The Selection Committee for the Second Annual DCBA Writing Contest is pleased to announce that three finalists have been selected. The first place winner and recipient of the $2,500 award will be will be announced at the DuPage County Bar Association’s annual Law Day luncheon at Klein Creek Country Club on April 28, 2005. Each of the three finalists have been personally invited to attend the luncheon, and we encourage all members to show their support by attending the luncheon. Many quality articles were submitted to the Selection Committee, and it is truly a credit to the three finalists efforts and abilities that they were selected. The article submitted by each of the three finalists will be printed in the Brief, in no specific order, and acknowledged as a top three selection. The first of the three articles is set forth below.
Since the Supreme Court’s landmark decision in Diamond v. Chakrabarty, the United States Patent and Trademark Office ("USPTO") has issued thousands of patents on genetic material. The biotechnology industry has heralded patents on genetic material as an. indispensable property right necessary to procure venture capital. However, equally vocal are those who oppose gene patents on the grounds that they prevent the development of life-saving genetic diagnostic tools that have the ability to revolutionize medicine and biomedical research. This paper examines the unique problem that gene patents pose on the development of diagnostic genetic technologies, analyzes several proposed solutions, and offers approaches that seek to maintain the incentive nature of the patent laws while providing universal access to gene sequences for biomedical research and medical diagnostics.
In the words of Abraham Lincoln, "Patents couple the fuel of interest to the fire of genius."1 The roots of the U.S. patent system are grounded in Article I, Section 8 of the Constitution, stating in part that, "Congress shall have [the] Power...to promote the Progress of Science and the Useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries. ..."2 This provision seeks to strike a balance between granting inventors a temporary monopoly in exchange for the public disclosure of their invention.3
Pre-1980, the patentability of living organisms was routinely struck down in the United States under the "products of nature" doctrine.4 This canon broadly held that patents would not issue for the discovery of the phenomena of nature.5 In Funk Bros., the plaintiff, Kalo Inoculant Company ("Kalo") brought a patent infringement action against Funk Brothers Seed Company.6 Kalo alleged that its patent on an inoculant for leguminous plants was being used by the defendant without authorization.7 The inoculant was comprised of six bacterial species, each of which physically existed in nature.8 The advantages of Kato’s mixture were that it had the capability to inoculate a wide variety of leguminous plants. Kato had created a mixture of these six bacteria using specified strains that would not impede the efficacy of the other.9 Speaking for the majority of the Court, Justice Douglas reasoned that "the combination of species produces no new bacteria, no change in the species of bacteria, and no enlargement of the range of their utility."10 Consequently, the Court invalidated Kalo’s patent under the "products of nature" doctrine for failing to disclose an invention or discovery within the meaning of the patent statutes.11
The "products of nature" doctrine arose once again in the seminal case of Diamond v. Chakrabarty in which the Court clarified the doctrine’s boundaries.12 Microbiologist, Ananda Chakrabarty sought to patent his genetically engineered bacterium that had the capacity to break down crude oil.13 The Supreme Court ruled 5-4 that Chakrabarty’s genetically modified "oil eating" bacteria was deserving of a patent.14 The Court reasoned that a genetically modified organism may qualify for patent protection as a new manufacture or composition under section 10 1 of the Patent Act.15 The Court distinguished Funk Brothers on the grounds that Kato had created a mixture of naturally occurring bacteria whereas Chakrabarty had created a new bacterium with characteristics not found in nature.16 In its opinion the Court expressed its conviction that Congress intended the patent laws to encompass anything under the sun made by man.17
The ability to patent genetic material has sparked national debate. Those who favor the patentability of genetic sequences predominately support their position with a constitutional argument. Proponents reason that the purpose of the U.S. patent system is to advance work in the sciences and useful arts by providing a reward to inventors as an incentive to disclose information for the benefit of the public.18 The grant of an exclusive right to the inventor for a specified amount of time provides the inventor with a financial incentive to invest in gainful pursuits. This incentive is perceived as essential to the pharmaceutical and biotechnology fields, where important discoveries often require extremely expensive and time consuming research and development. Moreover, supporters argue that patents are needed as a form a security in order for biopharmaceutical companies to secure venture capital and develop innovative products. In support of this argument are facts indicating that in 1992 there were 2,538 patents issued for biotechnological inventions and three new biotechnology drug and vaccine approvals. By 2002 the number of biotechnology related patents increased to 7,763 with new biotechnology drug and vaccine approval hitting 35.19 Furthering their argument that property in the form of a patent is essential to the biotechnology industry was the international reaction to a statement made by former U.S. president and British Prime Minister Tony Blair on March 14, 2000. As the Human Genome Project was nearing completion they suggested that human gene sequence data "should be made freely available."20 Investors interpreted this statement as a policy shift in which patents would not issue on genetic material. Consequently, many dumped biotechnology stocks causing them to plummet in value overnight21
Those opposed to patents for genetic material contend that such patents are inherently immoral and unethical. Often it is argued that patents on genetic material restrict research and development. Medical practitioners foresee unreasonably high costs for health care providers who test patients for genetic predisposition to disease.22 Furthermore, some human rights activists believe that humans are God’s creation and should therefore not be patented as man’s invention.23 Jeremy Rifkin, an outspoken critic to gene patenting, has expressed his belief that genes are mans’ evolutionary history and must be made freely available to mankind.24 Furthermore, there exists disagreement as to whether the isolation and sequencing of genetic material constitutes patentable subject matter under the patent laws. Opponents to gene patents argue that genetic material is not the result of an individual’s inventive effort and therefore must fail the novelty requirement of the Patent Act.25
The complex social and ethical problems inherent in gene patents are exemplified by the case involving Myriad Genetics ("Myriad"). The USPTO issued Myriad patents covering the BRCA-J and BRCA-2 genes.26 Mutations involving these genes greatly increase a woman’s risk of developing breast or ovarian cancer.27 Of clinical importance is the fact that genetic abnormalities in either of these two genes predispose a woman to a greater than eighty percent risk of developing breast cancer within her lifetime.28 Myriad’s patents give it the right to develop commercial laboratory testing services, therapies based on the gene sequences, and diagnostic tests for BRCA-J and BRCA-2. Importantly, knowledge of the BRCA-l or BRCA-2 gene sequence permits one to develop diagnostic genetic technologies that can detect cancer causing mutations in these genes, leading to targeted treatment strategies before manifestation of the disease. Myriad has strictly enforced its rights to the BRCA patents and notified all laboratories engaged in research or clinical trials of diagnostic tests involving BRCA-l and 2 to cease all activities.29 Myriad developed and marketed a diagnostic genetic test called BRCAnalysis© at a cost to the consumer of over $900 V.S.30 This test identifies many of the common BRCA mutations exhibited in breast cancer.31 Eventually, Myriad agreed to provide NIH funded researchers access to BRCA tests for half the commercial Cost.32 However, Myriad’s BRCA-2 patent was later challenged in Europe by Cancer Research Technology which also held a patent on BRCA-2 and first published the gene sequence.33 Recently, Cancer Research Technologies won an opposition proceeding and has chosen to grant royalty free licenses on its patent for BRCA-2. Cancer Research Technologies perceives gene patents as detrimental to the progress of public health services and has continuously sought to make them freely available to those in European countries.34
III. AN ARRAY OF CONGRESSIONAL ACTION COULD REMEDY THE PROBLEMS CONFRONTING DIAGNOSTIC GENETIC TECHNOLOGIES
The development of life-saving diagnostic genetic technologies will be suppressed unless gene patents are afforded less protection. The exorbitant transaction and licensing costs associated with acquiring the rights to use several gene sequences would prevent genetic diagnostic technology from its implementation in medical diagnosis and molecular biology research. Several approaches exist that could remedy the stifling affect that gene patents have upon the development of diagnostic genetic technologies.
A. THE PATENT LAWS COULD BE AMENDED TO EXCUSE THE INFRINGEMENT OF GENE PATENTS
A new statutory exemption could be amended to the Patent Act that excuses the infringement of gene patents. Such an approach has been proposed by former Representative Lynn Rivers (D. Mich.) in the Genomic Research and Diagnostic Accessibility Act of 2002 ("Act").35 In particular, her proposed bill focused upon the amendment and redefinition of two specific areas. First it contained an exemption from infringement for individuals that use gene sequences for research purposes.36 Second it contained an exemption from infringement remedies for those individuals who use gene patents for genetic diagnostic technologies.37 Rivers lost her reelection bid and the Act has yet to be passed by Congress. However, Rivers’ approach provides a roadmap that delineates specific solutions to the problems imposed by gene patents. The Act recognizes the importance of making gene sequences freely available to those engaged in academic research. Specifically, 35 V.S.C. § 271 would be amended to exempt from infringement research performed on patented gene sequences.38 The exemption would not apply to any individual or entity that is directly engaged in the commercial manufacture, commercial sale, or commercial offer for sale of a drug, medical device, process, or other product using such patent for or patented use of the genetic sequence information.39 Thus, biomedical research taking place at nonprofit academic research laboratories would be permitted to openly infringe gene patents. This discharge from infringement would significantly broaden the judicially created experimental use exemption currently available to academic researchers. In the wake of Madey v. Duke University the term non-profit academic research institution would need to be defined to include all non-commercially funded research laboratories.40 Madey strictly defined non-profit such that most, if not all, academic research would be classified as for profit.41
The Genomic Research and Diagnostic Accessibility Act of 2002 falls short of providing a sufficient solution to the problem imposed by gene patents. Although creative in her approach, Rivers fails to explain how diagnostic genetic technologies are to be commercially developed and manufactured. In essence, Rivers has put the cart before the horse. Those who perform noncommercial research on patented gene sequences or administer a genetic test that contains patented gene sequences would be free from infringement. However, diagnostic genetic tests would not be available if the infringement of gene patents for commercial purposes is not permitted. River’s proposal does not exempt from infringement those commercial firms that would use patented gene sequences in the creation of a diagnostic test. In order for diagnostic genetic tests to be produced there needs to be made available patented gene sequences. Conceivably, if diagnostic genetic tests were manufactured with licenses for specific gene patents, there would be no nee~ for the medical activity exemption to include diagnostic genetic testing. The administration of a diagnostic genetic test would merely be a permitted use of a patented invention, since one who purchases a patented invention has a presumed right to use it for its intended purpose. Therefore, River’s proposal falls short of providing an effective and workable strategy for gene patents to be made available for those involved in the creation and manufacture of genetic diagnostic tests.
B. A SYSTEM OF COMPULSORY LICENSING WOULD MAKE GENE PATENTS AVAILABLE FOR USE IN DIAGNOSTIC GENETIC TECHNOLOGIES
A federally created system of compulsory licensing could make patented gene sequences available for those involved in the development and manufacture of genetic diagnostic technologies. In the context of gene patents, a compulsory licensing scheme would require that the patent holder license his gene sequence in return for a statutory set fee. Donna Glitter has suggested that a system could be fashioned in which the licensing fee would not be established by the licensor but rather it would be tied to the commercial value of the product developed as a result of the licensee’s research.42 Conceivably such a system is fair to both licensor and licensee. The licensee would not be deterred from research and innovation due to the necessity to procure the rights to gene sequences. Additionally, the licensor would be ensured a financial return tied to the success of the licensee’s product. Such an approach could operate to make diagnostic genetic technologies available to those engaged in biomedical research and medical diagnostics. Moreover, Glitter’s approach would reduce the transaction costs that would be required for licenses to be obtained for all genetic sequences needed to create a complex diagnostic test that checks for multiple gene mutations.
C. GENE PATENTS COULD BE MADE AVAILABLE FOR DIAGNOSTIC GENETIC TECHNOLOGIES THROUGH A COLLECTIVE RIGHTS ORGANIZATION
The creation of a mandatory gene patent collective rights organization ("CRO") could alleviate transaction costs and make patented gene sequences available for another’s use. DNA arrays are a diagnostic genetic technology that can screen an individual for mutations in hundreds of genes at a time. Similar to the music industry, the creator of a DNA array would have to get a license from each patent holder owing an interest in the genes to be used on the DNA array. Obtaining authorization from each individual gene patent holder would involve large transaction costs. To combat these costs, the music industry has created a series of CROs that license the right to administer public performance rights from music publishers.43 The need for such a regime becomes apparent when one considers that radio stations and nightclub owners would have to negotiate with the musical work copyright owner for each song that he wished to play. CROs allow the radio station or nightclub owner to negotiate for public performance rights with and organization that holds the rights to an overwhelmingly majority of musical works. Likewise, a similar system could operate in the context of gene patents. An organization can be established in which holders of gene patents contract through a centralized agency for the rights to use particular gene sequences in their diagnostic genetic test.
A CRO can be made to operate in the context of gene patents. First, it would have to be created by the government with a requirement that upon the grant of a gene patent, the gene sequence would be catalogued by the CRO. Moreover, a second requirement would need to hold that owners of gene patents would have to be required to license gene patent upon request for a statutory set fee. This would have two predominant effects. The incentive to invent would remain for the original patent holder since he would be guaranteed a financial return for his endeavor. Importantly, others would not be discouraged from pursuing further invention or research due to the exorbitant costs involved in licensing the gene sequence. Such a CRO would facilitate the use of genetic diagnostic technologies in research and medicine where the need to reduce skyrocketing costs is crucial.
D. A BROADENED RESEARCH EXEMPTION COULD PERMIT THE USE OF DIAGNOSTIC GENETIC TECHNOLOGIES FOR RESEARCH PURPOSES
Gene patents could be made available to academic researches through a broad interpretation of the experimental use exemption. The experimental use exemption first arose out of dicta in which Justice Story stated that the purpose of the patent laws was not to punish someone who made or used a patented invention out of curiosity, or for mere amusement.44 The first case involving the application of the experimental use exemption to academic research came in 1935 with Ruth v. Stearns-Roger Mfg. Co.45 In Ruth, the defendant sold parts to a patented flotation device to the Colorado School of Mines.46 The Court found the defendant liable for contributory patent infringement but exempted the sales to the Colorado School of Mines because the school used the parts in instruments used to conduct research.47 The school’s activities fell within the experimental use exemption because no financial gain was had from the use of the patented invention.48
Since Chakrabarty, gene patents have provided security to the U.S. biotechnology and pharmaceutical sector which has permitted them to receive an influx of venture capital and flourish. Currently, knowledge of gene sequences can permit the development and manufacture of genetic tests that can aid in the diagnosis of disease before its victim begins to manifests symptoms. Moreover, gene sequences can be used to serve a variety of research purposes, many of which are noncommercial. However, gene patents have the ability to prevent diagnostic genetic technologies from being developed for medical purposes and stifle breakthrough genetic research. This paper has discussed several strategies that could operate either separately or in unison to reduce the protection afforded gene patents. Some approaches may be better suited for the research realm while other may be more appropriate for purposes involving medical diagnostics.
1 William A. Haseltine, The Case for Gene Patents; Technology Information, Tech. Rev. (Cambridge, Mass.), Sept. 1, 2000 at 59
2 U.S. Const. art. I, 8, cl. 8
3 See U.S. Const. art. I, 8, cl. 8
4 Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127,130 (1948)
6 Id. at 128
10 Id. at 131
11 Id. at 135
12 Diamond v. Chakrabarty, 447 U.S. 303 (1980)
13 Chakrabarty genetically modified bacteria with a technique known as transformation in which circular extra chromosomal segments of DNA are placed inside the bacterium that encode for a desired characteristic.
14 Id. at 3l8
15 Id. at 308
16 Id. at 309-10
18 The V.S. Constitution grants Congress the power to "promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Rights to their respective Writings and Discoveries." V.S. CONST. art. I, § 8, cl 8.
19 Biotechnology Industry Organization, Biotechnology Industry Statistics, online: Biotechnology Industry Organization http://www. bio. org/er/statistics.asp (date accessed: April 5, 2004).
20 Tom Abate, Do gene patents wrap research in red tape? San Francisco Chronicle, Monday March 25, 2002.
22 Tom Reynolds, Gene Patent Race Speeds Ahead Amid Controversy, Concern, 92 J. Nat’l Cancer Inst. 184, 272 (2000).
23 Ronald Cole-Turner, Religion and Gene Patenting, 270 Science 52, 52 (1995).
24 Jeremy Rifkin, Genes Ought to Belong to Us All- Not Just to "Bio-Prospectors," Houston Chron., July, 2, 2001.
25 35 U.S.C. § 102 (2004).
26 U.S. Patent No. 6, 162,897
27 Mutations in these two genes are caused by the insertion of one or two nucleotides, or by large scale rearrangements or deletions which shift the reading frame (that part of the gene that encodes for a protein) leading to the creation of an inactive truncated protein.
28 W. Hofmann & P.M. Schlag, BRCA1 and BRCA2: Breast Cancer Susceptibility Genes; J Cancer Research & Clinical Oncology 126:9, 487 (2000)
29 Claude Henry, Of Patents and Genes: Flows of Knowledge and Intellectual Property Rights, Ecole Polytechnique, April 30, 2003.
30 J. Roberts, "US Gene Discovery Leads to Patent War" 1996312:7043 British Med. J. 1378.
32 32 Tom Reynolds, NCI-Myriad Agreement Offers BRCA Testing at a Reduced Cost, 92 J. Nat’l Cancer Inst. 596, 597 (2000).
33 Susan Mayor, The Scientist, Charity wins BRCA-2 patent. February 13, 2004, http://www.biomedcentral.com/newsI20040213/02 last accessed (April, 4, 2004)
35 Tom Abate, Do gene patents wrap research in red tape? San Francisco Chronicle, Monday March 25, 2002.
39 Genomic Research and Diagnostic Accessibility Act of 2002, HR 3967 Ms Rivers 107th Congress 2d session
40 Madey v. Duke University, 307 F.3d 1351 (2002).
42 Donna M. Glitter, International Conflicts Over Patenting Human DNA Sequences In The United States And The European Union: An Argument For Compulsory Licensing And A Fair-Use Exemption, 76 N.Y.U.L. Rev. 1623 (2001).
43 Robert P. Merges, Contracting into Liability Rules: Intellectual Property Rights and Collective Rights Organizations, 84 Cal. L. Rev. 1293, 1295-97 (1996)
44 Whittemore v. Cutter, 29 F. Cas. 1120 (C.C.D. Mass. 1813)
45 Ruth v. Stearns-Roger Mfg. Co., 13 F. Supp. 697 (D. Colo. 1935)
46 Id. at 703