Patent Law Practice Center

Australia Court: Isolated DNA Patent Eligible

The Federal Court of Australia issued a ruling recently that is directly opposite to the ruling rendered by the United States Supreme Court relative to gene patents. In Yvonne D’Arcy v. Myriad Genetics, Inc., the Federal Court of Australia ruled that Myriad’s claims to isolated DNA are patentable under the laws of Australia. That is the ruling the U.S. Supreme Court should have reached in Association of Molecular Pathology v. Myriad Genetics. As the patent eligibility laws of the U.S. become increasingly inhospitable to high-tech innovative businesses, we can expect more job losses and worse news for the U.S. economy on the horizon.

Particularly interesting is that the Federal Court of Australia went out of their way to question the reasoning of the United States Supreme Court, and say that it is exceptionally difficult to reconcile Diamond v. Chakrabarty with AMP v. Myriad Genetics. I have previously written that AMP v. Myriad Genetics overrules the fundamental holding in Chakrabarty, with many disagreeing. I feel certain that my reading is correct, and the Federal Court of Australia agreed.

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Lemley’s Firm Files Declaratory Judgment Action Against Myriad

On September 20, 2013, Counsyl, Inc. filed a declaratory judgment complaint in the United States District Court for the Northern District of California against Myriad Genetics, Inc. Counsyl is represented by Daralyn Durie and Mark Lemley of Durie Tangri. Lemley is also a Professor of Law at Stanford University.

Counsyl seeks a declaration that claims from eight Myriad patents are invalid and not infringed. Further, Counsyl seeks their attorneys’ fees because they assert that this is an exceptional case because Myriad is enforcing its patent portfolio despite losing on “certain claims” in these patents in the Supreme Court decision in Association for Molecular Pathology v. Myriad Genetics.

The problem with Counsyl’s declaratory judgment action is that they do not seem to have any contact with Myriad, but they claim that “[t]here is a definite, concrete, real and substantial controversy between Counsyl and Myriad of sufficient immediacy to warrant the issuance of a declaratory judgment.…” However, there are no facts in the filing that show anything other than suspicion that Myriad may at some time sue Counsyl because Myriad has stated that they aggressively intend to assert rights to the patents they own. This type of nebulous, generalized fear is not usually sufficient to support declaratory judgment jurisdiction.

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SCOTUS Ending Term with Patent Decisions

Over the past several days, the United States Supreme Court has issued several important decisions that will impact the patent system.

First, on June 13, 2013, the Supreme Court issued a decision in Association of Molecular Pathology v. Myriad Genetics, which has sometimes been referred to as “ACLU v. Myriad” in recognition of the fact that it was the American Civil Liberties Union that was responsible for bringing the challenge in the district court and pursuing the matter through the judicial system.

In Myriad, Justice Thomas wrote for a nearly unanimous Court.  Only Justice Scalia wrote a brief separate opinion in which he concurred in part and concurred in the judgment.

The majority decision in Myriad is not long, and the first 10 pages are background. Despite not giving much detailed attention to the significant legal issues presented, the Supreme Court did manage to do real and serious harm to much of the biotechnology industry.

Justice Thomas summarized the Court’s decision by saying:

“[W]e hold that a naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated, but that cDNA is patent eligible because it is not naturally occurring.”

The decision has widely been reported as the Court recognizing that cDNA is patent eligible, but the ruling is far more nuanced. In fact, Justice Thomas specifically recognized that some cDNA is not patent eligible. He wrote:

“cDNA is not a ‘product of nature’ and is patent eligible under §101, except insofar as very short series of DNA may have no intervening introns to remove when creating cDNA. In that situation, a short strand of cDNA may be indistinguishable from natural DNA.”

I have spoken with a number of people who are in the biotech industry and they all seem to think this decision means that cDNA is patent eligible and I shouldn’t make too much out of Thomas specifically saying that at least some cDNA is not patent eligible. Personally, I think this is misplaced hope; we all know how the district courts will respond, and it won’t be to an expansive reading of patent eligibility. While the USPTO seems poised to say that cDNA is patent eligible, the fact that some has been determined not patent eligible will be used by challengers and likely successfully so. Further, it seems clear that Thomas is saying that if something is man-made but identical to what appears in nature, it is not patent eligible. This fundamentally undercuts the most important aspects of Chakrabarty and would effectively kill research into such important areas as artificially grown organs, which by their very nature must be identical to what is produced in nature to be transplanted into the human body, for example.

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Machine-Or-Transformation Test After Myriad: Implications To The Prosecution Of Process Claims

Michael Davitz, Partner at Axinn, Veltrop & Harkrider and Practice Center Contributor, recently sent in this article he wrote with colleague’s Josephine Liu and Stacie Ropka discussing recent case law on the patentability of process claims.

Not all inventions are patentable.  The Federal Circuit recently handed down its decision in Myriad[i] and the Supreme Court will be hearing Prometheus[ii] in the term beginning in October 2011.  The issues in both Myriad and Prometheus highlight the difficulty in determining when a claim directed to a process is patentable subject matter under § 101, a determination that is particularly troubling in many inventions related to the life sciences.

A first step for granting a patent is determining whether or not a patent application claims patentable subject-matter.  In a line of cases from the late 70s to early 80s and reaffirmed in 2010, the Supreme Court explained that 35 U.S.C. § 101 is to be interpreted broadly and has articulated only three exceptions to what is patentable:  (1) laws of nature; (2) physical phenomena; and (3) abstract ideas.[iii] With respect to process claims, the line between patentable “processes” and unpatentable principles or abstract ideas is not always clear.  The Supreme Court has yet to provide a concrete test by which such a distinction can be made.[iv] It did, however, provide a hint in Gottschalk v. Benson stating that “[t]ransformation and reduction of an article ‘to a different state or thing’ is the clue to the patentability of a process claim that does not include particular machines.”[v] From this pronouncement, the Federal Circuit formally presented and applied the machine-or-transformation test in In re Bilski.[vi] (more…)

Foley & Lardner On The ACLU/Myriad Decision

The following discussion comes from Courtenay C. Brinckerhoff and Jacqueline D. Wright Bonilla of Foley & Lardner.

Federal Circuit Decides Highly Anticipated “ACLU/Myriad” Gene Patenting Case – Subject Matter Patent-Eligibility of Isolated DNA and Diagnostic Methods Addressed Head-On

On July 29, 2011, in one of the most controversial and publicized biotech patent cases in many years, the Federal Circuit decided the “ACLU/Myriad” gene patenting case, formally known as Assn. Mole. Path. et al. v. USPTO et al. In a majority opinion by Judge Lourie, the Court addressed the case on the merits, after finding standing. The Court held all “isolated DNA” claims at issue patent-eligible, but held as patent-ineligible diagnostic method claims that in effect recite only “comparing” or “analyzing” DNA sequences. While it is anticipated that this ruling may be the subject of en banc review before the Federal Circuit and/or will ultimately find its way to the Supreme Court, today’s decision and its impact will undoubtedly be of great interest to everyone working in the biotechnology and diagnostic medicine fields.

Background

After hearing oral arguments on April 4, 2011, Judges Lourie, Bryson, and Moore issued opinions relating to the appeal of the March 29, 2010 summary judgment decision of the U.S. District Court for the Southern District of New York (Sweet, J.) that invalidated the challenged claims in seven Myriad patents as patent-ineligible under 35 U.S.C. § 101. (See Foley’s April 4, 2011 Legal News Alert: The Federal Circuit Hears Oral Arguments in Myriad Isolated DNA Case.) (more…)