A Reversal on Sequencing? Proposed Legislation Would Allow Patenting of Naturally Occurring Genes

A recent blog post focused on the potentially negative implications of the proposed Patent Eligibility Restoration Act (PERA) for manufacturers of generic drugs and biosimilar products.   The concerns raised by PERA are not limited to these industries, however.  Rather, developers of diagnostic tests      and, indeed of any product that relies on free access to gene sequence and other biomarker information, should pay also close attention, as PERA would overturn longstanding judicial precedent.

Under federal patent law, 35 USC § 101, an invention must fall within one of four categories to be considered eligible for a patent: process; machine; manufacture; or composition of matter. Courts have interpreted the statutory categories to exclude, inter alia, natural phenomena, including products of nature.  When it became possible to isolate the sequence of an individual gene from the genome, the Patent Office began issuing patents for them as compositions of matter.  By 2010, about 2000 isolated human genes had been patented in the U.S.  Critics of gene patenting argued, however, that it violated the statutory prohibition on patenting “products of nature,” restricted the conduct of basic research, and hindered innovation.

In 2010, the Association for Molecular Pathology (AMP), among other organizations, brought suit against Myriad Genetics, challenging the validity of the company’s patents on the BRCA 1/2 genes.  Mutations in these genes vastly increase the risk of breast and ovarian cancer in women who carry them, and the isolation of BRCA 1/2 allowed clinical laboratories to develop tests enabling the identification of women at heightened risk.  When laboratories other than Myriad began offering such testing and researchers attempted to study the genes, Myriad claimed infringement on their gene patents.  In a landmark 2013 decision, a unanimous Supreme Court held that a naturally occurring DNA segment, even when isolated, is a product of nature and therefore does not meet the subject matter eligibility requirement for patentability.  Although the controversy under review involved BRCA 1/2, the conclusion that isolated naturally occurring genes are not patent eligible subject matter was broad enough and has been understood to include isolated naturally occurring non-human (e.g., animal, viral, bacterial) DNA and RNA sequences.

Supporters of AMP v. Myriad have credited it—and the earlier unanimous Supreme Court decision Mayo v. Prometheus that narrowed the scope of patent claims for laboratory methods—for helping to precipitate an explosion in the availability of new genetic tests and laboratories and the concomitant decrease in the cost of such testing. As was noted by Dr. Bob Cook-Deegan et al. in a recent issue of the Journal of Law and the Biosciences, the impact of these Supreme Court decisions in molecular diagnostics “was especially pronounced, given the elimination of an entire category of claims on DNA molecules and related methods.”

Since Myriad and Mayo were decided, numerous other judicial decisions have addressed—with often inconsistent interpretations—the scope of subject matter eligibility under Section 101.  This has led to calls to amend Section 101, and in response, Senators Thom Tillis (R-NC) and Chris Coons (D-DE) introduced PERA, which would eliminate all judicially created exceptions to subject matter eligibility under Section 101 and instead establish five narrow categories of inventions ineligible for patent protection. Of relevance here, PERA would – and pardon the double negative – exclude as unpatentable “an unmodified human gene, as that gene exists in the body” (emphasis added). However, the bill also includes a condition that effectively nullifies this exclusion by stating that isolated genes “shall not be considered to be unmodified” (or, more plainly, will be considered to be modified).  This presumptively would mean that examination of genetic material by a research or clinical laboratory would involve a patentable modification under PERA, since such examination necessarily requires isolation of DNA from the sample. The Manager’s Amendment expected to be offered in an upcoming Senate Judiciary Committee markup is even more explicit; it includes a rule of construction listing the Myriad decision as one of the cases abrogated by the legislation.

While two former Directors of the Patent and Trademark Office testified in support of the legislation, Richard Blaylock, testifying on behalf of the biotechnology company Invitae (testimony here), disagreed, arguing that PERA “as introduced, will unintentionally stifle innovation and harm patient care in the fields of diagnostic genetic testing and precision medicine.”  Blaylock noted the importance of new knowledge gained from biomarker discovery to advances in personalized medicine and the harms that would result from the privatization of such information.  Invitae’s concerns are echoed by AMP as well as the College of American Pathologists (CAP), and nearly 100 other patient and provider organizations and industry.  (HPM is currently representing AMP in unrelated litigation.)

Proponents of PERA also invoked the COVID-19 pandemic, asserting (incorrectly in our view) that the shortage of COVID-19 tests at the height of the pandemic was the result of  the Supreme Court’s patentable subject matter decisions. They argued that the legislation was necessary to spur innovation of new vaccines and therapies in response to emerging health threats. Conversely, CAP President Emily Volk cited the importance of free, unfettered access to the full sequence of the SARS-Cov-2 genome early in the pandemic as critical to clinical laboratories’ ability to develop innovative COVID-19 tests:

Imagine if the genetic sequence for SARS-CoV-2 had been patented, and if laboratories were forced to pay fees to develop these critical tests . . . . Under the current patent framework — where natural phenomena, rules of nature and abstract concepts are judicially exempted from patent eligibility — pathologists and laboratories were able to directly develop and deploy tests to meet the capacity needs in communities across America.

Others have questioned whether a return to the pre-Myriad and Mayo status quo ante would in fact promote innovation in molecular diagnostics. Cook-Deegan et al. challenge the notion that there is an “innovation deficit for molecular diagnostics that would be addressed” by PERA and question whether “expanding patent-eligibility” would improve innovation in the field.  Whether it would do so is a topic that deserves careful thought.

To be sure, the issue of subject matter eligibility under Section 101 is complex, and we are cognizant that molecular diagnostics is only one aspect; we leave to others an assessment of how PERA’s proposed changes to Section 101 may affect innovation of other technologies. We are also aware that Section 101 is not the only statutory provision relating to patentability.  It is also hard to argue, in principle, with the desire for greater judicial certainty and predictability, although one can question whether the legislation will accomplish that goal, and whether that quest will cause unintended adverse consequences, e.g., the need for one laboratory to obtain multiple licenses from multiple companies just to run one novel multigene assay.   Returning to a time where merely isolating a naturally occurring DNA sequence was sufficient for patentability seems a problematic and unnecessary step backwards, in light of the ever-increasing importance of molecular diagnostics to clinical care.  Given the explosion in diagnostic tests and genetic research, it is difficult to see how patenting sequences would stimulate innovation.  We hope Congress will take seriously the concerns raised about PERA’s impact on continued innovation in this extremely important field.