Molecular Diagnostic Patenting After Mayo v. Prometheus: An Empirical Analysis

Since the United States Supreme Court's 2012 decision in Mayo v. Prometheus announced a new legal test for patent‐eligible subject matter, policymakers, and scholars have vigorously debated the decision's impact on molecular diagnostics innovation. Molecular diagnostics serve as the cornerstone of personalized medicine and its promise of treatments with fewer side effects and better outcomes for patients. This article contributes to the presently thin evidence base on the impact of Mayo by using data on patent applications, examinations, and grants from 2010 to 2019 to comprehensively trace the effects of the test and subsequent related developments. Using descriptive data as well as a difference‐in‐difference (DID) design we evaluate the extent to which the decision was followed by one of three expected outcomes: a decline in patent quantity (“retrenchment”); increase in patent prosecution “toughness”; and applicant “adaptation” with respect to submitted claims. We find substantial support for our toughness and adaptation hypotheses, but not our retrenchment hypothesis: molecular diagnostic patenting did not decline in aggregate, though there is some evidence of a decline, relative to a control, in the number of diagnostic patent applications and grants associated with small, U.S.‐based firms. These results suggest that molecular diagnostic patents are harder to get but they are still being applied for and granted, with their narrowed scope making them less likely to block follow on innovation.