The team is joined by Guest Kats Rosie Burbidge, Stephen Jones, Mathilde Parvis, and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Hayleigh Bosher, Tian Lu and Cecilia Sbrolli.

Sunday, 4 January 2015

Biotech inventions: controversies, case law, uncertainties and financing

The purpose of this post is to give a ‘taste’ of the issues around patenting biotech inventions. Subsequent posts will explore individual topics in more detail.

What is biotech?

The law has had an uneasy relationship 
with complex molecules ...
Biotech is about life and the complex molecules that support it. Biotech inventions often concern genetic material, proteins, the discovery and genetic modification of organisms, the diagnosing and treating of disease and research tools for measuring and manipulating biological properties. Strictly speaking the word ‘biotech’ does not cover all ‘pharmaceutical’ matters or all ‘medical’ matters. However for the purposes of this post the distinctions are being glossed over to focus on the issues being discussed.

The stats

The ‘Facts and Figures 2014’ report from the European Patent Office (EPO) shows ‘Medical Technologies’, ‘Pharmaceuticals’ and ‘Biotech’ occupying positions 1, 9 and 10 in a ranking of technical fields by number of European patent filings. The world’s best-selling drug in 2013 was a ‘biologic’, an antibody protein called Humira. Reports from the UK government (see here) and the Organization for Economic Cooperation and Development (OECD) (see here) show the growing contribution of biotech to the economy and its tremendous long term potential.

Van Gogh always found it more difficult to
paint genetically modified flowers

The patenting of ‘life’ creates ethical dilemmas. However in Europe these have mostly been dealt with by the EU Biotech Directive which has been incorporated into the European Patent Convention (see the EPO’s explanation of that here). Essentially the vast majority of biotech inventions are considered patentable on ethical grounds. However, The Court of Justice of the EU (CJEU) has subsequently had to decide on fundamental issues raised by patenting of embryo stem cells in Brüstle (see Katposts here and here) and International Stem Cell Corporation v Comptroller (see Katpost here).

The patenting of medicines leads to the ‘access to medicines’ debate (see Katpost here). Essentially that is about patents causing drugs to be unaffordable for many people in the developing world. The cost of drugs is now also an issue in the developed world as they become ever more expensive. However this Kat also realises these are complicated problems with no easy answer.

Case law and uncertainties

Biotech case law is complicated and forever changing. The question of whether medical inventions relating to administration schedules are patentable in Europe was only settled in 2010 by the EPO Enlarged Board’s decision G2/08 (see Katpost on G2/08 here and on issues relating to Swiss-style medical use claims here). However in day to day practice a biotech patent attorney will continue to face many uncertainties in exactly what a medical use can cover, such as: 

- to what extent can a medical use claim define substances or diseases functionally?

Aquinas dreaded considering
 the ethics of biotech
- to what extent can it incorporate additional steps before the actual treatment, such as a diagnostic step?

In the very important field of ‘antibodies’ case law seems to be getting stricter and stricter on how antibodies need to be defined in patent applications, and the amount of structural information that needs to be given (see this page of the EPO’s ‘Case Law of the Boards of Appeal’).

Quite fundamental issues are still being decided. For example the EPO Enlarged Board is presently considering the patentability of plants derived by essentially biological processes in G2/12 and G2/13 (see IPKat post here). The level of data needed in a patent application is a constant issue for biotech inventions, and in practice one gets the feelings it is a stricter test for medical inventions (see for example T1616/09 discussed on Patlit here). Ethical issues can impact examination, for example in trying to amend claims to exclude unethical matter (see for example decision T1441/13 which shows the difficulties of disclaiming certain embryo stem cells).

However for the moment the uncertainties we have in Europe in patenting biotech inventions are dwarfed by the tremendous uncertainty created in the US by the Supreme Court decisions Mayo and Myriad and the fact that Guidance issued from United States Patent and Trademark Office (USPTO) based on these decisions is yet to be finalised (see Katpost here).


Having done the due diligence Quentin
finally decided to invest in biotech
Biotech research and development (R&D) is expensive, and the early part of it is often carried out when less resources are available. During the R&D process a substantial value of small biotech companies may reside in the patent portfolio, and so filing patent applications is a crucial part of the business model. Sometimes the patent portfolio is all that a biotech company might have to show how well it is doing. Investors and collaborators like to see patent applications having been filed before they decide to enter into commercial agreements with biotech companies (see Katpost here on the role of IP in financing). In these circumstances patent strategy needs careful consideration. The portfolio needs to be built as quickly as possible, but taking into account future patent costs and future R&D.

The task of biotech patent attorneys is to cope somehow with all of the above, and in doing so they have the opportunity of making a meaningful contribution to an industry which has still to realise most of its potential.

Five further posts on biotech will be published at weekly intervals. The posts will be about:

- the ethics of patenting biotech
- biotech case law
- patent strategies for protecting biotech inventions
- biotech financing and patent portfolios
- a summing up of all the posts and if needed responses to readers comments.


Raoul said...

Thanks for this very interesting blog. I am looking Forward to reading the further issues announced.

Anonymous said...

There's no doubt EPO Examiners are becoming stricter for biotech inventions. However that's probably a good thing. As the sector develops and more and more actual products are sold, leading to more litigation, the purpose of filing patent applications will change from being used to bring in investment to covering what companies are selling. Narrower claims will then suit the sector better.

Anonymous said...

Anonymous @ 10:09,

I do not understand what your version of "serve the sector better" means.

From my reading, it appears that you mean that a weaker patent right is better for the entrenched players - a direct spinoff of the Infringers' Rights motif.

That cannot be correct.

Do you ascribe to the notion that improvement patents are somehow qualitatively different than a type of Flash of Genius ground-breaking patent? That for "the good of somebody" that protections should be less?

Manach said...

Perhaps God might be assigned the ultimate rights holder for any biotech related IPR work. This might curb the hubris of the more speculative prophets of profits within this sector.

Anonymous said...

In response to Anonymous of 12:05 I do think that as a sector matures it's helpful for patent rights to get narrower/weaker. Of course increasing prior art means that is going to happen, but I think also that Examiner's become savvier at granting the most appropriate scope of claim with increasing experience of a sector, more unconsciously than consciously. I believe that helps all players that are innovating at the time. The US Supreme Court is essentially doing this its recent Myriad and Alice decision which may be for the same reasons.

Anonymous said...

The main problem with the biotech drugs is their cost. Humira may have hit the top spot in sales (cash), but it is way down the list for number of prescriptions.

There is room and a need for both small molecule drugs and biotech drugs and pharma companies mustn't walk away from the former.

Anonymous said...

To anon@12.23 freedom to operate does get more difficult as people file more applications in an area. However a better solution is compulsory licencing (See section 50 of the UK Patents Act)

Anonymous said...

To Anonymous @ 13:23,

Perhaps it is my "ugly American" coming through, but the thought of compulsory licensing is anathema to me.

Our legal system (US law) reserves this avenue only to the strictest of emergencies. It is NOT something that I would advocate as a general panacea.

Anonymous said...

Dear anonymous american,
you are not alone and you position is also shared by many of us across the pond. Do not let the minority view posted on this website on this particular issue as well as many others, shape your view of the view of Euoropeans, or at least those in the UK.

Sophist said...

Manach - why do you think He isn't?

More fundamentally, why are biotech inventions to be treated differently from others? Is it because it's wrong to make a profit out of preventing people suffering (or to make a profit at all)? Is it because it adds to inequality (between those who are treated and those who aren't)? Or is it contended that we can devise a system that will produce more new drugs and treat more people at lower expense? The conviction that such a system must exist is understandable - but before we adopt it, we should have a working example. And we may wish to apply to that some rationally refined version of the Precautionary Principle (e.g., some assurance that overall it won't do more harm than good).

Anonymous said...

Great post here Sophist - and mirrors to a some degree the current thread on the morality/ethics issues affecting biotech patenting.

Anonymous said...

In response to Sophist, whether we choose to do nothing will depend how unsatisfactory we believe the present situation to be. Vested interests, those making huge profits, those in power would not want the system to change. However as the world becomes more democratic more people will want their voices heard, and then perhaps real change will happen to lessen the suffering of those who are victims of the present state of affairs.

Anonymous said...

In response to the anonymous responder to Sophist,

It is just not that direct and easy.

World becoming "more democratic" ignores the very real fact that individual sovereign nations are every bit entrenched as they have been, and that the "we are all in this" line of thinking, while indeed noble, is rather Pollyanna when it comes to disparate resource and profit gathering.

Yes there are vested interests - as there has ALWAYS been vested interests. The identity of vested interests may morph and change over time, but you are only fooling yourself if you believe that this world is evolving to that "Power of the People" (dare I say communist) model where idealism such as yours will be able to be achieved. That model has failed - and failed gloriously - because one cannot ignore basic human nature, and basic human nature does include selfish and yes sometimes self-defeating tendencies.

Rather, the better model, the model that has yielded more progress, is the model of Adam Smith's Invisible Hand.

To paraphrase (and slightly morph) the classic movie Wall Street's Gordon Gekko, Greed is good, or at least should be recognized as a real force and put to good use.

Anonymous said...

In response to anonymous of 13:48 I disagree with your version of 'human nature' and your philosophy of 'greed is good'. Human ingenuity is capable of much more. It is capable of changing things. What is morally correct does matter and there are people capable of translating that into moral action.

Anonymous said...

Anonymous @ 15:14,

Your rejection is itself rejected.

Open your eyes and witness history.

The Pollyanna "Gee, let's be good for goodness sake" may be inspirational, but to ignore the reality of the human condition is simply not forgivable.

Compulsory Licencing said...

I hope that at last the UK can properly debate whether to have compulsory licencing for important pharmaceuticals:

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