Pseudoxanthoma elasticum

THE RACE TO PATENT THE HUMAN GENOME IS ON. CAN THE PATENT OFFICE KEEP UP?

Night and day, the computers at Incyte Genomics churn out gene sequence data. Almost as quickly, Incyte's computers crank out gene-sequence patent applications.

Once scientists at the Palo Alto, Calif., biotech firm identify a sequence that may help develop profitable new drugs, the data is digitally funneled to Incyte's patent division. There the company's legal staff chooses from among 50 patent application templates that classify new genes and proteins by their function. "To write these applications from scratch would cost $15,000 to $20,000 and take four weeks," says Diana Hamlet-Cox, manager of Incyte's patent department. "We can file hundreds of sequences" in a week. Indeed, over the past nine years, Incyte has patented 580 gene sequences - more, she claims, than any other company.

The sprint to decode the human genome may be winding down, but another race is heating up: the mad dash by Incyte, Celera Genomics and other biotech companies to patent the sequence itself. With pharmaceutical firms beginning to design personalized drugs based on different genetic profiles, biotech businesses see a gold mine in licensing to drugmakers patented gene sequences and the proteins they produce. Some of these biotech companies also want to prevent competitors from commercializing genetic information because they plan to develop their own drugs. In just the past few years, genesequence patents have become the biotech industry's lifeblood.

But a serious clot is developing in the patent approval process. Tens of thousands of biotech patent applications are inundating the U.S. Patent and Trademark Office, lengthening the lag time between application and patent to two years or more. Such delays threaten to cost biotech companies millions of dollars in lost licensing and royalty fees.

The sheer volume of gene patent applications is only part of the problem. While the government makes patent decisions that will guide medical research for decades, scientific understanding of the genome's complexity changes almost daily. Earlier this year, for instance, scientists radically revised the number of estimated human genes from about 120,000 to fewer than 40,000. That means some biotech companies could conceivably hold patents on genes that don't even exist or are part of a gene patented by competitors.

Concerned about the ramifications of granting broad monopolies on genes, the patent office this year tightened its regulations to require that patent applicants more precisely identify the function of genes proteins. This shifting and legal landscape presages an onslaught litigation over the owner of gene sequences and proteins. Adding to the uncertainty: an upcoming U.S. Supreme Court case that could change the rules of the patent process.

The outcome of these patent wars will be crucial to the new generation of biotech firms that have emerged to exploit the sequencing, of the genome. "Patents are a key to our industry," said James Davis, general counsel of Human Genome Sciences, at a recent biotechnology conference. "None of us can develop products without them."

The Supreme Court set the stage for the biotech patent explosion two decades ago. In a watershed 1980 case, Diamond v. Chakrabarty, the court ruled that a patent could be granted for a genetically engineered bacterium. Until then, living matter was generally considered unpatentable. Without that ruling, says John Doll, the patent office's director of biotechnology, "you wouldn't have the sequencing project. You wouldn't have the large genomic companies. You wouldn't have biotech thriving in the U.S. like it is right now."

But the Supreme Court could not have foreseen how the genomic revolution would collide with the patent office. The office, spread across 18 buildings in the suburbs of Washington, received approximately 20,000 biotech patent applications in the fiscal year ending last September. Thousands of applications currently await review, stacked like cordwood on examiners' desks. "People are filing patents at a rate never seen before," says George Xixis, the intellectual property counsel at CuraGen, a New Haven, Conn., biotech firm.

The agency is particularly daunted by the genomics onslaught. While the office's overall approval rate is 70 percent, it OKs only 40 percent of biotech-related patent applications. The patent office now takes an average of 14 months -- a federally mandated deadline -- to issue its first response to an applicant. Unless Congress gives the patent office more funding, examiners initial response time is expected to double by 2006.

Securing a gene patent is already an elaborate dance, in contrast to years past. Then a biologist might start with an enzyme secreted by the pancreas that aids digestion and work backward to find the gene that produces that enzyme. Today scientists begin with the genetic sequence and work forward to understand its effect on the body.

But how much knowledge of function is enough? For Incyte, knowing that a gene sequence produces a particular protein is grounds for a patent on both.

Celera Genomics in Rockville, Md., which sequenced the human genome, is seeking patents on 150 to 300 genes valuable for drug development. Robert Millman, the company's director of intellectual property, acknowledges that the patent office faces intense pressure to limit the scope of gene patents. "The world is worried that patent monopolies will be granted on genes with little proof," he notes.

Francis Collins, the director of the National Human Genome Research Institute who also led the public effort to sequence the genome, is concerned about the long-term consequences of privatizing genetic material. "One has to worry about this becoming a disincentive [for research] rather than the incentive patents are supposed to supply," he says.

The world's largest pharmaceutical companies share some of Collins' misgivings. Drugmakers face the costly prospect of paying biotech companies to license specific gene sequences and proteins needed to develop genetically targeted medicines. To gum up the patent works. 10 drug giants formed the SNP Consortium in 1999 to search for minute genetic differences called single nucleotide polymorphisms. By freely publicizing SNPs - which can be used as drug targets - Big Pharma hopes to make it more difficult to patent those sequences, according to SNP Consortium Chairman Arthur Holden.

Those touched by genetic diseases are worried about licensing agreements that could make genetic tests too costly. Sharon Terry's two children have a rare disorder called pseudoxanthoma elasticum, or PXE, a connective tissue disease. Terry who lives in Sharon, Mass., recruited PXE patients to donate blood and loaned those samples to researchers. After the PXE gene was identified, she was listed on the patent application. Terry who assigned her patent rights to a foundation she started, hopes that controlling licensing will keep testing affordable and accessible.

With so much at stake, conflicts over gene patents are destined for the courts. Next fall, the Supreme Court is slated to hear a case that could shape future litigation over biotech patents. If upheld, Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co. could make it harder for biotech companies to bring patent infringement cases against competitors that artificially alter a patented gene sequence, replacing one bit of DNA with another, without changing the proteins that gene produces.

However, the case won't resolve some fundamental disputes over gene patents, such as whether patenting a gene sequence amounts to a patent on any proteins produced by that sequence. "The law is running so far behind," says John Barton, a professor at Stanford Law School. "None of the key issues has yet to reach the appellate courts."

It's just a matter of time. In late 1997, two biotechnology companies, Myriad Genetics and Oncormed, became embroiled in a dispute over a gene patent that is a portent of litigation to come. Both firms had received patents on the same gene, called BRCA1. When mutated, BRCA1 predisposes women to breast and ovarian cancer. Salt Lake City-based Myriad discovered the gene and received patent rights to its various mutations; Oncormed, now owned by Gene Logic of Gaithersburg, Md., garnered a patent on a variation of the normal version of the gene. Both companies hoped to make money from a BRCA1 gene test and sued each other for patent infringement.

The case eventually settled with Myriad retaining exclusive rights to the test. But if different mutations in the gene are subsequently discovered by competitors, Myriad could potentially face more litigation.

As biotech companies continue to produce gene patent applications pellmell, they just might want to add litigators to their patent divisions.

COPYRIGHT 2001 Standard Media International
COPYRIGHT 2001 Gale Group