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Why the Gene Patenting Controversy Persists

2002; Lippincott Williams & Wilkins; Volume: 77; Issue: Supplement Linguagem: Inglês

10.1097/00001888-200212001-00009

1938-808X

Rebecca S. Eisenberg,

CRISPR and Genetic Engineering

A puzzling aspect of the controversy over patenting genes has been its timing. Other controversies over patenting new subject matter—such as microorganisms, animals, software, and business methods—have typically erupted promptly upon the allowance of patents in these areas, and then diminished as people and institutions got used to it. By contrast, public controversy over patenting genes initially trailed patenting practice by a decade or more, yet it has remained remarkably robust ever since, despite many years of experience with gene patents. Throughout the 1980s, while Congress1 and commentators2 focused concerned attention on the patenting of living things, the practice of patenting genes was becoming well established beneath the radar of media attention. The first significant public controversy over patenting DNA sequences did not erupt until the early years of the Human Genome Project, when the National Institutes of Health (NIH) filed patent applications on the first few hundred expressed sequence tags (ESTs) identified in the laboratory of Dr. Craig Venter.3 But if critics of gene patenting were slow in launching public discussion of the issue, they have certainly been persistent in keeping the controversy alive. What accounts for this peculiar pattern of delayed, yet enduring, controversy? Although at a formal level patenting genes looks like an established practice, the interests that it implicates have shifted over time, bringing different stakeholders forward and raising different concerns and arguments that were not salient in the early days. In particular, in recent years the patenting of genes has raised evolving issues concerning (1) the patenting of DNA diagnostic products that are the object of mixed clinical and research use; (2) the patenting of "upstream" discoveries that are still some distance away from end-product development but are nonetheless of immediate scientific interest to researchers; and (3) the patenting of routine research results obtained through a mechanized process requiring no more than ordinary skill on the part of the inventors. Each of these issues has cast a new light upon the practice of patenting genes as science and technology move forward, bringing into focus questions that were neither raised nor resolved in the prior course of gene patenting. PATENTING GENES AS DRUGS Patenting genes began with little fanfare and little controversy in the early years of the biotechnology industry, with the patenting of newly cloned genes encoding therapeutic proteins.4 As a matter of legal doctrine, the courts and the Patent and Trademark Office (PTO) treated these inventions as chemicals,5 a characterization that provided an extensive body of precedent to consult in establishing the patent ground rules for this emerging field. Having long ago decided that chemicals isolated from nature through human intervention were eligible for patent protection,6 the courts and the PTO hardly blinked at allowing patents on newly isolated genes. In these early, low-controversy days, patenting genes looked more or less like patenting drugs. The case for patenting drugs, although disputed by some, is straightforward and plausible, given the high costs and risks of drug development7 and the avowed patent-sensitivity of the industry.8 The gene-patenting pioneers in the new biotechnology firms of the 1980s saw themselves as high-technology drug developers and, in their search for a viable business model for therapeutic protein development, emulated the patent strategies of the major pharmaceutical firms. Often the proteins that they sought to develop as drugs were familiar, but they were difficult and costly to isolate in significant quantities. By cloning the genes that encoded these proteins, biotechnology firms were able to produce the proteins in recombinant organisms in quantities sufficient to meet therapeutic needs. Patenting the genes and recombinant materials secured profitable exclusive franchises to manufacture these products. Although only a handful of these pioneering firms survived and prospered, gene patents undoubtedly played a critical role in attracting the necessary private investments to launch this industry. Patents on genes encoding therapeutic proteins have been the focus of numerous judicial opinions concerning the requirements for patent protection,9 priority of invention,10 and determinations of infringement.11 Judicial opinions resolving these disputes provide most of the existing legal precedent involving the patenting of DNA. Some firms continue to follow essentially the same business model as the biotechnology pioneers, searching for new therapeutic proteins and filing patent applications on the corresponding genes in order to secure profitable exclusive markets for these products. But as the underlying science has advanced, research strategies and business models have become more diverse, generating patents that play different roles in the economy of biomedical research and practice. PATENTING GENES AS DIAGNOSTIC PRODUCTS The research that yielded the first generation of gene patents used knowledge of therapeutically useful proteins to clone the corresponding genes. Later, the development of new tools and techniques for detecting genetic differences among individuals enabled researchers to bypass the stages of protein isolation and characterization and to identify directly the genes associated with diseases (or disease susceptibilities) through positional cloning.12 These genetic discoveries had immediate value as diagnostic products. They were also useful as research tools in the search for therapeutic products, but the relationship between gene and therapeutic product was typically less straightforward than it had been for the first generation of biotechnology products. Patents on these discoveries, although similar in form to patents on genes encoding therapeutic proteins, played a different and less familiar role in the biomedical community, setting the stage for conflict with people and institutions that had barely taken note of the first generation of gene patents. Professional societies of doctors and clinical geneticists have been particularly outspoken critics of both disease gene patents and exclusive licenses to perform DNA diagnostic tests.13 These groups advance many arguments against the patenting of genes, some of which would seem to apply with equal force to the patenting of drugs (e.g., that patents raise the costs of genetic tests and restrict patient access to a type of medical care) or of genes encoding therapeutic proteins. Setting these arguments aside, two additional arguments suggest why these groups have been more troubled by the patenting of disease genes than they were by the patenting of genes encoding thereapeutic proteins. First, they argue that giving patent owners the right to limit who may perform genetic tests interferes with the practice of medicine. Second, they argue that exclusive licenses to large commercial laboratories to perform genetic tests prevent other laboratories from identifying and validating new mutations and restrict the range of testing services that are offered. These arguments are particularly compelling to doctors and geneticists working in academic medical centers that are equipped to administer "home brew" genetic diagnostic tests themselves in pursuit of a mixed mission of treatment and research. That these arguments were not advanced when gene patents related primarily to the market for therapeutic products, but became salient when gene patents began to affect the market for diagnostic products, reveals interesting differences between these two markets. It is relatively easy for patents to confer effective monopolies in therapeutic products because patents are not the only constraint on competition in these markets. In order to bring a new drug (or a new biologic such as a therapeutic protein) to market, it is necessary to get approval from the Food and Drug Administration (FDA), a process that entails considerable costs for clinical testing and clearing administrative hurdles. Drug manufacturing requires specialized facilities and know-how that further limit entry into these markets. Doctors and non-commercial laboratories are not about to meet the therapeutic needs of their patients by making these products themselves, even after the relevant patents expire, and patents on these products therefore do not feel like a constraint on their activities, whatever impact they may have on the cost of medical care for their patients. On the other hand, many laboratories are equipped to perform DNA diagnostic tests, particularly in academic medical centers. Diagnostic products are far less extensively regulated than therapeutic products and are typically given to patients on a one-time basis, minimizing the non-patent obstacles to performing such tests. Even when a test is available at reasonable cost elsewhere, doctors in academic medical centers may prefer to use their own institutions' facilities for diagnostic testing rather than to ship samples off to a commercial laboratory in order to identify (or look for) new or rare mutations or to learn more about the underlying disease. They see restrictions on the provision of DNA diagnostic tests imposed by patent owners as an unaccustomed obstacle to their work as health care providers and researchers. Patents on disease genes also raise new challenges for patent owners seeking profitable strategies for deploying their patent rights. It is relatively simple to figure out how to deploy a patent on a drug that end users are not in a position to make safely and effectively for themselves. So long as the patent owner has a right to exclude competitors from making the patented product, it may secure a monopoly without having to sue end users. But if end users are capable of infringing the patent on their own without the intervention of a commercial competitor of the patent owner, it may become necessary to enforce the patent against them in order to maintain profitability. This adds to the costs of monitoring and enforcing patent rights, as well as creating bad public relations with potential customers. Indeed, this situation blurs the distinction between customers and competitors from the perspective of patent owners and places the interests of patent owners in conflict with those of health care providers, fueling opposition to gene patenting from groups that scarcely noticed the first generation of gene patents. The fact that DNA diagnostic products are routinely subject to incremental improvement as more is learned about the genetics of a disease further aggravates the problem of establishing and enforcing a lucrative patent position in these products. While the patented genes encoding therapeutic protein products typically are the same as the single most prevalent sequence carried by healthy individuals, DNA diagnostic products typically seek to identify aberrations in the sequence that are associated with disease. Practicing physicians with access to family pedigrees may discover many such aberrations over time. Limiting the number of laboratories permitted to do the testing could slow this incremental process of discovery. On the other hand, permitting multiple investigators to search for mutations in an uncoordinated fashion could fragment ownership of patent rights as each laboratory patents the mutations that it discovers, making it difficult to secure the necessary permissions to market a comprehensive diagnostic test.14 In this challenging strategic environment, it is not clear that the interests of owners of disease gene patents will converge with the social interest in promoting continuing technological progress. Arguments that gene patents interfere with the practice of medicine beg the question of why medical practitioners should be treated differently from any other providers of goods and services under the patent laws. Medical practitioners succeeded once before in persuading Congress to grant them special relief from enforcement of patents on medical and surgical techniques.15 Efforts to secure similar protection from enforcement of patents on DNA sequences would be likely to encounter more serious resistance from the genomics industry, which has invested substantial resources in R&D in reliance on the availability of effective patent rights in their discoveries. Arguments that gene patents interfere with incremental innovation in DNA diagnostics, although plausible, fly in the face of the strong presumption within the patent community that patents promote, rather than retard, progress.16 Notwithstanding the skepticism of medical practitioners and academic scientists, it is also plausible that eliminating or weakening patent incentives would retard the development of DNA diagnostic products, to the long-run detriment of medical practice. This is ultimately a complex empirical question with no clear answer. Different starting intuitions could lead different observers to sharply divergent interpretations of the available evidence. PATENTING GENES AS RESEARCH TOOLS The advent of high-throughput DNA sequencing facilitated the sequencing of DNA in advance of understanding the functions or disease relevance of particular sequences, raising the possibility of obtaining patents on "upstream" genetic discoveries that were still far removed from product development. Patent applications filed by the NIH on the first ESTs identified by Craig Venter set off alarm bells in the scientific community,17 although research scientists had previously expressed little concern about the patenting of genes encoding therapeutic proteins. If the DNA sequence discoveries that were claimed in the provocative NIH patent filings encoded therapeutic proteins, no one knew it at the time. The most obvious value of ESTs was not the speculative value of particular gene fragments for therapeutic or diagnostic uses, but the immediate value of growing collections of such sequences for use in gene discovery. With this shift, patenting genes started to look less like patenting end products and more like patenting scientific information. Scientists argued that the progress of biomedical research would be better served by making the human genome freely available than by permitting its balkanization through patent claims and restrictive licensing agreements.18 This opposition became more vehement as EST-sequencing moved from the NIH to the private sector, and as terms of access to privately held EST databases were set beyond reach of many academic institutions.19 The gene-patenting controversy arose during a period of rapid and uneasy change in the culture of academic biomedical research from a tradition of open science to a more restrictive, proprietary enterprise. Although by this point many academic scientists had begun patenting their own inventions and licensing them to private firms, they still enjoyed relatively free access to scientific information and methods for use in their own research. The first patent filings on results of large-scale DNA sequencing coincided with a broader trend in the biomedical research community to claim intellectual property rights in research tools, and to assert these rights against academic researchers.20 The availability of patent protection for research tools has undoubtedly motivated valuable private sector investments in developing, validating, and disseminating many important research platform technologies, to the benefit of researchers in the public and private sectors. Nonetheless, the case for patenting research tools is far more contestable than the more familiar case for patenting end products. Although the patent system can take much credit for a long history of promoting product innovation, the tradition of open science in the academy can also take much credit for a long history of promoting rapid growth in fundamental knowledge.21 Patents on research tools threaten to restrict access to discoveries that, according to the firm beliefs of scientists trained in the tradition of open science, are likely to have the greatest social value if they are widely disseminated to researchers who are taking different approaches to different problems. Although some patent owners may be well motivated to disseminate their research tools widely through licensing, there are reasons to fear that a private market for licenses might not achieve optimal dissemination of research tools. It is not obvious how to deploy patents on research tools to capture the value that those tools provide to researchers. It is difficult to predict which research projects will generate profitable future products, and it may take years before the value of research outcomes becomes apparent. Many biomedical researchers have limited resources to make up-front payments for access to state-of-the-art research tools, leading some tool providers to propose contingent payment terms in the form of reach-through royalties on 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 balk at agreeing to reach-through terms.22 As such terms become more common in proposed research tool licenses, the obligations imposed by different tool providers may come into conflict23 or create mounting royalty obligations that reduce incentives for future product development. Moreover, it may be difficult later on to trace a particular discovery or product to the prior use of a research tool and to establish that the product is subject to the reach-through obligation. These difficulties increase the transaction costs of negotiating over terms of access to proprietary research tools, slowing their dissemination and delaying research. That patents are less conducive to the dissemination of genetic research tools for use in R&D than they are to the dissemination of therapeutic end products is suggested by the fact that gene-patenting skeptics in the scientific community have enjoyed occasional cautious support from the pharmaceutical industry.24 Although reluctant to criticize openly a legal regime that they see as critical to their own profits, pharmaceutical firms have sometimes thrown their weight behind the movement for a patent-free genome by sponsoring initiatives, such as the Merck Genome Initiative and the SNP Consortium, to make DNA sequence information freely available in the public domain. Like academic scientists, pharmaceutical firms see DNA sequence information primarily as a tool for future R&D, and feel threatened by patents that might interfere with (or raise the cost of) future access to this tool. Any analysis that considers patents an impediment to R&D is deeply counterintuitive to those who administer the patent system and is unlikely to be persuasive to them. A more conventional view is that the patent system motivates investment in innovation by allowing inventors to capture the value of their inventions from users. According to this view, if a patent holder gets too greedy and seeks payments in excess of this value, potential users may simply forego use of the invention and make do with alternative (perhaps older) technologies, leaving them no worse off then they would have been without the patent holder's efforts. One might therefore expect that consumers of research tools, like consumers of therapeutic proteins, would benefit from and therefore welcome the patents that motivate other firms to develop new products for their use. But this conventional analysis rests on an important assumption—highly questionable for gene patents in the era of high-throughput DNA sequencing—that the patent holder is making contributions to the technology base that would not otherwise be made freely available. PATENTING GENES AS TRIVIAL ADVANCES Concern about the impact of gene patents on the use of genomic information in future research does not alone explain the level of indignation expressed by opponents of gene patenting in the scientific community. Their pique is augmented by the widespread perception among scientists that patents on the results of high-throughput DNA sequencing overreward routine, trivial discoveries and impose a corresponding burden on the more challenging and demanding work that remains to be done in order to understand the biological functions of genes. The argument that patents leave future users of patented products no worse off than they would otherwise have been rests on the assumption that, but for the efforts of the patent holder (or others similarly motivated by the prospect of getting a patent), the invention would not have been made. If, instead, the invention would, in all likelihood, have soon become freely available in the public domain through the efforts of others working in the field, patents are much harder to justify.25 Because patents impose social costs in the form of restricted access to new technologies, the net value of the patent system depends on its ability to distinguish those inventions that justify enduring those costs from those that do not. The principal doctrinal tool for making this distinction is the exclusion from patent protection of inventions that would have been obvious, at the time they were made, to a person of ordinary skill in the relevant field in light of the "prior art," or existing knowledge in the field.26 The logic behind this requirement is that obvious inventions are likely to be made by an "ordinary mechanic acquainted with the business" in the course of routine work even without the special inducement of a patent, and it is therefore unnecessary to hamper subsequent dissemination and use of such routine advances through the imposition of patent monopolies.27 On the other hand, non-obvious inventions presumably require greater risk-taking, and might not be made without the prospect of obtaining a patent. This standard has proven extremely difficult to apply in a consistent fashion. Originally developed by the courts in interpreting the Constitutional limitation of patent protection to "inventions," the standard was first codified by Congress in 1952. At that time, judicial formulations of the Constitutional meaning of "invention" had sometimes appeared to set an almost impossible standard for inventors to meet, limiting patent protection to technological breakthroughs that revealed a "flash of creative genius."28 Congress reacted to a perception that the judicial standard had become too strict by defining the standard in terms of obviousness and by adding the following inelegant proviso: "Patentability shall not be negatived by the manner in which the invention was made." One might expect the non-obviousness standard to exclude from patent protection the results of high-through-put DNA sequencing that can be (and is) performed by modestly competent research technicians in a mechanized discovery process. Regrettably, however, this important requirement for patent protection appears to do little work in this particular technological context. The reason for this is a pair of decisions from the U.S. Court of Appeals for the Federal Circuit reversing rejections of patent claims to genes that were cloned using information about the amino acid sequences of the proteins they encoded.29 In the early days of gene patenting, the process of cloning the gene for a known protein was fraught with uncertainty and required considerable creativity and skill, but as the field progressed, it soon became a routine matter. Patent examiners accordingly began to reject patent applications claiming genes encoding proteins for which a partial amino acid sequence had previously been disclosed, reasoning that "when the sequence of a protein is placed into the public domain, the gene is also placed into the public domain because of the routine nature of cloning techniques."30 This analytical approach was broadly consistent with prior decisions of the Federal Circuit that had stressed the unpredictability of research strategies used to make previous biotechnology products in holding that those product inventions were non-obvious, rather than focusing more narrowly on the predictable characteristics of the products themselves.31 But when this analytical approach began calling for rejections of claims to genes that were cloned through the use of what had become predictably successful strategies, the Federal Circuit changed course and repeatedly reversed these rejections on appeal. In the case of In re Deuel, the court concluded that knowledge of a partial amino acid sequence for a protein did not make the corresponding gene obvious by analogy to cases involving patents on chemicals, noting that a novel chemical is generally not presumed obvious unless it is structurally similar to a known compound, and proteins are not structurally similar to DNA sequences. That researchers of ordinary skill in the field, equipped with knowledge of the amino acid sequence, could have used known methods to isolate the corresponding native DNA sequence was, in the court's view, "essentially irrelevant to the question whether the specific [DNA] molecules themselves would have been obvious."32 In effect, then, the patentability of a newly sequenced DNA molecule appears to turn not on whether the teachings of the prior art make this an obvious and readily achieved next step for a genetics technician of ordinary skill, but on whether the prior art disclosed structurally similar DNA molecules. This wooden approach to the non-obviousness standard fits poorly with perceptions of scientific accomplishment among geneticists. But because it makes it easy for patent applicants to get past the non-obviousness hurdle, they have little incentive to challenge the rule, and after being repeatedly reversed on this point, the PTO seems to have little interest in raising it again. As more DNA sequence information becomes available in databases, even the restrictive approach of the Federal Circuit is likely to lead to obviousness rejections, as most newly sequenced genes are likely to be structurally similar to previously disclosed sequences, given conservation of coding regions in genomes. Nonetheless, it is regrettable that the approach of the Federal Circuit has eviscerated an important requirement for patent protection during the years when most of the human genome was sequenced. As a result, the patent system has encouraged researchers to race along pathways made obvious by their predecessors to complete the relatively easy step of DNA sequencing, laying patent claims along the way that will dominate more challenging scientific work that has yet to be done. CONCLUSION Significant opposition to gene patenting within the medical and scientific communities did not arise until the patentability of DNA had long been established. Given that patents on DNA sequences matter to biotechnology and genomics firms that have made considerable investments in R&D, those who would constrain the issuance of patents in this area have an uphill battle to fight in persuading policymakers to change the rules at this late date. The patent system purports to apply a uniform set of rules to promote progress in all fields of technology, leaving little room to fine-tune the rules from one field to the next. On the other hand, it makes little sense to apply less stringent standards in evaluating the patentability of advances in genomics than have been applied to advances in other fields of technology. Arguably that is exactly what the Federal Circuit has done through its decisions concerning the non-obviousness of DNA molecules identified through techniques that the prior art not only disclosed and suggested, but gave reason to expect would succeed. These decisions invite patent applications on the routine work of DNA sequencing technicians, allowing them to stake out claims that will dominate the more challenging work of future inventors.