Intellectual Property Concerns

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Introduction In line with the advancement of technology in the field of medicine, there has been a great deal of discovery of human genome related genes and diagnostic methods. Patent law has encouraged inventors to patent their invention so as to avoid exploitation and promote innovation. However, these patents appear to be controversial and have been a hotly debated issue in many countries, such as the BRCA1 gene patents and its diagnostic methods patents. This essay will address the merits and demerits of patent by looking into the relevant legal framework and analyzing it in terms of US, UK and EU case laws. The main focus would be on patentability of genetic diagnostic in vitro test and human genome related genes. Patent Law European Union The general requirements for patent law in Europe is governed by Art 52(1) of the European Patent Convention(EPC) 2000.[1] It provides that any inventions that fulfill the requirement of novelty and inventive step can be patented if they are capable of industrial application.[2] However, the exact concept of invention has not been explicitly defined by the EPC. Nevertheless, it is stated that the invention must possess technical features[3] that relates to a technical field[4], and which involves a technical problem.[5] Thus, it can be seen that ‘technicality’ is a prerequisite in order to be patent eligible. Besides, exclusions that must not be treated as inventions are provided in Art 52(2)[6] and 52(3)[7]. United Kingdom In UK, the governing statute for patent law is the Patents Act 1977.[8] It is passed to implement the EPC. The essence of patent law is in s1 to s3 of the act, where the criteria for patentability are provided. This act also provides a list of exclusions from patentability that will only be applicable when relevant. According to s 4A(1)(b), diagnostic methods themselves are unable to be patented.[9] This provision is very similar to Art 53(c) of the EPC. United States Patent law in the United States is governed by S 101 of Title 35 United States Code(USC).[10] It provides that for a subject matter to be patentable, it must fall within either of these categories, namely process, machine, manufacture and composition of matter.[11] If one discovers or invents any new and useful abovementioned subject matters, or any new and useful improvement, they might be eligible to acquire a patent subject to the requirements and conditions.[12] The prerequisite that an invention be ‘technical’ is not explicitly present in US law. Also, there is no statutory provision equivalent to Art 52 EPC that provides exclusions from patentability. Nevertheless, the courts have devised some exceptions from patentability, such as law of nature, abstract ideas and basic human knowledge.[13] Patentability of Genes European Union and United Kingdom In order for a gene to be patentable, there must be an invention and it must satisfy the requirements of novelty, inventive step and industrial application. In Netherlands v DIR 98/44/EC, it was confirmed that Art 5(1) of the Directive which states that human body is not patent eligible was valid.[14] Therefore, a mere discovery of the existence of specific DNA sequence in the human body is not an invention and not patentable.[15] It follows that only invention that merges a natural element with a technical process where the DNA sequence is isolated from its natural environment, or produced for an industrial application, would be capable of being patented.[16] As for the novelty requirement, we must be clear that what is being claimed here is the isolated sequence carried out through a technical process, which is distinct from what was existing, thus making it novel from patent law perspective.[17] The German Antamanid case held that the fact that an isolated substance which functions were not known to someone skilled at the time of application and not capable of being used before the application makes the substance something novel.[18] As for the inventive requirement, it is more difficult to satisfy. A genetic invention would only be regarded as inventive provided it is shown that acquiring the sequence was a technical achievement or that a new property related to the gene is discovered.[19] The use of DNA sequence as a diagnostic tool is said to involve an inventive step.[20] Lastly, the invention must be capable of industrial application. In short, if the patentability requirements are met, an isolated gene such as the BRCA1 is in principle patentable in the EU. United States In line with the three exceptions, a living thing is understood to be patent ineligible. However, in the 1980s, the Supreme Court held in Diamond v Chakrabarty that a genetically engineered bacterium that has different characteristics from the naturally occurring bacterium is patent eligible.[21] From then onwards, naturally occurring human DNA sequences of genes have been granted patent. This has sparked a widespread controversy over the negative impact gene patents could have on genetic testing.[22] Consequently, in Association for Molecular Pathology v Myriads Genetics, the Supreme Court held that the diagnostic genes which are involved in the susceptibility to breast cancer cannot be patented.[23] It held that merely isolating genes that can be found in nature does not render it patent eligible.[24] The impact of this decision has extended beyond putting an end to the company’s monopoly over its genetic diagnostic in vitro test. Patentability of Genetic Diagnostic Test European Union and United Kingdom Gene sequence is also used as the basic material of a genetic diagnostic test.[25] Patents are not only claimed in the gene sequence used in such tests, but also for diagnostic testing method itself.[26] Art 53(c) of the EPC provides that ‘diagnostic methods practiced on the human body’ are not patent eligible.[27] This is because medical and diagnostic methods ought to be available to the medical society, and without the need to obtain a use license.[28] The Enlarged Board in G1/04 sets out a list of steps that must be performed in order to be excluded from patentability and that each and every step must involve an interaction with the human body.[29] Therefore, genetic diagnostic methods such as the in vitro test where the steps are performed by in vitro technique on a sample tissue is purely specialized in nature, and lacking direct involvement with the body, hence will not be excluded from patentability under Art 53(c). This is evidenced in T666/05, where the genetic diagnostic in vitro test that determines one’s susceptibility to breast cancer is held to be patentable.[30] In terms of patentability requirements, novelty is easily satisfied. However, ‘inventive step’ could be difficult to be established. Nevertheless, if these tests could be performed based on the application of a single principle that is applicable to all the tests, as automated processes, there is no reason why patents of this kind should be denied despite the difficulty of establishing inventive step.[31] Moreover, even if the process is not inventive, it has been argued that it is inventive to come up with the test, and the development ought to be considered the unexpected effect of DNA.[32] Besides, the utility requirement is also easily satisfied because genetic testing based on the use of partial gene sequence is considered a special utility.[33] Thus, in principle, in vitro diagnostic test involving these technical steps are patentable in Europe, as opposed to tests that are practiced on the human body which are not patentable. United States In the US, there is no provision like Art 53(c). The US Patent and Trademark Office(USPTO) has provided a three-step test for determining whether it is patentable under S 101 of Tittle 35 USC. Firstly, it must be determined whether the subject matter is directed to a method, then whether its focus is on a natural subject matter, and lastly, whether there is presence of additional elements which combine the natural principle into the claimed invention in a way that the natural principle is practically applied.[34] In Mayo Collaborative Services v Promethues Laboratories, the diagnostic claim was held to be a law of nature and not patentable.[35] The process is something that has been well understood, and involves routine and traditional activity that has been practiced by researchers earlier.[36] There is no additional element such as innovation and inventive step that could otherwise make it patentable.[37] The court thought that patent law should not discourage further discovery by restricting the future use of law of nature in an inappropriate manner.[38] Mayo was followed in AMP v USTPO, where the genetic diagnostic in vitro test was held to be patentable ineligible.[39] It was held that the mental act of comparing gene sequences falls under the exception of abstract mental process. Besides, it also failed the ‘machine-or-transformation test’, which requires a particular article to be transformed into a different state or thing.[40] In short, patents for diagnostic genetic in vitro test in the US has been invalidated in this case.[41] Impact of Diagnostic Patents All these while, there has been a lot of controversy surrounding the granting of patents for diagnostic tests. In Europe, it has been argued that in vitro test should also be excluded from patentability. After all, the rationale behind the exclusion for ordinary diagnostic methods is partly due to the accessibility to health care methods, and there seems to be no reason why in vitro methods should be treated differently.[42] Thus, it is argued that in vitro method should also be governed by a similar health care concern. There are also some issues regarding whether patents for diagnostic testing are not overbroad.[43] For example, in the context of BRCA1 patents, broad claims are submitted, not only the gene sequences are claimed, but also a number of other predictive diagnostic tests, and sometimes even some gene therapy claims.[44] This seems to be categorized as reach-through claims and they could cause problems that will be discussed later.[45] Also, broad patents that cover almost all likely conceivable tests could stifle investment as there is no further incentive to develop and improve the tests.[46] Argument against Diagnostic Patents Research and Development Patents can have a negative impact on the development of better diagnostic tests and the research into disease, where the patented test is not widely licensed.[47] Even if it is widely licensed, royalty fees will still limit access.[48] The Institute Curie argued that the monopoly will eventually cause a loss of expertise and information among research scientists and physicians because they are prevented from improving diagnostic technologies and method, therefore not under any position to further their research.[49] For example, under Myriad’s superior position, it enjoys the advantage of receiving all the DNA samples from high-risk individuals and build up its genetic data bank, thus providing itself strong control over main research materials, at the expense of other researchers.[50] Besides, Professor Stratton claimed that the impact of patents on research is unacceptable because most research in the private sector will not be carried out due to the fear that the commercial value of their research will eventually be owned by the company having monopoly in the diagnostic test.[51] A survey conducted among 74 laboratory physicians indicated that 48 percent have not developed a clinical test due to patents, while 25 percent put aside a clinical test they had developed after receiving letters from patent holder claiming infringement.[52] For example, testing for breast cancer, Canavan disease, Charcot-Marie-tooth disease and Alzheimer’s disease have been stopped because of this.[53] Besides, researchers are of the opinion that patents imposed on the use of test can undermine their activities as unknown genetic mutation could well be disclosed by diagnostic testing.[54] Moreover, in order to validate and extend the early discovery of a disease gene, there must be an increased clinical studies and this becomes inconvenient and high-priced when access to the patented subject-matter is restricted.[55] Also, Dr Judy Kirk claimed that genetic research would be stifled because the research study is unable to pay for the amount of genetic testing that is ridiculously priced.[56] Patient Access Patent protection can also be a great stumbling block to competition and in turn compromise the benefits that a free market can bring to the industry.[57] From a consumer’s perspective, patents can result in the price for the in vitro test being very expensive because the patent owner is not under any price restraints imposed by competition in the industry.[58] Another reason for the high cost is due to the need to pay for royalties for each patent, known as royalty stacking.[59] This was exactly what happened in Myriad.[60] Thus, access to the test is only available to those who can afford to pay the inflated price and this is definitely not in the best interest of society. Apart from this, patents would result in a single provider having a monopoly over the particular genetic test, thus disabling patients from accessing alternative testing as double confirmation or as a second opinion.[61] Patents can potentially cause the concentration of expertise to be vested in one single provider who holds the patent rights, and in turn negatively affect quality and validation, ultimately having a detrimental effect on patient access.[62] Arguments for Patents of Diagnostic Tests As we move beyond the improperly restricted view of patents, we would come to realize that there is also considerable support for patents of diagnostic methods, including in vitro methods. It must be noted that nowadays in vitro diagnostics plays an important role in providing diagnostic solutions for a huge amount of diseases, it is also the initial step in the whole treatment process, and that patents has played an important role in this.[63] Research and Development As has been argued that patents could potentially stifle research and developments in terms of health care improvement, a broad exclusion of patents could also have the same result[64] In fact, this situation is worse as it will happen at an early stage of research while innovators still need to rely heavily on venture capital to fund the years of research.[65] Moreover, the royalty fee paid by academic researchers is much lower than what is paid by commercial researchers.[66] This is in the interest of society as social cost of patents is minimized while the profits of patent holders are increased and this allows a wider market to be exploited.[67] Acknowledging the need to develop such test for health care, investments should be encouraged instead of being deterred.[68] In fact, empirical studies have indicated that exclusivity creates incentives for development of diagnostic tests.[69] Moreover, innovation and invention both demand foresight, planning and organization in the employment of resources, and this arguably could not be achieved without the rights of a patent.[70] Disclosure of Information It should be noted that in the absence of patent protection, part of the know-how may never be disclosed and in turn affect cost of research for people seeking to develop such tests.[71] The rationale behind this is that no company would be willing to invest in creating a valuable database if value of the data can anyhow be acquired by competitors.[72] The SACGHS report has in fact indicated that the absence of patent protection promotes secrecy, and this is not in the interest of society because people are denied new knowledge.[73] Increased Investments It has been argued that patent protection would lead to exorbitant cost for test. However, these social costs should be tolerated as they are outweighed by the market advantage of an increased investment in innovation arising from patents.[74] This is in the public interest, thereby justifying it as having a net social benefit.[75] Besides, academic commentators have opined that high profitable returns resulting from the use of patent is what attracts investors to devote to long run commitments.[76] Moreover, without a patent system, the problem of free-riding will result in a market that undersupplies inventions.[77] The patent system focuses on correcting this market failure.[78] On a side note, in the very recent case of Ambry v Myriad, it is ruled that before Myriad’s patent claims has been struck down, other competing test on the market are still allowed.[79] Thus it can be seen that competition in the genetic testing market is necessary for the benefits of consumers.[80] Patient Access Despite various arguments on the negative impact of patents on patient access, evidence has shown that these patents are not really a problem in Europe because they are generally ignored.[81] In the US, Barbara Weber has also expressed that patents such as the Myriad diagnostic patent has not in any way affected patient access.[82] It might be true that Myriad has the only clinical test, it is also the only lab which is capable of doing it right with of the resources they own.[83] On the other hand, one of the biggest problems that patients who need a diagnostic testing service have to struggle with is insurance reimbursement.[84] The patent system provides incentives for patent holders to collaborate with insurance companies and overcome this problem.[85] Besides, with regards to BRCA testing, patents have empowered patients to take control of their genetic information, considering the fact that medical establishment has limited patient access to this information.[86] Solutions Despite the potential for patents to have negative impact on various issues discussed above, there are several ways to deal with the objections against diagnostic patents in particular. Research Exemption Patent law in Europe has the feature of research exemption that permits researchers to use a patented material without infringing the rights of the patent holder. In fact, most countries in Europe have such provisions that achieve the same effect.[87] This also applies to both the DNA sequence and diagnostic or screening methods thus exempting fundamental research from any infringement. Therefore, the concern about patent having a stifling effect on research is theoretical, at least in Europe. However, it must be noted that exact scope of these exemption differs between countries, and such provision does not exist in the US.[88] Government Intervention While it is true that patents would cause the price of the diagnostic test to increase, acting against it predominantly for this reason will however not be an appropriate strategy because patent law is not a price regulating instrument.[89] The denial of patent would not necessarily make the price lower even though it admittedly would do so in certain cases.[90] Thus, the more effective strategy of influencing the cost of such health care services is government intervention such as imposing maximum prices, funding and organization, as seen in many European countries.[91] Conclusion In conclusion, the patentability of gene and diagnostic methods differs in the US and Europe. Patents on diagnostic test have advantages as well as disadvantages. Nevertheless, there is sufficient evidence that the patent system has functioned satisfactorily for the dissemination of knowledge and the development of technology, and has no doubt benefited the society ultimately.[92] Therefore, any disadvantages seems to have been outweighed by the advantages discussed above. In all, the disadvantages may not be a good reason to overhaul the patent system for diagnostic tests, as these problems may also be solved by ways discussed above.
[1] European Patent Convention 2000, Art 52(1) [2] ibid [3] ibid, Rule 43(1) [4] ibid, Rule 43(1)(a) [5] ibid, Rule 42(1)(c) [6] ibid, Art 52(2) [7] ibid, Art 52(3) [8] Patents Act 1977 [9] ibid, s 4A(1)(b). [10] 35 United States Code 101 [11] ibid, MPEP s 2104 [12] ibid, MPEP s 2106 [13] ibid [14] Case C-377/98 Kingdom of the Netherlands v European Parliament and Council of the European Union [2001] ECR I-7079 [15] Sven Bostyn, ‘Patenting DNA Sequences (Polynucleotides) and Scope of Protection in the European Union : An Evaluation’ (2004) http://ec.europa.eu/internal_market/indprop/docs/invent/patentingdna_en.pdf accessed 4 May 2015 [16] ibid [17] ibid [18] Antamanid BPatG, GRUR 1978, as cited in Sven Bostyn, ‘Patenting DNA Sequences (Polynucleotides) and Scope of Protection in the European Union : An Evaluation’ (2004) http://ec.europa.eu/internal_market/indprop/docs/invent/patentingdna_en.pdf [19] Stephen Merrill, Richard Levin, Mark Myers, ‘A Patent System for the 21st Century’ www.nap.edu/html/patentsystem/0309089107.pdf accessed 23 April 2015 [20] Sven Bostyn, ‘Patenting DNA Sequences (Polynucleotides) and Scope of Protection in the European Union : An Evaluation’ (2004) http://ec.europa.eu/internal_market/indprop/docs/invent/patentingdna_en.pdf accessed 4 May 2015 [21] Diamond v Chakrabarty [1980] 447 US 303 [22] Naomi Hawkins, ‘An exception to infringement for genetic testing’ (2012) 43(6) IIC 641-661 [23] Association for Molecular Pathology v Myriads Genetics [2013] WL 2631062 [24] ibid [25] Sven Bostyn, ‘Patenting DNA Sequences (Polynucleotides) and Scope of Protection in the European Union : An Evaluation’ (2004) http://ec.europa.eu/internal_market/indprop/docs/invent/patentingdna_en.pdf accessed 4 May 2015 [26] ibid [27] European Patent Convention 2000, Art 53(c) [28] Sven Bostyn, ‘Patenting DNA Sequences (Polynucleotides) and Scope of Protection in the European Union : An Evaluation’ (2004) http://ec.europa.eu/internal_market/indprop/docs/invent/patentingdna_en.pdf accessed 4 May 2015 [29] [30] [31] Sven Bostyn, ‘Patenting DNA Sequences (Polynucleotides) and Scope of Protection in the European Union : An Evaluation’ (2004) http://ec.europa.eu/internal_market/indprop/docs/invent/patentingdna_en.pdf accessed 4 May 2015 [32] ibid [33] ibid [34] USTPO, ‘Evaluating Subject Matter Eligibility under 35 USC 101’ http://www.uspto.gov/sites/default/files/patents/law/exam/101_training_aug2012.pdf accessed 25 April 2015 [35] Mayo Collaborative Services v Promethues Laboratories [2012] 566 US ___???? [36] ibid [37] ibid [38] ibid [39] Association for Molecular Pathology v Myriads Genetics [2013] WL 2631062 [40] Case Report, ‘United States of America: Patent Act, 35 U.S.C. s.101 - AMP v USPTO and Myriad’ (2011) 42(8) IIC 976 [41] ibid [42] Sven Bostyn, ‘Patenting DNA Sequences (Polynucleotides) and Scope of Protection in the European Union : An Evaluation’ (2004) http://ec.europa.eu/internal_market/indprop/docs/invent/patentingdna_en.pdf accessed 4 May 2015 [43] ibid [44] ibid [45] ibid [46] ibid [47] David Booton, ‘Patents for Diagnostic Tools : An Economic Analysis’ (2013) 3 IPQ 187-213 [48] SACGHS, ‘Gene Patents and Licensing Practices and their impact on Patient Access to Genetic Tests’ http://osp.od.nih.gov/sites/default/files/SACGHS_patents_report_2010.pdf accessed 1 May 2015 [49] Matthew Rimmer, ‘Myriad Genetics : Patent Law and Genetic Testing’ (2003) 25 EIPR 20-33 [50] ibid [51] ibid [52] College of American Pathologists, ‘Statement to the Secretary’s Advisory Committee on Genetics, Health and Society’ http://www.cap.org/apps/docs/advocacy/comments/SACGHS_comments_gene_patents.pdf accessed 28 April 2015 [53] ibid [54] David Booton, ‘Patents for Diagnostic Tools : An Economic Analysis’ (2013) 3 IPQ 187-213 [55] ibid [56] Matthew Rimmer, ‘Myriad Genetics : Patent Law and Genetic Testing’ (2003) 25 EIPR 20-33 [57] David Booton, ‘Patents for Diagnostic Tools : An Economic Analysis’ (2013) 3 IPQ 187-213 [58] ibid [59] Naomi Hawkins, ‘An exception to infringement for genetic testing’ (2012) 43(6) IIC 641-661 [60] Association for Molecular Pathology v Myriads Genetics [2013] WL 2631062 [61] Naomi Hawkins, ‘An exception to infringement for genetic testing’ (2012) 43(6) IIC 641-661 [62] ibid [63] Sven Bostyn, ‘Patenting DNA Sequences (Polynucleotides) and Scope of Protection in the European Union : An Evaluation’ (2004) http://ec.europa.eu/internal_market/indprop/docs/invent/patentingdna_en.pdf accessed 4 May 2015 [64] ibid [65] Christopher Holman, ‘The Critical Role of Patents in the Development, Commercialization, and Utilization of Innovative Genetic Diagnostic Tests’ http://cpip.gmu.edu/wp-content/uploads/2014/04/Holman-Christoher-The-Critical-Role-of-Patents-in-Genetic-Diagnostic-Tests.pdf accessed 4 May 2014 [66] David Booton, ‘Patents for Diagnostic Tools : An Economic Analysis’ (2013) 3 IPQ 187-213 [67] ibid [68] Sven Bostyn, ‘Patenting DNA Sequences (Polynucleotides) and Scope of Protection in the European Union : An Evaluation’ (2004) http://ec.europa.eu/internal_market/indprop/docs/invent/patentingdna_en.pdf accessed 4 May 2015 [69] SACGHS, ‘Gene Patents and Licensing Practices and their impact on Patient Access to Genetic Tests’ http://osp.od.nih.gov/sites/default/files/SACGHS_patents_report_2010.pdf accessed 1 May 2015 [70] David Booton, ‘Patents for Diagnostic Tools : An Economic Analysis’ (2013) 3 IPQ 187-213 [71] Sven Bostyn, ‘Patenting DNA Sequences (Polynucleotides) and Scope of Protection in the European Union : An Evaluation’ (2004) http://ec.europa.eu/internal_market/indprop/docs/invent/patentingdna_en.pdf accessed 4 May 2015 [72] Christopher Holman, ‘The Critical Role of Patents in the Development, Commercialization, and Utilization of Innovative Genetic Diagnostic Tests’ http://cpip.gmu.edu/wp-content/uploads/2014/04/Holman-Christoher-The-Critical-Role-of-Patents-in-Genetic-Diagnostic-Tests.pdf accessed 4 May 2014 [73] SACGHS, ‘Gene Patents and Licensing Practices and their impact on Patient Access to Genetic Tests’ http://osp.od.nih.gov/sites/default/files/SACGHS_patents_report_2010.pdf accessed 1 May 2015 [74] David Vaver, ‘Sprucing Up Patent Law’ http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1879206 accessed 1 May 2015 [75] ibid [76] Zorina Khan, Kenneth Sokoloff, ‘Institutions and Technological Innovation During Early Economic Growth : Evidence from the Great Inventors of the United States, 1790-1930’ (2004) American Economic Review 395-401 [77] David Vaver, ‘Sprucing Up Patent Law’ http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1879206 accessed 1 May 2015 [78] David Booton, ‘Patents for Diagnostic Tools : An Economic Analysis’ (2013) 3 IPQ 187-213 [79] John Conley, ‘District Court Denies Myriad’s Preliminary Injunction Against Ambry’ http://www.genomicslawreport.com/index.php/2014/03/18/district-court-denies-myriads-preliminary-injunction-against-ambry accessed 27 April 2015 [80] ibid [81] Naomi Hawkins, ‘An exception to infringement for genetic testing’ (2012) 43(6) IIC 641-661 [82] Matthew Rimmer, ‘Myriad Genetics : Patent Law and Genetic Testing’ (2003) 25 EIPR 20-33 [83] ibid [84] Christopher Holman, ‘The Critical Role of Patents in the Development, Commercialization, and Utilization of Innovative Genetic Diagnostic Tests’ http://cpip.gmu.edu/wp-content/uploads/2014/04/Holman-Christoher-The-Critical-Role-of-Patents-in-Genetic-Diagnostic-Tests.pdf accessed 4 May 2014 [85] ibid [86] ibid [87] Sven Bostyn, ‘A test too far? A Critical Analysis of the non-patentability of Diagnostic Methods and Consequences of BRCA1 Gene Type Patents in Europe’ (2003) 5(4) BSLR 111 [88] http://osp.od.nih.gov/sites/default/files/SACGHS_patents_report_2010.pdf accessed 1 May 2015 [89] ibid [90] ibid [91] Naomi Hawkins, ‘An exception to infringement for genetic testing’ (2012) 43(6) IIC 641-661 [92] Sven Bostyn, ‘A test too far? A Critical Analysis of the non-patentability of Diagnostic Methods and Consequences of BRCA1 Gene Type Patents in Europe’ (2003) 5(4) BSLR 111
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