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.

Phillip C. Ross is a summer associate at Robinson, Bradshaw & Hinson, P.A. and a rising third-year student at Wake Forest University School of Law.

Many health care providers and other individuals and entities who deal with sensitive patient information may assume that if they comply with the Health Insurance Portability and Accountability Act (“HIPAA”), they need not worry further about the proper use or disclosure of patient data. However, a recent Michigan Court of Appeals decision served as a reminder to those individuals and entities that they must not only ensure compliance with HIPAA, but also any state laws that are more demanding than HIPAA.

HIPAA establishes regulations for the use and disclosure of Protected Health Information (“PHI”) held by “covered entities” (pdf) and “business associates.” PHI is any information held by a covered entity related to health status, provision of health care, or payment for health care that can be linked to an individual.

In Isidore Steiner, DPM, PC v. Marc Bonanni, No. 294016 (Mich. Ct. App. Apr. 7, 2011), the Michigan Court of Appeals held that HIPAA acts as a federal “floor” in establishing standards for the privacy of patients’ PHI. Although Bonanni was decided under Michigan law—and thus is not binding on other states—the decision is likely to be consistent among courts in other states.

The reason? HIPAA explicitly provides that where a state law is more protective of patients’ PHI than the applicable provision of HIPAA—that is, where the state law is more “stringent”—the state law will prevail (pdf).

Breaking Down Bonanni. In Bonanni, the Family Foot Center (the “Center”)—a covered entity—sought to enforce a non-compete agreement with one of its former physicians (Dr. Marc Bonanni). The Center believed that Dr. Bonanni had solicited its patients in violation of the agreement, and as part of pre-trial discovery, the Center requested Dr. Bonanni’s patient lists. Dr. Bonanni objected to this request, asserting that HIPAA and Michigan law protected this information from disclosure unless the Center first gained the consent of the patients in question. The Center filed a motion to compel the disclosure of this information, and the Michigan Court of Appeals chose to apply Michigan law instead of HIPAA.

Generally, HIPAA requires patient consent for the disclosure of PHI, just like Michigan law. However, with respect to responding to a subpoena or discovery request, HIPAA and Michigan law are in conflict. While a HIPAA exception allows for an entity to disclose an individual’s PHI without a written authorization in this situation, Michigan law contains no such exception. In Bonanni, the Court held that Michigan’s law provided more stringent protections than HIPAA for the PHI at issue, and so it applied Michigan privilege law in denying the Center’s discovery motion.

What Bonanni Teaches Us About PHI. The Bonanni ruling certainly limits the information that physicians can release during legal proceedings in Michigan. This will also likely be true in other states with similar discovery laws, as evidenced by a recent California Supreme Court ruling upholding a lawsuit (pertaining to the disclosure of medical records to a credit reporting agency) brought under a state medical information statute with provisions more stringent than HIPAA (Brown v. Mortensen (pdf), Case No. S180862 (Cal. Jun. 16, 2011)). There, too, the court held that HIPAA “authorized and encouraged further state regulation” in matters of patient medical privacy.

However, individuals and entities in every state deal with PHI in many other mediums and contexts outside of a discovery request during litigation, and Bonanni’s broader lesson is that HIPAA serves only as a federal floor when it comes to patient privacy provisions.

For instance, a Health Information Exchange (“HIE”) (also known as a Health Information Organization (“HIO”)) deals with PHI through the use of electronic health records (“EHRs”). An EHR contains sensitive patient data—including certain demographic information that would identify the patient—and it follows the patient to any and all hospitals to which he or she goes. The HIE/HIO pulls in data relating to that patient from the insurance company or government agency, from hospitals and physician offices, labs, pharmacies and other sources of clinical and administrative data. Then, the HIE/HIO provider may, among other things, analyze the patient information and derive alerts and recommendations to turn the data into actionable information. The benefits of such a program are wide-ranging, from simply reducing paper to creating an accessible information portal that enables physicians to coordinate care, use clinical research to devise the best treatments, encourage prevention and better manage chronic conditions.

In short, the effective use of EHRs by HIE/HIOs and other HIPAA covered entities is central to the continued progress of personalized medicine. Nevertheless, while an EHR program may provide a number of important benefits, it is also susceptible to PHI security issues under HIPAA and/or any other “more stringent” state laws, which could present the same state law preemption issue addressed in Bonanni.

For example, if an HIE/HIO—or any other entity subject to HIPAA—wished to use PHI in the course of conducting research, HIPAA would allow (pdf) such a use of PHI with individual authorization, or without individual authorization under limited circumstances. State law, however, may not be as flexible, and many states may lack a research exception to the use of PHI or may require different standards for individual authorization. In such a scenario, the more stringent state law is likely to prevail, restricting the ability of the HIE/HIO or other HIPAA-covered organization to use PHI to conduct research, no matter how important.

As shown by this hypothetical, despite the importance of PHI to the development of EHRs and the advancement of research essential to personalized medicine’s progress, Bonanni and Brown each make clear that that individuals and companies utilizing PHI must consider more than just HIPAA compliance. In fact, those individuals and entities who operate at a regional or national level would need to consider multiple (or even all) states as part of an effective compliance strategy.

Individuals and entities who deal with PHI should contact a qualified attorney who will undertake a detailed analysis of the applicable federal, state, and local laws prior to making any disclosure, transmission, or other use of PHI. By considering all sources of law, and not just the federal rule, health care providers, researchers and technology developers can minimize the inherent risk in dealing with PHI and work towards full compliance with privacy laws.

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.

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.

When NIH refused to act, a larger group filed a class action lawsuit (pdf) in Pennsylvania federal court against Genzyme and Mt. Sinai for damages allegedly caused by their inability to get prescribed dosages of Fabrazyme^®.   As we reported last month, the suit raises novel legal theories and faces an uncertain future. (Earlier this month Genzyme filed a motion to dismiss (pdf) the lawsuit.)

Additional Supply Delays Prompt Rehearing Request. The patients have now gone back to NIH, asking for a rehearing of their march-in petition in light of new evidence. Their lawyer, C. Allen Black (who is also co-counsel in the class action), points out that that the supply problems have gotten worse because of another contamination incident at Genzyme’s Allston, Massachusetts facility. As a result, Genzyme pushed back its anticipated resumption of “normal supply” of Fabrazyme^® from early 2011 to the second half of 2011.

However, Genzyme acknowledges that even that target date depends on:

the expected approval of our new manufacturing facility in Framingham, Massachusetts. Until this new facility is approved, Fabrazyme^® inventory remains low and supply will be vulnerable to disruption due to unforeseen manufacturing events such as this one.

The Genzyme announcement also declines to give specific information about regional differences in supply, advising patients to contact their company representatives.

As the Fabry patients’ new NIH march-in petition contends, all of this is hardly grounds for optimism about renewed supplies. In denying the original petition, the NIH seemed to be relying on the likelihood that Genzyme would resume normal production long before any other manufacturer would be able—or willing, given the cost of producing a biologic like Fabrazyme^®—to get up and running. As the NIH reasoned in denying the original petition (pdf):

A march-in proceeding resulting in the grant of patent use rights to a third party will not increase the supply of Fabrazyme^® in the short term because years of clinical studies and regulatory approval would be required before another manufacturer’s product could become available to meet patients’ needs in the United States….Finally, Genzyme has indicated that it expects the production of Fabrazyme^® to be back to full supply levels in the first half of 2011.

The NIH added, however:

Notwithstanding the foregoing, NIH will continue to carefully monitor the shortage of Fabrazyme^® and will re-evaluate this determination immediately upon receiving any information that suggests progress toward restoring the supply of Fabrazyme^® to meet patient demand is not proceeding as represented.

The NIH now has exactly that—“information suggesting progress toward restoring the supply of Fabrazyme^® to meet patient demand is not proceeding as represented”—and, if taken at its word, can be expected to give serious consideration to the Fabry patients’ petition for rehearing.

The Right Time to March In? The primary rationale for denying the original march-in petition was that, even with a forced NIH license, no competitor would be able to bring a Fabrazyme^® substitute to market before Genzyme would be able to alleviate the shortage on its own. However, as delays continue to mount, that argument seems increasingly dubious.

The NIH has also worried, particularly in denying previous march-in petitions, about the consequences of forcing biotech investors to continually weigh the possibility of government encroachment on the proprietary rights they thought they had purchased. But as the Fabrazyme^® situation becomes increasingly dire—a drug shortage with ongoing detrimental consequences to Fabry patients—the NIH must seriously consider two key questions:

(1) Would marching in here really send a troubling signal to the broader marketplace, given the significant and ongoing delays that have led to this point? and

(2) If marching in would fail to provide a meaningful remedy to these Fabry patients, then under what circumstances would the government’s march-in rights under Bayh-Dole constitute a viable remedy?

As we asked when the Fabry patients’ original petition was denied, if NIH refuses to march in here, will it ever?

The NIH has promised to evaluate new information that could change its determination “as quickly as possible to determine whether our decision should be modified.” The Fabry community and the biotech community now await the NIH’s response.

What We Learned from the Myriad Oral Argument. For all of the attention focused on the Myriad oral argument, most spectators have only one very practical question: did Monday’s argument provided any meaningful clues with respect to how the Federal Circuit might rule on appeal of the lower court’s startling ruling?

In a word: no. In a few more: we learned nothing from the Myriad argument that leaves us better able to predict how the Federal Circuit will rule in this case.

That may be unsatisfying for researchers, businesses, investors, academics and many others who, having tracked the litigation since its inception, are anxious for a resolution, but it should not come as even a mild surprise.

First, as John noted last week, it is dangerous to read too much into any oral argument. While an oral argument can be a balance-tipper in a close case, there’s no guarantee that a written judicial opinion will resemble the prior courtroom conversation.

Second, and more importantly, it is unlikely to the point of practical impossibility that the Federal Circuit’s upcoming ruling in Myriad will be the last word in the case. Whatever result the court reaches is virtually certain to be appealed and, as we wrote earlier this year, there is little reason to expect that the judicial system will finally resolve the issue of gene patenting in 2011.

What Caught Our Ear in Myriad. The limited predictive value of this week’s oral argument has not stopped media and legal commentators from dissecting how the Federal Circuit is likely to rule. While there is no way to confidently predict how the Federal Circuit will rule when it issues its opinion, likely in the next 2-3 months, here are a few of the issues raised during oral argument that caught our ear:

Procedural Arguments. The court spent considerable time addressing two procedural arguments raised by Myriad (and the other defendant-appellants): (1) that the plaintiffs in the case lack standing to maintain the lawsuit (a very technical question focused on whether these plaintiffs face enough of an immediate threat from Myriad’s patents to be allowed to challenge them) and (2) that, even if the plaintiffs were to win on all of their claims, they would not get the practical outcome they want (opening up BRCA testing beyond Myriad’s monopoly) because they failed to challenge all of the Myriad patents and claims that apply to BRCA testing (redressability, in legal jargon).

Those arguments seemed to receive more attention in court than they did in the parties’ briefs. On the one hand, this may reflect nothing more than the fact that these issues come logically first – if a plaintiff lacks standing to sue a court is barred from considering that plaintiff’s substantive claims – and there was a limited amount of time available for oral argument.

Then again, the extensive procedural discussion certainly raises the possibility that the Federal Circuit might dispose of Myriad on technical procedural grounds. This view finds some support in the concerns voiced from the bench (particularly by Judge Moore) that a ruling in Myriad could have “dramatic” consequences for the biotechnology industry, and that the substantive issues surrounding the patentability of human genes might be more appropriately addressed by Congress.

A procedural ruling, however, would fail to address an issue (the patentability of genes) that has sown uncertainty throughout the industry and created a rift within the United States government.

It would also be every bit as likely to be appealed as a substantive ruling and, in the long run, would probably accomplish nothing more than delaying the inevitable. Even if Myriad is ultimately dismissed on procedural grounds, it seems highly likely that one or more of the current plaintiffs and/or Myriad’s potential commercial competitors will continue to press the issue.

Still, because Myriad is the current patent holder and dominant BRCA testing provider, a scenario in which the Federal Circuit dealt with Myriad on procedural grounds, and thereby further delayed a substantive resolution, would likely be a practical victory for Myriad.

Whole-Genome Sequencing. As soon as the discussion shifted from procedural to substantive matters, Judge Bryson posed a pointed question to Gregory Castanias, Myriad’s attorney:

To me, at least, it is an important question as to how preclusive your patent – and any other patent on any particular gene – would be if, in effect, you have to get 100, 200 or 1,000 licenses before you can sequence the genome of an individual.

The uncertain relationship between existing gene patents and emerging whole-genome sequencing technologies and services is one we first discussed nearly two years ago, and one that has been hovering at the periphery of the Myriad litigation.

On Monday Castanias struggled to answer the question directly, noting (correctly) that it would depend in part on whether the particular method of sequencing involved “using” an isolated DNA sequence covered by Myriad’s patents.

The issue was raised directly only one other time, by Christopher Hansen of the ACLU (arguing on behalf of the plaintiff-appellees) in the context of Myriad’s BRCA method claims. Those claims involve comparing or analyzing gene sequences to identify the presence of mutations corresponding to a predisposition to breast or ovarian cancer. According to Hansen, if the judges were to compare the wild-type BRCA sequence against the publicly available genome sequence from Personal Genome Project founder George Church, side-by-side on a computer screen, they would infringe Myriad’s patents.

As we move rapidly into an age where whole-genome sequence data is inexpensive and ubiquitous, and the process of genomic interpretation is increasingly separate from genomic data generation, Hansen’s example illustrates why the disposition of Myriad’s method claims may well be more important in the long run than whether isolated DNA sequences are held to be patentable. (Myriad’s method claims, incidentally, received fairly minimal treatment during oral argument, although this may simply be due to the issue appearing last in the briefs and thus coming up last in each party’s argument, when there was little time left.)

While none of the judges responded to Hansen’s hypothetical (likely due in large part to the fact that Hansen had run over his allotted time by that point), it is encouraging to see, particularly in Bryson’s earlier comment, that the court clearly recognizes the potential for conflict between gene patents and the new generation of personalized medicine products built upon whole-genome sequencing.

However, whether the Federal Circuit will address that issue when it rules on Myriad, as with every other issue, is anybody’s guess.

Composition of Matter and Gene Patents. Predictably, the most attention was devoted to the patentability under § 101 of isolated DNA sequences. Numerous hypothetical scenarios were offered up by each of the parties, and by the judges as well: diamond mines, baseball bats in trees and even a hypothetical “magical microscope” envisioned by Neal Kumar Katyal, arguing on behalf of the Department of Justice.

One concept to which the court (and particularly Judge Lourie) returned repeatedly during the course of the argument was covalent bonding. Judge Lourie focused on the importance of covalent bonds in the DNA molecule, noting that those bonds must be broken in order to isolate sections of the molecule for purposes of examination, and suggesting that breaking those bonds renders isolated DNA different from DNA in the human body.

The focus on covalent bonds may be an effort by the court, and particularly Lourie, to find a way to apply the teaching of more than a century of cases that seem to say that patentable compositions of matter must be different in kind from their natural precursors or variants. Judge Lourie (a chemist) was playing around with the breaking of the covalent bonds during “isolation” as a potential Rubicon, beyond which isolated genes might be different in kind from those in the body.

However, Lourie’s covalent bond test was not the only one proffered. The government, for its part, offered up its own “magic microscope” test. The magic microscope (a term Judge Moore found “kitschy”) would enable the direct observation of naturally occurring DNA. According to the government’s test, any DNA sequence visible through this hypothetical device (which, if DARPA has its way, might not remain hypothetical forever) would be unpatentable. On the other hand, all other molecules (including, e.g., cDNA) not occurring in precisely the same form in nature – and thus not visible through the microscope – would be patentable.

While we wait to see whether any of the tests or hypotheticals outlined in the oral argument emerge in the written Myriad opinion, the bottom line is that the court, assuming it reaches the merits of patentable subject matter, must (1) decide what different in kind means in the genetic context and (2) apply that test to “isolation,” as the Myriad patents define that term.

The Next Myriad Mile Marker. For those who are interested in diving deeper, the Federal Circuit has made an audio transcript of the hearing available on its website (mp3). For everyone else, the next significant development in the Myriad litigation will most likely be the Federal Circuit’s opinion, which should be handed down sometime in the next few months.

At that point the parties and amici will have something concrete to digest – and likely appeal – and, depending on the outcome, Myriad, its would-be competitors and clinicians, researchers and patients with an interest in BRCA testing may be put to some difficult practical decisions. Until then, however, let the waiting – and speculation – continue

Who’s on the Panel? Federal cases on appeal are almost always heard initially by a panel of three randomly selected judges. (In rare cases all the judges of a circuit will rehear the case together, or en banc—no way to predict if that will eventually happen here.) The Federal Circuit will announce the panel for this case on Monday morning on its website. As of now, all we know is that Myriad—and only Myriad—will be heard by “Panel B+.” The + means that the makeup of that panel will be different from that of Panel B, which will hear the three other cases also scheduled for this 10 a.m. session (a panel customarily hears four arguments in a session). The + designation sometimes means that one member of the regular panel (here, B) has recused (disqualified) him or herself from the case because of some conflict, necessitating a replacement.

Chief Judge Rader has already been the subject of a recusal motion by the Myriad plaintiffs (see below), and there is also speculation that the lawyer spouses of two other judges (O’Malley and Moore) may have been involved in the filing of amicus briefs. Another possibility is that the + indicates that Myriad has been assigned to a five-judge panel, a rare expedient.

As soon as the panel is announced, expect journalists to start researching what, if anything, the three members have said about gene and methods patents in prior opinions. For example, Allison Dobson and I wrote in August 2010 about a dissent by Judge Dyk in a case involving a patent on isolated pig virus DNA. In that case (Intervet v. Merial) (pdf), Judge Dyk suggested that “whether the isolated DNA molecule, separate from any applications associated with the isolated nucleotide sequence (for example, the production of a vaccine) is patentable subject matter” is an undecided question of law—a controversial statement, given the PTO’s longstanding policy of granting such patents, with apparent Federal Circuit acquiescence. The point is that Judge Dyk’s appearance on the Myriad panel would provoke a lot of speculation.

So also with Chief Judge Rader. Back in August 2010, the Myriad plaintiffs filed a motion to have him recuse himself from participating in the case because of comments he made at two legal conferences—one sponsored by the Biotechnology Industry Organization—that the plaintiffs said indicated a preexisting view that the Myriad district court decision was wrong. As we wrote at the time, his comments were so abstract that the argument seemed far-fetched. The Federal Circuit announced that it would do nothing unless and until he were assigned to the panel, and there has been no further news beyond the enigmatic +.

How Much Difference Does Oral Argument Make Anyway? Over the course of 20+ years studying the legal profession I’ve interviewed many appellate judges about the process. They all say that they go into oral argument with an open mind, ready to be persuaded. But they also acknowledge that they’ve studied the briefs and the record and have received summaries (“bench memos”) from their law clerks, so they are intimately familiar with the case being argued. The most sensible view is that oral argument can be a balance-tipper. But appellate judges are nothing like trial jurors, who learn all they know about the case in the courtroom.

Pay Attention to the Judges’ Questions—But Not Too Much. Most judges also say that they use oral argument to clarify points they don’t fully understand and to probe potential weaknesses in the parties’ cases. So judges’ questions do reflect issues that are of concern to them.

But don’t read aggressive questioning as indicating hostility toward the side being questioned. That’s just what judges do. That’s especially true if they’ve been law professors—as many Federal Circuit judges have—because that’s part of the “Socratic method” we use in class.

On the other hand, do pay attention to the lawyers’ answers. Do they have persuasive answers to hard questions? If you didn’t think the answer made sense, maybe the judge didn’t, either.

I’ll close with an anecdote that shows the danger of reading too much into oral argument. Years ago I argued a Freedom of Information Act case before the First Circuit in Boston. Future Supreme Court Justice Stephen Breyer was on the panel. He asked a hard question, but I was expecting it and crushed it. He nodded and said, “Good answer.” I thought I had it in the bag. I lost, with Breyer voting against me.