Blue Genes: The Sad State of Gene Patenting in Canada Thomas Kurys Table of Contents 1.0 Introduction ………………………………………………………………. 1 2.0 What is a Gene? …………………………………………………………… 2 3.0 Gene Patenting in Canada……………………………………………………… 3 3.1 Patent Law Overview …………………………………………………….. 3 3.1 Owning Life: A History of Patenting Living Things……………………. 5 3.2.1 Owning Life Case Law ………………………………………………….. 5 3.3 Patenting Genes: A Closer Look …………………………………………..8 3.3.1 Satisfying the Act …………………………………………………………9 3.3.1.1 Subject Matter …………………………………………………………..9 3.3.1.2 Novelty ………………………………………………………………… 9 3.3.1.3 Utility ………………………………………………………………….. 10 3.3.1.4 Non-Obviousness ……………………………………………………… 10 3.3.2 Gene Patents in Foreign Countries ……………………………………. 11 4.0 Should Genes Be Patented? ………………………………………………. 12 4.1 Effect on Research ……………………………………………………….. 13 4.1.1 Overview of Biotechnology Research ………………………………….. 13 4.2 Effect on Clinical Work ………………………………………………….. 15 4.2.1 Cancer and Genes: The Myriad Case …………………………………. 17 4.2.1.1 BRCA Testing in Canada …………………………………………….. 18 4.3 Effect on Commercialization …………………………………………….. 19 4.4 Ethical Issues ………………………………………………………………..20 4.5 A Change to the Gene Patent Regime is Needed …………………………20 5.0 Possible Solutions ………………………………………………………….. 23 5.1 Solution 1: Compulsory Licensing ……………………………………….. 23 5.1.1 Other Compulsory Licences for Patents in Canada ……………………23 5.1.2 Australian Model …………………………………………………………24 5.1.3 Possible Model for Gene Patents ……………………………………….. 25 5.1.4 Application to BRCA Testing…………………………………………… 25 5.2 Solution 2: Research Exemption …………………………………………..26 5.3 Solution 3: Government Issued Guidelines ……………………………… 26 6.0 Further Consideration: International Relations ………………………….27 7.0 Recommended Solution …………………………………………………… 28 8.0 Conclusion………………………………………………………………….. 30 9.0 Bibliography…………………………………………………………………31 1.0 Introduction As technology has evolved, so too has the application of the Patent Act.1 Once meant to deal with inventions that could be modeled with prototypes, the Act is now being used to protect abstract innovations, such as computer programs and genetic material. In the hands of an inventor, a patent is a very powerful tool. It gives them the exclusive right to make, use and sell their invention in exchange for the public disclosure of their patent. This monopoly provides the incentive to innovate, so that society may benefit from the added new and useful knowledge. However, in the realm of gene patents, left unchecked, this power can be used in many unsavoury ways. For example, patent holders could potentially deny access to life saving technologies, or make them so expensive as to render them unaffordable to all but the very wealthy. Thus, there is a need for a system that continues to stimulate innovation in genetic science while ensuring that the public fully benefits from the technology. This paper recommends that the Act be amended to include a provision that grants Parliament the power to award compulsory licensing to a third party who can demonstrate an overriding public need, as decided by a government administrative body. It is further recommended that the Act be amended to include a research exemption for genetic patents in medical technology. This paper will proceed in 6 sections. The first part, section 2.0, will provide background information on genetic science. From there, section 3.0 introduces genetic patents by explaining the Canadian patent law system, giving an historical overview of patents on life in general and then looking specifically at how patents on genes fit into 1 Patent Act, R.S.C. 1985, c. P-4. [Act] 1 this overall system. Section 3.3.2 then briefly compares this system with those in foreign countries. Once the Canadian gene patent climate has been described, section 4.0 will highlight a number of deficiencies in the way genes are currently patented in Canada and argue that they should remain patentable but that changes to the system are needed. This section sets out the negative and positive effects of gene patents on research, clinical work and commercialization. The controversial patenting of the BRCA genes in breast and ovarian cancer testing by Myriad Genetic Inc. will serve as a case study and illustrate the perils of gene patenting. Furthermore, section 4.4 will explore the main ethical issues of patenting genes. Having identified the main issues, section 5.0 will involve a critical discussion of several possible solutions, including compulsory licensing, research exemptions and government issued guidelines. Next, section 6.0 will consider the impact of any decision on Canada’s international trade relations. Finally, section 7.0 will present the proposed solution, which involves amendments to the Act to include provisions allowing for compulsory licensing and research exemptions in gene patenting, as well a set of guidelines and a government administrative body to evaluate the applications of compulsory licences and to promote awareness of gene patent issues. This paper explores legal opinions, cases and government reports from Canada and abroad. In taking a critical perspective, it combines elements of previously recommended alternatives to propose a novel solution to the issue of gene patenting in Canada. 2.0 What is a Gene? Before discussing the legal aspects of gene patenting, it is important to first explain what is being patented. Human cells contain a nucleus, within which are tightly coiled 2 structures called chromosomes. Normally, human cells have 23 pairs of chromosomes: one pair from the mother, the other from the father. Each chromosome has within it hundreds or thousands of genes. Each gene has a specific location and consists of an inherited genetic material called deoxyribonucleic acid (DNA). DNA contains codes that direct the product of proteins, which are used to form the structure of the cell and control the chemical reactions within the cell.2 The DNA of each gene is characterized by a sequence of bases known as the “genetic code”. DNA can be sequenced when it is removed and isolated from its natural state and clone or amplified.3 Section 3.3.1.4 will explain the process of isolating and sequencing a gene. Now that genes have been explained, their patentability will be discussed. 3.0 Gene Patenting in Canada In Canada, there is currently no specific legislation dealing with gene patents, thus they are subject to the Act. The following section will provide a general summary of Canadian patent law, followed by a historical synopsis of patenting life and then a description of how genes are currently being patented in Canada. 3.1 Patent Law Overview Patents are issued under the Act and are intended to “stimulate the creation and development of new technologies”.4 A patent lasts twenty years and gives its holder the exclusive right, privilege and liberty of making, constructing and using the invention and selling it to others to be used,5 in exchange for complete disclosure of the invention. As Australian Law Reform Commission “Gene Patenting and Human Health” issues paper 27, July 2003 at 30 [ALRC]. 3 Ibid. 4 David Vaver Intellectual Property Law, Irwin Law, Concord, Ontario 1997 at 113 [Vaver]. 5 Ibid. 2 3 Justice Binnie stated in Cadbury Schweppes Inc. v. FBI Foods Ltd.:6 “The disclosure is the essence of the bargain between the patentee, who obtains a…monopoly on exploiting the invention, and the public, which obtains open access to all of the information necessary to practice the invention.”7 Patents are necessary for technology to flourish. They provide an economic incentive to undertake the initial costs of researching and developing. Indeed, without their protection, as soon as a product enters the market, competitors would be able to compete directly without incurring these initial costs. Patents are issued to applicants if their new technology meets the requirements of patentable subject matter, novelty, utility and non-obviousness.8 A further explanation of each requirement will be made in section 3.3.1, which discusses the patentability of genes. There are four main stakeholders in the patent system: the patent holders, the inventor, the users and the public. The patent holders have the exclusive rights to the invention and seek protection in order to develop and market the innovation free of competition.9 It should be noted that while the inventor is often the owner of the patent, this is not always the case. In certain employment situations, inventions may be the sole property of the employer.10 Thus, an inventor’s interests will be largely aligned with the interests of the patent holder. The public, though not expressly considered in the Act,11 benefits from the increase in knowledge to the public domain.12 This occurs both from 6 (1999), 83 C.P.R. (3d) 289 (S.C.C.) at para 46. [Cadbury] Ibid. at para 46. 8 Act, supra note 1 s2. 9 Vaver, supra note 4 at 113. 10 Ibid. at 147. 11 Ibid. at 120. 12 ALRC, supra note 2 at 48. 7 4 publication of the patent and from the addition of the patent to the public domain upon expiration. Similarly, the user of the patent benefits directly from the use of the invention and further as a member of the public. 3.2 Owning Life: A History of Patenting Living Things The issue of owning life dates back over seventy years, when the American botanist Luther Burbank created new varieties and species of plants for commercial purposes.13 Since then, rapid advances in technology have occurred, placing genes, stem cells and cloning at the forefront of science. Legislatures have also begun to adapt alongside this evolution. In the United States, the Bayh-Dole Act14 and the StevensonWyler Act15 encouraged the patenting of inventions and discoveries for the purpose of promoting new developments in these growing fields.16 As a direct consequence, there has been a flurry of patents for genetic material.17 Not surprisingly, this has brought with it a lot of controversy, particularly surrounding the question of “who owns life.” According to author Michael Crichton, “gene patents are now used to halt research, prevent medical testing and keep vital information from you and your doctor”. 18 The following cases exemplify the legal evolution in this area. 3.2.1 Owning Life Case Law In 1980, the United State Supreme Court in Diamond v. Chakrabarty19 overruled the U.S. Patent and Trademark Office and allowed a patent for the creation of oil-eating 13 David Magnus et al., Who Owns Life? (New York, Prometheus Books, 2002) at 11 [Magnus]. 14 35 U.S.C. §§ 200-212 (1980). 15 Stevenson-Wydler Technology Innovation Act 15 U.S.C. 3709 (1980). 16 Magnus, supra note 13 at 12. 17 Ibid. 18 Michael Crichton, “Patenting Life” The New York Times (13 February, 2007) online: The New York Times <http://www.nytimes.com/2007/02/13/opinion/13crichton.html> . 19 Diamond v. Chakrabarty, 447 U.S. 303 (1980) [Chakrabarty]. 5 bacteria. This marked the first time the issue of patenting organisms other than plants was decided upon. In the aftermath of the Chakrabarty decision, the issue was brought to the next level with the patentability of Harvard’s famous oncomouse. The question then became: can you patent higher life forms? On June 21, 1985, the President and Fellows of Harvard College filed a patent application seeking to patent a mouse (the “oncomouse”) that had been genetically altered to increase its susceptibility to cancer, for the purpose of carcinogenic studies. 20 The oncogene was taken from the genetic code of a non-mammal source, typically a virus, and then transported into the chromosome of the mouse using bacterial DNA known as a plasmid.21 The plasmid was then injected into a fertilized egg, implanted into a female mouse and brought to term. The resulting offspring were tested to ensure that they possessed the oncogene. Those that did were mated with mice that did not have the oncogene.22 The application sought to patent the method of creating the oncomice, the end product and the offspring. It also sought to patent all non-human mammals.23 The patent on the mouse itself was not granted in Canada and was the subject matter of the litigation.24 At the time of the Supreme Court of Canada (SCC) decision, the oncomouse had already been patented in the U.S. and the patent had not even been refused in any country with a patent system comparable to Canada’s.25 In a 5-4 decision, the SCC ultimately ruled that the transgenic mouse was not patentable subject matter in Canada as 20 Harvard College v. Canada (Commissioner of Patents), [2002] 4 S.C.R. 45 at para 121 [Harvard]. 21 Ibid. at para 122. 22 Ibid. 23 Ibid. at para 123. 24 Ibid. at para 123. 25 Ibid. at para 2. 6 it was not an “invention” in the meaning of s2 of the Act.26 Moreover, Bastarache J concluded that the patenting of higher forms of life raises a host of complex issues and that the courts are not in a position to rule on them.27 Two years after Harvard, the SCC was forced to revisit the issue of patenting life in Schmeiser et al. v. Monsanto.28 In yet another 5-4 decision, the court seemed to make an about-face, ruling that genes and the cells that contain them can be patented. The defendant Monsanto owned a patent for Roundup Ready Canola, which contained genetically modified genes and cells.29 This product was resistant to the herbicide Roundup, which would kill all other plants.30 Monsanto issued licences for the use of Roundup. Schmeiser, a farmer, never purchased Roundup Ready Canola nor did he have a licence to plant it, yet in 1998 his fields contained 95-98% Roundup Ready plants.31 The issue before the court was the patent’s validity. Since all parties agreed that the patent was valid for the gene, the process of insertion and the cell derived from the process, the question was whether the patent covered the plant that is generated from the patented cell.32 According to the majority “infringement does not require use of the gene or cell in isolation”33 and there is infringement if the “patented invention is a significant 26 Act, supra note 1 s2. Harvard, supra note 20 at para 206. 28 (2004), 31 C.P.R. (4th) 161 (S.C.C.) [Monsanto] 29 Ibid. at para 5. 30 Ibid. at para 5. 31 Ibid. at para 6. 32 Hilal El Ayoubi “Patentability of life forms: Supreme Court rules in favour of biotechnology industry” (2002) Fasken Martineau, online: < http://www.fasken.com/files/Publication/41673220-1099-408e-abef53ac11cb9994/Presentation/PublicationAttachment/341328de-1f7f-47c7-a692ffe39888b77d/PATENTABILITY_OF_LIFE_FORMS.PDF>. 33 Monsanto, supra note 28 at para 80. 27 7 aspect of the defendant's activity”.34 The court therefore ruled that the patent protection extended to the plant and that Schmeiser’s activity infringed the patent. 35 The SCC decisions in Harvard and Monsanto appear to be at odds with each and are difficult to reconcile. This showcases some of the general confusion in the area of patenting life. It is this system which has allowed for the patenting of genetic material, which is the primary focus of this paper. With this background in mind, the rest of this paper will explore the legal and ethical issues and consequences of patenting genes, and offer recommendations on ways to improve the regime. 3.3 Patenting Genes: A Closer Look As technology has advanced, it has become possible to sequence genes in organisms and in human beings.36 From 1981 to 1995 there were over 1,175 gene patents granted worldwide, in 1995 there were 652 patent applications for human DNA 37 and by 2000 there were more than 25,000 DNA-based patents.38 Further, in the US, revenues doubled between 1993 and 1999 and tripled by 2001.39 Given that genes are very different from the traditional understanding of an invention, there has been some confusion as to the application of the Act. Further, even though patents for genes have been issued for over 20 years, patent offices and courts have yet to establish any set of ground rules for patenting DNA sequences.40 Section 3.3.1 will attempt to explain how genes meet the requirements for a patent in Canada and 34 Ibid., at para 80.. Ibid., at para 160. 36 Magnus, supra note 13 at 13. 37 Timothy A. Caulfield and E. Richard Gold, “Whistling in the Wind” (2000) 15(1) Forum for Applied Research and Public Policy 75 at 76 [Caulfield and Gold]. 38 Bryn Williams-Jones. “History of a Gene Patent: Tracing the Development and Application of Commercial BRCA Testing” (2002) 10 Health L.J. 123 at 126 [Jones]. 39 Ibid. 40 Rebecca S. Eisenberg, “How can you Patent Genes?” in David Magnus, ed. Who Owns Life? (New York, Prometheus Books, 2002) at 117. 35 8 section 3.3.2 will discuss gene patents in an international context and look briefly at systems in the United States, Europe and Australia. 3.3.1 Satisfying the Act 3.3.1.1 Subject Matter The Act states that a patent must disclose a “new and useful art, process, machine, manufacture or composition of matter, or any new and useful improvement in any art, process, machine, manufacture or composition of matter”.41How can genes, which have been around for millions of years, satisfy this requirement? And indeed, genes as they exist in nature cannot be patented.42 However, once the gene is isolated, its function identified and put into commercial operation, it is no longer a product of nature. It has been transformed into something with real-world utility.43 Further, in nature, the coding DNA (which is patented) is mixed with non-coding DNA (not patented), making the sequence different from what is patented.44 3.3.1.2 Novelty The arguments for and against the novelty requirement mirror those of the subject matter requirement. Since genetic material appears to be a product of nature, how can it be novel? However, as stated above, once isolated and purified, genes are easily distinguishable from their natural counterparts and are therefore “new”.45 41 Act, supra note 1 s2. Canadian Biotechnology Advisory Committee, Human Genetic Materials: Making Canada’s Intellectual Property Regime Work for the Health of Canadians (October 2005) at 7 [CBAC 2005]. 43 Lee Bendekgey and Diana Hamlet-Cox. “Gene Patents and Innovation” (2002) 77(12) Academic Medicine 1373 at 1373 [Bendekgey]. 44 Ibid at 1374. 45 Mark A. Chavez. “Gene Patenting: Do The Ends Justify The Means?” (2003) 7 CLRTJ 255 at 259. [Chavez] 42 9 3.3.1.3 Utility In the case of gene patents, the utility requirement has been less contentious than the other criteria. To satisfy this “utility”, patented sequences have included activity in gene regulation, encoding for therapeutic proteins, diagnostic probes and other activities.46 3.3.1.4 Non-Obviousness The final criteria is that the invention must be non-obvious. Under this “inventive step” requirement, the invention must not have been “obvious on the claim date to a person skilled in the art or science to which it pertains”.47 This is a much more onerous task, since discovering new genes generally incorporates well known scientific techniques.48 The inventive step comes from isolating the gene, discovering its function and putting it into commercial use.49 Traditionally, this begins by identifying the precise biological function of the gene, purifying the protein and sequencing a few of its amino acids. From that, probes are made for all the possible nucleotides that could code for the amino acids. The messenger ribonucleic acid (mRNA) produced from these cells is extracted and transformed into complementary DNA (cDNA). Next, the probes created from the protein sequences are used to “fish out” the coding sequence from the cDNA mixture.50 Recent developments in the field have spurred the creation of a new method – one that uses high throughput DNA sequencing. Instead of looking for a gene that encodes a 46 CBAC 2005, supra note 41 at 7. Act, supra note 1 s28.3. 48 Chavez, supra note 45 at 260. 49 Bendekgey, supra note 42 at 1373. 50 Ibid. at 1374 47 10 specific biological function, gene sequences can be identified a priori from cDNA.51 The functionality can be identified from sources such as ‘‘homology analysis,’’ (comparing its structure to the structure of other known sequences) and microarraybased expression analysis.52 This new process has made it vastly easier and faster to code sequences, to the point where opponents of the patents are calling these “discoveries” and not inventions. However, the difficulty required is irrelevant to the patentability,53 therefore this does not affect the patentability. 3.3.2 Gene Patents in Foreign Countries Having just seen how gene patents function in Canada, it is important to compare that process with regimes in other countries to evaluate possible alternatives. This section summarizes a few noteworthy aspects of the gene patent systems in the United States, Europe and Australia. This section is intentionally brief, since simply put, the Canadian system is strikingly similar to its foreign counterparts. Certain features of these regimes will be explored in further detail when discussing the possible solutions in section 5.0. On the face of it, the U.S. patent system treats genetic patents in largely the same way as Canada, namely through the U.S. Patent Act.54 However, as the cases above have shown, Canada is more restrictive in granting patents on genes and life in general. In Europe, gene patents are governed by the European Patent Convention55 and directive 98/44/EC, entitled Directive on the Legal Protection of Biotechnological 51 Ibid. Ibid. 53 Ibid. 54 U.S. Patent Act -- 35 USCS §§. 1 – 376 [US Act]. 55 Convention on the Grant of European Patents, 5 October 1973, 16 Cmnd 8501. Eur. T.S. 52 11 Inventions.56 The European Patent Appeal Board has taken a much stricter interpretation of the non-obvious requirement in relation to gene patents than in the U.S. or Canada.57 Accordingly, a gene will only be patentable if a person skilled in the art would have difficulty cloning the DNA sequence for the known protein. 58 The Australian patent system is much the same as the Canadian; however, there is a general provision in their patent act which allows for compulsory licensing that may be applied to gene patents.59 4.0 Should Genes Be Patented? As was shown in Section 1.1, the purpose of patent law is to promote innovation for the benefit of society. Theoretically, this is a system in which everyone will prosper and anything which furthers this purpose should be encouraged. The following will address the major issues in gene patenting in Canada, including the effect on research, clinical work and commerce, as well as some ethical concerns, to determine if gene patents do in fact reach this goal. It will be argued that gene patents are in line with the general purpose of patent law and should continue to be issued. However, it will also be argued that there are deficiencies in the Canadian system that need to be corrected. 56 EC, Directive 98/44 of the European Parliament and of the Council of 6 July 1998 on the legal Protection of Biotechnological Inventions, O.J. Legislation (1998) No L213 [EC Directive]. 57 Anita Nador and Jennifer Jones “Patenting Genes: Canada, US and Europe” (2002) Bereskin & Parr, online: < http://www.bereskinparr.com/English/publications/pdf/Bio-PatentGenes-Nador.pdf>. 58 Ibid. 59 Patents Act 1990 (Cth), s 133 [Australian Act]. 12 4.1 Effect on Research 4.1.1 Overview of Biotechnology Research Technology is the lifeblood of modern society. From the extravagant to the mundane, new inventions are continually improving the way we live. These inventions do not appear magically. Rather, they are the product of lengthy research and innovation. In the field of genetics, research aims to understand how genes and environmental factors operate and interact to influence human health in order to improve public welfare. 60 It is, therefore, in the best interest of society to foster a research environment in which inventors are allowed to prosper. Private companies in the biotechnology industry draw on research done by publicly funded institutions, such as universities, to support their developments.61 This reliance has been increasing and the relationships between the private and public sector are becoming more complex.62 Along with this growth is the escalating need to protect intellectual property in the publicly funded sector, with the result that these publicly funded institutions are becoming more commercialized.63 Many argue that this system, which offers strong commercial incentive coupled with the pro-commercial universities, is negatively affecting the field of science. It is said that researchers are becoming more secretive, delaying the release of results and are less willing to share results and research, consequently making research less efficient.64 60 ALRC, supra note 2 at 38 CBAC 2005, supra note 41 at 15 62 Ibid. 63 Ibid. 64 Timothy Caulfield et al., “Evidence and anecdotes; an analysis of human gene patenting controversies” (2006) 24 Nat. Biotechnol. 1091 at1091 [Caulfield]. 61 13 A further concern is that patent holders overuse their rights and prevent others from accessing or developing the technology, or that there are too many licenses (and at exorbitant prices) which result in an under use of the technologies.65 If patent holders are refusing to license for research purposes or if the licences are too expensive potential researchers will be deterred or impeded, which affects the scientific community and in turn the Canadians public. This phenomenon is explained by the “tragedy of the anticommons”, which occurs when “multiple owners each have a right to exclude others from a scarce resource and no one has an effective privilege of use”.66 In effect, a series of “tollbooths”67 are established which must be passed through in order to create a downstream product (a product ready for commercialization). This increases costs and slows down innovation. It follows that the more upstream a patent (for example a nucleotide sequence and all homologous sequences), the more restrictive it can be on future innovations. Thus, if a patent holder chooses to be restrictive in its licensing, such broad patents can stifle research and innovation. In the field of DNA sequencing, these broad patents can be very difficult or impossible to invent around, causing patents on genetic material to have considerable impact on research.68 The counter argument is that these are necessary evils and that the alternative is far worse. If the system were not as it is, there would be no incentive to be the first to purify and isolate genes.69 It is the essence of patent law that the inventor be rewarded for their hard work. Indeed, without such reward, the efficiency of biotech research would 65 Ibid. Michael A. Heller and Rebecca S. Eisenberg “Can Patents Deter Innovation? The Anticommons in Biomedical Research”. (1998) 280(5364) Science 698 at 698 [Heller]. 67 Ibid. 68 Ibid. 69 Chavez, supra note 45 at 262. 66 14 decrease significantly.70 The inventor would be left with two options, neither of which holds much appeal. First, the inventor may disclose the invention to the public and be forced to absorb all of the costs. It is unrealistic to imagine many researchers as benevolent as that. Second, the inventor could resort to trade secrets or similar techniques and avoid all public disclosure. This would deprive society of valuable information and researchers would end up duplicating work and wasting time.71 It is argued that these consequences are far worse than those in the current system.72 While both arguments are strong, it is the latter that is overall more convincing. Patents are intended to spur research by creating strong financial incentives and publicly disclosing invention so that they may be learnt from and improved upon. The monopoly granted to patent holders allows them to exclude others from using their invention. It is necessary that such exclusions will prevent researchers from using it during the patent life. Genetic patents are receiving the benefits of the Act just as any other invention does, therefore they should also share the burdens. However, one exception to this general principle may be in the area of medical technology, where for policy reasons society’s need for such innovations may significantly override the needs of the patent holder. Such exceptions would be rare and the standard would be very high. This concept will be addressed again in section 5.3 when research exemptions are discussed. 4.2 Effect on Clinical Work Since quality of life is closely associated with general health and wellbeing, an examination of the effect of gene patents on clinical work provides an excellent standard upon which to judge their benefit to society. 70 Ibid. at 261. Ibid. at 262. 72 Ibid. at 262. 71 15 Adopting a familiar line of reasoning, gene patents enable technological advancement that improve the lives of Canadian citizens, and people worldwide. Recall the argument in the section above, with regard to the necessity of a proper incentive to invent. The same applies here, however, the effect of patent on clinical work raises issues of life and death and there are greater policy concerns against the patent system as it exists. As mentioned, the granting of a patent provides great power to the owner, which can potential create access problems. In clinical work, this can occur by a) the patent owner charging a premium for accessing the gene and/or b) requiring the test to be done by the patentee or specific licence holders and in a specific location.73 Further, a recent paper identified five main problems that cumulatively have an extremely negative effect on the state of our healthcare system. 74 First, there is a threat of patent infringement, real or implied, that can delay or prohibit any development, validation and implementation of diagnostic tests in Canada. This is clearly working against promotion of new and useful innovations. Second, the restrictions and qualifications that the patent holder puts on the testing procedure may not be in the best interest of the patient. Third, the cost of testing may reach a level at which the provincial government may not continue to insure a particular test. Fourth, if the testing is not covered by the government, many patients would not be able to afford the treatment. Fifth, and finally, sending the samples out of Canada could create many concerns about quality control and confidentiality.75 Richard Gold et al., “Gene patents and the standard of care” (2002) 167(3) JAMCA 256 at 256 [Gold]. 74 Ibid. 75 Ibid. 73 16 Many of these issues are illustrated in detail in the following case study, which examines the situation of gene patents in breast and ovarian cancer testing. The Myriad case shows the tension between the ability of the inventor to control the use of their invention and the need to make the innovation accessible to the public. 4.2.1 Cancer and Genes: The Myriad Case Breast cancer is a tragic disease that affects many people, almost exclusively women, and any means of fighting or preventing the disease is greatly welcomed in our society. Myriad Genetics Inc. (Myriad), a biopharmaceutical company out of Salt Lake City Utah,76 recently took a step in that direction. Studies suggest that 5-10% of the women with breast cancer have inherited a particular allele (series of different genes that occupy one position on a chromosome) that is associated with an increased risk of developing the disease.77 Myriad was the first to sequence and patent two genes that have been associated with hereditary breast cancer, BRCA1 and BRCA2. At their most basic, both genes code for proteins that are critical for DNA repair and transcription regulation.78 These genes are viewed as tumor-suppressers in that the associated cancers occur from a “two-hit” process of gene/protein inactivation.79 The first hit is as a result of a mutation that has been inherited by a parent, which leaves the person with only one functional copy of the gene. The person is then much more vulnerable to the cancer because the second gene could be knocked out by a random mutation, making the tumor-suppressers inactive.80 76 http://www.myriad.com/index.php Myriad Home Page. Jones, supra note 38 at 127. 78 Ibid. 79 Ibid., at 128. 80 Ibid. 77 17 Myriad developed three tests associated with the genes that attempt to identify whether a person has a mutation in the BRCA genes. In the U.S., Myriad has entered into agreements with health management organizations and insurance companies to provide BRCA testing.81 Similarly, they have signed licensing agreements with companies in Canada and other countries like Japan, Germany and the UK, for exclusive BRCA testing.82 The situation in Canada is illustrative of the potential dangers of the current gene patent system. 4.2.1.1 BRCA Testing in Canada By the late 1990s, most Canadian provinces performed BRCA testing in one form or another.83 In 2000, Myriad gave MDS Laboratory Services of Toronto an exclusive licensing agreement to provide BRAC testing across Canada. 84 Public institutions were sent “cease and desist” letters and encouraged to comply with the patent regulations.85 Thankfully, the provinces have refused to obey these orders and have continued to offer BRCA testing in public health care facilities. The sole exception to this is British Columbia, which temporarily complied with the Myriad patents. The result of this compliance is a perfect of example of why such unrestricted monopolies should not exist. The cost of performing a test in BC skyrocketed. An in-house test that used to cost C$1200 was transformed into a Myriad test with a price tag of C$3850. This resulted in less testing of “at-risk” individuals for a variety of hereditary cancer syndromes.86 Patients that were in need of the testing were being denied the service. In the end, patients 81 Ibid., at 136. Ibid. 83 Ibid., at 141. 84 Ibid. 85 Ibid., at 142. 86 Ibid. 82 18 would access BRCA testing in Ontario and return to BC for post-test counseling, essentially side-stepping the government regulations. The inefficiency of this method is self-evident. The BC government quickly realized their folly and reversed their decision, thereby allowing in-house testing once more.87 In summary, the Myriad case illustrates a number of points concerning the current system of gene patenting in Canada. The system as it exists is one where a patent holder has theoretical control of all activity surrounding their patented gene but where, in practice, their control is so powerful, overreaching and impractical, that many are choosing not to obey it. It also allows us to imagine what would happen if all the provinces in Canada enforced the patent. It would be more difficult to side-step the issue, as was done in BC. Patients would be forced to have testing done in another country or pay the high fees to have it done in Canada. The end result would be that the testing would be limited to the super rich. This demonstrates the need to restructure the system in a way that the patent holders retain much of their power and are still able to realize financial gain, yet will be permissive and fair enough so that it will actually be obeyed. 4.3 Effect on Commercialization Many argue that patents are absolutely critical to genetic innovations, particularly in the health sector.88 This is due to the extremely high research costs and long development and approval process.89 The biotechnology industry’s preference towards patenting inventions was shown in survey of licensing practices in Canada, which 87 Ibid. CBAC 2005, supra note 41 at 23 89 Ibid. 88 19 illustrated how patented genetic inventions were more likely to be licensed than nonpatented ones.90 However, similar to the analysis presented in the previous section, it is important to consider the effect of broad patents and restrictive licensing on development and commercialization.91 If most of the benefits are to the holders of upstream patents, there may be a disincentive for others to develop a downstream product.92 In an industry that relies so heavily on research, the commercialization of products will face many of the same issues as research in the field does, such as the tragedy of the anticommons. Patents are clearly vital for the commercialization of genetic inventions. Yet, there is also a pressing need to ensure that these patents are not so overly broad and subject to such restrictive licences as to make them virtually unusable downstream. Any solution that is adopted will need to take this into account. It is useful to recall Europe’s directive and the restrictive stance on gene patents. That system eliminates many broad patents and thus improves commerce. This will be fully considered when discussing possible solutions in section 5.0. 4.4 Ethical Issues For the most part, the concerns raised about gene patents are ethical and not social, political or economic.93 This section will investigate the main ethical issues that surround the patenting of genetic material. These concerns are primarily based on popular misconceptions, and once the science is explained, the ethical dilemmas dissipate. 90 CBAC 2005, supra note 41 at 23 Ibid., at 24 92 Ibid., at 24 93 Chavez, supra note 45 at 263. 91 20 One fear is that human DNA is part of a common heritage of humanity. Those in favour of this view argue that genes are a product of millions of years of evolution and belong to all of mankind and not to any one individual.94 It is, therefore, argued that the information contained in DNA cannot be intellectual property. The common heritage argument fails on several grounds. First, the idea that there is one single human genome is an abstract concept.95 Every person has their own personal genome, which is distinct from every other human being unless they have an identical twin.96 Further, recall that what is patented in a gene patent is different that what occurs in nature. When a patent is issued, nothing has been removed from the public domain, and in fact, something has been added to the public’s knowledge.97 When this is considered, it is clear that the common heritage concern is unfounded. Another common ethical argument is that gene patents effectively issue property rights on life.98 It is argued that life is reduced to a commodity no different than “electric toasters and automobiles.”99 However, these fears are misguided. Patents grant a temporary monopoly to a person who creates an invention and does not grant ownership rights.100 Moreover, with the donation of blood, semen and bone marrow widely practiced, society has already shown its willingness to have a market for bodily fluids. Melissa L. Sturges, “Who Should Hold Property Rights to the Human Genome? An Application of the Common Heritage of Humankind” (1997) 13 AM. U. INT'L L. REV. 219 at 249. 95 “The Genetic Age: Who Owns the Genome? A Symposium on Intellectual Property and the Human Genome” (2002) 2 J. MARSHALL REV. INTELL. PROP. L. 6 at 21. 96 Ibid. 97 Chavez, supra note 45 at 264. 98 Ibid. at 266. 99 Carrie F. Walter, “Beyond the Harvard Mouse: Current Patent Practice and the Necessity of Clear Guidelines in Biotechnology Patent Law” (1998) 73 IND. L.J. 1025 at 1035. . 100 Chavez, supra note 45 at 266 94 21 Like blood, genetic material can be isolated from renewable bodily fluids by unobtrusive methods. Clearly, it would be a simple extension to add genes to that former list. The ethical concerns of gene patenting may at first be compelling. However, once the misconceptions are dispelled it is clear that gene patents should be easily accepted in society. As further support, the Canadian Biotechnology Advisory Committee (CBAC), a body of external experts established by the Government of Canada, recently recommended that human genetic material patents should not be excluded based on ethical grounds. Indeed, it was their opinion that to do so would set Canada apart from other countries, many of which are trading partners.101 4.5 A Change to the Gene Patent Regime is Needed To summarize the above analysis: gene patents are necessary for the continued development of technology. They provide incentives for researchers and the industry to create new innovations for the betterment of society. However, under the current regime, gene patents are not operating to their full potential. Important research is stymied, clinical work is being frustrated and commerce is threatened. Clearly, there must be changes to the way in which genes are patented in Canada. It is also the opinion of the Government of Canada that the patent system as it stands must be changed. The CBAC stated that: Steps should be taken now to improve the patent regime and its operation in order to broaden the opportunities for mutual advantage, to deal more effectively with undesirable consequences of the exercise of patent rights when they do arise and to improve the timeliness and transparency of patent processes.102 101 Canadian Biotechnology Advisory Committee, Human Genetic Materials, Intellectual Property and the Health Sector (2006) at 3 [CBAC 2006]. 102 Ibid. 22 The remainder of the paper will discuss possible solutions to improve the patent regime and ultimately recommend the most suitable alternative. 5.0 Possible Solutions 5.1 Solution 1: Compulsory Licensing Compulsory licensing is a suitable and easily implemented solution that attempts to find a middle ground between the rights of the patent holder and the user and public. Compulsory licensing would allow the government to issue a licence to use a particular gene patent when there is overriding public need. This would be subject to a number of restrictions and the licencee would be required to pay the patent holder a royalty. A compulsory licence would be granted in cases where the government finds that there is an overriding public need to address a concern relating to the access of a patent. This would primarily apply to medical technologies. This solution respects the idea that, overall, gene patents are beneficial to society and it also recognizes that situations arise, such as the BRCA incident, where public concern should trump the rights of the patent holder. It is recommended that the Department of Justice establish a group to judge whether the threshold to grant a licence has been met. This will be elaborated on when the final solution is presented. There are several concerns with compulsory licences. It could be argued that compulsory licences are contrary to the purpose of patent law which grants patentees an exclusive right to their invention.103 Moreover, such systems necessarily restrict the powers of the patent holder and their ability to gain a profit, thus reducing the incentive 103 Chavez, supra note 45 at 270. 23 to invent. As the following will show, these issues are in reality fairly unsubstantial and compulsory licences can be designed such that they further the objectives of patent law. 5.1.1 Other Compulsory Licences for Patents in Canada This would not be the first time that Canada has amended the Act to include compulsory licensing. In fact, with Bill C-9,104 which came into force in May 14, 2005, Canada was the first country to implement the August 30, 2003 decision of the General Council of the World Trade Organization (WTO)105 which allowed for compulsory licensing to produce and export pharmaceuticals for public health reasons. Under this scheme, potential licencees would first be required to attempt to receive a licence from the patent holder, and to negotiate on the terms and conditions.106 Further, if that fails and a licence is granted, the licencee must pay a royalty107 to the patentee and is given the patent for two years,108 with the opportunity to renew once.109 5.1.2 Australian Model Guidance can also be sought from Australia’s patent legislation, as introduced in section 3.3.2, which includes provisions on compulsory licences.110 Under this act, compulsory licences are granted where “the reasonable requirements of the public with respect to the patented invention have not been satisfied”111 and “the patentee has given no satisfactory reason for failing to exploit the patent.”112 The act also contains a 104 Bill C-9, An Act to amend the Patent Act and the Food and Drugs Act (The Jean Chrétien Pledge to Africa), S.C. 2004, c. 23. 105 WTO, Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health, WTO Doc. WT/L/540 (2003). 106 Act, supra note 1 s21.04(3)(c). 107 Ibid. s. 21.08(1). 108 Ibid. s. 21.09. 109 Ibid. ss. 21.12(1) and (2). 110 Australian Act, supra note 59 s.133. 111 Ibid., s133(2)(a)(ii). 112 Ibid., s133(2)(a)(iii). 24 provision that allows for the licence to be revoked if a) there is an agreement between the patentee and the licencee, or if the court finds that the licence has ceased to exist and is unlikely to recur;113 and b) the interests of the licencee are not likely to be adversely affected by revoking the licence.114 5.1.3 Possible Model for Gene Patents Drawing on these sources, a similar system could be put in place for gene patents in Canada. Consistent with C-9 and the Australian Act, potential licencees would be required to seek a voluntary licence from the patent holder. Further, if a licence is granted, royalties would be paid and there would be a time limit on the licence. There would also be a provision whereby a court would have the discretion to suspend or terminate a licence if feels it is appropriate. This termination clause will ensure that the system works efficiently. When structured in such a fashion, compulsory licences create an environment that fosters innovation and benefits society. The patent holder still receives royalties for their invention, which is the driving force for inventors seeking a patent.115 5.1.4 Application to BRCA Testing In the case of BRCA testing, if compulsory licences for genes were incorporated into the Act, the government could issue licences to healthcare providers to perform BRCA testing. In this situation, everyone would benefit. The healthcare providers would no longer be subject to the threat of litigation and they would have the moral benefit of performing the tests legitimately. The patients would continue to receiver the services and Myriad would be given a royalty for their invention. 113 Ibid., s133(6)(a). Ibid., s133(6)(b). 115 Chavez, supra note 45 at 270. 114 25 5.2 Solution 2: Research Exemption As mentioned above in section 4.1, there may be an overriding public need to allow research exemptions for gene patents to further advances in medical technology. This could be done by adding another provision to the Act. If exemptions were allowed for purely scientific purposes and not for commercial reasons, it “would affect the public interest at large and might eliminate some of the ethical objections to gene patenting.”116 Further, exemptions would only be granted if it did not substantially affect the economic interests of the patent.117 The objectives of such an exemption would be the same as those enunciated above in the compulsory licensing section. In 2005, the CBCA recommended that the Act be amended to include a general provision allowing for research exemptions. However, as argued above, a general research exemption is inappropriate in a system that grants a monopoly to the patent holder. This monopoly should only be impinged upon when there is an overriding public need. This paper has identified one such need, namely genetic patents as they relate to medical technology. 5.3 Solution 3: Government Issued Guidelines It has been mentioned several times in this paper that there is a lot of confusion surrounding the patentability of genes in Canada. One possible way to address this is to have the Canadian Government issue a set of guidelines for genetic inventions. These guidelines would not present a full solution to the problems raised by gene patents, but would serve as a compliment to the ultimate solution. 116 117 Ibid., at 268. CBAC 2006, supra note 101 at 6. 26 For example, the guidelines would offer general advice on the scope and breadth of what may be patented, research exemptions, as well as guidance on how to obtain a compulsory licence. They would lay out what is needed in each criterion (subject matter, novelty, utility and non-obviousness) and would allow potential patent applicants to make their application as precise and complete as possible.118 Further, this would encourage the patent office and the judiciary to prevent overly broad patents from being granted, and thus stimulate research and commercialization. As shown in section 3.3.2, there is precedence in other jurisdiction for establishing guidelines. In the United States, the Utility Examination Guidelines119 has been in force since January 5, 2001. These guidelines were designed to be used for compliance with the “utility” requirement in 35 U.S.C. 101.120 They state that “where the application discloses a specific, substantial, and credible utility for the claimed isolated and purified gene, the isolated and purified gene composition may be patentable.”121 Similarly, in Europe, the Directive on the Legal Protection of Biotechnological Invention122 has specific provisions on the patenting of genetic material.123 6.0 Further Consideration: International Relations Intellectual property is an international phenomenon, and it is vitally important for all of the stakeholders that Canada is on good terms with its trading partners. The Biotechnology Industry Organization’s (BIO) decision in February 2005 to put Canada 118 Canadian Biotechnology Advisory Committee, Patenting of Higher Life Forms (June 2002) at 21. 119 Federal Register, Vol. 66, No. 4 January 5. 2001. 120 US Act, supra note 56. 121 Federal Register / Vol. 66, No. 4 / Friday, January 5, 2001 / Notices at 2. 122 EC Directive, supra note 58. 123 See for example Ibid s22. “whereas the industrial application of a sequence or partial sequence must be disclosed in the patent application as filed” and Ibid. s23 which states “Whereas a mere DNA sequence without indication of a function does not contain any technical information and is therefore not a patentable invention”. 27 on its “Watch List” could potentially put pressure on Canada to align its patent protection policies with the United States.124 This was mostly in response to the Supreme Court of Canada’s ruling in Harvard. Furthermore, as mentioned above in reference to ethical issues, the government does not wish to set itself apart from its major trading partners. It is for this reason that Canada cannot afford to radically alter the current gene patent system to correct the deficiencies. The solution must be consistent with the international community to maintain good trade relations. Thus, it would not be appropriate to remove patent protection of genes altogether. Nor would it be advisable to remove all restrictions on what may be patented. Amending the Act to include compulsory licensing and research exemptions is consistent with this line of reasoning. It represents a significant change, yet it does not completely alter the landscape so as to render it incompatible with the global market. 7.0 Recommended Solution The above analysis has demonstrated the need to continue offering patent protection to genetic material, while equally stressing the need to make these technologies available to the public. The most appropriate way to meet this objective is a three part solution comprising of 1) an amendment of the Act to include provisions for compulsory licensing and research exemptions, 2) a government issued set of guidelines on gene patenting and 3) an administrative body created by the Department of Justice. Legislation: Compulsory Licensing 1. A compulsory licence to make, use or sell a particular genetic patent will be issued where 124 CBAC 2005, supra note 42 at 24. 28 a. There is an overriding public need, and b. The patent holder has not given a satisfactory reason for failing to meet the public need, and c. The licencee has unsuccessfully attempted to obtain a voluntary licence from the patent holder, and d. A reasonable royalty will be agreed upon between the patentee and the licencee or decided by the court 2. The compulsory licence will be granted for a term of 2 years, subject to a. The option to renew for an additional 2 years, or b. Termination by agreement between the patentee and the licencee, or c. Termination by the court if it is just and equitable to do so. Legislation: Research Exemption 3. No infringement will be found in the case of a patent being used for exclusively non-commercial uses, if a. the patent relates to genetic material, and b. the patent is being used for medical purposes. Guidelines It is recommended that guidelines be issued by the Government of Canada, to explain the gene patent system. These guidelines will detail the scope and breadth of patentable subject matter and explain the new compulsory licensing and research exemption provisions. The release of the guidelines will coincide with the amendments coming into force. 29 Government Administrative Body The Department of Justice should establish an administrative body to perform two tasks. First, it would judge whether or not there is a great enough public need to issue a compulsory licence. This part of the admin body would be made up of a team of 6 to 8 people, whose professions would include lawyers, scientist and policy analysts. Second, a separate group within the body would be charged with increasing public awareness of the issues in genetic patenting, specifically in the area of human genetics, and correct many of the misconceptions. This group would be comprised of 3 or 4 policy analysts. It would construct and maintain a website that researchers, the industry, and the public could access. The website would expand upon the materials in the guidelines and host an open forum for questions and answers. 8.0 Conclusion Patent law is designed to promote the innovation of new technologies for the overall benefit of society. It balances the interests of the inventor, the patent holder, the user and the public at large. This is a balance worth maintaining and it is important to bear this in mind when reformulating the way in which genetic material is protected. The proposed solution to amend the Act meets these needs. Patent holders are still given a monopoly for their invention and the compulsory licensing and research exemptions balance the need for the public to access certain technologies and for the inventor to receive compensation for their effort. The guidelines and administrative body will assist in clearing up much of the confusion surrounding gene patents and will make the transition into using compulsory licences a smooth one. 30 9.0 Bibliography LEGISLATION: DOMESTIC Patent Act, R.S.C. 1985, c. P-4. LEGISLATION: INTERNATIONAL Bayh-Dole Act 35 U.S.C. § 200-212 (1980). EC, Directive 98/44 of the European Parliament and of the Council of 6 July 1998 on the legal Protection of Biotechnological Inventions, O.J. legislation (1998) No L213. European Patent Convention, 5 October 1973. Federal Register, Vol. 66, No. 4 January 5. 2001. Patents Act 1990 (Cth). Stevenson-Wydler Technology Innovation Act 15 U.S.C. 3709 (1980). U.S. Patent Act -- 35 USCS §§. 1 – 376. Convention on the Grant of European Patents, 5 October 1973, 16 Cmnd 8501. Eur. T.S. JURISPRUDENCE: DOMESTIC Cadbury Schweppes Inc. v. FBI Foods Ltd. (1999), 83 C.P.R. (3d) 289 (S.C.C.). Harvard College v. Canada (Commissioner of Patents), [2002] 4 S.C.R. 45. 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