Arti Rai: I will try to give you a relatively engaging
and short discussion so that we can have some time for questions.
I will also, I'm afraid, use a few more words in my slides than you may be accustomed to.
Lawyers -- and I'm a recovering lawyer -- do like words, and so there are more words than
would be ideal.
But the words end up being kind of important.
So, as Eric has already indicated, the Supreme Court, on June 13th, having heard argument
on April 15th, decided that AMP versus Myriad Genetics, the challenge was brought by the
Association of Molecular Pathologists, represented by the ACLU and the Public Patent Foundation.
In its ruling, the court, the Supreme Court, that is, held that not all gene patents are
alike, and I'll spend some time talking about what specifically they meant by not all gene
patents being alike.
As it happens, they got into the -- for them, I think, what was really tough sledding with
respect to molecular biology, they had to distinguish between cDNA and gDNA, which I
suspect for Justice Thomas was something of a struggle.
But he did an interesting job.
So what I'm going to do today, for those of you that don't necessarily spend their time
thinking a lot about patent law, and that may be many of you, is provide a little bit
of basic background on patent law, and also on gene patents in particular, and how they
emerged and why they emerged.
Then I'll discuss the history of the Myriad case very briefly, and also, its ultimate
resolution at the Supreme Court.
And finally, I'll discuss what the case might mean going forward.
That's very much a work in progress in terms of what it means, and there are subsequent
lawsuits that I will mention briefly as well.
So, just in terms of background, this is Patents 101, and also, as it happens to be, Section
101 of the Patent Statute.
That section has typically been interpreted very broadly to cover basically anything under
the sun made by man.
That's a statement from the Legislative History of the 1952 Patent Act.
And the provision in the statute suggests as much -- suggests that it's pretty broad
in its scope, so any new and useful process machine, manufacturer, or composition of matter
is supposed to be encompassed within Section 101, which means, basically, any new process
or product.
That said, there have been these long-standing common law exceptions that the Supreme Court
has enunciated, starting in the 19th century, and by "common law," I mean as contrasted
with statutory law.
Common law is the gloss that courts put on the statutory law.
And this common law gloss encompasses exceptions in the form of abstract ideas, laws of nature,
and products of nature.
The exception at issue, specifically in the Myriad case, was products of nature.
However, as we will see, all of these three exceptions kind of run together a little bit,
and that becomes important for what the case means going forward.
So the product of nature doctrine actually has an interesting history beyond the Supreme
Court, and in most ways, the most important expositor of the product of nature doctrine
was a judge by the name of Learned Hand -- that was really his name.
Judge Hand, albeit only a district court judge at the time, rendered what is one of the most
important decisions in the product of nature space in a case called Parke-Davis that was
decided in 1911.
In that case, he determined that isolated or purified adrenaline represented patent-eligible
subject matter, and in his view, this was not a product of nature -- isolated adrenaline
represented one patent, purified adrenaline represented another -- this was not a product
of nature because it was, and this was a quote from the opinion, "For every practical purpose
a new thing commercially and therapeutically," unquote.
Because this language resonated with some of the commercial instincts that patent lawyers
have, they really have seized upon this language for more than a century as representing what
they determine to be the narrow exception that product of nature represents; in other
words, anything that is a new thing, commercially or therapeutically, for many in the patent
lawyer community, is not a product of nature.
This view of the expansive realm of what is within patentable subject matter, and therefore
not a product of nature, was, to some extent, reaffirmed in the patent lawyer community
in the Supreme Court case of Diamond vs. Chakrabarty that some of you may have heard of.
That case involved a recombinant bacterium, a bacterium that had two or more stable energy-generating
plasmids put into it, each plasmid constituting a separate hydrocarbon degredative pathway.
In that case, the Supreme Court, in a divided opinion, determined that this was not a product
of nature because "It was markedly different," quote, unquote -- again, these are the words
that the court used -- from anything found in nature.
Not quite as expansive as the Parke-Davis opinion which suggested that if what one had
done provided something commercially useful, it represented patent-eligible subject manner.
So Diamond vs. Chakrabarty was not quite as expansive, but the combination was taken by
patent lawyers and the nascent biotech industries to mean that basically anything that was isolated
or purified could be patent eligible, and that included gene sequences.
So the first "gene patents," quote, unquote -- and that is, to some extent, now a term
of art because they mean different things to different people, that term means different
things to different people -- covered cDNA, in other words, DNA with introns excised that
was intended to be used to generate therapeutics and cover therapeutics.
One of the reasons, in part at least, these particular cDNA patents were not controversial
was that they were intended to cover a scope of genetic research and development, an area
of genetic research and development, i.e. therapeutics, that looked very much like what
had been patent eligible in the past in terms of small molecules.
So these were just large molecules as opposed to small molecules.
And so when, for example, when some of these patents began to issue in the early '80s,
and Amgen got one of these classic patents on DNA sequences encoding erythropoietin,
cDNA encoding erythropoietin in 1987, a patent that subsequently allowed it to make tens
of billions of dollars in revenue over the course of about 23 years, that wasn't considered
particularly controversial, at least certainly not in the patent bar community, and even
among the larger community, the idea of DNA sequences that would be patentable but would
correlate therapeutics wasn't particularly controversial.
And this patent was a subject of litigation; however, none of the litigation involved the
issue of whether or not this constituted patent-eligible subject matter, probably in part because everyone
in the litigation had their own gene patents.
So Amgen sued Genetics Institute, and Transkaryotic, and Roche, and, of course, all of those entities
had their own gene patents to defend, and so there was no incentive on the part of anyone
to say that gene patents were not patent-eligible subject matter.
Controversies began to emerge however when patents issued -- and some of these patents
issued relatively early on, including the Myriad patents -- that were later interpreted
to cover not just therapeutics but also diagnostics.
Obviously, like all patents, patents that covered diagnostics increase costs, or have
the potential to increase costs, and restrict access.
The argument, or one of the reasons people were more concerned about patents covering
diagnostics was, in particular, with the respect to laboratory-developed testing of the sort
that Myriad does.
That's not currently FDA regulated, so patents were seen as less necessary for purposes of
providing incentive to get a particular product to market.
If one had the relevant gene, it wasn't considered that expensive to then start doing testing
on the gene, and in point of fact, in a lot of the cases, testing started before the patents
emerged.
And the patents ended up being used to shut down certain testing -- diagnostic testing
laboratories.
In addition there was a substantial amount of federal funding involved with some of these
patents, including in the Myriad case itself, and we'll talk about that a little bit more
-- I'll talk about that a little bit more towards the end.
So the access questions in particular, relative to the diminished need for an affirmative
incentive provided by patents, were the focus of this very prominent report issued by the
Secretary's Advisory Committee on Genetics, Health, and Society, and our own Jim Evans
was at the helm of that particular report.
The focus there was not only on initial access but also on problems for women who wanted
to get second opinion testing, with the respect to BRCA-1 and BRCA-2.
The Secretary's Advisory Committee was -- relatedly was concerned about whether sole providers
of genetic diagnostic testing, such as Myriad, but also other providers, like Athena, had
the optimal incentive to work aggressively with all types of insurers, in particular
insurers that might cover less well off populations, such as state Medicaid providers.
So the report discussed not only the BRCA-1 and BRCA-2 patents, but also patents on genes
implicated in certain types of colon cancer, Alzheimer's disease, spinocerebellar ataxia,
and long QT syndrome.
This report was issued in 2010 after Myriad had been sued by the Association of Molecular
Pathologists, represented by the ACLU in district court.
So it came out as this debate was, for the first time, the Section 101 debate, was, for
the first time, unfolding in litigation.
Again, never before had a Section 101 challenge been brought to gene patents of any sort.
So we get to the Myriad gene patent litigation.
Myriad, I think, was chosen by the ACLU for a number of reasons, one of which was it was
the provider that was most aggressive in terms of asserting its patents against providers
who considered themselves to be doing clinical research in addition to providing patient
care.
In this particular case, the ACLU/AMP challenged 15 claims in seven patents.
Many of these patents, at it happens, were initially owned and exclusively licensed by
the University of Utah, which had received a fair amount of NIH funding, particularly
early on.
NIH was actually the co-owner of one of the patents.
So this is -- the federal funding issue was intimately involved with this particular case.
The litigation, notably, however, the litigation strategy by the ACLU didn't focus on access
at all.
And I think the ACLU determined that they were going to kind of talk the typical patent
lawyer's line of access -- not access, but innovation.
And so the arguments that were used very much were along the lines of these patents were
diminishing innovation in the area of genomic research and development.
In point of fact, at the federal circuit, Judge Lourie stated what I think all the judges
in this litigation agreed with, at least implicitly, by not saying anything about access.
He's stated explicitly, and he wrote the majority opinion, "This appeal is not about whether
individuals suspected of having an increase risk of developing breast cancer are entitled
to a second opinion."
Similarly, even the dissent in the federal circuit case, before it got to the Supreme
Court, really focused on innovation, and the dissent drew a distinction between cDNA and
gDNA that had been alluded to in the Secretary's Advisory Committee report, but for the purposes
of saying that cDNA patents wouldn't impede research and development in genome sequencing,
whereas gDNA patents might.
So, again, very much focused on innovation.
The Department of Justice's intervention in this case at the federal circuit level also
drew the cDNA/gDNA distinction with a focus on follow-on innovation, and Eric has mentioned
that NIH was influential in crafting the U.S. government's opinion.
I think that's an understatement in many ways; NIH was a critical player, and NIH, as it
happens, has had a long history in helping to shape genomic patent policy starting in
the late -- the end of the 20th century with the so-called utility and written description
guidelines that were very significantly shaped by NIH, and I think had a very positive influence
in terms of making sure that genomic innovation was not impeded by patents.
All of this, by the way, is drawn out in exhaustive detail in many more words in a Duke Law Journal
article; the role of NIH over the last 15 years or so is drawn out in exhaustive detail
in this Duke Law Journal that were published last year, so if you're interested, you can
go to that.
But, again, the focus on innovation, and the fact that cDNA patents are unlikely to impede
innovation whereas gDNA patents might well impede whole genome sequencing.
At the Supreme Court only claims at issue were the so-called product claims; the process
claims had been taken out of the litigation, so there were only nine composition of matter
or product claims at issue.
The Supreme Court, like Judge Bryson in dissent below, like the solicitor general, and like
Eric Lander, who's also been previously mentioned, adopted a cDNA versus gDNA distinction.
Unfortunately, the court's opinion was not as clear as to why it was adopting this distinction
as it might have been.
It did say that cDNA was not naturally occurring, and thereby implicitly suggesting that gDNA
could be naturally occurring, but it didn't really specifically say that, and we can only
infer based upon the fact that Eric Lander's brief was mentioned about six times in oral
argument, that they relied upon Eric Lander's brief's argument about gDNA being found -- isolated
gDNA being found in fetal DNA and also upon cell death.
So, unfortunately, though, the opinion doesn't explicitly say that, so that a little bit
hard to parse on the why gDNA is naturally occurring versus cDNA is not.
Another piece of the opinion focuses -- and this important going forward for purposes
of what the opinion means for future patenting, and also existing patents outside the cDNA/gDNA
context -- focuses on the so-called information versus chemical distinction.
This was a distinction that was drawn by the district court judge in this case, and the
Supreme Court picked it up again.
Again, however, it didn't completely connect the dots as to why cDNA versus gDNA mapped
onto that distinction.
In point of fact, the court even suggested -- the Supreme Court, that is -- that cDNA
and gDNA both covered information suggesting that, however, that, nonetheless, cDNA was
less problematic in terms of the informational claims it made.
All we can assume, and this is what I would assume and have argued should be the interpretation
of the case, is that Justice Thomas had been impressed by Eric Lander and the solicitor
general, and their statements that cDNA, even though it claimed information or could be
seen as claiming information, didn't -- those sorts of things wouldn't impede future follow-on
innovation in the same way as gDNA.
And Bob Cook-Deegan and I put that interpretation on the case in a Science article that just
came out a couple of months ago, and so we're hoping that the lower courts will take that
as a plausible interpretation that said the Supreme Court unfortunately wasn't as clear
as it could have been.
So in the immediate aftermath of the case, I suspect some of you know this already, on
the day of the case being decided itself, a whole bunch of providers, a whole array
of providers, announced that they would be testing for BRCA-1 and BRCA-2 mutations.
Ambry in particular announced a price that was about a 50 percent reduction from the
Myriad price, and perhaps not surprisingly, Ambry was the first provider that was sued.
So Myriad, as it happens, had been alleging that it had all these other patents it could
use even if they lost the case to the Supreme Court, and nobody necessarily took them that
seriously, but it turned out they were planning to sue on those other patents if they lost
to the Supreme Court, and they did, in fact, sue on 10 other patents involving dozens of
claims.
None of these claims, with the exception on one that we can talk about, was at issue in
the Supreme Court case.
Both these suits -- they also brought a suit against Gene-by-Gene -- both these suits,
for them, have a bit -- for Myriad, have a bit of a home-court advantage in that they're
being brought in Utah district court, and Myriad is obviously based in Utah.
So assessing the suits, I won't say too much here for fear of being proven wrong in the
next few months when the Supreme -- the district court decides the cases, but these claims
all cover basically either methods for sequence amplification, and then sequencing, and then
comparison with wild-type, a lot of method claims, and then a few primers plus PCR claims.
The determination of how these claims will be adjudicated, I think, is anyone's guess,
but I think that what the court will have to do -- the district court at the initial
level, and obviously, this case will go to the federal circuit which hears all appeals
in the patent cases, and then maybe even back to the Supreme Court -- the determination
of what the court -- district court will do, I think, will be based on a combination of
the Myriad case, and then also a case -- another Section 101 case the Supreme Court decided
last year, called Mayo versus Prometheus.
Some would say that the combination of those two cases means that these claims that Myriad
is bringing are likely invalid because they don't require any real inventive activity
-- that's the term of art that was used in the Mayo case -- beyond a law of nature or
a product of nature.
That said, one could argue, and Bob and I make this point in our Science article, that
Myriad could be seen as walking back Mayo versus Prometheus a little bit because cDNA,
arguably, is nothing more than non-inventive routine activity applied to a product of nature,
i.e.
DNA.
So whether the lower courts will -- how they'll interpret the combination of Myriad and Mayo
versus Prometheus, I think, is going to be very interesting to see.
And the key question will be, is inventive activity beyond a law or product of nature
always required, and I think the Supreme Court has, frankly, left that question a little
bit open.
Ambry has counterclaimed.
Frankly, I think that its counterclaims on validity are quite plausible.
It also argues a variety of anti-trust violations by Myriad.
I think those allegations are less clear to me, at least, or the basis for those allegations
is less clear to me.
They use Section two of the Sherman Act and talk about monopolization, however, patents,
by definition in some cases, represent legitimate monopolies.
So I'm not sure that the anti-trust claims, based upon the patents themselves, are necessarily
valid.
Another piece of the puzzle which is very interesting and important is all of this data
that Myriad has, mostly secret since 2006, however -- and I'll talk about that in a moment
-- however, the Ambry brief doesn't specifically link that data issue with the anti-trust question,
which I think would be a very interesting argument to make, and presumably, they will,
in further briefing on that question, draw that link.
The data, I think at this stage, are arguably more important than the soon-to-expire patents,
these particular patents, even the ones that Myriad is suing upon are going to expire in
the next few years.
So the data is going to be the competitive advantage that Myriad has going forward, at
least for the longer term.
And that brings us to that data issue.
Myriad itself, in its argumentation against Ambry and Gene-by-Gene, is actually using
the data as a bit of a club to argue for a permanent -- a preliminary, and then a permanent
injunction against Ambry and Gene-by-Gene, saying that Ambry is likely to have a variants
of unknown significance rate of 25 to 30 percent, much worse than Myriad's 3 percent rate, and
therefore, it would actually harm the public to have Ambry and other providers testing.
As you probably know, Myriad, however, has stopped contributing to public databases,
it stopped contributing to the Breast Cancer Information Core in 2005, and more generally,
the larger scientific community hasn't had access to the Myriad databases since 2006.
So one question is, what will happen in respect to this data?
And there are efforts already afoot, and our own Robert Nussbaum is intimately involved
with one of them, to quote, unquote, "free the data."
So the Sharing Clinical Reports Project out of UCSF, working with the Genetic Alliance,
is asking patients and clinicians to submit to de-identified data that has been received
from Myriad after Myriad's testing to create an alternative to the Myriad -- to create
additional alternatives to the Myriad database.
So we'll see how that goes.
Larger impacts.
So Greg Graff did an article in Nature Biotechnology a few months ago that suggest that 8,700 U.S.
gene patents with quote, unquote "naturally occurring sequences" are still in force, about
41 percent of those human.
Unfortunately, Greg, it's a great article, and I would commend it to your attention,
but his definition of naturally occurring doesn't really map on to cDNA and gDNA distinction,
so we don't really know -- and I've been in communication with him about this -- what
percentage of the 8,700 are gDNAs that would be knocked out and what percentage of cDNAs
that remain valid.
However, he does make the important point in the article that the percentage of both
cDNA and gDNA patents relative to entirely synthetic patents began to decline precipitously
around the time, I should note, that NIH became heavily involved in persuading the PTO to
issue much stricter examination requirements for gene patents.
This is not the remit of this particular group, but in terms of the larger patent bar, I think
that the biggest concern is not over gene patents but over what the statements in Myriad,
and also the Mayo case, mean for quote, unquote "purified" large and small molecule therapeutics
because that is an area where patent protection, I think, the conventional wisdom has been
patent protection is extremely important, and the patent bar is particularly concerned
about claims to proteins and antibodies that aren't explicitly designated as synthetic.
Going forward, I think most patent attorneys will designate every patent claim that they
can possibly think of as synthetic, but retroactively, those claims that are not quote, unquote "synthetic"
may be in peril.
So, that's it.
Any question either now, or you can email me at rai@law.duke.edu.
Eric Green: Questions?
Please step to the microphone, anybody in back just step to a microphone, turn the microphone
on.
Female Speaker: [inaudible]
Eric Green: Wait, wait, wait -- go to -- they won't hear
you unless you are at a microphone and the microphone is on.
Female Speaker: [inaudible] Ohio University.
We recently had a debate about this in a journal club, and I -- the point you mentioned about
-- a cDNA is really just a copy of a naturally-occurring molecule.
It's just a common technique.
Even if you could use it for a therapeutic -- if you don't change it, okay, and you found
it from a naturally-occurring messenger RNA or other non-coding RNA, it is still just
a copy; there is nothing novel about it.
So I would argue that the only way a cDNA could be patentable is if they've modified
it in a way for a unique purpose, for a unique application.
I don't even know if you identify an mRNA, clone it into a cDNA, and it has a novel mutation
for a disease.
That's still a naturally-occurring molecule that was in a tumor, or whatever disease state
the person was in.
So I really am having a hard time wrapping myself around what the -- why there is such
a big misunderstanding between the genomic versus the cDNA, as opposed to novel manipulations
or natural mutations, maybe, that you can patent.
It really -- so I'm glad you hit on that point, and I'm glad you -- I know that somebody is
out there saying, what a minute, it's really still a natural product, the cDNA, if you
don't manipulate it.
All you're doing is copying and putting it into a vector so you can sequence it.
Arti Rai: So I think that the cDNA/gDNA distinction
has been one that is not universally subscribed to in terms of the doctrine, that it's not
entirely clear to a lot of people that, as a matter of doctrine, it makes a huge amount
of sense.
That said, as I indicated, the cDNA patents are considered much more commercially valuable,
and I think that there's a certain element of economic policy also in patent law that
is, you know, inevitably apart of patent law.
Male Speaker: So could you clarify, when you are talking
about cDNA patents, are you talking specifically about Myriad cDNA patents, or the set of cDNA
patents that -- because there are a lot of cDNA patents, right?
Arti Rai: The set of cDNA patents are -- those are all
still valid.
Male Speaker: Right, but okay --
Arti Rai: Yeah.
So, yeah, absolutely -- sorry, follow up.
Male Speaker: No, no, so my question was, is your feeling
that, you know, because there are so many cDNA patents out there, outside of this -- the
ones that Myriad has, that the Supreme Court didn't want to take them all down at the same
time that it was taking down -- you know, by restricting it to the gDNA and leaving
the cDNAs open, it was a sort of Solomonic decision, or whatever --
Arti Rai: Yeah, it was I think it was a Solomonic decision,
I'm not sure they fully understood all the implications.
But I think it was clear to them that drawing that distinction would leave the biotech industry
largely satisfied, and also satisfy the concerns of researchers about gDNA claims.
So it was a way to try to balance the interests of the commercial community and research -- the
research community.
Male Speaker: I wonder if you could comment a little bit
further on this distinction of diagnostic versus therapeutic, especially in cases of
oncology where that line is getting blurred, or in rare diseases where oligonucleotides
and others are -- actually, the diagnostic is intrinsically linked to the therapeutic
--
Arti Rai: Yes, so I think it is going to be very interesting
because, yes, certainly with companion diagnostics, I think it's going to -- there's going to
be pressure brought to bear on that distinction, because with companion diagnostics in particular,
some of those patents could be quite commercially important.
And -- so query how that will all work out.
I think some people are rightly concerned about that question.
Male Speaker: Arti, I was wondering, do you have any sense
of what Ambry, GeneDx, and the others, what their response has been since the suits?
I mean, specifically, are they still offering the tests, and if any of them are still offering
it, do you -- you know, are you aware of any reports of sort of the quality of the annotation
going on since they don't have access to the Myriad databases?
Arti Rai: I believe they are still offering the tests,
I do not know about -- I know they dispute the Myriad numbers.
I don't know specifically about -- as I understand it, they put their VUS rates significantly
lower than the Myriad numbers.
And, in fact, one of the briefs argued that Myriad was unfairly maligning their tests,
and that was part of the monopolization claim, although I'm not entirely clear as to how
that fit into the monopolization question.
Male Speaker: I can confirm that they're still offering
the tests.
Many of us are sending it to Myriad's competitors.
I'd be interested in what Bob Nussbaum might think.
You know, that claim of 20 to 30 percent VUS is, I think -- my perception is, is grossly
inflated.
Certainly, what Ambry has on their website is a estimate that they'll have -- I think
it's around a 5 percent VUS rate, which seems more realistic to me, but I was wondering
what Bob thought.
Male Speaker: Well, there's a paper published in 2009, first
author Easton, which includes four authors, I believe, from Myriad that have a lower VUS
rate than they're claiming now Ambry would have, and based on public databases back in
2009.
So although Myriad may have improved their VUS rate, it is sort of hard for anyone to
know because it is a closed shop.
But I think that it's hard for me to imagine why the VUS rate would have jumped in the
last four years.
[laughter]
So that's kind of my feeling about it.
Arti Rai: Thank you.
Eric Green: Any other -- thank you, Arti.
That was terrific.
So we're breaking?
Rudy Pozzatti: We are breaking for lunch for the rest of
the audience, but for the council members, we are going to have your photograph taken.
So if you could please stay at the table, the photographer will come in here -- I think
we have a room reserved for the picture.
And then after that, you can go to lunch, and can we please come back at 1:15 to resume.
Okay.