The Myriad Decision: A Move toward Trade Secrets?

BY CHRIS PALMER, NCI

Are genes patentable? In June 2013, the U.S. Supreme Court, ruling on the case Association for Molecular Pathology v. Myriad Genetics, Inc., answered that question with a resounding “No.”

The unanimous ruling on the case, in which doctors, patients, and medical associations sued biotech firm Myriad Genetics to challenge its patents on two human genes, BRCA1 and BRCA2, has been viewed as a potential turning point for the biotech industry’s thinking about intellectual property (IP) protection. A discussion of the fallout from the landmark case, and how various players in the research community may react to it, was the basis of the NCI-hosted Ethical and Regulatory Issues in Cancer Research (ENRICH) Forum in November.

Leading the ENRICH Forum, entitled “The Myriad mire: Patents and trade secrets in the age of the genome,” were Mark Rohrbaugh, director of NIH’s Office of Technology Transfer, and Eleonore Pauwels, public policy scholar at the Woodrow Wilson International Center for Scholars (Washington, D.C.). Rohrbaugh, who participated in discussions about a “friend of the court” brief detailing the federal government’s position on the case, discussed the background and logic behind the Supreme Court’s decision, whereas Pauwels laid out the business, ethics, and policy implications of the ruling.

Between 1997 and 1998, researchers at Myriad Genetics and the University of Utah (both based in Salt Lake City) and NIEHS were granted patents for the BRCA1 and BRCA2 genes. (Note: NIH was not included in the BRCA2 gene patent.) Mutations in the genes have been associated with a predisposition to breast and ovarian cancers, making diagnostics based on the genes important for the health of millions of women worldwide.

Though nearly 4,000 gene-related patents have been issued in the past three decades, Myriad had been particularly fervent in protecting its patents, ensuring that the company was the sole source of diagnostic tests for the BRCA mutations. This strategy created controversy on several fronts: Myriad’s test was costly; the test sometimes failed to detect some mutations in patients because not all alleles were tested initially; and Myriad did not share its database of BRCA gene variants with the medical research community.

The U.S. Supreme Court ultimately ruled in June 2013 that isolated human genes cannot be patented, declaring, “A naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated.” However, the justices also ruled that synthetic DNA sequences—known as complementary DNA (cDNA)—are eligible for patent protection, leaving room for biotech firms to profit from genetics research. At the time of the ruling, NIH Director Francis Collins said in a statement, “The decision represents a victory for all those eagerly awaiting more individualized, gene-based approaches to medical care.”

In an attempt to explain Myriad’s choice to patent the BRCA genes, Rohrbaugh outlined two general strategies companies use to protect IP. A company can obtain a patent in exchange for making public a written description of how to make its invention, as well as demonstrating that it is novel, nonobvious, and not a product of nature. The trade-off is that the patent is only enforceable for 20 years. Alternatively, the company can declare its invention a trade secret—for example, Google’s search algorithm—indefinitely and hope nobody uncovers the secret to create a similar product. (For technologies based on genome sequences, all of which are now publicly available, this should not pose a serious problem to the development of gene sequence-based tests.)

Rohrbaugh said that even though the Supreme Court’s decision will mean less expensive tests for breast and ovarian cancers, the ruling could have long-term effects on biotech innovation. Paraphrasing the American Intellectual Property Law Association, he said, “Without genomic DNA being patentable, it may throw into question protection for important technology that’s critical to improving public health. The decision may even backfire on its proponents, leading to increased secrecy in research and reduced collaboration.”

According to Pauwels, the Supreme Court decision on Myriad could make the trade-secret route look more attractive to the biotech industry, including to Myriad itself. She quoted a 2011 New York Times piece in which Myriad’s chief executive, Peter Meldrum, said, “If I had my druthers, I would not want to go into a new market in a heavy-handed fashion, trying to enforce patents.” Instead the company would rather exploit its quicker turnaround time for testing as well as its vast database of gene variants, against which its patients’ DNA sequences are compared. Pauwels said this attitude is likely to be shared by other biotechs and that business models in a post-Myriad world may focus on keeping secret innovations regarding the peripheral aspects of gene discovery—analysis algorithms, sequencing technologies, and gene databases.

“You get much more into this area where the analysis or algorithm is key to determining the clinical utility of an invention,” said Pauwels. “Now you see companies relying on proprietary algorithms to protect their genetic tests.”

Pauwels also discussed the merits of making gene databases public, quoting a 2013 Nature article on the European Medicines Association’s viewpoint: “Putting clinical trial data in the public domain will make it more cost-effective to develop new medicines—for example by making sure one company does not run down a blind alley already mapped by another.” Pauwels then mentioned a handful of policies that could be put in place to ensure data sharing, including scientific journals creating and promoting voluntary public databases; FDA requirements for labs to share data as a condition of market approval of genetic tests; and insurer requirements that labs share data as a condition of reimbursement.

Rohrbaugh ended his portion of the forum by describing NIH’s best practices—first issued in 2005—for NIH-funded institutions wishing to license genomic inventions. He said patent seekers should avoid exclusive licensing—that is, allowing only a single company to produce a patented product—to the extent possible, unless doing so would provide commercial development incentives.

In addition, he recommended that patent seekers should always make sure they have the right to grant nonexclusive research-use licenses to lots of people rather than to a single company or lab. He further suggested setting up specific goals for the production and testing of therapeutics with definite timelines to facilitate the quick development of the licensed technology.

Such benchmarks would increase the likelihood that the patented invention is put to use improving people’s health and not gathering dust on a shelf.

For more information about the Office of Technology Transfer and inventions by NIH researchers, go to http://www.ott.nih.gov.