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TRENDSPOTTER: Just Say No to Patent Pooling for Genomics

THE UNITED States Patent and Trademark Office issued a white paper at the beginning of the year on the use of patent pools as a way to ensure reasonable access to patented genomic inventions. While patent pools have worked in the past as a method to cut down red tape and encourage industry growth, the method is not easily, or wisely, transferable to genomic intellectual property.

A patent pool ties like patents together in cross licensing agreements. This allows the companies holding the patents to go forward with technology developments without making new licensing agreements regarding the patents. It also allows a company outside the pool to secure one license covering all of the pool patents rather than making separate agreements with each company.

Because of the efficiencies gains, patent pools may encourage more licensing of the patents than would occur without the pool. Patent pools may also aid in the development of a field as a whole by encouraging freer exchange of both patented information and technological know-how.

The white paper argues that because these benefits were gained through patent pools in other industries, pools should be established for genomic inventions. For example, an extremely successful patent pool was formed in the airplane industry during World War I due to government efforts to streamline airplane manufacturing. But while this approach may have worked in the airplane industry with a few manufacturers making a largely homogenous product, the genomics industry is too widely dispersed and rapidly developing for a similar patent pooling approach to make sense.

Genomic companies are not only dispersed in product technologies, but also in incentives. For instance, it is easy to see how a genomics company competing for market share and product development might have vastly different incentives and concerns with regards to licensing patents than would a university. In other industries where patent pools have worked well, such as some electronics industries, the patent owners have had much more closely aligned goals, even if some owners are companies while others are non-profit institutions.

Additionally, when patent pools have worked, the key patents needed for a feasible pool have been held by only a few institutions. The number of institutions involved in genomics research makes it unlikely that a viable patent pool could be formed without the cooperation of a significantly larger number of patent owners, thus increasing the chance that one patent owner would refuse to cooperate and block the entire pool.

Most importantly, the rapid advances in genomics coupled with the variety of  research projects make it difficult to determine what patented technology should be pooled. Although the genomics industry has developed some internal structure, there are still no discrete categories of research comparable to the airplane or sewing machine industries. One cannot neatly categorize all patents necessary for a viable patent pool.

Even if a pool could be developed for one research project, it would probably be useless for any other project and possibly not even useful for several of the patent pool members. The value in a patent pool lies in its usefulness to all pool members and in its attractiveness to outside parties.


In order to form a pool comprehensive enough for all members to benefit and for the pool to be useful in more than a handful of isolated projects, a huge number of genomics patents would have to be amassed. Almost any patent pool of that size would certainly run afoul of antitrust provisions. Because it seems very unlikely that the genomics industry will ever be as discrete as the airplane industry, where very few companies supply the components and build the planes, this antitrust issue may prove insurmountable.

Patent pools may be effective and legitimate in certain industries. However, it is too soon to attempt to pigeonhole disparate genomics patents together into a pooling arrangement. Few attempts to do so will be worth the time and expense of creating the patent pool. The genomics industry would be well advised to stick instead to more traditional licensing schemes and to enter into cross-licenses or collaborations when more cooperation is needed.

Rochelle K. Seide is a partner at the law firm of Baker Botts, where she specializes in biotechnology, intellectual property, and patent issues. She also has a PhD in human genetics. Michelle LeCointe is an associate at Baker Botts and a registered patent agent. They can be reached at [email protected] and [email protected] .


TrendSpotter is a weekly column that focuses on how trends in politics, patent law, and the US and European markets will affect the genomics industry. The column appears every Friday. To access previous columns just enter the word "Trendspotter" in the archive search window on the homepage.

 

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