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Patent attorney frets that Supreme Court gene-patenting case will end badly for drug companies

The Supreme Court will soon decide whether human genes can be patented. One prominent patent attorney said it does not look good for the company and the industry.

Mercedes K. Meyer is a Washington patent attorney, with a Philadelphia connection, and is board member of the American Intellectual Property Law Association. She is also worried that Monday or later in June, the Supreme Court will rule against Myriad Genetics in a much-followed case with the very succinct question: "Are human genes are patentable?"

A Bryn Mawr College graduate, Meyer and the AIPLA wish the nine Supreme Court justices had chosen a different question or framed the discussion differently.

"It's like asking, 'Are you still beating your wife,' " Meyer said Friday. "The headline is going to be, 'Human genes are not patentable.' Based on the nature of the question, that's what we expect the announcement to be."

The case is Association for Molecular Pathology v. Myriad Genetics, Inc., 12-398. It is one of three cases involving pharmaceutical or healthcare diagnostic companies awaiting decisions by the Court before it completes the current term at the end of June. Decisions are usually announced on Mondays, but the Court might issue decisions Thursday of this week, too.

The other two pharmaceutical cases still pending are Mutual Pharmaceutical Co., v. Bartlett, 12-142, and Federal Trade Commission v. Actavis Pharmaceuticals, 12-416. (Note: Watson Pharmaceuticals was originally the first defendant in the second suit, but Actavis bought Watson earlier this year, so litigation passes to Actavis.)

Mutual used to be a private, stand-alone Philadelphia company founded in 1947. But since the case began, it was sold to Takeda Pharmaceuticals and then Sun Pharmaceuticals, so Sun inherits the ligation. The case involves whether federal law regarding FDA rules supersede a patient's ability to sue a generic drug company for product design in state court.

The FTC-Actavis decision is also much anticipated in the drug industry because the Court is deciding whether branded companies paying generic companies, as part of patent lawsuit settlements, violates antitrust law because it can delay when generic drugs get to market.

In Myriad, the Salt Lake City-based company was granted patents for two genes, BRCA1 and BRCA2, whose mutations can serve as indicators that a woman has greater risk of breast and ovarian cancer. As Myriad is quick to note, thousands of researchers have studied the gene since the patent was issued. But because Myriad controls the patent on the genes, the company is the only one allowed to make money from tests to determine the likelihood of those cancers. The tests can cost $3000. An earlier Inquirer story setting up the oral arguments is here.

Led in the litigation by the American Civil Liberties Union, a group of plaintiffs filed suit in federal court in New York. The original group had researchers, including two from the University of Pennsylvania, patient organizations and six women, including one from Williamsport, with breast or ovarian cancer or family history of it. The plaintiffs said Myriad's patent-provided monopoly on the genes has stifled research that would lead to cheaper tests and harmed patient health because there is no second source for testing.

Meyer's firm, Drinker Biddle & Reath LLP, has a big Philadelphia office and represents many pharmaceutical companies.

AIPLA filed an amicus brief, which is here, via the American Bar Association web site, hoping the appeals court decision supporting Myriad is upheld or affirmed. Usually, an amicus brief states at the beginning which side is being supported. A sign of AIPLA's dislike for situation is reflected on the first page, where a subtitle says, "The brief for the American Intellectual Property Law Association in Support of Affirmance but in Support of Neither Party."

Meyer said the AIPLA's concern is that with so simple a question, the Justices might not give weight to the complexity of patent law, the years of Patent Office guidance followed by companies and the very technical work done by Myriad to separate the genes from tissue.

But the problem, she said, is that the circumstances of this case don't help pharma, device and diagnostic companies. She said Myriad was "rigid" in its licensing practices. If it had been a little more friendly, it could have still made money, but avoided the possibility of a negative, precedent-setting ruling.

"There is one solo bad guy, a bad case, a bad actor and bad law - possibly - and it could produce a result that hurts an industry as a whole," Meyer said, referring to the expected adverse opinion.

Myriad threatened legal action (and created antipathy) by sending cease and desist letters to other researchers using the genes to develop other tests. Most of the company's revenue comes from this test.

Do you wish Myriad had not been so "rigid" in not licensing its patent for others to use?

"Myriad was trying to follow its business model, whether it was naive or not," Meyer said. "I don't know if it would have changed things. A lot of industry people went to Myriad and said just abandon the case, but they didn't listen to industry leaders."

Meyer did not specify the industry leaders that approached Myriad.

The Pharmaceutical Research and Manufacturers of America is the lobbying arm of Big Pharma and it filed an amicus brief in support of Myriad because its members hold lots and lots of patents. A link to PhRMA's brief is here. As a diagnostic company, Myriad Genetics is not a member of PhRMA. A PhRMA spokeswoman declined comment on whether the organization had urged Myriad to drop its case.

Myriad, incidentally, licensed some of the technology itself, from the University of Utah.

"When pharmaceutical companies discover a new drug or new medicine, they are entitled to patent protection for the life of the patent and we feel we're entitled to that as well and that we're well within our rights," Myriad spokesman Ron Rogers said.

As for people in the life sciences industry urging Myriad to abandon its legal case and not risk setting a bad precedent for the industry, Rogers dismissed the suggestion.

"That's water under the bridge," Rogers said.

Meyers said the question as posed gives people fear that that someone else could own their genes.....or liver....or kidney....or whole body.

"There is no Frankenstein factor," Meyer said, hoping to dispel that idea.

But when it comes to Supreme Court precedent, Meyer has a fear and it's called Mayo Collaborative Servs. v. Prometheus Labs., Inc., 10-1150.

The Myriad case is at the Supreme Court for the second time. In March, 2012, the Supreme Court vacated a decision in favor of Myriad by the U.S. Court of Appeals for the Federal Circuit, sending the case back to the appeals court to reconsider in light of the Supreme Court's decision a week earlier in Mayo.

The Mayo case was similar in that Prometheus Labs was a diagnostic company that claimed the Mayo Clinic was infringing on its patent for diagnosing a situation.

Prometheus lost badly. As badly as possible, 9-0.

Justice Stephen Breyer wrote the opinion for the unanimous court and a link to the opinion is here.

Breyer wrote of the long-standing Supreme Court precedent that "laws of nature, natural phenomena, and abstract ideas" are not patentable subject matter. And he turned back Prometheus' claim - later adopted by Myriad - that to not support Prometheus' patent claim would hinder researchers because they would not think it worthwhile to do work if they couldn't patent the work.

"Upholding the patents," Breyer wrote, "would risk disproportionately tying up the use of the underlying natural laws, inhibiting their use in the making of further discoveries."