Dr. Shi of EdgeTech Law: Despite Mayo Clinic v. Prometheus “Setback,” Opportunities in Life Sciences Remain

OneMedPlace is pleased to announce a special interview series exploring current issues facing the diagnostics sector and life sciences in general with Dr. Qin Shi, Managing Principal of Edgetech Law.

The series features segments of a Q&A session covering many aspects of the sector, from intellectual property and patenting issues to emerging markets in China. Along the way Dr. Shi discusses what makes Edgetech Law unique, the challenges and opportunities of company growth advisory in the space, and what particular technologies an investor may find irresistible.

In Part II of the Q&A series, Dr. Shi offers some advice to investors on emerging markets abroad, and the opportunities within areas of significant unmet need in life science. In Part III, Dr. Shi discusses genome sequencing, the JOBS Act and the future of Edgetech Law.

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Part I of this interview series is a discussion of Mayo Collaborative Services [Mayo Clinic] v. Prometheus Laboratories, Inc. and the current landscape of patents in drug development and development of companion diagnostics. The diagnostic world especially may be experiencing a paradigm shift in what is accepted, as the push for preventative and personalized medicine requires the customizing of natural processes in the body.

On March 20, the Supreme Court held that two patents related to a diagnostics test owned by Prometheus were ‘underlying laws of nature,’ and thus could not be protected against the unauthorized use by the Mayo Clinic. The decision, ruled 9-0 in favor of the Mayo Clinic, was met with criticism by the pharmaceutical community, expressed mostly by the perception that strongly protected patents are essential to incentivize the risky, expensive, laborious process of drug development and the development of novel diagnostics as well as combined diagnostics-therapeutics.

Out of this ruling arise several issues related to business practice as well as the philosophy of science. Are these semantics rulings, meant to further tighten the regulatory process, or indications of a larger precedent? Can natural elements of the body, identified as biomarkers, be patented? What about the process taken to identify the biomarkers, or the conclusions and treatments we draw from it? Will ‘unpatentable natural law’ inherently lead to a ‘chilling effect’? Do for-profit entities have a responsibility to share their findings with non-profits?

Dr. Qin Shi joins OneMedPlace CEO Brett Johnson for a candid look into the future of intellectual property in the realm of diagnostics and personalized medicine. Though Dr. Shi describes the decision as a “setback,” she proceeds to outline how companies can position their IP strategy to grow despite the tightened leash. The leader of a veteran law firm with unique ties to the business of diagnostics, Dr. Shi examines in some details the rationale of the courts and how companies can continue to grow.

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Brett Johnson:      What advice are you giving to your clients about this new development in IP law?

Dr. Qin Shi:       The Prometheus decision undoubtedly represents a setback for IP owners, especially in the diagnostics space. However, the Court’s reasoning also says to me that there are ways to navigate this ruling and maximize the scope of protection surrounding diagnostics businesses. I advise clients to avoid simple correlations that appear to be natural phenomena or law of nature. Beyond that, there is still much to capture creatively.

Brett Johnson:      How will companies begin to protect what may be deemed as “unpatentable natural process”?

Dr. Qin Shi:       The operative term in the context of Prometheus and related cases is “patent eligibility,” as opposed to “patentability” per se. In fact, the Court’s opinion seems to have the problem of conflating the patent eligibility considerations under Section 101 of the Patent Act with the patentability tests set forth in Sections 102 and 103. The Prometheus opinion appears to look for combined 102 novelty and 103 non-obviousness analyses in the context of the patent eligibility inquiry.

This is problematic of course, for the Court’s jurisprudence in this area. But put that aside, it’s extremely confusing for companies looking for guidance as they compete in the market. However, it may be a silver lining that the Prometheus Court in reaching its holding did not enunciate a new, bright-line patent eligibility test. Again, one must look at facts and circumstances on a case-by-case basis. Under Bilski v. Kappos, the machine-and-transformation test was held to be useful, but not required or exclusive, in patent eligibility determinations.

BJ:      So in order not to be held as a natural process that is not eligible for patent protection, how should companies position their business or IP strategy?

QS:      If you are working with biomarkers, you might want to look beyond merely the markers, and at all possible applications for the subject matter of protection. In other words, as part of your business, are you developing or selling smart devices, kits? Are you coming up with novel improvements on existing instruments in order to adapt them for analyses based on the new biomarker? Can you find ways to develop new reagents or improved formulations that would work with the new markers? And so on.

For those who would like to push the envelope and see how much more “upstream” one might be able to go in terms of patent protection on biomarker-related technologies, my advice would be, again, forget about simple correlations. Instead, consider profiles, matrix – some creative patterns and statistics that would shed light on disease conditions or patient prognosis or therapeutic responsiveness. These things are not simple natural phenomena, or simple law of nature.

Now, one needs to be clever in figuring these things out as a matter of science, business, and IP. Don’t forget that you would want to avoid going after pure mathematics or algorithms or have the appearance of doing so, as well.

BJ:      Outsiders often wonder whether there is a trend the Supreme Court is adhering to in making these decisions, Prometheus and the like. Are they trying to establish precedent or are they looking at case-by-case basis?

QS:      It seems as though how the Court came out in a particular case may have more to do with the timing and circumstance, and even the political climate at that particular point. The Roberts Court has been very occupied by some very high-profile cases such as Citizen United, the Obamacare case, and so on.

It would be unsurprising that some justices simply gave less attention to patent cases and went with the champion for a particular position at times. That champion in Prometheus was of course Justice Breyer.

Speaking more generally, it appears true and perhaps of concern, that this Court has tended to be influenced in its analysis of patent questions by inchoate constitutional law – civil liberty law concerns—and have tended to pay lesser attention to the intricacies of the patent law traditions. To me, this means both challenges and opportunity. It means that the IP owners in the diagnostics industry and other industries need to do a better job to educate the Court and courts, and to bring them near the realities of the industries – where IP is front and center and where technology is the engine for growth. By the way, that’s the reason why our practice also includes appeals and amicus briefing for matters of broad impact.

BJ:      Is there a role of protecting nonprofits and academic institutions in this decision? Would these decisions be different among company-to-company lawsuits?

QS:      It would be hard to say that with a different set of litigants, both for-profit companies, the Court would come out differently given the same facts at the time. However, in patent cases involving genes, biomaterials and so on, courts do pay a lot of attention to the arguments for public access and for uninhibited basic research. To that extent, it is possible that Mayo, being a non-profit, may have benefited from such sentiments, something easily shared by the Justices across the political spectrum. Although, as a footnote, in that case Mayo was commercializing its own diagnostics test and the activities in question were not strictly non-profit.

 

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