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                                  PART I
-------------------------------- GENET-news --------------------------------

TITLE:  Opposing patents on genes, proteins possible through product of
        nature doctrine, prof says
SOURCE: University of North Carolina, USA, by David Williamson, Press 
Release
        http://www.unc.edu/news/newsserv/research/conley122302.html
DATE:   Dec 23, 2002

------------------ archive: http://www.gene.ch/genet.html ------------------


Opposing patents on genes, proteins possible through product of nature 
doctrine, prof says

CHAPEL HILL -- People troubled by the fact that the United States 
government has granted patents on genes and is likely to continue may find 
new hope through a legal argument being made by a University of North 
Carolina at Chapel Hill patent expert and a Philadelphia law student.

Dr. John M. Conley, William Rand Kenan, Jr. professor of law at UNC, and 
Dr. Roberte Makowski, a former agricultural biologist now studying law at 
Villanova University, say opponents of such patents have not taken 
advantage of the long-standing "product of nature" doctrine.

They offer their opinions on biotechnology patents in the current issue of 
the Journal of the Patent & Trademark Office Society, the principal 
publication for patent attorneys.

"IÕve taught patent law for most of the past 20 years, and during that 
time, my course has increasingly concerned genetic and other biotechnology 
patents," Conley said. "The first time you expose law students or lawyers 
without any background in the topic to the idea that you can actually 
patent genes, they all have the same reaction -- ÔYouÕve got to be kidding! 
You canÕt do that.Õ"

Conley assures them that he -- or anyone else -- can.

"You canÕt patent genes inside the body, they have to be isolated outside 
it, and in most instances, the patented genes have nonfunctional regions 
excised from them," he said. "What are ultimately patented are versions of 
DNA sequences in the genes as they exist outside the body, but they are 
still genes weÕre talking about and also proteins and cell lines. ItÕs not 
just the new uses to which you can put genes such as gene therapy that are 
patentable."

Widespread concern exists about the ethics, economics and long-term effects 
of biotechnology patents, Conley said. Opponents have had difficulty, 
however, finding a legal hook to hang their concerns on, and the courts 
have rebuffed them repeatedly.

"People who look at this from an economic perspective say it seems 
inefficient and counterproductive to let others monopolize genes, proteins, 
etc. before the full range of uses you can put them to can be known," he 
said. "It seems like you will have a blocking effect on future progress. 
Many other people are saying such patents are just wrong and ought to be 
limited."

The courts, including the U.S. Supreme Court, have understood but not 
accepted those arguments, Conley said, because they say existing laws 
appear to allow such patents. Likewise, members of Congress have expressed 
reservations, but nothing has changed.

An issue that seems to have been glossed over in the court cases is how 
some biotechnology patents have been granted in the face of the more than 
century-old "product of nature" doctrine, he said. Just as it sounds, that 
essentially flat rule is that one cannot patent naturally occurring 
products.

"We examined the history of the Ôproduct of natureÕ doctrine and the cases 
where it was applied and concluded that the patent community generally has 
skated right past this without really pausing to think about it or to use 
it," the UNC professor said. "These cases assume that anything thatÕs 
outside the body is not a product of nature and that thereÕs enough 
difference to get past the doctrine.

The most famous related Supreme Court case, in which a scientist named 
Ananda M. Chakrabarty persuaded the court in 1980 that he should be issued 
a patent, was not a good one for testing the doctrine as a legal barrier 
since Chakrabarty inserted new DNA into a bacterium to create a species 
that had never existed before, he said.

"Based on our research, we believe that this doctrine is still out there 
and that the issue needs to be argued more vigorously by those who oppose 
certain kinds of biotechnology patents," Conley said. "We think it may be a 
hook people who want to slow the whole process down can use to their 
advantage. Every other hook they have tried so far has not worked."

Conley said the huge biotechnology industry is doing good things, 
particularly in medicine, and he is no fanatic in opposing biotechnology 
patents.

"The problem here is the unknown," he said. "For example, patents have been 
issued on so-called BRCA genes that in some cases are thought to cause 
breast cancer or predispose some people to breast cancer. If I have a 
patent on such a gene, I can effectively block all research on that gene 
because anyone who wants to do research on it has to come to me for a 
license, which I might choose not to give them.

"Given the enormous and as yet poorly understood potential for genetics in 
medicine, it seems to me troubling very early in the game to allow these 
enormous blocking patents way upstream."

Reopening such questions is worthwhile because of a tradition in U.S. 
intellectual property law that issues many thought to be resolved have been 
re-examined and sometimes reversed or modified considerably, Conley said.


- 30 -


Note: Conley can be reached at (919) 962-8502 or jmconley@email.unc.edu.
School of Law Contact: Audrey Ward, (919) 962-4125
News Services Contact: David Williamson, (919) 962-8596

NEWS SERVICES
210 Pittsboro Street, Campus Box 6210
Chapel Hill, NC 27599-6210
(+1-919) 962-2091
FAX: (+1-919) 962-2279
www.unc.edu/news/newsserv


                                  PART II
-------------------------------- GENET-news --------------------------------

TITLE:  INTELLECTUAL PROPERTY: Universities Ask Supreme Court to Reverse
        Patent Ruling
SOURCE: Science, USA, Volume 299 (5603): 26-27, by David Malakoff
        http://www.sciencemag.org/cgi/content/full/299/5603/26a?ijkey=
        mqKrWjUSyIMAY&keytype=ref&siteid=sci
DATE:   Jan 03, 2003

------------------ archive: http://www.gene.ch/genet.html ------------------


INTELLECTUAL PROPERTY: Universities Ask Supreme Court to Reverse Patent 
Ruling 

When Johns Hopkins University scientists met with the school's general 
counsel to discuss a recent court ruling involving patent rights, the 
lawyer offered them a disturbing real estate tip. "I told them to buy land 
in China," recalls Estelle Fishbein. "Because if this decision stands, Asia 
is going to be the only place where you can do cutting-edge research 
without facing oppressive regulation."

Fishbein's views might be extreme, but she isn't the only university 
official hitting the alarm button. This week, Johns Hopkins and other 
academic research powerhouses lined up to ask the Supreme Court to come to 
their aid. Their target is a federal court ruling on a bitter ownership 
fight over a laser developed by a university researcher. Critics say the 
October decision,* in Madey v. Duke University, effectively ends a 170-year-
old practice of allowing scientists to freely borrow patented technologies 
for limited use in basic research that isn't aimed at commercial ventures. 
The universities are asking the high court to review--and ultimately 
overturn--the decision by a special patent court, because they believe it 
will hinder research by forcing scientists to obtain permission before 
using patented technologies.

"The decision transforms the academic science landscape in a horribly 
perverse way," says David Korn of the Association of American Medical 
Colleges (AAMC) in Washington, D.C., one of the groups leading the charge. 
"It means that [government] research funds will be diverted into legal and 
administrative costs."

Others, however, say the decision simply requires universities to follow 
the same patent rules as everyone else. And patent attorneys say it is in 
line with decades of decisions that have narrowed the so-called "research 
exemption" clause in patent law. Few of those cases have involved 
universities, however, and that could make the current battle attractive to 
the high court. "It's a sexy legal question: Why should universities 
benefit from the [exemption] when they might profit from the fruits of the 
research, too?," says attorney Colin Sandercock, a patent specialist with 
the law firm of Heller Ehrman in Washington, D.C.

The current legal jousting stems from the invention of the free-electron 
laser (FEL) in the 1970s by physicist John Madey, then at Stanford 
University. Madey and Stanford won several patents on the device, which 
generates light that can be tuned to different frequencies, making it a 
potentially versatile tool for everything from physics research to surgery. 
After a falling out with Stanford administrators, Madey gained full control 
of the patents, and in 1988 he moved his Mark III laser into a custom-built 
laboratory at Duke, in Durham, North Carolina. A decade later, Duke 
officials removed Madey as head of the lab and he moved again, this time to 
the University of Hawaii, Manoa. Madey soon sued Duke over his removal and 
demanded the return of the equipment. His suit also accused the university 
of infringing on his laser patents by continuing to use the devices 
(Science, 21 November 1997, p. 1393).

A lower court sided with Duke, ruling in 1999 that the university wasn't 
infringing because its researchers were using the devices "for 
experimental, nonprofit purposes only." That standard is rooted in an 1831 
case. But a federal appeals court reversed the decision in October, noting 
that Duke is a businesslike entity that profited from the use of the 
lasers. The research "unmistakably further[ed Duke's] legitimate business 
objectives, including educating and enlightening students and faculty" and 
helped it "lure lucrative research grants," wrote Federal Circuit Court of 
Appeals Judge Arthur Gajarsa.

That language outraged many university research advocates because it 
implies that the research exemption doesn't apply in an academic setting. 
"To categorize a research university, with its educational mission, as just 
another commercial operation borders on ludicrous," says Sheldon Steinbach, 
general counsel of the American Council on Education (ACE) in Washington, 
D.C. It will be "disastrous," he says, if researchers have to stop and 
conduct expensive, time-consuming patent searches and make licensing deals 
every time they want to bring a new technology or technique into the lab.

It also will be difficult for administrators to keep track of which 
researchers are using patented material, adds James Severson, the new 
provost for intellectual property at the University of Washington, Seattle. 
"Academic scientists often don't know, and don't even think about, whether 
something is protected by a patent," he says. But the cost of not paying 
attention could be high, experts say, since alleged infringers could face 
triple-damages lawsuits.

Madey and some patent attorneys say that the threat of financial punishment 
is needed in a world where universities increasingly profit from their own 
patent portfolios--and sue infringers. The decision also follows legal 
precedent, they add. "What the court said isn't surprising to most 
businesses, but I guess it's seen as unusual because the case [involved] a 
university," says Madey's attorney, Randall Roden of Tharrington Smith in 
Raleigh, North Carolina. It's been 70 years since a university was involved 
in a similar, potentially precedent-setting case, other attorneys note.

Duke officials hope the high court will rewrite that case law. The 
appellate court decision is wrong "on the merits," they say. AAMC, ACE, and 
other university groups say they'll support Duke on a request filed this 
week by the university attorneys, Fulbright & Jaworski in New York City.

If the high court decides to take the case, it likely will be heard 
sometime after October 2003. If the court declines, the case will go back 
to a lower court, where Duke might still prevail on other grounds. And some 
observers predict that Congress may want to have the final word on the 
right balance between patent holders and the needs of academic researchers. 
That is, if all the scientists haven't moved to China.

*Madey v. Duke University, No. 01-1567, Federal Circuit Court of Appeals, 3 
October 2002.


                                  PART III
-------------------------------- GENET-news --------------------------------

TITLE:  Biotech patent policy muscled away future of once-bright CellPro
SOURCE: The Seattle Times, USA, by Luke Timmerman
        http://seattletimes.nwsource.com/html/businesstechnology/134609521
        _cellpro05.html
DATE:   Jan 05, 2003

------------------ archive: http://www.gene.ch/genet.html ------------------


Biotech patent policy muscled away future of once-bright CellPro

Six years ago, CellPro was an ambitious biotech company from Bothell with a 
product that had the promise of helping thousands of cancer patients.

It invented a machine to separate bone-marrow stem cells from tumor cells, 
which could help patients rebuild their immune systems after chemotherapy 
and radiation. When its device helped save the life of its chief executive, 
CellPro became famous.

But the company dissolved in bankruptcy in 1998 after losing a bitter fight 
with a research university and a competing company that claimed CellPro 
infringed on their patent.

Now, CellPro is in the spotlight again, as a new report co-authored by a 
leading bioethicist cites the company's demise as an example of the dark 
side of patent law.

The report argues that CellPro and its device fell victim to an overly 
broad patent held by Johns Hopkins University and licensed to a health-care 
giant, Baxter Healthcare. The authors suggest patients might have been 
better served had the federal government stepped in and compelled the 
parties to share the technology.

"The story was about a winner-take-all victory in the patent stakes," the 
authors wrote. "Hopkins certainly had a powerful argument ... for (its 
researcher's) work. But should assistance for one component of the 
technology have been sufficient to destroy the entire company and 
monopolize the market for cell separation instruments as a whole?"

The article, written by Avital Bar-Shalom, a fellow at the American 
Association for the Advancement of Science, and Robert Cook-Deegan, a 
bioethicist at Duke University, appears in December's issue of The Milbank 
Quarterly, a health-policy journal.

The authors are careful not to bash the fundamental concept of patents, 
agreeing with the prevailing industry view that patents - and the temporary 
monopolies they create - are necessary to attract the investment needed to 
fuel research.

But they suggest changes to the Bayh-Dole Act of 1980, which regulates the 
transfer of technology from research universities to industry, a bedrock 
law that many people believe enabled the rise of the biotech industry.

The authors say Congress could strengthen the Bayh-Dole Act's clause for 
the government to intervene when patents are being abused. Other options 
include creating exemptions to patent infringement, or allowing third 
parties to challenge patents shortly after they've been issued, such as in 
Europe.

They also suggest Congress require universities to disclose more 
information about how their technologies are licensed and used.

"Major research universities with significant patent portfolios should 
examine how they license their intellectual property as a public trust and 
ensure that their business interests do not take precedence over their 
academic values," the authors wrote.

Patenting has prompted bioethical debate lately, particularly as 
pharmaceutical firms use legal tactics to extend the length of patents for 
top money-making drugs.

Gary Wilcox, executive vice present for operations at Icos, a Bothell 
biotech company, said more university disclosure of licenses may foster 
research. But he said any overhaul of the system could cause havoc.

Patents are essential to biotech companies, he said, because it typically 
takes a decade or more, and hundreds of millions of dollars, to develop a 
drug. To sink that much money, investors want potential for substantial 
returns.

"You have to make sure your intellectual property is lined up before you 
make an investment," Wilcox said. "If you don't, nobody will benefit."

The report contends that Hopkins' patent on the technique for using 
antibodies to latch onto stem cells was first, but overly broad, and that 
researchers from the Fred Hutchinson Cancer Research Center and CellPro 
added other important innovations on their own, some of which were patented.

But Jeff King, an intellectual property attorney with Woodcock Washburn in 
Seattle, said CellPro was "overly cavalier" and relied on poor legal 
strategy when it decided not to buy a license from Hopkins.

"The authors are looking at it from a one-sided perspective that fails to 
consider other significant public-policy considerations and business 
realities," King said.

Whether patients were ultimately harmed by the CellPro legal battle is 
unclear, because subsequent clinical trials of the device showed little 
benefit.

After CellPro went bankrupt in 1998, its device was absorbed into Nexell 
Therapeutics, which developed a similar device. But the market for the 
technology shrank following unfavorable clinical trials.

Regardless of the public-policy implications, CellPro's case represents a 
cautionary tale for biotechs.

"I feel bad for CellPro," said Perry Fell, executive chairman of Seattle 
Genetics. "They had a good product, they innovated, but they had an 
intellectual property issue that they didn't take care of and get a license 
for."

Susan Wray, director of industry relations for the University of Washington 
School of Medicine, said the university, like the National Institutes of 
Health, has a policy of broadly licensing tools for research.

She said universities grant exclusive licenses when it is the only way a 
technology will be developed for the public.

"People think patents prohibit business, but it's the exact opposite - it 
spurs business and innovation," Wray said.




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