Diagnostic Medical Test Patents Draw High Court Scrutiny

The U.S. Supreme Court, accepting a case that will shape the burgeoning business of personalized medicine, agreed to consider what types of diagnostic medical tests can be patented.

The justices agreed today to hear an appeal from the Mayo Clinic, which is challenging a lower court decision backing two patents for determining the dosage of medicines to treat stomach diseases. The ruling cleared the patents’ owner, Prometheus Laboratories Inc., to press an infringement suit against two Mayo units.

Patent protection is important for companies that are focusing on personalized medicine, including Myriad Genetics Inc. (MYGN) and Novartis AG. (NVS) The field involves determining whether a patient is genetically susceptible to a particular disease or would be especially responsive to certain medicines.

“The industry is looking at personalized medicine as a great hope for the future,” said Nicholas Groombridge, a lawyer with Weil Gotshal in New York who specializes in biotechnology and health patents. “It’s not clear if that hope will materialize, but if it is, then patent coverage is going to be important. This case is right at the center of that issue.”

The case will test the scope of the U.S. patent laws. Mayo contends the two Prometheus patents cover natural phenomena, which the Supreme Court previously said can’t be patented. Prometheus says its discoveries involve the application of a law of nature, not the law itself.

Natural Phenomenon

“The patents do not claim or preempt any purely natural phenomenon,” Prometheus argued in court papers. The company said in May that it was being acquired by Nestle SA. (NESN)

The two patents cover a method for determining the proper dosage of medicines to maximize effectiveness while limiting toxic side effects. Doctors can use the method to treat inflammatory bowel diseases including Crohn’s disease and ulcerative colitis.

Some patents are so broadly written that they limit the ability of doctors to look at test results and determine the next step in a patient’s care, said Mayo lawyer Jon Singer of Fish & Richardson in Minneapolis.

“If there are new scientific relationships discovered, you have to come up some new way of using them instead of just thinking about them,” Singer said. “If all you’re doing is just thinking about it, that’s not patentable.”

Licensing Patents

The Mayo Clinic, a not-for-profit medical practice based in Rochester, Minnesota, had licensed the patents prior to 2004, when it created its own test.

The U.S. Court of Appeals for the Federal Circuit, which specializes in patent issues, overturned a trial judge’s conclusion that the patents were invalid.

Diagnostics are “essentially looking at things that are natural processes and comparing information about them,” Groombridge said. The Supreme Court case “does play into this tension between avoiding runaway costs and encouraging innovation. That’s something this court is still focused on.”

The Federal Circuit also is considering if Myriad’s diagnostic claims are eligible for patent protection as part of a review of a decision involving patents for tests to determine if a person is more likely to get breast cancer.

The primary part of that case revolves around the issue of whether genetic sequences, isolated from the body, can be patented or if they are something that occurs in nature.

Myriad, Novartis, Laboratory Corp. of America Holdings’s Monogram Biosciences and Genomic Health Inc. (GHDX) all have urged that diagnostic methods be patentable. Monogram and Genomic Health told the Supreme Court in 2009 that they would have difficulty getting funding without patent protection.

The annual market for diagnostic tests and drugs tailored to individuals may reach $42 billion by 2015, according to a 2009 report from PricewaterhouseCoopers LLP.

The case is Mayo Collaborative Services v. Prometheus Laboratories, 10-1150.

To contact the reporters on this story: Greg Stohr in Washington at gstohr@bloomberg.net; Susan Decker in Washington at sdecker1@bloomberg.net

To contact the editors responsible for this story: Allan Holmes at aholmes25@bloomberg.net; Mark Silva at msilva34@bloomberg.net

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