A federal court ruling invalidating patents on human genes held by Myriad Genetics Inc. should have little effect on the Utah company's operations, a top official said Monday.
But the decision by Judge Robert Sweet of New York related to patents for two genes used to detect a woman's predisposition to breast and ovarian cancers could have a large, lasting impact on medical research and development of treatments by the biotechnology industry.
In a 152-page ruling Sweet upheld challenges to Myriad's patents by the American Civil Liberties Union, genetic researchers and several women who suffered from breast or ovarian cancers.
The ACLU and the Public Patent Foundation argued in court filings that genes found in human bodies that control hereditary characteristics are products of nature and not subject to patents granted by the federal government.
"The court correctly saw that companies should not be able to own the rights to a piece of the human genome," Daniel B. Ravicher, executive director of the foundation said in a statement. "No one invented genes. Inventions are specific tests or drugs, which can be patented, but genes are not inventions."
Myriad was formed in 1991 by University of Utah researcher Mark Skolnick and venture capitalists to pursue research into the genes and their mutations that are associated with breast and ovarian cancers, and it created and sold diagnostic tests to detect the conditions. The University of Utah Research Foundation licensed several of the patents to Myriad, and also was sued by the ACLU.
The lawsuit said patenting the BRCA1 and BRCA2 genes stifled research and development of alternative tests by other scientists and companies.
Myriad has successfully marketed tests that cost about $3,000 to detect the presence of mutations of the BRCA1 and BRCA2 genes. The company's shares were down about 8 percent, or $2.17 a share, in after-hours trading on the Nasdaq stock market.
Peter Meldrum, president and CEO of Myriad, said the company will appeal the ruling but that it would not have a marked impact on its operations or earnings.
"We're confident the court of appeals will reverse this decision and uphold the patent claims," he said in an interview.
The ruling affects only seven of the company's 23 patents. Among the seven, it affects only 15 of 179 areas covered by the patents, Meldrum said.
But he said there could be wider implications of the ruling for the biotechnology industry if genes or methods for detecting sequences of genes cannot be patented, particularly for startup companies that rely on patent protections to attract investments for research and development of products.
"If the federal circuit court upholds this decision it, unfortunately I think, would be very bad for the biotech industry," Meldrum said.
His assessment was echoed by Kevin Noonan, a patent attorney and molecular biologist in Chicago, who said patents help young companies get started.
"It's not a gold star. It's not a pat on the back. It's a tool for getting investments," Noonan said. "It's a tool for putting you ahead of your competitors because you can do things better, faster, cheaper, more efficiently, etc., and that's really important at the beginning."
But Chris Hansen, an ACLU attorney, said the ruling could lead to new discoveries by researchers who previously had not been allowed to study gene sequences and related matters because of patents held by others.
"The human genome, like the structure of blood, air or water, was discovered, not created," Hansen said. "There is an endless amount of information on genes that begs for further discovery, and gene patents put up unacceptable barriers to the free exchange of ideas."
The University of Utah declined comment.
Sweet said he invalidated the patents because the existence in an isolated form of DNA -- or genes -- like that claimed by Myriad does not alter the fundamental quality of the material as it exists in the body nor the genetic information it encodes.
He rejected arguments that it was acceptable to grant patents on DNA sequences as long as they are claimed to be "isolated" from the body -- a practice the judge called "a 'lawyer's trick' that circumvents the prohibitions on the direct patenting of the DNA in our bodies but which, in practice, reaches the same result."
"It is concluded that DNA's existence in an 'isolated' form alters neither this fundamental quality of DNA as it exists in the body nor the information it encodes," Sweet wrote in his ruling. "Therefore, the patents at issue directed to 'isolated DNA' containing sequences found in nature are unsustainable as a matter of law and deemed unpatentable."
But Sweet did dismiss the U.S. Patent and Trademark Office from the lawsuit and with it claims that the DNA patenting interrupted the free flow of information and, therefore, violated the First Amendment of the U.S. Constitution.