Archive for the ‘Intellectual Property’ Category

Reading Myriad Genetics While Waiting For Bilski.

Why is this molecule different from all other molecules?

By Gerry J. Elman¹

As I write on April 29, 2010, the U.S. Supreme Court hasn’t yet issued its anxiously-awaited decision in the Bilski² case. This case is to determine the whether a particular business-related method is outside the scope of subject matter that is potentially capable of protection by the claims of a U.S. patent. The wider implications of the case are expected to be enormous.

The Framers of the Constitution understood the importance of innovation to the economy of their fledgling nation in the New World. They provided that Congress would have the power: “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”³ Congress has implemented this provision by enacting copyright and patent laws.

The patent law provides in section 101 that:

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.⁴ [Emphasis added.]

This section of the statute implies a threshold test that must be satisfied before proceeding to inquiries raised in other sections of the law. We typically refer to it for short as the requirement for statutory subject matter, that is, that the claimed subject matter defining the invention or discovery fit into one of the four categories listed in the statute: process, machine, manufacture, or composition of matter.

On March 29th, a month ago, federal district court judge Robert W. Sweet issued a summary judgment decision in a highly publicized⁵ case brought by a coalition of plaintiffs, primarily groups of medical specialists and their patients.⁶ It sought to establish the essential unpatentability of claims practised by Myriad Genetics relating to tests for various genetic abnormalities associated with an enhanced likelihood of developing breast cancer. Following extensive briefing by the parties and numerous amici curiae, Judge Sweet held that claims to certain isolated and purified genes and to certain test methods seeking to detect those genes in a human patient are not statutory subject matter under U.S. patent law.

With particular regard to inventions in the field of biotechnology, the Supreme Court was presented in 1980 with the question of whether a novel and nonobvious microorganism was statutory subject matter for a patent. In the case of Chakrabarty,⁷ Mr. Justice Burger wrote for a majority of the Court that “We have … cautioned that courts ‘should not read into the patent laws limitations and conditions which the legislature has not expressed.’”

Regarding the statute itself, he wrote:

In choosing such expansive terms as “manufacture” and “composition of matter,” modified by the comprehensive “any,” Congress plainly contemplated that the patent laws would be given wide scope.

Concluding that Congress had intended patentable subject matter to “include anything under the sun that is made by man,” the Court held that:

Judged in this light, [Chakrabarty]‘s micro-organism plainly qualifies as patentable subject matter. His claim is … to a nonnaturally occurring manufacture or composition of matter—a product of human ingenuity.

Such a decision begged the question of whether the organism was a “manufacture” or a “composition of matter,” and implied that even if it was something that overlaps the two expressions, the novel organism was still patentable subject matter.

Based on that holding, it should be a slam dunk to characterize a polynucleotide – clearly within the statutory recitation as a composition of matter – as meeting the statutory test for patentable subject matter, as long as that substance hadn’t previously existed in the form recited in the patent claim under consideration.

Yet Judge Sweet had been persuaded by plaintiffs to hold otherwise. How come? The decision includes a scholarly review of the case law, including a skeptical consideration of the 1911 district court decision in Parke-Davis Co. v. H.K. Mulford Co..⁸ He then wrote:

In sum, the clear line of Supreme Court precedent and accompanying lower court authorities, stretching from American Wood-Paper through to Chakrabarty, establishes that purification of a product of nature, without more, cannot transform it into patentable subject matter. Rather, the purified product must possess “markedly different characteristics” in order to satisfy the requirements of § 101.

Judge Sweet’s decision proceeds to consider whether a purified polynucleotide could meet this requirement, as follows:

The central premise of Myriad’s argument that the claimed DNA is “markedly different” from DNA found in nature is the assertion that “[i]solated DNA molecules should be treated no differently than other chemical compounds for patent eligibility,” and that the alleged “difference in the structural and functional properties of isolated DNA” render the claimed DNA patentable subject matter [citations omitted].

Myriad’s focus on the chemical nature of DNA, however, fails to acknowledge the unique characteristics of DNA that differentiate it from other chemical compounds. . . .

DNA represents the physical embodiment of biological information, distinct in its essential characteristics from any other chemical found in nature [emphasis added]. It is concluded that DNA’s existence in an “isolated” form alters neither this fundamental quality of DNA as it exists in the body nor the information it encodes. Therefore, the patents at issue directed to “isolated DNA” containing sequences found in nature are unsustainable as a matter of law and are deemed unpatentable subject matter under 35 U.S.C. § 101.

The decision latches onto a characteristic of DNA, seeking to distinguish it from other biologically active molecules, stating:

This informational quality is unique among the chemical compounds found in our bodies, and it would be erroneous to view DNA as “no different” than other chemicals previously the subject of patents [emphasis added].

Myriad and many of the amici suggest that the invalidation of the patents-in-suit will result in the decimation of the biotechnology industry. See, e.g., Myriad Br. … (suggesting that a finding that DNA is unpatentable subject matter will invalidate patents to important chemical compounds such as the anticancer drug Taxol (paclitaxel) and leave “little to nothing” of the United States biotechnology industry). The conclusions reached in this opinion concerning the subject matter patentability of isolated DNA, however, are based on the unique properties of DNA that distinguish it from all other chemicals and biological molecules found in nature. [This is ftn. 51, emphasis added].

In light of DNA’s unique qualities as a physical embodiment of information, none of the structural and functional differences cited by Myriad between native BRCA1/2 DNA and the isolated BRCA1/2 DNA claimed in the patents-in-suit render the claimed DNA “markedly different.” This conclusion is driven by the overriding importance of DNA’s nucleotide sequence to both its natural biological function as well as the utility associated with DNA in its isolated form. [emphasis added].

Judge Sweet’s decision happened to precede by just a few hours my participation in a ceremonial meal at which Jews down through the ages have recounted the Exodus. Curiously, it seems to me that these confluent events have something else in common. That’s because the Passover Seder creates a night that is different from all other nights of the year. It is traditional for a youngster to recite in Hebrew the Four Questions, starting with the words Mah nishtanah, ha-laylah ha-zeh, mi-kol ha-leylot, traditionally translated freely as: “Why is this night different from all other nights?”⁹

Judge Sweet’s decision holds that a polynucleotide which represents a human gene is not patentable subject matter. Never mind that the U.S. Patent Office agrees that it’s novel and useful and nonobvious. Judge Sweet holds that DNA is different from all other biologically active molecules such as adrenaline or Taxol, because DNA uniquely is a carrier of information.

But then, after the four cups of wine mandated by the Seder, I started to wonder: doesn’t the presence of biological information uniquely in DNA imply the existence of some Intelligence who’s intending to send the information or at least putting it into the DNA to be received or otherwise utilized?¹⁰ So wouldn’t that imply that the distinction that Judge Sweet draws between the claimed molecules, polynucleotides, and other biologically active molecules is due to a Source of information?

In contemplating this distinction between a molecule bearing biological information and all other molecules with a physiological function in the cell, it seemed to me that Judge Sweet’s opinion tacitly implies as an aspect of science the concept of Intelligent Design.¹¹

Yet as a resident of Pennsylvania and former public servant of the Commonwealth, I was familiar with the federal case in Harrisburg that had settled, seemingly once and for all after a lengthy trial with eminent fact witnesses, that “Intelligent Design is not science.”¹² But I did a double-take as I recalled who it was that had energetically spearheaded this successful challenge to the teaching of Intelligent Design as an alternative explanation of biological origins. Because it was none other than the folks who brought us this assault on the validity of gene patents …. the venerable ACLU, the American Civil Liberties Union.

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Footnotes

[1] Editor-in-Chief of Biotechnology Law Report and president of Elman Technology Law, P.C. (M.S. in Chemistry, Stanford) The opinions expressed herein should not be attributed to any client or other individual or entity. This article is scheduled to be published in Biotechnology Law Report, vol. 29, no. 2.

[2] Bilski v. Kappos, — U.S. —, reviewing the en banc decision of In re Bilski, 545 F.3d 943 (Fed. Cir. 2008). The Supreme Court argument was held November 9, 2009. see Wikipedia: In_re_Bilski

[3] U.S. Constitution, Article 1, section 8, clause 8.

[4] 35 U.S.C. § 101.

[5] See, e.g., PBS Newshour (April 2, 2010) and CBS 60 Minutes (April 4, 2010).

[6] Association for Molecular Pathology, et al. v. United States Patent and Trademark Office, et al., 1:2009cv04515, S.D.N.Y., filed May 12, 2009, decision on summary judgment March 29, 2010, as amended April 5, 2010 — F.Supp.2d —-, 2010 WL 1233416. The plaintiffs are: Association For Molecular Pathology, American College of Medical Genetics, American Society for Clinical Pathology, College of American Pathologists, Breast Cancer Action, Boston Women’s Health Book Collective and certain gene researchers and individuals potentially affected by breast cancer. The lawyers for plaintiffs are with the American Civil Liberties Union (ACLU) and the Public Patent Foundation. The named defendants are: United States Patent and Trademark Office (“USPTO”), Myriad Genetics, and the directors of the University of Utah Research Foundation. The case involves U.S. Patents 5,747,282; 5,693,473; 5,709,999; 5,710,001; 5,753,441; 5,837,492; and 6,033,857, owned by Myriad Genetics or licensed to Myriad by the University of Utah Research Foundation or other universities. For further background see the articles I co-authored, Biotechnology Law Report, vol. 29, no. 1. at 23-27 and 29-31.

[7] Diamond v. Chakrabarty, 447 U.S. 303 (1980).

[8] Parke-Davis Co. v. H.K. Mulford Co., 189 F.2d 95 (S.D.N.Y. 1911). After an extensive dissertation on the subject, Judge Sweet took the opportunity to candidly state in ftn. 46: “Although Judge Hand once turned his back on the author of this opinion arguing before him on behalf of the Government, his opinion in Parke-Davis deserves careful review but brings to mind that oft repeated adage ‘Quote Learned, but follow Gus [Hand].’ This author, confronted by genomics and molecular biology, also emphatically empathizes with Judge Hand’s complaint in Parke-Davis about his lack of knowledge of the rudiments of chemistry.” [citations omitted]

[9] Wikipedia: Ma_Nishtana

[10] Tiger, tiger, burning bright. In the forests of the night, What immortal hand or eye. Could frame thy fearful symmetry? William Blake, The Tiger (1794).

[11] Compare the science fiction novel by Robert J. Sawyer, Calculating God (Tor 2000) with Richard Dawkins, The God Delusion (Houghton Mifflin Harcourt 2006) esp. ch. 4.

[12] Tammy Kitzmiller, et al. v. Dover Area School District, et al., 400 F. Supp. 2d 707 (Docket no. 4cv2688)(M.D. Pa. 2005). Wikipedia: Kitzmiller_v._Dover_Area_School_District

Celebrate World Intellectual Property Day with us!

For the past ten years, April 26th has been set aside to commemorate the value that intellectual property provides to the world economy and well-being. The day this year also marks the 40th anniversary of the effective date of the International Convention establishing the World Intellectual Property Organization (WIPO).

For posters on World IP Day from all over the world, visit the Image Gallery on the WIPO website.

Excerpt from transcript of April 2, 2010 PBS Newshour:

A major goal of modern health science has been to identify the links between our genes and disease, to assess risk, and to find treatments and cures. Over the last two decades, university researchers and a multibillion dollar biotech industry have expanded the study of the human genome and developed a working blueprint of human DNA that includes hereditary information stored on 23 pairs of chromosomes wrapped as double-helixes.

Companies have also filed patents on particular genes and the research connected with them. Roughly 40,000 patents are now held on about 20 percent of all human genes. Among those are patents owned by Myriad Genetics, a company based in Salt Lake City, for genes known as BRCA1 and BRCA2, the genes whose mutations have been linked to hereditary breast and ovarian cancers.

Myriad sells a test costing more than $3,000 that helps assess a woman’s risk for cancer. But a group of individuals and organizations challenged those patents in a lawsuit, arguing that, under the law, a so-called product of nature cannot be patented.

This week, a federal judge agreed with the plaintiffs in a ruling that could have a broad impact on future genetic research.

Here to discuss the case are Daniel Ravicher, executive director of the Public Patent Foundation at the Benjamin Cardozo School of law. The foundation was one of the plaintiffs in the case against Myriad Genetics. And Ken Chahine, a patent attorney and visiting professor of law at the University of Utah. He’s a former CEO of a biotech company, and filed an amicus brief on behalf of Myriad. . . .

Click the black bar with red text below to play the video or read the rest of the transcript.

by Scott Rylan Powell and Gerry J. Elman^†

In New York City on October 20, 2009, the American Civil Liberties Union  (“ACLU”) hosted a screening of In The Family, a documentary on the emotional turmoil experienced by people across the nation who carry certain mutations along the Breast Cancer 1 and 2 (“BRCA”) genes. Everyone has these genes, and as the name implies, the mutated forms are linked to an increased risk of breast cancer.  And certain specific mutations of these genes indicate a high probability of developing ovarian and/or prostate cancer. These types of cancer, after developing in one organ, are prone to spreading throughout the body and killing the host. 

The main focus of In The Family is that, once a woman learns that she carries any of the mutations, the only preventative step she can take is to have her breasts and ovaries surgically removed.  Understandably, the women interviewed in the documentary struggled with the prospect of voluntarily excising these organs before cancer had even struck.  Ones who chose the surgery had joined emotional support groups. Many of those who had chosen to forego surgery died after the cancer developed and spread throughout their bodies. All in all, the movie paints a gloomy picture, leaving the viewer desperately looking for a solution to end the trauma.

After the movie, the ACLU presented their solution: sue the U.S. Patent and Trademark Office, along with anyone associated with patents relating to the BRCA 1 and 2 genes. Representatives from the ACLU proudly announced that ACLU and Public Patent Foundation (“PubPat”)( lawyers, on behalf of a variety of plaintiffs including makers of home-brew genetic testing kits that infringe intellectual property rights, had already filed such a lawsuit.

If the connection between the problem and the proposed solution seems attenuated, that’s because it is. However, with gross oversimplification and some sleight-of-hand, the ACLU converted their emotionally-charged, if slightly-confounded, audience of laypeople into supporters of the ACLU/Pubpat’s lawsuit.

The Lawsuit

On May 12, 2009, lawyers for the ACLU and the Public Patent Foundation (“PubPat”), an organization affiliated with the Benjamin N. Cardozo School of Law, filed a federal lawsuit in the Southern District of New York against the U.S. Patent and Trademark Office, Myriad Genetics Inc., and directors of the University of Utah Research Foundation.[1] Myriad Genetics (“Myriad”), portrayed as the archetypal evil corporation in the propaganda issued by the ACLU and PubPat, is a practitioner of a patent-protected test used to determine whether a person carries certain  mutations of the breast cancer susceptibility genes.  A number of patents are at issue in the case: US 5,693,473; US 5,709,999; US 5,710,001; US 5,747,282; US 5,753,441; US 5,837,492; and US 6,033,857.  All of the patents are owned or co-owned by the University of Utah Research Foundation. Myriad is a co-owner of US 5,747,282 and is a licensee of the other patents.

Patents for Genes?

First some background: To provide a means for inventors to recover their research and development costs and to incentivize further innovation, Article I of United States Constitution grants patent holders a time-limited exclusive right to practice their invention.  When the founding fathers drafted the Constitution, inventions were primarily mechanisms. Accordingly, whether a given area of technology qualifies as patent-eligible subject matter is a question that repeatedly appears as science and engineering branch out into new fields.

Fast-forward to 1972, when, having developed an oil-eating bacterium that would be particularly useful for cleaning up oil spills at sea, a scientist at General Electric Company, Ananda Chakrabarty, applied for a patent with claims to the microorganism itself.  When the application was examined for patentability, Chakrabarty immediately encountered resistance at the U.S. Patent and Trademark Office (“PTO”).  The government rejected the notion that a man-made microorganism could be patent-eligible subject matter. That began a struggle starting at the PTO, winding its way through appellate-level venues, and reaching its conclusion at the U.S. Supreme Court in 1980, when Chakrabarty’s bacterium was finally deemed to be patent-eligible.[2] As a result, the doctrines of U.S. patent law were adjusted to recognize the patent-eligibility of biological entities generated through human ingenuity.

Such a change in perspective was timely, given that during the interim, molecular biologists had been hard at work developing improved techniques to splice together DNA fragments and arrive at previously-non-existent sequences.  In short, U.S. patent law was seen as recalibrated to accommodate and support the burgeoning field of biotechnology.

Man-Made Molecules or Products of Nature?

The case strikes at the validity of any patent claims to polynucleotide molecules embodying naturally occurring genetic sequences, though “isolated” through a man-made process. The ACLU/PubPat arguments obscure the latter aspect by repeatedly stating in their complaint and through widely distributed propaganda that the patent claims are drawn to subject matter that is purely a product of nature. Whether it is through a misunderstanding of the science and U.S. patent law, or through intentional misrepresentation, the ACLU/PubPat’s efforts threaten to pull the rug out from under an entire biotech industry that has invested heavily in intellectual property and which is relying on the U.S. patent system in order to recover costs attendant to innovation. Whatever the underlying reasons for the ACLU/PubPat’s joint efforts in this regard, would-be infringers of the patents are all too happy to join the bandwagon. Indeed, one maker of a home-brew test for the BRCA mutations spoke at the New York City film screening to express her outrage at receiving a cease-and-desist letter for infringing the patents.

The Right to Exclude after eBay v. MercExchange

Moreover, the thrust of the ACLU/PubPat’s case is misguided.  In 2006, the Supreme Court issued a decision in eBay Inc. v. MercExchange, L.L.C., which reinterpreted one of the fundamental principles of U.S. patent law.[3]  Prior to the decision, a patent was understood to give its owner an automatic ability to enjoin others from practicing the patented invention, absent exceptional circumstances. Indeed, the Patent Act states that “patents shall have the attributes of personal property,” including “the right to exclude others from making, using, offering for sale, or selling the invention.”[4]  The availability of an injunction against patent infringement differed from most other areas of federal law, where a four-factor test is utilized to carefully weigh the pros and cons of granting this extraordinary type of relief instead of money damages. The test requires the plaintiff to show (1) that it has suffered an irreparable injury; (2) that remedies available at law are inadequate to compensate for that injury; (3) that considering the balance of hardships between the plaintiff and defendant, a remedy in equity (such an injunction) is warranted; and (4) that the public interest would not be disserved by a permanent injunction.[5]

In the case of eBay v. MercExchange, this reinterpretation of patent law allowed eBay and its customers to continue using the “buy it now” feature of eBay’s online auction system, even though MercExchange owned a patent covering that functionality.

As a result of the Supreme Court’s holding that the same four-factor test also applies for injunctions against infringement of U.S. patents, the public interest is now a relevant consideration in whether a court would enjoin a patent infringer to altogether stop practicing the invention or instead hold that the infringer should just compensate the patent holder with money, rather as if it were a licensee of the patent.

The ACLU/PubPat lawyers justify their case by arguing that since a patent gives the patent holder the right to exclude all others from practicing the invention, members of the public are prevented from getting the test for BRCA mutations from anyone but Myriad. The lawyers argue that, in order for members of the public to have the option of getting a second opinion on whether their BRCA genes contain the mutations indicative of breast, ovarian, or prostate cancer, the patents must be deemed invalid.

Yet, since the day eBay v. MercExchange was decided, the public interest is a factor to be carefully weighed before a court grants a patent holder an injunction to prevent others from practicing an invention recited in a patent claim. If the goal is to ensure the availability of health care that includes widely available genetic tests, there is no need to challenge the patentability of molecules embodying isolated genetic sequences.  Instead, the same ends of enabling other entities to perform the BRCA gene tests could be achieved simply through licensing the patents to others.  And if as seems to be the case, the owners of the pertinent patents are unwilling to license them to others, the courts are now open to considering the public policy arguments that weigh in favor allowing others to pay monetary damages, equivalent in effect to licensing royalties, instead of enjoining others from performing the tests.

The Research Exception to Patent Infringement

Another assertion that the ACLU/PubPat lawyers make is that research that could lead to developments of cures for cancer resulting from mutations along the BRCA genes is stifled because the act of researching the genes would constitute infringement of the BRCA patent claims. However, U.S. patent law provides an exception to patent infringement for research and development efforts that could lead to such a cure. Title 35, section 271(e)(1) of the United States Code states, in pertinent part:

It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention … 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 Supreme Court visited this topic in the case of Merck KGaA v. Integra Lifesciences I, Ltd. and helped further define the metes and bounds of this statutory exception to patent infringement.[6] In that case, the Supreme Court said that (1) experimentation on drugs that are not ultimately the subject of an FDA submission or (2) use of patented compounds in experiments that are not ultimately submitted to the FDA can still fall within the protection of 35 U.S.C. §271(e)(1).[7]  In other words, if an entity, such as a research physician or hospital, is developing a drug that will cure or treat cancer caused by mutations along the BRCA genes, then it is reasonable to expect that entity will be submitting information about the drug to the FDA in the future. Correspondingly, the entity would be protected under 35 U.S.C. §271(e)(1) and free to use the isolated genetic sequences recited in the claims of the BRCA patents for research and experimentation.  According to Merck v. Integra Lifesciences, even if the experiments are not ultimately submitted to the FDA, perhaps because further testing revealed that the drug is ineffective, there is still no infringement.[8]

Accordingly, the ACLU/PubPat’s tearful assertion that research into treatments and cures for breast and ovarian cancer is inhibited by the BRCA patents has little merit.  Their tears are crocodile tears, unnecessarily shed but to gather support from lay people for their assault on the protections fostered by U.S. patent system.

The Claims in Question

 Perhaps the most glaring disconnect between the ACLU’s statements and reality is the nature of certain patent claims that the ACLU seek to invalidate. The ACLU argue that the patent claims in dispute fall outside the scope of statutory subject matter, defined in a 35 U.S.C. §101 as “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” The ACLU assert that the claims recite products of nature, a class that has been judicially recognized as falling outside the scope of statutory subject matter.[9]  A quick look at the challenged patent claims reveals that they are directed to isolated DNA sequences of BRCA. Isolation is a process that must be carried out by a person or machine. In other words, for an isolated sequence of BRCA to exist, there must be human intervention. As the Supreme Court said in Chakrabarty, “non-naturally occurring manufacture or composition of matter – a product of human ingenuity” is patent-eligible subject matter.[10] The claims in question, reproduced below, all recite “isolated” as a limitation, thereby excluding naturally occurring compositions of matter from their scope:
 

U.S. Patent 5,693,473

Claim 1: An isolated DNA comprising an altered BRCA1 DNA having at least one of the alterations set forth in Tables 12A, 14, 18 or 19 with the proviso that the alteration is not a deletion of four nucleotides corresponding to base numbers 4184-4187 in SEQ. ID. NO:1.

(b) a DNA having the nucleotide sequence set forth in SEQ ID NO:1 having an extra C at nucleotide position 5385;

U.S. Patent 5,747,282

Claim 1: An isolated DNA coding for a BRCA1 polypeptide, said polypeptide having the amino acid sequence set forth in SEQ ID NO:2.

Claim 2: The isolated DNA of claim 1, wherein said DNA has the nucleotide sequence set forth in SEQ ID NO:1.

(c) a DNA having the nucleotide sequence set forth in SEQ ID NO: 1 having G at nucleotide position 5443; and, (d) a DNA having the nucleotide sequence set forth in SEQ ID NO:1 having 11 base pairs at nucleotide positions 189-199 deleted.

Claim 5: An isolated DNA having at least 15 nucleotides of the DNA of claim 1.

Claim 6: An isolated DNA having at least 15 nucleotides of the DNA of claim 2.

Claim 7: An isolated DNA selected from the group consisting of:

(a) a DNA having the nucleotide sequence set forth in SEQ ID NO:1 having T at nucleotide position 4056;

U.S. Patent 5,837,492

Claim 1: An isolated DNA molecule coding for a BRCA2 polypeptide, said DNA molecule comprising a nucleic acid sequence encoding the amino acid sequence set forth in SEQ ID NO:2.

Claim 6: An isolated DNA molecule coding for a mutated form of the BRCA2 polypeptide set forth in SEQ ID NO:2, wherein said mutated form of the BRCA2 polypeptide is associated with susceptibility to cancer.

Claim 7: The isolated DNA molecule of claim 6, wherein the DNA molecule comprises a mutated nucleotide sequence set forth in SEQ ID NO:1.

The Bayh-Dole Act

As mentioned previously, the BRCA patents in dispute are owned in whole or in part by the University of Utah Research Foundation, with Myriad as a partial owner of one of them and a licensee of the remaining patents. In other words, even though the ACLU/PubPat lawyers portray Myriad Genetics as an evil corporation hoarding patents on naturally-occurring material, the reality is that the patents are by-and-large owned by the University of Utah, which is collecting fees from Myriad Genetics to practice the patents. The court complaint also briefly references the fact that the Trustees of the University of Pennsylvania have an ownership interest in two of the patents. To the lay person, it may seem odd that educational institutions, which on their face seem to support the free flow and sharing of knowledge, are actually building fences and toll-booths around the products of their research.

A patent portfolio can be a significant source of income for a university, biasing it towards a proprietary view of its research efforts instead of an open, socialistic approach. For example, the University of Utah Technology Commercialization Office reports that it received over $25 million in licensing income for 2008.[11] The MIT Technology Licensing Office states that granted 67 patent licenses and brought in $66.3 million in royalties in 2009.[12] In universities, the old model of 1) research, then 2) publish has been replaced by 1) research, 2) apply for patent, and then 3) publish. The argument for the new process is that the revenue generated from licensing the resulting patents is necessary to fund further research. This appears to be a valid argument and would probably be agreeable to most lay people. What most lay people might not find agreeable is that their tax dollars are actually being appropriated to these institutions to help fund their research, the fruits of which the institutions are obtaining exclusive rights to.

The Bayh-Dole Act, passed by Congress in 1980, the same year as the aforementioned Chakrabarty decision, allows the recipient of government funding for research and development to hold sole title to the patents for any resulting inventions.[13] In fact, the Bayh-Dole Act requires that an entity receiving government funds and obtaining title to any resulting inventions seek patent protection for and commercialize the inventions.[14] Naturally, a university that intends to keep pace with its competition is going to take advantage of the government funds for research, and correspondingly, comply with the provisions of the Bayh-Dole Act. The result is that universities build up patent portfolios based on subject matter they might have simply published, if they were operating under the pre-Bayh-Dole model of 1) research, then 2) publish. 

There are those who assert that the principles of the Bayh-Dole Act should be blunted when gene patents are involved.  On February 5, 2010, a federal advisory committee to the Secretary of Health and Human Services approved a draft report on Gene Patents and Licensing Practices and Their Impact on Patient Access to Genetic Tests.[15]  

To head off the position expected of the SACGHS report, a press conference was convened by the Biotechnology Industry Organization (“BIO”) on February 4^th.  There former U.S. Senator Birch Bayh said that the legislation he had co-sponsored with former Senator Bob Dole came at a time when the federal government owned all the inventions that came from federally-funded research and U.S. innovation was stagnating and investment in R&D was not growing.  He added that the Senate Judiciary Committee reported “that it could not find a single instance where the old policies had resulted in even one drug being developed when the government controlled the patent.  We found numerous potentially helpful medical discoveries simply languishing on laboratory shelves, benefiting no one.”

“The American taxpayers had invested $30 billion in research and had received no return on investment,” Bayh added, pointing out that there needs to be incentives to get people and companies to invest in such ideas. “This incentive would not exist unless the investor has a right to the patent in which he’s investing.”

“Collaboration fostered by the Bayh-Dole Act and fueled by massive amounts of private investment means that research is translated into tangible medicines, diagnostic tests, and other healthcare-related products that save lives, improve diagnoses, and alleviate suffering for millions of people worldwide,” added BIO President and former Congressman Jim Greenwood. Although the SACGHS report indicates that gene patents and licensing practices have not had an adverse impact on patient access to genetic tests, the committee is nevertheless making recommendations that “would undermine the U.S. patent system and the Bayh-Dole technology transfer system that have served our nation so well,” he said.

SACGHS task force member Brian Stanton, Ph.D., a former biotechnology expert at the PTO and former director of the Division of Policy at the National Institutes of Health’s Office of Technology Transfer, said the report shows “no evidence of harm, and yet it still calls for changes.” One proposal under consideration has been exempt infringers of gene patents from liability. Acknowledging that the Task Force on Gene Patents and Licensing had identified isolated instances of harm that need to be addressed, it also determined that “the court systems and the systems of checks and balances that are built into the fabric of the patent system were more than capable of addressing problems on a case-by-case basis.” He pointed out that the SACGHS report includes a letter of dissent from the only three members of the full committee who have direct experience in business and law with respect to intellectual property and private sector development of products and services.

Conclusion

The ACLU/PubPat lawsuit exemplifies an oversimplified and ultimately incorrect view of the underlying facts and law. Their grandstanding threatens to sway public opinion in a direction that would reverse the advances fostered since 1980 by the U.S. patent system. It is of utmost importance that the defendants and the patent bar in general correct the ACLU/PubPat’s misrepresentations and reverse the damage that the ACLU has caused and prevent any further damage.  Evidence of such damage due to misguided public opinion is in the SACGHS recommendations approved on February 5^th.  It is to be hoped that HHS Secretary Kathleen Sebelius will take them with a grain of salt.

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^†  Attorneys with Elman Technology Law, P.C.  Opinions expressed herein should not be attributed to anyone else.  However, the authors wish to thank Geoffrey Karny for his thoughtful discussions on the subject of this article. This article is published at Biotechnology Law Report. February 2010, 29(1): 23-27.

[1] Association for Molecular Pathology, et al. v. United States Patent and Trademark Office, et al., 1:2009cv04515, S.D.N.Y., May 12, 2009.  The plaintiffs are: Association For Molecular Pathology, American College of Medical Genetics, American Society for Clinical Pathology, College of American Pathologists, Breast Cancer Action, Boston Women’s Health Book Collective and certain gene researchers and individuals potentially affected by breast cancer. The named defendants are: United States Patent and Trademark Office (“USPTO”), Myriad Genetics, and the directors of the University of Utah Research Foundation.

[2] Diamond v. Chakrabarty, 447 U.S. 303 (1980).

[3] eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006). 

[4] 35 U.S.C. §§ 261, 154(a)(1).

[5] 547 U.S. 388, 391 (2006).

[6] Merck KGaA v. Integra Lifesciences I, Ltd, 545 U.S. 193 (2005).

[7] Id. at 206.

[8] Id.

[9] Diamond v. Chakrabarty, 447 U.S. 303 (1980).

[10] Id. at 309.

[11] http://www.tco.utah.edu/metrics.html

[12] http://web.mit.edu/tlo/www/about/office_statistics.html

[13] 35 U.S.C. §§200-212; 37 C.F.R. §401

[14] 35 U.S.C. §§202(c)(3),(5).

[15] Secretary’s Advisory Committee on Genetics, Health, and Society, Twenty-first Meeting, February 4-5, 2010, Washington, D.C.

In a packed courtroom in New York City, a federal judge hears arguments about gene patents for BRCA

By Scott Rylan Powell and Gerry J. Elman

On February 2, 2010, Judge Robert M. Sweet at the U.S. District Court in Manhattan heard oral arguments in the case of Association for Molecular Pathology, et al. v. United States Patent and Trademark Office, et al.[1] The courthouse was swarmed by concerned citizens and reporters, in response to the American Civil Liberties Union’s mass mailings about the case and free screenings of “In The Family,” a documentary film on breast cancer that the ACLU has used as a platform to garner public support for this lawsuit.  

The oral arguments heard by Judge Sweet were for (i) the ACLU’s motion for summary judgment that the claims in seven U.S. patents[2] are invalid under 35 U.S.C. § 101 and in violation of Article I, Section 8, Clause 8 (the “IP clause”) of the U.S. Constitution, as well as the First Amendment; (ii) Myriad Genetics’ (“Myriad”s) countermotion for summary judgment in its favor; and (iii) the U.S. Patent and Trademark Office’s (“USPTO”s) motion to dismiss the Constitutional claims directed against it.  The humanities-oriented lawyers of the ACLU and counsel for the science-oriented defendants vehemently supported their differing positions on the meaning, scope, and implications of the patent claims in question.  The process seemed to embody C.P. Snow’s famous theory of The Two Cultures, on the communications breakdown between the humanities and sciences.[3]

 Chris Hansen, an ACLU lawyer, opened with assertions that the “isolated DNA” recited in certain of the patent claims in question is not markedly different from DNA as it exists in the body and accordingly is simply a “product of nature.” Quoting the U.S. Supreme Court in the 1948 case of Funk Brothers Seed Co. v. Kalo Inoculant Co., Hansen said that a patent cannot be granted for “one of the an ancient secrets of nature now disclosed.[4]” Hansen analogized isolated DNA to gold extracted from a mine and emphasized that while counsel for Myriad has argued that isolation of DNA is a complex process, the end result is still a DNA sequence made not by man, but by nature.

Apparently borrowing from copyright law, Chris Hansen averred that patents are not awarded for effort. This principle of copyright law is rooted in Feist Publications, Inc v. Rural Telephone Service Co., Inc., in which the U.S. Supreme Court held that information compiled in a telephone directory does not constitute copyright-protectable creative expression.[5]

Hansen argued that the method claims of the patents violate the First Amendment because they appear to cover the mere act of looking at one sequence of letters and another sequence of letters and thinking about or saying whether they appear to be the same. This, Hansen said, stifles the sharing of information between researchers who, without this obstacle, would be able to build upon existing research and potentially develop cures or treatments for BRCA1 and BRCA2-related cancer. Under this reasoning, the patents do not “Promote the Progress of Science and the useful Arts” under the Intellectual Property Clause of the U.S. Constitution.[6]

Sandra Park, also with the ACLU, discussed Diamond v. Chakrabarty, wherein the U.S. Supreme Court held in 1980 that claims to a genetically engineered bacterium capable of breaking down oil recited subject matter eligible for patent protection.[7]  She also briefly summarized the aforementioned Funk Brothers  v. Kalo case in which the U.S. Supreme Court held that claims to mixtures of naturally occurring bacteria that could extract nitrogen from the air were products of nature, and thus not patent-eligible under section 101 of the patent law.[8] Additionally, she mentioned American Fruit Growers v. Brogdex in which the U.S. Supreme Court held in 1931 that claims to fruit with a skin or rind that contains mold-resistant borax does not qualify as an “article of manufacture” under section 101.[9] Park said that these cases clearly show that section 101 is satisfied only when the claimed subject matter has useful properties that it did not have in its natural form. Park echoed Hansen’s assertions as to the purported insignificance of a DNA sequence being “isolated” and argued that the venerable Judge Learned Hand was wrong in concluding in the 1911 case of Parke-Davis & Co. v. H.K. Mulford Co. that isolated and purified adrenaline is patent-eligible subject matter in light of its commercial utility.[10] To buttress this position, Park said that Chakrabarty, Funk Brothers, and American Fruit Growers impliedly overruled the Parke-Davis case.

In arguing against the validity of the method claims in the patents in suit, Park cited the recent case of In re Bilski, wherein the Court of Appeals for the Federal Circuit (“CAFC”) held that a claimed process is patentable if “(1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.”[11] Park asserted that neither prong of the test is met by the method claims in the disputed patents, because no particular machine is recited and because comparing one DNA sequence to another does not involve a transformation of an article into a different state or thing. Park sought to distinguish the claims at issue from those in Prometheus Laboratories v. Mayo, where the CAFC recently held that method claims for measuring the level of a drug in a blood sample involved a transformation under the “machine or transformation” test of the Bilski case.  Park said that in Prometheus, the claims included a first step of administering a drug to a subject, which induced a chemical transformation that is necessary for subsequently determining the level of the drug in a blood sample taken from the subject and that, by contrast, no transformative step is necessary for comparing one DNA sequence to another.[12]

Brian Poissant, counsel for Myriad Genetics, took the podium and began by noting that history has a tendency to repeat itself. He elaborated, saying that the same level of controversy and media attention around this case also occurred 30 years ago when the Supreme Court considered the Chakrabarty case.  Poissant said that then, as now, some members of the public proclaimed that a “gruesome parade of horribles” would result if the Court were to decide that claims involving genetic technology could be patented. He added that the Court in 1980 wisely deferred these public policy issues to Congress, urging that Judge Sweet interpret the claims in question in light of the law as written.

Poissant invoked the language of section 101 of the patent law, directing the court’s attention to two of the four categories of patentable-eligible subject matter: processes and compositions of matter, and to the qualifier that they be “new and useful.”  Focusing on “new,” Poissant said that the isolated nucleic acids recited in the patent claims to compositions of matter simply do not exist in nature. And an “isolated” polynucleotide having a particular sequence that’s “useful” takes a lot of work to come up with. A critical portion of the cell’s undifferentiated DNA must be identified by the scientist. Such isolated nucleic acids are useful because they can be used as probes that find and attach to complementary sequences in a subject’s DNA, such as in diagnostic tests. The claimed nucleic acids may also potentially be used for gene therapy.

Poissant cast doubt on the ACLU’s contention that Parke-Davis was impliedly overruled by later case law and added that the patent-eligibility of isolated DNA sequences has long been recognized in the law and in the USPTO’s rules and procedures. Poissant also urged the court to take the approach of the Supreme Court in J.E.M. Ag Supply v. Pioneer Hi-Bred and look to whether Congress has passed legislation that renders subject matter patent-ineligible when it otherwise appears to be patent-eligible.[13] Now, as then, Poissant said, such legislation is absent.

Poissant also argued that many of the cases that the ACLU relies on are off-topic. He said that Funk Brothers dealt with anticipation under section 102, not patent-eligible subject matter under section 101.  He also noted that American Food Growers was about whether the claimed subject matter was an “article of manufacture,” not involving either a process or a composition of matter, as here.

Applying the “machine or transformation test” for method claims stated in the Bilski decision of the CAFC, Poissant asserted that, as in the Prometheus case, the method claims of the patents at issue do involve a “transformation.” Elaborating on this, Poissant said that cells are taken from the body and are opened up, probes having the recited BRCA sequences are introduced, the probes traverse the DNA from the cell and, if the DNA from the cell contains a sequence complementary to a probe, the probe attaches to the complement.  Poissant said that the claims are not about intangible information, but about physical molecules.  He added that thinking or talking about the DNA sequences are not precluded by the patents, despite what the ACLU would have the court believe.

Counsel for the USPTO, Ross Morrison, spoke briefly to state that under the Doctrine of Constitutional Avoidance[14], the court should decide the case on the basis of the ACLU’s Constitutional arguments only if it first finds that the patent claims are valid under section 101 of the patent statute. Morrison then said that the applicable test for a Constitutional challenge is whether Congress had a rational basis for establishing the patent system and that the rational basis was clearly to “Promote the Progress of Science and the useful Arts” as stated in the IP Clause of the Constitution.

In response to the First Amendment claim made by the ACLU, Morrison said that the patent system promotes the sharing of information under the “written description and enablement” requirements of section 112 of the patent law.  Furthermore, when the first Patent Act was being passed by Congress in 1790, the First Amendment to the Constitution was in the process of being ratified, so that Congress at the time would have taken into consideration the interplay between the two.

Judge Sweet said that he wouldn’t issue his decision immediately, noting that the importance and complexity of the subject matter justifies careful deliberation.

---

This is an annotated version of our article in the March 1, 2010 issue of GEN, Genetic Engineering & Biotechnology News (Vol. 30, No. 5), also published at Biotechnology Law Report. February 2010, 29(1): 29-31. See also Gerry Elman’s Comment about the Complaint in this case, posted on the GEN blog May 15, 2009.

[1] Association for Molecular Pathology, et al. v. United States Patent and Trademark Office, et al., 1:2009cv04515, S.D.N.Y., May 12, 2009.  The plaintiffs are: Association For Molecular Pathology, American College of Medical Genetics, American Society for Clinical Pathology, College of American Pathologists, Breast Cancer Action, Boston Women’s Health Book Collective and certain gene researchers and individuals potentially affected by breast cancer.   The lawyers for plaintiffs are with the American Civil Liberties Union (ACLU) and the Public Patent Foundation. The named defendants are: United States Patent and Trademark Office (“USPTO”), Myriad Genetics, and the directors of the University of Utah Research Foundation.

[2] U.S. Patents 5,747,282; 5,693,473; 5,709,999; 5,710,001; 5,753,441; 5,837,492; and 6,033,857, owned by Myriad Genetics or licensed to Myriad by the University of Utah Research Foundation or other universities.

[3] See http://en.wikipedia.org/wiki/The_Two_Cultures.

[4] Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 132 (1948).

[5] Feist Publications, Inc., v. Rural Telephone Service Co., Inc., 499 U.S. 340 (1991).

[6] U.S. Const., Article I, sec. 8, cl. 8.

[7] Diamond v. Chakrabarty, 447 U.S. 303 (1980).

[8] Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948); 35 U.S.C. § 101.

[9] American Fruit Growers v. Brogdex Co., 283 U.S. 1 (1931).

[10] Parke-Davis & Co. v. H.K. Mulford Co., 189 F. 95 (S.D.N.Y. 1911).

[11] In re Bilski, 545 F.3d 943, 954 (Fed. Cir. 2008).  This case is currently on appeal to the Supreme Court, having been argued there November 9, 2009.

[12] Prometheus Laboratories, Inc. v. Mayo Collaborative Services, 581 F.3d 1336 (Fed. Cir. 2009).

[13] J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred Int’l, Inc., 534 U.S. 124 (2001).

[14] See Ashwander v. Tennessee Valley Authority, 297 U.S. 288, concurring opinion of Brandeis, J. at 346-56 (1936).