Pathology labs would generally benefit if Judge Sweet’s ruling is upheld on appeal

It was positive news for many clinical pathology laboratories when a judge ruled against Myriad Genetics and the University of Utah Research Foundation in the federal suit attacking its patents for the BRCA1 and BRCA2 genes. The suit was brought by a group of patients, medical organizations and the American Civil Liberties Union (ACLU).

In Association for Molecular Pathology, et al v. U.S. Patent and Trademark Office 09-civ-4515, pathologist groups, patient advocacy groups, and the American Civil Liberties Union (ACLU) are challenging patents for the BRCA I and BRCA II genes which are held by the University of Utah and licensed exclusively to Myriad Genetics, Inc.,  (NASDAQ:MYGN) of Salt Lake City, Utah.

ACLU Challenges University of Utah and Myriad patent.

United States District Court Judge Robert W. Sweet issued a 152-page decision yesterday that invalidated seven patents related to the pair of genes. Judge Sweet found that the work of isolating the DNA from the body did not transform it and make it patentable, as was argued by lawyers for Myriad and the University of Utah.

Instead, Judge Sweet ruled that the patents were “improperly granted” because they involved a “law of nature.” He called the argument for patent protection “a ‘lawyer’s trick’ that circumvents the prohibition on the direct patenting of the DNA in our bodies but which, in practice, reaches the same result.”

Mutations in these two genes greatly increase the risk of breast and ovarian cancers. Clinical laboratory tests for genetic anomalies in the BRCA genes have been highly profitable for Myriad. The bulk of the company’s revenue comes from these patent-protected genetic tests.

That protection confers a monopoly for Myriad, which was one of the arguments asserted by the plaintiffs. Genae Girard, one of the plaintiffs who has the BRCA genetic mutations, joined the suit because she was unable to get a second opinion to confirm the test results, due to Myriad’s monopoly. Women with the mutation often choose to have both breasts and ovaries removed to avoid the chance of cancer. The plaintiffs argued that the inability to seek a second opinion before taking such a drastic step was a violation their rights.

Attorney’s for the plaintiffs also pointed out that the patents give Myriad a monopoly which also serves to keep the cost of the BRCA genetic high, reportedly about $3,000 per test.

A variety of researchers filed briefs in the case, both for and against the patents’ validity. Those in favor of the patents argued that the lack of patent protection would cut off private investment that has fueled much of the research in the field. Other scientists argued that the monopoly stifles research, preventing development of new genetic tests, even when research funds were ample and available.

The American College of Medical Genetics (ACMG), one of the plaintiffs in the suit, has stated that Myriad’s monopoly removes consumer choice and competitive incentives. It also represents a major impediment to developing laboratory tests that simultaneously study large groups of genes.

“Gene patenting creates an obstacle course that will make true genomic analysis not only cost-prohibitive but impossible, given that no single laboratory will ever own the rights to offer comprehensive testing,” remarked Bruce R. Korf, M.D., Ph.D., President of ACMG.

The original research upon which the patents were based was done at the publicly-owned University of Utah and licensed to Myriad. Both public and private dollars were used in development of the technology, though many other patented genes were isolated using private investment funds.

Besides the seven patents that were invalidated, Myriad holds 16 other patents related to the processing and testing of the genes, including a key method-of-use patent that was not affected and will not expire until 2023.

The ACLU singled out Myriad Genetics for this legal challenge to the BRCA patents because Myriad Genetics has itself initiated court action more than nine times to stop what it considered to be patent infringement. Its aggressive use of the courts made Myriad a high-profile target for those who believe that gene patenting is illegal and unethical.

This is not the first time that Myriad’s control of the BRCA genes has been challenged. In 2004, a European court limited Myriad’s patent protections in the European Union.  The charitable organization called Cancer Research was granted the European patent on the BRCA2 gene. This group allows free use of the patent by clinical pathology laboratories in Europe.

In the face of the steady growth in the number of genetic and molecular diagnostic tests which utilize multiple genes in a single assay, this ruling was good news for the pathology profession. It is a development that, if upheld by higher courts, will eliminate the need for researchers and clinical pathology laboratories to obtain rights for the tens, hundreds, and thousands of genes that may be incorporated in laboratory tests such as those which use microarrays and similar multi-marker technologies. Experts believe that Judge Sweet’s ruling will encourage more and faster progress in the development and in the use of genetic and molecular technologies for diagnostic testing.

John Ball, executive vice president of the American Society for Clinical Pathology (ASCP), one of the plaintiffs in the case, called the decision “a big deal.” In an interview with a New York Times reporter he said, “It’s good for patients and patient care, it’s good for science and scientists. It really opens up things.”

On the other hand, Bryan Roberts, a prominent Silicon Valley venture capitalist, told a Times reporter that the decision could push more of the research work aimed at discovering genes and diagnostic tests away from private companies and into universities. “The government is going to become the funder for [gene] content discovery because it’s going to be very hard to justify it outside of academia.”

Myriad says it will appeal the ruling. With about 20% of the human genome already patented, biomedical companies worldwide are watching to see what happens at the appellate level. Regardless of which party wins the expected appeal, the losers will likely appeal the ruling, which might take the issue all the way to the Supreme Court. For that reason, the final answer in this case is years away. — K. Branz

Related information:

Judge Invalidates Human Gene Patent

Court Rules Against Myriad

Key phase of gene-patent lawsuit in judge’s hands: Myriad Genetics, biotech industry defend research rights.

ACLU Challenges Patents On Breast Cancer Genes: BRCA

Hearing Held in Breast Cancer Gene Patent Lawsuit

THE DARK REPORT laboratory intelligence membership service

The Executive War College 2010 Agenda (April 27-28): “Fast-Moving Legal Issues”

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