Last month's U.S. Supreme Court decision in Association for Molecular Pathology v. Myriad Genetics, which considered whether portions of human genes may be patented, generated an extraordinary amount of passion for an intellectual property case.

James Watson, the Nobel Laureate credited with discovery of the double helix structure of DNA, wrote an amicus brief opining that human genes should not be patented: "Life's instructions ought not be controlled by legal monopolies created at the whim of Congress or the courts."

Because the patents at issue in Myriad concern genetic mutations associated with increased risk of breast and ovarian cancer, health care advocates voiced concern that a ruling favoring patentability would make it difficult for many women to afford genetic testing. On the other hand, participants in the biotechnology industry argued that robust patent protection is necessary to incentivize the huge investment necessary to develop and bring to market diagnostic and therapeutic products containing compounds designed to mirror naturally occurring genetic material or products using such compounds.

A unanimous Supreme Court ruled that naturally occurring human genes are not patentable, but upheld the patentability of "synthetic" human genes that had been manipulated by scientists. In doing so, the court adopted what some have called a compromise, agreeing with the position urged in the amicus brief filed by the United States. Although the popular press interpreted the decision as imposing limits on patentability and significantly reducing the cost of genetic testing, the actual impact of the decision is likely more nuanced.

TESTS FOR GENE MUTATIONS

The patents the Supreme Court considered in Myriad related to Myriad Genetics Inc.'s discovery of the location and sequence of the BRCA1 and BRCA2 genes on chromosomes 13 and 17, which allowed Myriad to determine their typical nucleotide sequences. This determination, in turn, enabled Myriad to develop tests for detecting mutations in those genes and thereby assess whether an individual has an increased risk of cancer.

Myriad obtained patents covering compositions of naturally occurring DNA, compositions of complementary DNA (cDNA), methods of analyzing or comparing a patient's BRCA sequence with a normal sequence, and methods of screening potential cancer therapeutics using altered BRCA1 genes.

Reversing, in part, the Court of Appeals for the Federal Circuit — and, significantly, disagreeing with the U.S. Pat­ent and Trademark Office — the Supreme Court held that the genes isolated from human DNA claimed in Myriad's patents were not patentable, because the "location and order" of the molecules in those genes "existed in nature before Myriad found them." Under Section 101 of the Patent Act, "[l]aws of nature, natural phenomena, and abstract ideas" may not be patented, because " 'they are the basic tools of scientific and technological work' that lie beyond the domain of patent protection."

Here, the court found, "Myriad's principal contribution was uncovering the precise location and genetic sequence of the BRCA1 and BRCA2 genes within chromosomes 17 and 13." This discovery was not enough to support patentability because "Myriad did not create anything.…It found an important and useful gene, but separating that gene from its surrounding genetic material is not an act of invention," the court wrote.

Disagreeing with the majority of the Federal Circuit panel, the Supreme Court held that Myriad's claims could not be "saved by the fact that isolating DNA from the human genome severs chemical bonds and thereby creates a nonnaturally occurring molecule." The claims focus on the genetic information encoded in the genes, and do not "rely in any way on the chemical changes that result from isolation of a particular section of DNA."

As the court said, discovery — even after great effort — is not equivalent to invention. The court noted that "[m]any of Myriad's patent descriptions simply detail the 'iterative process' of discovery by which Myriad narrowed the possible locations for the gene sequences that it sought." In contrast, the court upheld a separate category of patent claims directed to cDNA, a synthetically stripped-down version of DNA.

Because the court found that cDNA does not exist in nature, it concluded that a "lab technician unquestionably creates something new when cDNA is made" so that cDNA is patentable subject matter. Although the cDNA described in the Myriad patent "retains the naturally occurring exons of DNA," it is "distinct from the DNA from which it was derived." Therefore, "cDNA is not a 'product of nature' " and is patent-eligible under Section 101.

Beyond sustaining claims to cDNA, the Supreme Court also made clear that many of Myriad's patent claims were not at issue. Significantly, the claims the court considered covered compositions of matter, not methods of manipulating genes or reaching diagnoses.

THE FUTURE

On the heels of the Supreme Court's decision, two providers, Ambry Genetics Corp. and Gene By Gene Ltd., offered BRCA1 and BRCA2 tests for considerably less than Myriad had been charging. According to court filings made by Myriad, Gene By Gene's testing costs $995 and Ambry's $2,280, compared with Myriad's $4,000 price.

In response, Myriad sued both companies for patent infringement in federal court in Utah and moved for preliminary injunctions preventing Gene By Gene and Ambry from offering their tests. In the Utah actions, Myriad argues that it is asserting patent claims that were not called into question by the Supreme Court's decision or prior precedent.

There appears to be little doubt that patents simply claiming a relationship between particular genetic mutations and the risk of disease are not valid. In Mayo Collaborative Services v. Prometheus Laboratories, the Supreme Court in 2012 struck down patents that claimed a method of determining the proper dose of a drug by looking at the level of a metabolite in the patient's blood.

Relying on Mayo, the Federal Circuit's decision in Myriad held that Myriad could not patent a method for "screening a tumor sample" by "comparing" a gene sequence from a tumor sample with a sequence from a nontumor sample. Like the claims invalidated in Prometheus, such patents "essentially claim natural laws that are not eligible for patent." Myriad did not seek Supreme Court review of that ruling and says it has not asserted method claims merely claiming a correlation between genetic mutations and risk of disease in the Utah actions.

Instead, Myriad's preliminary injunction motions in Utah rely on six patents covering preparation of synthetic DNA samples for BRCA1 and BRCA2 sequencing and analysis. The patents include composition claims for particular DNA primers used for sequencing and claims for specific methods of screening patients for gene mutations. Myriad argues that these method claims involve a "new biomarker," "new reagents and techniques to analyze this biomarker" and "new methods of determining a patient's risk of breast and ovarian cancer using these reagents and techniques."

The ultimate outcome of the Utah litigations presumably will turn on traditional issues in patent litigation: the infringement, validity and enforceability of the specific claims at issue. After Myriad and Prometheus, patent holders will not be able to use the relatively blunt instruments of claims merely covering naturally occurring DNA sequences or correlations between mutations and risk of disease. Instead, their economic returns will depend upon much more specific claims, drawn to smaller innovations. And it is likely that there will always be an economic payoff for early discovery. As Judge William Bryson of the Federal Circuit noted in Myriad, the first to make a nonpatentable discovery "may well be in an excellent position to claim applications of that knowledge."

In deciding Myriad, the Supreme Court may well have been moved by the argument that endorsing the patentability of gene fragments would have stifled scientific research. It is difficult to know, however, whether the dividing line the court recognized — between fragments of naturally occurring DNA and "synthetic" cDNA — will produce the right amount of incentive for the biotech industry to make the huge commitments necessary to bring new diagnostic tools and therapies to market.

Lewis R. Clayton is a litigation partner in the New York office of Paul, Weiss, Rifkind, Wharton & Garrison and co-chairman of the firm's intellectual property litigation group. Jennifer H. Wu, an associate with the firm, assisted in the preparation of this article.