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.
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"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."
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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,
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 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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