Intellectual
Property Strategy in Bioinformatics and Biochips
by
Dennis Fernandez & Mary Chow, Fernandez
& Associates LLP
China
Compass Conference Topic Spotlight:
The Evolving Protections for Businesses in
China
Foreign firms have had mixed success in developing
US-China business over the years. While risks
have diminished as formal protections have evolved,
many challenges still remain. This panel examines
developing strategies to protect investments and
other business ventures, including intellectual
property legal structures, financial structures,
and the power of the personal touch.
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Intellectual
property rights are essential in today's technology-driven
age. A strong intellectual property protection strategy
is crucial in the bioinformatics and biochips technology
spaces as monetary and temporal resources are tremendous
in finding a blockbuster drug or gene therapy, as
well as in deploying advanced biosensor and other
medical systems. Current problems and intellectual
property practice in the genomic space are presented
and analyzed. Various strategy and solutions are proposed
to guide bioinformatic and biochip companies in forming
an aggressive strategy to protect one's intellectual
property and competitive positioning.
What
are the fields of bioinformatics and biochips? These
are relatively new disciplines that has gained much
recognition in the past few years. Basically, bioinformatics
is the convergence of analytical and computational
tools with the discipline of biological research.
This has vast influence in biological research as
numerous data that are collected through laboratory
experiments can be organized, analyzed, or prediction
made to reduce the time spent in finding cures to
diseases or causes of diseases. Additionally, biochips
pertain to primarily semiconductor-based devices used
for biological or other healthcare-related applications.
The
amount of data collected in biological research is
tremendous especially in the area of genomics. On
June 26, 2000, groups of scientist announced the completed
survey of the human genome, the sum total of all the
genes in each cell of the human body. The genome is
the entire genetic blueprint for a human being written
in the alphabet of chemical compounds called nucleotides,
adenine (A), guanine (G), cytosine (C), and thymine
(T). A gene is the specific sequence of the nucleotides
that tells the body how to create proteins that maintain
cellular structure of the organism and direct function
of the cell. The human cell has some 100,000 genes
that are specific sequences of DNA and the sum total
of all units of nucleotides results in a mind-boggling
3.1 to 3.2 billion base pairs in the human genome.
However, only 3%-5% of the genome contains genes,
which in turn each produce four to five proteins,
the molecules that control all major functions of
life . Thus, computational technology is required
in the sequencing of the database, the studying of
the functions of the specific sequence (gene), and
the management and dissemination of the genetic information.
With
the potential vast pay-off of finding a blockbuster
drug or treatment, copious amount of funding both
in the private and public area have gone into the
development of bioinformatic tools, as well as related
biochip applications, in the genomic space. With all
the money going into these bioinformatic and biochip
companies, these companies need to protect their technology.
In 1999 alone, for example, 289,448 patent applications
were filed in the bioinformatic space and the USPTO
has created working groups to deal with the influx
of bioinformatic applications. Although patents in
these areas have increased and provides an avenue
to protect ones intellectual property, there is also
controversy that surrounds the patenting of various
technology in this area. For one, the thought of allowing
a company to patent and have a monopoly over a gene
sequence that has been around since the beginning
of life is quite disturbing. On the other hand, the
discovering and developing a new gene-based pharmaceutical
product in the United States requires years of commitment
and immense capital resources, sometimes in the whelm
of $500 million. Without the protection of the patent
system, these companies would have no means of recouping
these capital and time investment, and innovation
would be put to a halt.
Intellectual
Property Protection In Genomic Discipline
Within
the genomic discipline, companies and research can
be divided into three areas: 1) sequencing the genome,
2) functional genomic, which is finding the functions
of the genes, and 3) information system, which is
the software tools to manage and present the tremendous
amount of data. Additionally, various biochips technologies,
such as microarrays, are deployed in cooperation with
such genomic tools. For each area, different technology
is generated and thus, a different intellectual property
strategy should be deployed. Often, companies participate
in one or more of the areas and should pursue a joint
strategy.
Sequencing
the Genome
With
the hype surrounding the completion of the Human Genome
Project, new technology has been developed for decoding
DNA that provided for the rapid discovery of gene
fragments known as expressed-sequence tags (ESTs).
These companies, such as Incyte Genomics and Celera,
have generated large databases of expressed sequence
(EST) data and have aggressively filed patents on
these ESTs. For example, Human Genome Sciences holds
patents on 103 human genes and has patents pending
on 7,500 genes. Incyte Genomics tops the list with
some 400 patented genes, while Celera, which only
began decoding DNA last year, has already filed patent
claims on at least 6,500 gene sequences.
To
fall within patent protection, an invention must be
deemed novel, useful and non-obvious. Often the biological
function of these DNA sequences are unknown and companies
have tried to fulfill the useful criteria by proposing
generic and often frivolous uses, such as forensic
probes and sometimes even cattle feed. Currently,
Incyte and similar companies have filed thousands
of provisional patent applications with the United
States Patent and Trademark Office (USPTO) for ESTs
in hopes that, they will someday be able to find the
"usefulness" of the sequence. Numerous opponents
of these tactics have argued that patent rights should
be reserved for whomever uncovers the true biological
function of a complete gene. The USPTO is currently
developing guidelines that require examiners to reject
patents that don't describe a "specific, substantial
and credible" use for a DNA sequence. Thus, many
experts predict that most of these EST patents would
eventually not receive patent protection.
To
combat the high risk that their patent applications
would not be allowed, companies in this area can pursue
various strategic options. One of which is to challenge
the examiner's rejection by an appeal to the PTO board
of appeals. However, if the appeal process is not
successful, your case can be taken to the Federal
Circuit Court of Appeals, where the new "usefulness"
standard has not been tested. Currently, the case
law including Brenner v. Manson (1966 Supreme Court),
Philips Petroleum (1989 Federal Circuit Court of Appeals),
and Bedford v. Hunt (1817) has defined "useful
to mean beneficial in contrast to injurious to the
morals, health, or good order of society." Thus,
the court would need to justify the requirement of
the newly proposed "specific, substantial and
credible usefulness standard."
Another
strategic move would be to fortify an application
by performing homology studies on the gene sequence
in the patent. Homology refers to the establishment
of a relationship or common thread between the novel
gene sequence in the patent to another gene that has
already been discovered, but not patented. For example,
claiming that gene XYZ is related to ABC, which has
a known function. Thus, making the argument that gene
XYZ performs a related function to gene ABC's function.
The standard upon which the USPTO relies on is that
an expert in the field would agree that the common
thread is strong. However, as our understanding of
genes increases, the existing definition of what's
related is constantly shifting and various patents
may be invalidated based on these shifts.
Another
tactic would be to conduct several functional assays
in order to better determine gene sequence function.
The inventor can submit a declaration on sequences
behavior asserting that he or she has a strong notion
that the sequence is more likely than not to have
some function. Even if a DNA discovery claims to encode
a protein involved in cancer but later on turns out
to be involved in another disease, the courts would
allow the new usage and the invention is protected.
For example, Viagra was originally patented as a heart
remedy.
The
most conservative approach would be to go back to
the laboratory and perform analysis until you find
a definitive function. However, when you do find the
function, the genetic sequence probably would have
been published already and you will be too late in
the game to claim the use of the genetic sequence.
With
the controversy surrounding the patenting of just
the sequences, companies in this area should explore
protecting intellectual property surrounding the tools
to sequence the genes and the tools to analyze the
genetic data. Patents in this category generally cover
computer-implemented methods, computer-based systems,
and computer programs for analyzing and annotating
voluminous nucleotide sequences. For example, protecting
a companies' proprietary method of locating boundaries
between exons and introns would create value in licensing
revenue and also, more importantly, the protected
intellectual property can be used as bargaining chips
in a cross-licensing of another company's technology.
Many of these analytic tools are embodied in software
and thus would get automatic protection from copyright
protection for its source code. However, patent protection
is a better venue as the functionality of the invention
is protected versus the literal source code. For example,
if a company obtained a patent for its method of locating
boundaries between exons and introns, one who practices
one of the steps covered in its patent claims would
be an infringer even if a different source code is
utilized. Under copyright protection, the infringer
would need to use the exact source code to infringe.
Functional
Genomics and Biochips
After
acquisition of specific sequences, the functionality
of these sequences need to be determine to generate
value in creating targets for new drugs and new genetic
therapy treatments. Many players compete in this area
using bioinformatics and biochips tools as the monetary
and emotional payoff is tremendous if one is able
to be the first to find a cure to a certain disease.
Once
again the importance of computational power is put
into play as computational methodologies are deployed
in comparative genomic, the comparing of human genetic
data to other organism genomes, which have functions
that have been defined. Patent protection would be
invaluable in protecting methods and related biosensors
for sequence alignments, homology searches, and metabolic
pathway modeling. Protecting these fundamental methods
and devices would create more value than patenting
a specific software product, as intense competition
in this area would create shorter and shorter product
life cycles.
Genes
do not work in isolation. Finding the pattern of gene
expression is another great area of interest that
requires computational power. Biochip companies, such
as Affymetrix and Hyseq, are engaged in developing
assays, tools, and computational techniques for detecting,
monitoring and interpreting gene expression profiles.
For example, a microarray, which is a collection of
probes, -short sequences of nucleotide synthesized
to hybridize with the genes of interest-, are placed
in a grid on a glass slide or chip and exposed to
a sample of unknown DNA. A fluorescent "signaling"
enzyme is attached to the end of the probe that glows
when the probe hybridizes with the gene of interest.
Affymetrix, which pioneered the concept of DNA microarrays
based on computer chip technology, can fit 250,000
probes in a matrix only 1 square centimeter in size.
With an estimated 100,000 genes in the human body,
a "universal" microarray is within reach.
Incyte Genomics has announced that its Synteni division
has intention to make a chip containing the entire
human genome in the next few years.
To
protect its intellectual property, companies in this
area need to seek patent protection covering the core
technology of these devices and methods. However,
an even more valuable claim would be to protect the
generation of expression data utilizing these methods
and devices. In addition, since the design of the
microarrays mirrors chip design technology, another
method of protection to explore would be maskwork
protection. In chip technology, when the chip layout
includes an original circuit design, the layout is
protectable. Specifically, maskworks protect against
the unauthorized copying of chip layout information.
Federal registration is relatively quick and an inexpensive
process, but filing must be done within two years
of commercialization of the chip product. Thus, it
is arguable that the layout of the probes for a microarray
can avail itself with maskwork protection.
Information
Systems and Bioinformatics
As
more information is generated from sequencing tools
and functional analysis tools, the managing and sharing
of the information would become increasingly important.
The ability to share, manage, and distribute the information
is extremely important in this space because ethical
issues creates an environment that fosters sharing
of the information and suppresses the patenting of
the information. Already there are advocates who call
for an intellectual property free zone for genomic
research, a moratorium on gene patenting, and a compulsory
licensing scheme. In March 2000, President Clinton
and Prime Minister Blair made a joint announcement
that human genome research "should be made available
to scientists everywhere." Thus, a company should
not concentrate all its intellectual property protection
on the information, the genetic sequence, but instead
should try to create value in the analytic tools and
the management of the information.
Bioinformatics
companies, such as Incyte Genomics, Celera, and CuraGen,
are developing Internet tools to allow researchers
to share the genetic information in their databases.
Also, these companies are providing researches various
tools to analyze the data, present the data, and store
their research results. This revolution toward content
delivery and presentation can be compared to the Internet
revolution where content is free but the added value
is the presentation. Thus, there is a "silent
gold rush in the genomic space" that mirrors
the rush to file Internet business method patents,
such as Amazon's "one-click" method. Numerous
companies are filing patents to stake out methods
for sharing and manipulating the enormous quantity
of genetic data being put online. For example, one
application claims the idea of using a reward system
to compensate scientists with free purchase for posting
information and comments to a private gene database.
However, patenting business methods would bring about
the same controversy that surrounds the current Internet
patents as opponents are arguing that these methods
of manipulating research data online have been utilize
in the research space for number of years. Thus, a
patent portfolio should include protection of the
enabling tools as well as protecting the business
methods.
In
its intellectual property portfolio, all companies
should aggressively protect their core technology
in numerous facets such as patent protection, copyright,
trademarks, maskworks for chip design, and trade secrets.
This is extremely important in the bioinformatics
and biochips space as ethical issues create an environment
against patenting of genetic sequence data. In addition
to a defensive strategy of defending its core technology,
companies should also pursue an offensive strategy
that includes analyzing emerging standards and competitor
focus so that companies could acquire a competitive
advantage or entice a cross-licensing of another's
technology.
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Business Opportunities.
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