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

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

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

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

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

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

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

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

(2) For the purposes of this subsection:

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

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

(ii) does not include –

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The report itself will not be available for several weeks, but the six recommendations on gene patenting and licensing approved by the Committee this past October continue to provoke a heated response. The Biotechnology Industry Organization (BIO), along with former Senator Birch Bayh (of Bayh-Dole Act fame) and others, held a Friday press conference to denounce – again – the report’s recommendations.

The SACGHS Recommendations. Most of the recommendations are uncontroversial, urging the Secretary of HHS to convene stakeholders to “explore” and “encourage” strategies to improve access to genetic testing, enhance patent licensing and ensure that the USPTO is “kept current with the latest scientific and technological developments related to genetic testing and technology.”

So what prompted Bayh’s charge that the recommendations represent “an attempt to send us back to a time when it appeared that American innovation was on its last legs and our economy was in deep distress”?

The sole controversial recommendation involves the Committee’s proposal to exempt healthcare practitioners and researchers from infringement of gene patents. The recommendation, in its entirety:

1. Supporting the Creation of Exemptions from Infringement Liability

The Secretary of Health and Human Services should support and work with the Secretary of Commerce to promote the following statutory changes:

          A. The creation of an exemption from liability for infringement of patent claims on genes for anyone making, using, ordering, offering for sale, or selling a test developed under the patent for patient care purposes.

          B. The creation of an exemption from patent infringement liability for those who use patent-protected genes in the pursuit of research.

BIO’s President and CEO Jim Greenwood looks at this particular SACGHS recommendation and sees doom and gloom. According to Greenwood, exempting patient care and research activities from infringement “would discourage investment in biotech innovation, hobble the transfer of federally-funded research, undermine university research programs, and harm patients who are waiting for life-saving therapies and diagnostics yet to be developed.”

Is the sky really falling, or would the SACGHS recommendation instead work as the Committee intends, increasing patient and researcher access to otherwise off-limits genetic information and tests? One of the most striking features of the proposed recommendation is the tremendous apparent breadth of its dual infringement exemptions. As written, the use and sale of a patented test for “patient care purposes” would be exempt, as would all uses of patent-protected genes for “research.” Patient care and research are broad, nebulous categories that, if interpreted generously, could cover every reasonably likely use for many patent-protected genes and related tests. We look forward to seeing how the final report elaborates on this issue, but it is not surprising that this recommendation would be the focus of controversy.

How a Bill Becomes Law. Still, the controversy may be somewhat academic, because it is hard to imagine it becoming law any time soon. As Schoolhouse Rock! taught us, it’s not easy to move from bill to law. No surprise, then, that the trip from a Departmental Secretary’s Advisory Committee recommendation to a law was too tortuous to ever find its way into a three minute educational animation.

Moving the proposal through HHS and, ultimately, Congress would require substantial elaboration. It’s nearly inconceivable that such elaboration would not involve narrowing the situations in which otherwise infringing activities would be considered exempt. Any Congressional action would be followed by further refinement as courts begin to apply the new infringement exemption (which would presumably show up in Section 271 of the U.S. Patent Act, near the Hatch-Waxman patent exemption that successfully accelerated the development of generic pharmaceuticals).

While the SACGHS recommendation will likely be years in producing any actual changes in patent law, if indeed it ever does, there are several pieces of ongoing litigation that bear directly on the future – and legality – of gene patents, as well as biotechnology patents more broadly. The oft-discussed Myriad litigation, as well as the less-familiar-to-mainstream-media but arguably more important Bilski and Prometheus cases that may define the contours of permissible personalized medicine patents, will almost certainly yield important developments far sooner than anything arising out of the SACGHS report or recommendations.

Of course, the SACGHS report and recommendations still matter, which is why BIO and others have been so quick to object. The SACGHS findings represent an important statement from a diverse and non-partisan advisory body that the current scope of gene patents interferes with both research and patient care. Although we should not expect to see this specific SACGHS recommendation become law in anything resembling the near future, it may play in an important role in the ongoing review of the appropriateness and limitations of gene patents.

Want to read more? Patent Docs has a detailed review of the BIO-led Friday press conference, along with a link to a podcast of the entire press conference.

Biologics 101. In short, here is the problem: typical pharmaceutical drugs (“small molecule drugs”) are chemically synthesized, and once the brand-name manufacturer’s exclusive patent rights expire, generic manufacturers are free to obtain approvals under abbreviated procedures, Generic manufacturers are generally not required to submit preclinical (animal) and clinical (human) data along with these Abbreviated New Drug Applications (ANDAs), thereby avoiding the huge expenses associated with developing new pharmaceuticals. But this route is only open to the generic manufacturer if it can prove that the generic version of the drug contains an identical replica of the drug’s active ingredient. Under the Hatch-Waxman Act of 1984, the Food and Drug Administration (FDA) may approve a generic version of a drug if the generic contains the same active ingredient as the original, shows bioequivalence to the original, and is demonstrated to be manufactured according to appropriate practices. Once these are shown, the generic is allowed to piggyback on the designation of the original drug as safe and effective.

A parallel short-cut procedure for biologic follow-ons is far more problematic. Biologics are complex molecular medicines that can be composed of sugars, proteins, nucleic acids, or complex combinations of these substances. They may also be organic, living entities like cells or tissues, or they may be manufactured in living organisms. (Well-known early examples of the latter include insulin, human growth hormone, interferons, and erythropoietin produced by recombinant DNA technology.) As a result, the biological drug cannot be objectively characterized the way typical pharmaceutical drugs can be. The composition of biological products is typically dependent on distinct manufacturing processes, and may be highly sensitive to changes in those processes. As a consequence, it is extremely difficult to prove that a follow-on or generic version of a biological is identical to a brand-name version that has undergone the clinical testing necessary for FDA approval.

As our ability to produce biological drugs becomes more sophisticated, they also become more expensive. According to a recent Federal Trade Commission report, treatment with the breast cancer biologic Herceptin (trastuzumab) can cost almost $50,000 per year, and the total annual consumer bill for biologics exceeds $40 billion. But those costs are not arbitrary: a report (pdf) by the Biotechnology Industry Organization (BIO) in 2007 estimated that the biological drug development process takes eight years and costs over $1.2 billion. The field of follow-on biologics is every bit as much in need of streamlining and cost-saving as traditional pharmaceuticals, if not more.

The streamlining process raises several questions. The first is technical: is it possible to streamline the process for approving follow-on biologics to ensure safety and efficacy, even though the follow-on cannot be demonstrated to be identical to the drug it is imitating? To put it another way, does it make sense to allow a follow-on (but non-identical) biological drug to rely on the clinical trials of the original? The second is economic: can we give consumers the benefit of lower follow-on costs while also protecting the interests—and the incentives—for the innovators who develop the drugs in the first place?

Biosimilarity. On the technical question, the European Medicines Agency permits the expedited approval of biosimilars after a thorough demonstration of the “comparability” of the “similar” product (pdf) to an existing approved product. More than ten biosimilars have already been approved in Europe. Japan is developing a regulatory framework of its own and has already approved its first follow-on biologic (Somatropin, a generic version of recombinant human growth hormone produced by a Novartis subsidiary). Legislation now pending in the United States Congress contemplates a parallel approach. According to H.R. 3962, the health care reform bill recently passed by the House (see below for details) “biosimilarity” to a reference biologic means:

(A) that the biological product is highly similar to the reference product notwithstanding minor differences in clinically inactive components; and

(B) there are no clinically meaningful differences between the biological product and the reference product in terms of the safety, purity, and potency of the product.

The House bill provides for an abbreviated licensure application for biologics that demonstrates “that the biological product is highly similar to the reference product notwithstanding minor differences in clinically inactive components”; that the follow-on and reference product “utilize the same mechanism or mechanisms of action for the condition or conditions of use prescribed, recommended, or suggested”; that “the condition or conditions of use prescribed, recommended, or suggested in the labeling proposed for the biological product have been previously approved for the reference product”; that “the route of administration, the dosage form, and the strength of the biological product are the same as those of the reference product”; and that “the facility in which the biological product is manufactured, processed, packed, or held meets standards designed to assure that the biological product continues to be safe, pure, and potent.”

Most of the competing legislative proposals, including Congressman Henry Waxman’s proposal (H.R. 1427), define “biosimilarity” using similar or identical criteria.

Exclusivity. While some continue to question the ability to effectively establish biosimilarity, and the implications for patient safety, the major locus of debate surrounding the various follow-on biologics legislative proposals centers on the economic question. One way that we reward innovators is by granting patents on new, useful, and non-obvious processes, machines, manufactures, and compositions of matter. Drugs, including biologics, can fall within these categories of patentable subject matter, as can the processes used to make them. A patent confers the right to exclude others from making, using, or selling the patented invention for a period of twenty years from the application date. In the case of pharmaceuticals, the life of the patent can be extended for up to five years to account for pre-marketing regulatory approval delays, but the total term of the patent cannot exceed 14 years after regulatory approval.

Many in the pharmaceutical community believe that this is not enough of an incentive to make the massive investments that pioneer biologic drugs require. Not all biologic processes and products will meet the stringent requirements of novelty and nonobviousness. Moreover, the patent law’s written description requirements may narrow the scope of patent claims, allowing makers of follow-on biologics to use variant sequences or methods that avoid the original biologic’s patents. In addition, many significant biologic patents will expire in the next few years.

The proposed solution is a period of post-FDA-approval market exclusivity (sometimes called data exclusivity) for original biologics that will operate independent of any applicable patent protection. The FDA would be prohibited from approving a follow-on during the exclusivity period. Under Congressman Waxman’s original proposal (H.R. 1427, proposed last March and tracked by S. 726), the data exclusivity period would have been five years. A second bill (H.R. 1548) introduced by Representative Anna Eshoo of Silicon Valley set the period at twelve years. Both proposals were less than the fourteen years of exclusivity supported by BIO (pdf). Ultimately, it was the Eshoo bill that was incorporated into the health care reform package (H.R. 3962, the proposed “Affordable Health Care for America Act”) and passed by the House on November 7th. Similar wrangling has occurred in the Senate, with a bill co-sponsored by Senator Orrin Hatch, which also provides for twelve years of data exclusivity, edging out a competing proposal by Senator Sherrod Brown (providing for only five years of exclusivity) in the Senate’s own version of the health care reform bill (H.R. 3590, the proposed “Patient Protection and Affordable Care Act”).

All kinds of protagonists continue to assert widely divergent views, and Patent Docs has done an excellent job keeping an eye on the back and forth (see their two most recent roundups here and here). As one might expect, groups aligned with the interests of original biologics manufacturers, including BIO and venture capitalists, generally support the longer exclusivity period, while groups aligned with generic manufacturers, including the Generic Pharmaceutical Association, tend to support a much shorter period of exclusivity (or no exclusivity at all, the approach favored by the FTC in a report issued this summer). The reaction from patient advocacy groups and the press has been vocal but mixed, with sufficient criticism of the twelve-year period that Representative Eshoo has felt compelled to publicly defend her proposal on several occasions.

So who is right? This is a classic Three Bears problem: is a particular period too short to create development incentives, too long from the consumer perspective, or just right? Not surprisingly, there is no clear answer. For instance, Duke economist Henry Grabowski generated attention – and provided a powerful piece of data for those in favor of a longer exclusivity period – with his 2007 white paper (pdf) that claimed that the breakeven lifetime for biologics was between 12.9 and 16.2 years, suggesting that the current twelve year proposal is either just right or maybe not long enough. On the other hand, it has been pointed out that Grabowski’s research is funded by the powerful Pharmaceutical Research and Manufacturers of America (PhRMA) industry lobbying group. In a recent Wall Street Journal opinion piece, a European legislator argued that a shorter period in the U.S. would be a gift to Europe that “would mean more investment dollars, more jobs, and more research facilities on this side of the Atlantic.”

The Stakes Are High. The risk in making the exclusivity period too short, or eliminating it entirely—with apologies for mixing fairy tale metaphors—is killing the goose that lays the golden eggs, in this case the biologic innovators and those who assume the substantial financial risks associated with developing original biologics. On the other side of the coin, of course, is concern that extended exclusivity—including the possibility that current proposals would permit biologics manufacturers to receive exclusivity substantially longer than the baseline twelve years through a process known as “evergreening,” in which slight changes to existing drugs results in additional exclusivity—will dampen competition, keeping prices for biologics artificially high and drugs out of the hands of patients that need them.

Is twelve years of exclusivity the right length of time to allow companies and investors to recoup their costs? Would a shorter data exclusivity period (or even the proposed twelve year period) result in the original biologic pipeline drying up or shifting overseas? Are there less-intrusive ways of protecting consumers from exorbitant prices—government subsidies, for instance—that would not impair innovation incentives?

The marketplace for biologics is already north of $100 billion and its expected expansion, including the seemingly inevitable introduction of biosimilars, means that the stakes are high for Congress, biotechnology companies, patients and investors. A recent PricewaterhouseCoopers report—Biotech: Lifting Big Pharma’s prospects with biologics (pdf)—noted that virtually every major drug company in the U.S. and Europe is involved in some fashion with biologics and estimated that the market for biosimilars could reach $15 billion by 2013. But for that to happen—at least in the United States—Congress must first act. At the moment, it remains the Senate’s move.

The Justices may not be reading the GLR (or are they?), but they are well aware of Bilksi’s potential implications. In argument, Justice Sotomayor commented that if the Court upheld the Federal Circuit’s Bilski decision she would “have no idea what the limits of that ruling will impose in the computer world, in the biomedical,” but expressed concern that upholding Bilski’s machine or transformation test could “destroy industries” by “shoe-horning technologies that might be different.” And Justice Ginsburg, while remarking that Bilski “could be decided without making any bold steps,” conceded that “we know that things that we haven’t yet contemplated may be around the corner, and when they happen, we will deal with them.”

So what is just “around the corner” when it comes to biotechnology patents? In addition to actually deciding Bilski (which is unlikely to happen until 2010), the Supreme Court must also decide whether to grant certiorari in Prometheus Laboratories, a case in which the Federal Circuit extended Bilski’s machine or transformation test to medical methods patents. And of course there’s the Myriad Genetics / ACLU gene patent litigation, where summary judgment motions are scheduled to be heard in Federal court in New York on December 11th.

As always, keep your dials tuned to the GLR for regular updates on all of these cases as they progress.

Want to read more? More on the Bilski oral arguments and other GLR biotechnology patent coverage:

• Supreme Court Bilski Argument (Patent Docs)
• Analysis: The “Lorenzo Jones” case emerges (ScotusBlog)
• Bilski Oral Argument (Blawg IT)
• A Court Ruling in the ACLU v. Myriad Gene Patent Litigation, But We’re Still A Long Way From A Gene Patent Resolution (Genomics Law Report)
• Biotech Patents under Attack from Two More Angles (Genomics Law Report)
• Prometheus and Medical Method Patents (Genomics Law Report)
• Whole-Genome Sequencing and Gene Patents Coexist (For Now) (Genomics Law Report)

Judge Sweet ruled against the defendants in each of several separate motions to dismiss, including lack of subject matter jurisdiction, lack of personal jurisdiction and failure to state a claim. The always-comprehensive Patent Docs blog has a complete summary of yesterday’s ruling—as well as the court’s full opinion (pdf)—but there’s at least one part of the ruling that’s worth highlighting here.

In denying the USPTO’s motion to dismiss, in which the government alleged that the plaintiffs lacked subject matter jurisdiction, the court concluded as follows:

While the USPTO notes the existence of a comprehensive scheme to redress violations of the Patent Act, it cites to no comparable statutory scheme providing a remedy for persons who complain about the constitutionality of patents issued by the USPTO and/or the policies and practices of the USPTO. . . . In such circumstances, the Supreme Court has held that Congress did not intend to preclude enforcement of federal rights through private actions. . . . Indeed, even when Congress has created a statutory remedy, if that remedy is not coextensive with the remedy provided by the Constitution, plaintiffs may still bring a separate action to enforce the Constitution.

The novel circumstances presented by this action against the USPTO, the absence of any remedy provided in the Patent Act, and the important constitutional rights the Plaintiffs seek to vindicate establish subject matter jurisdiction over the Plaintiffs’ claim against the USPTO.

Patent Docs concludes that “. . . in keeping the USPTO in the case, the judge left the government with sufficient skin in the game to motivate a spirited defense of gene parent [sic]  as appropriate public policy. . . .” However, as we have noted previously on the GLR, there is already substantial internal debate within the government’s patent policymaking bodies, including the Secretary’s Advisory Committee on Genetics, Health and Society (SACGHS), about whether or not gene patents make for appropriate public policy.

Despite the court’s ruling, the future of gene patents is no clearer today than yesterday. And before 2009 is through we expect to see additional rulings from the district court – the motions for summary judgment filed in August still await a ruling – along with a final report on gene patent recommendations from the SACGHS gene patent taskforce. The GLR will continue to cover these and other relevant developments as they unfold.

To read more about the ACLU / Myriad litigation and the continuing uncertainty surrounding gene patents please see:

• The ACLU v. Myriad Genetics Suit: Legitimate Challenge or Publicity Stunt?
• ACLU v. Myriad Genetics: Defendants Move to Dismiss
• Whole-Genome Sequencing and Gene Patents Coexist (For Now)
• ACLU Moves for Summary Judgment in Myriad Patent Case
• NCI’s New BRCA1 Test: Broader Utility and Another Challenge to Traditional Genetic Tests
• Biotech Patents Under Attack from Two More Angles