Rumors of the death of biotech patents have been greatly exaggerated. The U.S. Supreme Court recently held "a naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated."1 This holding sent shock waves throughout the biotech IP community not only because the court invalidated a class of commonly issued patent claims, but also because it established a bright-line distinction between naturally and non-naturally occurring compounds. However, a calmer reading of Myriad reveals that its reach may be more limited than first reported. The holding is likely to be limited to information-containing compositions and not to methods or applications of knowledge. Also, the holding will likely be narrowly interpreted because the Federal Circuit has historically given patent eligibility under 35 USC §101 wide latitude.2

It all started in the mid-1990s when Myriad Genetics discovered the location and sequence of two cancer susceptibility genes: BRCA1 and BRCA2. Mutations in these genes were found to correlate strongly to breast and ovarian cancer. Myriad also developed a test for detecting mutations in these genes in patients and obtained patents covering isolated native BRCA DNA (called genomic DNA) and synthetic BRCA -DNA (called complementary or "cDNA"). Myriad threatened doctors and institutions who used the BRCA DNAs to test for the genetic predisposition to these cancers with patent lawsuits if they did not immediately cease testing. The ACLU, along with the Association of Molecular Pathology and several affected individual doctors and patients challenged Myriad's patents, arguing that human genes are not patent eligible and as such Myriad's patents were invalid.

The Southern District court ruled for the plaintiffs, finding all of Myriad's asserted DNA claims to be "products of nature" rendering them patent ineligible under 35 U.S.C. §101. The Federal Circuit reversed on appeal.3 The Supreme Court granted certiorari, and vacated the judgment. On remand, the Federal Circuit again held that genomic DNA and cDNA are patent eligible,4 but the judges maintained divergent opinions, raising questions about the exact contours of DNA patent eligibility. Judge Alan Lourie's majority opinion upheld Myriad's DNA claims on the grounds that the chemical differences generated during the isolation process between naturally-occurring and isolated DNA sequences created a "non-naturally occurring" molecule.

Judge Kimberly Moore disagreed and instead concurred based on the U.S. Patent and Trademark Office's history of awarding gene patents and the reliance interest of patent holders. In dissent, however, Judge William Bryson argued the genetic similarities between naturally-occurring and isolated BRCA DNA dwarfed any chemical differences between the two. These divergent positions set the stage for the appeal to the Supreme Court that followed.

This time, the Supreme Court held that "separating [a] gene from its surrounding genetic material is not an act of invention. 5 The court identified two distinct categories for Myriad's DNA claims: isolated genomic DNAs and synthesized cDNAs. As for isolated genomic DNA, the court found that these sequences are identical to sequences that occur in nature but for that they are separated from native cellular environment.

As such, isolated genomic DNA are products of nature, not patent eligible under 35 U.S.C. §101. The court distinguished these DNAs from Myriad's cDNA claims. Complementary DNAs (cDNAs) are copies of mRNA molecules produced in cells by stringing together discontinuous portions of generic DNA (called exons), and eliminating other portions of the generic DNA (called introns). As such, cDNAs do not exist in nature in the DNA form because natural DNA molecules include both intron and exon sequences whereas mRNAs (and cDNAs) have only exon sequences. In other words, cDNAs are wholly synthesized by man and therefore patent-eligible under 35 U.S.C. §101. However, even short strands of cDNA may not be patent eligible if they are "indistinguishable" from natural DNA—e.g., when both the generic DNA and cDNA have no intervening introns. Thus, the court created a two category rule concerning the patent eligibility of DNAs: "Naturally occurring" DNAs are patent ineligible; while DNA sequences created from post-spliced mRNAs are non-natural and thus patent eligible.

The critical question post-Myriad is whether claims directed to important biotechnologies retain patent eligibility. DNA technology, such as DNA probes, chips, expression vectors, host cells and the like, will remain patent eligible. Myriad confirmed the reasoning of Diamond v. Chakrabarty,6 which held a man-made transformed bacterium modified to break down components of crude oil are patent eligible. Similarly, expression vectors—typically plasmids or viruses—are genetic vehicles for introducing heterologous genes into host cells. Because the expression vectors and the resulting host cells contain DNA sequences do not naturally occur in this form, they are analogous to the manufactured bacterium in Chakrabarty, and as such are patent eligible. Because Chakrabarty is consistent with the Myriad decision, such DNA technologies remain patent eligible.

Claims directed to methods of use for DNA sequences are not implicated by Myriad. However, practitioners must separately consider Mayo Collaborative Servs. v. Prometheus Labs., 132 S. Ct. 1289 (2012), which addressed patent eligibility for treatment method claims. Mayo cautioned against claims that simply pair "laws of nature" with "well-understood, routine, conventional activity already engaged in by the scientific community." Conventional method steps cannot sufficiently transform a newly-discovered law of nature into a patent-eligible application. By analogy, while Myriad prohibited patenting a known extraction method to isolate the BRCA gene, because both existed before Myriad discovered them, Myriad held open that "innovative methods of manipulating genes" could receive patent protection, for example, if such method claims include either patent eligible DNA or method steps that are new, inventive and useful.

Another area not directly addressed by the court is the patent eligibility of claims directed to biologics, i.e., compounds occurring in nature that have new and useful effects in isolated form. Patents on biologics have a longstanding acceptance. In fact, their patent eligibility is critical to maintaining a market for many large pharmaceutical companies, at a time when the pipeline for small molecule drugs has in large measure dried up.

On the surface, Myriad raised questions as to potential applicability of its holding to the patent eligibility of biologics claims. However, the court explained that Myriad's claims, although expressed as nucleic acids, were directed to the information contained in the DNAs and not to a specific chemical composition. Unlike naturally-occurring DNA which encodes other molecules, biologics possess new and useful functional properties in and of themselves—as a "chemical composition." Moreover, the patent eligibility of biologics has commonly been understood to turn on whether an isolated biologic is "a new thing commercially and therapeutically," not whether it is non-naturally occurring.7 Demonstrating a new and useful property of such molecules will continue to be critical to patent eligibility for biologics.

Ultimately, selecting the appropriate claim type and intelligent claim drafting will be key to navigating the new Myriad standard. For example, a DNA sequence that is naturally occurring for one individual may be non-naturally occurring for another. By properly directing such a claim to a particular species, one may avoid invalidation under the Myriad standard. The proper inquiry must focus on the source DNA claimed, not the hypothetical universe of all such DNAs. Similarly, as discussed above, claim types will be important, with a new emphasis on genetic vehicles and methods. Myriad reaffirms the importance of sound claim drafting for DNAs and other molecules that have both a therapeutic and information-carrying function, to navigate the new patent eligibility standards for naturally occurring DNA sequences.

Dorothy R. Auth, Ph.D., is a partner at Cadwalader, Wickersham & Taft. Michael Powell, a first year associate at the firm and Peng Lin, Ph.D., a summer associate, contributed to the preparation of the article.

Endnotes:

1. Ass'n for Molecular Pathology v. Myriad Genetics, No. 12-398 (U.S. June 13, 2013).

2. Ultramercial v. Hulu, 657 F.3d 1323, 1325-27 (Fed. Cir. 2011).

3. Ass'n for Molecular Pathology v. United States PTO, 653 F.3d 1329 (Fed. Cir. 2011).

4. Ass'n for Molecular Pathology v. United States PTO, 689 F.3d 1303 (Fed. Cir. 2012).

5. Myriad Genetics, No. 12-398, slip op. at 12.

6. 447 U.S. 303 (1980)

7. See Merck & Co. v. Olin Mathieson Chem., 253 F.2d 156 (4th Cir. 1958) (citing Parke-Davis & Co. v. H.K. Mulford Co., 189 F. 95 (C.C.D.N.Y. 1911) while upholding the patent eligibility of isolated vitamin B-12).