Supreme Court’s Prometheus decision adds significant risk factors to biotech IP valuations

In the wake of the U.S. Supreme Court’s decision in Mayo Collaborative Services v. Prometheus Laboratories (March 20, 2012), valuation analysts of medical diagnostics and biotech properties now have to reassess their take on risk.

Michael P. Dougherty of King & Spalding describes how Prometheus may have fundamentally changed the law, making it more difficult to obtain and enforce patent claims that include a law of nature. The decision, which specifically addressed methods to optimize drug efficacy, was of interest primarily to the medical diagnostics industry. However, the Supreme Court, in light ofPrometheus, has now vacated and remanded last year’s Federal Circuit finding in Myriad(Association for Molecular Pathology v. U.S. Patent and Trademark Office and Myriad Genetics) that isolated genes and shorter DNA sequences are patent-eligible.