Oh, When the Public Comes Marching In

I want to add my voice to those concerned with what might be cast as Myriad Genetics Inc.’s continuing infringement of the public trust, most recently exacerbated by its recent efforts to enforce through the courts its patents for testing BRCA1 and BRCA2. These genetic tests, which grew out of federal funding for University of Utah research, can detect mutations that speak to much higher risks of breast cancer, which can be used, in turn, to take steps that significantly reduce those risks for women. The Myriad genetic tests cost approximately $4,000, and the company is working hard to ensure that no one else can offer such tests.

The latest turn in this complicated case, which has much to teach us about intellectual property, comes from United States Senator Patrick Leahy (Dem. Vermont). On July 12, 2013, Senator Leahy wrote, in his role as Chair of the Judiciary Committee, to Francis Collins, Director of the National Institutes of Health (NIH), urging him to exercise the Institute’s “march-in rights” over Myriad’s patents related to the genetic testing.

March-in rights represents one of the checks in that delicate intellectual-property-law balance between private ownership and public interest. These rights figure in the Bayh-Dole Act of 1980, which is intended to ensure that valuable inventions reach the public by allowing universities and other recipient of federal research dollars to apply for patents that protect resulting inventions, and provide incentives for their development. As such, the act serves the spirit of the United States Constitution, insofar as it is used “to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries (Article I, Section 8, Clause 8).”

Under the march-in rights clause, the NIH, as the federal funding agency that sponsored the University of Utah’s research, is able to “march in” on Myriad’s patents. That is, it can require Myriad to license the testing process to third parties, “upon terms,” as the act reads, “that are reasonable under the circumstances,” if such “action is necessary to alleviate health or safety needs which are not reasonably satisfied by the contractor, assignee, or their licensees.”

This would seem to be the case, and all the more so, when the University of Utah Research Foundation launched patent-infringement suits against Ambry Genetics and Gene by Gene on July 9^th and 10^th, as these two companies had started to provide women with the genetic tests for breast cancer at greatly reduced prices ($2,280 and $995 respectively). The two companies began to offer the tests following the Supreme Court decision on June 13^th against Myriad’s patenting of the isolated DNA involved in BRCA1/2 testing. The Court’s decision, however, did not bear on other patents that the Foundation and Myriad hold related to the testing, and thus the infringement suits.

Now, it turns out that no federal agency has exercised the march-in rights of the Bayh-Dole Act in the thirty-three years of the act’s life. The NIH has resisted earlier calls to implement this form of compulsory licensing, for example, in the face of 400% increases in pharmaceutical prices for Abott’s AIDS drug Norvir in 2004. The general feeling has been that march-in rights are not intended to regulate pricing. But if you consider that the whole exercise of these patents is intended to preserve a monopoly and prevent market forces coming into play for the life of the patent, price regulation seems like an important regulatory role (second to preventing a company sitting on its patents and refusing to develop them).

The whole thing serves as an object lessons in the degree of public trust involved in the university’s involvement in gaining property rights over inventions related to research, and how this trust can be lost sight of amid what is assumed to be the natural and unassailable rights of property holders. The NIH’s funding of the original research was intended as a public service to further a greater good, as was allowing the university and researcher to privatize and patent the invention funded by taxpayers’ money. I think that there are clear grounds for both granting patent rights that ensure inventions reach the public, and limiting those rights in ways that reflect the public investment (much as other forms of investment become shareholders in assets).

Now, Myriad had established, in the Supreme Court case, that it was allowing other researchers to conduct research on BRCA1/2, pointing to the many thousands of published studies involving the genes in question. The right to conduct research involving patents may “promote the progress of science,” but this is considered an exception, a waiver, for what is otherwise intended to be an exclusive right-to-use granted by the patent. However, there is more at stake in this case. Given the constitutional intent, as I read it, the University of Utah Foundation needs to establish that, while its patent is not impeding “the progress of Science,” it is also actively promoting the progress of “the useful [healing] Arts,” as those arts effect women’s health through its exercise of its patent rights.

That is, it seems reasonable, in cases such as this, to place the onus on the property holder, and the institution as a whole. It should be possible, I am suggesting, to make it clear that in cases involving university research and other forms of public funding, no charge of patent infringement can be laid without the property holder demonstrating how their exercise of property rights respects and repays the element of public trust, even as it generates a reasonable return on investment, for all parties, including the public.

In this regard, it has been encouraging to see over a hundred institutions sign on to the In the Public Interest: Nine Points to Consider in Licensing University Technology. The document reminds us that “universities have a social compact with society.” It is hard to see that compact at work in the use of the patents covering BRCA1/2 testing. I invite the University of Utah Foundation to clarify how it is now, or will be soon, striking a balance between private and public rights. If it seeks its day in court over the infringement of its patents, then this element of balance should weigh in the court’s decision.