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Trade Secrets in Molecular Diagnostics

June 15, 2018

By Noel Courage and Sanjeevan Shivakumar

 

The US Supreme Court’s decisions in the Mayo[1] and Myriad[2] cases have cast unfortunate doubt on the patentability of some diagnostic products and methods. In the face of this uncertainty, some companies are giving more strategic consideration to protecting their diagnostic innovations as trade secrets, either as a primary strategy or as an adjunct to patent filings. 

Any diagnostic-related product, process or information that confers an economic benefit, is difficult to replicate/reverse engineer, and requires technical know-how, has trade secret potential. Diagnostics that incorporate laboratory developed tests (LDTs)[3], are particularly good candidates since there is very little requirement for the testing process or reagents to be publicly disclosed in order to obtain regulatory approval and market the diagnostic test.[4] Thus, a trade secret could encompass the overall LDT, or the individual constituent steps in the test.

By example, a LDT for measuring the concentration of an analyte in a patient’s blood, and its association with a disease such as cancer, may be a trade secret.[5] Secrecy can also be maintained with respect to the test sample preparation method and measurement devices. Reagents that are developed in-house, such as biomarkers, oligonucleotides, metabolite-specific probes, and their methods of manufacture can also be maintained as secret.  Of course, trade secret protection on reagents will be much less effective where commercialization is via an in vitro test kit, in view of the potential for reverse engineering and required regulatory disclosures. However, some aspects, such as methods of manufacture of reagents may still be kept as trade secrets even though the kit is sold widely.  Recently, the Pennsylvania Superior Court found that the internal policies and procedures pertaining to the interpretation of pathology specimens were a trade secret, and granted a protective order to limit public disclosure of the information learned in discovery.[6] If the diagnostic method in that case had been the subject of a patent filing, certain of the information may have been published in the patent application, instead of being enforceable as a trade secret. 

Algorithms and their use in diagnostics may also be an important trade secret.  The use of artificial intelligence and machine learning to develop and utilize algorithms used in data analysis is a potential growth opportunity for the use of trade secrets. 

The clinical data gleaned from diagnostic test results can also have independent value as a trade secret. Genetic diagnostic companies that compile and use clinical data to refine interpretive methods can provide more accurate test results compared to competitors. For example, a genetic database can be searched to identify gene variations of unknown significance (“VUS”) whose harmfulness is unknown. The more extensive the database is, the fewer VUS it will contain. As such, a patient can be given a more reliable prognosis if their sample is referenced against a more extensive database. Given that genetic information is immune to discovery by experimentation or reverse engineering, it is unsurprising that diagnostic companies closely guard their genetic databases.

There may be some regulatory and business headwinds in future on clinical data as trade secrets.  Some proponents of information sharing argue that maintaining clinical data as a trade secret can impede progress in genetic medicine if the data is the exclusive property of one entity. Several data sharing options have been proposed: (1) free access to the data as a prerequisite to publication; (2) public disclosure as a condition for regulatory approval or; (3) health plan payors, that reimburse genetic testing, refuse payment unless the clinical data is shared and subject to independent verification.  

Diagnostic companies will have to decide whether to keep the clinical data they have compiled secret, to allow access to the information on a restricted basis, or to make the information public while maintaining secrecy over the peripheral aspects of genetic testing, such as sequencing technology and analysis algorithms. Economic feasibility is likely to be the deciding factor.  

There is a significant breadth of subject matter that can be considered by IP attorneys for trade secret protection, whether or not patent applications are filed.  Diagnostic companies should have a robust program in place to ensure that reasonable efforts are made to define and preserve the confidentiality of trade secrets. The program should incorporate confidentiality and non-disclosure agreements, as well as physical and technological barriers to limit access to information.

This article was first published in the AIPLA - Biotechnology Buzz newsletter (May 2018).

 


[1] Mayo Collaborative Services v Prometheus Laboratories Inc, 566 US 66 (2012).

[2] Association for Molecular Pathology v Myriad Genetics Inc, 569 US 576 (2013).

[3] LDTs are defined by the Food and Drug Agency as “a type of in vitro diagnostic test that is designed, manufactured and used within a single laboratory.” < https://www.fda.gov/MedicalDevices/ProductsandMedicalProcedures/InVitroDiagnostics/LaboratoryDevelopedTests/default.htm>

[4] The only requirement for providing the test commercially is analytical validation pursuant to 42 CFR 1253(b)(2); the FDA has the discretion to assess clinical validity of LDRs, but it has not exercised this discretion in the past.

[5] Such a test may potentially be found unpatentable in light of the Mayo decision.

[6] McLaurin v Aria Health et al, J-A17043-17, unpublished, (Penn Sup Ct 2017).

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Author(s):

Noel Courage Noel Courage
B.Sc. (Biochem.), LL.B.
Partner
416.957.1655  email Noel Courage