KEY ISSUES IN LIFE SCIENCES IP


products that would result from that research. I don’t think it matters where people are based.


Chapman: That is why so many people have made submissions, from Japan to Europe and the UK. It affects them all. It is not just a US problem.


Essex: It affects anyone who does any sort of research and wants to sell the product in the US afterwards.


Paranavitane: The decision itself is limited to isolated genomic DNA. They have left room for the potential patenting of genes if there is a new application for them. All the US decision has done is to bring the US in line with the UK/European system, where genomic DNA is not patentable.


Under the Biotech Directive, DNA is patentable subject matter if it has been isolated using a technical process, even if it is identical to the naturally occurring substance. In the UK and at the EPO there are other conditions of patentability, such as novelty, inventive step and industrial applicability, which will also have to be met in order to get a patent.


Chris Stothers: It is a switch in the US because, for years, we were seeing the exact same arguments running the other way. A lot of criticism from the US said European rules are just too restrictive on subject matter. Forget about subject matter, you shouldn’t worry about that. Let’s look at novelty and inventive step. That is what innovation is about. Subject matter rules are ethical nonsense you do not need to worry about.


We have suddenly got this switch-around and all that criticism is being fired back at the US. Some of the responses, particularly from the Europeans, have been saying ‘you’ve been telling us that we are wrong for years and now you’re getting it wrong’.


Also, the US rules are much more court-driven and these guidelines much less subject to scrutiny, whereas European rules are in the legislation. You may not like them but they are there. The US rules are being made with less scrutiny I think.


England: In the US, I guess the billion-dollar question for those doing the research is what you can do with your patents and where the line needs to be drawn between those things that are patentable and those things that are not significantly different from the natural product.


Where is that line to be drawn? The line, no doubt, will be drawn in future decisions and is clearly going to be a difficult one for those drafting patents to decide. As I understand it, you’ve got to build something into the claim itself in the application to take all the benefit.


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Chris Stothers


“It is a switch in the US because, for years, we were seeing the exact same arguments running the other way.”


Chris Stothers


Chapman: Patent drafters are used to that. The goalposts move a lot and we have to adapt what we do. The people who will really lose out in this are the ones who were granted patents. Now people will question whether they are valid; even more so the ones that are pending. There is nothing you can do about those.


At least we’ve got an idea and some tricks up our sleeve to adapt the way we draft to try and address these rules. But if you have a pending case then you’re stuck with the language in the application. That is really difficult. Those guys who have built their whole industry, their whole company, around a big IP portfolio are the ones for whom issues have been raised.


If we’re talking about big pharma, we know they have the ability to move and change things. But the medium-sized companies; there’s no way could they do that.


Who suffers most?


Essex: So the ones to suffer most will be the universities and small private companies. Chapman: I don’t think the universities per se,


but start-up companies absolutely, because the universities can decide to change their remit, and a lot of them will say patenting is a secondary issue for them. But the small company that has raised finance on the back of a diagnostic test, or through extracting novel molecules out of seaweed, where does that leave them? They may find their whole business model has gone. And if there is suddenly a new funding phase, what are the investors going to say? That I don’t know the value of your idea.


England: Venture capital will be extremely nervous and they will certainly be extremely cautious about what they invest in.


Stothers: One of the questions you raised was whether this will stop innovation. The point is that a patent attorney drafting an application will find a way around a lot of things—by re-drafting or in some cases saying ‘I am not going to file until another three years later down the line’.


The damaging thing for venture capitalists is


the fact that this has changed retrospectively, so you have a point in time where people have lost rights that they would have kept if they’d drafted differently, had they known the rules would be like this. And you can do that on occasion, but the more often it happens the more damage is done to the market.


This is not a clever place to invest, because you are going to have a sudden decision by the Supreme Court that wipes out a lot of investment. It doesn’t mean you won’t create new products in the future, but it does mean people might be less willing to invest because they are worried about what is going to be the next Myriad/Mayo that is going to strip away the value we saw in the business. If it is


Life Sciences Intellectual Property Review Roundtable 5


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