Alex Philippidis Senior News Editor Genetic Engineering & Biotechnology News

“State of Innovation” Report Shows Fewer Patents for Biotech in 2015

Three U.S. Supreme Court decisions limiting the patentability of new diagnostics and diagnostic methods explain why, alone among technology fields, biotechnology generated fewer patents last year than in 2014, according to the latest edition of Thomson Reuters’ annual “State of Innovation” report.

During 2015, biotech inventions led to 43,016 patents, down nearly 3% from the 44,317 recorded for the previous year, based on Derwent World Patents Index data underpinning Thomson Reuters’ “2016 State of Innovation” report.

“There is a great deal of uncertainty currently about how patentable biotechnology based innovations will be in the United States going forward. With the value of biotech based patents generally in question, the incentive to file these applications has decreased,” Anthony Trippe, senior patent analyst for Thomson Reuters, told GEN.

Trippe cited three court cases where the Supreme Court narrowed patent eligibility to the detriment of diagnostics developers and other patent holders:

  • Mayo Collaborative Services v. Prometheus Laboratories (2012)—The court unanimously held as patent-ineligible the methods of dosage calibration for thiopurine drugs for gastrointestinal and nongastrointestinal autoimmune diseases that had been patented by Nestle’s Prometheus’ Laboratories.
  • Association for Molecular Pathology v. Myriad Genetics (2013) –The court unanimously overturned seven of Myriad Genetics’ 24 patents related to its discovery of the precise location and sequence of breast cancer susceptibility genes BRCA 1 and 2.
  • Alice Corp. v. CLS Bank International (2014)—The Court unanimously extended the narrowed patent eligibility framework of Mayo v. Prometheus to software inventions.

The U.S. Court of Appeals for the Federal Circuit (CAFC) cited Alice in its 2014 decision in University of Utah Research Foundation v. Ambry Genetics. The case was settled after CAFC held that claims from three patents covering DNA-based BRCA1 and BRCA2 tests Myriad had asserted against Ambry did not contain subject matter eligible for patent protection.

 “The Alice, Mayo, and Myriad Supreme Court cases have certainly called into question what biotech innovation can actually be patented in the U.S.,” Trippe said. “The combination of these cases has created an enormous amount of uncertainty around the value, and overall patentability of biological sequence based innovations.”

The sharpest drop in biotech patents last year, 20%, was seen in the diagnosis of diseases subsector— to 5,614 from 6,984 in 2014.

“The Myriad case in particular calls into question the whole premise of being able to protect diagnostic methods with patents. The new rules for eligibility after Myriad make it very difficult to get patents in this area,” Trippe said.

Also seeing a double-digit decline was drug discovery, where the number of patents fell 13% year-over-year, to 824 last year from 951 in 2014.

Decreases of 9% were seen in cancer treatment patents (to 4,412 in 2015 from 4,855) and patents for genetically modified crops (to 1,969 from 2,153).

The single biotech sub-segment that saw an increase in new patents was also the largest—“general biotechnology,” a category broad enough to include new gene-editing technologies. The number of general biotech patents rose from 29,374 in 2014 to 30,197 last year.

“The biotech field is still nascent in a number of ways, and as the science continues to evolve and the rules for patenting in the field solidify a return to sustain growth will likely be seen,” Trippe added.

Lisa Haile, J.D., Ph.D., a partner at the law firm DLA Piper, told GEN another factor in the patent decrease was the overhaul of the U.S. patent system wrought by the Leahy-Smith America Invents Act of 2011. The law shifted the basis on which the U.S. issues patents from first-to-invent to first-inventor-to-file.

“When I talk to investors, there are concerns about the ability or inability to protect certain technologies and innovations. The changes in the patent laws have created some additional risk aside from just scientific risk,” Dr. Haile said. “Investors generally have been less willing to take on the risk. I hear this all the time when I try and introduce an investor to new startups. So many of the investors will say, ‘If they’re not in the clinic, I’m not even going to take a look at them.’ The willingness to invest early is much less.”

This has been especially true, she said, in diagnostics in the years following the Supreme Court cases. That may start to change, according to Dr. Haile, since the U.S. Patent and Trademark Office this month published its Subject Matter Eligibility Update. The update, published May 6 in the Federal Register, includes 31 pages of new examples of hypothetical scenarios intended to illustrate life-sciences subject matter eligibility in light of the Alice, Mayo, and Myriad decisions.

In one example, a process for obtaining free fatty acids and glycerol from fat was deemed patent eligible: The claim recited a series of steps for mixing and heating fat and water: “The claim is directed to a process, which is one of the statutory categories of invention.” Also, the description of that process “makes it clear that the claim as a whole would clearly amount to significantly more than any potential recited [judicial] exception.”

The update follows USPTO’s 2014 Interim Guidance on Subject Matter Eligibility and 2015 Update: Subject Matter Eligibility to determine eligibility in life sciences fields—specifically, when claims for “natural products” such as biomarkers can be considered patent-eligible.

Other findings from Thomson Reuters’ “2016 State of Innovation” report:

  • Top global biotech innovators: DuPont led with 407 inventions last year, followed by China’s University of Jiangnan (287), and Monsanto (229). The U.S. and China had three top innovators each, followed by France (20) and one each from Switzerland and South Korea.
  • Top cancer innovators: Between 2011 and 2015, Roche saw the highest number of inventions in Europe (335), while its Genentech subsidiary held the top spot in North America (266), and Samsung, in Asia (104).
  • Most influential research institutions: The Broad Institute enjoyed the highest citation impact score (7.43) for its 485 published papers between 2005-2015, followed by the European Molecular Biology Lab, which pushed MIT to number-three.


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