Next on the agenda at the BIO Intellectual Property Counsels Committee Conference meeting in Seattle is the so-called Myriad case, Association of Molecular Pathology v. U.S.P.T.O, moderated by Andrew T. Serafini, Ph.D., Partner, IP Group & Life Sciences Practice, Fenwick & West LLP. I have been following the case closely since its beginning, so I am keenly interested in the case. I am separately working on a “readers digest like” summary of the oral arguments that took place at the Federal Circuit on April 4, 2011, so look for that in the coming days.
The first speaker on the second panel was Debra Greenfield, an attorney and Adjunct Assistant Professor, UCLA Center for Society and Genetics. It was a bit difficult for me to follow her presentation, oddly enough, because she was reading her presentation. Time and time again it seemed as if she was phrasing her background of the case and what is at stake as one who supports the ACLU challenge, ending with she looks forward to defending her position in the question and answer session. As it turns out, she is in favor the the ACLU position, which caught me by surprise. Let’s face it, the BIO IP attorneys are not exactly a friendly audience for her, but kudos to the program committee for attempting to provide a balance perspective of the case despite the obvious biases (which I share) of those in the audience.
Richard M. Marsh, Executive Vice President and General Counsel for Myriad Genetics is on the panel. He started off his presentation explaining that he really wants to talk about the case and the issues, but given that the case is ongoing and the future is uncertain regarding whether it will continue to be appealed, go back to trial or be dismissed altogether he might be unable to answer all questions. He did say clearly that the biotechnology industry “is under attack.” Marsh explained that the industry needs to be proactive because “if we sit back and idly do nothing there could be grave consequences.” Marsh explained that Myriad was able to do what it did thanks to the patents by giving it the time, money and incentive to innovate. I couldn’t agree with him more.
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Marsh explained that one of the charges levied against Myriad is that they prohibit research. Marsh said that just isn’t so and, in fact, said that the one thing that Myriad and every other company in the personal life sciences space must have is research. Research is necessary in order to get adoption and Myriad has funded research. Marsh explained that if you look at the fact there just isn’t any support for the proposition that Myriad has ever suppressed research efforts. In fact, he says there are 8,000 articles with 18,000 researchers who have published articles demonstrating they engaged in using the Myriad patented innovation. During the question and answer segment Marsh even pointed out that some 30 to 40 of the plaintiffs in the case have published showing that they have used Myriad claims without any enforcement efforts against them.
Marsh also explained the truth relating to one of the plaintiffs who is alleging that Myriad rejected her insurance. In fact, as it turns out, her insurance was the Massachusetts version of Medicare. The reason Myriad couldn’t accept the insurance wasn’t because they didn’t want to, but because the only way to accept this insurance is to have a negotiated contract and Massachusetts wouldn’t negotiate with Myriad despite repeated attempts by Myriad to negotiate. Additionally, Myriad went to great lengths to get her the test for free, and she did ultimately have the test. So the ACLU characterization of Myriad refusing to accept her insurance and being big, bad, evil and greedy just don’t jive with the actual facts.
Allow me to interject here — those darn pesky facts getting in the way of the ACLU argument again! Time and time again in the Myriad case we see that the ACLU doesn’t understand patent law, they either recklessly get the science wrong or knowingly make false statements about the science, and as it turns out they egregiously mischaracterize basic facts about insurance coverage and Myriad’s attempts to get testing to all those who want such testing.
Huw Hallybone, a partner at Carpmaels & Ransford in London, took to the podium to discuss the European view of DNA patents. Yes, DNA is patentable in Europe. He started with the European Biotech Directive of July 6, 1998, and which says: “An element isolated from the human body or otherwise produced by means of a technical process, including the sequence or partial sequence of a gene, may constitute a patentable invention, even if the structure of that element is identical to that of a natural element.” Hallybone explained that this was very different from where the European Directive drafts started back in the 1980s, which would not have allowed for the patenting of DNA.
The panel discussion turned back to Greenfield to discuss her perspective of the oral arguments in the Federal Circuit case. She started by saying that the oral argument was difficult to follow, which I find curious really. I didn’t find the oral arguments difficult to follow, although if you support the ACLU I can understand why your head would be spinning after the oral argument, which seemed overwhelmingly skeptical to the ACLU position, both relative to the substance and science of the case, as well as to the fact that there are real questions about whether there is standing for any of the plaintiffs to have brought a Declaratory Judgment case, time and time again Judge Moore troubled with what the ACLU was asking, which was to basically throw away the two-prong test and just assume that Myriad’s challengers would practice the invention, despite the affidavits of those having at least some evidence of apprehension of a lawsuit saying at best that they would likely have an earnest desire to consider whether they would engage in allegedly infringing activities, which Judge Bryson characterized as qualifications on qualifications, and which I just can’t see supporting a DJ action. Additionally, on standing, it seems unlikely that the Federal Circuit will allow consumers who want cheaper generics to bring Declaratory Judgment Actions seeking to invalidate patents.
Frankly, I am finding it difficult to sit here and listen to Greenfield, who is now talking about how the Federal Circuit refused to discuss or even acknowledge that the underpinnings of the law of patent eligibility is to prevent patenting of that which is the product of nature. The trouble she has, and which the ACLU will have, is that it ignores the science.
Is DNA a product of nature? Yes. Is isolated DNA a product of nature? Absolutely not. So Greenfield and the ACLU need you to believe that anything that is derivative of a product of nature is unpatentable, and that is simply not true. The Supreme Court addressed that point head on directly in Chakrabarty where they held that genetically modified bacterium is patentable eligible subject matter. The key was and always has been human intervention. Is a bacterium a product of nature? Yes. Is a genetically modified bacterium a product of nature? Absolutely not. This is exactly what the Supreme Court recognized in Chakrabarty and exactly why the case is directly on point. Greenfield and the ACLU obviously don’t like the law, but pretending that it is not the law seems naive to the extreme.
As Greenfield sat down, Marsh again took the podium to discuss his views of the oral argument. He said that he thought the Federal Circuit wants to address the patent eligible subject matter issue under 35 U.S.C. 101, but said he thinks they will have a hard time getting past the jurisdictional issues. I tend to agree. I personally think that most of the plaintiffs will be found not to have standing to have brought the Declaratory Judgment Action. I also believe there is at least a 50-50 chance that the entire case will be dismissed on jurisdictional grounds. It seems certain to me that the consumer plaintiffs will be found not to have standing, and then it gets interesting. Those with the best first prong evidence for a DJ have little or no second prong evidence, and those with second prong evidence have no first prong evidence. Jurisdiction will be interesting indeed.
In summary, Marsh explained that he thought it was clear that the Federal Circuit panel thought that isolated DNA is a separate chemical entity compared with naturally occurring DNA. Marsh said: “But for the handy-work of man, isolated DNA would not exist.” And at the end of the day that seems to sum up the entirety of the case. If you ask me, there is zero chance the ACLU will prevail at the Federal Circuit, and when they appeal to the Supreme Court they will lose as well. Given the state of the and how it so clearly mandates a Myriad victory and an ACLU loss it seems likely that this case is not about the Myriad patents, but rather about gene patents in general. I think these challenges are just the first battle and ultimately the fight will go to Congress.
My presence at the BIO IP Counsels Committee Conference has been facilitated thanks to BIO and the Practising Law Institue. I would like to thank BIO for providing me media access and privileges to the event, and for working to facilitate an exclusive interview with Erik Iverson of the Bill and Melinda Gates Foundation, who will provide the keynote address. I would also like to thank PLI, our major sponsor at IPWatchdog.com, for underwriting my travel expenses. Thanks to the generous support of PLI we have been able to engage in news gathering activities coast to coast.