Header graphic for print
Trading Secrets A Law Blog on Trade Secrets, Non-Competes, and Computer Fraud

In Setting Genes Free, Supreme Court Decision Will Put Greater Emphasis on Trade Secret Protection in Biotech

Posted in Trade Secrets

In a decision awaited with considerable trepidation by the biotech world, among others, the Supreme Court Thursday (June 13) handed down its unanimous decision (9-0) in Association for Molecular Pathology v. Myriad Genetics, Inc. The Court held “that genes and the information they encode are not patent eligible… simply because they have been isolated from the surrounding genetic material.”

Myriad discovered the precise location and sequence of what are known as the BRCA1 and BRCA2 genes. That information in turn enabled Myriad to develop medical tests useful for detecting mutations in patient’s genes, and therefore determine likelihood for certain cancers.  Myriad obtained patents directed to “an isolated DNA coding” for those genes. Other Myriad patent claims were directed to “complementary DNA,” called “cDNA,” which omits portions of the genetic sequence within the naturally occurring DNA.  Plainly stated, cDNA is a synthetic creation not present in nature.

As to the naturally occurring DNA patent claims, the court held “[i]t is undisputed that Myriad did not create or alter the genetic information” encoded in the naturally occurring genes. Determining the location and order of the nucleotides merely discovered what existed in nature. “[S]eparating that gene from its surrounding genetic material is not an act of invention,” Justice Thomas wrote for the Court. To hold otherwise “would be at odds with the very point of patents, which exist to promote creation.”

What this means is that a company willing to expend the substantial time and millions dollars, if not tens or hundreds of millions, in seeking to discover some aspect of genetic coding that may, or may not, yield a useful product or treatment, will need to think harder about keeping that discovery secret. The Supreme Court decision takes the heart of the target search- -the isolated gene for instance–and dedicates it to the public, if exposed, as would occur in a patent disclosure. A company therefore may consider commercializing the basic discovery in some form but retaining it as a trade secret (if the commercialization does not itself reveal the discovery).  

As to the cDNA (i.e. synthetic creation) patent claims, the Court had little difficulty affirming their patent eligibility. “[T]he lab technician unquestionably creates something new when cDNA is made.” Therefore, it is not a product of nature.

The Court acknowledged that the case did not involve method patents on “new applications” of knowledge about mutated genes or gene sequences that have diagnostic or therapeutic value.  The Court noted in its decision that “as the first party with knowledge of the BRCA1 and BRCA2 sequences, Myriad was in an excellent position to claim applications of that knowledge.”  Myriad’s patent claims to new applications of knowledge about mutated genes remain viable, as they were not challenged.

The concurring opinion of Justice Scalia also highlights what may be considered a drawback of the patent system. His one paragraph concurrence, in essence, states that he really did not understand any of the molecular biology going on, but nonetheless felt the decision sounded right. Jurists untrained in technology, let alone cutting-edge technology, are called upon to make critical decisions on patentability, and judges freely admit the difficulties they face in grappling with some technologies. Trade secrets, on the other hand, rarely see the light of day in a courtroom as to protectability of the technology itself under trade secret law.

Justice Thomas concluded the majority opinion, saying “[i]t is important to note what is not implicated by this decision.”  First, he noted, method claims were not involved, which could, for instance “involve an innovative method of manipulating genes while searching for” a  particular gene. Nor does this case “involve patents on new applications of knowledge about” some gene discovery. Further, the Court  did “not consider the patentability of DNA in which the order of the naturally occurring nucleotides has been altered.” The latter may not be viewed as naturally occurring.   “We merely hold that  genes and the information they encode are not patent eligible under §101 simply because they have been isolated from the surrounding genetic material.” Whether any of the foregoing would also pass muster under the patentability standards of novelty and unobviousness was likewise not before the Court. This bundle of potentially patentable spin-offs from the basic discovery will have to be weighed against the prospect of keeping the fundamental discovery a secret, as a patent directed to such an application of the isolated gene would invariably require the disclosure of the isolated gene itself.

The decision is being viewed by many as something of a victory for  both sides. Myriad lost its isolated DNA patent claims, but maintained its patent coverage on the non-naturally occurring cDNA and its unchallenged claims directed to methods of using genetic sequences to aid in the diagnosis and treatment of diseases.  cDNA, the synthetic creation not present in nature,  is becoming increasingly important in experimentation, testing and the evolving use of synthetic DNA sequences for novel therapeutics.  On the other hand, the victory for the parties opposing Myriad is that isolated DNA may have been freed as unpatentable subject matter by today’s decision, for anyone to use and build upon such discoveries. New and unobvious methods and applications that surround those discoveries, and clearly changes made to that isolated DNA not found in nature,  remain as fertile ground for possible patent protection.