Bloomberg News

Myriad Defends Patent Claims on Genetic Material in Court Case

July 20, 2012

Myriad Genetics Inc. (MYGN:US), owner of patents related to genes linked to hereditary cancer risks, is trying to claim legal ownership of a product of nature, the American Civil Liberties Union told a U.S. appeals court today.

“We need to be sure that natural things and all natural laws are available to all mankind,” Chris Hansen, an ACLU lawyer representing research groups including the Association for Molecular Pathology and the American College of Medical Genetics, said today in Washington. The Myriad claims “cover every conceivable form of DNA.”

The central legal issue in arguments before the U.S. Court of Appeals for the Federal Circuit is whether 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. Myriad owns patents for a test that can determine the hereditary risk of breast and ovarian cancers.

“The patent claims reflect not naturally occurring, but human-made compositions that were the product of human ingenuity,” Myriad lawyer Greg Castanias of Jones Day told the court. “This is not the patenting of a natural product or something so close to a natural product that it can’t be patented.”

The Federal Circuit, which specializes in patent law, last year said isolated DNA can be entitled to patent protection. It was ordered by the Supreme Court to reconsider that ruling in light of a decision by the high court in March, in a separate case, that limited the ability to obtain patents on certain diagnostic tests.

Isolated DNA

In its decision last year, the Federal Circuit ruled 2-1 in favor of Salt Lake City, Utah-based Myriad’s isolated DNA claims. The arguments today were before the same three-judge panel.

President Barack Obama’s administration argued that there should be limits on the types of genetic material that can be covered by patents. Justice Department lawyer Melissa Patterson said that changes to isolate the specific gene were insignificant. She likened it to extracting coal from the ground.

“Some of these claims preclude access to a product of nature,” she said. “Can the public still use and exploit that in new and different ways?”

In a typical case before the Federal Circuit, the U.S. Patent and Trademark Office will present the government’s arguments. Patterson declined to say whether the patent office agreed with the administration’s position.

Financial Stakes

Circuit Judge Kimberly Moore, who last year sided with Myriad, questioned the effect of ruling that isolated DNA can’t receive legal protection. The biotechnology industry has been getting patents on genes for decades and has come to rely on that, she said.

“There’s a lot of money at stake,” Moore said. “If it was so obvious it wasn’t patentable, why wasn’t it brought up before in the past 30 years?”

The circuit judges tried to determine where the line is drawn between a product of nature and something made by man -- whether isolated DNA is akin to a baseball bat carved from a tree, or simply a chopped-up tree trunk. Circuit Judge William Bryson, who sided against Myriad last year, said the company’s position is that isolated DNA is like Michelangelo’s statue of David, “a piece of marble with the unnecessary parts chipped away.”

Natural Laws

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

That high court case involved a challenge by units of the Mayo Clinic of patents owned by Nestle SA (NESN)’s Prometheus unit for methods to determine the dosage of medicines for certain stomach diseases. Such tests merely cover natural phenomena and aren’t inventions, the court ruled.

The Myriad dispute has split the medical community. Some scientists argue they have been stymied in their quest for new medicines and treatments because they fear coming up against demands for royalties or letters demanding they stop using patented inventions.

Companies like Genomic Health Inc. (GHDX:US) and Alnylam Pharmaceuticals Inc. (ALNY:US) argue they can’t attract investment dollars if they can’t protect their research from competitors.

Gene databases and technology to analyze them can be the key to new medical discoveries and more efficient ways of providing treatment. Annual U.S. spending on medical DNA testing will rise to $25 billion in the next decade from $5 billion in 2010, according to UnitedHealth Group Inc. (UNH:US), the biggest for- profit health insurer in the nation.

Patent Challenges

The genetics groups, backed by the ACLU and the Public Patent Foundation, initially sued to challenge aspects of seven Myriad patents, and won at the trial court. The Federal Circuit agreed that some claims made by Myriad on comparing a patient’s DNA with known mutations didn’t warrant legal protection. Those claims weren’t involved in today’s arguments.

The case currently before the court involves aspects of three patents. Myriad has said it owns two dozen patents related to its BRACAnalysis genetic cancer tests.

Myriad reported $363 million in revenue in the first nine months of the year. Myriad’s BRACAnalysis test accounted for 81 percent of total revenue in its fiscal third quarter ended March 31, according to a company statement from May.

The Myriad case is one of two that the Supreme Court has ordered the Federal Circuit to review following the Mayo decision. The second, involving a suit against online video-game company WildTangent Inc., would look at whether limits should be placed on some types of business methods. The appeals court hasn’t scheduled arguments in that case.

The case is Association for Molecular Pathology v. Myriad, 10-1406, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Association for Molecular Pathology v. U.S. Patent and Trademark Office, 09cv4515, U.S. District Court for the District of New York.

To contact the reporters on this story: Susan Decker in Washington at sdecker1@bloomberg.net; Kayla Bruun in Washington at kbruun@bloomberg.net

To contact the editors responsible for this story: Bernard Kohn at bkohn2@bloomberg.net; Katherine Rizzo at krizzo5@bloomberg.net


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Companies Mentioned

  • MYGN
    (Myriad Genetics Inc)
    • $38.15 USD
    • -0.18
    • -0.47%
  • GHDX
    (Genomic Health Inc)
    • $26.7 USD
    • -0.13
    • -0.49%
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