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Patent wars persist
NEW YORK—A federal court ruling invalidating patents on the breast cancer genes BRCA1 and BRCA2, held by Myriad Genetics Inc. has sent shock waves through the biotech community, industry stockholders, investors and patent attorneys. But the controversial decision rendered by New York Federal District Judge Robert W. Sweet on March 29 could just be the beginning of an appeals process ultimately landing in the lap of the U.S. Supreme Court.
"This is the first time a judge has ruled on gene patents in a conflict about a diagnosis," says Robert Cook-Deegan, director of the Center for Genome Ethics, Law & Policy at the Duke University Institute for Genome Sciences and Policy. "This completely changes the game, at least for now. Judge Sweet reached a decision the opposite of prior cases. One big difference is that this case is about diagnostics, getting information about DNA in a person's cells—and not about using DNA to make drugs."
The precedent-setting ruling calls into question the validity of patents now held on approximately 2,000 human genes. Approximately 20 percent of all human genes are patented, including genes associated with Alzheimer's disease, muscular dystrophy, colon cancer, asthma and many other illnesses.
The case began with a 2009 lawsuit brought by a group of patients and scientists represented by the American Civil Liberties Union (ACLU) and the Public Patent Foundation (PUBPAT), a not-for-profit organization affiliated with Benjamin N. Cardozo School of Law.
According to the suit, several women with histories of breast cancer in their families wanted the diagnostic tests at Myriad, but could not afford the cost and did not have the insurance coverage. They felt excluded from discovering their own susceptibility to breast cancer, according to the lawsuit, as this information is critical in helping women decide on a plan of treatment or prevention, including increased surveillance or preventive mastectomies or ovary removal.
The ACLU contends Myriad's monopoly allows the biotech to charge a high rate for their tests and makes it impossible for women to access alternate tests or get a comprehensive second opinion about their results.
ACLU attorney Christopher A. Hansen argued that patents on the Myriad BRCA genes were illegal and restrict both scientific research and patients' access to medical care. Furthermore, Hansen said patents on human genes violate the First Amendment and patent law because genes are "of nature."
"This is a victory for the free flow of ideas in scientific research. The human genome, like the structure of blood, air or water, was discovered, not created," Hansen says. "There is an endless amount of information on genes that begs for further discovery and gene patents put up unacceptable barriers to the free exchange of ideas."
Richard M. Marsh, executive vice president and general counsel of Salt Lake City, Utah-based Myriad Genetics, warns of the long-term affects of the ruling, and says the company plans to file an appeal to the Court of Appeals for the Federal Circuit—to possibly "take it to the highest court in the land."
"Judge Sweet's opinion is startling," Marsh tells ddn. "We were surprised and very disappointed."
But since the ruling "only applies to 15 claims of seven patents, and Myriad has 165 claims remaining under those seven patents (as well as 16 other patents) which were not challenged, we do not believe the eventual outcome of this case—positive or negative— will have a material impact on our business operations," Marsh says.
"However, we believe an adverse result in this case will have a great negative impact on those industries and businesses which are based in whole or part on genomics, particularly companies developing therapeutic, predictive and personalized medical applications," Marsh adds. "Certainly, the investment incentives provided by the patent system will be lost, and capital needed to fund research and development and subsequent product commercialization will go elsewhere."
Companies simply will not make the capital investment and spend the necessary developmental dollars without the benefit of patents, he says.
G. Steven Burrill, CEO of San Francisco-based venture capital firm Burrill & Co., says the ruling "has brought an added level of uncertainty for investors in the biotech space since drug developers have many gene patents in place. Until the result of the appeals process are known, which could take many years, the landscape of biotech patent law has clearly been changed to the detriment of our industry."
On March 30, just one day after Sweet's ruling, shares of Myriad Genetics fell as much as 7 percent, and many biotechnology stocks also fell "as investors struggled to understand the impact of a ruling that threw out parts of two gene patents and called into question thousands more," according to Andrew Pollack of the New York Times.
Biotech companies spend billions every year trying to develop new tests and treatments based partly on genes they have isolated and patented, he says, adding if the judge's reasoning is upheld on appeal, the invalidation of genetic patents could hit diagnostics companies and agricultural biotechnology companies.
Katharine Kowalchyk, an intellectual property attorney with IP firm Merchant & Gould, says the judge's opinion on Myriad's breast cancer genes failed to address the actual time and cost of bringing a new medical test to market.
"To develop such tests, the DNA sequence must be isolated from 30,000 other genes, the isolated DNA sequence and changes in the isolated DNA sequences must be validated as a clinically useful marker for a particular disease meaning that clinical trial studies must be conducted, and the government needs to approve a lab to conduct the test or a company to sell the test," Kowalchyk tells ddn. "This is a very time-consuming and costly process."
The "traditional" way of funding new healthcare technologies is through venture capital, she adds. The only asset a company may have are its patents—and having patents is a way to attract funding for these early stage companies, she notes.
Furthermore, a patent does not give Myriad the right to own the DNA sequence in the human body; just the limited right to exclude others from isolating the DNA sequence, sequencing it, identifying mutations and determining the risk of breast cancer or ovarian cancer, Kowalchyk says.
"This means that all a patent right does is restrict access to isolating the DNA sequence and using the isolated DNA sequence in a test to a single source (Myriad Genetics) for a limited time period," she says.
Additionally, the patent system is not a major gatekeeper regarding access to new medical tests and technology, Kowalchyk says.
"The court decision describes the stories of several women who could not get access to the BRCA1 and BRCA2 tests because their insurance carrier would not cover the test," she says. "The diagnostic test is not covered by Medicare and Medicaid. What role should insurers play with regard to access to this test, and why don't they cover this testing?"