PharmExec Blog

The Myriad Ruling: Six Points Every Biotech CEO Must Consider

by Konstantin Linnik, Ph.D., J.D.

Last week, the US Supreme Court issued a long-awaited decision in Myriad Genetics, which sent shockwaves through the very foundation of the biotech industry. The decision invalidated one of Myriad’s patents on mutated BRCA-gene sequences associated with increased risk of breast cancer. Though widely referred to as “a gene patent,” Myriad’s patent, in fact, did not claim genes per se, but instead claimed the sequences in their “isolated” form. Such claims –“isolated XYZ substance”–have long been widely accepted as a valid approach for claiming purified or isolated substances extracted from nature (e.g., insulin, antibiotics, blood coagulation factors, to name a few). The Federal Circuit has twice considered these claims and upheld them both times. Nevertheless, the Supreme Court held that for genomic sequences “isolation” does not go far enough in distinguishing them from the genomic DNA. According to the Court, such claims are merely trying to protect “natural phenomena.”

Many questions arise. How will this decision affect the biotech industry? Will it promote or impede innovation? Will it reduce the cost or increase access to medicines? Which sector of the industry will it impact the most? How large is the impact on the existing patents? How should a biotech company react to this decision?

Commentary and confusion both abound, but here are the six most salient points that every biotech executive should bear in mind in the post-Myriad world.

1. A Myriad-type decision was anticipated, and in many cases, backup positions had already been put in place. “Isolated” sequence claims are just one of many various types of claims that are typically drafted into a patent application or a patent portfolio. For example, Myriad itself announced shortly after the decision that it has about 500 other claims covering the BRCA test that were unscathed by the Supreme Court’s decision. Industry-wide, only a small fraction of patents will turn out completely unsalvageable.

2. Beware of the position you take with respect to your competitors’ patents. This dog will come back to bite you! Your position on any third party patent should always be consistent with your view of your own patents. In other words, you should not argue that your competitor’s patents are invalid under Myriad, if that position would, if turned against you, undermine your own patents. United States jurisprudence has a strong tradition of relying on statements “against self interest”; to paraphrase the Miranda warning, “Anything you say may–and will–be used against you.”

3. The Myriad decision was only concerned with genomic DNA—not with other biological sequences. Even with DNA, the Court concluded that complementary DNA (cDNA) – non-naturally occurring DNA molecules in which noncoding DNA is deleted – is patent-eligible.

Predictably, many will extend the Court’s logic to claims directed to other naturally found biologic molecules, such as “isolated” antisense DNA, microRNA, siRNA, bacterial and viral nucleic acids or even sequence fragments of naturally occurring proteins, natural antibiotics, hormones, isolated stem cells, etc. You should abstain from adopting such an overreaching position. At this point, this view is just a hypothesis, and even if probable, it still presents a question for future court decisions to answer. In fact, there may be substantial differences that could weigh in favor of isolated biologic molecules other than genomic DNA. Take microRNA, for instance: 1) isolation of microRNAs is a newer and lesser developed technology than isolation of genomic DNA; 2) unlike genomic DNA, microRNAs have a functional role, and they are not purely information bearing molecules; and 3) microRNA itself can be used as a drug, akin to purified insulin or an antibiotic, whereas genetic sequences do not have such utility. It will take 5-10 years to establish the exact breadth of Myriad as new cases with differing fact patterns go through the courts.

4. The Myriad decision leaves plenty of room for claims to chemically modified sequences and other types of claims. For example, naturally occurring sequences that have been somehow altered by man should remain valid. Here, again, the Court did not specify what type of modification is sufficient to cross the line from merely being a “product of nature” to being a patentable invention. It is likely that a sequence will need to be modified chemically to render the molecule some new property to be patent-eligible, for example, 1) an oligonucleotide linked to a fluorescent probe for diagnostic purposes, or 2) an oligonucleotide having the phosphorothiotate backbone (which increases the oligo’s resistance to nucleases). Most biologic drugs will contain chemical modifications relative to their naturally occurring forms, and if so circumscribed by the claims, they will avoid Myriad.

5. The Myriad decision will make it more difficult–but not impossible–to protect early discoveries. Typically, at the point of foundational discovery, very little is known about chemical modifications that will be ultimately present in the future drug. There is a concern that claiming conventional chemical modifications that are well known in the art may be viewed negatively by courts as a clever attempt to circumvent the Myriad holding. But at the same time, drafting narrower, more specific claims has the inherent risk that some valuable territory will remain unclaimed and open to design-arounds. Therefore, as a result of the Myriad ruling, more effort should be devoted to developing multiple backup strategies. Where a single sequence claim may have previously been sufficient, multiple and diverse narrower claims will be necessary to restore the commercially relevant competitive playing field to the pre-Myriad levels. More attention needs to be devoted now to guard against inadvertently pointing the competition to the most valuable commercial embodiments through narrowly focused claiming.

6. The Myriad case has gained significant publicity, and the Supreme Court’s holding is popular with various stakeholders, ranging from research scientists and cancer patients to high level policy makers and public interest groups (such as the ACLU). Regretfully, this large contingent may view innovators as bad actors who are out to game the patent system and the “gene patents” themselves as impediments to research and discovery of new drugs. These views, while often emotionally charged, have little grounding in facts or law. Notably, the press commentary has been rife with ungrounded generalizations and poorly informed, biased interpretations. To boot, the biotech industry has been struggling to find a politically sensible way of articulating its position in the wave of strong popular anti-patent sentiment. All biotech companies should be cognizant of this public perception and strive to convey a positive message.

As a final note, the vast majority of patent experts agree that Myriad’s claims did not and could not claim the genes as they are found in the human body. By weakening patent protection on the early fundamental discoveries, the Supreme Court has reduced the incentive for innovators to publicly disclose certain types of inventions. By doing so, the Court might have inadvertently thrown out the proverbial baby with the bath water. The patent system has proven again and again to be more beneficial to the technological progress than the medieval Masonic handshake. After all, a patent can enrich the inventor for a limited time, but mankind is enriched forever. And when it comes to finding cures for devastating diseases and improving people’s health, we must err on the side of encouraging disclosure, not promoting trade secrecy.

Konstantin Linnik, Ph.D., J.D. (twitter: @LifeSciIP) is a practicing patent attorney and is a partner in the Boston office of Nutter McClennen & Fish LLP. He also serves as a co-chair of the Legal & Regulatory Group of the Massachusetts Biotechnology Council and is a former lead in-house patent counsel for Pfizer’s Oligonucleotide Therapeutics Unit.

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3 Comments

  1. John Watson
    Posted June 19, 2013 at 12:11 pm | Permalink

    This is perhaps the most intelligent commentary on the effects of the Myriad decision that I have read. Good job!

  2. Posted June 19, 2013 at 12:27 pm | Permalink

    Konstantin,
    Interesting point of view on the Myriad Genetics ruling by the Supreme Court last week. I place IP attorneys with Berkley Legal Search, and I previously placed PhDs in the life sciences at Labs, Pharma and in research. So I try to read as much as I can, including opinions, on our industry and current events that might have some influence.
    Just a few weeks ago my insurance provider refused to pay for my Myriad screening, and in spite of Myriad’s marketing promise to work with all potential patients to come to a evenhanded agreement re. payment and payment schedule, and the fact that I am high risk -3 immediate family members in 2 generations who died of breast and/or ovarian cancer, Myriad and I have been unable to come to an agreement on the price of my testing. So, so far, no Myriad test for me.
    As a recruiter, I am perplexed by the ruling, and I am concerned about a negative impact; as a potential patient I struggle. The 3-4 thousand $ price tag is simply too high, and I’d welcome downward pressure on the price through increased competition.

  3. Louis Ferland, PhD
    Posted June 20, 2013 at 3:03 pm | Permalink

    I agree with basically everything here. Nice article. However, I find that, like nearly all the commentary I read this past week about the Myriad ruling, it fails to see the elephant in the room. Point #3 went in the right direction but still missed it.

    The patent eligibility of the materials used in the test (“natural DNA”, cDNA, protein, or whatever) does not matter in the end because the “application of knowledge” protection under patent law was not examined in the Myriad case and therefore remains intact.

    Let me explain. Every single genetic test, and even wider than that, every single marker-based test, past, present and future, is knowledge-based. Research folks find that a biological marker (like a mutation in a gene, the presence of a protein in a certain tissue, etc.) is an indicator of a certain condition (like a disease, or a risk of developing a disease, etc.). This is knowledge and it is NOT patent eligible per se.

    But then, folks in the development department create a test that can determine the presence or absence of the marker in a sample taken from an individual AND THEREFORE assess the presence or absence of the condition in that individual. This is application of knowledge and it IS patent eligible, even after the Myriad decision. It does not matter what the marker is or what materials are used in the test to determine its presence in the sample; all lab tests consist in the application of knowledge and can be protected by a patent.

    All this discussion about “natural DNA is not patent eligible”, and “cDNA is patent eligible (as long as the corresponding genomic sequence contains at least one intron)” is very nice, but this issue is of little consequence. It will allow people to do research on human genes unimpeded by others’ patents, but it will not allow them to market competitive tests unless their test is based on a different piece of knowledge. The acquisition of such new knowledge may happen a little bit more now that research can open up but even then, if the initial discoverers (not inventors, but that’s OK) did their job correctly and fully, I expect that there should be relatively meager pickings left and in any case, normally not competitive ones.

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