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Patents protect proprietary information but are of limited duration. After expiration, the patented technology becomes part of the public domain. Trade secrets, in contrast, never expire and therefore are not accessible to the public as long as the information remains secret. Thus, the authors of “The Next Controversy in Genetic Testing: Clinical Data as Trade Secrets?“  argue that trade secret protection of genomic data is inappropriate because it impedes the free flow of information that is necessary to advance personalized medicine.

Myriad’s Proprietary Technology – Patents and Trade Secrets

In positioning their argument, the authors take aim at Myriad Genetics (“Myriad”), the provider of BRCA1/2 diagnostic testing. Through its diagnostic services, Myriad has tested nearly one million patients and compiled genetic data from the tests. In most instances, the authors argue, the test results are simple to interpret — whether or not the patient sample contains the wild type or variant version of the gene. In a minority of cases, however, sequence differences from wild type are difficult to interpret. These are variations of unknown significance (termed “VUS”) and are valuable to those tested and to other researchers who are trying to interpret the unknown variations. This information, which Myriad for the most part has chosen to maintain as a trade secret, creates an economic inequality that, the authors argue, was created through its patent monopoly. While Myriad has access to public databases in interpreting mutations, outsiders do not have access to Myriad’s data and analytic algorithm. Thus, the authors argue, Myriad’s proprietary database gives Myriad an indefinite exclusivity independent of patent protection unless and until others can repeat Myriad’s sequencing and analysis of patient samples.

Policy Options

Comprehensive databases of genetic information such as VUS data exist, but Myriad has not consistently contributed to them. The objectives of these databases and research consortia, the authors state, are to accumulate data and to refine interpretive methods in order to create publicly available information for improving clinical interpretation of genetic testing. The authors acknowledge that as public resources accumulate data, the value of proprietary databases will erode. In the meantime, however, health plans will pay for many genetic tests that cannot be accurately interpreted based on publicly available information. Several options for encouraging the sharing of this information are suggested.

One option is that free access be a prerequisite to publication. Those having access to genetic information should be required to share data and algorithms as a prerequisite to publication of that information. However, only those who choose to publish would be required to share the data.

Another option would require that databases that list mutations or availability of genetic tests (e.g., the NIH’s nascent Genetic Testing Registry) mandate that test providers share sequence data and interpretive algorithms as a condition of listing their tests.

Another option would rely on the power of payors and regulators. Health plan payors currently reimburse bundled genetic tests and interpretive services. Payors, it is argued, could demand the evidence underlying the clinical determinations when interpretations cannot be independently verified. Payors could also refuse payment unless clinically relevant data are shared and subject to independent verification.

The authors alternatively suggest that national authorities that regulate genomic tests mandate public disclosures as a condition of pre-market approval. Yet further, national and international institutions could fund research to re-create the data in proprietary databases by ensuring that results of genetic analysis be incorporated into large databases. Finally, national health systems could craft payment policies to create incentives for disclosure of data needed to interpret genetic tests – e.g., establishing payment codes for public deposit and interpretation of genomic data.

Patents, Trade Secrets and Public Benefit

One of the benefits of patents is their limited duration. After the patents expire, the technology is placed into the public domain in a manner that allows the public to reproduce the technology. Those involved in the debate over patenting genes (brought to the fore by the challenge to Myriad’s BRCA gene and testing patents, see for example, my prior post of September 25, 2012) have cautioned that removing the ability to protect intellectual property with patents could result in companies deciding to protect the information by the use of trade secrets, rather than patents. Thus, as noted by the authors, the public ultimately loses as the technologies may never enter the public domain.

While the authors pose some interesting solutions to gain access to Myriad’s technology, they never consider that if Myriad had chosen to patent the technology, the patents would expire and the technology would eventually become publicly available. Indeed, Myriad’s patents on the BRCA1/2 technology will expire in a few years. In addition, most patent applications are published prior to grant, thereby disclosing the technology 18 months after filing.

Myriad’s patents did not give rise to its expansive database, it was access to patient samples and Myriad’s expertise in analyzing that information and creating value from it. It is well documented that patents do not impede genetic research. In a recent letter to the journal Nature Methods, Jim Greenwood of the Biotechnology Industry Organization, reports that the number of reported patent lawsuits involving gene patents is practically nonexistent. “Gene patents do not hinder academic research” Nature Methods, Vol. 9(11), page 1039. He states:

“A 2008 study identified only six instances in which such patents had been briefly asserted against clinical diagnostic testing, and none against basic research. This finding is consistent with earlier reports by the US National Research Council and Walsh et al., [citation omitted] which found little empirical evidence to support the notion that patents created obstacles to biomedical research… Gene patents, like other patents, are critical to the development of basic research inventions into cures and therapies for patients as well as drought- and pest-resistant crops and renewable sources of energy.  Encouraging the notion that scientists today routinely incur legal liability whenever they conduct genetic research may inflame public debate over ‘gene patents’ but it has nothing to do with a realistic appraisal of the role of patents in academic research. The likelihood that a researcher will infringe a technology patent by using a smartphone is much higher than the risk of infringing a ‘gene patent’ by doing benchwork.” (Embedded citations omitted)