Patenting Products of Nature:Assoc. Molecular Pathol. v. U.S. PTO

Technology Transfer TacticsWebinar

August 31, 2011

Kevin E. Noonan, Ph.D.

Outline of the Talk

Introduction How did we get here? Gene patenting myths

Patenting “products of nature” 19th Century Supreme Court cases Brogdex, Funk Bros. Bergy and Chakrabarty

Outline of the Talk AMP v. US PTO (“the Myriad case”)

Parties and interests The claims: DNA and methods The arguments The court’s decision CAFC opinion

Consequences and Recommendations Alternatives to patent Effects of non-disclosure Policy and societal concerns

Introduction

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How did we get here?

Tremendous success of a technological age

Biotechnology the beneficiary of strong patent protection

Biotechnology developed in university setting – 1980 Bayh-Dole Act promotes patenting

But success breeds criticism – from variety of sources

These include political criticism from those opposed to university patenting

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Where is here?

Politically-motivated groups in the arena: ACLU and PubPat

PubPat challenges variety of patents (not just biotech); notable the WARF human ESC patents

General attitude that patents have become too powerful and retard innovation (little empirical support)

Time ripe for Myriad challenge: in addition, the “right” defendant, due to aggressive patent enforcement tactics

Gene Patenting Myths

The Ownership Myth Michael Crichton, ACLU

and “Who Owns You”

The Information Myth “Physical Embodiment of Genetic Information”

Information not what’s patented; “DNA is a chemical compound, albeit a complex one”

Gene Patenting Myths

The “Natural Product” Myth Isolated DNA not found in nature cDNA not found in nature Natural products not patent-ineligible

per se

The “Inhibits Research” Myth The Anti-commons are not tragic Progress promoted by disclosure No evidence of research inhibition

Patenting “Products of Nature”

Is it possible? Widespread belief

that “products of nature” cannot be patented

Little support in binding precedent

Some sporadic support for both sides of the argument in lower court cases

No binding precedent 19th Century cases

Wood Paper Patent Cases (1874) Cochrane v. Badische Anilin Soda Fabrik,

(1874)

20th century cases American Fruit Growers v. Brogdex (1931) Funk Bros. Seed Co. v. Kalo Inoculant Co. (1948) In re Bergy (1979) Diamond v. Chakrabarty (1980) Bilski v. Kappos (2010)

What does the law say?

20th century cases

Funk Bros. Seed Co. v. Kalo Inoculant Co. (1948):

Discovery of the fact that certain strains of each species of these bacteria can be mixed without harmful effect to the properties of either . . . is no more than the discovery of some of the handiwork of nature and hence is not patentable . . . The combination of species produces no new bacteria, no change in the six species of bacteria, and no enlargement of the range of their utility . . . does not improve in any way their natural functioning.

What does the law say?

20th century cases

Diamond v. Chakrabarty (1980): The laws of nature, physical phenomena, and

abstract ideas have been held not patentable . . . Thus, a new mineral discovered in the earth or a new plant found in the wild is not patentable subject matter. Likewise, Einstein could not patent his celebrated law that E=mc2; nor could Newton have patented the law of gravity. Such discoveries are "manifestations of . . . nature, free to all men and reserved exclusively to none."

What does the law say? Diamond v. Chakrabarty (1980)

[R]espondent's micro-organism plainly qualifies as patentable subject matter. His claim is not to a hitherto unknown natural phenomenon, but to a nonnaturally occurring manufacture or composition of matter - a product of human ingenuity "having a distinctive name, character [and] use."

Better way to state the proposition: mere products of nature, unmodified by man, are not patent-eligible (predominantly because they are not novel)

What does the law say?

20th century cases

In re Bergy (1979): Therefore, in case there is doubt as to whether

the examiner's product-of-nature rejection is still an issue in this case, in the interest of judicial economy we rule on it now . . . We hold that Bergy's claim 5 clearly does not define a product of nature.

We were thinking of something preexisting and merely plucked from the earth and claimed as such, a far cry from a biologically pure culture produced by great labor in a laboratory and so claimed.

AMP v. USPTO (“Myriad”)

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Myriad: The claims

Two broad types of claims at issue: claims to isolated DNA molecules, and diagnostic method claims

DNA claims recite “isolated” DNA encoding specific amino acid sequences (cDNA)

Also claims to oligonucleotide probes

Method claims: methods of detecting mutation or providing a diagnosis/risk assessment

Method claims involve “comparing” mutant sequence to normal sequence

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Myriad: The claims

Composition of matter claims covering “isolated DNA” covering the BRCA 1 and BRCA 2 genes. Claim 1 of US Patent 5,747,282 is representative of this class of claims:

An isolated DNA coding for a BRCA1 polypeptide, said polypeptide having the amino acid sequence set forth in SEQ ID NO:2.

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Myriad: The claims Methods of detecting mutations in the BRCA

genes. Claim 1 of US Patent 5,709,999 is the only claim in this class:

A method for detecting a germline alteration in a BRCA1 gene, said alteration selected from the group consisting of the alterations set forth in Tables 12A, 14, 18 or 19 in a human which comprises analyzing a sequence of a BRCA1 gene or BRCA1 RNA from a human sample or analyzing a sequence of BRCA1 cDNA made from mRNA from said human sample with the proviso that said germline alteration is not a deletion of 4 nucleotides corresponding to base numbers 4184-4187 of SEQ ID NO:1

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District Court Decision

Judge Sweet agrees that DNA an unpatentable “product of nature”

DNA is “the physical embodiment of genetic information”

Distinguishes other types of “natural products” (antibiotics, vitamins) on this basis

Method claim invalid under Bilski

Federal Circuit Decision

Oral argument April 4th; decision July 29th

Three separate opinions, Judge Lourie wrote the majority opinion

Judge Moore concurred and Judge Bryson concurred in part and dissented in part

Overall consensus on outcome for most issues

Important differences in approach

Federal Circuit Decision Consensus on:

Standing (but for just one plaintiff)

Patent-ineligibility of diagnostic method claims

Patent-eligibility of screening method claims

Patent-eligibility of composition of matter claims to cDNA

Federal Circuit Decision Disagreement over patent-eligibility of

“isolated DNA” claims encompassing genomic DNA and primers

Also fundamental differences in approach in “majority” opinion, but agreement on decision in this case

Judge Bryson dissenting indicates a different approach

Federal Circuit: Majority Judge Lourie: “isolated DNA” patent-

eligible because it satisfies the Supreme Court “test” from Funk Brothers and Chakrabarty that a natural product can be patented provided that there is “a change in the claimed composition's identity compared with what exists in nature” and “that human intervention has given ‘markedly different,’ or ‘distinctive, characteristics.

Chemical changes in isolated DNA enough

Isolated DNA claims

“Isolated DNA” comes in two forms: genomic DNA and cDNA

Significant differences in structure and how isolated/ prepared

Is DNA a “product of nature”?

Genomic DNA may be But chemically

modified from native state

cDNA certainly is not Claims limited to

specific sequence that does not exist prior to human intervention

Federal Circuit: Majority 19th Century cases dismissed as being

based on novelty issues Many lower court decisions directed to

“products of nature” also dismissed as precedent as not addressing fundamental issue before court

Funk Bros. and Chakrabarty primary precedent

In re Bergy also dismissed as being non-precedential

Federal Circuit: Concurrence Judge Moore: DNA a polymer, like

nylon

Isolated DNA not just purified from nature

Also reads precedent as requiring alteration of natural product

This rationale convincing for cDNA and oligonucleotide fragments because do not occur in nature – made by man

Federal Circuit: Concurrence “Isolated DNA” claims are a “closer

case”

Not entirely convinced that isolation effects sufficient change to satisfy precedent

But, not “drawing on a blank canvas” - cannot ignore 30 years of PTO practice and CAFC precedent (Amgen v. Chugai etc.)

Change in the law up to Congress

“Isolation” vs. “Purification” Both the majority opinion and Judge

Moore’s concurring opinion set up a dichotomy

“Isolated” DNA as claimed patent-eligible because it has been chemically transformed

Thus, DNA has not “merely” been isolated

Implications for other biological molecule-based inventions

Federal Circuit: Dissent Judge Bryson: “common sense”

conclusion that human DNA not patent-eligible (including oligonucleotide primers)

Applies the same Supreme Court precedent, comes to the opposite conclusion

Concern seems to be negative effects on whole genome sequencing

Discounts PTO practice and deference to Congress, citing DOJ position

DOJ amicus brief

On the one hand, the brief argues that manipulated DNA (cDNA, vectors, oligonucleotides, etc.) are patent-eligible because they show “the hand of man”

On the other, isolated genomic DNA not patent-eligible because it is not sufficiently changed

Tries to “split the baby” by arguing on both sides of the issue

Genetic diagnostic methods also patent-ineligible, since merely a “natural phenomena”

Not from the Department of Commerce or the PTO and seemingly with little or no PTO input

Federal Circuit Decision

Method claims: claims reciting merely “analyzing” or “comparing” fail the “machine-or-transformation” test

Claims to screening methods do not, since cell growth in presence of putative BRCA inhibitor is transformative

Method claims Methods that “compare” and “correlate”

mutations in the BRCA genes with an increased risk of breast or ovarian cancer.

A method for diagnosing a predisposition for breast cancer in a human subject which comprises comparing the germline sequence of the BRCA2 gene or the sequence of its mRNA in a tissue sample from said subject with the germline sequence of the wild-type BRCA2 gene or the sequence of its mRNA, wherein an alteration in the germline sequence of the BRCA2 gene or the sequence of its mRNA of the subject indicates a predisposition to said cancer.

Claim 2 of US Patent 6,033,857

Federal Circuit Decision

Standing: rejects standing for most plaintiffs – no immediacy and reality

One plaintiff (Dr. Ostrer) on record that he will “immediately” provide testing

This is sufficient for standing Recent controversy on whether the

predicate condition – Dr. Ostrer’s capacity to begin immediate testing - still met

Federal Circuit Decision Status: a few possibilities

Petition for panel rehearing Petition for rehearing en banc Petition for writ of certiorari

Both parties have grounds for filing Plaintiffs filed petition for rehearing on

August 25th Parties have 90 days to petition for

certiorari

Consequences and Recommendations

Consequences of CAFC decision

For now, “gene patents” claim patent-eligible subject matter

Practically, consensus decision on gene patent-eligibility for cDNA covers most patents on genes

Isolated genomic DNA claims less certain, but less valuable

Oligonucleotide claims more certain as man-made manufactures

Consequences of PON ban

Not a good thing for DNA patents, but not the end of the world

BUT, the philosophy not limited to DNA claims

The best biologic drugs will be as close as possible to how they exist “in nature” – in the body

The better the drug, the less patent-eligible it will be

Can’t be the correct result

Proposition Bad analogies make bad law Isolated DNA is not a leaf (Judge Dyk),

or a mineral (DOJ brief) or information (Judge Sweet) or an arm (Morley Safer)

Consider these examples: Isolated chemical compound from crude oil

useful as a lubricant Isolated chemical compound from a plant

useful as a drug Isolated protein from an animal useful to

cure/ameliorate human disease

Consequences of CAFC decision

Diagnostic method claims less certain Claims at issue flawed by claim language Interpreted to broadly encompass mere

comparison of germline and patient BRCA gene sequences by inspection

Claims do not recite affirmative steps for obtaining sequence

Myriad has many other claims that do recite such steps

Consequences of CAFC decision

Diagnostic method claims generally less certain

Supreme Court will consider question this term in Mayo Labs v. Prometheus

Slightly different question, since the Prometheus case involves determination of effective dose of administered drug

Basis for Federal Circuit to find a “transformation”

Also implicates “practice of medicine”

Why should these claims be patent-eligible?

Only way to protect “correlation” discoveries – basis for molecular diagnostics

Promotes disclosure from academic/medical scientists, and translation of information into patentable technologies = innovation

Alternatives – such as trade secret – greater negative effects Risk of upsetting balanced approach to innovation

(academics do basic research, industry develops commercial embodiments)

Possible Solutions

• Machine or transformation test remains viable

• De-emphasize purely informational aspects of claims; recite claims containing more active steps (like “sequencing”)

• Recite method of treatment step relating to diagnosis

But this raises MuniAuction issues

• Will depend on Supreme Court decision in Prometheus

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Additional considerations

Potential for a patent “thicket”

Involves reagents for performing the assays – need to license dozens/thousands of genes correlated with disease

Some efforts around this (patent pooling, standard setting SNP consortium, Navigenics “ASCAP” solution)

Will get worse before it gets better, particularly regarding personalized medicine

Unintended (?) Consequences

No remedy for women Myriad patents expire in ~4-6 years

Test availability depends on insurance companies, not patents

Financial impact on biotech industry Burrill Report

http://www.patentdocs.org/2011/01/steve-burrill-makes-predictions-for-the-biotech-industry-in-25th-annual-report.html

Unintended (?) Consequences

Patent ineligibility promotes non-disclosure

Non-disclosure contrary to academic mission

Academia (U.S. taxpayer) as uncompensated corporate R&D department (foreign and domestic)

Unintended (?) Consequences

The future will be different from the past – much more complicated

Trade secret protection perpetual (and biotech hard to reverse engineer)

“Natural product” patent ineligibility extends to all medicinal chemistry and biologic drugs

Thank you!

Kevin E. Noonan, Ph.D.

Partner [ ] 300 South Wacker Drive [ ] Chicago, Illinois 60606-6709312-913-2145 direct [ ] 312-913-0001 main [ ] 312-913-0002 faxnoonan@mbhb.com [ ] www.mbhb.com [ ] www.patentdocs.org