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High Court Mulls Taking Up Diagnostic Patent Eligibility Fight

Feb. 26, 2021, 10:45 AM

A U.S. Supreme Court case over Illumina Inc.’s fetal DNA test patents gives the justices a chance to solidify a road map for how biotech companies can protect their diagnostic inventions.

The high court will have to decide whether to review a ruling by the U.S. Court of Appeals for the Federal Circuit that claims in a patent on detecting fetal DNA in a mother’s bloodstream “are not directed to that natural phenomenon but rather to a patent-eligible method that utilizes it.”

The decision, if allowed to stand, provides a playbook for saving diagnostic patents that could otherwise be found invalid, attorneys say. The case also fits into an ever-increasing body of case law on patent eligibility that critics say was muddled by the Supreme Court itself.

The case “tees up for the court a real quintessential problem,” said Kevin Noonan, chair of McDonnell Boehnen Hulbert & Berghoff LLP’s biotech & pharmaceuticals group.

“Everything in chemistry and biology is based on laws in nature and natural phenomenon. To draw the boundary as broadly as the Federal Circuit has done is a problem for innovation,” Noonan said.

Roche and its Ariosa Diagnostics Inc. unit urged the justices to undo the decision, arguing in a Supreme Court petition that it runs afoul of case law and “creates a back door to the effective patenting of human DNA, presenting serious ethical and scientific issues.”

The Supreme Court distributed Ariosa’s petition for a conference on Friday. The justices subsequently requested that Illumina file a reply brief, which is due April 19.

Diagnostic Benefit

Illumina sued Ariosa and Roche in the U.S. District Court for the Northern District of California for infringing its patents with a prenatal test. The defendants in turn moved for summary judgment, alleging that the patent claims were ineligible for protection. The district court granted the motion.

The Federal Circuit revived the patents and held that Illumina could pursue its lawsuit. Case watchers say that decision, if upheld, provides some guidance on what could be patented in the diagnostics space.

“If you are in the DNA sequencing or isolating or comparison space, like Illumina, then you will have a patent eligible way to claim inventions if this holds up,” said Kevin Buckley, founder of the Torrey Pines Law Group and a biotech specialist. “It’s a different way of patenting and excluding competition in a certain space.”

Patents can prove critical in the world of biotech. For a small biopharmaceutical startup, for example, a defensible patent can help get to a next funding round, Buckley said, “Are investors going to see you as a safe investment if you can’t protect your intellectual property?”

There are benefits for big pharma as well, according to Buckley, where “it’s all about lawsuits.”

“If you have a patent, you’re going to be able to sue your competition and stop them from crossing over into your revenue,” he added.

‘Quintessential Problem’

Attorneys say that the Federal Circuit’s decision, while providing diagnostic companies a road map for protecting inventions, is at odds with Supreme Court precedent on patent eligibility.

In Association for Molecular Pathology v. Myriad Genetics, Inc., the Supreme Court in 2013 deemed “a naturally occurring DNA segment” a product of nature that can’t get patent protection just for being isolated.

“The Myriad decision and then everything that’s come after it have really gutted a lot of diagnostic inventions,” MaryAnne Armstrong, a partner at Birch, Stewart, Kolasch & Birch, said.

“Since Myriad, companies have been trying to find alternative claim language to cover their technology and still get something that’s patentable in the opinion of the court,” she said.

Ariosa argues the Federal Circuit not only evaded Myriad in upholding Illumina’s fetal DNA testing patents, but that it “tried to dodge” its own 2015 precedent in Ariosa Diagnostics, Inc. v. Sequenom, Inc. In that case, the Federal Circuit found patent claims involving the amplifying of maternal blood samples of fetal DNA for diagnostic purposes couldn’t be patented.

Illumina “creates a roadmap for patent drafters to evade Myriad and Ariosa by drafting isolated DNA claims as methods for isolating DNA, and by drafting diagnostic claims as ‘method of preparation’ claims,” Ariosa argued in its petition.

Continuing Confusion

The Illumina case fits into a broader fracas over Section 101 of the Patent Act, which defines what inventions are eligible for protection. That section has baffled courts, lawmakers, and businesses alike.

Congress flirted with the idea of a legislative fix in 2019, with Sens. Thom Tillis (R-N.C.) and Chris Coons (D-Del.) bringing together stakeholders from various industries only for conversations to grind to a halt.

The Federal Circuit’s decision “exacerbates the continuing confusion regarding the scope and proper application of Section 101 to DNA-based diagnostic patents,” Ariosa said.

Many in the patent space contend the Supreme Court has upended the patent system via two decisions—2012’s Mayo Collaborative Servs. v. Prometheus Labs., Inc., and 2014’s Alice Corp. v. CLS Bank—that laid out a two-prong test on what inventions are eligible for protection.

The first part of that test asks whether a patent claim covers a concept that is ineligible for protection—a law of nature, a natural phenomenon, or an abstract idea. If it does, the second part asks whether something in the claim transforms it into an eligible application of that concept.

The Illumina case is “probably the most important since the original Mayo case, and certainly as important for biotech as compared to Alice,” said Buckley.

“It is big. The more we can distinguish the inventiveness of biotech inventions vs. computer inventions, the better,” he said.

The case is Ariosa Diagnostics, Inc., et al., Petitioners vs. Illumina, Inc., et al., U.S., No. 20-892, Distributed for Conference 1/26/21.

To contact the reporter on this story: Ian Lopez in Washington at ilopez@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloombergindustry.com; Alexis Kramer at akramer@bloomberglaw.com; Meghashyam Mali at mmali@bloombergindustry.com

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