Remedy to Incentivize Innovation as In Vitro Diagnostics Face Patent-Eligibility Challenges and Added Regulatory Scrutiny


On Monday the Supreme Court denied Sequenom Inc.'s petition for review of Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371 (Fed. Cir. 2015), in which a panel of the court held that method claims in U.S. Patent No. 6,258,540 were patent ineligible under 35 U.S.C. § 101.

The denial of certiorari leaves the Federal Circuit's ruling in place, which was the latest in a series of opinions that have significantly curtailed patent rights to compositions and methods involving natural phenomena, such as DNA. Over twenty amici, including Eli Lilly, Novartis and the Biotechnology Industry Organization filed briefs in support of Sequenom, hoping to clarify the reach of Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012), and avert instability in the life science industry, where patent rights support investment in research and development.

The '€˜540 patent was based on the discovery that fetal DNA fragments circulate freely in maternal blood. The inventors isolated this cell-free fetal DNA (cffDNA) and, after analysis using next generation sequencing technology, reliably diagnosed fetal aneuploidies such as Down syndrome as early as 10 weeks after conception. The method was heralded as a practical, non-invasive alternative to amniocentesis and chorionic villus sampling.

The Federal Circuit applied the two-step test the Court outlined in Mayo for distinguishing between patents that claim judicial exceptions such as laws of nature, natural phenomena, and abstract ideas and those that claim patent-eligible applications of those exceptions. First, the court asked whether the claims were directed to a judicial exception, and held that indeed the existence of cffDNA in maternal blood is a natural phenomenon. Second, the court asked whether the additional claim elements transformed the nature of the claim into a patent-eligible application of the natural phenomenon by reciting "significantly more" than the exception itself. The court found that the additional claim elements of amplifying and detecting the cffDNA did not transform the nature of the claims into patent-eligible subject matter, as those steps were well-understood, routine and conventional.

The claims of the '540 patent were intended to cover use of Sequenom's MaterniT21® test, an example of an in vitro diagnostic (IVD). IVDs are a growing segment of the biotechnology industry and comprise assays and kits for collecting and analyzing biological samples such as blood or tumor tissue, including companion diagnostic tests necessary for physicians to select targeted drug treatments. IVDs are fundamental to the emerging practice of personalized medicine, which makes use of an individual's genetic information to diagnose and treat disease.

Because IVDs involve detecting analytes in biological samples, patents directed to methods of using IVDs are likely to hinge on naturally-occurring phenomena. Use of IVDs also involves correlating test results with disease states and treatment interventions. These are steps that courts have deemed to be mental processes, which may be excepted from patent eligibility because they involve comparisons that can be performed by the human mind (see, e.g., Genetic Techs. Ltd. v. Merial L.L.C., 818 F.3d 1369, 1378 (Fed. Cir. 2016)). Thus, while IVDs stand at the forefront of personalized medicine, case law including Mayo and Ariosa has substantially limited the ability to secure patent rights protecting much of the technology underlying IVDs.

Inventors can consider these limitations when drafting and prosecuting patent applications. Patent claims can be written to circumvent the restrictions of Mayo and Ariosa if they recite additional elements that transform the use of natural phenomenon to include patent-eligible applications beyond the exception. Certain method claims may be patent-eligible even when they recite natural phenomena, as outlined in the May 2016 PTO guidance containing subject matter eligibility examples. Example 29 indicates that a method claim is patent-eligible where it is directed to detecting whether a protein "JUL-1" is present in a patient's plasma by contacting a plasma sample with an anti-JUL-1 antibody and detecting binding between JUL-1 and the antibody. Although nature-based product limitations are recited in the claim (e.g., the plasma sample and JUL-1), the PTO reasons that the claim as a whole is focused on a process and not the products of nature per se. This approach may not always be successful, however, as Claim 1 of Sequenom's '€˜540 patent is also a process for detecting the presence of a naturally-occurring product in a plasma sample and quite similar to this claim structure.

The uncertainty surrounding U.S. patent rights for IVDs coincides with the FDA tightening regulatory oversight of such devices. Because IVDs can include systems for disease diagnosis and treatment selection, they can inform "life or death" decisions. An example would be a test that provides information necessary for treatment selection in a disease with a high mortality rate. Herceptin is a breast cancer treatment that specifically targets the HER2 receptor, a cancer driver mutation present in only a subset of breast tumors, and thus HER2 IVDs carry risk, such that poor test performance could result in failure to identify HER2 positive patients, or inappropriately identify HER2 negative patients for Herceptin treatment. With the proliferation of IVDs used in personalized medicine, the FDA is holding IVDs to ever-higher regulatory standards.

On June 1, 2016 the FDA approved the Roche cobas® EGFR v2 Test, a designated Class III IVD subjected to a rigorous premarket approval (PMA) process. Class III devices are those that carry the highest risk, and have traditionally included implantable devices necessary to support or sustain human life such as pacemakers, implantable defibrillators and diaphragm stimulators. The cobas® EGFR v2 Test uses a novel personalized medicine approach referred to as a "liquid biopsy." It is the first FDA-approved genetic test that can detect EGFR gene mutations in non-small cell lung cancers based on a blood sample (rather than a tumor biopsy).

While meeting the demands of the PMA process may be challenging for device manufacturers, Class III status confers 6 years of data exclusivity for clinical and pre-clinical trials under 21 U.S.C. § 360j(h)(4)(A). By statute, copycat IVD manufacturers must undergo full clinical trials for their own IVD devices or wait 6 years for the right to reference the pioneer's studies. This is similar to the 5 years of exclusivity provided by the Hatch-Waxman protections for new chemical entities and the 12 years of exclusivity provided for new biologics.

This exclusivity is not available for Class II IVDs, however. Class II devices are not approved by the FDA, but rather cleared for marketing and sale in the U.S. through a § 510(k) notification if they are "substantially equivalent" to a device already on the market. While a § 510(k) applicant has a less burdensome pathway to regulatory clearance, this submission does not ensure market exclusivity. An example of a Class II device is Cepheid's Xpert® vanA Assay, an IVD that detects antibiotic resistant bacteria in patients and hospitals.

For IVDs that are truly new and different —€“ with no predicate comparison —€“ the statute requires Class III designation initially. If their safety and efficacy is commensurate with Class I or II, the manufacturer can petition to down-classify. New IVDs that are appropriately down-classified should be awarded some exclusivity if they are the first of their kind. Perhaps 3 years of exclusivity would be suitable to allow new IVD manufacturers to recover their investment. During that period, the reclassified IVD could not be referenced for functionality and operational features as a predicate device for any follow on § 510(k) approvals.

IVDs are at the forefront of biotechnology and the basis for the ongoing revolution in personalized medicine. The case law discussed above substantially constrains patent rights for these devices, and no scheme is currently available to incentivize needed research and development.

To support innovation, new legislation should grant pioneering in vitro diagnostic companies a period of market exclusivity that sufficiently recompenses their investment. Ideally, regulation will encourage innovation that benefits human health and economic development, with the right balance of incentives and regulations to encourage creation of innovative and valuable tests that also ensure public safety.

Written with Gina F. Nellesen, 2016-2017 Fellowship Attorney