The Supreme Court in the landmark case of Chakrabarty permitted patenting of living organisms, so long as the organism is “man-made.” Natural material as such is therefore unpatentable, but patenting has been permitted on material such as DNA, when it has been isolated and purified in a state or manner beyond what exists in nature.
On March 29, US District Court Judge Sweet in the Southern District of New York threw that long-held paradigm into question in Myriad Genetics, by ruling that patents on all the naturally-occurring genes were invalid, whether or not the genes had been isolated or purified.
The matter has been appealed to the Federal Circuit Court of Appeals, where the matter will be closely watched by many groups, including the ACLU and biotech companies. However, the final chapter may only be written by the US Supreme Court.