James Madison, father of the Constitution and proponent of strong patent rights.
As the end of 2013 approaches and I look back on what has transpired I am saddened to see that through the year patent rights have continued to erode. It is difficult to comprehend just how far the pendulum has swung. At one time strong patent rights were viewed by our Founding Fathers as obviously necessary. Now any patent rights are ridiculed as a relic of the past that simply stands in the way of innovation. The reality, however, is that patents don’t stand in the way of innovation; patents foster innovation. But so many won’t even take the time to inform themselves. Rather they equate “innovation” with a new consumer product. But to innovate is to do something new. Innovation has nothing in and of itself to do with a new products or services.
What those urging a weaker patent system want is the ability to release products and establish services regardless of whether they are infringing others. But those who infringe are not innovators, at least not in the most broad sense. Sure, they may have improved something, but if they are infringing then what they have done is copy an innovator. How and why that isn’t self-evident is a mystery. Copying is not innovating!
And if patents were getting in the way of innovation then why aren’t we seeing a standstill in the smartphone industry? The arguments made by the anti-patent crowd are ridiculous on their face, yet decision makers just nod their head in agreement as if they speak the gospel. The truth is the smartphone industry started with the iPhone in late 2007. It is just 6 years old! The phones from 2007 look and function nothing like the smartphones do today, and every new version has new improvements, better battery life, stronger structural integrity, glass that is harder to break, operates faster, has better cameras, etc. etc. For an area that is allegedly being suffocated by patents there sure is a lot of readily apparent improvement.
What follows below is a review of some of the biotech and pharma news stories that caught my attention during the month of September 2013.
Mark Lemley’s firm files DJ Action against Myriad
On September 20, 2013, Counsyl, Inc. filed a declaratory judgment complaintin the United States District Court for the Northern District of California against Myriad Genetics, Inc. Counsyl seeks a declaration that claims from 8 Myriad patents are invalid and not infringed. Further, Counsyl seeks their attorneys fees because they assert that this is an exceptional case given that Myriad is pursuing enforcing its patent portfolio despite losing on “certain claims” in the patents at issue at the Supreme Court in Association for Molecular Pathology v. Myriad Genetics.
The problem with the Counsyl declaratory judgment action is that there does not seem to be any contact with Myriad, so they claim that “[t]here is a definite, concrete, real and substantial controversy between Counsyl and Myriad of sufficient immediacy to warrant the issuance of a declaratory judgment…” However, there are no facts in the filing that show anything other than suspicion that Myriad may at some time sue Counsyl because Myriad has stated that they aggressively intend on asserting rights to the patents they own. Of course, Myriad has a right to seek to enforce their patents and this type of nebulous, generalized fear has never been sufficient to support declaratory judgment jurisdiction.
Senate Judiciary Committee Chairman Patrick Leahy (D-VT) asked NIH in a July 12 letter to force compulsory licensing of Myriad’s BRCA breast and ovarian cancer genetic test under the “march-in rights” provision of the Bayh-Dole Act. “Testimony presented to the U.S. Patent and Trademark Office made clear that many women are not able to afford the testing provided by Myriad.” Senator Leahy also charged that the Myriad test “was developed with federally-funded research.” See Leahy Urges Action.
Myriad received an exclusive license to develop the test from universities operating under Bayh-Dole Act. The law allows nonprofit institutions receiving federal R&D funds to own and license resulting inventions so they can be commercialized for use by the public.
Critics of Bayh-Dole have long sought to reinterpret its statutory standards under which the government can compel universities to issue compulsory licenses as a weapon to control prices. This was not the intent of the law.
Widely divergent views have formed in the wake of the Supreme Court’s decision in Association of Molecular Pathology v. Myriad Genetics, Inc., No. 12-398, slip. op. (U.S. Jun. 13, 2013). Some commentators have reacted with dire predictions for the biotech industry, suggesting that the Court’s holding has unduly narrowed patent protection traditionally granted to DNA technology and has disincentivized researchers in the field, particularly those from small start-ups. Other commentators suggest that the Supreme Court’s decision in Myriad willactually benefit genetic research, particularly researchers at the start-up level. The authors of this post tend to agree with this latter view.
The Court’s holding with respect to what constitutes unpatentable DNA subject matter was quite limited. Justice Thomas, writing for the Court, explained that “[w]e merely hold that genes and the information they encode are not patent eligible under § 101 simply because they have been isolated from the surrounding genetic material.” Id. at 18.In other words, a naturally occurring DNA segment does not qualify as patentable subject matter merely by virtue of its “isolation from the remainder of the human genome.” Id. at 1. Despite this limitation, the Court identified and implicated several related areas of technology that would not, as a matter of law, qualify as unpatentable subject matter. Indeed, if read carefully, the opinion actually provides instructions on how to successfully procure patent rights for technologies related to genes that have been identified and isolated.
The Supreme Court unanimously ruled yesterday that isolated DNA is not patent eligible under 35 U.S.C. §101. SeeAssociation of Molecular Pathology v. Myriad Genetics. Or, put more precisely, the Court ruled that Myriad’s isolated DNA claims as written are not patent eligible. The Court further ruled that similar cDNA claims are for the most part patent eligible, seemingly because the information underlying the claimed molecule omits some content of the information which underlies the full gene.
Spoiler alert: If you are the type of person who enjoys reading about convoluted analogies to baseball bats, plucked leaves, mined gold and surgically removed livers, you are out of luck. Mercifully, and quite amazingly, the Court managed to avoid that morass.
A pivotal point is the question of whether Myriad was claiming information or a chemical compound. Of course, the unique thing about DNA is that it is both (i) a chemical compound comprised of carbon, oxygen, nitrogen, phosphorus and hydrogen, and can be bound to cellular proteins, and (ii) an informational blueprint for proteins which form the building blocks of every living thing.
Earlier today the United States Supreme Court issued a decision that fundamentally changed the law of patent eligibility that has existed in the United States for the past 30 years, calling into question at least many tens of thousands of issued patents and many tens of thousands of pending patent applications. See Supremes Rule Isolated DNA and some cDNA Patent Ineligible.
With lightening speed, the United States Patent and Trademark Office has sent a memorandum to patent examiners relating to the aforementioned Supreme Court decision in Association for Molecular Pathology v. Myriad Genetics, Inc. The 1-page memorandum from Drew Hirshfeld, who is Deputy Commissioner for Patent Examination Policy, is direct. “Examiners should now reject…”
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