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GONE FISHING and Other Things To Do While Waiting For The Fallout From The Ariosa Decision To Settle Out

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Guest Bloggers: Ron Eisenstein, Partner, Nixon PeabodyDavid Resnick, JD, Partner, Nixon Peabody (Mr. Resnick will be giving a presentation entitled "Balancing Public and Private Intellectual Property Interests in a Post Mayo-Myriad Age: What is Likely to Be Patentable in Diagnostics - and What Should Be Patentable - to Best Serve the Public Interest" at the 7th Annual Personalized and Precision Medicine Conference in Baltimore on October 5-6, 2015.

By now most people have read about the U.S. Court of Appeals for the Federal Circuit's long awaited decision in Ariosa v. Sequenom. Whether or not you agree with the decision, almost all, including the Federal Circuit, agree that the technology in question revolutionized prenatal diagnostics. Sequenom developed the relevant technology to use fetal DNA in the mother’s blood to detect genetic abnormalities. This technological advance allowed diagnostic tests, for example, screening for Down’s Syndrome, to be done with a small sample of the mother’s blood, avoiding the serious risks of amniocentesis.  

The parties agreed that the underlying discovery upon which the patent (6,258,540,) was based was that a small portion of maternal blood from a pregnant woman contains cell-free fetal DNA (cffDNA). This cffDNA was found in serum and plasma, portions of the blood previously discarded in any analysis of maternal blood samples. It was this cffDNA obtained from a minimally-invasive blood draw performed on the mother that could be used to determine if the fetus had certain birth defects. The parties further agreed that the patent does not claim cffDNA or paternally inherited DNA themselves. Rather, the patent claims methods of using cffDNA. The district court, on summary judgment, had found that since the claims used conventional methods such as PCR amplification, the claims were  directed to a natural phenomenon and not eligible for patent protection  under 35 U.S.C. 101 in light of the Supreme Court's decision in Mayo. On June 12th, the Federal Circuit affirmed this decision. 
Many patent practitioners have denounced the decision. One argument is that it flies in the face of common sense. If serum and plasma were routinely discarded, their use can hardly be considered conventional. 
Others will point to Judge Linn's strange concurrence. After explaining why this case differs from Mayo, and that the claims were worthy of patent protection, he states that he is constrained by the Mayo decision to find the claims unpatentable. As Judge Linn points out, what he and the others are relying on is dicta, a judge's editorializing.  While persuasive, dicta is not binding. 
Second, Judge Linn ignores the Supreme Court's subsequent opinions in Myriad and Alice.  In Myriad the Court found that altering a natural material, even in a conventional manner, was sufficient for patent eligibility. In Alice the Court discussed how significant contributions to the field could result in patent eligibility.  Finally, while mentioning that the Mayo Court had pointed to the claims in Diamond v. Diehr as involving conventional steps that when considered as a whole integrated the statutory exception (an algorithm) and transformed the method into a patent eligible invention, Judge Linn failed to explain why the present claims failed to accomplish the same transformation. 
So what are we supposed to make of this decision? Some will just "go fishing" and stop trying to get method patents, certainly method directed to diagnostics. Indeed, practitioners have seen a decrease in filings of patent applications directed to diagnostics over the last few years. There has also been a decrease in patent litigation.  In fact, one recent study suggests that the decline in patent litigation is a result of the Supreme Court's recent decisions on patent eligibility. 
While no one wants unnecessary litigation, the question is what effect these decisions will have on health care and other scientific advances. We know for certain that these decisions will hurt licensing revenue for universities and nonprofits. Their impact on investment for the biotech industry will be somewhat more nuanced.  While innovators are likely to be negatively impacted by less valuable patent protection, others in the industry will enjoy reduced concern about being blocked by patents.  Will this help the consumer? Maybe. The current structure of the biotech industry places substantial emphasis on private investment. That investment is based upon a robust U.S. patent system that, for a limited time, blocks others from offering competing products  and undercutting attempts to recoup the costs of R&D.  
One can ask whether Seqenome would have made the same investment if it knew that others would be able to offer competing tests without the same development costs. What about Myriad Genetics? If there had been no Myriad to undertake the substantial clinical testing burden, would we have the data that permits women with "bad" tests to take preemptive action and prevent the development of breast cancer?  These are the questions that industry is likely to be prosposing to Congress in the coming weeks and months. The outcome of such efforts is unclear. 
The pharmaceutical industry has not helped itself by providing opponents with opportunities to criticize the effects of patents, such as substantially raising the cost of medications that have been in use for years. As a result of the current state of patent law, the research community may need to look to a different system of funding translational research. Given the climate in DC for at least the last decade, we know the money is unlikely to come from the government. 
In view of the problems with starting a new paradigm, we suggest that the patent system, even with decisions like Ariosa and Myriad, remains the most viable alternative. While the Federal Circuit's most recent decision in Ariosa does not help, it does not change the fact that the Supreme Court held that some patents involving laws of nature or natural phenomenon remain patent eligible. Certainly it does not affect alternative claiming strategies. For example, kit claims, device claims, or even method of treatment claims remain viable approaches. 
One key to successfully obtaining meaningful patent protection is to truly understanding how a given method will be used commercially and focusing the claims fairly narrowly to provide narrow but essential protection. Remember that claims which may no longer issue in the United States are still valid in Europe and many other countries. Additionally, if the most dire predictions prove true, a legislative solution becomes increasingly likely.  Moreover, the Federal Circuit could hear the Ariosa case en banc. Alternatively, the Federal Circuit could reach a different decision in other cases having different records. Such things have happened before.  
While the pendulum on patent eligibility has taken a fairly significant swing in the direction of patent ineligibility, history suggests that these pendulum swings a constant readjustment of competing concerns and that the situation is unlikely to be static. We suggest you stay tuned. 
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John Waslif is the Managing Director of Arrowhead Publishers and Conferences and the Producer of their Annual Personalized Medicine Conference, which brings together multiple stakeholders, including payers, molecular diagnostics companies, genome analysis/interpretation companies, clinicians and many others in order to provide attendees with a holistic view of the personalized and precision medicine landscape.


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