Tony Lai - 28 October 2010

LST Colloquium - “Effects of DNA Patents on Medical Research and Clinical Practice”

Commentary essay on papers prepared for discussion with Professor Mildred Cho.

The issues at hand in the papers have been well publicised following the recent Myriad

case, over whether genes, specifically two BRCA DNA molecules that were discovered,

isolated and disclosed by Myriad and its co-inventors, could be considered patentable

subject matter.1 One of the main questions which arises from the readings is how and to

what extent researchers at non-profit, governmental and/or commercial research

institutions should not be charged or penalised for, but rather even incentivized towards,

sharing knowledge, information and data, particularly in new fields of innovation like

genetic research and diagnostic testing. The answers lie at the heart of what the patent

law can and seeks to achieve. In both the legislature, through policy, and the judiciary,

through precedent setting decisions, the promotion of research, innovation and

developments in the public interest is a common thread. This paper will seek to pose

some tentative avenues for further consideration in this area.

One of the key criticisms levelled at Myriad and other gene patent holders is that their

actions often demonstrate an aggressive disregard for the past and potential future

contributions of others in the field towards their inventions, both domestically and

internationally; they ‘clash with scientific community norms’. Professor Cho concluded

in her research on the impact of gene patents on research and the clinical delivery of

genetic testing services that “although patents may have provided incentives to conduct
1
under 35 U.S.C. §101

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the basic research underlying genetic tests, the reported inhibition of clinical testing and

research does not bode well for our ability to fully and efficiently use the results of the

Human Genome Project and related work.”2 Sharing amongst academic scientific

communities, particularly in new fields, can promote innovation and improvements that

might better deliver the scientific and technological advances sought by the public.

Yet ground-breaking research which is truly novel and non-obvious should still be

incentivized and rewarded with the benefits that patent protection confers. Under the test

following KSR3, a novel species within a prior art genus is non-obvious if the inventor

found unexpected results or the prior art taught away from the invention. The risks

necessary to take on such speculative research and to then be able to deliver upon the

fruits of that research may only be possible under the commercial guises of limited

liability and with the prospect of serious rewards from a wide-patent monopoly

underlying the ability to raise finances in the capital markets. Without the incentives and

enforced publicity within patent law doctrines, such ground-breaking new research and

the accompanying enabling methods might be driven underground into trade secret

protection.

Gold and Carbone raise the issue of what the goals of any policy response might be in

order to balance these perspectives: controlling the cost of genetic services or health

services generally; maximizing innovation, access to innovation, or developing a

2
Cho MK, Illangasekare S, Weaver MA, Leonard DGB, Merz JF, Effects of patents and licenses on the
provisions of clinical genetic testing services, J Mol Diagn 2003; 5:3-8 quoted in Gold ER, Carbone J.,
Myriad Genetics: In the eye of the policy storm, Genetics in Medicine, Vol 12 No 4, April 2010
Supplement, 44
3
KSR Int’l Co. v. Teleflex Inc. 119 Fed. Appx. 282 (2007)

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scientific infrastructure. These are goals, which should rightly be considered within the

context of a wider debate as part of any deliberative democracy. Ideally, at the legislature

level, our representatives and lawmakers should steer this debate with public reason and

in the public interest, rather than speaking from their own comprehensive moral or

religious views4. They should also be cognisant of how the patent law can be connected

in with overall policies on health, industry, agriculture and other areas.

Whilst democratic minimalists might charge that the judiciary should defer to the

deliberations and decisions of the legislature, basing ones views on a broader conception

of constitutional democratic society and the spheres where public reason can best be

expressed5, the discourse of the judiciary, patent judges, attorneys and amici curiae briefs

from patent law scholars should also have a role to play in guiding the legislature and the

broader public debate. In promoting the substance of constitutions and laws, judges also

have certain discretions in determining how policies and reasonable policy discourse are

shaped into their decisions.

One such area where judges have discretion, certainly in the United States, is in patent

damages awards and how the concept of a ‘reasonable royalty’ is interpreted. Currently,

the basis for determining what damages an infringing party must pay for their

infringement is based upon the factors in the Georgia-Pacific case, whereby the Court

considers what the parties might have negotiated as a reasonable royalty prior to the

infringement. Where commercial entities like Myriad, aware of the reasonable policy

4
Cohen J, Procedure and Substance in Deliberative Democracy, in Contesting the Boundaries of the
Political, ed. Benhabib S., (Princeton, 1996)
5
See ibid and Rawls J, Political Liberalism, lecture VI, 8.5 (Columbia paperback ed 1996)

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discourse within which they operate, have declared that they do not require researchers to

sign licences to use their genes, it should surely be open to the Courts to also follow such

reasonable policy discourse and adopt a low-penalty-scheme of determining that the

reasonable royalty from a putatively infringing non-profit research institution would be

very low. Other non-profit and governmental entities might also benefit from the

certainty a line of such decisions could bring and be more confident in asserting their

rights to conduct their own research, particularly at the margins of a broad patent’s scope.

Commercial entities that competed with the patentee would nevertheless need to remain

relatively more circumspect about infringement, though the patent damages system might

be modified or tweaked to promote more reasonable license or settlement agreements

between commercial rivals where it would be more efficient to do so, and thereby also

encourage cross-licensing and commercial knowledge sharing.6 Whilst more licensing

and settlements might prevent as many patent cases reaching judgment, thereby lowering

the chance of potentially over-broad patents being invalidated, even without jurisdiction

decisions such as that of the Circuit Court in Myriad7, directly infringing non-profit

research institutions would, under the low-penalty-scheme, face less risk in taking the

slack up by defending infringement actions or filing for judgment on a patent’s invalidity,

particularly for the purposes of being able to freely engage in medical research or in

developing new clinical practices.

How a judiciary justifies, upholds and develops the principles of patent law is a

6
This could be a good avenue for further analysis as part of a patent damages paper.
7
The appellants forcefully argue that the plaintiffs should not have been given jurisdiction to bring the case
in their Brief for the Appellants in the Myriad appeal to the Federal Circuit, filed October 26, 2010.

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demonstration of public reason; of careful thought, an equal consideration of interests

based on evidence, prior to delivering an opinion and a judgement. By exercising their

role and function to the greatest degree possible, judges can apply and shape the patent

law to the contours of newly developing fields like genetics without recourse to religious

or moral conviction, but for publicly and reciprocally acceptable reasons, to balance the

need to reward extraordinary innovation and pioneering research, against the public

interest in sharing knowledge over how to best promote the progress of medical research,

clinical practice, and other useful arts.

“We build and create by bringing to the tangible and palpable reality around us new

works based on instinct, simple logic, ordinary inferences, extraordinary ideas, and

sometimes even genius. These advances, once part of our shared knowledge, define a

new threshold from which innovation starts once more.”8

8
From the opinion of Supreme Court Justice Kennedy in KSR, supra