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PATENTS: Two biotech perspectives on gene patents




                                  PART 1


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

TITLE:  TWO BIOTECH PERSPECTIVES

SOURCE: IP Worldwide, USA

AUTHOR: 

URL:    http://www.law.com/jsp/article.jsp?id=1039054490796

DATE:   30.12.2002

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TWO BIOTECH PERSPECTIVES

Intellectual property is often described as an international practice -- technology and ideas don’t respect borders. But IP -- like politics -- is local, too. What you believe is often a reflection of where you sit. Until the 1890s, the United States did not recognize the copyright of British authors like Charles Dickens and Sir Arthur Conan Doyle. The United States only started to protect the copyrights of foreign artists once this country began to be an exporter of artistic talent.

The debate over copyright protection on the Internet turns largely on locale. Hollywood, as the creator of copyrights, is on one side; Silicon Valley, as the carrier of copyrighted works, is on the other.

Today, there is a similar debate over gene patents. Most biotechnology companies and lawyers accept patents as a given. Without patents, there would not be funding. And without funding, there would not be companies and clients. This leaves the academic and research community to argue the other side -- a more skeptical view of the value of mini-monopolies over the stuff of life.

Barbara Caulfield, the general counsel of Affymetrix Inc., seems to break the mold. She’s the chief legal officer of a large biotechnology company who opposes gene patents. But unlike other biotechnology companies, whose business is mining the human genome, Affymetrix makes the tools that let others find the gold. If the gold mine is on private property, the prospectors don’t need to buy picks. Caulfield’s argument turns on where she sits. (Her company, for example, actively patents its genetic tools.)

Caulfield is an accomplished lawyer -- she was a partner at San Francisco’s Orrick Herrington & Sutcliffe and a federal judge -- whose position is well considered. For balance, we asked Lee Bendekgey, the general counsel of Incyte Genomics Inc., and Diana Hamlet-Cox, the company’s vice president of intellectual property, to respond. Incyte is one of the leading holders of gene patents and a past courtroom foe of Affymetrix’s. The two companies settled patent litigation in late 2001.



                                  PART 2

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

TITLE:  WHY WE HATE GENE PATENTS

SOURCE: IP Worldwide, USA

AUTHOR: Barbara A. Caulfield

URL:    http://www.law.com/jsp/article.jsp?id=1039054490790

DATE:   30.12.2002

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WHY WE HATE GENE PATENTS

Barbara A. Caulfield is executive vice president and general Counsel at Santa Clara, Calif.’s Affymetrix Inc. From 1991 to 1994 she served as a federal judge in the Northern District of California.

The general counsel of Affymetrix makes the case for keeping the human genome in the public sphere

[Those who] appreciate the majesty and beauty of the wilderness and of wild life, should strike hands with the far-sighted who wish to preserve our material resources ... in an effort to keep all living creatures from wanton destruction. This end can only be achieved through wise laws and by a resolute enforcement of those laws.

President Theodore Roosevelt wrote those words in 1903, and they embody his call for a public policy concept almost unheard of at the time: the conservation of America’s vast, yet finite, natural resources. If Roosevelt were with us today, he might use similar words to implore sound stewardship of another vast, yet finite, resource: the human genome.

In the years since 1903, the national debate over natural resources took place against a framework of real property law as construed by legislatures, courts and administrative institutions. The debate over allocating and controlling elements of the genome will play out through these same institutions. With the genome, intellectual property will provide the framework. The central question has and will continue to be how best to strike the balance between individual ownership and public access for research.

The U.S. Patent and Trademark Office issues patents on naturally occurring gene sequences. Conventional wisdom holds that these patents are not only legal, but highly desirable from a public policy perspective, as they have attracted investment to the biotech sector and are fueling the development of next-generation diagnostics and therapeutics. But the problem with conventional wisdom is that, left unchecked, it almost invariably evolves to the point where the convention far outweighs the wise.

Are these gene patents allowing us to practice sound public management of the genome? Or are they gradually siphoning off a finite natural resource and making it unavailable for basic research?

My experience at Affymetrix -- experience with the legal, scientific, economic and ethical issues involved -- has led me to conclude that gene patents are not in the best interest of science or the global society it seeks to serve.

The legal theory supporting gene patents is rooted in the notion that they aren’t patents on the naturally occurring gene per se, but on an isolated and purified form of the gene. That language dates from a 1911 case, Parke-Davis v. H.K. Mulford, decided by the 2nd U.S. Circuit Court of Appeals. In the modern world of genomics, that logic is a distinction without a difference. If you accept this argument, then would it not follow that you could patent a human heart once you removed it and preserved it? A human gene is created first in nature, the same way other parts of human bodies are, and the fact that it’s isolated, cloned and purified doesn’t change that root of origin.

Moreover, with the sequencing of the human genome, finding a new gene is now a process that involves little invention. Powerful supercomputers have replaced the lab bench as the source of discovery of genes, so the patents issued are really on information.

A 22-year-old case, Diamond v. Chakrabarty, is often cited as proof that the U.S. Supreme Court has approved gene patents. That decision requires perspective. Chakrabarty is quite narrow, a decision based not on naturally occurring human gene sequences, but on a bacterium engineered by humans to digest oil in spills. In fact, the Supreme Court has yet to hear a case which squarely addresses the human gene sequence issue.

This debate, of course, goes beyond the letter of the law and extends to science and research policy, where it takes on very practical aspects. The genome is enormously complex, and the only thing we can say about it with certainty is how much more we have left to learn. At the same time, we’re learning that many diseases are caused not by the action of single genes, but by the interplay among multiple genes. Just last month, for example, scientists announced that they had decoded the genetic structures of one of the most virulent forms of malaria and that it may involve interactions among as many as 500 genes.

So, with good reason, researchers want to look at more of the genome, not less. What happens when the technical ability to analyze the whole genome collides with the legal ability to wall off parts of the genome through patents?

In practical terms, what can scientists do when they receive letters demanding that they stop important research unless they pay fees and obtain licenses from the patent holders on genes? One option is to negotiate the license, but that can be time-consuming, complicated and costly. Remember, too, that patent holders are generally under no obligation to grant a license, expeditiously or otherwise. These complications can increase exponentially if the scientist is looking at multiple genes covered by patents or groups of genes covered by multiple patents.

In other research and development efforts, someone can invent around a patent -- find another way of doing the same process that doesn’t infringe on the original invention. Scientists, however, shouldn’t have to research around a discovery.

Some researchers may ignore these letters under the theory that as long as the research is nonprofit in nature, there is a de facto research exemption in the United States to protect the researcher. However, the exemption is really a gentleperson’s agreement -- it exists only as long as the patent holder chooses to be gentle.

Many in the industry argue that gene patents are essential in attracting investment to biotech companies. The argument is debatable. In today’s market, the commercial value of a gene sequence alone is often not enough to attract capital. Private and public investors alike are now more interested in determining whether a company can successfully bring worthy products to market based on genomic research.

These changing investment criteria are true not only for new entrants, but for seasoned players as well. Celera Genomics and Incyte Genomics Inc., two companies with many patents on gene sequences, have recently announced that they are entering the drug development business -- demonstrating the existence of this new market approach.

The growing number of gene patents is a vexing problem for the private sector, not just for public research. Licensing is as difficult for research and development companies as for scientists working in a university setting. Protective patent litigation is draining and expensive (some 30 percent above the average cost of other business litigation). Considering both the expense and the risks of bringing new technologies and therapeutics to market, we have to ask if these licensing and litigation costs are an efficient allocation of the research and development sector’s resources.

The human genome also presents us with profound ethical questions. Some people believe that you can’t assign ownership or exclusionary rights to something as central to life as the human genome. Others believe you should not be able to commoditize and monetize part of the human body. Still others believe that genes are part of the common heritage of humankind, and thus owned by all of us. Creating exclusionary rights in a few companies or countries will inevitably lead to a disparity between those that can and cannot afford the advances that are emerging from genomics research.

All of these are interesting and credible points of view and deserve to be represented in the debate about intellectual property rights. To ignore them -- to pretend as if this debate were simply about the economics of biotechnology -- would be a failure to recognize the value and history of the human genome as a natural resource.

To return to Theodore Roosevelt, in a 1903 speech at Stanford University about conservation, he said, ”There is nothing more practical in the end than the preservation of beauty.” Almost 100 years later, those same words simply but ably describe our goal of wisely allocating the intellectual property of the genome, a ”thing of beauty” and a human natural resource if ever there was one.



                                  PART 3

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

TITLE:  REBUTTAL: WHY WE NEED GENE PATENTS

SOURCE: IP Worldwide, USA

AUTHOR: Lee Bendekgey & Diana Hamlet Cox

URL:    http://www.law.com/jsp/article.jsp?id=1039054490503

DATE:   30.12.2002

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REBUTTAL: WHY WE NEED GENE PATENTS

Lee Bendekgey is the general counsel of Incyte Genomics Inc., and Diana Hamlet-Cox is the company's vice president of intellectual property.

Two in-house lawyers from Incyte Genomics argue that strong patent protection for genes is critical for innovation

More than 20 years ago Chief Justice Warren Burger kickstarted an industry. In Diamond v. Chakrabarty (1980) Burger used the phrase "anything under the sun that is made by man" to describe what kinds of inventions are patentable. In Chakrabarty, the Court found that genetically engineered bacteria useful for cleaning up oil spills were patentable. Many believe this decision propelled the tremendous growth of the biotechnology industry. 

Human genes have been around for at least as long as humans. Yet until recently, human genes and proteins had never been used to develop new therapies or to diagnose or cure disease. By delivering a comprehensive understanding of human biological responses to disease and drugs, genomics promises to improve health care. But it requires an enormous effort and multiple technologies to identify and characterize genes and to understand the roles that they play in key pathological and toxicological responses. 

These discoveries require enormous investments. Contrary to Ms. Caulfield's assertion, the discovery of novel genes does not involve "little invention." Incyte Genomics Inc. has spent hundreds of millions of dollars discovering and characterizing genes and proteins. While it may be apparent to many that the human genome is a good place to look for genes, the discovery and characterization of a gene requires significant invention in both the design of experiments and the analysis of data. 

Ms. Caulfield's article seems to make much of the distinction between discovery and invention. It is perhaps worth reminding the reader that the constitutional provision on which the patent system is based refers only to discovery. The Constitution gives Congress the mandate "to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive right to their respective Writings and Discoveries." 

There are lots of compounds in nature that the biopharmaceutical industry has developed as drugs and other treatments. Interferons, interleukins and insulin are found in nature, but not in a therapeutic form. If a company extracts the compound from its natural setting, purifies it, identifies its structure and determines how to use it -- for example, how it affects human health -- it has a patentable industrial invention. 

Without patent protection, those in the private sector who make genomic discoveries would have to choose between maintaining their discovery as a trade secret; allowing free access to the fruits of their inventions (not a very attractive economic proposition); or simply discontinuing their efforts. None of these alternatives does much to advance science or the useful arts. 

Those who doubt the impact of patent protection on the availability of biotechnology funding should look at the infamous Clinton-Blair announcement in 2000. At the time, President Clinton was misquoted as opposing gene patents just as the first draft of the human genome was nearing completion. 

The biotechnology sector lost over $5 billion in market capitalization that day. Even after the president's remarks were clarified the next day, it took six months for the biotechnology capital markets to recover. Companies that rely on these markets for research and development funding need a healthy patent environment in order to contribute to scientific progress. 

In that case, a perceived threat to free-market protection of intellectual property drove investors away from biotechnology and research. In the future, changes in public policy will have a similar effect. Attempts to weaken or eliminate patent protections or to bar or limit exclusive licensing are just the sort of policy shifts that will curtail biotechnology companies in their quest to better the health of all Americans. 

Like many of those who oppose gene patents, Ms. Caulfield argues that they impede research, and as with the others, she supplies no data to support her claims. In contrast, clinical trial data show that the discovery of even a single important drug target -- even if it is patented -- can have a big effect on the development of new drugs. A recent search of a database of clinical trials disclosed more than 150 different trials involving VEGF and EGF receptors -- proteins involved in cancer -- even though many of these receptors are patented. 

Thus, the discovery of a single class of important targets can launch a tremendous amount of research and development. If the goal of the patent system is to promote innovation, an important drug target -- by definition a "research tool" -- would seem like exactly the sort of discovery that deserves protection. 

These same clinical trial data also suggest that the nonexclusive licensing of those targets is the optimum way of maximizing innovation. Incyte Genomics, which is often referred to as one of the leading holders of patents on genes and proteins, has for years licensed its patents on genes and proteins for use as drug targets on a nonexclusive basis. 

The patent system is most effective when the cost of invention is high but the cost to copy the invention is low; put another way, patents protect against free riders. Gene-based inventions are the nearly perfect context to apply patents. It is expensive and risky to discover and characterize genes, but easy to copy those discoveries. 

In this regard, it is noteworthy that Affymetrix's major products require the identification and characterization of full or partial genes. In other words, Affymetrix's products are most useful if the customer possesses the inventions that Affymetrix now argues should be available for free. While Affymetrix's desire to avoid paying royalties is perhaps understandable, it is not a sound basis for making public policy.


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