THE DIRECTIVE RISES AGAIN

March 1997

THE DIRECTIVE RISES AGAIN

In March 1995, the European Parliament (EP) rejected the proposed Directive on the "legal protection of biotechnological inventions", better known as the Life-Patents Directive. This was the first time the Parliament had taken such a step and the move represented a considerable flexing of its new legislative muscles granted under the Maastricht Treaty. NGOs, which had long campaigned against the Directive, were jubilant and claimed a victory for common sense over commerce. The biotech industry, the driving force behind the creation of the Directive, was not happy. Nevertheless, it put on a brave face, claiming that this was not a particularly significant event. It would continue to use the patent regime established under the European Patent Convention (EPC) to obtain protection for its inventions from the European Patent Office in Munich (EPO).

Nine months after the vote, the Commission tabled a "new" draft life-patents Directive. Like the first draft, it was presented simply as a harmonisation measure - a technical tidying up to bring patent law in all member states of the EU into line. In fact, all 15 countries are already signatories to the EPC and therefore have a common patent framework. However, the interpretation of EPC patent rules varies from country to country, and the EPO decides patent approvals on a case by case basis, without providing clear guidelines as to what is patentable. As distinct from the EPC, the EU Directive would be a regulatory framework to which national patent legislation of EU member states would have to be adapted. Such a move is obviously much favoured by industry.

George Poste, Chair of Research and Development at SmithKline Beecham tried to reassure Members of the European Parliament (MEPs) in a recent letter that "this Directive does not extend patent law....it simply translates the European Patent Convention and current legal practice into European Union law. All that industry is seeking is to continue what has been possible since the first gene patents were granted 20 years ago". His position is typical of industry representatives, who hope MEPs will not notice the major changes the Directive really implies. In reality, the Directive seeks to change the terms of reference for patenting, and if agreed, will significantly broaden the scope of products and processes that are deemed patentable in Europe.

This time, the biotech industry has learnt that it cannot take success for granted and has mounted a major lobbying offensive led by the pharmaceutical companies. This is because the industry believes that the potential benefits of medical research are the most compelling arguments for gaining public acceptance of biotechnology. The new Directive, like the old one, would give industry patent control of the whole "supply chain" from the basic genetic material, through the processes which make use of genes and gene sequences, to the products which result, to successive generations which carry the genes and into other products which incorporate or express the same genetic information. No wonder that Poste believes that "Genes are the currency of the future."

The new Directive resembles the old one in many ways. Although there is some tightening up, such as in the arena of germ line therapies, overall the new text is more liberal than the old one in what it deems patentable. In a number of instances it seeks to reverse EPO case law, particularly the EPO's recent ruling that plants and animals are not patentable.

Human Genes and Germ Line Therapy

The most compelling issue which persuaded parliamentarians to vote against the Directive was the question of patentability of human genetic material and germ line gene therapies. MEPs were very clear that human genes and gene sequences should be placed outside the scope of patentability. They had three basic grounds for such objections. Firstly, that on philosophical, moral or religious grounds, humans and their genetic make-up are not to become commercial commodities. Secondly, that human genetic material already exists and is there to be discovered. It cannot therefore be invented. This is a long-established principle of patent law. Thirdly, that granting a monopoly patent on a gene to one company or institution effectively stops others from using that knowledge to develop other beneficial products such as medicines or treatments.

Although the first draft Directive ruled that parts of the human body should be unpatentable in not. The new text is much more explicit, stating that "an invention capable of industrial application which relates to an element isolated from the human body or otherwise produced by means of a technical process shall be patentable, even if the structure of that element is identical to that of a natural element." With these words, the Directive deliberately blurs the boundaries between the two distinct acts of discovery and invention. The technical processes of isolating the gene and replicating it in the laboratory may well be patentable inventions, but to proclaim that the result of applying these processes and reproducing an identical human gene gives a patent right over the gene is a breathtaking leap of illogicality. It is like claiming copyright for a photocopy of another author's manuscript.

In 1994, the French changed their patent law to prevent this very situation arising. Its new law says that on grounds of public policy and morality "the human body, its elements and products and knowledge relating to the overall structure of a human gene or element there of may not, as such, form the subject matter of patents." The Commission cites this as an example of the legal uncertainty which arises from the lack of a Directive. In practice it is seeking to override the French law.

The EPC has nothing directly to say on the subject of patenting human material, having been drafted before such possibilities existed. In practice though, the EPO has begun to accept such patent applications in an ad hoc way. It recently granted a patent to the US firm Biocyte for human stem cells derived from umbilical cord blood and all medical treatments which use the composition. There appears to be nothing inventive in the specification which describes collection and freezing techniques which are not themselves new (see Box). The gene coding for the hormone relaxin (used to assist in childbirth) was patented by Australia's Howard Florey Institute and still stands despite a challenge from the Green Group. Recently, SmithKline Beecham filed an application for a patent on the calcitonin gene and its proteins and mutations despite being unable to specify any application for them.

Patents granted by the EPO remain valid until successfully challenged, which takes several years. Leaving the EPO to develop its case law based on the hazards of the appeal process is an inefficient and energy-consuming process. A clear legal statement of the limits to patentability of human genetic material is needed. A Green Group initiative in the Environment Committee of the EP, which has advisory powers, has drawn up a formula which would help make clear the important distinction between discovery and invention, which is a useful step forward. However, in the light of recent announcements from the Roslin Institute in Scotland of the successful asexual cloning of a sheep and the probability that human cloning could be achieved using the same techniques, the whole question of patenting "inventions" involving human genetic material now needs to be re-examined and could lead to a much more comprehensive ban.

Germ line therapy was one of the key areas which parliamentarians felt was not dealt with satisfactorily last time. This is one of the few areas where the Directive has been strengthened rather than weakened. The Commission has now made the ban more comprehensive and the new text states clearly that "methods of human treatment involving germ line gene therapy" are unpatentable. However, the EPC contains provisions also excluding methods of treatment of the human or animal body by surgery or therapy and diagnostic methods practiced on the human or animal body. A limited version of this appeared in the old Directive but is not mentioned in the new one. The Commission argues that since this issue is covered by the EPC, it is not necessary to reproduce it again in the Directive but in view of the wholesale changes being introduced, this is spurious logic and raises the possibility of further moving the boundaries to include patents on non-germ line therapies.

Plants and Animals

Although under the World Trade Organisation's (WTO)Trade-Related Intellectual Property Rights (TRIPS) agreement, signatories are not obliged to extend the patent regime to plants and animals, the Commission has not changed its position on this issue. Article 4.2 has been expanded to read "Biological material, including plants and animals, as well as elements of plants and animals obtained by means of a proc
ess not essentially biological, except plant and animal varieties as such, shall be patentable" (changes in italics).

The "not essentially biological" qualification seems inoffensive enough, but it represents a further redefining of boundaries. The opposite to biological, in patent law, is a microbiological process which is prima facia patentable under the European Patent Convention (EPC). Here again the Commission has extended the demarcation lines, stating that products as well as microbiological processes shall be patentable.

The significance of these provisions is that they seek to reverse the current case law of the EPO. In a landmark case brought by Greenpeace against the Belgian company Plant Genetic Systems (PGS) the EPO decided that using genetic engineering techniques to modify the genome of a plant (a microbiological process) did not outweigh the essentially biological processes of regeneration and growth inherent in obtaining a plant. Plants (and seeds) could not therefore be claimed for patentability under the microbiological processes heading. As products though, they could be, under the new Directive. The same logic should apply to animals. The result of an opposition to the cancer-mouse patent is still outstanding, but one of the senior examiners in that case was reported recently as saying "Currently, the EPO does not patent plants or animals". The result is a curious state of affairs where the law on plant and animal patents is more restrictive than on humans.

Plant and animal varieties remain unpatentable "as such". However, the decision in the PGS case referred to above also involved the EPO in giving its interpretation of the extent of this restriction. They found that transformed plants and seeds effectively become a new plant variety because they are distinguishable from all other plants by their new characteristics which are transmitted in a stable manner to the next generation. This provided further grounds for the EPO to declare that plants (and by analogy animals) could not be patented. The Commission has made it clear that they do not like the PGS decision, and its new Article 4.2 sets up an explicit conflict between the EPO decision, with its wide interpretation of the concept of a variety, and the narrow wording of the Commission text.

Farmers' Privilege

The new Directive reflects the acceptance by the Commission that there should be a derogation for farmers who breed to replenish their livestock as well as a plant propagation privilege, which was outlined in the earlier Directive. This still represents a very limited concession to farmers and prohibits off-farm exchange or the co-operative sharing of seed or livestock without attracting royalty payments. But the reality is likely to be even less rosy for farmers. To get round such restrictions, we are likely to see the growth of strict contractual arrangements imposed by the seller on the farmer along the lines of those now being used by Monsanto in the USA for its RoundupReady soybeans (see p18.). The Monsanto contract imposes a technology fee, and requires an undertaking from the farmer not to re-use farm-saved seed for further propagation, to use only Monsanto's own branded herbicide and to pay predetermined legal damages for any breach of the contract terms. Such contracts completely by-pass the attempt to write a farmers' privilege into patent law.

Biopiracy

One of the most serious, but least understood or debated, issues of concern related to the Directive is the question of biopiracy: the appropriation of peoples' knowledge and genetic resources by corporations and the consequent privatisation of both through the application of patents. Most of the world's existing wisdom in the fields of agriculture and medicine has come about throught the free exchange of knowledge and resources between communities, individuals and countries. The biotech industry would have us believe that strong intellectual property right regimes are essential for innovation to thrive: yet reality belies the theory.

Some of the consequences of biopiracy are that it:

· Stifles innovation and suffocates the progress of R+D, in both the formal and informal sectors.

· Robs farmers and communities of the resources they need to survive and thrive.

· Downgrades farmer and community knowledge and wisdom, while overglorifying technological skills.

· Disempowers farmers, healers and other researchers in the informal sector.

· Concentrates genetic and financial resources in the hands of corporations.

· Threatens biodiversity and food security.

· Violates many communities' moral, ethical and spiritual codes.

Apart from its small concession of the farmer's privilege, the draft Directive does not address the implications patenting plants and animals has for farmers and communities around the world. It contains no reference to the principles set down in the Convention on Biological Diversity which provide for the equitable sharing of benefits arising from the knowledge of local communities, their innovations and practices. It does not address the issue of prior informed consent for the use of genetic resources collected from their territories. Nor does it consider the implications for farming systems and agricultural innovation which will be stifled by the privatisation of agricultural resources.

Patenting their own resources in order to protect their livelihoods, even if they were interested in doing so, is way beyond the means of most farmers and innovators in developing countries. At present, many people give away their seeds, their plants and their knowledge without realising that these may become the proprietary rights of some industrial company. Even if they are aware of this situation and could afford to get caught up in the patenting game, for many communities privatising genetic resources is simply not an acceptable path to follow. It is often against their moral, spiritual and ethical beliefs.

Animal Welfare

One of the concessions obtained by the EP in the conciliation process last time was the introduction of a ban on patenting processes for modifying animals in a way which would cause them suffering or handicap. It was, however, subject to an over-riding "cost/benefit" test which opened the door to such patents if there was "substantial benefit to man or animal" and/or the suffering was disproportionate to the objectives being pursued. The Commission has retained this text more or less unaltered. The Environment Committee proposed to drop the double tests and to make it an absolute prohibition.

Next Steps

The EP's Legal Affairs committee has again been charged with responsibility for this Directive and the Rapporteur is the same Herr Willi Rothley, German Socialist. His response to the Directive and all its shortcomings has been to delete many of its provisions, both the good bits and the bad, and to substitute a short list of patentable and non patentable items. His list is heavily weighted towards industry's demands and does nothing to meet the objections described above. This approach has already been criticised by some of his colleagues on the committee and it remains to be seen whether it will survive in its present form.

Except for the extracts discussed above, the new draft Directive remains essentially the same as the old one. If Parliament could agree to the changes adopted by the Environment Committee together with an explicit ban on cloning techniques for animals and humans then we would have made significant progress towards a workable set of restrictions on life-patents. If not, then we should campaign, as before, for rejection of the Directive and for a full revision of the European Patent Convention.

GRAIN is against patents on life and campains for the rejection of the patent Directive. Steve Emmot works for the Green Group in the European Parliament and monitors the developments of the Life-Patents Directive very closely. He can be reached at The Greens at the European Parliament (32-2) 299 11 11. This article was edited and enriched with Boxes by Janet Bell.