Patentability of biological material: continuing contradiction

THE PATENTABILITY OF BIOLOGICAL MATERIAL: CONTINUING CONTRADICTION AND CONFUSION

Dr Margaret Llewelyn

European Intellectual Property Review Volume 22 Issue 5 May 2000 pp. 191-197

Dr Margaret Llewelyn, Senior Lecturer in Law, Deputy Director, Sheffield Institute of Biotechnology, Law and Ethics, University of Sheffield

Two recent announcements highlight continuing divisions within the E.U. and between Europe and the United States of America in respect of the protection of biological material. The first is that the Blair and Clinton administrations are in discussions over a possible Anglo-American ban on the patenting of human genes. The second is Monsanto?s decision to co-operate with plant breeders in the development of new plant varieties through the combination of traditional plant-breeding methods with its genetic resources. Both these events focus attention yet again on the vexed question of the extent to which intellectual property rights should be used to protect the results of genetic research.

In particular they highlight a divergence in thought and practice between European patent law, in both its E.U. and EPC guises, and (1) an E.U. Member State and (2) the United States. These differences, coming at a time when the TRIPs Agreement is about to undergo a formal review, serve to reinforce the view that, despite decades of debate both in Europe and internationally, those who have sought to open up the patent system have failed to achieve the desired result of ensuring unity of agreement as to the form and scope of protection for biological material. Instead of certainty and consistency the picture is one of contradiction and confusion.

THE PROPOSED ANGLO-AMERICAN AGREEMENT

According to newspaper reports [1] the U.K. and U.S. Governments are engaged in serious discussions directed at preventing patent protection for human genes. The object is to ensure that the results of human genetic research, such as those resulting from the Human Genome Project, are made freely available. If the reports are accurate then Britain is sending out conflicting signals not only to its fellow E.U. Member States but also to the U.K. pharmaceutical industry. [2] It was only a year ago that the United Kingdom, as a member of the European Union, agreed to adopt the Directive on the Legal Protection of Biotechnological Inventions, [3] due to be implemented by July 30, 2000.

The Directive, which begins with the mandate that ?Member States shall protect biotechnological inventions? (Art. 1), expressly states that human genetic material is patentable.

"Article 5: (1) The human body, at the various stages of its formation and development, and the simple discovery of one of its elements, including the sequence or partial sequence of a gene, cannot constitute patentable inventions. (2) An element isolated from the human body or otherwise produced by means of a technical process, including the sequence or partial sequence of a gene, may constitute a patentable invention, even if the structure of that element is identical to that of a natural element. (3) The industrial application of a sequence or a partial sequence of a gene must be disclosed in the patent specification."

In addition, Recital 17 states quite clearly that patents are necessary in order to promote medical research.

"Whereas significant progress in the treatment of diseases has already been made thanks to the existence of medicinal products derived from elements isolated from the human body and/or otherwise produced, such medicinal products resulting from technical processes aimed at obtaining elements similar in structure to those existing naturally in the human body and whereas, consequently, research aimed at obtaining and isolating such elements valuable to medicinal production should be encouraged by means of the patent system."

It is this view, that patents are essential to promote and foster biomedical research, which proved to be the decisive factor in the Directive passing successfully through the European Parliament. While no Member State of the E.U. is strictly bound by new E.U. law until it is implemented, they are expected not to undermine the principles contained within it nor act in a manner which is inconsistent. The objective of the Anglo-American Agreement is to prevent patent protection for human genetic material. It would seem therefore that this directly runs counter to the commitment undertaken by the United Kingdom in July 1998. As a result the U.K. Government, if it takes this action, while not being strictly in violation of E.U. law, could at the very least be regarded as acting in a manner inconsistent with a future, agreed, obligation. Not least of the criticisms which can be made is that any agreement which results could constitute a barrier to trade and an impediment to the proper functioning of the single market. [4]

The announcement that these negotiations are ongoing is surprising. There has been no indication that the United Kingdom does not support the Directive. It has neither instigated a challenge to it on the grounds of an objection to the patentability of human genetic material nor has it joined the challenges which have been, or are about to be, lodged at the European Court of Justice. [5] Any agreement which is concluded would therefore contradict the U.K. position on the patenting of human genetic material within the European Union and indicate a volte face by the U.K. Government.

That the United Kingdom is acting in an inconsistent, or at least contradictory, manner can also be seen from its action when looked at in the broader European patent law context. In July 1999 the Administrative Council of the European Patent Office decided to implement the provisions of the Directive for the purposes of providing a supplementary means of interpretation. [6] Rule 23 (e), which has been inserted into Part II of the Implementing Regulations of the EPC, mirrors exactly the text of Article 5 of the Directive.

The decision to adopt these new Implementing Regulations was taken notwithstanding the challenge to the Directive, and the controversial comments of the Technical Board of Appeal in Novartis [7] in rejecting the argument that it should refer to the Directive for the purpose of determining the scope of the exclusions contained within the EPC. [8]

As a Member State of the EPC, with a representative on the Administrative Council, the United Kingdom would appear to have agreed to the new Implementing Regulations. [9] If, as could be argued, the Administrative Council by implementing the Directive adopted not only the Articles of the Directive but also embraced the principles underlying the Directive as outlined in the Recitals, [10] then the decision would include accepting not only that human genetic material is patentable but that such patents are necessary in order to foster medical research.

Any attempt therefore by a Member State of the EPC to prevent the use of the patent system in order to achieve this result must be looked at with concern. If the agreement is successfully concluded then it could give rise to the situation whereby the United Kingdom is a party to an agreed European policy of permitting patent protection over human genetic information, but it is bound to deny such protection to those seeking U.K. patent protection as a result of a separately negotiated, bilateral, agreement with a non-E.U./EPC country.

There is also the possibility that the agreement could place both the United Kingdom and the United States in violation of their obligations under TRIPs. Article 27(1) requires that patent protection is available for all inventions irrespective of the field of technology. There are only limited exceptions to this requirement and while plants, animals, diagnostic therapeutic and surgical methods are specifically excluded there is no explicit reference to human genetic material. [11] Both the United Kingdom and the United States could argue that they are entitled to take such action on the basis of Articles 8 and 27 (2).

Article 8 states that:

"Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this Agreement."

While the U.S. Government, which has not assumed a specific policy stance as such on permitting patents over human genetic material (unless the abortive attempt of the National Institute of Health to patent human gene sequences in 1992 counts) might be able to rely on this, the U.K. Government might not be able to present such a convincing case. The TRIPs Agreement was adopted in 1994, the Directive was adopted in 1998 and the EPO voted to implement the Directive in 1999. Where to all intents and purposes the U.K. policy has been one of supporting patent protection for human genetic material, any argument to the effect that it now believes the prevention of such patents is necessary to protect public health becomes less believable.

Article 27 (2) states that:

"Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law."

The problem with relying on Article 27 (2) is that, in the absence of any existing international jurisprudence on the interpretation and application of morality within patent law, it is likely that in any disputes involving questions of morality there would be reliance on the local jurisprudence. It is generally recognised that Article 27 (2) was included within TRIPs at the insistence of Europe. Given that the European Patent Office has been required to determine the application of the equivalent provision in the EPC (Art. 53 (a)) and there is some, albeit limited, jurisprudence, [12] it is likely that reference would be made to the EPO policy and practice. On the basis that the EPO has developed a practice of granting patents over human genetic material and has recently reinforced this practice through the amendment of the Implementing Regulations, it is unlikely that the United Kingdom could rely on the existing European jurisprudence to support its action. It would therefore have to find an alternative argument.

Aside from the implications the agreement has for research using human genetic material -- and there are signs that U.S. companies such as Celera Genomics, the head of which is Craig Venter, are trying to pre-empt the agreement by filing vast numbers of patents despite giving assurances previously that this information would be made publicly available -- it could prove significant for the protection of non-human genetic material. The absence of patent protection for commercially valuable research results involving human genetic material could mean that companies will become even more strident in seeking maximum intellectual property protection for research results involving other forms of biological material.

Monsanto?s apparent intention to use its gene technology to assist plant breeders in the development of new varieties is likely to centre attention on the question of the protection which should be available. In the United States both patents and plant variety rights are available. The same is not true around the world. It is likely that a call could be made for the same extent and type of protection as is currently available in the United States to be available in all those countries where American companies may wish to market their new varieties. The current review of Article 27 (3) (b) of TRIPS will provide an international platform from which those companies wishing to develop and protect plant varieties can lobby for the optional exclusion of plant varieties from patent protection to be removed.

As with the divergence between the actions of the United Kingdom and those of the E.U. and EPO in respect of patenting human genes, there is a difference of practice between the United States and Europe in respect of plant variety protection. In Europe plant varieties are excluded from patent protection both under the EPC and the E.U. Directive, the latter serving to reinforce the exclusion albeit with an increasingly controversial adjustment. [13] To be consistent with its recent practice Europe, encompassing both the E.U. and EPO, should present the view that the exclusion is to be retained. If the argument for the extension of patent protection to plant varieties is to be rejected then it would be helpful if the operation of the exclusion were seen to be unproblematic in practice. Unfortunately the European experience indicates that the contrary is true. This is worrying if Europe is to be seen as presenting a model of how to protect plant material.

EUROPEAN PLANT VARIETY PROTECTION

As already stated, both the E.U. Patent Directive and the European Patent Convention exclude plant varieties from patent protection. However, the recent comments of the EPO?s Technical Board of Appeal in Novartis served to highlight discrepancies between the two. Article 53 (b) of the EPC simply states that plant varieties are excluded from protection. In contrast Article 4 (1) of the Directive states that:

"The following shall not be patentable: (a) plant and animal varieties"

This would appear to mirror Article 53 (b) of the EPC. However, the Directive qualifies the exclusion within Article 4 (2): ?Inventions which concern plants or animals shall be patentable if the technical feasibility is not confined to a particular plant or animal variety.? This was introduced to enable claims to be made in respect of plant groupings which embraced more than one variety. In case there could be any doubt Recital 31 provides further clarification.

"Whereas a plant grouping which is characterised by a particular gene (and not its whole genome) is not covered by the protection of new varieties and is therefore not excluded from patentability even if it comprises new varieties of plants."

As already noted, the Directive has yet to be implemented in any E.U. Member State. Any immediate effect of Article 4 (2) is therefore contingent on whether or not the premise contained within the Directive is relied on by the EPO when assessing the validity of claims which encompass more than one variety. It might have been thought that as the Directive represents the views of E.U. Member States, and they make up the bulk of the membership of the EPC, there would be little resistance within the EPO to using the Directive for the purposes of clarification. However, the immediate reaction from the EPO was not promising.

In October 1999 the Technical Board of Appeal heard a request from Novartis for an appeal to the Enlarged Board of Appeal in respect of a patent application over plant groupings which encompassed more than one variety. [14]

In granting the request, the Technical Board passed comment on the arguments presented by Novartis, which included using the Directive to help interpret the provision of the EPC. In particular the Board addressed the issue of whether the exclusion of plant varieties within Article 53 (b) extended to only plant varieties as such or whether it extended to plant groupings which comprised of a number of varieties. In rejecting the argument that the exclusion only related to plant varieties as such, the Technical Board stated that, while the Directive did permit claims for plant groupings which encompassed more than one variety, they were not under any obligation to take the Directive into account when interpreting the EPC.

Subsequent to the decision of the Technical Board, but prior to the decision of the Enlarged Board of Appeal which is at the time of writing still awaited, the Administrative Council of the EPO adopted the Implementing Regulations on June 16, 1999. Rule 23c (b), which mirrors Article 4 (2) of the Directive, states that an intention which concerns plants or animals shall be patentable ?if the technical feasibility is not confined to a particular plant or animal variety?. This appears to say that where a claim encompasses more than one variety it shall be patentable.

It might be thought that this would put an end to the debate. However, the matter remains unsettled. It is possible that the Enlarged Board of Appeal will hold the Implementing Regulations to be inconsistent with the EPC and invalid. If the Enlarged Board does reject the Implementing Regulations as inconsistent then this would have the effect, if the challenges to the Directive prove unsuccessful, of meaning that the national laws of the majority of Member States of the EPC permitted patent grants over material which is unpatentable under the EPC.

The source of the problem is clear: how to define plant variety for the purposes of exclusion from patent law. [15] The continuing problems highlighted by the challenge to the Directive, the comments of the Technical Board of Appeal and the contrary position adopted under the Implementing Regulations indicate that the recent attempts to find consensus by what could be regarded as legal semantics have failed. And, any decision of the Enlarged Board in favour of the Implementing Regulations notwithstanding, it is likely that the problem over how to define excluded material appropriately will remain while there is a demand for patent protection. This demand will remain while there is a possibility of patent protection. The possibility of obtaining patent protection will remain while it is only those claims to plant varieties which are excluded, all other plant material thereby being patentable. The effect this will have, and it is one which we may not be prepared to accept, is that the determination of whether or not a claim falls within one of the categories of excluded material will ?depend on the verbal skill of the patent attorney?. [16]

It is critical that this should be resolved and in a manner which is commensurate with the needs of the European plant breeding community. If companies such as Monsanto are going to focus research on the development of plant varieties, with the concomitant investment that such research entails, then the issue how to protect these varieties appropriately becomes acute. It is also essential that external views of what is a suitable form of protection should not dictate or unduly influence the provision of protection within Europe.

POSSIBLE SOLUTIONS

There are two solutions to the ongoing European problem and both are obvious. Either the exclusions in both the Directive and the EPC are removed, thereby permitting all plant material, including plant varieties, which can meet the patent criteria to be patented, or the exclusion is extended, or broadly interpreted, to cover all plant material and not only varieties.

Removing the exclusion

The immediate problem of suggesting that the problem is resolved by removing the exclusion is that it would require (1) the E.U. to enact new legislation amending or revoking the E.U. Directive and (2) a Diplomatic Conference to revise the EPC.

However, in the light of the European Commission?s proposed measures for E.U. patent law, [17] it is possible to envisage an appropriate forum within which both the Directive and the EPC could be amended within the foreseeable future.

The objective of the Commission?s proposals is to ensure a single system of patent protection across the E.U. which will be quick and cheap to obtain. Most immediate of these measures will be a proposal for a Regulation creating a E.U. patent which will be valid across the E.U. Initially this system will co-exist with the EPC, but it is clear that long-term cohabitation of equals is not envisaged.

The Commission proposes that the E.U. should accede to the EPC and, either in addition to its accession or irrespective of its accession, that it will seek to encourage Member States to support a revision of the EPC in order (1) to adapt it to technological developments (which though not directly stated as such relates to biotechnology) and (2) (much more significantly in respect of the autonomy of the EPC) to take account of E.U. legislation.

Although biotechnology, Community plant variety rights and the Patent Directive are not specifically mentioned, they surely fall within the terms ?technological developments? and ?E.U. legislation?. This will mean that if the Commission is successful, and there is little reason to doubt that it will be given that the impetus for an overhaul of European patent law is gaining in momentum, this will result in pressure for an amendment of the EPC to bring it into line with E.U. patent practice. Even if the challenges to the Directive are successful it is unlikely that the basic principles which it has established will be left out of any future E.U. patent measures. It is possible, therefore, that within the framework of these measures the Commission would be able to effect a revision of both the Directive (provided it survives the challenge) and the EPC.

The hand of the Commission could be forced in this matter if the decision is taken to remove the optional exclusion of plant varieties from patent protection currently contained in Article 27 (3) (b) of TRIPs. If the option is removed then it would mean that all Member States, including those within the E.U., would be required to comply with the mandate contained in Article 27 (1) that patent protection is provided for all inventions irrespective of the field of technology. The only remaining exclusions would be on the basis of morality, or ordre public, or if the invention is deemed to be a method of human treatment. This would have the effect of bringing European patent law into line with the United States, thereby providing companies such as Monsanto with the desired patent protection for plant varieties. It would also mean that the possibility of both forms of protection being available already recognised in Article 92 of the E.U. Regulation on Community Plant Variety Rights, would be realised. [18]

But would removing plant varieties from the categories of excluded material be the most appropriate response to the problem? Given the growing public unease about commercial incentives driving genetic research, and the fact that the bioscience industries are under attack for seeking over-monopolistic protection for genetic material, perhaps the answer is not to look at removing the exclusion but instead at extending it to exclude more plant material than just varieties. It is recognised that those involved in agricultural research deserve a reward for their efforts and that they should be entitled to protect that which they develop. However, it is not universally accepted that the patent system is the best means of providing such protection. It might be more expedient therefore to deny intellectual property protection for all plant material except plant varieties, which would be protected by a system specifically designed to take account of the needs of both producers and end users, the plant variety right.

Extending the exclusion

If patent protection were to be denied for all types of plant material, it would remove the necessity of legal quibbling over what is a plant variety for the purposes of exclusion and it would also eliminate any need to assess whether plant material is novel [19] or inventive in the patent law sense.

To this end, those seeking to provide effective and appropriate protection should look not to the patent law for inspiration but to the Council Regulation on Community Plant Variety Rights. This is, after all, the only piece of European legislation relating to the legal protection of biological material upon which all Member States of the European Union are agreed. As with removing the exclusion, any extension could be achieved via the proposed E.U. Patent.

There is support for this view. In the United States one of Pioneer Hi-Bred?s patents on a transgenic plant variety is being challenged at the Court of Appeals for the Federal Circuit on the basis that plant variety rights and not patents are the only appropriate method of protection. In addition the president of one of the world?s leading research foundations, the Rockefeller Foundation, said at a meeting with Monsanto that the social welfare aspect of plant variety rights (for example, the breeders? and farmers? exemptions) make this a better system of protection for developing countries. His comments hold equally true for developed countries, although it is noted that both exemptions have been curtailed, or the possibility of curtailment has been provided, following the 1991 revision of the UPOV Act. [20]

It is also becoming clear that developing countries are reluctant to embrace patent protection unequivocally when determining compliance with their obligations under Article 27 (3) (b). Most have responded by looking to plant variety rights and not the patent system.

Plant variety rights were designed to protect living material and it is, in Europe at least, an uncontroversial form of protection. In contrast, the patent system was not designed to protect animate material and its use in respect of living material has met with criticism around the world.

It is also worth reiterating the different rationales lying behind the two rights -- for they serve to protect different things. Plant variety rights do not protect something new [21] which has been ?invented? by the applicant. The right does not protect unobvious research results, much conventional breeding relies on doing the obvious, nor is the applicant required to demonstrate that s/he has done anything particularly inventive in order to obtain the right. In contrast, the patent system serves to protect things which are not only new [22] but which result from an inventive step, something unobvious, which must be disclosed in order for an application to succeed.

This is not to infer that the plant variety rights system is without its own deficiencies, but these deficiencies are being taken into account within the local legislation often with the objective of mitigating the scope of the monopoly being granted. It is important to bear in mind that within the UPOV Convention there is greater scope for Member States to determine the extent of the right being granted, for example in respect of both the breeders and farmers? privileges, than is possible under patent law. The only question remaining is whether or not these sui generis rights meet the requirement of being effective.

CONCLUSION

The public distancing of bioscience companies from the image of corporate concerns taking precedence over public and environmental safety has meant a renewed focus on more traditional methods of producing new varieties. [23] There is a clear need, if the bioscience industry is to survive, for it to regain public confidence as well as that of the market-place. [24] One of the key factors in this lack of confidence is the insistence on patent protection for all aspects of genetic research. The need to reclaim confidence cannot and should not be simply seen in terms of human genetic research, but also in respect of all bioscience.

The failure within Europe to reach agreement on the issue of the provision of patent protection for genetic material should serve as evidence that it is time for those who have sought to gain acceptance of the patent system as an appropriate means of protecting biological material to admit defeat. It should be acknowledged that while the exclusions remain they leave, as the Technical Board of Appeal indicated, the system open to abuse through encouraging legal sleight of hand. It is time for the situation to be clarified. In respect of plants this could be achieved either by removing the exclusion or by banning patent protection for all plant material leaving the plant variety right as the sole means of protection. [25]

ADDENDUM

Since the time of writing the Enlarged Board of Appeal has upheld Novartis? argument that a claim which encompasses more than one variety is not excluded under Article 53(b). Whilst the decision is to be welcomed on the grounds that it indicates a degree of consensus between the application of Article 53(b) and the E.U. directive, it cannot be taken as a final statement as to the proper interpretation of Article 53(b). The Enlarged Board of Appeal does not, for example, address the concerns raised by the Technical Board of Appeal relating to the use of the ?verbal skill of the patent attorney? in order to avoid a claim falling within any of the categories of excluded material. This failure implies complicity with such practice and could be taken as agreeing to legal subterfuge in order to avoid an undesirable outcome. Given the problems which have been encountered in applying Article 53(b) it might have been hoped that the Enlarged Board would have made reference to the forthcoming review of the EPC, and introduction of an E.U. Patent as fora within which a debate as to the future of Article 53(b) could take place. However, the Board?s silence, when taken with the omission of Article 53(b) from the schedule of Articles for discussion at November?s Diplomatic Conference, only serves to support a view that the patent community is preserving an artifice of categories of excluded material when in practice none such exist. This can only serve to bring the patent system into disrepute.

1. The Guardian, Monday, September 20, 1999. 2. This commitment is also subject to criticism on the basis of recent action taken in respect of Glaxo-Wellcome?s anti-flu drug Relenza, which resulted in Glaxo?s Managing Director, Sir Richard Sykes, questioning the long-term future of research in the United Kingdom -- any reduction in the extent of patent protection available over the products of this research can only reinforce these concerns and add to the view that the pharmaceutical industry is being detrimentally harmed by the actions of the Government. 3. Directive 98/44. 4. Recital 5 of the Directive states that ?Whereas differences exist in the legal protection of biotechnological inventions offered by the laws and practices of the different Member States: whereas such differences could create barriers to trade and hence impede the proper functioning of the internal market?. 5. Action brought on October 19, 1998 by the Kingdom of the Netherlands against the European Parliament and Council of the European Union Case C-377/98 [1998] O.J. C378/13. Scott, "The Dutch Challenge to the Bio-Patenting Directive? [1999] E.I.P.R. 212. 6. Decision of the Administrative Council June 16, 1999 to Amend the Implementing Rules of the European Patent Convention, see in particular Rule 23 (b) (1), which states that the Directive