On July 29, 2011, the Federal Circuit handed down the long-awaited decision in Association of Molecular Pathology v. U.S. Patent and Trademark Office (Myriad) ¹ upholding the patentability of claims on isolated human genes ² in a 2-1 decision that is all but guaranteed to lead to an en banc review, a Supreme Court certiorari challenge, or both. ³

With the decision, the genomic startup community breathed a collective (if temporary) sigh of relief, although the final determination of the case may be months or years away.

To explain, since the Supreme Court ruled in 1980 in Diamond v. Chakabarty that bioengineered living organisms are patentable subject matter, ⁴ the USPTO has generally held that isolated human genes—segments of human genes that have been excised, with non-important parts spliced out, and then isolated in the laboratory—are patentable, ⁵ to the tune of thousands of issued patents over the years. ⁶ However, the lower district court in this case invalidated patent claims to two controversial isolated genes, the BRCA 1 and 2 genes, which have been linked to a far greater chance of female patients developing breast cancer.

The case was a surprise to many ⁷ and threw the venture capital market for many start-up biotech companies into disarray, as a cloud settled over their isolated gene patents. ⁸ Complicating matters further, the Justice Department and the U.S. Solicitor General took an interest in the case, and although the Solicitor General of the USPTO generally argues cases in front of the Federal Circuit on behalf of the government, instead the Justice Department unprecedentedly stepped in with a largely contrary position from the one the USPTO had long held. ⁹

The case, which pits the ACLU and concerned doctors against the company that isolated the gene and developed and patented the genetic test, rests largely on two very distinct ways of seeing the science behind isolating the human genome. The first could be called the “informational” view, and is basically the argument that won the day in the lower court—that the human genome represents information and sequences that occur naturally, and thus cannot be patented. The second can be called the “chemical” or “mechanical” view, and it posits that the isolated molecules—which have been chemically cleaved, separated, and do not occur in this chemically differing state in nature—are “markedly different” under the Chakabarty test and have distinct utility (as primers and test pieces). ¹⁰

The Attorney General’s office argued for the former, positing a “magic microscope” test where if one were to magnify the human genome, one could see the sequence as claimed in the patent.

In the majority opinion, Judge Lourie flatly rejected that test, ¹¹ and adopted the “chemical” view outlined above. The majority found that the chemical cleaving of the bonds that connect all human genomes produced a markedly different chemical structure than the one found in nature, and thus the resulting invention was patentable.

Another test advanced was the “leaf on a tree” test. Snapping a single leaf off of a tree would not render the leaf itself patentable, as it existed in nature in the same form and removing it from the tree did not change its form. The majority also rejected that test, saying that the isolated and chemically altered gene had particular utility in this isolated form, which did not occur in nature—unlike the leaf, which does not require a human hand to remove it.

In a remarkably well-written concurring opinion, Judge Moore said that, at least with regards to a certain set of broad claims, it was a much closer question, but that the economic reliance interests and the long-settled expectations of the biotechnology industry tipped the scales in favor of allowing patentability on isolated genes (as the USPTO and the Federal Circuit always have). ¹² This is a pragmatic argument that takes into account the large number of property rights that would be stripped from inventors and former applicants, who have been relying on their isolated gene patents for decades.

In one of the more memorable lines of the case, the majority seemed to rebuke the lower court’s lengthy opinion, urging deference to Congress and endorsing judicial minimalism: “Courts decide cases, they do not draft legal treatises.” ¹³

In conclusion, the majority and concurring opinions provide strong positions from which to defend the longstanding practice of allowing patents on chemically isolated human genes, but it remains to be seen whether the Federal Circuit will rehear the case en banc or whether the Supreme Court will take the case up to settle any lingering doubts. Until then, the genomic and diagnostic start-up market will suffer the consequences of that uncertainty.

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