|The PTO's new guidelines clearly describe the current criteria for patenting gene-based inventions. They've raised the bar by requiring that an invention show a specific and substantial utility, thus effectively eliminating patents on sequences of unknown function (such as first-generation EST patents). But the new guidelines still haven't answered all the questions posed by researchers, nor have they put to rest some genuine concerns voiced by academia. Despite the controversy and stiffer requirements, however, the PTO should grant scores of new gene patents in the next few years. Whether these patents will hold up in court is another matter -- as Amgen and TKT are still discovering.|
Now that the human genome's sequencing is nearing completion, the rush to patent full-length and partial sequences has taken on a whole new level of meaning. For soon, they say, all human genes will be identified -- and spoken for. A company that doesn't own at least a piece of this action could be out in the cold, forced to pay licensing fees for those genes it wishes to use in its own development programs. Moreover, many government and academic scientists already fear they've been shut out, and won't even be able to conduct basic research without scads of licenses. Some groups argue that genes shouldn't even be patentable, while others criticize the role that bioinformatics has come to play in gene identification.
The controversy continues -- even though the U.S. Patent and Trademark Office (PTO) has been granting gene patents for decades. But there's a difference now. The first gene patents that issued covered sequences that code for known human proteins with clear medical utility (erythropoietin or tissue plasminogen activator, for instance). These genes were isolated and identified the old-fashioned way -- in the laboratory -- and scores of scientists still depend on this method. Others, however, have adopted an in silico approach: They rely on computer-generated information, homology searches and structure analysis software to define the sequence and its probable function.
Not only has the advent of "machine genes" generated rancorous debates within the scientific community, but also it's flooded the PTO with applications. Five years ago, the stack of applications on expressed sequence tags (ESTs; short DNA sequences derived from cDNA) stood at half a million -- at which point the PTO quit tracking them, according to John Doll, the PTO's director of biotechnology examination. That's not even counting the tens of thousands of applications on full-length genes.
To top it off, the PTO doesn't have nearly enough examiners to deal with all the paperwork: According to Doll, the office was hoping to hire 125 more examiners this year, but because of budget restraints -- including a freeze on new hiring instigated by the Bush administration -- "we'll be lucky to hire 40 new examiners this year if the freeze gets lifted."
The filing frenzy's certainly not over -- nor will it be for some time, if ever. But what may help those overworked patent examiners --as well as the many innovators wishing to protect their inventions -- is a new set of guidelines. The PTO published its final guidelines in the Jan. 5, 2001 Federal Register, setting forth the conditions that must be met by any patent application. Importantly, these new rules don't eliminate EST patents per se -- as long as the EST has a substantial utility. For instance, if an EST can be used as a particular probe, specific to a distinct tissue or disease state, it would be useful as a diagnostic.
Indeed, it's that substantial utility requirement that's effectively raised the bar on gene patents. Now, inventors are required to know more about a gene's function and utility in order to fulfill the PTO's criteria. "Previously, to meet the requirements, a utility had to be specific, but it could be specific for a general class of compounds; i.e., any piece of DNA to be used as a probe for a gene," explained the PTO's Doll. "Now, the invention has to be supported by at least one specific, substantial and credible utility."
To be specific, the utility must be particular to the subject matter claimed. For instance, "if the only disclosed use of a polynucleotide is as a gene probe or chromosomal marker, and the specific DNA target is not disclosed, then that nucleotide would not be considered to have a specific utility." To be substantial, the utility must define a real world context of use, not a use that is considered to be a "throw-away" (for example, using a complex invention as landfill, or a purified cancer-associated protein as an animal food supplement.) To be credible, the logic underlying the assertion has to be consistent with the facts, and not flawed.
While the final utility guidelines aren't so different from the interim guidelines that the PTO published in December 1999, they are worth reviewing here. As well, this is the first time that the PTO has issued written description guidelines, Doll said. "The written description guidelines require that the applicant be in possession of the invention at the time the application is filed." This sounds logical, even obvious, but earlier court cases have shown clearly that it's not. Claims on the cDNA sequence for a particular gene in the rat, for instance, can't be extended to cover other species, unless the applicant can show that he or she is "in possession of a representative number of species," Doll added. (For a review of those landmark cases, in particular The Regents of The University of California v. Eli Lilly and Co., read the Signals article, "Biotech Patent Fights.")
Some of the major points covered in the utility guidelines are listed below. (You can access the full text of the Utility Examination Guidelines and the Written Description Requirement by clicking here. Each is downloadable as a PDF file.)
|§ Isolated genes can be patented. Because many individuals believe that genes, as products of nature, cannot and should not be patented, the PTO reiterated its stance on this point. "An isolated and purified DNA molecule that has the same sequence as a naturally occurring gene is eligible for a patent … because that DNA molecule does not occur in that isolated form in nature." As well, "Synthetic DNA preparations are eligible for patents because their purified state is different from the naturally occurring compound." Thus, DNA molecules are equivalent to other chemical compounds in this regard, a view point that the PTO has held for quite some time.|
§ The gene must have a use. However, the inventor must also "disclose how to use the purified gene isolated from its natural state" to satisfy the utility requirement." That is, the application must disclose a specific, substantial and credible utility for the claimed isolated and purified gene. "If a patent application discloses only nucleic acid molecular structure for a newly discovered gene, and no utility for the claimed isolated gene, the claimed invention is not patentable."
§ An EST must have a use. The possibility of obtaining a patent on a sequence whose function is unknown has been eliminated. "ESTs which meet the criteria for utility, novelty and nonobviousness are eligible for patenting when the applicant teaches those of skill in the art how to make and use the invention."
§ A DNA sequence per se is not patentable. "A DNA sequence -- i.e., the sequence of base pairs making up a DNA molecule -- is simply one of the properties of a DNA molecule. Like any descriptive property, a DNA sequence itself is not patentable. A purified DNA molecule isolated from its natural environment, on the other hand, is a chemical compound and is patentable if all the statutory requirements are met."
§ The entire gene sequence doesn't have to be disclosed. "An adequate written description of a DNA … requires a precise definition, such as by structure, formula, chemical name or physical properties … Thus, describing the complete chemical structure, i.e., the DNA sequence, is one method of describing a DNA molecule, but it is not the only method."
§ The applicant only has to disclose one use for the gene. Many in the research community fear broadly based gene patents, covering any number of possible applications, even though those uses may be unproven (or, in the end, not possible). The PTO reiterated its position that "The patentee is required to disclose only one utility, that is, teach others how to use the invention in at least one way. The patentee is not required to disclose all possible uses, but promoting the subsequent discovery of other uses is one of the benefits of the patent system."
§ The gene's function doesn't have to be known in order for the DNA to be useful. "The utility of a claimed DNA does not necessarily depend on the function of the encoded gene product. A claimed DNA may have a specific and substantial utility because, e.g., it hybridizes near a disease-associated gene or it has a gene-regulating activity."
The final guidelines sound straightforward enough, but some issues have still not been resolved to the satisfaction of all. And, for those who aren't directly involved in the patenting process -- and even for many who work in the research community -- the finer points remain elusive. Moreover, in the general population, bewilderment reigns. "There's a lot of confusion in the lay community," explained John Wetherell, a partner in the San Diego offices of law firm Pillsbury Winthrop LLP. "Many of these people still think it's possible to patent a gene without knowing what it does." Others still feel it's not appropriate to patent a gene at all -- no matter what the PTO or even the courts have to say on the matter.
And, academics are left with their original worry -- that they'll be barred from using protected genes or sequences in their research without taking out multiple licenses. To address these concerns, the PTO issued a white paper in mid-January on the use of patent pools as one way to allow "reasonable access to patented genomic inventions." Briefly, a patent pool allows two or more patent owners with related technologies to create an environment in which they can jointly license the patents to third parties. Potential licensees could then get access to all the relevant patents in one place, rather than having to license each individually.
But, while that sort of logic might have worked with the Cohen-Boyer patents -- which covered recombinant DNA technology and were pivotal to the development of biotechnology itself -- today's research technologies vary widely and may share no such basic attributes. According to Rochelle Seide, a partner in the New York offices of law firm of Baker Botts LLP, "The research tools are very different. I'm not sure they could be pooled adequately. If it's fundamental technology that everybody has to use, and it's held by a variety of parties, then patent pooling is OK. But I don't know if that sort of technology is out there anymore."
And, without a doubt, no biotech company would be willing to contribute its gene patent to a pool -- especially because the gene, or its protein, could become that company's next blockbuster drug.
Patent pools aside, the PTO's final guidelines hold no surprises for the majority of biotech scientists and executives. Patent attorneys, too, can find little fault. "They lay out a workable framework for practitioners and give good guidance for drafting applications," according to Baker Botts' Seide.
But there are some interesting aspects. Whereas in the past one could claim a compound (as yet unknown) identified by a new screening assay, what Seide calls a reach-through claim, that's much harder now. The compound claimed in such a manner "would have real world utility, but it's not patentable under the written description requirements. You have to show possession of the compound in some way." This requirement actually brings up the question of when it's appropriate to seek patent protection on early-stage technology (when it's quite possible that the inventor could show utility but not possession.) "Are there times when it might be too early to seek patent protection?" Seide asked. "There's still a debate as to whether the Lilly decision [in which the claims in a patent based on the determination of cDNA sequences for insulin in rats were extended to cover mammalian and human insulin cDNA] is correct or incorrect." [The Federal Circuit Court did not allow those claims due to lack of a written description.]
Although the final guidelines may not change the way in which the majority of biotech firms write their patents, they do alter the way in which companies think about ESTs. After the PTO ruled that ESTs were patentable in the early 1990s, biotech firms filed applications almost as fast as they could make and sequence their cDNA clones. The resulting frenzy fed upon itself, as one company after another filed EST patents in its own defense. But, in the end, few in the industry expect these early EST patents to be very valuable.
According to the PTO's Doll, "The [small number of] ESTs that have been patented are of very limited scope, because their contribution to the art is very limited." Doll said that the PTO "recognized five years ago that, legally, we couldn't issue broad-based EST patents."
Not surprisingly, the original flood of EST patent applications has abated. "The largest number of applications were filed about 5-6 years ago," Doll said. The number has since dropped dramatically, starting about three years ago, he added.
"Now we see second- and third-generation genomics patents that use ESTs to piece together parts of a gene. Now they claim the complete open reading frame [a sequence of DNA that is translated into protein]." In the second-generation patents, Doll explained, the function of the protein being expressed by the gene is determined by homology searches. In the third-generation patents, however, "[the inventors] have actually found the function by doing the science." He estimated that the PTO has received as many as 25,000 applications of these latter types.
Although the utility requirement bar has now been raised, mainly because of the early EST applications, according to Baker Botts' Seide, "the problem now is in the second-generation ESTs, which code for open reading frames. But you don't know what [gene] it is. How much sequence identity to something that is known is enough for a second-generation EST? This is going to be a problem going forward."
It's also far from clear how many of these second- and third-generation EST patents will ever issue. Nor does anyone know for certain whether all the human gene patents will survive the PTO's scrutiny. But quite a few already have: Incyte Genomics Inc. has been awarded over 560 patents on full-length genes; 167 of Human Genome Sciences Inc.'s gene-based inventions have received patents; and 27 of ZymoGenetics Inc.'s full-length gene patents have issued or been allowed. And that's just the tip of the iceberg: Although the actual number of gene patents on file is hard to come by, just these three companies have filed over 15,000 among them.
Consequently, the biotech patent battlefield could soon be strewn with casualties, as those who've staked their claims to this full-length gene or that second-generation EST begin to challenge each other for the ultimate rights. When push comes to shove, it doesn’t even matter that each of the contenders can produce an issued patent -- for then it's up to the judge (or the jury) to decide which party infringes the other.
When it comes to patent fights, biotech watchers are keeping a close eye on the prolonged brouhaha between Amgen Inc. and Transkaryotic Therapies Inc. (TKT). The heart of the matter revolves around the product per se as well as the process or processes for making it. The ultimate significance of this litigation has been the subject of intense debate -- both inside and outside the courtroom. Some industry observers claim that the final outcome will have sweeping implications for the biotech industry; others feel that only the companies directly involved in the litigation will be impacted. It's a story that's far from over, but recent events have provided a fairly good idea of the eventual outcome. (One must bear in mind, however, that the current judgments in this case are still subject to appeal and theoretically could be overturned.)
The fact that Amgen has continued to be successful in defending its erythropoietin (EPO) patents in the U.S. and the U.K. speaks volumes about the strength of the patents themselves: The product patents, especially, appear to be largely unassailable. And that reinforces the absolutely critical role that a carefully crafted composition-of-matter patent can play in a company's future. As we shall see below, the lengthy ruling issued by U.S. District Court Judge William Young in January 2001 reaffirms the fact that a patent on a product per se will be infringed by a competitor making the same product -- no matter what process is used to make that product.
Amgen prevailed in the latest skirmish in its long-running EPO patent battle, which occurred overseas. On April 11, 2001, Justice Neuberger of London's High Court of Justice ruled that Dynepo, the EPO product being developed by TKT and its partner Aventis Pharma, had infringed one of four claims (a product claim) of Kirin-Amgen Inc.'s European patent for Epogen-alfa (European patent Number 0 148 605 B2). The other three claims were found to be invalid. Simultaneously, the British court also found that Roche Holding Ltd.'s EPO product (NeoRecormon, which is already on the market in the U.K.) infringed the patent. (Amgen's licensee, Johnson & Johnson, markets EPO in the U.K. under the name Procrit.)
If upheld, this ruling would force Roche to either withdraw from the market or take out a license; it also would prevent TKT and Aventis from entering the U.K. market. (In early August 2000, Aventis submitted marketing applications in the U.S. and Europe for Dynepo.) But, because litigation will occur on a country-by-country basis in Europe -- and will certainly include appeals on any rulings handed down -- this battle could continue well into the future.
While the warring parties have just begun their campaigns in Europe, they've been sparring on this side of the Atlantic for about four years. They've chosen Boston as their battlefield -- and Judge Young's court was the center of the action, until his January 2001 ruling in favor of Amgen. Next stop: the U.S. Court of Appeals for the Federal Circuit
Amgen originally filed its lawsuit against TKT and Aventis (then Hoechst Marion Roussel AG) in 1997, claiming that the parties had infringed three of its U.S. patents on an erythropoietin (EPO) product and the processes for making it. Two years later, Amgen added two more of its U.S. patents to the list. (The Amgen patent numbers, for those of you who are interested in accessing the patents from the U.S. PTO's site, are: 5,547,933; 5,618,698; 5,621,080; 5,756,349; and 5, 955,422.)
Amgen makes its EPO in cultured Chinese hamster ovary cells via recombinant DNA technology. TKT, on the other hand, has developed a technology (gene-activation, or GA) that activates the EPO genes naturally residing in cultured human cells to produce EPO. In the patent fight, TKT argues that its gene-activation technology circumvents genetic engineering and thus does not infringe Amgen's patents.
Not so, declared Judge Young in his April 2000 ruling. At that point, Young granted Amgen a summary judgment that TKT/Aventis had literally infringed a single claim on a pharmaceutical composition patent for EPO. That claim (claim 1 of the '422 patent) reads as follows: "A pharmaceutical composition comprising a therapeutically effective amount of human erythropoietin and a pharmaceutically acceptable diluent, adjuvant, or carrier, wherein said erythropoietin is purified from mammalian cells grown in culture."
But there were many more claims at stake, and Judge Young deferred them for trial. During that trial, which began in May 2000, lawyers addressed issues surrounding the validity and enforceability of claim 1 of the '422 patent, as well as the infringement, validity and enforceability of the other four patents at stake. While much occurred during the trial, suffice it to say here that the two sides presented their closing arguments in the Boston court on Sept. 8, 2000 -- after which Judge Young retired to consider his decision.
And it took him more that four months to do it -- but then he'd already issued fair warning that this decision would take considerable time, due to the far-reaching and complex nature of the case. One look at his 235 page ruling, issued on Jan. 19, 2001, certainly drives that point home. (You can download the PDF file by clicking here.) It's fascinating reading, too, for Judge Young sets forth his arguments -- and the logic behind them -- with utmost clarity. It's also a mini-review of the pivotal biotech patent cases, and in this regard it provides many valuable insights into patent law, and its interpretation by the courts.
The bottom line: Judge Young found that TKT/Aventis had infringed eight claims on three of Amgen's patents (numbers '080, '349 and '422). He also found that the parties did not infringe Amgen's '933 patent, a composition of matter patent on a non-naturally occurring EPO, but that the claims in this patent would be invalid if they were infringed. He had already ruled (in June 2000) that TKT/Aventis did not infringe the process claims of Amgen's '698 patent. "There are many differences between Amgen's and TKT's processes," Young wrote. "The Court was not persuaded by a preponderance of evidence that TKT's process for making GA-EPO infringed, either literally or by substantial equivalence, claims 4 and 6 of the '698 patent."
Does that mean that TKT can make its GA-EPO without infringing Amgen's patents? No.
In fact, it's this particular ruling that bears directly on all companies that wish to make so-called "generic" biotech drugs. It also reinforces the crucial importance of an unassailable composition-of-matter patent.
For Judge Young took the opportunity in his 235-page opus to drive home some fundamental points about the differences between product patents and process patents. "A product patent claims a structural entity that, though some process must be undertaken in order to create it, is in no way defined or limited by how it is made … A process patent, however, claims not a structural entity, 'but rather an operation or series of steps leading to a useful result.' Thus, the very details regarding how such a 'useful result' has come about are at the heart of a process patent, whereas the process by which a patented product is obtained is ordinarily irrelevant to a product patent."
Judge Young concluded that "In order to avoid infringing a product claim, a competitor must not make that product regardless whether the process used to do so differs in some way from the process or processes described in the patent. If indeed the same product is ultimately obtained, it matters not that in order to do so the competitor tweaked the process in some manner."
According to Pillsbury Winthrop's Wetherell, this ruling "has a significant downside for companies such as TKT that are trying to produce patented compositions." As to TKT's fate, "The feeling on the street is that TKT's likelihood of success on appeal is fairly low. Of greater concern to TKT, however, is the effect it will have on its entire gene activation technology," which it is planning on using for a large number of therapeutic proteins, including many that are already on the market. If the ruling holds on appeal, then TKT will probably have to try and obtain licenses on the products it wishes to develop and sell.
"This ruling is a good sign for the biotech industry. It supports companies such as Amgen that have patented innovative discoveries. The innovators deserve novel composition-of-matter patents," he continued. In essence, the ruling says that one company "shouldn't be able to avoid another's composition claim just because it claims to use a different process of making the composition. This is one reason why there is such emphasis on composition-of-matter patents." In fact, according to Wetherell, if the ruling had been otherwise, "composition-of-matter claims would be meaningless. It would be too easy to avoid them."