Leonardo Angiulo: Two Supreme Court Rulings That Seem Like Sci-Fi

Monday, June 17, 2013

Leonardo Angiulo, GoLocalWorcester Legal Expert

Two decisions from the U.S. Supreme Court in the past two months may have a bigger impact on the economy than you know. On June 13, 2013 the case of Myriad Genetics made it clear that while you can't patent naturally occurring DNA sequences you can patent methods and synthetically created sequences known as cDNA. On May 13, 2013 their decision for Monsanto outlines how licensing agreements for patented items, including living organisms, will be protected by the courts. When you put the two together, it could be an unprecedented green light for investment in the biotech industry.

First the science

Justice Clarence Thomas' opinion in Myriad does an incredible job explaining the formation of DNA, its synthetically created cousin cDNA, and their role in the world. In fact, if I had this case as a study guide in High School I may have grown up to be a scientist instead of a lawyer. The gist of the science involved is that there are certain proteins that naturally combine to form DNA and genetic sequences. In addition, those genetic sequences are essentially codes for the production of amino acids and proteins. It is the arrangement of human DNA, the coding, that can cause diseases or your risk of disease.

In this case, Myriad Genetics, Inc. had isolated the location and sequence of two human genes that can substantially increase the risk of breast and ovarian cancer. The dispute was whether these isolated genes were patent eligible under section 101 and 102 of chapter 35 of the United States Code. The decision has three distinct conclusions I wish to point out: a) naturally occurring genetic sequences are not patentable; b) that cDNA are modified sequences of DNA made in laboratories that are not naturally occurring and are patentable; as well as c) there are things called “method patents” that protect innovative methods of manipulating genes.

Finders, keepers

The reality is that Myriad wanted a patent to protect their knowledge because they found the genes first and wanted to hold exclusive rights to tests diagnosing a persons risk for breast and ovarian cancers. Now the reality is that human ingenuity is at the center of a free market. Patents, generally, encourage people in our country to do, make and grow our economy and help to make our Country one of the greatest places in the world to be in business. There are, however, real differences between true innovations and unpatentable laws of nature, natural phenomona, and abstract ideas.

The Myriad decision defines true innovations as derivatives of naturally occurring things that can be patented when they represent a new and useful composition of matter created by human ingenuity. An example of this is found in the May 13, 2013 decision of Bowman v. Monsanto Company. In that case, the Monsanto company developed a soybean plant that included a genetic modification allowing the plant to survive exposure to certain herbicides that Monsanto also produced. One of the patents at the center of the dispute included the seed incorporating the genetic alteration they developed.

The dispute occurred when one intrepid farmer did what farmers do: save seeds from one harvest and used them for the next planting. The problem is that Monsanto claimed the seed had their genetic modification and, therefore, was the subject of a patent. Mr. Bowman, in response, claimed that since he had purchased the seeds from a third party grain company that had, in turn, purchased them from other farmers the original patent was exhausted. As the Supreme Court explained, patent exhaustion occurs when a sale occurs and the patent holder receives their reward for the article. If the soybeans had been sold for food, the court reasoned, this principle would control. The distinction came when Mr. Bowman planted the seed and made a new plant with the genetic modification patented by Monsanto which then made new seeds with that same genetic modification. The court ruled that permitting only one sale under patent would allow other companies to grow similar plants from the seeds, require farmers to only buy from the company once and would otherwise deprive “Monsanto of its monopoly.” This means a corporation can hold a patent on a living, reproducing, life form that will be enforced by the Court.

Jude Law

Interestingly, Jude Law appeared in two science fiction movies considering a future like this. Gattaca from 1997 portrays a society where the population is divided into genetically superior and inferior humans. The interesting part is that the genetically superior babies in the movie were created when parents paid to have their DNA modified in utero.

One way this could happen in the real world is, like what we saw proposed in the Myriad case, a company could develop a patented method of modifying certain genes. They could, for example, turn certain genes on and off and grow children immune from environmentally caused cancers or be wicked smart. Applying the logic of Monsato, would those genetically modified babies effectively be the property of whatever corporation modified them? Would parents have to pay licensing fees? What if they missed a payment? If the kid flunked out of college would there be any kind of breach of contract lawsuit possible against the corporation?
Speaking of licensing fees, the second Jude Law film on the subject is from 2010 and is called Repo Men. This fictional tale looks at the question of what would happen if people licensed artificial organs to prolong their life but fall behind on the payments. The answer: an abruptly shortened life. If Monsanto can get an injunction causing a farmer to tear up a field full of soybeans because they infringed on a patent, could an unlicensed organ transplant result in forcible removal by court order?

The practical reality is that these two decisions raise many questions. What they define, however, is that valid patents will be protected by the court. With that in mind, people in the biotechnology industry should feel comfortable investing in new technologies and other innovations because they will change the future of medicine and make businesses lots of money. And at the end of the day, these decisions drive home the point that human ingenuity really is at the center of our economy.

Leonardo Angiulo is an Attorney with the firm of Glickman, Sugarman, Kneeland & Gribouski in Worcester handling legal matters across the Commonwealth. He can be reached by email at [email protected] or through the firm's website at www.gskandglaw.com.

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Leonardo Angiulo: Two Supreme Court Rulings That Seem Like Sci-Fi

First the science

Finders, keepers

Jude Law

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