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By Salvatore Salamone

August 13, 2002 | Recently introduced legislative initiatives have the potential to bar patents on genetic-based human cloning along with licensing and royalty payments on patented genetic-based diagnostic tests.

A session on patenting genes and genetic research tools at the recent 21st Century Life Science Technology Revolution conference, co-sponsored by the Whitehead Institute for Biomedical Research and Hewlett-Packard Co., looked into looming legislative patent obstacles that will make some patents harder to get and others less valuable once acquired.

“Senator [Sam] Brownback [R-Kan.] wants to ban cloning of human embryos and recently introduced a bill to prohibit patents on human cloning,” says patent attorney Beth Arnold, a partner in the firm Foley, Hoag & Eliot LLP.

Since the seminar, Brownback’s anti-cloning bill stalled in the Senate. Brownback, however, has said that he will continue to pursue this legislation by adding anti-cloning amendments to unrelated bills. And in June, he filed an amendment to Senate bill S.2600, the Terrorism Risk Assurance Act of 2002. The Brownback amendment would bar the U.S. Patent and Trademark Office from granting patents on products and processes derived from somatic cell nuclear transfer. The bill is expected to clear the Senate, but faces uncertainty in the House.

Eye Opener

Another emerging legal issue life science companies need to keep an eye on has to do with the diagnostic tests based on genetic patents.

Earlier this year, U.S. Rep. Lynn Rivers (D-Mich.) introduced House bill H.R.3967 that, in the text of the submitted bill, calls for “non-infringing uses of patents on genetic sequence information for purposes of research and genetic diagnostic testing, and to require public disclosure of such information in certain patent applications.” The bill would let clinics use patented genetic-based disease diagnostic tests without having to pay royalties or licensing fees.

“If passed, H.R.3967 potentially could lower the licensing and royalty revenues life science companies can derive from clinical tests based on patented genetic technology,” says Arnold.

At the heart of H.R.3967 is a long-simmering issue related to the availability of medical tests. Under current law, fees and royalty payments discourage many clinics from offering these tests to their patients.

The issue has been discussed within bioethics circles for several years. For example, in July 2000, Jon Merz, a faculty member at the University of Pennsylvania School of Medicine’s Center for Bioethics, appeared before the House Subcommittee on Courts and Intellectual Property. The session was an oversight hearing on gene patents.

At that time, Merz told the subcommittee that the trend of exclusive licensing of genetic tests raised some concerns about the lack of availability of these tests to patients who need them. “Primary among these [concerns] is that some licensees are exercising their patent rights to prevent physicians—in particular, molecular pathologists—from performing genetic testing of their patients,” said Merz in a prepared statement.

In February of this year, Merz and three colleagues published a commentary titled “Genetic testing: Patent nonsense?” in Nature.

Merz and his colleagues had conducted a survey of clinical laboratories’ use of genetic testing for hereditary hemochromatosis, which is often caused by two mutant alleles of the HFE gene (C282Y and H63D).

A patent for a genetic-based HFE diagnostic test for the disease had been awarded to Mercator Genetics Inc. in early 1998. Through a series of corporate acquisitions, the patent was transferred to several companies. During this process, the collection of royalty payments vacillated from being aggressively enforced to completely neglected. In 2000, the patent was finally transferred to Bio-Rad Laboratories Inc., which started offering a test kit and enforcing patent royalties again.

Quantified Confusion

All of this transferring of the patent and off-again, on-again royalty collection created confusion for the clinical labs that would use the diagnostic kit.

Merz and his colleagues surveyed 119 labs and found that 31 of the labs said they had not developed and were not performing the test, and five said they had stopped performing the test. Of these 36 labs, 22 replied that patents were the reason they were not offering the test, and 10 replied that patents were one of several reasons they were not using the test.

After analyzing why the labs weren’t using the available genetic test, the Nature commentary stated: “In sum, the patents on HFE had a measurable effect on the development and availability of HFE testing services in the United States, as many laboratories that had the capability to perform the test reported not doing so because of the patents.”

Along the same lines, earlier this year a Boston Globe article detailed Myriad Genetics Inc.’s near monopoly in the genetic-based breast cancer testing and diagnostic market.

The article noted that some geneticists had concerns about such a monopolistic practice. However, the author of the article, Kimberly Blanton, stated that little would be done to change the situation in the United States. “[There] is little interest in Congress for delving into patent protections at the heart of the nationÕs free-enterprise system,” wrote Blanton.

Since that article appeared, the issue of patenting genetic materials germane to clinical tests has become much hotter with the introduction of Rivers’ bill.

“Evidence is mounting that the patenting of human genes is both inhibiting important biomedical research and interfering with patient care,” said Rivers in a prepared statement when she introduced the bill.

“Many clinical laboratories have been forced to abandon testing for genetic ailments and genetic markers, and progress in diagnostic testing has been slowed by high costs, litigation, and complex licensing arrangements,” said Rivers. “While patent protection may stimulate initial genetic discovery, it is probably not enhancing the delivery of affordable and widely available health services.”

Rep. Rivers’ bill seeks to change matters by granting medical researchers and genetic diagnosticians protection from patent infringement. In May, this bill was referred to the House IP subcommittee. The subcommittee will consider the bill when Congress reconvenes in the fall. 

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