Tuesday, April 6, 2010

Myriad Gene case shakes up and shakes down Biotech Industry

First, I would like to thank Matthew Dillon with the Organic Seed Alliance @Seed_Alliance for pulling me from under my rock and informing me about this very important case.

Judge Sweet of the Southern District of New York invalidated seven patents linked to detecting genetic predisposition of breast and ovarian cancers of the Utah-based Myriad Genetics last week after granting plaintiff’s motion for summary judgment. The plaintiffs were many in number, and consisted of various non-profits and individuals who were unable to receive the test that was a result of all the patents. In a lengthy opinion, which can be found here courtesy of Genomics Law Report, the Court effectively reversed the policy of the USPTO that allowed the patenting of isolated DNA after it was purified from the body using common techniques and turned large segments of biotech patents on their collective ear.

The gist of the case was that the subject matter, the DNA sequences that were extracted, was not patentable as it was not different in character from what the DNA sequences do as its normal function, which would be coding or targeting and identifying nucleotide sequences. Although the DNA was purified (manipulated0 and created to be free-standing “isolated DNA” sequence, it was utilized to perform the same function that it would do without manipulation in order to allow researchers to detect potential mutations on the 13th and 17th chromosome that has been linked to predisposition to breast and ovarian cancers (as well as potentially prostate cancer as the opinion briefly states). Judge Sweet closely analogized the current case with Funk Brothers, where researchers patented their creation of a mixture of bacteria that acted together to perform a desired function that they did not do individually. The patent in that case was invalidated as the Court determined that the bacteria were performing the same actions individually that they would have done prior to being manipulated and grouped therefore it was a law of nature and unpatentable.

This is a major step in defining the line while making it somewhat murky to what is patentable subject matter. The Supreme Court has long recognized three subject areas that would not be entitled to patent protection: “the laws of nature, physical phenomena, and abstract ideas . . .”. The court quoting Chakrabarty (The case that allowed the patentability of living things, which in that case were naturally occurring bacteria that were manipulated to perform the new function of breaking down crude oil). It was a general assumption that through the Chakrabarty case that “anything under the sun that is made by man is patentable”, however the Court declared that these aforementioned exceptions were always meant to be taken into account despite that very lofty statement if you were to look at the full quote from the legislative history of the Patent Act of 1952.

The moral of this story, if this decision were to be affirmed at higher levels is that you have to have any DNA sequence you purify perform a different function than to simply code or target and identify other nucleotide sequences. At first supposition, this case does not seem to threaten genetically modified foods and agriculture that attempts to chemically alter the character of certain food and feedstuffs. I am referring to items such as glysophate resistance in various row crops and similar characteristics.

The second portion of the holding is that the act of “analyzing” and “comparing” was not patentable as well, as those were abstract mental process which is a long-held exception for patentable subject matters as well. This also deals with the transformative language concept and has quite a bit to do with how to write patent claims and their interpretation. Although, its an interesting aspect of the opinion and would be relevant for those drafting claims or learning patent law, it does not add much to our discussion here.

As this opinion is only at the district level, its reach is relatively limited as of this moment in time. The Court even states in its discussion of constitutional avoidance (Rule that a Court is rather to handle issues of statute and resolve those issues in an effort to rule on constitutional issues) that if the Federal Circuit would affirm the decision then it would have an effect on the USPTO policy regarding isolated DNA.

However, the more compelling part of this case for the lay observer is the policy driven dicta that arguably could have impacted this decision, despite the Court’s disclaimer that it was not considering it in this opinion. There was the more human side of the argument that this test was $3000, (1/3 less in Canada where the patent is not recognized) and was not covered by many insurers. Additionally, Myriad sent out cease and desist letters to other researchers and practitioners that were possibly infringing upon their patent, which were effective in chilling others from research similar tests or performing tests. Therefore, there was inadequate means in the market to receive a second opinion on the test, as the only options were a few labs that were licensed under Myriad. This line of rationale leads to a subsequent argument stifling of competition and innovation in such an important area as disease prevention.

On the other side of this argument, the companies and industry groups state that the patent protection is one of the only ways to secure capital investment in researching these areas further. This side goes to the argument that the patent protection is the only safeguard to allow an infusion of monies into this scientific field to allow for innovation. The opinion goes further to explain that Merck essentially put out a free audition to scientists to map the human genome and did not take patent protection over findings, as the human genome was seen to be owned by mankind.

Fascinating arguments on both sides, and I’m sure blogger would not appreciate taking up the bandwidth to hash out all the pros and cons of both sides to eventually lead to a decision of I sure as hell don’t know. However, it does bring this argument even further into the public discourse in the age where patentability of life is becoming ever more important as so many drugs are based on the human genome mapped in the early 2000’s and much of our food and fiber is genetically modified. The opinion briefly discussed a law review speaking of “the tragedy of the anticommons”, which postulates the great number of patent rights holders actually hinders innovation as everyone owns a piece that if researched may overlap someone else’s patent, thereby infringing and subjecting that person to litigation and hefty damage awards.

This concept is particularly apt in light of recent DOJ/USDA antitrust discussions, as much of the anti-competive allegations in row crops are directed at improper use of patents, or just the simple fact that the patent is there in the first place. Cases such as these could fuel fire for much of the fringe legislation that wants all plant patents to look similar to PVPA provisions, which may seem more palpable in the near future based on public perception. It becoming that point where the industry, years after the green revolution, will have to look at itself and see if it is doing right by everyone, or acknowledge if there are ways to tweak the system to encourage innovation and allow for increased competition. This blog post from the Chicago Tribune gives a brief rundown of the happenings going on with the USDA/DOJ discussions that have happened thus far and the Pioneer-Dupont/Monsanto legal squabble.

Tuesday, January 19, 2010

Race to the finish line for Monsanto's GE Alfalfa

This past Friday, the U.S. Supreme Court granted the petition of certiorari in order to hear the GE Alfalfa case, Monsanto Co. v. Geertson Seed Farms, No. 09-475, that has been causing quite a stir in the biotech world. This is fortuitous for many involved in biotech crops as a similar decision came out recently regarding Round-up Ready Sugar Beets. The Sugar Beet case had a similar result to alfalfa in that it required an Environmental Impact Statement (EIS) to look at possible consequences on the human environment instead of the less stringent Environmental Assessment (EA) that was performed by the Animal and Plant Health Inspection Service (APHIS). The petitioner's brief is due February 25, 2010 and the Respondent's Brief is due March 25, 2010, while the end of the October 2009 term for the U.S. Supreme Court is over in June 2010. This makes everything sound like it is on the fast track to hearing a decision relatively quickly, at least in terms of typical judicial time continuum.

However, there is a factor that could cause a concern with this case being heard if it is not rectified with an Order to Stay by the Supreme Court. The EIS that was ordered by the U.S. District Court in the N.D. of California has been completed by the USDA and the comment period is scheduled to close on February 16, 2010. The EIS came to a finding of no significant impact (FONSI) on the human environment, and more than likely, after review comments, APHIS will deregulate GE Alfalfa. This process could potentially take anywhere from 2-6 months depending on the amount of comments. I would expect there to be a lot of comments with the longevity and passion surrounding this issue, and the recent nod from the U.S. Supreme Court. This means the decision from USDA could be out sometime this summer. This could potentially cause a problem for Petitioner who wanted to create a precedent regarding deregulation of GE seeds, as the case may be moot by the time of oral argument or decision.

Article III of the U.S. Constitution has a case or controversy requirement that forms part of its standing analysis, (a.k.a. whether or not the person bring the suit is the proper party to bring the suit if one still exists). In order for a case to be heard there must have at least two litigants that have a controversy upon which the Court can issue a ruling. If the Alfalfa is deregulated prior to a ruling, than Monsanto no longer has a controversy as the alfalfa seed would be like it was prior to a suit ever being brought by a plaintiff, therefore creating a situation where the opinion would be an advisory opinion from the Supreme Court as the gravaman of the suit is moot.

This problem could be solved by Monsanto motioning for a stay of administrative procedures and the U.S. Supreme Court granting such a stay. This may have been done, but I have not seen anything evidencing it yet. The other way to have it solved is to have the Supreme Court move at the same speed of the famous Bush v. Gore case, but I would put my money on the former of my suggestions to occur first.