On Monday a Federal judge threw out a patent on human genes. Yes that's right the US patent office has been allowing folks to actually patent bits of the human genome.
The law is pretty clear. One can not patent a law of nature, or otherwise patent something you discover in nature.
The patent office should never have granted such a patent in the first place.
A patent for a method of isolating the gene, YES.
For a gene itself, NO.
More discussion over at Volokh.
Now obviously this ruling will be appealed, but I think it will stand, as the SCOTUS has been (at least lately) somewhat skeptical of patenting everything and anything under the sun.
furthermore the patent office should not be granting software patents, because one can not patent a mathematical algorithm either. One may of course copyright the exact code.
Note that this was a narrow ruling, and only applies to genes already found in nature. This does not apply to Monsanto's use of patented organisms like it's "Roundup Ready" crops. Now that is also an abuse of the patent system, but of a different kind. Congress specifically designated a type of patent called a "plant patent" to grant intellectual property rights over plants. That's fine, the problem is that Monsanto was granted a "mechanical patent".
Under a plant patent, one may buy the plant, but may not propagate it via cuttings. (i.e. no cloning). Under Monsanto's mechanical patent, they are claiming that any plant with their gene in it (even if the gene got there via natural fertilization) is their IP. That's a case for a different day.