Patents, Genetic Testing, and Federal Funding

17 July 2013 Personalized Medicine Bulletin Blog

In a July 12, 2013 letter to Dr. Francis S. Collins of the National Institutes of Health (“NIH”), Senator Patrick J. Leahy urged the NIH to exercise its march-in rights under the Bayh-Dole Act to directly license the genetic testing patents held by Myriad Genetics, Inc. (“Myriad”) that have been the subject of on-going litigation. Senator Leahy notes although many of Myriad’s patent claims were recently invalidated by the U.S. Supreme Court in Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. __ (2013) (see my prior post of June 13, 2013), Myriad’s remaining patent claims still provide it with sufficient patent coverage such that “Myriad may continue to be the only company able to provide women genetic testing they need to make important health care decisions.”

The Bayh-Dole Act

The Bayh-Dole Act (Act) was enacted on December 12, 1980 (P.L. 96-517, Patent and Trademark Act Amendments of 1980). It created a uniform patent policy among the federal agencies that fund research and allowed the grant recipients (e.g., small businesses, non-profit organizations, and universities) to retain title to inventions made under federally funded research programs. The Bayh-Dole Act has been instrumental in moving break-through technologies out of the academic environment and into the public domain. According to the American Association for Technology Managers (see http://www.autm.net/Bayh_Dole_Act1.htm), several key provisions of the Act include:

  • universities are encouraged to collaborate with commercial concerns to promote the utilization of inventions arising from federal funding;
  • universities are expected to file patents on inventions they elect to own;
  • universities are expected to give licensing preference to small businesses;
  • the government retains a non-exclusive license to practice the patent throughout the world; and
  • the government retains march-in rights.

The march-in rights provision of the Act gives the federal agency under whose funding an invention was made the right to grant a license to a responsible new applicant, if among other things, the current manufacturer has failed to make the product available on reasonable terms (18 U.S.C. 201(f), 203(1)(a)), or if action is necessary to alleviate health or safety needs which are not reasonably satisfied by the current manufacturer. See 18 U.S.C. 203(1)(b)).

Myriad’s Test and March-in Rights

Because the research underlying some of Myriad’s technology was supported by federally funded research, the patents are subject to federal march-in rights. Senator Leahy argues that because of Myriads patent position and because Myriad does all of its testing in-house (at a reported charge of between $3,000 and $4,000 per test), Myriad may still be the only company that can offer the test. According to testimony delivered during the U.S. Patent and Trademark hearings on genetic testing (as required by the America Invents Act, see my prior post of June 26, 2011), the cost of Myriad’s genetic test is beyond the financial reach of many women. For these reasons, Senator Leahy argues, the government should exercise its march-in rights to alleviate health or safety needs which are not reasonably satisfied by the patentee.

During the over three decades Bayh-Dole Act has been in effect, the U.S. government has never exercised its march-in rights on any technology. Indeed, it has been reported that very few petitions for exercise of these right have ever been filed. See Government Refuses to March-In Under Bayh-Dole Act-Again. Thus, it is unlikely that the government will elect to exercise these rights and license the technology to Myriad’s competitors. Nevertheless, if the issue is really the cost of the test, why aren’t these tests covered under all health care insurance programs? Or, more pointedly, isnt universal access to health insurance to provide these important tests a reasonable alternative to patent busting? One hopes that agendas that may be in play here will not thwart the noble goals of the Bayh-Dole Act to support academic research and commercialization of of innovative technologies.

 

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