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Part Two of our Special Report highlights an important case that may significantly affect the patent infringement landscape. The piece includes analysis from various sides of the issue as well as attempts to trace the history and legal precedent of the case.

Shares of Myriad Genetics, Inc. (NASDAQ: MYGN) fell 10 percent in the wake of the Mayo ruling. The diagnostics cancer company is currently a defendant in a federal patent case brought by the Association for Medical Pathology.

Myriad seeks to protect seven patents supporting its BRACAnalysis test, which looks for genetic mutations that indicate an increased risk of inherited breast cancer. The BRCA1 and BRCA2 genes, which were isolated by Myriad Genetics and the University of Utah, are both closely associated with the risk of developing breast and ovarian cancer. Myriad manufactures the only test currently available to identify the two genes.

On March 26, the Supreme Court remanded this case to the Federal Circuit Court of Appeals, a specialized court that hears patent cases.

The issue at hand is whether the Mayo decision yields a legal precedent that gene isolation is a law of nature, as DNA itself is indeed a law of nature. In similar patent cases outside of healthcare, the courts tend to support the practice of mining natural phenomena as unique. Patently-O, a leading intellectual property blog, notes that the Mayo decision could refute this ‘uniqueness’ in healthcare and particularly gene isolation:

Following Mayo, the court could logically find that the information in the DNA represents a law of nature, that the DNA itself is a natural phenomenon, that the isolation of the DNA simply employs an isolation process already well known and expected at the time of the invention, and ultimately that the isolated DNA is unpatentable because it effectively claims a law of nature or natural phenomenon.

Though Prometheus patented a process while Myriad claims a composition of matter, the authors note the composition was only arrived at by the “already well-known process of isolating human DNA.”

In July 2011, the Federal Circuit Court of Appeals ruled 2-to-1 in favor of Myriad, stating that the two genes could be patented because they did not occur in isolation in nature. This reversed a 2010 New York District Court decision that Myriad could not patent the genes.

The history of the Myriad case dates back to 2009, when the AMP, the American Civil Liberties Union and the Public Patent Foundation filed a lawsuit against the US Patent and Trademark Office and Myriad. They argued that Myriad created a monopoly with its patent, since the company possesses the only test available for the BRCA1 and BRCA2 genes. Additionally, they argued that the company also restricts other researchers’ access to the genes.

Opinions of the Myriad case are divided, GEN reports. Richard Marsh, Myriad EVP, General Counsel and Secretary, noted that Myriad invested $500 million over 17 years before breaking even on research, development and commercialization of its tests.

“Myriad wouldn’t have been able to make this capital investment without the promise of exclusive patent rights,” he said. “The risk and reward inherent in the ability to obtain exclusive license rights in the patent system is the driving force behind investment in genetic tests and hence their development and commercialization to the general public.”

However, Daniel J. Nevrivy, Ph.D., founder of the Nevrivy Patent Law Group, argued that the scientific practice Myriad claimed as unique did not noticeably deviate from the methods previously determined to be unpatentable law of nature.

“Myriad’s rejected mutation analysis patent merely required comparison of a mutation sequence with a control sequence, with no additional step such as assaying or isolating the gene and determining the sequence,” Nevrivy said in the GEN story. “There’s no transformative step in the way that there is a transformative step in Prometheus’ claims of determining or administering. In Myriad, the claim is purely mental.”

Critics of Myriad included Misha Angrist, Assistant Professor of the practice at Duke Institute for Genomic Sciences & Policy. Angrist faulted Myriad for not making its mutation data open to independent verification and scientific scrutiny. He cited the nonparticipation in the international collaborative mutaDATABASE and lack of contribution to the NIH-funded Breast Cancer Information Core since 2004.

“The implication is that if it were not for Myriad there would be no analytically valid, clinically valid, and useful BRCA testing for American women,” Angrist testified. “This contention is simply, excuse my French, bullshit in Babylon.”