Biotech Ventures Beware! The Industry May Need a Different Kind of Cure.
On June 13, 2013 the Supreme Court handed down its decision in Association for Molecular Pathology v. Myriad Genetics, Inc.. In this landmark decision for life science patents, the court held that a “naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated.” In so holding, the court weaved a fine line between unpatentable subject matter – the long-standing rule that “laws of nature, natural phenomenon, and abstract ideas are not patentable,” as they are not any single inventor’s creation, but rather are the “tools of scientific and technological work,” – and patentable subject matter. The court indicated that “the rule against patents on naturally occurring things is not without limits, for all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomenon, or abstract ideas, and too broad an interpretation of this exclusionary principle could eviscerate patent law.” After Myriad, practitioners were uncertain as to whether Myriad specifically made genomic DNA unpatentable or whether other “naturally occurring” entities were also unpatentable.
On March 4, 2014 the United States Patent and Trademark Office (U.S.P.T.O), the regulator of U.S. patent grants, issued guidelines determined to shed clarity on this Myriad ambiguity. In these guidelines, the Deputy Commissioner for Patent Examination Policy identifies 12 factors that must be considered by a patent examiner in determining whether the invention is “naturally occurring.” Some of the factors that weigh in favor of eligibility are:
a) Claim is a product claim reciting something that initially appears to be a natural product, but after analysis is determined to be non-naturally occurring and markedly different in structure from naturally occurring products.
b) Claim recites elements/steps in addition to the judicial exception(s) that impose meaningful limits on claim scope, i.e., the elements/steps narrow the scope of the claim so that others are not substantially foreclosed from using the judicial exception(s).
c) Claim recites elements/steps in addition to the judicial exception(s) that relate to the judicial exception in a significant way, i.e., the elements/steps are more than nominally, insignificantly, or tangentially related to the judicial exception(s).
Some of the factors weighing against patentability are:
g) Claim is a product claim reciting something that appears to be a natural product that is not markedly different in structure from naturally occurring products.
h) Claim recites elements/steps in addition to the judicial exception(s) at a high level of generality such that substantially all practical applications of the judicial exception(s) are covered.
i) Claim recites elements/steps in addition to the judicial exception(s) that must be used/taken by others to apply the judicial exception(s).
The large number of factors and their inherent ambiguity have resulted in unpredictable examinations. Practitioners have been surprised to receive 35 U.S.C. § 101 rejections, when they were expecting patent issuance notices for molecular biology and non-molecular biology based inventions alike. Patent examiners have thus been effectively reading Myriad’s prohibition on “naturally occurring” as not limited solely to DNA-based inventions. As pointed out in a recent article, what’s more is that products that are derived from a naturally occurring product might be considered to be naturally occurring as well, further stifling patent protection for life science inventions.
The result has been a siege of the biotech and pharmaceutical industries. For an industry so reliant on patent protection, that is fixed with high upfront research and development costs, patent ineligibility is a real scare. If these guidelines stand, the industry can no longer be assured that their R&D expenses will pay off down the road.
However, the Myriad-Mayo Guidelines have themselves also been under threat from those companies and practitioners most affected by them. July of this year marked the end of the public commenting period, in which biotech and pharmaceutical companies as well as universities voiced their consternations with the Myriad-Mayo Guidelines. The vast majority of the comments were extremely critical of the guidelines, incentivizing the USPTO to revise the Myriad-Mayo Guidelines. The revision is currently underway and it will be important for life science based startup companies to watch for what occurs at the USPTO in the immediate future. Will the USPTO cure the patent illness it began? Patent protection for your start-up may be at stake