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Implications of the DNA Patenting Dispute: A US Response to Dianne Nicol
Author: Rochelle Cooper Dreyfuss EAP Date (approved for print): 28/11/2012 DOI: 10.5778/JLIS.2012.22.Dreyfus.1
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5 Indeed. and Society and served on its task force on Patient Access to Genetic Tests. See. 410-411 (2004).S Ct --. 540 US 398. 81 USLW 3199 (30 November 2012) (“Myriad” case). decision reinstated in all respects. Class of 2013.Implications of the DNA Patenting Dispute: A US Response to Dianne Nicol ROCHELLE COOPER DREYFUSS* 1 Introduction Researchers and physicians in the United States have their backs against the wall. certiorari granted. Association for Molecular Pathology v Myriad Genetics. LLP. it too has been largely eliminated. the patent misuse doctrine may have compensated for that omission. 1344-48 (2011). at times. 307 F 3d 1351 (Fed Cir 2002). 448 US 176. See also Association for Molecular Pathology (AMP) v USPTO. making antitrust law equally unavailable to safeguard access interests. LLC. NV v Apotex. 35 USC § 271(d)(4). Inc. Cf Dawson Chemical Co v Rohm and Haas Co. 2012 WL 4508118 (US). eg. the Supreme Court has never adopted an essential facilities doctrine. 1 2 3 4 5 6 7 EAP 1 . 215 (1980) (describing attempts to include compulsory licensing provisions in US patent law). * Pauline Newman Professor of Law. and remanded. I wish to thank the Filomen and D’Agostino and Max E Greenberg Research Fund for its financial support and Nitika Gupta. 537 F 3d 1336 (Fed Cir 2008). it has decided that monopolists have a right to refuse to deal.3 At one time. yet the traditional tools for balancing public and private interests are largely broken. The basic research defence was gutted by the Court of Appeals for the Federal Circuit. Ibid.6 And while the Supreme Court has suggested that public-regarding uses may not be the subject of injunctive relief.7 “doing equity” at the end of an infringement suit is no way to assure researchers at the outset of their projects that they will remain free to complete and use their work. fundamental research inputs and medical outputs are patented. my own. The views expressed here are.1 that court has. certiorari granted on other issues.2 US law does not include compulsory licensing provisions that might prevent patentees from withholding permission to use their inventions. I was a member of the US Health and Human Services Secretary’s Advisory Committee on Genetics. for her research assistance. Increasingly. decision vacated. Janssen v Pharmaceutica. 689 F 3d 1303. See ibid.4 For its part. However. Health. also limited standing to challenge patent validity. 1319-1321 (2012) (denying standing to most of the nominal plaintiffs). 547 US 388 (2006). LLC v Medicis Pharmaceutical Corp. New York University School of Law. 540 F 3d 1353 (2008). Madey v Duke University. 653 F 3d 1329. however. Prasco. -. See Verizon Communications Inc v Law Offices of Curtis V Trinko. 132 S Ct 1794 (2012). eBay Inc v MercExchange.
§ 14.” and the Mayo Ruling (11 April 2012) <http://www. 11-962). 2012 WL 369157 (US 21 May 2012) (No. Dianne Nicol. Dianne Nicol’s essay. Ultramercial LLC v Hulu. judgment vacated.economist. The Economist. “Implications of DNA Patenting: Reviewing the Evidence” (2011) 21(1) Journal of Law.com/node/21551087>. LLC.11 And although the decision in Mayo did not alter the Federal Circuit’s view in Myriad that isolated DNA sequences are patentable. 500 F 3d 1346 (Fed Cir 2007). Of Patentability. the biotechnology community. Prometheus unsound: America’s Supreme Court wallops the biotech industry (24 March 2012) <http://www. that subject matter challenges have been on the upswing in US courts. the interest in defining patentable subject matter in the United States extends to a broader range of fields — witness Bilski v Kappos and In re Comiskey (on business methods).13 raises particularly apt questions for observers of US patent law. Inc v Ultramercial. then. 125 Stat 284 (2011). In it she asks whether efforts should continue to be spent on the subject matter issue or whether the legal system ought to consider other ways to ease the blockage problems that upstream patents can create. and In re Nuijten10 (on electronic signalling). Mayo Collaborative Serv v Prometheus Laboratories. Cases like AMP v USPTO — the so-called Myriad case which challenges the patentability of isolated DNA and DNA diagnostic and screening methods — are symptoms of a disease: attacks on patentable subject matter appear to be the only avenue left for protecting the viability of upstream research and its efficient translation into downstream products. routine. In re Comiskey.”12 Given that context. Implications of DNA Patenting: Reviewing the Evidence. The culmination of that trend (so far) came in 2012.” the Court raised the possibility that many other fundamental advances do not constitute statutory subject matter either. the Supreme Court recently granted certiorari to review that question.Journal of Law. Leahy-Smith America Invents Act. and case remanded subnom. 1294 (2012). Needless to say. WildTangent. 10 11 12 13 14 EAP 2 . the US tax bar has successfully dealt with its scepticism regarding patents on tax avoidance schemes by convincing Congress to enact a provision deeming all tax strategies within the prior art. Information and Science Vol 22(1) 2012 It is no wonder. Corporate Counsel. Information and Science 7. conventional activity previously engaged in by scientists in the field. 132 S Ct 1289. Thus. along with computer scientists and the financial services industries are now in a “minor panic. Holding that claims to laws of nature are not patentable if they add no more to the art than “well-understood. Inc. while scholars in other countries are heavily focused on the specific question of whether patents on DNA have a detrimental impact on life sciences research. Pub L No 112-29.law. 657 F 3d 1323 (Fed Cir 2011). 442 F 3d 967 (Fed Cir 2009).14 Taxpayers are thus placed on a level 8 9 Bilski v Kappos. “Laws of Nature. a case involving the relationship between the therapeutically appropriate dose of a drug and the blood level of a metabolite the drug produced.com/jsp/cc/PubArticleFriendlyCC. 130 S Ct 3218 (2010). LLC.8 WildTangent v Ultramercial9 (on internet systems).jsp?id=1202548536351>. Notably. cert granted. when the Supreme Court decided Mayo v Prometheus.
focusing especially on whether the evidence she cites can be generalised to the United States. However. and then consider how these doctrines might be revived and modernised. US courts may regard them as infringed even by sequencing techniques that do not require isolation. 15 Parke-Davis & Co v HK Mulford Co. have become so straightforward that it is unlikely that new DNA molecules will be considered nonobvious (inventive) enough to patent.15 the seminal case holding isolated natural products patentable. only the tip of the iceberg. DNA isolation and sequencing. see ibid. See Helen Berman and Rochelle Dreyfuss. Some product patents are framed so broadly. “The Impact of Human Gene Patents on Innovation and Access: A Survey of Human Gene Patent Litigation” (2007) 76 University of Missouri at Kansas City Law Review 295. 115 (SDNY 1911). Additional — hopefully.18 And certainly. Genomics. that there is little evidence they have harmed either research or consumer access. I do not quarrel with the observation. as inserted into a vector for delivery). the product would be considered inventive enough to patent.Implications of the DNA Patenting Dispute: A US Response to Dianne Nicol playing field while messy decisions on what is too abstract to patent are avoided. and that even if there once was a problem. it is difficult to know their scope. and Drug Development’ (2006) 53 UCLA Law Review 871. “Gene patents” include a broad array of advances. revd in part. 561 F 3d 1351 (Fed Cir 2009) (holding that genes may be obvious in light of the protein for which they code). more nuanced — techniques for protecting public interests would eliminate the need to continually struggle with metaphysical questions concerning the difference between “discovery” and “invention” or “law of nature” and its “application. along with translating protein sequence information into DNA coding information. 2 Is the Patent Problem Transient? The Nicol essay makes three principal points: that gene patents are necessary to the biotechnology industry. ‘Reflections on the Science and Law of Structural Biology. until these patents are interpreted by a court. I then move on to discuss the evidence that these patents are not problematic. it is diminishing over time. 189 F 95.16 Furthermore. affd in part. it is likely that as new sequencing techniques develop. in re Kubin. C M Holman. it will be possible to sequence the genome without isolating DNA or literally infringing the patents covering the sequenced material.17 Patents on isolated DNA are.” I begin with an underlying contention in Nicol’s essay: that the problem posed by gene patents is transient. however. More important. Holman does not agree. I begin with the third contention: that DNA patenting is disappearing. if isolated DNA were claimed as a therapy (for example. I look at the publicinterest safeguards that existed when Judge Learned Hand decided ParkeDavis v Mulford. 196 F 496 (2d Cir 1912). 16 17 18 EAP 3 . 326.
in essence. Information and Science Vol 22(1) 2012 many gene patents cover processes. Jeanene Swanson. See. companion diagnostics. some patents claim methods for diagnosing vulnerabilities to disease. both before and after the Supreme Court required the Federal Circuit to reconsider its decision. for example.19) Finally. the diagnostic essentially operates as a research tool — a screening technique for finding effective and safe therapies. 2012 WL 4508118 (US). Once the companion test is developed. however. But once a companion diagnostic is developed for one treatment.S Ct --. even after Mayo. raise significant questions concerning access for both researchers and patients. Association for Molecular Pathology v Myriad Genetics. 81 USLW 3199 (30 November 2012). Very simple associations that disclose previously unknown relationships (such as Myriad’s claimed relationships between BRCA mutations and early-onset breast cancer) are inventive enough to patent (although after Mayo. there is considerable competition to find new treatments for disease. Accordingly. However. there may be little incentive to develop these tests.genomeweb. At present. 20 EAP 4 . the recent grant of certiorari in that case is limited to the question whether human genes are patentable. the patent on that diagnostic could prevent other firms from working on the same condition. Furthermore. further clinical trials on the drug will likely be required by regulatory authorities in order to gain marketing clearance. Patents may not be needed to encourage the development of diagnostics that identify patients for whom a drug is safe. they are likely to constitute patentable subject matter. Note. there is likely ample room for patents on more complex diagnostics. 689 F 3d 1303. eg. not products. 653 F 3d. GenomeWeb (October 2009) <http:// www.20 These are methods for diagnosing whether a pharmaceutical product (such as a cancer therapy) will be safe or effective for patients with particular genetic endowments. Companion Diagnostics Take Off. (And even after Mayo. they too are probably inventive enough to patent. Asher Hodes. “Diagnosing Patentable Subject Matter” (2011) 26 Berkeley Technology Law Journal 225. Some are for methods for screening potential therapeutics or for using genetic material therapeutically. After all. 19 The screening technique at issue in Myriad was upheld.com/dxpgx/companion-diagnostics-take>. for they enable a manufacturer to sell a product that might otherwise be rejected on the ground that it harms a significant portion of the population. a mandate by government regulators). and scale-up diagnostic methods for testing the relevant patients. -. Without a patent (and perhaps. These are their own reward. Consider.Journal of Law. Patents on companion diagnostics will. These techniques are likely to involve novel materials and new methodologies. identifying patients for whom the drug is ineffective could reduce the size of the pharmaceutical firm’s market. Developing a companion diagnostic is expensive: firms must engage in drug trials to find the patients who are harmed or especially benefitted by the drug. Furthermore. AMP v USPTO. The patent will. these firms will need to differentiate among the same sets of patients. 1357-1358. they may no longer be patentable subject matter). search for the genes and mutations that cause the observed variance. 1335-1337 (2012).
sole source providers often do not have dealings with all insurers. “Bayh-Dole Reform and the Progress of Biomedicine” (2003) 66 Law & Contemporary Problems 289. S Lopez-Gomollon and T Dalmay.gov/oba/sacghs/reports/SACGHS_patents_report_2010. As Nicol notes. and about disease pathways. Far from ‘Junk. Health and Society (SACGHS). drug companies will be forced to offer the diagnostic in cases where the issue is safety (otherwise the drug would not have been approved).nih.Implications of the DNA Patenting Dispute: A US Response to Dianne Nicol create an exclusive innovation opportunity for the firm that finds the first drug and develops its companion diagnostic. Arti K Rai and Rebecca S Eisenberg. and the diagnostics will be claimed.html?_r=1&pagewanted=all> (suggesting that this material contains millions of gene switches controlling chemically and physically adjacent genes). 291. as screens for new treatments. exclusivity will be a problem because. eg. These developments are critical to drug development and it is not at all clear that finding these products will be too uninventive to support patenting.pdf> G Kolata. Gene Patents and Licensing Practices and their Impact on Patient Access to Genetic Tests (April 2010) US Department of Health and Human Services <http://oba. like the presumptively valid patents in Myriad. Methods and Applications in Plant Biotechnology” (2010) 4(3) Recent Patents on DNA & Gene Sequences 155-166. These patents will also create access problems.od.22 There is also much more to be learned about the structural aspects of proteins (such as the dimensions of the spaces where possibly therapeutic molecules can fit).com/2012/09/06/science/farfrom-junk-dna-dark-matter-proves-crucial-to-health.nytimes. about RNA. Health and Society (SACGHS) found. E Ashihara. As the US Secretary of Health and Human Service’s Advisory Committee on Genetics. 21 US Secretary’s Advisory Committee on Genetics.’ Play Crucial Role”. 22 23 EAP 5 . E Kawata and T Maekawa. “Recent Patents in RNA Silencing in Plants: Constructs. “Bits of Mystery DNA. leaving some patients to fend for themselves. there is no way to invent around this information.23 But like the current crop of gene patents. See. there are many other biological products on the horizon. “Future Prospect of RNA Interference for Cancer Therapies” (2010) 11(3) Current Drug Targets 345-360. the output is novel. patients that can barely afford the therapy may not be able to find the resources to pay for a test to determine its efficacy. See. The work to develop them is complicated. Presumably. it is becoming increasingly clear that non-protein-coding regions play an important role in regulating gene function. As important. as with DNA. While genes may play a special role in the public’s imagination and therefore generate the most controversy. US Patent Application 20100003709 (7 January 2010). But pharmaceutical companies will have a strong incentive to charge high prices for tests that identify patients for whom the drug is not efficacious because the identification will shrink the market. They may also seek to retain control over such testing by doing it themselves or licensing the patent to a single provider. eg.21 And yet these patents are likely valid. information about the coding regions of genes does not signify the end of scientific advancement in the life sciences. NY Times (online) 5 September 2012 <http://www.
however. it must be assessed against the background rules in which the patent system operates.27 Several EU countries’ patent laws include the possibility of awarding compulsory licenses when patent holders interpose obstacles to access.Journal of Law. 2011 FSR 6. § 48A(1)(b)(i) (Eng). Patents Act.28 These licensing provisions are rarely invoked. See Code de la Propriété Intellectuelle (France) Art L613-2-1. Monsanto Tech LLC v Cefetra BV et al.02 (2001).25 To properly evaluate this evidence. 25. BGBl I.”). Danish Patents Act § 3(3)(3) (“The exclusive right shall not extend to: … acts done for experimental purposes relating to the subject-matter of the patented invention. other uses fall into the public domain. 54 (joining Cases C-241/91P and C-242/91P) (copyright case). eg. Telefis Eireann & Independent Television Publications Ltd v Commission of the European Communities.30 It is no wonder. See. Belgian Group. but they can have significant in terrorem effects. World Patent Law and Practice § 8. there are several ways in which patent holders there are severely constrained. UK Patents Act § 60(5)(b) (excluding an act if “it is done for experimental purposes relating to the subject-matter of the invention”).26 Some of these countries also limit the scope of patents to the utility recited in the patent application. 27 28 29 30 EAP 6 .29 And in the Magill case. 146. the CJEU held that gene patents are infringed only when the gene is performing its function. Information and Science Vol 22(1) 2012 3 What Can be Concluded from the Evidence? Professor Nicol’s second point is that even if patents continue to issue. 30-34. Most European countries have exemptions that excuse upstream research from patent infringement liability. the Court denied a right holder who lacked business justification the power to refuse to license to a party who would bring to market a product consumers desire. 1977 c 37. See generally Mireille Buydens. then. Report 202: The Impact of Public Health on Exclusive Patent Rights (2002). 2005. Ibid 16. Case C-428/08. 21 January 2005. To take the example of the European Union. The Court of Justice of the European Union (CJEU) has also played an important role in regulating the power of right holders. above n 13. In Monsanto v Cefetra. 1995 ECR I-743 ¶¶ 53. 2 JW Baxter. there is no reason for concern as there is little evidence that DNA patents have impeded either research or consumer access. 25. For Germany. §1a (4) (FRG). In support of this proposition. see Gesetz zur Umsetzung der Richtlinie über den rechtlichen Schutz biotechnologischer Erfindungen [Statute Implementing the European Council’s Biotechnology Directive]. that observers of the scene in the United Kingdom and Belgium would not find 24 25 26 Nicol. Belgian Patent Act art 28 § 1(b) (“The rights conferred by the patent shall not extend to acts done for scientific purposes with or on the subject matter of the patented invention”). France has adopted a similar approach. eg. See. she cites her own work on the landscape in Australia24 as well as research by groups in Belgium and the United Kingdom.
patentology.com. however.pdf>. above n 13. MedImmune. 540 US 398 (2004). Thus. the Federal Circuit’s standing jurisprudence has been parsimonious in the extreme. from the absence of significant litigation over the validity of gene patents in the United States and from empirical work conducted by Wesley Cohen and his co-authors on US scientists. See. eg. Part 1. Madey. 32 33 34 35 36 37 38 EAP 7 . The analogy he draws to polymers is also imperfect as these can be invented around for virtually all purposes. Nicol also puts weight on a 1998 article by John Doll. not all Nicol’s evidence comes from Europe or Australia. cited by Nicol. As noted above. She draws her conclusions.gov. largely limited to competitors — that is.Implications of the DNA Patenting Dispute: A US Response to Dianne Nicol significant problems. to litigants who would not want to eliminate from patentability a category that includes their own assets.38 Since only those who are using a patent can be sued. as it had in the polymer industry. The result is that validity suits are unlikely when a field is at 31 Australian Government. the Federal Circuit has largely stuck to its guns. A research exemption was. Advisory Council on Intellectual Property.36 But as she herself notes. in part. recently enacted.au/library/ACIP%20Patents%20&%20Experimental%20U se%20final%20report%20FINAL. Nicol. Nicholas D Walrath. 307 F 3d 1351. To be sure.33 and Verizon v Trinko. the court granted only litigants who had an objectively reasonable apprehension of suit the authority to challenge patent validity. 17. The clarity of these rules makes compromise and workarounds in the US context much less likely. standing is. then director of Biotechnology Examination. Australia has lacked a research exemption. Significantly. Verizon Communications Inc. 23. who thought the problem would work out.31 and it may be unclear whether refusals to deal constitute misuses of market power. 887 n 2 (Fed Cir 1992). Inc 549 US 118 (2007). See J J Doll.acip.au/2011/11/frand-obligations-to-be-airedin.35 Of course. the evidence is hardly unambiguous. “Expanding Standing in Patent Declaratory Judgment Actions to Better Air Public Policy Concerns” (forthcoming April 2013) 88 New York University Law Review. See Competition and Consumer Act 2010 (Cth).37 While the Supreme Court has attempted to expand standing doctrine in patent suits. “The Patenting of DNA” (1988) 280 Science 689. See generally. see “FRAND Obligations to be Aired in Australian Court” on Mark Summerfield.html>. Shell Oil Co v Amoco Corp. The issue may be resolved in a pending case between Samsung and Apple. in effect. 970 F 2d 885.34 which make it explicit that there is no common law research exemption or any control over refusals to deal. Patentology (1 November 2011) <http://blog. see above n 2. other factors may account for the absence of litigation. above n 13. Inc v Genentech. the Doll article was written before Madey and Trinko were decided.32 but at least there are no cases like the United States’ Madey v Duke. s 119C. 28. Originally. see Patents Act 1990 (Cth) s 119C as inserted by Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth) Schedule 2. Patents and Experimental Use (2005) <http://www.
A Arora and W M Cohen.pdf> (“Real Impediments”). see W M Cohen and P Walsh. While research uses are difficult to price. Information and Science Vol 22(1) 2012 its inception and the application of patent law to the facts is unpredictable.html#pagetop (“Research Tool Patenting”) and J P Walsh. Global Pharmaceutical R&D Productivity Declining According to Thompson Reuters. 2003) <http://books. courts can be expected to be rather generous when asked to remedy infringement that produced a highly valuable product.39 The effect of the standing doctrine is exacerbated by opinions such as Judge Moore’s in the Myriad case. developed a norm of ignoring patents. See. patent holders may be very happy to let researchers infringe. “Access – or Not – in Academic Biomedical Research” in Rochelle C Dreyfuss.edu/books/0309086361/html/285. Wesley M Cohen and John P Walsh. The latter juggle many projects simultaneously and may not be fully aware when specific work is obstructed. Diane L Zimmerman and Harry First. above n 2. the litigation picture could change dramatically.41 Until there are ways to translate the advances in the science of biotechnology into products. 39 See Michael J Burstein. 40 41 42 43 EAP 8 . Nicol cites J P Walsh. “Rules for Patents” (2011) 52 William and Mary Law Review 1747. “Effects of Research Tool Patenting and Licensing on Biomedical Innovation” in W M Cohen and S A Merrill (eds).nap. The authors also conducted a second study.”40 At this juncture. above n 42. “Real Impediments to Academic Biomedical Research” (2007) 8 Innovation Policy & Economics 1 (2007) <http://www. who were asked whether they experienced delays on account of patent licensing problems. “Is the Pharmaceutical Industry in a Productivity Crisis?” (2007) 7 Innovation Policy & Economics 1. Patents in the Knowledge-Based Economy (National Academies Press.org/chapters/c5300. “Working Through the Patent Problem” (2003). Iain M Cockburn. as the authors claim. Wes Cohen’s work also bears careful scrutiny. eg. where she held certain of the challenged DNA sequences patentable largely because such patents had been granted for a long time and the industry now enjoyed “settled expectations and extensive property rights.nber.com/content/press_room/science/RandDProductivity-Declines>.thomsonreuters. 10-11. that should be worrisome to anyone who takes the rule of law seriously (or thinks that patent holders are simply waiting for products to develop before they sue). 299 Science 1021. it is also not clear what litigants would sue about: there is currently a lull in pharmaceutical productivity. however. It is unclear. A Arora and W M Cohen. (eds) Working Within the Boundaries of Intellectual Property (Oxford University Press 2010) 3 (“Working Within”). whether the interviewees were bench scientists or the heads of laboratories. See Real Impediments. Once that occurs. in the hope that the infringers will find therapies (or methods for developing them).Journal of Law. Thomson Reuters (1 July 2010) <http://www. CMR International.42 Much of the information was gleaned from surveys of academic biomedical researchers. The treatment of most of the plaintiffs in the Myriad case serves as an example. And to the extent they said no because they had.43 Most said no.
infringe patents. See Research Tool Patenting. “Bargaining over the Transfer of Proprietary Research Tools: Is the Market Failing or Emerging?” in Rochelle Cooper Dreyfuss. Accordingly. The literature includes one example: the discovery of large scale rearrangements.46 Significantly. “Myriad Genetics: In the Eye of the Policy Storm” (2010) 12 Genetics in Medicine S39 <http://www. Most important. For example. Expanding the Boundaries of Intellectual Property (2001) 223. conversely.45 There is another difficulty with survey evidence: certain types of information may never be reported. in fact. the difficulty in negotiating MTAs is often caused by fights over the allocation of patent rights in the research output. D G B Leonard and J F Merz. Fiona Murray and co-authors demonstrated that researchers are less likely to do work in a particular area after significant findings are patented and. 317-318. However. 24.Implications of the DNA Patenting Dispute: A US Response to Dianne Nicol In addition.ncbi. M A Weaver. and hence as substitutes for patents. In a series of citation studies. non-survey evidence supports the notion that exclusivity is a problem both upstream and downstream. Underground labs often find systemic problems with the commercial tests — and their work can even lead the provider to alter its procedures.nlm. in the BRCA gene. Indeed. Heidi Williams studied databases subject to exclusive 44 Cf Rebecca S Eisenberg. while Cohen’s work generally stands for the proposition that patents can be worked around (or ignored). it is worth noting that many of Cohen’s interviewees complained about how long it took to negotiate material transfer agreements (MTAs). the MTA issue may. above n 42. Nicol cites a study supporting the point. such as deletions and insertions. “Does Patent Strategy Shape the Long-Run Supply of Public Knowledge? Evidence from Human Genetics” (2009) 52 Academy of Management Journal 1193. be a proxy for a patent problem. including genetic research. see E R Gold and J Carbone. These efforts do. Fiona Murray and Scott Stern.47 At the downstream end. 45 46 47 EAP 9 . above n 13. behind closed doors. citing M K Cho. The authors saw withholding materials as another avenue for appropriating the benefits of research. which Myriad did not catch. the underground does not publish its findings. S Illangasekare. the authors were careful to state that clinical diagnostic research. is an exception to the general rule. “Effect of Patents and Licenses on the Provision of Clinical Genetic Testing Services” (2003) 5 Journal of Molecular Diagnostics 3. “Do Formal Intellectual Property Rights Hinder the Free Flow of Scientific Knowledge? An Empirical Test of the Anti-Commons Hypothesis” (2007) 63 Journal of Economic Behavior & Organization 648. Diane Leenheer Zimmerman and Harry First (eds).44 Thus. They therefore concluded that patents have little impact on research. Kenneth G Huang and Fiona E Murray. however. that more researchers come into a field and conduct more varied research after significant patented inputs become generally available. geneticists will describe a diagnostics underground: laboratories (usually in universities) that provide second opinions when a patient’s medical history contradicts the results of a test conducted by a commercial sole source provider.nih.gov/pmc/articles/PMC3037261/>. making the work almost impossible to document. see Nicol.
Professor Nicol suggests that neither side can sustain the burden of proving the impact of gene patenting. 2d ed. concurring) (2012). Graham Dutfield. AMP v USPTO. She found that. will almost certainly deserve the same solicitude: the efforts are risky and bringing new therapies through clinical testing is extraordinarily expensive. 1889 Dec Comm’r Pat 123 (1889) and Am Wood-Paper Co v Fibre Disintegrating Co. Still.48 4 Policy Implications In passing. the United States’ comparative advantage lay in isolation and purification. J. was the basis for finding isolated DNA to constitute patentable subject matter. Because the resulting substances could be easily reverse engineered. citing Ex parte Latimer. the US chemical sector was at a crossroads. Learned Hand’s 1911 opinion in Parke-Davis. the data in the protected databases were less often translated into products and that the effect persisted even after the material became freely available.” arguing that it conflicted with earlier cases holding the results of extraction. 108-109. however.Journal of Law. There are many other incentives to innovate. eg. gene patenting was founded on exactly that premise. 689 F 3d 1303. above n 13. that the biotechnology industry is heavily reliant on patenting. Information and Science Vol 22(1) 2012 rights. especially in the biological realm where so much of the work is accomplished in academia or medical offices and motivated by curiosity or the desire to help patients.52 The fruits of biotechnology. By virtually all accounts.51 Hand. Indeed. Intellectual Property Rights and the Life Sciences Industries (World Scientific. ‘Dicta on Adrenaline: Myriad Problems with Learned Hand’s Product-of-Nature Doctrine’ (2011) 93 Journal of Patent & Trademark Office Society 363. J) and 1338-1339 (Moore. purification. As recounted by Graham Dutfield.org/papers/w16213>. 1328-1330 (Lourie.213. Nicol. 48 Heidi L Williams. 2010) <http://www. 90 US (23 Wall) 566 (1874). at around the time of the decision. and isolation to be unpatentable products of nature. when used therapeutically. Working Paper No 16. “Intellectual Property Rights and Innovation: Evidence from the Human Genome” (National Bureau of Economic Research. was a quintessential legal pragmatist. patent protection was essential.49 But the same would be true on the question of whether patents are necessary. See. Germany excelled in synthesis. relative to information in the public domain. See M Harkness.50 At least one observer has suggested that Hand’s decision was “profoundly incorrect. I will accept Professor Nicol’s third contention. which upheld a patent on purified adrenaline. Hand found a way to protect this nascent industry. 2009) 85-89.nber. By holding that purified adrenaline was different from the natural product because it had new functionality. 49 50 51 52 EAP 10 . 28.
for its own sake and in spite of possible cost. Hand was also a firm believer in competition. Ibid 429. Shredded Wheat Co v Humphrey Cornell Co. His decision (on behalf of the Supreme Court) in US v Alcoa53 is heavily cited. Genes are similarly of a dual nature: they function as chemicals and also as carriers of information. the manufacturer of a wrench claimed its shape as a trademark. or for the purpose of ascertaining the sufficiency of the machine to produce its described effects. Indeed. in assessing Parke-Davis. Indeed. 1121 (CCD Mass 1813) (“[I]t could never have been the intention of the legislature to punish a man. it must be remembered that Hand was writing against the backdrop of an experimental use exemption. akin to the one that facilitates 53 54 55 56 57 United States v Aluminum Co of America. where there is a similar duality — might be used to inform the application of patent law to genetic advances. Crescent Tool Co v Kilborn & Bishop Co. Hand took seriously the effort required to establish a new mark. but it was also intrinsically desirable to consumers.55 In that case.”56 His subsequent decision in Shredded Wheat v Cornell helped lead the Supreme Court to make the doctrine of functionality the law of the nation. most especially in the intellectual property cases he entertained. an organization of industry in small units which can effectively compete with each other. which had been developed by none other than Joseph Story. he would not have allowed the progeny of Parke-Davis to give unbounded control to US patent holders. Shredded Wheat demonstrates one of the avenues he might have pursued. however. Emphasising that a trademark holder can only protect the “nonessential” features of his product. 29 F Cas 1120. Hand worked to fashion relief in a manner that accommodated both interests.”) 58 EAP 11 . 305 US 111 (1938). Hand paid careful attention to competition throughout his life. Hand held that “in no event may the plaintiff suppress the defendant’s sale altogether. Kellogg Co v National Biscuit Co. Whittemore v Cutter. often for the proposition that [t]hroughout the history of these [antitrust] statutes it has been constantly assumed that one of their purposes was to perpetuate and preserve.Implications of the DNA Patenting Dispute: A US Response to Dianne Nicol Importantly. who constructed such a machine merely for philosophical experiments. 148 F 2d 416 (2d Cir 1945).54 While Alcoa was decided toward the end of his illustrious career. In that case. Recognising the dual nature of the configuration. the shape of cereal biscuits served as a trademark. several scholars have recommended the development of a patent fair use doctrine. Thus. 247 F 299 (2d Cir 1917).58 It is fair. 250 F 960 (2d Cir 1918).57 Finally. doctrinal developments in trademark law — and also in copyright law. Ibid 301. but he considered the shape to be functional. to say that were Hand alive today. one of the foremost jurists ever to sit on the US Supreme Court. then. Crescent Tool v Kilborn is illustrative.
including very basic (pre-pre-clinical) work. Katherine J Strandburg. the Supreme Court is currently considering a petition for certiorari in the case. “Refusals to License Intellectual Property after Trinko” (2006) 55 DePaul Law Review 1191.62 With respect to antitrust scrutiny. 60 61 62 63 EAP 12 . as well as research in the many other areas where there is scepticism about patenting because of its potentially adverse impact. 545 US 193 (2005). eg. revd. As Judge Pauline Newman has stated: Today’s accelerated technological advance is based in large part on knowledge of the details of patented inventions and how they are made and used. As to the research exemption. the Federal Circuit gave the provision limited scope. Michael A Carrier.Journal of Law. “Patent Fair Use 2. the prospect for change is not as rosy. It has interpreted the so-called Bolar exception. Prohibition of research into such knowledge cannot be squared with the framework of the patent law.63 Still. broadly enough to cover some preclinical experimentation. the systems at issue could be duplicated. Integra Lifesciences I Ltd v Merck KGaA. In Trinko. s 119B. Merck KGAA v Integra Lifesciences I Ltd. there appears to be sentiment in favour of narrowing the reach of Madey. Schedule 2. Maureen A O’Rourke.59 Reviving the background rules under which Hand operated — the common law research exemption and antitrust scrutiny — would also go a long way to improving the situation for the scientific community as a whole. 876 (Fed Cir 2003) (Newman J. which are needed to access customers. 59 See.60 How far upstream that extends remains to be seen. 331 F 3d 860. it did not involve exclusivity obtained through a patent.61 Better would be the reintroduction of a general research exemption. however. this exemption was also extended to non-pharmaceutical products: see. and that would deal with all kinds of research. albeit at high cost. However. Merck KGAA v Integra Lifesciences I Ltd. a statutory exemption for information destined for submission to the Food and Drug Administration. Information and Science Vol 22(1) 2012 transformative uses of copyrighted materials (or expressive uses of protected marks). Trinko concerned the power of a telephone company to bar its rivals from using its operations support systems. 545 US 193 (2005). “Toward a Doctrine of Fair Use in Patent Law” (2000) 100 Columbia Law Review 1177. In Australia. Part 1.com/sol3/papers. the Supreme Court appears to be in agreement. Patents Act 1990 (Cth) s 119B as inserted by Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth). eg.cfm?abstract_id=1835007>.ssrn. one that would be independent of the goal of satisfying regulators. Even on the Federal Circuit. Similarly. (Fed Cir 2011). most observers believe that the Supreme Court would apply Trinko even to cases where an intellectual property right holder refuses to license.0” (2011) UC Irvine Law Review <http://papers. See. there is a tenuous argument that gene patents are distinguishable. dissenting). 659 F 3d 1057. In Classen Immunotherapies v Biogen IDEC. most of the advances covered by intellectual property rights can be invented around.
including in areas where the patient population is very small and the tests would be administered infrequently. But even more will be required. gene patents resemble copyrighted materials in terms of the need to access certain informational content. the AIA also deals with the issue of patient access. including parties who do not enjoy standing in court. confirming genetic diagnostic test activity where gene patents and exclusive licensing for primary genetic diagnostic tests exist. as well as for other sciences suffering similar problems.Implications of the DNA Patenting Dispute: A US Response to Dianne Nicol perhaps at even higher cost. it is conceivable that the Supreme Court would treat hold ups regarding this technology differently. Because there is so much doubt concerning the level of inventiveness. utility. even though the doctrine of patent misuse has fallen by the wayside. copyright misuse has become an important defence. Pub L No 112-29. and certification across a broad range of diagnostic tests. it is improbable that this defence will have a significant impact. Its proponents apparently have in mind the establishment of independent laboratories to furnish second opinions. where validity issues can be resolved at lower cost and by adjudicators with experience in patent matters. this effort is also unlikely to solve access problems. 64 As noted previously. but now that the potential effects of gene patents are better understood. Leahy-Smith America Invents Act. “Codifying Copyright’s Misuse Defense” 2007 Utah Law Review 573. the America Invents Act (AIA). a cheaper and more accessible avenue for challenging them is important.”68 In reality. It creates a prior user defence. Accordingly. the time limit may not be a significant problem. gene patents cannot be circumvented at any price. the United States’ new patent statute. Thus. In addition. there appears to be a second opinion 64 65 66 Tom W Bell. As noted earlier. and disclosure required of a gene patent. courts and legislators might reconsider reviving the misuse doctrine for these cases. Ibid § 6. Importantly.66 The procedure is available for only nine months after a patent issues. which will insulate laboratories that were utilising genetic advances before they were patented. § 27. most geneticists doubt that such labs could be commercially successful. Ibid § 5 (codified at 35 USC § 273). The labs would also have to deal with multiple insurance companies and the demands of clinicians working in diverse settings. 125 Stat 284 (2011). The labs would be required to maintain skills. the AIA instructs the Director of the Patent and Trademark Office to “conduct a study on effective ways to provide independent. but had failed to make their work public enough to create prior art. But for most uses. Ostensibly. 77 Fed Reg 28 7061 (proposed 10 February 2012) (to be codified at 37 CFR pt 42). More generally. Unfortunately. Changes to Implement Post-Grant Review Proceedings. Leahy-Smith America Invents Act.65 will be significant because it provides a post-grant review procedure in the patent office. however. the AIA makes these challenges available to anyone concerned with the patent.67 But because clinical work is often shared (and thus made public). reagents. In this regard. 67 68 EAP 13 .
The promise of greater antitrust scrutiny or the revitalisation of the patent misuse doctrine might. Maureen O’Rourke has suggested that when valuable products are developed from patented advances (and especially when the second developer diverts the first developer’s customers). by instructing the practitioner on how to practice the method. 4. a patent holder who has been deprived of compensation from the infringer has recourse against anyone who contributes to the infringement — for example. which can be interpreted as limiting users to research “on” the patented advance. in fact. EAP 14 . above n 59. There is no way to know whether collectively these facilities could offer comprehensive coverage. Knowing that competition is always possible. patent holders would hopefully become less enamored of the sole-source provider business model and drop it in favor of licensing multiple laboratories. Information and Science Vol 22(1) 2012 underground. But unless construed more broadly. but it is largely composed of academic labs staffed by researchers interested in particular diseases. royalties may be appropriate. not research with the patented advance. More important.Journal of Law. an exemption covering second opinions would not help patients who lack insurance coverage or resources to obtain first opinions. however. That provision immunises health care providers’ use of a patented method from all remedies.72 69 70 71 72 SACGHS Report. ordering. or selling a test … for patient care purposes. At the same time. but retains their liability for infringement. While copyright and trademark fair use do not require royalty payments. A research exemption of the type common in Europe. using. For example. See above n 26. above n 21. a less inclusive exception would be preferable.71 would enable researchers to perfect these diagnostics. 35 USC § 287(c) (2006). SACGHS suggested a diagnostics exception that would exempt “anyone making. A fair use exception could also be helpful in this situation.”69 The proposal is very broad and would. To deal with that problem. If it is believed that their development merits patent protection.70 In that way. strip inventors of all financial incentive to develop these tests. a tactic analogous to the one the United States uses for medical and surgical methods could be adopted. health care providers retain the ability to do testing. by supplying materials uniquely suited to performing the method — or induces infringement — for example. induce patent holders to license. O’Rourke. offering for sale. it would not prevent pharmaceutical companies from using patents on companion diagnostics to exclude rivals who wish to develop therapies for patients who cannot benefit from the patent holder’s drug. The development of personalised medicine — companion diagnostics as well as multiplex testing (simultaneous analysis of large arrays of genes) and whole genome sequencing (the analysis of each person’s entire genetic endowment) — furnishes an example of how these strategies might work to better accommodate the interests of all relevant parties.
This Comment suggests several approaches that are worthy of more detailed consideration. Background rules are important and it is clear from Nicol’s evidence that many countries already have a set of rules that make patent holdups in the genetic arena unlikely. “Of Thickets. a diagnostic exemption would help assure the availability of companion diagnostics. one courts and legislators are unlikely to undertake. there are important differences between these fields: in electronics. But genetic advances do more than furnish hereditary information. The temptation to obsess about their suitability for patent protection is. Accordingly. The United States should be paying more attention to developments elsewhere — not vice versa. gene patent holders can exploit their rights on their own. the availability of a misuse defence could similarly induce licensing. 73 See Geertrui Van Overwalle. compulsory licensing could solve holdup problems. Stripping genetic inventions of patent protection is therefore a risky move. Thus Dianne Nicol is surely right that attention should shift to strategies for dealing with the adverse impact that these patents can have on fundamental biological research and on the practice of medicine. In Europe. The Comment is also intended to serve another purpose: to explain to observers outside the United States that they should not automatically take US obsessions as their own. as licensing is a possible remedy. no patent holder can bring a product to market without technology exclusively held by others. In misuse cases. In contrast. Blocks and Gaps” in Geertrui Van Overwalle (ed). a patent is unenforceable as long as the misuse persists. accordingly. they are likely to become the basis for dramatic new therapies.Implications of the DNA Patenting Dispute: A US Response to Dianne Nicol As to patient access. 4 Conclusion Unlike other patentable advances.73 However. pools may not be as attractive. Thus. as it is in the electronics sector. EAP 15 . Gene Patents and Collaborative Licensing Models (2009) 383-463. genes and like biological information cannot be invented around. powerful. European observers suggest that patent pooling should be used in this situation. But holdups could be a serious problem with regard to commercial tests that require multiple genes and therefore multiple patented inputs. Most could be adapted to other industries where inventing around is impossible and patenting is problematic. the potential application of antitrust law could have a similar effect.
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