Patent Baristas

A panel of distinguished lecturers provided thoughts and insights on recent major court cases in the biotech arena — and the decision-making behind them. In a discussion on the effects of Prometheus (and Myriad), the consensus seemed to be that there’s no consensus. On Prometheus, the panel tackled the question of how will the decision effect diagnostic patents?

The decision might be read as rendering much of the innovation in biotechnology, including drug method-of-treatment claims, patent-ineligible. However, Seth Waxman, a lawyer at WilmerHale, felt that the decision will be read narrowly because it was unanimous. Unfortunately, however, the language of the decision creates substantial uncertainty with respect to the patent-eligibility of a large number of issued patent claims in biotech.

Other panel discussions on the topic have showed that the vast majority of companies and venture capitalists are in a tizzy over what this means to investments. With all the uncertainties – clinical trial failure, market failure, etc., and now add this new patent uncertainty — venture capital people may just walk away and “go invest in the 37th iteration of an improved hemorrhoid treatment.”

Others expressed frustration that the Supreme Court never reverses itself, it just makes decisions that can’t be reconciled with earlier decisions. The Court had made an analysis of section 101 as a very broad grant of patentability subject to the further patent rule limitations. That is, 101 sets out very broad array of inventions that are patentable provide and now not true. Here, the Court seems to be skewing patent laws to provide for public policy decisions.

Diagnostic companies should get mobilized over the decision since many diagnostic patents will be challenged to get an interpretation of what is patentable and what is not. The Supreme Court, in declaring all of the claims patent-ineligible in a unanimous decision, emphasizes the role of Section 101 and patent eligibility in guarding against the danger of too broad of patent protection.

In looking at Myriad, the panel noted that isolated DNA has a different structure, different utility compared to the native DNA and lacks lots of things native DNA has. These are markedly different composition with markedly different properties. Such a decision would render taxol unpatentable even though chewing on bark won’t treat cancer while the purified form is incredibly valuable cancer treatment. Myriad is not the model of patent claims — and certainly not the model citizen for biotech companies — but broad rejection of isolated, purified molecules on arguments that not different enough from non-purified state that exists in nature would be detrimental and wrong

Neal Katyal, a lawyer at Hogan Lovells, felt that plenty of cases are unanimous and yet read broadlybroad. He felt the that in reversing the Circuit, the Court wouldn’t have just let Justice Breyer do whatever he wanted. Skepticism about need to patent things to protect economy.

Katyal felt that Myriad is not directly controlled by Prometheus since it deals with a composition and not a process and has both broad and narrow claims. But, it would be wise to consider aspects of Prometheus in terms of uncertainties raised for Myriad.

Earlier, the Court has made plenty of arguments are that section 101 is a broad statute, e.g., Chakrobatry, but it is not that section 101 has no limits. Prometheus suggests that the line has tipped a little towards the not so broad. The Court has noted that its for Congress to decide if limiting of 101 needed – the policy doesn’t need to be decided by the courts.

John Whealan, Associate Dean for Intellectual Property Law, George Washington University Law School, agrees with Waxman. Whealan noted that we can’t just give up on diagnostics. Section 101 cases are impossible to reconcile so it is not an exact test but a matter of degree. In trying to fit what the Court is going to do, look at what the claims trying to do and what is the science.

Kevin Marks, Vice President and General Counsel, Roche Molecular Diagnostics, addressed the question of how businesses may deal with the uncertainty. Companies can use trade secret route but that is very limiting in its protection. The general thought is that we will see diagnostics look to trade secrets more often but they are in a wait and see period. Diagnostic companies are still trying to understand the full impact of the case. How can we craft around the cases? Breyer seems to say that it is not just claims craftsmanship but broader subject matter implications.

Will diagnostic companies decide not do the research in this area because of it? The potential impact is that investors looking for a certain level of return will be turned off. As diagnostics are becoming more like pharmaceutical in the data required for approval, this means that without patents, companies won’t spend that kind of money. This has downstraeam implications since substantial licensing comes out of universities and companies won’t license or pay, without more clear data on how this will be interpreted.

For now, we seem to be in a wait and see period.