What We Learned From The Myriad Oral Argument

Yesterday brought the long-anticipated oral argument in the Myriad gene patent litigation. After much speculation, the final panel consisted of Judges Lourie, Bryson and Moore. Following the Myriad argument, Judge Lourie was replaced on the panel for the remainder of the day’s cases by Judge O’Malley, lending support to speculation that Judge O’Malley recused herself from the Myriad argument because her lawyer-spouse filed an amicus brief in the case.

What We Learned from the Myriad Oral Argument. For all of the attention focused on the Myriad oral argument, most spectators have only one very practical question: did Monday’s argument provided any meaningful clues with respect to how the Federal Circuit might rule on appeal of the lower court’s startling ruling?

In a word: no. In a few more: we learned nothing from the Myriad argument that leaves us better able to predict how the Federal Circuit will rule in this case.

That may be unsatisfying for researchers, businesses, investors, academics and many others who, having tracked the litigation since its inception, are anxious for a resolution, but it should not come as even a mild surprise.

First, as John noted last week, it is dangerous to read too much into any oral argument. While an oral argument can be a balance-tipper in a close case, there’s no guarantee that a written judicial opinion will resemble the prior courtroom conversation.

Second, and more importantly, it is unlikely to the point of practical impossibility that the Federal Circuit’s upcoming ruling in Myriad will be the last word in the case. Whatever result the court reaches is virtually certain to be appealed and, as we wrote earlier this year, there is little reason to expect that the judicial system will finally resolve the issue of gene patenting in 2011.

What Caught Our Ear in Myriad. The limited predictive value of this week’s oral argument has not stopped media and legal commentators from dissecting how the Federal Circuit is likely to rule. While there is no way to confidently predict how the Federal Circuit will rule when it issues its opinion, likely in the next 2-3 months, here are a few of the issues raised during oral argument that caught our ear:

Procedural Arguments. The court spent considerable time addressing two procedural arguments raised by Myriad (and the other defendant-appellants): (1) that the plaintiffs in the case lack standing to maintain the lawsuit (a very technical question focused on whether these plaintiffs face enough of an immediate threat from Myriad’s patents to be allowed to challenge them) and (2) that, even if the plaintiffs were to win on all of their claims, they would not get the practical outcome they want (opening up BRCA testing beyond Myriad’s monopoly) because they failed to challenge all of the Myriad patents and claims that apply to BRCA testing (redressability, in legal jargon).

Those arguments seemed to receive more attention in court than they did in the parties’ briefs. On the one hand, this may reflect nothing more than the fact that these issues come logically first – if a plaintiff lacks standing to sue a court is barred from considering that plaintiff’s substantive claims – and there was a limited amount of time available for oral argument.

Then again, the extensive procedural discussion certainly raises the possibility that the Federal Circuit might dispose of Myriad on technical procedural grounds. This view finds some support in the concerns voiced from the bench (particularly by Judge Moore) that a ruling in Myriad could have “dramatic” consequences for the biotechnology industry, and that the substantive issues surrounding the patentability of human genes might be more appropriately addressed by Congress.

A procedural ruling, however, would fail to address an issue (the patentability of genes) that has sown uncertainty throughout the industry and created a rift within the United States government.

It would also be every bit as likely to be appealed as a substantive ruling and, in the long run, would probably accomplish nothing more than delaying the inevitable. Even if Myriad is ultimately dismissed on procedural grounds, it seems highly likely that one or more of the current plaintiffs and/or Myriad’s potential commercial competitors will continue to press the issue.

Still, because Myriad is the current patent holder and dominant BRCA testing provider, a scenario in which the Federal Circuit dealt with Myriad on procedural grounds, and thereby further delayed a substantive resolution, would likely be a practical victory for Myriad.

Whole-Genome Sequencing. As soon as the discussion shifted from procedural to substantive matters, Judge Bryson posed a pointed question to Gregory Castanias, Myriad’s attorney:

To me, at least, it is an important question as to how preclusive your patent – and any other patent on any particular gene – would be if, in effect, you have to get 100, 200 or 1,000 licenses before you can sequence the genome of an individual.

The uncertain relationship between existing gene patents and emerging whole-genome sequencing technologies and services is one we first discussed nearly two years ago, and one that has been hovering at the periphery of the Myriad litigation.

On Monday Castanias struggled to answer the question directly, noting (correctly) that it would depend in part on whether the particular method of sequencing involved “using” an isolated DNA sequence covered by Myriad’s patents.

The issue was raised directly only one other time, by Christopher Hansen of the ACLU (arguing on behalf of the plaintiff-appellees) in the context of Myriad’s BRCA method claims. Those claims involve comparing or analyzing gene sequences to identify the presence of mutations corresponding to a predisposition to breast or ovarian cancer. According to Hansen, if the judges were to compare the wild-type BRCA sequence against the publicly available genome sequence from Personal Genome Project founder George Church, side-by-side on a computer screen, they would infringe Myriad’s patents.

As we move rapidly into an age where whole-genome sequence data is inexpensive and ubiquitous, and the process of genomic interpretation is increasingly separate from genomic data generation, Hansen’s example illustrates why the disposition of Myriad’s method claims may well be more important in the long run than whether isolated DNA sequences are held to be patentable. (Myriad’s method claims, incidentally, received fairly minimal treatment during oral argument, although this may simply be due to the issue appearing last in the briefs and thus coming up last in each party’s argument, when there was little time left.)

While none of the judges responded to Hansen’s hypothetical (likely due in large part to the fact that Hansen had run over his allotted time by that point), it is encouraging to see, particularly in Bryson’s earlier comment, that the court clearly recognizes the potential for conflict between gene patents and the new generation of personalized medicine products built upon whole-genome sequencing.

However, whether the Federal Circuit will address that issue when it rules on Myriad, as with every other issue, is anybody’s guess.

Composition of Matter and Gene Patents. Predictably, the most attention was devoted to the patentability under § 101 of isolated DNA sequences. Numerous hypothetical scenarios were offered up by each of the parties, and by the judges as well: diamond mines, baseball bats in trees and even a hypothetical “magical microscope” envisioned by Neal Kumar Katyal, arguing on behalf of the Department of Justice.

One concept to which the court (and particularly Judge Lourie) returned repeatedly during the course of the argument was covalent bonding. Judge Lourie focused on the importance of covalent bonds in the DNA molecule, noting that those bonds must be broken in order to isolate sections of the molecule for purposes of examination, and suggesting that breaking those bonds renders isolated DNA different from DNA in the human body.

The focus on covalent bonds may be an effort by the court, and particularly Lourie, to find a way to apply the teaching of more than a century of cases that seem to say that patentable compositions of matter must be different in kind from their natural precursors or variants. Judge Lourie (a chemist) was playing around with the breaking of the covalent bonds during “isolation” as a potential Rubicon, beyond which isolated genes might be different in kind from those in the body.

However, Lourie’s covalent bond test was not the only one proffered. The government, for its part, offered up its own “magic microscope” test. The magic microscope (a term Judge Moore found “kitschy”) would enable the direct observation of naturally occurring DNA. According to the government’s test, any DNA sequence visible through this hypothetical device (which, if DARPA has its way, might not remain hypothetical forever) would be unpatentable. On the other hand, all other molecules (including, e.g., cDNA) not occurring in precisely the same form in nature – and thus not visible through the microscope – would be patentable.

While we wait to see whether any of the tests or hypotheticals outlined in the oral argument emerge in the written Myriad opinion, the bottom line is that the court, assuming it reaches the merits of patentable subject matter, must (1) decide what different in kind means in the genetic context and (2) apply that test to “isolation,” as the Myriad patents define that term.

The Next Myriad Mile Marker. For those who are interested in diving deeper, the Federal Circuit has made an audio transcript of the hearing available on its website (mp3). For everyone else, the next significant development in the Myriad litigation will most likely be the Federal Circuit’s opinion, which should be handed down sometime in the next few months.

At that point the parties and amici will have something concrete to digest – and likely appeal – and, depending on the outcome, Myriad, its would-be competitors and clinicians, researchers and patients with an interest in BRCA testing may be put to some difficult practical decisions. Until then, however, let the waiting – and speculation – continue