"The mere discussion of this type of legislation—whether it goes anywhere or not—is very unhealthy for our industry," says Lila Feisee director of government relations and intellectual property at the Washington, DC-based Biotechnology Industry Organization (BIO), the biotech industry trade group. "Anything that makes patent protection shaky and unpredictable is a huge problem. It drives investors to other technologies. If there is enough of this stuff happening, you'll see people move away from investing in biotech," says Feisee.
The US Federal Trade Commission and a subcommittee of the US House of Representatives' judiciary committee each held hearings in March on biotechnology and patent policies. Rep. Lynn Rivers (D-Mich.) also introduced legislation that would exempt researchers and clinicians who use genetic-based diagnostic tests from patent infringement suits.
Rivers' proposed legislation would create exemptions from patent protection in troublesome areas, including nonprofit research and the use of genetic-based diagnostic tools. The proposal also calls for a study by the White House Office of Science and Technology Policy on the impact of Federal policies, particularly patent policy, on the rate of innovation, the cost, and the availability of genomic technologies. It would also require public disclosure of genomic sequence information in a patent application when federal funds were used in the development of the invention. The data would be released within 30 days of patent filing, rather than the current 18 months.
The most controversial provision of Rivers' legislation would exempt medical personnel who use genetic diagnostic tests from patent infringement actions. Rivers says she based this part of the legislation on similar provisions enacted in 1996 exempting doctors from patent suits for using patented medical or surgical procedures.
The Academy of Clinical Laboratory Physicians and Scientists supports some of the ideas in the Rivers' bills. "A number of our members have either not offered tests or stopped offering tests because of gene patents, particularly restrictive licensing," says Petrie Rainey, the group's president. "We believe this has considerably reduced the ability of people to get needed testing because it's simply not being offered widely."
However, Rainey says the organization fell short of endorsing the legislation as written because of concerns that the elimination of patent restrictions could halt development of new tests. "The interesting thing is that many of the patents on genes are owned by universities," says Reed, the intellectual property lawyer. "And they make money off of these, whether it's for diagnostic or therapeutic purposes. It's a weird paradox. Something gets lost in the translation," she says. "The university is seen as for the good of all, but there seems to be a psychological shift when it comes to the companies partnering with them."
The diagnostic provisions would endanger a growing business for biotech firms and has drawn fire from BIO. "The diagnostic testing carve-out is the worst for the industry," Feisee says. In practice, she says, companies do not sue clinicians for doing pure research. "What they're trying to do with this carve-out is make anyone free to do whatever they want with patented material."
David Korn, senior vice president for biomedical and health services research at the Association of American Medical Colleges, says scientists don't object to patents for specific diagnostic equipment or test kits, but are increasingly prohibited from doing diagnostic lab work because of what he says are overly broad patents. "The patent isn't on the process or a specific invention, or tool, or a chemical. It's a patent on a piece of knowledge," he says. "The community of academic laboratory physicians, geneticists, and pathologists have felt very unhappy about the fact that they can't apply those tests in their ordinary academic medical practices because the patent owners have sent cease-and-desist letters which generally are fairly frightening."
Suited for Suing
Mike Kirk, executive director of the American Intellectual Property Law Association, says his organization has not prepared a formal position on the bills because no hearings have been set. However, he says, they appear to conflict with laws already in place, including global treaties. Under the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement of the World Trade Organization, he says, member nations must guarantee remedies that will protect patent-holders. Kirk says the carving out of patent protections may be viewed by trading partners as an elimination of enforcement of intellectual property.
The United States, Europe, and Japan generally try to work together on patenting systems, Reed says. "However, it doesn't always work because of the public outrage over the ownership of genes in Europe. The outrage is much greater than here," she explains. "A lot of countries within the European Community are not happy, and there are some legal processes in certain countries to overturn the European Community's dictates."
Andrew G. Sheard, chairman of the Intellectual Property Advisory Committee for the Bio Industry Association in London, says scientists and industry are awaiting a major report due in June by the Nuffield Council on Bioethics. The study group, formed by the Medical Research Council, The Wellcome Trust and the Nuffield Foundation, has been working on the report for two years.
Sheard says some European countries are lagging on enforcement of Europe's patent laws and companies must generally face higher patent hurdles in Europe than in the United States. "It is still a politically live issue," he says. "There are obviously groups opposed to biotech as a whole, probably more than in the United States, but the law as it is at the moment is that genes are in principle patentable."
Back in the United States, the House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property is considering an amendment to the current patent law that is designed to clear up uncertainty about how patent law affects collaborative research. The current confusion stems from a 1997 federal court ruling on a patent dispute over the design of a foam football after employees disclosed the drawings.
Rep. Howard Berman (D-Calif.) says that as a result of the court ruling, "an otherwise patentable invention can be denied a patent simply because research partners have exchanged information. This undoubtedly can cause a chilling effect on collaborative research." Berman says the issue affects universities more than private companies because they often collaborate with many different entities. While one solution would be to create separate joint ventures for research collaborations, Berman says many universities prohibit the practice of assigning rights to outside partners.
Kirk suggested new language could confuse the situation further and he says it could possibly subject the public to patent terms even longer than the current 20 years if researchers need to take out separate patents on similar discoveries.
The Federal Trade Commission and the antitrust-division of the US Department of Justice have also been examining patent policy in a series of hearings that began in November and are scheduled to continue through May. In March the hearings focused on biotechnology, and Barbara Caulfield, executive vice president and general council of Affymetrix Inc., a Santa Clara, Calif. biotech firm, testified against patenting of genes, arguing that the discovery of a gene should not allow an individual or company to control further downstream developments based on the gene. Her company makes probes that take genetic material from tissue and could run into legal difficulties if more and more genes are patented.
Gregory J. Glover, a lawyer with Ropes & Gray, counsel to the Pharmaceutical Research and Manufacturers of America, argued that strong property rights are especially important for the early critical stages of development, and he says companies must receive sequential patents to encourage new investment to improve existing products. "Achieving the promise of pharmaceutical innovation," he testified, "requires the maintenance of strong and predictable intellectual property rights."