On May 11, 2016, a new federal trade secrets law called the Defend Trade Secrets Act (DTSA) took effect. Its primary impact is to allow the victims of trade secret misappropriation to sue in federal court. It also provides some new civil remedies that exceed what is usually available under state law. The DTSA will be slotted into the U.S. Criminal Code (chapter 90 of Title 18), which already makes industrial espionage and trade secret theft a federal crime. In terms of what companies have to do to comply, the answer is almost nothing—the sole exception being a change in future employee contracts that is discussed below. In this post I’ll describe and analyze the new law and offer some thoughts about its potential impact on the life sciences industry.
Until now, civil trade secret protection has been entirely a matter of state law. The law is very consistent from state to state, as 47 states have enacted the Uniform Trade Secrets Act (UTSA). The exceptions are New York, Massachusetts, and North Carolina, though the North Carolina statute is generally similar to UTSA. Enforcement actions must usually be brought in state court, though federal courts can take jurisdiction if the plaintiff and defendant are citizens of different states. Even then, however, the federal court must apply state law in deciding the case.
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A day after Amgen purchased deCODE Genetics for a whopping $415M, in part for access to its unique data (as described in yesterday’s post), 23andMe announced today it had raised $50M in new financing as part of a concerted effort to grow its genetic database to one million customers.
Both events underscore the increasing importance of data to the business of personalized medicine. In addition, today’s news suggests that 23andMe’s efforts to refocus the company to maximize its most valuable asset – “an engaged, enthusiastic and growing community of customers-qua-research-participants” who supply the raw genetic, phenotypic and other material for 23andMe’s expanding database – continue apace.
Either way, in securing another massive round of financing and lowering its price to $99, the last company standing of the direct-to-consumer (DTC) genetic testing pioneers appears unlikely to be joining deCODE, Navigenics and others in abandoning its consumer-facing approach any time soon.
The big biotech news of the day is the $415 million sale of deCODE Genetics to Amgen. Coverage of the deal is everywhere, including a typically excellent overview from Matthew Herper of Forbes.
We’ve written extensively about deCODE here at the Genomics Law Report over the years, including the company’s well-publicized bankruptcy and privatization two years ago. That transaction left plenty of deCODE shareholders out in the cold, and those shareholders aren’t likely to be feeling any better about things this winter.
Two years ago, questions were raised regarding how the newly private deCODE would utilize one of its most noteworthy assets: it’s database of genetic and other personal health information about Icelandic citizens. Those questions are likely to resurface now, as Amgen seeks to extract $415 million worth of a company that it bought – at least according to one of deCODE’s owners – in large part for access to deCODE’s data. Expect the usual assurances, but remember that those assurances are only as strong as the paper – and legal framework – upon which they are premised.
Last week, personal genetics company 23andMe announced that it had formally delivered the first round of documentation to the U.S. Food and Drug Administration (FDA) in an attempt to receive 510(k) clearance for its consumer product.
23andMe declared itself “first in the [ direct-to-consumer (DTC) genetic testing] industry to announce it is working towards FDA clearance.” That first followed another first for the company earlier in the summer: 23andMe’s first patent, which covers a method of predicting susceptibility to Parkinson’s Disease.
I sat down last week with The Burrill Report to discuss 23andMe’s recent activities and their implications for the future of DTC genetic testing and personalized medicine. You can listen to the complete podcast here.
Editor’s Note: This was first published at Genomes Unzipped and was co-authored by Daniel MacArthur and Luke Jostins. Genomes Unzipped received 12 free kits from Lumigenix for review purposes, and Dan Vorhaus has provided legal advice to the company. Genomes Unzipped plans to release a full review of the Lumigenix service in early July.
Last month three direct-to-consumer (DTC) genetic testing companies opened their mailboxes to find a slightly ominous but entirely expected letter from the FDA. The three recipients (Lumigenix, American International Biotechnology Services and Precision Quality DNA) received substantively equivalent letters, with the FDA warning each company that its genetic testing service “appears to meet the definition of a device as that term is defined in section 201(h) of the Federal Food Drug and Cosmetic Act,” and that the agency would like to meet with company representatives “to discuss whether the service [they] are promoting requires review by FDA and what information [they] would need to submit in order for [their] product to be legally marketed.”
Updating the DTC Debate: Trial by Press Release, More FDA Letters, the Problem of Pleiotropy and New RUO Guidance
Later today I will join several colleagues here in Chicago, IL at the American Society of Clinical Oncology (ASCO) annual meeting for a panel discussion on Direct-to-Consumer Genetic Testing for Cancer: What Physicians Need to Know (pdf). (Daniel MacArthur and Misha Angrist will not be on the panel, although each joined us in authoring the pre-conference paper.)
This will, I believe, mark direct-to-consumer (DTC) genetic testing’s formal debut at ASCO. It should also serve as another reminder that, despite its relatively small numbers (both in terms of dollars and customers), DTC genetic testing continues to exert an outsized influence when it comes to conversations about the future of genomic medicine. This is particularly true when the discussion turns to appropriate policy and regulatory oversight.
In advance of ASCO, here are several items of interest from the past few weeks in DTC genetic testing.
Last month, the National Institute on Aging and the Alzheimer’s Association issued new diagnostic guidelines that divide Alzheimer’s disease into three distinct stages, reflecting recent evidence that the disease begins to affect the brain years before symptoms become evident. The expanded definition of Alzheimer’s includes two new phases of the disease:
(1) presymptomatic and (2) mildly symptomatic but pre-dementia, along with (3) dementia caused by Alzheimer’s. This reflects current thinking that Alzheimer’s begins creating distinct and measurable changes in the brains of affected people years, perhaps decades, before memory and thinking symptoms are noticeable.
At least for the moment, the new guidelines are intended to be used only with patients enrolled in clinical trials, making them more of a work in progress and not a standardized method of determining disease onset in Alzheimer’s patients.
Federal Alzheimer’s Activity. The revisions to the diagnostic guidelines – the first in nearly three decades – indicate how far scientists have come in understanding the disease and are reflected in new legislation introduced in both the Senate (S.738) and the House (H.R.1386) that would expand Medicare coverage of Alzheimer’s to cover “comprehensive Alzheimer’s disease diagnosis and services,” including for individuals who fall under stage (1) or (2) of the new guidelines.
Social media – including Facebook, Twitter and other social networking platforms – are widely credited with fundamentally altering the nature of political discourse and, in some instances, credited as catalysts of political revolution. But social media’s ability to affect change need not be limited to politics, as recent developments in the arena of personalized medicine and consumer genomics continue to demonstrate.
Social Media as a Research Tool. Last month, PatientsLikeMe, an online patient community, made headlines with a study published in Nature Biotechnology in which the company analyzed self-reported data from nearly 600 patients to demonstrate that the use of lithium had no effect on the progression of amyotrophic lateral sclerosis (ALS, also known as Lou Gehrig’s disease).
The study’s findings are valuable for ALS patients, who frequently experiment with unproven treatments in an attempt to slow progression of the degenerative disease for which there is not yet an effective therapy. But the long-term impact of the study’s methodological approach, which suggests “that data reported by patients over the internet may be useful for accelerating clinical discovery and evaluating the effectiveness of drugs already in use,” should be felt far beyond the ALS community.
With so many developments at the intersection of genomics and the law, there are often a variety of interesting stories that, for one reason or another, don’t find their way into a full-length posting on the Genomics Law Report. Here we recap several recent key developments and, at bottom, round up all of the recent tweets from @genomicslawyer.
The Continuing Threat of Decreased Science Funding. At least for the moment, the two houses of Congress appear, finally, to be edging toward a budget compromise that would bridge the $51 billion gap between the House bill (which passed at the beginning of March) and the most recent Senate proposal. That’s a good thing, given that the current continuing resolution is set to expire on April 8.
Nevertheless, it seems increasingly clear that federal science funding is unlikely to increase from its fiscal year 2010 levels, and funding almost certainly will not meet the targets President Obama set in his FY 2012 budget proposal.
Earlier this month an FDA advisory panel met for two days to consider a range of issues pertaining to clinical direct-to-consumer (DTC) genetic testing. The non-voting advisory panel’s discussion (pdf), including whether certain genetic tests or categories of tests should be made available only through qualified healthcare professionals, sparked considerable controversy (see here for a collection of links) and confusion.
In response, the FDA agreed to reopen the public docket in order to receive additional public input on scientific issues concerning DTC genetic tests. The docket will reopen tomorrow and will remain open through May 2nd (pdf).
For those with an interest in the FDA’s oversight of DTC genetic testing, this is the first of several opportunities to be heard. In addition to the newly reopened public docket, the FDA has also announced its next “town hall discussion” with top officials from the Center for Devices and Radiological Health (CDRH), the FDA center responsible for the regulation of medical devices, including genetic tests. Both CDRH director Jeffrey Shuren and OIVD Director Alberto Gutierrez are scheduled to participate in a public question-and-answer session on May 5th in Orlando, FL. An additional town hall discussion is slated for San Francisco, CA later in the year. The Genomics Law Report will post additional details for that meeting as they are made available.