Jurisprudential and Economic Justifications for Gene Sequence Patents

• Publication year: 2021
• Citation: Vol. 90

90 Nebraska L. Rev. 196. Jurisprudential and Economic Justifications for Gene Sequence Patents

Matthew Poulsen, Ph.D.(fn*)

Jurisprudential and Economic Justifications for Gene Sequence Patents

TABLE OF CONTENTS

I. Introduction.......................................... 197

II. Clarifications and Scientific Background............... 201

III.Legal Background..................................... 204
A.Products of Nature Doctrine.......................205
B.Natural Extracts Doctrine.........................206
C.Heightened Utility Standard.......................209

IV.Association for Molecular Pathology v. United States Patent AND Trademark Office ........................... 211
A.Product of Nature Analysis - BRCA1 and BRCA2 .. 213
B.Law of Nature - BRCA1 and BRCA2.............. 219
1.Isolated Gene Sequences Are Not Embodiments of the Laws of Nature ......................... 219
2.BRCA1 and BRCA2 Patents Do Not Preempt Genetic Code .................................. 221

V.Incentive Theory...................................... 223
A.Prospect Theory ................................... 224
B.The Tragedy of the Anticommons .................. 227
C.Evidence for the Anticommons ..................... 229
D.Trade Secret and Contract Law.................... 233
E.Mitigating Measures Available to Congress ........ 234
1.March-In Rights............................... 235
2.Experimentation Defense ...................... 236

VI. Conclusion ............................................ 237

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I. INTRODUCTION

With the recent decision in Association for Molecular Pathology v. United States Patent AND Trademark Office(fn1) (AMP), the attack on the genetics patent regime has reached a crescendo. While the ruling in AMP was startling to most in the genetics industry,(fn2) pressure from critics of gene sequence patenting has been building for the last decade. Concerns raised by gene sequence patenting opponents are summarized in Michael Crichton's statement in the New York Times, in which he boldly stated:

You, or someone you love, may die because of a gene patent that should never have been granted in the first place... . Gene patents are now used to halt research, prevent medical testing and keep vital information from you and your doctor. Gene patents slow the pace of medical advance on deadly diseases. And they raise costs exorbitantly ... . [b]ecause the holder of the gene patent can charge whatever he wants, and does... . The gene may exist in your body, but it's now private property.(fn3)

If true, Crichton's claims would certainly cast a dark light on the practice of genetics patenting. Statements such as Crichton's are currently in vogue, and support of such sentiments is gaining momentum even at the policymaking level. In 2007, at the urging of Crichton, Congressmen Xavier Becerra and Dave Weldon introduced the Genomic Research and Accessibility Act (GRAA).(fn4) The GRAA, if passed, would have established that "no patent may be obtained for a nucleotide sequence, or its functions or correlations, or the naturally occurring products it specifies."(fn5) Although the GRAA did not move out of committee, its breadth was startling. Based on the plain language of the bill, it not only would ban the patenting of gene sequences themselves, but also would potentially ban the patenting of methods derived from gene sequences.(fn6)

Undeterred by the 2007 GRAA failure, the American Civil Liberties Union (ACLU) pushed forth in AMP, alleging that patents held by Myriad Genetics pertaining to the BRCA1 and BRCA2 gene sequences, associated with hereditary breast and ovarian cancer, are

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patent ineligible because they cover "products of nature, laws of nature and/or natural phenomena, and abstract ideas or basic human knowledge or thought."(fn7) The AClU further claimed that the Myriad patents create a monopoly that inhibits research, limits women's healthcare options, and is unconstitutional.(fn8)

Judge Robert W. Sweet of the Southern District of New York surprised nearly all those in the genetics community when he found Myriad's patents ineligible under section 101 of the U.S. patent statute.(fn9) Noting the unique information-carrying character of gene sequences, Judge Sweet departed from the traditional products of nature analysis and, instead of focusing on physical and functional differences, based his decision on the commonality of the information carried on the native DNA and Myriad's CDNA sequences.(fn10)

Only days after the AMP ruling, echoing the allegations made by the ACLU, Congressman Becerra rejoined the fray by pronouncing that he would "once again introduce legislation banning gene patenting to ensure patients' access to their own medical information, reduce the costs of gene tests and increase scientific research into personalized medicine."(fn11) Moreover, in his proposed 2010 version of the GRAA, Becerra reportedly seeks to expand the 2007 version by extending the proposed prohibition on gene patenting to all species, including animals and plants.(fn12)

As expected, Myriad has filed a notice of appeal with the District Court for the Southern District of New York, thus bringing the gene sequence patent question before the Court of Appeals for the Federal Circuit (CAFC).(fn13) While the CAFC has not yet weighed in on the matter, the United States Department of Justice (DOJ) surprisingly filed an amicus brief with the CAFC.(fn14) In its brief, the DOJ has taken a

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middle ground by stating that genetic patents that require both isolation and alteration should receive the benefit of patent eligibility, while those patent claims directed merely at isolation of genetic material should be denied such protection.(fn15) Specifically with respect to the Myriad patent claims, the DOJ asserts that patent claims directed at complimentary DNA, discussed further herein, require both isolation and alteration of naturally occurring genetic material, thus rendering the Myriad patent claims eligible for patent protection.(fn16) In contrast, the DOJ opposes patent eligibility of patent claims directed at genomic DNA, which the DOJ asserts merely amounts to isolating the genomic DNA from the human body.(fn17)

A number of economic theorists have analyzed the usefulness of the genetics patenting regime as an engine for innovation.(fn18) Many critics have pointed to the increased patenting activity in "upstream" areas of the biotechnology industry as reason for concern, suggesting that over-appropriation of upstream subject matter could lead to a tragedy of the anticommons,(fn19) resulting in a stifling of "downstream" product and diagnostic development.(fn20) Most of these theoretical claims, however, fail to recognize aspects of reality which act to mitigate the anticommons effect, such as the inertia required for a patentee to impose his exclusive right on an academic researcher,(fn21) the large amount of upstream subject matter controlled by publicly funded agencies,(fn22) and the fact that the U.S. Patent and Trademark Office (USPTO) and the courts have drawn a line demarking non-appropriable upstream subject matter by essentially banning patents on express

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sequence tags (ESTs).(fn23) Much in the same way non-zero transaction costs in the real world cause social efficiency to fall below idealized Coasian levels in a private property regime,(fn24) costs of patent enforcement can inhibit the emergence of the tragedy of the anticommons.(fn25) Indeed, empirical studies suggest that the anticommons concern is largely exaggerated, as only a very small percentage of researchers indicate that licensing requirements or the existence of patents impact their activities.(fn26)

Unfortunately, much of the outcry which has seemingly driven the ACLU's course of action in AMP is based on the assumption that gene patents inhibit research and make medical care more expensive.(fn27) While gene patents, just as any other class of patents, provide a limited right of exclusivity to the patentee, temporarily restricting a competitor's access to related subject matter, critics overlook the positive aspects of patent protection, namely private investment and the resulting advances in technology. Irrespective of the outcome in AMP, the continued use of gene sequence patenting as a tool in the United States' innovation policy should not hinge on hyperbole. Rather, the future of gene sequence patents should be based on (1) whether gene sequence patents meet the technical and legal requirements of patent eligibility under section 101 of the patent statute, and (2) whether gene sequence patents hinder or stimulate innovation in the biotechnology industry.

While statements such as Crichton's and Congressman Becerra's are currently fashionable,(fn28) it is important for the courts, lawmakers, and the public to appreciate the full implications of abandoning the gene patenting regime. Just as a truly malfunctioning gene patenting regime would certainly lead to detrimental effects felt by researchers and patients, abandoning a functioning regime would have an equally negative impact. If gene patents do, in fact, provide more societal benefit than cost, then "[y]ou, or someone you love, may die"(fn29) because biotechnology firms were unable to attract the capital necessary to bring to the market the fruits of their ground-breaking genetics research.

Part II of this Article introduces the...