Medical Device Link.

Originally Published IVD Technology June 2003

COMMENTARY

Brian A. Jackson

Brian A. Jackson, PhD, is an associate physical scientist at the RAND Corp. (Santa Monica, CA). He can be contacted at bjackson@rand.org.

After intense efforts by both the public and private sectors, the well-publicized race to sequence the human genome was completed just over two years ago. Both the clinical and scientific communities are still exploring the opportunities presented by this availability of large amounts of genetic sequence information. At the same time, many public and private organizations are also trying to understand the consequences of another race run in parallel to the sequencing efforts: the race to file patents on gene sequences and fragments in an attempt to profit from the potential medical and other uses of the identified genes.

During the sequencing of the genome, considerable attention was paid to the potential of the genomic information to assist in clinical decision making and improve the delivery of healthcare. However, in this postgenomics era, the property rights assigned by gene sequence patents could significantly impede the broad realization of this potential. Because the possibility of genome-based diagnostics and personalized medical care represents an important route through which the public could benefit from these advances, the effect of these genomic intellectual property rights on the diagnostics industry is of particular interest and concern.

The Effect of Patent Property Rights

It is necessary for public systems to protect the rights of inventors who invest time and resources to develop novel products and processes. Because the costs involved in imitating a previously developed invention are often minimal, the legal framework provided by the patent system is critical to preserving incentives for future inventors to continue their research.¹ However, even while seeking to stimulate innovation, the patent system invariably impedes future inventors as well.

Potential innovators face uncertainties about various issues, such as how their work will fit into the existing patent landscape; the costs of patent searches, negotiation, and licensing; ambiguities about the strategic behaviors of firms holding patents in the technology area; and the risk of significant legal expenses associated with patent litigation. Patents also have positive and negative effects on the diffusion of technologies. On the one hand, they provide incentives for companies to produce products derived from the patented technologies. On the other, they restrict the availability of technologies for broad use by all firms in an industry or technology area.² As a result, the patent system seeks to balance these potential negative and positive effects to produce an efficient technology policy for the nation as a whole.

Striking a Balance in Gene Sequence Patents

Unlike the patents for most inventions, gene sequence patents have generated debate about whether this balance between stimulating and hindering innovation has been appropriately struck. Although formally claiming to be a DNA sequence isolated and purified from nature, many gene patents seek to cover other applications that go far beyond the sequence itself.

In the descriptions of their claimed inventions, these gene patents may include use of the proteins produced from the sequences, various mutant forms of the nucleic acids and proteins, fragments of the proteins, and small molecules targeted to the claimed gene products. These claims to other uses for the genes, proteins, and related products are included in the patents even though many or all of them have not been investigated or specifically described at the time of filing. Successful claims on such "likely but not yet realized" uses would allow the patents to "reach through" the individual claimed sequences and take full or partial ownership of potential future inventions involving the genes. Allowing such future uses to be claimed has generated significant concern that these particular patents are not properly balancing the potential restrictions on innovation with the stimulus provided by assigning property rights.³

Public debate on gene patents has often included questions about whether such patents interfere with patients gaining access to tests for genetic diseases. Of great concern to some is the fact that many of these patents are exclusively licensed to single firms, thereby allowing a strong monopoly in testing services for any disease associated with these patented genes.⁴

Recent work by Cho, et al., surveyed clinical laboratory directors about the effect of intellectual property on their testing services. This study concluded that a significant number of clinical labs have either stopped offering a test covered by a patent or decided not to develop new tests because of intellectual property concerns.⁵ Although such demonstrations of the power of patents to protect the testing market for a particular disease could benefit individual test developers or providers, the broader effect on the industry as a whole could be less positive.

For diseases involving multiple genes that might be patented by different firms, developing a comprehensive test could require paying several licensing fees to gain access to the needed genes. These requirements could significantly increase the cost of a test or test kit even before the product itself has been produced.⁶ Such up-front costs are a serious barrier to even promising technology areas. In addition, sizable licensing fees can generate angry reactions from patient populations and the medical professionals who seek to serve their needs. For example, families affected by Canavan's disease filed a lawsuit against Miami Children's Hospital, the holder of the patent on the relevant gene.⁷ In that case, the families objected to the size of the royalty being charged for the gene and the resulting restriction in access to the test. Concern about the effect of gene patents on test accessibility most recently led to the introduction, but not passage, of legislation during the 107th Congress. The proposed legislation exempted noncommercial research and diagnostic uses of patented genes from infringement remedies.⁸

As research and commercial interests shift from the results of now-complete gene sequencing activities to proteomics, there are added levels of uncertainty about the potential effect of gene patents on technology development and innovation. The increased heterogeneity of proteins in the body, that are generated through mechanisms such as RNA splicing or postribosomal modification, complicates these matters from a biological and intellectual property standpoint. How conflicts between gene patents and future patents on proteins will be resolved is not clear. These conflicts are likely to generate additional barriers to research and development of protein-based diagnostics.⁹ Beyond these conflicts between gene and protein patents, recent court decisions have also called into question the so-called "experimental-use exemption" that had often been thought to protect research uses of patented inventions.¹⁰ As a result of these decisions, even research activities utilizing a patented gene or the protein it expresses could be challenged. Such challenges could be more likely from firms that have chosen to use their patent rights to support testing monopolies as discussed above.

Looking into the Future

As the number of gene patents that are issued continues to increase and the value of individual patents becomes clearer, additional legal and policy action will likely begin to reduce the uncertainty surrounding this area of intellectual property law. A court ruling in March 2003 took a significant step toward reducing the ability of gene patents to claim uses of sequences that have not been reduced to practice at the time of the patent filing. In the relevant case (University of Rochester v. G.D. Searle & Co., Inc.), the plaintiff claimed infringement of the university's patent on the gene for the cyclooxygenase-2 (COX-2) enzyme.¹¹ Inhibition of COX-2 is the basis for a number of blockbuster painkilling medications, and the potential damages associated with this case were significant.

However, the judge in the COX-2 case indicated that sequencing the relevant gene and suggesting a way to identify specific inhibitors was not enough to justify patent rights on the inhibitors themselves, essentially ruling that the patent's attempt to reach beyond the sequence and claim subsequent uses of the gene was inappropriate. In the ruling, the judge described the claims as "a wish or a plan or a first step for obtaining a desired result. What [the reader] appreciates is that the patentee had a goal for achieving a certain end result. The reader can certainly appreciate the goal but establishing goals does not a patent make."¹²

If this decision does establish precedent, then some concerns about the scope of these patents and their potential conflict with proteomics patents will be resolved. However, since the decision does not address the use of gene sequences in genetic testing, issues surrounding gene patents will remain relevant to clinical test developers and providers. As these markets and technologies evolve, it is likely that future judicial or legislative action may be necessary to ensure that an appropriate balance is met between the positive and negative effects of this area of intellectual property policy on innovation.¹³

References

1. L Feisse, "Gene Patenting: A Threat to the Development of Molecular Diagnostics?" IVD Technology 6, no. 7 (2000) [on-line; cited 5 May 2003]; available from Internet: http://www.devicelink.com/ivdt/archive/00/11/006.html.

2. MA Heller and RS Eisenberg, "Can Patents Deter Innovation? Anticommons in Biomedical Research," Science 280 (1998): 698–701.

3. BA Jackson, "Innovation and Intellectual Property: The Case of Genomic Patenting," Journal of Policy Analysis and Management 22, no. 1 (2003): 5–26.

4. A Schissel, JF Merz, and MK Cho, "Survey Confirms Fears About Licensing of Genetic Tests," Nature 402 (1999): 118.

5. MA Cho et al., "Effects of Patents and Licenses on the Provision of Clinical Genetic Testing Services," Journal of Molecular Diagnostics 5, no. 1 (2003): 3–8.

6. S Halasey, "Technology Roundtable: Intellectual Properties in the Molecular Age," IVD Technology 5, no. 3, Supplement (2000) [on-line; cited 5 May 2003]; available from Internet: http://www.devicelink.com/ivdt/archive/00/05/009.html.

7. E Marshall, "Families Sue Hospital, Scientist for Control of Canavan Gene," Science 290 (2000): 1062.

8. Genomic Research and Diagnostic Accessibility Act of 2002, 107th Cong., 2nd sess., 2002. H.R. 3967, [cited 5 May 2003]; available from Internet: http://www.aipla.org/html/Legislative/107/house/hr3967.pdf.

9. RF Service, "Gene and Protein Patents Get Ready to Go Head to Head," Science 294 (2001): 2082–2083.

10. RS Eisenberg, "Patent Swords and Shields," Science 299 (2003): 1018–1019.

11. D Malakoff, "Judge Turns Rochester's Golden Patent into Lead," Science 299 (2003): 1638–1639.

12. University of Rochester v. G.D. Searle & Co., Inc., [cited 5 May 2003]; available from Internet: http://www.nywd.uscourts.gov/decision/20030305_00cv6161_larimer.pdf.

13. RS Schifreen, "On to the Postgenomics Era," IVD Technology 8, no. 5, (2002) [cited 5 May 2003]; available from Internet: http://www.devicelink.com/ivdt/archive/02/06/007.html.

Brian A. Jackson, PhD, is an associate physical scientist at the RAND Corp. (Santa Monica, CA). He can be contacted at bjackson@rand.org.

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