5. New Issues in Patentability 1: Biotechnological Patents
What is Biotechnology?
113. Biotechnology is essentially about the study or manipulation of one or more of the basic components of living things, including tissues, cells, proteins, genes or DNA, to create new products or technologies. Biotechnology is employed in the development of many everyday products, from the processing of foods, to the development of vaccines and other medical treatments. Early uses of biotechnology include traditional breeding techniques used to improve plants, livestock and other food products.
114. Genetic engineering or genetic modification is an aspect of biotechnology that involves the manipulation or movement of DNA material, including between species.
Why Is it an Issue?
115. Biotechnology, (including genetic modification) has a well-established presence in New Zealand. Potential applications of biotechnology are wide with new applications constantly being developed. New Zealand has an excellent reputation for high quality research and research facilities and is a world leader in agricultural and horticultural research, a great deal of which involves some form of biotechnological activity. Biotechnological inventions have also had a major impact on a number of other New Zealand industries, including medical research, agriculture, animal production, dairy, food and beverages and waste processing.
116. Because of the importance of the primary production sector in our economy, and in our external trade (with around half our exports comprising food products and two thirds derived from agriculture, forestry and fisheries), the implications of biotechnology for primary sector production are particularly important for New Zealand. Parts of our primary sector, including organic producers, oppose the use of a number of biotechnological applications, and particularly those which involve genetic modification.
117. Medical uses of biotechnology are also becoming increasingly important, both in terms of a growing range of diagnostic tests and new pharmaceuticals now available to New Zealanders, and also in the area of medical research where an ever-increasing number of professionals are using biotechnology applications to study and prevent diseases.
118. It has been suggested that research (and subsequent product development) in the field of genetic modification and other biotechnological applications has the potential to be a valuable source of intellectual property for New Zealand, and one which can be sold on world markets. In recent years increasing numbers of patent applications have been filed around the world (including New Zealand) for inventions involving biotechnology.
119. There has, however, been some opposition to the commercial exploitation of inventions involving biotechnology, particularly those involving genetic modification. Although in many instances it is the activity involved or the possible end result of that activity which generates concern, concerns have also been expressed that the availability of patent protection for such inventions encourages their creation.
Royal Commission on Genetic Modification
120. Public concern about the possible adverse effects on society of genetic modification lead to the establishment of the Royal Commission on Genetic Modification. The Commission presented its report on 27 July 2001. The report made two recommendations regarding the patenting of biotechnological inventions. These recommendations are discussed later in this section.
121. Questions have also been raised as to the appropriateness of allowing proprietary rights to inventions which include living matter, and in particular to inventions which relate to, or include what are often called "higher life forms" such as animals or human beings.
122. Many countries have laws that regulate the exploitation of certain inventions for moral, ethical or environmental reasons. As noted previously, arguments against patenting of biotechnological and genetically modified inventions, particularly those involving "higher life forms" appear to focus on the activity involved. For example, there is concern that genetic modification may interfere with the integrity of species and as such is inherently wrong. Questions have been raised over the morality of assigning economic value to biological material and the implications this has in terms of distribution and concentration of wealth.
123. A 1994 paper prepared by the Westminster Institute for Ethics and Human Values at the McGill Centre for Medicine and Law (Canada): Ethical Issues Associated with the Patenting of Higher Life Forms noted that if genetic engineering and its applications are regarded as ethically concerning to begin with, patenting becomes ethically suspect in direct proportion to the strength of the incentive it provides for such research and development.
124. While there are many people, including Māori who see genetic modification as being in some way immoral, there is another point of view. This alternative view sees interventions such as genetic modification as a proper extension of society's enquiries into nature. Failure to pursue such research can be seen as a dereliction of duty in caring for other human beings, as the research may provide major health benefits. On this basis it would be considered immoral to take any action which discouraged research in these areas.
Biotechnology Patents in New Zealand
125. The definition of a patentable invention contained in s2 of the Patents Act 1953 does not specifically exclude biotechnological inventions, although IPONZ does have a practice of refusing patents that would include human beings within their scope. Non-human animals, however, may be patented, and such patents have been granted by IPONZ. For example, New Zealand patent 24390813 claims a transgenic mouse.
Treatment of Biotechnological Inventions in Other Countries
126. Attitudes to the patenting of biotechnological or "life form" inventions in different jurisdictions tend to reflect the extent to which biotechnological activity impacts on the economy in question. Developing countries have tended to focus on issues such as the availability of products including food and medicines at prices which make them accessible to consumers. These countries may be reluctant to implement patent systems that conflict with these objectives.
European Union
127. The European Patent Convention (EPC)14 reflects the TRIPS Agreement in excluding from patentability inventions which are contrary to public order or morality. Article 53 of the EPC states that: "European patents shall not be granted in respect of inventions the publication or exploitation of which would be contrary to 'ordre public' or morality…..[and shall not be granted] in respect of plant or animal varieties or essentially biological processes for the production of plants or animals….."
128. The European Union Directive 98/44/EC sets out rules for patent offices in EPC member states regarding biotechnological inventions. Member states are required to convert such directives into domestic law. It allows inventions to be excluded from patentability if they are considered to be against "ordre public" or morality and provides examples of the types of inventions that would fit this criteria including:
- processes for cloning human beings;
- processes for modifying the germ line identity of human beings;
- uses of human embryos for industrial or commercial purposes; and
- processes for modifying the genetic identity of animals which are likely to cause them suffering without any substantial medical benefit to man or animal, and also animals resulting from such processes.
129. The treatment of the patent application for the Harvard "Oncomouse" in 199515 can be seen to reflect this approach. A patent was granted on the Oncomouse on the basis that the benefits (the study of cancer) were considered to outweigh the disadvantages (cruelty to animals). Accordingly, the European Patent Office refused a similar type of patent on a mouse developed to study hair growth as the subject matter was not considered important enough to outweigh animal suffering.
130. The Directive states that gene sequences without an indication of a function do not contain any technical information, and are not patentable inventions as they are not capable of "industrial application" as required by Article 52(1) of the European Patent Convention. Biological material which is isolated from its natural environment however, or produced by means of a technical process and which is capable of industrial application, may be the subject of a patentable invention even if it previously occurred in nature.
United States
131. United States Patent law has no specific exclusions to patentability. In 1980, the United States Supreme Court ruled that a live, human-made micro-organism is patentable subject matter.16 This lead to the United States Patent and Trademark Office (USPTO) conferring patentable status on plants, seeds, and plant tissues in 1985, and two years later on "multi-cellular living organisms, including animals". The Harvard "Oncomouse" (referred to above) was granted a patent (No 4736866) under this policy. However, the United States Patent Office will reject an application if the broadest reasonable interpretation of the claimed invention as a whole encompasses a human being. Such an invention would be considered contrary to the 13th Amendment to the United States Constitution, which forbids slavery.
132. In January 2001, the USPTO introduced revised "utility examination guidelines" to be used by patent examiners is assessing whether an invention is "useful" as required by the s101 of the United States Patents Act (Title 101 US Code). These guidelines, although applicable to all patent applications, were introduced in response to concerns that gene sequences or DNA fragments were being patented even though their inventors had not described any particular use for them. The guidelines require that the utility of an invention be:
- Specific - that is specific to the subject matter claimed;
- Substantial - that is that a real world use is defined rather than one which requires further research to identify it; and
- Credible - is the utility believable to a person skilled in the field?
The effect of these guidelines would be to prevent the patenting of mere discoveries for which a specific, substantial, and credible use has not been described.
South America
133. Latin American countries have some of the greatest biological and cultural diversity in the world and, (it is argued), this characteristic makes an ideal location for bioprospecting activity - the practice of exploring potential commercial uses of natural resources and related traditional knowledge. This has caused considerable concern amongst Latin American communities that knowledge and resources are being appropriated with little or no benefit to the peoples concerned, and whose cultural beliefs may also be being ignored in the process.
134. In response to this problem, the Andean Community17 has introduced a Common Intellectual Property Regime.18 Article 3 of this regime states:
The Member Countries shall ensure that the protection granted to intellectual property elements shall be accorded while safeguarding and respecting their biological and genetic heritage, together with the traditional knowledge of their indigenous, African American, or local communities. As a result, the granting of patents on inventions that have been developed on the basis of material obtained from that heritage or that knowledge shall be subordinated to the acquisition of that material in accordance with international, Andean Community, and national law.
The regime also restricts the patentability of living things and genetic material (Articles 15(b) and 20(c)). Where inventions are developed or obtained from genetic material originating in one of the member countries, or make use of traditional knowledge, applicants must show that they have permission to use the genetic material or traditional knowledge (Articles 26(h) and (i)).
How Should New Zealand Approach Biotechnology Patents?
135. The 1992 paper recommended the repeal of section 1719 of the Patents Act 1953, on the grounds that patent law is not the appropriate mechanism to control the development and use of certain inventions, and that refusing to provide patent protection would not affect the development or subsequent use of inventions considered ethically concerning. It was also considered inappropriate that the Commissioner of Patents be required to determine ethical questions.
136. Since that time however, there has been a growing body of interest in both intellectual property law reform and issues related to genetic modification and associated technologies. It has become apparent that there is a sufficient degree of concern and in some instances opposition to any reform of the Act which might either extend patentability in these areas, or which may in turn result in the granting of patent rights to inventions based upon living organisms.
137. Submissions to the Royal Commission on Genetic Modification, developing countries' interventions to the TRIPS Council on issues related to Article 27.3(b) of the WTO TRIPS agreement, and a growing body of academic and other work in this area suggest it is timely for New Zealand to consider its position on these matters again. The areas of greatest concern are the patenting of genes or gene sequences, and the patenting of living organisms, particularly plants and animals. Both gene sequences and non-human living organisms are patentable in New Zealand.
138. It has been argued that genes should not be patentable on the grounds that they do not meet the requirements for a patentable invention. Reasons that are advanced in support of this argument include:
- if a gene exists in nature, it is not novel and therefore not patentable;
- an inventor who isolates a gene does not actually invent or discover anything and should not be entitled to a patent;
- determining the structure of a gene is, at most, a discovery rather than an invention;
- sequencing a gene has become such a routine automated process that it cannot be regarded as inventive.
139. Those who support the patenting of genes point out that it has long been possible to obtain patents for chemical substances that occur in nature. The rationale for this, confirmed by judicial decisions, is such patents only cover the substance when isolated and purified, and that it does not exist in nature in an isolated purified form. Once purified and isolated, the substance is in a useful form. As a gene is a chemical substance, that is, a DNA molecule, then an isolated and purified DNA molecule that has the same sequence as a naturally occurring gene is considered patentable because the DNA molecule does not exist in nature in an isolated and purified form.
140. The grant of a patent on a gene or gene sequence does not mean that the patent owner also "owns" any organism containing that gene. A gene is simply a DNA20 molecule, that is, it is a chemical substance, which can be purified and isolated. A patent covering a gene only covers the isolated and purified DNA molecule that forms the gene, but does not cover the gene as it is found in nature. So, for example, a person whose body contained a patented gene or gene sequence would not infringe the patent, and the patent owner would not have any "rights" over that person.
141. If a gene, whether or not it is patented, is inserted into a living organism, such as a plant or an animal, the living organism could be patented. This would allow the patent owner to control the commercial exploitation of the plant or animal. Commercial exploitation of plants and animals, such as buying and selling them, is widely accepted in our society. The idea that someone can own plants or animals is also widely accepted. The buying and selling of human beings, or the idea that a person can be someone else's "property" is, however, considered to be morally repugnant. Because of this, patents that might include human beings within their coverage are not granted, either in New Zealand or in other countries.
142. The Patents Act 1953 contains no specific ban on the granting of patents for human beings. Any patent application that might include human beings within its coverage would be refused by IPONZ on the grounds that it does not constitute a "manner of manufacture" and it is unlikely that such a patent would be granted. The Royal Commission on Genetic Modification considered that the issue should be put beyond doubt and recommended (recommendation 10.2) that the Patents Act 1953 be amended by adding a specific exclusion from patentability of human beings and the biological processes for their generation, in line with section 18(2) of the Australian Patents Act 1990. The government has agreed that this amendment should be made. It should be emphasised that such an exclusion would not prevent research taking place in this area. If it was intended to regulate such research, specific legislation would be required.
143. A problem that has arisen in other countries, particularly the United States, is that some applicants have obtained patents for large numbers of gene sequences without describing any use for them, in the hope that anyone who does discover a use will have to pay a royalty. There is no explicit requirement in the Patents Act 1953 that an invention be "useful" before being granted a patent, although grant of a patent could be refused if the patent applicant had not identified any use at all for the invention.21 In such a case, the invention would considered to be a discovery rather than a patentable invention. But if the applicant identifies some use for the invention, however insubstantial, the grant of a patent could not be refused. Lack of usefulness is, however, a ground for revoking a patent.
144. If there was a formal requirement for an invention to be "useful" before a patent is granted, this would discourage, for example, the patenting of large numbers of gene sequences with no known use. In light of the developments in Europe and the United States described earlier, should New Zealand introduce a requirement that an invention be shown to be "useful" before a patent is granted?
145. The patenting of living organisms, particularly animals, raises ethical concerns where animal welfare is concerned. The European Union Biotechnology Directive (referred to earlier) provides that where genetic modification of an animal may cause suffering without any substantial benefit to humans or animals, patents may be refused for the animal or a process for producing it on the grounds that such inventions would be against public order or morality. Should IPONZ adopt similar guidelines? Animal ethics committees in New Zealand already monitor animal research applications in these terms.
146. Any restrictions on the patentability of biotechnological inventions, for example to restrict the patenting of genetic material or living organisms, would need to be consistent with the exclusions to patentability permitted by the WTO TRIPS Agreement. Articles 27.2 and 27.3 allow parties to TRIPS to exclude from patentability:
- inventions whose commercial exploitation must be prevented for the protection or ordre public or morality, including the protection human animal or plant life or health or to avoid serious harm to the environment;
- diagnostic, therapeutic, and surgical methods for the treatment of humans or animals; and
- plants and animals (other than micro-organisms) and biological processes for the production of plants or animals.
147. Among the issues to consider in reviewing the current provisions under the Act is New Zealand's status as a net importer of technology and products subject to intellectual property rights. Most of our pharmaceutical and technological products are imported. Essentially New Zealand is on the receiving end of "technology transfer" and consideration would need to be given to the potential effects a less liberal patent system might have on our continued ability to access such goods, and the extent to which New Zealand might miss out on the benefits provided by an expanding biotechnology sector.
Plants and Patents
148. New Zealand provides protection to new plant varieties22 through the provisions of the Plant Variety Rights Act 1987, and, since 1981 has been a member of UPOV, the International Union for the Protection of New Varieties of Plants. A plant variety right will be granted if the variety is "new, distinct, homogeneous, and stable" (s10(2)(d) of the Plant Variety Rights Act 1987).
149. The grant of a plant variety right under the Plant Variety Rights Act 1987 gives the owner of the right the exclusive right to produce for sale, and to sell, reproductive material of the variety concerned (S17(1)(a) of the Plant Variety Rights Act 1987). Where the variety is a plant that is a vegetatively propagated fruit or vegetable producing plant, or a vegetatively propagated ornamental plant, the owner of the right also has the exclusive right to propagate the variety for the purposes of the commercial production of fruit, flowers or other products of the variety.23
150. It is also possible for plants to be granted a patent under the Patents Act 1953. Where a plant variety is protected by a patent, the rights of the patent owner are greater than those conferred by the grant of a plant variety right under the Plant Variety Rights Act 1987, as shown in the table below. For example, the owner of a plant variety right cannot prevent other breeders exploiting another variety bred from the protected variety. A plant variety right owner cannot prevent farmers from saving seed from a previous crop in order to sow a new crop. The grant of a patent, however, would prevent the exploitation of "essentially derived" varieties and would also prevent farmers from saving seed for their own use.
Comparison of Rights Conferred by the Plant Variety Rights Act 1987 and the Patents Act 1953:
| | Plant Variety Rights Act 1987 | Patents Act 1953 |
|---|
| Right to prevent others from producing for sale reproductive material of the protected variety: | Yes | Yes |
| Right to prevent others from selling reproductive material of the protect variety: | Yes | Yes |
| Right to prevent others from producing and selling bred from the protected variety: | No | Yes |
| Right to prevent farmers from sowing saved seed: | No | Yes |
151. New Zealand patents have been granted for plants. Patent Nos. 330335 and 330495 claim varieties of olive plants, while patent No. 217113 claims plants that have been made resistant to glyphosate herbicide by genetic engineering.
152. Article 2(1) of the 1978 revision of the UPOV Convention24, (to which New Zealand is a party), states that member states may recognise the rights of plant breeders by the grant either of a special title of protection or of a patent. The Article goes on to state that member states whose national law allows both forms of protection can provide only one of them for one and the same botanical genus or species. Despite this provision, the present New Zealand legislation does not prevent plant breeders from seeking both patent and plant variety right protection for the same genus or species. That is, if a new plant variety meets the criteria for protection under the Plant Variety Rights Act 1987, and is similarly eligible under the Patents Act - (that is, it falls within the definition of invention), it can essentially receive dual protection.
153. Amendment of the Patents Act would be required to ensure consistency with the 1978 UPOV Convention. This is because the existence of a granted patent (or a patent application) for the same genus or variety is not a ground for refusal of a plant variety right under the Convention. Alternatively, New Zealand could consider ratifying the 1991 UPOV convention, which does not contain any provision equivalent to Article 2(1) of the 1978 Convention. This would require amendment of the Plant Variety Rights Act 1987.
The Situation in Other Countries
Australia
154. Protection for new varieties of plants is available under the Plant Breeder's Rights Act 1994. Australia has ratified the 1991 UPOV Convention, which allows for a level of protection for plant breeders that is similar to that provided by a patent. Australia also allows plants, including new plant varieties, to be granted a patent under the Patents Act 1990.
European Community
155. Article 53(b) of the European Patent Convention states that:
European Patents shall not be granted in respect of plant or animal varieties or essentially biological processes for the production of plants or animals; this provision does not apply to microbiological processes or the products thereof.
Article 4(2) of the European Biotechnology Directive (Directive 98/44), however, states that inventions which concern plants or animals shall be patentable if the invention is not confined to a specific plant or animal variety.
United States
156. In the United States, protection for asexually reproduced new plant varieties is available under Chapter 15 of the United States Patents Act (Title 35, United States Code). Sexually reproduced varieties are protected under the Plant Variety Protection Act (Chapter 57, Title 7 of the United States Code). Following the decision of the US Board of Patent Appeals and Interferences in Ex Parte Hibberd,25 which held that seeds, plants, and plant tissue were eligible for the grant of a patent, the United States Patent Office also grants patents for plants under Chapter 10 of the United States Patents Act. Chapter 10 deals with the granting of patents for inventions in general.
International Obligations
157. Article 27.3(b) of the TRIPS agreement provides that members may exclude certain matters from patentability, including plants or animals. The Agreement requires, however, that members shall provide for the protection of plant varieties (as opposed to plants themselves) either by way of patents or by an effective sui generis system, that is, by way of legislation especially intended for this purpose.
Should Plants Be Eligible for Two Forms of Protection?
158. The availability, in New Zealand of two forms of protection for plant varieties raises two questions
- should plant varieties be eligible for two forms of protection? and
- are patents an appropriate form of protection for plants?
159. It is not clear why plant varieties should be eligible for two forms of protection, when inventions that do not involve plants are only eligible for one. As discussed earlier, a patent gives a greater level of protection than a plant variety right. If, however, New Zealand were to ratify the 1991 UPOV Convention, new plant varieties would be entitled to a level of protection similar to, although not necessarily the same as, that provided by a patent.
160. Article 14 of the 1991 UPOV Convention extends the protection provided by a plant variety right to cover varieties that are "essentially derived"26 from a protected variety. Ratification by New Zealand of the 1991 UPOV Convention would be in line with Recommendation 10.1 of the Royal Commission on Genetic Modification which recommended that the Plant Variety Rights Act 1987 be amended to introduce the concept of essentially derived varieties. The government has agreed in principle with this recommendation, subject to the outcome of the review of the Plant Variety Rights Act 1987 being undertaken in tandem with Stage 3 of the the review of the Patents Act 1953. Article 15(2) of the 1991 UPOV Convention also allows member countries to provide that the use by farmers of their saved seed would not infringe a plant variety right.
161. If it were decided that plants should be eligible for only one form of protection what form should this take? If it were decided that plants should be protected by patents only this would mean repeal of the Plant Variety Rights Act 1987. The future course of the Plant Variety Rights Act 1987 is discussed in a Discussion Paper released simultaneously with this paper.
Are Patents an Appropriate form of Protection for Plants?
162. The rights provided by a patent are greater than those that may be allowed by the grant of a plant variety right. For example, if a plant or plant variety is the subject of a patent, then, as noted earlier, farmers would not be able to save or store seed to sow a subsequent crop. While this may be of benefit to patent owners, it may disadvantage farmers who would have to pay to use saved seed, when in the past they have not had to do so. If it was considered desirable that farmers continue to be able to freely use their saved seed, it would be necessary for the Patents Act to specifically exclude plants from patent protection.
163. The granting of patents for genetically modified plants has lead to fears that growers whose crops are accidentally contaminated by these plants may be sued for patent infringement. A recent judgement of the Canadian Federal Court27 has, however, indicated that mere accidental contamination of a crop with a patented plants would not infringe the patent.
164. One possible disadvantage of this approach is that there may be some plants which, although excluded from patent protection, would also not be eligible for a plant variety right. For example, it has been suggested that physiological or biochemical differences in a cultivar, such as pine trees with different fibre characteristics than other pine trees, or changed oil content in an oil seed such as sunflowers might not be protectable by plant variety rights.28
Questions
Biotechnology and Patents
- Should New Zealand's patent legislation exclude plants or animals from patentability? If so, why?
- Should some biotechnological inventions be excluded from patentability. If so, which ones? Why? What benefits or costs could there be to New Zealand in providing such exclusions?
- Should New Zealand's patent legislation contain an explicit requirement that an invention be "useful" before it can be granted a patent?
Plants and Patents
- Is it appropriate that plant breeders should be able to gain both patent protection and plant variety rights protection for the same genus or species? If so, why?
- If only one form of protection for plant varieties is provided, what should this be? Why?
- If plant breeders can obtain only one form of protection for their new plant varieties, should plant breeders be able to decide which form of protection should be applied to a particular variety, or should this be specified in legislation?
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