 And I will try to give you a relatively engaging and short discussion so that we can have some time for questions. I will also, I am afraid, use a few more words in my slides than you may be accustomed to at lawyers, and I'm a recovering lawyer, do like words, and so there are more words than would be ideal, but the words end up being kind of important. So as Eric has already indicated, the Supreme Court on June 13th, having heard argument on April 15th, decided AMP versus Myriad Genetics. The challenge was brought by the Association of Molecular Pathologists, represented by the ACLU and the Public Patent Foundation. In its ruling, the Supreme Court that is held that not all gene patents are alike, and I will spend some time talking about what specifically they meant by not all gene patents being alike. As it happens, they got into the, for them I think what was really tough sledding with respect to molecular biology, they had to distinguish between cDNA and gDNA, which I suspect for Justice Thomas was something of a struggle, but he did an interesting job. So what I'm going to do today, for those of you who don't necessarily spend their time thinking a lot about patent law, and that may be many of you, is provide a little bit of basic background on patent law and also on gene patents in particular and how they emerged and why they emerged. Then I'll discuss the history of the Mericast case very briefly, and also its ultimate resolution at the Supreme Court. And finally, I'll discuss what the case might mean going forward. That's very much a work in progress in terms of what it means, and there are subsequent lawsuits that I will mention briefly as well. So just in terms of background, this is Patents 101 and also as it happens to be Section 101 of the Patent Statute, that section has typically been interpreted very broadly to cover basically anything under the sun made by man. That's a statement from the Legislative History of the 1952 Patent Act. And the provision in the statute suggests as much, suggests that it's pretty broad in its scope. So any new and useful process, machine, manufacturer, composition of matter is supposed to be encompassed within Section 101, which means basically any new process or product. That said, there have been these longstanding common law exceptions that the Supreme Court has enunciated starting in the 19th century, and by common law I mean as contrasted with statutory law, common law is the gloss that courts put on the statutory law. And this common law gloss encompasses exceptions in the form of abstract ideas, laws of nature, and products of nature. The exception at issue specifically in the myriad case was products of nature, however as we'll see all of these three exceptions kind of run together a little bit and that becomes important for what the case means going forward. So the product of nature doctrine actually has an interesting history beyond the Supreme Court and in some ways the most important expositor of the product of nature doctrine was a judge by the name of Learned Hand, that was really his name. Judge Hand, albeit only a district court judge at the time, rendered what is one of the most important decisions in the product of nature space in a case called Park Davis that was decided in 1911. In that case he determined that isolated or purified adrenaline represented patent eligible subject matter, and in his view this was not a product of nature, isolated adrenaline represented one patent purified and adrenaline represented another. This was not a product of nature because it was, and this is a quote from the opinion, for every practical purpose a new thing commercially and therapeutically, unquote, because this language resonated with some of the commercial instincts that patent lawyers have, they really have seized upon this language for more than a century as representing what they determined to be the narrow exception that product of nature represents, in other words anything that is a new thing commercially or therapeutically for many in the patent lawyer community is not a product of nature. This view of the expansive realm of what is within patentable subject matter and therefore not a product of nature was to some extent reaffirmed for the patent lawyer community in the Supreme Court case of Diamond versus Chakrabarti that some of you may have heard of, that case involved a recombinant bacterium, a bacterium that had two or more stable energy generating plasmids put into it, each plasmid constituting a separate hydrocarbon degradative pathway. In that case the Supreme Court, in a divided opinion, determined that this was not a product of nature because it was markedly different, quote unquote, again these are the words that the court used from anything found in nature, not quite as expansive as the Park Davis opinion which suggested that if what one had done provided something commercially useful it represented patent eligible subject matter. So Diamond versus Chakrabarti was not quite as expansive but the combination was taken by patent lawyers and the nascent biotech industry to mean that basically anything that was isolated or purified could be patent eligible and that included gene sequences. So the first gene patents, quote unquote, and that is to some extent now a term of art because they mean different things to different people, that term means different things to different people, covered CDNA, in other words DNA with introns X size that was intended to be used to generate therapeutics and cover therapeutics. One of the reasons in part at least these particular CDNA patents were not controversial was that they were intended to cover a scope of genetic research and development, an area of genetic research and development, i.e. therapeutics that looked very much like what had been patent eligible in the past in terms of small molecules. So these were just large molecules as opposed to small molecules and so when for example some of these patents began to issue in the early 80s and AMGEN got one of these classic patents on DNA sequences encoding erythropoietin, CDNA encoding erythropoietin in 1987, a patent that subsequently allowed it to make tens of billions of dollars in revenue over the course of about 23 years, that wasn't considered particularly controversial, at least certainly not in the patent bar community and even among the larger community the idea of DNA sequences that would be patentable but would correlate to therapeutics wasn't particularly controversial and this patent was the subject of litigation, however none of the litigation involved the issue of whether this constituted patent eligible subject matter, probably in part because everyone in the litigation had their own gene patents, so AMGEN SU Genetics Institute and Transkaryotic and Roche and of course all of those entities had their own gene patents to defend and so there was no incentive on the part of anyone to say that gene patents were not patent eligible subject matter. Controversies began to emerge however when patents issued and some of these patents issued relatively early on including the myriad patents that were later interpreted to cover not just therapeutics but also diagnostics. Obviously like all patents, patents that covered diagnostics increase costs or have the potential to increase costs and restrict access. The argument or one of the reasons people were more concerned about patents covering diagnostics was in particular with respect to laboratory developed testing of the sort that myriad does, that's not currently FDA regulated so patents were seen as less necessary for purposes of providing incentive to get a particular product to market. If one had the relevant gene it wasn't considered that expensive to then start doing testing on the gene and in point of fact in a lot of these cases testing started before the patents emerged and the patents were ended up being used to shut down certain testing diagnostic laboratories. In addition there was a substantial amount of federal funding involved with some of these patents including in the myriad case itself and we'll talk about that a little bit more, I'll talk about that a little bit more towards the end. So the access questions in particular relative to the diminished need for an affirmative incentive provided by patents were the focus of this very prominent report issued by the secretary's advisory committee on genetics health and society and our own Jim Evans was at the helm of that particular report. The focus there was not only on initial access but also on problems for women who wanted to get second opinion testing with respect to BRCA 1 and BRCA 2. The secretary's advisory committee was relatedly was concerned about whether sole providers of genetic diagnostic testing such as myriad but also other providers like Athena had the optimal incentive to work aggressively with all types of insurers in particular insurers that might cover less well-off populations such as state Medicaid providers. So the report discussed not only the BRCA 1 and BRCA 2 patents but also patents on genes implicated in certain types of colon cancer Alzheimer's disease Spino cerebellum ataxia and lung QT T syndrome. This report was issued in 2010 after myriad had been sued by the association molecular pathologists represented by the ACLU in district court so it came out as this debate was for the first time the section 101 debate was for the first time unfolding in litigation. Again never before had a section 101 challenge been brought to gene patents of any sort. So we get to the myriad gene patent litigation myriad I think was chosen by the ACLU for a number of reasons one of which was it was the provider that was most aggressive in terms of asserting its patents against providers who considered themselves to be doing clinical research in addition to providing patient care. In this particular case the ACLU slash AMP challenge 15 claims in seven patents many of these patents as it happens were initially owned and exclusively licensed by the University of Utah which had received a fair amount of NIH funding particularly early on NIH was actually the co-owner one of the patents so this is the federal funding issue was intimately involved with this particular case. The litigation notably however the litigation strategy by the ACLU didn't focus on access at all and I think the ACLU determined that they were going to kind of talk the typical patent lawyers line of access not access but innovation and so the arguments that were used very much were along the lines of these patents are diminishing innovation in the area of genomic research and development. In point of fact at the federal circuit Judge Lurie stated what I think all the judges in this litigation agreed with at least implicitly by not saying anything about access. He stated explicitly and he wrote the majority opinion this appeal is not about whether individuals suspected of having an increased risk of developing breast cancer are entitled to a second opinion. Similarly even the dissent in the federal circuit case before it got to Supreme Court really focused on innovation and the dissent drew a distinction between CDNA and GDNA that had been alluded to in the Secretary's Advisory Committee report but for the purposes of saying that CDNA patents wouldn't impede research and development in whole genome sequencing whereas GDNA patents might so again very much focused on innovation. The Department of Justice's intervention in this case at the federal circuit level also drew the CDNA GDNA's distinction with a focus on follow on innovation and Eric has mentioned that NIH was influential in crafting the U.S. government's opinion. I think that's an under statement in many ways. NIH was a critical player and NIH as it happens has had a long history in helping to shape genomic patent policy starting in the late the end of the 20th century with the so-called utility and written description guidelines that were very significantly shaped by NIH and I think had a very positive influence in terms of making sure that genomic innovation was not impeded by patents. All of this by the way has drawn out an exhaustive detail in many more words in a Duke Law Journal article the role of NIH over the last 15 years or so has drawn out an exhaustive detail in this Duke Law Journal article that was published last year. So if you're interested you can you can go to that. But again the focus on innovation and the fact that CDNA patents are unlikely to impede innovation whereas GDNA patents might well impede whole genome sequencing. At the Supreme Court the only claims at issue were the so-called product claims. The process claims had been taken out of the litigation so there are only nine composition matter or product claims at issue. The Supreme Court like Judge Bryson in dissent below like the solicitor general and like Eric Lander who's also been previously mentioned adopted a CDNA versus GDNA distinction. Unfortunately the court's opinion was not as clear as to why it was adopting this distinction as it might have been. It did say that CDNA was not naturally occurring and thereby implicitly suggesting that GDNA could be naturally occurring but it didn't really specifically say that and we can only infer based upon the fact that Eric Lander's brief was mentioned about six times in oral argument that they relied upon Eric Lander's briefs argument about GDNA being found isolated GDNA being found in fetal DNA and and also upon cell death. So unfortunately though the opinion doesn't explicitly say that so it's a little bit hard to parse on the why GDNA is naturally occurring versus CDNA is not. Another piece of the opinion focuses and this is important going forward for purposes with the opinion means for future patenting and also existing patents outside the CDNA, GDNA context, focuses on the so-called information versus chemical distinction. This was a distinction that was drawn by the district court judge in this case and the Supreme Court picked it up again. Again however didn't completely connect the dots as to why CDNA versus GDNA mapped on to that distinction. In point of fact the court even suggested the Supreme Court that is that CDNA and GDNA both covered information suggesting that however that nonetheless CDNA was less problematic in terms of the informational claims it made all we can assume and this is what I would assume and have argued should be the interpretation of the case is that Justice Thomas had been impressed by Eric Lander and the Solicitor General and their statements that CDNA even though it claimed information or could be seen as claiming information didn't those sorts of claims wouldn't impede future follow-on innovation the same way as GDNA and Bob Cooke-Degan and I put that interpretation on the case in a science article that just came out a couple of months ago and so we're hoping that the lower courts will take that as as a plausible interpretation that said the Supreme Court unfortunately wasn't as clear as it could have been. So in the immediate aftermath of the case I suspect some of you know this already on the day of the case being decided itself a whole bunch of providers a whole array of providers announced that they would begin testing for BRCA1 and BRCA2 mutations. Ambry in particular announced a price that was about a 50% reduction from the myriad price and perhaps not surprisingly Ambry was the first provider that was sued so myriad as it happens had been alleging that it had all these other patents that could use even if they lost to the case of the Supreme Court and nobody necessarily took them that seriously but it turned out that they were planning to sue on those other patents if they lost the Supreme Court and they did in fact sue on 10 other patents involving dozens of claims. None of these claims with the exception of one that we can talk about was at issue in the Supreme Court case. Both these suits they've also brought a suit against Gene by Gene both these suits for them have a bit for myriad have a bit of a home court advantage in that they're being brought in Utah district court and myriad is obviously based in Utah. So assessing the suits I won't say too much here for fear of being proven wrong in the next few months and when the Supreme Court the district court decides the cases but these claims all cover basically either methods for sequencing and then sequencing and then comparison with wild type a lot of method claims and then a few primers plus PCR claims. The determination of how these claims will be adjudicated I think is anyone's guess but I think that what the court will have to do the district court at the initial level and obviously this case will go to this federal circuit which hears all appeals in patent cases and then maybe even back to Supreme Court. The determination of what the the court district court will do I think will be based on a combination of the myriad case and then also a case another section one case the Supreme Court decided last year called Mayo versus Prometheus. Some would say that the combination of those two cases means that these claims that myriad is bringing are likely invalid because they don't require any real inventive activity that's the term of art that was used in the Mayo case beyond a law of nature or a product of nature. That said one could argue and Bob and I make this point in our science article that myriad could be seen as walking back Mayo versus Prometheus a little bit because cDNA arguably is nothing more than non inventive routine activity applied to a product of nature i.e. DNA. So whether the law courts will how they'll interpret the combination of myriad and Mayo versus Prometheus I think is going to be very interesting to see and the key question will be is inventive activity beyond a law or product of nature always required and I think the Supreme Court has frankly left that question a little bit open. Ambrie has counter claimed frankly I think that its counter claims on validity are quite plausible. He also argues a variety of antitrust violations by myriad. I think those allegations are less clear to me at least or the basis for those violations is less clear to me. They use section two of the Sherman Act and talk about monopolization. However patents by definition in some cases represent legitimate monopolies so I'm not sure that the antitrust claim based upon the patents themselves are necessarily valid. Another piece of the puzzle which is very interesting and important is all of this data that myriad has mostly secret since 2006 however and I'll talk about that in a moment however the Ambrie brief doesn't specifically link that data issue with the antitrust question which I think would be a very interesting argument to make and presumably they will in further briefing on that question draw that link. The data I think at this stage are arguably more important than the soon to expire patents these particular patents even the ones that myriad is soon sewing upon are going to expire in the next few years so the data is going to be the competitive advantage that myriad has going forward at least for the longer term and that brings us to that data issue. Myriad itself in its argumentation against Ambrie and Gene by Gene is actually using the data as a bit of a club to argue for a permanent a preliminary and then a permanent injunction against Ambrie and Gene by Gene saying that Ambrie is likely to have a variance of unknown significance rate of 25 to 30% much worse than Myriad's 3% rate and therefore it would actually harm the public to have Ambrie and other providers testing. As you probably know Myriad however has stopped contributing to public databases it's stopped contributing to the breast cancer information core in 2005 and more generally the larger scientific community hasn't had access to the Myriad databases since 2006. So one question is what will happen with respect to this data and there are efforts already afoot and our own Robert Nussbaum is intimately involved with one of them to quote-unquote free the data so the sharing clinical reports project out of UCSF working with the genetic alliance is asking patients and clinicians to submit de-identified data that has been received from Myriad after Myriad's testing to create an alternative to the Myriad to create additional alternatives to the Myriad database. So we'll see how that goes. Larger impacts so Greg Graff did an article in Nature Biotechnology a few months ago that suggests that about 8700 U.S. gene patents with quote-unquote naturally occurring sequences are still in force about 41% of those human. Unfortunately Greg it's a great article and I would commend it to your attention but his definition of naturally occurring doesn't really map on to the CDNA, GDNA distinction so we don't really know and I've been in communication with him about this what percentage of the 8700 are GDNAs that would be knocked out and what percentage are CDNAs that remain valid. However he does make the important point in the article excuse me that the percentage of both CDNA and GDNA patents relative to entirely synthetic patents began to decline precipitously around 2000. Around the time I should note that NIH became heavily involved in persuading the PTO to issue much stricter examination requirements for gene patents. This is not the remit of this particular group but in terms of the larger patent bar I think that the biggest concern is not over gene patents but over what the statements and Myriad and also the Mayo case mean for quote unquote purified large and small molecule therapeutics because that is an area where patent protection I think the conventional wisdom has been the patent protection is extremely important and the patent bar is particularly concerned about claims to proteins and antibodies that aren't explicitly designated as synthetic. Going forward I think most patent attorneys will designate every claim that they can possibly think of as synthetic but retroactively those claims that are not quote unquote synthetic may be in peril. So that's it. Any questions either now or you can email me at rye at law.gddu. Questions? You step to a microphone anybody in back step to a microphone just turn the microphone on wait wait wait yeah go to they won't hear you unless you're at a microphone and the microphone's on. Eight about this in a journal club and I the point you mentioned about a cDNA is really just a copy of a naturally occurring molecule it's just a common technique even if you could use it for a therapeutic if you don't change it okay and you find it from a naturally occurring messenger RNA or other non-coding RNA it is still just a copy there's nothing novel about it so I would argue that the only way a cDNA could be patentable is if they've modified it in a way for a unique purpose for a unique application I don't even know if you identify an mRNA clonin into a cDNA and it has a novel mutation for a disease that's still a naturally occurring molecule that was in a tumor or whatever disease state the person was in so I I really am having a hard time wrapping myself around what the why there's such a big misunderstanding between the genomic versus the cDNA as opposed to novel manipulations or natural mutations maybe that that you can patent it it really so I'm glad you hit on that point and I'm glad you I know that somebody is out there saying wait a minute it's really still a natural product the cDNA if you don't manipulate it all you're doing is copying and putting it into a vector so you can sequence it so I think that the cDNA gDNA distinction has been one that is not universally subscribed to in terms of the doctrine that it's not entirely cleared a lot of people that that as a matter of doctrine it makes a huge amount of sense that said as I indicated the cDNA patents are considered much more commercially valuable and I think that there's a certain element of economic policy also in patent law that is you know inevitably part of patent law so could you clarify when you're talking about the cDNA patents or you're talking about specifically myriad cDNA patents or the set of cDNA patents that there are lots of cDNA patents right the set of cDNA patents are those are all still valid right but okay yeah so yeah absolutely sorry follow up no no so my question was is is your feeling that you know because there are so many cDNA patents out there outside of this the ones at myriad has that the supreme court didn't want to take them all down at the same time that it was taking down this you know by restricting it to the gDNA and leaving the cDNA is open it was a sort of a solemnonic decision or whatever it was I think that there was a solemnonic decision I'm not sure they fully understood all the implications but I think it was clear to them that drawing that distinction would leave the biotech industry largely satisfied and also satisfy the concerns of researchers about gDNA claims so so it was a way to to try to balance the interests of the commercial community and research to the research community I wonder I wonder if you could comment a little bit further on this distinction of diagnostic versus therapeutic especially in cases of oncology where that that line's getting blurred or in rare diseases where all the nucleotides and others are actually the diagnostic is intrinsically linked to the therapeutic yes so I think it's going to be very interesting because yes certainly with companion diagnostics I think it's going to there's going to be pressure brought to bear on that distinction because with the companion diagnostics in particular some of those patents could be quite commercially important and so query how that will all work out I think some people are rightly concerned about that question Artie I was wondering um do you have any sense of what ambry gene dx and the others what their response has been since the suits I mean specifically are they still offering the tests and and if if any of them are still offering it do you that you know are you aware of any reports of sort of the quality of the annotation going on since they don't have access to the myriad databases I believe they're still offering the tests I do not know about quality I know they dispute the myriad numbers I don't know specifically about I as I understand it they put their V us rates significantly lower than the myriad numbers and in fact in the one of the briefs um argued that myriad was unfairly maligning their tests and and that was part of the monopolization claim although I'm not entirely clear as as to how that fit into the monopolization question yeah I can confirm that they're still offering the test many of us are sending it yeah to to myriads competitors I'd be interested in what bob nusbaum might think I you know that claim of 20 to 30 percent V us is I my perception is is grossly inflated certainly what amry has on their website um is a uh estimate that they'll have I think it's around a five percent V us rates um which seems more realistic to me but I was wondering what bob thought well there's a paper published in 2009 first author easton which includes four co-authors I believe from myriad that um have a lower V us rate than they're claiming now amry would have um and and based on public databases back in 2009 so although myriad may have improved their V us rate it's sort of hard for anybody to know because it's a closed shop but I think that it's hard for me to imagine why the V us rate would have jumped uh in the last four years um um so that's that kind of that's my feeling about him thank you I'm the other club thank you already that was terrific so breaking uh we are breaking for lunch for the rest of the audience but for the council members uh we're going to have your photograph taken so if you could please stay at the table uh the photographer will come in here I think we have a room reserved for the picture and then after that you can go to lunch and can we please come back at 115 to resume okay that's right