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filed before or after the implementation of the Biotechnology Directive. Often known in Europe as the ‘gold plating’ of directives, it is usually permissible only where a directive clearly sets out to ensure a minimum standard for a particular legislative regime.

Analysis of the ruling suggests the Court has fallen into error. Yes, the function of a gene must be disclosed within the application but this is required to satisfy the industrial applicability (or utility) requirement for patentability under the European Patent Convention6. The failure to appreciate this suggests a grave lack of under-standing of fundamental patent law on the part of the Court. This is perhaps not surprising given this was the Court’s first-ever decision on substantive patent law. In relation to any other new and useful chemical, the disclosure of one use only of the new chemical is sufficient to give the inventor a monopoly over all uses of that chemical for the term of the patent. The Court now considers this rule should be modified for DNA-based inventions. Further, the require-ment to include the functionality of the gene was introduced to prevent the mass patenting of expressed sequence tags, not to restrict the scope of properly granted patent claims directed at genes whose function had been characterized and disclosed in the patent.

Remarkably, in also holding that its ruling was not contrary to the Trade Related Aspects of Intellectual Property Rights agreement and did not unfairly prejudice the legitimate rights of patentees7, the Court did not attempt to address or analyze the effect that its ruling has in rela-tion to claims to “isolated” DNA sequences or the ability of patentees to exploit their newly restricted DNA-based claims. The term ‘isolated’ finds its way into numerous European gene pat-ents possibly because it is a drafting requirement in the United States. In both the English8 and

DNA sequence used in the genetic modification process. The case can therefore be summarized by the question, Can a patent claim to a DNA sequence protect any product containing DNA molecules of the claimed sequence?

The important section of the Biotechnology Directive on which the Court ruled is Article 9:

“The protection conferred by a patent on a product containing or consisting of genetic information shall extend to all material, save as provided in [Article 5(1)][paragraph 3(a) above], in which the product is incorporated and in which the genetic information is contained and performs its function.”

Experiments performed in the Dutch case proved the DNA sequences claimed in the Monsanto patent5 were present. To prove its claim, Monsanto therefore needed the Court to rule that Article 9 should be interpreted per-missively and that claims to DNA sequences do protect any product containing molecules of the claimed sequence. However, with a display of linguistic gymnastics and little meaningful analysis, the Court ruled that Article 9 should be construed restrictively.

The Court ruled that the many express refer-ences to the requirement for the inclusion of the function of a gene within a patent should be read as incorporating the function of the gene into the concept of the DNA sequences as inventions and, correspondingly, claim scope in such pat-ents should be equally restricted. Importantly, the Court also ruled that the Biotechnology Directive created a single regime of purpose-bound protection for DNA sequences within the EU—no deviation from this regime was to be permitted by individual member states no matter whether the patent in question was

Two recent cases in the United States and the European Union (EU) have induced a

state of anxiety in gene patent stakeholders—including not only holders of patents directed at gene sequences but also patent attorneys who draft and file patents for such claims. The first case, a reference1 to the Court of Justice of the EU (the “Court”) for a preliminary ruling on the interpretation of the Biotechnology Directive2, has cast doubt on the enforceability of claims directed at DNA sequences. The key issue that the Court has been asked to consider is whether claims directed at DNA sequences only protect the claimed DNA sequences when the corre-sponding DNA molecules are in a functional context. In the second case, Judge Robert W. Sweet provided a ruling on March 29, 2010, invalidating claims to both genes and methods of diagnosis based on the analysis of the native genes and mutations in the genes3. The decision is potentially far-reaching as it may affect the validity of many patents containing DNA-based claims in the biotech industry for which inves-tors have invested large sums of money.

Monsanto v. CefetraThe reference to the Court was made by the District Court of The Hague in the Netherlands in the case of Monsanto v. Cefetra4. Monsanto, lacking patent protection for its first genera-tion Roundup Ready technology in Argentina, had sought to prevent Argentine genetically modified (GM) soy imports into a number of European territories through the assertion of its European patent rights. This patent did not have any claims to soy meal but did claim the

A shadow falls over gene patents in the United States and EuropeGareth Morgan & Lisa A Haile

Will a pair of court decisions that restrict the protection offered to DNA-based claims reduce financial incentives and thus chill investment?

Gareth Morgan and Lisa A. Haile are at DLA Piper LLP, London, UK. e-mail: gareth.morgan@dlapiper.com; lisa.haile@dlapiper.com

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nature biotechnology volume 28 number 11 november 2010 1173

However, of broader concern is that gene patents were, and still are, the foundation of the biotech industry. Whether patents are for genes encoding therapeutic proteins such as insulin and growth hormone, antibodies such as Herceptin (trastuzumab) and Rituxan (rituximab), or mutated genes that are indic-ative of breast or ovarian cancer, precluding patents on this subject matter may inhibit the progress that has been made in the biotech industry over the 30 years since Chakrabarty was decided. There is a real danger that Judge Sweet’s ruling will have this effect if upheld by the CAFC.

Generally speaking, and given the rate of recent advances, the patent system on both sides of the Atlantic is working as intended. Patentees are given a limited monopoly for their inven-tions and after the patent term expires, the pat-ented invention is placed into the public domain. Although it is important not to lose sight of one of the central purposes of the patent sys-tem, which is to encourage public disclosure of new inventions, the reality is that in the biotech field, companies and researchers are motivated by patents either to improve upon old technolo-gies or to develop new and innovative drugs or tests partly for the monopoly offered and partly to design around existing patents. Restricting the protection offered to DNA-based claims will reduce the available incentives, the conse-quence of which will be to reduce the invest-ments companies are prepared to commit to such research. In the United States, much now rests on how the CAFC reacts to Judge Sweet’s ruling. In the EU, the Court has left industry and legal practitioners with the problem of trying to work around bad law that unfairly discriminates against DNA-based inventions.

COMPETING FINANCIAL INTERESTSThe authors declare no competing financial interests.

1. Case 428/08 Monsanto Technology LLC v. Cefetra BV & Others.

2. Directive 98/44/EC, OJ 1998 L 213, p.13.3. Association for Molecular Pathology et al. v. United

States Patent and Trademark Office, et al. No. 09 Civ. 4515 (S.D.N.Y.).

4. Monsanto Technology LLC v. Cefetra BV & Others, 249983/HA ZA 05–2885 (Hague District Court 2008).

5. European patent EP 0 546 090 Barry, G.F, Kishore, G.M. & Padgette, S.R., filed 28 August 1991.

6. European Patent Convention, as given effect in the recent case of Eli Lilly v. HGS [2010] EWCA Civ 33.

7. Paragraphs 70–77 of the Court’s ruling in case 428/08, Monsanto Technology LLC v. Cefetra BV & Others.

8. Monsanto Technology LLC v. Cargill parties, EWHC 2257 (Pat), (10 October 2007).

9. Cohen, S. & Morgan, G. Nat. Biotechnol. 26, 289–291 (2008).

10. See last sentence of paragraph 36 of the Advocate General’s opinion in case 428/08, Monsanto Technology LLC v. Cefetra BV & Others.

11. Anonymous. Nature 465, 267–268 (2010).12. Morgan, G. More patent protection for medicines with a

new purpose. Nature 465, 1005 (2010).13. Diamond v. Chakrabarty, 447 US 303 (1980).

followed that he found isolated DNA “is not markedly different from native DNA as it exists in nature.” He therefore ruled that it did not constitute patentable subject matter under 35 USC §101. This ruling has the industry in some turmoil as gene patents have been issued in the United States for decades and they are not likely to stop being issued by the USPTO based on this decision by Judge Sweet.

Currently, thousands of patents have been issued in the United States to hundreds of uni-versities, companies and other researchers on human DNA sequences. Judge Sweet’s decision will be the subject of an appeal to the US Court of Appeals for the Federal Circuit (CAFC) and it is hoped that any discrepancies between his rea-soning and previous authorities will be resolved, at least clarifying the scope and/or enforceability of such patents.

ConclusionsThe Court of Justice of the EU has now estab-lished an EU-wide regime of “purpose-bound” protection for DNA-based inventions. This regime even applies to patents filed before the Biotechnology Directive was implemented in Europe. Although some member states imple-mented the Biotechnology Directive in this manner (most notably France and Germany), most did not. For patentees within the agricul-tural biotech sector, no derivative or processed products will be protected by claims to DNA sequences. A new form of claim drafting will need to be adopted to obtain protection on such products. For all other patentees within this field, it removes a broad layer of protec-tion that may erode the value of key patents within the company’s portfolio. The significant difficulties this ruling creates for the exploita-tion and enforcement of DNA-based claims are not addressed in the Court’s ruling, despite it finding in less than half a page of text that patentees’ legitimate interests were not being unfairly prejudiced.

In the United States, there is doubt as to whether, and to what extent, the CAFC will uphold Judge Sweet’s decision. However, the BRCA patents were filed many years ago, at a time when diagnostic tests relied more on the ‘one gene, one mutation’ premise. The diagnos-tics industry today is based more on ‘multiplex’ testing, or testing multiple genes at once, as well as testing entire genomes. For single-nucleotide polymorphism (SNP) analyses, multiple SNPs over large fragments of DNA are typically tested because it is thought that genetic linkage, rather than a single mutation, is likely responsible for a trait. Thus, should Judge Sweet’s decision be upheld at the CAFC, we may still see a stimu-lation of innovation in the discrete area of the diagnostics industry.

Dutch parallel cases in the Monsanto Roundup Ready litigation, the national courts held that the term ‘isolated’ restricts the scope of the claim to DNA sequences that are separated out from other molecular species ready to be used in labo-ratory experiments9. Henceforth, patent claims to isolated DNA can now never be infringed in Europe as isolated DNA is, by definition, not functional.

This potential erosion of the patent pro-tection offered to patentees of DNA-based inventions could have an impact on innova-tion within the sector. Further, the ‘use’ patents that have been proposed as the answer to any criticism that DNA-based inventions will not be given proper protection10 are notoriously difficult to enforce and have recently been criti-cized as not encouraging innovation to ‘repro-file’ old medicinal products11,12.

Myriad in the United StatesIn 1980 the US Supreme Court13 upheld the first patent in the field of genetic engineering for the invention of oil-ingesting bacteria. The decision overturned the US Patent and Trademark Office (USPTO)’s pronouncement that life forms were not patentable. By holding that “anything under the sun made by man is patentable,” any live, human-made microorganisms (as well as iso-lated nucleotide sequences) were deemed pat-entable subject matter under 35 USC §101.

The American Civil Liberties Union, the Public Patent Foundation and others filed a law-suit in 2009 (ref. 3) challenging patents on two human genes associated with breast and ovarian cancer. It was the plaintiffs’ contention that these gene patents stifle research that may lead to important cures and potentially restrict patient options with regard to treatments. The lawsuit, filed in the US District Court for the Southern District of New York against the USPTO and owners of the patents on mutations in the BRCA genes, Myriad Genetics and the University of Utah Research Foundation, has the potential to be a landmark case for the biotech industry.

The patents at the center of the lawsuit are based on the initial identification of muta-tions within two genes, called BRCA1 and BRCA2, which appear to be the cause of the majority of cases of hereditary breast and ovarian cancers. The lawsuit states that the patents on the two human genes are uncon-stitutional and invalid because “human genes are products of nature, laws of nature and/or natural phenomena, and abstract ideas or basic human knowledge or thought.”

In the March ruling, Judge Sweet struck down the Myriad patents, ruling that DNA merely contains information, and that DNA molecules of the same sequence, whether in the body or isolated, still contain the same information. It

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