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6-Regulation: European Commission allows member states to implement patent directive individually

-------------------------------- GENET-news -------------------------------

TITLE:  Member states to have say on patent rules
SOURCE: Wall Street Journal Europe, by Raoul Wootliff
        posted by Checkbiotech, Switzerland
DATE:   19 Jul 2005

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Member states to have say on patent rules

BRUSSELS - In a blow to Europe's biotechnology industry, the European
Commission said it will allow countries to adopt different approaches in
patenting biotech-drug innovations instead of insisting on a single
European standard.

A report by the European Union's executive arm focused particularly on
stem-cell research, which the commission said was so controversial and
fast-moving that it would allow EU member countries to set their own
rules on what types of human-genetic inventions can be protected. But the
fact that the commission is allowing different interpretations raised
concern in the broader biotech industry.

Europe's biotech industry has argued a single standard is necessary to
avoid confusion that has been hindering progress in research. "The huge
contrast in the systems has created a sense of uncertainty and
uncertainty kills this industry," said Adeline Farrelly, a spokesperson
for EuropaBio, the European Association for Bioindustries.

Biotech is a key growth industry, with revenue increasing almost 20% a
year, but European companies haven't benefited from the growth as much as
U.S. rivals, industry experts say. In 2004, U.S. biotech firms received
$16.9 billion (14 billion euros) in funding compared with only $3.4
billion in Europe, according to accountants Ernst & Young.

The report follows a vote earlier this month by the European Parliament
that overwhelmingly rejected a proposed commission law creating a unified
way of patenting software across the EU. That vote effectively killed an
ambitious EU project and left companies uncertain about legal protection
for their innovations. The commission, responsible for proposing laws,
said then it wouldn't reintroduce any Europe-wide legislation and instead
would allow the present system of 25 national laws to remain in place.

In contrast, a single law giving wide scope for patenting biotech was
approved in 1998. The problem has been enforcing it. In December 2003,
the commission filed suit at the Luxembourg-based European Court of
Justice against eight countries for not adopting the legislation, saying
the failure "is considerably hampering the development of the biotech
industry in Europe."

The report yesterday said the science has changed in the seven years
since the biotech law was enacted, justifying additional restrictions.
"The field of biotechnology research is rapidly developing," Internal
Market Commissioner Charlie McCreevy said in a statement. "It is
important the EU continues to monitor developments in patent law in this
complex and sensitive area."

While the law relates to all patents in the field of biotechnology and
genetic engineering, it is embryonic-stem-cell research that has caused
the most controversy.

Some EU member countries have widely different policies toward stem-cell
research. Staunchly Catholic Ireland, Italy and Poland have banned stem-
cell research partly because of religious beliefs that harvesting stem
cells, which destroys human embryos, is equivalent to killing. But
Belgium, Sweden and the U.K. allow most kinds of stem-cell research, and
in November, voters in Switzerland allowed embryo research after the
government argued the country needed to keep pace with rival centers like
the U.K. Proponents believe embryonic stem cells could help repair
crippling spinal-cord injuries and treat an array of degenerative
diseases such as Parkinson's.

The report says countries aren't obliged to allow some types of stem-cell
innovations to be patented. It focuses particularly on cells that have
the potential to develop into a human embryo, saying they "should not be
patentable on grounds of human dignity." In practice, for example, the
report could give member states the choice whether to allow inventions
derived from a cloned cell to be patented.

Under the 1998 law, an inventor is allowed to claim a patent on all
possible future uses of a particular gene sequence. But France and
Germany say the patents on any human gene should be good for only a
single type of use. The commission report says this restrictive approach
is justified because the material in question comes from the human body.

After the release of the report, some members of the European Parliament
said they believe the commission must introduce a new biotech-patent law.
A commission spokesman said that while the commission hasn't yet decided
how to proceed, he doubted agreement could be found on a single European-
wide standard. "We must take a careful approach in this area," said
spokesman Oliver Drewes. "We are taking a minimalistic approach."

Ali Ulucay and Victoria Knight contributed to this article.


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