Federal Circuit Rules That Gene Patents Are Eligible Subject Matter, but Some Related Method Claims Covered Unpatentable Abstract Ideas
A three-judge panel of the U.S. Court of Appeals for the Federal Circuit reversed-in-part and affirmed-in-part a district court ruling that patents related to the human BRCA1 and BRCA1 genes, which are associated with an increased risk of breast and ovarian cancer, were not eligible subject matter under 35 U.S.C. § 101. The Federal Circuit ruled that claims directed to isolated DNA sequences and complementary DNA (“cDNA”) corresponding to the BRCA1/2 genes were patentable subject matter because the molecules were chemically different from native DNA in the human body. The court, however, ruled that several claims directed to methods for detecting anomalies in a patient’s genes using the DNA sequences were invalid because the claims only recited mental processes that were unpatentable abstract ideas.
Myriad’s BRAC1/2 Patents and the ACLU’s Challenge
Following an extensive hunt for human genes associated with an increased incidence of breast cancer, Myriad Genetics, Inc. obtained seven patents, including U.S. Patent No. 5,747,282, entitled “17Q-linked breast and ovarian cancer susceptibility gene.” Myriad’s patents included claims directed to isolated genes and therapeutic and diagnostic processes based on the genes. The U.S. Patent and Trademark Office allowed the claims under a formal written policy that permits patents on isolated or purified DNA because DNA does not appear isolated in nature. Utility Examination Guidelines, 66 Fed. Reg. 1092 (Jan. 5, 2001). Following issuance, Myriad has asserted the patents against genetic testing laboratories and researchers investigating the BRAC1/2 genes.
The plaintiffs, represented by the American Civil Liberties Foundation Legal Foundation (“ACLU”), are genetic testing laboratories, physicians, researchers, and patients who are unable to afford BRAC1/2 testing provided by Myriad. In May 2009, the plaintiffs filed suit against the U.S. Patent and Trademark Office in the U.S. District Court for the Southern District of New York, alleging that 12 broad claims in the Myriad patents are invalid under Section 101 and that the USPTO issued the patents in violation of Article I, Section 8 of the U.S. Constitution and the First and Fourteenth Amendments to the Constitution.
District Court Finds Patents Invalid Under Section 101
Initially, the district court denied the USPTO’s motion to dismiss the action, ruling that the plaintiffs had standing to maintain their challenge, and the district court had jurisdiction over the defendants. Then, in a detailed 156 page decision, the district court granted the plaintiffs’ motion for summary judgment, finding that the disputed claims were invalid as ineligible subject matter under Section 101. See Myriad BRAC 1/2 Gene Patents Held Not Eligible Subject Matter Under 35 USC § 101, Bloomberg Law Reports – Intellectual Property, Vol. 4, No. 15 (Apr. 12, 2010) for a discussion of the district court’s decision.
The patents’ claims fall into three groups. First, several claims are directed to isolated DNA that codes for the BRCA1/2 genes. Second, a limited number of claims cover cDNA corresponding to the same genes. Third, the patents claim processes covering (1) the use of the DNA sequences and/or cDNA to detect mutations in a patient by comparing the patient’s native DNA with the isolated sequences or known mutations and (2) the screening of potential cancer drugs by analyzing changes in affected cell growth rates.
The district court ruled that the Myriad patents were not eligible for patenting. Among other things, the district court ruled that the DNA sequences claimed in the Myriad patents were not eligible for patenting because they were merely purified compounds that existed in nature, without any substantial change. Moreover, the district court noted that the purified DNA contained exactly the same coding information as native DNA, and that Myriad’s entire test technology rested on that equality. The district court also ruled that the Myriad method claims were not eligible under the “Machine-or-Transformation Test,” which was the applicable standard at the time under the Federal Circuit’s decision in In re Bilski, 545 F.3d 943 (Fed. Cir. 2008), affirmed on other grounds by Bilski v. Kappos, 130 S. Ct. 3218 (2010). Myriad appealed to the Federal Circuit.
Federal Circuit Rules that One Plaintiff Has Standing to Maintain Declaratory Judgment Action
In a decision spanning three separate opinions, the Federal Circuit reversed the district court ruling in part and affirmed-in-part. Circuit Judge Alan Lourie wrote the majority opinion of the panel. As a threshold issue, the Federal Circuit ruled that at least one plaintiff, Dr. Harry Ostrer, had standing to maintain a declaratory judgment action challenging the validity of the Myriad patents. Applying the “all of the circumstances” test established in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007), the appeals court held that Ostrer established a sufficiently real and imminent injury to confer standing under the Declaratory Judgment Act. 28 U.S.C. § 2201. Ostrer alleged that he desired to engage in genetic testing for BRCA1/2 gene mutations, but Myriad’s actions in enforcing its patents, including sending him cease and desist letters and filing infringement suits against other health professionals, caused him to avoid that activity. The court noted that the mere risk of infringement alone does not create an actual controversy, without “some affirmative act of the patentee.” Myriad at 28 (citing SanDisk Corp. v. STMicroelectonics, Inc., 480 F.3d 1372, 1380 (Fed. Cir. 2007)). Because Myriad had demanded a royalty from Ostrer and had sued or threatened to sue other health practitioners, however, Ostrer was compelled to cease his work and send to Myriad all patient samples that he planned to use for genetic testing, despite his belief that the Myriad patents were invalid. Accordingly, the court found that Myriad and Ostrer had taken adverse legal positions on Ostrer’s right to conduct genetic testing of the BRCA1/2 genes. Ostrer also established a real and immediate controversy, since he had the experience and resources to conduct the testing and stated unequivocally that he would immediately commence testing in the event the threat of infringement was removed.
The Federal Circuit rejected Myriad’s argument that Ostrer’s injury was “stale,” because Myriad’s threats occurred 10 years before the commencement of the litigation. The court noted that:
In many cases a controversy made manifest by a patentee’s affirmative assertion of its patent rights will dissipate as market players and products change. In this case, however, the relevant circumstances surrounding Myriad’s assertion of its patent rights have not changed despite the passage of time.
Id. at 31. Among other things, despite the 10-year gap between Myriad’s threats and the filing of the lawsuit, Myriad continued to maintain that Ostrer’s proposed tests infringed its patents, and Ostrer maintained his belief that his inability to conduct genetic testing was due to Myriad’s invalid patents. As a result, the Federal Circuit reversed the district court’s broad recognition of the plaintiffs’ standing, and affirmed the district court only with respect to Ostrer’s individual standing. As to the other plaintiffs, the court noted, “[s]imply disagreeing with the existence of a patent or even suffering an attenuated, non-proximate, effect from the existence of a patent does not meet the Supreme Court’s requirement for an adverse legal controversy of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Id. at 35.
Federal Circuit Finds DNA and cDNA Claims Recite Patent-Eligible Subject Matter
Turning to the merits of the dispute, the Federal Circuit ruled that claims in the Myriad patents directed to isolated DNA sequences and cDNA were eligible subject matter under Section 101. The court noted that the statute is to be construed broadly, but not without limits. The Supreme Court has identified three general categories of ineligible subject matter: laws of nature, physical phenomena, and abstract ideas. Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980). The Federal Circuit ruled, however, that the isolated DNA and cDNA were distinctive chemical molecules that differed from molecules present in the human body. According to the court, native (or naturally-occurring) DNA exists in the human body in chromosomes surrounded by proteins, chromatin, and other compounds. Isolated DNA, on the other hand:
[I]s a free-standing portion of a native DNA molecule, frequently a single gene. Isolated DNA has been cleaved (i.e., had covalent bonds in its backbone chemically severed) or synthesized to consist of just a fraction of a naturally occurring DNA molecule. For example, the BRCA1 gene in its native state resides on chromosome 17, a DNA molecule of around eighty million nucleotides. Similarly, BRCA2 in its native state is located on chromosome 13, a DNA of approximately 114 million nucleotides. In contrast, isolated BRCA1 and BRCA2, with introns, each consists of just 80,000 or so nucleotides. And without introns, BRCA2 shrinks to just 10,200 or so nucleotides and BRCA1 to just around 5,500 nucleotides. . . . Accordingly, BRCA1 and BRCA2 in their isolated state are not the same molecules as DNA as it exists in the body; human intervention in cleaving or synthesizing a portion of a native chromosomal DNA imparts on that isolated DNA a distinctive chemical identity from that possessed by native DNA.
Myriad at 42. In addition, the court ruled that cDNA molecules, which are created by reassembling a DNA-like molecule using transcription based on the “blueprint” of a messenger RNA molecule, are eligible subject matter because they are engineered by man and, with rare exceptions, are not present in nature.
The court rejected the district court’s reliance on cases holding that purified forms of naturally-occurring chemical compounds are not patentable unless the purified form exhibits markedly different or distinctive characteristics. See Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948). The court noted that, “[I]solated DNA is not purified DNA.” Id. at 42. Unlike a purified compound, isolated DNA has been chemically altered by removing it from its native chemical environment. As a result, when isolated, the DNA molecule is cleaved from the chemical bonds and becomes a distinct chemical entity, not simply a purified form of the same compound.
In a concurring opinion, Circuit Judge Kimberly Moore agreed with the court’s ruling that isolated DNA and cDNA were patent-eligible, but elaborated on the reasons for her conclusion. As to cDNA, Judge Moore noted that the molecules have a “unique sequence of DNA bases (A, C, G, T) which is not actually present in nature.” Myriad, Moore, J., concurring at 12. Thus, Judge Moore concluded that cDNA are not naturally-occurring compounds and are eligible under § 101. She also observed that small DNA fragments are patentable because they have a different chemical structure from native DNA “which is the product of the intervention by man, [and] leads to a different and beneficial utility” in diagnostic and other testing. Id. at 16. Finally, Judge Moore observed that larger DNA strands pose a “closer question,” but that the strands were patent-eligible largely because of the long-established practice of granting patents to such inventions:
This case, however, comes to us with a substantial historical background. Congress has, for centuries, authorized an expansive scope of patentable subject matter. Likewise, the United States Patent Office has allowed patents on isolated DNA sequences for decades, and, more generally, has allowed patents on purified natural products for centuries. There are now thousands of patents with claims to isolated DNA, and some unknown (but certainly large) number of patents to purified natural products or fragments thereof. . . . [I] believe we must be particularly wary of expanding the judicial exception to patentable subject matter where both settled expectations and extensive property rights are involved. Combined with my belief that we should defer to Congress, these settled expectations tip the scale in favor of patentability.
Id. at 18-19.
Circuit Judge William Bryson submitted a separate opinion concurring in the court’s conclusion that the cDNA claims were patent eligible, but dissenting from the decision relating to isolated DNA fragments. Judge Bryson argued that the isolated DNA were essentially the same as native DNA, and the only chemical changes were those incidental to the necessity of removing the DNA from human cells. He likened the isolation of DNA to removing a leaf physically connected to a tree. “[P]rematurely plucking the leaf would not turn it into a humanmade invention. That would remain true if there were minor differences between the plucked leaf and the fallen autumn leaf, unless those differences imparted ‘markedly different characteristics’ to the plucked leaf.” Myriad, Bryson, J., concurring-in-part and dissenting-in-part at 10 (citations omitted).
Federal Circuit Rules Some Myriad Method Claims Are Unpatentable as Abstract Ideas
All three judges joined the majority opinion on the issue of patentability of the Myriad process claims. Applying the Supreme Court’s Bilski analysis, the court held that claims reciting the steps of “comparing” and “analyzing” patient DNA samples and isolated DNA or cDNA sequences were only abstract mental processes. The claims did not recite a particular machine, or result in a transformation, two important clues to patent eligibility identified in Bilski. Further, the court noted:
Although the application of a formula or abstract idea in a process may describe patentable subject matter, Myriad’s claims do not apply the step of comparing two nucleotide sequences in a process. Rather, the step of comparing two DNA sequences is the entire process claimed.
Myriad at 50-51 (emphasis in original).
The court distinguished the “comparing” and “analyzing” claims in the Myriad patents from the claims at issue in Prometheus Labs., Inc. v. Mayo Collaborative Servs., 628 F.3d 1347 (Fed. Cir. 2010), cert. granted, 2011 BL 161646 (June 20, 2011). The Prometheus claims, directed to a method of adjusting the dosage of a drug used to treat gastrointestinal disorders, recited the administration of a drug which resulted in a chemical transformation in the patient’s system. A metabolite of the drug was then used to assess whether to adjust the dosage. Thus, although the claims recited the steps of “administering” and “determining,” the claimed method required the transformative step. The Myriad claims, in contrast, recited that “comparison between the two sequences can be accomplished by mere inspection alone.” Id. at 52. Thus, the methods were merely mental processes that are ineligible abstract ideas.
Finally, the Federal Circuit held that other Myriad process claims directed to screening potential cancer drugs by evaluating cell growth rates were eligible under Section 101. Among other things, the claims recited the step of “growing” cells, a step that is clearly transformative. Thus, under the Bilski standard, the court ruled that those method claims recited eligible subject matter.
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