Gene Patents Have Not Had a Negative Effect on Research

By E. Jonathan Soderstrom, who  is managing director of the Yale University Office of Cooperative Research, which oversees patenting and licensing activities.

Scholars have recently argued that patents may impose significant costs upon noncommercial biomedical research. [Michael] Heller and [Rebecca] Eisenberg suggest that the patenting of a broad range of the inputs that researchers need to do their work may give rise to an "anti-commons" or "patent thicket" that may make the acquisition of licenses and other rights too burdensome to permit the pursuit of what should otherwise be scientifically and socially worthwhile research. [Robert] Merges and [Richard] Nelson and [Suzanne] Scotchmer highlight the related possibility that, in some fields of technology, the assertion of patents on only one or two key upstream, foundational discoveries may significantly restrict follow-on research. A further concern is that the prospect of realizing financial gain from upstream research may make researchers reluctant to share information or research materials with one another, thereby impeding the realization of research efficiencies and complementarities. Similarly, researchers may be trading away rights to conduct future research or to freely disseminate their discoveries in exchange for current access to research inputs or financial support. Finally, prospective financial gains from the exploitation of intellectual property may induce researchers to choose research projects on the basis of commercial potential rather than scientific merit.

Anecdotal Evidence

Another aspect of the debate about whether intellectual property fosters or hinders biomedical research relates to the "research tools," which are the ideas, data, materials or methods used to conduct research. Many such materials and methods are disclosed or claimed in DNA patents. Among DNA patents, there is particular concern about the subset of gene patents and their relevance to research tools because genes are not only inputs to developing genetic tests and therapeutic proteins, and thus directly relevant to medically important products and services, but also are crucially important tools for ongoing research. Concern over the impact of patenting and licensing on biomedical research has grown since the Court of Appeals for the Federal Circuit's 2002 Madey v. Duke decision, which visibly affirmed the absence of any research exemption shielding universities from patent infringement liability. Patent claims based on DNA sequences can be infringed by research activities that entail making or using the claimed sequence, not just by selling products or services.

Without diminishing the importance of these potential concerns, it should be pointed out that the evidence offered to support these contentions is primarily anecdotal. Although these isolated instances have received significant attention, there is no evidence that widespread assertion of patent rights on genes has significantly hampered biomedical research. Contrary to these prevailing beliefs, findings from a recent survey of 414 biomedical researchers in universities, government, and nonprofit institutions offer little empirical basis for claims that restricted access to intellectual property is currently impeding academic biomedical research. The authors noted that, although common, patents in this field are not typically used to restrict access to the knowledge and tangible materials that biomedical scientists require.

The licensing of DNA patents at US academic institutions has not led to the decline in academic cooperation and technology transfer that many observers have feared.

The authors cite a number of reasons, including the fact that firms generally do not threaten infringement litigation against academic research institutions (a de facto research exemption), in part because such academic use may improve their invention, because they wish to maintain good will and to ensure access to future academic inventions, and also because the damages are likely to be very small. According to the authors:

"Our research thus suggests that 'law on the books' need not be the same as 'law in action' if the law on the books contravenes a community's norms and interests."

A Survey of Academic Institutions

These findings are consistent with another recent major survey of 19 of the 30 US universities with the largest number of DNA patents. Their results showed that the licensing of DNA patents at US academic institutions has not led to the decline in academic cooperation and technology transfer that many observers have feared. In fact, based on responses, the study demonstrated that in most cases the licensing behavior of universities allows for collaboration and sharing of DNA-based inventions among academic institutions.

The study investigated the patenting and licensing behavior for four main types of DNA-based inventions:

DNA sequences that encode therapeutic proteins

DNA sequences that are phenotypic markers only

DNA sequences comprising genes encoding drug targets

DNA discoveries or inventions representing research tools

The authors discovered that most universities base their decisions to patent and strategies for commercializing the invention on a determination of the level of protection necessary to induce an interested company into investing in the further development, testing, manufacture, marketing and sale of a product embodying the technology. Thus, in the case of a fully sequenced gene that encodes a therapeutic protein, where the utility and the development risks are both generally acknowledged to be high, survey respondents generally agreed that they would patent and license such inventions exclusively. However, in the case where the gene encoded is simply a target for drug discovery, few would consider even patenting such a discovery since researchers would be free to screen their compound libraries against the target while the patent application was pending and to use any resulting information without fear on infringement. In addition, it has become commonplace for universities, when licensing their inventions, to reserve the right for their own faculty, as well as researchers at other nonprofit entities, to use the patented invention. The study confirmed that university technology managers take a nuanced approach to patenting and licensing, seeking only enough intellectual property protection to facilitate the commercial development of the invention.

This market sensitivity is also reflected in data on patent trends. The number of DNA patents has shown a fairly dramatic and steady decline since their peak in 2001 (from about 4,500 to around 2,700 in 2005). Patent prosecution, maintenance and management costs that are typically between $20,000 and $30,000 per patent militate against patenting inventions that are unlikely to recover those costs and encourage considerable selectivity in which inventions are patented....

We do not think that gene patents are having a significant negative impact on academic research.

A Balanced Approach

We believe that patent policy, as well as practice, should be guided by the goal of promoting innovation and, in turn, improvements in human welfare. That view drove Yale's interest in helping to draft the "Nine Points" guidelines, which recommend that universities refrain from patenting genomic inventions that will serve primarily as research tools. Yale has long taken a balanced approach to patenting, taking into account the nature of the invention, its relevance to research, and the extent to which patent protection would be necessary to give a commercial partner adequate incentive to develop the product completely. We have taken a similar approach to licensing, especially by insisting upon the right to make the invention available to researchers at Yale and other academic institutions.

We do not think that gene patents are having a significant negative impact on academic research. There have been thoughtful analyses of problems that could arise, and there have been anecdotal reports and two comprehensive studies of this issue ... that concluded that patents are not slowing the pace of research for several reasons. Universities take a nuanced approach to patenting and they are increasingly making specific provision for research uses of inventions in licenses. There is evidence that a "de facto research exemption" exists because companies rarely prosecute academic investigators for research uses that may be infringing.

Yale and other universities have a major stake in ensuring that access to research tools is not compromised (the "Nine Points" document is evidence of that); we also recognize that circumstances may change as the fields of genomics and proteomics continue to advance. I am confident that the scientific community, working with the National Institutes of Health, the Association of University Technology Managers, the Association of American Medical Colleges and others, will continue to monitor whether gene patents are interfering significantly with research.

Adapted from E. Jonathan Soderstrom, "Hearing on Stifling or Stimulating—The Role of Gene Patents in Research and Genetic Testing," House Committee on the Judiciary, Subcommittee on Courts, the Internet, and Intellectual Property Web site: judiciary.house.gov/hearings, October 30, 2007.

Copyright 2010 Greenhaven Press, a part of Gale, Cengage Learning.