April 2002
Patenting Human Genes

Putting it All Together

Measuring Cosmic X-ray Fireworks

Understanding Gene Functions Through Mutation

New Fellowships Integrate Teaching and Research

Pursuing Answers to Big Questions

Commentary: The Mentoring Mindset

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Bryn Mawr College
A quarterly newsletter on research, teaching, management, policy making and leadership in Science and Technology

Patenting Human Genes
By Jeanne Andrea Di Grazio, M.A. ’92

In 1980 the U.S. Supreme Court first addressed the question of whether a live, human-made microorganism is patentable subject matter. Ananda M. Chakrabarty, a microbiologist at the University of Illinois, Chicago, had bioengineered a microorganism capable of degrading crude oil. The discovery was groundbreaking because it promised to be an efficient and rapid means for cleaning up oil spills. Could Chakrabarty get a patent on the human-made microorganism?

By a slender 5-to-4 margin, the Court answered affirmatively, holding that the microorganism fell within the range of subject matter upon which a patent can be issued. Chakrabarty obtained his patent in 1981.

The landmark Chakrabarty decision has had a far-reaching impact on patent law and the growth of the biotechnology industry and has triggered ongoing debates concerning the ethics of patents on certain types of living matter. Presently, the range of subject matter for patents is broad — any product of human creation is eligible for patent protection as long as the subject matter is new, useful and non-obvious and satisfies other statutory criteria. Since the Chakrabarty decision, patents have been issued on an "oncomouse," which has a genetically engineered predisposition to cancer and is used as a model for the disease, monoclonal antibodies, human cell lines, isolated human bone marrow stem cells, viruses, altered plants and microorganisms, and genes.

Genes are composed of sequences of nucleotide bases that encode a variety of proteins necessary for life processes. With the advent of the Human Genome Project, which has mapped virtually all of the roughly 30,000 genes in human DNA, a floodgate of gene patents has been opened. According to the Human Genome Project Web (http://www.orni.gov/hgmis/elsi/patents.html), more than 3 million gene-related patent applications have been filed by corporate, government and academic researchers. Presently, about 20,000 applications related to gene patents are pending before the U.S. Patent and Trademark Office.

Promoting Progress

Patents play a critical role in commercial and social progress. They encourage inventors to make novel discoveries by protecting the fruits of their efforts from commercial exploitation by others. That is, once an inventor gets a patent on his or her invention, others are excluded from making, using, offering for sale or otherwise importing its subject matter for the lifetime of the patent unless they have the express permission of the inventor. Patent protection provides the necessary incentive for corporations and other institutions to invest millions of dollars in research by giving them exclusive rights to any financial gains from a patent’s development.

Jennifer A Zarutskie ’96

"I think it’s useful to understand what a patent is and is not," says Jennifer A. Zarutskie ’96, a technology specialist in the Boston law office of Foley Hoag. "A patent is a quid pro quo between the government and the inventor. The inventor gets a patent in exchange for full disclosure of the subject matter of the invention to the public so that, once the patent expires, others are free to make use of the subject matter of the patent. In countries without patent protection, people tend to hide things. Companies want an incentive for development. Gene patents are good for pharmaceutical companies because these companies generally won’t develop new products without patent protection."

Keum A. Yoon ’89

Keum A. Yoon ’89, an associate in the litigation group of Shearman & Sterling, New York, observes that generic drug companies likely would not exist without big biotech or pharmaceutical companies "spending money on research and development to obtain patents. When these patents expire and pass into the public domain, generic drug companies are free to manufacture and market inventions unburdened by the high research and development costs underlying these inventions."

Promoting Innovation

Gene patenting also promotes innovation in research and development by minimizing "wasteful duplication of effort," says Zarutskie. "Once a gene patent is published and its subject matter fully disclosed, other companies can avoid the cost of ‘reinventing the wheel’ and instead develop genuinely new innovations."

Mercedes K. Meyer ’88

Mercedes K. Meyer ’88, an associate at Burns, Doane, Swecker & Mathis, Alexandria, Va., adds that gene patenting leads to greater innovation because it "encourages competition in science. Competition is beneficial as it helps to further propel scientific innovation. Gene patenting is propelling new innovation, because as genes are identified, research will then be able to identify their functions and manipulate their activity, perhaps with the end result of treating diseases and conditions."

Karoline K. M. Shair ’90

Karoline M. Shair ’90, an associate at Choate, Hall & Stewart, Boston, says gene patents spur companies to be more innovative because they have to learn to "design around" already existing patents to avoid infringement. "They also allow companies to carve out their own IP rights — and thus be able to exclude others from making or using their invention. This point is particularly important for a company interested in developing a therapeutic agent that may be very expensive to develop."

Intentional infringement, if proved, can carry a heavy "treble damages" penalty — that is, the infringed patent holder may be awarded three times the amount of damages assessed by the courts. However, as Meyer notes, intentional infringement is "tough to prove. Documents showing knowledge of intentional infringement of another’s patent are difficult to obtain. It’s also difficult to get people to admit to those sort of things in depositions."

Gatekeeper Patents

Not all discoveries are alike in terms of complexity. Often, the first discovery in a class of related discoveries is later viewed as "easy" or "obvious," which raises the question whether patent laws unfairly reward these early discoveries.

With respect to gene patents, the first inventor in a class of similar inventions gets a broad patent. Later inventions must be narrowly defined to avoid infringement of this "gatekeeper" patent. Is this fair to those who later make more complex discoveries than the initial discovery?

"How do you define what’s ‘easy’?" asks Zarutskie. "It may be that the first discovery in a line of later discoveries is the most innovative. The key issue is utility. The U.S. Patent and Trademark Office has issued stricter standards to help prevent someone from making a discovery and then claiming overly broad uses for it, such as a gene sequence for ‘research purposes.’ Trying to patent a protein as a drug is most likely a good use."

"What may be easy or obvious must be viewed by the other statutory requirements of enablement and description. Something is not obvious or anticipated if it is not enabled," notes Meyer.

Licensing and Royalties

Because genes can be patented in various sequence lengths, legal problems may arise when an inventor seeks to patent a larger gene fragment that contains an already-patented smaller sequence. In these cases, licensing may be necessary to avoid possible infringement litigation, but licensing comes with a price in the form of royalty payments.

Shair notes that "the process of licensing can be frustrating to academia and to research "because of the cost of royalties as well as the time spent on searching out what is patented and who holds the patent. On the other hand, Yoon says, "The patent owner can use the money received from licensing on other research and development projects."

An alternative to licensing is cross-licensing — that is, patent holders reciprocally license to each other the right to use the subject matters of their respective patents.

"Cross-licensing is very big with respect to biotech patents," Meyer says. "Royalties are an accepted part of the biotech industry, and given the boom in biotechnology, do not appear to be impeding scientific progress." Cross-licensing is like "fences within fences, like Venn Diagrams," she adds.

The Value and Ethics of Gene Patents

The gene-patent rush that began in the 1990s, like the land rush of the 1890s, is a frantic dash to stake claims to as yet-undeveloped "property" of potentially great value. In a Nov. 15, 2000, special report on the ethics of genetics, the British newspaper The Guardian identified the top 10 patenters of human gene sequences worldwide (http://www.guardian.co.uk/genes/article/ 0,2763,397405,00.html). Leading the list was Genset S.A. of France, which has applied for patents on more than 36,000 human gene sequences. In comparison, 10th-ranked Incyte Genomics Inc., Palo Alto, Calif., claimed 1,755 gene-related patents.

What value can be placed on an intellectual property portfolio consisting of thousands of undeveloped gene-based patents?

"The value of a company’s gene patent portfolio depends on who is looking at it," Meyer says. She offers a few guidelines on how to value a company’s portfolio: "Is the patent valid? How well developed is the technology? Is there a benefit to the public? What is the value of the drug? Monoclonal antibodies may have a different value than a gene for a protein without the FDA hurdles. Provisional patent applications are valued differently than issued patents because they confer no ability to prevent others from making and using the claimed invention."

Of course, corporations are not the only players in the gene-patent rush. Government and academic researchers are also involved. For example, the U.S. Department of Health, of which the National Institutes of Health is a part, ranked seventh in The Guardian’s top-10 list with just under 3,000 patents on human gene sequences. According to data presented at "Commercializing the Human Genome," an April 5, 2001, conference at the Harvard Business School, academic institutions hold more gene patents than the top 25 pharmaceutical companies and all biotech companies combined (http://www.harvardmagazine.com/archive/01ja/ja01_jhj_15.html).

The rush to patent genes inevitably raises questions about the ethics of treating something so intrinsically human as patentable intellectual "property."

"I would favor using an objective approach to evaluating the ethics of allowing a particular patent. The best approach may be to balance scientific, medical and societal interests — a consequentialist approach wherein the goal is to act in a way that best accords with those interests, so long as no one is made to suffer from that act," Zarutskie concludes.

About Our Sources

Mercedes K. Meyer ’88, senior associate at Burns, Doane, Swecker & Mathis LLP, Alexandria, Va., majored in chemistry at Bryn Mawr. She received a Ph.D. in virology at the University of Texas, Houston, and has research experience in retroviruses as well as virology, molecular biology, immunology and protein chemistry. Meyer earned a J.D. at the University of Houston Law Center in 1996 and is experienced in the preparation of NIH licensing agreements, drafting and prosecuting U.S. utility and provisional patent applications, and foreign patent applications directed toward antibodies, proteins, viral vectors, hormones and hormone receptors.

Karoline K. M. Shair ’90, associate at Choate, Hall & Stewart, Boston, works in intellectual property procurement in pharmaceuticals, drug screening methods, combinatorial chemistry, catalysis, biomaterials and other areas. She graduated with honors in chemistry from Bryn Mawr, where she conducted research on the design and synthesis of models for the metal site in phenylalinine hydroxylase. Shair received her Ph.D. in chemistry at Yale University in 1995, was a postdoctoral fellow at Memorial Sloan-Kettering Cancer Center, New York, and a senior postdoctoral fellow at Ariad Pharmaceuticals Inc., Cambridge, Mass., and earned a J.D. from Boston College Law School in 1999.

Keum A. Yoon ’89, associate at Shearman & Sterling, New York, has represented biotechnology and pharmaceutical companies in patent-infringement suits and financial institutions in transactions, such as mergers and acquisitions, initial public offerings and joint ventures, that involve intellectual property. She majored in chemistry at Bryn Mawr and earned a Ph.D. in chemistry at Columbia University in 1994. She received a J.D. from Fordham University Law School in 1997.

Jennifer A. Zarutskie ’96, technology specialist at Foley Hoag, Boston, has experience in prosecuting patent applications in the fields of biotechnology, pharmaceuticals, biosensors and materials science. She graduated magna cum laude in chemistry from Bryn Mawr, received a Ph.D. in biological chemistry from the Massachusetts Institute of Technology in 2001, and is attending Boston University Law School, where she expects to earn a J.D. in 2004.

About the Author:

Jeanne Andrea Di Grazio, J.D., L.L.M., includes intellectual property law among her other practice areas. Her most recent work has appeared in the Intellectual Property and Technology Law Journal, Delaware Journal of Corporate Law, and various legal newsletters.

 
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