by Jake Meyer

Myriad Genetics, in mid-August, 2010, sent a letter offering to surrender its Australian BRCA1 breast cancer gene.  The letter said, “Myriad wishes to gift Australian Patent No 686004 (the Patent) to the people of Australia.”  On September 2, 2010, the Commissioner of Patents published notice of Myriad’s offer to surrender the Patent in the Australian Official Journal of Patents, and interested parties that want to be heard before the offer of surrender is accepted must submit a request within a month.

Myriad will surely claim its offer to surrender its patent is based on compassion and consideration for Australian women who have a family history of breast cancer and want genetic testing.  Not enforcing their Australian patent will allow competing labs to open and provide BRCA1 testing—perhaps at a lower cost or at higher quality.  The existence of more labs will give Australian women who wish to be tested the option of obtaining a second opinion before deciding to pursue radical surgeries, such when healthy, asymptomatic women have their breasts or ovaries removed based on a test result that suggests they are at a higher-than-normal risk of developing cancer.

A second opinion can be critical. Myriad’s genetic tests can return inconclusive results and do not test for all mutations in the BRCA1 gene that are associated with a predisposition to developing breast and ovarian cancer.  With the Australian patent out of the way, more testing methods than the single method offered by Myriad will be available to Australian women.  And the tests available will become more accurate as competing labs develop tests that include mutations missed by Myriad’s tests.  Further, the price tag for BRCA1 genetic testing will drop as new labs offering BRCA testing enter the market and begin to compete, which will make testing available to Australian women who previously couldn’t afford the Myriad test.

All of this is good news for Australian women who want or will want genetic testing of the BRCA1 genes, but the surrendering of the Australian patent does raise a few questions in my mind.   By gifting its patent, Myriad is giving up its monopoly over BRCA1 genetic testing in Australia, so why would Myriad do this?  Pure altruism?  To clean up their public image?  And will Myriad stop with just the Australian people?  Why not gift the American patent to the American people as well?

There is a likely answer to these questions: money.  The U.S. is a big market for genetic testing and Myriad’s breast cancer patents are big money.  In 2008, Myriad’s revenue for its molecular diagnostic tests totaled $222,855,000.  Myriad wants to hold onto its U.S. patents and the monopoly it maintains over the larger U.S. market.   Myriad is currently fighting in the U.S. courts to keep its BRCA1 and BRCA2 patents from being unenforceable.  Myriad lost the first round in the Southern District of New York and is ramping up for round two in the Court of Appeals for the Federal Circuit, the court that hears all patent appeals.  The Australian BRCA1 patent, however, is a bit of a liability for Myriad.  The Australian Senate is inquiring into the Australian BRCA1 patent and a case has been filed in Australia challenging the validity of the patent.  The Australian patent includes claims that are very similar to the claims challenged in the U.S.: claims that cover both the genetic sequence and also the correlation between a mutation and a predisposition to developing breast or ovarian cancer.  Although a ruling by an Australian court would not have any binding legal effect on a U.S. court, a U.S. judge could be influenced by an Australian ruling finding Myriad’s patent claims on gene sequences and correlations between mutations and breast cancer invalid.  If the offer to surrender the Australian patent is accepted, the validity of the patent’s validity will not be weighed by the Australian courts.

Myriad also isn’t out much money by surrendering the Australian BRCA1 patent to the Australian people.  Myriad exclusively licensed the Australian BRCA1 patent to Genetic Technologies Inc.  Genetic Technologies threatened to sue Australian labs performing BRCA1 testing, but after the public protested, Genetic Technologies withdrew its threat.  With Myriad not making any money from its Australian BRCA1 patent, it’s an easy decision to make:  drop the Australian patent and prevent the risk of a court decision in Australia influencing judges to invalidate the U.S. patents, which are big money makers in the larger U.S. market.  So while Myriad’s actions in Australia are great for Australian research and healthcare, it was probably based on strategic legal moves and a cold calculation of profit margins.