Last week, following the denial of its petition for a panel rehearing, the ACLU announced that it will seek to bring the much-debated Myriad Genetics case before the Supreme Court.  Among other things, the case involves the patentability of isolated DNA – pieces of natural human DNA that have been chemically cleaved from the chromosome.  Myriad Genetics holds patents over two isolated DNA genes, BRCA1 and BRCA2, which are linked to susceptibility to breast cancer and may be used for clinical screening.  According to Myriad, women with mutations in these genes have an 82% risk of developing breast cancer, compared to about a 10% chance in the general population.

The history of the Myriad Genetics case has been tumultuous.  The U.S. District Court for the Southern District of New York unsettled the biotech industry when it ruled that isolated DNA was not patent eligible under 35 U.S.C. § 101.  This decision went against the long-standing tradition of the U.S. Patent and Trademark Office, as well as the Supreme Court’s history of interpreting § 101 broadly.  However, although the statute is broad, it does have certain established limitations.  The one at issue here is the restriction on patenting “products of nature” unless they are “markedly different” from naturally occurring ones. See Diamond v. Chakrabarty, 447 U.S. 303 (1980).  In a 2-1 decision in July, the U.S. Court of Appeals for the Federal Circuit reversed the district court’s ruling, restoring the status quo by finding isolated DNA patent eligible under § 101.  The court based its decision on the finding that isolated DNA is “markedly different” from DNA occurring in nature because the act of cleaving it from the chromosome gives it a new chemical composition.  The court also stressed the importance of deferring to Congress regarding potential changes in the scope of patentable material.

While the waters may currently seem calm, there is a good chance that this case will move forward, and a Supreme Court decision could have an historical impact on the future of biotechnology.  First, the decision itself is not beyond critique.  The dissent makes a strong case against patenting isolated DNA.  It compares the extraction of natural DNA to plucking a leaf from a tree or isolating the element lithium, since lithium only occurs in nature as part of chemical compounds.  Judge Bryson argues that isolated DNA is no different from naturally-occurring DNA except for the chemical changes that necessarily result from its extraction.  Consequently, he finds unconvincing the majority’s argument that isolated DNA is “markedly different” from natural DNA based solely on this minor chemical difference.

Secondly, the Myriad case exposed a tension within the government.  Although the ACLU brought the case against Myriad Genetics and the U.S. Patent Office, the Department of Justice actually submitted an amicus brief in support of the plaintiffs.  This uncertainly on the federal level suggests that the Supreme Court may hear the case and perhaps even restore the lower court’s ruling.  If the case goes forward, it will be interesting to see whether the Court rules narrowly or decides to expound more broadly on the patentability of other biotech products.

The Myriad case has received a lot of attention because of its policy implications.  On the one hand, the plaintiffs argue that the patents stifle patient access to clinical tests and suppress related DNA research.  They also raise ethical issues regarding the “ownership of what some view as our common heritage.” Ass’n for Molecular Pathology v. U.S. Patent and Trademark Office, 702 F. Supp. 2d 181 (2010).   Strong policy arguments exist on the biotech side as well, since companies rely on their patents when developing new products.

Do patents on isolated DNA restrict patient access to care any more than patents on new medications? Although clinical screening based on genetic code is an emerging field of medicine, access to affordable health care is far from a new debate.  There are also some who say that patents are preferable to their alternatives.  If a company is unable to rely on a patent for exclusive rights to a newly discovered gene or product, it will be forced to rely on trade secrets to keep its discovery private.  Thus, it is argued that patents actually encourage the free exchange of information and thereby incite other parties to conduct related research.

Many also fear the repercussions from a decision finding isolated DNA patent ineligible.  Would this restrain a growing biotech industry during a time when the last thing we want to do is stifle the job market?  What would happen to those who already hold DNA patents and rely on these patents for their work?  Would a Supreme Court decision reverberate beyond isolated DNA and prevent patents relating to stem cells and proteins?

With all of these worries and uncertainties at stake, it seems that maybe the U.S. Court of Appeals for the Federal Circuit was right in deferring to Congress. For even if the majority’s “markedly different” holding is weak, isn’t the concurrence correct in finding that “the judiciary is ill-suited to determine whether the claims at issue pro­mote or inhibit science”?

Graciously accepting ill-suited gifts and slyly exchanging or re-gifting these unwanted articles may become antiquated formalities of the past.  In November, Amazon received a patent for a System and Method For Converting Gifts, US Patent No. 7,831,439 (issued Nov. 9, 2010). Amazon explains in their patent application that “as in other gift-giving situations, it sometimes occurs that gifts purchased on-line do not meet the needs or tastes of the gift recipient who may already have the item and may not need another of the same item [and] wish to convert the gift into something else, for example, by exchanging the gift for another item or by obtaining a redemption coupon, gift card, or other gift certificate to be redeemed later.”

The recipients can choose to exercise their own discretion in determining whether to invoke a preemptive gift swap or, alternatively, rely on an automated process by delegating the decision to an algorithm which determines when a substitution is necessary.  Figure 7 of the patent illustrates how a user may use the product recommendation capabilities of Amazon’s website to facilitate gift conversion decisions.  Additionally, this system enables the recipient to automatically replace gifts sent from specified individuals.

While gift-giving purists may object to recipients seemingly hijacking a gift-giving process, Amazon spins the purpose of its system away from the selfish inclinations of recipients and frames the system’s utility in terms of the gift sender who can enjoy more creative latitude with gift-exchanges serving as a safety net for good intentions gone awry:

“[C]oncern that the recipient may not like a particular gift may cause the person sending the gift to be more cautious in gift selection.  The person sending the gift may be less likely to take a chance on a gift that is unexpected but that the recipient might truly enjoy, opting instead of a gift that is somewhat more predictable but less likely to be converted into something else.  If the sender does decide to send the more unexpected gift, the sender may offer words of encouragement to the recipient (e.g. instructing the recipient to “feel free to exchange it if you don’t like it”).”

Additionally, others have identified potential economic benefit of gift optimization through reducing the volume of shipped goods, as unwanted gifts would be preemptively rejected rather than leaving the warehouse only to be shipped back and exchanged. While this scheme may mark the beginning of a shift in the sender-recipient dynamic in online shopping, Amazon has not indicated how much progress has been made in implementing this system, nor has a final date been established for its availability to Amazon users.

As courts [PDF] have established standards for subpoenas to ISPs in online defamation lawsuits, they have raised new questions.

Professor Wasserman has raised the question whether these standards are a part of state substantive defamation law that federal courts would apply in diversity actions under Erie or are instead mere procedural rules. My article from JTLP, Who’s Exposing John Doe? Distinguishing Between Public and Private Figure Plaintiffs in Subpoenas, argues that the constitutional distinction between public and private figures in defamation law should apply to certain procedural issues also. My proposal would appear to be a substantive distinction that federal courts would apply under Erie. The court opinions [PDF] fashioning standards also discuss substantive and constitutional issues in developing the procedural rules.

What do you think?

Congressional hearings this week focused on whether or not traditional radio stations should have to pay royalties for the music they play. Billy Corgan of The Smashing Pumpkins, was among those who testified in support of H.R. 848, The Performance Royalties Act. Radio stations argue that the value of promotion they give artists outweighs the costs of any royalties due. That’s an argument that sounds familiar, and may explain some of the impetus for copyright holders to come forward now to reject such a rationale.