Emergence and Expansion of the Biotechnology Industry

The importance of the university scientist to commercial biotechnology has been well documented (U.S. Congress, 1988; NRC, 1988; Blumenthal et al., 1996). Early concerns about collaborative research arrangements in biotechnology, particularly those involving universities and industry, focused primarily on issues of academic freedom, proprietary information, patent rights, and other potential conflicts of interest among collaborating partners (Blumenthal et al., 1986; Kenney, 1986; Kodish et al., 1996). Biotechnology firms and large pharmaceutical companies, however, continue to support biotechnology research in universities.

Concerns persist regarding the subtle impacts of these collaborative arrangements, specifically whether university-industry relationships adversely affect the academic environment of universities by inhibiting the free exchange of scientific information, undermining interdepartmental cooperation, creating conflict among peers, or delaying or completely impeding publication of research results (Firlik and Lowry, 2000).

Several drawbacks to university involvement with industry-sponsored research have been identified (Dueker, 1997; Firlik and Lowry, 2000). University officers and faculty are concerned about constraints on academic freedom and the inevitable conflict between commercial trade secrecy requirements and traditional academic openness. Many circumstances and forces at play prompt companies to control research conduct and protect the secrecy of research data. In surveys of the biotechnology industry conducted in the 1990s, 56 percent of companies reported that in practice, the university research they supported often or sometimes resulted in information that was kept confidential to protect its proprietary value beyond the time required to file a patent (Blumenthal et al., 1997). On occasion, conflicts between companies and faculty about the content in published reports of industry-sponsored research have been reported. For example, companies have preferred not to publish the results of studies resulting in less-than-optimal data, although academics asserted that the insights to be gained by publication would advance scientific understanding (Bodenheimer, 2000).

On the other hand, much of this research activity is mutually beneficial and also advantageous to society, because it can accelerate the commercialization of useful medical products. Such collaborations also allow companies to remain up-to-date and informed of discoveries as they come off the bench. For clinical research, such as human drug trials, access to patients at university hospitals can be a primary motivator for collaborative research.

Further, biotechnology advances have frequently returned new science and new products to universities for basic and translational research. The production of recombinant erythropoietin (EPO) by Amgen in the late 1980s provides one such example. EPO is the hormone that regulates red blood cell proliferation. Although it had been discovered several decades before, it had never been available in sufficient quantities for many studies. The availability of the recombinant protein enabled such research.

From the university perspective, working with industry carries real benefits. In the medical and agricultural sciences, universities have benefited from research collaborations with industry, especially in the face of limited government research funding. Increased access to resources allows universities to expand research programs, attract new faculty, build facilities, purchase equipment, and enhance their reputations. Industrial relationships bring valuable equipment and prototypes to the university laboratory. Collaboration with industry also provides faculty with an understanding of industrial problems, enriching the training of engineers and scientists for their future work in an industrial environment.

The EST Patent Debate

As discussed in further detail in Chapter 3, in the late 1980s and early 1990s genomic companies and universities, and NIH itself (under the leadership of then-director Bernadine Healy) began filing patents on ESTs, sparking debate in the scientific community over the public health consequences of genomic patenting and its impact on the culture of openness in science.

An EST is a small region in the active part of a gene. In the absence of genome sequence, an EST can be labeled and used as a probe to locate and isolate functional genes. Combined with a genome sequence, an EST can provide a valuable clue to the presence of a gene in the genome. Generally, EST patent applications contain broad claims, and researchers typically have identified new ESTs, guessed at the biological function of the encoded protein fragments through computerized searches of the DNA and protein databases, and then sought utility patents on the proteins on grounds of hypothetical function.

That strategy stimulated a forceful statement in 2000 by Aaron Klug and Bruce Alberts, the presidents, respectively, of the Royal Society of London and the National Academy of Sciences in the United States. They called guessing at gene function by computerized searches of genomic data bases “a trivial matter.” Its outcome might satisfy “current shareholders' interests,” but it did “not serve society well.” Holding that its results did not warrant patent protection, they stressed that “the human genome itself must be freely available to all humankind” (Alberts and Klug, 2000).

On the other hand, in the mid 1990s USPTO considered ESTs patentable subject matter based on a variety of utilities, such as a DNA probe. ESTs may be novel, because the sequence has not yet been published. Further, ESTs may “enable and describe at least one use, as a DNA probe.”

The scientific community has expressed several concerns about the allowance of broad patent claims on ESTs, including:

• whether a DNA sequence including well-studied genes later found to contain the EST sequence would infringe the patent on that EST sequence;
• whether companies currently using gene sequences in clinical trials or those selling recombinant proteins could infringe on one or more EST patents and as a result be forced to re-engineer their gene sequence and repeat years of experiments to avoid the infringement; and
• whether industry would delay or refrain from investing in genomic research and development due to uncertainty surrounding the scope of millions of secret EST claims at USPTO that have not yet been made public either by publication of the application or issuance of the patent itself.

Many scientists believe that ESTs should not be patentable, based partly on the way they are discovered. Companies in the EST race ran genetic samples through DNA-sequencing machines that automatically identified expressed sequences but did not reveal what corresponding protein the sequence encoded or its functions. NAS President Bruce Alberts noted that, “This involves very little effort and almost no originality” (Abate, 1999). The scientific community's concerns center on the fact that ESTs have a number of immediately useful characteristics that are critical to research on hundreds of diseases. For example, an EST can be used as a label to localize that sequence on a chromosome. Because the sequence information contained in an EST is enough to distinguish one gene from all others, each EST may be used to identify the chromosomal location of its corresponding gene. The ability to identify where a particular gene is located on the chromosome is important in the detection of chromosomal mutations and corresponding disease states. Using an EST as a tool in this way could provide diagnostic tests for many diseases. Thus, restrictive patenting and licensing of ESTs potentially could throw a roadblock in the way of many pathways that investigators are taking.

In 1999, amidst growing concerns about the United States Patent and Trademark Office's (USPTO's) publicly signaled acceptance of broad claims on ESTs and other genomic inventions, then NIH Director Harold Varmus and the National Human Genome Research Institute Director Francis Collins wrote to USPTO urging the implementation of strict criteria for biotechnology patents, and specifically urging that the bar be raised for utility standards for DNA patenting so that longstanding requirements for utility would clearly apply. Since 2001, USPTO clarification of standards has become much more rigorous—that is, fewer claims are allowed.

Ultimately, through a rigorous application of existing law, USPTO did decide that it was necessary to require more than just a piece of DNA with a unique position in the genome to establish that something was useful. The applicant also must demonstrate that he or she had conceived of some practical and substantial function of that piece of DNA. However, the utility could not be something merely general and nonspecific, for example, a computer homology search indicating a similarity to a characterized protein. On the other hand, experimental data were not needed. This policy fell short for those expecting that there would be a requirement for more rigorous experimental evidence of utility. Varmus and Collins appealed to USPTO for consideration, writing:

While we were pleased with the PTO's new stance on the utility of polynucleotides for which only generic utilities are asserted, we were very concerned with the PTO's apparent willingness to grant claims to polynucleotides for which a theoretical function of the encoded protein serves as the sole basis of the asserted utility.⁹

Currently, many patent applications directed to ESTs are pending before USPTO.

There have been persistent concerns that the patenting of an EST or indeed a gene without knowledge of its function, or with only a sketchy knowledge of its function, could preclude a product patent by some future party who discovers a much more detailed and significant functional role for that gene. Although a process patent may well be available, its value is more limited because of monitoring problems. Equally worrisome, the initial patent may block the research needed to elucidate the full role of the gene. This illustrates one feature of the patent law. A patent issued on something novel and useful can be enforced against persons seeking to use the patent for uses developed in the future. So far, USPTO has taken the statutory requirements for patents seriously and has issued few patents on ESTs. One well-known case illustrates the point, however. A firm received a patent on the gene encoding the CCR5 lymphocyte receptor without any prior knowledge of its link to HIV infection. Once the disease link was established, the patentee declared its intention to enforce the patent against others, making use of the discovery in the development of any pharmaceutical to combat HIV (Johnson and Kaur, 2005).

Recent litigation has addressed the confusion related to the status of EST patents. In July 2005 a three-judge panel of the U.S. Court of Appeals for the Federal Circuit upheld USPTO in rejecting an EST patent application by Monsanto Corporation (In re Fisher, No. 04-1465) on the grounds that it lacked a specific, substantial, credible utility. Although the panel was split, the dissenting judge agreed that the patent should be denied—but on the grounds of obviousness rather than on utility.

Finally, now that the one-gene/one-protein postulate has proven to be overly simple (that is, one gene can encode many related variants), prior patents on genes claiming to be responsible for the production or regulation of one protein may be questioned as new discoveries are made about the many new and previously undiscovered related proteins encoded by the patented gene. Although much remains to be clarified about the appropriate standards for DNA patenting and its impact on the conduct of biological research, the burgeoning field of protein analysis raises even more consequential and distinct intellectual property policy issues. The discipline of proteomics may become an even more commercially important and active patenting arena than DNA because of its closer proximity to disease detection and therapy. Moreover, proteomics may raise novel questions of patent law that must be addressed carefully by a system that for other biological materials has evolved painfully slowly.

The Worm Model

In emerging fields, scientists often have banded together to share ideas and results before formal publication, in hopes that even more rapid scientific advances may occur. In contrast to publication, in which readers are expected to use the information without constraints, these prepublication sharing groups often impose some additional “rules of etiquette”—some restraint on the use of the information to protect the interests of the individual scientists in exchange for early access. Genetics provides several such examples, including the Drosophila community, in which the early adopters of this organism communicated data and materials amongst themselves before publication. The community of C. elegans (worm) researchers is another example and is particularly relevant, because the precedents developed can be traced directly to the data release policies of the public HGP.

C. elegans, a small free-living nematode, was selected by Sydney Brenner in the 1960s to extend his molecular genetic dissection of life from prokaryotes to animals. He considered—but discarded as too complex—the scientifically better-known and established fruit fly, Drosophila melangaster. Despite the obscurity of the worm, Brenner's vision of what might be learned from molecular genetic studies of this 959-celled animal soon attracted a small group of graduate students and postdoctoral fellows to Brenner's laboratory in the Medical Research Council (MRC) Laboratory of Molecular Biology, Cambridge, England.

Within the overall goal of understanding how genes specified the development and behavior of the worm, individual students applied themselves to different aspects of its development, from the early events in embryogenesis to the wiring of the nervous system. But all were united both by the overall goal and by the need to develop the tools necessary to study this recent arrival in the laboratory. Mutants of all kinds had to be isolated and the associated DNA mutations positioned on the genetic map. The genetic tools to manipulate these mutants more effectively were revised constantly. Basic methods of manipulation had to be refined. A simple but telling example is the invention of a formed, platinum wire to replace the sharpened stick used to pick individual worms under a dissecting microscope. Word quickly spread through the laboratory and soon everyone had a platinum wire “pick.”

Within a few years, Brenner's postdoctoral fellows went off to establish their own laboratories, often in the United States. Feeling isolated and at a competitive disadvantage relative to their peers studying the better-established Drosophila, they found that communication with their colleagues in the larger Cambridge group and with other new worm laboratories proved critical for success of the next generation. This phenomenon was institutionalized by the establishment in 1975 of the Worm Breeder's Gazette (WBG) by Bob Edgar of Santa Cruz, an unedited compilation of contributions that was copied and sent off to all subscribers. Twice a year, laboratories submitted brief descriptions (typically one page) of new methods and exciting results, and a month later the WBG would appear. The WBG also periodically provided the community with updated genetic maps, the basic guide for all work. The information usually was shared well before any publication was planned, greatly speeding dissemination of ideas and findings. In return, readers eschewed “unfair” use of such privileged information, with fairness and individual judgment enforced by community reaction.

In addition to the WBG, the community shared stocks, mailing mutant strains around the world. Mutants were a currency of the community, providing the means of discovery. Sharing might be preceded by an explicit agreement on usage for recently obtained mutants, but mapping stocks, other tools, and published mutants were shared without constraint. These practices led eventually to the formation of a stock center, started by Bob Herman of the University of Minnesota, which centralized the activity.

It was within this community that John Sulston of the MRC Laboratory of Molecular Biology in the early 1980s began the construction of a physical map of the worm genome. The construction of the map required specialized methods carried out on thousands of clones and was considered a massive project at the time. But to be of use, the physical map had to be associated with the genetic map through genes, thereby locating the DNA fragments on the chromosomes. The community-at-large carried out this crucial activity. The central mapping laboratories (the Cambridge laboratory was joined by the Waterston laboratory at Washington University in St. Louis in the mid-1980s) provided clones to individual laboratories; in return, the laboratories identified the clones containing particular genes. As more genes were placed on the physical map, its utility became greater, rapidly escalating productivity. Again, rules of etiquette were developed to balance the interests of the community and the individual contributing laboratories. Progress on the map was communicated initially via the WBG, but as electronic media and the Internet developed, updates were provided through these media. Formal publications on the map were limited to descriptions of the methodologies and broader conclusions.

As the physical mapping project transformed into a genome sequencing project beginning in 1990, the two mapping laboratories continued their collaboration with each other and the community. The two laboratories jointly developed strategy and shared methods freely. Often the two laboratories competed in finding solutions to problems; at other times, the laboratories focused on complementary problems.

The keys to making this long-distance collaboration work were full disclosure and complete sharing of the results. In working with the community, the sequencing laboratories made the areas to be sequenced clear and submitted the results to international public databases as each segment of the genome was sequenced. But as the volume of sequence data increased along with the interest in them, it became clear that the user community could exploit the sequence data well before they were in final form. Because the public databases at the time accepted only complete sequence, the centers began posting intermediate sequence products on their Web sites. Again rules had to be developed to govern access to this prepublication data. Users were cautioned about the incomplete, imperfect nature of the sequence and were asked to consult with the centers before publication, to find out if a more complete version of the sequence was available. The centers asked to be acknowledged for providing the sequence. The users also were asked to notify the centers of any specific genes found within the sequence. This clear and practical experience in collaboration and in sharing early sequence data with the community proved invaluable when in 1996 the nascent human sequencing centers met in Bermuda to formulate plans.

The Bermuda Rules

In 1996, an international group of scientists, from both the public and private sectors, who were engaged in genomic DNA sequencing, passed a unanimous resolution, commonly referred to as the Bermuda rules, which stated that “all human genomic DNA sequence information, generated by centers funded for large-scale human sequencing, should be freely available in the public domain in order to encourage research and development and to maximize its benefit to society” (see Box C). Since the sequencing phase of the publicly funded HGP began, all of the data generated by participants have been deposited in publicly available databases every 24 hours. By 2003, an essentially complete copy of the human genome sequence was posted on the Internet, with no barriers to its use, and therefore no subscription fees or other obstacles.

BOX C

Summary of Principles of the International Strategy Meeting on Human Genome Sequencing (1996). The following principles were endorsed by all participants. These included officers from, and scientists supported by, the Wellcome Trust, the U.K. Medical (more...)

With the 1998 entry of Celera Genomics into the race to sequence the human genome, issues of access to the emerging data became more contentious between the public and private projects. On March 16, 2000, President Bill Clinton and U.K. Prime Minister Tony Blair issued a joint statement: “to realize the full promise of this research, raw fundamental data on the human genome, including the human DNA sequence and its variations, should be made freely available to scientists everywhere”¹⁰

At the beginning of the structural genomics initiative, international meetings were held to determine policies for data sharing. At a meeting of genomics and proteomics investigators held at Airlie House in Virginia in the summer of 2000, participants agreed that the coordinates for structures would be deposited in the PDB no later than six months after the completion of a structure determination.¹¹ The proposed delay was in direct response to the patent policies in Europe and Asia and the funding model for work being carried out on those continents. The policy for the pilot study phase of the U.S. Protein Structure Initiative (PSI) projects required data deposition within six weeks of completion of a structure determination. In Phase 2 of the PSI, the waiting period will be reduced to four weeks.

Unlike the consensus leading to the Bermuda Rules governing the HGP, general agreement on the desirability of instantaneous release of all interim data produced by structural genomics efforts was a nonstarter at Airlie House and subsequent international meetings. As for the issue of structural data release described above, much of the resistance was fueled by perceptions that patents on protein structures could generate significant financial returns within Japan and Europe. Funding agency representatives from these countries argued that without the prospect of such benefits, they would be hard pressed to make the case for funding structural genomics initiatives.

Sharing Biomedical Research Resources

The 1999 principles were developed in response to complaints from researchers that restrictive terms in material transfer agreements¹⁴ were impeding the sharing of research resources. These restrictions came both from industry sponsors and from research institutions. In the Principles and Guidelines, NIH urges recipient institutions to adopt policies and procedures to encourage the exchange of research tools, specifically: (1) minimizing administrative impediments to the exchange of biomedical research tools; (2) ensuring timely disclosure of research findings; (3) ensuring appropriate implementation of the Bayh-Dole Act; and (4) ensuring dissemination of research resources developed with NIH funds.

Four main principles are addressed in the report:

1. Ensure Academic Freedom and Publication
   1. Recipients are expected to avoid signing agreements that unduly limit the freedom of investigators to collaborate and publish.
   2. Brief delays in publication may be appropriate to permit the filing of patent applications and to ensure that confidential information obtained from a sponsor or the provider of a research tool is not inadvertently disclosed.
2. Ensure Appropriate Implementation of the Bayh-Dole Act
   1. Recipients must maximize the use of their research findings by making them available to the research community and the public, and through their timely transfer to industry for commercialization.
   2. The use of patents and exclusive licenses is not the only, nor in some cases the most appropriate, means of implementing the act. Where the subject invention is useful primarily as a research tool, inappropriate licensing practices are likely to thwart rather than promote utilization, commercialization, and public availability of the invention.
   3. Utilization, commercialization, and public availability of technologies that are useful primarily as research tools rarely require patent protection; further research, development, and private investment are not needed to realize their usefulness as research tools. In such cases, the goals of the act can be met through publication, deposit in an appropriate databank or repository, widespread nonexclusive licensing for nominal or cost-recovery fees, or any other number of dissemination techniques.
3. Minimize Administrative Impediments to Academic Research
   1. Recipients should take every reasonable step to streamline the process of transferring their own research tools freely to other academic research institutions using either no formal agreement, a cover letter, the Simple Letter Agreement of the Uniform Biological Materials Transfer Agreement (UBMTA), or the UBMTA itself.
4. Ensure Dissemination of Research Resources Developed with NIH Funds
   1. Unique research resources arising from NIH-funded research must be made available to the scientific research community.

A second section of the report, “Guidelines for Disseminating Research Resources Arising Out of NIH-Funded Research'” contains both a sample document, a UBMTA, used when transferring nonpatented materials, and sample phrases that can be used in license agreements. The goal of the NIH guidance is to simplify the process of transferring research resources from one party to another. By streamlining the process, it will help to avoid confusion about how to implement the Bayh-Dole Act properly, and will help ensure that the interests of all parties, as well as the public health, are properly balanced.

NIH Best Practices for the Licensing of Genomic Inventions

Consistent with its ongoing interest to facilitate broad access to government-sponsored research results, in 2004 NIH issued Best Practices for the Licensing of Genomic Inventions. This document aims to maximize the public benefit whenever Public Health Service-owned or -funded technologies are transferred to the commercial sector. In this document, NIH recommends that “whenever possible, nonexclusive licensing should be pursued as a best practice. A nonexclusive licensing approach favors and facilitates making broad enabling technologies and research uses of inventions widely available and accessible to the scientific community.” The policy distinguishes between diagnostic and therapeutic applications and cautions against exclusive licensing practices in some areas.

The report considers the following to be “genomic inventions”: cDNAs, ESTs, haplotypes, antisense molecules, small interfering RNAs (siRNA), full-length gene and expression products, methods, and instrumentation for the sequencing of genomes, quantification of nucleic acid molecules, detection of SNPs, and genetic modifications.

The best practice guidelines for seeking patent protection on genomic inventions depend on whether significant investment by the private sector is required to make the invention widely available. If significant investment is necessary, then patent protection should be sought. If significant investment is not necessary, however, as with many research material and research tool technologies and diagnostics, then patent protection rarely should be sought.

Regarding best practices in licensing research tools, the report recommends pursuing a nonexclusive licensing agreement whenever possible. If an exclusive license is necessary to encourage research and development by the private sector, however, then the license should be tailored to promote rapid development of as many aspects of the technology as possible. This may include limiting the field of use, specific indications, or territories the licensee has exclusive rights to develop. NIH also recommends that specific milestones be included in the licensing agreement to ensure that the technology is fully developed by the licensee. If the licensee does not meet these milestones and/or progress toward commercialization is deemed inadequate, NIH recommends that the license be modified or terminated. Additionally, whenever possible, a licensing agreement should include a provision allowing both the funding recipient and nonprofit institutions the right to use the licensed technology for research and educational purposes.

The BRCA Story

At a scientific meeting in 1990, Mary-Claire King, then a professor at the University of California, Berkeley, announced the discovery that a small region of chromosome 17 could be linked to early-onset breast cancer. This discovery was based on 15 years of research by King as well as others in this field and fueled interest in the scientific community to find the gene responsible for the high incidence of breast cancer in some families. The Breast Cancer Linkage Consortium (BCLC), an international group of scientists interested in the genetic inheritance of breast and ovarian cancer, was formed, and by pooling resources and data, scientists in the consortium were able to make discoveries more quickly than by working alone. Nevertheless, the race to the discovery of the gene was a competitive one.

In 1994, a group of scientists working under the direction of Mark Skolnick at the University of Utah announced that they had identified the gene underlying hereditary breast cancer, and named the gene BRCA1. At the time, OncorMed also performed BRCA1 diagnostic testing based on its 1997 U.S. patent on the BRCA1 consensus sequence (U.S. Patent #5,654,155). Skolnick and the University of Utah applied for and eventually were granted a U.S. patent for the gene sequence of BRCA1. They licensed the exclusive rights to Myriad Genetics, a biopharmaceutical company founded in 1991 by Mark Skolnick and others.

The studies of the BCLC also uncovered evidence that there was at least one other breast cancer gene, based on the fact that only 45 percent of familial breast cancer cases showed linkage to chromosome 17. Soon a region on chromosome 13 was identified, and the gene was localized by two groups, one led by Skolnick and Myriad Genetics and a second at the Institute for Cancer Research in the United Kingdom. BRCA1 and BRCA2 are both tumor suppressor genes whose protein products interact to control cell growth and division. Certain mutations in the BRCA1 or BRCA2 gene disrupt the regulation of growth in mammary cells, a critical step on the path to tumor formation.

Both groups filed patents in December 1995 on the second gene, termed BRCA2. CRC Technology, the technology transfer office of the Institute for Cancer Research, filed for a patent in the United Kingdom on behalf of researcher Mike Stratton, and Myriad Genetics filed for a patent in the United States. CRC Technology was granted a patent in the United Kingdom for its discovery of BRCA2 (GB 2307477), and licensed exclusively the right to a BRCA2 diagnostic test to OncorMed, a U.S. company providing genetic testing services to clients. Myriad Genetics and OncorMed were in a legal dispute over both of these patents; in 1998, the dispute finally was settled with Myriad paying OncorMed for exclusive rights to the patents. Myriad, in essence, now had a monopoly over diagnostic testing for BRCA1 and 2 familial breast cancer in the United States.

Myriad Genetics began enforcing its patent claims against certain universities, a previously rare practice. In 1999, Arupa Ganguly, of the Clinical Genetics Laboratory at the University of Pennsylvania, received a patent infringement notification from Myriad Genetics. Ganguly had developed independently a test to screen for mutations in the BRCA genes and was charging a fee to her patients to perform this test. The University of Pennsylvania was advised to cease activities related to its testing for the BRCA genes for fear of litigation by Myriad Genetics.

To curb criticism from the academic community, in 2000, Myriad Genetics negotiated an agreement with NIH so that NIH-funded researchers would receive a discount on Myriad's BRAC analysis test as long as the test was used for research purposes. The negotiated price was $1,200 per test instead of the $2,580 Myriad normally charged. In exchange for this discount, Myriad would have access to resulting research data (Hollen, 2000).

Myriad also sought patent protection on BRCA1 and BRCA2 in the European Union. In 2001, three European Union patents on BRCA1 were granted to Myriad. Myriad's first European Union patent, EP 699754, covered any methods of diagnosing a predisposition for breast and/or ovarian cancer using the normal sequence of the BRCA1 gene. Its second European Patent, EP 705903, covered 34 specific mutations of the BRCA1 gene and diagnostic methods for detecting those mutations. The third European patent, EP 705902, covered the BRCA1 gene itself, the corresponding protein, therapeutic applications of the BRCA1 gene, and diagnostic kits. In 2003, Myriad was granted a European patent on BRCA2. This patent, EP 785216, covered materials and methods used to isolate and to detect BRCA2.

In 2001 and 2002, European researchers challenged Myriad's three patents on BRCA1. When the BRCA2 patent was granted in 2003 by the European Patent Office, researchers challenged it as well. Institut Curie, a French cancer research center, and Belgian officials led the challenge along with other French and Italian research institutes. Most of the complaints fell under the categories of failure to show novelty, inventive step, industrial application, and disclosure.

In February 2004, Myriad's patent on BRCA2 was struck down because CRC Technology had filed the claim for the gene first. The European Patent Office (EPO) granted Cancer Research U.K. patent EP 868467B1 for the BRCA2 discovery. Cancer Research U.K. plans to allow free public access to its patented gene sequence.

In May 2004, Myriad's first European patent on BRCA1, EP 699754, was struck down, based on errors in the original sequence and lack of an inventive step. By the time errors were corrected by Myriad in subsequent U.S. patents, the sequence was in the public domain (Sheridan, 2004). In January 2005, two of Myriad's other BRCA1 patents met similar fates in the EPO. The scope of Myriad's claims in EP 705902 and EP 705903 was limited to probes on only the correct parts of Myriad's originally filed sequence on BRCA1 and only for testing in Ashkenazic populations. Those claims are being reviewed and may be opposed as well. These rulings by the EPO were considered a victory to those supporting free access to BRCA1 testing in Europe (Vermij, 2005).

The Canavan Disease Story

Another aspect of the controversy around genetic testing addresses the rights of patients and families whose tissue donation enable the discovery of a disease gene and eventually development of a specific test for its presence. The fight for control over the CD gene patent illustrates this debate. CD is a degenerative brain disease that irreversibly leads to loss of body control and death in children. It is a rare recessive disorder that affects about 200 children, mostly in Ashkenazi Jewish families.

Patient families were instrumental to the development of the CD genetic test. A Chicago couple with two afflicted children secured seed funding to develop a CD prenatal test, and more than 160 families provided the tissue and DNA samples that enabled discovery of the gene. Dr. Reuben Matalon at the Miami Children's Hospital (MCH) led the team that discovered the CD gene (Kaul et al., 1993). Matalon and MCH received a patent on the gene in 1997 (U.S. Patent #5,679,635).

At the time the patent was issued, the Canavan Foundation was promoting CD testing. In 1998, the American College of Obstetricians and Gynecologists recommended screening for Ashkenazi Jewish couples. Soon afterwards, MCH began enforcing its patent rights. It charged a $12.50 per test royalty and, more significantly, limited the number of laboratories that could perform the test and the number of tests performed each year. It also sought to identify one laboratory that would become the market leader and ultimately receive an exclusive license (it later abandoned this attempt). MCH came under severe criticism from patient advocacy groups and from a CD screening consortium that had been banned from performing genetic testing. In 2000, MCH initiated negotiations that involved relaxing its licensing practices and offering funds from royalties for outreach and testing in exchange for ceasing public criticism. Consortium members rejected the terms.

Also in 2000, CD families and tissue donors sued MCH; they hoped to regain control of the gene patent, testing costs, and availability. In its 2003 decision, the U.S. District Court for the Southern District of Florida dismissed several of the plaintiffs' claims—including lack of informed consent, breach of fiduciary duty, fraudulent concealment of the patent, and misappropriation of trade secrets. The judge did not dismiss the families' claim of unjust enrichment made by tissue donation, concluding that it should be litigated. MCH and the litigants decided to settle the claim; however, the settlement is sealed. Under terms of the confidential settlement, the Canavan Foundation and the families agreed to renounce any further challenges to MCH's ownership and licensing of the CD gene patent, MCH would continue to license and collect royalty fees for CD clinical testing, and license-free use of the gene in research would be allowed.

The Huntington's Disease Story

Treatment of intellectual property for the gene associated with Huntington's disease (HD) represents a counterpoint to the BRCA1/2 and CD examples. HD is an autosomal dominant disease causing involuntary movements of all parts of the body, cognitive decline, and psychiatric disturbance. It is inevitably fatal over a 10 to 20 year course. In 1979, the Hereditary Disease Foundation (HDF) organized a workshop at NIH to discuss using DNA markers to find the HD gene. HDF subsequently funded a grant to David Housman, a molecular biologist from the Massachusetts Institute of Technology, and his graduate student James Gusella to develop and use restriction fragment length polymorphisms (RFLPs) for genetic linkage analyses to locate the HD gene. Gusella continued this research at the Massachusetts General Hospital (MGH), where he began collaborating with Nancy Wexler, then at the National Institute of Neurological Disorders and Stroke. Wexler and colleagues traveled to a region in Venezuela that is home to the largest number of HD kindreds in the world, more than 18,000 people, in order to collect pedigree information and DNA for these genetic studies. The collaboration was successful; in 1983 Gusella, Housman, and colleagues discovered a RFLP marker tightly linked to the HD gene on the short arm of chromosome 4 (Gusella et al., 1983). This discovery marked the first time a disease gene of unknown chromosomal locale had been localized using anonymous DNA markers.

It would take another decade to clone the HD gene itself. To this end, scientists who discovered the HD gene marker, as well as investigators who had developed technologies for cloning genes from linked markers, in 1983 organized the Huntington's Disease Collaborative Research Group (HDCRG), under the auspices of HDF. After 10 years of collaboration by more than 50 scientists, the HD gene was isolated in 1993 (MacDonald et al., 1993). The HD gene encodes a protein called “huntingtin,” the function of which remains unknown. The protein normally contains a stretch of 7 to 34 glutamines in a row. In HD, a DNA expansion causes an increase in repeats of CAG, the nucleotides encoding glutamine. In late middle age, when 40 or more CAGs occur in a row, HD almost invariably appears, usually around 30 to 40 years of age. Juvenile onset results with 60 CAG repeats or more.

When linkage was discovered in 1983, it was evident that presymptomatic and prenatal testing would be possible. These tests carry the potential to bring devastating news to HD individuals and families. Accordingly, many groups collaborated to develop detailed guidelines for HD genetic testing. In all instances, the groups included HD family members, interdisciplinary health care professionals, and research scientists. The development of counseling guidelines, including pre-, during-, and post-test counseling sessions, accompanied the development of meticulous laboratory protocols. The biotechnology company Integrated Genetics (IG), whose founders included Housman and Gusella, introduced the first HD diagnostic test in 1986. IG had been selected by MGH to carry out genetic testing, and its leadership had been included in the advisory group developing guidelines. (IG was acquired by Genzyme in 1989 and continues to do HD genetic diagnostic testing.)

Treatment of intellectual property related to the HD gene and the genetic test has been largely shaped by patient and family concerns. MGH has been granted three patents related to the HD gene. The first (U.S. Patent #4,666,828) was issued in 1987 and claimed diagnostic uses of DNA markers to detect the HD gene; Gusella was listed as the sole inventor. The others (U.S. Patents #5,686,288 and #5,693,797) were issued in 1997 and claimed huntingtin nucleic acid and protein sequences, respectively; Gusella was one of four inventors from his own laboratory. The patent application from which the 1997 patents issued was broadly written and described diagnostic and therapeutic uses of the HD gene; however, MGH did not pursue further patents claiming these methods. When Gusella and MGH filed the first application, their main concern was that the marker not be used inappropriately; they believed they might use the patent to control the testing process. Similarly, discussion of patenting the huntingtin gene usually focused on using licenses as a means to enforce testing and counseling protocols. To date, MGH has not exerted its own patent rights or licensed the patents to others for financial gain.

The HD test is now available from more than 50 academic and commercial laboratories in the United States. It also is offered in Canada, Europe, Australia, New Zealand, Mexico, and other Latin American countries. In each region, there is no centralized licensing or pricing. There are also no complaints of the test being prohibitively expensive. (The HD genetic test is available at considerably lower cost than the BRCA tests, from $200 to $500 in the United States. The pricing of both may reflect real costs as much as business decisions. The CAG repeat test for HD involves particular primers, PCR, and accurate counting of size bands. The Myriad tests for BRCA 1 and 2 involve complete sequencing of two extremely large genes.)

The broad availability of the HD test has important ramifications for patients. First, it allows verification of test results; sending a blood sample to two different laboratories independently avoids error, which can have dire consequences. Second, the relatively low cost allows at-risk individuals to pay out-of-pocket and thus to maintain privacy with respect to insurers and employers. In the United States, many presymptomatic individuals who choose to be tested elect to pay for the test themselves. In fact, part of the genetic counseling protocol involves warning people that if they are found to have the abnormal form of the HD gene, their medical and life insurance may be jeopardized. Even individuals who are symptomatic may not want their insurance to cover the test, because a positive test implicates other family members as having a genetic risk, who then become uninsurable.

Genetic testing for HD can have profoundly catastrophic and irrevocable repercussions, as there is no treatment, prevention, or cure. Since the test became available in 1986, and where it is offered, fewer than 20 percent of eligible candidates worldwide have chosen to be tested. The psychological burden, combined with prospects for loss of privacy, insurance, and employment discrimination, have often weighed against testing. Patent-related issues, however, have not been shown to inhibit prospects for testing, in contrast to BRCA1/2.

Once the HD gene was cloned, academic and commercial laboratories interested in testing took it upon themselves to develop the proper test methodology to ensure quality control. They shared test samples representing normal and variably sized expanded alleles in order to ascertain that all the laboratories were using the same techniques and getting comparable results. This cross-checking among laboratories was also done after genetic linkage was discovered as a quality control check, but accurately counting CAG repeat numbers requires more diligence and skill. Testing quality control by sending around test samples has been done periodically ever since.

Responsibility for monitoring quality control was assumed by the academic and commercial laboratories themselves since, at least for HD and many other genetic disease tests, quality control for test performance itself currently is not monitored by any federal or state agency.

The Clinical Laboratory Improvement Amendments (CLIA) were passed by Congress in 1988 to establish “quality standards for all laboratory testing to ensure the accuracy, reliability and timeliness of patient tests.” The Centers for Medicare and Medicaid Services regulates all laboratory testing (except research testing) performed on humans in the United States through CLIA regulations, but CLIA's mandate extends only to examining the physical conditions and quality control procedures of the laboratory and not to the actual performance of tests (although proficiency testing is required for many standard tests).

If the genetic test involves using a commercially available kit, FDA regulates the kit as a device and must approve the manufacturer's claims regarding the composition and performance of the kit before it can be marketed. If the test is considered a “home brew,” no matter how complicated, to date neither FDA nor CLIA has opted to regulate its performance and accuracy.

In order for academic and commercial laboratories to be able to deliver an HD test result to an individual, the laboratory must be CLIA certified. As noted above, this does not mean that CLIA certifies the accuracy of specific test results, only that the laboratories in which the tests are conducted meet CLIA requirements. Many laboratories, most particularly academic laboratories that are not CLIA certified, conduct the HD test for research purposes only and these test results cannot, by law, be given to individuals, nor should they be entered into the medical record.

Gene Patents and Diagnostics

Currently, more than 1,000 genetic diseases can be diagnosed through available tests. Although some of the associated genes are free of patents, most are not. The cases of the BRCA, CD, and HD genes represent the range of situations that might apply to such genes. In a number of instances, as with HD patents, the patent holder does not enforce patent claims to prohibit testing. In some other instances, patent holders offer nonexclusive licenses for reasonable fees, making the patented tests generally available. (Following litigation, this is now the case with the CD patent.). Some gene patents, however, have been licensed exclusively, and licensees (or the original patent holders, such as Myriad) either enforce their patent rights to prevent others from performing genetic testing, or present prohibitively expensive terms under which others may perform genetic testing. Anecdotally, there are instances in which hospital laboratories performing tests on genes covered by patents have continued to offer the test until subjected to very strong pressure from the patent holder or exclusive licensee. In numerous other cases, however, hospitals have stopped offering these tests or have decided against developing genetic tests due to fear of litigation (Henry et al., 2002; Merz and Cho, 1998). (Also see further discussion in Chapter 3.)