Myriad in a Nutshell: What Happened at the Court Today* Harold C. Wegner Today in Top Ten No.

(1) the Myriad case, Association for Molecular Pathology v. Myriad Genetics, Inc., __ U.S. __ (2013)(Thomas, J.), a unanimous Supreme Court reversed the Federal Circuit holding of patent-eligibility of claims to isolated DNA, following the dissent-in-part below by Judge Bryson, while affirming the conclusion of patent-eligibility of c-DNA subject matter (a conclusion in agreement with the result reached by all three members of the panel below). The Court emphasized that in its opinion it does [not] consider the patentability of DNA in which the order of the naturally occurring nucleotides has been altered. Scientific alteration of the genetic code presents a different inquiry, and we express no opinion about the application of 101 to such endeavors. We merely hold that genes and the information they encode are not patent eligible under 101 simply because they have been isolated from the surrounding genetic material. The Court spent several paragraphs discussing the split viewpoints and rationales amongst the three members of the Court. It also distanced itself from the principal opinion below by referring to the District Court opinion for a discussion of the science, while it implicitly endorsed the opinion of Circuit Judge Bryson as it quoted from his dissent in part below and reached the same result on all claims in accord with what Judge Bryson had argued.
The author is a partner at Foley & Lardner LLP. This paper represents the personal views of the writer and does not necessarily reflect the views of any colleague, organization or client thereof. The paper, prepared the same day as the decision, reflects the initial thoughts of the writer and obviously does not include all aspects or implications of the opinion. The writer also acknowledges participation as counsel for an amicus party in Myriad. June 13, 2013.
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Wegner, Myriad in a Nutshell: What Happened at the Court Today

Isolated DNA Patent-Eligibility The Supreme Court agreed with Judge Brysons dissent in part that isolated DNA lacks patent-eligibility: Judge Bryson conclud[ed] that isolated DNA is not patent eligible. As an initial matter, he emphasized that the breaking of chemical bonds was not dispositive: [T]here is no magic to a chemical bond that requires us to recognize a new product when a chemical bond is created or broken. [689 F. 3d] at 1351. Instead, he relied on the fact that [t]he nucleotide sequences of the claimed molecules are the same as the nucleotide sequences found in naturally occurring human genes. Id., at 1355. Judge Bryson then concluded that genetic structural similarity dwarfs the significance of the structural differences between isolated DNA and naturally occurring DNA, especially where the structural differences are merely ancillary to the breaking of covalent bonds, a process that is itself not inventive. Ibid. More- over, Judge Bryson gave no weight to the PTOs position on patentability because of the Federal Circuits position that the PTO lacks substantive rulemaking authority as to issues such as patentability. Id., at 1357.

cDNA Patent-Eligibility The Court followed the view of Judge Bryson that the cDNA is patenteligible subject matter. cDNA cannot be isolated from nature, but instead must be created in the laboratory . . . because the introns that are found in the native gene are removed from the cDNA segment. Myriad, __ U.S. at __ (quoting Federal Circuit opinion, 689 F. 3d at 1356 (Bryson, J., concurring in part and dissenting in part)).

Wegner, Myriad in a Nutshell: What Happened at the Court Today

Failure to Understand that Patents Encourage Research Until the Supreme Court understands that patents encourage research it is difficult to see the highest court moving away from its current, negative direction on patent-eligibility under 35 USC 101. The continued misunderstanding by the Court is explained thusly: We have long held that [the patent-eligibility provision, 35 USC 101,] contains an important implicit exception[:] Laws of nature, natural phenomena, and abstract ideas are not patentable. Mayo, 566 U. S., at ___ (slip op., at 1) (internal quotation marks and brackets omitted). Rather, they are the basic tools of scientific and technological work that lie beyond the domain of patent protection. Id., at ___ (slip op., at 2). As the Court has explained, without this exception, there would be considerable danger that the grant of patents would tie up the use of such tools and thereby inhibit future innovation premised upon them. Id., at ___ (slip op., at 17). This would be at odds with the very point of patents, which exist to promote creation. Diamond v. Chakrabarty, 447 U. S. 303, 309 (1980) (Products of nature are not created, and manifestations . . . of nature [are] free to all men and reserved exclusively to none). The rule against patents on naturally occurring things is not without limits, however, for all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas, and too broad an interpretation of this exclusionary principle could eviscerate patent law. 566 U. S., at ___ (slip op., at 2). As we have recognized before, patent protection strikes a delicate balance between creating incentives that lead to creation, invention, and discovery and imped[ing] the flow of information that might permit, indeed spur, invention. Id., at ___ (slip op., at 23). (emphasis added).

Wegner, Myriad in a Nutshell: What Happened at the Court Today

Research Preemption What made the conclusion that isolated DNA lacks patent-eligibility a nearly certain result was the failure of the Court to understand that patents encourage further research, the antithesis of patents preempting research. There was essentially no chance that the Court would grasp this concept given the one two punch of a principal opinion below which verifies the misunderstanding that patents preempt research, coupled with the failure of the parties to properly address this issue. Until such time as the Court understands that patents encourage research it is difficult to see the Court taking a new approach to patent-eligibility. The damning passage in the principal opinion below is the statement without qualification that [third] parties are preempted from practicing the patent.. Myriad, 689 F.3d at 1331 (Lourie, J.). To be sure, the Federal Circuit as a whole must accept responsibility for the position of the principal opinion. The Court has failed to consider en banc this dangerous misunderstanding of a basic premise of the patent law. To be sure, there have been isolated instances where a correct understanding is given: For example, the Chief Judge has stated that information in patents * * ** * * is not insulated from analysis, study, and experimentation * * *. Momenta Pharmaceuticals, Inc. v. Amphastar Pharmaceuticals, Inc., 686 F.3d 1348, 1376 (Fed. Cir. 2012)(Rader, C.J., dissenting), quoting Classen Immunotherapies, Inc. v. Biogen IDEC, 659 F.3d 1057, 1072 (Fed. Cir. 2011)(Newman, J.).
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Wegner, Myriad in a Nutshell: What Happened at the Court Today

Later, the author of Classen Immunotherapies underscored that it could never have been the intention of the legislature to punish a man who constructed [a patented] machine merely for philosophical experiments, or for the purpose of ascertaining the sufficiency of the machine to produce its described effects. Rosuvastatin Calcium Patent Litigation, 703 F.3d 511, 527 (Fed. Cir. 2012)(Newman, J.) (quoting with approval Whittemore v. Cutter, 29 F. Cas. 1120, 1121 (C.C.D.Mass.1813))

Funk v. Kalo: A Case about Invention, not Patent-Eligibility

The Court perpetuates the mistaken identification of Funk v. Kalo as dealing with patent-eligibility (as opposed to patentable invention under the pre1952 Hotchkiss standard that was replaced by nonobviousness under 35 USC 103): Groundbreaking, innovative, or even brilliant discovery does not by itself satisfy the 101 inquiry. 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. Id., at 12829. The ability of the bacteria to fix nitrogen was well known, and farmers commonly inoculated their crops with them to improve soil nitrogen levels. But farmers could not use the same inoculant for all crops, both because plants use different bacteria and because certain bacteria inhibit each other. Id., at 12930. Upon learning that several nitrogen-fixing bacteria did not inhibit each other, however, the patent applicant combined them into a single inoculant and obtained a patent. Id., at 130.

Wegner, Myriad in a Nutshell: What Happened at the Court Today

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. So do Myriads. Myriad found the location of the BRCA1 andBRCA2 genes, but that discovery, by itself, does not render the BRCA genes new . . . composition[s] of matter, 101, that are patent eligible. The failure to classify Funk v. Kalo as an obviousness case presents significant challenges for patenting of isolated chemical and biological entities segregated from their natural environment.

Implications of Myriad for Chemistry and Biotechnology

A variety of situations will come to mind where Myriad opens the doors to new challenges involving, for example, isomeric forms of known compounds and purified aspirin types of inventions. Scenarios are likely to be settled at the level of the Federal Circuit where the outcome could very well be panel-dependent. To be sure, the Court attempted to manifest a limited scope of its decision through its concluding passages:

Wegner, Myriad in a Nutshell: What Happened at the Court Today

It is important to note what is not implicated by this decision. First, there are no method claims before this Court. Had Myriad created an innovative method of manipulating genes while searching for the BRCA1 and BRCA2 genes, it could possibly have sought a method patent. But the processes used by Myriad to isolate DNA were well understood by geneticists at the time of Myriads patents were well understood, widely used, and fairly uniform insofar as any scientist engaged in the search fora gene would likely have utilized a similar approach, 702 F. Supp. 2d, at 20203, and are not at issue in this case. Similarly, this case does not involve patents on new applications of knowledge about the BRCA1 and BRCA2 genes. Judge Bryson aptly noted that, [a]s the first party with knowledge of the [BRCA1 and BRCA2] sequences, Myriad was in an excellent position to claim applications of that knowledge. Many of its unchallenged claims are limited to such applications. 689 F. 3d, at 1349. Nor do we consider the patentability of DNA in which the order of the naturally occurring nucleotides has been altered. Scientific alteration of the genetic code presents a different inquiry, and we express no opinion about the application of 101 to such endeavors. We merely hold that genes and the information they encode are not patent eligible under 101 simply because they have been isolated from the surrounding genetic material. Implications for Areas outside Chemistry and Biotechnology

There is only one patent law for all technologies. The interpretation given in Myriad in the context DNA will surely have repercussions in software and other areas.