Reversing the “IP Ratchet”: Global Implications of the U.S. Supreme Court’s Ruling in Myriad
Co-authored by Adriana Benedict and Tiffany Jang
The U.S. Patent and Trademark Office (USPTO) and European Patent Office (EPO) have been granting patents on isolated human DNA since the early 1980s. Many countries have followed their lead.
More than three decades later, the U.S. has become the first country to reject the patent eligibility of isolated DNA following last week’s Supreme Court ruling in Ass’n of Molecular Pathology v. Myriad Genetics. Will its opinion have any global ripple effects?
The USPTO has promoted harmonization with its standards of patentability through training and technical assistance programs since 1985. USPTO patent standards have spread in part due to a partnership established between the USPTO, EPO and Japanese Patent Office (JPO) in 1983. As noted by the Australian Law Reform Commission, in 1988, these Trilateral Offices issued a joint statement explaining that
Purified natural products are not regarded as products of nature or discoveries because they do not in fact exist in nature in an isolated form. Rather, they are regarded for patent purposes as biologically active substances or chemical compounds and eligible for patenting on the same basis as other chemical compounds.
In response to some uncertainty regarding claim drafting for isolated DNA sequences, the USPTO Manual of Patent Examination and Procedures was updated in 1990 to provide clear guidelines to this effect. Similarly, the JPO’s Implementation Guidelines for Inventions in Specific Fields explicitly provides that isolated genes are patentable; and in the E.U., isolated DNA is patentable under Biotechnology Directive 98/44/EC (although patents on isolated DNA may only be issued in the E.U. if the inventor can show that the genetic sequence exhibits surprising or unexpected properties). Importantly, the European Commission was influenced by the U.S.’s acceptance of gene patents in its deliberations leading up to the directive. When it proposed the Biotechnology Directive in 1988, it noted:
[W]hereas the two leading nations in biotechnology, the United States of America and Japan, have been able continuously to adapt their patent protection according to the latest needs of industry, science and consumers, the Member States, representing comparable potential of intellectual manpower and capital, are immobilized by a not yet completed and . . . outdated legal framework.
Other countries have followed suit. Isolated DNA sequences are patent eligible in Canada as biomolecules, and the Intellectual Property Office of Singapore recognizes patents on genes, in accordance with Howard Florey Institute [Relaxin]. In February of this year, the Federal Court of Australia held that isolated DNA is patentable under the Statute of Monopolies because it embodies a chemical compound, and thus is a “manner of manufacture,” rather than genetic information.
But the Supreme Court is forcing the USPTO to reverse course. In the long-awaited Myriad opinion, the U.S Supreme Court ruled late last week that isolated human DNA is not patentable subject matter because it is naturally ocurring, while complementary DNA (cDNA) is patentable subject matter because it is not naturally occurring. cDNA is a synthetic form of DNA that does not contain introns (nucleotide sequences that don’t encode for proteins), while isolated DNA is composed of exons (protein-coding nucleotide sequences) interspersed with introns. Because both isolated DNA and cDNA have important research applications, the Supreme Court’s decision in Myriad will have an enormous impact on the future of biotechnology, biomedical research, and diagnostic and therapeutic efforts.
Prior to Myriad, the recognition of human genes as patentable subject matter meant that the owners of patents on isolated DNA could hold monopolies on the genetic information embodied in DNA sequences, raising the cost of access to this information for both patients and scientific researchers. This led to a concern that, among other things, exclusively licensed patents on isolated DNA stood in the way of patient access to secondary opinions confirming the results of genetic tests. To address this concern, the America Invents Act had directed the USPTO to explore this challenge and propose possible solutions to it; the USPTO’s final report, however, was delayed more than a year and has yet to be released.
Under common law precedent regarding 35 U.S.C. § 101’s definition of patentable subject matter, laws of nature, products of nature and abstract ideas cannot be patented in the U.S. As explained in Mayo v. Prometheus, laws of nature constitute “the basic tools of scientific and technological work.” In addition to playing a major role in the Supreme Court’s ruling in Mayo last year, the law of nature exception has a long history of Supreme Court precedent, including Mackay Radio & Telegraph Co. v. Radio Corp. of America, Funk Bros. Seed v. Kalo Inoculant, and Parker v. Flook. Indeed, even in Diamond v. Chakrabarty, the case considered to have paved the way for gene patents, the Court expressly stated that “laws of nature, physical phenomena, and abstract ideas have been held not patentable.” Prior to today’s ruling, it was the long-held practice of the U.S. Patent and Trademark Office (USPTO) to grant patents on isolated DNA. It had been widely believed that because human DNA does not exist in nature in isolated form, isolated DNA could be patented on the grounds that it is a product of human ingenuity.
Petitioners in Myriad challenged the legality of Myriad’s patents on BRCA1 and BRCA2 genes, mutations of which are known to be associated with heightened risk of breast and ovarian cancer. Myriad’s patents on isolated DNA had originally been struck down by the Southern District of New York in a ruling that was later reversed and subsequently affirmed after being remanded by the Supreme Court. In a unanimous holding (with the exception of some minor concurrences by Justice Scalia on biological explanations), Justice Thomas explained that isolated human DNA is not patent eligible subject matter under § 101 because it constitutes a law of nature. Specifically, the Court explained that:
- Myriad did not invent anything by isolating or locating the BRCA1 and BRCA2 genes, but rather identified what already exists in nature;
- the relevant “patent descriptions simply detail the ‘iterative process’ of discovery by which Myriad narrowed the possible locations for the gene sequences that it sought;
- the claims at issue cover the information contained in a genetic sequence rather than chemical compositions themselves; and
- deference to past USPTO practice was not persuasive in the absence of explicit statutory support for the patentability of isolated genes, which is absent from Title 35 of the U.S. Code.
In contrast, the Court explained that cDNA—with the exception of very short strands free from intervening introns—is patentable because it differs from naturally occurring DNA, which contains both introns and exons.
Myriad paves the way for increased competition in the provision of genetic tests for BRCA1 and BRCA2 mutations because Myriad will no longer have a monopoly on all research and diagnostic methods that use the isolated BRCA1 and BRCA2 nucleotide sequences. On the coattails of the Court’s ruling, many diagnostic companies and research institutions such as Ambray Genetics and the University of Washington announced their intentions to incorporate BRCA1 and BRCA2 into their next-generation sequencing panels, significantly reducing the cost of BRCA1 and BRCA2 diagnostic testing. Similarly, GeneDX has announced its plans to launch comprehensive genetic testing for hereditary cancers, and DNATraits has said that it will provide a test for $995, less than a third of the cost of Myriad’s test. There has also been speculation that whole genome sequencing will become easier without Myriad’s patents on isolated BRCA1 and BRCA2 sequences. However, Myriad will retain its monopoly over BRCA Analysis, the only test currently used worldwide for determining susceptibility to hereditary breast and ovarian cancer based on an analysis of BRCA1 and BRCA2 mutations. Additionally, Myriad will retain a monopoly on all research that involves the cDNA of BRCA1 and BRCA2, which includes many research methods that use a probe to assay for gene expression.
Following in the footsteps of Mayo v. Prometheus and Bilski v. Kappos, Myriad is the third case since 2010 in which the Supreme Court has used subject matter eligibility to limit long-standing practice of the USPTO. This apparent trend demonstrates the risk in exporting the maximum reach of U.S. law and practice at any given time via the USPTO and trade agreements negotiated by the office of the U.S. What is clear for now, however, is that the Supreme Court is scaling back on the maximalist tendencies of U.S. patent policy, referred to by some as the global IP ratchet.
Will other countries once again follow suit?