1 May 2010Americas

Myriad issues for gene patents

Since the entire human genome was sequenced and made available for the first time in 2003, scientists and medical professionals have looked to a future in which all medical treatment will be tailored to individuals, based on their unique genetic make-up. Individual genes responsible for illnesses such as cancer will be identified early, risks will be assessed accurately, and many medical problems will be treated or prevented by targeting therapy to the specific needs of a person’s genetic profile.

So goes the theory at least. However, as with many technologies that are still in their infancy, this vision of the future has plenty of obstacles in its way. There is a link between genes and illness, but it seems in most cases to be complicated—preventing heart disease is not always so simple as identifying a ‘heart disease gene’ and developing drugs to target it, or tests to identify the risk of getting it. And even if it were, any such programme is certain to require substantial research and development, which comes with a significant cost.

The question is how to incentivise the traditional pharmaceutical developers (multinationals and academic researchers) to invest time and most importantly, money, in a process that may result in nothing at all. Research into a gene that is linked with a particular illness could equally well disprove a causal relationship as prove it.

To date, the incentive has been straightforward: a company that can isolate particular DNA sequences (which make up genes) can then patent them, conduct whatever research is necessary and commercialise its findings, secure in the knowledge that others won’t be able to piggyback on its research. But a US district court decision in late March threatens to change those certainties.

Isolated incident?

On May 12, 2009, the American Civil Liberties Union (ACLU) and several other plaintiffs, including breast cancer sufferers, filed a suit against patents owned by the University of Utah Research Foundation, related to the BRCA1 and BRCA2 breast cancer genes. The suit also named Myriad Genetics, which licenses the patents, and the US Patent and Trademark Office (USPTO), which granted them.

The suit alleged that the patents were unconstitutional because genes are ‘products of nature’, which can’t be patented. It also claimed that the ‘method claims’ of the patents didn’t meet the Bilski ‘machine or transformation’ test, because the patents were not tied to a particular machine and did not physically transform the gene sequences. Myriad’s method claims were for methods of comparing and analysing DNA strands to identify mutations that increase the risk of breast or ovarian cancer.

Many had assumed that there was no case to answer, especially on the composition claims. But in late March of this year, Judge Robert Sweet of the US District Court for the Southern District of New York dropped a bombshell: he ruled in favour of the plaintiffs on the method claims and the composition claims, thereby invalidating the patents.

While Myriad instantly announced that it would appeal against the ruling, many practitioners are worried that the ruling could have damaging implications for the biotechnology industry.

As Hans Sauer, of the Biotechnology Industry Organization (BIO), says: “If the ACLU’s legal arguments were adopted, whole classes of patents that today protect biologic drugs, biotechnology manufacturing processes and other molecular biology inventions could be invalidated or drawn into question.

Denying patent protection for such basic molecular biology inventions would not only impact genetic testing, but also remove incentives for the development of biologic therapeutics and personalised medicine products for many unmet medical needs.”

The ACLU said in a statement that the case represents a huge victory for women’s health and scientific freedom. “Myriad has already said that it will appeal, but if this decision is upheld, it will mean that the thousands of researchers and clinicians who have the ability to conduct BRCA testing and provide results to women will no longer be prohibited from doing so. This could well mean that the price of this test will come down, making it accessible to many women for whom the current cost (Myriad charges over $3,000) is prohibitive.”

Judge Sweet didn’t address the issue of whether Myriad’s patents prevent research into the genes or prevent fair access to genetic tests for patients, as claimed by the plaintiffs.

On the issue of the patent’s composition, the judge ruled that “[i]n light of DNA’s unique qualities as a physical embodiment of information, none of the structural and functional differences cited by Myriad...render the claimed DNA ‘markedly different’ [from natural DNA]”.

He further underlined that “[t]he entire premise behind Myriad’s genetic testing is that the claimed isolated DNA retains, in all relevant aspects, the identical nucleotide sequence found in native DNA”. Of course, it’s possible that the Federal Circuit (and eventually, the Supreme Court) may quash the district court’s decision.

David Gass, partner at Marshall Gerstein Borun LLP in Chicago, says the decision “is a departure from the last 30 years or so of biotech practice”. He says there is precedent supporting the idea that things that man isolates from nature can be patented, especially when the isolated material has a new or different use from the things in their natural state.

“If the ACLU’s legal arguments were adopted, whole classes of patents that today protect biologic drugs, biotechnology manufacturing processes and other molecular biology in ventions could be invalidated or drawn into question”

And even assuming that the judge used the proper standard to reach his decision, Gass says: “You need to look at whether the product is markedly different from how you would find it in nature. The judge focused on the informational character of DNA—he refused to see anything markedly different. He seems to acknowledge that DNA in nature cannot be used for the genetic testing that Myriad does. It’s a reasonable conclusion to draw that if you cannot use something in nature for something like a diagnostic assay then you must have changed it in a significant way to use it for the diagnostic assay.”

Gass thinks the Federal Circuit “would find it difficult to sustain this opinion”. But even if it does, Judge Sweet’s ruling “didn’t decide how much you would need to change the DNA to make it patentable. So some sort of radioactive label might be attached to it for the purposes of a claim. You might put the DNA in some kind of non-naturally occurring expression vector. There are lots of types of claims that the industry can write that were not addressed in this case.”

Machine or transformation?

While the ruling on the patents’ composition of matter claims attracted the headlines, Judge Sweet’s evaluation of the method claims could have an equally profound impact on future cases. He relied on the Federal Circuit’s In re Bilski opinion, which is due to be clarified by the Supreme Court this year.

Judge Sweet found that “[t]he claimed process is not limited to any particular method of analysis and does not specify any further action beyond the act of ‘analysing’”, meaning that it cannot be seen as transformative. “[E]ven if the challenged method claims were read to include the transformations associated with isolating and sequencing human DNA, they would still fail the ‘machine or transformation test’…for subject matter patentability.”

Gass says that for “diagnostic companies, the methods issue may have a more immediate effect”, especially since it is unclear how far-reaching the composition element of the judgment will be for therapeutics companies.

Playing politics

For the most part, challenges to patents tend to be launched by competitors—those who feel that heir own patents have been infringed or those who want to develop competing technologies that may implicate the patent at issue. The Myriad case is unusual because it was prompted by a collection of plaintiffs with personal and political agendas.

Whether the court’s judgment signals a change in attitude towards patents of this sort, or merely turns on the specific facts of the case, remains to be seen, but it threatens to dredge up an argument that many thought was settled. But the fact that Judge Sweet decided the case on a summary judgment would imply that he was relatively certain of his ground on the broader issues.

In Europe, there was much discussion prior to the EU Biotechnology Directive of 1998 on the subject of what constitutes a patentable invention in the biotech field. As Charles Harding, partner at D Young in London, says, the discussions were designed to “end the argument once and for all”. Since then, the situation in Europe has been clear.

Indeed, the European Patent Office’s (EPO) Technical Board of Appeal has already ruled emphatically on some of the issues surrounding the Myriad patents. In relation to the BRCA1 patent, it affirmed that “an element isolated from the human body or otherwise produced by means of a technical process may constitute a patentable invention”, as envisaged in the directive and confirmed by the European Patent Convention, which EU member states are obliged to apply.

There are, however, potential ways to challenge these sorts of patents in European national courts. In Eli Lilly and Company v. Human Genome Sciences, the English Court of Appeal found that although Human Genome Sciences’ patent for a protein was “patentable subject matter”, the invention was not “susceptible of industrial application”, because at the time the patent was applied for, there was no evidence for the therapeutic use of the protein. The court’s ruling contrasted with the EPO’s view of the case, but seems to impose a higher burden on biotech, and especially gene patents in the future.

Harding says that while there is a difference on this point between the UK court and the EPO board of appeal, the central point about the patentability of gene sequences is not up for debate.

Both Eli Lilly and the Myriad case may point to a trend that will nonetheless give biotech companies more to think about when applying for patents. Both seem to require greater specificity, whether on the method claim of Myriad or the industrial application of Eli Lilly. This finds analogues in current German practice.

In Germany, companies are obliged to insert the purpose of a technology into the patent claim. In an area such as gene patents, this can be problematic. Almost by definition, companies that are developing therapies or diagnostic tests for genetic disorders are engaging in research with an eye firmly on its future application. The need to protect their investment may come far earlier than they can specify with any certainty what the function of their products will be.

Dr. Thomas Friede, partner at Bardehle in Munich, says: “It’s of course a concern that you have to insert the purpose into the claim. Since you do not have this requirement for European patents, gaining a European patent will result in a patent with a broader scope.”

Looking ahead

The Myriad decision, especially if it is upheld, may have enormous ramifications for the biotech industry, including giving rise to a difference in the approach of European and US courts to a fundamental issue for the success of therapeutics and diagnostics companies. And given that the US is the biggest market for such companies, any such change is likely to have a huge impact on the profitability of the companies.

As Friede says: “It would raise the question of whether it is possible for biotech companies to work on an open-source basis—the answer is probably no.” This is doubly true given that many of the companies in the industry are small or medium-sized businesses that would not be able to compete with larger rivals without patent protection for their research.

The most likely option, and one that may happen to a degree whatever the eventual result in Myriad, is that companies will tighten up their patent applications, taking care to include only the information that is necessary. However, disclosure requirements for European patents are exacting, so any company that applies for a European patent in this area may be concerned about the possibility of not being protected in the US if the Myriad decision is upheld, and yet having the obligation to disclose fully and in public the nature of its European patents.

For now though, there is no need for companies to panic. The USPTO will not change its current practice because of the district court ruling, and neither are any other courts obliged to take the same view. Given the time it takes for appeals to be heard at the Federal Circuit, and if it takes the case, at the Supreme Court, it may be a few years before the issue is definitively resolved in the US. In the meantime though, there is nothing to stop rivals of Myriad testing the waters and trying to develop therapies or diagnostic tests related to the BRCA1 and BRCA2 genes. Whether they will do so remains to be seen.

But whatever the outcome, it will have an impact. As Gass puts it: “There is perhaps a short and long-term view of these kinds of things. In the short term, you might open a particular product to competition and then the price might go down, but in the long term, you might limit the ability of companies to justify investment in developing new technologies. If there’s no incentive at the back end, then the potential for innovation is limited.”

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