The Federal District Court for the Southern District of New York ruled that certain claims covering isolated DNA sequences in seven patents on the BRCA genes owned or exclusively licensed to Myriad Genetics Inc. (Salt Lake City) are invalid. The ruling follows a lawsuit that was brought by a group of patients and scientists who were represented by the American Civil Liberties Union and the Public Patent Foundation, a not-for-profit organization affiliated with Benjamin N. Cardozo School of Law. Myriad is appealing the decision to the Court of Appeals for the Federal Circuit.

The following is an analysis of this ruling and its potential impact on the IVD industry by Timothy B. McBride, JD, an attorney at Senniger Powers LLP (St. Louis):

“To say that the District Court’s ruling in the Myriad case is ground-breaking would be an understatement. For approximately 25-30 years, the United States Patent and Trademark Office has been issuing patents directed to genes and nucleic acid sequences. Thus, the ruling in this case comes as what can only be described as a shock to the biotech community.

“With respect to the DNA claims, I think the Federal Circuit will likely overturn, or at the very least curb, the breadth of the district court’s ruling. In particular, the district court refers to the fact that the DNA as claimed does not have ‘markedly different characteristics’ from the natural form of the DNA such that it has ‘a new or distinctive form, quality, or property.’ However, there is no clear indication of what, if anything, with respect to DNA would constitute a modification sufficient to confer ‘markedly different characteristics.’

“Certainly, isolation of DNA and even the isolation or creation of cDNA (which contains only the coding regions of a DNA sequence) does not meet the district court’s assessment of ‘markedly different characteristics.’ But would, for example, a DNA hybridization probe that is labeled and designed to hybridize to a wild-type or even a naturally occurring mutant gene constitute a sufficient difference? If the Federal Circuit decides to affirm the district court’s ruling, what constitutes ‘markedly different characteristics’ is a point on which the Federal Circuit may have to elaborate in order to provide guidance for future patent preparation, prosecution, and litigation.

“How will this ruling affect IVD manufactures and the industry as a whole? In the short term, I do not think it will have any substantial or real effect. In particular, since the decision is going to be appealed and since a majority of those familiar with the decision, particularly those in the legal field, believe the decision will likely be overturned or curtailed in some fashion on appeal, I do not believe that IVD manufacturers or the IVD industry generally will radically change or be affected by the district court’s decision.

“But if the decision were affirmed, the effect on the IVD industry depends heavily on the degree of necessity of the use of DNA for IVD purposes. If IVD manufacturing and the industry as a whole can effectively utilize means other than comparisons of isolated human genes for IVD purposes, then the effect could be minimal. For example, claims directed to methods and kits that utilize antibodies for purposes of diagnosis were not challenged in this litigation and remain valid and patentable subject matter.

“Moreover, claims directed to primers and constructs containing the DNA sequences or gene segments also remain valid and patentable. Thus, to the extent that kits and methods utilize antibodies or to the extent that IVD kits and methods rely on the use of primers or constructs containing human genes, there is no real effect on the manufacturers and industry as a result of this decision.

“However, if the IVD industry were moving more toward methods and manufacturing (e.g., kits) that require the use of human gene sequences (in particular those that do not rely on the use of primers or constructs as described above), then the affirmation of the district court’s decision will likely have a substantial impact. In particular, in the absence of the ability to patent isolated and purified genes, there will likely be an underinvestment in genetic research, as the investments of capital and manpower will come with an almost guaranteed risk of never paying off.

“Thus, IVD companies performing this research in order to develop their own proprietary methods, tests, or kits will likely greatly reduce or cease such research. Moreover, due to the reduction or cessation of genetic research generally, even companies that would typically piggyback on the knowledge obtained by others will suffer. Specifically, while these companies would be able to avoid payment of substantial licensing fees that would generally be related to IVDs based on gene technology patented by others, they will nevertheless suffer as genetic research in general rapidly and substantially declines.

“In a nutshell, if the decision were affirmed, the initial result might be a reduction in medical and IVD costs generally (which it seems was a focus of the ACLU’s suit). However, the industries that provide these technologies will suffer, potentially causing this benefit to dwindle, and ultimately result in long-term detriments.”