This year, the U.S. Supreme Court issued two significant opinions that will impact patent protection in the life sciences arena for many years to come. Arguably, the court seesawed by strengthening patent protection in one opinion while weakening patent protection in the other by declaring that certain discoveries cannot be patented. Nonetheless, the court has provided valuable guidance to those who seek patent protection, and a close inspection of these two opinions — Association for Molecular Pathology v. Myriad Genetics Inc., 133 S. Ct. 2107 (2013), and Bowman v. Monsanto Co., 133 S. Ct. 1761, rehearing denied, 2013 WL 3778991 (2013) — reveals that the court has adhered to the principle that innovation should be rewarded.

Patent Eligibility

The first opinion that warrants analysis concerns the Myriad case. For years, patents have issued concerning “isolated DNA” molecules, and patent owners have claimed that they have protection over naturally occurring DNA molecules that have been isolated from a genome. In the closely watched Myriad case, the court addressed whether certain types of DNA molecules are patentable. Although the court determined that isolated DNA molecules are not patentable, it recognized that an inventor may patent certain types of DNA molecules.

Myriad concerned patents that served as the basis for diagnostic tests that Myriad Genetics Inc. used to assess a patient’s risk of developing cancer. Myriad’s patents contained, among other things, claims concerning isolated DNA molecules with sequences that correspond to the BRCA1 and BRCA2 genes. Mutations in these genes may indicate that an individual has an increased risk of developing breast and ovarian cancer. Accordingly, in light of its patents, Myriad attempted to prevent others from offering diagnostic testing regarding the genes. Eventually, various groups filed a lawsuit against Myriad and sought a declaration that Myriad’s patent claims were invalid because they concerned subject matter that cannot be patented.

The Supreme Court determined that the act of uncovering the location and sequence of the BRCA1 and BRCA2 genes did not render the genes patentable, and, as such, isolated DNA molecules are not patentable. However, the court determined that claims directed to cDNA molecules concern patentable subject matter. The key distinguishing characteristic of the cDNA claims at issue was that the court considered cDNA molecules synthetically made. The court left open whether methods of manipulating genes, new applications of knowledge about the BRCA1 and BRCA2 genes, and DNA in which the order of the genetic code has been altered should qualify as patentable subject matter.

Self-Replicating Products

One month before it issued its opinion in Myriad, the Supreme Court addressed a dispute concerning self-replicating technology in Bowman v. Monsanto Co. In Monsanto, the court strengthened the rights of patent holders by recognizing that in certain circumstances, limitations should be placed on a purchaser of patented, self-replicating technology.

Monsanto concerned a dispute regarding genetically modified soybeans. Monsanto sells Roundup Ready soybean seeds, which are covered by Monsanto patents and have been genetically modified to be resistant to the herbicide glyphosate. Planted Roundup Ready soybean seeds give rise to soybean plants that are resistant to this herbicide. A purchaser of these genetically-modified soybean seeds agrees to enter into a licensing agreement with Monsanto. Under the agreement, the purchaser may use the seeds to create a crop of glyphosate-resistant soybean plants for only one growing season. In other words, the purchaser agrees that it will not save the soybean seeds that it harvests from the glyphosate-resistant plants for replanting. Nonetheless, the harvested soybeans seeds may be consumed or sold as a commodity.

Vernon Bowman, a farmer in Indiana, was a regular purchaser of Roundup Ready soybean seeds. He would sell his first soybean crop of the season, which consisted of soybeans harvested from Roundup Ready soybean seed plants, to a grain elevator. Thereafter, the grain elevator would normally resell the soybeans to an agricultural processor, and the soybeans would be used for human or animal consumption.

For his second season planting, Bowman used soybean seeds that were not purchased from a seller of Monsanto’s Roundup Ready seeds. Instead, Bowman purchased commodity soybeans from a grain elevator, planted these soybeans, and then treated his fields with glyphosate. Because a portion of the commodity soybeans consisted of soybeans that were grown by farmers who used Roundup Ready seeds, some of the plants in his field survived the treatment. Bowman saved seed from this crop and used it for his second season planting for the next year. He continued to save seed from his second season planting — which he occasionally supplemented with additional soybeans from the grain elevator — in subsequent years. Eventually, Bowman harvested eight crops that arose from glyphosate-resistant seeds that he obtained from a grain elevator.

After learning of Bowman’s activities, Monsanto sued him for patent infringement. As a defense, Bowman argued that patent exhaustion applied. Pursuant to the patent exhaustion doctrine, the purchaser of a patented invention who obtained the invention through an authorized sale, as well as any subsequent owner, has the right to use or sell the invention without restraint. However, the purchaser does not obtain the right to copy the patented invention. Bowman claimed that because the glyphosate-resistant soybeans that he planted during his second season were the subject of an authorized sale, his actions were permissible. In other words, because other farmers sold their soybean seed to the grain elevator, Bowman argued that Monsanto had no patent rights over the soybean seed that Bowman used for his second season.

The Supreme Court rejected Bowman’s defense and explained that his practice of growing plants from commodity soybeans was not protected by the patent exhaustion doctrine. The patent exhaustion doctrine only applied to the particular items that were sold — i.e., the soybeans whose sales were authorized by Monsanto. Bowman could use the commodity soybeans that he purchased from the grain elevator for consumption or resale, but he could not use them to create additional crops without Monsanto’s consent.

Lessons Learned

Both Myriad and Monsanto should be considered by those who seek to patent and commercialize inventions that relate to the life sciences, particularly those that concern genetically transformed materials. Despite the apparent limitations of these opinions, it is clear that the Supreme Court continues to believe that innovators should enjoy the benefits of patent protection when appropriate.

Notably, in Myriad, the Supreme Court did not exclude all DNA molecules from patent eligibility. The court indicated that as long as a DNA molecule is modified in some manner, it may be eligible for patent protection. Accordingly, an inventor may be able to obtain patent protection for a commercially useful DNA molecule — including one that may be used for genetic transformation — if it was created synthetically. Additionally, by specifically noting that its opinion did not apply to certain types of inventions, the Supreme Court avoided inadvertently expanding limitations on patentability.

Moreover, although the Supreme Court stated that its opinion in Monsanto is limited and addressed the particular case before the court, the opinion demonstrates that a patent holder can sell a patented, self-replicating organism while maintaining control over how the organism is used. As such, despite the limiting language of its opinion, it appears that the court accepts that a patent holder may place conditions on the sale of a self-replicating product, which maintains the benefits of patent protection. An inventor of a self-replicating invention — such as a genetically transformed plant or genetically transformed mammalian cell — may be able to obtain patent protection, sell its patented invention, and prevent the unauthorized replication of the invention. The Supreme Court has indicated that the patent exhaustion doctrine does not allow a purchaser to intentionally “copy” this type of invention in an unapproved manner.

As reflected in the Myriad and Monsanto opinions, the Supreme Court has not been reluctant to address patent cases concerning rapidly developing, complex technology. Indeed, the Supreme Court has indicated that it is willing to further clarify how patent protection applies to this type of technology. In doing so, the court has provided guidance for those who seek patent protection for inventions in the life sciences, ensured that patent protection for these types of advancements is attainable, and indicated how an inventor may seek to market such inventions.•