Alice/Mayo restrictions gut genetic biotech investment

a. Mayo and Alice: The Court Takes a Hard Stance on Laws of Nature and Abstract Ideas

The Court reassessed its position on patent subject matter exclusions in Mayo. 144 In that case, Prometheus Laboratories devised and patented a method for calibrating drug dosage in patients being treated for autoimmune diseases, such as Crohn’s disease.145 Typical treatment of these diseases includes administration of thiopurine, an immunosuppressant.146 However, as different individuals metabolize thiopurine at different rates, finding an effective dosage of the drug can prove tricky.147 Prometheus developed a method for administering thiopurine to patients and then measuring thiopurine metabolites in a patient’s blood to see how they metabolized the drug.148 Thiopurine dosage could then be adjusted in a patient-specific manner based on an individual’s metabolism.149 The Supreme Court found that Prometheus’s patent attempted to claim an underlying law of nature and was thus outside the realm of patentable subject matter.150 Specifically, the Court found that Prometheus’s patent effectively restated a natural law—that the level of metabolites in a person’s blood reflect the rate at which they metabolize something—and then said to “apply it.”151 Absent some additional inventive step that transforms the “laws of nature, natural phenomena, [or] abstract ideas” into something more concrete, the Court held that such applications were not patentable.152

The Court solidified their stance two years later in Alice Corp. v. CLS Bank International. In Alice, the Court was faced with assessing whether a computer program implementing an abstract idea to facilitate financial transactions was sufficiently inventive to make it patentable subject matter.153 The Court reiterated its holding in Mayo, finding that mere application of an abstract idea without a more inventive step did not make the idea patentable subject matter.154 The Court further formalized the test first laid down in Mayo, holding that, for inventions directed to the three excluded categories of laws of nature, natural phenomena, and abstract ideas, a court must ask whether the claimed patent transforms the unpatentable principle into something patentable through an inventive step.155 If such a transformation occurs, the claim can be considered eligible subject matter despite being a natural or abstract principle.156 Alternatively, if the claim merely says to apply the principle, such an application does not transform the principle and the claim should not be considered valid subject matter.157

b. Myriad: The Downfall of Gene Patents

Between the Mayo and Alice decisions, the Court heard a case on the patentability of genetic sequences.158 In the 1990s, Myriad Genetics patented the sequences for BRCA1 and BRCA2, genes that, when mutated, predispose an individual to developing breast cancer.159 Myriad directly offered testing for BRCA1 and BRCA2 mutations to patients, as well as offering licensing agreements to other medical groups to allow these groups to test patients in-house for such mutations.160 However, Myriad’s licensing agreements were limited in terms of the number of mutations and identity of patients that could be tested.161 These limitations meant that, in effect, if a patient wanted to be screened for BRCA mutations, they had to go through Myriad.162 Myriad actively enforced its patents over BRCA1 and BRCA2 to prevent others from infringing by offering their own BRCA tests.163

In 2009, a group of plaintiffs sued Myriad, alleging that its patents over the BRCA1 and BRCA2 gene sequences, and by extension the right to test patients for mutations thereof, were invalid for covering unpatentable subject matter.164 Among the plaintiffs were a number of doctors who had been blocked from administering their own BRCA tests by Myriad; patients who either could not afford Myriad’s tests or who desired a second opinion of their results but could not get it, as Myriad was the sole provider of BRCA testing; and nonprofit groups dedicated to advocating for women’s health or to advancing medical research, such as the Association for Molecular Pathology (AMP).165 The plaintiffs were further backed by groups, such as the ACLU, who saw the issue of gene patents as a civil rights issue over bodily autonomy.166 The plaintiffs sued the USPTO and Myriad Genetics, alleging that Myriad’s BRCA patents were invalid for attempting to patent a law of nature.167 With the backing of amici across the biotech industry, academia, and the patent bar, the defendants argued that the process of isolating DNA from its natural environment turned it into something made by man and thus transformed it into patent-eligible subject matter.168

The U.S. District Court for the Southern District of New York found that Myriad’s BRCA patents covered ineligible subject matter.169 The court considered both the nature of the isolated DNA itself and the process of comparing isolated BRCA sequences to a healthy reference when checking for mutations.170 Concerning its nature, the court noted that DNA was a composition of matter with special properties as both a chemical substance and a carrier of information.171 The court observed that although isolation of a specific gene sequence might chemically alter the substance, it does nothing to change the “defining characteristic”—that is, the genetic information—of the DNA.172 The court reasoned that Myriad’s patents covering isolated BRCA sequences were effectively equivalent to claiming naturally occurring biologics akin to the claims in Funk Bros.173 The court thus found that Myriad’s patented claims to the BRCA gene sequences themselves covered unpatentable subject matter and were thus invalid.174

The district court further held that Myriad’s claims over comparing patient BRCA sequences to healthy references were likewise ineligible for patent protection.175 Drawing parallels to cases such as Diehr and Flook, the court held that the process of comparing genetic sequences was a mental process that, absent something more, was too abstract to be patent-eligible.176

On appeal, the Federal Circuit reversed the district court’s ruling on isolated DNA sequences, holding that the process of isolating DNA from a patient rendered it “not a purified form of a natural material, but a distinct chemical entity” that is “markedly different . . . from the native DNA . . . [and], therefore, patentable subject matter.”177 The Federal Circuit, however, affirmed the district court’s invalidation of the claim over comparing and analyzing patient DNA sequences, finding that this claim covered an unpatentable mental process.178 Thus, even though Myriad no longer had the exclusive right to analyze patients’ BRCA sequences, these rulings effectively upheld Myriad’s monopoly on testing BRCA mutations because Myriad maintained the exclusive right to isolate the genes for sequencing.179 On remand from the Supreme Court to reconsider its findings in light of Mayo, the Federal Circuit maintained that isolated DNA was patent-eligible and the process of comparing DNA sequences was not.180

Both the plaintiffs and Myriad appealed the Federal Circuit’s ruling.181 The Supreme Court assessed the nature of Myriad’s isolated BRCA gene sequences and came down on the same side as the district court.182 Finding that DNA must be thought of in its dual role as a chemical composition of matter and carrier of information, the Court agreed with the district court that isolation of a DNA sequence did not render the underlying information contained therein distinct from its naturally occurring counterpart and that “separating that gene from its surrounding genetic material is not an act of invention.”183 The Court held that Myriad’s claim of isolated DNA fell squarely within the “laws of nature” exception to patentable subject matter and that Myriad’s patents were thus invalid.184 As an aside, the Court also held that Myriad’s claims over synthetically created “cDNA,” included in the BRCA patents, were valid patent subject matter because the cDNA was not naturally occurring.185 Thus, the Court indicated that although genetic material itself might be patent-eligible, genetic information based on the isolation of an individual’s DNA alone was no longer valid subject matter for patents.186

The Supreme Court upended decades of practice in the biotech industry when it invalidated gene patents in Myriad. 187 Although the Court did not issue a categorical ban on patenting genetic material—thus allowing some niche uses to still be patent-eligible188—at the time, its decision in Myriad seemed likely to have profound effects on the research and commercialization of genetic information.