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Biotechnology Patents Issues, Concerns, and Unintended Consequences

Biotechnology Patents Issues, Concerns, and Unintended Consequences. Do Biotechnology Patents Stifle Innovation?. ‘ 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

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Biotechnology Patents Issues, Concerns, and Unintended Consequences

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  1. Biotechnology PatentsIssues, Concerns, and Unintended Consequences

  2. Do Biotechnology PatentsStifle Innovation?

  3. ‘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 162:1243 ‘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 280:698

  4. ‘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

  5. ‘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

  6. ‘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 309:2002-2003 Source: Pressman et al. (2006) Nat. Biotechnol. 24:31-39

  7. Gene Patenting

  8. 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

  9. 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 310:239-240.

  10. 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

  11. 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

  12. 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

  13. Gene Patenting ControversySummary • Product of nature • Where’s 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

  14. Stem Cell Patenting

  15. 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

  16. 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. 25:419-424

  17. 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

  18. Follow-On Biologics

  19. 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

  20. 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

  21. 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

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