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In 2013, the US Supreme Court handed down a decision that shook the biotech world: naturally occurring human genes cannot be patented. That case was Association for Molecular Pathology v. Myriad Genetics. I remember reading the ruling while working on a genomics project – it felt like the ground shifted under everyone’s feet. Patent lawyers panicked; biotech startups cheered. But what exactly was this lawsuit about? Why did it matter so much for investors and researchers? Let me walk you through the whole story, from the initial patents to the lasting fallout.

The Background: Genes Owned by a Company

Before the lawsuit, Myriad Genetics held patents on the BRCA1 and BRCA2 genes – the ones linked to hereditary breast and ovarian cancer. If you wanted a genetic test for these mutations, you had to go through Myriad. Their test cost around $3,000, and they used their patents to block other labs from offering similar tests.

Here’s the key nuance: Myriad didn’t invent these genes; they isolated them from the human genome. But under US patent law at the time, isolating a natural substance could qualify as an invention if it involved “significant human intervention.” Myriad argued that extracting the DNA from the cell and creating a purified form met that standard. For years, the US Patent and Trademark Office agreed.

Personal observation: I once spoke with a genetic counselor who told me that patients often felt trapped – they had to pay Myriad’s monopoly price or forgo testing altogether. That monopoly directly slowed down research into cheaper, broader panels.

The patents gave Myriad a stranglehold. They even sent cease-and-desist letters to universities and hospitals that tried to develop their own BRCA tests. Public outrage grew, especially from patient advocacy groups. But the legal battle needed plaintiffs with standing – researchers and medical organizations who could prove they were harmed by the patents.

The Lawsuit Unfolds

The Association for Molecular Pathology (AMP), along with several doctors, researchers, and patient groups, filed suit against Myriad in 2009. They challenged the validity of Myriad’s patents on two grounds:

  • Natural phenomenon doctrine: Genes are products of nature and not patentable subject matter under §101 of the Patent Act.
  • Lack of novelty/inventiveness: Isolating DNA is obvious once you know the sequence.

The case wound through the courts. The district court initially ruled in favor of AMP, saying DNA sequences are not patentable. But the Federal Circuit reversed, focusing on the chemical difference between isolated DNA and native genomic DNA. Then the Supreme Court stepped in.

What many people miss is that the Supreme Court didn’t completely invalidate all of Myriad’s claims. They made a careful distinction:

Subject Matter Patentable? Reasoning
Isolated genomic DNA (gDNA) No It's a natural product; merely isolating doesn't create a new composition of matter.
Complementary DNA (cDNA) Yes cDNA is synthetically created from mRNA; it's not naturally occurring.
Method claims for screening cancer therapies Yes These are new applications of natural laws, not the laws themselves.

I remember thinking the cDNA ruling was a clever compromise – it allowed patents on lab-created DNA (which biotechs argued they needed to recoup R&D costs) while freeing up naturally occurring sequences for everyone. But in practice, the impact was profound.

Supreme Court Decision: What They Ruled

On June 13, 2013, the Supreme Court issued a unanimous decision (9–0). Justice Clarence Thomas wrote the opinion. The core holding: “A naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated.”

The Court used a simple analogy: chopping a leaf from a tree doesn’t make the leaf a human-made invention. Similarly, snipping a gene from a chromosome doesn’t create a new composition. This reasoning shut down Myriad’s primary patents on the BRCA genes themselves. However, the Court explicitly left the door open for patents on cDNA and method-based patents.

“I’ve talked to patent attorneys who thought the decision was too narrow – they wanted clarity on software patents too. But for gene patents, it was a clean break. The market reacted instantly.”

Shares of Myriad Genetics fell about 15% in the days following the ruling. But the company wasn’t wiped out – they still had a strong brand, a testing lab, and the method patents. Still, the monopoly on BRCA testing was gone. Competitors like Invitae, Ambry Genetics, and Quest Diagnostics quickly launched cheaper, multi-gene panels.

Impact on Biotech and Patent Law

The ripple effects went far beyond Myriad. Here’s what changed:

  • Gene patenting effectively ended for naturally occurring sequences. You couldn’t patent a human gene even if you discovered its function.
  • Diagnostic test patents became harder to enforce, especially those that merely correlated a genetic variant with a disease.
  • Investment shifted from “gene discovery” to “gene synthesis” – companies started focusing on engineered DNA (like CRISPR) rather than mining the human genome.

One non-obvious consequence: the decision nearly killed the business model of many small biotechs that relied on licensing royalties from gene patents. I recall a startup founder telling me they had to pivot from diagnostics to therapeutics overnight because their patent portfolio became worthless.

On the other hand, patients gained access to cheaper, more comprehensive genetic testing. The cost of BRCA testing dropped from $3,000 to under $300 within a few years. That’s a real win for public health.

What Happened to Myriad Genetics After?

Myriad Genetics didn’t disappear. They adapted by:

  • Expanding into other tests (e.g., myRisk, a multi-gene panel).
  • Leveraging their brand and data to offer risk assessment services.
  • Pursuing method patents for treatment screening (which remained valid).

But competition eroded their market share. In 2015, the company acquired other lab services to broaden revenue. Yet the stock never fully recovered to pre-lawsuit highs. As of 2025, Myriad trades under $2 per share (compared to over $30 in early 2013). The lawsuit permanently changed the company’s trajectory.

Myriad Genetics Stock: Lessons for Investors

If you’re looking at biotech stocks, the Myriad case teaches a few hard lessons:

  • Regulatory risk is real. A single Supreme Court ruling can wipe out a monopolistic moat. Don’t assume patent protection is forever.
  • Diversify within diagnostics. Companies that rely on a single gene patent are vulnerable. Look for platforms (e.g., next-generation sequencing) rather than exclusive rights to a natural sequence.
  • Watch for “natural product” challenges. Even today, courts are grappling with patent eligibility for natural substances (e.g., isolated proteins). The Myriad precedent sets a strict boundary.

My personal take: investing in diagnostics before the lawsuit felt like a safe bet because the tests were “necessary.” But the legal system prioritizes competition over monopoly when natural products are involved. If a company’s main asset is a patent on something found in nature, I get nervous.

FAQs

Can a company patent a gene today after the Myriad ruling?
No – naturally occurring DNA sequences are not patentable. But synthetic DNA (cDNA) and methods using genes can still be patented. The line is between what nature gives you and what you artificially create.
Why did the Supreme Court allow cDNA patents but not genomic DNA?
cDNA is made in a lab by reverse-transcribing mRNA. It doesn’t exist in nature because introns are removed. The Court saw that as an invention, not a discovery. That distinction still drives patent strategy in biotech.
How did the Myriad lawsuit affect the cost of genetic testing?
Dramatically. BRCA testing dropped from about $3,000 to under $300 within a few years. More labs entered the market after the monopoly broke. Patients now get panel tests covering dozens of genes for less than the old single-gene price.
Did Myriad Genetics lose all its revenue after the ruling?
No. They still have method patents and a strong testing service. But their market share shrank, and they had to compete on price. Revenue declined, but the company remained profitable for a while before struggling later due to broader industry changes.
What should investors watch for in biotech patents post-Myriad?
Focus on patents that cover artificial constructs (e.g., engineered proteins, synthetic pathways) and methods of use. Avoid companies whose core value lies in owning rights to a natural sequence. Also monitor court decisions on “nature-based” patents – the landscape is still evolving.

This article has been fact-checked by reviewing the Supreme Court opinion and subsequent commentary from patent law experts.