June 12, 2015 / 7:06 PM / 2 years ago

UPDATE 2-Prenatal DNA test patent invalid -U.S. appeals court

(Adds comment from companies, concurring opinion)

By Andrew Chung

NEW YORK, June 12 (Reuters) - A U.S. appeals court said on Friday that the discovery of a new form of prenatal testing that avoids the risks of invasive medical techniques was good for science but did not deserve a patent.

The U.S. Court of Appeals for the Federal Circuit in the District of Columbia said a patent held by genetic testing company Sequenom Inc on detecting fetal DNA in a pregnant woman's blood was invalid. The decision by the nation's top patent court upholds a ruling by a lower federal court in California and clears Roche Holding AG unit Ariosa Diagnostics of infringement.

The appeals court said the DNA's presence in the blood fell under the U.S. Supreme Court's rule against patenting natural phenomena.

The decision is the latest to interpret two Supreme Court decisions from 2012 and 2013 that made it harder to obtain patents on naturally occurring substances and the tests used to detect them, potentially putting a wide swath of biotech patents at risk.

Sequenom's innovation was in finding a way to use DNA found in maternal blood samples that had previously been discarded as medical waste in order to determine certain fetal characteristics, such as gender. The method avoided the risk of more-invasive tests, such as taking samples from the fetus or placenta, the decision said.

But this innovation was still was not enough to deserve a patent, the appeals court said.

While calling the test "a positive and valuable contribution to science," the court said: "Even such valuable contributions can fall short of statutory patentable subject matter, as it does here."

Shares of Sequenom were up 3 cents at $3.35 in late trading.

The case originated in 2011 and 2012 when San Diego-based Sequenom and San Jose, California-based Ariosa sued each other over the patent. Sequenom said Ariosa infringed with its Harmony prenatal test.

Ariosa's attorney, David Gindler, hailed the decision as a victory and said preventing companies from patenting natural phenomena allows researchers to freely perform their work, which can lead to new treatments and benefits for patients. Sequenom declined to comment.

In a unusual concurring opinion, one of the three judges on the appeals panel, Circuit Judge Richard Linn, said he was forced to invalidate the patent because of the unnecessarily broad wording in one of the Supreme Court precedents, which he is bound to follow. He said that Sequenom should have been entitled to keep its patent.

The case is Ariosa Diagnostics et al. v. Sequenom, Inc et al., in the U.S. Court of Appeals for the Federal Circuit, No. 14-1139 and 14-1144. (Reporting by Andrew Chung; Editing by Alexia Garamfalvi and Dan Grebler)

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