Bloomberg News

Myriad’s Human-Gene Patent Rehearing Ordered by High Court

March 26, 2012

The U.S. Supreme Court (1000L) ordered a lower court to revisit whether human genes can be patented in light of the justices March 20 decision that limited the ability to obtain legal protection for some diagnostic medical tests.

The justices today ordered the U.S. Court of Appeals for the Federal Circuit to reconsider its decision that allowed patents on genetic material used in Myriad Genetics Inc. (MYGN) tests for breast and ovarian cancer.

The high court on March 20 said that patents shouldn’t be allowed on tests that look at, for instance, the proper dosage for a medicine based on a body’s reaction to a drug. Such tests merely cover natural phenomenon and aren’t inventions, the court ruled. The Federal Circuit, which specializes in U.S. patent law, must consider the effect of that ruling on the Myriad patents.

“The message is, ‘We’re not prejudging what the outcome should be in this case, but we don’t think you’ve analyzed it in the right way,’” said Nick Groombridge, a patent lawyer with Paul Weiss in New York who also teaches law at Columbia and Rutgers Universities.

The March 20 decision involved a dispute between Nestle SA’s Prometheus unit and units of the Mayo Clinic and whether certain types of diagnostic tests met the threshold of eligibility for a patent. A June 2010 decision by the Supreme Court also addressed what types of inventions qualify for legal protection.

Array of Opponents

Myriad said the case doesn’t involve all of its patents that cover the screening tests. Still, the company said, it would defend the claims that are the subject of the lawsuit.

“It has great importance to the medical, pharmaceutical, biotechnology and other commercial 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,” Myriad Chief Executive Officer Peter Meldrum said in a statement.

The Myriad case pits the biotechnology industry, which supports gene patents, against an array of opponents --including doctors, researchers and patients -- who say gene patents will stifle innovation and improperly permit a monopoly on part of the human body. The case affects the field of personalized medicine, in which doctors determine whether a patient is susceptible to a particular disease or would be more responsive to certain medications.

Human Genes

“The question of whether human genes and the information they convey are patentable is of paramount importance to the future of patent law, the advancement of medical science and patients’ health,” the challengers to the Myriad patents argued in their appeal.

The group, whose legal team includes the American Civil Liberties Union, is pressing a test case against Salt Lake City- based Myriad. The company makes tests for the hereditary risk of breast and ovarian cancer.

The Prometheus patents “excluded too many other people from developing new things,” said James Mullen, a patent lawyer with Morrison & Foerster in San Diego who specializes in helping biotechnology companies obtain patents. He said that the Supreme Court’s decision to have the Federal Circuit look at the patents anew is good news for patents on gene-related technology.

“If they wanted to put a stake through the heart of these claims, they’d do it,” Mullen said of the Supreme Court. “If they delve into isolated DNA claims, they would have the ability to disrupt and cripple biotechnology across the board.”

Myriad Rises

Myriad rose 56 cents, or 2.5 percent, to $23.34 at 4 p.m., its biggest one-day jump since Feb. 23. About 2.5 million shares were traded, almost four times the three-month daily average.

About 20 percent of human genes have some level of patent protection, according to a 2005 article in Science magazine. The biotechnology industry says patents let it attract venture capital to pay for research into new medicines and the causes of diseases.

The central legal issue is whether so-called isolated DNA - - genetic coding that has been removed from the body and separated from other material -- is a product of nature and thus ineligible for patent protection under previous Supreme Court rulings.

In the March 20 decision, Justice Stephen Breyer wrote for a unanimous court in warning against “tying up the use of the underlying natural laws.”

Actual Politics

“To the extent that actual politics intrude on the thought process of the Supreme Court, I wonder if they’re not concerned with patent policy that results in an increase in costs to patients,” Mullen said.

Genes are encoded strands of nucleotides in different sequences that are responsible for inherited traits. In isolating genes, Myriad strips out unneeded information to home in on aspects that determine whether a person has a higher risk of breast and ovarian cancer.

In court papers, Myriad said that “human intervention” brings isolated DNA within the scope of the U.S. patent laws. The company says the U.S. Patent and Trademark Office has issued 2,645 patents for isolated DNA over the past 30 years.

The case is Association for Molecular Pathology v. Myriad Genetics, 11-725.

To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net.

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net.


Cash Is for Losers
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus