SAN FRANCISCO — They may be in the business of new life, but prenatal testing companies are fighting to the death in Northern District patent cases.

The brawl involves four life sciences companies, an army of elite lawyers, half a dozen patents and two high-profile universities. At stake, say those watching, is the future of non-invasive prenatal testing, which screens for genetic disorders using a mother’s blood sample, reducing the need for riskier procedures like amniocentesis.

Researchers — and expectant moms — cheered the arrival of the new techniques two years ago, hoping they would dramatically expand the availability of prenatal testing. Now, the litigation moving forward in the Northern District will decide how many companies offer the tests — and at what price.

Like Myriad, the most recent U.S. Supreme Court decision to address the patentability of genetic elements, the cases raise a host of legal questions about the line between nature and invention and could have ramifications for how companies research and develop new treatments.

And though the questions feel familiar, they remain confounding.

“I have frankly gone back and forth and back and forth on what to do,” U.S. District Judge Susan Illston said at a hearing Friday.

Ariosa Diagnostics Inc. and Sequenom Inc., two companies offering the new tests, faced off in Illston’s courtroom to debate the validity of a patent that Sequenom is using to try to block sales of Ariosa’s rival product. Sequenom sought a preliminary injunction against Ariosa to keep its Harmony Prenatal Test off the market — a request that was denied by Illston and then vacated and sent back to her for further consideration by the U.S. Court of Appeals for the Federal Circuit this fall. The case could put either company out of business, the Federal Circuit wrote.

Ariosa’s lawyers contend the patent is worthless because it covers a law of nature — the detectability of fetal DNA in maternal blood. Sequenom argues that the patent stands up, even under new case law, because it covers specific methods for isolating the DNA and leaves room for researchers to devise other methods.

Considering rival motions for summary judgment, Illston noted that she is leaning toward Sequenom’s point of view, though she did not arrive at her conclusion easily.

Ariosa lawyer David Gindler of Irell & Manella tried to bring her back to his side. The Supreme Court has now made clear that an inventor must make a meaningful contribution beyond the discovery of a natural law in order to win a patent, Gindler said.

“The question is what did they bring to the table? What is claimed in the patent other than the discovery of a natural phenomenon?” he said, adding: “That’s how you prevent a patent from claiming too much.”

Sequenom lawyer Michael Malecek of Kaye Scholer defended the value of his client’s discovery and said it should be rewarded. “Discover is not a bad word in the patent statute,” Malecek said. “If you discover something, that’s a good thing in the patent statute’s view.”

Outside the courtroom, the case is being watched by personalized medicine companies trying to gauge whether they can hang onto their own patents and advocates hoping to safeguard the accessibility of the tests.

“If a company emerges with a dominant patent position, the testing is likely to be more expensive, more slowly adopted and less subject to quality competition,” said Hank Greely, a law professor at Stanford University. “I’m rooting against any company that is seeking a patent monopoly.”

LITIGATION QUAGMIRE

Sequenom was the first mover in the market for non-invasive prenatal testing. Two years ago, the San Diego biotechnology company introduced MaterniT21, a blood test that screens for fetal Down Syndrome and other disorders. The company then moved to clamp down nascent competitors, claiming that other companies would infringe its patent if they offered such a test.

A quagmire of litigation followed: Three would-be rivals, Ariosa, Verinata Health and Natera, responded with suits for declaratory judgment that they had not infringed Sequenom’s patent. Sequenom responded with counterclaims. Verinata, which was recently purchased by gene sequencing company Illumina, is also asserting a handful of patents against Sequenom and Ariosa. All cases are moving forward before Illston.

At their core is Section 101, a portion of the Patent Act that deals with subjects that can and cannot be patented and has emerged in recent years as a hot-button topic.

The Supreme Court upended the law with its 2012 decision in Mayo v. Prometheus, holding that a medical test that helps doctors determine the right drug dosage for treatment could not be patented because the basis for the invention was a law of nature.

Making Sequenom’s case to Judge Illston Friday, Malecek did not dodge the turmoil in the law.

“I would agree with the court that this 101 jurisprudence is hard and slippery,” he said. “But I do not agree that this is close.”

Malecek is defending U.S. Patent No. 6,258,540, which gives steps for detecting fetal DNA from a maternal blood test.

That’s just the type of natural phenomenon that the Supreme Court has long said cannot be patented, Gindler argued for Ariosa at the hearing. Although innovative applications of the phenomenon may be patented, Sequenom falls far short of that bar, Gindler added.

“It’s not good enough if all that you do is use routine, well known, conventional techniques in connection with a natural phenomenon,” he told Illston. “It’s not patentable.”

Reviewing Illston’s denial of a preliminary injunction, the Federal Circuit took no position on Ariosa’s claim that Sequenom’s patent covers subject matter that is ineligible under Section 101. The court instructed Illston to consider the question anew in light of the Supreme Court’s decision in Association for Molecular Pathology v. Myriad Genetics Inc., which broadly decided genes cannot be patented.

Both sides insisted Friday that Myriad supports their position. Ariosa contends the case fits with the legacy of Supreme Court decisions limiting patents of natural phenomena; Sequenom says Myriad set a threshold for patentability that it can clear.

Illston tried to envision the opinion she might write in Sequenom’s favor and pressed Malecek to explain what the invention has contributed beyond the natural law.

He said it calls for the use of parts of the mother’s blood to draw out fetal DNA in ways that do not bar others from still making use of the natural phenomenon.

“The new idea here is that this is a completely traditional way to do it, but that doesn’t preempt other ways,” Illston surmised. “That doesn’t sound like much of a new idea.”

“You’re falling into the trap,” protested Malecek, who said Ariosa has tried to discredit Sequenom’s patent by breaking it down to its parts: the use of conventional techniques and an underlying natural phenomenon. But the courts have called for more holistic analysis, he said.

“While the law is clear that you do go through that exercise, you have to put it all back together again,” Malecek said.

A BILLION-DOLLAR MARKET

After its October 2011 debut, Sequenom’s MaterniT21 was met with a crop of rival tests also promising pregnant women accuracy and convenience. Verinata rolled out its Verifi test in March 2012, followed by Ariosa with Harmony in May of that year and Natera with Panorama in December.

The companies were staking claims in a burgeoning segment of the diagnostics industry. The market for prenatal testing is worth an estimated $1.3 billion a year, according to researchers at Stanford and Duke University. Non-invasive options promise to expand the market, Stanford’s Greely said.

“It could lead to millions of women and millions of fetuses getting prenatal genetic testing, when now only a few tens of thousands do,” he said.

Scientists were vying to reach the finish line first as well. Sequenom’s ’540 patent dates back to the 1996 research of two Oxford scientists who analyzed the fetal nucleic acid circulating outside of cells in the blood of pregnant women, according to court papers. By homing in on paternally inherited fetal DNA, which differs from the mother’s own DNA, the scientists devised a way to detect a host of the unborn baby’s genetic characteristics.

Meanwhile, Verinata, represented by Edward Reines of Weil, Gotshal & Manges, is asserting patents which stem from the research of Stanford professor Stephen Quake, who devised a method to sequence the genome of an unborn baby using a mother’s blood sample.

Sequenom was poised to release a prenatal test in 2009, but the company was forced to change course after announcing that some data had been manipulated. Five executives, including the company’s CEO, lost their jobs in the scandal.

When it returned to the market two years later, Sequenom signaled to its competitors that it would aggressively assert its patent.

Robert “Bill” Bowen, Sequenom’s vice president and general counsel, said in an interview that later entrants have copied technology in which Sequenom invested heavily.

And he’s not concerned that the litigation will limit access to testing. “We certainly feel like we are able to supply the market.”

Ariosa’s general counsel, Dianna DeVore, declined comment.

Illston denied Sequenom’s motion for a preliminary injunction against Ariosa in July 2012. The Federal Circuit vacated and remanded Illston’s order in August.

The court found that Illston made mistakes in claim construction that led her to incorrectly find a substantial question of non-infringement. The Federal Circuit’s construction broadened Sequenom’s claims considerably, boosting the chances of infringement, UC-Hastings professor Jeffrey Lefstin said.

With Sequenom’s motion for a preliminary injunction before Illston once more, the judge may still decline to issue a sales ban, but it will be tougher, said Stanford’s Greely. “They had to have been doing cartwheels at Sequenom when they saw the Federal Circuit decision,” he said.

Legal watchers say a rift between the Federal Circuit and the Supreme Court over how to apply Section 101 is playing out in the Ariosa suit and other cases.

Whereas the Supreme Court views patent eligibility as a threshold question, the Federal Circuit is more reluctant to find that patents touch on material that is off-limits, patent litigators say.

“This case is another skirmish in this larger battle between the Federal Circuit and the Supreme Court,” said David Maizenberg, founder of Biology Partners, an IP consulting firm.

Ariosa and Sequenom appear to be capitalizing on the divide, IP litigators say. With dual doctrines in play, each party can emphasize the one that favors them. Ariosa’s briefs highlight the Supreme Court’s findings in Mayo and Myriad, whereas Sequenom draws more heavily from Federal Circuit decisions.

Amid the uncertainty, patent lawyers expect to see many more claims that center on patent eligibility. District court judges seem to be caught in a precarious position.

“If I were in Judge Illston’s shoes, I would have no idea what to do,” said Lefstin.

With isolated genes deemed unpatentable, some personalized medicine companies are adjusting their patent strategy to emphasize methods rather than pure biological discoveries, said Joshua Sarnoff, a law professor at DePaul University.

IP lawyers warn that businesses may also be less willing to engage in costly research if they do not have strong patent protection to ensure a return on their investments.

The Supreme Court’s effort to stop specific companies from monopolizing laws of nature seems at odds with the concept of a patent, Lefstin said.

A patent, by definition, always creates a monopoly, he notes. “It’s been perceived as part of the bargain of the patent system.”

Contact the reporter at jlove@alm.com.