Monday, August 1, 2011

Appeals court says genes can be patented; More legal battles likely

By Lori Valigra, Mass High Tech correspondent

A federal appeals court on Friday partially reversed a controversial lower court decision and ruled by 2-1 that companies can patent genes, but that they cannot patent methods to compare the gene sequences.

This is the latest chapter in a case that has captivated the biotechnology industry, including in Massachusetts, where companies including Alnylum Pharmaceuticals Inc. and Novartis Corp., both with offices in Cambridge, filed amicus curiae “friend of the court” briefs. But the case is likely to be appealed, lawyers said.

The Federal Circuit Court of Appeals ruled that Myriad Genetics Inc. of Salt Lake City, Utah, was entitled to patents on the BRCA-1 and BRCA-2 genes, which are used to predict whether women have a higher risk of getting breast or ovarian cancer.

“This is a very good result for the biotech industry,” said Erik Belt, an IP attorney at McCarter & English in Boston, who filed an amicus curiae brief on behalf of the Boston Patent Law Association in support of Myriad Genetics. “The decision should be seen as promoting and protecting innovation and research in the biotech and pharmaceutical industries and the development of new life-saving technologies.” Attorneys who filed amicus briefs said that the lower court’s ruling would have had a wide-ranging negative impact on biotechnology, diagnostics and vaccines companies in Massachusetts.

Last summer, New York U.S. District Judge Robert Sweet issued an injunction against Myriad that invalidated its two patents related to breast cancer that are used with its diagnostic test for cancer. The plaintiffs in the case, researchers and breast cancer patients led by the American Civil Liberties Union (ACLU), successfully argued that the patents were illegal under patent law and under the U.S. Constitution. The judge ruled that the patents cover parts of the natural world and are therefore not patentable. There were two other named defendants in the case: the University of Utah, and the U.S. Patent and Trademark Office.

The appeals court reversed that decision, saying that Myriad’s claims that “isolated” DNA molecules do not exist in nature and are eligible to be patented. However, the appeals court did agree with the district court’s decision that Myriad’s methods of “comparing” or “analyzing” DNA sequences are not patentable, because they include no transformative steps and involve abstract, mental steps.

Commenting on the rulings, Myriad’s President and CEO Peter Meldrum said, “This decision is in the best interests of the agriculture, biotechnology and pharmaceutical industries, as well as the hundreds of millions of people whose lives are bettered by the products these industries develop based on the promise of strong patent protection.”

Belt said he expects appeals on both rulings, most likely first going back to the federal circuit court and either asking for a rehearing among the three judges who ruled on the case or among the entire federal circuit judges. If the case is not resolved then, it could make its way to the Supreme Court.

“This is one battle, but not the war,” Belt said. “My guess is that there will be a lot more legal shouting before this is over, and another year’s worth of legal wrangling. One side or another, or both, will appeal.”

The ACLU said the original lawsuit called into question the validity of patents now held on about 4,000 human genes. “[This] ruling is a blow to the idea that patent law cannot impede the free flow of ideas in scientific research,” Chris Hansen, a staff attorney with the ACLU Speech, Privacy and Technology Project, said in a statement. “Human DNA is not a manufactured invention, but a natural entity like air or water. To claim ownership of genetic information is to unnecessarily block the free exchange of ideas.”

The lawsuit against Myriad and the University of Utah Research Foundation, which hold the patents on the genes, charged that the challenged patents are illegal and restrict both scientific research and patients’ access to medical care, and that patents on human genes violate the First Amendment and patent law because genes are “products of nature.”

In a dissenting opinion on the case, Judge William C. Bryson seemed to agree, noting that broad claims to genetic material present a significant obstacle to innovation in genetic medicine. “While Myriad has emphasized the biotechnology industry’s need of patent protection to encourage and reward research in this difficult and important field, there is another side to the coin. Broad claims to genetic material present a significant obstacle to the next generation of innovation in genetic medicine — multiplex tests and whole-genome sequencing. New technologies are being developed to sequence many genes or even an entire human genome rapidly, but firms developing those technologies are encountering a thicket of patents.”

Attorney Belt disagreed with Bryson’s opinion. “It’s important to maintain strong patent rights so companies can commercialize on them.”

Belt pointed to a similar case that the biotechnology and life sciences industries will also be watching carefully – that of Mayo Medical Laboratories’ appeal of a lower court’s decision that upheld two diagnostic method patents held by Prometheus Laboratories Inc. of San Diego, Calif. The Supreme Court has agreed to hear the case, which could also have a wide impact on gene patenting and other intellectual property issues. The high court will consider whether two patents on methods held by Prometheus Laboratories are claiming natural phenomena, and thus cannot be protected by patent. According to Mayo’s website, Prometheus sued Mayo Clinic in June 2004 in California’s federal district court, alleging that a planned Mayo Medical Laboratories diagnostic test infringed two Prometheus patents. Mayo has maintained that those patents are invalid and unenforceable. In March 2008 the District Court dismissed the lawsuit and held that the patents are invalid because their claims wholly preempt all uses of a natural phenomenon. The Federal Circuit Court of Appeals has since reversed the District Court, and the Supreme Court has agreed to review the Circuit Court’s decision. Belt expects the case to be argued next spring.