Discovery, Invention and Innovation in Biotechnology.
Transcript Of Discovery, Invention and Innovation in Biotechnology.
Myriad Claims: Discovery, Invention and Innovation in Biotechnology.
Anton Jackson-Smith
October 2014
A dissertation submitted in partial fulfilment of the requirements for the degree pf Bachelor of Laws (Honours) at the University of Otago
ii
Acknowledgements
Thanks for this dissertation are owed to a great number of people, only a few of whom are named here. I would not have been capable of completing such a task without their friendship, support, and teaching. So far as my work succeeds it is because of these friends, who have my heartfelt gratitude. To the extent that my work is flawed, however, the fault is mine alone.
Thanks to Shelley Griffiths, for her unwavering optimism, support, and assistance, even in the face of adversity.
Thanks to Lauren Farmer, for loving me, looking after me, and being a constant friend and companion.
Thanks to the delightful inhabitants of 7C13—Josie, Kim and Stacey— for keeping me entertained, enthused, gossiped, and supplied with coffee and chocolate.
Thanks to the eleventh-hour proofreading team, for making things readable.
Thanks to Simon Hoffman, for the 2010 study group and all the food, wine and banter since then.
Thanks to Nicola Peart, who convinced me to do this in the first place, then compelled me to do my best.
Finally, thanks to Mum and Dad, for getting me here.
iii
iv
Contents
1 Introduction
1
2 Legal Background
5
2.1 The BRCA Patents . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Patent Law in New Zealand . . . . . . . . . . . . . . . . . . . 6
2.3 The Statute of Monopolies . . . . . . . . . . . . . . . . . . . . 8
2.4 Inherent Patentability in the United States . . . . . . . . . . 10
2.5 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3 Scientific Background
11
3.1 The Cell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.2 Molecules of Life . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.3 The Central Dogma of Biology . . . . . . . . . . . . . . . . . 12
3.4 Mutations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.5 Biotechnological Techniques . . . . . . . . . . . . . . . . . . . 14
4 Inherent Patentability
17
4.1 Commonwealth . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.1.1 Boulton v Bull . . . . . . . . . . . . . . . . . . . . . . 17
4.1.2 Re GEC’s Application . . . . . . . . . . . . . . . . . . 19
4.1.3 NRDC . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.2 United States of America . . . . . . . . . . . . . . . . . . . . 21
4.2.1 Funk Brothers v Kalo Inoculant Co . . . . . . . . . . 21
4.2.2 Diamond v Chakrabarty . . . . . . . . . . . . . . . . . 23
4.2.3 Mayo v Prometheus . . . . . . . . . . . . . . . . . . . 26
5 Myriad Claims: The BRCA Genes
29
5.1 United States: Myriad . . . . . . . . . . . . . . . . . . . . . . 29
5.1.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . 29
5.1.2 Federal Circuit: Introduction . . . . . . . . . . . . . . 30
5.1.3 Federal Circuit: Lourie J . . . . . . . . . . . . . . . . 30
5.1.4 Federal Circuit: Moore J . . . . . . . . . . . . . . . . 32
5.1.5 Federal Circuit: Bryson J . . . . . . . . . . . . . . . . 33
5.1.6 Federal Circuit: Conclusion . . . . . . . . . . . . . . . 34
v
vi
CONTENTS
5.1.7 Supreme Court . . . . . . . . . . . . . . . . . . . . . . 34 5.1.8 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . 36 5.2 Australia: D’Arcy v Myriad Genetics Inc . . . . . . . . . . . 37 5.2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . 37 5.2.2 Australian Analysis . . . . . . . . . . . . . . . . . . . 37 5.2.3 Consideration of Association for Molecular Pathologists 39 5.2.4 Encode versus Code For . . . . . . . . . . . . . . . . . 40 5.2.5 Decision . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6 Conclusion
45
7 Bibliography
47
Chapter 1
Introduction
The past two years have seen two Courts of significant standing—the United States Supreme Court and the Full Court of the Australian Federal Court— issue decisions on the often-controversial area of gene patents.1 The decisions focused on the inherent patentability of isolated DNA: whether it can be considered appropriate subject matter for patentability. Despite a growing push for consistency in intellectual property law worldwide, the courts disagreed, with the Supreme Court unanimously deciding that isolated DNA is not patentable while the Full Court unanimously decided that it is. This divergence could perhaps be represented as nothing more than a reflection of the differences in the legal environments of the respective countries. However, both courts were endeavouring to solve the same fundamental question: where do we draw the line between the work of nature, and the invention of man?
The answer to this question has significant implications. The primary means to protect and monetise innovation is the patent system. Patents provide an incentive to develop and disclose new technology in return for a time-limited monopoly over the invention.2 At its ideal, the patent system results in a net benefit to society. The economic incentive results in higher levels of investment and innovation, and disclosure requirements allow new knowledge and innovation to disseminate.3 Overall, the benefit to society outweighs losses due to monopoly pricing over the patent’s term.
Unfortunately, this is not always or necessarily the case. It has been suggested that patents can limit the rate of innovation by preventing oth-
1 Both cases were in fact based on disputes over the same technology, protected by very similar patents: Association for Molecular Pathology v Myriad Genetics Inc [2013] US (slip op) No 12-398, 133 S Ct 2107 (2013); D’Arcy v Myriad Genetics Inc [2014] FCAFC 115.
2 PC Sumpter Intellectual property law: principles in practice (CCH New Zealand Limited, 2006) at p 231.
3 This rationale is given as a purpose of the Patents Act 2013, s 3(a).
1
2
CHAPTER 1. INTRODUCTION
ers from building on newly-invented technologies.4 Licensing requirements and litigation risk can disincentivise new development by increasing costs. Uncertainty as to whether a particular technology is patented or not can inhibit further research, even where it would not infringe. This is particularly true in New Zealand given that, until recently, patents were not examined for inventive step or utility prior to grant.5 Once granted, challenges to patent validity can result in expensive litigation.6 This litigation is likely to be cost-prohibitive and high-risk, especially to small organisations.7 At their worst, patents may stifle innovation through the creation of “patent thickets” leading to the “tragedy of the anti-commons”, where the costs associated with patent compliance are so high as to preclude new research and development.8 The need to maintain the balance between the benefits and downsides of the patent system thus requires a clear understanding of where patent protection begins and ends. Private actors need to be able to determine the scope of protection to make decisions as to what to patent, research, and litigate.
The problem is especially fraught in the area of biotechnology, where innovation and invention is closely linked to natural processes and discoveries. The industry has produced significant gains in medicine, food, and the environment, and shows the promise to provide many more. In New Zealand, biotechnology is a thriving industry, accounting for $611 million in revenue directly, and $39 billion when firms using biotechnology are included.9 Working within a research- and knowledge-based industry, biotechnology companies are dependent on patents in order to raise capital and earn income. However, the patenting of biotechnology has been heavily criticised
4 See, for example, Michele Boldrin and David K Levine “The Case Against Patents” (2013) 27 The journal of economic perspectives 3–22 (arguing that there is limited evidence to suggest higher rates of innovation have resulted from the patent system, while negative effects have appeared), and Michael A Heller and Rebecca S Eisenberg “Can patents deter innovation? The anticommons in biomedical research” (1998) 280 Science 698–701 (describing the ‘anti commons’ in biotechnology research).
5 Under the Patents Act 1953, patent examination only required an investigation of the novelty of the invention. The inherent patentability, non-obviousness, and utility of the invention could only be challenged in opposition or revocation proceedings.
6 Although applications can be made for the Commissioner to re-examine patents on specified ground after grant (Patents Act, above n 3, s 95).
7 In 2011, 102 of 147 bioscience companies had fewer than 10 employees, with approximately 50% reporting access to capital as the primary limitation to R&D or commercialisation.
8 Where the commonly-understood “tragedy of the commons” relates to the overuse of shared resources, the tragedy of the anti-commons occurs where resources are underutilised due to the exclusionary nature of property rights. This problem is especially relevant to patenting, given that information is an inherently non-rivalrous good. See Michael A Heller and Rebecca S Eisenberg “Can patents deter innovation? The anticommons in biomedical research”, above n 4.
9 Statistics New Zealand BioScience Survey: 2011 (2012).
3
for raising the price of food,10 reducing access to medicine,11 preventing research,12 and, more fundamentally, offending moral values.13 The dividing line is critical to both industry and society in New Zealand.
Finally, the decisions overseas arrive just as New Zealand’s new patent legislation, the Patent Act 2013, fully enters into force.14 The Act represents a significant update to the Patents Act 1953, based on over two decades of consultation and new international norms, and strengthens examination requirements while explicitly dealing with the patentability of certain matters, such as methods of medical treatment. However, the Act remains silent on the patentability of genes. New Zealand courts will need to decide on a path to take.
The limits of patentability lie at the heart of the patent system, and biotechnology sits at the edge of those limits. Gene patents are a means of exploring where the limits lie, and how they are determined. In Chapter One, I explain the development of the patent system and its structure in New Zealand. Chapter Two covers the background science necessary to understand the facts and arguments at issue in the cases discussed. Chapter Three outlines the key cases related to inherent patentability in the Commonwealth and in the United States. Chapter Four aims to be an in-depth exposition and discussion of the various arguments put forth and the conceptions of inherent patentability formed in the opposing Myriad cases. Finally, in Chapter Five I conclude that the best test is that conceived by the minority of the Federal Circuit in the United States and adopted by the Supreme Court.
10 Eamon Murphy “Bowman v Monsanto: The Price We All Pay for Roundup Ready Seeds” (2013) Daily Finance
11 M´edecins Sans Fronti`eres “The impact of patents on access to medicines” MSF Access Campaign.
12 Michael A Heller and Rebecca S Eisenberg “Can patents deter innovation? The anticommons in biomedical research”, above n 4.
13 G Marchant “Genomics, ethics, and intellectual property” [2007] Intellectual property management in health and agricultural innovation: A handbook of best practice, Oxford: MIHR. Available from www. ipHandbook. org.
14 Patents Act, above n 3, s 2 (commencement). The Act received Royal assent on 13 September 2013 and thus entered force on 13 September 2014.
4
CHAPTER 1. INTRODUCTION
Anton Jackson-Smith
October 2014
A dissertation submitted in partial fulfilment of the requirements for the degree pf Bachelor of Laws (Honours) at the University of Otago
ii
Acknowledgements
Thanks for this dissertation are owed to a great number of people, only a few of whom are named here. I would not have been capable of completing such a task without their friendship, support, and teaching. So far as my work succeeds it is because of these friends, who have my heartfelt gratitude. To the extent that my work is flawed, however, the fault is mine alone.
Thanks to Shelley Griffiths, for her unwavering optimism, support, and assistance, even in the face of adversity.
Thanks to Lauren Farmer, for loving me, looking after me, and being a constant friend and companion.
Thanks to the delightful inhabitants of 7C13—Josie, Kim and Stacey— for keeping me entertained, enthused, gossiped, and supplied with coffee and chocolate.
Thanks to the eleventh-hour proofreading team, for making things readable.
Thanks to Simon Hoffman, for the 2010 study group and all the food, wine and banter since then.
Thanks to Nicola Peart, who convinced me to do this in the first place, then compelled me to do my best.
Finally, thanks to Mum and Dad, for getting me here.
iii
iv
Contents
1 Introduction
1
2 Legal Background
5
2.1 The BRCA Patents . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Patent Law in New Zealand . . . . . . . . . . . . . . . . . . . 6
2.3 The Statute of Monopolies . . . . . . . . . . . . . . . . . . . . 8
2.4 Inherent Patentability in the United States . . . . . . . . . . 10
2.5 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3 Scientific Background
11
3.1 The Cell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.2 Molecules of Life . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.3 The Central Dogma of Biology . . . . . . . . . . . . . . . . . 12
3.4 Mutations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.5 Biotechnological Techniques . . . . . . . . . . . . . . . . . . . 14
4 Inherent Patentability
17
4.1 Commonwealth . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.1.1 Boulton v Bull . . . . . . . . . . . . . . . . . . . . . . 17
4.1.2 Re GEC’s Application . . . . . . . . . . . . . . . . . . 19
4.1.3 NRDC . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.2 United States of America . . . . . . . . . . . . . . . . . . . . 21
4.2.1 Funk Brothers v Kalo Inoculant Co . . . . . . . . . . 21
4.2.2 Diamond v Chakrabarty . . . . . . . . . . . . . . . . . 23
4.2.3 Mayo v Prometheus . . . . . . . . . . . . . . . . . . . 26
5 Myriad Claims: The BRCA Genes
29
5.1 United States: Myriad . . . . . . . . . . . . . . . . . . . . . . 29
5.1.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . 29
5.1.2 Federal Circuit: Introduction . . . . . . . . . . . . . . 30
5.1.3 Federal Circuit: Lourie J . . . . . . . . . . . . . . . . 30
5.1.4 Federal Circuit: Moore J . . . . . . . . . . . . . . . . 32
5.1.5 Federal Circuit: Bryson J . . . . . . . . . . . . . . . . 33
5.1.6 Federal Circuit: Conclusion . . . . . . . . . . . . . . . 34
v
vi
CONTENTS
5.1.7 Supreme Court . . . . . . . . . . . . . . . . . . . . . . 34 5.1.8 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . 36 5.2 Australia: D’Arcy v Myriad Genetics Inc . . . . . . . . . . . 37 5.2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . 37 5.2.2 Australian Analysis . . . . . . . . . . . . . . . . . . . 37 5.2.3 Consideration of Association for Molecular Pathologists 39 5.2.4 Encode versus Code For . . . . . . . . . . . . . . . . . 40 5.2.5 Decision . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6 Conclusion
45
7 Bibliography
47
Chapter 1
Introduction
The past two years have seen two Courts of significant standing—the United States Supreme Court and the Full Court of the Australian Federal Court— issue decisions on the often-controversial area of gene patents.1 The decisions focused on the inherent patentability of isolated DNA: whether it can be considered appropriate subject matter for patentability. Despite a growing push for consistency in intellectual property law worldwide, the courts disagreed, with the Supreme Court unanimously deciding that isolated DNA is not patentable while the Full Court unanimously decided that it is. This divergence could perhaps be represented as nothing more than a reflection of the differences in the legal environments of the respective countries. However, both courts were endeavouring to solve the same fundamental question: where do we draw the line between the work of nature, and the invention of man?
The answer to this question has significant implications. The primary means to protect and monetise innovation is the patent system. Patents provide an incentive to develop and disclose new technology in return for a time-limited monopoly over the invention.2 At its ideal, the patent system results in a net benefit to society. The economic incentive results in higher levels of investment and innovation, and disclosure requirements allow new knowledge and innovation to disseminate.3 Overall, the benefit to society outweighs losses due to monopoly pricing over the patent’s term.
Unfortunately, this is not always or necessarily the case. It has been suggested that patents can limit the rate of innovation by preventing oth-
1 Both cases were in fact based on disputes over the same technology, protected by very similar patents: Association for Molecular Pathology v Myriad Genetics Inc [2013] US (slip op) No 12-398, 133 S Ct 2107 (2013); D’Arcy v Myriad Genetics Inc [2014] FCAFC 115.
2 PC Sumpter Intellectual property law: principles in practice (CCH New Zealand Limited, 2006) at p 231.
3 This rationale is given as a purpose of the Patents Act 2013, s 3(a).
1
2
CHAPTER 1. INTRODUCTION
ers from building on newly-invented technologies.4 Licensing requirements and litigation risk can disincentivise new development by increasing costs. Uncertainty as to whether a particular technology is patented or not can inhibit further research, even where it would not infringe. This is particularly true in New Zealand given that, until recently, patents were not examined for inventive step or utility prior to grant.5 Once granted, challenges to patent validity can result in expensive litigation.6 This litigation is likely to be cost-prohibitive and high-risk, especially to small organisations.7 At their worst, patents may stifle innovation through the creation of “patent thickets” leading to the “tragedy of the anti-commons”, where the costs associated with patent compliance are so high as to preclude new research and development.8 The need to maintain the balance between the benefits and downsides of the patent system thus requires a clear understanding of where patent protection begins and ends. Private actors need to be able to determine the scope of protection to make decisions as to what to patent, research, and litigate.
The problem is especially fraught in the area of biotechnology, where innovation and invention is closely linked to natural processes and discoveries. The industry has produced significant gains in medicine, food, and the environment, and shows the promise to provide many more. In New Zealand, biotechnology is a thriving industry, accounting for $611 million in revenue directly, and $39 billion when firms using biotechnology are included.9 Working within a research- and knowledge-based industry, biotechnology companies are dependent on patents in order to raise capital and earn income. However, the patenting of biotechnology has been heavily criticised
4 See, for example, Michele Boldrin and David K Levine “The Case Against Patents” (2013) 27 The journal of economic perspectives 3–22 (arguing that there is limited evidence to suggest higher rates of innovation have resulted from the patent system, while negative effects have appeared), and Michael A Heller and Rebecca S Eisenberg “Can patents deter innovation? The anticommons in biomedical research” (1998) 280 Science 698–701 (describing the ‘anti commons’ in biotechnology research).
5 Under the Patents Act 1953, patent examination only required an investigation of the novelty of the invention. The inherent patentability, non-obviousness, and utility of the invention could only be challenged in opposition or revocation proceedings.
6 Although applications can be made for the Commissioner to re-examine patents on specified ground after grant (Patents Act, above n 3, s 95).
7 In 2011, 102 of 147 bioscience companies had fewer than 10 employees, with approximately 50% reporting access to capital as the primary limitation to R&D or commercialisation.
8 Where the commonly-understood “tragedy of the commons” relates to the overuse of shared resources, the tragedy of the anti-commons occurs where resources are underutilised due to the exclusionary nature of property rights. This problem is especially relevant to patenting, given that information is an inherently non-rivalrous good. See Michael A Heller and Rebecca S Eisenberg “Can patents deter innovation? The anticommons in biomedical research”, above n 4.
9 Statistics New Zealand BioScience Survey: 2011 (2012).
3
for raising the price of food,10 reducing access to medicine,11 preventing research,12 and, more fundamentally, offending moral values.13 The dividing line is critical to both industry and society in New Zealand.
Finally, the decisions overseas arrive just as New Zealand’s new patent legislation, the Patent Act 2013, fully enters into force.14 The Act represents a significant update to the Patents Act 1953, based on over two decades of consultation and new international norms, and strengthens examination requirements while explicitly dealing with the patentability of certain matters, such as methods of medical treatment. However, the Act remains silent on the patentability of genes. New Zealand courts will need to decide on a path to take.
The limits of patentability lie at the heart of the patent system, and biotechnology sits at the edge of those limits. Gene patents are a means of exploring where the limits lie, and how they are determined. In Chapter One, I explain the development of the patent system and its structure in New Zealand. Chapter Two covers the background science necessary to understand the facts and arguments at issue in the cases discussed. Chapter Three outlines the key cases related to inherent patentability in the Commonwealth and in the United States. Chapter Four aims to be an in-depth exposition and discussion of the various arguments put forth and the conceptions of inherent patentability formed in the opposing Myriad cases. Finally, in Chapter Five I conclude that the best test is that conceived by the minority of the Federal Circuit in the United States and adopted by the Supreme Court.
10 Eamon Murphy “Bowman v Monsanto: The Price We All Pay for Roundup Ready Seeds” (2013) Daily Finance
11 M´edecins Sans Fronti`eres “The impact of patents on access to medicines” MSF Access Campaign
12 Michael A Heller and Rebecca S Eisenberg “Can patents deter innovation? The anticommons in biomedical research”, above n 4.
13 G Marchant “Genomics, ethics, and intellectual property” [2007] Intellectual property management in health and agricultural innovation: A handbook of best practice, Oxford: MIHR. Available from www. ipHandbook. org.
14 Patents Act, above n 3, s 2 (commencement). The Act received Royal assent on 13 September 2013 and thus entered force on 13 September 2014.
4
CHAPTER 1. INTRODUCTION