28 September 2014

Gene Patent Questions Answered, As High Court Asked to Weigh In

Green Question MarkAs expected, lawyers representing Yvonne D’Arcy in her fight to have Myriad Genetics’ BRCA ‘cancer gene’ patent claims declared invalid have filed an application with the High Court of Australia for special leave to appeal the decision of a Full Bench of the Federal Court upholding the claims.  At some time in the coming months, therefore, the High Court will decide whether or not it will review the Federal Court’s decision.  My prediction remains that it will not, although the policy implications are certainly significant enough that Australia’s top court may feel that there is value in having its say.

In the meantime, unfortunately, the patent itself, the technical and legal issues, and the decision of the Full Federal Court remain poorly-understood by most people.

Helpfully, Fairfax Media has published an ‘explainer’, to get people up-to-speed on some of the issues in the case, and the differences dividing the two sides of the debate over gene patents.

However, missing from the Fairfax article are questions and answers about the underlying legal issues, which is (unsurprisingly) where many of the misunderstandings and misconceptions arise.

Do private corporations own your genes?  What rights does Myriad’s patent actually give it?  What is the effect on the cost of healthcare?  What is the impact on research?  Will a positive outcome for Myriad lead to more companies seeking gene patents?  And is all this just a sign that, as a society, we have lost our moral compass?

Read on for my answers to these questions, and more.
Does Myriad own my genes?

Does Samsung own your smartphone?  Does Sony, or Philips, own your DVD player?  Does Intel or Apple own your personal computer?  The answer to all these questions is also ‘no’, even though every one of these companies owns patents covering various aspects of the products in question.

But if you acquired your phone, DVD player and personal computer legally, then they are yours to do with as you see fit.  And so are your genes, no matter how many companies may hold patents covering isolated components of those genes.

At the risk of sounding like a pseudo-philosopher, it is important to make a clear distinction between intellectual property rights associated with a thing, and the thing itself.  Just as you can own a book without owning the copyright in its content that would permit you to make further copies of the book, you can retain full possession and control of your own DNA, despite the existence of related IP rights owned by other parties.
OK, so if Myriad doesn’t own my genes, what do they own?
A patent confers the exclusive right to exploit the subject matter covered by the patent claims.  This is a bit technical, so let’s break it down into its key components.

The word ‘exclusive’ tends to be used loosely in everyday speech.  News outlets tell us about their ‘exclusive’ stories, which then appear on every other news outlet within hours (or minutes) of first publication.  Most of the time, the initial source of the story has a ‘scoop’, i.e. is first with the news, however there is nothing actually ‘exclusive’ about the information. 

Similarly, an ‘exclusive’ event, or an ‘exclusive’ deal, is not particularly exclusive when it is available to hundreds, or even thousands, of consumers.  In this context, the word ‘exclusive’ is being used merely as a promotional tool to create an impression that something is special.

In patent law, when we talk of an exclusive right we mean, quite literally, a right to exclude others from doing certain things.

The things that a patent-owner can exclude others from doing are those falling within the scope of the term exploit.  The scope of this term is quite broad, and includes such things as making, using, selling and offering to sell things that are covered by the patent.  It also includes authorising (i.e. licensing) others to do these things.

There is some legal authority for the proposition that the term ‘exploit’ covers only exploitation which has some commercial character or effect.  However, we may never know for certain whether a patent provides a right to prevent somebody from engaging in wholly non-commercial use of patented subject matter, for the simple reason that there is no benefit to a patentee in pursuing legal action against an alleged infringer whose activities have no financial impact on the patentee’s business.  A court is therefore unlikely ever to be asked to address the question directly.

Finally, the scope of this exclusive right is defined by the claims of the patent.  In the Myriad BRCA gene case, the claims at issue cover the specific gene mutation associated with an increased risk of breast cancer, when that particular genetic material is removed from the cell, separated from the rest of the DNA, and constituted into a stable isolated form.

So, what Myriad ‘owns’ is a right (should it choose to exercise it) to exclude others from isolating the claimed gene, and/or exploiting the isolated gene, in ways that have some commercial character or effect.
But, still, doesn’t this mean that Myriad has rights over my genetic makeup?
Again, no – at least, probably not in the way you might be concerned about.

The thing about a right to exclude is that it is a negative right.  The ability to prevent someone else from doing something does not automatically carry with it the right to do that thing yourself.  A negative right is trumped by every positive right, obligation and prohibition present in the law.

To take a fanciful example, suppose I invent a new instrument and method of torture, and I somehow manage to obtain patent rights over it.  (I note in passing that the Commissioner has a discretion to refuse to grant such a patent, under section 50(1)(a) of the Patents Act 1990, but for present purposes we can assume that this discretion was not exercised.)

I now have the right to prevent others from exploiting my torture method and device.  But this does not mean that I have any right to exploit it myself, so long as it remains illegal to commit torture.  I could, possibly, use my rights to sue torturers for patent infringement, however it seems safe to assume that the penalties available under the criminal law would provide a more effective deterrent to would-be infringers!

By the same token, Myriad’s exclusive right to prevent other parties from doing certain things does not allow it to engage in any activities that would violate the positive rights of any individual, including any rights relating to privacy and bodily integrity.  Your genes remain yours, no matter how many ‘gene patents’ are granted.
OK, but what about the price of healthcare? Don’t patents increase costs?
Absolutely, yes – diagnostics, treatments and drugs that are protected by patents generally cost more than those that are not, because the patent-holder, to a large degree, gets to name its price.

But that is the whole point of patents, and the situation reflects the outcome of decades of policy decisions that have led to the particular model we currently have for the development and deployment of improvements and innovations in healthcare.

Certainly, governments could invest billions of dollars in directly funding health-related research, including drug discovery and development, new treatments, and new diagnostic techniques – including those based on genetic technologies.  They could then make the outcomes of this research freely available, such that cost to patients of the drugs, treatments and tests would be much lower.  But, to the extent that those patients would also be taxpayers, they would nonetheless be footing the bill for the original research.

Under the system we currently have in Australia, the government instead invests billions of dollars in subsidising healthcare, to ensure that it is (as far as possible) universally available.  We leave it to private enterprise to make the decisions on how to invest in the original research and development, to carry the associated risk, and to bring new products to market.  We allow them to obtain patents, and we accept that the higher cost incurred while a patent remains in-force is the price we pay, after the fact, to enable companies to afford and to justify the investments they make in research.

I am not saying that this system is perfect.  I am just pointing out that this is the system we actually have, and it is the same system that applies to traditional drugs and tests.  Those people who are calling for genetic technologies and personalised medicine to be treated differently from other forms of healthcare development therefore need to bear in mind that this could have far-reaching effects beyond the mere exclusion of genes from patent-eligibility.
Now, since you have mentioned research, don’t patents impede new research?
There is no credible evidence suggesting that patents have ever inhibited new research and innovation in any medical field in Australia.

In the early 2000s there was increasing concern in Australia and overseas that patent rights might be inhibiting research, particularly in biotechnology.  The Australian Government therefore tasked its Advisory Council on Intellectual Property (ACIP) with examining this issue, and considering whether there should be an experimental use exception to infringement in Australia's patent legislation.

Among the conclusions and observations made in its resulting 2005 Report, ACIP found that:
  1. many researchers were largely unaware of patent laws, or deliberately disregarded them;
  2. there seemed to be a ‘convention’ in Australian industry of not pursuing infringement actions in cases of experimental use;
  3. as a result, there was no case law addressing the question of whether or not a ‘common law’ exemption for experimental use exists, as many people believed; and
  4. there was no convincing empirical evidence to suggest that the situation was adversely affecting the balance between the incentives to innovate and the ability to use innovations for research and development.
However, ACIP was concerned that this situation could change, and that Australian industry and researchers would be better served by the certainty of having an express statutory defence for research involving patented technologies.  A provision along the lines recommended by ACIP was introduced into the Australian Patents Act 1990 on 15 April 2012.
Doesn’t Myriad’s success open the floodgates to more gene patents?

The Australian Patent Office has been granting patents on isolated genes since the early 1990s.  The Myriad patent itself dates from 1995, and will expire next year.  Throughout this period, there has always been a presumption that these patents were validly granted, and enforceable.  However, none was ever enforced, or otherwise tested in the courts, until the Myriad patent was challenged.

In 2013, IP Australia published a report that it had commissioned from the Centre for International Economics (CIE) investigating the economics of isolated human gene patents in Australia.  Key findings of the report included:
  1. patents play an important role in incentivising innovation and the public-private partnerships required to bring new human gene based medicines and diagnostics to market;
  2. the role of isolated human gene patents has become less important, with the number of patents granted with claims directed to isolated human gene sequences declining dramatically since the completion of the Human Genome Project in 2003; and
  3. in correlation with this decline, patenting activity has increasingly focused on methods of using isolated gene sequences and on modified (i.e. not ‘naturally occurring’) DNA and genetic sequences created in laboratories.
Additionally, various reforms introduced by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 have further reduced the scope for obtaining new patents on isolated human gene sequences.  These include the raising of standards for establishing a inventive step, the enhanced requirements for utility (i.e. usefulness) in section 7A of the Act, and the stricter disclosure requirements in section 40.

The reality is that the vast majority of patents claiming isolated human gene sequences that will ever be granted in Australia have already been granted, and most of these will expire over the next decade.  The ‘floodgates’ are already closed!
That’s all very well, but isn’t it just wrong for companies to own rights over genes?
I have great sympathy for the general moral sense that there is something wrong about private enterprises holding rights of any kind over human genetic material.  From a certain perspective, I can see how it looks like ‘capitalism gone mad’!

And perhaps capitalism has gone mad.  There are countries in the world (not yet Australia, thankfully) in which private enterprise has been given a largely free rein to run the healthcare system, and where securing any kind of quality care and treatment comes down to how much money you have, or how well you have been able to afford to pay private health insurance premiums.  I think that is ‘wrong’, though I know that there are many people who disagree with me.

In this context, I have difficulty seeing the great ‘evil’ in gene patents.  All the evidence says that, to the extent they have had any effect at all, it has been largely beneficial.  As much as I respect people’s genuine feelings and moral beliefs, I have difficulty with the idea of using this, rather than a rational evaluation of the available evidence, as the basis for any legal or policy change.

There are many choices we make as a society that at least some people will regard as ‘wrong’.  And so long as we enjoy the various rights and freedoms (including freedom of religion) within our democratic system, that is not going to change.  Everybody has the right to express their own beliefs – feel free to exercise yours in the comments below.


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