Stifling or Stimulating – The Role of Gene Patents in Research and Genetic Testing

I noticed a couple of days ago that George Bush when he was talking about President Putin and some of the problems he said in terms of whether or not it’s possible to reprogram the kind of basic Russian DNA which is a centralized Authority that’s hard to do so at first like to know if there is a patent for an authoritarian Cheney and how does it express itself then can be licensed scientific knowledge concerning genes has expanded considerably in the last half century since James Watson and Francis Crick put forth their discovery of DNA put aside mr. Watson social views for a moment air we know now the gene that genes are the blueprints of all living things I’m told the genes are chemical instructions stored in ourselves they tell our bodies to grow bones make blood repair damaged skin and perform tens of thousands of other functions efforts to match to map the human genome like a human genome project and by NIH has the oddest identify specific genes determine their function and harness their difference as a result we have been able to produce therapies to eliminate human suffering such as insulin develop tests to determine susceptibility to diseases like Alzheimer’s and breast cancer and create wholly new organisms like cancer mice and pesticide distant plants many attributed his success to the incentives provided by the patent system given the robust nature of the commercialization of biotechnology research it’s fair to say the fans had done their job and promoting new inventions in this field however there are those that have raised concerns about the impact of providing exclusivity for patents on genes for some genes are thought of as products of nature and this should not be patentable subject matter however the courts have long held that compositions of matter isolated and purified from their natural state are worthy of patent protection this principle was made clearly applicable to living matter like jeans and the supreme court’s diamond vs chakrabarti decision for some gene patents should require a more vigorous review the USPTO revised their examination guidelines for gene patenting and 2001 which strengthened utility requirements of the regime could no longer be patented based on users like being good for landfill but while the 2001 guidelines tightened patentability requirements some continue to argue that many gene patents are still issued for uses that are speculative and unproven if the quality of gene patents remains a problem stricter utility standards requiring more concrete uses may be called for however any lingering quality issues surrounding how gene inventions are examined could very well be impacted by the recent ksr vs. teleflex decision still other fears legend ends still others fear the gym pants will be used to hinder research the argument of patent thickets were to form it would become too costly or too troublesome for researchers to license the patents and inventions they need forcing them to abandon their research there is anecdotal information that supports this notion that research researchers have discontinued research pursuits because of the threat of lawsuits by gene patent holders however there’s also data that suggests just the opposite the gene pants have had little impact on basic research in instance survey by the National Academy of Sciences found that in biomedical research there is a lack of substantial evidence for a patent thicket or a patent blocking problem end of quote primarily because Richard researchers aren’t very concerned about patents being enforced against them however the report went on to say this that this nonchalant attitude was based on the assumption by many researchers that they qualify for a robust research news exception which many believe was

eliminated by the 2002 maddy vs duke decision regardless it might only take one major victory against the university to create a real and substantial chilling effect as such we may need we may need to examine the effects or necessity of a clear researchers exception finally for some opposition to jean pants as a matter of principle they point out that guidance on genetic tests is harming patient access to and stunting improvement of these tests it is reasoned that since most insurance providers do not provide coverage for genetic tests the patent markup can price tests out of reach for many patients in addition some claim that gene patents have been asserted in order to prevent others from improving possibly inaccurate genetic tests and identifying whether the tests are viewing applicable to certain population subgroups well I firmly support a patent holders right to charge what the market will bear for his invention musingly patent to block efforts could check the efficacy of such tests borders on the realm of patent misuse and may constitute anti practices patents are meant to encourage technological progress thus it is antithetical to the patent system for that for companies to use their patents to freeze a technology at a particular stage of development but is that what is happening are the practices of a few unfairly coloring all jump ends in a negative light our complaints related to Japan’s based on more on how they are being used instead of what is being patented we need to examine the world gene patents playing stimulating or stifling research the mercenary testing it’s my hope that this hearing will help us answer these and many other underlying questions it’s now my pleasure to recognize my friend and colleague the distinguished ranking minority member of the subcommittee Howard Coble for his opening statement Thank You mr. chairman this is they did hearing topic which are very large part because the subject matter lends itself oftentimes to misrepresentation at the outset it seems to me that an inventor whose application satisfies the requirements for gene patent is it tried to patent cold life close quote our personal DNA chemistry and violation of the 13th amendment the inventors ultimate goal is to develop a protein-based drug and diagnostic test therapeutic modality that will improve public health did not save lives now therefore of the subcommittee will collectively knowledge after the sharing the GD is illegitimate part of our patent system it is a thriving component seems to be of our knowledge based economy more importantly gene patents ultimately contribute to the health and welfare of the American people had patients all over the world the National Institutes of Health is the world’s largest agency for conducting basic medical and biological research with a budget in excess of twenty eight billion dollars but the pharmaceutical and biotech industries divert more than 50 billion annually to research the process of identify sequence through clinical testing and manufacturing of an fda-approved drug may toss the plant holder success of a billion dollars yet only a third of all drugs have we generate revenue sufficient to cover those costs and the great majority I am told was the chairman of the biotech companies did not realize a profit distribute a very good masterful job I’ll say it negotiating the roots of the Christ fact reform act of two thousand seven one thing we learned while debating that legislation is that different industries deploy different business models they use the patent system in various and sundry ways American biotech companies are more relying on the Patent Act at any other industry a few biotech companies are large most or smaller and lack the internal for massive resources to subsidize their drug research and development this is especially true of small startup companies whose valuation is an exclusive function of their patent portfolios and our hearing today the witnesses and the subcommittee will it will explore so legitimate topics associated with gene patents are gene patents an impediment to university research they inhibit competition and limit patient access to diagnostic testing said the government exercise marchin rights to promote greater testing and research to look forward to

the testimonies of our witnesses today on these and other issues and in conclusion mr. chairman in March the fourteenth of 2000 about four months before you and I were involved in a subcommittee on this very issue Don g-packs in genomic convictions I remember President Clinton and Prime Minister Blair issued a joint statement on the human genome they said that all genes in the human body should be very fully available to scientists everywhere and some interpreted that new government policy that genes could not be patent it then the biotech industry of course experience bad difficulty losing several billion dollars and the following day the White House released another statement emphasizing that the administration’s support department of genes I guess the moral of the story mr. chairman is to proceed cautiously and deliberately and you have a good reputation of doing that and I think that new thing this is a good topic for an oversight hearing but I think we must exercise great care about legislative in this area less possibly important industry to compromise public health could result Thank You mr. chairman Thank You mr Coville oh I’m wondering whether the asset value of the company’s went back up by two billion on that next day when he said that because if i could say anything now I’m corrected tomorrow Lauren son is director of the intellectual property law program at University of Maryland School of Law he is a partner in the Washington DC office of dewey & leboeuf where he specializes in biotechnology medical device and pharmaceutical patent litigation in counseling additionally serves as a consultant to the National Human Genome Research Institute and as chair for intellectual property concerns for the National Research Council professor from earned a PhD in microbiology from the US Department of Defense uniformed services University of the Health Sciences a JD from American Universities Washington College of Law John Soderstrom is the managing director of the Office of Cooperative Research at Yale University where he is responsible for managing the university’s intellectual property portfolio executing commercialization strategy and developing spin-off ventures his posture has allowed him to participate in the formation of more than 25 new startup companies many in the biotechnology sector prior to joining Yale dr. Sonia Strom was the director of program development for Oak Ridge National Laboratory dr. Soderstrom is also present elected an association of university technology university of technology managers dr. Soderstrom received his PhD from Northwestern University I might put out we’ve had listened the president of the University testifying on x mark roadman is founder of bio reference laboratories the largest clinical laboratory operating in the Northeast in addition to being a major regional laboratory bio reference laboratories also provides national services and informatics and genomics dr. Groman is also an assistant professor of clinical medicine at Columbia University’s College of Physicians and Surgeons dr. Goldman received his BA from the University of Pennsylvania his MD from Columbia University and attended harvard university’s Kennedy School of Government Jeffrey kushan is a partnering with Sidney in Austin where he serves as practice group chair to the firm’s DC office mr. Kishan focuses his practice on hatch-waxman patent litigation patent appeals and proceedings patent portfolio reviews and it represents clients including trade associations on domestic and international patent policy matters he is testifying today on behalf of the biotechnology industry organization before entering private practice mr Kishan working government is a patent examiner in various policy advisory positions at the USPTO and as an IP negotiator at the USTR mr. Kishan received his ma in chemistry from the University of North Carolina at Chapel Hill and his JD from George Washington University statements will be made your instincts will be made part of the record those students in their entirety I’d asked if you would be willing to to summarize

your testimony in five minutes or less and to stay within the time there’s a timing light at the table when one minute remains the light will switch from green to yellow and then read when the five minutes are up is that my god I charge during every time is relatively modest I’m not here to represent an organization nor am i clear to Crescent agenda rather I hope to help inform your deliberations on Jim captaining with insights about the nature of patent protection for genomic inventions and also to describe some available options that might assist in effectuating the particular balance between patent exclusivity and public access you ultimately deem appropriate he’s been not the actual answers to the question of gene pattern but then as you know what law professors do best is to answer a question by raising more questions the subcommittee of the benefit of hearings focusing on the state of the patent system and on the possibility of patent reform legislation I will not revisit these general principles of the patent system but instead address some of the distinctions about gene happening brie in particular first patent Geneva Conventions is different because the underlying technology is different metaphorically speaking in the physical sciences if one dedicates her career to climbing the highest mountain than on that day she can be confident that she is seen all there is to see by contrast in the biological sciences once you summit the highest mountain only then do you see that there are other mountains you’ve never seen before the science in this field is fluid and Miss creates an inherent tension with the patent system which like other systems of legal rights depends upon static definition gene patents defined this type of container second genes are simply something that we had a sense should be part of the public comment that the subject matter might fit within the legal standards of what is patentable does not necessarily change the fact that many are left feeling that something is just not right about treating genetic information as property third the temporal distortion that exists between the time one files a patent application and a time the courts adjudicating those patent rights since even greater when dealing with gene commons sometimes decades separate these two events and when courts make pronouncements today about what was a fledgling technology 20 years ago that does not sit well with the public that sees for most what is it state today now the state of gene patenting has seen significant evolution when technology developed to allow rapid gene sequencing occurred patent claims began Phil being filed in horse with some called the patent gold rush but like most skilled rushes virtually all of the claims were speculative and the prospect of great wealth between illusory the Patent Office wisely issued a moratorium on examination until setting forth revised standards of utility and written description that could be applied more sensibly to patent claims to DNA fragments known as expressed sequence tags or vsts this error concluded with the 2005 Federal Circuit decision in a new ray Fisher which clarify the DNA fragments without some demonstrated knowledge about its biological relevance were not patentable for failure to teach a specific substantial incredible utility his case arguably alleviates much of the wild concern over what many generically and inaccurately called gene patents to be clear gene patents still exists but there are claims for DNA for which we have been taught both what it is and what it does and this is somewhat more acceptable than the GSG patent claims that the public first rallied against but the issue of gene patents in their effect on research and public access to genetic testing remains for those of the mind actions necessary one option is the maintenance or the enhancement of the river with which the Patent Office examines gene patent applications involving jurisprudence generally in the patent law doctrines of anticipation inherently and obviousness including the Supreme Court’s decision in Ferris are versus teleflex combined with the existing disclosure requirements of written description and enablement suggests that fewer gene patents will pass muster in addition to supreme court decision merck versus integrable likely lessen the ability of certain counties including some gene Kranz to be enforced the supreme court decision ebay versus Merck exchange also implicates the restraint on the grounds of public interest in granting injunctive relief to gene patent plaintiffs even where infringement has occurred the government’s implementation of existing marchin rights for federally funded technology covered by gene patents would be another avenue to ensure public access for those that feel the status quo or the reinvigoration of these standards fall short new legislation might be considered and these include three options first is the creation of a heightened standard of inventorship that effectively precludes the mirror elucidation of natural property such as a DNA sequence or

biological pathway second is compulsory licensing of gene patents or a some form of mandatory patent cooling of gene patents and third is an academic research use exemption from patent infringement in this last regard my written submission for this hearing details a proposal of an elective right to use patented technology I appreciate your attention in closing I ask your indulgence to be mindful that in the brief time here I’ve necessarily oversimplified many aspects of the complex set of considerations as I caution my written statement generalization is problematic with regard to gene patents and I hope you will seek further insights of others on the important specifics thank you very much dr. soon chairman for the invitation to be here today as you indicated in your opening statement some scholars have argued that patents and their enforcement may impose significant classifying non-commercial biomedical research by creating an anti commons or a patent cricket that may make the acquisition of licenses and other rights too burdensome to permit the pursuit of these otherwise scientifically a social worthwhile research these concerns have grown since May to be Duke decision that affirmed the absence of any research exemption shielding universities from patent infringement liability but without diminishing the importance of these potential concerns it should be pointed out that the evidence offered to support these contentions is primarily anecdotal and I need not remind you that the plural of anecdote is not data although a few isolated incidents have received significant attention there is little systematic evidence that widespread assertion of patent rights on genes has significantly hampered biomedical research two recent surveys as you pointed out offer little empirical basis for claims that restricted access to intellectual property is currently impeding academic biomedical research the authors in fact further note that patents are not typically used to restrict access to knowledge and and tangible materials that biomedical scientists require the surveys further show their firms generally do not threaten infringement litigation against academic research institutions a de facto recent research extension if you will in part because such academic views may improve their invention or because they wish to maintain good will ensure access to future academic inventions and also because the damages as we all know are likely to be very small these studies also confirmed that university technology managers take a very nuanced approach to patenting and licensing seeking only enough intellectual property protection to facilitate the commercial development of an invention decisions to patent and strategies for commercializing the inventions depend on a determination of the level of protection necessary to induce an interested company into investing in further development testing manufacturing marketing sales of product embodying the technology but these results should not be surprising the practice of university technology transfer managers reflect the salutary effects of the guidance that the National Institutes of Health has issued on patenting of research tools and genomic inventions as well as the formation of professional norms and standards of behavior encouraged by groups such as the one that I’m Dudley an association of university technology managers the university’s share certain core values and we seek to maintain to the fullest extent possible in oil technology transfer agreements chief among these values of the protection of academic freedom and he opened pursuit of scientific inquiry received balance between the business needs of our licensing partners and these shared values of our respective academic institutions recently a group of university research officers licensing directors and a representative from the Association of American Medical Colleges recognized the need to clearly articulate a set of principles that strike such an appropriate public policy balance the participating universities released a white paper in the public interest nine points to consider in the licensing the university technology these considerations were put forth an aspirational or self-correcting sense to encourage the profession to set a high standard bye bye creatively stretching the boundaries of conventional and licensing practices and ensuring that licensing activities are in the public interest for society’s benefits the nine points included one university should reserve the right to practice licensed inventions and to allow other nonprofit organisations to do so to exclusive licensing should be structured in a manner that encouraged technology development in use as broadly and as quickly as possible three that we should strive to minimize the licensing of quote future improvements for the university should anticipate and help manage technology transfer related conflicts of interest five ensure broad access to research tools six enforcement actions should be carefully considered southern we should be mindful of export regulations eight we should be mindful of the implications of working with patent aggregators and nine we should consider including provisions that address unmet needs such as those of neglected patent patient populations or geographic areas giving particular

attention to improve therapeutics diagnostics and agricultural technologies for the developing world many of these points were already being practiced in fact the nine points have been endorsed by a growing number of academic institutions and professional organizations around the world we applaud these participating universities efforts to articulate these important principles and urge their adoption and application by the wider community of universities in the end we hope to foster thoughtful approaches and creative solutions to complex problems that may arise when universities license technologies in the public interest and for society’s benefit we believe the patent policy as well as practitioner guided by the goal of promoting innovation and in turn improvements in human welfare that view drove nails interest in helping to draft the nine points guidelines which recommended that universities and devorah imagenomic inventions that will serve primarily as research tools as broadly available as possible the other has long taken a balanced approach to patenting taking into account the nature of the invention is relevant to research any extent to which patent protection would necessary should be given a commercial partner adequate incentive to develop the product completely we have taken a similar approach to licensing especially by insisting that the right to make inventions available to researchers at nil and other academic institutions we do not think that gene patents are having a significant negative impact on academic research there have been thoughtful analysis of problems that could arise but the most comprehensive studies of this issue concluded that the patents I’m not sole indication you know another research research universities have a major stake in ensuring access to research tools we also recognize the circumstances may change as the field of genomics and proteomics continued to advance and I am confident the scientific community working with the Nationals Institutes of Health the association of technology managers the Association of American Medical Colleges and others will continue to monitor whether gene patents are interfering significantly when research my colleagues and I gratefully for the subcommittee’s interest in this topic thank you mr. chairman members of the subcommittee I want to thank you for the opportunity to testify on a critical issue of Public Health my name is Mark Rodman I’m physician as well as founder and CEO of by reference laboratories a puppy traded company with the largest independent regional clinical laboratory in the Northeast employing over 700 people with revenue this year that exceed 250 million dollars and synthetics expire reference laboratories purchased gingy X the laboratory in Gaithersburg Maryland that does primarily genetic testing this is important business opportunity unfortunately the ability of gene DX to offer potentially life-saving gfs have been severely restricted gene patent holders are granted exclusive licenses with the testing of genetic disorders keeping competitors but gene DX out and we think of the adverse effect on the public I am NOT here today to attack the cognitive means but I’m here to say is that using gene patents for the exclusive license energetic tests such as conditions in cancer or neurological disease certain kinds of heart disease among others can be severely restricted if not barred the laboratory with an exclusive testing license doesn’t have to compete this results in substantial quality of the testing as well as excessive pricing making attempts unaffordable too many it also stifles research innovation competition on the other hand is the most effective tool we have to address the needs of public health they described three examples i will explain what i mean the first example concerns of one of our society’s most dangerous killers breast cancer analytic breast cancer drinks bracha one worker to a patent holder has granted an exclusive license to one company to do the diagnostic testing two distinct for these genes not surprisingly over the course time quality issues arose about the tongue from the University who has to be the testimony alone of my testimony I’d seen her testimony that for about 10 years the test for breast cancer genes was not as comprehensive as it might have been think that there were a number of subsequent notations that were not found competition would never allow the situation to go on and in fact this information is confirmed in a peer-reviewed article which is also siren doctrines testimony the second example involves longevity genes that can cause sudden death from heart arrhythmias these genes were patented and an exclusive license was record to a single laboratory for two years the exclusive license laboratory women’s of bankruptcy the no other laboratory could test for this gene during this hiatus Abigail it’s the Nero child alone QT syndrome died is not just one or two genes each of the genes may mean a different medicine may work so we have to do it and do it well in a period of

time this girl never had access to the test dr. Cheng also describes persistent problems with its has performed by this exclusive laboratory including long delays in getting results and determinants findings high costs and just the basic lack of improvement are making the test better we can make a better test but under the existing system we can’t the third example was raised by testimony that I submitted from dr. captain Matthews a child neurologist pediatrician at the University of Iowa dr. Matthew describes here as quality issues that she’s encountered with the exclusive last the seeing of laboratory class for certain neurological disorders somewhat amazing that as time goes on and we learn more about the association of different medical conditions and genetic patterns if she’s now at a point to where she’s referring less these scenarios or threaten of the problem of the laboratory with the exclusive license has no incentive to conduct further research or other laboratories and other laboratories or prevent including academic laboratories are prevented by the patent holder in doing research as well in many cases I believe that competition and diagnostic testing is critical to protecting the public health and fortunately is a remedy aside from legislative reform that’s what bioactive 1980s react that allows universities to get patents on games even though federal funds help pay for the research the apt however recognizes that the patent monopolies obtained from taxpayer funding could be misused that specified specifically a remedy when the public’s health or safety needs are not being reasonably satisfied by the patent holder or its exclusive licensee the federal funding agency has the power to march in and provide licenses to other interested parties thus under existing by the legislation when there are legitimate perfect quality complaints about genetic laboratory tests of an exclusive licensee the NIH may give licenses to other laboratories willing and able continue tests opening up the licensing process to more than one diagnostic testing laboratory while the hammer will have a desirable benefits of improving quality more research lower price and creating a competitive framework that a higher standard by which even the exclusive licensees have to be able to attain as a laboratory we’re not seeking any windfall under bayh-dole any laboratory given a license through the marketing provisions can and should be charged a reasonable world keeping you as the patent even though the guy I age has refused to marching in three existence which which was asked to do so those cases involve drugs and not chain drive most interesting that involve issues a price not a fricassee and for Congress must control the H to enforce the marching provisions of the bayh-dole Act inclusion if we or any company can be able to provide a faster better fairer results more complete more efficient test to the public the ability to go ahead and obtain this on a non-exclusive license and then sweep the market in the public office advantage thank you very much change your name to mr. cushion thank you thank you and stir cherry include here today to provide the views of the biotechnology industry organization on this regime patents and bios the principal trade association representing the biotechnology industry there are more than 1,100 members of bio you can find them in every state of the union and the present employ employ more than 1.2 million people in the United States biotechnology is silly young and growing industry there are about 300 public companies in the biotech industry at the end of 2005 their market cap was about four hundred and ten billion dollars the remainder of the company is in the biotechnology industry have private companies the typical biotech company is a small business with no products no revenues and running itself on investor funding many of these companies were formed to take advantage of a significant scientific discovery of development these companies focus on performing cutting-edge research aimed at discovering new products and services and bringing them to market they follow a high-risk high-reward business model this model has been a signature the industry since its inception we fundamentals requirements exist for biotech companies that are following this business model first scientific innovation second adequate funding and third dependable intellectual property protection I’ve chosen the word dependable in relation to intellectual property intentionally but a biotech

company develops an invention they must be let’s make a judgment on whether the invention can be patented and whether these patent rights can be effectively used women if they finally get a product to market that judgments based on existing legal standards and an assessment of the prior art it’s certainly in the availability and use of patent rights in the future is critical given the uncertainty that exists on the scientific side of the business they will ever reach the market with the product today’s discussions focus on gene patents the word gene patent as some of the other panels about Accord out of someone who precise what’s at issue are patterns that claim nucleic acids nucleic acid inventions are developed following extensive research and development they rely on sophisticated research in the genomic genetic information the research focuses on deciphering their genetic information in identifying a practical application for using the nucleic acid important to recognize this is not a debate about the quality of these patents this is perhaps the one area the Patent Office that is the most competent the most high quality of all the areas the PTO for more than 20 years in doing extensive research develop on developing its own first class examination group we have more to experience in the biotech group than any other area and they certainly other stuff when one of my other panelists have mentioned that the standards governing patent law in the biotech area had evolved significantly over the last 20 years I think one thing we can ensure you are because like when a patent issues in the sector you have is reflective of a significant advance the company is deserving in the protection and that will be used to develop products and bring them to market there are three points that I feel need to be addressed today first the biotechnology industry is an extremely competitive and it’s a lucrative business it’s that dynamic is going to create conflicts no matter how you look at it it’s good for companies to have competition is also good for companies to be able to develop their technology protect it in reliant patents to do so you also appreciate that the competition is making industry healthy and strong I mean it’s also delivering significant benefits for patients as products which the market without that lucrative dry for the incentive for reward on innovation you won’t see the products coming to the market you won’t see the technology reaching the marketing informing valuable products and services it’s also the fact that conflicts arise whenever you have pretty competitive market patent conflicts also our comment in this world and biotechnology industry accepts that is part of the equation of doing business in this environment given the dependence on patent rights and the acceptance of the industry that there will be need to resolve disputes over property rights we were very concerned that there might be some tinkering of the patent system that would alter the equation so many companies have relied on before they made their investments second point that was raised was the question of using the Martian right from the Bible act in the mid 90s there was some thought to use it at authority in the Bible act to regulate pricing in front of suitable products the only impact we could see from that is that the private companies ran away from the federal funding because to attach a string like that upstream to invention of a product before you took the funding from the government basically made that a non-starter for the companies looking at that source of funding third is to just touch on the research exemption I think what we’ve seen and dr. Soderstrom had pointed this out there’s very few instances of patent owners doing the universities for many of the reasons he’s already pointed out the maybe the vehicle is kind of a weird case involving a particularly unhappy patent owner the employment dispute with Duke University and I don’t think it reflects the or as a representative fact pattern but most companies who hold patents see when they’re dealing with universities so I would select two conclusions in encouraging the committee to look very carefully at the issue of gene patents and to also carefully consider what impact upstream downstream that might have if you start to look at changing some of the parameters and companies have relied on before they made their investments in the second thank you thank you all very much I’ll recognize myself chironex to begin the questioning process dr. show you proposed in your written testimony a very specific legislative proposal it creates a research use exception one problem I’ve heard often in designing a research news exception is being able to draw a bright line between commercial use and a research use of an

invention how did your proposal to you on that issue Congress magic say that the researchers proposal that I’d lay down my witness submission was used as a piece for further discussion points about that very I don’t think that it has been traditionally very easy to make that delineation between commercial and non-commercial use in fact the focus of the Federal Circuit opinion in navy vs duke related to that difficulty that being said the proposal therefore takes it and makes it a selective opt-in process whereby that is a self identification issue on the part of entities interested in engaging in that type of quote-unquote academic research use and to the extent they are willing to self-identify they would need to do some transparency and accountability for what they plan on doing through the submission of a detailed research plan this is not meant to put both academics and the private industry at odds but hopefully to help foster a more open working relationship between the two for that purpose so the researcher hops in and then has some kind of transparent process submitted to what the PTO actually could be a notice directly to the patent owner for that purpose and again to facilitate the dialogue now some may say that it’s problematic because oftentimes researchers would not know about a patent in existence much less the patent owner and the reason this is drafted as an opt and procedure is you could certainly rely on status quo and the conductor Affairs accordingly mr. cushion you just you say that any change to the law regarding gene pens would negatively affect expectations by investors and biotechnology companies you also indicated the biotechnology industries have a long tradition of refraining from asserting their plans against universities and you point to data that supports this since the biotechnology industry does not seem universities that are making research news of their gene pens would legislating a clear research news exception upset investor expectations wouldn’t an explicit researchers exception for gene patents just codify an already existing practice and therefore be the real importance to investors welcome past three years of effort in carefully drafting patent reform has shown the words you choose to articulate that line will be very difficult to write down and naturally do not have another broad or under bride or unintended consequence will use the second window I think it’s fair to say that this has been kind of an academic question that we’ve seen for the past 15 years whether it’s necessarily create this kind of statutory bright line for to shield and purely academic research one of the challenges we see is that there’s very infrequently we very infrequently see purely academic research I mean one concern that can immediately come up is if you have an academic researcher who sponsored by your biggest competitor running programs intending to make an infringing product we wouldn’t want to see a statutory recent research exemption somehow shield that person from the commercial liability are going to create and I think as you go through some of these types of scenarios why would it take dr simulation the researcher ops in and then tells the patent holder even though he’s against do this by the potential competitor exactly what he’s doing and the bad order is it now watching the see the day it goes from research into commercial development in lakhs of not only for infringement but for which I I’ll go back to the kind of weather that would ever happen first there’s two scenarios that are that are out there in this example one is that a researcher who’s doing purely academic research is going to be concerned about a patent and liability from that and I don’t think there are many researchers who do truly academic research that deleted but they’re they’re at risk the second scenario is if there is really a commercial motivation dragon that researcher to kind of step up and put yourself in squarely in the headlights of the patent owner would not be recommended by most attorneys representing the company that sponsoring that research because it will create unnecessary risks I think as a practical matter we see very few instances of patent owners going after a purely academic research both because there’s

very limited damages at the outside the work that’s being done doesn’t reflect let’s go well my time is excited I’m sorry instead they we’re ready to go after purely academic research and then you say that they really don’t do purely academic research well that’s part of the challenge of drawing that line you’re trying to draw I think if it’s if it’s truly academic research there’s nothing they should be concerned with if it’s something that is not if it’s if it’s a ship until it’s clothing or a wolf in sheep’s clothing then you shouldn’t really be shielding that activity under a research assumption because it’s not appropriate to do that that’s actually commercially competitive like the scenarios mr. Colvin thank thank you Miss chairman let me direct this question to ancient got all the witnesses are most of the complaints about gene patents based on isolated incidents are anecdotal evidence the appendices of dr. Goodman’s testimony of sight so disturbing cases now I’m wondering is there a systemic problem with the exclusive licensing of genetic associations mr. Grove 10 * with you any testimony we both have in there both pura periodical there was one article two from JAMA that talked about breast cancer specifically and talked about in those areas where there were two genes that were found out that scientific research said that there were other areas other insertions genetic rearrangements and mutations that in fact that seventeen percent of the cases which was seen to be negative or in fact positive when in light of new studies but in the cases of the one laboratory during the test that was not the same incentive or urge to be able to go up and update the test as if there was another laboratory that was keeping up those keeping it up-to-date there also were in their specific cases of rare when results come back in an indeterminant manner which is something that no degree of regulation could attach could it could be able to deal with that in those cases it’s up to between the referring geneticist and dr van being in the laboratory to come up with a satisfactory result in that case that geneticists refer the dust had nowhere else to go for the test so the concern is that exclusive licenses in diagnostic gene testing we believe does lead to a situation of where there is no proper competition mostly produced a better service mr. crucial emasculation what would happen to the bartending biotechnology industry if the federal government exercise brought sin rights or regular basis a and should the standards of section 203 of the patent I’d be amended to encourage greater use of moisture Bryce was there too difficult questions and i’ll do what i can to respond to that but your car out of madness where I put it need that bench notice my carolina blue tights i think the the first question of the use of the marching authority would have a fairly significant chilling effect on the biotech industry in part because the political decisions that might drive use of that authority are very scary feeling invested money in developing a product the idea that you’re going to do all this work spent all this money finally reached the market and then at the back end of your business model and uncertainty couldn’t even imagine they’ll pop up in deprive you of the patent exclusivity is going to have an impact on on use of those funds the second part of this is that we have seen the NIH take steps in the past decade to use their influence without the marching authority to such standards of conduct for example they developed guidelines relating to use of intervals and sharing of research tools when there have been federal funding involved and that’s kind of a better model of essentially putting on the table that before you take funding you know that there will be conditions attached to it I think when you look at the marching experience the fact that they have never been used and that there is so much reticence about going to that as a mechanism has created a fairly significant set of expectations in the industry that they won’t be used at the back end in the commercial setting thank you before my time expires let me hear dr. socket and all dr sundstrom we have compulsory licenses in the Copyright Act why shouldn’t we have compulsory licenses for patented pharmaceuticals and biologics interview change I would simply let go many of the comments that mr. Cushing dismayed in that when we are negotiating licenses

particularly to startup companies for biotech companies position comes up all the time what are the government reserved rights what are marchin rights how often are they used it is it something that for investors is of extreme concern because of the reasons he pointed out if they are going to put a significant amount of money at risk over a long period of time in a fairly high risk technology development exercise they need some assurance that that investment if they are successful would be protected quickly not relevant under the red lights about to one point about it the cost as you mentioned in your opening comments the class of getting a new drug to market may well be a million dollars but we’re talking about what I’m really addressing or diagnostic genetic tests the cost of wish to take from the association between the critical edition in this sequence that’s getting the University of any licensed out for half a labret were to bring up that test that might be anywhere from 25 to 50 thousand dollars to it most within technologies maybe a quarter of a million dollars it’s not the same investment that were talking about the therapeutics it’s very very different explore that specifics of you later thank you a fifth-round is where I get my really tough questions in you know I looked for something that was akin to this subject you know when did we discover something and granted a patent and oddly enough I found something there was a little bit close and that was when they the product now known as Botox took something that was commonly understood and said but you can do it for this do it do what it does and you can do it for this reason and he was granted a patent and continues to be a ever more broadly successful product including for people with migraine headaches now which I think Congress should figure out that Botox is the antidote for what we do so I mean I see the importance of it i and i guess i’ll ask two major questions then in one of them dr. this is coca-cola it’s a secret nobody knows what it is if we don’t grant patterns understanding you you support the patents but just because you support it and yet have a problem with the exclusion if we were to not grant happens in this area would it be a little bit like this except we wouldn’t see in the marketplace people would discover and then continue to keep the secret so that they could do the follow-on work isn’t that a risk we take when we don’t patent something which we want discovered but it could be discovered and kept a secret and for example diagnostic centres could preclude you from knowing what you need to know well they know what they need to know and say just send it to us and we’ll tell you whether you’ve got this fatal disease I’m you scarcely the last one on this panel would be champion patents I think that any medical Elena we do know what the formula if you will go with in coca-cola is it’s been well researched in reference in medical journals the question is whether or not we’re able to go in and have access in very different information so I’m by no means supporting or for my purpose today supporting we’re not supporting patents but I am supporting is the fact that there needs to be competition than when we have certain information about Diagnostics but people can compete over producing a better test round preference is that the information is open then that people do benefit in a system of what I’m addressing fact license for cloak is the best one there is another one knows what is I’m saying fine the pavement license if you want to be able to do it but be able to allow that we want to be able to enjoy a cocoa matter what about so essentially you’ve got to be making the argument for a pattern otherwise there’d be nothing license it just be a secret I’m not making the place for or against packings my concern is the ultimate amount of patient care under grading the competition for the exclusionary idea will be prepared before the test mr. sorry I guess I’ll switch to you just to see if i can get a dissenting opinion if we in fact deny patents in his field don’t we induce universities perhaps the private sector because universities might choose to publish regardless but don’t we induce

people to cloak discoveries in a way that allow them to further their business practices without ever release in it couldn’t you end up with 5 or 10 or 20 different research facilities discovering the same thing but keeping it to themselves because if they can’t enjoy a period of patent protection they might as well enjoy a period of exclusivity through nondisclosure agree with those comments I think what you are risking if you were denied to deny pan exclusive in particular areas to risk that without good encouragement for disclosure that there may be I guess more of a motivation if he will towards keeping something secret for a business purpose but that I would depend in a particular industry on the various marketing business approaches but I do agree that you would be removing the encouragement for disclosure that the patent system is design and dr. Gardner nah go back to you with a different I’ll get off of coca-cola for a moment I was electronics manufacturer with now hundreds but in those days 37 of my own patterns and I made it a practice not to license anybody I made it a practice to produce my own products and to provide a superior product based on my patterns why is it you think that a medical diagnostic company whether or not they invented it or they licensed it shouldn’t have that same ability to to do it and why do you think that it per se causes them not to one innovation isn’t isn’t there clock ticking and that if there isn’t an encouragement by the licensee to get the inventor or to invent more and to continue if that encouragement isn’t there by the large dollars and the ticking clock on the pattern why wouldn’t that in fact it was good development and good products I would argue that guys is not necessarily the case but it comes to medical diagnostic orange in genetic diagnostics that when you go in and have a variable as a clinical Association what you’re really doing is not having the product but something that you’re going to sell your packing an association where would be for a type of a Whitney and three or four different genes and you next you’ll do for you without competition you’ll perform that lesson of people have that but I’ve nowhere else to go for that answer let’s say someone else goes in says you know what they were three or four other genes that we can discover that will help make that other those original genes make the answer clearer better the leader those who had whisk maybe with medicines they need to be on or not the head innovation there’s no possible way that those other games can be done our trust can be done on those without getting the conditional license on the original genes as a result of innovation that case gets to be stifled in patient care is affected if the second group of people had a license to perform those tests they can go in and make the ultimate dress better that would be laws of only one person how the innovation the example the testimony that we gave about where there were certain genes about breast cancer that Madonna but over ten years it’s what the failure is a time for the one company value exclusive license to include those other genes that hope make the test clearer for risk of adverse disease in a competitive framework that would not be the case I would argue that the genes on products or the patents on products or drugs is different but in this case from the diagnostic association between a clinical condition that sequence there are fundamental differences which makes it important for people to be of multiple people to take a test have a couple questions let me just make sure I understand is there something explain any of you is there something difference between a patent on this would be a great thing there’s not often the case in fact it is seldom the case

with universities employed and this is another misconception we often think there is a patent and there’s a product and as you know from your experience those two things are not necessarily equal in fact oftentimes we are in the business of aggregating technology so that we can create the product and that’s one of the misconceptions and so well I admit that there had been some examples where we probably as universities could have done licenses differently in hindsight it’s oftentimes we’re not in that admirable position we’re looking towards trying to induce somebody to invest in the technology and trying to bring it into a product for them as quickly as possible so we do take a new us we we don’t necessarily always grant across-the-board licenses we divided up in the fields of users be billed for me so simple that i can understand it i think of a Madison I’ll technology produces medicines and then I think of tests which determine whether or not you have something or you have a predisposition to something or genetic makeup you’re saying position and that’s our maneuver should I be thinking about patents in the context of these two different clothes or is it all blurry into one ultimately there’s the same the products that embody claims to invention and to the extent that you deliver that in a pill bottle or to the extent that you deliver that in a set of reagents that are going to be mixed with a with a patient’s blood and then spotted on a slide different ways they have different goals treating versus diagnosing but when we are presented with a discovery of a new gene affects the disease category there are usually four different sets of claims that you write for it one is the use of the protein that X expresses of therapeutic the gene itself as a potential diagnostic gene potentially has an antigen that would be used in a vaccine or other prophylactic and then the food is as a researcher agent for discovery of other things those are the four major claim sets on all dat base sequences that we typically it’s sort of boilerplate it’s fairly routine it’s still expensive but it’s become much more routine I just leased one of the question I asked originally before I went down this road mr Christian why wouldn’t I wouldn’t buy a support case of marchin rights the kind of case the doctor Grogan’s talking about where the need to have others provide unit tests is great again I guess some of that depends on how I understand the questions I was asking you can you have marchin rights for mr i guess the merchant rights exist they’re just never utilized can you have can you can we encourage the use of marchin rights in this area isn’t billions the kinds of purposes dr Gordon is dr. well I think your earlier question is getting to the challenge that is at the root of this problem the patents that issue we’re going to have claims nucleic acids corresponding to a gene that discovered something that patent right that single patent is going to protect many different potential applications one might be developing a method of making the protein which then becomes a drug another might be youth in the clintus clinical Diagnostics i don’t worry that it was screaming and trying to determine if Angelina’s present in a sample another application maybe might be but for the purposes of this process you’re talking about the single patent putting a condition through marchin rights on eliminating the use of that patent right is is the thing that causes concern within biotech sector the idea that at the back end of the process once you’ve reached the market there’s going to be a government mediated decision to

limit those patent rights that’s I think the chilling effect that I was trying to ascribe before I’m sorry no I think one of the other questions that I wanted to address is just can you address the concerns that have been raised in the settings of clinical diagnostic use versus patent rights and product development I don’t think you can do that cleanly through the patent system or by living in patent rights one of the things we always like to point out is that the patent rights are rights over the invention and if there’s conduct or other types of conditions that are seen in the market regarding the beginning of these companies there are other ways of addressing that other than through the path system and I guess that’s one question two tackles whether that’s something that’s worth looking into you mr Corbell think it was chairman cuz it’s issue would find a way i’ll come back at you with a two-part question what is your opinion of the bow check examiner’s upto a and B are they approving overly broad biotech patents similar to what occurred with business method patents in the in the late night 19 owners nineteen nineties well as I was at one point my life a biotech examiner and I think for that sector of the Patent Office I feel like those patent examiner’s probably on the higher end of the scale of experience and training in most patent examiners they shouldn’t would come out many of them opportunities that probably the best of the office based on their training experience inside right I think patent office is doing the best job I’ve seen a really kind at our patent claims I think anybody who works in the area getting patents out of that group can share my painting of saying that the claims that you emerge with are often due to be exceedingly narrow driven by both the strictness of the examiners perspective and how the patent office uses these significant cases that have come down that goes to one of my comments in my testimony this is one area where you’re not talking about a patent it should not evasion these are patents that are meritorious their narrow they match the contribution in a patent application and so that’s why we’re looking at these rights but with great interest very strong patent rights they should be respected k do the other three witnesses gentleman to what extent our patent approved used today and said the Congress do anything to encourage their use the use of pooling at patents has become a much more routine on university parts but probably the most impressive one is the pharmaceutical industries patent boolean snips small repeated segments segments in in jeans and we find it has become for a reality for most of us in licensing technologies that we only own a small part in part because of what mr Christian just said which was our claims have become significantly narrow game and that is a significant reality in the last six or seven years that it has become much more difficult to give broad claims in the Patent Office and for that reason we’re often times my case in my University it’s a very frequent probably ten to twenty percent of the time we are putting together intellectual properties not just from Yale but from other of the University of colleagues to try to put together a package which then can be licensed it’s not difficult to do it has become relatively routine and I don’t see it as being a significant barrier to entry for a product sure okay hi I can’t comment on what it’s like in the academic environment and the commercial environment is something you know it’s a noble attempt to be able to overcome a problem but is something which is not taken hold I mean be a minute case in which we can talk about wear some jeans were diagnosed condition and three other genes may diagnose it better or differently and in those cases there is very little comrade away her ability to be able to share information often when that happens causing conflict it’s a noble extent but it hasn’t helped the diagnostic environment I won’t use DNA for these purposes and so for that reason the ability to design around in this field is very different than you might see in other mechanical or electrical technologies where patent pools first grew up so I think there is a need for this and then so if you could as I have five or

more questions on ask all of you but I’m not gonna be able to do it during this process would hope you would allow us to be in touch with you to pursue some of these things because we’ve just sort of in some cases touch the surface and we intend no commercial use of our research we quit dr. Soderstrom your it was an earlier statement that somehow patents were buying people from doing follow-up research to discover new James and your experience is that incorrect that isn’t okay so you don’t feel the ale university doesn’t feel that that even if somebody over here it has an exclusive license that you read the pattern that it allows you to take what they’ve done and look at it for your follow-on work you just can’t incorporate it in your later release would that be fair two points one is we take there is no Tennessee to look at patents prior to conducting research at Yale University faculty members are free to continue your inquiry second in terms of the discovery that they ultimately do not deserve just to see if there is other intellectual property and in those cases we may choose not the patent simply because we all see the point and we would just encourage publication as soon as possible if we do think that it would be a significant improvement we usually would approach whoever has the exclusive rights now this is an academic question but for me it wasn’t academic my experience has been that exclusivity is being excluded from somebody’s invention caused me to in fact figure out a way to skin the cat differently I’m not in your industry I’m not in your academic endeavors but isn’t it somewhat true in all areas of endeavor that what you do not have access to and dr. Sun I saw you perk up on this you get first thing isn’t it true that in a sense there is a benefit to exclusivity which is causes people to go elsewhere and discover other things or around isn’t that an experience that even in medicine goes on I do think as a generality the patent system is designed to encourage design around efforts and for progress as a result of those efforts I do think that in certain instances again because we’re talking about genomic information here the ability to do so may be somewhat scripter and harder to do so I think there are instances where there may be blocking patents that might issue to this that are impossible as a technological matters designer I think your general proposition is correct and isn’t the the cooling that’s gone on to a certain extent the result of those blocks causing people to go to other areas create if you will block backs to then lead to the pooling being a necessity so that you have an ability to invent in an area in which very little is known I’ve seen yes here dr certainly been our experience that’s what we’ve recognized because people see it as a utility as an opportunity to get around some of the things that are blocking them glamsham no I would disagree with that so we only have three out of four okay suspension passed without here I time is limited for the Chairman too so I appreciate that we sort of have a disagreement but at least we got that out as to what the value of exclusivity is potentially changes channel with great regret I have to join this way this place works but I do appreciate you coming all the efforts but if Utley some of you made from coming aways to testify and we will be following up you