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Dx Method Exemption, Clearinghouses Proposed as Solutions for Gene Patent Issues

By Matt Jones

NEW YORK (GenomeWeb News) – While judgments in US court decisions may greatly influence the gene patenting landscape, significant issues will remain regardless of those verdicts that could be addressed by changes to the patent systems, according to a new Policy Forum article in Science.

The US patent system faces two challenges when it comes to gene patents, and there may be a few ways to address them, according to Professor Geertrui Van Overwalle in the Centre for Intellectual Property Rights at the University of Leuven, who wrote the article.

Gene patents can cause one type of problem when they are licensed too restrictively, potentially obstructing research and development, clinical use, and access to high-quality tests for patients, Van Overwalle wrote.

"The first problem is not the amount of patents, but simply that one key patent is licensed too restrictively," Van Overwalle told GenomeWeb Daily News this week.

"So even if there is only one patent owner holding a key patent on a test and not willing to license, or not willing to license at a reasonable price, that blocks further innovation, blocks commercialization, and that may be problematic for patients in the long run," she said.

Patents also could become entangled in patent thickets, which are caused by overlapping patents on one technology, which could lead to accumulation of royalties that have to be paid, negative effects on research and development, and difficulty for clinics and patients to access the technology for diagnostic and treatment purposes.

"The result of granting low-quality patents is many patents, and … you get so many patents that certain areas become very problematic for second-comers to enter into," said Van Overwalle. "If you want to improve and commercialize a certain technology you need to get legal access to all those existing patents, and that may become so cumbersome that you decide not to enter that domain. That is called the famous tragedy of the anti-commons."

The case of Myriad Genetics' BRCA1 and BRCA2 patents, which were rendered invalid earlier this year in a New York District Court in a ruling that is now under appeal, is an example of patents being licensed too restrictively, Van Overwalle argues.

Developing policies of compulsory licensing for public health use and a narrow diagnostic-use exemption could help discourage exclusive or highly restrictive licensing, according to Van Overwalle.

She explained that legislatures in Belgium, France, and Switzerland have recently imposed compulsory licenses that force patent holders to grant use to their technologies "in the name of public health."

Although these license rules have not yet taken effect, they could eventually "have an indirect, preventive effect on unduly restrictive licensing behavior by patent owners," she wrote.

A diagnostic method exclusion can be constructed rather narrowly … which implies that the only methods excluded from patent protection are diagnostic methods practiced on the human body," Van Overwalle stated in the Science article. "However, a broader exclusion of all diagnostic methods, disregarding the fact whether the treatment was practiced on the human body or not, will have more effect in patent practice," she wrote.

Thickets, Pooling, and Diagnostic Exclusion

Patent thickets pose a different set of potential problems. Although currently there is no empirical data showing the existence of many patent thickets in the genetics sphere, according Van Overwalle, there is reason to be concerned that they may grow as multi-factorial testing and whole-genome sequencing penetrate more broadly into the clinic and the marketplace.

Van Overwalle suggests that a "purpose-bound protection regime, a broad diagnostic method exclusion, and genetic patent pools and clearinghouses" could be useful tools in keeping thickets from becoming too problematic.

Private, collaborative efforts could be used to make genetic patenting manageable, she advised, suggesting the possible creation of "specially tailored genetic patent pools and clearinghouses" that roughly follow a copyright collecting society model, and would collect license fees from users and distribute them among the patent-holders.

Genetic patent pools, which would require an open and nondiscriminatory licensing policy, would use a take-now-pay-later method under which use of the patented material is not dependent on the consent of the holder but only on the payment of a fee.

"Patent pools for me start with the assumption that even if we raise the bar [on patent quality] we may still have many patents, especially with the advent of multiplex diagnostics and genome-wide association studies A patent pool is not a way to address low-quality patents. Many patents, even many high quality patents, may lead to patent thickets," Van Overwalle told GWDN.

"The idea is: why not put together in a basket all patents related to the essential genes playing a role in the diagnosis of genetic diseases? The pool concept is organized in a way that by buying one license, I get access to all the patents in the pool. It's called a one-stop license," she said.

"The clearinghouse is more like a shop, more like a supermarket," she further explained. "You say: 'I want patent A, I want patent M, I want patent X.' And then you go to the cashier and you pay a license per patent."

However, she said that it may be more feasible to create various smaller pools that are narrowly defined around a specific set of genes for a specific disease, rather than setting up one pool that includes patents on hundreds of genes.

"The downsides of these models are that the patent-holders lose control of who gets access" to their intellectual property, Van Overwalle said.

Another way to approach patent thickets could be to institute a diagnostics-use exemption that would protect diagnostic testing applications from infringement claims, she suggested.

"The problem is that if you do diagnostics in a clinic you do not only sample blood or tissue, but you also reach a diagnosis and want to inform a patient. This dialogue with a patient is not covered by the experimental use exemption," she said. "What I suggest is that you introduce a specific exemption focused on diagnostic testing which would shield this in-house testing from infringement, but would not shield use of commercial test kit."

For example, blood or tissue sampling may fall under a safe harbor research exemption. However, the subsequent diagnostic steps clinics may take may not be covered under the safe harbor. Therefore, Van Overwalle calls for a statutory diagnostic exemption, as has been recommended by the Department of Health and Human Services' Secretary's Advisory Committee on Genetics, Health, and Society.

Such an exemption would apply to commercial and public service providers using laboratory-developed tests, as well as test kit makers. That exemption, however, could have an unknown "and possibly stifling" impact on kit developers, and the scope of the exemption should apply only to clinicians who are using their own home-brew, gene-based tests, Van Overwalle stated in the article.

"Regardless of what happens with the Myriad court case, all of these avenues remain valid. Just excluding gene patents may be detrimental to incentivize downstream innovation and development of drugs and therapies," said Van Overwalle.

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