BIO 2014: US fears uncertainty over patent eligibility could drive innovation overseas

In a discussion about the implications of the US Supreme Court’s decisions on patent-eligible matter in Prometheus and Myriad at the BIO International Convention yesterday (Wednesday), entitled Patent eligibility from the trenches, an audience member expressed concern that uncertainty over patenting rules could drive American innovators overseas.

The recent rash of takeover bids by large US pharmaceutical companies bidding for UK and Ireland-based biotechs could be a symptom of this trend beginning to take hold.

As the US Patent and Trademark Office (USPTO) invites comments and suggestions related to its guidelines on subject matter eligibility following the Myriad and Prometheus decisions, the office’s former acting director Teresa Rea said she was optimistic for the future of biotech patents.

She added that the patent office will tend to err on the side of patentability.

However, Rea’s optimism was not shared by Dianna DeVore, senior vice president of IP and legal affairs at Ariosa Diagnostics.

She said that the Myriad and Prometheus decisions will have a “chilling effect” on diagnostic patents, and that her company is considering protecting elements of its business practices with trade secrets.

“That scares me,” Rea said. If the method is kept entirely secret, and reverse engineering is almost impossible, single companies will hold exclusive rights to diagnostic tests, which denies customers choice.

She said that new inventions should be made public: “I want it all in the public domain,” she added.

Kate Neville, a partner at Marshall, Gerstein & Borun LLP in Chicago, said that the USPTO’s guidelines, although drawn up in reference to the Myriad decision, extend the application of law beyond the realm of DNA, and could affect other therapeutic areas including antibiotics, antibodies and vaccines that comprise natural products.

Biologics, which make up the majority of new drugs, will be subject to a lot of uncertainty, which could stifle innovation, she said.

The BIO International Convention runs from June 23 to 26 in San Diego.