In a closely watched case, a federal appeals court ruled on Friday that genes can be patented, overturning a lower court decision that had shocked the biotechnology industry.

The Court of Appeals for the Federal Circuit, which specializes in patent cases, said that Myriad Genetics was entitled to patents on two human genes used to predict if women have an increased risk of getting breast and ovarian cancer.

The court ruled that DNA isolated from the body was eligible for patents because it was “markedly different” in its chemical structure from DNA that exists inside the chromosomes in the body. As a result, the isolated DNA is not simply a product of nature, which would not be eligible for a patent.

The 2-to-1 decision on the gene patenting issue was also a rejection of arguments made by the Obama administration, which had filed a friend of the court brief arguing that isolated DNA should not be patented. That brief went against the long-standing policy of the United States Patent and Trademark Office to grant such patents.