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Monsanto v Cefetra EU Court of Justice Limits Scope of Patent Protection Available to Gene Sequences

A couple of years ago I posted an article (available here) discussing the case of Monsanto v. Cefetra. Essentially, in that case a European court held that Monsanto patents claiming the gene responsible for its Roundup Ready trait were not infringed by the importation of soy meal containing the gene, because the grinding of the soybeans to make the meal rendered the DNA incapable of expressing the encoded protein, and thus unprotectable pursuant to the 1998 European Union Directive on biotechnology.

On Tuesday, July 6, that decision was affirmed by the Court of Justice of the European Union. This is the highest judicial body of the European Union, so there will be no further appeals, and this would appear to be the final word on the subject. The decision was reported in an article posted on IPKat, a respected European IP blog, available here. I am no expert on European law, but here are a few thoughts on the significance of this case.

First, my interpretation of the decision.

In a nutshell, the Court of Justice held that although the so-called Biotech Directive, promulgated by the European Union in 1998, permits the patenting of naturally occurring DNA sequences, the scope of patent protection only extends to products incorporating the DNA if the DNA is capable of performing “the function for which it was patented." Applying this criterion to the facts of the case, the Court held that the patentable function of the gene at issue was to confer glyphosate (i.e., RoundUp) resistance upon a plant, and that since the soy meal is dead and thus incapable of expressing this function, the DNA residing in the soy meal is ineligible for patent protection.

The Court went on to hold that the Biotech Directive supersedes national law, and precludes individual European nations from enacting legislation that would permit patenting of DNA sequence per se. It also held that the prohibition against patenting DNA sequences per se applies retroactively to patents predating the EU’s adoption of Directive in 1998. In short, this unappealable ruling appears to be binding upon all 27 European Union Member States, and all DNA patents, no matter when they were issued.

The ruling could have a substantial impact on biotechnology. Obviously, it provides an opening for growers to circumvent gene patents used to protect genetically modified crops by growing the crops in a country where the gene is not patented, such as Argentina in this case, or in a jurisdiction with weak patent enforcement, and then importing the product into a European Union member wherein the patent is in force with impunity.

According to the logic of the decision, if viable seeds were imported, they would likely be found infringing because the DNA would still be capable of performing the function for which it was patented. But if the product has been processed, and as a result no longer viable, as exemplified by the soy meal at issue in this case, importation should not be found to constitute infringement.

The ruling could also have implications for the scope of protection afforded by gene patents for genetic diagnostic testing. Genetic diagnostic testing, such as by DNA sequencing, typically involves the isolation and/or amplification of the gene sequence being tested. This isolation and amplification might be characterized as the manufacture of the DNA, which could constitute infringement of a patent claiming the DNA sequence. For example, the ACLU challenge to Myriad’s BRCA gene patents is based in part on an assumption that the patent claims reciting isolated BRCA sequences would be infringed by unauthorized testing for mutations in the BRCA genes (which typically involves DNA sequencing).

However, this assumption is premised on the patents covering the isolated DNA sequences per se. But arguably, the isolated and amplified DNA fragments generated in the course of DNA sequencing and testing are not capable of performing their function, and thus after this week’s Court of Justice decision are ineligible for patent coverage in the European Union.

Of course, this would depend upon how one defines the "function of the patented gene. For example, one might argue that one important function of BRCA sequences claimed in Myriad’s patents is for diagnostic testing, and hence isolated DNA sequences generated in the course of genetic testing are performing a function for which they are patented

However, under a more restrictive view the function of the BRCA genetic sequences is to code for the BRCA protein product, i.e., the actual physiological function of the BRCA gene in the human body. Myriad’s patents specifically discuss use of the isolated BRCA gene for production of the BRCA protein in a recombinant cell, which could be a useful research tool in drug discovery. As discussed in earlier posts relating to the ACLU lawsuit, I point out that in practice BRCA testing does not involve the amplification of the full length BRCA coding sequence, but only amplicons representing fragments of the gene. These fragments would not be capable of achieving the function of expressing the full-length protein, and thus arguably lack the requisite functional potential.

I think reasonable minds could go either way on the issue, but given the current level of antipathy towards the use of gene patents to block genetic diagnostic testing, I can envision a European court adopting a restrictive interpretation of what it means for a genetic sequence to be capable of performing its patentable function, and decide that gene patent coverage does not extend to use of the genetic sequence in diagnostic testing.

In a related context, the Court’s decision could have implications for the effect of gene patents on whole genome sequencing. There is much buzz these days regarding the imminent arrival of personal whole genome sequencing, which will permit individuals to have their entire genome sequenced for a relatively small amount of money. Some have worried that a thicket of gene patents might impede the ability of firms to provide whole genome sequencing. However, DNA “manufactured” in the course of whole genome sequencing is unlikely to be found capable of performing the function of individual patented genetic sequences residing therein, in which case genome sequencing would not result in patent infringement liability in Europe.

I personally do not think gene patents will substantially impede whole genome sequencing, in the US or elsewhere. But if I am wrong, and patents on genes pose a substantial impediment to whole genome sequencing in the US, the patents could be circumvented by exporting the process to a place like Europe. The EU court decision could substantially reduce the likelihood that whole genome sequencing in Europe will result in liability for patent infringement.

On the other hand, the ruling should not affect the ability of biotechnology companies to use gene patents to protect their biologic drugs. In this context, the patented gene is performing its primary function of expressing the protein encoded by the gene, and thus satisfies the criterion established by Tuesdays decision of the Court of Justice.

Available link for download

Myriad and the ACLU Disagree over Claim Scope But Apparently Not over Patent Eligibility of Genetic Diagnostic Methods

After reading the briefs submitted by Myriad and the ACLU/PubPat in AMP v. PTO (the challenge to Myriad’s gene patents, described in previous posts to this blog), one thing that struck me was that the parties do not appear to disagree over the patent eligibility of genetic diagnostic methods. In fact, with respect to these method claims, the only dispute is with respect to the proper interpretation of the claims.

The challenged diagnostic method claims recite processes of either "analyzing" or "comparing" nucleotide sequences. For example, claim 1 of US patent number 6,033,857 claims:

A method for identifying a mutant BRCA2 nucleotide sequence in a suspected mutant BRCA2 allele which comprises comparing the nucleotide sequence of the suspected mutant BRCA2 allele with the wild-type BRCA2 nucleotide sequence, wherein a difference between the suspected mutant and the wild-type sequence identifies a mutant BRCA2 nucleotide sequence.

Myriad argues for a relatively narrow interpretation of the claims, under which the claims are limited to methods which require actual physical analysis of DNA molecules. Under their interpretation, the term "nucleotide sequence," as used in the claims, refers to actual polynucleotides, i.e., DNA or RNA molecules, and the step of comparing these molecules necessarily requires physically isolating polynucleotides from a patients tissue sample, and then processing and analyzing the molecules. Myriad argues that these processes are all clearly transformative of physical molecules, and because the transformations are “central to the purpose of the claims,” the claims satisfy the machine or transformation test. They cite to Prometheus for the proposition that transformative steps that are central to the purpose of the claims cannot be disregarded in the analysis as mere "data-gathering steps,” and argue these transformative steps render the claim patent eligible.

The ACLU, on the other hand, argues for a much broader interpretation of the method claims. They argue that the term "nucleotide sequence" in the claims refers to sequence information, not to molecules, and that the claims cover the purely mental process of "comparing" or "analyzing" DNA sequence information. Under this broad interpretation, the claims clearly do not require any sort of physical transformation, and on this basis the ACLU argues they fail the machine or transformation test, which they correctly note remains "a useful and important clue" to patent eligibility (using the language of the Supreme Court).

Interestingly, the ACLU never suggests in their brief that the diagnostic method claims would be patent ineligible if limited to methods involving actual isolation and processing of DNA molecules, i.e., the only processes covered by the claims under Myriads interpretation of the claims. Conversely, Myriad never argues that a method claim that encompasses purely mental processes for comparing DNA sequence information would be patent eligible. Thus, both parties seem implicitly to agree on a consensus approach under which a claim directed toward a genetic diagnostic method is patent eligible if limited to diagnostic methods that involve actual isolation and manipulation of DNA molecules, but patent ineligible if the claim would also cover merely comparing DNA sequence information.

Notably, the district court adopted the ACLUs broad interpretation of the claims, and held that the claims cover a process of comparing or analyzing DNA sequence information. However, in dicta the district court went even further, stating that "[e]ven if the challenged claims were read to include the transformations associated with isolating and sequencing human DNA, these transformations would constitute no more than ‘data-gathering step[s]’ that are not central to the purpose of the claimed process.. . . . Consequently, even if the method claims-in-suit were construed to include the physical transformations associated with isolating and sequencing DNA, they would still fail the ‘machine or transformation’ test under Section 101 for subject matter patentability."

In my analysis of the district court decision, I pointed out that this dicta seems clearly wrong, and is inconsistent with the Federal Circuits decision in Prometheus. Clearly, these data-gathering steps are central to the purpose of the claim and should be included in the machine or transformation analysis. I suspect that the ACLU agrees with my assessment, and is not even trying to argue for more extreme position taken by the district court.

It seems to me that the implicit consensus between Myriad and the ACLU is correct, i.e., method of genetic diagnostic claims are patent eligible if they include steps involving the actual physical manipulation of DNA molecules, but patent ineligible if they would cover the wholly mental process of analyzing DNA sequence information.

As a side note, another point of contention regarding claim interpretation exists with respect to whether some of the claims are limited to cDNA molecules. In its amicus brief, the United States government has argued that claims to isolated genomic DNA are patent ineligible, but claims limited to cDNA molecules are patent eligible (as reported in an earlier post to this blog). For some reason, in its brief the ACLU argues that the United States is mistaken, and that none of the challenged claims is limited to cDNA. ACLU seems to be clearly mistaken on this point--for example, Claim 2 of US patent 5,747,282 (one of the challenged claims) recites "DNA [having] the nucleotide sequence set forth in SEQ ID NO:1.” The Sequence Listing section of the patent specification explicitly identifies SEQ ID NO:1 as a cDNA.

Available link for download

Myriads BRCA Claims Held Patent Eligible in Australia

The court also found significant, although not determinative, the fact that the Australian Parliament had considered and rejected proposals to limit the patenting of isolated nucleic acids, as well as the long-standing practice of the Australian patent office to grant claims to isolated nucleic acids.

Available link for download