Saturday, 20 July 2013
Myriad—Enforcement Continues and Now March-in Rights to Protect the Public?
Immediately after the U.S. Supreme Court issued the Myriad opinion, numerous competitors to Myriad announced that they would offer genetic testing for breast cancer at a much lower price than that offered by Myriad before the decision. One of those competitors was Gene by Gene who offered the possibly noninfringing test for a price that was about one third of Myriad’s price before the U.S. Supreme Court’s decision. Myriad responded with several patent infringement suits alleging infringement against some competitors including Gene by Gene. Here is the Gene by Gene complaint filed on July 10, 2013.
Notably, some of the patents held by Myriad were funded by the federal government and thus, are subject to the provisions of the Bayh-Dole Act. The influential U.S. Senator Patrick Leahy of Vermont has sent a letter to the Director of the National Institutes of Health urging the exercise of “march-in rights” under the Bayh-Dole Act. March in rights can be exercised by the federal government in certain circumstances:
(a) With respect to any subject invention in which a small business firm or nonprofit organization has acquired title under this chapter, the Federal agency under whose funding agreement the subject invention was made shall have the right, in accordance with such procedures as are provided in regulations promulgated hereunder to require the contractor, an assignee or exclusive licensee of a subject invention to grant a nonexclusive, partially exclusive, or exclusive license in any field of use to a responsible applicant or applicants, upon terms that are reasonable under the circumstances, and if the contractor, assignee, or exclusive licensee refuses such request, to grant such a license itself, if the Federal agency determines that such--
(1) action is necessary because the contractor or assignee has not taken, or is not expected to take within a reasonable time, effective steps to achieve practical application of the subject invention in such field of use;
(2) action is necessary to alleviate health or safety needs which are not reasonably satisfied by the contractor, assignee, or their licensees; . . . .
March in rights have never been exercised by the federal government even though there have been several requests. What good are the rights if they are never exercised? As a deterrent? How good is the deterrent if the rights aren’t going to be exercised? The prior requests have mostly involved claims concerning reasonable pricing—a theory which has been rejected by some. Is this the perfect case for a change (at least for federally funded patents)? Can Myriad price its tests in such a way that allows it to recover its alleged $500 million in developing the patented inventions, earn a “reasonable” profit and provide relatively wide access? What do you think?