Intellectual Property Cases Reshaping Biotech

Article excerpt

Intellectual property and patents are nowhere more fraught issues than in biotechnology. While biotech firms assert that patent protection is a strategic necessity if they are to support the vast R&D costs associated with advancing work in the field, ethicists, lawyers, and others consider the ethical and practical concerns of, for instance, allowing patents on individual human genes or DNA sequences. A series of recent and forthcoming rulings on high-profile intellectual property cases is throwing some long-accepted principles into doubt, and consequently raising the level of tension even further.

The upheaval began with the Supreme Court's decision in Bilski v. Kappos, released in June 2010. In what some observers have called "the most highly anticipated patent decision of all time," the Court declined to address the broader issues presented by the case, which centered around two issues: the patentability of intangible innovations such as business methods or software and the validity of the "machine-or-transformation" test (MoT) as the sole test of patentability for such intangible innovations. MoT, which a lower court ruled was the only valid measure of patentability for a process, says that a process must require a machine for completion or involve the transformation of one thing into another in order to be patentable.

While the opinion did not offer categorical rules to govern process patents, the Court did overrule the lower court's insistence on MoT as the sole valid test, deeming it only "a useful and important tool." As the Genomics Law Report noted wryly, "Other useful and important tools were not, however, identified." That said, the Court went on to uphold the Circuit Court's original rejection of Bilski's patent on narrow, case-specific grounds; the patent was vacated because, the Court argued, it sought to protect abstract ideas, which are not patentable on any grounds.

Bilski was not a biotech case; the plaintiff sought to patent a method for hedging risk in commodities trading. However, the decision had wide-ranging implications for biotech patents, which frequently involve processes rather than products. The logic of the MoT test applies as well to medical and diagnostic processes as to business methods. While the Court's argument regarding the patentability of processes did not help Bilski, it did give biotech companies some relief; many had feared that the Court would use the Bilski opinion to issue broad definitions and restrictions that might have invalidated existing patents and complicated IP protection for biotech innovations.

In fact, Bilski had immediate repercussions for two biotech cases. Having released the Bilski opinion, the Court immediately vacated two other cases, returning them to lower courts for reconsideration in light of Bilski. Prometheus v. Mayo and Classen v. Biogen IDEC were both returned. Classen is still under consideration, but the Federal Circuit Court handed down its new decision in Prometheus on December 17, 2010.

Perhaps unsurprisingly, given the vagueness of the Bilski opinion, the Circuit Court largely reaffirmed its initial decision, even reproducing in the revised decision passages from the original decision. The guiding ruling encouraged but did not require the consideration of patentability tests other than MoT; in that context, the Circuit Court chose to reiterate its original affirmation of Prometheus's patent. The company's process for monitoring drug levels in a patient's system and recommending dosage adjustments based on those measurements does not, the Court said, either "encompass laws of nature or preempt natural correlations," and so is patentable. Provided that the decision is not reversed by the Supreme Court on appeal, Prometheus potentially establishes patentability for a broad category of diagnostic methods.

In both decisions on Prometheus v. Mayo, the Federal Circuit Court invoked a very broad interpretation of MoT, arguing that "methods of treatment . …