The Myriad Genetics Case Gregory A. (Greg) Castanias Jones Day—Washington, DC September 22,

Disclaimer Any views expressed here are my views only, offered in order to advance the cause of thinking about some of the issues presented in this case. The views expressed here do not necessarily represent the views of Myriad Genetics, Jones Day, or any of Jones Day’s clients, and are not to be attributed to any of those organizations or individuals. 2

Section 101’s actual language “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.” No one in the case doubted that isolated DNA molecules are “compositions of matter.” 3

Judicially created exceptions “The [Supreme] Court’s precedents provide three specific exceptions to § 101’s broad patent-eligibility principles: ‘laws of nature, physical phenomena, and abstract ideas.’” Bilski v. Kappos, 130 S. Ct. 3218, 3225 (2010) (quoting Diamond v. Chakrabarty, 447 U.S. 303, 308 (1980)). Fourth exception for “products of nature” having “markedly different characteristics from any found in nature and one having the potential for significant utility” (Chakrabarty)? 4

“Products of nature” Chakrabarty sets forth two verbal formulations for patent-eligibility: “a nonnaturally occurring manufacture or composition of matter—a product of human ingenuity ‘having a distinctive name, character and use.’” (447 U.S. at , quoting Hartranft v. Wiegmann, 121 U.S. 609, 615 (1887)) “Here, by contrast, the patentee has produced a new bacterium with markedly different characteristics from any found in nature and one having the potential for significant utility.” (447 U.S. at 310) 5

The panel’s areas of agreement Of 20 plaintiffs, only Dr. Ostrer had standing Composition claims: cDNA claims are patent-eligible Method claims: Claims where the “comparing” can be done by “mere inspection alone” not patent-eligible, but directed to “the abstract mental process of comparing two nucleotide sequences” Claim to method of screning potential cancer therapeutics was patent-eligible; involved a transformation and was not abstract 6

The panel’s area of disagreement Composition-of-matter claims drawn to “isolated” DNA molecules Judge Lourie: Chemical approach to distinctiveness from a pure product of nature— broken covalent bonds make a new composition Judge Moore: Functional (utility) approach— isolated molecules can be used as primers and probes; native DNA cannot Judge Bryson: Focus on similarity in structure and similarity in utility 7

Judge Lourie: Chemical distinction “[T]he challenged claims are drawn to patentable subject matter because the claims cover molecules that are markedly different— have a distinctive chemical identity and nature—from molecules that exist in nature. [¶] It is undisputed that Myriad’s claimed isolated DNAs exist in a distinctive chemical form—as distinctive chemical molecules—from DNAs in the human body, i.e., native DNA.” “[I]solating genes to provide useful diagnostic tools and medicines is surely what the patent laws are intended to encourage and protect.” 8

Judge Moore: Utility distinction “I analyze the isolated DNA claims below, to determine whether they have markedly different characteristics with the potential for significant utility, e.g., an ‘enlargement of the range of... utility’ as compared to nature.” (Quoting Funk Bros., 333 U.S. at 131.) “[T]he claimed isolated DNA molecules, which are truncations (with different ends) of the naturally occurring DNA found as part of the chromosome in nature, are not naturally produced without the intervention of man. [¶] Given the differences, we should, as precedent instructs, consider whether these differences impart a new utility which makes the molecules markedly different from nature.” 9

Judge Bryson: Distinct structure and utility required “[T]he test employed by the Supreme Court in Chakrabarty requires us to focus on two things: (1) the similarity in structure between what is claimed and what is found in nature and (2) the similarity in utility between what is claimed and what is found in nature. What is claimed in the BRCA genes is the genetic coding material, and that material is the same, structurally and functionally, in both the native gene and the isolated form of the gene.” Concludes that isolating DNA molecules is “akin to snapping a leaf from a tree.” 10

The “Magic Microscope” Test “According to the government’s test, if an imaginary microscope could focus in on the claimed DNA molecule as it exists in the human body, the claim covers unpatentable subject matter. The government thus argues that because such a microscope could focus in on the claimed isolated BRCA1 or BRCA2 sequences as they exist in the human body, the claims covering those sequences are not patent eligible.” 11

The “Magic Microscope” Test Judge Lourie: “It misunderstands the difference between science and invention and fails to take into account the existence of molecules as separate chemical entities. * * * * It is the difference between knowledge of nature and reducing a portion of nature to concrete form, the latter activity being what the patent laws seek to encourage and protect.” Judge Moore: “[F]undamentally changes more than a century of precedent and Patent Office practice in the pharmaceutical and biotechnology arena. The proposed test is a purely mechanical inquiry that fails to account for the possibility that chemical changes to the isolated DNA sequences at issue, as compared to their natural state, could result in markedly different uses.” 12

Settled expectations “[T]he PTO has issued patents directed to DNA molecules for almost thirty years. In the early 1980s, the Office granted the first human gene patents. It is estimated that the PTO has issued 2,645 patents claiming “isolated DNA” over the past twenty-nine years, and that by 2005, had granted 40,000 DNA-related patents covering, in non-native form, twenty percent of the genes in the human genome. In 2001, the PTO issued Utility Examination Guidelines, which reaffirmed the agency’s position that isolated DNA molecules are patent eligible, 66 Fed. Reg (Jan. 5, 2001), and Congress has not indicated that the PTO’s position is inconsistent with § 101. If the law is to be changed, and DNA inventions excluded from the broad scope of § 101 contrary to the settled expectation of the inventing community, the decision must come not from the courts, but from Congress.” 13

More § 101 CyberSource Corp. v. Retail Decisions, Inc., No (Fed. Cir. Aug. 16, 2011) (Bryson, Dyk, Prost) (method for verifying credit-card transactions over the Internet and “Beauregard” claim to computer-readable medium not patent-eligible) (unanimous) Classen Immunotherapies, Inc. v. Biogen IDEC, No (Fed. Cir. Aug. 31, 2011) (Rader, Newman, Moore) (method of lowering risk of chronic immune-mediated disorder, including physical step of immunization, patent-eligible; claims directed toward abstract principle that variation in immunization schedules may have consequences for certain diseases were not) (Rader additional views; Moore dissenting) Ultramercial, LLC v. Hulu, LLC, No. 2010–1544 (Fed. Cir. Sept. 15, 2011) (Rader, Lourie, O’Malley) (unanimous) (method for distributing copyrighted products like songs, movies, or books over the Internet, where consumer receives copyrighted product for free in exchange for viewing an advertisement, and the advertiser pays for the copyrighted content, was patent-eligible) (“Unlike the claims in CyberSource, the claims here require, among other things, controlled interaction with a consumer via an Internet website, something far removed from purely mental steps.”) 14

In summary... Major §101 battleground is method claims (Prometheus), not compositions Panel decision on compositions consistent with statutory language, with Chakrabarty, and with 2001 PTO Utility Guidelines “The hand of man” created these compositions (“Whoever invents or discovers” in §101) Policy concerns (“should we have these kinds of patents”?) properly taken to Congress, not courts 15

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