Patenting the Human Genome - The Ongoing Controversy

by Roland Vogl

and background information on
The Bayh-Dole Act -The Basis for U.S. Technology Transfer by Christian Neumann

This article seeks to provide a brief update on the continuing debate surrounding human gene patents, a subject that has produced considerable controversy in the international scientific community. The article describes the origins of the gene patenting controversy in the context of the general policy goals underlying the patent system. It also discusses the legal criteria supporting the patenting of isolated and purified human genes, as well as the general scope and limitations of gene patents in the U.S. and E.U. The author addresses the often misdirected question of "Who owns one's genes?" as well, and examines the most controversial issues in the current gene patenting debate: The patentability of diagnostic tests and research tools, and the patenting of partial gene sequences, such as ESTs and SNPs (**).


{access view=guest}Access to the full article is free, but requires you to register. Registration is simple and quick - all we need is your name and a valid e-mail address. We appreciate your interest in bridges.{/access} {access view=!guest} A Brief History of Genomics and the Patent System
In 1953, the structure of deoxyribonucleic acid (DNA), the genetic material of living organisms, was discovered. Since this historic discovery, science has made giant leaps in understanding how DNA works and how differences in DNA influence human traits and diseases. The Human Genome Project, aimed at identifying all the genes in the human DNA, was established in 1990. In 2001, a draft map of the human genome was published which at least partially identified the majority of the 30,000 to 40,000 distinct gene sequences that may, in combination, express 100,000 proteins. The full human genome sequence was finally completed in April 2003. It is now common knowledge that many of these gene sequences play a role in human diseases and disorders, and that identifying these genes may be a first step in the development of new diagnostic tests and treatments.


Genomic research aims to discover the biological function of particular genes, and how sets of genes and proteins work together in health and disease. Research is also focusing on identifying and understanding the proteins produced by the genes.

The modification of living organisms through genetic engineering in the 1970s and 1980s created endless possibilities for the development of novel products and processes. By inserting foreign or synthetic genes directly into a bacterium, scientists were able to envisage the creation of new drugs based on human genes, new agricultural crops, and transgenic animals with newly enhanced traits. Research into human genes opened up new commercial possibilities. The protection of this knowledge has been primarily sought through the patent system, which was quick to allow patents on genetic inventions(1). This trend to allow such patents has triggered a considerable discussion and debate about the acceptability of this practice (2).

Before addressing the merits of this controversy, some basic principles underlying the patent system should be clarified. The rationale of the policy underlying the patent system is to provide an advantage to society as a whole by rewarding the development of new inventions. This task endows the patent system with two basic purposes: (i) to promote the advancement of technology and (ii) to protect the inventor. The patent system seeks to achieve these purposes by ensuring that people who develop new and useful objects are able to capitalize on their inventions. This is achieved by conferring on the inventor an exclusive right ("a patent") for a limited period of time (currently 20 years in the U.S. and the E.U.) to prevent others from exploiting the invention. U.S. patent law is rooted in Article I, Section 8, of the U.S. Constitution which gives Congress the power to "promote the progress of science and useful arts by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries." The exclusive right to commercially exploit the invention does, however, comes with a tradeoff: The inventor must publish (in the patent claim) a full description of the invention and at least one reduction of the invention to practical use, a requirement that is based on the overall task of the patent system to promote innovation in form of follow-on inventions. In addition to providing incentives for inventors, patents also provide important incentives for investors. Developing a new product - particularly in the pharmaceutical field - is a risky, time-consuming and expensive process. When failures are figured in, it costs an average of $802 million to develop a single marketable medicine, according to researchers at Tufts University in 2001 (3). Companies therefore seek the protection of a patent in order to ensure that their competitors will not immediately copy a product they have developed. The right that a patent temporarily confers to exclude competitors allows the patent holder company to capture a market and to earn a good rate of return for people who have invested in the company's research. This in turn means that the company will be able to conduct further research and develop more innovative products. However, a patent does not guarantee that a product will be economically viable and produce any return for investors. Nevertheless, the general economic rationale underlying the patent system suggests that by preventing others from copying an innovative product, and thereby undercutting the patent holder on price, a patent makes it possible for an innovator to secure a market without having to keep the details of its product a trade secret. This makes individual investments more dependable, and it advances technology in general. On March 14, 2000, stock prices of many biotechnology companies fell sharply after President Bill Clinton and British Prime Minister Tony Blair issued a joint statement that some observers misinterpreted as signaling a change in the respective countries' patent policies. Investors feared that America and Britain intended to restrict patents covering gene-based inventions and consequently lowered their valuations of companies that obtain patents on such inventions. In reality, the two leaders' statement signaled no change in patent policies.

Particularly during the past decade, an increasing number of critics of the patent system have expressed concerns about whether certain aspects of the interpretation and application of patent law might lead to socially undesirable effects. They suggest that these laws need to be re-evaluated. Such concerns have primarily been focused upon the way in which patent law has been interpreted and applied to human gene sequences and to business methods encoded within computer software or other media.

The Changing Landscape of Life Sciences Research and the General Controversy Surrounding Gene Patents
During the 1970s and 1980s, several hundred small biotechnology companies that aimed to develop and apply new genetic technologies were established in the U.S. Many were originally formed within universities by entrepreneurial academics and later "spun out" into the industrial sector. This practice, which was mirrored in other technologies, blurred the relatively clear divide between the publicly-funded sector of universities, research institutes and foundations on the one hand, and industry on the other. In 1980, the Bayh-Dole Act (see background info in this volume) was passed by the U.S. Congress allowing universities and other public institutes and their employers to seek patent protection for their inventions and retain royalties. This practice has now been encouraged by the governments of many other nations (4).

Universities and biotech companies alike filed several thousand patent applications for genes, sections of genes, and the proteins they produce. Many of those patents have been granted. The identification and cloning of genes that produce therapeutic proteins has led to the development of a number of new medicines based on human proteins, while the identification of genetic mutations that cause disease has been widely applied in the development of diagnostic tests for relatively rare diseases. Patents that assert property rights over DNA sequences have been granted in both these areas as well.

The idea that a gene or DNA sequence can be claimed as an invention, and thus be subject to property rights, has attracted considerable criticism from researchers, clinicians, NGOs, and religious groups. The arguments launched by the opponents of gene patents can be summarized as follows:

• Gene patents should not be allowed by virtue of the special status or nature of DNA.

• Gene patents should not be allowed because they do not meet the legal criteria for patenting.

• Gene patents should not be allowed by virtue of the possible deleterious consequences for healthcare and research related to healthcare.

From a legal perspective, a patented invention has to be useful, novel, non-obvious, and it must be fully described. The basic requirements for obtaining a patent are set forth in four sections of Title 35 of the U.S. Code: §§ 101, 102, 103, and 112. Under these provisions, laws of nature, naturally occurring phenomena, and abstract ideas are not patent-eligible subject matter. Those who oppose patents on genes have therefore argued that patents should not be allowed on genes or genomic sequences because they are products of nature. However, according to patent law doctrine in the U.S. and the E.U., laws of nature are patent-eligible subject matter if they are claimed in a form that does not occur in nature. Thus, under the current patent law doctrine in the U.S. and the E.U., patent protection is not granted for the genomic sequence as it exists in nature, but only for the inventive steps of isolating a gene, determining its function, and putting it into a commercially useful format. Accordingly, the U.S. Patent and Trademark Office (USPTO), as well as the European Patent Office in Munich (EPO), are issuing patents for isolated (i.e. separated from its natural state) or purified (i.e. excluded from the way the particular DNA occurs in nature) human genes encoding protein drugs, diagnostic probes, receptors, immunogens, and gene replacement therapy (5).

Who Owns your Genes?
With the issuance of an increasing number of patents to those who work with human genetic material, it has become commonplace for the popular press to ask the question of who "owns" a person's genes. While the above discussion of the underlying patent law principles should make clear that the more appropriate question to ask would be "who owns the intellectual property associated with a person's genes," one may still wonder as to whether the existence of a patent owned by Amgen on purified genes for Erythropoietin (EPO)(6), or by Genentech on isolated genes for Tissue Plasminogene Activator (TPA)(7), mean that Amgen or Genentech own the specific genes used in these proteins. The answer to this is, of course, no because the genes in our bodies are neither purified nor isolated.(8) Given that these companies' patents only cover the isolated and purified form of the gene, these patents cannot cover our genes. However, one might still wonder as to who owns one's genes if they are isolated from the person's body. There is some precedent in the U.S. for this scenario, where the courts have taken the position that a person does not own any tissues or cells once they are outside of that person's body. Once removed, these tissues and cells belong to the doctor or hospital. For example, in Moore v. Regents of U. of California, a patient (Moore) sought ownership of a cell line that the University of California (UC) researchers had developed for cancer research using his cells.(9) The Supreme Court of California held that, for policy reasons regarding the promotion of medical research, a person does not retain ownership of any tissue or cells that have been excised from the person's body with his or her informed consent. The same would logically and legally hold true for DNA material excised from a human body. Thus, if EPO genetic material is excised from a person's body with the person's informed consent, he or she cannot lay claim to owning it from that point forward. Another interesting case in the context of attempting to control the fate of isolated patented genes is the one of Sharon Terry. Ms. Terry, the mother of children with the genetic connective tissue disorder pseudoxanthoma elasticum (PXE), apparently helped with the conception of the gene discovery itself.(10) This made her a co-inventor and, therefore, the co-owner of a patent application on the isolated genetic material. As a co-owner of the intellectual property rights to the isolated gene sequence, she may be able to control, at least to some extent, how the gene patent will be exploited and also might be able to steer research towards finding a treatment for the disorder. This situation is unusual because it is highly uncommon for tissue donors or patent providers to be legally entitled to a co-inventor status with patents in derived materials (since an inventor has to provide conceptual solutions to a problem at hand, not just tissues). Nevertheless, the PXE case reflects a growing unease among patient groups with the widespread commercialization of what they - legal accuracy aside- perceive to their biological property.(11)

Recent Issues in the Ongoing Controversy About Human Gene Patents

The use of gene patents in medical research and in diagnosis
The patenting of genes began, with fairly little controversy, with the patenting of newly cloned genes encoding therapeutic proteins in the early years of the biotechnology industry. Most individuals who are closely associated with medical and pharmaceutical research still believe it is essential to permit effective patent coverage of specific protein products and processes for producing specific proteins (and perhaps, therefore, of the corresponding gene sequences) in order to encourage private-sector investment in the research and clinical trials needed to bring such products to the market.(12)

The current debate surrounding gene patents focuses on the use of genomic information in medical research and diagnosis. Probably the most famous patented research tool in molecular biology is the Cohen-Boyer technology, now commonly known as recombinant DNA cloning or gene splicing, which is often also cited as the most-successful patent in university licensing. This technology is actually covered by three patents. One is a process patent for making molecular chimeras and two are product patents - one for proteins produced using recombinant prokaryote DNA, and another for proteins from recombinant eukaryote DNA. This invention is the "biotechnology tool." Under this technology, a gene from a piece of foreign DNA is inserted into a bacterial plasmid. The plasmid is inserted into a living organism, and the organism becomes a cell "factory" capable of reproducing the desired gene in unlimited quantities. This technology became the core of the fledgling biotechnology industry. Stanford University licensed a total of 467 companies to use this technology. Stanley Cohen and Herbert Boyer, who developed the technique together at Stanford and the University of California, San Francisco (UCSF) respectively, were initially hesitant to file the patent. Several years of discussion involving the National Institutes of Health (NIH) and Congress followed. By 1978, the NIH decided to support the patenting of recombinant DNA inventions by universities. In December 1980, the process patent for making molecular chimeras was issued. The product patent for prokaryotic DNA was issued in 1984. These patents were jointly awarded to Stanford and UCSF and shared with Herbert Boyer and Stanley Cohen. The major products sold under the licensing program include tissue plasminogen activators for heart attacks, erythropoeitin for dialysis patients, insulin for the treatment of diabetes, growth hormones for children with growth deficiencies, and interferon for cancer patients. Major licensees included Amgen, Eli Lilly, Genentech, Johnson and Johnson, and Schering Plough. Licensing agreements have generated several hundred million dollars in royalties.

It is difficult to separate the issues surrounding gene patents for diagnostic tests and DNA patents for research tools because diagnosis and research are oftentimes entirely interdependent in academic medical settings, and nearly indistinguishable. One contributes to knowledge about an individual patient, and the other to knowledge as a whole. The ultimate applications of patented genes in the field of diagnostics and research are tests designed to detect particular single nucleotide polymorphisms (SNPs) (and other variable sequences) that may affect susceptibility to particular diseases or to particular therapeutics. The technology to detect the characteristics of a particular genome may require only a simple laboratory process. In this context, some experts have suggested that patents on SNPs are likely to interfere with medical research.(13) For example, a medical researcher may want to measure the expression of different genes under different circumstances, and to correlate these expressions with the specific characteristics of the patient that are revealed by a specific SNP. This would be impossible if patents cover the particular SNP, and the patent holder is unwilling to grant a license. Moreover, since the regulatory structure for diagnostic testing imposes less severe approval requirements on testing conducted in-house than it does on distributed products, a patent holder is more likely to require that samples be sent to the holder's own lab in order to provide a more convenient gene kit.(14) In light of all of this, professional societies of doctors and clinical geneticists have been outspoken critics of both disease gene patents and exclusive licenses to perform DNA diagnostic tests.(15) The main point of concern is that patents will raise the costs of genetic tests and restrict patient access to a type of medical care involving gene-encoded therapeutic proteins.

Other objections, particularly with regard to patents on research tools, center around the impact of this practice on open science. The scientific community, trained in the tradition of open science, has argued that new discoveries are likely to have the greatest social value if they are widely disseminated to researchers who are taking different approaches to specific problems. The most important research tools are fundamental platforms that can open up new territories of investigation. In this context, opponents of patents on research tools have suggested that a single patent holder is unlikely to see the myriad directions in which any particular research platform could be developed.(16) On the other hand, the proponents of patenting research platforms sometimes argue that the patent holder will be inclined to license follow-on researchers who will then develop the platform in different directions. Critics, however, still believe that even if a researcher can afford to pay a supra-competitive price for a particular platform, coming to an agreement on license terms may be very costly. Historical research by Robert Merges and Richard Nelson suggests that in many important industries, including the automobile, aircraft, and radio industries, costs associated with concluding licensing agreements (known in the economics literature as "transaction costs") prevented research platforms from being licensed and developed further.(17) In fact, the costs of doing research may become prohibitive if patentees of research tools take full advantage of their exclusivity.

image credit: Mitch Doktycz, Life Sciences Division, Oak Ridge National Laboratory; U.S. Department of Energy Human Genome Program.

Recent issues surrounding patents on partial gene sequences (ESTs, SNPs)
Patent coverage of partial gene sequences, such as expressed sequence tags (ESTs), single nucleotide polymorphisms (SNPs), or receptors that are more important as targets for drugs than as therapeutics- is more controversial than patent coverage of specific protein products and processes for producing specific proteins. These sequences may be useful in therapeutic discovery. In general, their patentability is defended by genomics firms that are developing such sequences and seeking to market information derived from them to pharmaceutical firms, but their patentability is opposed by the pharmaceutical firms themselves.(18) In principle, ESTs are not excluded from eligibility for patenting by the patent system. However, the USPTO's new Utility Examination Guidelines state that the subject of a patent must show a well-established utility that is readily apparent to one 'skilled in the arts.'(19) The 1998 EC Directive on the Legal Protection of Biotechnological Inventions (98/44/EC) explicitly excludes the patenting of partial or entire gene sequences where the function of the DNA sequence is unknown. Very few patents on ESTs have been granted, and it appears most unlikely that further patents on ESTs will be granted because they would not meet the utility requirement. In 1999, the company Incyte was granted a patent in the U.S. for human kinase homologues based on 12 EST sequences for use as a molecular probes (U.S. Patent US 5817479). This patent was granted on the basis of the predicted function of the genes from which the ESTs were derived. The USPTO could therefore argue that the patent grant did not cover ESTs with "no known genetic function." The Incyte patent is, however, widely regarded as an aberration. So far, no patents on ESTs have been challenged in the courts (20) and many genes patents have been granted or applied for: Human Genome Sciences holds patents on 103 human genes and has patents pending on 7,500 genes. Incyte Genomics tops the list with some 400 patented genes, while Celera, which only began decoding DNA last year, has already filed patent claims on at least 6,500 gene sequences.(21)

Experts have expressed similar concerns over the prospect of patenting SNPs which appear in the human genome.(22) SNPs are single base pair differences occurring in a frequency of about one in every 1,000 nucleotides when the genome sequences of many individuals are compared. SNPs enable scientists to study the genetics of disease and the genetic basis for the response of patients to certain medicines. The explanations may reside in the cumulative effect of a small number of differences in the DNA base sequence called single-nucleotide polymorphisms (SNPs). These underlie individual responses to environment, disease, and medical treatments. Scientists hope to find answers to the questions why some of us live to celebrate our hundredth birthday in perfect health while others succumb in midlife to cancer or heart disease, or why one woman's breast cancer can be effectively eradicated while another's shows no significant response to the same treatment. Some disease-causing mutations are SNPs, for example, the single base change in the gene associated with sickle cell anemia. SNPs occur inside and outside of genes, about once every 100 to 300 bases throughout the human genome. The associations of SNPs with specific genes implicated in the susceptibility to diseases or response to medicines will be of use primarily for the identification of new targets for drugs. Given that SNPs are tiny, naturally occurring changes in the DNA that are used as gene markers, they are widely thought of as scientific knowledge that should be freely available for unrestricted use by biomedical researchers and that they should not be subject to intellectual property restrictions. A consortium of ten pharmaceutical companies and the UK Wellcome Trust have been established to support the creation of an SNP map of the human genome. This consortium (TSC) aims to accelerate the search for genes associated with disease by making the map available to all researchers. The aim is to prevent research into substantial areas of the human genome from being impeded or hindered through the lodging of claims for SNP patents.(23)

Patenting the entire human genome and TRIPS
 Experts have also addressed the issue of whether the patenting of the entire genomes could be contrary to "ordre public" or the morality provision of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Article 27.2 of TRIPS states: "Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their laws." In this context, USPTO officials have declared that patent claims which embrace a human being can be considered as violating the Thirteenth Amendment to the U.S. Constitution which prohibits slavery. A claim to a human genome, i.e., the entire DNA of an individual (even if novel and non-obvious), could violate the constitutional prohibition and thus be unpatentable.(24) image credit: U.S. Department of Energy Human Genome Program,

The utility/usefulness of gene sequences
As mentioned earlier, one criterion that an invention must meet in order to be eligible for patent protection is that it must be considered useful. In Europe, this requirement is termed "capable of industrial application."(25) In the U.S., the utility requirement is covered by Title 35 U.S.C. 101:

"Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore, subject to the condition and requirements of this title."

The U.S. Supreme Court clarified the "utility" requirement, as it is generally referred to in the U.S., in Brenner v. Manson, 383 U.S. 519 (1966). This case, in essence, dealt with the right for patents to be accorded to relatively abstract inventions. Thus, this doctrine deals with the balance that has to be maintained to encourage both initial and subsequent innovations. The Utility Examination Guidelines of the USPTO speak of a "specific and substantial utility that is credible," and, under current U.S. law, identification of one adequate utility is enough to control the use of the invention for all purposes.(26) There has been considerable debate over whether DNA sequences in various forms can fulfill the criterion of usefulness or utility. Since the development of large scale DNA sequencing techniques over the past ten years, more DNA sequences have become available without an understanding of their function. As a result, many patent applications have been filed on genes or part of genes without the demonstration of a "credible utility." As mentioned above, such patent applications, involving those for fragments of DNA, including ESTs and SNPs, whose functions are for the most part still unclear, have been controversial. Some experts have argued that if "credible utility" means no more than a "theoretically possible utility," the threshold for utility is set too low. They suggest that evidence of a "specific and truly substantial utility" should be required, and that the utility in question should be more than a biological function such as encoding a receptor. They argue that even if the biological function ascribed is correct, it is only a description of a fact of nature (i.e., not patentable) and not a practical utility in the usual sense applied to an invented product.(27) Despite this objection, one of the strategies employed by companies seeking to bolster patent claims on gene sequences with unknown function is to search public databases for homologous (similar) gene sequences with a known function.

The patenting of genes as trivial advances
The patenting requirement of "inventiveness" means that patent applicants must be able to demonstrate that, when compared with what is already known, the claimed invention would not be obvious to the "skilled person" who is generally viewed as an ordinary worker with a good knowledge and experience of the subject. It is generally the case that the more human intervention is needed to produce a product, the greater the chances of it fulfilling the inventive step requirement, and therefore the greater its eligibility for patenting. There has been considerable debate about whether isolated DNA sequences, since they are used in diagnostic tests or as research tools, are inventive and non-obvious to the skilled worker. Opponents of gene patenting have argued that the technological advances in DNA sequences now mean that the process of isolating a gene can no longer be regarded as inventive. Instead, it is a routine and industrialized process even if the resulting sequence codes for a novel product. Prior to the impact of the large scale DNA sequencing programs, genes were identified by procedures such as positional cloning and the use of protein sequences to derive nucleic acid sequences. Positional cloning is the cloning of a gene based simply on knowing its approximate chromosomal position in the genome without any idea of the function of the gene. These are time-consuming and labor intensive techniques, the early application of which was viewed as inventive. The isolation and identification of a novel DNA sequence together with a use, either disclosed or predicted, was the subject of many patent applications. Since the early 1990s, methods such as the application of in silico technologies have been developed. As we have seen, now that DNA sequence of the human genome is accessible from a personal computer, a researcher can match an unknown human DNA sequence to a homologous gene sequence in an animal genome where the function may already be known. The researcher can then file a patent application on the human sequence based on the proposed similarity of the function in the context of, for example, a diagnostic or therapeutic use.(28) It is therefore important to consider how these changes in the methods of identifying genes affect the claim that isolated DNA sequences meet the criterion of inventiveness. There are important differences between the American and the European approach to assessing inventiveness. According to the USPTO, non-obviousness does not depend on the amount of work required to characterize the DNA sequence. Rather, it depends on whether a gene having a particular DNA sequence claimed as part of a patent would have been obvious to others at the time. That is, the question asked is "would the sequence of base pairs in the section of DNA have been obvious before the gene was isolated?" As it will generally be difficult to predict a given a sequence without the isolated genes, the U.S. patent law allows a low threshold on the requirement of inventiveness in the case of patents relating to genes. Moreover, the existence of a general method of isolation of genes sequences is considered to be essentially irrelevant.(29) In contrast, the EPO has stated that the isolation of DNA sequences that have a structure closely related to existing sequences where the function is known, is not inventive. The USPTO's view is that establishing the nature and function of a DNA sequence by electronic means (a trivial process) does not exclude the granting of a patent on the grounds of non-obviousness. In re Deuel is not expected to be followed by the EPO.(30)



Do "upstream" patents impede innovation?
High-throughput DNA sequencing made it possible to sequence genes in advance of understanding the functions or disease relevance of particular sequences. This raised the possibility of obtaining patents on so-called "upstream" genetic discoveries that are still far removed from product development but are nonetheless of immediate scientific interest to researchers. Patent applications filed by the National Institute of Health (NIH) on the first ESTs identified by Craig Venter alarmed the scientific community.(31) As discussed earlier, the most obvious value of ESTs was not the potential value of particular gene fragments for therapeutic or diagnostic uses, but the immediate value of a growing collection of such sequences for use in gene discovery. The patenting of genes, therefore, started to look less like patenting end products and more like patenting scientific information, which goes against long-established principles in the scientific community.

Also, the allocation of economic returns among the "upstream" and "downstream" inventors is a very challenging problem for economic theory as well as for contemporary biomedical research. This problem finds expression in the licensing and cross-licensing disputes involving "reach-through" and "reach-back" rights. It has been shown that such disputes can generate enormous transaction costs.(32) Because many biomedical researchers have limited resources to make up-front payments for access to state of the art research tools, some tool providers have proposed contingent payment terms in the form of "reach-through" royalties in future product sales, or reach-through licenses to future inventions made through use of their tools. These terms have the advantage of making tools available at minimal up-front cost for use in non-commercial research, while still permitting the tool owner to share the wealth if the research yields a commercial product. But many tool users are hesitant to agree to reach-through terms. As such agreements become more and more common in proposed research tool licenses, the obligations imposed by different tool providers may come into conflict, or else create mounting royalty obligations that reduce incentives for future product development. Moreover, it may be difficult in the future to trace a particular discovery or product to the prior use of a research tool, and then to establish that the product is subject to a reach-through obligation. These difficulties increase the transaction costs of negotiations over terms of access to proprietary research tools, slowing their dissemination and delaying research.(33)

There is a proliferation of patents on upstream discoveries and tools, and how those patents affect downstream discovery and innovation depends heavily on the breadth of patent claims. While the USPTO has permitted broad claims to issue, the question of how the courts will evaluate those claims has been unclear. A recent case involving the University of Rochester's patent on the Cox-2 (cyclooxygenase 2) enzyme, which includes claims on drugs that inhibit the enzyme, suggests that the courts have become suspicious of overly broad claims. The Cox-2 patent was the basis of a lawsuit against G.D. Searle & Co., Inc., Monsanto Co., Pharmacia Corp., and Pfizer Inc.(34), alleging that Pfizer's sale of its Cox-2 inhibitors Celebrex® and Bextra® for the treatment of inflammation infringed the patent.(35) In February 2004, the Court of Appeals for the Federal Circuit found in favor of the defendants, holding the patent invalid as it was too broad and nonspecific.(36)

Over the last 200 years, the patent system has arguably worked well in achieving its goal of promoting innovation and maximizing social benefit. This brief review of the current debate surrounding patents on genes in general and patents on research tools and diagnostic tests in particular suggests, however, that the current system may have to be reexamined in order to ensure that it still promotes innovation rather than stifles it. In this context, the recent extensions of patentable subject matter into more and more intangible areas, such as genetic information or methods of doing business, may have to be reconsidered by the courts and lawmakers. On a more general note, it will be important to ask the question of what should be in the public domain and what should be in the private domain in scientific research. Many have argued that basic scientific research is most effectively utilized when the findings of that research are openly disseminated without significant restrictions, while research with more practical application should be the prerogative of private enterprises. It is, however, difficult to draw the public vs. private science line in molecular biology and genomics since these fields of study lie at the intersection of basic research and applied science. Institutional demarcations that once separated basic research from technological development have become permeable, with more and more academic research finding application in industry. In order to ensure that the patent system still fulfills its ultimate goal of maximizing social benefits and advancing innovation, policymakers around the world will have to recognize the value of public science and ensure open and unencumbered access to information.

** The author would like to thank Prof. John H. Barton from Stanford Law School, Prof. Siegfried Fina from the University of Vienna, Pablo Arredondo (Stanford Law School '05) and Krista Andersen for their valuable input regarding this paper.

1. Other devices, such as trade secrecy and confidentiality, have also played a role. The importance of secrecy as a method of protecting knowledge was highlighted by a survey of academic geneticists in the U.S. which found that 35% of researchers felt that there had been a decline in the sharing of data in the past ten years. It also found that researchers who had been engaged in the commercialization of university research were significantly more likely to withhold data from other researchers. The study concluded that the withholding of data in the field of genetics, though not widespread, was nonetheless affecting essential scientific activities such as the ability to confirm published results. See Campbell EG et al., 'Data Withholding in Academic Genetics: Evidence from a National Survey', JAMA 2002; 287:473-80; Nuffield Council on Bioethics (2002), 'The Ethics of Patenting DNA', 3.
2. See World Health Organization, Advisory Committee on Health Research, 'Genomics and World Health 2002', (June 7, 2002).
3. See Tufts Center for the Study of Drug Development (CSDD), 'Tufts Center for the Study of Drug Development Pegs Cost of a New Prescription Medicine at $802 Million', (Nov. 30, 2001).
4. See, e.g., the German initiative for commercializing university intellectual property: .
5. In 1988, before the patenting of DNA sequences had become widespread, the EPO, USPTO and the Japan Patent Office (JPO) issued a joint statement clarifying their position with regard to isolation: "purified natural products are not regarded under any of the three laws as products of nature or discoveries because they do not in fact exist in nature in an isolated form. Rather they are regarded for patent purposes as biologically active substances or chemical compounds and eligible for patenting on the same basis as other chemical compounds." Quoted in Crespi RS, 'Patents on Genes: Can the Issues be Clarified?' Bio-Science Law Review (1999/2000); 3(5): 199-204. Perhaps the most well known example of a living organism which was granted a patent is the genetically engineered bacterium that was the subject of litigation in the U.S., Diamond v. Chakrabarty (1980). The Supreme Court allowed the grant of the patent to stand, U.S. Chief Justice Burger famously remarking that "anything under the sun that is made by man is eligible for patenting." The 1998 EC Directive on the Legal Protection of Biotechnological Inventions (98/44/EC) states in Article 3 that "for the purposes of this Directive, inventions which are new, which involve an inventive step and which are susceptible of industrial application shall be patentable even if they concern a product consisting of or containing biological material or a process by means of which biological material is produced, processed or used. Biological material which is isolated from its natural environment or produced by means of a technical process may the subject of an invention even if it previously occurred in nature."
6. Erythropoietin (EPO) stimulates red blood cell production and is normally produced in the kidney and liver. Because failing kidneys do not produce enough EPO - leading to chronic anemia - an artificial version of EPO has a huge potential market among a growing number of dialysis patients, estimated to be 220,000 in the U.S. alone. Some have argued that Amgen's patent on the EPO gene has given them a monopoly on its production since "exploiting earlier public sector research and strategic maneuvering has allowed them to extend the patent lifetime to 30 years." See, e.g., Econexus and GeneWatch UK (April 2001), 'Patenting Genes - Stifling Research and Jeopardizing Healthcare', (last accessed March 29, 2004). The EPO protein was first identified at the University of Chicago by molecular biologist Eugene Goldwasser in 1977 after two decades of government-funded research. However, Amgen won the race for the gene patent in the mid 1980s although it had to go through protracted litigation to win exclusive rights to manufacture its recombinant version of EPO - called Epogen.
7. In 1988, Genentech, Inc. received a patent on human tissue plasminogene activator (TPA). The company then produced the blood clot-dissolving drug called TPA using recombinant DNA. The patent has been subject to a significant amount of patent infringement litigation. For example, in 1994, Genentech sued the Wellcome Foundation asserting that Wellcome's modified TPA infringed Genentech's patent, although Wellcome's TPA was missing a region of the native protein. Genetech, Inc. v. The Wellcome Foundations, Ltd., 31 USPQD2d 1161 (Fed.Cir. 1994).
8. Goldstein, J.A., and E. Golod (2002), 'Human Gene Patents', Academic Medicine 2002; 77:1320 (1315).
9. Moore v. Regents of the Univ. of Cal., 51 Cal.3d 120 (Cal. 1990).
10. Fleischer, M. (2001), 'Patent Thyself', The American Lawyer, Jun. 21, 2001. , last accessed March 26, 2004.
11. Goldstein and Golod (2002), 1321.
12. See Barton, J.H. (2002), 'Patents, Genomics, Research, and Diagnostics', Academic Medicine 2002; 77:1339 (Dec. 2002).
13. Ibid. 1339-40.
14. Huang, A. (1994), 'FDA Regulation of Genetic Testing: Institutional Reluctance and Public Guardianship', 53 Food & Drug L.J. 555 (1998), in Holtzman N. & M. Watson (eds.), Promoting Safe and effective Genetic Testing in the United states; Final Report of the Task Force on Genetic Testing (1998); Institute of Medicine, Assessing Genetic Risks (1994).
15. See, e.g., Association for Molecular Pathology, 'AMP Position on Patenting of Genetic Tests (Dec. 17, 1999), (last accessed March 29, 2004).
16. See, Scherer, F.M. (2002), 'The Economics of Human Gene Patents', Academic Medicine 2002; 77:1348-67.
17. See Merges, R.P. and R.R. Nelson (1990), 'On the Complex Economics of Patent Scope', Columbia Law Review (May 1990), 90:839-916.
18. See Barton (2002), 1339.
19. USPTO Utility Examination Guidelines Fed. Reg. 66: 1092, 5 Jan 2001. The USPTO has indicated that patents with claims to ESTs could be granted in the context of inventions using partial. DNA sequences as molecular markers or probes to identify specific sequences.
20. See the Nuffield Council on Bioethics (2002), 'The Ethics of Patenting DNA', 33 FN 27.
21. See Regalado A. (2000), 'The Great Gene Grab', MIT Tech. Rev., Sept.-Oct. 2000, 48.
22. e.g., Nuffield Council on Bioethics (2002).
23. Masood, E. (1999), 'Consortium plans free SNP map of human genome', Nature 1999; 398: 545-546. For more information, see the SNP Consortium website at .
24. See the AIPPI Report of the American Group in connection with Q 150, 'Patentability Requirements and Scope of Protection of ESTs, SNPs and Entire Genomes',
25. Article 52(1) of the EPC states that European patents shall be granted for any inventions which are susceptible of industrial application, which are new and which involve an inventive step. Article 57 of the EPC states that an invention shall be considered as susceptible of industrial application if it can be made or used in any kind of industry, including agriculture. With regard to the novelty requirement, the EPC applies an absolute standard. Consequently, before filing a European patent application, the inventor must not disclose his invention in any way. This appears to be of particular interest for U.S. applicants because the grace period generally provided in the U.S. patent law is not available under the EPC (only a few exemptions are detailed in Art. 55 EPC). Because of the absence of a generally available grace period, situations may arise where a U.S. applicant obtains a U.S. patent but no corresponding European patent because the participants of a scientific congress were not obliged to confidentiality.
26. See Barton (2002), 1342.
27. See the Nuffield Council on Bioethics (2002), 31.
28. Example taken from the Nuffield Council on Bioethics (2002), 29.
29. See in re Deuel, 51 F.3d 1552, 1559, 34 USPQ2d, 1210, 1215 (Fed. Cir. 1995).
30. See the Nuffield Council on Bioethics (2002), 29-31. However, according to an EPO decision (T 0301/87, Alpha-interferons/BIOGEN, OJ EPO, 1990, 335), the unexpected properties of a DNA sequence may also prove to be an inventive step. The selection of such a DNA sequence is very difficult and involves an inventive activity even if the protein which it encodes is known or obvious.
31. See Eisenberg, R.S. (2002), 'Why the Gene Patenting Controversy Persists', Academic Medicine 2002; 77:1383 (1381).
32. See, Scherer, F.M. (2002), 'The Economics of Human Gene Patents', Academic Medicine 2002; 77:1348.
33. See Eisenberg, (2002), 1384.
34. Celebrex® and Bextra®, generically known as celecoxib and valdecoxib respectively, were both developed by Searle, which was purchased by Monsanto in 1985. In 2000, Monsanto merged with Pharmacia & Upjohn, Inc. to form Pharmacia Corp. In 2002, Monsanto, sans Searle, was spun-off from Pharmacia, and Pharmacia merged with Pfizer in 2003. The combined company has retained the name Pfizer Inc.
35. See University of Rochester v. G.D. Searle & Co., Inc., 249 F.Supp.2d at 220.
36. See University of Rochester v. G.D. Searle & Co., Inc., 358 F.3d 916, Feb. 13, 2004.{/access}