Gene Patent Face-off
Transcript of BioCentury This Week TV Episode 135
Gregory Castanias, Partner, Jones Day
Sandra Park, Staff Attorney for the Women's Rights Project, American Civil Liberties Union (ACLU), New York, N.Y.
PRODUCTS, COMPANIES, INSTITUTIONS AND PEOPLE MENTIONED
Association for Molecular Pathology (AMP), Bethesda, Md.
Stephen Breyer, Associate Justice, U.S. Supreme Court
Anthony Kennedy, Associate Justice, U.S. Supreme Court
Myriad Genetics Inc. (NASDAQ:MYGN), Salt Lake City, Utah
National Institutes of Health (NIH), Bethesda, Md.
John Roberts, Jr., Chief Justice, U.S. Supreme Court
U.S. Department of Justice, Washington, D.C.
U.S. Patent and Trademark Office, Alexandria, Va
Steve Usdin, Senior Editor
STEVE USDIN: The gene patent face off moves from the Supreme Court our studio. Hear both sides debate what will happen next. I'm Steve Usdin, welcome to BioCentury this week.
NARRATOR 1: Your trusted source for biotechnology information and analysis, BioCentury This Week.
STEVE USDIN: While millions or even billions of dollars are at stake in patent disputes, they rarely inflame public passions. But a patent case the Supreme Court heard last week, the Association for Molecular Pathology versus Myriad Genetics, has inspired protest rallies, advertising campaigns and front page news coverage. The Court's being asked to decide a broad question, can genes be patented?
The case involves Myriad's patents on two genes, BRCA1 and BRCA2, that it uses in tests to determine the probability that a woman will develop breast or ovarian cancer. Opponents of the patent say Myriad's intellectual property deprives women of affordable access to diagnostic information they need to manage their health.
The case boils down to a critical distinction. Inventions can be patented, discoveries cannot be patented. The company argued its diagnostics are true inventions, and the Obama administration told the court there's a middle ground. But the justices' questions made it clear that drawing the line between invention and discovery isn't going to be easy. It also isn't easy to predict how any high court decision will affect incentives to make risky investments in new science and technology or consumer access to innovative diagnostics and medicine.
STEVE USDIN: No one can predict with confidence what the Supreme Court will do in this very complex case. Today we'll get the legal viewpoint from advocates for both sides. Greg Castanias, a partner at Jones Day is lead counsel for Myriad Genetics. He argued the biotech's case in front of the court last week. Sandra Park, a staff attorney at the ACLU Women's Rights Project, is a co-counsel for the plaintiffs. She helped prepare last week's arguments.
I want to start out with a clip, or a little segment, from what Chief Justice Roberts said. He said that the issue here is that Myriad was just snipping away at something and that they didn't really invent anything. What would be your response to that, Greg?
GREGORY CASTANIAS: Well, my response is that these were new, human-created molecules. As the later discussion with the court after that question pointed out, what Myriad Genetics did was take hundreds of patient samples and created what's called a composite sequence of cDNA. That was the first step in this inventive process.
And that cDNA was a cDNA that codes for that breast cancer gene. And then from that cDNA, the company and its inventors then invented the new molecule, which is known as the BRCA1 gene. And then in another patent there's also the BRCA2 gene, both of these being genes that are associated with breast and ovarian cancers.
But in determining the definition of the gene -- now remember that genes themselves are human constructs. There's nothing that's marked off in the body that says, this is a gene. All we have is undifferentiated matter in our bodies. The Myriad inventors had to decide where the gene started and where the gene ended.
STEVE USDIN: And so that's where the snipping comes in. Sandra, your response.
SANDRA PARK: Myriad's patents claim the genes once they're isolated from the cell. And all that means is that the moment the gene is removed from the cell it falls under Myriad's intellectual property rights. I think what Justice Roberts recognized, as well as some of the other justices yesterday, is that simply removing something from the natural environment doesn't automatically entitle you to a patent. You need to transform it into something more, into an invention.
And so I think, similarly, the gene is an element of human biology. Yes, Myriad identified it. They contributed to our scientific knowledge. But you don't get patents on contributing to scientific knowledge, you need to invent it. And that element of human biology is defined by nature. It's made by nature, it's not invented by Myriad.
STEVE USDIN: So one of the things that the Obama administration argued to the court, and the justices seemed to have some level of agreement with this, is that you can make a distinction between isolated genes and cDNA. Is that a distinction that makes a difference? As far as you're concerned is that a valid difference? And what would be -- for both of you -- what would be the consequences if the court did decide that cDNA, complimentary DNA, could be patented but isolated genes can't?
SANDRA PARK: Well we've argued in this case the court does not need to reach the issue of cDNA. But if the court does choose to reach that issue, we believe it is still a product of nature. And that is because cDNA mirrors naturally occurring mRNA. It includes the coding regions of the genes, but that inclusion of the coding regions and exclusion of non-coding regions is done in the body, by the body. It simply mirrors what's already in the body.
And for that reason our argument is that it's still a product of nature. Now we still think it would be a huge advancement in this field for the court to invalidate the patents on isolated genes and not reach the issue of cDNA because the patents on the genes themselves have been what has tied up innovation in genetic testing in this arena. And so that, we think, would be a huge step forward.
STEVE USDIN: Greg.
GREGORY CASTANIAS: Well I think I've got to take on the notion that this has somehow tied up innovation.
STEVE USDIN: We're going to get to that later. Can we stick right now though on the issue of cDNA versus isolated DNA.
GREGORY CASTANIAS: Sure, and the answer is that both of those molecules are manipulated from what occurs in the body. Both of those reflect human innovation and intervention. The fact is that cDNA may be even further afield than human genomic matter. But the fact that the court is being asked to draw the line in this case is one of the things that we object to in our position in the case.
We believe that Congress has spoken very clearly through the Patent Act in saying that all compositions of matter made by inventors are patent eligible. And that 30 years plus of practice by the Patent Office of issuing patents on isolated DNA, and in a guideline that responds in 23 specific paragraphs to the arguments that the other side made, and rejecting them instead and now offering to the public well over 40,000 patents on isolated genetic material, that's deserving of quite a bit of respect. A ruling against us, and against the biotechnology industry in this case, would retroactively invalidate tens of thousands of patents. Whereas leaving it to the Patent Office and then to Congress to determine if later on they think these patents should not be allowed would only be prospective going forward.
STEVE USDIN: Sandra?
SANDRA PARK: Well I think the Patent Office policy of granting these patents has been rejected by the U.S. government. What we saw yesterday was the Solicitor General, the top attorney for the United States, arguing that patents on isolated genes are invalid. And that conclusion was reached after consulting with NIH, the top scientists, as well as DOJ, the top lawyers for the government.
STEVE USDIN: So that's interesting that there's a split actually between where the Patent Office is on this and where the Justice Department is. We're going to get back to that. The Myriad case centers on patent law, but the Supreme Court justices are clearly interested in the effect their ruling could have on society. In a moment we'll discuss what Justice Anthony Kennedy said after hearing the argument that patent protection isn't needed to stimulate investment.
STEVE USDIN: We're speaking with Greg Castanias, the attorney who presented Myriad's side in oral arguments to the Supreme Court last week, and with Sandra Park, an ACLU attorney who is co-counsel in the case against Myriad. Sandra, we just saw that quote about the economic incentives. And during the arguments, your colleague suggested that the thrill of scientific discovery, maybe the possibility of getting a Nobel Prize, would be sufficient to entice scientists to do this research.
Justice Scalia had a withering response. He said something like, well, oh, that's lovely. He didn't really buy it. What's your response to that?
SANDRA PARK: Well, our response is that what we're talking about are patents on genes themselves. And so, certainly, there can be patent protection at later stages in the process when a company invents the test related to that gene, when the company uses that DNA to invent recombinant DNA that has therapeutic effects. Those are the kinds of inventions that we do want to incentivize that deserve patent protections.
But when you tie up the genes themselves, you're tying up incentives for that innovation, the follow-on innovation we want to see. And what the history shows here is that, in fact, the patent incentive was not necessary to identify these genes, as well as other genes. And that was established by a genetics task force report a couple of years ago that came out from the federal government. You don't need the patent incentive for identifying genes, because of federal funding, because lots of companies want to engage in that kind of research, so that they can then develop the kinds of inventions we do want to incentivize.
GREG CASTANIAS: Right. Well, the same task force also said that patents were not, in fact, tying up research in this area. And the facts really belie the notion that there's been some sort of tie up in this case. On these two genes alone, there have been over 18,000 scientists who have written almost 10,000 papers studying these genes.
In the 15, 16 years that these patents have been in force, the Human Genome Project has been completed. Advances like whole genome sequencing that doesn't infringe Myriad's patents have been developed. So the patent system is working exactly as it should. It's incentivized the creation of these new molecules. And it has disclosed the invention to the public and allowed others to build on and around those inventions.
STEVE USDIN: Is this case really, in some way, about overreaching or concerns that Myriad has overreached? If they had freely licensed, for example, freely licensed their patent so that other companies could provide second opinions to women and done things like that, would we even be here talking about this today?
GREG CASTANIAS: Well, I can't speak for that, because nobody in the first 15 years of these patents ever filed a lawsuit against us. It was not until the ACLU, Ms. Park and her colleagues, came along and filed what's known as a declaratory judgment lawsuit against us, claiming that our patents were impeding this sort of research that this came along. But the simple fact is that there are companies that are licensed to perform certain tests under the Myriad patents. That said, a patent is a right to exclude others. And no company is required to engage in that licensing, unless it chooses to.
Now, of course, the courts in litigation can shape remedies. It can say, well, you could pay damages for using this, but we won't grant an injunction. Instead, you can pay what's called a reasonable royalty. And you can continue to use the test, if there's a public reason to do that.
STEVE USDIN: One of the other things that I'm wondering is that you're attacking or you're going against some of the claims in the Myriad patents and some of their patents. Even if you win, would that actually prevent Myriad from excluding others from doing testing on these two genes?
SANDRA PARK: Yes. I think that's a really important question. And the answer is yes. Our point is that the patents on the genes are what we're challenging, because that's the fundamental element of biology that all the scientists want to work with.
And in fact, if we look historically at what happened in this case, there were other labs offering genetic testing on BRCA1 and 2 when Myriad obtained its patents. And they were actually using different testing methods. But because Myriad had patents on the genes themselves, they could stop those labs from continuing to perform testing. And they can continue to stop any other lab from performing testing on these genes.
I want to address the point about research. The figure that's thrown around is very misleading because, yes, there may be papers published that cite BRCA1 and 2. But in order to actually sequence the genes and if you want to offer those results to patients who may be participating as subjects in your study, Myriad's patents stop you from doing that. And that's really our concern, that the government has granted exclusive rights over an element of human biology. The patent holder decides whatever it wants to do with that right and also to exclude any other from exercising a scientific inquiry into that.
STEVE USDIN: Greg, very quickly, we've just got a few seconds. Has Myriad prevented researchers from conducting clinical research using these genes?
GREG CASTANIAS: Our position is absolutely not, that the claims that have been made by the other side are not accurate. And in fact, that the numbers that I've just thrown around, Ms. Park said, are in fact true. And again, if you look at the explosion that's happened in biotechnology over the last 15 years, it's really hard to see that there's been an imposition on research.
STEVE USDIN: All right. Justice Stephen Breyer gave some insight into the competing interests in making patent policy, patent law represents a balance between creating incentives for innovation and preventing patents blocking progress. Next, we'll talk about his perspective. Here's what the Justice said.
NARRATOR: Now, back to BioCentury This Week.
STEVE USDIN: We're talking about gene patenting with lawyers on both sides of the Myriad case, Greg Castanias and Sandra Park. So you just saw the quote there from Justice Breyer about looking at both sides of the patenting pros and cons and setting the boundaries around it. How does that play into the Myriad case?
GREG CASTANIAS: Well I think the question -- I think Justice Breyer is exactly right that there is a balance in patent law between protecting patent rights on the one hand -- protecting the true rights of inventors -- and on the other hand, making things available to the public. Of course, the patent grants a limited 17-year right. But to me, the question is, who should be making that decision? Should it be the justices of the Supreme Court? Or should it be Congress and the Patent Office?
And here, as I mentioned before, there's 30 years of history, a specific set of guidelines where the United States Patent Office said, isolating a gene -- isolating a specific gene-- that has a specific substantial, incredible use, utility outside the body, is a good ground for a patent. And while the United States lawyers, the litigators, have filed a brief that says that they object to that. But still not the position of the Patent Office, which continues to follow that practice.
And what's more, if I could just add, that in the recent America Invents Act that Congress passed, there's a section 27 that says that where Congress said at the Patent Office, we know gene patents exist. Study the effects of gene patents and come back to us with a report. In other areas, they decided to actually ban patents, such as patents on human beings.
So the inferences, Congress knows about this. They've known about it for 30 years. And yet they let it be in the most recent legislation.
STEVE USDIN: So, Sandra, another way to ask that question, I guess, is are we 30 years too late? The Patent Office looked at this, and they made their judgments and said, yeah, gene patents can be issued.
SANDRA PARK: Mmm hmm. Well, in fact, if you actually look at patents that are challenged in court, up to 40% are overturned. So I don't think there's any just deference given to when a patent is issued.
I think the key issue with Justice Breyer's quote is looking at the balance that has already been struck through Supreme Court precedent. And one thing that the Supreme Court has consistently said for over a century is that products and laws of nature cannot be patented. And it is to serve that purpose.
If you carve out that exception for products and laws of nature, you then create incentives to use those products and laws of nature, apply them, and create inventions. And that's exactly what we are challenging in this case, that this product of nature has been locked up.
STEVE USDIN: And one of things I thought was interesting, you said during your oral argument, you said that this -- I forget what you call it -- but this kind of doctrine of the product of nature can be dangerous if there aren't boundaries put around it. What did you mean by that?
GREG CASTANIAS: Well, what it means is that think about how many of the pharmaceuticals that we take, for example, are derived from products of nature. There's a famous quote from the Court of Appeals that decided this case before that says that only God works with nothing. Man has to work from new elements.
Well aspirin originated in the bark of the willow tree. It was mentioned by Hippocrates in 500 BC. Yet Bayer properly got a patent because it isolated the particular chemical out of the willow tree bark.
STEVE USDIN: So then that gets to your argument again. You're not contesting that. You're basically contesting whether Myriad actually did anything, or simply just found something.
SANDRA PARK: There's a clear distinction, we think, from the isolated genes and drugs and other tests and things that we do want to incentivize. What happened there was what if they had gotten a patent from the bark removed from the willow tree? That would've then stopped development of other drugs. That's the problem we have with the argument made by Myriad and others, which Mr. Castanias said in court on Monday, that possibly the chromosome removed from the body could be patentable. Where do we draw the line for allowing natural things just removed from their natural environment to be patented?
STEVE USDIN: And your issue is that that's not what's happening here, right, or --
GREG CASTANIAS: Well that's not what's happening here. And not only the issue is where you draw the line, but the issue here is also that Congress and the Patent Office already drew that line. They drew it 30 years ago.
STEVE USDIN: It's not where you get to draw the line, but also who gets to draw the line.
GREG CASTANIAS: That's exactly right.
SANDRA PARK: The Patent Office has never been given any deference by the Supreme Court or courts as to their determination on whether something is a product or law of nature.
STEVE USDIN: And certainly the Supreme Court didn't seem to be too worried about what the Patent Office is going to think of it.
One of the arguments that the ACLU has made in its legal briefs and certainly in discussions with the public and the media is that it's concern in the Myriad case is that the patents block access to the tests and also that they allow the company to charge a great deal of money for them. Isn't that going to be the case, and isn't that the case, with almost every biomedical innovation? If you win this case, then are you going to move on now and try to make similar arguments about recombinant proteins, which you could argue are copies of something that's in the body?
SANDRA PARK: Well the root of why we make that argument is because what has been patented here is the gene itself. And so by locking up the gene, Myriad has prevented any other competition, whether based on advancements in genetic testing, whether based on quality, the cost of that testing, that could be offered by multiple labs around the U.S. if they had not patented the gene itself. If they just patented their test, then other labs would be free to develop new and better tests.
And so the problem here is that the gene is what's been patented. And, in fact, by allowing these patents, Myriad can control access to their own genetic information. And that's what isolated genes are useful for. Simply to convey your own genetic information and what inherited risks you might have for both diseases and what treatments might better work for you based on your genetic information.
GREG CASTANIAS: So the patents don't cover information. They cover specific, precisely defined molecules. And the simple fact is look at how much money Myriad has had to spend, $500 million dollars, just to break even with a company whose principal products are these two breast cancer analysis tests. Now that's been very good for patients. Over a million women have been tested. 250,000 a year are sending their tests to Myriad. It's recognized as the gold standard in testing. And insurance coverage covers 95% of this. So most patients are paying well under $100 to get their genetic sequencing done by Myriad.
STEVE USDIN: I noticed how you shake your head there. What would be your response on the access issue?
SANDRA PARK: Well if you look at who is supporting the plaintiffs is in this case it's the American Medical Association. It's all the major patient advocacy groups. It's geneticists like Dr. Jan Watson and Eric Lander. They are all united because they understand that these patents have blocked their ability to do better testing, to do better -- work better with the genes themselves.
GREG CASTANIAS: Yeah, if the molecule itself, the genetic molecule that the Myriad inventors invented, is invalidated, then the next argument we're going to face is that well, our test is just a bunch of well-known routine steps applied to this invalid unpatentable gene. And so we won't be able to protect that investment either.
STEVE USDIN: We'll be right back with some final thoughts from both sides of the debate over gene patenting. For a closer look at the case, you can download my BioCentury report on Supreme Court arguments from BioCenturytv.com.
STEVE USDIN: We're wrapping up our conversation with Sandra Park and Greg Castanias about the debate over gene patenting.
I wanted to ask you both, what do you think could be the legacy of this case, depending on what the court does for access to therapies, for incentives for biomedical innovation? Sandra?
SANDRA PARK: Well I think it's crucial that the court rule and invalidate these patents for precisely some of the reasons we talked about. Patents on genes tie up the element of human biology that industry, scientists, geneticists want to work with. And particularly now with the sequencing of the genome through the Human Genome Project, the ability of scientists to test the multiple genes now connected with breast and ovarian cancer, as well as many other cancers, at the model of patenting individual genes and allowing one company to control access to those genes is simply out of date. And it's an impediment to those kinds of innovations we want to see for both doctors and patients.
GREG CASTANIAS: Well the patent's a limited exclusionary right. For the older patents in this case, it was a 17 year period from the date of issuance. And for the latest one, it was 20 years from the date of application. They're going to expire in the next couple of years.
So the point is that the patents don't tie up anything forever. And on top of that, they encourage people to build on and design around what's been patented.
So a broad ruling in this case, I fear, would have very significant effects on venture capital investment. Myriad Genetics spent $500 million dollars just to get to a point where it could break even with its BRCA1 and BRCA2 analysis tests.
And that $500 million was only available to be spent because of investment that was available because of the promise of patent protection. Without patent protection, the investment won't be there. The research won't be there. We'll be left to the decision of a university researcher, as my opponent in the Supreme Court said, to want to work for his own greater glory, to discover and to create a new gene as the Myriad inventors did, that would be terrible.
STEVE USDIN: And Sandra mentioned that technology has moved on. We've got whole genome sequencing now. I think you said earlier in the show that you don't think that that would violate the BRCA1 and BRCA2 patents --
GREG CASTANIAS: Absolutely not.
STEVE USDIN: So why does this matter? Very quickly.
GREG CASTANIAS: I'm sorry. Again?
STEVE USDIN: So why does this matter? If the technology's moved on, why is this incentive still important?
GREG CASTANIAS: Well it matters because, as Ms. Park said, they disagree with that position. But we are not, on this show, going to decide whether or not whole genome sequencing infringes Myriad's patents. But it's been our position consistently that it doesn't. And obviously, if that's our position, then it's unlikely that Myriad is going to go after anybody.
STEVE USDIN: Well I'm sorry. That's all the time we've got for this week's show. I'd like to thank Greg Castanias and Sandra Park. Join the conversation on Twitter by sharing your thoughts about today's show. Just use the hashtag #BioCenturyTV. I'm Steve Usdin. Thanks for watching.