Patenting in Biotechnology

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EUROPEAN FEDERATION

OF BIOTECHNOLOGYTASK GROUP ON

PUBLIC PERCEPTIONSOF BIOTECHNOLOGYINFORMATIONFor further information concerning BriefingPapers and other publications and activities of the European Federation of Biotechnology,Task Group on Public Perceptions of Biotechnology, contact:Prof John Durant (chairman)R esearch and Information Services

National Museum of Science & IndustryGB-SW7 2DD LondonTel: +44 171 9388201Fax: +44 171 9388213Email: [email protected] Dr D J Bennett (secretary)Secretariat, EFB Task Group on Public

Perceptions of BiotechnologyOude Delft 60 NL-2611 CD DelftTel: +31 15 2127800Fax: +31 15 2127111Email: [email protected]://www.kluyver.stm.tudelft.nl/efb/home.htm Copyright EFB Task Group on PublicPerceptions of Biotechnology, 1996.This Briefing Paper is intended for informationand does not represent the views of theEuropean Federation of Biotechnology or anyother body. This publication may be reproducedfor the purposes of research or study only, withdue acknowledgement of the copyright owner and a notice in terms of this notice. No part mayotherwise be reproduced without the permission


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of the copyright owner. B riefing Paper

1 S econd Edition, S eptember 1996

Patenting in B iotechnologyl N ew forms of lifel The debate about patents in biotechnologyl International developmentsl EC directive on protection of biotechnological inventionsThe techniques of genetic modificationallow novel characteristics to be introduced

into living organisms, but there is debateover how far resulting modified life formsshould be patentable. US law allows

patents to be considered for all modifiedorganisms whether they be microorganisms,

plants or (non-human) animals.In Europe, a European Commission

proposal for a Directive is under consideration

to endorse the availability of suchrights in all European Union (EU)countries.This briefing paper is an update of thebriefing paper Patenting Life whichwas published in June 1993. It


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considers the scientific developmentswhich have led to the possibility of patenting living organisms or theirproducts, and the concerns about it . Thepatent law, commercial and ethicalconsiderations pertaining to geneticmodification of naturally occuringsubstances, micro-organisms, plants andanimals differ considerably andtherefore each category is consideredindependently . The overall aim of thisbriefing paper is to provide balanced

information and to advance the publicdebate about these topics . The paper results from the combinedcontributions of patent experts,scientists, industrialists andenvironmental and consumer group representativesfrom throughout Europe .

NEW FORMS OF LIFER ecombinant DNA technology is the termused for a series of techniques that can beused to modify the basic genetic make-upof a living organism by inserting (or removing) sections of DNA, a moleculethat carries hereditary information.Following the first demonstration of thesetechniques in 1973, their potential to

introduce novel characteristics intomicrobes, plants and animals has beenrapidly explored. Initial efforts focused onmicroorganisms because of the relativesimplicity of their structure, and a number of commercial processes now use


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microorganisms which have beengenetically programmed to producematerials which they would not producenaturally ( eg drugs such as human insulin,growth hormone and certain enzymes).With plants, the intentions of the traditional

breeder and the genetic engineer are thesame - to insert into or modify the genometo introduce a novel trait. The extra power of genetic engineering comes from itsability to control more precisely theintroduction of new traits and to introduce

genetic material from unrelated species of plants and from organisms other than plants. Genetically modified plants includevarieties with traits such as resistance toherbicides, pests or diseases, enhancednutritive content and new shade of flower colouring.Genetic modification of farm animals andfish is still largely at the experimentalstage. The aims of research includeinfection resistance and increasing growthrate. A method for producing

pharmaceutical products via farm animalsmilk is at an advanced stage of development. The first patented geneticallymodified animal, which is available for medical research, is a mouse which isgenetically predisposed to cancer - for usein testing new drugs or chemicals for carcinogenicity.The use of recombinant DNA methods inrelation to human diseases caused by genedefects ( eg cystic fibrosis) is at present


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concentrated on diagnostic applications buttherapeutic applications are also under investigation. The first attempt to modifyhuman body cells in a patient, using thegene transfer technique (somatic genetherapy) was made in the US in 1984. Bonemarrow cells which were unable to producean enzyme essential to the immune systemThe Task Group gratefullyacknowledges the continuingsupport and funding of theEuropean Commission, Directorate

General XII, for this and other issues.were removed from the patient, modified toinclude the gene for the missing enzymeand replaced. This attempt failed, but in1990 a similar method was successfullyused to modify white blood cells genetically.Since then more than one hundredclinical protocols involving gene therapyhave been recommended and clinical trialsare under way in many countries. Moreradical and controversial is the proposal for germ line gene therapy. Such manipulationwould change the genetic make-up of theeggs or sperm produced by an individualand would be carried on to futuregenerations. The general opinion in Europeabout germ line gene therapy is at presentstrongly negative.Innovations such as these are clearly industriallysignificant and potentially valuableto society. Biotechnology companies consider legal protection for these innovations


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to be essential, as evidenced by the multimilliondollar settlements negiotiated insuccessful patent infringement suits. Theytherefore insist that there should be no discriminationagainst legal protection in thisfield as compared with what is available inother technologies. Patent protection givesthe opportunity to the innovator to earn acommercial return on the heavy investmentin this research and therefore to fuel theongoing research necessary for further improvement in eg health care and human

and animal nutrition.PATENTSPatent laws, like trade mark and copyrightlaws, are an important area of intellectual

property protection legislation. In the caseof patent laws, they provide protection of inventions demonstrating the keycharacteristics of novelty, nonobviousness,utility and sufficientdisclosure. The grant of a patent confers acivil right on the patent owner to preventothers from exploiting what is claimed inthe patent, excluding use for scientificresearch purposes. It does not permit the

patent owner to exploit his own invention(eg a patent owner must comply with

national regulationsregarding the use of theinvention), nor does itconfer any right of ownership of patentedmaterials. Patenting in the


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EUcan take place either through national patentoffices or through theEuropean Patent Office(EPO) in Munich whichaffords protection in all, or any selection of, states partyto the European PatentConvention (EPC)1. Practicein the US and Japan is alsoof considerable relevance toEU inventors and

companies, since the USoften provides the largest single market for products developed in the EU; equally the patent protection available to a US or Japanese company in its home marketaffects its ability to compete in other markets.Attempts to harmonise patent law and

practice internationally have not yet fullysucceeded. For example, at present the USallows a one-year grace period between aninventors publication and the deadline for filing a US patent application. In contrast,any public disclosure of an invention

before filing any application is usually fatalto the prospects of protection in Europeancountries. Again, the US settles disputesover priority as between rival claimants for the same invention by comparing actualdates of invention, whereas, in other countries, whoever has the earlier effective

patent application date will usually prevail.Therefore patents encourage secrecy up to


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the point of filing but ensure publication of the information after the granting of a

patent, and thus making it available for research purposes.Another difference is that in US patent lawthe term invention means invention r discovery. In European law discovery isdistinguished from invention and isunpatentable. The distinction is not easy todefine. A discovery involves new knowledgewhereas an invention is a practicalapplication of knowledge. For example: the

elucidation by Crick and Watson of thedouble helix structure of DNA was anunpatentable discovery whereas later exploitation of this to produce DNA artificiallyand to produce new forms of DNAhave given rise to many patents.Naturally occurring substances , presentas components of complex mixtures of natural origin, can in principle be patentedwhere they are isolated from their naturalsurrounding, identified, and made availablefor the first time and a process is developedfor producing them so that they can be putto a useful purpose. This applies toinanimate substances as well as to livingmaterials. In appropriate circumstancessuch substances are not ruled out as merediscoveries but are considered as invention

by the EPO and other legal authorities.Micro-organism patents are nowroutinely granted by the US, European andJapanese Patent offices. Although a US

patent had been granted in 1873 to Pasteur


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for yeast free from germs of disease as anarticle of manufacture , the US courts later held that the discovery of some of thehandiwork of nature was unpatentable. Inthe Chakrabarty case in 1980 the USSupreme Court decided that a microorganismwas not precluded from

patentability solely because it was alive.Thus a Pseudomonas bacterium manipulatedto contain more than one plasmidcontrolling the break-down of hydrocarbons (therefore more useful in

dispersing oil slicks than the naturalorganism containing only one such plasmid) was a new bacterium withmarkedly different characteristics from any

found in nature and hence not natureshandiwork but that of the inventor. Thep roduct of nature objection thereforefailed and the modified organism was held

patentable. This decision was influential inmost other industrially developed countriesand the issue is now settled in law.Plant patents are also obtainable in US,Europe and Japan. The US Plant Patent Actof 1930 is restricted to asexually

propagated plants and over 6,500 of such plant patents have been granted (mostly for rose and fruit trees). In the Hibberd case(1985), following the principle establishedin the Chakrabarty case, it was decided thatnormal US utility patents could begranted for other types of plant eg genetically modified plants.In Europe, patent law was originally


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considered unsuitable for protecting new plant varieties developed by traditional breeding methods. Special national laws of plant breeders rights, which are also calledPlant Variety R ights (PV R ), were thereforeestablished in the 1960s in some countriesas well as the International Union for theProtection of New Varieties of Plants(UPOV, 1961). To avoid legal confusion,

patent law in Europe subsequentlyexcluded plant varieties from patentabilityeg EPC Article 53(b) which excludes

patents for p lant and animal varieties assuch and essentially biological processes for the production of plants and animals.The UPOV Convention was revised in1991 and now does not prevent dual

protection by PV R or patents. This revisionawaits ratification by Member States and istherefore not yet in force.Plant breeders rights have been highlysuccessful in their own sphere. However,legal experts now generally recognise that2 Briefing Pa per no 11 All EU countries, Switzerland, Liechtenstein andMonaco can be covered by a single application.

STEPS IN GENETIC MODIFICATIONMethods of Controlling and Introducing Genes Plasmids Viruses Microinjection N ew Gene Construct Controller and Gene


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Sources of Genetic Diversity Bacteria Plants Fungi Animals Insects ManG ene Identification and

Isolation Identification and Isolation Method develo pment Transfer of G ene Construct into

Living OrganismGenetically Modified Organism

patent law is better suited to the protectionof recombinant methods for producingtransgenic plants and the resulting

products. Patents of this type, claimingmethods and products per se, have beengranted by the EPO.Animal breeds produced by traditionalmethods have no legal system for their

protection comparable to plant breedersrights. Based on the micro-organism and

plant patent precedents, the USCommissioner of Patents declared in 1987that US patents would be granted for nonnaturallyoccurring non-humanmulticellular living organisms including animals. The first transgenic animal

patent was issued in 1988 to HarvardUniversity with claims covering theoncomouse, one in which an oncogenehas been introduced to make the animalmore susceptible to cancer and thereforemore sensitive in testing possiblecarcinogens. After initial reluctance by the


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EPO to grant the corresponding European patent (and a successful appeal to theAppeal Board) the European patent wasissued. This is now under formalopposition by anti-vivisection and animalrights groups. More than 300 patentapplications for transgenic animals have

been filed but so far few have been granted(3 in the EPO, 6 in the US Patent Office).Gene patents are available in all fields of

biotechnology. For recombinant DNAinventions, the patent will claim the

nucleotide sequence coding for the proteinexpression product, vectors eg plasmidscontaining this sequence, micro-organismsor higher organisms transformed with thesequence, and in appropriate cases theexpression product itself (normally only if the product is new per se ). Corresponding

process technology will also be claimed.The patentability of DNA sequences of unknown function is dubious andcontroversial. The Human GenomeOrganisation accepts that patents should begranted for full length genes but is against

patenting fragmentary cDNA sequenceshaving no established utility.

THE DEBATE ABOUT PATENTS IN

BIOTECHNOLOGYThe industries that utilise biotechnologyare convinced that intellectual property

protection should be obtainable for theinventions that stem from research andwhich have commercial potential.


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against each others patents but so far it hasnot achieved a high success rate. Theargument also lies at the heart of the moralobjections many with religious beliefs haveto patenting genes. They regard claims of invention, instead of discovery, tantamountto claiming to be God.Some feel that patenting living thingschange the relationship between humanityand the rest of nature. This is particularlysensitive as regards animals, where patentsare seen as conferring ownership,

thereby undermining the animals right toindependence of being and relegating it tothe status of a mere object. However, plantsand animals are owned by the farmers who

produce them and use them as agriculturalcommodities. All such owners, whether of

patented or unpatented organisms, are bound to respect animal welfare legislation.The opposers can raise the morality issuewhere the patent law allows, as in Europeunder EPC Article 53(a) which forbids

patents for inventions the publication or ex ploitation of which is contrary to ordre public (public order) or to morality. Themorality objection is being currently usedagainst the European oncomouse patent. To

programme an animal genetically for certain death in laboratory experiments ismorally repugnant to these opposinggroups and they feel in conscience bound to

protest. Animals have, however, long beenused as disease models. The response of the

patent authorities may depend on whether,


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in the light of general public acceptance of the use of test animals in research to findcures for serious human diseases, the use of the oncomouse would be generallycondemned.The objection to animal suffering may alsoapply to the genetic modification of farmanimals. One early experiment to insert agrowth hormone gene into a pig in order toincrease growth rate succeeded but causedsevere unforeseen side effects includingarthritis. Animal welfare groups argue that

patents will encourage more research onanimal genetic modification, which theyoppose on grounds of possible sufferingand of principle. Intended to prevent unduesuffering, legislation requires the grantingof animal experimentation licenses and fulldisclosure of the experimentation.Freedoms for breeders and farmers areseen by some groups as threatened by

patents on transgenic plants and animals.Under PV R breeders previously enjoyedthe so-called breeders privilege or research exemption which gave them thefreedom not only to use protected plantvarieties in their breeding programmes butalso to commercialise the further varietiesdeveloped therefrom (often onlycosmetically different from the original)without any royalty payment to the owner of the initial variety. The UPOVConvention as revised in 199l now expandsthe scope of the right of the initial variety

breeder to include what are termed


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essentially derived varieties (both theterms essentially derived and varietyare defined). This expansion of the right isnot automatic but depends on Member States amending their national PV R legislation in conformity with UPOV 1991.Freedom to research and tocommercialise: The freedom to research issafeguarded equally under both patent lawand PV R law. But the freedom tocommercialise the resulting products of research depends on whether or not they

infringe the patent claims or areessentially derived under PV R law. Astrengthened UPOV-type protection wouldtherefore go part of the way towards thestrong protection given by patents. Neither system is a threat to the free use of existinggerm plasm since these rights can in no

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EXAMPLES OF US & EPC PATENTS ONORGANISMS AND GENES Patent number Isolated gene coding for enzyme involved in penicillin

biosynthesis. US 4,885,251Isolated gene coding for human erythropoietin, ahormone stimulating growth of red blood cells. US 4,703,008EP 148,605R ecombinant plasmids and transformed micro-organismsexpressing precursor of the enzyme chymosin (rennin). EP 077,109Pseudomonas with multiple plasmids for degradinghydrocarbons (Chakrabarty, see text) US 4,259,444Insecticidal Bacillus thuringiensis strain EP 178,151Pesticidal (trypsin inhibitor) gene transfer from cowpea


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to cereals US 5,306,863Plant gene/promoter EP 122,791Maize seed and plant enriched in tryptophan (Hibberd) US 4,581,847Oncomouse (Harvard, see text) US 4,736,866EP 169,672Immunodeficient mouse for study of auto-immune disease US 5,175,384Expressing pharmaceuticals in milk of farm animals US 5,322,775Herbicide resistance plants EP 242,236sense monopolise known material as such.Again, until the UPOV revision is taken upin national laws, farmers legitimatelysowing seed of a protected variety are

legally free to save part of the seed from thefirst crop of plants for sowing on their ownfarms to produce a second and subsequentcrops (the farmers privilege).R ecognising that the current scale of use of farm-saved seed thus deprives the breeder of significant royalty income, thestrengthened right under the 1991 versionof UPOV would make this subject toauthorisation of the breeder. However,Contracting States can re-introduce thisfreedom under their national legislation within reasonable limits and subject to the

safeguarding of the legitimate interests of the breeder.

INTERNATIONAL DEVELOPMENTS

(1) The United Nations Convention onBiological Diversity, enacted in June 1992and entering into force in December 1993,has been ratified by 157 States to August1996 . It aims to ensure conservation of

biological diversity, sustainable use of


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genetic resources, and the fair andequitable sharing of the benefits from their utilisation.Genetic resources have in the past beendeclared a common heritage of mankind to be preserved, and to be freely availableto all, for use for the benefit of present and

future generations. However, in thisConvention, Article 15 now recognises thesovereign rights of States over their naturalresources, their authority to determineaccess thereto, and the need for access to be

subject to prior informed consent and onmutually agreed terms. In return for providing access to its genetic resources, adonor country should benefit through anyof three mechanisms: participation in research, Article 15(6), sharing in the results of research and

proceeds of commercial exploitation,Article 15(7), and access to and transfer of derivedtechnology, Article 16(1).The Convention recognises a legitimaterole for intellectual property in achievingthese objectives.(2) The Uruguay round of the GeneralAgreement on Tariffs and Trade (GATT)created a subsidiary Agreement on TradeR elated Aspects of Intellectual PropertyIssues (T R IPS). Any country ratifyingGATT accepts the obligation to establishminimum standards of intellectual

property. Patents are to be available in allfields of technology except where


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exploitation of the invention must be prevented to protect ordre public, human,animal or plant life or health or to avoidserious prejudice to the environment.TR IPS allow Members to provideexclusions from patentability similar tothose found in the EPC (see above) but theymust provide for the protection of plant varieties either by patents or by an effectivesui generis system or by any combinationthereof. (A sui generis system is onedevised for its own special purpose.)

EC DIRECTIVE ON PROTECTIONOF BIOTECHNOLOGICALINVENTIONSThe proposed draft of an EU Directive onthe Legal Protection of BiotechnologicalInventions was originally published in1988. After several years of debate, a

version of this proposal was agreed by a joint committee of the EuropeanParliament (EP), the European Council andthe European Commission but was voteddown in plenary session of the EuropeanParliament in March 1995. The EuropeanCommission published a revised proposalin December 1995. The Directive aims atharmony in the EU between national patentlaws and the EPC, and a uniform legalinterpretation on some points of specialrelevance to living systems.The Directive is addressed to patent issuesrelating to biological material, which isdefined in Article 2 as any material


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containing genetic information and capableof self-reproducing or of being reproducedin a biological system. This must thereforecover living matter, viruses, genes andother types of DNA and R NA. AlthoughArticle 3 excludes patents on the human

body and its elements in their natural state,elements isolated from the body or otherwise produced by a technical processcan be patented if they are capable of industrial application. Article 4 providesthat no invention is to be refused patent

protection for the sole reason that biological material is involved. This principle has been confirmed for manyyears in patenting jurisprudence in themajor industrial countries. Article 4

provides specifically for the patentabilityof plants and animals and parts of theseexcept for Plant and animal varieties.

Natural products which have biologicalutility can qualify for patent protection incertain circumstances (usually as the

purified material). Article 8 of theDirective confirms that patents for these

products should not be ruled out in principle as mere discoveries. Thus the presence of a product as part of a preexistingmaterial is not alone a sufficientground for refusing a patent for it.By Article 9, inventions are not patentablewhere their exploitation would be contraryto ordre public or morality. The EPC andlaws of most Member States alreadycontain a similar exclusion eg in EPC


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Article 53(a) mentioned above. However,Article 9 goes on to specify particular examples which for this reason cannot be

patented. Paraphrasing the actual text,these include (a) methods of humangermline gene therapy2 and (b) any geneticmodification of animals which causessuffering disproportionate to the likely

benefit to man or animal.Article 10 confirms that a patent on a

biological material (or a process for producing it) covers the first and all

subsequent generations of materialobtained by multiplication or propagation provided the crucial characteristics of theoriginal are retained. Patent rights in a

product normally become exhausted whenthe product is marketed by the patent owner or a licensee. However, for a product whichcan be multiplied biologically, the

purchaser can obviously propagate the purchased product for the purpose impliedin the sale, but Article 12 forbids theresulting material being used in further cycles of multiplication or propagation.Article 13 provides an important exceptionto this rule, allowing farmers to re-sowseed saved from the first crop. Thisfarmers privilege in patent law is to belimited, however, in order to be in line withthe corresponding provision in the EUregulation on an EU plant breeders right.The new EU plant breeders right providesfor a royalty payment on farm-saved seedwhich is sensibly lower than that for


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bought-in certified seed. Animal farmersare also free to breed from the patentedanimal for renewal of their own stock.Article 14 covers the situation in which athird party has bred a new plant varietyfrom a patented transgenic plant and hasobtained a plant breeders right for it. If, toexploit the variety, the breeder needs alicence from the patent holder but has beenrefused one, a compulsory licence must begranted, subject to payment of ana ppro priate royalty. This is dependent on

the proviso that the new variety constitutes significant technical progress and thelicence is dictated by the public interest.Article 14 is objected to by theagrobiotechnology industry because itdetracts from the patent right in anunprecedented way.General reactions to the revised proposalhave been mixed. For example, the LegalAffairs Committee of the EP has raised anumber of questions, the EuropeanAlliance of Genetic Support Groups are infavour while Greenpeace has expressed anegative opinion. The first plenary EP votewill probably be in 1997. The EuropeanCommissions proposal envisages Member States implementing the Directive by 1January 2000 at the latest.4 Briefing Pa per no 12 Such methods are already excluded in EPC and Europeannational laws.

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Patenting in Biotechnology