Is Court Ruling a Genetics Game Changer?

A judge in New York shook up the genetics world yesterday. In short, Myriad Genetics, a company that had a patent on the gene that predisposes breast cancer, was stripped of its monopoly on breast cancer gene testing. Ipso facto, there is now legal precedent that a company cannot hold a patent on identifying gene code.

Over 20% of the human genome is already patented…so a lot of people stand to gain or lose a lot of money. This throws all gene patents into question. The ruling could affect several of our Breakthrough Technology Alert stocks.

But the ruling should not apply beyond specific gene patents. Speculation that it will apply to other naturally occurring substances is unwarranted. It also stands a good chance of being overturned in appeal. We won’t know how things will shake out until the final ruling, which could take place in the Supreme Court many years from now.

My opinion about the ruling, incidentally, is irrelevant. I’m increasingly skeptical of the value of both patents and copyrights in these exponentially accelerating times. Nevertheless, what is relevant is the possible impact of the ruling on the biotechs in our portfolio. Though it may lead me to recommend selling one of the companies in our portfolio, my guess is that it would be a net benefit.

Patrick Cox
for The Daily Reckoning

The Daily Reckoning