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Federal Circuit ruling a win for biotech field

In a second victory for the biotech industry in one year, the U.S. Court of Appeals for the Federal Circuit has reinstated its ruling that a company’s isolation of human genetic material, and its process for using that material to determine the effectiveness of certain cancer therapies, meet the threshold test for patent-eligibility.

“The isolated DNA molecules before us are not found in nature,” Judge Alan D. Lourie wrote for the majority in Association for Molecular Pathology, et al. v. U.S. Patent and Trademark Office, et al. “They are obtained in the laboratory and are man-made, the product of human ingenuity. While they are prepared from products of nature, so is every other composition of matter. All new chemical or biological molecules, whether made by synthesis or decomposition, are made from natural materials.”

The highly anticipated 106-page decision sets up what some expect will be another showdown between the Federal Circuit and the U.S. Supreme Court over the issue of patents for biotechnological materials.

Claire Laporte, who submitted an amicus brief on behalf of defendant Myriad Genetics, said the Federal Circuit took “extraordinary steps” to defend and justify its opinion that genetic material is patentable and that certain methods that rely on genetic material are also patentable.

Laporte added that the Supreme Court has heard various cases over the past several years aimed at cutting back and limiting the scope of what is eligible for a patent. In doing so, the court has not taken into full account “the scientific steps necessary to create those inventions,” the Boston attorney said.

Zoe Argento, who teaches intellectual property law at Roger Williams University School of Law in Rhode Island, said the Supreme Court has been “far from consistent” on the issue.

“The Federal Circuit gave a narrow interpretation of Mayo vs. Prometheus, possibly more narrow than the Supreme Court intended.  However, it is hard to know what the Supreme Court’s approach would be,” she said.

Leaf or baseball bat?

The plaintiffs — a group of organizations, researchers and patients — filed suit in U.S. District Court for the Southern District of New York in 2009, arguing that the U.S. Patent and Trademark Office had violated federal law by granting the medical research company Myriad Genetics patents for two human genes, BRCA 1 and BRCA 2.

Certain mutations of the genes have been identified as conveying a predisposition to develop breast and ovarian cancer.

In July 2011, the Federal Circuit ruled that the isolated genes were patentable, as was a method for screening therapeutics using one of those genes, but that a method for comparing and analyzing certain DNA sequences was not.

The Supreme Court vacated the decision and instructed the panel to reconsider its ruling in light of the high court’s holding in Mayo Collaborative Services v. Prometheus, Inc. In that case, the Supreme Court found that a company could not obtain a patent for identifying correlations between the results of a blood test and a patient’s health at various doses of a drug to treat an autoimmune disorder.

On remand, the Federal Circuit found that Mayo does not control the question in Myriad and, in a 2-1 split, ruled Myriad’s claims to isolated human gene sequences are patent-eligible.

The full panel found that Myriad’s claims to genes altered to remove non-coding DNA are also patent-eligible, as is its method for using transformed cells to test the efficacy of cancer therapeutics.

And the Federal Circuit reinstated its earlier ruling invalidating Myriad’s patent-eligibility for a method of comparing and analyzing gene sequences.

The split in the panel is likely to be the focus of an appeal to the Federal Circuit en banc and/or to the Supreme Court.

In his dissent, Judge William C. Bryson likened Myriad’s isolation of the genes to the equivalent of pulling a leaf from a tree, saying “the extraction of a product in a manner that retains the character and function of the product as found in nature does not result in the creation of a human invention.”

Baseball bats are also “isolated” from trees, Bryson said, but those products require a process that changes the “nature, form, and use of the ash tree and thus results in a manmade manufacture, not a naturally occurring product.”

Nature of invention

Gregory A. Castanias of Jones Day in Washington, D.C., who represented Myriad Genetics, took issue with the analogy in Bryson’s dissent.

“No one would say that snapping a leaf from a tree is a human invention,” Castanias said. “Anybody can do that; that’s not an invention. This is much more akin to the baseball bat.”

ACLU staff attorney Sandra S. Park, lead counsel for the plaintiffs, said the Federal Circuit’s ruling allows Myriad to have a “monopoly” on testing for risk of breast and ovarian cancers.

Park said the decision also gives Myriad “exclusive rights” to determining who examines the genes of patients at risk and severely limits access to the tests. Because it holds the patent, Myriad is the only laboratory in the U.S. to conduct testing on the genes. It is also able to market two separate tests, instead of one, Park said.

“If Myriad did not hold the patent on the genes, other laboratories could and would offer the testing, and some at a more affordable rate,” she said.

But the court specifically set aside that consideration, saying its role was not to decide “whether is it desirable for one company to hold a patent or license covering a test that may save people’s lives, or for other companies to be excluded from the market encompassed by such a patent — that is the basic right provided by a patent, i.e., to exclude others from practicing the patented subject matter.”

The majority said the issue for the court was “solely whether the claims to isolated BRCA DNA, to methods for comparing DNA sequences, and to a process for screening potential cancer therapeutics meet the threshold test for patent-eligible subject matter under 35 U.S.C. §101 in light of various Supreme Court holdings, particularly including Mayo.”

Maria L. Zacharakis, an intellectual property lawyer at McCarter & English in Boston who submitted an amicus brief in support of Myriad, said the majority ruling creates a challenge for patent attorneys with respect to diagnostic claims.

The challenge lurks within the court’s holding that Myriad’s method of “comparing” or “analyzing” DNA sequences or other biomarkers is not patentable unless — as with Myriad’s screening method claim — it involves a “transformative action.”

“The challenge for patent attorneys who work in that diagnostic realm will be to come up with language to prove that transformative first step prior to the comparing step,” Zacharakis said. “It’s very easy to write a claim that says you remove a sample from a patient and extract DNA. But companies will not invest billions of dollars in developing diagnostic tests to have only a very narrow claim issue in [a patent] to cover it. They will want to write a broad claim that nonetheless clearly sets forth a transformative step that must take place prior to performing the comparing. It will be hard.”

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