Three Blockbuster Patent Cases at the Supreme Court This Term

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The United States Supreme Court is being asked to make decisions in cases involving DNA molecules, generic drugs and genetically modified seeds. The court’s decisions will impact how genetic research is conducted, drugs come on the market and food is grown, according to Professor Daryl Lim of The John Marshall Law School in Chicago.

Patent law isn’t often a subject that gets most people talking. But this year, three patent cases before the U.S. Supreme Court could impact people at the most basic levels and have important consequences for the future of food and medicine here and abroad.

The controversial cases involve ownership of isolated genes, the cost and availability of prescription drugs as well as the seeds used in almost everything we eat, according to Intellectual Property Law Professor Daryl Lim of The John Marshall Law School in Chicago.

In the case Association for Molecular Pathology v. Myriad Genetics (132.S.Ct.1794 (2012)), the Court will determine if human genes are patentable. Earlier the Federal Circuit, the nation’s appellate court for patent cases, had concluded that DNA molecules used in breast cancer testing and screening could be patented.

“This case invokes strong emotions on both sides. The broad argument against allowing such patents is that it gives companies a monopoly over a basic element of the human body,” Lim said.

As a practical matter, the American Civil Liberties Union, one of the plaintiffs, maintains that allowing such patents would inhibit affordable access to medical care and research. Myriad, the molecular diagnostic company owing the patents, spent $500 million over 17 years to develop its tests.

“Myriad has warned that without patent protection, investment in personalized medicine would be chilled, since patient therapies depend on such tests. Its patents protect molecules isolated from the human body,” Lim noted.

“I believe the Supreme Court will approach its decision fully aware that adequate patent protection is an existential issue in these industries. The key challenge it faces is how to tailor that protection in a way that better represents its view of the balance between competing interests while being as faithful to the underlying principles of patent law as possible.”

In Federal Trade Commission v. Watson Pharmaceuticals (12-0416 WL 4758105 (2012)), the Court must decide if generic drug companies can agree with potential rivals owing patented drugs to stay out of the market until those patents expire, or whether such agreements violate antitrust laws.

“The Federal Trade Commission (FTC) estimates the agreements cost consumers $3.5 billion yearly as companies share the profits,” the professor explained.

Supporters say these agreements are within the scope of their patent rights and serve as an efficient way to avoid costly litigation. The Court took the case to resolve a split between federal courts on the issue.

“This case is one battle in a much larger war,” Lim predicts. “If the agreements are upheld, the FTC will continue the fight through legislative reform. If the FTC wins, such payments will become presumptively illegal but patent owners have other strategies to exclude their generics competitors.

“One controversial strategy involves making small non-therapeutic changes to drug formulations and withdrawing the original before generic competitors enter,” he said. “This allegedly forces patients to switch to the reformulated patented drugs. Future battles notwithstanding, any clarity the Court can provide will be valuable.”

And lastly, Monsanto v. Bowman (133 S.Ct. 420 (2012)) involves the right of farmers to replant second or later generation genetically modified seeds they bought with the permission of patent owners.

“Seed technology contributed to vast increases in crop productivity. Most soybean, corn and cotton are grown in an industry worth more than $25 billion worldwide. These seeds are ‘self-replicating’ technologies because they lead to seed that can be re-planted again and again,” Lim explained.

Since 2010 Monsanto, however, got $20 million by suing 400 farmers for infringement. Indiana farmer Vernon Bowman argued that allowing Monsanto to prevent re-planting contravene laws that cut off that control once seeds are sold. Monsanto and the U.S. government contend that patent law allows this control to protect the ability of patent owners to recoup their investment.

Lim was a co-consultant to the American Antitrust Institute on its amicus brief to the United States Supreme Court in the Bowman case.

“This case has implications for other forms of self-replicating technologies such as cell lines, virus strains and microorganisms, including those found in the earliest Supreme Court cases which helped spur the biotech boom,” the intellectual property law expert stressed. “Siding with Farmer Bowman may result in more robust rights for farmers and users of patented technology in general. But interpreting this ‘first sale doctrine’ too broadly may destabilize innovation incentives in these industries.”    

As the final arbiter on patent law, the Court’s focus on these industries “worries some patent practitioners, who think its recent decisions were based on a misaligned view of how these industries work,” he added.

The Federal Circuit was created thirty years ago as a specialist court of appeals to harmonize patent law but it has also produced many cases favoring patent owners.

“Some Federal Circuit judges today question past orthodoxy on what it takes to promote innovation. What is clear is that this is the beginning of a new normal for both the Federal Circuit and the Supreme Court. Conflicting views on innovation and competition are, and will continue to be, fought out in future cases,” Lim said.

About The John Marshall Law School
The John Marshall Law School, founded in 1899, is an independent law school located in the heart of Chicago’s legal, financial and commercial districts. U.S. News and World Report America’s Best Graduate Schools 2013 ranks the law school’s Legal Writing Program sixth in the nation. The publication also ranked the Intellectual Property Law Program 17th. John Marshall offers the nation’s only graduate program in employee benefits. Its program in Information Technology and Privacy Law remains the only graduate law program in the country that emphasizes privacy as part of its core curriculum. And, The John Marshall Law School is one of three law schools in the country offering graduate programs in real estate law.

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Marilyn Thomas
The John Marshall Law School
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