Wednesday, May 20, 2009

ACLU Lawsuit Challenges Patenting of Genes

By now, most readers are probably aware of the lawsuit filed by the ACLU on behalf of multiple plaintiffs(including breast cancer patients, clinicians and providers of genetic diagnostic testing services) against Myriad Genetics and the directors of the University of Utah Research Foundation (referred to collectively as "Myriad"), as well as the US Patent and Trademark Office (PTO). For a summary of the case, and the complaint, see posts on Patently-O and Patent Docs.

In this post, I will discuss two aspects of the case - the merits of the ACLU's allegations of patent invalidity, and the question of whether the named plaintiffs have the necessary standing to bring the lawsuit.

Merits of the assertions of patent invalidity

The ACLU lawsuit does not challenge the validity of all the claims in Myriad’s BRCA patents, but only a select few of the broadest claims. All but one of the challenged claims are directed towards either (1) a method for detecting a mutation in a BRCA1 or BRCA2 gene, or (2) an isolated DNA molecule encoding a naturally occurring BRCA1 or BRCA2 protein. The validity of claim 20 of US patent number 5,747,282 is also challenged - I agree with the observation of the Patent Docs that the inclusion of this claim, directed towards a method of screening for drugs, in the complaint is curious, and I will not discuss that claim further. But with respect to the other claims, I think that the ACLU plaintiffs have nonfrivolous arguments that the claims are indeed patent ineligible. But I think there is substantial question as to whether these plaintiffs have standing to bring the lawsuit, an issue that I address below.

The plaintiffs allege that the challenged patent claims are invalid for a failure to comply with the U.S. Constitution, particularly the so-called "IP clause" (Article I, Section 8) and the First and 14th amendments, and Section 101 of the patent statute (35 USC 101). The constitutional claims are a stretch in my view - to my knowledge, a patent claim has never been invalidated solely on the basis of a constitutional violation. Courts sometimes cite to the IP clause, which authorizes Congress "to promote the progress of science and useful arts, by securing for limited Times to authors and inventors the exclusive rights to their respective writings and discoveries," as a limitation on the potential scope of patent claims, but as far as I know no claim has never been invalidated solely for violating the IP clause.

For example, in Graham v. John Deere, a seminal Supreme Court decision relating to the nonobviousness doctrine, the Court stated that the IP clause limits the authority of Congress to enact patent laws. According to the Graham court, the Constitution requires that the patent laws promote advances in the "useful arts,” and thus Congress may not enact laws that "enlarge the patent monopoly without regard to the innovation, advancement or social benefit gained thereby,” nor may it "authorize the issuance of patents whose effects are to remove existent knowledge from the public domain, or to restrict free access to materials already available." Although the Court pointed to the IP clause as setting the standard for assessing patent validity, the claims at issue in Graham were invalidated for violating Section 103 of the patent statute.

More recently, Justice Breyer in his LabCorp dissent opined that “laws of nature, natural phenomena, and abstract ideas” are excluded from patent protection because "sometimes too much patent protection can impede rather than ‘promote the progress of science and useful arts,’ the constitutional objective of patent and copyright protection.” (italics in original) I suspect that the ACLU plaintiff”s are relying in part on Justice Breyer's assertion as basis for their allegation that Myriad’s patent claims violate the IP clause.

Some scholars have argued that gene patents are unconstitutional because the mere identification of the sequence of a naturally occurring gene lacks sufficient originality to constitute an act of invention, while the IP clause only authorizes exclusive rights for "inventors." The plaintiffs might also pursue this line of argument, though I did not notice any reference to it in the complaint.

The plaintiff’s First and 14th Amendment claims are really out there in uncharted territory. I don't know of any legal precedent that would support the notion that a patent claim violates either of these amendments to the Constitution. I assume that plaintiffs are referring at least in part to the First Amendment’s guarantee of free speech, and are suggesting that the patents restrict the ability of doctors to communicate with their patients. For example, paragraph 84 of the complaint states that "although others including plaintiffs have the technical ability to determine if a person has a mutation, and are willing to do so using non-patented methods, they can be prohibited from doing so because of the patents on the BRCA1 and BRCA2 genes and can't tell any patient the results because of myriads enforcement of its patents.” This allegation seems to assume that the plaintiffs’ identification of the mutation by genetic testing would infringe Myriad’s patents. Importantly, note that the communication of the results to a patient would not be infringing, but rather would merely serve as evidence that the plaintiff had infringed by conducting the patented method of screening for a mutation. This argument really seems to be a stretch. After all, any patent infringer will feel constrained from communicating to others the fact that he has engaged in patent infringing activities, because this will alert the patent owner of the infringement, and could provide evidence of that infringement in an enforcement action. But if this constraint on communication is a violation of the First Amendment, then it would seem that all patents are unconstitutional - after all, no matter what the subject matter covered by the patent, infringers will probably feel constrained not to publicize their infringement. I don't see how one can make a principled legal distinction between patents relating to genetic diagnosis and other patents, and see little merit in this First Amendment challenge to the patents. However, there is a tendency in our society towards genetic exceptionalism, i.e., treating issues involving genes and genetics as somehow fundamentally different and warranting exceptional treatment. And I am sure the ACLU will present its argument much more effectively than I have, so I think it is conceivable that the plaintiffs could make some headway with this challenge.

On the other hand, I think the plaintiffs have a much better shot with their more conventional Section 101 arguments, at least if they can get past issues of standing discussed below. Bear in mind that the Section 101 challenges have only been asserted against Myriad; the ACLU complaint specifically states that the PTO is sued solely on the constitutional claims. As discussed below, I don't believe the plaintiffs have standing to sue the PTO for violating the patent statute.

As discussed in previous posts, the Federal Circuit's decisions in Bilski and Classen have certainly opened the door for challenges to this sort of method claim for encompassing patent-ineligible subject matter. Arguably, Myriad’s broad method claims are not tied to any particular machine, and any transformation that a court would characterize as more than “insubstantial extra-solution activity.” At this point, the validity of this sort of diagnostic claim under the Bilski machine-transformation test is certainly an open question, but a forthcoming decision by the Federal Circuit in Prometheus v. Mayo will likely shed some light on the court’s thinking in this regard.

The ACLU's argument that the isolated DNA claims are patent ineligible under Section 101 is more tenuous. It is generally considered settled law that while a naturally occurring biomolecule is patent ineligible in its native state, isolation or purification of the molecule can constitute sufficient human intervention to render the isolated molecule patent-eligible subject matter under Section 101. Clearly the PTO adheres to this view, and considers naturally occurring DNA sequences and other biomolecules patent eligible so long as the claim is limited to isolated or purified forms of the molecule.

However, to my knowledge this interpretation of patent eligibility has not been directly challenged since the inception of the Federal Circuit more than 25 years ago. The cases most commonly cited for the proposition that a purified naturally occurring compound is patent eligible are In re Kratz, 592 F.2d 1169, 1174 (CCPA 1979) (stating that a naturally occurring strawberry constituent compound does not anticipate claims to the substantially pure compound) and In re Bergstrom, 427 F.2d 1394 (CCPA 1970) (stating that a material occurring in nature in less pure form does not anticipate claims to the pure material). The Federal Circuit implicitly seems to support this view, and as recently as 2003 a Federal Circuit panel cited both Kratz and Bergstrom with apparent approval. But it is worth noting that Kratz and Bergstrom dealt specifically with the novelty and nonobviousness of the compounds, not patent eligibility per se. To my knowledge, there is no judicial precedent that has directly addressed the issue of whether isolation of a naturally occurring molecule renders the isolated molecule and eligible under section 101. Earlier precedent, particularly the Supreme Court's 1948 Funk Brothers decision, arguably supports the proposition that isolated DNA molecules are not patent eligible. In that case, the Court held that a novel, non-naturally occurring combination of naturally occurring bacteria was patent ineligible because the bacteria continued to "perform in their natural way." As recently as 1994, Affymetrix argued in an amicus curiae brief filed with the Federal Circuit in support of the PTO in In re Fisher that under Funk Brothers isolated and purified naturally occurring DNA molecules are patent ineligible. In the words of Affymetrix:

The Supreme Court took up the product of nature doctrine twice during the twentieth century, in Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948), and Diamond v. Chakrabarty, 447 U.S. 303 (1980). Funk, which rejected a claim to a mixture of nitrogen-fixing root-nodule bacteria, stated the doctrine as follows: “[M]anifestations of laws of nature [are] free to all men and reserved exclusively to none. He who discovers a hitherto unknown phenomenon of nature has no claim to a monopoly of it which the law recognizes.” 333 U.S. at 130. The Court repeated this language in Chakrabarty, and characterized “laws of nature, physical phenomena, and abstract ideas” as being beyond the realm of section 101. 447 U.S. at 309. Chakrabarty's claim was deemed statutory because he had, through genetic engineering, “produced a new bacterium with markedly different characteristics from any found in nature.” Id. at 310.

The subject matter question facing this Court is thus whether the claimed nucleic acid sequences have been subjected to sufficient human intervention to acquire “markedly different characteristics” from their naturally occurring counterparts. On the contrary, the interest in these sequences depends on their being functionally indistinguishable from their natural precursors. As the Deputy Director of the World Intellectual Property Organization has recently written, under Chakrabarty, “isolated, purified and synthesized human genes are not statutory patentable subject matter because, when isolated from the human body, they maintain identical or very similar characteristics to those found in nature ... [and] because they realize exactly the same function that genes inserted in their natural environment perform.” Nuno Pires de Carvalho, The Problem of Gene Patents, 3 WASH. U. GLOBAL STUD. L. REV. 701, 723 (2004) (footnotes omitted).

The rationale for this conclusion is that, even when claimed--unlike here--in “isolated, purified and synthesized form,” a cDNA molecule differs from its natural counterpart only in trivial and functionally irrelevant ways. The only differences are that the DNA has been removed from its natural environment and that its noncoding regions have been excised. Consequently, despite nominal chemical distinctiveness, what is claimed is functionally indistinguishable from natural DNA and RNA. It contains exactly the same genetic information as its natural counterpart. It can do precisely the same work as a naturally occurring gene--protein synthesis or perhaps some other function--and it employs precisely the same processes to do it, whether in the body or in the laboratory. Critically, these informational and functional properties are the whole reason for seeking DNA patents. In Chakrabarty's terms, such a gene does not have “markedly different characteristics from any found in nature.”

In Fisher, the Federal Circuit held the isolated nucleic acid claims at issue in that case (expressed sequence tags, or ESTs) invalid for lack of utility in enablement, and
never addressed Affymetrix’s patent eligibility argument. But if the ACLU lawsuit is allowed to proceed, the court might be put in a position where it will be required to address this important question head-on.

Plaintiff’s Standing to Bring Suit

To my mind, perhaps the more groundbreaking issue raised by the case is the question of whether the plaintiffs have standing to bring suit. Generally, members of the public are not permitted to challenge the validity of issued patents, nor are they permitted to challenge the PTO's interpretation of substantive patent law. Some people would like to change this; for example, patent reform legislation being considered by Congress would create an opposition procedure for third parties to oppose granted patents. In other jurisdictions, such as Europe, opposition of granted patents has long been available. But at least for the time being, in the U.S. the avenues for challenging the validity of a patent are generally limited to reexamination in the patent office, or as a defense to an allegation of patent infringement in a patent litigation.

In this case, patent reexamination was not an option for the ACLU, because reexamination is basically limited to issues of invalidity based on prior art, i.e., lack of novelty or obviousness of the claims. The ACLU plaintiff's only allege violations of the U.S. Constitution and Section 101 of the patent statute, and these sorts of allegations are not amenable to resolution by reexamination.

None of the plaintiffs have been sued by Myriad for patent infringement. However, a potential infringer of a patent can in some instances beat the patent owner to the punch by filing a declaratory judgment action challenging the validity of a patent. Until recently, a potential infringer had to have a "reasonable apprehension" of being imminently sued for patent infringement in order to have standing to bring a declaratory judgment action. However, in 2007 in MedImmune v. Genentech the Supreme Court effectively lowered the bar, making it easier for plaintiffs to bring declaratory judgment actions and eliminating the "reasonable apprehension" test. Still, even after MedImmune, a declaratory judgment plaintiff must allege an “actual controversy . . . touching the legal relations of parties having adverse legal interests.” I think that, even post-MedImmune, the courts will still require a declaratory judgment plaintiff to identify some potential risk of being sued for patent infringement in order to have standing to bring suit. Some of the plaintiffs in this case, such as cancer patients who allege they have been injured by the patents because they prevent competition that would lower the price of BRCA testing, clearly face no credible threat of being sued for infringing Myriad’s patents. Other plaintiffs, particularly providers of genetic diagnostic testing services, do face the prospect of being sued for patent infringement if they were to engage in commercial BRCA testing. But none of the plaintiffs appear to be currently engaged in commercial BRCA testing, and it is doubtful whether any of them would have standing under the pre-MedImmune “reasonable apprehension" standard. The closest would be two professors at the University of Pennsylvania, who allegedly received cease-and-desist letters from Myriad. As discussed in my article on human gene patent litigation, Myriad did sue the University of Pennsylvania in 1998 for infringing its BRCA patents, but according to press reports the University ceased conducting the tests and the lawsuit was immediately dropped. After 10 years of presumably not conducting the tests, these professors seem a little late in claiming a fear of being sued for infringement.

However, perhaps the ACLU will be able to convince a court that at least some of these plaintiffs have standing to bring suit under the more permissive MedImmune standard. I believe the ACLU would argue that universities and other genetic diagnostic testing laboratories have wanted to challenge Myriad’s patents, but have been afraid to continue providing commercial testing services because they fear potential liability if they failed to convince a court that the patents are invalid or not infringed. In MedImmune, the Supreme Court explicitly stated that one of the rationales for a more permissive standing requirement is that a potential infringer should not be required to “bet the farm” by being forced to choose between infringing a patent (and taking on the risk of potentially large damages) or not challenging the patent. The ACLU could pursue this policy rationale, and argue that the plaintiffs legitimately do not want to bet the farm by infringing Myriad’s patent, but still have standing under the MedImmune standard to challenge the patents.

Issues of standing will especially limit the ACLU's ability to challenge the PTO on its position that isolated polynucleotides are patent eligible. In the late 1980s, animal protection organizations such as PETA filed a lawsuit against the PTO challenging a PTO notice in the Official Gazette stating that genetically engineered animals are patent eligible . The case was dismissed because the parties lacked standing to bring suit. In Animal Legal Defense Fund v. Quigg, the Federal Circuit affirmed the dismissal, pointing out that under Supreme Court precedent a party bringing suit must come "within the zone of interests addressed by the substantive provisions of the law they seek to invoke," i.e., the patent laws, and that the plaintiffs failed this test. In pertinent part, the Federal Circuit explained:

In essence appellants claim the patent statute's "zone of interests" encompasses any member of the public who perceives they will be harmed by an issued patent which they believe to be invalid. We cannot agree that the "zone of interests" of the patent laws is so broad. Under such an interpretation, we would, for example, be opening the door to collateral attacks on the validity of issued patents; any competitor could simply file suit against the Commissioner challenging a patent's validity. This we decline to do. The structure of the patent act indicates that Congress intended only the remedies provided therein to ensure that the statutory objectives would be realized."

Under this test, as interpreted by the Federal Circuit, it seems clear that the ACLU plaintiffs lack standing to challenge the PTO’s interpretation of the patent laws, which likely explains why they only sued the PTO on the constitutional claims. ACLU will presumably argue that

In the end, although the merits of the challenges to Myriad’s patents have garnered most of the attention so far, I think the issues of standing are perhaps just as important. If the ACLU is successful in establishing a more permissive standing requirement for challenging issued patents, it could open the door to more challenges by members of the public facing no real threat of being sued for patent infringement, the scenario identified by the Federal Circuit in Animal Legal Defense Fund as problematic and contrary to the structure of the patent act. Biotech has been adamantly opposed to patent reform efforts that unduly open the door to ancillary patent challenges, such as the proposal for so-called “second window” opposition proceedings, but the ACLU appears to be seeking to open a new avenue for these sorts of attacks on patents by “members of the public.”

With respect to the merits of the case, I think that the question of patent eligibility is much more significant for the biotech industry with respect to the method claims than the isolated polynucleotides claims. As discussed in previous posts, a determination by the Federal Circuit that method claims such as this are patent ineligible could significantly impact the ability of innovators to patent diagnostic testing and personalized medicine discoveries. Isolated polynucleotides claims are not as important. Indeed, in the amicus brief Myriad filed in support of Prometheus, Myriad went so far as to argue that composition of matter claims directed toward isolated nucleic acids are no longer available because the Human Genome Project has made the entirety of the genome prior art. I think this might be going too far, but I do believe that claims directed towards isolated naturally occurring polynucleotides are becoming less and less relevant. Although many of these claims have issued in patents, very few have been successfully enforced in the courts; part of the reason I think is that there are challenges to successfully enforcing these sorts of claims, including unknown prior art.


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Anonymous said...

Prof. Holman,

I'm a bit perplexed with the Bilski decision. On the one hand, it appears that the US Supreme Court has indicated that a Section 101 analysis should be conducted on the claim as a whole and not an element by element approach. Yet, the Fed Cir in Bilski requires looking for insignificant extra-solution activity (not insignificant post-solution activity). How do you reconcile this?

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