Reversing decades of federal patent awards, the U.S. Supreme Court last week unanimously ruled that human genes and the information they encode are not patent-eligible.

The ruling invalidated controversial patents held by Myriad Genetics Inc. on two genes whose mutations dramatically increase the risk of hereditary breast and ovarian cancer — the so-called BRCA1 and BRCA2 genes. Myriad discovered the exact location and sequence of the two genes, which enabled it to develop diagnostic tests for detecting the mutations and assessing a person’s cancer risk. The company’s patents gave it the exclusive right to do research and diagnostic testing of those genes and also to synthetically create BRCA DNA, known as complementary or cDNA.

The justices’ decision in Association for Molecular Pathology v. Myriad Genetics surprised few in the patent law field. Following oral arguments in April, the court appeared to be leaning favorably toward an argument presented by Solicitor General Donald Verrilli Jr. Breaking with the position held by the U.S. Patent and Trademark Office, Verrilli urged the justices to hold that isolated, naturally occurring DNA is not patent-eligible, but that laboratory-created, synthetic DNA is.

Justice Clarence Thomas, writing for the court, said the justices "have long held" that federal patent law contains an important, implicit exception: Laws of nature, natural phenomena and abstract ideas are not patentable.

"It is undisputed that Myriad did not create or alter any of the genetic information encoded in the BRCA1 and BRCA2 genes," Thomas wrote. "The location and order of the nucleotides existed in nature before Myriad found them. Nor did Myriad create or alter the genetic structure of DNA."

Separating the gene from its surrounding genetic material is not an act of invention, he wrote, adding, "Ground­breaking, innovative, or even brilliant discovery does not by itself satisfy" the patent inquiry.

Myriad’s patent claims, Thomas wrote, focus on the genetic information encoded in the BRCA1 and BRCA2 genes. "We hold that a naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated," he wrote.

The court also ruled that cDNA — synthetic or complementary DNA — is patent-eligible because it is not naturally occurring. The lab technician, Thomas wrote, "unquestionably" creates something new when cDNA is made.

"cDNA retains the naturally occurring exons of DNA, but it is distinct from the DNA from which it was derived," Thomas wrote.

At the end of his opinion, Thomas stressed what was not implicated by the court’s decision. First, he wrote, there were no method claims before the court — for example, that Myriad had created a new method of manipulating genes while searching for the BRCA1 and BRCA 2 genes that might be patentable.

Second, the case did not involve patents on new applications of knowledge about the BRCA1 and BRCA2 genes. And finally, the court did not consider the patent eligibility of scientific alteration of the genetic code.

The court case stemmed from a lawsuit filed against Myriad by the American Civil Liberties Union and the Public Patent Foundation on behalf of researchers, genetic counselors, patients, breast cancer and women’s health groups, and medical professional associations representing 150,000 geneticists, pathologists and laboratory professionals.

The decision was a semivictory for both parties. The ACLU had argued that neither isolated DNA nor synthetic DNA was patent-eligible. Myriad defended patents for both.

"Because of this ruling, patients will have greater access to genetic testing and scientists can engage in research on these genes without fear of being sued," said Sandra Park, senior staff attorney with the ACLU Women’s Rights Project. On the effect of patents for synthetic DNA, she said scientists can perform genetic testing without relying on cDNA.

Peter Meldrum, Myriad’s president and chief executive officer, noted that the decision invalidated five of the company’s claims on isolated DNA, but that many of its unchallenged claims are method claims applying knowledge about the BRCA1 and BRCA2 genes.

"We believe the Court appropriately upheld our claims on cDNA, and underscored the patent eligibility of our method claims, ensuring strong intellectual property protection for our BRACAnalysis test moving forward," Meldrum said in a written statement.

Patent litigators differed on the long-term consequences of a decision that human genes were not patent-eligible.

"The court ruled very narrowly on the particular question asked and took the road map the Department of Justice gave it," said Kevin Noonan, a biotech partner in Chicago’s McDonnell Boehnen Hulbert & Berghoff.

The main concern was that the court would issue a major pronouncement on products of nature that would affect antibodies, proteins and other substances occurring in nature, Noonan said. "The court, instead, focused its discussion on human DNA. It did not expansively opine on products of nature," he said. "The narrowness of the decision is good. It doesn’t implicate, the way it might have, the broader scope of biotech products out there."

Michael Tuscan, co-chairman of Cooley’s patent counseling and prosecution practice group, agreed the decision was narrow. "While a fair number of existing patent claims are now likely invalid, many of these patents are at or near the end of their term," he said.

The decision will not prove too disruptive for the industry, he added, because it leaves open many ways for companies to build patent exclusivity around manipulated nucleic acids, methods of using even naturally occurring nucleic acids. "Much of what this decision pertains to is research and discoveries that took place more than 10 years ago, not what is generally new to the life sciences industry in this day and age."

The Myriad decision is "unlikely to move the needle on biotech investment," said Edward Reines, partner in Weil Gotshal & Manges’ technology litigation practice. "It’s obviously not a good decision to incentivize investment, but it’s not the end of the world," he said.

However, patent litigator Timothy Worrall of Dorsey & Whitney predicted the decision would discourage investment in diagnostic and personalized medicine.

"The Myriad CEO is on the record saying it cost $500 million before Myriad broke even on this," Worrall said. "In the absence of the ability to protect exclusively the aspects of the invention, the net return for investors would seem to be reduced. That is an issue going forward."

Furthermore, "the ruling will impact the patent eligibility of other newly discovered compounds that are ‘isolated’ from nature, such as medicinal compounds isolated from plants, beneficial proteins isolated from human or animal sources, and beneficial microorganisms isolated from soil or the deep sea," said Courtenay Brinckerhoff, partner in Foley & Lardner’s intellectual property practice group.

As for the reliance interests of the holders of patents issued during the last 30 years, Thomas, in a footnote, wrote that those concerns "are better directed to Congress."

Marcia Coyle can be contacted at mcoyle@alm.com.