming a reality than was previously suspected.]

Although the second opinion safe harbor proposal seems unlikely to pass at this time, at least in its current form, Whether the safe harbor proposal passes or not, it should serve as a stark reminder that even as patent attorneys and biotechnology companies anxiously await the Federal Circuit’s ruling in Myriad—which could come any day now and significantly alter the personalized medicine patent landscape—Congress will continue to loom in the background, with the ability at any moment to completely rewrite the rules of the game.

However, we have argued in several articles (see, e.g., here, here and here) that the real action is more likely to involve all of those “other requirements” as courts explore other ways to limit the patentability of scientific and technology progress without altering the threshold test of patentability under section 101.

A recent Federal Circuit case (Billups-Rothenberg, Inc. v. Associated Regional and University Pathologists, Inc.) decided under the written description requirement of section 112 illustrates this point yet again.

Billups v. ARUP Background. The Billups case involves a disorder called Type I hereditary hemochromatosis, which is characterized by excessive absorption of iron. The critical gene in the absorption process is called HFE, or “High Fe.” In 1994, Billups filed the application that led to a patent on methods for testing for hemochromatosis (U.S. patent number 5,674,681; “’681”). The court’s opinion reproduces this claim as “representative”:

2. A method to identify an individual having or predisposed to having hemochromatosis, comprising the steps of:

a) providing from the individual a sample containing a gene encoding a nonclassical MHC class I heavy chain

and

b) detecting a mutation in said gene, which mutation results in the reduced ability of said heavy chain to associate with said β2 microglobulin, wherein the presence of said mutation identifies said individual as having or predisposed to having hemochromatosis.

Significantly, at the time of the 1994 filing Billups had not yet isolated the relevant gene or mutation—later discovered to be C282Y.

Then, in 1996, a competing research team filed a patent application that disclosed C282Y and another relevant mutation called S65C (resulting in patent number 6,025,130; “’130”). That patent was assigned to Bio-Rad Laboratories, Inc. (a co-defendant along with ARUP in this case), which in turn licensed the patent to ARUP (like Myriad Genetics, a University of Utah spinoff).

Both ARUP and Billups continued their work. ARUP developed its own hemochromatosis test that detected C282Y and S65C, and in 1999 Billups filed another patent application that resulted in patent number 6,355,425 (“’425”). The 425 patent is far more specific than the earlier ‘681 patent, disclosing the S65C mutation.

Claim 1 of the ‘425 patent reads:

A method of diagnosing an iron disorder or a genetic susceptibility to developing said disorder in a mammal, comprising determining the presence of a mutation in exon 2 of an HFE nucleic acid in a biological sample from said mammal, wherein said mutation is not a C→G substitution at nucleotide 187 of SEQ ID NO: 1 and wherein the presence of said mutation is indicative of said disorder or a genetic susceptibility to developing said disorder.

In 2009, Billups sued ARUP and Bio-Rad, claiming that the company’s “diagnostic assays or kits for detecting hemochromatosis” infringed both the ‘681 and ‘425 patents. A California federal district court found both of the Billups patents invalid and, last month, the Federal Circuit affirmed unanimously. (Judge Kimberly Moore, who is on the Myriad panel, was one of the three judges who signed the opinion in this case.)

More Nibbling Around the Ages of Patentability. According to the Federal Circuit, the problem with the ‘681 patent issued to Billups was a failure to satisfy the written description requirement of section 112. The applicant must describe the claimed invention at a sufficient level of detail to “enable any person skilled in the art to which it pertains” to make and to use the invention. (The standard is purely theoretical: that person couldn’t actually reproduce the invention, of course, because that would be infringement.) Providing an adequate written description satisfies the applicant’s part of the basic patent bargain—trading knowledge for exclusive rights—and also proves that applicant actually possesses the claimed invention.

In a series of cases, most importantly last year’s en banc decision in Ariad Pharms., Inc. v. Eli Lilly & Co., the Federal Circuit appears to have tightened the section 112 requirement for gene-related inventions. As the court put it in 1997 (in Regents of the Univ. of Cal. V. Eli Lilly & Co.), and reiterated last month in Billups:

[A]n adequate description of a DNA requires more than a mere statement that it is part of the invention and reference to a potential method for isolating it; what is required is a description of the DNA itself.

That is, the patent must disclose not only the function of the relevant DNA, but something about its structure as well. The ‘681 patent failed this test according to the Federal Circuit:

The ’681 patent claims a test for mutations, yet it is undisputed that the specification and originally filed claims of the ’681 patent disclose neither the hemochromatosis gene sequence nor any specific mutations within that gene.

Billups contended that its written description should be judged in light of “knowledge outside the patent, including the subsequent discovery of C282Y,” but the court disagreed:

Given the lack of knowledge of sequences for the hemochromatosis gene and its mutations in the field, the limited extent and content of the prior art, and the immaturity and unpredictability of the science when the ’681 patent was filed, Billups cannot satisfy the written description requirement merely through references to later-acquired knowledge.

After dispensing with the ‘681 patent, the Federal Circuit then invalidated Billups’ ‘425 patent (filed in 1999) under section 102 as “anticipated,” or fully disclosed, by ARUP’s ‘130 patent (filed in 1996). Billups argued that the ‘130 patent’s disclosure of the S65C mutation should not count because ARUP did not appreciate its significance. The court acknowledged that “the ’130 patent discounts the utility of the S65C mutation in diagnosing hemochromatosis,” but nonetheless “held that a ‘reference [to another invention, in this case the S65C mutation] is no less anticipatory if, after disclosing the invention, the reference then disparages it.’”

These holdings may be highly technical in patent law terms, but the underlying point seems straightforward: Yet again, the Federal Circuit has demonstrated skepticism about a gene-related patent, and a willingness to scrutinize it closely under all of the requirements of the Patent Act, not just section 101.

While the question of patentable subject matter under section 101 may be more glamorous, particularly in the context of Myriad’s gene patents, it continues to appear that the real work of limiting product and method claims on genes and their interpretation is being done elsewhere.

Murky Methods. Meanwhile, back within section 101, the difficulty in figuring out the standards for the patentabilty of methods and processes was on display in two oral arguments at the Federal Circuit during the first week of May. (CyberSource Corp. v. Retail Decisions Inc., No. 2009-1358, argued 5/2/11, and DealerTrack Inc. v. Huber, No. 2009-1566, argued 5/4/11). The cases involved computer-aided manipulation of credit information, not genes, but the arguments nonetheless underscored the problems the court faces in sorting out the method claims in Myriad.

As the GLR has reported, last summer’s Bilski Supreme Court decision shed little light on the patentability of a range of emerging technologies, particularly in the areas of software and biotechnology, including the so-called “diagnostic method” patents challenged in Myriad. The Bilski Court held that the Federal Circuit’s machine-or-transformation test should not be used exclusively, but said little else beyond emphasizing that abstract ideas were unpatentable.

Since Bilski, the Federal Circuit has upheld the patentable subject matter status of a “method for the halftoning of gray scale images” on computer screens (Research Corporation Technology, Inc. v. Microsoft Corporation) and reaffirmed its earlier opinion that a method for administering a drug was also patentable subject matter (Prometheus v. Mayo). Although both cases suggest that the patentable subject matter standard is not especially demanding, neither does much to clarify exactly what that standard is.

The CyberSource patent claims a three-step method for “for verifying the validity of a credit card transaction over the Internet,” as well as a “computer readable medium” programmed to carry out the method (a so-called Beauregard claim—named for the case in which such a claim was recognized, not the guy who fired on Fort Sumter). The DealerTrack patents claim a “computer aided method” of managing an automated credit application for car loans.

In both cases, neither the judges nor the lawyers seemed to have a firm sense of what standard should be applied. On the contrary, lawyers on both sides seemed to take the position that, wherever the method patent line currently is, the claims they were arguing about were either clearly short of it or well over it.

What Does It All Mean for Personalized Medicine? As Myriad illustrates, there are two kinds of gene patents that are of significance to the increasingly broad array of personalized medical research and practice: product patents on genes themselves and method patents on biomarker-based diagnostic testing and interpretation.

As we look ahead to Myriad’s resolution and beyond, it is the latter category of patents that is likely to be the more important to personalized medicine. As isolated gene patents begin to expire, or are circumvented by rapid technological advancements, the standard for the patentability of methods is unclear and seems to be getting even less clear with each new case.

Although the courts—especially the Federal Circuit—appear increasingly willing to use other patentability requirements to strike down broad claims to gene-related methods, thereby avoiding the fundamental question of which methods are patentable under section 101, this question will need to be clearly resolved at some point in order for personalized medicine to continue to thrive.

(1) presymptomatic and (2) mildly symptomatic but pre-dementia, along with (3) dementia caused by Alzheimer’s. This reflects current thinking that Alzheimer’s begins creating distinct and measurable changes in the brains of affected people years, perhaps decades, before memory and thinking symptoms are noticeable.

At least for the moment, the new guidelines are intended to be used only with patients enrolled in clinical trials, making them more of a work in progress and not a standardized method of determining disease onset in Alzheimer’s patients.

Federal Alzheimer’s Activity. The revisions to the diagnostic guidelines – the first in nearly three decades – indicate how far scientists have come in understanding the disease and are reflected in new legislation introduced in both the Senate (S.738) and the House (H.R.1386) that would expand Medicare coverage of Alzheimer’s to cover “comprehensive Alzheimer’s disease diagnosis and services,” including for individuals who fall under stage (1) or (2) of the new guidelines.

More significantly, the new guidelines and proposed legislation follow closely on the heels of the passage, earlier this year, of the National Alzheimer’s Project Act (NAPA). NAPA (pdf) charges the Secretary of Health and Human Services with developing “an integrated national plan to overcome Alzheimer’s,” including by accelerating the development of treatments, improving patient diagnosis and care and coordinating efforts across all Federal agencies. Although NAPA did not include any Federal appropriations, its supporters believe it represents a significant commitment to fighting the disease and will lead to an increase in funding, as well as in awareness.

DTC APOE Testing. As Alzheimer’s researchers continue to refine how to define and diagnose the disease – and, of course, seek treatments as well – and the Federal government attempts to coordinate and strengthen its attack on the disease, a few companies are offering consumers the ability to take diagnostic testing for Alzheimer’s disease into their own hands.

Recently, direct-to-consumer (DTC) genetic testing company 23andMe introduced an optional Alzheimer’s health report for its customers (of European ancestry). 23andMe customers who have been genotyped on the company’s latest platform – or who are willing to upgrade – can choose to learn which variants of the apolipoprotein E (APOE) gene they carry. The APOE gene, which comes in at least three different versions or alleles (ε2, ε3 and ε4), has been shown to affect an individual’s risk of developing late-onset Alzheimer’s, although the full physiological and genetic complexity of the disease is likely far from understood.

While 23andMe’s customers must separately choose to learn their APOE status, and are presented with a detailed report (pdf) outlining the gene’s predictive limitations in the face of other important factors, at least one prominent Alzheimer’s researcher has already criticized 23andMe for providing APOE results DTC. Allen Roses, a researcher at Duke University who helped to identify the link between APOE and late-onset Alzheimer’s disease, “believes that 23andMe should not report APOE status through DTC channels,” according to Pharmacogenomics Reporter. (In addition to 23andMe, other DTC genetic testing services, including the Decode Genetics service deCODEme, also offer customers the opportunity to examine their APOE status.)

At the center of the debate is whether individuals will benefit or be harmed, on balance, from learning whether they are at increased risk of developing a genetically influenced – but not determined – condition such as Alzheimer’s Disease for which there is no known cure.

This is exactly the issue that researchers at Boston University have sought to examine through the REVEAL (Risk Evaluation and Education for Alzheimer’s Disease) Study. While the REVEAL study is ongoing, proponents of DTC genetic testing in general, and of APOE testing in particular, point to preliminary findings which indicated that reporting APOE status to individuals “did not result in significant short-term psychological risks.” (pdf) Study researchers also recently published additional findings, concluding that one year after the initial disclosure of APOE status “test recipients still consider the pros to strongly outweigh the cons.”

Opponents of DTC testing, on the other hand, note that (1) the preliminary REVEAL findings measure only short-term outcomes, (2) individuals who tested negative for the APOE genotype associated with higher risk did experience reduced test-related distress, and (3) the initial REVEAL data involved subjects with significant exposure to Alzheimer’s disease who received direct access to genetic counseling, neither of which may apply to many DTC customers. (For more, see the final section of this Pharmacogenomics Reporter piece.)

A Matter of Utility. Then there is the issue of “clinical utility.” While there is no universally accepted definition of “clinical utility,” it is generally used to refer to the usefulness of a test or other procedure to alter (hopefully for the better) medical care. For example, the Centers for Disease Control and Prevention (CDC), in describing its ACCE model process for evaluating genetic tests, defines clinical utility as “how likely the test is to significantly improve patient outcomes.”

At least for the moment, there is no established cure or prevention strategy for Alzheimer’s disease, meaning that a genetic test designed to indicated predisposition to the disease fails to satisfy many traditional definitions of “clinical utility.” This lack of clinical utility, particularly for pre-symptomatic individuals, is frequently cited as a reason why such information should not be returned. For example, Muin Khoury, director of the CDC’s Office of Public Health Genomics, told Pharmacogenomics Reporter he believes tests that lack a sufficient level of demonstrated clinical utility, including, presumably, APOE testing, “should be offered in a medical setting, with counseling,” and should not be made available DTC. Similarly, last fall the European Society of Human Genetics issued genetic testing guidelines (pdf) in which it opposed “the premature DTC commercialization of various genetic tests,” including tests for which clinical utility is unproven.

Proponents of DTC genetic testing, including 23andMe, have adopted a very different perspective, arguing that APOE information – as with other genetic information – should be available to any individual who desires it. The “utility” noted by DTC proponents is slightly different, with a focus on “personal” as opposed to “clinical” utility. Even if it is unable to alter a course of treatment or improve a patient’s likely outcome, genetic information may still possess significant personal utility for some individuals.

For example, to return to APOE testing, the REVEAL study has demonstrated that even though there are no proven effective treatments for Alzheimer’s Disease, providing participants with genetic information regarding their genetic risk of Alzheimer’s has been found “to be useful by allowing [individuals] to prepare their families and arrange personal affairs including long-term care.” (The quoted language is supplied by Khoury et al. and is the byproduct of a 2009 joint NIH/CDC workshop investigating, among other topics, the utility of personal genomic tests. A summary is also available here.)

What’s Next? For patients and family suffering through Alzheimer’s at any stage of the disease, the hope is that increased Federal funding and continued scientific awareness will continue to improve the ability to diagnose the disease early and accurately but, soon, begin to supply effective treatments or even preventative measures.

As for DTC genetic testing for Alzheimer’s disease, 23andMe now offers what is likely the most widely available and least expensive DTC test (although there are other avenues for consumer-ordered APOE genetic testing, including DTC competitor deCODEme) and has pushed the door wide open for individuals to directly assess (a portion of) their genetic risk for Alzheimer’s disease. At least so far, despite objections from scientists and policymakers like Roses, Khoury and others, regulators have not expressed any public concern with 23andMe’s decision to offer APOE testing and Alzheimer’s risk analysis as part of its service.

Looking ahead, however, there are at least two potential barriers to the continued availability of DTC APOE genetic testing. With the FDA continuing to evaluate the appropriate regulatory approach to DTC genetic testing (the latest opportunity for public comment closed earlier this month), there is no guarantee that DTC genetic testing services such as the one offered by 23andMe will remain available indefinitely in its current form.

And more specifically to DTC APOE genetic testing, Turna Ray of Pharmacogenomics Reporter recently noted that Duke University is considering whether DTC companies, including 23andMe, are infringing APOE patents developed by Duke and exclusively licensed to Athena Diagnostics. As discussed in Ray’s article, a variety of factors, including the uncertain status of Duke’s APOE patents (which claim an association between APOE variants and Alzheimer’s risk) in light of the ongoing Myriad gene patent litigation, suggest that both Duke and Athena may elect to be cautious in considering whether to challenge 23andMe’s DTC APOE testing.

For the moment, anyway, new and recent customers of 23andMe (those genotyped on the company’s current v3 platform) have the option to explore their APOE status if they so choose. Earlier customers (those genotyped on the v2 platform) are left with a choice: upgrade to 23andMe’s latest offering, wait until a later date for APOE genotyping or, as my colleagues at Genomes Unzipped will discuss soon, make an educated guess on the basis of their v2 results.