Genetic testing continues to play an increasingly important role in the selection of animals for beef cattle production. Recently, the United States Supreme Court determined that the discovery of the location of a gene on a chromosome is not eligible for patent protection. This ruling will significantly alter the playing field for cattle genomics companies that seek to patent genes in relation to tests for traits like marbling, tenderness, or milk production.

In Association for Molecular Pathology v. Myriad Genetics, Inc.,[1] the Supreme Court held that the location of genes and the order of nucleotides in a gene are “products of nature” that do not meet the Patent Act’s invention requirement. At issue in Myriad were patents directed to two DNA markers that identified the BRCA1 and BRCA2 genes as well as the normal sequence of nucleotides within those genes.  Women with certain mutations in these genes have an extraordinarily high risk of developing breast or ovarian cancer. Myriad’s patent claimed the exclusive right to isolate an individual’s BRCA1 and BRCA2 genes and the sequence of the nucleotides within those genes. As a result, no other laboratories could perform tests for mutations of these genes because isolating the genes and their DNA sequence in any individual would infringe Myriad’s patent.

The Court struck down the patent because “Myriad did not create or alter any of the genetic information encoded in the BRCA1 and BRCA2 genes. The location and order of the nucleotides existed in nature before Myriad found them. Nor did Myriad create or alter the genetic structure of DNA. Instead, Myriad’s principal contribution was uncovering the precise location and genetic sequence of the BRCA1 and BRCA2 genes. . . . To be sure, [Myriad] found an important and useful gene, but separating that gene from its surrounding genetic material is not an act of invention. Groundbreaking, innovative, or even brilliant discovery does not by itself satisfy the [patent eligibility] inquiry.”

Why does this matter to beef producers? Genomic companies in the beef industry follow a similar strategy – finding DNA markers that identify genes related to a specific trait and then offering genetic tests to determine whether an animal possesses those genes. Whether the trait is positive (like tenderness or marbling) or negative (like curly calf or dwarfism), the technology is premised on identifying the location of the relevant gene and offering a test to determine whether the gene is present or absent in a given animal.

By holding that individuals or companies cannot patent naturally occurring genes (or their nucleotide sequence), the Court insured that competition for genetic testing will remain robust. While genomics companies may still protect their discoveries as trade secrets, those companies can no longer prohibit competitors from engaging in research to locate the same genes and offering competing tests under the Patent Act. As genetic technology becomes more sophisticated and a more accurate predictor of phenotypic results, the absence of monopoly power among genomics companies may serve to keep testing costs lower by encouraging price competition among these providers.

On the downside, the absence of the Patent Act’s monopoly protection may cause private companies to think twice before devoting substantial sums to research and development of new gene markers and tests. Though, as with many products and services, the ability to be the first in the market place to offer new or particularly valuable tests may well offer sufficient financial rewards to keep the private capital flowing. Yet, even if there is some limitation on private research, land grant institutions and federally funded institutions like the National Beef Cattle Evaluation Consortium and the US Meat Animal Research Center are likely to continue investing significant time, energy and funds into identifying DNA markers for commercially relevant traits.

Finally, and probably more importantly, the Myriad ruling will allow genomics companies to discover and offer tests for multiple gene pairs relevant to a given trait without fear of incurring patent liability. Especially for those traits that we know are governed by multiple genes like marbling and tenderness, the impact of the Myriad holding will be significant. Assume, for example, that a thousand gene pairs have a statistically significant effect on marbling. If ten genomics companies each hold patents on one-hundred of the one-thousand relevant genes, each company could only offer tests that represent ten-percent of the relevant genome. Absent a producer’s willingness to pay for ten separate tests, we would never get a true picture of an animal’s genetic merit for marbling.  For now, Myriad insures that we won’t have to face this scenario.

While no one can predict the exact effect that the Myriad decision will have on the beef industry, the Supreme Court’s determination that the location of a gene is not patentable is a positive step for producers who seek to profit through science.

[1]Ass’n. for Molecular Pathology v. Myriad Genetics, Inc., No. 12-398, 2013 WL 2631062 (U.S. June 13, 2013)