---

Return to main page.

Rochelle K. Seide, Ph.D. and Janet M. MacLeod, Ph.D. (1)

Both of these articles provide the authors' views on the economic effects of intellectual property rights (especially patents) in biotechnology. The premise of Heller and Eisenberg, both of whom are law professors at University of Michigan, is that patents granted on upstream technology will stymy further downstream research and the development of useful products. On the other hand, Doll, who is Director of Biotechnology Examination at the U.S. Patent and Trademark Office, argues that patents granted for DNA inventions will not limit further research and development.

Heller and Eisenberg warn of tragedy that may result from a proliferation of patent rights in biomedical research. The authors suggest a scenario in which a "downstream" researcher, faced with negotiating a daunting number of patents on "upstream " research, would have to obtain licenses from multiple owners of these upstream patents, resulting in the diversion of resources to a less promising line of research with fewer licensing obstacles. We suggest that the situation may not be as dire as predicted for several reasons: (1) the numbers of owners and potentially blocking patents ("concurrent fragments") has been overstated, (2) existing patents on broad-based fundamental patents in biotechnology has not stymied downstream research and development of products therefrom that have been commercialized and (3) U.S. patent law provides research exemptions that shield researchers from liability for infringing a granted patent that permits further research and development by academic, and even corporate researchers, under certain circumstances.

There are not as many owners of intellectual property rights as Heller and Eisenberg suggest. They indicate that those who do research with public funds may feel entitled to coinventorship, resulting in overlapping claims with different ownership. While patents in the U.S. are filed and issued in the name of the actual inventor(s) of the patented invention, inventorship is distinct from ownership of the patents and the rights conferred (2). Government-funded researchers are usually under obligation to assign their patent rights to their institution and/or the federal government; they are thus inventors, but not owners. The downstream researcher or licensee negotiates with the owner institution, not the multiple inventors.

Further, Heller and Eisenberg may have overemphasized the potential number of blocking patents to a particular technology. In one of their examples to support their premise, they seem to suggest that a researcher wishing to screen for ligands against the adrenergic receptor would need to negotiate with the each of the owners of the more than one hundred issued U.S. patents they located having the term "adrenergic receptor" in the claims. This is simply incorrect. We have performed a cursory review of 135 issued U.S. patents located by searching the term "adrenergic receptor." Although brief, our review indicated that the majority would not be infringed by such an assay, thus obviating the need for a license. For example, NIH has patented a method of treating schizophrenia by administering an alpha2 - adrenergic receptor antagonist and a D2 dopamine receptor antagonist to a patient. Although this patent has the term "adrenergic receptor" in the claim, the assay to detect a ligand to such a receptor would not be covered, and no license need be obtained. Thus, in order to determine whether a license to any or all of the issued patents would be required in order to search for suitable ligands, one would be able to eliminate many on a first reading. In reality, licences to only certain technology would be required and these can be negotiated with the owners.

Finally, it has been our experience that the average institutional researcher, in designing biomedical research projects and soliciting and allocating research funds, generally does not consider the patent positions of others in the field (with the exception of a few well-known patents).

Next, there are paradigms of successful strategies of licensing patents on basic and fundamental inventions in biotechnology. In this regard, Stanford successfully licensed the Cohen and Boyer patents covering the basic recombinant DNA technology. Because the licenses were offered at reasonable rates to all who sought them, technology was not stymied. Indeed, since these broad patents issued, there has been a great deal of research that has gone on, with significant commercial application. Genentech has taken a similar approach with its Itakura/Riggs gene expression patents and Columbia University with its eukaryotic expression patents granted to Richard Axel. What this indicates is that the biotechnology/biomedical/pharmaceutical industry is used to negotiating and obtaining licenses to patented technology in order to carry out downstream research and product development. Patents have not stopped such activities.a

Finally the patent law recognizes various research exemptions to patent infringement. Most university-based research, as long as it is not directed to commercializing a product, would be exempt from any claim of patent infringement even though the research is covered by the patent. Also, companies are making proprietary products and technology available to researchers without having to go through complicated licensing negotiations. For example, Genzyme Transgenics Corp. has recently made its transgenic animal protein production technology available to corporate and academic researchers at early stages of research, without having to take a licence from the company. A license would be required only for commercial scale production or other commercial uses.

Doll lays out the basics of the U.S. Patent and Trademark Office's position on granting patents for EST's and SNP's. While we agree that there does not appear to be any impediment to granting such patents, as long as all of the conditions for patentability are met, he only addresses subsequent patenting of genes encompassing such fragments. We agree that full length genes are patentable over patented gragments of nucleic acids. Thus, downstream researchers will not be precluded from researching, obtaining and patenting "improvements, " i.e., the full length gene and encoded protein, if the conditions of patentability are met. However, even though a gene may be patentable over a gene fragment, it may sill infringe a patent issued on the fragment. Thus, the questions for downstream researchers, especially those who wish to commercialize their work, will be in the scope of protection afforded such patents, especially when they are enforced against potential infringers who may be using the complete gene, of which the patented EST or SNP is a part, in the production of a useful therapeutic, such as gene therapy or a protein product, or the patent owner seeks to licence its patent for such use. The Court of Appeals for the Federal Circuit has laid out some guidelines in recent cases as to the permissible scope of DNA claims and what is required in a patent specification to support such claims. It is unlikely, that we have seen the last of such cases.

We agree with Heller and Eisenman that "[p]olicymakers should seek to ensure coherent boundaries of upstream patents." We are not of the opinion that changes to the patent law and special patenting policies are needed for biotechnology. In this regard, we agree with Mr. Doll that the existing patent law is suitable to ensure such boundaries, to balance the interests of "upstream" and "downstream" researchers and to protect the public.

References and Notes

1. Rochelle K. Seide is a partner and Janet M. MacLeod is an associate in the Intellectual Property group of Baker & Botts, L.L.P., and international law firm. Drs. Seide and MacLeod both specialize in biotechnology patent practice. The views sted herein are those of the authors and are not meant to reflect those of Baker & Botts, nor those of its clients.
2. An issued patent provides the patent holder with the right to exclude others from making using, selling or offering to sell the patented invention. However, the patentee may not be able to practice his/her own invention, if there is a dominationg patent.

To Advertise   |   Find Products