State of Innovation

Patents and Innovation Economics

Does the Myriad Decision Constitute a 5th Amendment Taking?

The Supreme Court in ASSOCIATION FOR MOLECULAR PATHOLOGY ET AL. v. MYRIAD GENETICS, INC., ET AL retroactively withdrew the property rights of hundreds if not thousands of inventors, by stating patents to isolated forms of DNA are not patent eligible.  The relevant part of the 5th amendment states:

nor shall private property be taken for public use, without just compensation

Patents are private property, they are owned by private individuals and the statute says they have attributes of personal property.  The Myriad decision is not just relevant to Myriad but thousands of patents.  It was a long established policy of the Patent Office to issue patents to isolated strands of DNA.  This decision changes that policy and invalidates these patents, which eliminates the patent holders’ property rights.  There was not compensation, so the question is whether this is a public use?  People often state that patent right revert to the public, but of course what really happens is there are no rights in the invention.  The situation is roughly analogous to the EPA regulating that no building can occur on wetlands.  Governmental land-use regulations that deny the property owner any economically viable use are deemed a taking of the affected property. See, e.g., Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1982), First English Evangelical Lutheran Church v. County of Los Angeles (1987).  Here the Supreme Court has denied a group of patent holders and economically viable use of their property.

These sort of broad policy changes by the courts are clearly unfair to patent owners.  The patent owner who applied for a patent when it was the clear policy of the Patent Office to allow patents on isolated strands of DNA has not done anything wrong.  If the policy had been different then they might of structured their claims to their patent differently or invested their efforts in other areas of invention.  At the least the aggrieved patent holders should have a right to a reexamination that allows them to introduce new claims based on the Myriad decision.

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June 18, 2013 Posted by | -Law, -Philosophy, -Prosecution, Patents | , | 2 Comments