Will the Supreme Court kill the gene-patent business?

For $99, the company 23andMe can generate all of your basic DNA testing information: ancestral origins, disease predisposition and even if you are more likely to sneeze under a bright light. But it is the only company in the U.S.  that can tell you if you carry a gene variant that makes you more likely to develop Parkinson’s Disease.

Like many other companies in Silicon Valley’s thriving biotechnology scene, 23andMe holds a patent for a human gene. Anyone who wishes to find if they carry the Parkinson’s-related gene must use 23andMe’s testing kit. In fact, that’s how Google’s Sergey Brin, who also happens to be married to 23andMe co-founder Anne Wojcicki, found out he has the gene.

It is a scenario that is common across the industry; companies pour money into research and then rely on patents to protect their discoveries and diagnostic tools, and to generate revenue. More than 40,000 patents cover 41 percent of the human genome, according to a Cornell University study released in March.


That could change this year. A case currently before the Supreme Court asks the justices to consider if a human gene should be patentable. At the center of the case is Myriad, a Utah company that holds two patents for genes linked to breast and ovarian cancer. Supporters say intellectual property protection makes it possible for companies to confidently sink millions into research. They also say the patents are issued for the minute segment of DNA that makes up a gene, which researchers must extract from a much larger strand. Once it is removed from the body and chemically altered, it becomes distinct.

“They were never available to the world until Myriad’s scientists applied their inventive faculties to a previously undistinguished mass of genetic matter and created a new chemical entity,” Myriad says in a Supreme Court brief.

Opponents say it is still the same gene, and isolating it does not constitute a patentable invention. They also say being able to patent genes makes genes inaccessible to research and raises testing costs for patients. “I see Myriad’s claim that a gene should be patentable because they isolated and purified it away from its natural context to have no more validity than claiming that if you cut a leaf off a tree you have now created a new ‘thing’ and should be able to patent it,” said Robert Nussbaum, head of genomic medicine at University of California-San Francisco and founder of an open-access gene database. “I see a gene that is isolated or patented as being a discovery of something in nature, not an invention.”

The justices are expected to rule before the end of their term in June.

What’s at stake

U.S. Supreme Court

For years, the U.S. Patent and Trademark Office and Supreme Court have issued and upheld patents for just about anything produced by man. Dan Burk, a University of California-Irvine professor and intellectual property expert, said the Supreme Court is aware that banning gene-related patents would upset 30 years of expectations.

As a result, many experts believe the justices will try to strike a balance by banning some types of gene patents, but not all. When a company patents a gene, it is patenting a stretch of DNA that has a specific purpose. Burk and other law and bioscience experts I spoke with for this piece believe the court will rule that genetic DNA, which is extracted from a cell, is unpatentable. But complementary DNA, which is made in a lab and has a different structure, will remain patentable, they believe. Both can have the exact same purpose, but gDNA is present in nature and cDNA is not.

Companies tend to patent both gDNA and cDNA versions of genes. Myriad, for example, has gDNA and cDNA versions of its patents. Burk pointed out that one without the other is not very valuable. If gDNA patents are banned, no one is going to license a cDNA patent. Instead, they can develop a similar product or process using gDNA for free.

“I don’t think it’s going to make it such that it’s totally unprofitable and impossible to do work in the future,” said Jacob Sherkow, a fellow at the Stanford Center for Law and Biosciences. “It’s just going to make things harder, and eventually, with enough time, they’ll find a way to get around this legally, if not scientifically.”

Silicon Valley’s role

Silicon Valley is closely tied to the advent of human gene patents. The University of California-San Francisco and South San Francisco biotechnology company Genentech received patents for human growth hormone and insulin genes in the early 1980s, dramatically rewriting industry expectations for intellectual property.

Today, Genentech is a giant of biotechnology. It holds about 10,500 patents covering areas such as genes and gene applications. Its insulin patent expired in 2005 after bringing in $2 billion in sales.

Patent-holding diagnostic companies like Amgen, Navigenics, Target Discovery, 23andMe and Genomic Health also have stakes in the Myriad case. It’s a lucrative business: A 2012 study by UnitedHealth Group found the U.S. was spending $5 billion a year on genetic tests for 2,500 conditions. By 2021, that number could be $25 billion.

Most of the patent holders say they support scientific research and people’s access to their genome, but say they need to make money to be able to continue to research gene applications.

dna strand

“We do fundamentally believe that individuals should have access to their own genetic data and that patents should not be used to prevent individuals from knowing what’s in their genome or to obstruct the advancement of scientific discovery,” 23andMe spokesperson Catherine Afarian said. “23andMe’s mission is to make scientific discoveries that have a positive impact on the lives of people everywhere. We believe patent protection is one method that can help us achieve that.”

With Myriad’s patent in place, no other company can test for the breast and ovarian cancer genes. Instead, the consumer–or, more likely, their insurance company–pays around $4,000. Other genes carry upfront fees as high as tens of thousands of dollars for research labs and hundreds of thousands for commercial labs, plus royalties on every test sold. The fees vary depending on whether a patent is licensed exclusively or non-exclusively, says Dietrich Stephan, a geneticist and founder of several biotech companies. If gDNA or cDNA patents are banned, anyone will be able to test for disorders without a license.

Showing how complex the gene patent business is, a restrictive court ruling could both hurt and help a company like 23andMe. On one hand, the startup could lose its exclusivity on the Parkinson’s patent, which would cut into its revenues. But if Myriad’s breast cancer gene patent no longer exists, 23andMe (and anyone else) could screen for the gene in their testing kit without paying the licensing fee.

Priced at $99, 23andMe has one of the cheapest tests available. But that’s been subsidized by tens of millions of dollars of venture capital, which dropped the price from an original $999. San Francisco start-up InVitae, which aims to “aggregate the world’s genetic tests into a single assay,” according to its website, filed a brief with the Supreme Court against Myriad. It currently charges $1,500 to screen for 264 conditions.

Whatever combination of gene patents is banned, the genetic testing industry is about to become much more open. Soon the entire human genome will be routinely sequenced for $1,000; the Archon Genomics XPRIZE offers $10 million to the first institution to do so quickly and accurately. The question is whether analytics tools will become equally affordable.