Industry fears stifling of sequencing research, investment

Gene-patent case unlikely to harm biotech: experts



The U.S. Supreme Court’s rejection Thursday of natural DNA patent protection could hurt biotech companies, but specialists said it left enough safeguards for the industry to keep innovating.

The court ruled that Myriad Genetics Inc., which sells expensive tests for the genetic markers for cancer, could not patent the DNA it identified in the 1990s to develop the tests.

Critics said the ruling would inhibit other companies and their financial backers, such as venture capitalists, from investing in more genetic sequencing research because they will not be able to patent their discoveries.

“The Supreme Court’s decision today represents a troubling departure from decades of judicial and Patent and Trademark Office precedent,” said Jim Greenwood, president of the Biotechnology Industry Organization.

Companies “have long relied on patents on preparations of DNA molecules and other biological chemicals in order to bring innovative, socially beneficial products to the marketplace,” he said, calling the United States “now the only developed country to take such a restrictive view of patent eligibility.”

“This is a real disappointment for the advancement of medical innovation. Venture capitalists needs certainty, and that certainty is what patents provide,” said Kelly Slone, vice president of the National Venture Capital Association (NVCA).

But analysts said the ruling was narrow enough to avoid stifling genetic sequencing research by pharmaceutical firms, agrotechnology businesses and others.

“The court clearly is struggling, as it has been for years, with striking the right balance,” said Michael Shuster, a partner at San Francisco law practice Fenwick & West and a specialist in biotechnology and intellectual property. “I think that they understand that the biotech industry is a bright spot for the economy.”

The court’s decision “makes the climate a little more difficult” for companies and their financial backers, “but there are still strategies that can be pursued,” said Shuster, who wrote a “friend of the court” brief for the case on behalf of the NVCA.

Nevertheless, he called it “a ruling the industry as a whole can live with.”

The Supreme Court justices were clearly sensitive to the case’s potential impact, saying, “Patent protection strikes a delicate balance between creating incentives that lead to creation, invention and discovery and impeding the flow of information that might permit, indeed spur, invention.”

As a result, the justices stressed, they did not rule on Myriad’s processes for using the DNA and upheld the firm’s patents on synthetic DNA (cDNA). Myriad said in a statement that the decision will ensure it can continue with its main business, selling its tests for the rare BRCA1 and BRCA2 genes, which can point to the likelihood of cancer.

The ruling was “very narrow in its focus,” said Kevin Noonan, a biotechnology patent lawyer at Chicago law firm McDonnell Boehnen Hulbert & Berghoff. “It’s probably the best decision that we could have hoped for.”

But Noonan and Shuster highlighted one problem raised by the decision: By ruling against patenting DNA because it is something freely found in nature, the top court reopened questions over existing patent protection for molecules isolated from nature, such as those used to develop antibiotics and other drugs.

“I don’t know if those remain patent-eligible,” said Shuster.

One immediate impact from the decision, nevertheless, was that Myriad will face new competition from companies that develop their own tests based on the two cancer-related genes. By late Thursday, Ambry Genetics announced it was coming to market with its own BRAC1 and BRCA2 analysis “at a competitively lower cost and comparable turnaround time” to Myriad’s.

“Your genes have been freed,” the company said in a banner headline on its website, above a picture of the Supreme Court.