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Wednesday, 3 August 2011

Excluded Subject Matter American Style - Association of Molecular Pathology v Myriad (CAFC, 2011)

Important patent things have been happening ‘across the pond’ from the muggy and badly-ventilated London sweathouse that this particular Kat’s office has become over the past few days. (Readers will appreciate that this is not a reference to an actual pond – there little room for such an installation in the immediate vicinity of his office, and the inhabitants of the surrounding rooms would probably be less than impressed to find an impromptu water feature quite literally springing up under their desks (although given the weather in London at the moment the Kat is prepared to be proved wrong on this point). In any case, the Kat struggles to think of what patent related matters could be enacted on the other side of an actual pond that would: (a) be sufficiently important to grace the pages of this blog; and (b) have come to the Kat’s attention in any case. But I digress…). No, the reference to the pond (and things happening across it) is in fact an allusion to developments in the U.S. on patent matters in recent days). The Kat refers, in particular, to the decision of the Court of Appeals for the Federal Circuit (CAFC) in The Association of Molecular Pathology & Ors v The USPTO and Myriad Genetics Inc, __ F.3d __ (available here) (CAFC, 2011).

The decision is relatively page-heavy, weighing in at 105, but of only modest heft in terms of words (in the region of 27,000 – a 5.1 if you’re interested). It concerns, in part, the heated question of whether patents should be allowable in principle on isolated forms of naturally occurring DNA molecules – the short answer from the majority being “yes”.

Background
In essence, the Association of Molecular Pathology and a selection of other parties (collectively ‘the plaintiffs’) brought a suit against Myriad challenging the patentability of certain composition and method claims relating to human genetics. The challenged patents concerned two isolated human genes, BRCA1 and BRCA2, and certain mutations in these genes associated with a predisposition to ovarian and breast cancer – women with BRCA mutations, for example, apparently face a cumulative risk of between 50 to 80% of developing breast cancer (compared to the U.S. national average of 12-13%). The patents’ claims related to the isolated gene sequences themselves and to diagnostic methods of screening, analysing and comparing a patient’s BRCA sequence to the ‘normal’ sequence.

Having overcome the hurdles relating to standing (in contrast to the position in the UK, where there is no requirement of standing – s72 PA 1977 simply states that the “court… may by order revoke a patent for an invention on the application of any person” (emphasis supplied) – under U.S. law in order to bring a declaratory judgment suit challenging the validity of a patent a party must demonstrate that there is a “a case of actual controversy” of the type justiciable under Article III of the U.S. Constitution. In patent cases, this has been interpreted to mean that there must be a “definite and concrete” dispute that touches “the legal relations of parties having adverse legal interests,” which is “real and substantial,” and which admits of “specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.” (See MedImmune v Genentech, 549 U.S. 118, at 127 (Sup Ct, 2007)), the Court moved to consider the main issue at play in the case: patentable subject-matter.

Patentable Subject-Matter
Myriad had argued that the lower court’s rejection of its claims to “isolated” DNA sequences under §101 as “products of nature” was incorrect on a number of grounds. In particular, it alleged that the district court had: misread “Supreme Court precedent as excluding from patent eligibility all “products of nature” unless “markedly different” from naturally occurring ones”; and incorrectly focused on the similarity in the informational content between isolated and native DNAs rather than on their marked differences in other areas. Accordingly, it argued that “an isolated DNA molecule is patent eligible because it is, as claimed, “a nonnaturally occurring composition of matter” with “a distinctive name, character, and use.”

Myriad argued that as isolated DNA does not exist in nature, it could not be considered to be a “product” thereof. Furthermore, any categorical interpretation of this exception to patent eligibility would not only be “unworkable, as every composition of matter is, at some level, composed of natural materials”, but would also be contrary to precedent.

The plaintiffs, on the other hand, argued that claims to isolated DNA molecules failed to satisfy the §101 standard as “such claims cover natural phenomena and products of nature.” Accordingly, they asserted that Supreme Court precedent stated that a product of nature was not patent eligible even if it had undergone some highly useful change from its natural form. The critical question was whether the composition of matter had a distinctive name, character, and use, making it “markedly different” from the natural product. Only then would it be patent eligible. On the current facts, the plaintiffs argued that because the isolated DNAs retained the same nucleotide sequence as native DNAs, they did not have any “markedly different” characteristics.

Circuit Judge Lourie, giving the opinion for the court, explained that the distinction “between a product of nature and a human-made invention for purposes of §101 turns on a change in the claimed composition’s identity compared with what exists in nature. Specifically, the Supreme Court has drawn a line between compositions that, even if combined or altered in a manner not found in nature, have similar characteristics as in nature, and compositions that human intervention has given “markedly different,” or “distinctive,” characteristics.”

Accordingly, the fact that Myriad was claiming isolated DNAs – “a free-standing portion of a native DNA molecule” – was determinative. As Judge Lourie explained, isolated DNA is not simply purified DNA:

“Purification makes pure what was the same material, but was previously impure. Although isolated DNA must be removed from its native cellular and chromosomal environment, it has also been manipulated chemically so as to produce a molecule that is markedly different from that which exists in the body. It has not been purified by being isolated.”
Discussing the approach of the district court, Judge Lourie considered it had fallen into error in considering not whether the isolated DNAs were markedly different, in that they had a “distinctive characteristic” to distance them from naturally occurring DNAs, but rather whether they had the same informational content as native DNA sequences.
“Adopting this approach, the district court disparaged the patent eligibility of isolated DNA molecules because their genetic function is to transmit information. We disagree, as it is the distinctive nature of DNA molecules as isolated compositions of matter that determines their patent eligibility rather than their physiological use or benefit. Uses of chemical substances may be relevant to the non-obviousness of these substances or to method claims embodying those uses, but the patent eligibility of an isolated DNA is not negated because it has similar informational properties to a different, more complex natural material that embodies it.”
Nevertheless, the CAFC considered that the district court was correct in holding that Myriad’s claims directed to comparing and analysing gene sequences were patent ineligible, as these claims contained no transformative steps and covered only patent ineligible abstract steps. Finally, the claims directed to methods of screening potential cancer therapeutics via changes in cell growth rates were considered to be patent eligible, presenting, as they did, ““functional and palpable applications” in the field of biotechnology”

Circuit Judge Moore, concurring in part, noted that
“DNA is a chemical polymer. In principle, a polymeric DNA sequence is no different than any other well known polymer, for example, nylon. Like any polymer, DNA is made up of repeating monomer units, connected by chemical bonds to form one larger molecule.”
Nevertheless:
“Isolation of a DNA sequence is more than separating out impurities: the isolated DNA is a distinct molecule with different physical characteristics than the naturally occurring polymer containing the corresponding sequence in nature.”
According to Circuit Judge Moore, the fact that human action had “whittled the chromosomal DNA molecule down” to a shortened version of its natural self, “defining the parts to be retained and discarded” rendered it “entirely different” from the naturally occurring gene from which it was obtained.

Circuit Judge Moore explained that whilst she might conclude that and isolated DNA sequence that includes most or all of a gene was not patentable subject matter if she was approaching the factual matrix from a blank canvas, this was not in fact the case. There was a “substantial historical background” with the courts having been authorised by Congress to approach the issue of patentable subject matter expansively. The established practice was to allow patents on isolated DNA sequences – such patents having being allowed by the USPTO for “decades” according to the Judge.

Accordingly, the Judge explained that she considered that “we must be particularly wary of expanding the judicial exception to patentable subject matter where both settled expectations and extensive property rights are involved. Combined with my belief that we should defer to Congress, these settled expectations tip the scale in favor of patentability.”

Nevertheless, as numerous commentators who have been quicker off the mark than this Kat in digesting this judgment have noted, whilst diluted somewhat Myriad’s patents remain strong and the plaintiffs are likely to seek an en banc rehearing in the CAFC or file a writ of certiorari with the Supreme Court.

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