15 Apr 2013: The Myriad case on “human gene patents” was argued at the Supreme Court this morning and it’s a big day for Intellectual Property. Here are 3 things you should know:

1. It’s not really about human genes. It is often pitched that way to get people’s attention, and it is certainly an attention-getter. It involves breast cancer (the genes at issue, called BRCA1 and BRCA2, predispose one to get breast cancer — hence their names). It also involves health care costs (Myriad’s patent allows them to charge a mint to test for these genes — over $3000…which they point out is covered by insurance…but remind me again who pays for insurance?)

But the legal arguments have to do with gene patents in general. There isn’t much that’s special about human genes; we share 98% of them with chimps. Here is what is special about human genes: a genetically engineered human cannot be patented because of the 13th Amendment, although you can patent any other kind of genetically engineered organism.

But the human-ness of the genes in the case may be significant in the end because federal courts have had a consistent aversion to human gene patents (although without addressing why human genes should be different).

Listen to this. Trying to figure out how to devise policy that balances economic incentives with concepts of invention and property rights. The problem is, that isn’t his job. That’s what happens when you have a case that turns on a non-existent legal principle.

2. The argument that funding for genetic research will dry up without DNA patents is deceptive and overstated. The vast majority of new genetic inventions — including medical and agricultural — are based on publicly funded research. Yes, private companies do research too, sometimes spending a lot, plus they put out some long green for “regulatory science” (safety/efficacy studies). But more often than not they are capitalizing on basic research done by academics and paid for by the government.

In this “human gene” case, a private corporation was spun off from an academic lab doing basic research supported by the government. Specifically, Myriad Genetics was spun off from the Univ. of Utah in 1991 after receiving $5 million from the National Inst. of Health. Their work, in turn, was based on a lot of other public-funded academic work, most notably pioneering research on the BRCA genes by Mary-Claire King at the Univ. of Washington with funding from the National Cancer Inst.

3. The fate of gene patents rests on one of the biggest unanswered questions in law. Products of nature are not patentable; inventions are. What is dividing line? A tree isn’t patentable but a baseball bat carved out of it is^*; but why? What is the rubicon you have to cross to turn a product of nature into an invention? What is the deciding criterion?

The more you look at the history of court cases confronting this question, the more different answers you find. I pointed out in an earlier blog that courts have for many years just plunged ahead and made decisions in patent cases without a clear legal basis for telling nature from invention. They go with their gut.

In fact, the last time the Supreme Court saw the Myriad case is a case in point. This case was appealed to them back in 2010. They sat on it a while and then sent it back to lower court and told them to consult another case in which they gave an example of one “invention” that was still a product of nature and one “invention” that crossed the line. But they still never clarified what the dividing line was.

So we end up with a profoundly important case hinging on an unstated legal principle:

• Myriad (joined by the biotech industry and the court of appeals) says their gene patent is valid because in the process of using the gene in a test they changed it from a product of nature into an invention. And they did change it too — chemically.
• Another company called Molecular Pathology (joined by the ACLU, the US Dept. of Justice, and the District Court) says the gene patent is invalid because the only value of DNA is to encode information, and it still encodes exactly the same information after the chemical change. In fact, if it didn’t encode the same information, it would be worthless.