August 2009 Clinical Laboratory News: Patenting Genes

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August 2009: Volume 35, Number 8

Patenting Genes
Is the Future of Genetic Testing on the Line?
By Bill Malone

Trying to follow the debate around gene patents can leave you wondering whether anyone is really talking about the same thing. On one side, it almost seems that elements of patients’ very bodies are somehow being traded by corporations, while from the other, gene patents are benign legal tools spurring innovation in the biotech industry, including molecular diagnostics. But clinical laboratorians and other scientists might feel squeezed in between, not totally comfortable with either characterization of what patenting a gene really means.

Part of the problem is that the debate draws from several separate domains of language and argument: patent law, science, business, and bioethics, stressing the limits of each to fully grasp the nuances. But at the same time, gene patents have become the core of the biotech business model in the 21st century, making this controversy more than just an intellectual exercise. In fact, a 2005 study found that 4,382 of the 23,688 human genes in the National Center for Biotechnology Information’s database have been claimed as intellectual property, or about 20% of human genes.

Now a lawsuit from the American Civil Liberties Union (ACLU) challenging patents controlled by Myriad Genetics for breast cancer risk testing has brought the issue into the spotlight, with prominent professional associations such as the College of American Pathologists (CAP) and the Association for Molecular Pathology (AMP)—as well as patients—joining the lawsuit, which experts say could draw a line between what is and what is not patentable. If the ACLU wins the case and the court decides that Myriad’s patents are invalid, the value of many similar patent claims would be called into question, explained Matthew Hinsch, PhD, a partner with the law firm Townsend and Townsend and Crew, LLP. Hinsch has advised clients on patent law in the areas of personalized medicine, stem cells, immunology, disease therapeutics, and molecular biology. This loss of patent protection could change the landscape for diagnostic companies that focus on genetic testing, he said.

“This is really a test case. The diagnostic industry is not like the software industry where companies can sell a million apps on the iPhone before they get their first patent. Instead, they can’t even form a company until they can convince a venture capitalist to give them $10 million,” Hinsch explained. “And the basis of getting that $10 million is to say that you’ve got a couple patents and you think you have a little bit of control over this space. I know if I had $10 million I wouldn’t give it to somebody who just said they had a good idea and as soon as they figured it out everybody could copy them. This is the diagnostic companies’ argument.”

Product of Nature or Invention?

The thrust of the ACLU lawsuit targeting Myriad, and the contention of many scientists and medical professionals, is that DNA should not be patentable because it is a product of nature, the traditional boundary for what is off limits under U. S. Patent and Trademark Office (USPTO) guidelines. Furthermore, scientists and laypeople alike understand DNA to have a special status among other molecules and biological discoveries because of how closely it’s tied to an individual’s identity.

“From the perspective of the general population, there just seems to be something sacred about the very material that defines who we are, and if you’re patenting a piece of that material, that just rubs some people wrong,” said John Howe, PhD, associate professor of laboratory medicine and director of the molecular diagnostics laboratory at Yale School of Medicine. “When I discuss patenting of genes with students in a classroom, they’re shocked—‘You’re patenting the very stuff of life!’”

Howe likened the idea some of his students have of patenting DNA to the story of Christopher Columbus ‘discovering’ the New World. “It’s the same view of the controversy with DNA. You’re basically staking your territory on something that is already inside everyone and saying that the information derived from that is yours to do with what you want.” Howe said that the ACLU lawsuit will force companies to come up with a better argument of why they should be able to claim DNA. “They need to answer, what’s the benefit to people that their DNA is patented? How are you benefiting people by patenting a piece of them and then selling it back to them, versus allowing that to be freely available to everyone?”

On the opposite side of the spectrum, some experts who work in patent law see even the label ‘gene patents’ as going too far. “What these companies have patented is not the genes in you, me, your mother, and your sister. They patent an isolated version of those. What they claim is isolated DNA or isolated nucleic acids, and the key word here is ‘isolated.’ So they claim something that was not in a person, but something that has been purified in a test tube,” said Hinsch. It’s this explanation of gene patents that the USPTO relied on in approving Myriad and other companies’ patents for genetic tests, the logic being that the DNA has been altered from it’s original state, thus qualifying as a man-made ‘composition of matter.’ He also pointed out that patents don’t last forever: they have a term of 20 years from the earliest filing date and only become enforceable once the patent office allows them, typically 3 to 4 years after they are filed.

However, this reasoning doesn’t really capture the essence of what companies claim in patents, said Jan Nowak, MD, PhD, president of AMP. “The significance of DNA goes beyond it’s being a thing—it’s the information content in it. By purifying a DNA sequence, you don’t transform the information content. Of course, people use DNA for all kinds of things. If someone can figure out that it can be made into a glue and you can build a bridge using DNA glue, that’s using it as a thing. And they can modify it and patent it, and that seems pretty clear. But the significance of the sequence is the information there. And that’s ephemeral.” Nowak is medical director of molecular diagnostics at Northshore Evanston University Health System, and clinical associate professor of pathology at the University of Illinois, Chicago. “We’re physicians taking care of patients. There is the business interest that sees gene patents as a patentable thing. But our interest is a medical interest, and I don’t know that that’s the focus that’s been appreciated. Companies live in a different world with different priorities. And that’s good for them. But you miss the point if that’s all you’re looking at.”

William Gaede, a partner with the law firm McDermott Will & Emery, LLP, noted that the kind of DNA sequence claim at issue in Myriad’s patents reflect a claim format used in thousands of other gene-related patents. Gaede’s practice focuses on intellectual property litigation in the life sciences and medical device industries. “What’s potentially missing in the ACLU lawsuit as the case progresses further, is that this kind of patent claim protects basic protein and antibody inventions that have brought enormous good to mankind,” he said. Isolated DNA sequence claims are one of the fundamental patent cornerstones of strategy for a biotech company to protect the investment made in identifying and expressing polypeptides as well as antibodies. “So the whole story of how isolated DNA sequence claims have fostered this remarkable industry and changed patients’ lives may not be told in the ACLU lawsuit,” Gaede predicted. “And yet patent claims that reflect a form of patent protection that is a cornerstone of the incentive to invest in the biotech industry are sought to be invalidated in that lawsuit. That’s one reason why, if successful, the case potentially may have far-reaching ramifications.”

The Innovation Model

Aside from the dispute on whether gene patents are a good thing in principle, the practical consequences of how some companies have controlled access to their intellectual property has fueled much of the criticism leading up to the ACLU lawsuit, especially of Myriad, the suit’s main target. Like many other companies —though not all— Myriad does not allow any other lab to license or run the test, performing each test in its own CLIA-certified lab. The only exception has been to license limited rights to test for the three common mutations in persons of Ashkenazi Jewish heritage. The ACLU suit calls Myriads patents “particularly broad and offensive” because women can’t get a so-called second opinion test as they face difficult choices about screening, prevention, and treatment based on results of the test.

Driving its point home further, the ACLU lawsuit also draws attention to the fact that Myriad did not discover the correlation between BRCA1 and BRCA2 genes and an increased risk of breast and ovarian cancer in isolation. Rather, an international consortium of researchers worked to identify these genes, funded in part by the federal government. The researchers who went on to found Myriad were those who filed first with the patent office.

However, many biotechnology companies using gene patents—whether they be focused on drugs or diagnostics—follow a quite different path, beginning with venture capital funding obtained solely on the promise of the fledgling firm’s intellectual property. Most biotechnology companies in general don’t make money for a long time, explained Hinsch. “Many of my clients will never make money. The paradigm biotechnology life cycle is: 1. scientist comes up with a great idea, maybe at a university; 2. she gets some small investors to put in $10 million; 3. maybe they go into phase 1 or phase 2 trials and spend another $50 million; 4. at the end of the day, the drug or diagnostic fails. One in every 50 comes up with something that works, and then it’s worth $1 billion.” Based on this course, no investor is going to risk putting money into one of these companies if the patents aren’t there to begin with, he noted.

Gaede agrees, highlighting the potential impact on personalized medicine. “The important point for the personalized medicine industry is that if a company cannot obtain sufficient patent protection, and competitors can then follow in the company’s footsteps without having to do all the expensive, upfront research and development, where is the incentive to invest? If we can’t protect the identification of specific biomarkers, which necessarily implicate a person’s genetic sequence, and tie that to diagnostics and treatments, we may hurt investment in the personalized medicine industry that has such enormous promise.”

Yet critics of patenting aren’t wholly persuaded. “The data do not support that argument,” said Jeffrey Kant, MD, PhD, immediate past chair of the CAP/ACMG Biochemical and Molecular Genetics Resource Committee and Professor of Pathology and Human Genetics at the University of Pittsburgh Medical Center. “There are now in excess of 1,000 clinical tests on genes, and many of those tests involve genes that are as complex or more complex than say, BRCA1 or BRCA2 genes. What’s required to develop a genetic test—we do that all the time in my lab. And I’m in a modest-size academic laboratory. We don’t have any venture capitalists supporting us. The vast majority of the genetic tests, many labs can and have developed. There are many labs with a menu of at least 100 different gene-based tests.”

Similarly, Yale’s Howe also highlighted how many times markers come right out of the literature. “You can have a company that says they have a patent on a particular mutation in a gene, and you ask them, where did you get that? Well, they bought it from researchers at a university. So if you really think about it, where did the researchers get the money to do the original work? A lot of that came from the federal government. So there is a lot that’s at odds in this because so much of the research starts out as NIH money—our tax money.”

Government agencies have not been silent on the matter, but the two most significant reports—one from the National Research Council (NRC) and one from the Secretary’s Advisory Committee on Genetics, Health, and Society (SACGHS)—found it difficult to come to solid conclusions on how gene patents affect researchers or patients. The 2006 NRC Report, “Reaping the Benefits of Genomic and Proteomic Research: Intellectual Property Rights, Innovation, and Public Health,” does warn that “the potential for a ‘perfect storm’ exists, in which future discoveries in genomics and proteomics that would benefit the public health and well-being could be thwarted by an increasingly complex intellectual property regime.” But as yet, the report found scant evidence of research being slowed due to intellectual property problems.

The more recent 2009 draft report from SACGHS, “Gene Patents and Licensing Practices and Patient Access to Genetic Tests,” also noted there was no “broad or consistent evidence” of gene patents restricting access to tests by patients, though it admitted it was difficult to document systematic effects, either positive or negative. The draft report did find, however, that patenting did not seem to be necessary for developing or commercializing genetic tests. The report also found that whether or not a company licensed a test to many providers was key to whether patient access to the test became a problem.

Looking Toward the Future

One of the main complaints directed at gene patents is that because they make it possible for only one company and one lab to control testing, the usual innovations and improvements that come about from a large community of lab scientists using a test are limited. “Maybe there is some incredibly innovative company or person who can look at all aspects of a test and create something new and interesting from it. But generally that’s not going to be the case. You need multiple institutions, multiple people looking at the gene and asking questions about it that maybe no one else has thought of before,” said Howe. “Just like anything else in life, you really need many people looking at any question to really come to a good decision.”

As more and more companies follow an exclusive licensing model and only run patented tests out of their own labs, the traditional mix of hospital and commercial clinical labs could get pushed out of newer genetic testing, said Howe. “If they share the information through kits or relatively cheap licensing, we’ll still be in business, so to speak. But if companies pattern themselves after the Myriad model, which is exclusivity of testing, then hospital labs will not be allowed to participate in testing.” Problems will also ensue if providers have to interact with a different company for each test, increasing costs to everybody.

Likewise, as more and more genes are patented, both research and lab-developed clinical testing becomes more complex as laboratorians try to sort out what’s patented, what’s not, and what the limits are of each patent claim. “Life is a series of complex biologic processes in cells, and there are many, many points where molecules interact with each other to accomplish important functions. So you can imagine with that being the case that looking at many, meaningful medical questions, that the products of multiple genes could be involved. And if you had a number of different intellectual property holders for each of those, working out the licensing of that would be very demanding,” explained Kant.

However, Hinsch suggested that once laboratorians and researchers get an idea of what to look for, individual gene patents should be relatively easy to sort through. “The nice thing about DNA is that it has sequences that are like barcodes. So, with not much effort you can actually use free, web-based systems to search the patent database for your amino acid or nucleotide sequence. So I would say it’s easier than in many technologies. There are a million ways that you or I can describe a mousetrap, for instance, that would make it hard to search for and find that kind of mousetrap. Is it a clasp, a holder, a device, etcetera. So actually it’s pretty easy compared to most spaces to find a patent.” It can become complicated, though, when the aim is to test for many genes at once, and a lab or company is faced with possibly licensing rights from multiple patent owners, he added.

Hinsch also contests the idea that diagnostic companies with gene patents are out to stop or sue researchers looking into genetic tests. “If you’re an individual researcher at a university, the likelihood that a diagnostics company is going to sue some academic researcher who isn’t making any money himself off of the test itself, is pretty much zero. Everyone will find a counter-example, but frankly the people who are worried about getting sued are the competitors of that company. These researchers are not targets.”

While on first blush it might seem that removing patent protection would create more opportunity and lead to better access and more testing, the long term consequences might not be so rosy, warned Hinsch. “I think various parties would say that if the ACLU wins, diagnostics will become cheaper and more prevalent. I’m skeptical of that. I think current diagnostics on the market now could become cheaper. All those people who currently have patents and thought they could keep other people out will no longer be able to do so. On the other hand, I’m not so sure that 20 years from now, there will be as many improvements in diagnostics as there would have been if all those companies would have been able to stay in business, as well as those about to form. I truly think many diagnostics companies would not form, and these are the ones who would take things through the FDA. Researchers in the university aren’t looking to make kits to send to labs—they make a discovery and then move on to the next thing.”

Hinsch suggested that perhaps the crux of the matter is not patenting, but a healthcare insurance question. Certainly if the cost of patented tests was brought down, much of the ire directed toward Myriad and other companies from the public might be soothed. Currently, Myriad charges about $3,000 for the BRCA1 and BRCA2 test, and not all insurance plans cover it. “I’m not sure everything is as screwed up as people think. My clients at biotechnology companies go home and love their children, too. They are inspired scientists but also business people who want a way to win through the system.”

Nowak agreed that there are difficult and complex choices to be made. “I don’t know that there are simple outcomes. We have a system of patents for a very good purpose and that needs to be respected. On the other hand, we have this controversy now because it’s in conflict with what many of us believe, and it must be resolved. It certainly will be a multi-year process—and that’s fine. All of the different parties really need to discuss this in order to come to a resolution. We need to think very carefully about this and resolve the dilemma that we find ourselves in.”

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