By Tom Abate

Taking a position that seems to question biotech's financial underpinnings, Affymetrix Corp. last week told a government panel that gene patents are hindering medical progress and that the United States should quit handing them out.

"There should be no patenting of gene sequences, period. They were invented by nature," said Barbara Caulfield, general counsel for the Santa Clara company. "This a position Affymetrix feels strongly about." Caulfield, a noted trial attorney and former federal judge, made her declaration before the Federal Trade Commission and Department of Justice. The two agencies are studying whether patents may be stifling competition, rather than encouraging innovation, in knowledge-based industries such as biotech.

In a separate but related action, Rep. Lynn Rivers, D-Mich., introduced legislation last week to exempt diagnostic tests from the full protection of gene patents -- a move that would threaten startups like Alameda's Celera Diagnostics, which hopes to become profitable based on the price-setting power of patents.

Although activist and patient groups have staked out similar positions in the past, these two developments represent the sharpest challenge to gene patents since former President Bill Clinton and British Prime Minister Tony Blair sent biotech stocks plunging two years ago, by suggesting that raw human gene sequence data "should be made freely available."

The authority for granting patents is enshrined in the Constitution, which allows inventors to exercise a temporary monopoly over their discoveries in order "to promote the progress of science."

A 1980 Supreme Court ruling paved the way for genes to join mouse traps in the patent files. In a 5-4 decision, the court ruled that scientist Ananda Chakrabarty deserved a patent for altering a bacterium to eat oil slicks. Although the bacterium evolved naturally, the court said Chakrabarty had increased its appetite for oil, making it an invention.

The Patent Office used the same logic to award gene patents to fledgling firms like Genentech and Amgen. Although genes evolved over billions of years, scientists extracted them from their natural environment and used these purified chemical extracts to create medicines or diagnostic tests. Ever since, gene patents have formed the foundation of biotechnology.

Caulfield doesn't want to wreck this edifice by revoking the roughly 1,300 patents on human genes that have already been granted. But she thinks it's time to revisit the Chakrabarty decision and that the government changes the rules on gene patents the frontiers of medical research will get fenced off by the barbed wire of intellectual property.

"Just because someone is an early discoverer of a particular piece of real estate on the human genome doesn't mean they should control downstream development," Caulfield said.

Critics of her position were quick to observe that Affymetrix has a unique vested interest in a wide open genome. The company makes probes designed to fish genes out of tissue samples. These probes require Affymetrix to put bits of the genes onto the devices. As more genes are patented, the company could run into legal problems using genes owned by some other entity.

"Intellectual property is a two-sided coin," said Todd Dickinson, former patent commissioner and now an attorney with the Washington, D.C., law firm of Howrey Simon Arnold & White.

"Everybody likes to use everybody else's discoveries for free, but when it comes to protecting their intellectual property, they want strong enforcement."

Dickinson said one of the reasons the United States has emerged as the world leader in biotech is that the Chakrabarty decision and subsequent patent office rulings put this country ahead of Europe in issuing gene patents.

Lila Feisee, director of intellectual property law for the Biotechnology Industry Organization, said that thanks to gene patents, the United States has more than 1,200 biotech companies, 130 biotech drugs and vaccines on the market and 350 in development.

"We would have nothing if these gene patents were obstructing progress rather than promoting it," she said.

All the same, there seems to be growing concern over the issue, even within the biotech community. "The proliferation of gene patents does create something of a minefield that could inhibit the commercial development of new medicines," said Regis Kelly, executive vice chancellor at the University of California at San Francisco.

In part, this is because complex diseases are often influenced by many different genes. If these genes are patented by a slew of firms or universities, drug researchers must obtain licenses to all these patents before they can proceed.

Francis Collins, director of the National Human Genome Research Institute and leader of the Human Genome Project, echoed those concerns, although, like Kelly, he disagreed with Caulfield's notion of halting the issue of new gene patents.

Instead, Collins suggested that inventors be required to show a more direct link between the gene they are seeking to patent and the product they propose to create. In patent lingo, this is called utility. But the patent office tightened the utility requirements during Dickinson's tenure. The former commissioner and the genome guru were on different sides then, and they still disagree over whether the patent office got it right.

Complaints over gene patents extend far beyond the utility issue. For instance, one of the clearest, simplest ways to use a newly discovered gene is to diagnose an illness. No question of utility there.

Yet in recent years, bioethics researchers such as Stanford University's Mildred Cho have been building the case that patents on gene diagnostic tests are inflating prices and restricting access.

This perceived problem is the main target of HR3967, co-authored by Rivers, who is from a liberal district in Michigan, and Rep. Dave Weldon, R-Fla., who is the lead author of the total ban on human cloning that passed the House last year.

Rivers-Weldon would define a gene-based diagnostic test as a medical activity exempt from patent protections. Congress created the medical activity exemption in 1996 after lawmakers became annoyed that physicians were patenting surgical techniques.

Slipping gene-based diagnostics into that same exemption would mean Congress would have to squelch one of biotech's newest niches.

In introducing her bill, Rivers listed support from patient advocacy groups, public health specialists, medical societies and regional diagnostic labs.

"I expect this one to be hotly debated," said Patricia Thayer, a patent attorney with HellerEhrman in San Francisco. "You have groups with power pushing forward and groups with power pushing back."

Whether this friction results in political action or simply lets off heat, simmering complaints over gene patents seem to be coming to a boil. Concerns once voiced only by activist groups like Jamie Love's Consumer Project on Technology and MIT Professor Jonathan King's Council for Responsible Genetics have found some expression in corporate circles.

"We're going to try to interest other persons and companies in the wisdom of this opposition to gene patents," said Affymetrix's Caulfield. "That way, at least there will be a public debate."

Printed in the San Francisco Chronicle, 25 March 2002

© San Francisco Chronicle

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