1. © 2012 Cooley LLP, Five Palo Alto Square, 3000 El Camino Real, Palo Alto, CA 94306 The content of this packet is an introduction to Cooley LLP’s capabilities and is not intended, by itself, to provide legal advice or create an attorney-client relationship. Prior results do not guarantee future outcome. Patenting Genes, Biomarkers and Other Natural Products in a Post-Myriad World Bonnie McLeod, Ph.D., Erich Veitenheimer, Ph.D. and Chris Holly, Ph.D. University of Miami April 1, 2014

2. www.cooley.com Agenda  Patenting Genes – Myriad  Patenting Natural Products – Funk Brothers  Patenting Diagnostics – Prometheus  PTO Guidelines

3. www.cooley.com US PTO Policy January 2001  “Patenting compositions or compounds isolated from nature follows well-established principles, and is not a new practice.”  Louis Pasteur (1873) - Claiming yeast, free from organic germs of disease, as an article of manufacture  Parke-Davis & Co. v. H. K. Mulford Co., 189 F. 95 (S.D.N.Y. 1911) (J. Learned Hand) – “Takamine was the first to make it [adrenaline] available for any use by removing it from the other gland-tissue in which it was found, and, while it is of course possible logically to call this a purification of the principle, it became for every practical purpose a new thing commercially and therapeutically. That was a good ground for a patent.”  In re Bergstrom, 427 F.2d 1394 (CCPA 1970) - The Court reversed the PTO and explained the error: “What appellants claim--pure PGE2 and PGE3--is not `naturally occurring.' Those compounds, as far as the record establishes, do not exist in nature in pure form.”

4. www.cooley.com A claim search of issued US patents…  (isolated or purified) and (nucleic acid or gene) - >19,000  1. A composition comprising an isolated and purified nucleic acid, wherein said isolated and purified nucleic acid comprises SEQ ID NO: 5. (“Invention provides non-naturally occurring and isolated naturally occurring nucleic acids” encoding proteins that modulate the Fas receptor pathway”)  (isolated or purified) and protein - >20,000  1. A purified and isolated galanin receptor 2 protein comprising SEQ ID NO: 2. (Claiming a previously undescribed form of galanin receptor)  (isolated or purified) and compound - >16,000  e.g. 1. An ioslated and purified compound of the formula X. (Claiming compounds having Cox-2 inhibitor activity isolated from evergreen shrubs in India)

5. www.cooley.com “Isolated genes” are no longer patentable  After 150 years of case law, thousands of patents and well established PTO policy …  Association for Molecular Pathology (AMP) v. Myriad Genetics (“Myriad”)  Claim 1: An isolated DNA coding for a BRCA1 polypeptide [which has] the amino acid sequence set forth in SEQ ID NO: 2.  Claim 2: The isolated DNA of claim 1, wherein said DNA has the nucleotide sequence set forth in SEQ ID NO: 1.  Supreme Ct: “Myriad’s claims are simply not expressed in terms of chemical composition nor do they rely in any way on the chemical changes that result from the isolation… Instead, the claims understandably focus on the genetic information encoded in the genes”

6. www.cooley.com The parties Myriad Genetics – start-up out of University of Utah, founded by scientists searching for BRCA genes  Filed first patent on BRCA1 gene in 1994, as co-owners with University of Utah and Nat. Inst. Environmental Health Sciences  In 1996, launched BRCAnalysis test, detecting mutations in BRCA1 and BRCA2 genes  Business model – exclusivity for test; enforce against competitors, which included university labs Association for Molecular Pathology (AMP) – lobbies against exclusive licensing of gene patents  Original litigant, joined by several patient advocacy groups and several patients – American Civil Liberties Union (ACLU) and Public Patent Foundation

7. www.cooley.com Case history  Several Myriad patents challenged – contained claims to isolated genes, diagnostic methods and methods of drug screening  District Court declared all claims invalid  Isolated BRCA DNA not “markedly different” from its native counterpart; encoded information is the same  Federal Circuit reversed in part  Isolated DNA is markedly different because covalent bonds have been chemically severed  Isolation significant – chromosome 80 million bp vs. gene 80,000 and coding region 10,200

8. www.cooley.com Supreme Court Disagreed  Held: “A naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated, but cDNA is patent eligible because it is not naturally occurring.”  Myriad simply found the location and sequence of the BRCA genes; finding the location does not render them “new”  Claims are not expressed in terms of chemical composition so breaking of chemical bonds is of no consequence; claims focused solely on the genetic information

9. www.cooley.com What about long standing PTO policy?  Myriad argued that PTO’s past practice of awarding gene patents is entitled to deference  Supremes: Amicus Brief to CAFC for United States weighs against PTO policy  According to the government’s brief, district court opinion “prompted the United States to reevaluate the relationship between [isolated genomic DNA] patents and the settled principle under Supreme Court precedent that the patent laws do not extend to products of nature”  Fn7 “Concerns about reliance interests arising from PTO determinations, insofar as they are relevant, are better directed to Congress”

10. www.cooley.com The Supreme Court Decision was Focused  The decision did not reach beyond the facts at hand  No statements as to whether a similar rationale would apply to other molecules  Held: “A naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated, but cDNA is patent eligible because it is not naturally occurring.”  “Important to note” case does not involve method claims, patents on new applications of knowledge about the BRCA genes or patentability of DNA in which the order of nts has been altered

11. www.cooley.com US PTO Interim Guideline was Focused  June 13, 2013  “As of today, naturally occurring nucleic acids are not patent eligible merely because they have been isolated. Examiners should now reject product claims drawn solely to naturally occurring nucleic acids or fragments thereof, whether isolated or not, as being ineligible subject matter under 35 U.S.C. 101.”  “The USPTO is closely reviewing the decision in Myriad and will issue more comprehensive guidance on patent subject matter eligibility determinations, including the role isolation plays in those determinations.”

12. www.cooley.com Potential Claiming Strategies?  Include support for limitations that distinguish isolated DNA from native sequence  Fusion to other sequences, i.e., promoters and vectors  Include other structural features, i.e., host cells, kits, chips, assays  Include claims to cDNA  Methods of making/using  For diagnostics, include transformative steps  Combination diagnostics  Include buffers, pharmaceutical excipients?  Claim as a purified population of molecules?  Claim as “synthetic” molecule? (Myriad has argued in the more recent case v. Ambry that synthetic molecules were distinguished from naturally occurring molecules by the Supreme Court because made by hand of man) New PTO Guidelines Suggest that last three avenues not sufficient

13. www.cooley.com But, (oh no!) Myriad does cite Funk Brothers  “In Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U. S. 127 (1948), this Court considered a composition patent that claimed a mixture of naturally occurring strains of bacteria that helped leguminous plants take nitrogen from the air and fix it in the soil.”

14. www.cooley.com Funk Brothers v. Kalo  The problem encountered in the art were that nitrifying bacteria were normally inhibitory amongst species  Funk Brothers claimed a heterogeneous combination of nitrifying bacteria that were able to live in a community together

15. www.cooley.com Funk Brothers and “Products of Nature”  “The Court held that the composition was not patent eligible because the patent holder did not alter the bacteria in any way. Id., at 132 ("There is no way in which we could call [the bacteria mixture a product of invention] unless we borrowed invention from the discovery of the natural principle itself "). His patent claim thus fell squarely within the law of nature exception.”

16. www.cooley.com Mayo v. Prometheus (SCOTUS, 2012)  U.S. Patents 6,355,623 and 6,680,302 are directed to methods for calibrating the proper dosage of thiopurine drugs used for treating both gastrointestinal and non- gastrointestinal autoimmune diseases.

17. www.cooley.com Prometheus’ Claims  Claim 1 of the ‘623 patent is representative:  A method of optimizing therapeutic efficacy for treatment of an immune- mediated gastrointestinal disorder, comprising: (a) administering a drug providing 6-thioguanine to a subject having said immune-mediated gastrointestinal disorder; and (b) determining the level of 6-thioguanine in said subject having said immune-mediated gastrointestinal disorder, wherein the level of 6-thioguanine less than about 230 pmol per 8 × 10 8 red blood cells indicates a need to increase the amount of said drug subsequently administered to said subject and wherein the level of 6-thioguanine greater than about 400 pmol per 8 × 10 8 red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject.

18. www.cooley.com Supreme Court  Opinion by Justice Breyer  Unanimous court ruled claims were not directed to patentable subject matter  Questions to decide  “whether the claims do significantly more than simply describe these natural relations”  “do the patent claims add enough to their statements of the correlations to allow the processes they describe to qualify as patent-eligible processes that apply natural laws?”

19. www.cooley.com Supreme Court  The Court’s focus is on the difference between  claims to laws of nature themselves - not patent eligible and  claims to specific applications of such laws - patent eligible. – Monopolization of laws of nature, mental processes and abstract intellectual concepts through the grant of a patent might tend to impede innovation more than it would tend to promote it. – An application of a law of nature or mathematical formula to a known structure or process may be deserving of patent protection. – However, to transform an unpatentable law of nature into a patent-eligible application of such a law, one must do more than simply state the law of nature while adding the words “apply it.”

20. www.cooley.com Court’s analysis of the claims Analysis of the claims went through four steps:  1. the Court observed that the administering step just defines “the relevant audience” — doctors who treat patients with thiopurine drugs.  2. “the ‘wherein’ clauses simply tell a doctor about the relevant natural laws.”  3. the determining step does not specify any particular process, but merely invites doctors “to engage in well-understood, routine, conventional activity.”  4. “to consider the three steps as an ordered combination adds nothing to the laws of nature that is not already present when the steps are considered separately.”

21. www.cooley.com Court’s analysis of the claims  Concluded that these instructions add nothing specific to the laws of nature other than what is well-understood, routine, conventional activity, previously engaged in by those in the field; and  the steps of the method, when viewed as a whole, add nothing significant beyond the sum of their parts taken separately.  The effect of the steps is simply to tell doctors to apply the law of nature somehow when treating their patients.

22. www.cooley.com Supreme Court – Guidance?  Not much specific guidance of what would constitute “enough” or “sufficient” to “transform the nature of the claim” from an unpatentable law of nature into a patentable application of such a law  Backed away from making a determination of whether the additional steps relating to the use of the laws of nature if less conventional would be sufficient or not to invalidate the claims – “[w]e need not, and do not, now decide whether were the steps at issue here less conventional, these features of the claims would prove sufficient to invalidate them.”

23. www.cooley.com Supreme Court – Guidance? Examples of what the Court considered as not being “enough” or “sufficient”:  the process should not “depend simply on the draftsman’s art” and would need additional features to make the process more “than a drafting effort designed to monopolize the law of nature itself.”  just to “limit the use of the formula to a particular technological environment’ or adding ‘insignificant postsolution activity’” would not be sufficient, i.e. “post-solution activity” that is purely “conventional or obvious... can[not] transform an unpatentable principle into a patentable process.”  “additional steps, apart from the natural laws, must not just involve well- understood, routine, conventional activities”  simply a suggestion to consider tests results for decisions was not sufficient, i.e. “[t]he “wherein” clauses simply tell a doctor about the relevant natural laws, adding, at most, a suggestion that they should consider the test results when making their treatment decisions.”

24. www.cooley.com Recent USPTO Guidance The USPTO has recently issued guidance (heavily criticized by the Patent community) to the Examining Corps: Guidelines focus on a “significantly different” analysis

25. www.cooley.com Recent USPTO Guidance

26. www.cooley.com Recent USPTO Guidance

27. www.cooley.com Recent USPTO Guidance

28. www.cooley.com Recent USPTO Guidance

29. www.cooley.com Recent USPTO Guidance

30. www.cooley.com Questions?

31. © 2012 Cooley LLP, Five Palo Alto Square, 3000 El Camino Real, Palo Alto, CA 94306 The content of this packet is an introduction to Cooley LLP’s capabilities and is not intended, by itself, to provide legal advice or create an attorney-client relationship. Prior results do not guarantee future outcome. Patenting Genes, Biomarkers and Other Natural Products in a Post-Myriad World Bonnie McLeod, Erich Veitenheimer and Chris Holly University of Miami April 1, 2014