Friday, December 19, 2014

Myriad II: Another Blow to the Patenting of Biotech Innovation

On December 17 the Federal Circuit issued a unanimous decision invalidating product and method claims relating to BRCA genetic diagnostic testingfor lack of patent eligibility. The decision, formally titled In re BRCA1- & BRCA2- Based Hereditary Cancer Test Patent Litigation, University of Utah Research Foundation v. Ambry Genetics Corp, has been referred to as “Myriad II,” since it involves the same patents that were at issue in “Myriad I,” the Supreme Court’s landmark 2013 decision (although the two cases involve different claims).  Myriad II is yet another blow to the patenting of diagnostics and personalized medicine, and biotechnology innovation in general.
Myriad I dealt primarily with two types of patent claims: product claims directed towards isolated DNA molecules, and method claims broadly ditected towards the comparison of a human subject’s BRCA gene sequence with the wild-type sequence. Early in the Myriad I litigation, the Federal Circuit declared the “comparison” method claims patent ineligible. The Supreme Court subsequently declared the product claims directed towards isolated genomic DNA molecules patent ineligible, while upholding the patent eligibility of claims directed towards isolated cDNA, which the Court characterized as man-made and sufficiently removed from their native counterpart to qualify for patent protection.

Myriad II picks up where Myriad I left off, by addressimg the patent eligibility of product and method claims that were not challenged by the plaintiffs in Myriad I, and which lie farther along the spectrum towards patent eligibility than the claims invalidated in Myriad I.  In particular, while the method claims in Myriad I merely recited a single step of “comparing” two DNA sequences, the method claims at issue in Myriad II further recite specific DNA analysis steps such as amplification by PCR or hybridization to a DNA probe.  The product claims in Myriad II are directed towards “pairs” of PCR primers, which are by definition synthetic molecules. In contrast, the product claims found to be patent ineligible in Myriad I were directed towards single DNA molecules, which were not necessarily synthetic (Myriad’s patent specifications defined “isolated” so as to encompass native origin genomic DNA).

Method Claims
The Federal Circuit’s invalidation of the method claims in Myriad II was unfortunate but not surprising.  Prior to the Supreme Court’s recent decisions in Mayo and Alice, many practitioners (including myself) would have thought that the inclusion of clearly patent eligible claim limitations (such as the use of hybridization probes and PCR amplification) would have rendered the claims clearly patent eligible.  In fact, this was the position taken by the Federal Circuit when it first decided Prometheus v. Mayo, when the court upheld the patent eligibility of what were essentially diagnostic method claims. However, in Mayo the Supreme Court reversed the Federal Circuit, holding that the inclusion of patent eligible claim limitations (i.e., administering a drug and determining level of metabolite) does not necessarily render a claim otherwise directed towards a fundamental principle (i.e., a natural phenomenon, law picture or abstract ideas) patent eligible, if the patent eligible limitaations are “well understood, routine and conventional.”

In Myriad II, the Federal Circuit characterized the comparison of subject and wild-type DNA sequences to be an abstract idea, which contrasts with Mayo, wherein the physiological correlation at the heart of the claims was characterized as a natural phenomenon. But whether characterized as an abstract idea or natural phenomenon, the ultimate question under the new patent eligibility jurisprudence (Mayo and Alice) is whether additional claim limitations introduce sufficient “further ‘inventive concept’ to take the claim into the realm of patent eligibility.” In Myriad II, the Federal Circuit determined that the use of hybridization probes and PCR in genetic diagnostics is “well understood, routine and conventional,” and thus insufficient to render the claim patent eligible.
This is precisely what happened in Ariosa Diagnostics v. Sequenom, a district court decision I discussed in a previous post. Ariosa Diagnostics is currently on appeal to the Federal Circuit. It will be interesting to see how that case is decided, but based on the decisions in Mayo and now Myriad II, it seems likely that the district court’s decision will stand.

An interesting side note: In Myriad I, Judge Bryson of the Federal Circuit identified specific method claims in Myriad’s patents that were not at issue in Myriad I, but which Judge Bryson assumed would be patent eligible. His point was that Myriad did not need the patent claims at issue in Myriad I in order to protect its business, since alternative (presumably valid) claims would nonetheless be available for the company. In writing the opinion of the Supreme Court majority in Myriad I, Justice Thomas specifically cited to Judge Bryson’s remark, opining that Myriad was in an excellent position to obtain alternative patent claims which presumably would be valid and would provide adequate protection.

In Myriad II, Myriad pointed to these statements by Justice Thomas and Judge Bryson, and argued that its method claims are very similar to a claim specifically identified as patent eligible by Judge Bryson. Judge Dyk (author of Myriad II) rejected this argument, but it seems clear that under the Federal Circuit’s analysis as set forth in Myriad II, the claim which Judge Bryson and Justice Thomas assumed to be patent eligible is in fact not patent eligible.
In other words, it appears that Judge Bryson and Justice Thomas (and likely other Justices on the Supreme Court) decided Myriad I on the basis of a flawed premise, i.e., that their decision would not fundamentally undercut the ability of companies like Myriad to effectively patent their inventions. Unfortunately, that is not the way the Court’s patent eligibility jurisprudence is playing out.

Product Claims
In Myriad II, Myriad essentially argued that the Supreme Court’s holding in Myriad I should be read as limited to isolated DNA molecules of native origin, and not extending to synthetic DNA molecules such as the claimed PCR primers. I think that this was a reasonable argument - the isolated DNA claims invalidated by the Supreme Court encompassed native DNA, i.e., DNA isolated from human tissue. In Myriad I the Court never explicitly addressed the patent eligibility of a claim limited to synthetic genomic DNA.  Still, most people (including the PTO) have inferred that Myriad I applies to synthetic versions of naturally occurring DNA (and other biomolecules), so it was not surprising that the Federal Circuit rejected Myriad’s argument and held that the synthetic nature of the claimed PCR primers was insufficient to render them patent eligible.

What I found more significant with respect to the PCR primer claims is that the claims were directed towards a combination of primers, rather than to a single isolated DNA molecule.  It’s one thing to declare isolated natural products patent ineligible; it’s quite another to declare combinations of natural products patent ineligible. After all, at some level most product claims are directed towards inventive combinations of natural products.

For example, the foundation of biotechnology is recombinant DNA, which typically involves involved the recombination of naturally occurring genetic elements. It cannot be the case that any combination of synthetic versions of naturally occurring biomolecules is patent ineligible, but in Myriad II the Federal Circuit provides no guidance with respect to the threshold for patent eligibility.

Interestingly, patent eligibility guidance published by the PTO on March 4, 2014 (which the PTO refers to as the “March 2014 Procedure”) included a specific example of a claim directed towards a pair of PCR primers, and concluded that the claim was not patent eligible because the sequence of the primers is the same as naturally occurring DNA. I always found this example particularly problematic, because it failed to acknowledge the distinction between a claim directed toward a natural product and a claim directed toward a nonnaturally occurring combination of natural products.

The PTO’s most recent “Interim Eligibility Guidance” (published December 16, 2014) specifically supersedes the March 2014 Procedure, and does not include the PCR primer claim example. To the contrary, the Interim Eligibility Guidance specifically notes that “when [a] nature-based product is produced by combining multiple components, the markedly different characteristics analysis should be applied to the resultant nature-based combination, rather than its component parts.” (Emphasis added).

Unfortunately, in Myriad II, the Federal Circuit has essentially adopted the PTO’s original position in the March 2014 Procedure, focusing on the components recited in the PCR primer claims rather than the claimed combination. A step backwards, introducing more uncertainty into the misguided doctrinepatent eligibility , and in all likelihood more difficulties for biotechnology innovators seeking effective patent protection for their inventions.