Sequencing the future of IP in genomics

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In 2000, President Clinton predicted that genome science would “revolutionise the diagnosis, prevention and treatment of most, if not all, human diseases”. That prediction is now coming true, thanks to technological advances such as almost limitless data storage and enormous supercomputing power. The genomics market is estimated to be worth $20 billion by 2020. But this advance is being accompanied by a surge in litigation in the US and Europe involving companies such as Illumina, Myriad, Premaitha, UC Berkeley and Ariosa. Mostly, this litigation concerns patent issues such as inventive step and insufficiency. But it is also important to be aware of trade secrets and data protection developments, as these are likely to play an important role. IP counsel in this industry need a checklist for their offensive and defensive strategies.

On a late June morning in 2000, US President Bill Clinton walked down the red carpet in the White House's East Room towards the presidential podium facing a wall of impatient reporters. Linked by satellite to UK Prime Minister Tony Blair, President Clinton announced the news that the first map of the human genome was complete. As one of humankind's greatest scientific achievements, President Clinton predicted that genome science would "revolutionize the diagnosis, prevention and treatment of most, if not all, human diseases". Now, almost 20 years later, it has.

Technological advances, including almost limitless data storage in clouds and enormous supercomputing power on the ground, have created a burst of disruptive, genomic sequencing applications which allow scientists to predict and understand the genetic basis for diseases. Armed with this information, new treatments can be devised with therapies tailored to patients by genotype. Genetic testing kits are now available at home. Genome sequencers are portable. There seems to be no stopping the technological progress in a market estimated to be worth $20 billion by 2020. Perhaps unsurprisingly, this has, in turn, resulted in a flashpoint of patent litigation. Parties such as Illumina, Myriad, Premaitha, Broad Institute (Harvard and MIT), UC Berkeley and Ariosa are battling each other for market share in both US and European courts. We examine the key issues that companies in this space need to consider to make sure they are prepared – offensively and defensively – for this next wave of IP litigation.

The same year that President Clinton took the podium, the UK Patents Regulations 2000 came into force. The Regulations confirmed, like Article 3 of the Biotech Directive (Directive 98/44/EC) two years before, that genomic DNA sequences (gDNA) could be patentable. Paragraph 1 of Schedule A2 of the UK Patents Act 1977 states that an invention for a product or process shall not be considered unpatentable solely because it consists of, produces or uses biological material. This contrasts with the US position following the Supreme Court's 2013 decision in Myriad which held that naturally occurring DNA segments are not patentable. Although it is easy to get caught up in the social and ethical issues surrounding the patenting of genetic material, the patent assessment will more often than not come down to what are fairly standard considerations of patentability. We set out a few key tenets below:

Novelty has generally not been a substantial hurdle in genomics patent litigation (save for when priority is lost). In Europe, a natural substance, such as gDNA, that has been identified and isolated for the first time does not lack novelty merely because it has always been present in nature (see Howard Florey Institute's Application/Relaxin, Rule 29 of the European Patent Convention and the UKIPO's Examination Guidelines). This is because although the DNA has always existed, it has not been previously known to exist. The isolated DNA sequence is therefore new. Its novelty will not necessarily be destroyed merely because the claimed DNA sequence has been published as part of a whole genome in prior art. This is because the publication will not necessarily contain enough information to allow the skilled person to reproduce the invention (that is, it is not an enabling disclosure). Further, similar to the position in the US, claimed complementary DNA (cDNA) relating to a naturally occurring polynucleotide, is patentable and, under English law, can be considered new as it does not occur in nature. Difficulties can be encountered when the isolated gDNA is part of a larger isolated sequence that has been previously published. However, those issues may be overcome if it can be shown that the sequence subset has some useful characteristic not previously recognised; for example, in that the particular sequence predicts a patient's disposition to suffer from a particular condition or respond to specific treatments.

If individuals in a distinct sub-population have already been treated by the specific treatment as part of a prior indiscriminate administration of that treatment to a wider population, this does not necessarily destroy the novelty of a claim to that sub-group. If the patentee can show that the sub-population claimed has a physiological or pathological status distinct from that of the former wider population (T 233/96) and benefits from the particular therapy more so than the wider population so that the claim is not arbitrary (T 1399/04), the fact that the sub-population overlaps with the larger population will not be novelty destroying. However, challenges may lie for the patentee in arguing inventive step.

The computer program problem

Without computer programs to sequence data from patient and customer samples, the utility and scientific potential of genomic information would be lost. However, computer programs and mathematical methods are excluded subject matter under section 1(2) of the UK Patents Act. Determining whether the actual contribution of the invention falls solely within the excluded subject matter or is technical in nature following Aerotel/Macrossan, will turn on the facts. For example, in Forensic Science Service Limited, an iterative method for analysing mixed-source DNA samples to establish the proportions and likely genotypes of the sources was determined to be data processing and thus excluded as a computer program. The UKIPO Hearing Officer held that all the invention had really contributed to human knowledge was a reduction in processing time and cost which were inherent properties of the computer used. It is conceivable that as the information content of genome libraries increases, and the computer algorithms used to find homologies improve, advances in bioinformatic processing per se may not be eligible for patent protection by reason of the statutory exclusion. Patentees would be wise to focus as far as possible on the predicted utility of the sequences identified by bioinformatics, a concept with which the UK Supreme Court was generous in the Lilly v HGS litigation in 2011.

The inventive step hurdle has become increasingly challenging for patentees in certain areas of genomics. This is because numerous genomes have already been sequenced and sophisticated software tools which evaluate this data (bioinformatics) can readily identify new sequences that may have similar activities to known sequences (homology). Armed with these tools, a skilled research worker may be able to identify a new gene without possessing a "spark of imagination", even if the obstacles to overcome may once have been high (see Genentech Inc's Patent). Challengers are therefore likely to have an easier time arguing that the invention was "obvious to try with a reasonable expectation of success" in light of the significant data at the skilled persons disposal, particularly where there is high degree of homology between a gene and other known family members.

To overcome these issues, patentees should, where possible, tailor their evidence around the following considerations:

• Increase the uncertainty: Evidence that shows a lack of extensive DNA libraries, routine screening techniques and/or well-established common general knowledge (T 0500-91), especially in a new area of technology, will help increase the uncertainty as to whether the invention would have a reasonable expectation of success (see also MedImmune v Novartis). The fewer the facts at hand for the skilled person to evaluate, the less likely he or she will be reasonably able to expect success (T 0207/894). However, patentees need to be cautious. They must find a balance in which there is enough common general knowledge (CGK) to make the patent inventive, but not so little CGK to make the patent insufficient (see below).

• Increase the need: Even where the technological area is not new, secondary indicia such as evidence of a long-felt want for the invention may assist in supporting a finding of inventive step (see Schlumberger v EMGS). For example, evidence that other companies have been long trying to reach the claimed invention but have failed can support a finding of inventiveness (see Teva v Leo). Analogies could be drawn with longstanding efforts to identify sequences responsible for particular diseases or developing methods for screening for a particular gene.

• Increase the surprise: When it comes to patient sub-populations, the question faced by the court may be whether it was obvious to identify certain biomarkers in patient populations. Patentees may need to provide expert evidence that the skilled person would not have been motivated to find biomarkers in the particular population, and even if they were, that the identification of a previously unknown biomarker in the sub-population was inventive. Factual evidence that the patentee's research team was in fact surprised to discover that a particular sub-population responded not only better, but surprisingly better, to the treatment itself and/or a specific claimed dosage regime will assist in surmounting the challenge. However, such evidence comes with the usual risks associated with internal witnesses being subject to cross-examination.

Patentees must tread a fine line in arguing that their claim is inventive, but not insufficient. This "sufficiency squeeze" is common in English patent litigation and has come to the fore in recent disputes (see Actavis v Lilly and Hospira v Genentech). For example, in the pending UK litigation between Illumnia and Premaitha and Ariosa, the defendants argue that that the claims of Illumnia's European patents (UK) No 0,994,963 and No 1,981,995 do not enable the skilled person to screen for Down's syndrome or other chromosomal aneuploidies. They argue that the patent merely "speculates" as to ways in which screening could be undertaken, but not in sufficient detail for the skilled person to be able to perform the invention across the breadth of the claims (that is, Biogen insufficiency).

For patentees to overcome such an objection, they will need to provide expert evidence that the patent "credibly" discloses at least one way to perform the invention without undue burden or without needing inventive skill and, for particularly broad claims, at least a principle of general application for performing the invention across its breadth (see Kirin-Amgen [2003] RPC 3). It must be remembered that it is the party challenging validity who has the burden of proving that the invention does not work across the breadth of the claim (something that TKT in Kirin-Amgen failed to do). To do so, challengers may seek permission to conduct experiments to show that the disclosure is insufficient. Subject to arguments that the cost and time of conducting experiments is prohibitive when compared to their probative value, the use of experiments – which are conducted before exchange of expert reports – may be a tactic to put pressure on the patentee earlier in the litigation. This may also push patentees to consider early amendments to their patents in order to limit their claims.

Patents are not always the most appropriate tool for protection. Know-how, computer source code and algorithms that carry out the DNA analysis may amount to excluded-subject matter. Further, the monopoly afforded by patent protection is time-limited and is paid for by way of public disclosure. For some companies, this may destroy their competitive advantage. Perhaps unsurprisingly, therefore, the US has recently seen a number of trade secrets disputes related to genomics technology. Last year, Pennsylvania-based company, Cybergenetics successfully resisted the disclosure of its source code to its TrueAllele DNA analysis program used in over 200 criminal cases on the basis that its source code constitutes a trade secret. Disclosure, argued Cybergenetics, would be financially prejudicial given the "highly competitive commercial environment". Last February, California-based R&D company, Agilent, issued a trade secrets misappropriation claim against a former employee accused of stealing Agilent trade secrets related to its DNA oligonucleotide synthesis technology.

Know what data you have and how you are using it

Techniques for analysing and storing vast amounts of data are critical to the success of genomic medicine. By combining and analysing data from sequencing labs and pharmaceutical manufacturers with patient clinical data, scientists will be able to isolate genes responsible for conditions to develop targeted treatments. However, the volume of data involved is dizzying. For sequencing labs alone, one estimate puts the amount of genetic data produced by the approximately 2,000 sequencing machines now operating around the world as high as 15 petabytes. It is therefore important that the data is carefully managed, particularly in light of the EU General Data Protection Regulation (GDPR). The GDPR has increased the level of fines that a company may be subject to for a breach of data protection laws – now either €20 million or 4% of global turnover whichever is higher – and introduced a new principle of "accountability". This principle requires organizations to be able to demonstrate that they are consistently complying with the GDPR in their ordinary course of business, not just demonstrating compliance when something goes wrong. Under the GDPR, genetic information that is anonymised will fall outside of the definition of "personal data", but information that can be linked to a particular individual is not. Therefore genetic information that is coupled with the patient's detailed clinical data may not meet the standards of pseudonymization as specified under Recital 26. In those cases the GDPR will apply. Article 9 of the GDPR formally designates genetic and biometric data as "sensitive personal data" which is subject to more stringent processing prohibitions, but also a number of exceptions. US-based companies in particular must also be alive to their obligations to protect Europeans' personal data in the wake of last year's CJEU decision in Schrems (C-362/14) and the new EU-US Privacy Shield. Given the sheer amount of data involved, it makes sense for companies to utilize cloud storage. Although there are clear costs savings to using third-party cloud service providers, companies must also take steps to ensure adequate protection of patient information. This is all the more important in an environment where a significant cybersecurity attack is a question of "when" not "if" (see for example the proposal for the Network and Information Security Directive). Further considerations are outlined in a recent Managing IP article on trade secrets in the cloud.

With the recent introduction of the European Trade Secrets Directive and US Defend Trade Secrets Act, the use of trade secrets to protect commercially valuable information in this field is likely to be of increasing importance. Life sciences companies should therefore consider the role that trade secrets and confidential information may play in protecting their investment in new genomic technologies. In particular, companies should:

• Classify valuable information: Identify your valuable know-how, formulae, algorithms and methods involved in commercial products and processes which are not suitable for patent protection (either legally or commercially).

• Identify potentially weak information: Some elements of a product or process, when marketed, may be reverse-engineered, thus destroying confidentiality. Identify these weaknesses and consider technological and contractual measures to reduce the risk of reverse engineering.

• Map out the access chain: Confidential information will be accessible not only by the company's employees, who will generally owe a contractual and common law obligation to maintain confidentiality, but by third parties in a supply chain. Map out the access chain to the technology to identify parties who should sign up to confidentiality agreements.

• Implement technological and educational safeguards: To ensure that confidential information is protected, technological measures should be put in place to restrict access to confidential information, as well as limiting storage of the information to discrete silos. A staff education programme that frequently reinforces the importance of maintaining the confidence of information is key.

A robust confidential information policy will also help prevent inadvertent public disclosures that could act as novelty-destroying prior art should a company later wish to seek patent protection on an eligible invention.

IP counsel grappling with genomic sequencing technology should have a checklist of issues at the ready. They need to prepare a convincing invention story for patents, remember that trade secret protection can be a viable alternative to patents and ensure that iron-clad data protection and cybersecurity measures are in place. In addition to these, in-house IP counsel to should consider their offensive and defensive strategy in relation to potential litigation:

• Think before you file: The subject technology of a patent application is generally still under development when the application is filed. This means that is generally impossible to cater for every application or disclose every example. However, in light of the recent trend for sufficiency attacks based upon plausibility, it is crucial that patent specifications credibly disclose how the invention would work. A general principle that has universal application can suffice even for broad claims, as long as the variables within that general principle can be identified without undue burden by the skilled person using his or her CGK. Parties should also consider whether their patent application will provide sufficient basis to amend down to a specific biomarker, for example, should prior art be cited during prosecution.

• Identify potential experts early: Genetic sciences are an increasingly niche discipline and the pool of potential litigation experts is likely to be small. It is therefore important to identify potential experts early on. This is especially important in the UK where the recent Generics v Warner-Lambert case confirmed that the CGK accepted by the relevant scientific community is specific to the UK, not elsewhere. This may further limit an already narrow pool of experts.

• Prepare a UPC strategy: In less than a year, the European Unified Patent Court is likely to be up and running. Companies should therefore plan their strategy as to whether and, if so, which patents they will opt-out from the jurisdiction of the UPC during the sunrise period. Similarly, potential defendants wishing to clear the path of patents may wish to commence a pre-emptive revocation action in the life sciences branch of the Central Division in London, alongside existing clearance efforts at the EPO via post-grant oppositions.

• Competition defences to the rescue: Competition law defences may play a role in two ways. First, where a technology is essential to an industry or is a de facto standard and the patentee has refused to license on reasonable terms (although an obligation to license is exceptional outside of the standard essential patent context). Second, where the infringement action involves some other abuse of a dominant position. This is usually pleaded in relation to the scope of the relief claimed (as has recently been seen in second medical use cases).

• Conduct data processing offshore: For patents, depending on the language of the claims, there may be scope for avoiding infringement of a diagnostic process patent if the analysis and processing of data takes place outside the jurisdiction of the patent. Whether test subject data could be considered as "means relating to an essential element of the invention" under the law of contributory infringement has yet to be fully determined, although the English courts have indicated in Menashe v William Hill that they will not look kindly on a party seeking to avoid infringement by locating part of a process abroad. However, every case will turn on its facts.

Dominic Adair

Annsley Merelle Ward

© 2016 Dominic Adair and Annsley Merelle Ward. Adair is a partner, and Merelle Ward is an associate of Bristows in London