Biotechnology Patents Issues, Concerns, and Unintended Consequences

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Biotechnology PatentsIssues, Concerns, and
Unintended Consequences
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Do Biotechnology PatentsStifle Innovation?
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The Tragedy of the Anticommons

• Tragedy of the commons
• Overuse of commonly owned resources results when
  there are no restrictions on use or incentives to
  conserve
• Hardin, G. (1968) Science 1621243
• Tragedy of the anticommons
• Multiple owners of a given resource can result in
  underuse of that resource
• So-called patent thicket threatens innovation
• High transaction costs
• Significant delays due to multiple negotiations
• Failure to obtain only one of many licenses can
  derail project
• Biomedical research particularly vulnerable
• DNA, research tools, reagents
• Heller, M.A and Eisenberg, R.S. (1998) Science
  280698

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The Tragedy of the Anticommons

• Common example- Golden Rice
• Rice expressing pro-Vitamin A-three foreign genes
  two from daffodil one from a bacterium to combat
  vitamin A deficiency, a serious third world
  problem
• Technology encompasses 40 patents and contractual
  obligations (MTAs) affecting commercial
  development
• Madey v. Duke impact on academic freedom
• Research exemption does not apply by virtue of
  non-profit status
• Universities have commercial interests
• Obtaining government and private grants
• Sports marketing
• Technology Transfer
• Patent Trolls- Exert rights in large patent
  bundles
• Time lost in litigation
• Money lost rather than fighting

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The Myth of the Anticommons

• If tragedy of the anticommons exists, should
  see
• Decrease in research development expenditure
• Fewer innovative therapies tested
• In fact, since 1998 see
• Research development expenditures increased 60
• Venture capital funding increased 200
• Employment increased 21
• Clinical trials increased 37
• T. Buckley (2007) Biotechnology Industry
  Organization (BIO) White Paper

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The Myth of the Anticommons

• Madey v. Duke shows little impact on academic
  research
• Only 8 of researchers report being aware of
  third party IP
• Of the 8, 12 report changing their approach and
  16 report a delay of more than one month
• However, this simply means academic researchers
  are routinely infringing patents.
• Generally, companies are not exerting their
  patent rights against academic researchers- not
  biting the hand that feeds?
• Will university technology transfer/licensing
  change this benevolence?
• Academic DNA patent licensing practices are
  diverse and flexible
• Non-exclusive licensing
• Retained academic and humanitarian rights
• Field restrictions
• Patent pools

Source Walsh et al. (2005) Science 3092002-2003
Source Pressman et al. (2006) Nat. Biotechnol.
2431-39
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Gene Patenting
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Gene Patenting

• Gene patenting has been possible since the
  Diamond v. Chakrabarty case
• Claims drawn to isolated nucleotide sequence to
  avoid product of nature rejections
• Both composition and method of use claims are
  possible
• Compositions
• Isolated nucleotide sequence
• Expression vectors
• Probes
• Methods of use
• Production of therapeutic proteins
• Gene therapy
• Diagnostics
• Transgenic plants and animals

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Gene PatentingThe Numbers

• 4,270 patents claiming human DNA sequences
• 63 patents owned by private firms
• e.g., Incyte, Human Genome Sciences, Isis, Amgen,
  Glaxo, Millennium, Roche/Genentech, Celera
  (Applera), Myriad
• Represents 4,382 genes or 20 of the human
  genome
• 3,000 genes have only a single intellectual
  property rights holder

Source Jensen and Murray (2005) Science
310239-240.
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Gene Patenting Controversy Public Awareness

• Public awareness of gene patenting resulted from
  several events
• High profile of the Human Genome Project
• Publication of Next, introduction of Genomic
  Research and Accessibility Act and New York
  Times Op-Ed piece by Michael Chrichton
• Legal Activities of Myriad Genetics
• From awareness grew controversy

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Gene Patenting Run Amok

• Dramatic increase in the number of DNA sequence
  patents filed during Human Genome Project
• Intellectual property land grab
• Rush to file resulted in substandard patent
  applications claiming
• DNA fragments
• SNPs
• Domains
• Genes with no known function
• Poor quality applications and public pressure
  forced a re-evaluation of patentability
  guidelines by USPTO
• New guidelines issued in 2001 to ensure only
  tangible inventions receive protection

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Gene Patenting Controversy The Myriad Firestorm

• In 2001 Myriad Genetics begins to exert its
  patent rights relating to breast and ovarian
  cancer susceptibility genes, BRCA1 and BRCA2
• Testing must occur solely through Myriad or its
  licensees
• Test 3000
• Opponents contend Myriad position restricts
  patient access
• High cost
• Not all insurance providers reimburse
• Lack of second opinion opportunity
• Opponents cite this as an example of private
  profit at public expense
• Development costs significantly lower than
  biologics
• Less regulatory hurdles for approval

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Gene Patenting ControversySummary

• Product of nature
• Wheres the invention?
• Genes must be isolated, altered to be patented
• Ownership
• How can a company own my genes?
• Patents do not convey ownership
• Limits to Access
• Profits versus the public good

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Stem Cell Patenting
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Stem Cell Patenting

• Stem cell patenting is in a position to be as
  controversial as gene patenting
• Perfect storm conditions
• Ethical, moral, religious issues
• Federal research restrictions
• Miracle cure aura
• Intense media coverage
• Ten year market potential of 4 billion
• Arguments for and against stem cell patenting are
  similar to those of gene patenting

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Stem Cell Patenting

• Through 2005- Patents covering uses methods or
  compositions involving human or animal stem
  cells
• 1,724 granted and 3,711 pending- USPTO
• 421 granted and 560 pending- EPO
• 4,265 published- PCT

Ownership of Granted Stem Cell Patents
Source Bergman Graff (2007) Nat. Biotechnol.
25419-424
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Stem Cell Patenting

• Currently, most of the controversial focus on
  stem cell patents is on three patents in
  particular
• Primate Embryonic Stem Cells
• US 5,843,780- Primate embryonic cells
• US 6,200,806- Human embryonic stem cells (hES)
• US 7,029,913- Cultures of hES cells
• James A. Thomson, inventor
• Wisconsin Alumni Research Foundation (WARF),
  assignee

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Follow-On Biologics
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Generic Drugs

• Prior to 1984, FDA approval of generic drugs
  required the same clinical trials as brand-name
  drug
• Duration and costs of trials had a dramatic
  negative impact on introduction of generics
• Only 35 of brand-name drugs had generics
• Drug Price Competition and Patent Term
  Restoration Act-1984 (Hatch-Waxman Act)
• Sought to balance patent protection and generic
  drug availability

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Generic Drugs

• Long clinical trial times required by FDA before
  approval eats into patent life
• Hatch-Waxman provides for patent extension- 100
  approval time and 50 of trial time maximum of 5
  years
• Hatch-Waxman Abbreviated New Drug Application
  (NDA)- prove bioequivalence, not efficacy
• Small molecules easy to demonstrate molecular
  equivalence
• /- 20 bioavailability of brand-name
• No generics approved within 5 years of brand-name
  approval, so-called data exclusivity
• NDA data considered trade secret
• Safe Harbor provision
• Exempt from infringement if generating data for
  FDA
• Established process for patent challenge

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Summary Patent Issues in Biotechnology

• Patents offer inventors a limited monopoly to
  their inventions in exchange for sharing the
  inner workings of those inventions with the
  public
• Provides incentives to inventors
• Stimulates innovation
• Changes in case law that allowed the patenting of
  biological processes, components and organisms
  led to the advent of the biotechnology industry
• Diamond v. Chakrabarty
• The Bayh-Dole Act helped bring university
  research from the lab to the marketplace
• A large percentage of university licensing is in
  the life sciences
• Long development times and high costs of bringing
  biotech products to market make patents vital to
  the biotechnology industry
• Biotechnology patents raise many ethical issues
  for the public
• Patenting of life
• The public good vs. private profits
• Biotechnology companies and public policy makers
  must work together to ensure that patents
  continue to stimulate innovation and bring new
  diagnostic, preventative and therapeutic products
  to market
• Avoid the anticommons
• Preserve academic freedom