May 01, 2010

Mutant court case?

Medical News, May 1, 2010

Intellectual property derived from gene patents supports massive industries; employing hundreds of thousands of individuals. In light of the social and economic impact of gene patents, when the District Court essentially found all gene patents to be invalid, it was not only the legal community that took notice.

In a surprising move away from what many thought to be well-established fundamentals of patentability, a United States District Court Judge recently found a group of so-called "gene patents" to be invalid. The decision in the case has the potential for a substantial impact in healthcare and the life sciences.

Assoc. for Molecular Pathology v. U.S. Patent and Trademark Office (S.D.N.Y., March 29, 2010) was a case brought by the American Civil Liberties Union (ACLU) and others against the U.S. Patent and Trademark Office (USPTO), Myriad Genetics, and the University of Utah Research Foundation. The patents at issue covered isolated DNA that is useful for assessing risk of developing breast cancer.

Patents for isolated DNA molecules, sometimes referred to as "gene patents," have a wide-range of utilities, from early-stage detection of life-threatening diseases to the large-scale production of therapeutic compounds and vaccines. Early stage diagnosis is often touted as having great potential to improve prognosis and reduce healthcare costs, as is technology for efficiently-producing biologics. Intellectual property derived from gene patents supports massive industries, employing hundreds of thousands of individuals. In light of the social and economic impact of gene patents, when the District Court essentially found all gene patents to be invalid, it was not only the legal community that took notice.

Patent Protection is Based in the U.S. Constitution

Even before enacting the Bill of Rights, our founding fathers saw fit to provide for patent protection in the U.S. Constitution. At the time that the Constitution was drafted, patent laws protecting inventions had existed in the United Kingdom for more than 150 years, and were recognized to be important for the strength and prosperity of the new nation. It was recognized that copying an invention is significantly less costly than investing in the original research and development of the invention. The logic is simple: one is more likely to invest time and resources in innovation if one is given the opportunity to recoup the investment through a limited exclusive right to resulting inventions.

Basic rules of econimics suggest that, due to controlled supply and competition during a period of exclusivity, a patented product will be more costly; however, cost will decrease when generic competitors enter the market after the exclusiveity period has expired. Although, a portion of the public might be unable to afford the product until the patent has expired, without the incentive put in place by the promise of a limited exclusivity period, the product might never be brought to market to benefit the public in the first instance.

Criteria for Patentability

Not just anything can rise to the level of an invention worthy of patent protection. The Patent Act requires that an invention meet the basic criteria of being useful, new and not obvious. The subject matter of the invention must also be deemed patent eligible.

The basis for isolated DNA being patent-eligible subject matter is found in a lengthy history of patent protection for isolated and purified products of nature, and the recognition that such products are different and have unique utility once isolated from their natural state. For example, U.S. Patent No. 141,072 was granted to Louis Pasteur in 1873 for isolated yeast. In more recent years, thousands of patent claims have been grated for isolated DNA having numerous beneficial uses.

Potential Impact of the Case

Proponents of the decision in AMP v. USPTO consider the case to be a victory for breast cancer patients and researchers. Others focus less on the invalidation of the specific breast cancer diagnosis patents, and more on the implications that the decision could have on the thousands of other issued patent claims, as well as future innovation.

If the decision is ultimately allowed to stand, the value of intellectual property portfolios based on isolated DNA would be decimated, and the incentive to invest in DNA-based technologies would decline.

Many existing patents to isolated DNA, such as the breast cancer diagnosis patents at issue in AMP v. USPTO, have already been successfully commercialized such that viable products and markets have been created. For the general public, the invalidation of patents for developed products may result in nothing more than receiving an early benefit of lower prices associated with the generic competition. On the other hand, there is a risk that the public may receive little or not benefit from yet-to-be developed technologies that enter the public domain before they have been refined and made useful through investment in their commercialization.

Most legal scholars and practitioners are expecting an appeal to the Federal Circuit and a reversal of the District Court decision in AMP v. USPTO, making way for an interesting question to be answered by the U.S. Supreme Court.