The end of gene patents

An Australian lawyer’s 20-year quest to put an end to gene patents has been vindicated.

ALL PAR FOR THE COURSE for the Sydney-based intellectual property and trademark lawyer. But in 1993, something landed on Palombi’s desk that made him scratch his head. It was a patent that claimed the genetic code for the hepatitis C virus.

The claim, made by Californian company Chiron, wasn’t just odd, it was at odds with the principles of patent law.

In 1790, when the first patent statutes were written in the United States, American courts had judged that “manifestations of ... nature [are] free to all men and reserved exclusively to none”.

The founding fathers had codified what seems obvious. You wouldn’t expect Marie Curie to be granted a patent for radium, for instance. (That’s not to say her work had to go unrewarded: Curie could have claimed the medical use of X-rays.)

Yet since the 1980s, when it came to bits of the DNA code, the Australian and US patent offices had apparently changed their thinking. The feisty young Palombi decided they were wrong – and took on an epic battle that would change the direction of his legal career and his life.

More than two decades later, the highest courts of both countries vindicated him. On 7 October 2015, the High Court of Australia ruled genes could not be patented. “The information [contained in the genes] is not ‘made’ by human action. It is discerned,” noted the majority of judges. The US Supreme Court reached a similar ruling the year before.

Palombi – the boy in the crowd who called out the naked King – had finally been heard.

While these elite courts specifically deliberated on a case concerning genes linked to a deadly form of breast cancer, their ruling applies to all genes.

For those looking forward to the era of personalised medicine, that decision comes not a moment too soon. We may soon be able to have our own genome read for $100, but with patents claiming ownership of thousands of genes, it might cost 100 times as much to find out your risk for particular diseases and what drugs will work best for you. In other words, gene patents are “an impediment to personalised medicine”, says Francis Collins, director of the National Institutes of Health.

For now, Palombi is savouring his moment of victory. “I think gene patents are history.” But this war of words has raged for more than two decades, and it’s unlikely the struggles are entirely over yet.

THE LOGIC OF AUSTRALIA’S High Court decision is clear and compelling. When it comes to the DNA sequence of a gene, “the information is not ‘made’ by human action”. It is therefore not an invention, and not patentable. So how was it that some of the world’s sharpest legal minds held such a different view for three decades?

Part of the answer is that technological leaps tend to muddy the waters over whether something is a manifestation of nature or manmade. In 1873, for instance, Louis Pasteur was granted a patent not just for his method of purifying yeast to brew spoilage-resistant beer, but also for the yeast itself.

So too, in 1922, Canadian scientists were not only awarded a patent for the method of purifying the life-saving hormone insulin, but for insulin.

Is yeast a different product once it has been purified from the muck it naturally resides in? Is insulin different once plucked out of pig tissues and stripped away from other proteins and toxins? Or is that proposition just as ludicrous as claiming Marie Curie should have been granted a patent for radium after isolating it from pitchblende?

“Deciding whether something is new is easy; deciding whether it is made by man, God or nature is not,” Palombi wrote in his 2009 book

Gene Cartels.

“DECIDING WHETHER SOMETHING IS NEW IS EASY; DECIDING WHETHER IT IS MADE BY MAN, GOD OR NATURE IS NOT.”

Only a tiny fraction of gene patent claims have come under the spotlight of the highest courts. The breast cancer gene patents failed to stand up to scrutiny – and their collapse triggered a new chapter in patent law. But there was a prequel.

IN 1991 AUSTRALIAN BLOOD BANKS were in a panic. A new type of hepatitis virus threatened to contaminate the national blood supply. Kits were available to test donated blood for hepatitis A and hepatitis B. But the new type had long eluded testing. Finally, a Californian company called Chiron isolated the mystery virus which was dubbed hepatitis C. It was cause for celebration. The virus, estimated to cause at least 520,000 hepatitis infections a year, could also cause liver cirrhosis and cancer. But celebration turned to chagrin when the company began enforcing the patent they’d been granted, including a warning letter to the custodian of Australia’s blood supplies, the Australian Red Cross.

The Chiron patent was “the most breathtakingly broad patent I’d ever seen,” Palombi recalls. It laid claim to the DNA of the virus and to its messenger RNA copy (a recipe to manufacture the proteins that are the working parts of the virus), as well as to every conceivable use of the virus, including the right to develop a blood test or vaccine. Although the patent was still pending approval in the US, it had already been granted in the UK and in Australia.

Here, the monopoly of the test was causing two problems for the blood banks. One was that the Chiron test (sold by Abbott Pharmaceuticals under exclusive licence) was 14 times the cost of the hepatitis B tests. The second was that the Chiron test did not pick up all six strains of the hepatitis C virus. In desperation, the Australian blood bank had turned to Canadian company, Murex. It not only tested for the other strains, but offered them at a cheaper price.

The folders now forming a new mountain on Palombi’s desk were from Murex, which was facing a lawsuit from Chiron. Palombi accepted the curious case. Not only did it strike him as a righteous cause, it also seemed winnable.

With the help of scientific supporters including the late Nobel Prize-winning US cancer researcher Baruch Blumberg, Palombi became an overnight expert on biology’s “central dogma” – how genetic information is uploaded from DNA to RNA to proteins. Then he leapt into a decade of case law on gene patents. It went back to 1980 and the influential Diamond v Chakrabarty case.

Ananda Chakrabarty, employed by General Electric, had transferred a foreign gene into the Pseudomonas bacterium giving it the ability to gobble up crude oil spills. At first, the claim of an invention had been rejected by the US patent office on the basis one could not patent a life form. But five out of nine US Supreme Court judges disagreed, finding that “anything under the Sun made by man is patentable subject matter”. They ruled that the genetically engineered bacterium was an invention and hence patentable.

Palombi entirely agreed. But he also traces the point at which patent law was derailed to that ruling. “It was the misinterpretation of ‘anything under the Sun’ that opened the floodgates to the gene patenting era,” he says. In 1998 the European Parliament went so far as to pass the Biotech Directive. It held that “biological materials”, even those identical to the “natural elements” that are “isolated or produced by means of a technical process”, are presumed to be “inventions”.

Swayed by the Chakrabarty argument, a UK judge had recently upheld the Chiron patent against Murex. “I formed a view the judge was wrong,” says Palombi. He put together a team to challenge Chiron’s Australian patent. Finally, in 1996, the case was heard in the Federal Court of Australia.

IT PROMISED TO BE A BATTLE of scientific titans. On Chiron’s side was Sir Gustav Nossal, the face of Australian science and the director of Melbourne’s Walter and Eliza Hall Institute. Nossal believed the hepatitis C patent would serve as the incentive to develop drugs or a vaccine. There was also John Shine, the director of Sydney’s Garvan Institute and a superstar of genetic engineering who’d been

part of the US team that isolated the human insulin and growth hormone genes. Shine’s support for the patent was based on the extreme difficulty of isolating the virus and the inventive steps involved.

Opposing them, the Palombi team boasted Blumberg and Peter Colman, developer of the anti-flu drug Relenza. They argued the patent was harming basic research into the hepatitis virus. As Blumberg stated in an affidavit: “If I were a research director for anti-virals and had the option of working on several viruses, the existence of this patent would weigh against my deciding to undertake [hepatitis C virus] research.” Indeed to this day, while there is a vaccine for hepatitis A and B, no hepatitis C vaccine has yet been developed.

Palombi recalls the scientists’ arguments as “powerful and bitter”. To some extent they centred on how best to serve the public good: patents were the necessary incentive to bring medicines to the market but clearly they could also impede basic research and the availability of the tests.

“This is an area where people of good will disagree,” Nossal reflected.

But public good was an aside to the key legal question: did the act of isolation and purification transform the virus into something other than what it was in nature?

The media were out in force. The storyline was clear: how can you patent what you cannot invent, like a virus?

But the crowd was deprived of the spectacle of a courtroom finale. After just nine weeks of jousting, Chiron capitulated out of court and offered Murex a worldwide licence for Hepatitis C blood testing. “Though it was a fantastic result for my client and the Australian blood supply, at a personal level it was a great disappointment,” Palombi recalls. He felt robbed of the judicial ruling that would burn away the fog that had descended upon the collective legal mind.

IT SEEMS REMARKABLE that from the 1980s, the issue of gene patenting sat largely below the radar of the highest courts. This was probably because the biggest challenges occurred between pharmaceutical companies, and while they had their squabbles, no one wanted to put an end to the lucrative game. And so the issue faded from view, despite the fact gene patents were being granted at a stunning rate. By 2013, 40% of the 22,000 known human genes were under patent.

The case of Murex v Chiron turned out to be a victory of sorts. Palombi acquired a reputation as the one who had “successfully slayed the dragon”, and found himself in global demand. “I don’t know why I just happened to be the guy; 99% of people took the opposite position. I was going to spend the next 15 years of my life fighting for this.”

In legal arenas across the world, Palombi became a firebrand and increasingly ostracised by colleagues in the intellectual property community. A Youtube clip from 2012 shows him in full flight: a broad-chested 50-something, clad in a polo shirt with close-shorn thinning hair and chunky spectacles, goading an audience at the University of Sydney into indignation. “For 11 years, I’ve had to fight armies of lawyers with no scruples … I am classified as a dangerous person, someone who is trying to destroy the progress of science … But at the end of the day, there is a line and you either have an invention or you do not ... The majority of [gene] patents are about getting a monopoly under false pretences.”

After the Chiron case, six years passed before gene patents once again lit up the public radar. In this case the combustible mix was a gene test for a deadly form of breast cancer, and two exceptionally aggressive companies on either side of the Pacific – Myriad genetics in Utah, US, and Genetic Technologies in Melbourne, Australia.

THERE’S NO DOUBT that developing gene tests for breast cancer was a monumental feat. Back in the 1970s most cancer researchers doubted breast cancer could be inherited – notwithstanding the evidence of families like that of Angelina Jolie, where women are at high risk of developing an aggressive, early-onset form of breast and ovarian cancer. To Mary-claire King, a geneticist at the University of California, Berkeley, that was a sure sign of a faulty family gene. It took her two decades to track it down to chromosome 17 in 1990. She dubbed it BRCA1 (breast cancer one) suspecting there would be another.

Four years later, Michael Stratton and Richard Wooster at the UK’S Institute of Cancer Research tracked down BRCA2 to chromosome 13. Between them these two genes accounted for about a quarter of families afflicted by early onset breast cancer. A woman with the BRCA1 mutation has a 55-65% chance of developing breast cancer, while a woman with BRCA2 has a 45% chance of developing the disease up to age 70 (compared to a 12% chance for women in the general population). For a woman in these families, finding out whether she has inherited the gene is crucial.

But identifying the genes was not enough to develop a gene test. Researchers had to pluck the

NOT ONLY DID IT STRIKE HIM AS A RIGHTEOUS CAUSE, IT ALSO SEEMED WINNABLE.

DNA out of the chromosomes and read its code to pinpoint the exact error. Geneticist Mark Skolnick at the University of Utah was the first to claim the prize. He had an advantage – Mormon families. They were large, they kept impeccable family records, and they were willing to offer their DNA.

In 1991 Skolnick founded a company, Myriad Genetics. As he reflected in an online interview: “I came up with the idea of using an industrial answer to the question, believing that we then as a company could serve a great social purpose.”

To be sure, high quality tests for the breast cancer genes became a commercial reality thanks to Myriad’s efforts. “They broke open widespread gene testing. They put in an enormous education effort to bring tests to mainstream medicine. They’d argue that was not possible without the patent,” notes Robert Nussbaum, former director of genomic medicine at the University of California, San Francisco and now Chief Medical Officer at Invitae, a California-based company that offers genetic tests for thousands of inherited conditions.

But somewhere along the line Myriad’s “great social purpose” seems to have gone off track. While thousands of gene patents had been granted, Myriad distinguished itself by its “industrial” style. Most owners of gene patents freely offered licences to pathology labs. Myriad, on the other hand, issued legal threats even to university-based researchers who were traditionally free of such constraints – unless they tried to commercialise the work. Even BRCA1 discoverer, Mary-claire King, received a threatening letter.

Myriad’s approach harmed the public in three ways.

For starters, at $3,500, the cost of the Myriad test was prohibitive for some women. By contrast, the test for the cystic fibrosis gene is around $230.

Besides the cost, the company prevented pathology labs from offering the test, so depriving women of a second opinion to confirm their result.

Third, the company obstructed basic research. Nussbaum’s lab was among those who received a threatening letter. His lab was trying to decipher the consequences of the numerous mutations that can arise in breast cancer genes.

The BRCA1 gene, for instance, is 126,000 letters long and “misspellings” can occur anywhere. Ten to 15% of the time, a geneticist cannot tell a woman whether the particular misspelling she carries is deadly or not, leaving her to agonise over its possible significance. The way to find out is to collect a database of these misspellings and track what happens to the women who carry them. But Myriad, which held the largest database, was not sharing its data and was preventing others from doing so.

In May 2009, the disaffected parties – patients, pathologists and researchers – banded together as the Association for Molecular Pathology to challenge Myriad’s US patent. They were legally supported by the American Civil Liberties Union (ACLU).

MEANWHILE, DOWN UNDER, an identical battle was shaping up. The wily Australian company Genetic Technologies (GT) had a licence to sell the Myriad breast cancer gene test in Australia. As with Myriad, it aggressively enforced the patent, and as in the US there was a public backlash in 2002.

As an aside, GT acquired the licence through patent trading. They’d been granted an international patent on “junk” DNA that does not encode proteins, but represents 98% of human DNA. Since all genes carry snippets of junk DNA, that allowed the company to demand licences from any company with a gene patent. They even went after US giants such as Monsanto. Remarkably, the strategy worked with Myriad. In return for the rights to use junk DNA in its gene tests, Myriad issued GT with a licence to sell the breast cancer gene test.

The tumult brought gene patents back under the Australian legal microscope. The Australian Law Reform Commission appointed an advisory board to examine the issue. Its 2004 report recommended that the government do nothing. In Palombi’s view, the board was heavily swayed towards a pro-patenting position. “According to them the horse had bolted and it was too late to stop it.”

To martial heftier forces, Palombi embarked on a PHD at the University of New South Wales. In a friendlier form his thesis became the 2009 book Gene Cartels.

While Palombi was buried in academic papers, the temperature of the debate died down as GT had ceased enforcing the patents. But it was a temporary state of affairs. In July 2008, it resumed its threats against Australian laboratories and this time the Australian Senate launched an inquiry. In 2010 the Senate concluded that it should do nothing. Palombi on the other hand was firing up. He’d started a dialogue with the American Civil Liberties Union and travelled to the US. He gave away copies of his book and spoke to packed halls in New York.

“IT’S A GREAT FEELING TO BE WRONG, WRONG, WRONG AND THEN TO BE TOLD YOU’RE RIGHT.”

The civil liberties union case had an initial success. In 2010, the Federal Circuit District Court in New York found the Myriad patent invalid, ruling the breast cancer genes were a product of nature. Myriad appealed to the Court of Appeals for the Federal Circuit, which was set up in 1982 to hear patent appeals, which it typically did in a sympathetic light, says Palombi.

Returning home, Palombi helped hammer a volunteer legal team into shape to challenge Myriad in Australia.

By this stage Palombi was no longer a practising lawyer, but served as the team’s expert adviser. He had the backing of law firm Maurice Blackburn. The plaintiffs were Cancer Voices Australia and Yvonne D’arcy, a breast cancer survivor. With Palombi as the bridge, the US and Australian teams started talking to each other.

THE AUSTRALIAN CASE LAGGED behind the US, yet followed a remarkably parallel path. In the US, Myriad won at the Court of Appeals for the Federal Circuit, once in 2011 and again in 2012. The US team appealed to the US Supreme Court. In Australia, Myriad won at the Federal Court of Australia in 2013, and then again at the Full Federal Court in 2014. The Australian team appealed to the High Court of Australia.

Finally, in the US, in June 2013, nine judges of the Supreme Court handed down a unanimous decision. “A naturally occurring DNA segment is a product of nature and not patent-eligible merely because it has been isolated,” the court ruled. The decision invalidated all of Myriad’s claims to the DNA of the BRCA1 and BRCA2 genes. But it upheld that a man-made copy, so-called complementary DNA (CDNA), was patentable. This protected Myriad’s monopoly on its particular method of testing for the breast cancer genes, which relied on CDNA. But it freed other companies to develop breast cancer gene tests that did not rely on CDNA.

In Australia the bell tolled two years later, in October 2015. Australia’s High Court judges went further than the US Supreme Court. They found that even CDNA was not patentable material. For the purposes of genetic testing, the relevant aspect of the gene was the information it carried – regardless of the manmade manipulations to which it may have been subjected.

It was the final vindication of Palombi’s crusade. “It’s a great feeling to be wrong, wrong, wrong and then to be told you’re right.”

Thousands of gene sequences that were once covered by patent monopolies are now freely available for use by clinicians and scientists. “The prize,” says Palombi, “will be the best and the cheapest gene test or vaccine.”

That’s already happening in the US, says Nussbaum. “Gene patents are a dead issue. It’s opened competition – the playing field has been levelled.”

AFTER THE HIGH COURT’S RULING, IP Australia, the government agency responsible for examining and granting Australian patents, issued a statement that the High Court’s decision was limited to genes that code for proteins. They maintained that junk DNA and isolated proteins remained patentable material. Palombi and others went on the offensive and in December 2015, IP Australia modified its position, agreeing junk DNA is not patentable subject matter but keeping the door open to isolated proteins.

“So there’s an ambiguity – and that’s what lawyers exploit,” a bristling Palombi told me.

It seems unlikely Palombi will be laying down his sword just yet.