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Myriad Genetics, Inc IP Overhang Continues SCOTUS Grants Certiorari in the ACLU/Myriad Case; Use Resulting Weakness as Entry Point

Late Friday afternoon, in a somewhat surprising (timing wise) announcement, the Supreme Court has granted the ACLU’s petition of certiorari in the Myriad case. The grant was limited to the question of whether human genes are patenteligible. In other words, the decision by the Federal Circuit to invalidate five of Myriad’s method claims is now permanent. This is a negative turn of events for Myriad in the sense that it extends the IP overhang on the story through potentially June 2013

While the implication suggests the Supreme Court has agreed to hear the case because it did not agree with the Federal ircuit’s decision to uphold the composition of matter claims, one cannot make this assumption, in our view. At least four of the Judges have something to say about it; however, the question the court will be considering is in and of itself vague: Are human genes patent eligible? The court could ultimately wish to establish clearer precedent, change the theory behind the result, provide additional guidance, or indeed reverse or affirm part or all of the decision

Importantly, Myriad’s composition of matter patents do not broadly claim human genes but are focused on two types: isolated DNA and cDNA claims (9 of the 15 claims challenged by the ACLU, with about half related to isolated DNA and the other half cDNA). The Federal Circuit had indicated that both isolated DNA and cDNA have a different chemical structure as compared to native DNA and are therefore patent‐eligible subject matter. This is important because first, in addition to the specific claims allenged in this lawsuit, Myriad has patent claims on isolated DNA sequences related to the BRCA1/2 genes that extend through 2023, including common mutations that increase susceptibility of breast and ovarian cancer.

The Department of Justice, representing the government, had argued that isolated DNA failed the microscope test, or that a “magic microscope” could be used to view “isolated DNA” as it exists in the human body, and thus isolated DNA is not atentable; cDNA as an engineered molecule is patent eligible, according to the DOJ, however. Thus, there was a view that the court could adopt the DOJ’s position, leaving the cDNA claims intact but invalidating the isolated DNA claims specifically, potentially weakening Myriad’s IP position.

Based on our discussions with various IP attorneys and the company, we continue to believe that no matter what is decided at the ACLU v. MYGN case, Myriad’s patent portfolio of 24 patents and over 500 claims (which include methods that, according to our discussions, meet the machine‐or‐transformation test) should sustain the company’s market position for some time composition
of matter patents extend through 2015 and key method claims through 2018).

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