The shift to trade secrets protection weakens follow-on innovation

While many U.S. companies continue to innovate in the diagnostic space, many doing so are maintaining their discoveries as trade secrets. This will not have the same impact on driving innovation as patent protection would, because the discoveries are not being made known to others who might improve upon them or build new innovations on them. In his written and live testimony, Mr. Blaylock argued that PERA would undesirably “permit the privatization of natural phenomena in the form of knowledge of new biomarkers and their clinical relevance,” but it is the current state of Section 101 that incentives innovators to keep their discoveries to themselves. Mr. Blaylock’s position forgets that patent rights come with the cost of public disclosure, and only last for a limited time. Without PERA, innovators have little reason to share what they learn about newly discovered disease biomarkers and personalized medicine, and more reason to develop their technologies in-house while keeping the underlying methodology a trade secret. It is the trade secret paradigm, not the patent system, that rewards “privatization” of knowledge.

I am aware of an empirical study reported in 2022 in the Washington and Lee Law Review2 that determined that, “in the four years following Mayo, investment in disease diagnostic technologies was nearly $9.3 billion dollars lower than it would have been absent Mayo.” The study focused on venture capital investment in the United States, in particular. While it did not consider whether money was invested in other countries instead, it at least indicates reduced investment in specific U.S. industries impacted by Mayo, which is of grave concern.