Wired: The U.S. Supreme Court’s unanimous ruling that naturally occurring genes can’t be patented looks, on the surface, like terrible news for biotech companies. It would appear to strike down thousands of patents claiming intellectual property rights over isolated genetic sequences — the very DNA patents that anchor countless business plans.
Yet biotech stocks saw a small increase on the Nasdaq Biotechnology Index yesterday, and the effect of the ruling was even more dramatic for Myriad Genetics, the Utah company whose patents were in question. Myriad’s stock price closed up nearly 10 percent, at one point topping $38. That’s the highest since 2009, the year the lawsuit against its patents on BRCA1 and BRCA2, two genes associated with early-onset breast and ovarian cancer, was filed.
There’s a reason investors rejoiced over a decision that, superficially, seems to strip so many companies of their most valuable assets. John Wilbanks, who runs the Science Commons project at Creative Commons, says that competitive advantage comes not from the DNA data itself but from the ways companies figure out to use it.
“It’s clearly not as terrifying a ruling for the industry compared to what it could have been,” Wilbanks said. “It’s a decision that says that data is free, and that’s in line with what patent law has always said, which is that you can’t patent data. That’s what a gene sequence is.
“By making that data free, there is a lot of room for public good and public and private innovation.”
At the same time, the court did not strike down patents on “new applications of knowledge,” or on DNA whose sequence has been altered. In other words, biotechnologists still have plenty of room to develop proprietary innovations that use DNA data in new ways. Businesses can be build on genetic insights applied to new processes, methods or algorithms, which in most cases would still be patentable.
This distinction between the data and its uses echoes the sentiment among experts that real innovation comes after genes and gene mutations are identified. [Continue reading…]