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Global Agenda Council on Genetics
Intellectual Property Law, Genetics and Ethics:
Facts, Challenges and Opportunities
This paper highlights the diverse dimensions of intellectual property (IP) law relating to genes or DNA
segments of any organism (gene patents). It aims at facilitating the understanding of the main issues
currently present or emerging in the field of gene patents and reviews possible points of entry to build
on identified challenges and opportunities.
IP protection is part of the enabling environment for scientific and commercial activity, namely research,
development, production and distribution. The basic approach of IP is to turn certain elements of
knowledge or information (in a broad sense) into property rights by providing limited exclusivity, which
allows the IP owner to prevent competitors from performing certain specified and well-defined actions
during the period of legal protection. The IP system is thus aimed at benefiting society by encouraging
innovation and promoting greater access to information and technology. It supports innovation by
offering a tool for return on investment and creates a legal framework that makes innovations and the
creation of knowledge beneficial to society.
The IP system – composed of the legal and regulatory dimension and the “toolbox” (copyright, patents,
trademarks, know-how or trade secrets in certain jurisdictions and other forms of protection) –
represents a strategic management tool for technology development and business relationships. The
right to exclude competitors from entering a defined market for a certain period of time enables
innovators to leverage risk capital and investments. IP rights also support the structured transfer of
technology and the creation of partnerships and permit exercising a certain degree of influence over
the delivery chain. To provide for a balanced use of these rights, the IP system includes a refined
system of checks and balances, such as excluding some subject matters from being patentable,
providing research exemptions (in most jurisdictions), limiting IP rights through anti-trust and
competition policies, and accessing court systems for adjudication.
Biotechnology is a rapidly growing field whose growth is facilitated by, among others, the IP system,
and patent protection in particular. The dynamics in biotechnology can be illustrated by the number of
patent applications in that field, especially in the area of gene patents. A search in the International
Patent Classification (IPC) classes A61K 48/00, C12N 15/12 and C12N 15/52, for example, shows a
dramatic increase of patent activity during the late 1980s and 1990s, a slight decline from 2002 to 2006,
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and a renewed increase since then.
Ethical discussions add yet another dimension to an already complex issue. They centre on whether
genes should be patentable at all, and if so, which ethical limitations should govern the use of gene
patents. Other questions that have been intensively debated include the impact of gene patents on
research, market dynamics for product development, clinical uptake of new tests and treatment, and
evolution of licensing practices, particularly those of the public sector.
Current Policy Issues in Genetics
The IP system has evolved as an internationally agreed public policy instrument in its modern form
since the 18th century. Elements of the system can be found in the United States Constitution and
several international treaties, including the 1883 Paris Convention for the Protection of Industrial
Property and the 1995 World Trade Organization (WTO) Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS). The TRIPS Agreement considers the trade dimension of IP and is
the most comprehensive international agreement on IP to date. It sets down minimum standards for
many forms of IP regulation as applied to nationals of other WTO Member States.
These international agreements have led to some convergence of laws and practice, but in reality the
IP system is implemented and operates at the national level and rights are granted under national
1
See http://patentscope.wipo.int/search/en/search.jsf
-2jurisdiction. There are, for example, no worldwide patents, but only national or regional patents. This
structure gives countries a certain degree of flexibility to implement the framework at the national level
(the so-called TRIPS flexibilities). Countries may use TRIPS flexibilities to pursue their public policies,
for instance in specific fields like access to pharmaceutical products or protection of biodiversity, or
more generally, in establishing macroeconomic and institutional conditions that support economic
development. This flexibility is particularly important for developing and least developed countries.
Over time, a number of policy and regulatory frameworks have been developed by certain countries to
improve the use of IP by implementing limited exceptions and limitations to IP rights, including research
exceptions or exclusions for diagnostic and therapeutic purposes. Other mechanisms aim at improving
access to knowledge. A number of collaborative models also emerged and have led to creative use
and sharing of IP such as public-private partnerships, particularly product development partnerships
(PDPs) in the health sector.
The legal obligation to fully disclose newly invented technologies as a condition for patent protection
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creates an extensive base of public information. Researchers and potential competitors can use this
published data to pursue further innovation and improvements by “inventing around” granted patents.
Hence, the role of IP in the innovation cycle also includes creating a transparent base of publicly
available technological knowledge.
Gene Patents and the Legal Framework
A gene commonly refers to a fundamental unit of inheritance. It resides in a stretch of DNA or RNA that
can code for an RNA molecule, leading to substances – mainly proteins – that have many functions in
an organism. To study genes, researchers use a process called sequencing. This process begins with
the isolation of a gene from its natural state (removal from an organism), followed by purification
(separation of surrounding cellular material), and, in many cases, multiplication of the DNA sequence
of interest.
Patents can only be granted if the patent application relates to patentable subject matter and all
patentability criteria are cumulatively met. National patent law generally distinguishes a non-patentable
discovery from a patentable invention. For instance, some national patent offices have taken the view
that an isolated gene is patentable subject matter as opposed to a non-patentable gene as it occurs
naturally in a human body.
Much of the debate surrounding gene patents results from a perception that patent protection of a gene
sequence is equivalent to ownership of that gene. Patent rights, however, do not grant material
ownership in the sense of a right to use. Patent rights allow excluding others from making, using,
offering for sale, selling or importing the patented invention. Other areas of law may determine whether
a patented invention can be used. For example, bioethics legislation, not patent law, determines
whether and to which extent it is allowed to do research with human embryonic stem cells.
Concerns have been expressed about patents that claim genes per se because such a patent would
then cover all possible applications of that gene sequence, including those which are not yet known. It
has been argued that such broad protection of genes is inappropriate and overly broad. It has also
been shown that such patents can inhibit research and development under certain circumstances. This
could be the case where no research exception exists as it would block competitors or other market
players if no alternative technology exists or if the patentee applies a restrictive licensing strategy. To
address such concerns, law in some countries, for instance, requires that the function of a gene needs
to be precisely indicated in the patent application or even in a patent claim.
It is often said that gene patents, unlike inventions in most other technical areas, are difficult to invent
around. Whether and to which extent it is difficult to invent around also depends on the breadth of the
granted claims. In practice, researchers and companies aim at overcoming potential hindrances
through licensing and other business strategies, such as seeking non-assertion covenants, merging
with or acquisition of a company that owns relevant patents, challenging the validity of the relevant
patent, seeking compulsory licenses or abandoning a given project/investment.
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For instance, accessible through WIPO Patentscope at http://patentscope.wipo.int/search/en/search.jsf
-3Ethical Questions
Ethical considerations add another dimension to ongoing discussions around IP and biotechnology.
The question whether genes should be patentable subject matter has been much debated; offering
patent protection for genes has been criticized often based on cultural and religious grounds. Some
dislike the basic concept of associating IP rights with biological materials, especially if they are human.
To others, genes are part of the common heritage of humanity and should therefore only be public
property. Still, others believe that genes do not meet the criteria for patentability as they represent
discoveries rather than innovation.
Some argue that DNA sequences are not simply chemical compounds, but also strings of information
and that the genome should be viewed as a huge database whose information should be available to
all. Others feel that the unique nature of the genome warrants special consideration. The finite number
of the genome, the fact that naturally occurring DNA sequences are natural products, the relatively
small number of human genes and the limited genetic variation between species might call into
question the assignment of property rights. It is feared that within a short time all of the human genes
could be patented and that their owners would be beneficiaries of significant “reach through rights” on
the many uses of these genes yet to be discovered.
Another concern is to avoid misappropriation of genetic material through patenting. Certain countries
have addressed such concerns, for example, by requiring applicants to disclose in their patent
application the origin of any genetic material covered by the application, and to indicate that any such
material was subject to prior informed consent and an access and benefit sharing agreement with the
individuals, communities or states holding such material.
These issues have been controversially discussed in the context of the UN Convention of Biological
Diversity (CBD), as well as in the World Intellectual Property Organization (WIPO) Intergovernmental
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Committee on Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore and
the WTO TRIPS Council.
Emergence of Knowledge Networks and Open Innovation
A number of developments in the 1990s led to an increase in knowledge networks and more open
collaboration models. Drivers of these changes include an increased focus of the public sector in R&D
and the aim to enhance the efficiency of R&D, the creation of PDPs, and the need to integrate many
different scientific disciplines and technological platforms.
The open movement is epitomized by open source, originally in software that led to the Linux operating
system, whereby innovations are jointly developed by contributors from different institutions. The open
science movement followed with the intent of fostering transparency and access to scientific
developments, particularly in the context of reusability of data, tools and materials. Open access
relates to efforts to make the scientific literature freely available, particularly online. These elements
have been harnessed by the life sciences community and have led to increased knowledge flows and
collaborations.
The most significant element, however, is open innovation, which does not mean the absence of IP,
but the proactive leveraging of IP through more open approaches towards knowledge management.
Open innovation can therefore be defined as “the use of purposive inflows and outflows of knowledge
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to accelerate internal innovation, and expand the markets for external use of innovation”. Here,
licensing is the means to facilitate structured knowledge and IP transfers in an effort to open the
innovation process itself and support technology transfer. In that context, IP is not seen as a defensive
right but as a starting point for inclusion.
This drive to collaborate with multiple players has changed engrained bilateral licensing to a
collaborative and often collective approach with new institutional arrangements, particularly in the
biomedical area where access to data (in the form of copyright), inventions (in the form of patents) and
bailments (in the form of material transfers) regulate the relationship between actors. These structures
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See http://www.wipo.int/tk/en/igc/
Chesbrough, H, Vanhaverbeke, W, West, J. Open Innovation: Researching a New Paradigm, Oxford University
Press, 2006.
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-4include data generation and technology developing initiatives such as the Human Genome Project and
the HapMap Project; data repositories such as GenBank and the Database of Genotypes and
Phenotypes (DBGaP); technological platforms such as Sage Bionetworks and the BioBricks
Foundation; various forms of consortia and public-private partnerships in the precompetitive space
such as the Innovative Medicines Initiative and the Biomarkers Consortium; and pools (e.g. the
TM
emerging LibrAssay DNA diagnostic pool being formed by MPEG-LA) and clearinghouses (e.g. the
Medicines Patent Pool Foundation).
Promoting Access to Innovation through Judicious Use of the IP System
When discussing the IP system and genetic inventions, the following possible issues are of primary
relevance:
Legislation and Administration
In many countries, general patent law has been applied to inventions in biotechnology and genetics.
However, biotechnology is special, not at least because it is based on living organisms.
Biotechnological inventions can be self-reproducing and self-disseminating. Technological advances in
genetics have spurred an intensive and controversial debate about the appropriateness of the effects
of such practice.
This debate has influenced patent law and practice in certain countries and regions and has led to
specific biotechnology patent legislation, such as the 1998 European Union Biotechnology Directive
98/44/EC, specific Patent Offices Guidelines or the 2001 United States Patent and Trademark Office
(USPTO) Guidelines for Determining Utility of Gene-Related Inventions.
These new rules for gene-related patents have established definitions, clarifications and certain rules,
such as what kind of gene patents can be granted. They have addressed the impact of patents on R&D
and continued access to innovation, information and technology, for example, clarification of
exemptions for research, experimental and diagnostic use. These instruments have added special
public order (ordre public) and morality clauses, rules about the scope of biotechnology patents,
specific exhaustion rules, etc. Revised examination guidelines and newly established patent offices’
quality frameworks are an expression of an increased focus on a high-quality outcome of administrative
procedures (also in a special technical field such as genetic engineering) and the coherent application
of regulations by patent offices.
New Licensing Models
Licensing patent and related rights can solve many access issues. A patent holder may license an
invention to others free of charge, against payment, in exchange with other rights, or not enforce a right
in certain fields (non-assertion covenant). Rights may be licensed to one party only (exclusive license)
while retaining the same rights (co-exclusive), or to more than one party (non-exclusive). Some patent
right holders permit broad, non-exclusive use of their technology, such as allowing free use for
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research but charging a fee for commercial use.
One possible approach is to define a restricted coverage requiring the patentee (if rights are to be
available over diagnostic sequences) to grant reasonable royalty licenses for the use of the sequence
as part of an array or for use of the sequence in pharmacogenetics.
A number of additional policy and regulatory frameworks have been developed to improve the use of IP
through access to knowledge. The US Bayh-Dole Act of 1980 is a well-known example of such a policy
that fostered university-industry collaboration and significantly accelerated technology transfer and
increased collaborations.
However, a patent owner is not obliged to license patent rights and can be the sole provider of the
product or service covered by the patent. To address this situation, in well-defined situations, many IP
systems provide for the legal instrument of compulsory licenses to safeguard the public interest or
remedy anti-competitive behaviour.
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For instance, the HIV test kit technology patented by NIH and Institut Pasteur, and the Choen-Boyer patent on
recombinant DNA from UC San Francisco and Stanford University.
-5Complementary approaches include the promulgation and adoption of best practices in licensing. For
example, public sector institutions may consider policies that allow them to provide only non-exclusive
licenses for certain types of inventions, such as those related to diagnostics, rigorously retain
humanitarian rights, limit exclusivity in licensing therapeutics and vaccines, and broadly adopt field-ofuse licensing practices.
Self-Regulation
An efficient way to promote access to information and technology could be to encourage self-regulation
by patent holders. Such self-regulation could involve: public funding of research with the explicit aim of
putting results into the public domain; private sector access initiatives (e.g. consortia, patent pools or
collective licensing organizations; and educational or corporate social responsibility initiatives. Selfregulation and efforts to promote self-regulation are attractive because they are less likely to distort
incentives to innovate. However, they are also less likely to garner public trust and their effectiveness
in changing behaviour has yet to be proven.
Collaborative Models of Drug Development and Technology Transfer
Collaboration is the working together of individuals to achieve a common goal. Research collaboration
could therefore be defined as the working together of researchers and research-based institutions to
achieve a common goal of producing new scientific knowledge.
New scientific knowledge and technologies can be produced in many different ways. On one side of
the spectrum, research and development are carried out in entirely vertically integrated enterprises,
where everything is done in-house (this is not a collaboration per se, except between different units
within one institution). At the other end of the spectrum are various forms of open innovation models
where a range of different partners are working together.
Another way to categorize different types of collaboration is by the partners involved: public institutions,
companies or a mix of both. Although public and private actors have been collaborating for a long time,
the collaboration used to be somewhat linear whereby knowledge and technologies from the public
sector would be transferred to private actors. With the advent of biotechnology and molecular biology,
the lines defining such linear collaboration are not only increasingly blurred, but the model is more
interactive and iterative with public and private actors assuming various roles throughout the product
development and deployment process.
Importantly, licensing, contract research, R&D alliances, collaborative research and joint ventures are
ubiquitous instruments in all forms of collaboration. Importantly, the legal instruments that define
partnerships remain the same, while the specific terms and the context of these strategies have
changed significantly over the last decade or two.
Similarly, patenting and licensing strategies vary between and within public and private actors. This in
turn defines the types of deal terms in licensing or collaboration agreements. When looking at
collaborative mechanisms, one needs to distinguish between the models and definitions that refer to
the innovation environment and models for resolving or “sharing” ownership.
Additional public-private partnerships that are committed to enabling the licensing of competitive
regulatory and other data, research tools, know-how (trade secrets) and patents have recently
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emerged. One example is WIPO Re:Search, a voluntary consortium involving WIPO, BIO Ventures for
Global Health (BVGH), private sector companies, the public sector and academic research institutions
from around the world, with the World Health Organization (WHO) providing technical advice to WIPO.
WIPO Re:Search provides a platform for public and private sector organizations to make IP, know-how
and expertise available to the global health research community in an effort to promote development of
new drugs, vaccines and diagnostics in the field of neglected tropical diseases, malaria and
tuberculosis. Institutions joining WIPO Re:Search commit to making selected IP assets available under
royalty-free licenses anywhere in the world for research, development and manufacture, and royaltyfree sales in all least developed countries. Terms of access for other developing countries can be
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See www.wipoReSearch.org
-6negotiated on a case-by-case basis. Within less than a year of its launch, over 50 institutions joined the
consortium as IP providers, potential users or supporters.