Earlier this morning the United States Supreme Court issued its much anticipated ruling in Association of Molecular Pathology v. Myriad Genetics. Justice Thomas wrote for a a nearly unanimous Court, only Justice Scalia wrote separately and he concurred in part and concurred in the judgment. The decision is not long, and approximately half of the decision is background, yet at the end of the day much damage has been done to the biotechnology industry, the medical industry and the patent system. Indeed, the assault on patents continues.
According to Todd Dickinson, Executive Director of the American Intellectual Property Law Association, the outcome was fairly predictable given the oral argument, although 9-0 was a bit surprising. Dickinson told me via telephone earlier today the the decision itself is disappointing because it “keeps framing an anti-patent narrative.” He went on: “Patents are terribly useful to incent innovation and necessary to provide funding. If we undermine the patent system further I think we will be shooting ourselves in the foot.” I couldn’t agree more!
Justice Thomas summarized the Court’s decision by saying:
[W]e hold that a naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated, but that cDNA is patent eligible because it is not naturally occurring.
Further, with respect to cDNA, Justice Thomas also explained:
[T]he lab technician unquestionably creates something new when cDNA is made. cDNA retains the naturally occurring exons of DNA, but it is distinct from the DNA from which it was derived. As a result, cDNA is not a “product of nature” and is patent eligible under §101, except insofar as very short series of DNA may have no intervening introns to remove when creating cDNA. In that situation, a short strand of cDNA may be indistinguishable from natural DNA.
So, cDNA is patent eligible as long as the series is not too short. But wait, there is more. It is not correct to take form this decision any believe that cDNA is patent eligible. When you unpack the decision and apply it to the claims directly, which the Supreme Court did not do directly, it becomes clear that there are real and very significant limitations on patent eligibility relating to cDNA.
More on cDNA
Some are reporting that the Supreme Court split the baby, so to speak, finding isolated DNA patent ineligible and cDNA patent eligible. Not so fast!
Time and time again the Court explains that Myriad’s claims cannot be saved for one reason after another, but how is that possible if cDNA is patent eligible? You see, the claims at issue all incorporate cDNA into the claim itself, and the cDNA incorporated was a composite cDNA created from hundreds of individuals.
Justice Thomas further explained:
[C]laim 1 [of the ‘282 patent] asserts a patent claim on the DNA code that tells a cell to produce the string of BRCA1 amino acids listed in SEQ ID NO:2.
Justice Thomas then goes on to explain:
Like SEQ ID NO:2, SEQ ID NO:1 sets forth a long list of data, in this instance the sequence of cDNA that codes for the BRCA1 amino acids listed in claim 1. Importantly, SEQ ID NO:1 lists only the cDNA exons in the BRCA1 gene, rather than a full DNA sequence containing both exons and introns.
The Supreme Court ruling must mean that even though cDNA is patent eligible the presence of cDNA in the Myriad claims did not save those claims, although the point is not directly addressed. Thus, the statement that cDNA is patent eligible has real and significant limitations. Still, whatever the boundaries of the Supreme Court ruling, the ruling has to at least mean that a composite cDNA made from the hundreds of individuals in a lab setting is not patent eligible unless it contains both exons and introns.
Chakrabarty No Longer Relevant
The Supreme Court’s decision today obviously and seriously undermines the continued relevance of the Chakrabarty decision given that something (i.e., composite cDNA) created in a lab by man is not patent eligible. The very foundation of the Chakrabarty decision mandates a finding of patent eligibility when man has engaged in activity to alter something. Clearly a composite cDNA made up of hundreds of individuals was created by man and by and through the sequence listings incorporated into the Myriad claims. Thus, the very fabric of Charkabarty has been ripped to shreds, although the Supreme Court didn’t understand that this is the factual and scientific consequence of the ruling.
Not recognizing that the decision today undermines Chakrabarty, the Supreme Court sought to distinguish this case from Chakrabarty, explaining:
In this case, by contrast [to Chakrabarty[, Myriad did not create anything. To be sure, it found an important and useful gene, but separating that gene from its surrounding genetic material is not an act of invention.
Justice Thomas then wrote the nearly incredible statement:
Groundbreaking, innovative, or even brilliant discovery does not by itself satisfy the §101 inquiry.
Yes, the Supreme Court ruled today that innovative discovers are not patent eligible. No need to inquire whether they are new, non-obvious and adequately described. If you have an innovation no patent for you!
Thomas claims support for this ridiculous statement that innovative discoveries are not patent eligible is found in Funk Brothers Seed Co. v. Kalo Inoculant Co. Yes, the same Funk Brothers case from 1948, which gets used to kill software too! The same case that was decided by the Supreme Court some 65 years ago, which pre-dates both the biotechnology and computer industries.
Justice Scalia’s Opinion
As for Justice Scalia’s concurrence-in-part and concurrence in the judgment, it was very brief. Justice Scalia wrote only 1 paragraph, which in part explained:
It suffices for me to affirm, having studied the opinions below and the expert briefs presented here, that the portion of DNA isolated from its natural state sought to be patented is identical to that portion of the DNA in its natural state; and that complementary DNA (cDNA) is a synthetic creation not normally present in nature.
So if an invention is identical to what appears in nature the innovation is patent ineligible. That should fairly well kill any and all development in the medical field related to growing organs for medical transplantation since the entire point is to create something that is identical to the organ found in nature.
Fallout from the Decision
This decision is really a huge blow for much of the biotech industry. You can expect stock prices for many biotechnology companies to crater, if that hasn’t already happened by the time you are reading this article.
Furthermore, you can expect a near complete cessation in many areas of personalized medicine. If creating something in a lab, such as a composite cDNA, does not make the underlying claims patent eligible because what results is indistinguishable from what appears in nature that means that the fledgling and potentially promising technologies to grow organs for transplantation will shrivel up and die. The whole point is to create an organ that is indistinguishable from what appears in nature so that it can be transplanted into a human body to prolong life. Given the breadth of this opinion and the uncertainty it will cause funding will dry up in the U.S.
Today is a big win for those who wish to copy innovators.
Today is a big lose for the advancement of science and even a bigger lose for people who rely upon the advancement of medical technologies to live longer, better lives. Thus, we all lose.
Today is also a big loss for the patent system. The United States Patent and Trademark Office has been issuing these types of patents for upwards of 30 years without challenge in the Courts and all the while Congress knowing that such patents were being issued. The settled expectations of corporations meant nothing to the Supreme Court, which continues to operate as if a patent is not a property right.
Will Congress step in and do anything? Who knows, but they should. Yesterday the Patent Trial and Appeals Board at the USPTO issued a ruling that as a consequence of the ruling makes software patent ineligble. So on back to back days we have decisions that will render many hundreds of thousands of patents void and render many hundreds of thousands of patent applications useless.
By the way, if you haven’t noticed, the software and biotechnology industries are the backbone of the U.S. economy. So while this decision was urged by the Obama Administration the impact will not be good news for the Obama Administration, which will watch numerous jobs vanish and the economy suffer as a result.
The war on patents continues!