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The Case of Myriad Genetics: Should Companies Own Patents on Human Genes?

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After 30 years of companies patenting isolated genetic material, the US Supreme Court will decide this spring whether the practice is even legal.

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For 30 years, companies have been patenting human genes. Yes, the very genetic material of our bodies, of our DNA, albeit in isolated forms. For longer than that, debates have been incessant -- in the scientific community, between businesses, and in the courts -- over whether or not this practice is legal, let alone ethical. Earlier this month, an Australian court heard yet another case about the legality of gene patenting, ultimately defending the practice. This spring, media attention over the controversy will shift back to the US as a similar case (originally heard in the US District Court for the Southern District of New York) will be heard by the Supreme Court.

Last month, the Australian Federal Court ruled that isolated genetic material is patentable in Australia because the isolation involved requires skills and expertise that make it akin to manufacturing a product. In other words, the court ruled that human genes, if successfully isolated from their natural state, may rightfully be patented -- in this case, by Myriad Genetics (NASDAQ:MYGN). The company holds patents on BRCA1 and BRCA2 genes, which have been linked to hereditary breast and ovarian cancer. The patent means that Myriad Genetics -- and the Australian company it licenses the patents to, Genetic Technologies (PINK:GNTLF) -- have the exclusive right to run expensive tests for these particular genes, which is what caused Cancer Voices Australia and a breast cancer survivor named Yvonne D'Arcy to file a suit against Myriad Genetics. The case's outcome is good news for Myriad, but this spring, the US Supreme Court will hear a case on gene patenting and determine whether this practice is legal or not in the USA. The outcome could have very wide-reaching implications.

The History of Gene Patenting

The door for gene patenting was opened by the 1980 Supreme Court case Diamond v. Chakrabarty, in which a genetic engineer for GE (NYSE:GE), Anada Chakrabarty, won the right to a patent for a genetically engineered bacterium with the ability to break down crude oil. The argument against Chakrabarty, made by Sidney Diamon, the Commissioner of Patents and Trademarks, maintained that living organisms cannot be subject to patent. The engineer won the case when the Court ruled, after a 5 to 4 vote, that the organism had in fact been manufactured, writing that "the fact that micro-organisms are alive is without legal significance for purposes of the patent law."

Two years later, the first patent of a gene was issued to three scientists from the University of California at Berkeley who had isolated a recombinant DNA transfer vector that coded for the gene chorionic somatomammotropin. This patent would also result in legal problems, with allegations made that Genentech had stolen the patented vector and used it in the development of Protropin, a growth hormone intended for the treatment of dwarfism. That case wouldn't end until 1999, with a settlement.

After these first two landmarks, and with the monumental sequencing of the human genome, more and more patents were filed for genetic material. About 20% of human genes have been patented over the past 30 years.

The Case Against Gene Patenting

Arguments against gene patenting claim it is wrong both as a matter of science since it limits research, and as a matter of business since it limits innovation and opportunities that could be created by that research.

BRCA1 is a very useful indicator for scientist and doctors. In women who have the gene BRCA1, there is a 50% to 60% chance of developing breast cancer by the age of 70, while there is a 35% to 46% chance of developing ovarian cancer by 70. Obviously many women would want to know if they possess the gene, and therefore, a likelihood of cancer, and only Myriad and the companies it licenses to can conduct the test. Therefore prices are extremely high. (Myriad charges $3,500 for the diagnostic test.)

To understand what is at stake with the upcoming upcoming Supreme Court decision, I spoke with Dr. Diane Allingham-Hawkins, the Senior Director of Genetic Test Evaluation Program at the health care consulting firm Hayes, Inc. According to her, gene patents restrict who can do what kind of test, limiting the potential for beneficial research. Even though patents protect only isolated genetic material, and not that material in its natural form, for scientific research, it's only the isolated form that is useful. Only Myriad or a company it licenses the patent to can do any kind of legal research on BRCA1.

Allingham-Hawkins referred us to a 2012 US Court of Appeals for the Federal Circuit case, Association of Molecular Pathology et al v. US Patent Office et al, which began in 2009 and is the case that will be heard by the Supreme Court in 2013. One of the dissenting judges in 2012, Judge Bryson, employed a leaf analogy, comparing a gene that has been isolated from the human body to a leaf that has fallen or been removed from a tree. A leaf plucked from a tree is not patentable material, and as Bryson maintained, a gene should not be, either. Of course, this analogy discounts the expertise and labor required to successfully isolate a genetic material, but the point has resonated with bioethicists who fundamentally disagree with the practice of gene patenting, as well as genetic researchers and smaller companies who want to broaden their research and business.

Ethically, the question is simple: Should we be allowed to patent, to hold exclusive rights to a naturally occurring material, even if it requires a great deal of work to isolate for scientific purposes?

The Case for Gene Patenting

On the side supporting continued gene patenting are the major business interests that already benefit from its practice: biotech firms, pharmaceutical companies, patent attorneys, and intellectual property offices. With the $3,500 diagnostic test and all the research to which it has exclusive rights, Myriad obviously wants to contest any kind of change to the status quo. Banning gene patents would open the door to competition, which would mean lower prices for consumers, too.

A lot of work and capital investment goes into genetic research, and proponents argue that companies like Myriad Genetics should be rewarded for their efforts. Furthermore, argue gene patent supporters, ending gene patents might reduce the incentive to press onward with difficult genetic research. The free market argument says that the patents make innovation more common, which means treatments and preventive measures for serious diseases will also be more common. Patents create incentives for heightened investment in research, which raises the quality of that research, therefore offering greater benefits to society.

Another argument for continuing gene patenting? It's already been happening for 30 years. If the Supreme Court did rule against the Patent Office in the upcoming case, it wouldn't necessarily invalidate existing patents, but it would definitely make those patents difficult to enforce.

The Supreme Court Will Decide

On November 30, 2012, the Supreme Court agreed to hear the appeal of the Association for Molecular Pathology after the US Court of Appeals for the Federal Circuit ruled for the second time that genes could be patented. Oral arguments are scheduled to begin on April 15, 2013.

Though many countries won't honor patents for genes, including Canada, there has been no definitive, legal strike against the practice of patenting genes in the US or elsewhere. A decision against the US Patent Office in the spring could hurt major pharmaceutical companies and encourage a flourishing of genetic research. As Dr. Allingham-Hawkins told us, "If the US makes that decision, it will be a first; it will be a precedent."
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