Gene Patents Draw High Court Review in Biotechnology Test

The U.S. Supreme Court agreed to consider whether human genes can be patented, taking up an issue that has split the medical community and will shape the future of personalized health care and the biotechnology industry.

The justices yesterday said they will hear a challenge to Myriad Genetics Inc. (MYGN)’s patents on genetic material used in tests for breast and ovarian cancer. Doctors, researchers and patients are opposing the patents, arguing that Myriad’s monopoly over the genes is blocking clinical testing and research.

“Myriad and other gene patent holders have gained the right to exclude the rest of the scientific community from examining the naturally occurring genes of every person in the United States,” the group argued in its appeal, filed by the American Civil Liberties Union.

Biotechnology companies say they have been getting patents on genes for 30 years -- and can’t attract investment dollars unless they can protect their research from competitors. A study published in 2005 by Science magazine found that 20 percent of human genes had some level of patent protection.

Any move to change that system, “particularly with the deeply settled reliance interests of the technology and investing communities at stake, should be addressed to Congress, not the courts,” Salt Lake City-based Myriad argued in court papers that urged rejection of the appeal.

Photographer: Chip Somodevilla/Getty Images

The U.S. Supreme Court justices today said they will hear a challenge to Myriad Genetics Inc.’s patents on genetic material used in tests for breast and ovarian cancer. Close

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Photographer: Chip Somodevilla/Getty Images

The U.S. Supreme Court justices today said they will hear a challenge to Myriad Genetics Inc.’s patents on genetic material used in tests for breast and ovarian cancer.

The nation’s highest court will hear arguments, probably in March, and rule by the end of June.

Isolated DNA

The central legal question is whether isolated DNA -- genetic coding that has been removed from the body and separated from other material -- is a product of nature and thus ineligible for patent protection. In largely backing Myriad’s patents, the U.S. Court of Appeals for the Federal Circuit said isolated DNA could be patented.

“The isolated DNA molecules before us are not found in nature,” Circuit Judge Alan Lourie wrote. “They are obtained in the laboratory and are man-made, the product of human ingenuity. While they are prepared from products of nature, so is every other composition of matter.”

Genes are encoded strands of nucleotides in different sequences that are responsible for inherited traits. In isolating genes, Myriad strips out unneeded information to home in on aspects that determine whether a person has a higher risk of breast and ovarian cancer.

The challengers say isolated DNA is identical to the coding that exists naturally in the body.

“Isolation simply makes a person’s genetic information more accessible for sequencing by medical professionals,” the group argued.

Myriad Falls

Myriad fell after the court’s announcement, dropping $1.13, or 3.8 percent, to $28.72 in Nasdaq Stock Market trading yesterday. It was the biggest one-day drop since July 31.

The case is making its second trip to the Supreme Court, which in March ordered the Federal Circuit to reconsider an earlier ruling favoring Myriad. The high court pointed to its just-issued decision limiting patents on some types of diagnostic medical tests. The Federal Circuit, which specializes in patent cases, then said that Supreme Court ruling didn’t apply to isolated DNA.

The Supreme Court in past cases has taken a more restrictive approach toward patent coverage than the Federal Circuit. In the diagnostic-test case, Justice Stephen Breyer wrote for a unanimous court in warning against “tying up the use of the underlying natural laws.”

Medical Discoveries

Gene databases and technology to analyze them can be the key to medical discoveries and more efficient ways of providing treatment. Annual U.S. spending on medical DNA testing will rise to $25 billion in the next decade from $5 billion in 2010, according to UnitedHealth Group Inc. (UNH), the biggest for-profit health insurer in the nation.

Genetic testing is a hallmark of the growing field of personalized medicine, in which doctors determine whether a patient is susceptible to a particular disease or would be more responsive to certain medications.

Myriad said it spent 17 years and $500 million to develop its test.

“This case has great importance for the hundreds of millions of patients whose lives are saved and enhanced by the life science industry’s products,” Myriad Chief Executive Officer Peter Meldrum said in a statement.

Public Domain

It’s become more difficult to obtain new patents on genetic material because of the amount of research already in the public domain, said William Gaede, a patent lawyer with McDermott, Will & Emery’s personalized medicine team in Menlo Park, California.

Many of the genetic-sequencing patents, including those owned by Myriad, are expiring, making the case “somewhat yesterday’s news,” said Gaede, who isn’t involved in the case. Still, he said, a decision could provide guidance on the line between an invention and a product of nature.

“What you see is a willingness by the Supreme Court to determine whether compositions that arguably come from nature can be patentable subject matter,” Gaede said.

Those supporting the challenge to Myriad’s patents include the American Society of Human Genetics, the American Medical Association and AARP, which represents older Americans.

Myriad’s supporters in the litigation have included the Biotechnology Industry Organization and the U.S. unit of Novartis AG (NOVN), Europe’s biggest drugmaker.

The case is Association for Molecular Pathology v. Myriad Genetics, 12-398.

To contact the reporter 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: Steven Komarow at skomarow1@bloomberg.net; Bernard Kohn at bkohn2@bloomberg.net.

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