Why the Biotech Industry Is Rejoicing Over the End of Gene Patents

On the surface, last week’s Supreme Court ruling that human genes cannot be patented looked like a huge blow to the biotech industry, which collectively holds thousands of patents on isolated DNA sequences and has a vested commercial interest in protecting these intellectual property rights. But as it turns out, biotech firms don’t really want to own your DNA after all.

To get a sense of the broad scope of gene patenting, consider this: Since 1984, the US Patent and Trademark Office has issued around 40,000 patents related to human genes, covering around 20 percent of the human genome, according to a 2005 study in Science. A more recent estimate, published in March in Genome Medicine, found that as many as 41 percent of of the human genome has actually been claimed by at least one patent.

Thursday’s Supreme Court ruling would appear to challenge these claims. The court ruled unanimously that patents on raw DNA—the natural DNA found in the human body—were invalid, while upholding patent protections for modified genetic material, including complementary DNA, or cDNA, which is synthetically created. Moreover, the ruling applied to all gene patents, not just those on human DNA.

But in a surprise twist, the NASDAQ index for biotech companies—and the stock price for Myriad Genetics, whose patents were at the center of the Supreme Court case—actually rose after Thursday’s ruling. Although both have fallen slightly since, it looks like biotech investors are pretty happy about how the court came down on the gene patent issue.

According to an analysis on gene patents published last month in Nature Biotechnology, the number of patents on raw, or natural, DNA has been steadily declining since 1999, while other types of gene patents—including patents on synthetic DNA and on methods of diagnosing DNA—have been rising. Between 2000 and 2010, the percentage of gene patents that claimed human DNA sequences has declined from 58 percent to 19 percent, while the percentage of gene patents that claimed synthetic DNA has risen from 14 percent to nearly 40 percent, a trend that researchers attribute to the realization among biotech companies that its hard to profit off of patents on raw DNA. In other words, it doesn’t really matter who owns a gene—it’s what that they do with it that counts.

“What the Supreme Court did do was create a clear distinction between what they consider natural genomic sequences, and cDNA, or complementary DNA, which is synthetic, but basically mirrors the sequences found in nature—the Supreme Court says you can patent that kind of stuff,” said Greg Graff, a Colorado State University professor who co-authored the Nature Biotechnology study. “That's what gave the biotech industry more of a shot in the arm, because most of the commercial products tend to hinge on these synthetic concepts.”

Read the rest over at Motherboard.