Caile Morris

On June 13, 2013, the United States Supreme Court took a new stance in the patenting of genes in a landmark ruling that may have broad implications for biomedical businesses.  In Association for Molecular Pathology v. Myriad Genetics, Inc., the Court ruled that the location and isolation of the DNA sequences were not patent eligible, but artificially created cDNA sequences of were patent eligible under Section 101 of the Patent Act that defines patentable subject matter.[1] In doing so, the Court invalidated some of the patents held by Myriad Genetics (“Myriad”) but upheld others.[2] Myriad discovered the precise location and sequence of the BRCA1 and BRCA2 genes, which when mutated dramatically increase the risk of breast and ovarian cancer.[3] This discovery allowed Myriad to develop tests to detect mutations a patient may have in these genes, thus allowing for a calculation of that patient’s risk for breast or ovarian cancer.[4] Dr. Harry Ostrer, along with other doctors, patients, and advocacy groups filed a lawsuit to challenge the validity of Myriad’s patents.[5]

Section 101 of the Patent Act states that “whoever invents or discovers any new and useful . . . composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”[6] Simply put, a patent claim must involve something new, useful, and nonobvious, or a new improvement on something that already exists.[7] The Supreme Court has long held that things occurring in nature, such as laws of nature, natural phenomena, and abstract ideas are not patentable.[8] Any review of a patent application must consider the standard requiring observation of the “delicate balance between creating incentives that lead to creation, invention and discovery and impeding the flow of information that might permit, indeed spur, invention.”[9] In Association for Molecular Pathology, the Court decided that Myriad’s patent claims for the BRCA1 and BRCA2 DNA gene sequences were naturally occurring, and therefore could not be patentable.[10] However, the cDNA sequences of each gene were made by Myriad’s lab technicians thereby creating something new that does not occur naturally, making the genes patent eligible.[11]

This decision significantly affects medical research companies, laboratories, hospitals, medical schools, and individual doctors as well as the consumers who would be seeking this kind of genetic testing.[12] The “delicate balance” totality of the circumstances test clarified in Association for Molecular Pathology hurts Myriad as a company specifically but was extremely helpful to other competing companies.[13] Invalidating Myriad’s isolated gene patents essentially negates its investments of money and time it poured into research leading to the discovery of the BRCA1 and BRCA2 genes. Similar medical research companies fear the decision disincentives research for new and innovative ideas in the biotechnology sector by removing sizeable monetary returns on their products.

Alternatively, the Association for Molecular Pathology holding aids companies, like those who filed the lawsuit because they are able to utilize the information discovered by other companies like Myriad through freeriding. Proponents of the decision also argue that it allows necessary and available medical testing to enter the market previously blocked by Myriad’s patent monopoly. The holding also aids patients by minimizing monopolies in the biomedical industry by potentially decreasing the price of access to genetic testing. This means if a patient now wants to undergo genetic testing she may now have multiple companies to choose from with competitive pricing.  Prior to Association for Molecular Pathology, if Myriad continued to hold patents on the location and sequence of the BRCA1 and BRCA2 genes, that same patient would only be able to go to Myriad for testing, and she would be paying a premium to do so since Myriad would have no incentive to keep the price low.

The Association for Molecular Pathology holding is a testament to the balance patent law aims to strike between innovative technologies and the public good. The Court’s holding will certainly affect future genetic testing research in the biomedical industry. By invalidating Myriad’s patents on BRCA1 and BRCA2 gene sequences, the Court is allowing similar companies to use the location of the genes to further research and develop methods of testing and other applications of the genes themselves.  Still the Court recognized Myriad’s innovation in creating the cDNA sequences of the BRCA1 and BRCA2 genes by upholding those specific patent claims, allowing Myriad to exclusively use those sequences under a patent monopoly, which allows Myriad to recoup significant portions of its investment. This preserves incentives for biomedical companies investing in genetic tests to turn a profit so long as they create something new beyond merely isolating a gene’s location. However, it potentially allows other companies to benefit from the discovery by allowing them to use the gene sequence without a license. Finally, the holding may positively affect consumers as free market principals will be better able to dictate pricing and competition that allows the public to reap the benefits of new medical discoveries.