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Mayo yes, Myriad maybe
WASHINGTON, D.C.—In late March, the U.S. Supreme Court sent the Myriad Genetics patent case back to the Federal Circuit Court of Appeals, instructing the lower court to reconsider its decision from July 2011 that upheld the company's patents. The action comes hard on the heels of the court's decision in favor of Mayo Collaborative Services, denying Prometheus Laboratories' patent, which Mayo had disputed, on the relationship between drug metabolites in a person's blood and the optimum dosage of the drug.
In the decision, delivered by Justice Stephen Breyer, the court unanimously found that Prometheus' process was not patent-eligible. The court determined that because the laws of nature recited by Prometheus' patent claims—the relationships between concentrations of certain metabolites in the blood and the likelihood that a thiopurine drug dosage will prove ineffective or cause harm—are not themselves patentable, the claimed processes are not patentable.
Most observers agree that the Supreme Court clearly wants the appeals court to reconsider its earlier Myriad decision in light of this new precedent.
According to an analysis by GlobalData's head of medical devices, Derek Archila, and head of the healthcare industry dynamics team, Dr. Jerry Isaacson, at the center of the case is Myriad's licensing of two patents regarding genes BRAC1 and BRAC2. Patients with inherited mutations in these genes have an increased likelihood of developing breast or ovarian cancer as compared to the general population. Myriad developed a genetic test called the BRACAnalysis test that allowed physicians to identify patients at the highest risk of developing cancer. Patients testing positive could then be monitored or undergo preventive medical treatment to minimize their risk.
Whatever the outcome of the "re-review" of Myriad by the federal circuit court, the biotech community and their legal minions are collectively asking, "What's next?" Archila and Isaacson think it's still too early to tell what the impact of the Prometheus decision and a potential denial of Myriad's patents will have on biotechnology innovation. But Jim Mullen, a San Diego-based patent prosecutor (and molecular biologist) with Morrison & Foerster, who counsels clients in the diagnostics, therapeutics and clean-technology fields regarding patent procurement and IP due-diligence actions, fears the ruling in favor of Mayo will put all companion diagnostics in danger, with the resultant exodus of technology from the United States to less patent-restrictive nations.
Countering Mullen's viewpoint are opinions such as that of Jennifer Comacho, a patent attorney and shareholder at Greenberg Traurig, who notes that over the past decade, the Supreme Court has taken a heightened interest in patent cases, deferring less to the federal circuit court (which was created by Congress with passage of the Federal Courts Improvement Act of 1982 and merged the U.S. Court of Customs and Patent Appeals and the appellate division of the U.S. Court of Claims). She expects there to be some chilling effect as patent seekers focus on drafting claims differently, i.e., to move beyond mere correlation between biomarkers and the resulting diagnosis. In addition, she notes that academic gene patent holders may find it more difficult to license such patents to Big Pharma, which may want to see the patents upheld before loosening its purse strings.
For example, the patents in dispute in the Myriad case were not originally filed by the company. Instead, they were primarily licensed to the company by the University of Utah Research Foundation. This distorts the issue, says the GlobalData analysis, because academic researchers, while certainly aware of commercial possibilities for their discoveries, have traditionally been driven by science rather than profit. So, while these decisions may have a chilling effect on biotech companies, innovative research will likely continue, says Comacho.
Courtenay Brinckerhoff agrees with many of her legal colleagues about the chilling effect the Supreme Court's actions will likely create but shapes her views from a slightly different perspective. Brinckerhoff is a partner with Foley & Lardner, vice chair of the firm's Chemical, Biotechnology & Pharmaceutical Practice and a member of the firm's Appellate Practice and Life Sciences Industry team. She edits the Foley blog, PharmaPatentsBlog.com, and has written extensively on Mayo v. Prometheus.
"The Supreme Court didn't tell us what to do," she says, "and it will make things more difficult and uncertain for the next few years—probably at least two—until we get more guidance. Prometheus' claims were based on optimizing the dose of a drug by measuring its metabolite, which was known. If you have an invention involving a new metabolite, that might make a difference. Or the innovator might take a multifaceted approach to its claim or do more of a 'how-to' approach."
She says she sees the decision having a broader impact with extrapolation to other types of methods and with a trickle-down effect to the patent office, which is likely to toughen its evaluation of claims.
Citing a "cloud of uncertainty," Brinckerhoff says that one outcome seems certain: higher legal costs for claimants.
GlobalData figures indicate the market for genetic testing has experienced double-digit, year-on-year growth in recent years, and is expected to continue to grow at a CAGR of 10.3 percent through the end of this decade. The market for these tests, worth only $426 million in 2004, is expected to approach $2 billion by 2018.
"One thing that we do expect to result from these patent decisions is the shifting of diagnostic revenue from small biotech companies to larger, more established diagnostic players. Large companies possessing platform technologies will be able to devise their own tests, without the fear of patent infringement, to compete with more expensive proprietary tests. These companies can then offer their customers more comprehensive testing at a lower price at the expense of smaller companies who may have initially developed the tests with the promise of patent protection," states the Archila/Isaacson analysis.
As Mullen puts it, "Intellectual property is no longer a backwater of jurisprudence, but instead is now on the cutting edge."