The Nature of Patents
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The Nature of Patents

January 2014

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Defending Patents Abroad February 2011

U.S. patent law provides that inventors can patent "any new and useful process, machine, manufacture, or composition of matter." (35 U.S.C. § 101.) Though this may sound like an open-ended invitation to patent anything under the sun, the courts have identified three types of discoveries that are not eligible for patenting: abstract ideas, laws of nature, and natural phenomena. Thus, "Einstein could not patent his celebrated law that; nor could Newton have patented the law of gravity. Such findings are 'manifestations of ... nature, free to all men and reserved exclusively to none.' " (Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980).)

But what if someone discovers a genetic mutation - previously undetected in nature - that helps predict whether a woman will develop breast cancer? Can the researcher file for a patent on it? On the one hand, the discovery seems to qualify as a new and useful composition of matter, thus eligible for patenting. On the other hand, because it already exists in nature, information about the genetic mutation might seem to be little more than a law of nature and therefore excluded from patentable subject matter. The U.S. Supreme Court recently grappled with just this situation.

The Myriad Case
The case before the Court involved a company known as Myriad Genetics, which had obtained several patents covering "isolated" segments of deoxyribonucleic acid (DNA) encoding the human genes known as BRCA1 and BRCA2. These two genes have an important property not understood before the patents were filed: mutations in these genes correlate to increases of as much as 80 percent in a woman's risk of developing breast cancer and 50 percent in her risk of developing ovarian cancer. Myriad markets and sells diagnostic tests that determine whether an individual's genetic material contains the mutations. The tests help patients assess their individual risk of developing breast or ovarian cancer. Each test costs thousands of dollars.

A coalition of groups and individuals led by the ACLU sued Myriad in federal district court in New York, claiming that its patents should never have been granted and seeking declaratory relief. The plaintiffs contended that human genes are "products of nature" and therefore ineligible for patent protection.

The district court found the patents invalid, making a distinction between DNA and other molecules, such as proteins or drugs; it concluded that DNA has "unique qualities as a physical embodiment of information." Further, DNA, whether native or isolated, contains sequence information used to direct the synthesis of protein. Because both native and isolated DNA encode the same information, the district court reasoned, both serve as the "physical embodiment of laws of nature - those that define the construction of the human body." (Ass'n for Molecular Pathology v. U.S. Patent & Trademark Office, 702 F. Supp. 2d 181, 228-229 (S.D.N.Y. 2010).)

A divided appellate panel reversed the trial court's decision, holding that claims covering isolated DNA sequences are indeed patentable subject matter. The court of appeals reasoned that the isolation of DNA from the human genome requires human intervention: Someone must chemically cleave the bonds connecting a particular sequence to the rest of the genomic DNA. That human intervention "impart[s] on that isolated DNA a distinctive chemical identity as compared to native DNA." Thus, the Federal Circuit held the isolated DNA to be patent-eligible subject matter. (Ass'n for Molecular Pathology v. U.S. Patent & Trademark Office, 689 F.3d 1303, 1328-1329 (Fed. Cir. 2012).)

At the Supreme Court
The Supreme Court granted certiorari to decide a deceptively simple question: "Are human genes patentable?" The high court issued a unanimous opinion (authored by Justice Clarence Thomas) that found naturally occurring DNA to be a non-patent-eligible product of nature, regardless of its isolation from the surrounding genetic material. However, the Court found that a different kind of molecule - known as cDNA, for complementary DNA - which does not occur in nature, is patent-eligible under section 101. (Ass'n for Molecular Pathology v. Myriad Genetics, Inc., 133 S.Ct. 2107, 2112 (2013).)

The Myriad decision has potentially far-reaching effects, in part because although the question presented was couched in terms of the patent-eligibility of human genes, the holding is directed at all genes, regardless of their origin.

Justice Thomas began the decision with a brief history of the study of molecular biology, explaining the methods by which individual DNA sequences are identified and isolated. The ruling concluded that the study of genetics "can lead to valuable medical breakthroughs," setting the tone for an opinion woven through with concern about stifling such innovation. (133 S.Ct. at 2112.)

The opinion described in detail Myriad's composition claims and the methods it employed to isolate the BRCA1 and BRCA2 genes. It noted that "[t]he location and order of the nucleotides existed in nature before Myriad found them" and thus "Myriad's principal contribution was uncovering the precise location and genetic sequence" of the genes. (133 S.Ct. at 2116.)

Details of the Claims
Addressing the standard for patent-eligibility, the Court reaffirmed its holding in the oft-cited Mayo Collaborative Services v. Prometheus Laboratories, Inc. (132 S.Ct. 1289 (2012)) that abstract ideas, laws of nature, and natural phenomena - the three exceptions to patent-eligibility - "are the basic tools of scientific and technological work." Without these exceptions, the Court explained, "there would be considerable danger that the grant of patents would 'tie up' the use of such tools and thereby 'inhibit future innovation premised upon them.' "The Court concluded this result "would be at odds with the very point of patents, which exist to promote creation." (133 S.Ct. at 2116.)

Against this backdrop, the Court determined that Myriad's isolated DNA claims "fell squarely" within the law-of-nature exception. "Groundbreaking, innovative, or even brilliant discovery does not by itself satisfy the § 101 inquiry," the Court explained. "Myriad did not create anything. To be sure, it found an important and useful gene, but separating that gene from its surrounding genetic material is not an act of invention." (133 S.Ct. at 2117.)

The Court rejected the Federal Circuit's rationale that "isolated DNA" is patent eligible because it requires "breaking the covalent bonds that connect the DNA to the rest of the individual's genome." It explained that "Myriad's claims are simply not expressed in terms of chemical composition, nor do they rely in any way on the chemical changes that result from the isolation of a particular section of DNA. Instead, the claims understandably focus on the genetic information encoded in the BRCA1 and BRCA2 genes." The Court pointed out that Myriad likely would take the position that its patents were infringed even if a molecule cleaved from native DNA contained additional nucleotides - the cleaved molecule would still contain within it the same genetic sequence, even if it was not the exact same molecule Myriad claimed to have "invented." (133 S.Ct. at 2118.)

In explaining that Myriad's alleged invention fell short of patent eligibility, the Court failed to provide meaningful guidance as to the level of change or alteration of a product of nature necessary to transform it into patent-eligible subject matter. How much change is required? The high court also did not squarely address the Federal Circuit's reasoning that the human intervention of breaking the covalent bonds results in something that is "markedly different" from naturally occurring DNA. Unfortunately, the Court's treatment of complementary DNA does not provide much help, either.

cDNA Survives
Taking a Solomonic approach to the question at hand, the high court split the baby on the issue of patenting genes in any form. The Court's decision agreed with the position advocated by the Solicitor General that synthetically created complementary DNA (cDNA) is patent-eligible subject matter. Unlike the DNA found in the human genome, cDNA "contains the same protein-coding information found in a segment of natural DNA but omits portions within the DNA segment that do not code for proteins." As a result, cDNA does not exist in nature and must be created in the laboratory.

The Court explained that the "creation of a cDNA sequence ... results in [a] molecule that is not naturally occurring." A lab technician, therefore, "unquestionably creates something new when cDNA is made," unlike the result of isolating of a naturally occurring gene sequence. (133 S.Ct. at 2119.) The Court thus held that cDNA is patent eligible under section 101.

This intermediate position raises a number of interesting questions that will need to be sorted out by the lower courts or Congress. For example, if merely breaking covalent bonds is insufficient to transform an isolated genomic DNA sequence into patent-eligible subject matter, then why should cDNA be viewed any differently? One might characterize the cDNA form of a gene as a series of DNA fragments stitched together by the formation of covalent bonds. Is it the formation of new bonds that renders cDNA patent eligible? If so, how would such reasoning affect other biological inventions?

Even with the holding that they are patent eligible under section 101, the path is not necessarily clear for cDNA claims. The Court expressly left open the question of whether Myriad's cDNA claims would meet any of the other statutory requirements for patentability, such as novelty and nonobviousness.

PTO Practice
to the Court that the U.S. Patent and Trademark Office had a long-standing practice of granting patents to "isolated" genes. Indeed, some commentators estimate that the PTO has issued thousands of patents of the same form found invalid in the Myriad decision. In declining to defer to the PTO, the Court stated that it found no evidence Congress supported the agency's practice through subsequent legislation. The Court also noted the Solicitor General's position that isolated DNA is not patent eligible, and that the PTO's practice was not "a sufficient reason to hold that isolated DNA is patent eligible." (133 S.Ct. at 2118-2119.)

Limits of the Ruling
The Court took care to constrict the scope of its decision. First, it pointed out that no method claims were before it. It stated that the techniques Myriad used to isolate the BRCA1 and BRCA2 genes were well known at the time of Myriad's patents. Had Myriad discovered "an innovative method of manipulating genes while searching for the BRCA1 and BRCA2 genes, it could possibly have sought a method patent," the opinion stated. The Court also noted that its decision does not apply to new applications of the information learned about the two BRCA genes, nor to DNA sequences in which the order of naturally occurring nucleotides has been altered. (133 S.Ct. at 2119-2120.) But this portion of the Court's decision leaves unresolved questions about whether molecules that exist in nature can constitute patent-eligible subject matter.

What's Next?
Myriad Genetics continues to vigorously defend its remaining intellectual property. After the Supreme Court announced its decision, two companies - Ambry Genetics and Gene by Gene - immediately announced plans to offer BRCA1 and BRCA2 genetic testing to patients. Myriad sued both companies, asserting that the testing would violate some of its remaining patent claims, including methods for detecting mutations and the use of synthetic DNA as genetic probes and primers. (Univ. of Utah Research Found. v. Ambry Genetics, No. 13-CV-00640 (D. Utah filed July 9, 2013); and Univ. of Utah Research Found. v. Gene By Gene, Ltd., No. 13-CV-00643 (D. Utah filed July 10, 2013).)

Meanwhile, the PTO is expected to issue guidance to its examiners to help them apply the Myriad decision. Among the many issues:

- Nonhuman genes. The Supreme Court undertook to consider the patentability of human genes, even though the language of the decision was directed to genes in general. But what about genes from bacteria? It remains to be seen how the Court will deal with laboratory manipulation of this phenomenon.

- Other substances. What other types of patents directed to naturally occurring substances will be affected by Myriad? Will patent claims covering isolated, naturally occurring proteins be deemed patent eligible? What about claims regarding isolated, naturally occurring small chemical molecules (often used as therapeutic drugs)?

- Combined matter. Can a novel combination of otherwise unpatentable natural substances be patented? Many (perhaps most) inventions involve new ways of combining previously known things.

In the years ahead, watch for these and other questions to be raised as inventors - and those affected by inventions and patents - battle before the courts. The Federal Circuit in particular will likely be asked to opine on crucial genetic engineering questions central to scientific progress - rooted though they are in somewhat opaque intellectual property and patent concepts. That very progress, and the tangible benefits that flow from it, is what patent law was designed to foster and protect. Finding the right balance between the laws of nature and the law of patents will continue to be a challenge.

Morrison & Foerster's James J. Mullen III and Mary Prendergast practice in the firm's San Diego office, where Aaron S. Parker is a law clerk; Matthew Kreeger practices in San Francisco.

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