

How today's Supreme Court ruling affects the biotech industry

 – Washington Bureau Chief,

You can fool around with genes and patent what you come up with, but you can't patent naturally occurring genes themselves.

That, in layman's terms, is what the U.S. Supreme Court unanimously ruled today in a decision that has broad implications for the biotechnology industry.

The case involved patents by Salt Lake City-based Myriad Genetics Inc., which developed tests for breast and ovarian cancer from its discovery of the location and sequence of two genes, BRCA1 and BRCA2. Myriad (MYGN) obtained several patents based on this discovery, including one for isolating a naturally occurring segment of DNA from the rest of the human genome.

The court ruled that patent was invalid, but it upheld Myriad's patent for synthetically created DNA, known as complementary DNA (cDNA), that contains the same protein codes that are in the natural DNA but omits other information.

"We hold that a naturally occurring DNA segment is a product of nature and not patent-eligible merely because it has been isolated, but that cDNA is patent eligible because it is not naturally occurring," read the court's opinion, written by Justice Clarence Thomas.

"Myriad did not create anything" when it isolated this DNA segment, Thomas wrote. "To be sure, it found an important and useful gene, but separating that gene from its surrounding genetic material is not an act of invention."

The ruling ends Myriad's monopoly on genetic testing for high risk of breast and ovarian cancer -- tests that led actress Angelina Jolie to have a mastectomy.

The Association for Molecular Pathology, which filed the lawsuit challenging Myriad's patents, issued the following statement : "The court’s decision that human genes are not patentable is a great step forward for the field of molecular pathology, for genomic science, and most important for our patients. We look forward to exciting future advancements in diagnostic testing and therapeutics that will accrue to the benefit of our patients and our field."

The American Civil Liberties Union agreed, and contended the biotechnology industry as a whole will be helped, not hurt, by the decision.

"Most of the industry is focused on using genes as a starting point to create new tools, tests, and therapeutics," the ACLU's Sandra Park wrote in her blog. "While all of these applications could be patented, the genes themselves should remain in the public storehouse of knowledge, for scientists at universities and corporations to freely study and use."

The ruling was not a total loss for Myriad, however, since the court upheld its patent for its synthetically created DNA.

That may be why Myriad's stock price jumped 10 percent in trading after the ruling was announced.

 – Washington Bureau Chief,