When the Supreme Court ruled that you couldn't patent human genes, Ambry Genetics began offering women a test for the BRCA genes, which are linked to breast cancer. But last week, Myriad Genetics, the firm that has enjoyed a de facto monopoly on BRCA tests in recent years, sued. It argues that despite the Supreme Court's ruling, it still has patents covering Ambry's product.
Myriad is the lead plaintiff, but two universities also signed on to the lawsuit: the University of Pennsylvania and the University of Utah Research Foundation. These schools own BRCA-related patents, which they have licensed exclusively to Myriad.
Why are universities trying to force a potentially life-saving cancer test off the market? A spokeswoman for the University of Pennsylvania declined to comment for this story, and a University of Utah spokesperson didn't return our call Friday afternoon. But the short answer seems to be money.
Many universities now have "technology transfer" offices whose job it is to obtain patents based on university research and license them to private industry. These activities generated $1.8 billion in patent licensing revenues in 2011.
This is a relatively new phenomenon. According to the Wall Street Journal, universities were only obtaining about 250 patents a year as recently as 1980. Then Congress passed the Bayh-Dole Act, which made it easier for universities to claim patents for federally-funded research. By 2003, the number of patents universities were getting each year had shot up more than 10-fold to almost 4,000.
Officials at technology transfer offices like to emphasize how they help move technologies developed in the laboratory into the commercial marketplace. But getting private companies to pay hefty licensing fees always rests on an implicit threat: if you don't pay up, you could get sued for patent infringement.
And in some cases, these enforcement efforts are hard to distinguish from garden-variety patent trolling. In one high-profile case, the University of California licensed a patent to a company called Eolas, which claimed to own the concept of embedding interactive content in web pages. Eolas has sued a wide variety of high-tech companies, with the University of California sometimes signing on as a plaintiff. A settlement with Microsoft alone netted more than $30 million for the University of California.
Myriad doesn't fit the standard definition of a patent troll because the firm offers a suite of BRCA testing products. But its aggressive efforts to claim ownership of a basic fact of human biology—that the BRCA1 and BRCA2 genes are linked to breast cancer—raises many of the same issues.
Firms like Ambry don't have to use any of the specific techniques Myriad and its university allies invented in order to run afoul of their patents. Any product that sequences the BRCA genes for diagnostic purposes is likely to expose a competing firm to a lawsuit.
The standard argument for patents holds that they are needed to reward inventors for their creative endeavors. But that argument doesn't make as much sense for universities. Most university research is funded by taxpayers and private philanthropists, not profits from commercial activities. And university researchers are motivated more by academic prestige than the prospect of earning licensing revenues for their employers.
Of course, higher licensing revenues enable universities to engage in research and educational activities they might otherwise be unable afford. But as the Myriad lawsuit illustrates, that licensing revenue is not free. Every licensing negotiation comes with an implicit threat to sue for patent infringement if the licensing company doesn't pay up.
In other words, in order to generate licensing revenue, the University of Pennsylvania and the University of Utah are effectively limiting women's choices for a potentially life-saving cancer test. That seems hard to square with universities' broader mission to expand public access to knowledge.