Some Thoughts on Myriad After the Supreme Court Argument

MyriadOn April 15, the Supreme Court heard oral arguments in Association for Molecular Pathology v. Myriad Genetics. This was another significant step—probably the penultimate one—in the long-running Myriad drama. It began with a group of plaintiffs (including researchers, doctors, and breast cancer patients) joining an American Civil Liberties Union-organized lawsuit to invalidate Myriad’s patents on two breast cancer susceptibility genes (BRCA1 and 2) as well as patents on methods of interpreting genetic test results and testing anti-cancer drug efficacy. In a shocking decision, the federal district court in New York threw out all of Myriad’s patents. The Federal Circuit then reversed the district court’s rulings on the gene patents, with the three-judge panel holding unanimously that cDNA is patentable subject matter and holding 2-1 that isolated genomic DNA is patentable as well. The Federal Circuit affirmed the district court’s ruling that Myriad’s methods of interpreting mutations are not patentable, but reversed it in reinstating Myriad’s claims to methods of testing drug efficacy.

When it took the case (granting certiorari), the Supreme Court agreed to hear only a single straightforward question: “Are human genes patentable?” In other words, is it possible to patent human genes as human-made inventions, or are they simply unpatentable products of nature? The Court thus let stand the Federal Circuit’s split decision on Myriad’s methods.

Two more pieces of background before I get to my reactions to the oral arguments. First, the case is only about whether genes are patentable subject matter; that is, are they the kinds of things that are eligible for patent protection under section 101 of the Patent Act, assuming that all other requirements for patentability are met. Even if the Supreme Court rules in favor of gene patents here, every gene patent would still have to pass the tests of novelty (section 102) and nonobviousness (section 103), and to be the subject of an adequately explicit written description (section 112).

The second background point is a reminder of the distinction between product patents and method patents. Product patents claim things—machines, manufactures, and compositions of matter, in Patent Act terms. To draw on some recent and historical Supreme Court cases, a patentable product can be a plow, a chemical, a drug, an automobile brake assembly, a bacterial species, and maybe a gene. When you patent a product, you can prevent anyone else from making, using, or selling that product without your permission—period. It doesn’t matter how the infringers make the product or what they use it for, because the patent covers the product itself.

A method patent, by contrast, covers a specific way of doing something, such as managing a group of mutual funds, doing some form of genetic engineering, or testing a cancer drug. Whereas any use of a patented product infringes, a use of the patented method only infringes if the use replicates every step of the method described in the patent claims. Not surprisingly, patent lawyers usually think of product patents as far stronger, since they’re much harder to invent around. It might well be possible to come up with a way of testing of cancer drugs that avoids Myriad’s claims, but if I want to do anything with the BRCA1 gene in isolation from the body, I need Myriad’s permission.

That leads to several observations about the arguments. I saw three major themes: (1) Several justices seemed skeptical about the patentability of genomic DNA in isolation; (2) there also seemed to be broad-based acceptance of the idea that cDNA—which is synthesized, and lacks the non-coding regions found in genomic DNA—is a human invention; and (3) everything was tempered by concern about the “settled expectations” of the marketplace, and the need to maintain adequate incentives to innovate.

On the first point, multiple justices—at least seven, at various junctures and in various ways—challenged the idea that simply isolating genomic DNA from its natural environment in the body moved it from the product of nature category to the realm of inventions. Most pointedly, Justice Sotomayor got Myriad lawyer Gregory Castanias to agree that “if you cut off a piece of the liver” you wouldn’t have patentable subject matter, and then said, “So what’s the difference?” Castanias struggled to answer, leading Justice Breyer to start ruminating in his academic way, arriving at the Delphic pronouncement that “everything is inside something else.” Castanias’s most effective response may have been to suggest that rather than wrestling with these imponderable questions under section 101, it would be most efficient to let the novelty and obviousness standards do the work of screening out dubious patents—a position that some individual judges of the Federal Circuit have previously taken. Here, Justice Breyer criticized that view, although Chief Justice Roberts evinced some sympathy for it.

But however much Castanias struggled, things seemed to go at least as badly for ACLU lawyer Christopher Hansen when attacking the subject matter eligibility of cDNA. In fact, there seemed to be broad acceptance of Justice Sotomayor’s statement (not a question) that “it is not a product of nature; it’s a product of human nature.” Hansen responded (very oddly, for one claiming that cDNA is not patentable) that “there are two big differences between cDNA and DNA.” Throughout, Hansen failed to stress the point that had persuaded the district judge: that irrespective of the chemical differences between cDNA and naturally occurring DNA, the two had exactly the same informational content.

There was also some evidence of support for a compromise position suggested by Solicitor General Donald Verrilli, who argued for the government: Find cDNA patentable, but not isolated genomic DNA. (Verrilli’s position effectively threw the Patent Office under the bus, since it has long taken the position that isolated DNA is clearly patentable subject matter.) Justice Sotomayor got right to the point: “Is there some value to us striking down isolated DNA and upholding the cDNA?” Justices Breyer and Kennedy also expressed interest in such a compromise.

On the third issue, a concern for economic and scientific consequences of the decision ran through the whole argument. Justice Scalia raised the issue bluntly: “Why would a company incur massive investment if it can’t patent?” When Hansen referred to the “enormous recognition” that comes from isolating a gene, Scalia responded, with his trademark sarcasm, “Well, that’s lovely.” Justices Kennedy, Kagan, and Sotomayor raised the same concern in less caustic terms, while other questions probed the other side of the issue—whether over-zealous patent protection would impede basic research. The Court clearly recognizes the Three Bears dilemma that it faces in almost every patent case: avoiding giving either too much protection (and hurting basic science) or too little (and undercutting necessary financial incentives), and instead getting it just right.

So what do I think will happen? Well, first I should emphasize, as I always do, that it’s dangerous to infer judges’ opinions from their questions to lawyers. They may be probing the lawyers’ arguments by playing devil’s advocate, trying to improve their own understanding, or sometimes—no names here—just being cantankerous.

But that said, this case might be different, with the justices seeming to give evidence of well-developed views. Almost everyone who has heard or read the Myriad argument has the same prediction: the Court may well strike down isolated genomic DNA patents while upholding those on cDNA. I agree.

And that leads to a final question: What difference will it make? If the Supreme Court invalidates genomic DNA patents, it will be seen as a win by the growing personalized medicine industry. Companies using isolated genomic DNA to screen patients at multiple gene loci will no longer have to worry about whether the genes they are testing are patented—though the industry hasn’t seemed terribly worried about that problem thus far.

But beyond personalized medicine’s potential interest in the Myriad outcome, as Dan Vorhaus and I have written many times, the significance of the case is probably overrated. (For example, Myriad’s own patents will all expire in the next couple of years, and the company has announced that it will base its expanding business in Europe not on patents but on its proprietary database of associations between gene variants and clinical outcomes.) There are not that many businesses like Myriad, in the sense of successful enterprises built on existing single-gene patents. If the genes-in-isolation patents are rejected, competitors may not be able to start offering second-opinion testing before the patents would’ve expired anyway. Going forward, single-gene patents are going to be hard to get regardless of this decision because of a stricter obviousness standard. And if all that were not enough, newer sequencing technologies may be able to avoid using patented single genes in isolation, which would avoid Myriad-style patents entirely.

So the Supreme Court’s decision will attract huge, if not hysterical, academic and public interest, but the market may already have moved beyond it.