ABA Health eSource
June 2010 Volume 6 Number 10

The Myriad decision: Judicial criticism of the Bayh-Dole Act and its progeny?

By Kathryn R. James, Chapman University School of Law, Orange, CA

AuthorIntroduction

Recently, a federal court in New York ruled against the Utah-based biopharmaceutical research and development company, Myriad Inc 1 .The issue in the case was whether or not patents held by Myriad over specific genes related to susceptibility to breast and ovarian cancer were valid under the Patent Act and the Constitution. The court’s rejection of the patents’ validity was unexpected by many, as the courts have typically upheld genetic patents as valid since 1980. Hence, while Myriad will almost certainly appeal, the decision potentially represents the beginning of a judiciary rejection – or, at the least, criticism - of the last 30 years of judicial and legislative encouragement of the commercialization of medicinal research and development 2 .

Background and Decision

Myriad Inc. was formed in 1991 by Marc Skolnick (and a team of scientists) at the University of Utah’s Center for Genetic Epidemiology, who were one of many groups attempting to identify the BRCA 1 gene, which had recently been located by another group of scientists and was believed to be the first gene that could indicate hereditary susceptibility to breast and ovarian cancer. 3 Myriad ostensibly was formed in order to procure significant funding so as to enable it to be the first to identify and thereafter patent all research and commercial uses for the BRCA 1 gene. 4 Between 1994 and 1995, Myriad successfully obtained multiple patents over the exclusive use of the BRCA 1 gene 5 , which led to Myriad’s discovery of and acquisition of patents over BRCA 2 between 1996 and 1998 6 .

The litigation against Myriad and the US Patent and Trademark Office was first brought in the Federal Court in 2009 by multiple plaintiffs assembled by the American Civil Liberties Union, including individual patients, companies, and broad-reaching organizations 7 . The action sought to challenge the fifteen claims of seven patents held by Myriad that related to BRCA 1 and BRCA 2 8 , two genes whose mutations and the sequencing thereof are associated with breast and ovarian cancer susceptibility 9 . The plaintiffs claimed that the isolation of the genes, the sequencing process to identify and classify mutations, and the diagnostic method employed for testing did not constitute patentable material even under the “broad scope” of the Constitution 10 and the Patent Act 11 .

On March 29, 2010, the Court struck down all seven patents as invalid, asserting that each failed to meet the requirements of 35 U.S.C.S. § 101 and 102 12 . Judge Robert W. Sweet delivered the opinion, stating “purification of a product of nature, without more, cannot transform it into patentable subject matter”, but instead the “purified product must possess markedly different characteristics in order to satisfy the requirements of 35 U.S.C.S. § 101.” 13 The Court did not address the question of Constitutionality 14 , as it asserted that the issue could be wholly adjudicated on the basis of patent law 15 .

Much attention has been given to the possibility that this decision will reach the average patient by heightening access to and quality of genetic testing. However, the greater significance of the decision – even if partially reversed on appeal – is that it may represent the courts’ beginning to challenge the industry norm of rigorous medicinal patenting that began with the passage of the Bayh-Dole Act in 1980 16 . That same year, the U.S. Supreme Court upheld as valid patents covering living organisms for research and commercial purposes 17 . These two events enabled legislative and judicial predication for the acquisition of medicinal (including genetic) patents, the frequency of which has increased significantly since then 18 . While there has been fervent opposition to the commercialization of medical research and development by all tiers of stakeholders 19 , the Myriad case is the most significant and visible judiciary expression of that opposition.

Why the court ruled against Myriad

The nature of the genetic patents in the Myriad case differed from previous genetic patent litigation, as Myriad’s patents pertain to the isolation and sequencing of genes for diagnostic purposes, as opposed to being used for the development of medicinal therapies. Even so, the decision is likely to be appealed, and given precedent 20 it is likely that Myriad’s patents covering the BRCA 1 and BRCA 2 genes themselves will be upheld. However, whether or not Myriad’s patents over the diagnostic tests will be held as valid is not as certain, and this has fueled the public discussion regarding better access, availability, and reliability of the test over which Myriad currently holds a monopoly.

However, the efficacy of the test – and therefore the significance of broader access to it - has been largely misconstrued in the public discourse. The test that Myriad controlled strictly examines the presence of particular mutations in persons with a hereditary risk of breast or ovarian cancer. Of all cases of breast cancer, between 5 and 10 percent are hereditary 21 . While a significant percentage, the test is not conclusive for those who receive either a negative or positive result – that is, if a patient discovers that she possesses the particular mutations of BRCA 1 or 2 that lend to the development of breast cancer, it does not suggest any probability of cancer – only the possibility 22 . Conversely, a patient that does not possess the particular mutations is not guaranteed that she will not develop breast or ovarian cancer 23 . While the test enables a patient with a positive test result to take preemptive action 24 , it bears little utility on the actual decision to take such action 25 . This is a large part of the criticism of Myriad’s practices – i.e., the test is one of such complexity, and relevant to so limited a class, that it should by administered under the care and control of medical “gatekeepers” who might fully inform patients of the test’s implications, both before and after testing.

It is likely that the Court took this issue into account in denying Myriad sole control over the use of the genes. That is, Myriad developed and administered the test, but did very little in terms of making the test results useful to patients. Previously, genetic tests analogous to that which is under discussion herein were only administered in a controlled, university, research environment. 26 Myriad commercialized genetic testing without facilitating sister services – i.e. counseling, physician training, etc. 27 – which seems to indicate that Myriad was motivated by profiting from the test as a market commodity, as opposed to responsibly providing it for the purposes of medical advancement in detection and treatment of breast and ovarian cancer 28 . That is to say, Myriad provided the test (for a cost); but, without further medical services, the test is not only of little practical use but also possibly harmful to the patient who chose to take it 29 . Further, the decision to take the test might have been spurred by direct-to-customer advertising employed 30 by Myriad. Myriad’s business model was seemingly designed with profits as opposed to patients in mind 31 . While this was not the central legal grounds upon which the Court ruled against Myriad (as the Court’s interpretation of the “broad scope” afforded by Patent Act and the Constitution was the grounds for invalidating the patents), it is likely that Myriad’s unpalatable practices factored into the Court’s rationale as a policy consideration 32 .

The Myriad decision as a criticism of Bayh-Dole

There is a very real possibility that the case represents a shift in the judiciary away from encouraging extensive patent protection in the medical industry. This may be a response to multiple factors, one of which being the lack of legislative guidance as to medicinal patents. The only standing legislation 33 regarding the intersection of patents and medicine is the Bayh-Dole Act, which is largely criticized as anachronistic 34 . The purpose of the act was to encourage greater commercialization of medicinal research and development on the part of publicly funded institutions at a time when the Unite States feared that it was sliding into global economic and technological obscurity.

The effect of the Act was to heighten the commercial relationship between research universities and private corporations. That is, publicly funded institutions (universities) became more likely to procure federal grants should they retain a private business partner that promised to market the potential medicinal development from university technology in exchange for licensing upon the acquisition of a patent 35 . Criticism of the Act cited the fear that both public and private institutions would begin directing their research and development endeavors according to profit motive as opposed to meeting medicinal needs. Myriad represents an almost caricature-like example of the pitfalls of this technology transfer; Myriad seemingly came into existence under the sole premise of obtaining exclusive control over all uses of the BRCA 1 gene (as it enjoyed access to the extensive University of Utah-based database and the research into the gene incited therein) so as to gain a valuable market commodity – not to contribute to broader medical research 36 .

While there are both critics and proponents of Bayh-Dole, there is an “evidence gap” 37 regarding the effect that patents bear on research – i.e. whether the current patent and licensing scheme encourages or discourages research and the accessibility to the findings thereof. However, in regard to genetic patents in particular, there is evidence to suggest that, either in spite of patents or due to them, “[…] current licensing practices […] seem to facilitate both academic research and commercial testing.” 38 , 39 Even so, the climate under which Bayh-Dole was enacted – i.e. a lack of medicinal commercialization – has obviously changed (due to the Act), and there is little substantive evidence to support the claim that the Bayh-Dole Act incentivized further and greater research or in the generation of revenue. 40

It is possible that the Bayh-Dole Act has survived beyond its utility due to an affable climate – i.e. the primarily private, commercial nature of US health care. Conversely, in single payer systems, the market and medicine are almost completely mutually exclusive. Myriad encountered limitations to its patents and strong overall resistance against its entry into the European 41 and Canadian 42 public health care systems, largely because the state – as opposed to the private sector - was left to assume the cost of Myriad’s services, patents, and business model 43 . This decision affirms concerns that these systems articulated, and thus may represent a judiciary that is critical of a legislative and judicial rationale that supports medicine for profit instead of health.

Conclusion

While the Bayh-Dole Act is not specifically mentioned in the opinion 44 , the Myriad case potentially represents a substantial judiciary criticism of the present commercialization of medicinal research and development as incurred by the Act. Irrespective of whether the patents are upheld as valid upon appeal 45 – which, it is likely that at least a portion of them will be - the decision of the Federal Court sends a clear message to Myriad and like entities with like practices regarding the willingness of the judiciary to reject its previous compliance with extensive medicinal patenting in favor of a more scrupulous approach that satisfies policy concerns in regard to medical research and development being motivated by an interest in profits as opposed to the needs of patients.

1 Ass'n for Molecular Pathology v. United States PTO , 2010 U.S. Dist. LEXIS 30629.
2 That is to say that the discussion of this case from a strictly legal perspective – i.e. the validity of Myriad’s patents and enforcement thereof – while significant, obviates the larger discussion of public policy in regard to current practices in medicinal research and development: “… what this case so strikingly points out is that a focus on legal rights is misleading because when legal rights conflicted with business and governmental norms and with institutional structures, it was the set of legal rights that were of least significance.” Gold, E. Richard, et al. “Myriad Genetics: In the eye of the policy storm”. Genetics in Medicine; April 2010 Supplement, Vol. 12. No. 4, pp. 39-70. Pp. 62. Available by clicking here.
3 Gold, et al. at 39-41.
4 Id. (It is significant to note, at the time of formation, “Myriad did not hold any patents, often considered as essential to attracting money from private investors to biotechnology companies.” What it did possess, however, was access to a database containing nearly 200,000 Mormon family groups, 40,000 of which were “cross-linked entries”. This was sufficient to convince Eli-Lilly (a pharmaceutical company) to significantly fund the project in exchange for “rights to develop any future therapies involving BRCA 1.”)
5 Id.
6 Id. at 42.
7 Including the Public Patent Foundation at the Benjamin N. Cardozo School of Law.
8 Myriad acquired multiple patents for each gene. For BRCA 1 alone it acquired eight patents, the last two of which gave Myriad the exclusive right to all commercial and research uses pertaining to the gene, both in the actual genetic sequence and identification thereof. ( See Gold, et al. at 41)
9 Susceptibility in this instance is identified if a patient is found to possess mutations that suggest a hereditary possibility of developing breast or ovarian cancer.
10 Article 1 § 8, Clause 8 of the Constitution provides that Congress has the power “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries”.
11 35 U.S.C.S. § 101-102 provides statutory guidance for the interpretation of what constitutes a patentable invention or discovery.
12 § 101 “requires determining: 1) whether the claimed invention possesses utility; and 2) whether the claimed invention constitutes statutory subject matter, that is, whether it is a process, machine, manufacture, or composition of matter, or any new and useful improvement thereof…” Molecular Pathology v. USPTO, 2010 U.S. Dist LEXIS 30629, 107.
13 Id. at 118.
14 The Constitutional issue neglected was the question of First and Fourteenth Amendment rights, not Article 1 § 8.
15 “If a case can be decided on either of two grounds, one involving a constitutional question, the other a question of statutory construction or general law, the court will decide only the latter.” Id. at 110.
16 Also known as the University and Small Business Patent Procedures Act, 35 U.S.C. § 200-211 (2010).
17 See Diamond v. Chakrabarty , 447 U.S. 303 (1980).
18 Gold, et al. at 39.
19 That is, patients, clinicians, researchers, and the general public; the advent of genetic patents resonated with the general public as it seemed to dehumanize and devalue human life, while patients and professionals continue to be wary of the implications of so closely interweaving commercial compulsions with medicine.
20 But see Ariad v Eli Lilly, 560 F. 3d. 1366 (Fed. Cir. 2009) (in which the court invalidated a patent upon a messenger protein), and In re Kubin, 561 F. 3d. 1351 (Fed. Cir. 2009) (in which the court invalidated a patent upon identifier polynucleotides).
21 Gold, et al. at 39.
22 Id. at 46.
23 Id.
24 I.e. lifestyle changes, double mastectomy, removal of the ovaries, and/or administration of tamoxafin. Id. at 51.
25 This has been one of the major criticisms of Myriad, in that the test alone provides little guidance as to actions a patient might take. Though Myriad acknowledge the need for trained counselors and prepared primary care physicians to discuss the implications of the test, it found itself unable to accommodate that need and therefore abandoned the project to do so. (Gold, et al., at 46).
26 “Before Myriad cloned BRCA 1 and BRCA 2, genetic testing was generally offered within academic medical centers and, so, was only available to families participated in research studies under the scrutiny of ethics committees. Even those private companies at the time limited their availability.” Id.
27 Id..
28 Id at 47-48. Some of Myriad’s other business practices contributed to the accusation that it was motivated by profit instead of patients – particularly, the controversial use of direct-to-consumer advertising for genetic testing.
29 Id at 46. The harm may be tangible (i.e., insurance discrimination as the result of a positive test) and intangible (i.e. emotional distress in the form of fear, anxiety, false sense of assurance, or even guilt in response to either a false or positive test),
30 “Before Myriad’s entrance into the field, advertising for the test was limited. … only 11% of practitioners reported learning of the BRCA 1 and BRCA 2 test through lay media, whereas 54% learned about them through academic journals and 47% through conferences.” Id.
31 “…Myriad, its patents, and business strategy … became an easy example of what could go wrong is patent holders did not act responsibly. Even industry froups shunned Myriad’s practices, arguing that Myriad did not represent the bulk of companies working in the biotechnology field.” Id. at 57.
32 The judiciary has of previously intervened to radically change medical industry norms when the benefits of doing so were great for patients, and posed little cost to practitioners. See Helling v. Carey, 83 Wn.2d 514 (Wash. 1974) (wherein the court ruled against ophthalmologists who did not administer a glaucoma test in a timely fashion due to industry norms that proscribed glaucoma testing only for those over 40, resulting in the 32 year old plaintiff’s blindness. The court reasoned that, due to the low cost and high accuracy of glaucoma testing, it should be administered upon every eye examination.)
33 Two notable bills were introduced and rejected in 2002: the Genomics Research and Diagnostic Accessibility Act, and the Genomic Science and Technology Innovation Act. ( Id. at 49)
34 Lin, Annette, et al. “ The Bayh-Dole Act and Promoting the Transfer of Technology of Publicly Funded-Research: UAEM White Paper on Indian Bayh-Dole Analogue”. Universities Allied for Essential Medicines; updated and revised 4/22/2010, pp. 1-12. http://essentialmedicine.org/archive/uaem-white-paper-indian-bayh-dole-bill-revised-april 22-2010
35 Similarly, private funding became more likely available if a patent was obtained. Id. at 4.
36 Myriad was criticized for its apparent willingness to “block scientific research to return a profit.” (Gold, et al. at 44).
37 “Given that research and innovation exist within complex environments involving universities, public and private funding of research, different health care systems, and education systems, it is highly unlikely that we will ever have a clear answer to the question of how patents actually work to increase or decrease research, commercialization, and access. Therefore, premising policy action on decisive evidence is a futile quest and, indeed, may simply be a cover for ideology, inertia, or political weakness.” Id. at 66.
38 Chandrasekharan, Subhashini, et al. “Impact of gene patents and licensing practices on access to genetic testing for cystic fibrosis”. Genetics in Medicine; April 2010 Supplement, Vol. 12. No. 4, pp. 194-211. Pp. 196. (This article further details how the nucleus of research surrounding cystic fibrosis is a model for effective and responsible patent and licensing practices that have produced tangible results.)
39 Multiple other case studies were produced for Vol. 12, No. 4 of Genetics in Medicine “at the behest of the Secretary’s Advisory Committee on Genetics, Health, and Society, a Federal committee whose charge is to provide advise and recommendations to the Secretary of Health and Human Services.” Evans, James. “Putting patients before patents”. Genetics in Medicine; April 2010 Supplement, Vol. 12 No. 4, pp. 3-4. Other case studies available at: http://journals.lww.com/geneticsinmedicine/toc/2010/04001.
40 Lin, et al. at 1-3.
41 In the instance of Europe, Myriad’s patents were severely limited, and its presence prompted the OECD due to its credibility amongst inter-governmental organizations, to work through “soft law” so as to recommend “guidelines that would not be binding in the way that a new treaty would be” regarding the clash between Myriad’s business practices and European health care concerns. (Gold, et al. at 65).
42 In the instance of Canada, Myriad’s action incited broad public resentment for its practices that led to an intensified discussion of federal-provincial regulation and dissemination of health care services. ( Id. at 24-29, 21).
43 Gold, et al. at 45. Myriad would enter a foreign market, license to a company therein for local testing (the results of which were ultimately evaluated by Myriad in Utah), and then “force patients to send their tissues to Myriad, allowing Myriad to collect annotated DNA samples that would give it unfair advantage over potential competitors in discovering cures. … This would provide the company with the only viable database containing breast and ovarian cancer data, thus giving Myriad a large advantage in conducting further work in developing medicines to treat these cancers.” However, it should be noted that Myriad denied any such intention to create a comprehensive and exclusive database.
44 There is very little case law pertaining to the Act, and that which does exist does not address the propriety of the Act nor its effect on medical research and development. See University of Rochester v. G.D. Searle & Co., 358 F.3d 916 (Fed. Cir. 2004) (wherein the court held that the Act did not bear upon how courts determine subject matter’s patentability).
45 This is not to suggest that any decision upon possible appeal will not be significant to a more targeted discussion of whether or not living organisms are patentable.

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