1. Biotechnology Patents Issues, Concerns, and Unintended Consequences

2. Do Biotechnology Patents Stifle 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 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 Patenting The 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. 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 Gene Patenting Controversy The Myriad Firestorm

13. Gene Patenting Controversy Summary 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 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 Stem Cell Patenting

16. 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 Source: Bergman & Graff (2007) Nat. Biotechnol. 25:419-424 Ownership of Granted Stem Cell Patents

17. 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 Stem Cell Patenting

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