Debunking the Myth: ‘Gene Patents’ are not necessary for healthcare innovation.

Myth: ‘Gene Patents’ are not necessary for health care innovation.

Facts:

1. Patents on DNA preparations or sequences are often the first patents upon which a later technology platform or portfolio is built.  These patents are often in-licensed from universities by small start-up companies for the purpose of additional R&D, evidencing that the public/non-profit university sector cannot bear alone the cost of development of these inventions into useful products. 
    
2. It is precisely these types of early-stage companies that hold roughly 2/3 of the future clinical pipeline for patients, and are developing novel DNA-based approaches to dealing with environmental contamination, climate change, renewable energy, and more sustainable agriculture.  Without these basic patents, these early-stage companies will not be able to attract the necessary funding for further R&D and to ultimately develop an approvable product based off of the original DNA-based invention.

3. In 2008, more than $30 billion in biotechnology-related research and development investment occurred in the United States alone.  (Ernst & Young, Beyond Borders: Global Biotechnology Report 34 (2009).) 

4. The average cost of bringing a single biotechnology-related therapeutic to market, including basic research, clinical trials, and post-approval testing, exceeds $1.2 billion.  (Grabowski, Follow-On Biologics, 7 Nature Reviews Drug Discovery 479, 482 (2008).)

5. Only 30% of biological therapeutics that make it as far as human trials succeed in gaining regulatory approval.  (See, e.g., id. at 481.)

6. Most biotechnology firms are emerging firms with 50 or fewer employees working on their first products, a process that can take 15 years or more.  (Guide to Biotechnology). 

7. The stage in a company’s lifecycle after the point of basic discovery but before proof of concept has often been described as the “valley of death,” during which tens or hundreds of millions of dollars are needed to take the invention to the next stage of development. 

8. Patents “are typically the only assets those firms possess that are sufficiently stable and valuable to attract the large amounts of capital they need to exploit promising research toward new drugs and diagnostics.”  (Barfield & Calfee, Biotechnology and the Patent System 27 (2007)).

9. A preview of what might happen if patent eligibility is limited by the courts occurred in March 2000, when investors mistakenly interpreted a statement by President Clinton and British Prime Minister Blair as announcing an intent to narrow patent protection for gene-based innovations.  Even though the statement was quickly clarified, leading American biotechnology companies lost $50 billion in aggregate shareholder value over the following two weeks.  (Davies, Cracking the Genome 205-207 (2001)).

10.  Government-funded research cannot reasonably be expected to replace research and development efforts conducted privately under the current patent-incentive system.  A recent GAO study found that only 4-6 of the top 100 drugs used by the Department of Defense were developed using government money. To the extent arguments are raised that government can step in to develop new therapeutics and diagnostics, the objective data is to the contrary: the system relies heavily on private research and development. (U.S. General Accounting Office, Technology Transfer Agencies’ Rights to Federally Sponsored Biomedical Innovations (GAO-03-536 2003).)

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Debunking the Myth: Your Genes are Patented

 

MYTH: YOUR GENES ARE PATENTED.

FACTS:  IT IS NOT POSSIBLE TO PATENT YOUR GENES

The term “gene patent” is a misnomer, because genes as they exist in the body cannot be patented. Because a naturally-occurring gene – even a newly-discovered one – cannot be patented, patents don’t provide ownership rights over our genes, and nobody can infringe a patent by having a certain gene, or by passing it on to their children.

If genes aren’t patentable, what is?

Natural genes are not eligible for patenting, but artificial preparations of DNA molecules are, because they have new qualities that distinguish them from natural genes. Like other chemicals that are derived from nature (such as antibiotics or natural dyes), preparations of DNA molecules are patentable because they have been transformed through human intervention into something that is so different from the natural state as to qualify as new, useful, and man-made. This transformation begins with the purification and isolation of the natural DNA. But isolating and purifying is not enough. The resulting DNA preparation must have new qualities, advantages, and technical applications that allow it to be used in important new ways that are not possible with the natural gene, making it different not just in degree, but in kind. For these reasons, every nation in the developed world recognizes the patentability of such inventions.

How is a patented DNA preparation different from a natural gene?

Patented DNA preparations contain isolated DNA molecules that are stripped of everything that is necessary for the normal operation of a gene in its natural state. Such purified DNA molecules also are often reconfigured in ways that eliminate large parts of the genetic sequence of the natural gene, giving rise to DNA molecules that do not exist in nature. Such DNA molecules can be used in ways that are simply not possible with the natural gene – for example, to conduct gene transfer experiments, to make DNA vaccines, or to produce therapeutic proteins in large scale cell culture.

What else is required to make a DNA molecule patentable?

It is impermissible to patent a DNA molecule, even if isolated and purified, unless the scientist establishes the detailed biological function of the gene from which it was derived and identifies a credible, specific and substantial utility for it. Identifying a gene’s biological role and establishing a credible, specific and substantial use for the claimed DNA molecule are often harder than identifying the new gene itself, and certainly meets the standard thresholds for inventiveness. Furthermore, in every case, the inventor has to satisfy the “novelty” and “unobviousness” requirements under which the claimed DNA must be new and distinct from all preexisting scientific knowledge. Finally, the patent application must contain a detailed scientific disclosure that enables other scientists to replicate the invention.

Overall, identifying, deriving, characterizing and describing a DNA sequence in this way requires the same level of human ingenuity as synthesizing a new chemical, composing a new metal alloy, or other human creations that are commonly deemed patentable.

This post was authored by Hans Sauer, Ph.D., J.D. Deputy General Counsel for Intellectual Property at BIO and Adjunct Professor of Law, Georgetown Law.

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Myriad Oral Argument Review and Analysis by Patent Docs

Great comprehensive review of oral arguments at the federal circuit in the Myriad case by Kevin Noonan of Patent Docs.

IP Position Critical to Biotech Investment

A great article from Genetic Engineering and Biotechnology News written by Lisa Haile reviewing the Myriad case and its implications for future medical advances.

Interesting Quotes:

“While it is unfortunate, I have seen quite a few technologies over the years that would be of potential great benefit to patients, but the intellectual property was simply not there to support protecting the product from fast followers in the market place,” explains Robert More, a general partner at Frazier Healthcare Ventures.

“Unfortunately, because of the enormous sums of money required to discover, develop, test, and approve anything in the healthcare sector, quite aside from the time it takes, IP is critical.” More further states that since “patents have definitive lifetimes, 20 years or less of exclusivity, and then an infinite time in the public domain, I think that is a small price for us to pay for innovation.”

“When evaluating opportunities to determine whether we will come in and underwrite the deal, we look at the IP position as one of the key questions,” explains Robert Dentice, head of life sciences investment banking at Cantor Fitzgerald. “We know that if the IP position is not strong, it is unlikely that we will pursue the opportunity further, knowing that the IP strategy and position will be one of the top three questions that the investors will ask about.”

Takeaways: The Case for Gene Patents

 Gene patents are the foundation of the biotech industry and precluding them would halt forward progress.

The patent system promotes innovation and stimulates investment in R&D.

If there were no exclusive rights in the final product, there would be little incentive to invest time and money into developing it.

Without the incentives offered by the issuance of patents, the industry and, ultimately, patients would suffer. 

BIO submits comments on Australian Senate Patent Amendment

The Australian Senate has proposed the Patent Amendment (Human Genes and Biological Materials) Bill 2010 that aims to ban ‘gene patents’. 

From the BIO Submission to Australian Senate Legal Committee on Patent Amendment:

This amendment would exclude from patent protection “any” biological material, whether a human gene or otherwise, that is substantially identical to a naturally-occuring biological material.  Specifically, the amendment states that the following materials would be catergorically declared unpatentable:

            “biological materials including their components and derivatives, whether isolated or purified or not and however made, which are identical or substantially identical to such materials as they exist in nature.”

“Biological materials” broadly “include,” but apparently not limited to, such fundamental biotechnology building blocks as “DNA, RNA, proteins, cells and fluids.”

As almost any biological material can be said to be “substantially identical” to some other natural biological material, this change would have the effect of banning large swaths of previously patentable innovative biological discoveries – thus, removing the protection needed to incentivize investment in biotechnology-related innovation in drugs and biological therapies, preventative treatments such as vaccines, animal healthcare products, renewable energy production and other “green” technologies, environmental mitigation and remediation, biodiversity, farming, food, nutrition, household cleaners, and industrial fermentation for food and fuel production.

BIO and its members believe that excluding biological inventions from patent protection is inconsistent with the demonstrated evidence of social benefit from isolating and purifying active compounds from previously ineffective mixtures occurring in nature. For example, the invention of isolated polymerase from certain thermophilic bacteria has provided valuable methods for amplifying DNA that enables forensic DNA analysis to establish guilt or innocence of crimes, the development of life-saving medical diagnostics, and molecular breeding for improved plants. If the amendment had been law, it would have prevented the patenting – and thus development – of significant advances in human health, like purified insulin, adrenaline, and antibiotics; vitamin D and B-12 compositions; human growth hormone; erythropoietin, and numerous vaccines and anti-cancer treatments on the market today.

Accordingly, BIO believes that this amendment, if adopted, would fail to affect its intended purpose of advancing medical and scientific research and the diagnosis and cure of human illness and disease. Indeed, it would slow such progress immeasurably. The public demands continuing the patent incentive for such biologic innovation.

 

 

 

 

Is the Myriad Case Decision and/or the DOJ Brief TRIPS Compliant?

Judge Sweet seemed to dismiss Myriad’s constitutional taking and TRIPS claims by indicating:

“Finally, Myriad’s suggestion that invalidating the patents-in-suit would constitute an unconstitutional taking in violation of the Fifth Amendment of the Constitution or a violation of the United States’ obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) is unpersuasive. Myriad’s novel taking argument runs counter to a long history of invalidation of patent claims by the courts and is unsupported by legal precedent. Similarly,Articles 8.1 and 27.3 of TRIPS permit governments to incorporate public health concerns into their intellectual property law and to exclude from patentability diagnostic, therapeutic, or surgical methods as well as particular inventions on the grounds of public interest. As a result, invalidation of the patents-in-suit would constitution neither a constitutional violation nor a conflict with the Untied States’ treaty obligations.” Pages 106-107. Emphasis added.

Alnylam’s Appellate Brief to the Circuit Court in the Myriad case argues that “excluding certain “compositions of matter” from patent-eligibility would violate the United States’ treaty obligations under the TRIPS Agreement.” pg. 17  The Brief goes on to discuss this legal issue as well as international policy implications.  pg. 18-19

Questions for thought:

1.  Would ‘isolated DNA’ even constitute an “invention” under TRIPS Article 27.1?  How do other nations view patentability of ‘isolated DNA’ and how does that affect a TRIPS analysis? See European Union Biotechnology Directive and WIPO’s “Information provided by WIPO Member States Concerning Practices Related to the Protection of Biotechnology Inventions.”

According to practice, a Dispute Panel would use the ordinary meaning of the word (probably from the Oxford English Dictionary) and look at common practice around the world.  Isolated DNA seems to meet the definition of ‘invention’ and the resources mentioned above seem to back up the assertion. 

2.  What about Alnylam’s “discriminatory… as to the field of technology” argument?  Does Judge Sweet’s opinion discriminate against DNA based patents and/or the Biotechnology Industry?  How does the DOJ’s Brief fare? 

Based on a WTO Dispute Panel analysis on discrimiation in a similar context (see CANADA – PATENT PROTECTION OF PHARMACEUTICAL. PRODUCTS), it seems that both Judge Sweet and the DOJ Brief are discriminating against DNA based patents and the biotechnology industry.  Judge Sweet creates a patentability exemption for ‘isolated DNA’ and DNA based inventions (to an unknown point).  The DOJ seem to create a new ‘isolation’ test which implicates much more than ‘isolated DNA’.  Both approaches specifically target the biotechnology ‘field of technology’ and have devastating effects on the industry.

BIO Press Release: BIO and AUTM file Amicus Brief in Myriad Case

The Biotechnology Industry Organization (BIO) filed an amicus brief in the U.S. Court of Appeals for the Federal Circuit on Friday, October 29^th, in an appeal of a lawsuit brought by the American Civil Liberties Union on behalf of a number of plaintiffs against Myriad Genetics, the U.S. Patent and Trademark Office, and others.

The brief, filed jointly with the Association of University Technology Managers (AUTM), supports the patentability of isolated DNA molecules, noting that invalidating the patentability of these molecules would discourage future biotechnological innovation.  DNA-based patents are a critical tool that help enable the fundamental research and development of new biotech products, therapies and technologies to fight deadly diseases, expand agricultural production, clean the environment, and reduce our dependence on foreign sources of oil. 

Isolating a DNA molecule, in addition to creating a new chemical molecule that does not exist in nature, imparts new utilities and functions that are not available from native DNA.  The utility of isolated DNA molecules derives from their chemical structure, which is developed by human ingenuity using complex scientific expertise and equipment. As a result, isolated DNA molecules are patentable subject matter based on decades of U.S. case law.

 “Unless reversed, the district court’s ruling will seriously harm the U.S. biotechnology industry, which consists largely of small firms that are engaged in foundational research and dependent on private investment to fund their work,” stated BIO President & CEO Jim Greenwood.  “Patent protection is critical for the ability of biotechnology firms to secure the private investment necessary for the research and development of innovative diagnostic, therapeutic, environmental and agricultural products. This innovation will lead to domestic job creation and help sustain our country’s global competitiveness.”

 If the Court of Appeals affirms the district court’s categorical rejection of the patentability of isolated DNA molecules, it would cast a cloud of uncertainty over thousands of similar patents and compromise the ability of biotechnology firms to pursue groundbreaking discoveries in human healthcare, renewable energy, and sustainable agriculture. 

 “Patentability of isolated DNA molecules is critical to the translation of university research discoveries for the public good. Without this, many promising discoveries would not make their way from the university research lab and into the hands of companies for development of products which improve the public health,” stated AUTM President Ashley J. Stevens.

“From the mass production of life-saving medicines by cell cultures to the screening of our blood supply for life-threatening viruses, patented DNA molecules have been put to countless uses that have benefited society,” concluded BIO President and CEO Jim Greenwood. 

The joint BIO-AUTM amicus brief is available at http://bio.org/ip/amicus/BIO_AUTM_Amicus_Brief_AMP_v_USPTO_2010-1406_FedCir.pdf.  Additional background materials are available at http://bio.org/ip/genepat