Dispute over DNA patent could upend biotech industry

It hasn’t attracted much attention yet, but a case making its way through federal court to a sure-fire date with the U.S. Supreme Court could obliterate the business models of biotech companies across the country.

The case, which pits the American Civil Liberties Union against Myriad Genetics & Laboratories, concerns whether Myriad can hold patents over two genes, BRCA1 and BRCA2, which the company uses to diagnose women with ovarian and breast cancer.

A U.S. District Court judge ruled in favor of the ACLU. But in a surprise move that rattled the biotech industry, the Obama Administration supported the ruling, reversing longstanding federal policy over intellectual property (IP) protection for DNA.

That worries people like Brian Dorn, an attorney with Merchant & Gould, a prominent Minneapolis-based IP law firm. If the ACLU prevails, Dorn warns, then thousands of patents currently owned by biotech firms would be invalid, throwing the industry into turmoil.

Venture capitalists fund only biotech startups with strong IP, Dorn said. Take away the patents, and companies won’t attract investors, he said.

Most things in the United States are patentable, with three limited exceptions: laws of nature, physical phenomena, and abstract ideas, such as a newly discovered mineral or plant. The ACLU argues that genes are naturally occurring substances and, therefore, not patentable.

But Myriad says it owns the rights to  BRCA1 and BRCA2 because the company essentially manufactured the genes by isolating specific pieces of DNA. In other words, BRCA1 and BRCA2 would not exist naturally without Myriad’s magic.

The federal judge sided with the ACLU, furthering reasoning that BRCA1 and BRCA2 were not patentable because the genes contain “information” found in nature.

But Dorn argues that ruling is flawed. That’s like saying an iPad can’t be patented because it contains free articles from the New York Times, he said. Isolated DNA has specific uses that are unique to its composition, Dorn said.

I suspect there’s something larger at play here, a kind of populist revolt against medical and biotech companies that seek to make money from treatments and technology that could benefit a lot of people. And the power keg that ignites that resentment is exploding healthcare costs.

In some ways, corporate medicine has itself to blame. Drug companies have not been especially astute at public relations, earning the wrath of American consumers, for example, by opposing greater access to cheaper generic medications from Canada.

Critics like Dr. Carol Elliott of the University of Minnesota have long charged the culture underpinnings of medical device and pharmaceutical research is corrupt, infested with ethical lapses, conflicts of interest and plain greed.

Dorn suggested Myriad also overreached by holding too strong of an intellectual property grip on the technology surrounding the BRCA1 and BRCA2 genes. Perhaps the ACLU’s case would be less sympathetic if there were more competition in that space, or Myriad had licensed the technology to other companies, he said.

The antipathy toward medical companies also has fueled the open-source movement in medicine. Like the Linux operating system or Mozilla Firefox browser use publicly available code, information and/or technology should be freely available to all to encourage innovation and scientific breakthroughs that would benefit mankind.

Perhaps there’s no better symbol for open-source medicine than something as uniquely inherent and personal as DNA, isolated or not.

I believe investors and companies, which provide a lot of capital and brainpower to groundbreaking research, should profit from their inventions.

But as Myriad’s case proves, patents and business models go out the window when we’re a protein strand away from curing or preventing diseases.