An increasing number of scientists and companies are starting to experience some of the negative implications of applying the patent system to life forms. Tremendous costs for law suits and huge time delays in getting products to the markets are just some of the factors that become apparent. The most recent controversy was triggered off by the US National Institutes of Health patent application for almost 3000 human gene fragments. The situation is getting to a point where companies are starting to argue that the whole thing might work against innovation. In the meanwhile, the European Parliament - not bothered by all of this - adopted a report that basically endorses the EC Commission's proposal to allow for the patenting of life forms in Europe.
"The patent system, designed to nurture innovation, is in danger of strangling the world's biotechnology companies" . The radical statement of yet another NGO joining the campaign against the patenting of life forms? No. It is the first sentence of an article in the Financial Times, not really a newspaper renowned for its anti-patent rhetorics. It reflects a growing concern, also within the corporate sector, that the application of the patent system to living matter is leading us nowhere. Corporations which for years have been sending their lobbyists to Washington and Brussels, arguing that there is no future for humanity without a strong biotech patent system, are now starting to bite their tongues.
Biotech companies seem to start realising that the patenting of life forms is not all that straight-forward and marvellous as they might have dreamed. It often involves long and costly law suits, with results that might be detrimental to their interests. Take, for example, the case of a new blood-boosting biotech drug called EPO. Two US companies, Genetics Institute (GI) and Amgen, developed different versions of it and each got its own patent on it in 1987. Amgen got its version approved and on the market, and is making some $US 300 million a year on it. GI, however, quickly found itself in court, as Amgen claimed that they were guilty of patent infringement. The battle lasted until 1991, when the US Court of Appeals ruled that GI was guilty indeed and should be barred from the US market. Additionally, GI might have to pay $ US 11 million in damages to Amgen.
Another illustration of the patent nightmare facing the industry is a conflict over a new technique for detecting genetic mutations, called LCR. The first LCR-related patent was awarded to Applied Biosystems Inc. in 1989, but later several other contenders came in filing patent applications for their versions of the technique, including Abbott Laboratories, Beckman Research Institute and Cornell University. Nobody really knows what will happen, and several companies and institutes might end up having to drop their research or pay royalties. "There is a lot of hoopla out there. Some of these people are going to be very disappointed," warns one of the scientists involved.
Wasting research resources
While patenting was meant to stimulate innovation, the centre of action has resolutely moved from science to law, and innovation is suffering. Science waiting for the outcome of yet another law suit before continuing the research. Entire research projects being suspended due to unfavourable decisions in court. And.... lots of money wasted on legal advisors rather than on moving the technology forward. This is something NGOs have been predicting and warning against all the way through, but now they find odd allies in their concerns about the patenting of life forms.
Biotech companies spend more time and money filing and defending patent applications than any other industrial sector today. Take Celltech of the UK, for example. This biotech boutique spends some $ US 380,000 a year managing its intellectual property portfolio -- a stiff figure compared to the total $US 6.3 million spent on their annual research work. The Financial Times estimates that total worldwide spending on biotech patents probably exceeds $US 100 million! Money for lawyers, lost to the science. Many researchers are getting frustrated and start questioning the sense of all this. "The whole patenting process hurts industry and creates uncertainty. It makes it difficult to make marketing plans," complains Walter Haussler, lawyer for Cornell University. He is in the midst of several complicated law suits on Cornell's biotech research. He continues: "As if in a game of poker, the question is: who will be left holding the cards at the end of the game." Haussler's counterparts in Europe are even more straight-forward. John Savin of the London-based Centre for Exploitation of Science and Technology thinks that the growing patent jungle in the USA, "is definitely acting as a disincentive to proper investment in biotechnology by European countries."
Monopolising the human genome
The bomb under the already chaotic patent situation was placed by the US National Institutes of Health (NIH) when in 1991 they filed patent applications for almost 3,000 fragments of human genes without knowing what these fragments really do in our bodies. Together with other agencies, NIH is involved in mapping the human genome with the expectation that this research might provide useful new treatments for genetically-determined human diseases. The reasoning of NIH to take the patent route is that they have to protect this material in order to be able to give waterproof monopoly licences to any company who wants to take the research further and develop something useful out of it.
NIH's move caused a wave of protest throughout the international scientific community -- and even brought James Watson, head of the Human Genome Project to resign in outrage. Obviously the ethical question as to whether someone should be allowed to patent parts of the human body is the first one that comes to a normal person's mind. But those already enroled in the patent game also raised other objections. Most of NIH's patent applications refer to gene fragments, parts of genes whose functions nobody knows much about. It is like saying: I found something, I don 't know what it really is, but it might be useful sometime in the future and I call it an invention so give me a monopoly on it.
Normally, three requirements have to be met to obtain a patent: the invention must be (1) new, (2) useful, and (3) non-obvious. In a provisional decision last month, the US Patent Office found that NIH's applications filled none of these requirements. The DNA fragments are not new, as the description of the fragments were based on existing DNA libraries, they are not necessarily useful as nobody knows what they do, and they are obvious in the sense that several of the genes the NIH had described in full contain fragments that were already published elsewhere.
However, despite the interim "no" of the US Patent Office, everybody expects that the applications will be approved in the end. The agency initially rejects up to 90% of applications, but often grants patents after applications are rewritten. Convinced that this will indeed happen, NIH already applied for patents on an additional 4,000 human gene sequences. They turn out some 1,500 DNA fragments per month, so the patent office can expect more applications in the future. Many others are now also rushing to get their share of the human cake. One starts wondering how many gene fragments the human body has and how long it will take before the cake is finished and monopolised. Britain's Medical Research Council (MRC) was one of the first to protest the NIH move to apply for patents, but then followed suit and filed patent applications with the UK patent office for yet another 1,100 human gene fragments. David Owen of MRC remains worried though: "What concerns me is that we are moving into a world where more and more marginal inventions are being patented. That devaluates the currency of patents -- to the point where the patent system might become a disincentive, an obstacle to progress."
This is what also starts bothering the companies. The NIH case provoked strong reactions among the biotech industries. Normally in favour of patenting anything you can get hold of, the companies start to worry. The US Industrial Biotechnology Association (IBA) reacted strongly against the move, and warned that the patenting of gene fragments will encourage companies "to abandon current research efforts that are aimed at product development in favour of routing genetic sequencing for the purpose of staking claims to as much of the genome as possible." The US Pharmaceutical Manufacturers Association comes out even more strongly saying that "A governmental policy of ownership and licensing of gene sequences would inevitably impede the research and development of new medicines in this country."
The corporate patent-pushers got themselves into an interesting mess. By lobbying policy-makers to increasingly adopt strong patent practices, they now find that this might be undermining their own commercial interests. They not only find themselves spending growing amounts of money on law suits, but also find entire areas of research fenced by patent protection and blocked from commercialisation. The patenting of gene fragments as described above, is a case in point. Once a company "invents" -- as lawyers would see it -- a really useful gene, it might well be that it contains fragments that are already described and patented, rendering the "invention" of the "new" gene a perfectly unpatentable "obvious" product.
The Europeans move ahead anyway
Over in Europe, the policy makers don 't really seem to care. Four years of painful work to inform the general public about the implications of patenting life and mobilise broad debate over the European Commission's 1988 proposed directive to allow for life patents came abruptly to a halt the last week of October. The European Parliament's Socialist Group, the largest party, opted to go ahead and get the vote over with once and for all. At its plenary session on October 29, the Parliament voted by a small majority (105 for, 82 against, 16 abstentions) to adopt the Legal Committee's report on the directive and send it on to Council and the Commission. Members of the Group aggressively forced a plenary vote in Strasbourg despite the fact that three other Committees had urged changing or rejecting the directive.
In the three years since the Commission presented its draft Directive on "The Legal Protection of Biotechnological Inventions" to the Parliament, it has been referred back to the Legal Committee three times to consider essential social, ethical and economic questions raised by an increasing number of NGOs and parliamentarians. In all these years, those questions never have been addressed satisfactory. After three years, nothing is solved, nothing is answered and the public debate on the issues raised by the patenting of life forms just got under way. The affirmative vote forced upon the Parliament last month is one of resignation.
The last time the plenary sent the report back to the Legal Committee was in June with the request to consider possible incompatibilities with the UNCED Convention on Biological Diversity, signed by all EC memberstates. That legally-binding convention does stipulate a number of limitations on patents as applied to living matter. It also was a reason to involve the Development and the Environment Committees in the discussions, who were asked to submit opinions. But the Legal Committee did not bother to wait for their opinions, and it sent the unmodified report straight back to the plenary for voting in October. Clearly upset by this procedure, deputy Wilfried Telkaemper protested this procedure on behalf of the Development Committee and noted that "all development NGOs which have taken a position on this matter have been against extending the patent system to biotechnological inventions on the basis of potential consequences for the economies of developing countries and in particular Third World farmers." The strategy of the Legal Committee and the Socialist Group was clear enough: force a vote before other Committees responsive to all kinds of other interests can voice their concern. While controversy abounded in the Parliament, the Socialists were fed up. They knocked down every piece of protest against the directive as "Green manipulation", quoting the negative positions of the German Plant Breeders ' Rights office, international church organisations and animal welfare agencies as part of one anti-patenting Green plot.
The lack of seriousness of the Legal Committee's report and the totally-outdated 1988 directive itself might backfire on the patent-pushers. The Council of Ministers has already rehauled the directive several times, and the report of the Legal Committee has been described by many legal experts as a juridical piece of rubbish. After so many years of discussion, the European Parliament lost a unique opportunity to make a difference on an important piece of legislation. But this certainly does not mean that the battle is over. The European Commission technically has to take into the account the adopted report of the Legal Committee. But Council has a whole new directive it would prefer to see discussed. In any case, the whole thing has to go back to the parliament for a second reading. Also, in the Maastricht crisis, where EC countries are grumbling about how much a single-market Europe takes away from national sovereignty, the convoluted tickings of EC procedure on this directive might raise further rows at the national level.
Clive Cookson, Julie Clayton: "Of mice, men and money", Financial Times, June 3, 1992
Celia Hampton, Simon Cohen: "A patent for Dr. Frankenstein", Financial Times, August 14, 1992
Rebecca Eisenberg: "Genes, Patents and Product Development", Science, Vol 257, 14 August 1992
The Economist, several issues of 1992: August 22, October 3, October 24.
"Tired Parliament Bows to Genetic Engineering Industry", Press release of the Green Group of the European Parliament, Strasbourg, 29 October 1992