Legal advice disclaimer; if you learn anything from this article, it would be the importance of getting a sharp patent lawyer to protect your inventions!
In 2020 professors Jennifer Doudna of UC Berkeley and Emmanuelle Charpentier, now with the Max Planck in Berlin, won the Nobel Prize in Chemistry for their development of the simple and highly effective CRISPR-CAS9 method for editing plant and animal DNA genomes.
Yet not even two years later, the U.S. Patent and Trademark Office (USPTO) issued an 84-page decision that ruled against Doudna and Charpentier, awarding the patent for the CRISPR discovery to a group led by Dr. Feng Zhang of the Broad Institute in Cambridge, Massachusetts instead.
Coarsely speaking, you might ask, ‘what the hell happened?’
Outside USPTO observers believe that, while Doudna/Charpentier was the first to document the theoretical principles of CRISPR (a decade ago, in 2012), the Broad team was the first to demonstrate (in the eyes of USPTO patent inspectors) the successful practical application of CRISPR technology in the lab.
The decision will be appealed according to Doudna, and we’ll likely not know the final result for many years – which, according to the Wall Street Journal, is giving biotech companies using CRISPR technology fits, leading many of them to hedge their bets and enter into expensive license agreements with both parties.
As you are likely aware, patent law is enshrined in the U.S. Constitution (Article I Section 8) which gives Congress the power “to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”
Over the past 234 years since the Constitution was ratified, there have been some especially acrimonious, knock-down, drag-out fights over patent rights.
Does this sound familiar?
In one especially egregious case, an attorney locked up the rights to an invention that was critical to the development of a new industrial sector for nearly 33 years by manipulating the application process (through a series of lengthy amendments to his application).
Making the matter worse, this patent holder never built a production version of his patent, yet he (and a successor holding company) was able to collect royalties from nearly every leading company in the industry – except for four stubborn holdouts who refused to pay.
Any guesses which case this is?
The answer is the Selden patent – issued to George B. Seldon for his claim to be the invention of the automobile.
The Selden patent was famously reversed near the end of its 17-year life thanks to a lawsuit appeal brought by none other than Henry Ford and his Ford Motor Company, maker of the Model T car – on the basis that Ford and other car makers used a different, unrelated engine technology based on the principles of the Otto engine (and not the Brayton engine outline in Selden’s original patent).
Congress has revised patent law significantly over the last 232 years, including the following legislation that established and subsequently revised Title 35 of the US Code (particularly Section 101 “Inventions Patentable” and Section 102 “Conditions for Patentability”):
- Patent Act of 1790
- Patent Act of 1836
- Patent Act of 1922
- Patent Act of 1952
- Patent and Trademark Law Amendments Act (Bayh–Dole Act) of 1980
- Drug Price Competition and Patent Term Restoration Act (Hatch-Waxman Act) of 1984
- American Inventors Protection Act (AIPA) of 1999
- Intellectual Property and High Technology Technical Amendments Act of 2002
- Leahy–Smith America Invents Act (AIA) of 2011
(The latest major revision, the America Invents Act of 2011, brought about one of the biggest changes to date, switching American patent law away from “first to discover” to the more common “first to file” principle, which has long applied in most foreign countries.)
While the CRISPR patent dispute seems to center around whether Doudna/Charpentier were successful in creating a working implementation of their idea before the Broad team, many patent disputes center around whether the patent can be issued at all under the guidelines of U.S. Code Title 35, Section 101.
If you want to know the details, the USPTO offers a useful ‘refresher’ course here, but, in a nutshell, patent inspectors zero in on whether a patent application satisfies the following guidelines:
- The invention is “unobvious,” e.g., is a truly new discovery, invention, or unique synthesis of concepts not seen before.
- Provides a useful function, either as a “process, machine, manufacture, or composition of matter.”
- Does rely exclusively on “laws of nature, natural phenomena, and abstract ideas.”
Clearly, technology has changed significantly over the last 200-plus years.
As a result, USPTO patent inspectors, Congress, and the Federal courts have had to step in repeatedly to determine how current patent law applies to new technologies and circumstances.
This process of interpreting the rules has been especially consequential for those working in biotech and the life sciences.
To get a thorough appreciation of how patent law has impacted the biotech/life sciences industry over the years, let’s step through the chronology of key milestones affecting the industry by calling out the major judicial rulings that interpreted patent law as well as important legislative revisions passed by Congress.
In the field of botany and agriculture, Congress passed two major acts that allowed certain plant varieties to get 15-year patents:
- Plant Patent Act of 1930
- 1970 Plant Variety Protection Act (PVPA) of 1970
(To be exact, these acts provided for patenting asexually propagated plants but excluded sexually-propagated or tuber-propagated plants).
The 1970 revision added the provision that farmers could collect seeds from the (patented) crops they planted without infringing the patent.
This practice was challenged in the case Asgrow Seed Co. v. Winterboer, which accused the Winterboer family of growing patented plants from Asgrow Seed Co. for the express purpose of reselling the seeds to other farmers, bypassing the patent.
The Supreme Court ruled in 1994 that, under the PVPA, Winterboer could only collect enough seeds sufficient to sow new crops on their own fields and that anything beyond that was a violation of the seed patent.
But this practice was upended again by the courts in 2013 in the case Bowman v. Monsanto.
Here the Supreme court ruled that neither Bowman (nor other farmers) could collect the seeds from crops grown using Monsanto-patented seeds – unless they paid the patent royalty again.
So why did the courts give such seemingly conflicting rulings between Asgrow Seed Co. v. Winterboer and Bowman v. Monsanto?
To explain this, we have to step back to 1971 when a researcher working at General Electric, Ananda Mohan Chakrabarty, developed a new, genetically modified organism – in this case, a type of “oil-eating” bacteria that was capable of breaking down hydrocarbons – making it potentially very useful for mitigating oil spills.
Patent inspectors at the USPTO initially rejected the application on the basis that living organisms couldn’t be patented. However, after sustained litigation, the Supreme Court ruled in 1980 in Diamond v. Chakrabarty that under the Patent Act of 1952, a man-made micro-organism qualifies as a patentable idea (falling under the “manufacture” or “composition of matter” categories of Section 101 of U.S. Code 45) and that the fact the invention was alive was irrelevant.
This landmark Diamond v. Chakrabarty decision by the Supreme Court launched today’s modern biotech industry by giving inventors patent protection for genetically modified organisms.
Thus, when the Supreme Court ruled years later in favor of Monsanto (in the case Bowman v. Monsanto), they relied on the Diamond v. Chakrabarty case to decide that farmers could not propagate Monsanto’s seeds for free due to the fact they had patent protection (as genetically-modified organisms) apart from the patent rules Congress had authorized under the PVPA.
But what are the limits of patenting living organisms?
Could human cells (including stem cells) or DNA be patented?
This question has been litigated several times at the Supreme Court, and we have some clear guidance (well, sort of).
In 2013, the Supreme Court clarified in Association for Molecular Pathology (AMP) v. Myriad Genetics Inc. while artificially-created DNA (genetically modified, etc.) can be patented, naturally occurring DNA sequences cannot be patented because they are a naturally occurring, even when isolated from the body.
So, the rule of thumb is that in the US, at least, organisms (including human cells and DNA) that are unmodified can’t be patented, while those that have been modified could be considered for a patent, assuming they qualify under the other requirements of U.S.C 45 Section 101, etc.
(It’s important here to separate patents from ethics for a moment. For example, in the past, certain human cell lines have been collected and used for years – without providing compensation to the original donors. For example, researchers at Johns Hopkins Hospital collected the cell lines from the cervix of Ms. Henrietta Lacks, a Baltimore mother, in 1952. Since that time, and without her knowledge or consent, Lacks’ cells have been reproduced billions of times, and have found their way for use in projects ranging from AIDS research, the invention of the HPV vaccine, and more recently, Covid vaccine development. While the cell line was later commercialized (under the name HeLa) and sold for a profit, Lacks and her descendants received no compensation. A lawsuit was recently filed against Thermo Fischer Scientific, of the leading companies reproducing and selling the HeLa cells to researchers.)
To continue our story, we need to take a detour and discuss some of the important court decisions in the field of computer software and business applications.
The reason we need to do this should be clear soon enough, but you might be asking, “why are we bringing up computer software patent law when the (main) topic is biotech/life science.”
Good question. The reason is that, as we all know, software now plays an increasingly outsized role in life science (in clinical diagnostics, for example), so it’s logical that an increasing number of patent law disputes in biotech are decided on the basis of precedents concerning the validity of software patents.
We’ll try to be brief.
As computer software applications became more powerful and widely used, companies sought to patent their business applications.
Several landmark court cases decided that using a computer and clever software to speed up an existing algorithm wasn’t enough to earn a patent; these include:
- Gottschalk v Benson in 1972, which held that performing a series of mathematical calculations or mental steps in binary code (software) does not constitute a new patentable “process” under U.S.C. 45 Section 101.This case introduced the “Machine-or-transformation test,” which evaluates whether A) an invention uses a machine in a non-conventional and non-trivial manner or B) transforms an article from one state to another.
- Parker v Flook in 1978, which held that a mathematical algorithm can’t be patented if it not new (e.g., “novel”).
- Diamond v Diehr in 1981, which held that a novel software algorithm that controls a machine (in this case, a mold for making rubber tires) could be patented.
What are we to understand from these trio of landmark computer software patents?
Basically, a natural algorithm (such as a mathematical formula) can’t be patented just because you encode it to run in computer software; however, a novel (e.g., undiscovered) algorithm can be patented if it controls a machine or process that involves “transforming or reducing an article to a different state or thing.”
These principles were further tested in the following cases:
- Bilski v. Kappos (AKA In re Bilski) in 2010, in which the Supreme Court upheld a decision that the “machine-or-transformation” test identified in Gottschalk v. Benson was not the sole test for determining if a process could be patented. In this case, the method for hedging risk in the commodities market did not qualify for a patent.
- CyberSource Corp. v. Retail Decisions, Inc. in 2011, in which the court determined that the patent application for a process to assess the validity of a credit card transaction over the Internet could not be patented because the activity was not exclusively tied to the Internet (other processes were required) and that it relied on “mental processes” which are not patentable, even if they are performed by computers
OK, are you ready for a test?
Let’s look at some more recent Supreme Court decisions that ruled on patent applications for clinical diagnostic tools.
(Spoiler Alert: Here, you will see how the court has to consider rulings from the biological sphere – such as Association for Molecular Pathology (AMP) v. Myriad Genetics Inc. as well as from precedents stemming from rulings in computer software and algorithm patent cases, such as the those listed above.)
In 2012, the Supreme Court was asked to rule on the Mayo Collaborative Services v. Prometheus Laboratories case.
Researchers at Hospital Sainte-Justine (now CHU Sainte-Justine) in Montreal developed a clinical test to determine the best dosage for treating autoimmune diseases (such as Chron’s disease) with thiopurine drugs. They issued an exclusive license to Prometheus Laboratories, which began selling diagnostic kits to clinical testing laboratories around the world, including to Mayo Collaborative Services, the for-profit arm of the Mayo Clinic. However, in 2004, Mayo stopped buying the kits and started creating its own diagnostic test using the same underlying technology. Prometheus sued for patent infringement. The resulting court cases were long and arduous, including the Supreme Court remanding the case back to Federal Circuit Court (which basically ignored their instructions) before Supreme Court made its final ruling in 2012.
The Supreme Court found that the relationship between the naturally-occurring metabolites in the body and the efficacy of the drug (along with any potential toxicity) was an unpatentable “natural law.” It further held that it does not matter if the “natural law” was previously unknown or not.
This ruling was controversial among many members of the biotech community, who felt this ruling would inhibit the ability of startups to get funding for new patient-specific diagnostics and clinical therapies to deliver truly “personalized medicine.” On the other hand, the then chair of the AMA lauded the decision, saying it would help keep treatment options for patient care more widely available.
Our second diagnostics patent case is Ariosa Diagnostics Inc v. Sequenom Inc, which was decided by three members of the Federal Circuit court in 2015. (Disclaimer, Ariosa is a Formaspace customer.)
The case concerned a patent held by Sequenom for a method to detect fetal abnormalities by sampling the analyzing the free-floating Cell-free fetal DNA (cffDNA) from the placenta that circulates in the womb – without performing potentially risky procedures using long needles, such as amniocentesis. Using standard PCR methods, the researchers could amplify the paternally-inherited DNA sequences of the cffDNA (which come from the father, not the mother) to look for evidence of concerning genetic conditions, such as Down Syndrome, which is associated with extra chromosomes.
After Sequenom brought their test to market, other companies, including Ariosa, introduced similar tests, leading to a legal threat by Sequenom for patent infringement, which was met with legal counterclaims. The case was decided by a three-judge panel at the Federal Circuit court, which held that, per the Mayo case, the process that Sequenom tried to patent was at its core a “natural phenomenon” (e.g., the presence of cffDNA) and furthermore analyzing the cffDNA via PCR methods was a “well-understood, routine, and conventional activity” – and thus not patentable.
We hope this serves to bring you up to speed on the major case law in biotechnology and life science.
But now, let’s turn our attention to the future.
What will the future bring in the world of biotech and patents?
We predict the next area of dispute will be over patent ownership.
But first, we should circle back to discuss a very relevant landmark case, Stanford University v. Roche Molecular Systems, Inc.
(A quick disclaimer, both Stanford University and Roche are Formaspace clients.)
The case centered on a dispute over who owned three patents for HIV clinical diagnostic tests for HIV that were developed by Dr. Mark Holodniy, who at various times had worked both at Stanford and at Cetus, a biotech firm that invented the PCR test and was later acquired by Roche.
In 2011, the Supreme Court ruled that discoveries belong to their inventors, at least initially. Any agreements that transfer the rights to employers, financial backers, etc. are secondary.
The effect of this ruling was generally negligible at the time, except you may have noticed since the ruling came down, many employers and universities had their legal teams write very detailed contracts for their researchers, lab technicians, and other employees to sign as part of their employment (typically these clarify the terms of transferring of intellectual property to the employer, institution, etc.)
Why are we bringing this up?
Indulge us for another second, and our point will become clear.
Perhaps you are familiar with the legal case surrounding a photographer who created a camera setup that allowed monkeys to take selfies of themselves in the jungle?
In 2014, the British photographer, David Slater, was denied a US copyright on the photos.
But why?
According to the U.S. Copyright office “only works created by a human can be copyrighted under United States law, which excludes photographs and artwork created by animals or by machines without human intervention.”
(Note: we recognize that a copyright application is not the same as a patent application, but it appears the principle is the same.)
So, let’s get to our greater point.
There is a growing question about the role of artificial intelligence and intellectual property rights.
Let’s imagine a scenario where a super-powerful AI computer makes a novel discovery that meets the requirements for awarding a patent – presumably, the patent will be issued.
But the question becomes, who gets the patent?
If we follow the precedent set forth by Stanford University v. Roche Molecular Systems, Inc. (see above) that inventors own their discoveries, the question becomes even thornier.
Some, including some prominent researchers writing in Nature magazine, believe it’s possible that the patent should be awarded to the AI software program itself rather than to the developer(s) of the AI system.
In other words, could an AI program own a patent for one of its discoveries?
This is a very interesting legal question.
We could take this one step further – what would happen if artificial intelligence advances to the point where the AI system is accepted as a sentient being – what rights would it accrue under the law?
This question is not as farfetched as it sounds. After all, US courts have long treated corporations “as people” in many instances of case law, thus affording corporations certain rights, including the ability to own things (such as stock, capital equipment, or subsidiaries).
Corporations are also culpable under the law for their actions (although some would argue they aren’t held up to high enough legal standards or prosecuted criminally when circumstances warrant.)
This causes us to wonder how the courts would rule in a case where an AI program is accused of being liable for a mistake, such as bodging a medical diagnosis when reading an X-Ray or causing a traffic accident by allowing a self-driving vehicle to hit a pedestrian.
One also has to wonder if this was one of the reasons that Google reacted so swiftly and decisively to distance itself from Blake Lemoine, one of its advanced AI researchers, who declared he believed that LaMDA, Google’s AI-powered chatbot generator, had become (in his view) a sentient being.
(Disclaimer: Google is a Formaspace customer.)
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