Wednesday, February 14, 2007

Clearing the Gene Patent Thicket

The gene patent issue, which I addressed once before, continues to boil. Derek Lowe has two good back-to-back posts (with another anticipated) on the topic, triggered by a Michael Crichton OpEd piece in the NY Times. A few weeks back there was another opinion piece in the Sunday NY Times, which Hsien Hsien Lei has covered over at Genetics & Health(NY Times articles require free registration).

There are really two classes of concerns, and concern holders, in the debate. At the one end you have the Crichtons and many others who feel that any sort of patenting of genes is improper and immoral. At the other you have a lot of people (such as myself) who believe certain gene patents are appropriate, but that there is a lot of confusion generated by the legacy of past gene patents.

I can understand some of the concern of the Crichton camp. It is true that genes are natural monopolies -- in general, one can't invent around them easily if the goal is genetic testing. On the other hand, some of Crichton's complaints are simply those that are generally levied against any intellectual property protection in biomedicine: that it creates 'unnecessary' costs and unequal access to lifesaving information. But, as last weeks approval of the MammaPrint microarray-based breast cancer diagnostic test reminded, private companies do bring important health innovations to market. Without premiums for the investors to cover the very high risk of failure, such innovations might never reach market.

As an aside, the issue of failure in biotech is nicely covered in another of Lowe's postings, though Xoma? What pikers! Only 0.75B gone through in 25 years -- that's only 0.03B/year. I'm pretty sure a certain company in Cambridge that burned off closer to 1.5B in about 12 years, and Celera must have done even better than that in terms of bucks per year.

There are some other issues to consider in this space. If patent law is altered to exclude gene patents, will it exclude multigene tests? If I make a small change in a protein therapeutic, ala Aranesp, is that patentable? Are other purified preparations of natural products, such as natural-product derived pharmaceuticals, still patentable?

For those of us who feel that gene patents are appropriate, but under well defined restrictions, the current situation is clearly a mess. During the genomics gold rush, companies flooded the patent office with applications. The general assumption was that these patents would probably be worthless -- but that nobody could take the chance that the courts & Patent Office would decide otherwise. Until one was litigated, nobody knew how things stood -- and nobody felt they could afford to wait around and potentially find themselves naked. From the regulatory ambiguity of the time sprung a gazillion patents. The paralegals used to book me for an hour at a time just to sign patent forms -- since I wrote the software that tag things as 'worth' patenting, I was a co-inventor or sole inventor on many dozen applications. Most of my applications are dead, but there is a horrible mess out there.

Now these patents would just be irritating if they only gave fodder to writers, but there is a real cost to society of them. I was at a Celtics game recently with a friend and a bunch of his buddies, several from his law firm. One specialized in biotech law and was quite confident that none of those genome era patents would hold up under legal assault. But it is that very risk of litigation that hangs a cloud over everything. If you are working on these genes, prudence says that you must review all of those patents, and perhaps worry about them even though they are junk. The same sort of uncertainty that led to these patents continues to make them a problem.

So, I would like to make the following proposal. It won't interest the 'gene patents are evil' crowd, but I will claim it would make good public policy. An organization should be set up and funded with the goal of retiring mass numbers of the gold rush patents. At regular intervals, the organization would hold a Dutch auction to buy up blocks of patents. You couldn't sell them individual patents, only large batches. Once purchased, the organization would have the patents cancelled (if that isn't available in the current law, then that would require some legislation). Or, the organization would somehow be a legal black hole for the patents, forbidden to ever sell them or defend them in court. Not only would the regular auctions slurp in patents, but they would establish a market value for the patents -- and so profitable companies might just donate blocks of patents instead of selling them to reap tax benefits.

The last thing one would want to do is create more incentive for junk patents. The regular auctions would be capped so that these patents would be selling for cents on the dollar spent to get the patents in the first place. Only patents of a certain age range would be taken, perhaps nothing younger than 5 years old. Nobody's going to make a profit on this, but for companies stuck with lots of essentially worthless patents, this is free money. But because it is delivering a value to society, by reducing the overhead imposed by all those patents, I would argue it is a worthwhile expenditure.

This approach wouldn't solve the junk patent problem, and it clearly wouldn't address the patents that biotech executives think do have value. The controversial ones will all fall in that category, as they are controversial precisely because they can transfer money to entrepreneurs. Public debate about patenting is healthy & appropriate, but let's think carefully about unexpected consequences.


Andrew Chin said...

Crichton’s knowledge of patent law is spotty, but he’s on the right side of the debate. For a more detailed discussion, please see my blog.

rdf said...

Maybe I'm being niave, but I think of this a very short-term concern.

In my mind the sequencing would not have happened so quickly without the (overly optimistic) hopes of oceans of cash that would be generated by the new theraputics that were going to quickly be developed after the sequence was available.

In a few years the patents will expire and their life can't easily be extended with techniques similar to those used for drug patents and then the question becomes moot. All in all it doesn't seem like a bad tradeoff

Kevin E. Noonan said...

A few years ago there was a group called the SNP Consortium, whose purpose was to file and obtain patents to disease-related SNPs, and once granted, to dedicate them to the public. I know Motorola (who were dipping their toes in the microarray space) was a partner, and there were many others. I'm not sure what became of the idea, but it is parallel to what you propose with the Dutch auction idea.

For more on the topic, see