Monday, March 26, 2012

Supreme Court Sends Myriad Back to the Federal Circuit

Today the Supreme Court granted certiorari in Association for Molecular Pathology v. Myriad Genetics, and sent the case back to the Federal Circuit to reconsider in light of Mayo v. Prometheus. The case has important implications not only for the patent eligibility of isolated DNA, but more generally for purified natural products and other inventions based on naturally occurring biological materials.

When the Federal Circuit originally decided Myriad, it held the method of genetic diagnostic claims to be patent ineligible, but the claims directed towards isolated DNA molecules patent eligible. The Supreme Court's decision in Mayo clearly would not change the outcome regarding the former - Myriad's diagnostic method claims lie further down the spectrum of patent ineligibility than the Prometheus claims, since they do not recite a step of physically analyzing a DNA molecule, but could potentially be infringed by merely comparing DNA sequence information (at least according to the Federal Circuit's interpretation of the claims). However, it could alter the result with respect to the isolated DNA claims, and presumably that is the issue which the Supreme Court wishes the Federal Circuit to revisit.

There is a sense of déjà vu. Recall that the Federal Circuit originally decided the Prometheus appeal prior to the Supreme Court's Bilski decision, and found the Prometheus personalized medicine claims patent eligible. Mayo petitioned for certiorari, and then the Supreme Court decided Bilski, granted Mayo's petition, vacating the Federal Circuit's earlier decision and directing the Federal Circuit decision to reconsider the patent eligibility of Prometheus’ claims in light of Bilski. The Federal Circuit responded by again upholding the patent eligibility of the Prometheus claims, relying to a large extent on the same rationale used in the original pre-Bilski decision, and arguably paying insufficient heed to the Supreme Court's pronouncement in Bilski. This prompted the Supreme Court to take up the Prometheus case, and unanimously reject the Federal Circuit's narrow interpretation of Bilski as the court had applied it to the Prometheus claims. Clearly the Supreme Court has a significantly narrower view of the scope of patent eligible subject matter than many of the judges on the Federal Circuit, and it will be interesting to see how this tension plays out in the Myriad case.

On remand, I can see the Federal Circuit going either way on the patent eligibility of Myriad's isolated DNA claims. I think the Mayo decision could plausibly read as rendering claims to isolated (naturally occurring) DNA patent ineligible, an outcome that would be consistent I think with the rationale and tenor of Mayo. After all, naturally occurring DNA sequences would seem to fall squarely into the category of natural phenomena, and under Mayo patent eligibility of the claims would depend on a determination of whether the "isolated" limitation is sufficient to can find the claim to a patent eligible "application" of the phenomenon.

In Mayo Justice Breyer concluded that the specific recitation of a step of determining the level of drug metabolite a patient sample was "well-understood, routine and conventional," and for that reason did not render the claim patent eligible. At the time Myriad filed its patent applications on isolated BRCA sequences, the isolation of naturally occurring DNA could be characterized as routine and conventional, and hence insufficient to impart patent eligibility on a claim to isolated DNA. I think that would likely be the outcome were the Supreme Court to decide the issue itself, and perhaps the Federal Circuit will feel obliged to come to that outcome, particularly after being implicitly chastened by the Mayo decision.

On the other hand, I think that many of the judges on the Federal Circuit, including the two in the Myriad majority (Lourie and Moore) believe that isolated DNA claims should be patent eligible, and there is I think sufficient ambiguity in Mayo to support that outcome (although I do not think that decision would be likely to withstand Supreme Court review, were the Court inclined to take up a third patent eligibility case). For one thing, Mayo only addressed method claims, and the Federal Circuit could read the decision as having limited applicability to product claims reciting compositions of matter. Significantly, Mayo did not overturn Diehr and Chakrabarty, so the Federal Circuit could cite to those cases as supporting patent eligibility of isolated DNA.

As I pointed out in my Mayo blog post last week, the Supreme Court left the door open for lower courts to declare a claim patent eligible if it includes some limitation that is, in the words of Justice Breyer, "[significant] in terms of patent laws objectives." Perhaps the Federal Circuit could point to this language, and affirm the patent eligibility of Myriad's isolated DNA claims based on a determination that the isolation of DNA significantly furthers the objectives of patent law (whatever those are).

If the Federal Circuit finds Myriad's isolated DNA claims patent ineligible, I'm not sure how significant that decision will be for biotechnology. I don't think it would be good, since it unfortunately sends a message to investors that the courts might come in at anytime and declare patent ineligible subject matter that for years has been treated as patentable, and invalidate a whole category of patents that have been deemed important in investment decisions (as discussed in an earlier post).

On the other hand, I don't think it would be devastating for biotechnology, or even diagnostics. I tend to think that claims to isolated forms of naturally occurring DNA molecules are becoming less and less relevant, and that method claims are in fact much more important for the protection of innovation in personalized medicine diagnostics. I think that product claims directed towards DNA constructs based on naturally occurring DNA molecules, but drafted more narrowly so as to be limited to particular embodiments, such as gene therapy vectors or recombinant expression vectors, should remain patentable.

On the other hand, the prospects appear to not be so bright for claims directed towards isolated natural products, such as proteins or other naturally occurring biomolecules. In the Federal Circuit's Myriad decision, Judge Lourie emphasized that the Federal Circuit was not declaring purified biomolecules patent eligible, and in fact he seemed to cast doubt on the patent eligibility in general of purified biomolecules. He took pains to explain that isolated DNA is different, because it involves the breaking of covalent bonds, resulting in a different chemical structure for isolated DNA relative to its naturally occurring counterpart. I suspect he did this in order to frame the decision as a narrow one, and thus hopefully avoid Supreme Court review of the decision.

In general, Mayo has raised some question as to the degree of human intervention that will be required to transform naturally occurring biological material from a patent ineligible natural phenomenon into a patent eligible application of that phenomenon.


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