Are The Patent Police Ganging Up On Biotech?

Pursuing a treatment for AIDS may be easy compared to dealing with the U.S. Patent & Trademark Office (PTO). At least that has been the experience of immunologists Dennis J. Carlo and Jonas E. Salk, the legendary inventor of the polio vaccine.

In 1987, Carlo and Salk came up with a vaccine they believed could slow or prevent the onslaught of AIDS. They immediately applied for a patent. To win it, though, they couldn't show just that the vaccine worked in a petri dish. They were required to test it on chimpanzees and, later, in a trial involving people infected with HIV. The company that they co-founded, Immune Response Corp., got financial help from Rhone-Poulenc Rorer as a joint-venture partner. And without knowing if they would ever get a patent, the partners ended up spending $45 million before they finally got the O.K. last October. "We were lucky," says Carlo. "The hurdles were very high."

PATENT BLOCK. Far higher than they ought to be, many biotech executives say. After all, they argue, the purpose of a patent inquiry is merely to decide whether someone should get legal rights to an invention--not whether it's ready for drugstore shelves. Stringent rules that keep companies from getting patent monopolies may hurt their ability to raise capital and may slow down research, the industry complains. "We have a Food & Drug Administration that protects the public against drugs that don't work," fumes Robert P. Blackburn, chief patent counsel at Chiron Corp. in Emeryville, Calif. "The role of the patent office is to grant patents on inventions."

The PTO agrees that its examiners have often held biotech companies to a much tougher standard of usefulness than that used for makers of ordinary drugs, who don't often have to submit evidence from human trials. Some examiners who have required human clinical trials have said it's because the behavior of biotech products in the body isn't easily predictable from the way they act in the lab.

Some venture capitalists appreciate the patent examiners' close scrutiny, which they say helps them by winnowing out marginal science. Take Kevin J. Kinsella, both a partner in Avalon Ventures, a venture-capital firm in La Jolla, Calif., and CEO of Sequana Therapeutics, a La Jolla company that is working on sequencing specific disease-causing genes. "Why should biotechnology be treated differently from any other technology developing something that's half-baked?" he asks. "The crybaby status of biotech on this is unseemly."

Nonetheless, the patent office is starting to take the industry's complaints seriously. Charles E. Van Horn, deputy assistant commissioner for patent policy, says some examiners may have believed that human clinical trials were a legal requirement for biotech patents. They're not, he says, adding, "we definitely should make some changes." As a first step, the patent office has begun beefing up the legal education of its 175 biotech examiners, many of whom are more knowledgeable in science than in patent law. PTO Commissioner Bruce A. Lehman says that, in some cases, they may even act as if "it's a peer review rather than a patent examination."

Lehman has other steps in mind, too. He says that he plans to hold hearings at yearend to explore the industry's complaints and make certain the patent office's standards don't discourage legitimate investments in

biotech. "If there are problems, we're not going to gloss over them," he promises.

"CHILLED FEET." Change can't come too soon for companies and universities that say they've been pinched. Small companies with no products on the market depend on the promise of patent monopolies to lure venture-capital financing. "Once you pass all the hopes and dreams, patents are the one concrete measurement of value," says Ronald D. Brown, president of privately held Octamer Inc. in Mill Valley, Calif., which focuses on cancer and AIDS treatments. And companies that license technology from universities in anticipation of a patent are getting "chilled feet," says Lita Nelsen, director of Massachusetts Institute of Technology's Technology Licensing Office.

The PTO's impending moves should take some of the chill off a big sector of the biotech industry. Still uncertain, though, is what will happen with patents on sequences of DNA that have no demonstrated usefulness. A major dispute arose when the National Institutes of Health filed patents covering 6,000 partial gene sequences in 1991 and 1992. PTO examiners cast doubt on the claims because the NIH hadn't figured out their uses. The NIH voluntarily withdrew the patent applications in February. But private companies--such as Human Genomic Sciences Inc. in Rockville, Md., and Incyte Pharmaceuticals Inc. in Palo Alto, Calif.--are charging ahead with applications on gene sequences.

SCALED-DOWN PROTECTION. Opponents of patents on sequences with no demonstrated usefulness say those patents would discourage other people from pursuing biotech products that might result from the sequences. The sequencing companies, however, disagree. Denial of patent protection "will turn our work into something like generic drugs, where our knowhow is publicly available," frets Randy W. Scott, vice-president for research and development at Incyte Pharmaceuticals. "That's a disincentive for pharma- ceutical development," he adds.

Plenty of lawyers are staying up late thinking of ways to get out ef the impasse. Washington patent attorney Jorge A. Goldstein favors issuing patents for DNA sequences if it is proved that they can be used in a diagnostic product or scientific process, even if they can't actually cure a particular disease. Another idea, from San Diego lawyer Ned A. Israelsen, is to generate a weak, copyright-like form of protection for discoverers of gene sequences. Someone who might come along later and find a use for the sequence would then still be able to earn a patent for the application.

Those ideas and others (table) should get a full airing when the PTO holds hearings on the subject starting late this year. The perfect rule for legal protections on new inventions has never been easy to come by. But a sensible, predictable policy might unleash groundbreaking innovations that would benefit everyone.

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