21 July 2013

Myriad Sues Ambry, Delivers a Lesson in Patent Law

ClassroomAs has been widely reported, hot on the heels of its ‘loss’ at the US Supreme Court Myriad Genetics has sued Ambry Genetics for infringing 10 patents covering genetic testing for BRCA1 and BRCA2 genes linked to breast and ovarian cancer.

Informed coverage of the basis for Myriad’s complaint can be found, for example, on the PharmaPatents Blog, the PatentDocs Biotech and Pharma Patent Law and News Blog, and the Patently-O Blog.

I think it is fair to say that Ambry was, quite literally, asking to be sued.  It announced its intention to commence BRCA1 and BRCA2 genetic testing on the very same day (13 June 2013) that the Supreme Court handed down its decision invalidating Myriad’s claims to isolated ‘naturally occurring’ genes.  It also immediately updated its home page with graphics promoting the newly-available tests, as well as a banner showing an image of the US Supreme Court building emblazoned with the slogan ‘Your Genes Are Still Free’.

Myriad’s legal response to this provocation was, it seems to me, entirely predictable.  Anyone who has been surprised by this – particularly those who believed that the Supreme Court had somehow deprived Myriad of the ability to sue competing providers of BRCA testing – might perhaps best view these latest events as a useful lesson in the intricacies of patent law!

Was Ambry Courting Litigation?

It is inconceivable, firstly, that an established genetic testing company such as Ambry was unaware that Myriad owned and/or was the exclusive licensee of 10 patents related to BRCA gene testing having claims which were untouched by the Supreme Court decision.  It further beggars belief that Ambry could have geared up to launch its own BRCA tests within hours of the Supreme Court announcing its judgment.  It is, in fact, almost certain that Ambry was already primed to pursue this course pretty much regardless of the Court’s ruling.

Of course, not everybody is thrilled about this latest development.  The usual anti-patent suspects at sites such as Ars Technica and TechDirt were quick to jump on the story, despite the fact that they generally cover IT news and events, and have little or no expertise relevant to genetics, diagnostic testing, or the specialist patent law applicable to this technology area.  TechDirt’s Mike Masnick, in particular, accused Myriad of ‘giving the middle finger to the Supreme Court’, going on to liken the company to a patent troll (despite Myriad’s claims to have invested US$500 million in bringing viable BRCA genetic testing to market).

There should, however, be no surprises for anyone in these events – including Ambry.  The US Supreme Court case [PDF, 147 kB] considered only claims directed to isolated gene sequences, and to artificially-created cDNA, the first of which the Court found to be unpatentable products of nature, while the second are human-made, non-naturally-occurring molecules, which are therefore patentable in principle.

As the Supreme Court quite clearly stated in its opinion (pp 17-18):

…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.”

This, it seems to me, is a tacit approval, at least in principle, of patent claims directed to specific applications.  Myriad itself was not unhappy about this outcome, stating in a media release that ‘[w]e believe the Court appropriately upheld our claims on cDNA, and underscored the patent eligibility of our method claims, ensuring strong intellectual property protection for our BRACAnalysis test moving forward.’

However, courts make decisions based on the specific facts and legal questions that come before them, and a general statement such as the above cannot be read as an endorsement of all patent claims that might be written to cover an application of knowledge about genetic information.

Which is why, presumably, Ambry has elected to put itself in the firing line by so ostentatiously going into competition with Myriad the instant the Supreme Court issued its ruling.  While we now know where the US law stands on isolated DNA, and cDNA, we are no wiser than we were before about where the dividing line lies between patentable and unpatentable applications – such as diagnostic and therapeutic tests – of genetic knowledge.  To the extent that this remains unclear, it is in the interests of all companies operating in this area to seek clarification from the courts. 

Even for Ambry, the main game is not whether it can start making money from BRCA genetic testing today, or will have to wait a few years for Myriad’s patents to expire.  The bigger questions about what can, and cannot, be patented have the potential to influence R&D and investment decisions made by businesses, funding bodies, public and private research organisations, and other stakeholders across the entire industry.  After all, if you are facing the prospect of investing hundreds of millions of dollars in bringing a new test or therapy to market, you probably want to be able to project the likely return on that investment, which in turn will be strongly influenced by whether or not patent protection is available for your R&D outcomes.

Relevance to Australian Challenge

The position in Australia is no different.  Indeed, if anything the final outcome of the challenge to Myriad’s patent in this country will be even more limited in scope.  The decision finding that isolated DNA in patentable in Australia, which is currently on appeal to a Full Bench of the Federal Court of Australia, involves only three patent claims, all directed to isolated ‘naturally occurring’ DNA.  There has been no challenge to claims directed to artificially-created molecules such as cDNA (although, if there were, there is no reason to suppose that the outcome would be any different from that in the US), nor to any claims directed to methods of testing based upon the BRCA genes.

As I have commented previously, the sympathetic public face of the Australian challenge, grandmother and cancer survivor Ms Yvonne D’Arcy, has been quoted making statements that misrepresent what is at stake in the case.  While her concern for ‘future generations of people who at some point in their life may need treatment for cancers and other diseases’ is laudable, it is not clear, given the costs involved, that limiting the availability of patent protections will actually improve the opportunities for future generations.

More importantly, however, even if the Federal Court – or possibly the High Court, should the case go further – finds that isolated DNA is not patentable, it will make no more difference to the position regarding diagnostic and therapeutic applications, the patentability of which will remain unchallenged.


I have no doubt that the backlash against Myriad’s assertion of its surviving patent claims against Ambry is driven in part by a widely-held misconception that in declaring isolated DNA unpatentable, the Supreme Court had stripped Myriad of the power to prevent others from conducting BRCA genetic tests for cancer risk.  Certainly, there is no other obvious explanation for TechDirt’s line that Myriad is ‘mocking’ the Supreme Court.  However, you do not ‘mock’ a court by asserting patent claims which remain in-force, particularly when the court in questions has gone so far as to offer tacit approval of those claims!

If anybody is mocking anyone else, it is Ambry, which deliberately set about engaging in activities which it surely knew – and, in fact, probably hoped – would attract legal action from Myriad.  But, in fact, these actions are readily explained as a perfectly rational strategy to test the limits of laws which impact significantly on the business models of all participants in the industry.

In any event, there is an important lesson in this dispute for those who believed that the Supreme Court had stripped Myriad of its right to prevent others from conducting BRCA testing:  it did not.  Indeed, the Court knew it had not done so, and made express reference to the many unchallenged claims directed to applications of knowledge about the BRCA1 and BRCA2 genes.

So, now everybody else knows it, too!

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