New Developments in Biotechnology:

Patenting Life—Special Report

April 1989

NTIS order #PB89-196612
Recommended Citation:

U.S. Congress, Office of Technology Assessment, New Developments in Biotechnology:

Patenting Life--Special Report, OTA-BA-370 (Washington, DC: U.S. Government Printing

Office, April 1989).

Library of Congress Catalog Card Number 88-600596

For sale by the Superintendent of Documents

U.S. Government Printing Office, Washington, DC 20402-9325

(order form can be found in the back of this report.)
Foreword

Since the discovery of recombinant DNA technology in the early 1970s, biotechnology

has become an essential tool for many researchers and industries. The potential of

biotechnology has spurred the creative genius of inventors seeking to improve the Nation’s

health, food supply, and environment. In 1980, the Supreme Court ruled that a living

micro-organism could be patented. Subsequently, the U.S. Patent and Trademark Office held

that certain types of plant and animal life constituted patentable subject matter.

This special report is the fifth in a series of OTA studies being carried out under an

assessment of “New Developments in Biotechnology,” requested by the House Committee on

Energy and Commerce and the House Committee on Science, Space, and Technology. This

report reviews U.S. patent law as it relates to the patentability of micro-organisms, cells,

plants, and animals; as well as specific areas of concern, including deposit requirements and

international considerations. The report includes a range of options for congressional action

related to the patenting of animals, intellectual property protection for plants, and enablement

of patents involving biological material.

The first publication in OTA’s assessment of “New Developments in Biotechnology”

was Ownership of Human Tissues and Cells, the second was Public Perceptions of

Biotechnology, the third was Field-Testing Engineered Organisms, and the fourth was U.S.

Investment in Biotechnology. OTA was assisted in preparing this study by a panel of advisors,

a workshop group, and reviewers selected for their expertise and diverse points of view on the

issues covered by the assessment. OTA gratefully acknowledges the contribution of each of

these individuals. As with all OTA reports, responsibility for the content of the special report

is OTA’s alone. The special report does not necessarily constitute the consensus or

endorsement of the advisory panel, the workshop group, or the Technology Assessment

Board.

u JOHN H. GIBBONS

Director
New Developments in Biotechnology

Advisory Panel

Bernadine P. Healy, Panel Chair

The Cleveland Clinic Foundation

Timothy B. Atkeson

Steptoe & Johnson

Washington, DC

David Blumenthal

Brigham and Women’s Hospital Corp.

Cambridge, MA

Hon. Edmund G. Brown, Jr.

Reavis & McGrath

Los Angeles, CA

Nancy L. Buc

Weil, Gotshal & Manges

Washington, DC

Mark F. Cantley

Concertation Unit for Biotechnology

in Europe

Brussels, Belgium

Alexander M. Capron

University of Southern California

Los Angeles, CA

Jerry D. Caulder

Mycogen Corp.

San Diego, CA

Lawrence I. Gilbert

University of North Carolina

Chapel Hill, NC

Conrad A. Istock

The University of Arizona

Tucson, AZ

Edward L. Korwek

Hogan & Hartson

Washington, DC

Richard Krasnow

Institute for International Education

Washington, DC

Cleveland, OH

Sheldon Krimsky

Tufts University

Medford, MA

Joshua Lederberg

The Rockefeller University

New York, NY

William E. Marshall

Pioneer Hi-Bred International, Inc.

Johnston, IA

Ronald L. Meeusen

Sandoz Crop Protection Corp.

Palo Alto, CA

Robert B. Nicholas

McDermott, Will & Emery

Washington, DC

Eric J. Stanbridge

University of California, Irvine

Irvine, CA

James M. Tiedje

Michigan State University

East Lansing, MI

Kunio Toriyama

Nat. Fed. of Agri. Coop. Assn. of Japan

Tokyo, Japan

Pablo D.T. Valenzuela

Chiron Corp.

Emery vine, CA

Thomas E. Wagner

Ohio University

Athens, OH

NOTE: OTA is grateful for the valuable assistance and thoughtful critiques provided by the Advisory Panel members. The views

expressed in this OTA report, however, are the sole responsibility of the Office of Technology Assessment.

iv
OTA Project Staff

New Developments in Biotechnology: Patenting Life

Roger C. Herdman, Assistant Director, OTA

Health and Life Sciences Division

Gretchen S. Kolsrud, Biological Applications Program Manager

Gary B. Ellis, Project Director

Kevin W. O’Connor, Study Director and Legal Analyst

Robyn Y. Nishimi, Analyst

Luther Val Giddings, Analyst1

Blake M. Cornish, Research Analyst2

Editor

Bart Brown, Baltimore, MD

Support Staff

Sharon Kay Oatman, Administrative Assistant

Lori B. Idian, Secretary/Word Processing Specialism

Contractors

American Type Culture Collection, Rockville, MD

Baruch A. Brody, Baylor College of Medicine, Houston

John Kinsman, La Valle, WI

William H. Lesser, Cornell University, Ithaca, NY

David J. Maki, Seed & Berry, Seattle, WA

TX

R.J. Patterson& Associates, Inc., Research Triangle Park, NC

Robbins & Laramie, Washington, DC

Bernard E. Rollin, Colorado State University, Fort Collins, CO

Sandra R. Segal, Washington, DC

Jane Stein, Washington, DC

Acknowledgment to Other OTA Staff

Michael J. Phillips, Senior Associate, Food and Renewable Resources Program

Gladys B. White, Analyst, Biological Applications Program

IT~()@ January 1989.

2Though May 1988.
Contents

Chapter

l. Summary, Policy Issues, and Options for Congressional Action . . . . . . . . . . . . . . . . . . . . . . 3

2. Introduction and Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

3. Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ......................00.. 37

4. Patenting of Micro-Organisms and Cells ...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

5. Intellectual Property and Plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

6. Patenting of Animals-Scientific and Regulatory Considerations . . . . . . . . . . . . . . . . . . . . . 93

7. Patenting of Animals—Economic Considerations . . . . . . . . . . . . . . . . . . . . .. .. ... ... ... ..115

8. Patenting of Animals-Ethical Considerations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....127

9. Deposit Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

10. International Protection for Micro-Organisms, Plants, and Animals . ..................155

Appendix

A. Selected Sections, 35 United States Code, Patents . . . . . . . . . . . ........................169

B. Patents: Questions and Answers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ................172

C. Proposed Rules on Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....................174

D. Participants, OTA Workshop on Federal Regulation and Animal Patents . . . . . . . . . . ....178

E. List of Contractor Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..................179

F. Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...,..,........180

G. List of Acronyms and Glossary of Terms, . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ............183

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....191

vi
Chapter 1

Summary, Policy Issues, and

Options for Congressional Action

“Last month the government granted its first patent on something that can look you in the eye. Is

this small step for a mouse a giant leap backward or forward for mankind?”

The New Republic, May 23, 1988.
CONTENTS

Page

INTELLECTUAL PROPERTY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Patents . . . . . . . . . . . . .. . . . . . . . . . . . ........0 . . . . . . . . . . . . . . . . 0 . . . . . . . . . . . . . . . . . . . . .

Copyrights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Trade Secrets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Plant Variety Protection . . . . . . . . . .. .. .. .. .. .. .. .. .. .. ... ... ... ..$.. . . . . . . . . . . . . . .

PATENTING OF MICRO-ORGANISMS AND CELLS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Chakrabarty Case.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Post-Chakrabarty Events and Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

INTELLECTUAL PROPERTY PROTECTION AND PLANTS . . . . . . . . . . . . . . . . . . . . . .

Plant Patent Act of 1930.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Plant Variety Protection Act of 1970. . . . . . . . . . . . . . . . . . .. .. .. . .. .. .. .. . . . . . . . . .

Utility Patents for Plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .....

Comparison of Different Forms of Plant Intellectual Property Protection . . . . . . . . . . . . .

PATENTING OF ANIMALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Producing Transgenic Animals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... ........

Species Barriers and Species Integrity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Federal Regulation and Animal Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Economic Considerations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ethical Considerations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..+

DEPOSIT Considerations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

INTERNATIONAL PROTECTION FOR MICRO-ORGANISMS, PLANTS,

AND ANIMALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

International Agreements and Laws of Other Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . .

POLICY ISSUES AND OPTIONS FOR CONGRESSIONAL ACTION . . . . . . . . . . . . . . .

4

4

5

5

7

7

7

7

8

9

9

10

11

11

12

12

13

16

16

17

18

21

21

22

Box

Box Page

l-A. Patenting of Animals: Nine Applications for European Patents. . . . . . . . . . . . . . . . . . . 23

Figures

Figure Page

l-1. Patents Issues in Biotechnology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...... . . . . . . . . . . . 3

l-2. Figures, Mousetrap and Mouse Patents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Tables

Table Page

l-l. Comparison, Utility Patents and Plant Patents . . . . . . ............... . . . . . . . . . . . . . 12

l-2. Comparison, Utility Patents and Plant Variety Protection Certificates. . . . . . . . . . . . . . 12

l-3. Advantages of Mice for Research in Gene Transplantation. . . . . . . . . . . . . . . . . . . . . . . 14

l-4. Arguments For and Against Patenting Transgenic Animals. . . . . . . . . . . . . . . . . . . . . . . 18

l-5. Fees, Deposit for Patent Purposes.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

l-6. International Agreements and Biotechnology Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Chapter 1

Summary, Policy Issues, and Options for Congressional Action

Intellectual property protection, which for

purposes of this report is defined as that area

of the law involving patents, copyrights,

trademarks, trade secrets, and plant variety

protection, is not new. The concept of patents,

for example, can be traced to ancient Greece,

and as developed by English common law, was

defined as the grant by the sovereign to a subject

under some authority, title, franchise, or property. In the United States, the concept of

intellectual property rights can be found in the

U.S. Constitution (Art. I; Sec. 8), which gives

Congress the power “to promote the Progress of

Science and useful Arts, by securing for limited

Times to Authors and Inventors the exclusive

right to their respective Writings and Discoveries.” Subsequently, Congress enacted this Nation’s first patent and copyright laws in 1790.

Much in biotechnology, on the other hand,

is relatively new. In the past 15 years, dramatic

new developments in the ability to select and

manipulate genetic material have created heightened interest in the commercial uses of living

organisms. Biotechnology, broadly defined, includes any technique that uses living organisms

(or parts of organisms) to make or modify

products, to improve plants or animals, or to

develop micro-organisms for specific uses. Although people have used organisms since the

dawn of civilization to improve agriculture,

animal husbandry, baking, and brewing, it is the

novel uses of such biological techniques (e.g.,

recombinant DNA techniques, cell fusion techniques, monoclinal antibody technology, and

new bioprocesses for commercial production)

that have caught the imagination of many

people.

Patents have come to be viewed by many as

vital to protecting commercial interests and

intellectual property rights in biotechnology. In

1987 alone, the U.S. Patent and Trademark

Office (PTO) issued 1,476 biotechnology patents, up from 1,232 in 1986 (figure 1-1). About

6,900 biotechnology patent applications were

pending as of January 1988. The wide-reaching

potential applications of biotechnology lie close

to many of the world’s major problems—

malnutrition, disease, energy availability and

cost, and pollution.

One novel result of the development of

biotechnology is the creation and patenting of

inventions that are themselves alive. The

patenting of new life forms raises arguments in

favor of and against the issuance of such patents.

Most recently, public debate has centered on

patenting of animals. Such debate is to be

expected when an old and relative] y well-settled

body of law must be applied to unforeseen

technologies. The debate over whether to

permit the patenting of living organisms

frequently goes beyond simple questions of

the appropriateness of patents per se, focusing instead on the consequences of the commercial use of patented organisms or the

underlying merits of biotechnology itself.

Discussion regarding the patenting of a genetically engineered organism, for example, can

turn to the environmental application of the

organism (e.g., the field test of a microorganism that is patented), the welfare of the

Figure l-l—Patents Issued in Biotechnology

. Number of patents

---- I

-3-
4 ● New Developments in Biotechnology: Patenting Life

organism (if it’s an animal), scientific questions

(e.g., whether the method of creating the organism represents a radical departure from traditional scientific or breeding methods), ethical

issues (e.g., the morality of creating novel

organisms or transferring genetic information

between species), and economic considerations

(e.g., whether the Federal Government should

finance biotechnology-related research). One

inherent difficulty in examining the patenting of living organisms is determining which

arguments raised are novel and directly

related to patent issues, as opposed to those

questions that would exist independent of

patent considerations.

This report, the fifth in a series on new

developments in biotechnology,l analyzes some

of the legal, scientific, economic, ethical, and

practical considerations raised by the patenting

of micro-organisms, cells, plants, and animals.

The primary focus of this report is on subject

matter patentability—what can and cannot

be patented, as enacted by Congress under

the patent statute and interpreted by the

courts. Other issues related to intellectual property and biotechnology, such as infringement

and international harmonization, are beyond the

scope of this report.

INTELLECTUAL PROPERTY

Rooted in the Constitution, intellectual property law provides a personal property interest in

the work of the mind. Modern intellectual

property law consists of several areas of law:

patent, copyright, trademark, trade secret, and

breeders’ rights.

Patents

A patent is a grant issued by the U.S.

Government giving the patent owner the right to

exclude all others from making, using, or selling

The US. Constitution provides that “Congress shall have

the power. . . To promote the Progress of Science and

useful Arts, by securing for limited Times to Authors and

Inventors the exclusive Right to their respective Writings

and Discoveries.”

the invention within the United States, and its

territories and possessions, during the term of

the patent (35 U.S.C. 154). A patent may be

granted to whoever invents or discovers any

new, useful, and nonobvious process, machine,

manufacture, composition of matter, or any new

and useful improvement of these items (35

U.S.C. 101). A patent may also be granted on

any distinct and new variety of asexually

reproduced plant (35 U.S.C. 161) or on any new,

original, and ornamental design for an article of

manufacture (35 U.S.C. 171).

The first patent act was enacted by Congress

in 1790, providing protection for “any new and

useful art, machine, manufacture, or composition of matter, or any new and useful improvement [thereof].” Subsequent patent statutes

were enacted in 1793, 1836, 1870, and 1874,

which employed the same broad language as the

1790 Act. The Patent Act of 1952 replaced “art”

with “process” as patentable subject matter (35

]~ller ~ep~~ ~ the ~~s~ent of New &velopments in Biotechnology Me: ownersh@ Of Hnn TiSSUeS uti Ceffs, OTA-BA-337

(Washington, DC: U.S. Government Printing Office, March 1987); Public Perceptions of Biotechnology, OTA-BP-BA45 (Springfield, VA:

National Tmhnical Information Services, May 1987); Fie/d-Tesring Engineered Organisms: Genetic and Ecological Issues, OTA-BA-350

(Lancaster, PA: ‘kchnomic Publishing Co., Inc., May 1988); US. Investment in Biorechnofogy, OTA-BA-3tX) (Springfield, VA: National lkchnical

Information Semices, July 1988).
Chapter 1---Summary, Policy Issues, and Options for Congressional Action ● 5

U.S.C. 101). The Committee Reports accompanying the 1952 Act demonstrate that Congress

intended patentable subject matter to include

“anything under the sun that is made by man.”

However, the Supreme Court has held that laws

of nature, physical phenomena, and abstract

ideas are not patentable.

Patents have many of the attributes of personal property (35 U.S.C. 261). Property is

generally viewed as a bundle of legally protected interests, including the right to possess

and to use, to transfer by sale and gift, and to

exclude others from possession. Patents are

designed to encourage inventiveness by granting to inventors and assignees a limited property

right—the right to exclude others from practicing the invention for a period of 17 years. In

return for this limited property right, the inventor is required to file a written patent application

describing the invention in full, clear, concise,

and exact terms, setting forth the best mode

contemplated by the inventor, so as to enable

any person skilled in the art of the invention to

make and use it. Although a patent excludes

others from making, using, or selling the

invention, it does not give the patent owner

any affirmative rights to do likewise. As with

other forms of property, the right to make,

use, or sell a patented invention may be

regulated by Federal, State, or local law.

Patents are more difficult to obtain than other

forms of intellectual property protection. All

applications are examined by PTO, which is

responsible for issuing patents if all legal

requirements are met. Once obtained, the enforceability of a utility patent is maintained by

the payment of periodic maintenance fees.

Copyrights

Copyrights, like patents, find their domestic

roots in the Constitution, “. . . securing for

limited Times to Authors. . . the exclusive right

to their . . . Writings . . .“ Historically, the term

“writings” has been interpreted broadly. The

copyright statute (17 U.S.C. 102(a)) defines a

writing as that which is “fixed in any tangible

medium of expression, now known or later

developed, from which they can be perceived,

reproduced, or otherwise communicated, either

directly or with the aid of a machine or device.”

Copyright protection is expressly provided for

eight categories of works: literary; musical;

dramatic; pantomimes and choreographic; pictorial, graphic, and sculptural; motion pictures and

other audiovisual works; sound recordings; and

computer programs.

A copyright does not protect an idea, but

rather the expression of the idea. Copyrights

also do not extend to any procedure, process,

system, method of operation, concept, principle,

or discovery, regardless of the form in which it

is described, explained, illustrated, or embodied

(17 U.S.C. 102(b)). Copyright protects the

writings of an author against copying, and

protects the form of expression rather than the

subject matter of the writing.

Trademarks

A trademark is a distinctive mark, motto,

device, or emblem that a manufacturer stamps,

prints, or otherwise affixes to goods, so they can

be identified in the market, and their source or

origin be vouched for. The law of trademarks is

governed by both Federal and State law. Federal

trademark law stems from the Trademark Act of

1946 (15 U.S.C. 1115-1127, popularly known

as the Lanham Act), which provides for the

registration of trademarks, service marks, certification marks, and collective marks. Each State

has an administrative registration system that is

generally parallel to but autonomous from

systems in other States and from the Federal

system. Prior to 1989, Federal trademark registration had a term of 20 years, which could be

renewed if continuous use of the mark was

shown. Under new law (Public Law 100-667),

however, Federal trademark registrations have a

renewable term of 10 years and a party can apply

for Federal registration based on an “intent to

use” the mark.
6 ● New Developments in Biotechnology: Patenting Life

Thomas Jefferson authored the first U.S. patent statute, enacted by Congress in 1790.

The patent law embodied his philosophy that “ingenuity should receive a liberal encouragement.”
Chapter 1---Summary, Policy Issues, and Options for Congressional Action ● 7

Trade Secrets

Trade secret protection is governed by State

law, and extends to information used in a trade

or business that is maintained secret by its owner

and provides a competitive business advantage

over those not having the information. A plan,

process, tool, mechanism, chemical compound,

customer list, and formula are all examples of

information that can be maintained as trade

secrets. Affirmative steps must be taken by an

employer to keep information secret (e.g., by

limiting access or by contract), so that the secret

is disclosed in confidence only to those having

a reasonable need to know (e.g., employees).

Once the information becomes publicly known,

it loses its status as a trade secret.

U.S. trade secret law has been fashioned to

promote two beneficial ends. It encourages

commercial morality and fair-dealing, and it

encourages research and innovation. It does not,

however, promote disclosure, which is one of

the end results of a patent.

Plant Variety Protection

Plant variety protection provides patent-like

protection for breeders of certain sexually reproduced plants. Like patents, plant variety protection is governed by Federal statute (see subsequent discussion on Plant Variety Protection

Act). However, the plant variety protection

statute is administered by the U.S. Department

of Agriculture (USDA), not PTO.

PATENTING OF

MICRO-ORGANISMS AND CELLS

Patents on biotechnological processes date

from the early days of the United States. Louis

Pasteur received a patent for a process of

fermenting beer. Acetic acid fermentation and

other food patents date from the early 1800s,

while therapeutic patents in biotechnology were

issued as early as 1895.

The development of recombinant DNA technology (rDNA)—the controlled joining of DNA

from different organisms—has resulted in

greatly increased understanding of the genetic

and molecular basis of life. Following the first

successful directed insertion of recombinant

DNA into a host micro-organism in 1973,

scientific researchers began to recognize the

potential for directing the cellular machinery to

develop new and improved products and processes in a wide variety of industrial sectors.

Many of these products were micro-organisms

(microscopic living entities) or cells (the smallest component of life capable of carrying on all

essential life processes). With the development

of recombinant DNA technology, the potential

of patenting the living organism resulting from

the technology arose.

Prior to 1980, PTO would not grant patents

for such inventions, deeming them to be “products of nature” and not statutory subject matter

as defined by 35 U.S.C. 101. Although patent

applications were rejected if directed to living

organisms per se, patent protection was granted

for many compositions containing living things

(e.g., sterility test devices containing living

microbial spores, food yeast compositions, vaccines containing attenuated bacteria, milky spore

insecticides, and various dairy products). In the

absence of congressional action, it took a

catalytic court decision to clarify the issue of

patentability of living subject matter.

The Chakrabarty Case

The Supreme Court’s single foray into biotechnology occurred in 1980 with its ruling in

the patent law case of Diamond v. Chakrabarty.

Chakrabarty had developed a genetically modified bacterium capable of breaking down multiple components of crude oil. Because this

property was not possessed by any naturally

occurring bacteria, Chakrabarty invention was

thought to have significant value for cleaning up

oil spills.

Chakrabarty’s claims to the bacteria were

rejected by PTO on two grounds:
8 ● New Developments in Biotechnology: Patenting Life

micro-organisms are “products of nature;”

and

as living things, micro-organisms are not

patentable subject matter under 35 U.S.C.

101.2

Following two levels of appeals, the case was

heard by the U.S. Supreme Court, which in a 5-4

ruling, held that a live, human-made microorganism is patentable subject matter under

Section 101 as a “manufacture" or “composition of matter.” The court reached several

conclusions in analyzing whether the bacteria

could be considered patentable subject matter

within the meaning of the statute:

●

●

●

●

●

The plain meaning of the statutory language indicated Congress’ intent that the

patent laws be given wide scope. The terms

“manufacture” and “composition of matter” are broad terms, modified by the

expansive term “any.”

The legislative history of the patent statute

supported a broad construction that Congress intended patent protection to include

“anything under the sun made by man.”

Although laws of nature, physical phenomena, and abstract ideas are not patentable,

Chakrabarty’s micro-organism was a product of human ingenuity having a distinct

name, character, and use.

The passage of the 1930 Plant Patent Act

(affording patent protection for certain

asexually reproduced plants) and the 1970

Plant Variety Protection Act (providing

protection for certain sexually reproduced

plants) does not evidence congressional

understanding that the terms “manufacture” or “composition of matter” do not

include living things.

The fact that genetic technology was unforeseen when Congress enacted Section 101

does not require the conclusion that microorganisms cannot qualify as patentable

●

subject matter until Congress expressly

authorizes such protection.

Arguments against patentability based on

potential hazards that may be generated by

genetic research should be addressed to

Congress and the executive branch for

regulation or control, not to the judiciary.

Post-Chakrabarty Events and Trends

The Chakrabarty decision and subsequent

actions by Congress and the executive branch

provided great economic stimulus to patenting of micro-organisms and cells, which in

turn provided stimulus to the growth of the

biotechnology industry in the 1980s. In addition to the Chakrabarty decision, revisions in

Federal patent policy promoted increased patenting of inventions in general, including living

organisms and related processes. The Patent and

Trademark Amendments of 1980 (Public Law

96-517) as amended in 1984 (Public Law

98-620) encourage the patenting and commercialization of government-funded inventions by permitting small businesses and nonprofit organizations to retain ownership of

inventions developed in the course of federally

funded research.

These policies, which gave statutory preference to small businesses and nonprofit organizations, were extended to larger businesses by

Executive order in 1983. The Technology Transfer Act of 1986 (Public Law 99-502) granted

Federal authority to form consortia with private

concerns. An Executive order issued in 1987

further encouraged technology transfer programs, including the transfer of patent rights to

government grantees.

Increased patenting of biotechnology inventions has led to litigation, primarily related to

patent infringement issues. Already, patent battles are being fought over interleukin-2, tissue

plasminogen activator, human growth hormone,

2S~[ion 101. Inventions palcn~~bk. Whoever invents or discovers any new and useful process, machine, manufacture, or composition Of matter, or

any new and useful improvement thereof, may obtain a patent thercfor, subject to the conditions and requirements of this title.
Chapter 1--Summary, Policy Issues, and Options for Congressional Action ● 9

alpha interferon, factor VIII, and use of dual

monoclinal antibody sandwich immunoassay

in diagnostic test kits. It is likely that patent

litigation relating to biotechnology will increase

given the complex web of partially overlapping

patent claims, the high value of products, the

problem of prior publication, and the fact that

many companies are pursuing the same products.

One negative trend arising from the increase

in patent applications is the inability of PTO to

process biotechnology applications in a timely

manner. The number of these applications has

severely challenged the process and examination capabilities of PTO. In March 1988, PTO

reorganized its biotechnology effort into a

separate patent examining group. As of July

1988,5,850 biotechnology applications had not

yet been acted on. Currently, approximately

15 months lapse, on average, before examination of a biotechnology application initiates,

and an average of 27 months passes before

the examination process is completed by

grant of the patent or abandonment of the

application. Turnover among patent examiners, lured to the private sector by higher pay,

is cited as a significant reason for the delay in

reviewing patents.

INTELLECTUAL PROPERTY

PROTECTION AND PLANTS

To date, plants are the sole life form for

which Congress has expressly permitted intellectual property protection. Federal statutory protection of ownership rights in new

plants has existed for almost 60 years. Today,

two Federal statutes, a decision by PTO

Board of Appeals, and recognized trade

secret law provide a variety of protection for

inventions that constitute plant life.

Plant Patent Act of 1930

Prior to 1930, plant breeding and research

depended primarily on federally funded agricultural experiment stations and the limited endeavors of amateur breeders to develop new diseaseresistant, cold-tolerant, or medicinal varieties.

Financial incentives for private sector breeders

were inadequate, since the breeders’ sole financial reimbursement was through high sales

prices of comparatively few reproductions during the first 2 or 3 years after the variety’s initial

availability. Once a variety left a breeders’

hands, it could be reproduced in unlimited

quantity by anyone.

In 1930, Congress enacted the Plant Patent

Act (PPA) to extend patent protection to new

and distinct asexually propagated varieties other

than tuberpropagated plants. The PPA was the

first and remains the only law passed by

Congress specifically providing patent protection for living matter.

Design, plant patent 641, rose plant.
10 ● New Developments in Biotechnology: Patenting Life
Chapter 1--Summary, Policy Issues, and Options for Congressional Action ● 11

except for asexually reproduced plants covered

by PPA.

The Plant Variety Protection Act (PVPA) was

enacted by Congress in 1970 to encourage the

development of new, sexually reproduced plants

by providing an economic incentive for companies to undertake the costs and risks inherent in

producing new varieties and hybrids. Although

PVPA is not formally part of the patent act and

is not administered by PTO, the protection it

provides to breeders of new plant varieties is

comparable to patent protection. Upon application to, and examination by USDA, a plant

variety certificate may issue on any novel

variety of sexually reproduced plant (other than

fungi, bacteria, or first generation hybrid).

Amendments in 1980 added protection for six

vegetable crops, and extended coverage to 18

years so PVPA would be consistent with UPOV

provisions.

PVPA includes two important exclusions to a

certificate holder’s protection:

. research exemption that precludes a breeder from excluding others from using the

protected variety to develop new varieties;

and

. farmer’s exemption that allows individuals whose primary occupation is growing

crops for sale, for other than reproductive

purposes, to save protected seed for use on

their farm or for sale to people whose

primary occupation also is growing crops.

From 1970 through 1988, 2,783 applications

for plant variety protection certificates were

filed at USDA for some 100 different crops. By

December 31, 1988, 2,133 certificates had been

issued and 274 applications were pending.

Another 376 applications have been abandoned,

withdrawn, declared ineligible, or denied.

Utility Patents for Plants

Although Diamond v. Chakrabarty held that

living things, namely micro-organisms, were

patentable, the specific issue of whether utility

patents could be issued for plants was not

addressed by the Supreme Court. Subsequently,

in 1985, PTO’s Board of Patent Appeals and

Interferences ruled in Ex parte Hibberd that a

corn plant containing an increased level of

tryptophan, an amino acid, was patentable

subject matter under 35 U.S.C. 101.

Since the Hibberd ruling, utility patents have

been granted on plants, even though protection

was already available under PPA or PVPA.

There are no statutory exemptions from infringement for a plant utility patent—in contrast

to PVPA, the holder of a plant utility patent can

exclude others from using the patented variety

to develop new varieties.

Comparison of Different Forms of Plant

Intellectual Property Protection

Utility patents, when the requirements can be

satisfied, generally offer broader protection for

the same plant than would be available under

PPA or PVPA (tables 1-1 and 1-2). Although

trade secret protection is available, plants are by

nature ill-suited to such protection since they

often cannot be confined to an enclosed space,

and some plants are easily reproduced and

grown.

An OTA survey of universities, nurseries,

seed companies, and biotechnology firms found

an array of opinions on intellectual property

protection of plants, especially regarding utility

patents. Many respondents viewed utility patents as beneficial and necessary to provide

adequate protection for new varieties. Some

seed companies, however, expressed concern

about utility patents, including: restriction of

germplasm, industry concentration, and domination of the industry by large conglomerates.

From a practical perspective, it is unclear that

any single approach to protecting plant intellectual property will be the most productive.

Accordingly, present strategies involve multiple

approaches based on several factors, including

crop type, farmer’s exemption under PVPA,
12 ● New Developments in Biotechnology: Patenting Life

Table l-l-Comparison, Utility Patents and

Plant Patents .

[Statute]

Utility patents Plant patents

(35 U.S.C. 101) (35 U.S.C. 161)

No limit on number of claims Limited to single claim

Can cover plant parts May not cover plant parts

(e.g., flowers, fruits, nuts)

Can cover sexually Cannot cover sexually

reproduced varieties reproduced varieties

Stringent disclosure required Less stringent disclosure required

Fees for patent filing and Fees for patent filing and

maintenance higher than maintenance lower than

fees for plant patents fees for utility patents

SOURCE: OffKX of T-logy Assessment, 1989.

Table 1-2-Comparison, Utility Patents and

Plant Variety Protection Certificates

[Statute]

Plant variety protection

Utility patents certificates

(35 U.s.c 101) (7 U.S.C. 2321)

Not limited to a single variety Limited to a specific variety

Extensive scope of Limited to a specific variety

protection (e.g., plant,

seeds, plant parts, genes,

specific traits, processes)

Can cover asexually Cannot cover asexually

reproduced varieties reproduced varieties

No farmer’s exemption Farmer’s exemption

No research exemption Research exemption

Protection commences when Protection commences when

patent issues certificate is filed.

SOURCE: Office of Technology Assessment, 1989.

litigation, licenses, research exemption under

PVPA, and deposit.

PATENTING OF ANIMALS

In April 1987, the Board of Patent Appeals

and Interferences ruled that polyploid oysters

were patentable subject matter. Subsequently,

PTO announced that it would henceforth consider nonnaturally occurring nonhuman multicellular living organisms, including animals,

to be patentable subject matter under general

patent law. This statement initiated broad debate

and the introduction of legislation concerning

the patenting of animals.

The first animal patent was issued in April

1988 to Harvard University for mammals genetically engineered to contain a cancer-causing

gene (U.S. 4,736,866). Exclusive license to

practice the patent went to E.I. du Pont de

Nemours & Co., which was the major sponsor

of the research. The patented mouse was genetically engineered to be unusually susceptible to

cancer, thus facilitating the testing of carcinogens and of cancer therapies. Specifically, the

patent covers “a transgenic nonhuman eukaryotic animal (preferably a rodent such as a mouse)

whose germ cells and somatic cells contain an

activated oncogene sequence introduced into the

animal. . . which increases the probability of the

development of neoplasms (particularly malignant tumors) in the animal.” In November 1988,

du Pont announced its intention to begin sales of

the patented “oncomouse” in early 1989. The

1987 PTO policy and the 1988 issuance of the

first patent on a transgenic animal spurred public

debate on scientific, regulatory, economic, and

ethical issues.

Producing Transgenic Animals

Most potentially patentable animals are likely

to be transgenic animals produced via recombinant DNA techniques or genetic engineering.

Transgenic animals are those whose DNA, or

hereditary material, has been augmented by
Chapter 1--Summary, Policy Issues, and Options for Congressional Action . 13

adding DNA from a source other than parental

germplasm, usually from different animals or

from humans.

Laboratories around the world are conducting

research that involves inserting genes from

vertebrates (including humans, mammals, or

other higher organisms) into bacteria, yeast,

insect viruses, or mammalian cells in culture. A

variety of techniques, most developed from

early bacterial research, can now be used to

insert genes from one animal into another. These

techniques are known by a number of exotic

names: microinjection, cell fusion, electroporation, retroviral transformation, and others. Of

the currently available scientific techniques,

microinjection is the method most commonly

used and most likely to lead to practical

applications in mammals in the near future.

Other methods of gene insertion may become

more widely used in the future as techniques

are refined and improved. If protocols for

human gene therapy, now being developed in

animal models, or laboratory cultures of mammalian cells prove successful and broadly adaptable to other mammals, other gene insertion

techniques could supplant microinjection.

Although the number of laboratories working

with transgenic animals remains small (no more

than a few hundred, worldwide), and researchers

with the required skill and experience are not

common, the number of research programs

using these techniques has grown steadily in

recent years. For reasons of convenience, much

research involving transgenic mammals continues to be done using mice, although programs

using several larger mammals have made significant progress. (see table 1-3). It is anticipated that some animals of research utility or

substantial economic importance will become more common as subjects of transgenic

modifications in the near future (within 5 to

10 years). Beyond mice, the major research

efforts involving transgenic modifications

focus on cattle, swine, goats, sheep, poultry,

and fish.

Producing transgenic animals by microinjection, although tedious, labor intensive, and

inefficient (only a small fraction of injected eggs

develop into transgenic animals), compares

favorably in at least three respects with traditional breeding techniques:

●

●

●

The rapidity with which a specific gene can

be inserted into a desired host means that

the time it takes to establish a line of

animals carrying the desired trait is

much reduced.

The specific gene of interest can be transferred with great confidence, if not efficiency, and if proper purification protocols

are followed, without any accompanying,

unwanted genetic material.

With proper preparation, genes from almost any organism can be inserted into

the desired host, whether it is a mouse or

some other animal. Historically, genetic

material exchanged by classical hybridization (crossbreeding) could only be transferred between closely related species or

different strains within a species.

If there is a fundamental difference arising

from the new techniques, it is that breeders

have greatly augmented ability to move genes

between organisms that are not close genetic

relatives (e.g., human and mouse, or human

and bacterium). Most transgenic animal research in the near future will likely focus on

traits involving a single gene. Manipulation of

complex traits influenced by more than one

gene, however, such as the amount of growth

possible on a limited food regimen, or behavioral characteristics, will develop more slowly

(perhaps within 10 to 30 years) because of

greater technical difficulty and the current lack

of understanding of how such traits are controlled by genes.

Species Barriers and Species Integrity

Some concern has been raised over negative

impacts transgenic animals might have on their

own species, based on the assertion that transfer-
14 ● New Developments in Biotechnology: Patenting Life

Table 1-3-Advantages of Mice for Research in

Gene Transplantation

. A warm blooded mammal with many similarities to humans in

genetics and physiology.

. Small organism, easy to maintain in the laboratory, can be

raised in substantial numbers easily and quickly, at modest

expense.

● Compared to other mammals, genetics and physiology very

well known.

. Available in a variety of different, well characterized, genetically

consistent lines for use in different types of studies.

SOURCE: Office of TectwIology Assessment, 1989.

ring genes between species transgresses natural

barriers between species, and thus violates their

“integrity” or identity.

Modem biologists generally think of species

as reproductive communities or populations.

They are distinguished by their collective manifestation of ranges of variation with respect to

many different characteristics or qualities simultaneously. The parameters that limit these

ranges of variation are fluid and variable themselves: different species may have substantially

different genetic population structures, and a

given species may look significantly different in

one part of its range than it does in another while

still demonstrably belonging to the same gene

pool or reproductive community. Although

research into the nature of species continues to

be vigorous, marked by much discussion and

disagreement among specialists, general agreement among biologists exists on at least one

point: nature makes it clear that there is no

universal or absolute rule that all species are

discretely bounded in any generally consistent manner.

The issue of species integrity is more complex and subtle than that of species barriers. If a

species can be thought of as having integrity as

a biological unit, that integrity must, because of

the nature of species, be rooted in the identity of

the genetic material carried by the species.

Precisely how a species might be defined

genetically is not yet apparent.

Any genetic definition of species, grounded

in the perception of a species as a dynamic

population, rather than a unit, cannot be simple;

it must be statistical and complex. Therefore, to

violate the “integrity” of a species it is not

sufficient to find a particular gene, once

widespread throughout the species, now entirely replaced by a different gene. Such

changes occur repeatedly throughout the evolutionary history of a lineage and are described as

microevolutionary. These changes are usually

insufficient to alter a species in any fundamental way or to threaten any perceived genetic

integrity.

If it is possible to challenge the integrity of a

species, it would have to be by changing or

disrupting something fundamental in its genetic

architecture, organization, or function. Mammals like mice, cattle, or humans may contain

from 50,000 to 100,000 or more genes. Whatever it is in the organization and coordination of

activity between these genes that is fundamental

to their identity as species, it is not likely to be

disrupted by the simple insertion or manipulation of the small number of genes (fewer than

20) that transgenic animal research will involve

for the foreseeable future.

The right of a species to exist as a separate,

identifiable creature has no known foundation in biology. Species exist in nature as

reproductive communities, not as separate creatures. The history of systematic and taxonomy

(the disciplines of naming and describing species) demonstrates that species’ existence has

often been independent of scientists’ shifting

understanding or abilities to discern this existence. Furthermore, most of the domestic animals that are now the subjects of transgenic

research (with the possible exception of some

fish), and are likely to be for the foreseeable

future, are already the products of centuries, and

in many cases millennia, of human manipulation.
Chapter 1--Summary, Policy Issues, and Options for Congressional Action ● 15

Photo credit: Library of Congress

Line drawing, early 1900s, Old Jersey Cow and Improved Jersey Cow.
16 ● New Developments in Biotechnology: Patenting Life

Federal Regulation and Animal Patents

To gain an understanding of the potential use

and regulation of genetically altered animals

that might be patented, OTA asked selected

Federal agencies the following questions:

How are genetically altered animals currently used in research, product development, and mission-oriented activities conducted or funded by your agency?

What are the potential uses of such animals

during the next 5 years?

How does (or would) your agency regulate

such animal use? What statutes, regulations, guidelines, or policy statements are

relevant?

Several agencies currently use transgenic

animals. The National Institutes of Health is

currently the largest user of such animals for

biomedical research projects. USDA has conducted research on the genetics of animals for

many years. USDA’s Agricultural Research

Service reported projects involving the use of

growth hormone in sheep and swine, and

chickens engineered by recombinant DNA technology to be resistant to avian leukosis virus.

USDA’s Cooperative Research Service is in the

early stages of supporting extramural research

projects involving genetically engineered animals. The National Science Foundation (NSF)

currently funds research involving transgenic

animals in a range of experiments, all involving

laboratory animals. With the use of transgenic

animals becoming central to whole lines of

investigation, NSF expects that work with such

animals will increase. The Agency for International Development (AID) funds research involving conventional and transgenic animals at

international research centers that are only

partially funded by the United States. Accordingly, AID has minimal control over such

research activities.

Several Federal agencies regulate experimental use or commercial development of

genetically altered animals. Because current

statutes regulate various uses and protections for

animals, no single Federal policy governs all

uses of genetically altered animals. In the

absence of a single policy, Federal agencies will

rely on existing statutes, regulations, and guidelines to regulate transgenic animal research and

product development. Current federally

funded research efforts could lead to patents

on animals. The patentability of an animal

however, does not affect the manner in which

the animal would be regulated by any Federal agency.

Economic Considerations

Economic considerations will influence the

order in which different transgenic animals are

produced for commerce. Transgenic animals

used for biomedical research are likely to be

developed first, primarily due to extensive

research in this area. Transgenic agricultural

animals are also likely to be produced, although

USDA animal physiologist Dr. Vernon Pursel examines a

pig born with a bovine growth hormone gene inserted in the

embryo. Scientists hope to produce leaner and faster

growing pigs using less feed. To date, these animals have

been lethargic and have had health problems. As part of a

long term research effort, USDA hopes current studies will

lead to better understanding of how growth hormone works

and how to better control it.
Chapter 1-Summary, Policy Issues, and Options for Congressional Action ● 17

large-scale commercial production of such livestock and poultry is unlikely in the near future

(5 to 10 years).

The largest economic sectors likely to be

influenced by animal patents are the different markets for agricultural livestock and

some sectors of the pharmaceutical industry.

The principal agricultural markets involve poultry, dairy, and red meat. These markets are

organized quite differently, and are subject to

different degrees of economic concentration.

Poultry is most concentrated (though still diffuse by the standards of other industries, such as

automobiles) and the dairy and red meat sectors

much more diffuse. Different economic forces

are important in markets as well: Federal price

supports are of major importance in the dairy

market, while the market for poultry is more

open and competitive.

It is difficult to predict the manifold

consequences of any particular approach to

protecting intellectual property, especially

across so wide a range of economic activity as

that spanned by patentable animals. This

range embraces diverse sectors of the agricultural livestock markets, pharmaceutical and

other chemical production, as well as academic

research or industrial testing. The economics of

patenting and the effect on inventors and consumers will be determined by the potential use

of the animal, its market, its reproduction rate,

and its relative value.

The existence of animal patents and the

degree to which they are employed in the

different markets may introduce some new

economic relationships. It is not now clear that

these are likely to have any substantially adverse

effects on the major markets or existing market

forces. The same types of pressures that have

driven economic choices in the past are likely

to continue to dictate them in the future. If an

innovation increases costs (e.g., if a patented

animal costs more than the unpatented alternative) it is unlikely to be adopted unless it

commensurately increases outputs or product values. It therefore seems that although cost

savings can be anticipated to follow from animal

patenting in some areas (e.g., pharmaceutical

production or drug testing), innovations attributable to patented animals are likely to advance

more slowly in low margin operations such as

raising beef cattle. -

In some cases, efficient alternatives to protection of intellectual property via patents are

feasible. Trade secrets or contractual arrangements might serve well where the animals

involved have a high intrinsic value and are

limited in number (e.g., animals used for pharmaceutical production). When faced with the

complexity of the markets for pork or beef

production, however, such alternatives are

clearly less practical, although the same complexity complicates any scheme for enforcement

or royalty collection associated with patenting

animals per se.

Ethical Considerations

A number of ethical issues have been raised

in regards to patenting animals. Many of these

arguments focus on the consequences that could

occur subsequent to the patenting of animals.

Other arguments focus on religious, philosophical, spiritual, or metaphysical grounds. These

arguments have been used to support and oppose

the concept of animal patenting (see table 1-4).

Many arguments relating to the consequences

of animal patenting are difficult to evaluate

since they are speculative, relying on factual

assertions that have yet to occur or be proven.

Arguments based largely on theological, philosophical, spiritual, or metaphysical considerations are likewise difficult to resolve, since they

usually require the assumption of certain presuppositions that may not be shared by other

persons. Thus, such arguments are not likely to

be reconciled with those persons holding opposing and often strongly held beliefs.
18 ● New Developments in Biotechnology: Patenting Life

Table 14-Arguments For and Against Patenting

Transgenic Animals

Arguments for patenting transgenic animals:

● Patent law regulates inventiveness, not commercial uses of

inventions

● Patenting promotes useful consequences, such as new products and research into solutions of problems.

. Patenting is necessary if the Nation’s biotechnology industry is

to be able to compete internationally.

. If patenting is not permitted, inventors will resort to trade secret

protection, which could hinder the sharing of useful information.

● Patenting rewards innovation and entrepreneurship.

Arguments against patenting animals:

● Patenting raises metaphysical and theological concerns (e.g.,

promotes a materialistic conception of life, raises issues of the

sanctity of human worth, violates species integrity).

● Patenting will lead to increased animal suffering and inappropriate human control over animal life.

● Other countries do not permit the patenting of animals, leading

to potential adverse economic implications for the Third World.

. Patenting promotes environmentally unsound policies.

. Patenting produces excessive burdens on American agriculture (increased costs to consumers, concentration in production of animals, payment of royalties for succeeding generations of animals).

SOURCE: Ofhce of Twhnology Assessment, 1989.

Most arguments that have been raised

both for and against the patenting of animals

concern issues that would be materially

unchanged whether patents are permitted or

not. Most arguments center on issues that

existed prior to the current patenting debate

(e.g., animal rights, the effect of high technology on American agriculture, the distribution of wealth, international competitiveness,

the release of novel organisms into the environment). It is unclear that patenting per se

would substantially 

uses or relates to animals.

Many concerns about the consequences of

patenting can be addressed by appropriate regulations or statutes, rather than by amendments to

patent law. Other arguments, particularly those

of theological, philosophical, spiritual, or metaphysical origin, need to be debated more fully

and articulated more clearly.

DEPOSIT CONSIDERATIONS

In 1949, PTO began recommending that

patent applications for inventions involving

micro-organisms should include the deposit of

the pertinent micro-organism with a culture

collection. Although not a formal requirement,

patent examiners advised applicants that in

cases where words alone were not sufficient to

describe the invention adequately, a deposit was

advisable.

Currently, patent applications for inventions

involving micro-organisms, plasmids, vectors,

cells, plant tissues, seeds, and other biological

materials that are not generally available or

reproducible without undue experimentation by

persons skilled in the pertinent field are often

supported by a deposit in a recognized patent

depository.

Biotechnology presents a unique administrative issue in that it is the only art known

where words alone may be incapable of

describing an invention sufficiently to enable

one skilled in the art to make and use it in a

reproducible manner. Whether or not a deposit

is necessary is a decision made on a case-bycase basis. The decision generally takes into

account the reproducibility of the invention

based on a written description alone, the level of

skill in the art, the teachings of the prior art, and

the availability of the starting materials. Although not automatically requi

employed in many cases to meet the requirement

that a patent provide enablement or the best

mode of practicing an invention.

PTO first published guidelines on the deposit

of micro-organisms in 1971. In 1977, establishment of the Budapest Treaty required contracting states that allow or require the deposit of

micro-organisms as part of their patent procedure to recognize the deposit of a microorganism with any International Depositary

Authority. In 1985, the Court of Appeals for the

Federal Circuit held that the enablement provision of the patent statute did not require a
Chapter 1-Summary, Policy Issues, and Options for Congressional Action ● 19

Figure 1-2-Figures, Mousetrap and Mouse Patents

FIG I

/

FIG 3

Above--Two figures were submitted for U.S. Patent No. 661,068, the mousetrap, which was issued

in 1900. The invention is “a trap of simple construction which can be manufactured inexpensively” in

which “the bait cannot be removed without releasing

the engaging jaw.”

FIG 4

FIG 5

FIG 6

Right column—Eight figures were submitted for

U.S. Patent No. 4,736,866, “Transgenic NonHuman Mammals,” which was issued in 1988. The

invention “features a transgenic non-human eukaryotic animal (preferably a rodent such as a

mouse) whose germ, cells and somatic cells contain

an activated oncogene sequence introduced into

the animal, or an ancestor of the animal, at an

embryonic stage.” The eight figures represent plasmids, activated oncogene fusions, and a probe.

SOURCE Office of Technology Assessment, 1989; adapted from U.S. Patents 661,068 (1900) and 4,736,866 (1988)
20 . New Developments in Biotechnology: Patenting Life

l%ob credit: U.S. @afiment of Agriculture

Cloned strawberry plants in a growth chamber.

deposit in a recognized depository by the filing

date of the patent application, but only before

the issuance of the patent. In 1988, PTO

published proposed rules for deposit of biological materials for patent purposes (see app.

C). These rules, if adopted formally by PTO,

will assist the inventor and the depository in

defining the position of PTO on deposits.

A culture depository accepts, maintains, and

distributes cultures of micro-organisms, viruses,

cells, or other genetic-type material. The deposit

of seeds and plant tissue culture has become

established practice. A depository maybe public

or private; nonprofit or for profit. The main

function of a public culture depository is preservation and distribution of reference cultures that

serve as standards for users in the scientific and

educational communities (table 1-5).

The new patentable status of animals

raises the possibility that PTO will encourage

or require deposit of animal forms to support

certain patent applications. To date, no animal has been deposited with a depository. In

the case of the first animal patent granted (U.S.

4,736,866), the deposit requirement was satisfied not by deposit of a mouse or other animal,

but by deposit of the cancer-causing genes

intended for transfer into an animal. DNA

plasmids bearing those genes were deposited. In

the patent, the inventors describe detailed instructions for inserting those genes into mouse

embryos to produce transgenic mice.

The patenting of animals could cause problems for a depository if deposit of the animal is

required. Currently no depository is willing to

accept the deposit of animals for the following

reasons:

The cost of facilities and expertise that

might be needed to maintain animals would

be prohibitive.

A depository maintaining animals for patent purposes might be subject to adverse

publicity.

If it were necessary to maintain the animal,

a depository might need to grow another

sample to prove the replication of the

animal. After growth of the animal, disposal might not be acceptable, and, therefore, maintenance of progeny would be

necessary.

How would a depository make samples of

the animal available? Grow more animals?

Maintenance of many animal types for the

current required period of 30 years would

not be practical or possible, as their life

spans are shorter than 30 years.

The deposit of animal embryos may not

present the same difficulties as long as the
Chapter 1--Summary, Policy issues, and Options for Congressional Action . 21

Table 1-5-Fees, Deposit for Patent Purposes

Fee, 30 years of maintenance and viability testing on a culture

deposited for patent Purposes:

American Type Culture Collection

Rockville, MD . . . . . . . . . . . . . . . . . . . . . . . . . . . $670

In Vitro International, Inc.

Linthicum, MD . . . . . . . . . . . . . . . . . . . . . . . . . . $610

Northern Regional Research Laboratory

Peoria. IL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $500

SOURCE: Office of Technology Assessment, 1988.

embryos can be successfully frozen and recovered. To date, at least 13 species of animal

embryos (cattle, mice, rats, rabbits, hamsters,

sheep, goats, horses, cats, antelopes, and three

species of nonhuman primates) have been successfully frozen and recovered.

INTERNATIONAL PROTECTION

FOR MICRO-ORGANISMS,

PLANTS, AND ANIMALS

Intellectual property protection of microorganisms, plants, animals, and biological processes is of increasing concern to the world

community. Subject matter patentability is an

important consideration facing an inventor who

wants to patent living matter in a foreign

country.

In addition, international subject matter patentability is one element of the current debate in

the United States regarding the scope of patentable subject matter. For example, those who

favor patenting of animals point out that other

countries either permit or do not expressly

exclude the possibility of such patents. Opponents of patenting of animals conclude that other

nations expressly exclude or have yet to issue

patents on animals.

International Agreements and

Laws of Other Countries

Several international treaties and agreements

are relevant to biological inventions (table 1-6).

These agreements are efforts by member countries to harmonize various procedural and substantive elements of international patent practice. The patenting of animals is not the subject

of any existing treaty. Of the existing agreements, the European Patent Convention (EPC)

is most relevant to the substantive issue of

patenting plants and animals.

Article 52(1) of EPC defines patentable

subject matter as inventions which are susceptible to industrial application, which are new, and

which involve an inventive step.

This definition is extraordinarily general and

broad. Rather than providing a precise, positive

definition of patentable subject matter, EPC

instead takes the approach of narrowing this

broad definition by explicitly specifying negative restrictions thereto. One such exclusion is

Article 53(b), which stipulates that European

patents will not be issued for plant or animal

varieties and essentially biological processes for

the production of plants and animals (with the

exception of microbiological processes or the

products thereof).

Although plant varieties are specifically excluded, there is no general exclusion for plants.

According to the Technical Board of Appeal of

the European Patent Office (EPO), EPC Article

53(b) prohibits only the patenting of plants

which are in the genetically fixed form of a plant

variety, i.e., a specific variety such as the rose

“Peace” or the wheat cultivar “Chinese Spring.”

Thus, EPO will grant utility patent (generic)

protection for plants, for example, where a gene

has been inserted into a plant (e.g., corn having

gene X), but is not fixed in a single plant variety

(e.g., corn inbred A having gene X). Similarly,

a process for transforming a plant to insert a

desired gene would be patentable because human

intervention played a greater role in the final

result than biological forces. This viewpoint has

been adopted by the Swiss patent office as well

as by EPO, which in early 1988 granted a patent

on a technique for increasing protein content of

forage crops such as alfalfa and for plants

produced with the aid of that technique. This
22 ● New Developments in Biotechnology: Patenting Life

Table l-6-international Agreements and

Biotechnology Patents

Entered Number of

Agreement into force signatories

Paris Union Convention . . . . July 7, 1884 97

Budapest Treaty . . . . . . . . . . Aug. 19, 1980 22

Patent Cooperation Treaty . . Jan. 24, 1978 40

European Patent

Convention . . . . . . . . . . . . Oct. 7, 1977 13

Union for the Protection of

New Varieties of Plants . . . Aug. 10, 1968 17

SOURCE: Office of Technology Assessment, 1989.

decision arguably opens the door for plant and

animal patenting in Europe, subject to the

specific treatment of European patents on a

country-by-country basis. In October 1988, the

European Communities Council published a

proposed directive recommending that plants

and animals that are not in the genetically fixed

and stable form of a variety be patentable subject

matter. The proposed directive will be debated

by European Community nations as part of the

program for the completion of the internal

European market in 1992.

Differences exist between nations regarding intellectual property protection of biotechnological inventions, including the issue

of, what constitutes patentable subject matter. Patent protection is widely available for

micro-organisms, as are various forms of

patents and breeder’s certificates for plant

life. Any projection of the number of nations

permitting animal patents must be considered speculative in the absence of patent

prosecution in this area. To date, only the

United States has both announced a policy

permitting patents on animal life forms and

issued a patent on an animal invented

through biotechnological techniques, although

at least 9 such patent applications have been

filed in Europe (see box l-A). It is likely that

other nations will issue such patents in the

future. The Japanese patent office, for example,

recently issued an internal notice announcing its

intention to grant patents on nonhuman animals

if they meet the requirements of their patent law.

POLICY ISSUES AND OPTIONS FOR

CONGRESSIONAL ACTION

Three policy issues relevant to patenting of

living organisms were identified during the

course of this study. They are:

● patenting of animals,

● intellectual property protection for plants,

and

. enablement of patents involving biological

material.

Associated with each policy area are options

that Congress might consider, ranging from

taking no action to making major changes. Some

of the options involve direct legislative action.

Others are oriented to the actions of the executive branch that involve congressional oversight

or direction. The order in which the issues and

options are presented should not imply their

priority. The options provided for each issue are

not, for the most part, mutually exclusive:

adopting one does not necessarily disqualify

others in the same category or within another

category. However, changes in one area could

have repercussions in others.

ISSUE 1: Should the patenting of animals

be permitted by the Federal Government?

Option 1.1: Take no action.

Since April 1987, PTO has considered nonnaturally occurring nonhuman multicellular living organisms, including animals, to be patentable subject matter. Congress could take no

action if it determines that the present PTO

policy is adequate for such inventions. If Congress takes no action, patent claims for animals

will be reviewed by PTO, and such claims will

not be rejected under 35 U.S.C. 101 as being

directed to nonstatutory subject matter. Claims

directed to or including a human being will not

be considered to be patentable subject matter

under 35 U.S.C. 101 on the grounds that a

limited but exclusive property right in a human
Chapter 1—Summary, Policy Issues, and Options for Congressional Action ● 23

Box l-A—Patenting of Animals: Nine Applications for European Patents

Under U.S. law, the contents and status of a patent application are maintained in confidence by the Patent and

Trademark Office (35 U.S.C. 122). Such is not the case with patent applications filed in Europe, which are published

18 months after their original filing date. At least nine applications claiming animals have been filed with the

European Patent Office (EPO), and each has also been filed with the U.S. Patent and Trademark Office. Of the nine

applications, six are from U.S. inventors, and one (from Harvard College) has received a U.S. patent.

The applications generally cover methods for creating transgenic animals, methods for producing animals that

express biological substances, and the final product of both methods (i.e., the animals). The nine applications have

priority dates ranging from June 1984 (Harvard College) to April 1987. A summary of the nine applications:

● Method for transferring organic or inorganic substances to egg cells or somatic cells of animals and

compositions for use #herein. A method for transferring organic or inorganic substances to egg cells or

somatic cells of animals by combining sperm of the respective type, optionally modified by chemical or

physical means, with vesicles or granulae containing the desired organic or inorganic substances and

subsequently contacting the loaded sperm with egg cells or somatic cells under intracorporal or extracorporal

conditions. The invention also includes animals produced by the method. Applicant: Transgene (Bad Soden,

West Germany).

● Peptide production. A method that involves incorporating a DNA sequence coding for a peptide into the

gene of a mammal (such as a sheep) coding for a milk whey protein so that the DNA sequence is expressed

in the mammary gland of the adult female mammal. The substance may be a protein such as a blood

coagulation factor. Applicant: Pharmaceutical Proteins Ltd. (Cambridge, Great Britain).

. Transgenic animals. A method for creating new breeds of animals that involves: 1) obtaining a recently

fertilized ovum; 2) isolating a gene sample of a characterizing hormone homologous with the ovum; 3)

introducing the gene sample into the male pronucleus of the ovum prior to fusion with the female pronucleus

to form a single cell embryo; and 4) subsequently implanting the ovum into a suitably prepared female

animal. Applicant: Luminus PTY Ltd. (Adelaide, Australia).

● Expression of heterologous proteins by transgenic lactating mammals. Mammals capable of expressing

recombinant proteins by lactation are produced by micro-injection of recombinant DNAs that contain novel

expression systems into fertilized ova. Applicant: Immunex (Seattle, WA).

. Method for producing transgenic animals. A method for producing a transgenic eukaryotic animal having

an increased probability of developing neoplasms by introducing an activated oncogene sequence. The

animal may be used in testing a material suspected of being carcinogenic or of conferring protection against

carcinogens. Applicant: President and Fellows of Harvard College (Cambridge, MA).

● Transgenic mammal containing heterologous gene. A process for producing a transgenic mammal,

especially a mouse that contains and expresses a heterologous gene, especially the human insulin gene. The

mice are useful for studies of pharmacological and drug reactions. Applicant: The General Hospital Corp.

(Boston, MA).

● Transgenic animals secreting desired proteins into milk. Animals expressing proteins useful in the

treatment, prevention, or diagnosis of human disease (e.g., t-PA and hepatitis B surface antigen). Applicant:

Integrated Genetics, Inc. (Framingham, MA).

● DNA sequences to target proteins to the mammary gland for efficient secretion. A method of targeting specific

genes to the mammary gland which results in the efficient synthesis and secretion of biologically important

molecules. Further, a transgenic mammal having the ability to reproduce itself and being suitable for the

secretion of biologically active agents into its milk. Applicant: Baylor College of Medicine (Houston, TX).

. Procedure for transplanting a donor bovine embryo into a recipient ovocyte, and bovine embryo created by this

procedure. The invention concerns a procedure to transplant bovine donor nuclei from an embryo into

enucleated recipient oocytes. Applicant: N.L. First, F. Barnes, R.S. Rather, and J.M. Robl (Madison, WI).

The European Patent Office’s view on patenting living material is based strictly on the provisions of the

European Patent Convention, which permit patenting of certain life forms if they are novel, inventive, and

industrially applicable, if the invention is not contrary to public order, and does not cover plant or animal varieties

per se. According to EPO, “the use to which certain inventions are put must be the subject of other legislation, apart

from patent law,” thereby balancing “the inventor’s rightful claim to recognition and economic reward” with “the

public’s legitimate right to be protected. . . from any possible dangers to which technology may expose it.”

SOURCE: OffiCC of ‘IMnology Assessment, 198% adapted km “Patenting of Life Forms,” European Paknt OiKce, 1988.
24 ● New Developments in Biotechnology: Patenting Life

being is prohibited by the Thirteenth Amendment to the U.S. Constitution.

Option 1.2: Enact a moratorium on the

issuance of animal patents.

Congress could enact a moratorium on the

issuance of animal patents. The duration of such

a moratorium-based either on time or on

fulfillment of particular conditions-could be

specifically mandated by Congress. A moratorium would allow further opportunity for public

debate on the economic, ethical, and public

policy issues of patenting animals and could be

used to gather information from Federal agencies regarding the regulation and use of such

animals. Enactment of a moratorium, however,

would be the first time Congress has so acted to

limit subject matter patentability. Such action

could serve as a precedent for future moratoriums to limit the kinds of inventions that could be

patented. A moratorium could decrease research

and investment in the production of new inventions that are animals.

Option 1.3: Enact an animal variety protection statute modeled after the Plant Variety

Protection Act.

Congress could enact a statute providing

animal breeders with rights similar to those

enjoyed by plant breeders under the Plant

Variety Protection Act. A combination of selected elements found in the plant variety

protection statute (e.g., USDA registration, a

farmer’s exemption, a research exemption, an

18-year term of protection) could be used to

address specific concerns raised by animal

patenting. Such a statute, however, would raise

many of the same issues found in the legislative

history of the Plant Variety Protection Act (e.g.,

industry concentration, genetic diversity, effects

of exemptions, mandatory deposit). If enacted

without congressional examination of utility

patent protection, such a statute could provide

inventors with an additional statutory safeguard

for intellectual property protection of animal

inventions; conversely, issues raised by patenting could remain unresolved.

Option 1.4: Enact a statute amending the

patent law to address the patenting of animals.

Congress could amend the patent statute to

address specific issues raised by the patenting of

animals. Such action would indicate congressional intent that patenting of animals is permitted and could address unresolved issues such as

exceptions from infringement, patent specification, or selected limitations on subject matter

patentability.

One provision that has already proven contentious is an exception from infringement for

persons whose occupation is farming. Too

narrow an exception could result in extensive

and costly compliance that would outweigh

intended benefits. On the other hand, too broad

an exception could deprive inventors of rewards

for certain animal inventions or stifle research

and development in animal agriculture.

During the 100th Congress, on September 13,

1988, the House of Representatives passed the

Transgenic Patent Animal Reform Act (House

Rule 4970). The bill implicitly acknowledged

the patentability of nonhuman animals and

provided for an exemption from liability for

farmers who reproduce patented animals. The

bill was not brought to a vote in the Senate.

Option 1.5: Enact a statute explicitly providing for patents on animals.

Congress has the authority to expand or

restrict the kinds of inventions that are patentable. Currently, 35 U.S.C. 101 permits patents on any new and useful process, machine,

manufacture, or composition of matter. Patent

protection has also been explicitly extended to

plants (35 U.S.C. 161) and designs (35 U.S.C.

171). By amending the patent statute to include

patents on animals, Congress would erase any

doubt regarding whether animals are intended to

be patentable subject matter. Such a statute

could also include any limitations or exceptions
Chapter 1---Summary, Policy Issues, and Options for Congressional Action ● 25

to subject matter patentability on animals,

deposit, or infringement. Such action, however,

is presently unnecessary if Congress’ sole intent

is to permit the patenting of animals, and could

be interpreted by future court action as limiting

the patentability of certain kinds of inventions in

the absence of explicit congressional action.

Option 1.6: Enact a statute prohibiting the

issuance of patents on animals.

Congress could amend 35 U.S.C. 101 to

explicitly prohibit the issuance of patents on

animals. Such action would bar the patenting of

animals per se, while still permitting the patenting of processes that produce novel animals. A

prohibition could result in a redirection of

investment in medical and agricultural research.

This could slow the invention of new and useful

animals that could be used for production of

food, pharmaceuticals, and medical research

tools. A prohibition could also serve as a

precedent for limiting the patentability of technologies that are currently unimagined or to regulate

subject matter that is perceived to be immoral or

inadequately regulated.

ISSUE 2: Is the current statutory framework of intellectual property protection for

plants appropriate?

Option 2.1: Take no action.

There are four principal means for inventors

to protect plants—plant patents, Plant Variety

Protection Certificates, utility patents, and trade

secrets. The first two are forms of plant protection expressly permitted by Congress through

legislation: the Plant Patent Act of 1930 and the

Plant Variety Protection Act of 1970. Thousands of plants are protected by the four

mechanisms.

Absent congressional action, inventors will

continue to seek protection for plant intellectual

property by balancing the factors inherent in

each of the four approaches. Inventors employ

a strategy that balances crop type, farmer’s

exemption under PVPA, litigation, licenses,

research exemption under PVPA, deposit considerations, and other factors. Inventors use no

single approach to protecting plant intellectual

property, as the different forms of plant protection each have unique advantages and disadvantages. The present system provides inventors

much flexibility.

With regard to germplasm, inventors will

likely continue to seek protection through the

avenue they deem most appropriate or advantageous. Germplasm exchange would continue on

an ad hoc basis. Some parties claim that

intellectual property protection for plants interferes with exchange of germplasm.

Option 2.2: Direct the Secretary of Agriculture to report on the effect of the farmer’s

crop/seed exemption under the Plant Variety

Protection Act of 1970.

In passing the Plant Variety Protection Act of

1970, Congress permitted farmers to save protected seed for subsequent crop production on

their farms without being considered as infringing upon the Plant Variety Protection Certificate

holder. Farmer-saved seed is a common practice

for crops such as wheat, cotton, and soybeans.

Complaints about abuses of the farmer’s exemption, notably from seed companies, have been

lodged with the U.S. Department of Agriculture,

which enforces the PVPA. USDA may be

moving toward a clarification of the limits of the

farmer’s exemption.

Congress could direct the Secretary of Agriculture to collect information and report on the

practical impact of the farmer’s exemption. Of

particular interest would be the degree to which

property rights of PVPC holders are compromised by the farmer’s exemption and the

dimensions of the economic benefit reaped by

farmers exercising their rights under PVPA.

Option 2.3: Direct the Secretary of Agriculture to report on the impact that plant protection

has on germplasm exchange.
26 ● New Developments in Biotechnology: Patenting Life

Congress could direct the Secretary of Agriculture to report on the impact that proprietary

interests in plants had on germplasm exchange.

To date, any information on the issue is anecdotal. Because all interested parties agree that free

exchange of germplasm is necessary to continue

progress in agricultural research and development and in plant biotechnology, a comprehensive analysis examining trends in plant protection and germplasm exchange could reveal that

a problem exists, that no problem exists, or

could direct attention to potential problems.

ISSUE 3: Is the current system of patent

enablement adequate for biological material?

Option 3.1: Take no action.

Congress could take no action if it determines

35 U.S.C. 112 in its present form adequately

addresses patent specification requirements for

biological inventions. Currently, a deposit of

living material is sometimes required in order to

meet the requirement that the invention be

described in such terms as to enable any person

skilled in the art to make and use the invention

in the best mode contemplated. Deposit is

currently considered on a case-by-case basis for

patent applications involving biological material. Under this course of action, it is unlikely

that whole animals will be deposited, since

transgenic animals will be derived from known

and readily available animals and developed

using known reproducible processes. The courts

would likely be called upon to interpret the

validity of PTO policies regarding deposit and

disputes of fact and law arising from the current,

broad statutory language.

Option 3.2: Enact a statute providing PTO

Commissioner with the authority to set conditions for the deposit of biological material.

If Congress determines that PTO requires

additional authority to regulate the deposit of

materials, it could amend 35 U.S.C. 112 to

expressly provide such authority. Such action

would provide PTO with the express authority

and flexibility to maintain an enablement policy

that expressly addresses biological material, and

could lessen the need for court interpretation of

deposit requirements under Section 112. Such

action, however, could lead to required deposit

of every living organism for which a patent is

sought. This would set a separate and unequal

specification standard for inventions that are

biological in nature and could be unduly burdensome for the inventor, deposit facility, or

both.
Chapter 2

Introduction and Overview

“On the outskirts of Washington, DC, sits the U.S. Patent and Trademark Office. On long shelves

and in wood cases, it houses the more than 4.75 million U.S. patents issued since 1790. In recent

years this venerable office has seen a new kind of patent: genetically modified living matter, ranging

from microorganisms to mammals.”

Elizabeth Corcoran

Scientific American, September 1988
CONTENTS

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

WHAT IS A PATENT?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

HISTORY OF PATENTING LIVING ORGANISMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Patenting of Micro-Organisms and Cells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Patenting of Plants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Patenting of Animals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ORGANIZATION OF THE REPORT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER P REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29

31

31

31

31

32

32

33

33

Box

Box Page

2-A. Apolitical History of Patenting Life..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Table Page

2-1. Patents Issued in Biotechnology.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Chapter 2

Introduction and Overview

INTRODUCTION

This report examines some of the legal, economic,

ethical, religious, and practical considerations raised

by the patenting of micro-organisms, cells, plants,

and animals. This introductory chapter provides a

context for the report’s more technical material by

reviewing the historical background of intellectual

property protection for living organisms.

Intellectual property protection, which for

purposes of this report is defined as that area of

the law involving patents, copyrights, trademarks, trade secrets, and plant variety protection, is not new. The concept of patents, for

example, has its roots in English law, where it was

defined as the grant by the sovereign to a subject

under some authority, title, franchise, or property.

English common law is the root of much of

American law. In the United States, the concept of

intellectual property rights can be found in the U.S.

Constitution (Article 1, Section 8), which gives

Congress the power “to promote the Progress of

Science and useful Arts, by securing for limited

Times to Authors and Inventors the exclusive right

to their respective Writings and Discoveries.” In

1790, Congress enacted this Nation’s first patent law

(giving inventors a limited, exclusive right for their

inventions) and copyright law (giving authors protection for the expression of their ideas).

Biotechnology, on the other hand, is relatively

new. In the past 15 years, dramatic new developments in the ability to select and manipulate genetic

material have created heightened interest in the

commercial uses of living organisms. Biotechnology, broadly defined, includes any technique that

uses living organisms (or parts of organisms) to

make or modify products, to improve plants or

animals, or to develop micro-organisms for specific

uses. Although people have used organisms since

the dawn of civilization to improve agriculture,

animal husbandry, baking, and brewing, it is the

novel uses of such biological techniques (e.g.,

recombinant DNA techniques, cell fusion techniques, monoclinal antibody technology, new bioprocesses for commercial production) that have caught

the imagination of many people.

Patents have come to be viewed by many as vital

to protecting commercial interests and intellectual

property rights in biotechnology. In 1987 alone, the

U.S. Patent and Trademark Office (PTO) issued

1,476 biotechnology patents, up from 1,232 in 1986

(table 2-1 ). About 6,900 biotechnology patent applications were pending as of January 1988 (7). The

wide-reaching potential applications of biotechnology lie close to many of the world’s major

problems—malnutrition, disease, energy availability and cost, and pollution. Biotechnology can

change the way we live due to its potential to

produce new, safer, and more cost-effective products

(15). In order to develop these new products,

research and discovery resulting in the creation of

new inventions must occur.

One novel result of the development of biotechnology is the creation and patenting of inventions

that are themselves alive. Where once a credo of

invention was to build a better mousetrap, U.S. law

now permits the patenting of a new and useful mouse

(see box 2-A).

The patenting of new life forms raises arguments

in favor of and against the issuance of such patents.

Most recently, public debate has centered on the

patenting of animals (8,9). Such debate is to be

expected when an old and relatively well-settled

body of law must be applied to unforeseen technologies. Some proponents of patenting new life forms

cite benefits of fostering innovation and technology

transfer, rewarding creativity, and providing full

Table 2-l—Patents Issued in Biotechnology

Year Number of patents issued

1983 ..., ., ., . . . . . . . . . . . . . . . . . . . 1,018

1984 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,114

1985 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,076

1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,232

1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,476

SOURCE: ‘U.S. Patent and Trademark Otfia Issues 1,476 Biotechnology Patents in

1997,’ Geneac Engnewmg Akws 8(3):25, March 1966.

–29 –
30 ● New Developments in Biotechnology: Patenting Life

Box 2-A—A Political History of Patenting Life

1873 Louis Pasteur awarded patent 141,072 with a 1987 In Ex Parte Allen, the Patent Appeals Board

claim for a yeast. determines that multicellular animals are pat1930 Plant Patent Act permits patenting of certain entable subject matter.

asexually reproducing plants, thus allowing the 1987 The U.S. Senate adopts a moratorium on

first patents on life forms. animal patents as part of a supplemental

1970 Plant Variety Protection Act provides patent- appropriations bill. The moratorium is dropped

like protection for sexually reproducing plants. in House-Senate conference.

1973 The first recombinant DNA organisms are 1987 House Resolution 3119, a bill to amend Title

generated. 35 of the United States Code to prohibit the

1975 The Asilomar Conference urges adoption of patenting of genetically altered or modified

guidelines for recombinant DNA research, animals is introduced in the U.S. House of

setting a precedent of scrutiny and caution in Representatives, but dies as the 100th Congress

recombinant DNA research. adjourns.

1980 The Patents and Trademarks Amendments 1988 Senate bill 2111, to amend Title 35 of the

(Public Law 98-620) grant title to nonprofit United States Code to prohibit the patenting

and small businesses whose research was of genetically altered or modified animals, is

federally funded. introduced in the U.S. Senate, but dies as the

1980 Genentech’s initial public offering raises 100th Congress adjourns.

public awareness of the commercial possi- 1988 First animal patent (4,736,866) is issued to

bilities of genetic engineering. Harvard University for a genetically engi1980 Stanford University and the University of neered mouse.

California San Francisco are awarded the 1988 House Resolution 4970, the Transgenic AniCohen-Boyer patent on the basic technique of mal Patent Reform Act is passed by the U.S.

gene splicing. House of Representatives, but dies as the 100th

1985 Ex Parte Hibbard establishes that plants are Congress adjourns.

patentable subject matter under general utility

patent provisions.

SOURCE: Office of Technology Assessment, 1989.

disclosure of inventions to further advance the state environmental application of the organism (e.g., the

of scientific research and technological developments. Some opponents of patenting believe that

owning and manipulating living organisms is unethical, while others fear the economic consequences of patenting on various sectors of the

economy (e.g., the effect of patented animals on

livestock farmers).

The debate over whether to permit the patenting of organisms frequently goes beyond simple

questions of the appropriateness of patents per

se, focusing instead on the consequences of the

commercial use of patented organisms or the

underlying merits of biotechnology itself. Discussion regarding the patenting of a genetically engineered organism, for example, can turn to the

field test of a micro-organism that is patented), the

welfare of the organism (if it is an animal), scientific

questions (e.g., whether the method of creating the

organism represents a radical departure from traditional scientific or breeding methods), ethical issues

(e.g., the morality of creating novel organisms or

transferring genetic information between species),

and economic considerations (e.g., whether the

Federal Government should finance biotechnologyrelated research). One inherent difficulty in examining the patenting of living organisms is determining which arguments raised are novel and

directly related to patent issues, as opposed to

those questions that would exist independent of

patent considerations.
Chapter 2—introduction and Overview ● 31

WHAT IS A PATENT?

A U.S. patent is a form of property granted by the

Federal Government to an inventor giving the

inventor the right to exclude others from making,

using, or selling the invention for a stated period of

time (35 U.S.C. 154). Patents may be issued for a

new and useful process, machine, manufacture, or

composition of matter (35 U.S.C. 101 or so-called

utility patents) or for asexually reproduced plants

(35 U.S.C. 161-164).

The rationale behind the patent law is simple: to

foster innovation, inventors must be guaranteed

some degree of exclusivity on their inventions in

order to be assured a reasonable profit and to justify

the risks of development. In return for a patent, the

inventor discloses how the invention works so that

the knowledge is available to the public and others

may build upon that knowledge.

HISTORY OF PATENTING

LIVING ORGANISMS

Louis Pasteur was awarded a patent in 1873 (U.S.

141 ,072) which had as one of its claims a yeast, free

from organic germs of disease, as an article of

manufacture. This patent was the first of several

“living matter” patents to be issued in the United

States. Other early patents were issued on bacterial

and viral vaccines. As a general rule, these patents

claimed an organism in an inert carrier or in an inert

culture medium (3).

Although no formal policy was issued barring the

patenting of living organisms, the enactment by

Congress of the Plant Patent Act of 1930 (35 U.S.C.

161-164) (which specifically permitted patent protection for asexually reproduced plants) was seen by

many as standing for the proposition that in the

absence of explicit congressional action, living

matter itself was not patentable.

Patenting of Micro-Organisms and Cells

In 1980, the Supreme Court in the case of

Chakrabarty v. Diamond (4) ruled in a 5-4 decision

that a “manmade” micro-organism could be patented, in this case a bacterium engineered to

breakdown four of the main components of crude oil.

The decision rested in part on the premise that the

patent statute as passed by Congress made no

distinction between living and nonliving subject

matter. Prior to the Court decision in Chakrabarty,

PTO had considered micro-organisms products of

nature, and thus not themselves patentable. The

decision was hailed by some as assuring this

country’s technological future and was denounced

by others as creating Aldous Huxley’s “Brave New

World.” It left unclear whether patents would be

permitted on higher life forms, The Court expressly

refused to consider the potential hazards of the

technology, saying

[w]hatever their validity, the contentions now

pressed on us should be addressed to the political

branches of the Government, the Congress, and the

Executive, and not to the courts.

Ananda M. Chakrabarty, then a research microbiologist with the General Electric Co., developed the

oil-eating microbe using four naturally occurring

plasmids—small circles of DNA that are not part of

a cell’s chromosomes—to confer the ability to

degrade four different components of crude oil on a

single strain of bacteria. Since the microbe itself

would be the product sold, anyone would be able to

secure and reproduce the organism for their own

benefit, unless it was patented; therefore, Chakrabarty could not rely on trade secrecy to protect his

invention, Initially, PTO granted Chakrabarty a

patent on the process by which the microbe was

developed and on the combination of the carrier

(straw) and the bacterium. The Patent Office would

not, however, grant a patent for the organism itself,

contending that living things other than plants,

which are specifically covered by the Plant Patent

Act of 1930 and the Plant Variety Protection Act of

1970 (see chs. 3 and 5), could not be patented.

However, the U.S. Court of Customs and Patent

Appeals reversed this decision, and this reversal was

ultimately upheld by the Supreme Court.

Patenting of Plants

Although Congress had in 1930 expressly acted to

create patent protection for asexually reproduced

plants, the Chakrabarty decision opened up the issue

of whether general patent law could be used to

provide protection for any new and useful plant.

In 1985, the Board of Patent Appeals and Interferences (a review body within PTO) ruled that plants,
32 ● New Developments in Biotechnology: Patenting Life

seeds, and plant tissue cultures were proper subject

matter for utility patents (6). This constituted the

first time that utility patents were granted for

multicellular organisms.

Patenting of Animals

In April 1987, the Board of Patent Appeals and

Interferences ruled that polyploid oysters were

patentable subject matter (5). Subsequently, PTO

announced that it would henceforth consider “nonnaturally occurring nonhuman multicellular living

organisms, including animals, to be patentable

subject matter” under general patent law. This

statement initiated broad debate and the introduction

of legislation concerning the patenting of animals.

The first animal patent was issued in April 1988

to Harvard University, for genetically engineered

mammals, such as mice (U.S. 4,736,866). Exclusive

license to practice the patent went to E.I. du Pont de

Nemours & Co., which was the major sponsor of the

research. The patented mouse was genetically engineered to be very susceptible to cancer, thus

facilitating the testing of carcinogens and of cancer

therapies. Specifically, the patent covers a transgenic nonhuman eukaryotic animal (preferably a

rodent such as a mouse) whose germ cells and

somatic cells contain an activated oncogene sequence introduced into the animal . . . which

increases the probability of the development of

neoplasms (particularly malignant tumors) in the

animal.

The first animal patent prompted newspaper

editorials both pro and con. One editorial stated,

. . . companies must have a way to protect their

investments in research and innovation . . . It would

be a travesty for Congress to halt this process(1).

But another countered,

When it acts on animal patent applications, the

Patent Office is in effect making public policy

decisions with no public input. In a field with as

far-reaching implications as genetic engineering,

that should not be allowed to happen (2).

PTO had 21 other patents on genetically engineered animals pending at the time the mouse patent

was granted. Three bills on the subject of animal

patenting were introduced in the 100th Congress.

One bill, H.R. 4970, passed the House of Representatives (9).

ORGANIZATION OF THE REPORT

This special report is the fifth publication in

OTA’s assessment New Developments in Biotechnology.

1 The purpose of this special report is to review

U.S. patent law as it relates to the patenting of

micro-organisms and cells, plants, and animals. The

primary focus of this report is on subject matter

patentability—what can and cannot be patented,

as enacted by Congress under the patent statute

and interpreted by the courts. This report does not

focus on issues related to process patent protection

or issues related to the harmonization of international patent law.

Chapter 3 presents an overview of intellectual

property law. Chapter 4 reviews issues related to the

patenting of micro-organisms and cells. Chapter 5

examines intellectual property protection relating to

plant life: plant patents, plant variety protection

certificates, trade secrets, and utility patents. Chapters 6, 7, and 8 examine the scientific, regulatory,

economic, and ethical issues related to the patenting

of animals. Chapter 9 addresses deposit considerations. Chapter 10 reviews international subject

matter protection for micro-organisms, cells, plants,

and animals.

This report does not address in detail the following issues, which are the subjects of related OTA

reports:

●

●

●

intellectual property issues associated with

mapping and sequencing the human genome

(12);

patents and intellectual property rights considerations related to commercial investment and

industrial competitiveness (15);

property rights related to the ownership of

human tissues and cells (14);

3Emiier repo~s in the assessment of New Developments in Biotechnology are: Ownership of Human Tirsues and Ceh--Speciai Repon,

OTA-BA-337 (Washington. DC: U.S. Government Printing Office, March 1987); Background Paper: Public Perceptions of Biotechnology,

OTA-BP-BA-45 (Springfield, VA: National ‘Ikchnical Information Service, May 1987); Field-Testing Engineered Organisms: Genetic and

Ecological Issues--special Report, OTA-BA-350 (Lancaster, PA: Twhnomic Publishing Co., Inc., May 1987); New Developments in Biotechnology:

U.S. Investmetipeciai Report, OTA-BA-360 (Springfield, VA: National Tbchnical Information Service, July 1988).
Chapter 2–--Introduction and Overview ● 33

. . . . —

Photo credit: Gretchen S Kolsrud

Four reports published under OTA’s assessment of New

Developments in Biotechnology.

●

●

●

●

international patent law considerations other

than subject matter patentability (11 );

genetic and ecological consequences of environmental release of micro-organisms, plants,

and animals (13);

technologies to maintain biological diversity

(16); and

use of animals in research, testing, and education (10).

SUMMARY

Patents on certain life forms have been permitted

since the Plant Patent Act of 1930. The range of life

forms susceptible to patenting has broadened, most

significantly with the decision in Diamond v.

Chakrabarty that a micro-organism could be patented; in Ex parte Hibberd that plants, seeds, and

plant tissue cultures are patentable subject matter

under the general patent laws; and in Ex parte Allen

that a multicellular animal was patentable subject

matter.

The patenting of living organisms, particularly

animals, raises a number of ethical, economic,

emotional, and practical issues, which are addressed

in this report. The premise that life forms are

patentable, and particularly that higher animals are

patentable, has engendered considerable political

controversy.

CHAPTER 2 REFERENCES

J.

2.

3.

4.

. 5 .

6.

7.

8.

9.

10.

Chicogo Tribune, “On Patented Mouse, &t Reason

Rule,” Apr. 17, 1988.

Christian Science Monitor, “Don’t Jump into Designer Genes,” The Christian Science Monitor, Apr.

25, 1988.

Cooper, I. P., Biotechnology and the Law, $2.02 (New

York, NY: Clark Boardman, 1985).

13iamwzd v, Chakrabarty, 447 U.S. 303 (1980).

Exparte Allen, 2 USPQ 2d 1425 (PTO Bd. Pat. App.

& Int. 1987).

Exparte Hibberd, 227 USPQ 473 (PTO Bd. Pat. App.

& Int. 1985).

Klausner, A., “Patent Office Reorganizes Biotech

Coverage,” Biotechnology 6(4):368, April 1988.

U.S. Congress, Committee on the Judiciary, Subcommittee on Courts, Civil Liberties, and the Ministration of Justice, Hearings on Patents and the Constitution: Transgenic Animals, Serial No. 23 (Washington, DC: U.S. Government Printing Office, 1988).

U.S. Congress, House Committee on the Judiciary,

Report 100-888, Transgenic Animal Patent Refbrm

Acf, to accompany H.R. 4970 (Washington, DC: U.S.

Government Printing Office, 1988).

U.S. Congress, Office of Technology Assessment,

Alternatives to Animal Use in Rescurch, Testing, and

tiiucufion (Springfield, VA: National Technical

Information Service, February 1986).
34 ● New Developments in Biotechnology: Patenting Life

11. U.S. Congress, Office of Technology Assessment,

Commercial Biotechnology: An International Analysis (Elmsford, NY: Pergamon Press, Inc., January

1984),

12. U.S. Congress, Office of Technology Assessment,

Mapping Our Genes-The Genome Projects: How

Big? How Fast? OTA-BA-373 (Washington, DC:

U.S. Government Printing Office, April 1988).

13. U.S. Congress, Office of Technology Assessment,

New Developments in Biotechnology-Field- Testing

Engineered Organisms: Genetic and Ecological

Issues, OTA-BA-350 (Lancaster, PA: Technomic

Publishing Co., Inc., May 1988),

14. U.S. Congress, Office of Technology Assessment,

New Developments in Biotechnology: Ownership of

Human Tissues and CellMpecialReport, OTA-BA337 (Springfield, VA: National Technical information Service, March 1987).

15. U.S. Congress, Office of Technology Assessment,

New Developments in Biotechnology: U.S.lnvestme~

Special Report, OTA-BA-360 (Springfield, VA:

National Technical Information Service, July 1988).

16. U.S. Congress, Office of Technology Assessment,

Technologies to Maintain Biological Diversity, OTAF-330 (Washington, DC: U.S. Government Printing

Office, March 1987).
Chapter 3

Intellectual Property

“The Congress shall have the power. . . To promote the Progress of Science and useful Arts, by

securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings

and Discoveries.”

United States (institution

Article I, Section 8

“Ingenuity should receive a liberal encouragement.”

Thomas Jefferson
CONTENTS

Page

INTRODUCTION . . . . . . . . . .

PATENTS . . . . . . . . . . . . . . . . .

Subject Matter and Utility.

Novelty . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nonobvious Subject Matter. ...., . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

How a Patent Is Obtained.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Patent Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Protection of

Patent Rights

COPYRIGHTS

Patent Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

in Inventions Made With Federal Assistance . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .,.,

TRADEMARKS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TRADE SECRETS, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER 3 REFERENCES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Figures

3-1.

3-2.

3-3.

All Patents and a List of Patentees Are

The Eight Categories of Copyrightable

A Sampling of Trademarks.. . . . . . . . . .

37

37

37

39

40

40

41

41

43

43

44

46

46

47

Published Each Week by PRO. . . . . . . . . . . . . 42

Subject Matter.

. . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . 44

. . . . . . . . . . . . . . . . . . . . . . . . . . 45

Table

Table Page

3-1. Patent Examining Groups. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Chapter 3

Intellectual Property

INTRODUCTION

Intellectual property law—which provides a personal property interest in the work of the mind—has

its roots in ancient Greece, and developed in the

common law of European nations (2). The Framers

of the U.S. Constitution assured Congress’ broad

power to “promote the Progress of Science and

useful Arts, by securing for limited times to authors

and inventors the exclusive right to their respective

writings and discoveries” (Article I, Section 8).

Pursuant to its constitutional powers under this

clause, Congress subsequently pained statutes providing for the granting of patents and copyrights.

Two other areas of law, trademark and trade secret,

were enacted to protect commercial use of distinctive marks and secret information. Protection of

intellectual property is crucial to all areas of

inventive inquiry, including biotechnology. The

purpose of this chapter is to explain basic concepts

of intellectual property law; specifically, what constitutes a patent, copyright, trademark, and trade

secret. Intellectual property protection specifically

designed for plant life is discussed in chapter 5.

PATENTS

A patent is a grant issued by the U.S. Government

giving the patent owner the right to exclude all

others from making, using, or selling the invention

within the United States, its territories, and possessions during the term of the patent (35 U.S.C. 154).

A patent may be granted to whoever invents or

discovers any new, useful, and nonobvious process,

machine, manufacture, composition of matter, or

any new and useful improvement of these items (35

U.S.C. 101). A patent may also be granted on any

distinct and new variety of plant (35 U.S.C. 161) or

on any new, original, and ornamental design for an

article of manufacture (35 U.S.C. 171).

The first patent act was enacted by Congress in

1790. It embodied Thomas Jefferson’s philosophy

that “ingenuity should receive a liberal encouragemerit. ” The first patent act provided protection for

“any new and useful art, machine, manufacture, or

composition of matter. or any new and useful

improvement [thereof].” Subsequent patent statutes

were enacted in 1793, 1836, 1870, and 1874, which

employed the same broad language as the 1790 Act.

The Patent Act of 1952 replaced “art” with “process”

as patentable subject matter (35 U.S.C. 101). The

Committee Reports accompanying the 1952 Act

demonstrated that Congress intended patentable

subject matter to include “anything under the sun

that is made by man.” However, the Supreme Court

has held that laws of nature, physical phenomena,

and abstract ideas are not patentable.

Patents are designed to encourage inventiveness by granting to inventors a limited property

right—the right to exclude others from practicing the invention for a period of 17 years. A

patent does not grant the inventor any affirmative right to use an invention. Use maybe regulated

by Federal, State, or local law. In the United States,

patent law is exclusively Federal (35 U.S.C. 1 et

seq.; 28 U.S.C. 1338(a)). Of the various forms of

intellectual property protection, patents are the most

difficult to obtain, since strict examination is required. However, once obtained, a patent is generally easy to maintain, requiring only the periodic

payment of maintenance fees during the life of the

patent (35 U.S.C. 41(b)).

How does an invention become patented? One

Federal judge has spoken of three doors which must

be opened in order to obtain patent protection (5).

The first door is subject matter jurisdiction and

utility. The second concerns novelty. The third and

final “door” to be opened involves the issue of

obviousness. Once these three “doors” have been

opened, a patent (i.e., a grant issued by the U.S.

Government giving a property right from the Government to one or more individuals) can result.

These three barriers to patentability are covered by

35 U.S.C. 101, 102, and 103 respectively.

Subject Matter and Utility

A patent may issue to “[w]hoever invents or

discovers any new and useful process, machine,

manufacture, or composition of matter, or any

new and useful improvement thereof. . . “ (35

-37-
38 ● New Developments in Biotechnology: Patenting Life
Chapter 3--Intellectual Property ● 39

U.S.C. 101). Known as utility patents, they are

divided into three classes by the U.S. Patent and

Trademark Office (PTO) for examination purposes:

chemical, electrical, and mechanical (see table 3-l).

Approximately 1,400 utility patents are granted

every week by the U.S. Government (8).

Under section 101, the invention must:

● fall into one of four broad categories-process,

machine, manufacture, or composition of matter;

. be a new invention or a new and useful improvement of an existing invention; and

. be useful.

Congress and the courts have given a wide

meaning to subject matter patentability (i.e., what

constitutes a process, machine, manufacture, or

composition of matter). The expansive terms used in

the patent statute have been interpreted to “include

anything under the sun made by man” (7). Although

the subject matter of things that may be patentable

is broad, it is not unlimited. Laws of nature, physical

phenomena, and abstract ideas cannot be patented

Table 3-l—Patent Examining Groups

Group

Chemical examining groups:

General metallurgical, inorganic, petroleum

and electrical chemistry, and engineering . . . . . . . . . . . 110

Organic chemistry. . . . . . . . . . . . . . . . . . . . . ., . . . . . . . . . . 120

Specialized chemical industries and chemical

engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130

High-polymer chemistry, plastics, coating, photography,

stock material, and compositions . . . . . . . . . . . . . . . . . . 150

Biotechnology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180

Electrical examining groups:

Industrial electronics, physics, and related

elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210

Special law administration , . . . . . . . . . . . . . . . . . . . . . . . . . 220

Packages, cleaning, textiles, and geometric

instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230

Electronic and optical systems and devices ., , . . . . . . . . . 240

Communications, Measuring, Testing, and

Lamp/Discharge Group . . . . . . . . . . . . . . . . . . . . . . . . . . 250

Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290

Mechanical examining groups:

Handling and transporting media. . . . . . . . . . . . . . . . . . . . . 310

Material shaping, article manufacturing, and tools . . . . . . 320

Mechanical technologies and husbandry personal

treatment information . . . . . . . . . . . . . . . . . . . . . . . . . . . , 330

Solar, heat, power, and fluid engineering devices . . . . . . . 340

General constructions, petroleum, and mining

engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350

SOURCE U S. Patent and Trademark Office, 1989

(7,11,13,22). The rule that discovery of a law of

nature cannot be patented rests not on the notion that

natural phenomena are not processes, but rather on

the more fundamental understanding that they are

not the kind of discoveries that patent law was

designed to protect; mere recognition of existing

phenomena or relationships carries with it no rights

to exclude others from its enjoyment (22),

In addition to the types of patents permitted under

section 101, two other types of subject matter patents

are issued under U.S. law:

Patents for plants (35 U.S.C. 161-164). A

patent for a plant may be issued to the inventor

of any distinct and new variety of plant,

including cultivated sports, mutants, hybrids,

and newly found seedlings, other than a tuberpropogated plant or a plant found in an uncultivated state. Plant patents are discussed in

further detail in chapter 5.

Patents for designs (35 U.S.C. 171-173). Such

a patent may issue to the inventor of any new,

original, and ornamental design for an article of

manufacture. Unlike other types of patents

(which have a term of 17 years), design patents

have a term of 14 years.

Utility or usefulness of an invention is generally

an easy hurdle for patent applicants. This cart be

shown by experimental data, commercial use, or

through the drawings or description of the patent

application.

Novelty

Although section 101 requires that art invention

must be new, it does not explain what constitutes

novelty, To determine the requirement for novelty,

one must look to section 102, the second barrier in

the path of an invention for which a patent is sought.

In order for an invention or discovery to meet the

statutory requirement for novelty, it must be new; it

should not have previously existed through the work

of others (8).

Under section 102, a patent can be denied under

several conditions including:

. if the invention was known or used by others in

the United States or patented or described in a

printed publication in the United States or a
40 ● New Developments in Biotechnology: Patenting Life

●

●

●

foreign country before the invention claimed by

the application for patent;

if the invention was patented or described in a

printed publication in the United States or a

foreign country, or sold or used in the United

States more than 1 year prior to the date of the

application for a patent in the United States;

the invention was abandoned; and

if the invention was made in the United States

by another person who has not abandoned,

suppressed, or concealed it. In such cases,

determining the priority of invention becomes

important.

Nonobvious Subject Matter

Even if an invention is found to be new and useful

and is statutory subject matter, a patent may still be

denied on grounds of obviousness, the third door

that must be opened. Obviousness is the subject of

section 103 of the patent code. In addition to novelty

and utility, the statute states that a patent may not be

obtained “if the differences between the subject

matter sought to be patented and the prior art are

such that the subject matter as a whole would have

been obvious at the time the invention was made to

a person having ordinary skill in the art to which the

subject matter pertains” (35 U.S.C. 103).

Obviousness addresses the degree of difference

between the invention sought to be patented and that

which is known or available (the so-called “prior

art”) to a person skilled in the relevant field of

technology. Evidence of prior art (e.g., existing

patents, publications) is evaluated not only for what

it expressly teaches, but also for what it would fairly

suggest to one of ordinary skill in the relevant field

of technology (9), Since an invention may be new

but still be obvious, a determination as to whether or

not the proposed invention is obvious needs to be

made. The test for determining obviousness was

expressed by the Supreme Court in 1966 (14):

. determine the scope and content of the prior art;

. ascertain the differences between the prior art

and the claims at issue; and

. resolve the level of ordinary skill in the pertinent

art.

In addition, the Court stated that secondary

considerations such as commercial success, long felt

but unsolved needs, and the failure of others maybe

relevant to particular situations.

How a Patent Is Obtained

An application for a patent must generally be

made by the inventor, must be in writing, contain a

specification, a drawing (where necessary), claims,

and an oath that the inventor believes himself or

herself to be the original and first inventor of that for

which patent protection is sought (35 U.S.C. 111-

113, 1 15).

The specification is the written description of the

invention, describing the manner and process of

making and using it “in such full, clear, concise, and

exact terms” as to enable any person skilled in the art

to which it pertains to make and use the same, and

setting forth the “best mode contemplated by the

inventor” of carrying out the invention (35 U.S.C.

112). The specification includes one or more claims,

which particularly points out and distinctly claims

the subject matter which the applicant regards as the

invention. The claims represent the metes and

bounds of the property to be protected. As in a title

to real property, the claims stake out the patent

holder’s territory, and any encroachment on that

particular territory constitutes infringement (4). For

biotechnology -related inventions, particularly microorganisms, it is sometimes impossible for the

applicant to fully describe the invention as required

by statute. In such cases, the applicant may be

required to deposit a specimen of the microorganism to meet the enablement requirement (35

U.S.C. 114). Issues related to deposit are discussed

in chapter 9.

The patent application can be made by the

individual inventor, by two or more inventors

jointly, by legal representatives of deceased or

incapacitated inventors, or under certain circumstances by a person to whom the inventor has

assigned a proprietary interest in the invention (35

U.S.C. 116-1 18). The actual filing date of the

application is important, for that date becomes the

presumed date of the invention, or the priority

date. The presumption is that patent applications and

documents published after the priority date do not

constitute prior art for purposes of the filed patent

application.
Chapter 3-Intellectual Property ● 41

Once the application is filed, it is referred to a

primary examiner at PTO, who makes the determination as to whether a patent should issue (35 U.S.C.

131) (table 3-l). After the application is filed, there

is generally give-and-take written correspondence

between the patent examiner resigned to the application and the applicant. Often, the examiner will find

several prior art references in addition to those found

in the patent application that limit or preclude

patentability of the claimed invention. These are

provided to the applicant, who may in turn respond

with amendments to the claims, information, or

arguments to distinguish the claimed invention from

the prior art. This procedure whereby the applicant

attempts to demonstrate the patentability of the

claimed invention is called “prosecuting” a patent

application (8).

If, after examination, the examiner determines

that any claim of a patent application is unpatentable, the claim is rejected and the applicant is so

notified with reasons for the rejection. The applicant

has a right to automatic reconsideration of the

rejection of the claims, as long as a request is made

within 6 months (35 U.S.C. 132-133). An applicant

whose claims have been finally rejected may appeal

the decision of the primary examiner to the Board of

Patent Appeals and Interferences, which consists of

the PTO Commissioner, Deputy Commissioner,

Assistant Commissioners, and the examiners-inchief of the various examining sections. Each appeal

is heard by at least three members of the Board of

Patent Appeals and Interferences, as designated by

the Commissioner (35 U.S.C. 7, 134).

An applicant dissatisfied with the decision in an

appeal to the Board may either file an appeal with the

U.S. Court of Appeals for the Federal Circuit or file

a civil action against the Commissioner in the U.S.

District Court for the District of Columbia (35

U.S.C. 141, 145). Appeals of interference actions

(establishing the priority of an invention) operate in

a similar manner (35 U.S.C. 141, 146). For the

applicant who chooses to appeal to the District

Court, a trial de novo (i.e., a new hearing) is

conducted (15). One advantage of a trial de novo is

that the applicant may be able to introduce additional

evidence into the prosecution record (3).

The Patent Term

Once obtained, a patent has a term of 17 years,

assuming that maintenance fees are paid (35 U.S.C.

154) (see figure 3-1 ). Maintenance fees are not

required for design and plant patents. Exceptions to

this general term of 17 years are design patents,

which have a term of 14 years, or certain utility

patents where the term has been extended for up to

an additional 5 years (35 U.S.C. 156). Where a

patent claims a product (limited to a human drug

product, medical device, a food or color additive)

that has undergone regulatory review prior to

approval for commercial marketing or use by the

Food and Drug Administration, the patent may be

eligible for an extension of the patent term for up to

5 years if certain conditions are satisfied,

Protection of Patent Rights

Patents have the attributes of personal property

(35 U.S.C. 261). Property is generally viewed as a

bundle of legally protected interests, including the

right to possess and to use, to transfer by sale and

gift, and to exclude others from possession. Property

can be tangible (e.g., animals, furniture, merchandise) or intangible (e.g., copyrights, stocks, annuities). Patents are intangible personal property; a

violation of that personal property right constitutes

infringement, which is defined in the patent statute

as the making, using. or selling of any patented

invention without authority of the patent owner (35

U.S.C. 271).

The remedy for patent infringement is by civil

action (35 U.S.C. 281). Monetary damages may be

recovered, and an injunction may also be granted in

order to prevent the violation of any patent right (35

U.S.C. 282). In awarding damages for infringement,

a court must award at least the amount of a

reasonable royalty; a court may, at its discretion,

award increased damages up to three times the level

found or assessed. In exceptional cases, attorney’s

fees can be awarded by the court (35 U.S.C. 285).

A patent that has been issued can be reexamined.

This can occur at the request of any person citing

prior art and paying the requisite reexamination fee

or by the initiative of the Commissioner (35 U.S.C.

302, 303). Once initiated, patent reexamination

follows the procedural steps of an initial patent

examination. All reexaminations, however, must be
42 ● New Developments in Biotechnology: Patenting Life

Figure 3-1—All Patents and a List of Patentees Are Published Each Week by PTO

SOURCE’ Wrious pages from the Oificial Gazetfw of the Urs’lwd States and Trademark Office, Dac. 27, 19S8,
Chapter 3--Intellectual Property ● 43

conducted by PTO with “special dispatch” (35

U.S.C. 305).

Patent Rights in Inventions Made With

Federal Assistance

Beginning in 1981, a uniform patent policy went

into effect regarding ownership of inventions made

using Federal funds by small businesses and nonprofit organizations. The purpose is “to promote the

utilization of inventions arising from federally

supported research and development, to encourage

the maximum protection of small business firms . . .

[and] to promote collaboration between commercial

concerns and nonprofit organizations including universities . . . “ (35 U.S.C. 200). This law, the Government Patent Policy Act of 1980 (Public Law

96-517) and additional amendments added in 1984

(Public Law 98-620), replaced 26 different agency

policies then in effect (24).

Under the law, nonprofit organizations (e.g.,

universities, nonprofit scientific or educational organizations) or small businesses (i.e., independently

owned and operated with fewer than 500 employees)

can elect to retain title to any invention resulting

from any funding agreement (including grants,

contracts, or cooperative agreements) with any

Federal agency. In order to retain title, such election

must be within a reasonable time, normally 2 years.

If the contractor does not elect to retain title within

the appropriate time, the Federal agency may take

title (35 U.S.C. 202(c)(2)). If the contractor retains

title, the Federal agency retains a nonexclusive

license to practice the invention worldwide (35

U.S.C. 202(c)). The Federal agency also retains

march-in rights (i.e., the ability to intercede) to

require the granting of a license if the invention is

not practiced within a reasonable time. Such marchin rights are limited (35 U.S.C. 203) and have not

been used by a Federal agency nor interpreted by the

courts (23). In 1983, a Presidential Memorandum

extended the policies of the patent statute to

contractors other than nonprofit organizations and

small businesses (i.e., large businesses), thus allowing almost all contractors to retain title to inventions

created with Federal support (21).

During the 5 years following passage of the 1980

patent law amendments, patent applications by

universities and hospitals for inventions involving

human biological increased more than 300 percent

as compared with the preceding 5-year period and

constituted 22 percent of all patent applications filed

by these institutions (25).

COPYRIGHTS

Copyrights, as patents, find their domestic roots in

the Constitution, ” . . . securing for limited Times to

Authors . . . the exclusive right to their . . . Writings.” Historically, the term *’writings” has been

interpreted broad] y. The copyright statute(17 U.S.C.

102(a)) defines a writing as that which is “fixed in

any tangible medium of expression. now known or

later developed, from which they can be perceived,

reproduced, or otherwise communicated, either directly or with the aid of a machine or device.”

Copyright protection is expressly provided for eight

categories of works: literary; musical; dramatic;

pantomimes and choreographic; pictorial. graphic,

and sculptural; motion pictures and other audiovisual works; sound recordings; and computer

programs (see figure 3-2).

A copyright does not protect an idea. but rather the

expression of the idea. Copyrights also do not extend

to any procedure, process, system, method of

operation, concept, principle, or discovery, regardless of the form in which it is described, explained,

illustrated, or embodied (17 U.S.C. 102(b)).

Copyright protects the writings of an author

against copying, and protects the form of expression

rather than the subject matter of the writing.

Copyright protection, for example, would extend to

a writing that describes a machine. Such protection

would prevent others from copying that description;

it would not prevent others from writing a description of their own or from making or using the

machine itself (26).

One writer on intellectual property law has

suggested that DNA molecules are copyrightable as

express information, comparing DNA molecules to

computer programs; both are sets of instructions

(18). The U.S. Copyright Office, however, has

unofficially stated that DNA molecules and gene

sequences do not constitute copyright subject matter, a position that would likely extend to engineered

proteins (6). Even if such information was copyrightable, the protection afforded would arguably be

inferior to that provided by a patent, since under
44 ● New Developments in Biotechnology: Patenting Life

Figure 3-2-The Eight Categories of Copyrightable Subject Matter

SOURCE: Office of Technology Assessment, 1989.

copyright law, the author of such information could

not prevent others from independently making or

sequencing the same information (12).

TRADEMARKS

A trademark is a distinctive mark, motto, device,

or emblem that a manufacturer stamps, prints, or

otherwise affixes to goods so that they may be

identified in the market and their source or origin be

vouched for. The law of trademarks is governed by

both Federal and State law. Federal trademark law

stems from the Trademark Act of 1946 (15 U.S.C.

1115-1127, popularly known as the Lanham Act), as

amended in 1988 (Public Law 100-667). Each State

has an administrative registration system that is

generally parallel to but autonomous from the

system in other States and from the Federal system

(10). For those marks which qualify, Federal registration is preferable to State registration because it

provides nationwide protection; State registration

only affords protection within the State of registration.

Trademarks are designed to protect the public

against false and deceptively marked goods and to

secure to the owner of the mark the good will of the

business (27). For example, “Sanka” designates a

brand of decaffeinated coffee. “Bib” the “Michelin

Man” is the symbol for a brand of tires. A stylized

penguin designates those books published by Penguin Books; and the color pink is a trademark for

residential insulation manufactured by OwensComing (16,20) (see figure 3-3).
Chapter 3--Intellectual Property ● 45

Figure 3-3-A Sampling of Trademarks

OMEGA

soulRCE Office of Technology Assessment, 1989.
46 ● New Developments in Biotechnology: Patenting Life

A Federal trademark may issue to persons who

use or intend to use a trademark in commerce (prior

to the 1988 amendments, only trademarks already in

use could be registered). Trademarks, unlike patents,

must be used in order to maintain registration.

Federal trademark registration has a term of 10

years, which can be renewed if continuous use of the

mark is shown.

As applied to biotechnology proprietary rights,

trademarks can be useful to indicate the source of

commercial products, but such marks do not prevent

a subsequent competitor from lawfully developing

the same product and marketing it under a new

trademark that is not confusingly similar to the

trademark of the original manufacturer (6).

TRADE SECRETS

Trade secret protection extends to information

used in one’s trade or business that is maintained

secret by its owner and provides a competitive

business advantage over those not having the

information. A plan, process, tool, mechanism,

chemical compound. customer list, or formula are all

examples of information that can be maintained as

trade secrets. Affirmative steps must be taken by an

employer to keep information secret (e.g., by limiting access or by contract). Once the information

becomes publicly known it loses its status as a trade

secret.

Trade secrets are the subject of State law. The

theft of a trade secret is a tort and action lies against

the “thief’ for misappropriation. It is not considered

a misappropriation if one obtained trade secret

information and did not know that such information

was a trade secret. However, the trade secret owner

may have a cause of action against the disclosing

party for wrongful disclosure of the trade secret.

Trade secret law in the United States has been

fashioned to promote two beneficial ends. It encourages commercial morality and fair-dealing, and it

encourages research and innovation. It does not,

however, promote disclosure to the public, which is

one of the end results of a patent.

In Kewanee Oil v. Bicron Corp. (19), the Supreme

Court found trade secret law to be compatible with

patent law, stating that:

Certainly the patent policy of encouraging invention is not disturbed by the existence of another form

of incentive to invention. In this respect the two

systems are not and never would be in conflict.

In support of its decision in Kewanee, the Court in

1979 held in Aaronson v. Quick Point Pencil Co. (1 )

that a contract for royalties on a product was

enforceable even though the product was unpatentable. The Court was seeking to prevent the suppression from the market of innovative products which

do not achieve the level of patentability, and thereby

encourage trade secret law where it is not inconsistent with the aims of the patent system. Quick Point

Pencil Co. had placed great value on an innovation

disclosed to it in confidence and paid for the right to

be the first in the marketplace, knowing that a patent

might not issue.

Trade secret rights require that a trade secret be

disclosed in confidence only to those having a

reasonable need to know (e.g., employees). These

rights require that measures be taken to prevent

disclosure of the trade secret to the public or to

competitors. Companies generally identify what

information constitutes trade secrets so that it will

have enforceable rights. A person entering into a

confidential relationship with a trade secret holder,

therefore, must know what is considered to be a trade

secret. If a trade secret is disclosed in a nonconfidential manner, it is lost forever.

Patent applications are held in confidence and

nondisclosure rules apply during the pendency of an

application (35 U.S.C. 122). A member of the public

must obtain permission from the owner of a patent

application to obtain access to the file. Abandoned

patent applications are similarly not generally available to the public, except under special circumstances. Confidential patent information can be

maintained as a trade secret. However, once a patent

issues, the information contained in it is made

available to the public, in order to encourage further

innovation.

SUMMARY

Various forms of American law protect the

intellectual property rights of inventors, authors, and

holders of commercially useful trademarks and

secrets. Of primary relevance to this report is one

area of intellectual property law—patent law—
Chapter 3-Intellectual Property ● 47

which is of increasing importance to biotechnology

research and development. Subsequent chapters will

address the patentability of micro-organisms and

cells, plants, and animals.

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11,

12.

13.

14.

CHAPTER 3 REFERENCES

Auronson v. Quick Point Pencil Co., 440 U.S. 257

(1978).

Adler, R., “Biotechnology as an Intellectual Property,” Science 224(4647):357-363, 1984.

Adler, R., Finnegan, Henderson, Farabow, Garret &

Dunner, Washington, DC, personal communication,

Sept. 2, 1988.

Amemick, B. A., Patent LaH’ for the Nonlaw>qer: A

Guide for the Engineer, Technologist, and Manager

(New York, NY: Mm Nostrand Reinhold Co., 1986).

Application of Bergy, 596 F.2d 952 (CCPA 1979,

opinion of Judge Giles Rich).

Bahn, P. R., and Hultquist, S. J., “Engineered Proteins

as Intellectual Property,” Genetic Engineering New’s

7(3):18-19, March 1987.

Diamond v. Chakrabarty, 447 U.S. 303 (1980).

Drabiak, J., “Patents, Copyrights, and Trademarks: a

Primer on Protecting Intellectual Property Work

Product,” Southern Illinois University Law Journul

11( 1):1-28, Fall 1986.

Electro-Nucleonics v. Mossinghofi, 592 F. Supp. 608

(DC, 1984).

Evans, L. E., “A Primer on Trademark and Service

Marks,” Texas Bar Journal 50(3):258-265, March

1987.

Funk Brothers Seed Co. v. Kalo Inoculant Co., 333

U.S. 127 (1948).

Giesser, J., Patent and Trademark Affairs, Sandoz,

East Hanover, NJ, personal communication, Aug. 19,

1988.

Gottschalk v. Benson, 409 U.S. 63 (1972).

Graham v. John Deere Co,, 383 U.S. 1 (1966).

15.

16.

17.

18.

19.

20.

21.

22.

23.

24.

25.

26.

27.

Hoover Co. v. Coe, 325 U.S. 79 (1945).

Hubbard, J., *’Think Pink! Color Can Be a Trademark,” Washington & Lee Law Re}*iew 43(4):

1433-1467, Fall 1986.

In re Hall, 781 F.2d 897 (Fed. Cir 1986).

Kayton, I., “Copyright in Genetically Engineered

Works,” George Washington Unii’ersity Law Review

191 (1982).

Kewanee Oil v. Bicron Corp., 416 U.S. 470 (1974).

Landes, W., and Posner, R., “Trademark Law: an

Economic Perspective,” The Journal of Luw and

Economics 30(2):260-309, October 1987.

Memorandum dated Feb. 18, 1983 from the President

to the heads of the Executive Departments and

Agencies on Government Patent Policy, 19 Weekly

Comp. Pres. Dec. 252.

Parker v. Flook, 437 U.S. 584 (1978).

Rosenfeld, S,, The Committee on Science and Law,

The Association of the Bar of the City of New York,

Sharing of Research Results in a Federally Sponsored Gene Mapping Project, contract No. H3-

5130.0, submitted to the U.S. Congress, Office of

Technology Assessment, Washington, DC, Aug. 26,

1987.

U.S. Congress, House Judiciary Committee, House

Report No. 96-1307(1) to accompany H.R, 6933

(Washington, DC, 1980).

U.S. Congress, Office of Technology Assessment,

Newf Developments in Biotechnology: Ownership of

Human Tissues and Cells---Special Report, OTA-13A337 (Washington, DC: U.S. Government Printing

Office, March 1987).

U.S. Department of Commerce, Patent and Trademark Office, “General Information Concerning Trademarks,” GPO No. C 21.2:T67, Washington, DC,

1986.

Wrist-Rocket Manufacturing. Co., Inc. v. Saunders,

379 F.2d 846 (D. C. Neb.1974), affirmed in part,

reversed in part on other grounds, 516 F.2d 846 (8th

Cir., 1975).
Chapter 4

Patenting of Micro-Organisms

and Cells

“The grant or denial of patents on micro-organisms is not likely to put an end to genetic research

or its attendant risks. The large amount of research that has already occurred when no researcher

had sure knowledge that patent protection would be available suggests that legislative or judicial

fiat as to patentability will not deter the scientific mind from probing into the unknown any more

than Canute could command the tides. ”

Chief Justice Warren Burger

Chakrabarty v.. Diamond

“Those companies in the private sector which are investing hundreds of millions of dollars in this

new science do not accept the theory that patents are unimportant. Such a concept is particularly

repugnant to patent-conscious, research-intensive pharmaceutical firms dealing in global markets

with drugs which require staggering investments of time and money before ultimately yielding a

commercial return. To them the patent shelter is paramount. It is quite literally their sole incentive

for risk taking.”

William Duffey

Patent Lawyer, Monsanto
CONTENTS

Page

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

PROCESS PATENT PROTECTION PRIOR TO 1980. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

THE CHAKRABARTY CASE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

POST-CHAKRABARTY EVENTS AND TRENDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Federal Patent Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Patents and the Commercialization of Biotechnology.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Patent Activity Following Chakrabarty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Emerging Patent Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

U.S. Patent and Trademark Office Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

CHAPTER 4 REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

Figures

Figure Page

4-1. The Structure of DNA.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

4-2. Recombinant DNA: The Technique of Recombining Genes From One Species

With Those From Another . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

4-3. Patent Activity Class 935, Genetic Engineering.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

4-4. Patent Activity Class 435, Chemistry: Molecular Biology and Microbiology . . . . . . . 64

Tables

Table Page

4-1. Class 935, Genetic Engineering. ........ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

4-2. Class 435, Chemistry: Molecular Biology and Microbiology . . . . . . . . . . . . . . . . . . . . . . 62

4-3. Patents: Applications and Ownership, by Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Chapter 4

Patenting of Micro-Organisms and Cells

INTRODUCTION

The development of recombinant DNA technology in the 1970s led to debate on many policy

questions, one of which concerned the patenting of

living matter. The purpose of this chapter is to

discuss process patent protection available prior to

1980, the Supreme Court’s landmark decision permitting the patenting of living matter (in this case

bacteria), and several patent-related events and

trends that occurred or were identified subsequent to

the Supreme Court case.

PROCESS PATENT PROTECTION

PRIOR TO 1980

Patents on biotechnological developments date

from the early days of the United States patent

system. Louis Pasteur received a patent for a process

of fermenting beer. Acetic acid fermentation and

other food patents date from the early 1800s, while

therapeutic patents in biotechnology were issued as

early as 1895. The first patent for isolating nucleic

acid was issued in 1945, and the first patent for

preparing ribonucleic acid by a fermentation process

was issued in 1966. Until the recent advances in

biotechnology, such process patent applications

were examined primarily by the U.S. Patent and

Trademark Office’s (PTO) examining group in

fermentation chemistry (18). Since March 1988, a

special biotechnology examining group handles

these patent applications.

The development of recombinant DNA technology—

the joining of DNA from different organisms—has

resulted in greatly increased understanding of the

genetic and molecular basis of life (see figure 4-l).

Following the first successful directed insertion of

recombinant DNA in a host micro-organism in 1973,

scientific researchers began to recognize the potential for directing the cellular machinery to develop

new and improved products and processes in a wide

variety of industrial sectors (see figure 4-2). Many of

these products were micro-organisms (microscopic

living entities) or cells (the smallest component of

life capable of carrying on all essential life processes). With the development of rDNA technology

arose the issue of patenting the inventive results of

the technology.

Prior to 1980, PTO would not grant patents for

such inventions, deeming them to be “products of

nature” and not statutory subject matter as defined

by 35 U.S.C. 101.1 Although patent applications

were rejected if directed to living organisms per se,

patent protection was granted for many compositions containing living things (e.g., sterility test

devices containing living microbial spores, food

yeast compositions, vaccines containing attenuated

bacteria, milky spore insecticides, and various dairy

products) (18). In the absence of congressional

action, it took a catalytic court decision to clarify the

issue of patentability of living subject matter.

THE CHAKRABARTY CASE

The Supreme Court’s single foray into biotechnology occurred in 1980 with its ruling in the patent

law case of Diamond v. Chakrabarty (4).

Figure 4-l-The Structure of DNA

SOURCE: Office of Technology Assessment, 1989.

Isec.tion )()/. /nventjom Patgnt&/e. whoever invents or discowrs any new and useful process, machine, manufacture, or composition of matter, or

any new and useful Jmprwemern thereof, may obtain a patent thercfor, subject to t.k conditions and requirements of this title.

–5 1-
52 ● New Developments in Biotechnology: Patenting Life

Ananda Chakrabarty, a microbiologist at the

General Electric Research and Development Center

in Schenectady, New York, had developed a genetically engineered (but not recombinant) bacterium

capable of breaking down multiple components of

crude oil. Because this property was not possessed

by any naturally occurring bacteria, Chakrabarty’s

bacterium was thought to have significant value for

the cleanup of oil spills.

Chakrabarty filed a patent application asserting

36 claims relating to “a bacterium from the genus

Pseudomonas containing therein at least two stable

energy-generating plasmids, each of said plasmids

providing a separate hydrocarbon degradative pathway.” The patent claims were of three types:

● process claims for the method of producing the

bacteria;

. claims for an inoculum comprised of a carrier

material floating on water (e.g., straw); and

. product claims for the bacteria.

The patent examiner allowed the claims for the

process and for the inoculum but rejected the claims

for the bacteria on two grounds: 1) micro-organisms

are “products of nature” and 2) as living things,

micro-organisms are not patentable subject matter

under 35 U.S.C. 101. Chakrabarty appealed the

rejection of these claims to the PTO Board of

Appeals. The Board reversed the examiner on the

first ground, concluding that the new bacteria were

not products of nature, because Pseudomonas bacteria containing two or more different energygenerating plasmids are not naturally occurring. The

second ground of rejection—that the bacteria did not

constitute statutorily protectable subject matter—

was affirmed.

Chakrabarty then appealed the PTO decision to

the Court of Customs and Patent Appeals, which

reversed the decision (3). Judge Rich, writing for the

majority in the split decision, relied upon an earlier

lower court decision which held that the fact that

micro-organisms are alive is without legal significance for purposes of the patent law (9).2 The case

was then appealed to the U.S. Supreme Court by the

Government. The Supreme Court, in a 5-4 ruling,

held that a live, human-made micro-organism is

patentable subject matter under section 101 as a

“manufacture>’ or “composition of matter.”

Figure 4-2-Recombinant DNA: The Technique of

Recombining Genes From One Species With Those

From Another

Restriction enzymes recognize sequences along the DNA and

can chemically cut the DNA at those sites. This makes it possible

to remove selected genes from donor DNA molecules to form the

recombinant DNA. The recombinant molecule can then be

inserted into a host organism and large amounts of the cloned

gene, the protein that is coded for by the DNA, or both, can be

produced.

SOURCE: Office of Technology Assessment, 1989.

How did the Court reach its conclusion? Because

the case involved statutory construction, i.e., the

meaning of the language of the statute and the intent

of the legislature in enacting the statute, the Court

conducted an analysis of the language and legislative history of section 101. In so doing, the Court

reached the following conclusions:

. In looking at the plain meaning of the statutory language, words are to be interpreted as

taking their ordinary, contemporary, common

meaning. In addition, courts should not read

into the patent laws limitations and conditions

which the legislature has not expressed (23).

Therefore, the terms “manufacture” and “composition of matter” must be interpreted in

accordance with their dictionary definitions.

Because both terms are expansive in their

meaning, and are modified in the statutory

language by the expansive term “any,” Congress plainly contemplated that the patent laws

2Allhough tie su~me Cow decided to hear both the Ber~ and Chakrabar@ cases, Bergy wiLhdrew his Ckim so only the C’hakra&W cw w=

argued.
Chapter 4--Patenting of Micro-Organisms and Cells ● 53

1

BACKGROUND OF THE INVENTION

‘

1

SOURCE: U S Patant and Trademark Ofhca
54 ● New Developments in Biotechnology: Patenting Life

would be given wide scope. Federal courts

should not read into patent laws limitations and

conditions which the legislature has not expressed.

● The legislative history of the patent statute

also supports a broad construction. Congress

originally adopted Jefferson’s view that “ingenuity should receive a liberal encouragement.”

Jefferson’s original subject matter statutory

language remained virtually intact through five

rewrites of the patent statute spanning 187

years. Indeed, committee reports accompanying the most recent patent act revision “inform

us that Congress intended statutory subject

matter to include anything under the sun made

by man.”

. Laws of nature, physical phenomena, and

abstract ideas are not patentable. New minerals discovered in the earth, a new plant found

in the wild, Einstein’s celebrated law of E=mc2

,

and Newton’s law of gravity were all cited by

the Court as “manifestations of. . . nature, free

to all men and reserved exclusively to none.”

Unlike such manifestations, Chakrabarty’s microorganism was a product of human ingenuity

having a distinct name, character, and use.

. The passage of the 1930 Plant Patent Act

(PPA) (affording patent protection for certain

asexually reproduced plants) and the 1970

Plant Variety Protection Act (PVPA) (providing protection for certain sexually reproduced plants) does not evidence congressional

understanding that the terms “manufacture” or

“composition of matter” do not include living

things.

● The fact that genetic technology was unforeseen when Congress enacted Section 101 does

not require the conclusion that microorganisms cannot qualify as patentable subject

matter until Congress expressly authorizes

such protection.

● Arguments against patentability based on

potential hazards that may be generated by

genetic research should be addressed to the

Congress and the Executive for regulation or

control, not to the Judiciary.

The dissenting opinion opposed the patentability

of living things and concluded that PPA and PVPA

evidenced Congress* understanding, at least from

1930, that living things were not patentable subject

matter. The dissenters reasoned that if living things

were patentable, then “the plants included in the

scope of the 1930 [PPA] and 1970 [PVPA] Acts

could have been patented without new legislation.”

Because Congress thought it had to legislate in order

to make agricultural “human-made inventions patentable” in 1930, and because bacteria were specifically excluded from coverage in the PVPA, the

dissenters reasoned that “Congress plainly legislated

in the belief that Section 101 does not encompass

living organisms.”

Although Chakrabarty held that a live, humanmade micro-organism was patentable, the specific

issue of whether plants and animals are patentable

was not addressed. The Chakrabarty decision did,

however, provide the judicial framework for PTO to

later determine that plants and animals were patentable subject matter under the U.S. Code (see chs. 5

and 6). Many observers agree that the Chakrabarty

decision provided great economic stimulus to patenting of micro-organisms and cells, which in turn

provided stimulus to the growth of the biotechnology industry in the 1980s. One patent examiner

notes, however, that even without Chakrabarty,

some aspects of patenting of recombinant DNA

technology probably would not have been adversely

affected since plasmids, phage, and viruses are not

living and thus would have been ultimately embraced as patentable subject matter (18).

POST-CHAKRABARTY EVENTS

AND TRENDS

Federal Patent Policy

In addition to the Chakrabarty decision, revisions

in Federal patent policy encouraged increased patenting of living organisms and related processes.

Prior to 1980, no single patent policy existed for

government-supported research, despite the Federal

Government’s preeminence in biotechnologyrelated research funding. Instead, each Federal

agency developed its own rules, resulting in 26

different patent policies. Under this system, only

about 4 percent of some 30,000 government-owned

patents were licensed. Furthermore, the government

policy of granting nonexclusive licenses discouraged private investment, since a company lacking an

exclusive license was unlikely to pay the cost of
Chapter 4---Patenting of Micro-Organisms and Cells ● 55

developing, producing, and marketing a product.

Thus, potentially valuable research remained unexploited.

To resolve this problem, Congress passed the

Patent and Trademark Amendments of 1980 (Public

Law 96-517) as amended in 1984 (Public Law

98-260) to promote efforts to develop a uniform

patent policy that would encourage cooperative

relationships and to commercialize governmentfunded inventions. From 1980 through 1984 patent

applications by universities and hospitals for inventions containing human biological increased more

than 300 percent as compared to the previous 5-year

period (20).

The policies adopted by Congress in 1980 and

1984, which gave statutory preference to small

businesses and nonprofit organizations, were extended to larger businesses (with some exceptions)

in 1983 (12). The Technology Transfer Act of 1986

(Public Law 99-502) granted Federal authority to

form consortia with private concerns. Executive

Order 12591, issued in 1987, further encouraged

technology transfer programs, including the transfer

of patent rights to government grantees. In combination with the Chakrabarty decision, these actions

helped spur patent activity.

Patents and the Commercialization of

Biotechnology

The Chakrabarty decision helped to precipitate

increased research and development, assuring the

commercialization of biotechnology in the United

States. The commercialization of biotechnology was

the focus of an earlier report in OTA’s New

Development in Biotechnology assessment series

(21). In that report, OTA noted that patent protection of biotechnology products is a major unresolved issue that presents a potential barrier to

commercialization.

Patents are very important to commercial entities.

For an emerging biotechnology company, patents

can help attract venture capital, collaborative arrangements, and new research and development

leads. Investors watch biotechnology patent developments and sometimes react quickly to news. The

initial public offering of stock by Genentech in 1980

set a Wall Street record for the fastest price per share

increase ($35 to $89 in 20 minutes); the initial public

offering by Cetus in 1980 set a record for the largest

amount of money raised in an initial public offering

($1 15 million) (19). In September 1986, Genentech’s stock dropped 10.5 points following the news

that Hoffmann-La Roche had sued it for infringing

a patent for human growth hormone. Genentech’s

stock rose the previous year when it sued BurroughsWellcome (PLC) in Great Britain for allegedly

infringing a British patent on tissue plasminogen

activator (21 ).

By 1987, 403 American companies dedicated to

biotechnology and 70 established corporations with

significant investments in biotechnology yielded an

estimated 35,900 jobs, including 18,600 scientists

and engineers. Combined, U.S. industry is spending

$1.5 billion to $2.0 billion annually in biotechnology research and development. On average,

dedicated biotechnology companies—those entrepreneurial ventures started specifically to commercialize innovations in biotechnology—have filed fewer

biotechnology patent applications than larger, diversified firms that use biotechniques—1.5 v. 10

applications, respectively, in 1986. This is likely due

to a greater institutional capacity to file multiple

patents in the larger, more diversified companies

(21).

Patent Activity Following Chakrabarty

Although Chakrabarty addressed the subject

matter patentability of a human-made microorganism, i.e., a patent on the end product, many

patent law developments involve the use of such

micro-organisms and cells in processes that could

be patented. Data compiled by PTO within the first

3 years of the Chakrabarty decision focused on six

areas of U.S. patent activity relating to microorganisms and cells (22). The six areas present a

cross-section of the types of patents issued in this

field.

Mutation/Genetic Engineering

Patents in this emerging area within biotechnology refer to laboratory processes for producing a

stable, inheritable change in the genotype of an

animal, a plant, or a micro-organism. This can be

accomplished by artificially inducing a structural

change in a gene or through the incorporation of

genetic material from an outside source (e.g., a
56 ● New Developments in Biotechnology: Patenting Life

chemically synthesized or modified gene). Patents in

this area include methods of modifying plasmids by

chemical or biochemical processes.

Probably the best known patent in this area is

Patent 4,237,224, covering the process for producing biologically functioning molecular chimeras.

Soon after the Chakrabarty decision, Stanley N.

Cohen and Herbert Boyer (at Stanford University

and the University of California at San Francisco,

respectively) patented a process for inserting foreign

genetic material into a bacterial plasmid, a technique

widely used in recombinant DNA research. The

Cohen-Boyer patent was assigned to their universities, who split royalty payment income received

from those wishing to use the patented process. By

1987, the Cohen-Boyer patent was Stanford’s top

earning patent ($1.7 million annually), surpassing

the former leader, a 1971 patent on the FM synthesizer chip used in music synthesizers (2),

Enzymes Per Se

An enzyme is a protein that acts as a catalyst,

speeding the rate at which a biochemical reaction

proceeds, but not altering its direction or nature. An

important tool in biotechnology, patents in this area

have included products (enzymes per se and enzyme

compositions) and processes for preparing, separating, purifying, and treating enzymes.

Immobilized Enzymes

Immobilization of an enzyme occurs when the

enzyme or microbe is bonded to a carrier or

entrapped within a carrier. The carrier material

physically confines the enzyme or microbe, making

them more stable when exposed to changes in

reaction conditions. Binding often makes the enzyme insoluble, offering additional economic advantages. Examples of such bonded or entrapped

enzymes include enzymes chemically or physically

bonded to a water-soluble matrix, enzymes contained within a polymer or gel, and enzymes

absorbed in resin.

Tissue and Cell Culture

Tissue and cell culture refers to the propagation of

cells removed from organisms in a laboratory

environment that has strict sterility, temperature,

and nutrient requirements. Techniques in this area

are of extreme importance to the medical sciences

for the production of vaccines, pharmaceuticals, and

antibodies. Patents in the area include those covering processes, apparatus and nutrient media that

permit the growth and maintenance of cell lines, as

well as cell lines per se.

Starch Hydrolysates

Hydrolysis is a chemical process of decomposition involving splitting of a chemical bond and

addition of the elements of water. Patents in this area

include those covering processes for synthesizing

monosaccharides by the action of an enzyme or

micro-organism. An example of such a process is the

hydrolysis of starch to sugar.

Amino Acids

Amino acids are the building blocks of proteins.

Each different protein is made up of a specific

sequence of amino acids—which number some 20

molecules—with the unique sequence coded for by

DNA. Patents in the area include processes for

preparing alpha or beta amino acids and salts by a

biological transformation of matter.

Emerging Patent Litigation

Early patents in the biotechnology field have

resulted in the emergence of patent litigation.

Factors leading to litigation include the presence of

pioneer inventions, high value-added products, major

investments, and personality factors. Where litigation is avoided, mitigating factors can include

economic considerations and the ability of parties to

enter into licensing or cross-licensing arrangements

(1 1). Courts are being asked to determine whether

patent holders have met the requisite requirements

of novelty, usefulness, and nonobviousness. In

addition, issues relating to the scope of claims,

infringement, and enforcement of patents have

occurred.

Uncertainty over patent protection is likely to be

costly and will undoubtedly influence the research

and development strategy of many companies.

Eighty-five percent of large companies responding

to an OTA survey indicated that they expect to

pursue trade secret protection for biotechnology
Chapter 4-Patenting of Micro-Organisms and Cells ● 57

The patent awarded to Stanley Cohen and Herbert Boyer in 1980. This patent has since become Stanford

University’s top earning patent ($1.7 million annually).

[11] 4,237,224

Cohen et al. [45] Dec. 2, 1980

[54] PROCESS FOR PRODUCING

BIOLOGICALLY FUNCTIONAL

MOLECULAR CHIMERAS

[75] Inventors:

[73] Assignee:

[21] Appl. No.:

[22] Filed:

Stanley N. Cohen, Portola Valley;

Herbert W. Boyer, Mill Valley, both

of Calif.

Board of Trustees of the Leland

Stanford Jr. University, Stanford,

Calif.

1,021

Jan. 4, 1979

Related U.S. Application Data

[63] Continuation-in-part of Ser. No. 959,288, Nov. 9, 1978,

which is a continuation-in-part of Ser. No. 687,430,

May 17, 1976, abandoned, which is a continuation-in

part of Ser. No. 520,691, Nov. 4, 1974.

[51] Int. cl.~ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C12P 21/W

[52] U.S. Cl. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 435/68; 435/172;

435/231; 435/183; 435/317; 435/849; 435/820;

435/91; 435/207; 260/1 12.5 S; 260/27R; 435/212

[58] Field of Search . . . . . . . . . . . . . . 195/1, 28 N, 28 R, 112,

195/78, 79; 435/68, 172, 231, 183

[56] References Cited

U.S. PATENT DOCUMENTS

3,813,316 5/1974 Chakrabarty . . . . . . . . . . . . . . . . . . . . . . 195/28 R

OTHER PUBLICATIONS

Morrow et al., Proc. Nat. Acad. Sci. USA, vol. 69, pp.

3365-3369, NOV. 1972.

Morrow et al., Proc. Nat. Acad. Sci. USA, vol. 71, pp.

1743-1747, May 1974.

Hershfield et al., Proc. Nat. Acad. Sci. USA, vol. 71,

pp. 3455 et seq. (1974).

Jackson et al., Proc. Nat. Acad. Sci. USA, vol. 69, pp.

2904-2909, Oct. 1972.

Mertz et al., Proc. Nat. Acad. Sci. USA, vol. 69, pp.

3370-3374, Nov. 1972.

Cohen, et al., Proc. Nat. Acad. Sci. USA, vol. 70, pp.

1293-1297, May 1973.

Cohen et al., Proc. Nat. Acad. Sci. USA, vol. 70, pp.

3240-3244, Nov. 1973.

Chang et al., Proc. Nat. Acad. Sci, USA, vol. 71, pp.

1030-1034, Apr. 1974.

Ullrich et al., Science vol. 196, pp. 1313-1319, Jun.

1977.

Singer et al., Science vol. 181, p. 1114 (1973).

Itakura et al., Science vol. 198, pp. 1056-1063 Dec.

1977.

Komaroff et al., Proc. Nat. Acad. Sci. USA, vol. 75, pp.

3727-3731, Aug. 1978.

Chemical and Engineering News, p. 4, May 30, 1977.

Chemical and Engineering News, p. 6, Sep. 11, 1978.

Primary Examiner—Alvin E. Tanenholtz

Attorney, Agent, or Firm--Bertram 1. Rowland

[57] ABSTRACT

Method and compositions are provided for replication

and expression of exogenous genes in microorganisms.

Plasmids or virus DNA are cleaved to provide linear

DNA having ligatable termini to which is inserted a

gene having complementary termini, to provide a biologically functional replicon with a desired phenotypical property. The replicon is inserted into a microorganism cell by transformation. Isolation of the transformants provides cells for replication and expression of

the DNA molecules present in the modified plasmid.

The method provides a convenient and efficient way to

introduce genetic capability into microorganisms for

the production of nucleic acids and proteins, such as

medically or commercially useful enzymes, which may

have direct usefulness, or may find expression in the

production of drugs, such as hormones, antibiotics, or

the like, fixation of nitrogen, fermentation, utilization of

specific feedstocks, or the like.

14 Claims, No Drawings

SOURCE: Office of Technology Licensing, Stanford University
58 ● New Developments in Biotechnology: Patenting Life

Photo credit: Robyn Nishimi

Human cells in culture

lines in addition to patent protection, although patent

protection is more desirable for many companies

(21). When intellectual property rights are unclear,

valuable resources are invested in expensive and

time-consuming litigation.

Infringement

The patenting of micro-organisms and cells and

related processes have, in several early cases,

involved issues resulting from questions of patent

infringement. Patent infringement issues arise

mainly in three contexts: literal infringement, infringement through the doctrine of equivalents, or

noninfringement through exceptions from infringement.

Literal infringement occurs whenever a person

without authority makes, uses, or sells any product

or process that is covered by the patent claims within

the United States during the term of the patent (35

U.S.C. 271(a)). This is the most common form of

infringement litigation. In addition to literal, or

statutory infringement, the Supreme Court has

established the rule that in order to prevent an

infringer from stealing the benefit of a patented

invention, a patentee may proceed against the

producer of a product or process if it performs

substantially the same function in substantially the

same way to obtain the same result (7). This is the

rule of the doctrine of equivalents. The rule applies

in instances where the accused product or process in

question does not constitute literal infringement, yet

remains an “equivalent” of the patented invention.

In one case, a court found that certain “antibody

fragments” do the same thing in essentially the same

way as previously patented whole antibodies and,

therefore, infringe the patent *’either literally or by

the doctrine of equivalents” (8). From this case it

seems possible that the doctrine of equivalents is

applicable to other areas of biotechnology as well.

In biotechnology, the most relevant exemption

from patent infringement is the experimental use

exception, a court-created doctrine which holds that

an experiment with a patented invention for the sole

purpose of gratifying true scientific inquiry or

philosophical curiosity does not attack the right of a

patentee, and thus does not constitute infringement.

In 1984, the Court of Appeals for the Federal

Circuit decided that “the limited use of a patented

drug for testing and investigation strictly related to

Food and Drug Administration (FDA) drug approval

requirements during the . . . term of the patent” did

not fall within the experimental use exemption, and

thus constituted infringement (15). Roche, the plaintiff, held a patent on the brand name prescription

sleeping drug “Dalmane.” Bolar, a generic drug

manufacturer, began taking steps near the end of the

term of Roche’s patent. to gain FDA approval of a

generic drug equivalent. Bolar’s actions (bioequivalency

tests) were conducted pursuant to the requirements

of the Federal Food, Drug, and Cosmetic Act

(FDCA) (21 U.S.C. 301-392), which govern actions

required for FDA drug approval.
Chapter 4-Patenting of Micro-Organisms and Ceils ● 59

Roche argued that Bolar’s use of the patented

drug constituted infringement. Bolar argued that

FDCA requirements created a conflict with the

patent infringement statute; because FDCA increased the time necessary for FDA drug approval,

and because the patent code did not allow for

FDA-mandated testing until the end of the patent

term, the patentees “gain for themselves . . . a de

facto monopoly of upwards of two years” by

preventing the testing of a generic drug until the

patent expires. Although admitting that it used

Dalmane, Bolar claimed that the use was “experimental.” The court found that Bolar’s use did not fall

within the narrow confines of the experimental use

doctrine, and thus infringed Roche’s patent.

In the wake of Roche, Congress amended the

patent code (Public Law 98-417) to allow a statutory

exemption with respect to human drug products

which in part overruled the court decision. Thus, it

is “not. . . an act of infringement to make, use, or

sell a patented invention . . . solely for uses reasonably related to the development and submission of

information under a Federal law which regulated the

manufacture, use, or sale of drugs” (35 U.S.C. 271

(e)(l)).

Where the testing of a patented drug is found to

be not solely for purposes of meeting FDA

approval requirements, however, the testing will

still be found to constitute infringement. A 1987

case tested the limits of this provision. In Scripps

Clinic and Research Foundation v. Genentech (16),

the plaintiff, owner of a patent for blood-clotting

factor VIII:C, brought an infringement suit against

Genentech, which defended by arguing that all its

uses of the factor VIII:C, though not solely for

purposes related to FDA testing, bore some reasonable relationship to such purposes and hence fit the

new 271 (e) exception. The court disagreed with

Genentech, finding that actions taken by the company (e.g., preparation of a European patent and the

development of an agreement to commercially

market Factor VIII:C) constituted more than was

permitted by statute, which creates an exception

solely for the development and submission of

information required by a Federal law.

271 (c)(l ). A strict interpretation of the statute could

result in slower development of generic copies of

previously patented organisms. A looser interpretation could result in infringers taking advantage, early

in a patent’s term, of the amendment in circumstances where it was not intended to operate (10).

Scope of Protection

A significant issue presented by several cases

involves the scope of protection for naturally occurring proteins as opposed to those that have been

genetically engineered. Although a protein found in

nature is not patentable, purified compositions of the

protein may be patented.

An example of this involves current development

of tissue plasminogen activator (tPA), a genetically

engineered protein drug that helps to dissolve blood

clots in patients who have suffered heart attacks.

Genentech, Inc. received FDA approval in 1987 to

market its form of tPA. During the first 5 months

following government approval, sales totaled $100

million (1). Subsequently, Genentech received exclusive license to a patent claiming broad protection for

the way tPA acts on blood clots (U.S. 4,752,603) (6).

Nonetheless, other companies also filed patent

applications for their forms of tPA, based on small

changes in the molecular structure of the drug.

The scope of protection (i.e., whether patent

protection will be on the fundamental characteristics

and uses of an organism or product, or on the slight

It remains unclear how other courts will interpret

exemption from infringement issues raised by the

application of various fact patterns to Section
60 . New Developments in Biotechnology: Patenting L@

modifications of the organism or product) is an issue

that will determine the degree of exclusivity that

patent holders will enjoy. The Patent Office and the

courts have a long history of experience in dealing

with questions of claim scope (17), but comparatively little experience in applying this law to

biotechnology inventions. Until court decisions

resolve emerging issues, neither a patentee nor the

patentee’s competitors can be entirely clear on the

limits of patent claim enforcement (5).

Already, patent battles are being fought over

Interleukin-2, tissue plasminogen activator, human

growth hormone, hybridoma technology, alpha interferon, factor VIII, and use of dual monoclinal

antibody sandwich immunoassay in diagnostic test

kits. Companies receiving basic product patents are

in court enforcing their rights against infringement

or defending the patent grant in opposition or

revocation proceedings. It is likely that patent

litigation in biotechnology will increase given the

complex web of partially overlapping patent claims,

the high-value products, the problem of prior publication, and the fact that many companies are chasing

the same products (21).

U.S. Patent and Trademark Office Activity

The majority of biotechnology patent applications

involving micro-organisms and cells fit into one of

two classes established by PTO for examination

purposes. Class 935 is a comprehensive cross-

-reference collection of patents and other technical

documents relating to genetic engineering technology. Within the Class 935 are various subclasses

(see table 4-l). Micro-organisms per se that are not

provided for in other classes are listed in Class 435,

Chemistry: Molecular Biology and Microbiology

(see table 4-2).

Patent activity in both areas has increased dramatically during the past 10 years, both as a function

of application filing date (that date when the

application is filed) and patent grant date (the date of

those patents which issued) (see figures 4-3 and 4-4).

In both classes, the majority of patentees are

Americans, and the vast majority of patents are

owned by U.S. corporations (see table 4-3).

A recent survey of genetic engineering patents

confirms the dominance of U.S. inventors in the area

of biotechnology patents as related to pharmaceuticals and health care (14). The Pharmaceutical

Manufacturers Association found that of 1,476

biotechnology patents issued by PTO in 1987, some

206 used techniques of the “new biotechnology.”

Fully 80 percent of these patents (159) were of U.S.

origin, as opposed to only 20 percent (40) from

foreign sources. Within the United States, corporations accounted for 45 percent of the patents (89),

nearly 21/2 times as many patents as U.S. universities.

One negative trend from the increase of patent

applications is the inability of PTO to process

biotechnology applications in a timely manner. The

number of biotechnology patent applications has

severely challenged the process and examination

capabilities of PTO. In March 1988, PTO reorganized its biotechnology effort into a separate patent

examining group. As of July 1988, 5,850 biotechnology applications had not yet been acted on.

Currently, it is approximately 15.5 months, on

average, before examination of a biotechnology

application is initiated, and an average of 27

months before the examination process is completed by grant of the patentor abandonment of

the patent application (24). Turnover among patent

examiners, lured to the private sector by higher pay,

is cited as a significant reason for the delay in

reviewing patents (21 ).

SUMMARY

Prior to 1980, the U.S. Patent and Trademark

Office did not grant patents on living organisms per

se, deeming such organisms to be outside the scope

of statutory subject matter. This policy was reversed

by the Supreme Court’s landmark decision in

Diamond v. Chakrabarty in 1980, a case involving

a genetically engineered bacterium capable of breaking down multiple components of crude oil. The

Chakrabarty decision, in concert with revisions to

Federal patent policy, led to increased numbers of

patent applications for living micro-organisms and

cells, as well as related processes. The majority of

such patents are filed by U.S. inventors and owned

by U.S. corporations. Patent activity is one measure

of the increased commercialization of biotechnology during the 1980s. One predictable and costly

result has been the emergence of patent infringement

litigation, as patent holders and alleged infringers

attempt to define the scope of biotechnology patent
Chapter 4--Patenting of Micro-Organisms and Cells ● 61

Table 4-l--Class 935, Genetic Engineering

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28
62 ● New Developments in Biotechnology: Patenting Life

Table 4-2-Class 435, Chemistry:

Molecular Biology and Microbiology

This class provides for the following subject

matter when not provided for elsewhere:

A process of using a micro-organism or enzyme to synthesize

a chemical product.

A process of treating a material with a micro-organism or

enzyme to separate, liberate, or purify a preexisting substance.

An in vitro process of measuring and testing in which:

(1) A micro-organism or enzyme is used to determine the

presence or identity of a compound or composition in a

sample.

(2) A micro-organism is identified by propagation.

(3) An enzyme is identified by its catalytic activity.

(4) The presence of micro-organisms is detected.

(5) A live micro-organism is used in an antigen antibody test

as an antigen.

A process of propagating a micro-organism.

A process in which the genetic structure of a micro-organism

or extrachromosomal genetic structure is altered.

A process of organ or tissue maintenance.

A process of mashing or malting.

Apparatus claimed or solely disclosed as for A-G.

Micro-organisms per se or the subcellular parts thereof.

Enzymes, immobilized enzymes or enzyme containing compositions not otherwise provided for and the processes for

purifying enzymes or forming immobilized enzymes.

Compositions claimed or solely disclosed as for the propagation of micro-organisms or for measuring and testing

processes in C above.

SOURCE: U.S. Patent and Trademark Office, 1988

Table 4-3-Patents: Applications and Ownership,

by Class

Class

935 435

Percent of applications, US inventor . . . . . . . . . . 77 59

Percent of applications, foreign inventor . . . . . . . 23 41

Percent of patents, corporate owned . . . . . . . . . . 91 88

Percent of patents, government owned . . . . . . . . 4 4

SOURCE: U.S. Patent and Trademark Office, 1988.

protection. It is unclear at this time what the result of

such litigation will be. One negative result of

increased numbers of biotechnology patent applications is PTO’s inability to examine such applications

in a timely manner.

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1.

2.

Andrews, E. L., “The Complex bgai Issues in TPA

Fight,” New York Times, July 2, 1988.

Barinaga, M, “Stanford Still on Top,” Nature 332

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3,

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8.

9.

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1 i.

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13.

14.

15.

16.

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20.

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Diamond v. Chakrabarty, 477 U.S. 303 (1980).

Duffey, W,, “The Marvelous Gifts of Biotech: Will

They Be Nourished or Stifled by Our International

Patent Laws?” Symposium on the Protection of

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NY, June 1987.

Ezzell, C., “Genentech Gets Patent Protection for

Tissue Plmminogen Activator,’’ Nature,333(6176) :79O,

1988.

Graver Tank & Manufacturing Co., Inc. v. Linde Air

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Hvbritech v. Monoclinal Antibodies, Inc., 802 F.2d

1367 (Fed. Cir. 1986).

/n re Bergy, 563 F.2d 1031, 195 USPQ 344 (1977).

Janicke, P. M., attorney, Arnold, Durkee & White,

Houston, TX, personal communication, Aug. 24,

1988.

Kamy, G., attorney, Dickstein, Shapiro & Morin,

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Comp. Pres. Dec. 252.

Nelicin, D., Science as Intellectual Property (New

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Pharmaceutical Manufacturers Association, “update: Biotechnology Products in Development,*’ Juiy

1988.

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733 F.2d 858 (Fed. Cir. 1984).

Scripps Clinic and Research Foundation v. Genentech, 666 F.Supp 1379 (N.D. Cai. 1987).

Sibley, K. D., “Factuai Inquiries in Deciding the

Question of Enablement,” 70 J. Pat. Off. Soc. 115

(1988).

Tanenholtz, Alvin E., “Genetic Engineering—

Technological Trends From the Perspective of a U.S.

PTO Examiner,” Fourth Annual Biotechnology Law

Institute (Clifton, NJ: Prentice Hall Law & Business,

1988).

U.S. Congress, Office of Technology Assessment,

Commercial Biotechnology: An International Analysis, OTA-BA-218 (Elmsford, NY: Pergamon Press,

January 1984).

U.S. Congress, Office of Technology Assessment,

New Developments in Biotechnology: Ownership of

Human Tissue sandCells-Specia lReport, OTA-BA337 (Washington, DC: U.S. Government Printing

Office, March 1987).
Chapter 4--Patenting of Micro-Organisms and Cells ● 63

Figure 4-3-Patent Activity Class 935, Genetic Engineering

Patent s

200

150

100

5 0

.

u

200

150

100

50

0

By patent grant date 1978-87

/

w——

I I

Patent s

I

SOURCE. U S Patant and Trademark Othce, 1989.
64 . New Developments in Biotechnology: Patenting Life

Figure 4-4-Patent

Patents

Activity Class 435, Chemistry: Molecular Biology

and Microbiology

1,080

8 1 0

5 4 0

2 7 0

0

1,080

8 1 0

5 4 0

2 7 0

0

1978 1979 1980 1981 1982 1983 1984 1985 1986 1987

Patents

By application filing date 1975-84

9 8 3 1984

SOURCE: U.S Patent and Trademark (Mice. 1989.
Chapter 4-Patenting of Micro-Organisms and Cells 65

21. U.S. Congress, Office of Technology Assessment, 23. United States v. Dublilier Condenser C’orp., 289 U.S.

New Development.~ in Biotechnology: U.S. lnvestment-- 178 (1933).

Special Report, OTA-BA-360 (Springfield, VA:

National Technical Information Service, July 1988). 24. %n Horn, C., Deputy Solicitor, U.S. Patent and

22. U.S. Dep~rnent of Commerce, Patent and Trade- Trademark Office, Washington, DC, personal commark Office, OffIce of Technology Assessment and munication, September 1988.

Forecast, Patent Prqfiles-biotechnology: 1982 Update (Washington, DC, September 1983).
Chapter 5

Intellectual Property and Plants
CONTENTS

Page

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

HISTORICAL PERSPECTIVE OF PROPRIETARY PROTECTION OF PLANTS.... . 70

The Plant Patent Act of 1930. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

The Plant Variety Protection Act of 1970. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

Utility Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

COMPARISON OF DIFFERENT FORMS OF PLANT INTELLECTUAL

PROPERTY PROTECTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

Plant Patents v. Plant Variety Protection Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Plant Patents v. Utility Patents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Plant Variety Protection Certificates v. Utility Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Trade Secret Law...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

INTELLECTUAL PROPERTY AND THE U.S. SEED AND PLANT INDUSTRIES... 78

Choosing and Managing Plant Protection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

Hybrid Corn. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

Soybeans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

Tomato Seeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

Plant Biotechnology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

IMPACTS OF PLANT PROTECTION ON U.S. AGRICULTURE . . . . . . . . . . . . . . . . . . . . 84

Economic Impacts of Plant Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

Germplasm and Plant Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

CHAPTER 5 REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

Boxes

Box Page

5-A. The Plant Patent Act of 1930: Judicial Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

5-B. The Plant Variety Protection Act of 1970: Judicial Interpretation. . . . . . . . . . . . . . . . . 75

5-C. Survey of Universities, Seed Companies, Nurseries, and

Biotechnology Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

Tables

Table Page

5-1. Plant Patents Issued. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

5-2. PlantVariety Protection Certificates Granted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

5-3. Number of Utility Patents issued for Plants by Crop. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

5-4. U.S. Soybean Breeding Research By Private Industry Before and After

the Plant Variety Protection Act of 1970. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Chapter 5

Intellectual Property and Plants

INTRODUCTION

Intellectual property protection for living organisms is not a novel or recent phenomenon. Proprietary protection specifically for plant varieties has

evolved in the United States over the last 60 years.

Plants are the sole life form for which the U.S.

Congress has expressly permitted intellectual

property protection.

Two Federal statutes specifically confer ownership rights to new plant varieties: the Plant Patent

Act of 1930 (PPA) (35 U.S.C. 161-164) and the Plant

Variety Protection Act of 1970 (PVPA) (7 U.S.C.

2321 et seq.). The Supreme Court decision in

Diamond v. Chakrabarty (8), coupled with Ex parte

Hibberd (16), affords individuals the additional

option of seeking a utility patent (35 U.S.C. 101) to

protect a novel plant variety. Inventors have the

opportunity to protect their plant discoveries

through three different mechanisms based on three

different, and not necessarily exclusive, statutes.

Credentialed protection of plants encompasses three

forms: plant patents, Plant Variety Protection Certificates (PVPCs), and utility patents. Together with

trade secrets, they cover thousands of different

plants and varieties.

Historically, what has been the economic impact

of patent and patent-like protection of plants? Have

biotechnological advances altered the situation? In

addition to providing economic incentives to develop new plants and varieties, have there been other

ramifications of proprietary protection of plants?

Are there perspectives from the evolution of plant

protection that are pertinent to the debate surrounding animal utility patents?

This chapter examines the history of intellectual

property protection of plants and the relevant

Federal statutes. Different mechanisms of protection

are compared, to highlight advantages and limitations. The impact of intellectual property rights on

both the U.S. seed industries and the public interest

is also discussed.

Two forms of intellectual property protection of

plants are not discussed in this chapter: trademarks

and seed certification. Since 1956, trademarks are

not allowed on seed and plant varieties under the

Federal Seed Act (7 U.S.C. 1551 et seq.). Although

trademarks on ornamental crops, which are not

specifically excluded under the Federal Seed Act,

could be a looming issue (31). And, while Federal

and State regulations for seed certification are

important protection methods for some crops, such

as potatoes (45), this chapter focuses on the legal and

economic issues of the three principal means for

inventors to protect plants-plant patents, PVPCs,

and utility patents.

DEFINITIONS

Asexually reproduced plants are usually reproduced commercially by cuttings, grafting, and budding, but not by seeds. Asexual reproduction assures

the production of plants that are exactly the same.

A sexually reproduced plants include flowering

plants, such as roses, chrysanthemums, African

violets, and lilies; fruits, such as peaches, apples,

oranges, grapes, and strawberries; nuts, such as

pecans and walnuts; shrubs, such as azaleas, hollies,

and lilacs; conifers; and broadleaf trees.

Sexually reproduced plants reproduce by seed.

These plants include varieties (often called inbreds)

such as corn, sorghum, and sunflowers. Inbreds are

used to produce hybrids, which are the commercial

product. Hybrids can neither be used to derive the

original parent inbreds nor be used to produce

commercial seed. Sexually reproduced plants also

include nonhybrid varieties, such as wheat and

soybean, which are the commercial product. Their

progeny can be used for commercial seed.

Plant patents, authorized by PPA, protect plant

varieties that have been asexually reproduced, including cultivated sports,l mutants, hybrids, and

newly found seedlings. They cannot be obtained for

plants reproduced from seeds, tubers (e.g., Irish

potatoes or Jerusalem artichokes), and wild varieties

found in nature that are not asexually reproduced.

Bulbs, corms, stolons, and rhizomes are not considered to be within the tuber exception. For a period of

I A SpOr-I is an individud Cxhibi[ing a sudden deviation from type beyond the normal limits of variation, usually as a resuh Of mulation.

-69-
70 ● New Developments in Biotechnology: Patenting Life

Photo credit: Artmaster Book Co.

17 years, a plant patent holder can exclude others

from asexually reproducing, selling, or using the

plant so produced. The Patent and Trademark Office

(PTO) issues plant patents.

Plant Variety Protection Certificates, authorized by PVPA, provide a form of protection for new,

distinct, uniform, and stable varieties of sexually

reproducing plants, except fungi, bacteria, tuberpropagated or uncultivated plants, and firstgeneration hybrids. PVPA is administered by the

Plant Variety Protection Office (PVPO) within the

U.S. Department of Agriculture (USDA). Under

PVPA, the breeder can exclude others from selling,

offering for sale, reproducing (sexually or asexually), producing a hybrid from the variety, and

importing or exporting the protected variety. Two

exemptions limit the certificate holder’s protection:

farmers may save seed for crop production, and

breeders may use the protected variety to produce

new varieties-the so-called research exception.

Furthermore, the Secretary of Agriculture can require the certificate owner to grant licenses to third

parties if it is in the public interest. The period of

exclusion is 18 years (7 U.S.C. 2483(b)).

Utility patents, issued under general patent law

by the PTO, can be granted for plant inventions (35

U.S.C. 101) (8,16). Patents issued can claim plants,

seeds, plant varieties, plant parts (e.g., fruit and

flowers), processes of producing plants, plant genes,

and hybrids. Utility patents for plants and varieties

provide 17 years of protection for the owner. Chapter

3 discusses the requirements that inventions, including plants, must meet to be patentable.

This chapter reserves the term “plant patent” only

for applications protected under PPA, and uses

“utility patent” for plants covered by general patent

protection (35 U.S.C. 101).

HISTORICAL PERSPECTIVE

OF PROPRIETARY PROTECTION

OF PLANTS

Granting inventors an exclusive right to their

creations for a limited time is authorized in the

Constitution, and patents have been available since

1790 pursuant to statute. Until the late 1920s,

, w? w Ml ,%:%[

Photo credit: U.S. Patent and Trademark Office

Design, plant patent 641, rose plant.
Chapter 5-Intellectual Property and Plants ● 71

however, three factors were thought to weigh

against patenting plants and plant varieties:

●

●

●

first, the sentiment that plant varieties were

products of nature and thus not patentable

under the general patent statute (33);

second, the view that a new plant variety could

not be adequately described to comply with the

description requirements of the general patent

statutes (35); and

third, the legislature’s conclusion that plant

breeding

allow

material

In resolving

courts, and

deliberation

was not sufficiently reproducible to

for stable, uniform, and true-to-type

suitable for patent protection (29).

these and other issues, Congress, the

PTO have developed a history of

s that span nearly six decades of debate

about proprietary protection of plants.

The Plant Patent Act of 1930

Prior to 1930, plant breeding and research depended, for the most part, on federally funded

agricultural experiment stations or limited endeavors of amateur breeders to develop new diseaseresistant, cold-tolerant, drought-tolerant, or medicinal varieties. Yet while such goals loomed important

to agricultural development, financial incentives for

the U.S. private sector to develop new varieties were

inadequate to recover research and development

costs and earn a sufficient profit. Once a new variety

left a breeder’s hands, it could be reproduced in

unlimited quantity by anyone. The breeder’s sole

opportunity for financial reimbursement was

through high sales prices of comparatively few

reproductions during the first 2 or 3 years after the

variety’s initial availability. Private industry sought

greater returns through plant protection legislation

to offset increased investments of capital and

encourage plant development (39).

In 1930, Congress enacted PPA into law. PPA

allows protection for new and distinct asexually

propagated varieties other than tuber-propagated

plants. It did not extend to a right to exclude others

from propagating the patented plant by seeds. At the

time, it was thought that seeds lacked capability to

reproduce true-to-type.

Two additional requirements for issuance of plant

patents were of concern: whether all plants were

products of nature (33) and whether a complete,

Photo credit: U.S. Patent and Trademark Office

Design, plant patent 2,566, ash tree.

written disclosure of the invention was possible (35).

In enacting PPA, Congress concluded that the work

of the breeder was an aid to nature and thus a

patentable invention (39). Addressing the second

point of contention, Congress recognized the inherent difficulty in describing a new plant variety and

relaxed the written description requirement (35

U.S.C. 162) by permitting it to be in accordance with

traditional botanical descriptions (39).

PPA was designed to encourage new variety

development and to afford agriculture the benefits of

the patent system. At the time, American agriculture

recently had suffered from “phony peach disease”

which had threatened the peach supply upon which

the State of Georgia was so dependent, and “chestnut

blight*’ which had virtually destroyed an entire

timber source. It was believed that plant breeders

could produce new disease-resistant, droughtresistant, and cold-resistant varieties of plants to

extend the range of fruit crops and blunt the effect of

extremes in weather patterns.
72 ● New Developments in Biotechnology: Patenting Life

Protection under PPA is for only a single

variety (e.g., the rose “Peace”) and not a group of

varieties having a common trait (e.g., a rose having

white flowers). It is an open question as to whether

plant patent protection extends to plant parts, such as

flowers, fruit, and cuttings, which may be the actual

commercial embodiment of the variety, yet may be

incapable of asexually reproducing the plant ( 17,46).

Deposit of the plant is not required under PPA. Box

5-A describes some judicial interpretation pertinent

to PPA.

Since 1930, over 6,000 plant patents have been

issued by PTO (see table 5-1) (41). Among plant

patents that have been issued include those for

ornamental flowering plants, ornamental trees, fruit

trees, nut trees, and grapes,

The Plant Variety Protection Act of 1970

As with pre-PPA plant breeding work, between

1930 and 1970 developing new sexually reproduced

varieties (i.e., nonhybrid cultivars that are pure

strains and breed true) was primarily undertaken by

Box S-A—The Plant Patent Act of 1930: Judicial Interpretation

The mere existence of a variety that had been asexually reproduced is not sufficient to prohibit a plant patent,

if the distinctive characteristics of the variety and its value were not appreciated by anyone prior to the discovery

by the inventor or no one had known of the existence of the variety.

This finding was clarified in a case involving a chrysanthemum, Yoder Brothers, Inc. v. California-Florida

Plant Corp. et al. In Yoder Brothers, the court said, “the whole key to the invention of a new plant is the discovery

of new traits plus the foresight and appreciation to take the step of asexual reproduction.” The court also determined

that the requirement of distinctness for plants essentially replaced the requirements of utility and nonobviousness

for utility patents. In Yoder Brothers, the court also concluded that infringement under PPA was either the asexual

reproduction of a patented plant or selling or using a plant so reproduced. The court held that it was not necessary

to show production of the whole plant and that the taking of plant material or cuttings was sufficient to find

infringement,

In Pan-American Plant Company v. Matsui, again involving a chrysanthemum, the court set forth the list of

characteristics that distinguishes two varieties. (This list was originally set forth in the legislative history of PPA.)

In this case, the plant patent owner destroyed a chrysanthemum, which was not disease-resistant, for which a plant

patent was later issued. The inventor substituted a disease-resistant chrysanthemum variety developed by a third

party by a mutational event similar to the original patented plant. This disease-resistant variety was marked with

the number of the patented plant. The court concluded that the replacement chrysanthemum was not the patented

plant, based on the disease-resistance characteristic not being specified in the plant patent.

In determining infringement, the court considers the characteristics of the alleged infringing variety and the

description in the plant patent. If there is no match, infringement is not found. In Kim Brothers v. Hagler, for

example, the court concluded the size and color of the allegedly infringing nectarines were not the same as the size

and color of the patented nectarines described and shown in the plant patent.

In addition, the court requires proof of an asexual reproduction of the patented plant (i.e., a physical

appropriation from one of the patented plants). When asexual reproduction has been established, a finding of

infringement will result. In Armstrong Nurseries, Inc. v. Smith, et al., the court found infringement as a result of

the asexual reproduction of the patented roses and the sale of the asexually reproduced plants. The court also held

that providing material for asexual reproduction was an active inducement to infringe and that assisting in the sale

of the roses was a contributory infringement.

SOURCES: office of Technology Assemntmt, 1989; Armstrong Nurseries, Inc v. Smith et u1., 170 F. Supp. 519 (ED. Tex. 1958); Cole Nursery Co. V. Youdath

Perennial Gardens, Inc., 17 F. Supp. 159 (N.D. Ohio 1936); Kim Brothers v. }{agler. 276 F.2d 259 (9th Cir. 1960); Langrock, P., Journal of the PatenI

Office Society 41:787, 1959; Nichofson v. Bailey, 182 F. Supp. 509 (SC. Fla., Orlando Div., 1960); Pan-Amertcari Plan[ Company v. Matsui, 433 F.

Supp. 693 (N.D. Cal. 1977); U.S. Congress, .%na;e Comsm[@c on Agriculture, Nutsition, and Forestry. Plant Var/ety Protection Act, hearings before

the Subcornrnmee on Agricultural Research and General Leglslamrn, June 17-18, 1980 (W’ashirtgfon, DC: U.S. Oovernmen[ pruning Office, 1980);

Yoder Brothers, Inc v. Caitf_ornia-Fiorida Plant Corp. et al., 537 F.2d 1347 (5th Cu. 1976).
Chapter 5--Intellectual Property and Plants ● 73

Table 5-l—Plant Patents Issued

Number granted between

Cropa

1931-62 1963-68 1969-73 1974-78 1979-83 1984-87

African violet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ., . . .

Almond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Apple . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Azalea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Begonia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Camellia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Carnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chrysanthemum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fuchsia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Gladiolus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Grape . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Kalanchoe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nectarine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Peach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Plum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Poinsettia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Strawberry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annual average . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9

49

4

38

50

133

27

30

10

151

25

13

1,061

30

53

0

15

22

40

0

5

6

38

3

53

8

0

14

29

18

14

232

8

108

12

9

17

34

7

4

11

68

0

8

5

5

25

29

6

17

141

13

111

45

11

36

27

28

1

33

155

0

6

9

33

29

30

16

22

239

18

189

54

15

33

7

7

0

10

99

0

0

16

14

17

34

14

0

232

21

162

49

7

17

4

11

1

83

128

1

0

14

30

23

30

31

15

201

14

227

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,207 647 556 946 808 907

aPartial listingof mostcommon plants, representing from 70t079 percentof plant patents fortha time period.

SOURCES: American Aasoctafiono fNurserymen, Plant Patents with Common Names, 1931-1862; 19631968; 1969-1973; 1974.1978 (WSSM9ton, DC: Aneriin Asaociatin of

Nurserymen, 1963; 1969, 1974; 1981)

plant breeders at State agricultural experiment

stations. With the acceptance that sexually reproducing plants can replicate "true-to-type,” private industry sought increased financial incentives to invest in

research and development of new nonhybrid cultivars. At the time, breeders in private industry

worked primarily with corn and sorghum, of which

the commercial product is hybrids, with some

breeding efforts for alfalfa, cotton, sugar beets, and

certain other vegetables.

In addition to stimulating private investment in

developing sexually reproduced varieties, international events influenced U.S. deliberations to protect

sexually reproduced plants (34). In 1961, a number

of European countries formed the International

Union for the Protection of New Varieties of Plants

(UPOV) to provide national breeders’ rights. Most

European countries had laws offering legal protection to plant breeders, but U.S. breeders had no law

protecting their innovations, except for asexually

reproduced plants covered by PPA. Concern that

U.S. agriculture and domestic breeders would beat

a competitive disadvantage in international markets

for seed (and for food, feed,and fiber crops produced

from them), weighed in favor of actions to provide

protection for sexually reproduced plants.

Following an unsuccessful 1968 attempt to amend

PPA to include sexually reproduced plants, PVPA

became law in 1970, Again, PVPA was enacted to

encourage the development of novel, sexually reproduced plants by providing an economic incentive for

companies to undertake the costs and risks inherent

in producing new varieties and hybrids. The protection extends only to a single variety and not to a

group of varieties having a common trait. In 1980,

amendments to the original act added protection for

six vegetable crops, and protection for woody

varieties was extended from 17 to 18 years. Congress extended coverage to 18 years so that PVPA

would be consistent with UPOV, which stipulated

18 years as the minimum term for the protection of

woody plants (see ch. 10).

Two important exclusions to a certificate holder’s

protection under PVPA are specifically stated. First,

a breeder cannot exclude others from using the

protected variety to develop new varieties (research

exemption), and second, a right to save seed/crop

(farmer’s exemption) is provided. According to this

exemption, it is not an infringement for individuals

whose primary farming occupation is growing crops

for sale for other than reproductive purposes to save

protected seed and use that seed in the production of
74 ● New Developments in Biotechnology: Patenting Life

Sec.

2321.

2322.

2323.

2324.

2325.

2326.

2327.

2328.

2329.

2330.

2331.

CHAPTER 57—PLANT VARIETY PROTECTION

SUBCHAPTER I—PLANT VARIETY PROTECTION OFFICE

PART A-ORGANIZATION AND PUBLICATIONS

Establishment.

Seal.

Organization.

Restrictions on employees as to interest in plant variety protection.

Repealed.

Regulations.

Plant Variety Protection Board.

(a) Appointment.

(b) Functions of Board.

(c) Compensation of Board.

Library.

Register of protected plant varieties.

Publications.

Copies for public libraries.

P ART B - LEGAL P ROVISIONS AS TO THE P LANT V ARIETY PROTEC T ION O FFICE

2351.

2352.

2353.

2354.

2355.

2356.

2357.

2371.

2372.

Day for taking action falling on Saturday, Sunday, or holiday.

Form of papers filed.

Testimony in Plant Variety Protection Office cases.

Subpoenas; witnesses.

Effect of defective execution.

Regulations for practice before the Office.

Unauthorized practice.

PART C—PLANT VARIETY PROTECTION FEES

Plant variety protection fees.

Payment of plant variety protection fees; return of excess amounts.

SUBCHAPTER II—PROTECTABILITY OF PLANT VARIETIES AND

CERTIFICATES OF PROTECTION

PART D - PROTECTABILITY OF P LANT VARIETIES

2401. Definitions and rules of construction.

2402. Right to plant variety protection; plant varieties protectable.

2403. Reciprocity limits.

2404. Public interest in wide usage.

PART E-APPLICA TIONS; FORM; WHO MAY FILE; RELATING BACK: CONFIDENTIALITY

2421. Application for recognition of plant variety rights.

2422, Content of application.

2423. , Joint breeders.

2424. Death or incapacity of breeder.

2425. Benefit of earlier filing date.

2426. Confidential status of application.

2427. Publication.

Ch. 57 PLANT VARIETY PROTECTION

2441.

2442.

2443.

2461.

2462.

2463.

2481.

2482.

2483.

2484.

2485.

2486.

2501.

2502.

2503.

2504.

PART F—EXAMINATIONS: RESPONSE TIME; INITIAL APPEALS

Examination of application.

Notice of refusal; reconsideration.

Initial appeal.

PART G-APPEALS TO COURTS AND OTHER REVIEW

Appeals.

Civil action against Secretary.

Appeal or civil action in contested cases,

PART H-CERTIFICATES OF PLANT VARIETY PROTECTION

Plant variety protection.

How issued.

Contents and term of plant variety protection.

Correction of Plant Variety Protection Office mistake.

Correction of applicant’s mistake.

Correction of named breeder.

PART I—REEXAMINATION AFTER ISSUE. AND CONTESTED PROCEEDINGS

Reexamination after issue.

Priority contest.

Effect of adverse final judgment or of nonaction.

Interfering plant variety protection.

SUBCHAPTER HI-PLANT VARIETY PROTECTION AND RIGHTS

2531.

2532.

2541.

2542.

2543.

2544.

2545.

2561.

2562.

2563.

2564.

2565.

2566.

2567.

2568.

2569.

PART J-OWNERSHIP AND ASSIGNMENT

Ownership and assignment.

Ownership during testing.

P ART K — INFRINGEMENT OF P LANT V ARIETY P ROTECTION

Infringement of plant variety protection.

Grandfather clause.

Right to save seed; crop exemption.

Research exemption.

Intermediary exemption.

PART L-REMEDIES FOR INFRINGEMENT OF PLANT VARIETY

PROTECTION, AND OTHER ACTIONS

Remedy for infringement of plant variety protection.

Presumption of validity; defenses.

Injunction.

Damages.

Attorney fees.

Time limitation on damages.

Limitation of damages; marking and notice.

False marking; cease and desist orders.

Nonresident proprietors; service and notice.

Contents, plant variety protection statute.

a crop on their farm. Additionally, these farmers can

sell the protected seed to people whose primary

occupation also is growing crops. The farmer’s

exemption has been subjected to judicial interpretation (see box 5-B).

From 1970 through 1988, 2,783 applications for

plant variety protection certificates were filed at

USDA for some 100 different crops. By December

31, 1988,2,133 certificates had been issued and 274

applications were pending. Another 376 applications have been abandoned, withdrawn, declared

ineligible, or denied (see table 5-2).

Utility Patents

Although Diamond v. Chakrabarty held that

living things, namely micro-organisms, were patentable (8) (see ch. 4), the specific issue of whether

utility patents could be issued for plants was not

expressly addressed by the Supreme Court. Subsequently, in 1985, PTO’s Board of Patent Appeals

and Interferences (BPAI) ruled in Ex parte Hibberd
Chapter 5-----Intellectual Property and Plants . 75

Box 5-B—The Plant Variety Protection Act of 1970: Judicial Interpretation

One provision of PVPA subjected to judicial interpretation is the farmer’s exemption. In Delta and Pine Land

Co. v. Peoples Gin Co., the court concluded that the farmer’s exemption did not apply to either a nonprofit

agricultural cooperative that arranged sales of a protected variety or to a company dispensing the protected variety

without giving notice that it was protected, The court felt that the intervention of a third party to act as a broker or

sales agent would frustrate the basic purpose of PVPA because the third party was larger in size than a single farmer

and would be more aggressive. After concluding the farmer’s exemption did not apply, the court concluded there

was infringement because the variety had been sold, delivered (7 U.S.C. 2541(1)), and dispensed without notice of

it being protected (7 U.S.C. 2541(6)); and these actions were instigated or actively induced (7 U.S.C. 2541(8)).

A second case, Asgrow Seed Co. v. Kunkle Seed Co., Inc. et al., also involved the farmer’s exemption. The

issue was whether the primary farming occupation of the defendant is growing crops for sale for other than

reproductive purposes. The district court refused to grant a preliminary injunction preventing the sale of seed of a

protected variety of soybeans. The district court based its decision on the fact that less than half the total volume

of seed produced by the defendant was sold for reproductive purposes. The plaintiff alleged that the defendant’s

primary occupation was to sell seed, as evidenced by its sale of 1.42 million pounds of the specific protected seed

(not including additional public varieties which were sold), increasing the acreage to grow such seed, and intent to

sell as much seed as possible, even though less than half of the farm income came from the sale of the specific

protected seed. The Court of Appeals for the Federal Circuit affirmed the district court’s decision.

SOURCES: Office of Tdmology Assessrnsnt, 19S9; Asgrow SeedCo. v. Kunkfe Seed Compmty, /nc ef af., Appsal No. S7-1402 (Couri of Appeals for ths kieral

Circuil), appeal from W.D, LA, Alexandria Divisi(m; Delta and Pine Lund Co v. Peoples Gin Co,, 694 F.2d 1012 (5tb Cir. 1983).

that corn plants, seeds, and plant tissue culture

containing an increased level of tryptophan, an

amino acid, were patentable subject matter under 35

U.S.C. 101 even though such plants could be

protected under PVPA ( 16).

The Hibberd application contained claims directed to plants, seeds, tissue cultures, hybrid plants,

and hybrid seeds. The PTO examiner rejected the

claims, asserting that although human-made life

forms, including plants, were patentable under 35

U.S.C. 101 as a result of Chakrabarty, plants were

excluded from utility patent protection by the prior

enactment of PPA and PVPA. The examiner maintained that both laws set forth how and under what

conditions plant life should be protected. In other

words, the examiner maintained that PPA and PVPA

were the exclusive forms of protection for plants

specified in each law.

After considering the many aspects of the case,

the BPAI disagreed with the examiner and held that

plants. varieties, seeds, and plant tissue cultures

could be protected by utility patent. The BPAI noted

that the availability of one form of statutory protection does not preclude the availability of protection

under another form.

Since the 1985 Hibberd ruling ( 16), plants have

been considered to constitute patentable subject

matter under the patent laws governing utility

patents. There are statutory exemptions from infringing a plant utility patent—in contrast to PVPA,

the holder of a plant utility patent can exclude others

from using the patented variety to develop new

varieties. Table 5-3 lists the number of utility patents

issued by crop type.

COMPARISON OF

DIFFERENT FORMS OF PLANT

INTELLECTUAL PROPERTY

PROTECTION

As described earlier, Federal proprietary protection of plants encompasses three forms: plant

patents, PVPCs, and utility patents. Trade secrets,

governed by State law, represent a fourth mechanism of protection. Although each method of protection differs in some respect, not all methods are

mutually exclusive. This section compares the

different forms of protection available to plant

inventors.
76 ● New Developments in Biotechnology: Patenting Life

Table 5-2-Plant Variety protection Certificates

Granted

Table 5-3-Number of Utility Patents Issued

for Plants by Crop

Number granted between Crop Number

Crop 1971-1985 1971 -1987a

--Soybeans . . . . . . . . . . . . . . . . . 244 (37)b

430 (59)

Peas . . . . . . . . . . . . . . . . . . . . . 113 (o) 187 (0)

Beans . . . . . . . . . . . . . . . . . . . . 110 (2) 169 (4)

Wheat . . . . . . . . . . . . . . . . . . . . 127 (36) 159 (44)

Cotton . . . . . . . . . . . . . . . . . . . . 102 (13) 151 (21)

Corn . . . . . . . . . . . . . . . . . . . . . 12 (2) 78 (0)

Lettuce . . . . . . . . . . . . . . . . . . . 44 (o) 69 (0)

Ryegrass . . . . . . . . . . . . . . . . . 23(1) 64(2)

Fescue . . . . . . . . . . . . . . . . . . . 22(1) 61(9)

Alfalfa . . . . . . . . . . . . . . . . . . . . 25(6) 49(10)

Barley . . . . . . . . . . . . . . . . . . . . 14(2) 36(3)

Marigold . . . . . . . . . . . . . . . . . . 25(0) 34(o)

Bluegrass . . . . . . . . . . . . . . . . . 19(3) 33(3)

Tomato . . . . . . . . . . . . . . . . . . . 9(o) 28(4)

Onion . . . . . . . . . . . . . . . . . . . . 14(0) 25(4)

Watermelon . . . . . . . . . . . . . . . lo(l ) 24(6)

Tobacco . . . . . . . . . . . . . . . . . . 14(0) 22(o)

Cauliflower . . . . . . . . . . . . . . . . 19(0)

Oats . . . . . . . . . . . . . . . . . . . . . 16(8) 21 (12)

Rice . . . . . . . . . . . . . . . . . . . . . 12(0) 14(0)

China aster . . . . . . . . . . . . . . . lo(o) 11 (o)

● ToDac. 1, 1967.

bF@um}n~rent~~si~~tes thaWmbarOfW~CVtiti05.

SOURCES:R.E. Evenson, “tntalleotual Property RigMs and Agribuamass Research

and Dewlopmanv Implications for the PutWo Agriouitural Research

Sysbm; ArrrericanJournal ofAgfict@ra/ Econanics65:967-975, 1963.

K.H. Evans, Piant &iatyProtactronO ffi@, US. Oapartmentof AgncuL

ture, Belkvilb, MD, personal communkdons, October and December

1967.

Plant Patents v. Plant Variety Protection

Certificates

PPA provides rights, through plant patents, to

plant breeders and horticulturists who discover or

develop new and distinct plant varieties and propagate them by asexual reproduction. In contrast,

PVPC holders under PVPA are granted protection

for discovering or developing new, uniform, stable,

and distinctive plant varieties that are propagated by

sexual reproduction. Protection under PPA and

PVPA complement each other in providing protection for new varieties of plants-asexually reproduced by plant patents and sexually reproduced

by PVPCs.

Plant Patents v. Utility Patents

Utility patents provide protection for plants,

including asexually reproduced plants such as those

included within PPA, as well as plant parts (e.g.,

flowers, fruits, and nuts) and hybrids, which are

excluded from PPA. Also seeds and plants with

defined physical traits can be protected through

Corn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Sunflowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

soybeans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Wheat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42a

● For wvo patents the claims Irtoluda both com and wheat, therefore the total number of

patents is 42.

SOURCE: Office of Technology Assessment, 1988.

utility patents. Utility patents for plants, when the

requirements can be satisfied, offer broader

coverage than would be available for the same

plant under PPA.

Advantages of obtaining a utility patent for an

asexually reproduced plant are many. A plant patent

is limited to a single claim; a utility patent need not

be so limited. Perhaps the most significant advantage of the utility patent is that it provides broad

protection for inventions that can affect more than a

single variety and can cover plant parts including

flowers, nuts, fruits, and cuttings that do not

asexually produce a plant. Further, no requirement

exists for utility patents that an infringing plant be

produced asexually from the patented plant, hence

sexual reproduction of the protected variety is also

covered. Finally, in theory, a utility patent can

protect any plant having an inserted gene, rather than

a single variety containing that gene. Also, protection is not dependent on whether the plant is sexually

or asexually reproduced.

One disadvantage of utility patents is that the

description requirement is more stringent than that

required for a plant patent. In order to satisfy this

requirement for utility patents, placing the plant or

seed on deposit may be necessary (depending on

whether or not the production of the plant can be

enabled by words alone).

Plant Variety Protection Certificates v.

Utility Patents

As is the case with plant patents, utility patents

offer broader protection for the same plant than

would be offered through PVPCs.
Chapter 5--Intellectual Property and Plants ● 77

Photo cradit: Natwnal Agricultural Lbrary

Compared to PVPCs, several aspects of utility

patent coverage for sexually reproduced plants

appear advantageous to plant breeders. A utility

patent is not limited to the specific variety described;

it can protect the specific variety, as well as other

varieties having the same traits and functional

properties, Hybrids are specifically excluded from

plant variety protection but are fully protectable by

utility patents. Extensive scope of coverage is

another significant advantage of utility patents over

PVPCs. Utility patents can protect the plant, seed,

plant parts, genes, plants having a specific physical

trait, and processes for developing new varieties and

hybrids.

Another key difference is that utility patent

statutes do not provide for a farmer’s exemption.

Consequently, if anyone other than the patent owner

makes, uses, or sells the seed for reproductive

purposes, it is an infringement of the utility patent,

subject to judicial enforcement. Another advantage

of protecting plants with utility patents is that there

is no research exemption (i.e., it is an infringement

of the utility patent to use the patented plant or

variety in developing a new variety or hybrid).

Finally, compulsory licensing cannot be mandated

by any Federal agency for a utility patent. In

compulsory licensing under PVPA, the Secretary of

Agriculture directs the PVPC holder to grant a

license to a third party if the Secretary determines

such a license is in the public interest. The owner

receives a reasonable royalty but has no option and

must grant the license.

An advantage of PVPCs over utility patents is that

the latter have stringent description requirements

that may necessitate the deposit of the plant or seed,

which is publicly available when the utility patent

issues. Although PVPA requires a seed deposit, the

present PVPO policy is that the majority of deposited seed is not available to the general public. One

other advantage of PVPCs is that protection is

afforded to the new variety before the issuance of the

certificate. With proper notice, coverage initiates

when the seed is dispensed.

There is a perception that certainty in obtaining a

PVPC is greater than for a utility patent (31),

although some reviewers believe there is no difference (2).

Trade Secret Law

Trade secrets, in addition to plant patents, PVPCs,

and utility patents, are also an important form of

plant protection. Trade secrets are the subject of

State law (see ch. 3). Trade secret rights can be

protected in laboratories and factories where the

movement of outsiders is confined and security is

maintained. Academic researchers probably view

trade secrets less favorably, since they hinder
78 ● New Developments in Biotechnology: Patenting Life

publication efforts (36). If a trade secret is disclosed

in a nonconfidential manner, it is lost forever. With

secrecy a legal prerequisite to a trade secret, it can be

difficult to use trade secrecy as a form of protection:

some secrets may be known, for example, to many

employees (l).

In some respects, plants are, by their nature,

ill-suited to trade secret protection since they often

cannot be easily confined to an enclosed space, thus

making them susceptible to theft by outsiders. Some

plants are easily grown from only a portion of the

parent or, if the plant is an inbred, from a seed—if

someone obtains inbred seeds, plants from those

seeds can be easily reproduced. Theft of secret plant

varieties jeopardizes producers potential compensation

for their investment of creative effort, time, and

dollars. Nevertheless, some inventors within the

agricultural and horticultural industries successfully

employ trade secret protection by not releasing the

parents of hybrids that they sell.

Plant patent, PVPC, and utility patent applications are kept in confidence by PTO, and nondisclosure rules apply while an application is pending.

The owner of the application controls public access

to the file. Abandoned applications also generally

are not available to the public, except under particular circumstances. However, once a plant patent,

utility patent, or PVPC is granted, the information it

contains is publicly available. Accordingly, these

statutory modes of patent protection encourage the

disclosure of new plants allowing the public to

benefit from their use (12).

INTELLECTUAL PROPERTY AND

THE U.S. SEED AND PLANT

INDUSTRIES

Saving and bartering seed by farmers, once the

norm, have evolved into corporate enterprises that

depend on developing and selling seeds and plants.

Agriculture is the principal client, however, ornamental and nursery products are also important.

Expenditures for seeds, bulbs, plants, and trees

accounted for 5-7 percent of a typical farmer’s total

1985 operating cost and totaled $3.37 billion,

nationwide (40). This is a relatively low portion of

the operating cost, but is of prime importance to the

success of the farming operation (12).

.

Photo credit: Artmaster Book Co

Profitability and innovation in the U.S. seed and

plant industries rely on their ability to legally protect

their products. This section analyzes the general

criteria companies consider when making decisions

about protecting plant inventions. Selected plant and

seed industries are also discussed to identify important issues related to different sectors,

Choosing and Managing Plant Protection

The different forms of intellectual property are not

equivalent in value or utility for all segments of the

seed and plant industries. An OTA survey of

universities, nurseries, seed companies, and biotechnology firms found an array of opinions on intellectual property protection of plants especially on plant

utility patents (see box 5-C).

Opportunities for proprietary protection vary not

only with the biology of different plants but on legal

grounds as well. It may be possible to obtain

different forms of protection on the same plant

invention. If the invention, for example, related to

the treatment of apple trees so that all the fruit

ripened for harvest on the same day, a utility patent

could be granted on apple trees so treated, and a plant

patent granted on one or more specific varieties of
Chapter 5-Intellectual Property and Plants . 79

apple tree so treated. Any concern about double

protection or a time extension of the exclusionary

rights could be addressed by a terminal disclaimer

(i.e., an instrument whereby the patent owner

disclaims a portion of the term of a patent so that it

expires on the same day as another patent) and

covenants that both patents will be enforceable so

long as they are commonly owned (42).

With respect to double protection for sexually

reproduced plants, an overlap in the statutory subject

matter of PVPA and 35 U.S.C. 101 exists and was

acknowledged by BPAI in Hibberd. However, the

mere presence of an overlap does not preclude

obtaining more than one type of protection (21). At

present, one company has obtained both PVPCs and

utility patents for two inbred corn lines (20).

Although no one approach to protecting plant

intellectual property appears to be the most

productive, the choice is generally clear for a

specific plant. Present strategies therefore involve

multiple approaches based on several factors. Some

key components to consider in reaching decisions

about plant protections are crop type, farmer’s

exemption under PVPA, litigation, licenses, research exemption under PVPA, and deposit.

Crop Type

Proprietary protection varies fundamentally from

crop to crop. Although crops can be classified by

their natural reproductive processes, some crops can

be propagated either sexually or asexually. Thus, it

is the practical method by which a crop propagule is

made that determines the intellectual property protection available for that crop. Further, in addition to

utility patents for crops, new processes to produce

propagules are also potentially patentable.

Farmer’s Exemption Under PVPA

The farmer’s exemption provision of PVPA

reflects farming practices dating back to the Nation

agricultural beginnings; practices that include retaining seed for upcoming planting cycles, as well as

using seed for barter. Strictly unique to PVPA, the

provision allows farmers to retain protected seed for

planting and for sale to others whose principal

occupation is also farming. It is the only provision of

PVPA that has been subject to judicial interpretation

(box 5-B).

In effect, farmers can compete, to a limited

degree, directly with the seed industry that developed the variety, as long as the primary occupation

of the farmer is production agriculture. Farmersaved seed is a common practice for several crops,

including wheat, cotton, and soybeans (25). Based

on a USDA survey of 1986 plantings, only 54

percent of the soybean seed planted was purchased

and only 60 percent of wheat seed planted was

purchased (26). As a result, from an industry

perspective, property rights under PVPA are considered inferior to utility patents and plant patents (24),

and the net effect of the exemption is that PVPC

holders will seldom profit as extensively as their

variety is grown. Ironically, the more successful a

new variety, the lesser the percentage of the seed that

will be sold by the originator (12).

To circumvent the difficulties seed companies

perceive about the farmer% exemption, increased

protection through utility patents could be

sought. At present, anecdotal evidence indicates

that industries are considering this option, but

proceeding cautiously since utility patents also

are not without problems (31). Because more

complaints about the farmer’s exemption than any

other are received by PVPO, and owing to concern

that utility patents could undermine PVPA, the

PVPO Advisory Board appointed a committee to

examine this provision (15). The committee has

recommended that USDA promulgate a rule clarifying the limits of a farmer’s entitlement to sell the

protected variety produced (43).

Litigation

Litigation is intrinsic to all types of intellectual

property protection of plants. However, this involves substantial cost to assert or defend claims. A

company should expect to spend a minimum of

$500,000 for litigating important utility patents (17).

Not all patents on plant-related claims can commercially support such costs. An average variety of corn,

soybean, or wheat may remain profitable for only

5-10 years, although the occasional extraordinary

variety, such as Pioneer Hi-Bred 3780, has been sold

for more than 20 years (31). Although experience

with utility patents of plants is minimal at present, it
80 . New Developments in Biotechnology: Patenting Life

Box 5-C--Survey of Universities, Seed Companies, Nurseries, and Biotechnology Companies

OTA obtained the views of 39 biotechnology companies, seed companies, nurseries, and universities about

intellectual property protection for plants and varieties in general, and utility patents in particular.

There-was strong agreement that PVPCs, plant patents, utility patents, and trade secrets have been or will be

beneficial, and that all four types of protection will provide an incentive to develop new varieties. A majority wanted

both PVPC and plant utility patent protection, and expected that intellectual property protection of plants would not

interfere with the development of new varieties or inbreds. A majority did not want compulsory licensing for new

varieties or inbreds and desired worldwide standardization of plant protection.

Both industry and universities support all types of intellectual property protection of plants. Although most

sectors favorably view plant utility patents, seed companies-on average—adopt a more neutral position. The

overall neutral position by seed companies on many of the questions reflected differences in opinion between

unaffiliated seed companies (less favorably inclined toward utility patents) and seed companies affiliated with the

chemical or pharmaceutical industry (more approving of utility patents of plants).

Overall, biotechnology companies favored the protection provided by utility patents because they protect plant

parts, processes, and genes. A majority of the universities favor all types of intellectual property protection for plant

life, although trade secrets are more skeptically viewed by universities than other sectors. Nurseries strongly support

plant patents and protection for asexually reproduced plants. Nurseries also favor utility patents, probably because

they protect plant parts.

Reaction to utility patents for plants was equivocal. Many viewed utility patents as beneficial and necessary

to provide adequate protection for new varieties, while at the same time not interfering with new varietal

development. Unaffiliated seed companies, however, expressed concern about utility patents. These concerns

included: restriction of germplasm, industry concentration, and domination of the industry by large conglomerates.

Some of the concerns expressed by these seed companies are the same as those expressed during congressional

hearings on the 1980 amendments to the Plant Variety Protection Act.

Concern by seed companies about broad protection of plants also is reflected in views on compulsory licensing.

Unaffiliated seed companies prefer compulsory licensing for utility patents, but they are not as concerned about

compulsory licensing of PVPCs. It appears these seed companies have less concern with restriction of access to

germplasm if it is on a variety-by-variety basis, as opposed to a physical trait basis.

The perspective of unaffiliated seed companies on compulsory licensing is opposite to that of the

biotechnology companies. This difference could result, in part, from the knowledge and perception concerning

utility patents by the two sectors. Seed companies that favor compulsory licensing for plant utility patents have been

operating profitably under the current seed business environment. These generally established companies could be

concerned that any changes resulting from plant utility patents could lead to possible negative effects on their

businesses. For the most part, these seed companies are less familiar with the utility patent system than are

biotechnology companies and are concerned about having access to a major development that is patented—access

that could be denied by the patentee unless there is compulsory licensing. Some developments that could be of

interest include yield, herbicide resistance, disease resistance, and seed content (e.g., oil, starch, or protein). Since

many of these developments will probably result from using new technologies (e.g., cell culture or genetic

engineering) rather than from classical breeding, the unaffiliated seed companies may view utility patents as

interfering in new varietal development.

In contrast, biotechnology companies have grown up with the utility patent system and recognize its value to

them, Biotechnology companies fund research with the expectation of future financial return and consider utility

patents essential to insure adequate return on the initial investment. They may feel that compulsory licensing of

patents could significantly affect financial returns from their research and, consequently, oppose compulsory

licensing.
Chapter 5-Intellectual Property and Plants ● 8 1

There is a strong preference among companies primarily involved with biotechnology for utility patent

protection for their plant inventions. Compulsory licensing is strongly disapproved. Some companies also expressed

the belief that utility patents for plants are important and yield significant benefits for everyone and desire no change

in the patentability of plants.

Seed companies indicate that all four mechanisms for plant protection have provided an incentive to develop

new varieties and have been beneficial for their organizations. Compared to the other sectors, many seed companies

express concern that utility patents of plants could interfere in the development of new varieties and inbreds. And,

in contrast to biotechnology companies, seed companies further demonstrate this concern by having a preference

for compulsory licensing with plant utility patents. Some seed companies state that a company having plant utility

patents could refuse to license a new biotechnology or other plant development to competing companies. On the

other hand, the majority of the seed industry companies generally view plant utility patents as having a beneficial

effect on their business and as providing art incentive to develop new varieties.

Other views expressed by seed companies include: the undesirability of restriction of access to germplasm by

plant utility patents, the belief that plant variety protection would be sufficient if it were strengthened, the necessity

of a good database for PTO, and a concern that large conglomerates with ready capital could dominate the industry.

Universities expressed less concern than seed companies that plant utility patents would interfere with new

varietal development. University respondents generally perceived PVPCs, utility patents, and plant patents as

effective types of protection for universities. But, trade secret protection was viewed as a less favorable form of

protection.

Nurseries strongly support PPA, which allows plant patents for asexually reproduced plants. Nurseries also

favor the other forms of plant protection and advocate standardizing plant protection worldwide. Of the four sectors

surveyed, nurseries most strongly opposed compulsory licensing. Other concerns and comments expressed by

nurseries principally focus on strengthening plant patent protection to include plant parts.

SURVEY RESPONDENTS: Biotechnology companies-Agracetus; Blosource Geneucs Corp.; Calgene; EniChem Americas, 1x.; Molecular Genetics, Isw.;

Monsanto Co.; NPI; Plant Genetics, Inc.; Sungene Twhrtolo&es Corp. Seed compan@.+-Agncultural Alumni Seed Improvement Association;

Agrlgenetics, Corp., Cal/West Seeds; Cargill, Inc.; Dekalb-Pfizer Genct]cs: Edw. J. Funk & Sons, Inc.; GarsI Seed Co.; Holden’s Foundation Seeds, Inc.;

Hoegemeyer Hybrids; Illinois Foundation Seeds, Inc.; J.G. Limited, Inc., Mike Brayton Seeds, Inc.; Nickorsort American Plant; Northrup King Co.; Peto

Seed Co., Inc.; Pioneer Hi-Bred Internatiortd, Inc.; United Agrisecd. Irsc , The Upjohn Co.; W. Atlee Burpee; Wyffels Hybrida, htc. Universities---iowa

State University, Otuo State Utuvemity; Purdue University; Rutgers Umverslty, Univem!y of IIlinms; Umversity of Mirttwot a; University of Wisconsin.

Nurstries-The Conart-Pyle Co.; Jaeksmt & Perkins Co.; Mikkelserts, Inc.

SOURCES: Office of Twttnology Assessment, 1989; J.L. Ihnen, R.T. Gallegos, and R.J. Jondle, %tcllectual property Protection for Plants and Varieties,” umtract

document prepared fm the Office of Tmhnology Assessment, U.S. Congress, November 1987.

is reasonable to speculate that for crops where the

profit margins are small, or for varieties for which

the total market is small, litigation costs could weigh

in proprietary protection decisionmaking. And, as

mentioned earlier, while the farmer’s exemption has

presented litigation problems for PVPC protection

(see box 5-B), the perception exists that there is

more certainty in obtaining a PVPC than a utility

patent. Some, however, believe there is no difference (2).

Licenses

In general, licensing agreements can resolve

patent litigation and enhance profitability; they are

central to intellectual property management, including protection of plants. One aspect of licensing is

unique to plants: compulsory licensing by the

Secretary of Agriculture under PVPA when in the

public interest. In principle, decisions to seek a

PVPC versus a utility patent may factor in the

mandatory licensing provision of PVPA, which is

absent in general patent law. Since PVPA was

enacted in 1970, however, no Secretary of Agriculture has exercised this authority. Compulsory licensing was supported by seed companies and opposed

by biotechnology firms surveyed by OTA (see box

5-c).

Research Exemption Under PVPA

Neither 35 U.S.C. 101 nor PPA provide for

unencumbered research uses of protected plants. In

I
82 ● New Developments in Biotechnology: Patenting Life

sharp contrast, and again as part of the public interest

focus of PVPA, varieties covered by PVPCs can

expressly be used for research purposes. Companies

with plant breeding research programs must evaluate

concerns that improvements in their PVPCprotected plants can be directly used, without

compensation, in breeding programs by their competitors. Despite such concerns, a company that

bases its research program on commercial varieties

of competitors will probably be a consistent follower

in a marketplace that rewards innovation (7). Some

argue, however, that there exists a plethora of

followers who need not invest in breeding research

because of the exemption, indicating a major disincentive keeping the level of investment, and hence

innovation, in plant research lower than for human

and veterinary biologics (27).

Deposit

Deposit considerations are important aspects of a

company’s management of plant intellectual property because of the risk taken when a biological

deposit (e.g., seed) is made. Under PVPA, statutory

deposit requirements exist, but access to the deposited material requires permission from the PVPC

holder. In contrast, deposit for utility patents issued

by PTO requires unrestricted access to deposited

seed after a patent has issued. This type of deposit is

considered substantially more risky than deposit

under PVPA and provides a more accessible mechanism through which a patent can be pirated. Proof of

pirating shifts from documenting access (under

PVPA) to the pursuit of litigation to prove actual

pirating.

Hybrid Corn

Hybrid corn seed is the largest seed industry in the

country, with domestic sales of approximately $1.4

billion in 1985 (40). Examining proprietary protection of corn is interesting since the method used to

produce hybrid corn varieties gives the company

substantial control over the varieties without proprietary protection. Inbred parental lines are crossbred to produce high-yielding hybrid seed with

“hybrid vigor.” Commonly, a hybrid yields more

than twice as much grain as its seed parents (13).

But, unlike seed for nonhybrid crops, seed from a

harvest from a planting of hybrid seed cannot be

saved and used for additional high-yield planting

cycles. Since hybrid vigor from subsequent progeny

declines, the producer must return to the source for

new seed to maintain the highest yields. Thus,

hybrid seeds have “internal genetic protection,” and

de facto force the user back to the supplier.

PVPA specifically excludes protection of firstgeneration hybrid varieties, and therefore only

inbred parental lines can be protected under PVPA.

Protecting the parental lines under PVPA requires

disclosure of the genetic nature of the plants, and

protection is limited to 18 years. However, by

protecting the parental plants as trade secrets,

breeders can use the successful inbreds indefinitely

to develop new inbred lines and hybrids. Historically, the hybrid corn industry has depended heavily

on trade secret protection of parental lines (18).

Through November 1987, only 78 PVPCs for corn,

about 2 percent of all PVPCs, had been issued (table

5-2) (15).

The Hibberd ruling specifically involved corn

seed (16) and clearly opened the possibility of a new

avenue of proprietary protection for this and other

crops. Of the 42 utility patents of plants granted by

PTO, 11 are for corn (table 5-3). Coupled with the

higher issuance rate of PVPCs for corn (table 5-2),

indications are that both of these protection mechanisms will be used increasingly by the hybrid corn

industry.

Several crops are grown as hybrid varieties, such

as onions and sorghum. Many characteristics of the

corn industry apply to the sorghum industry. However, the onion industry is more similar to the tomato

seed case study discussed in a following section.

Soybeans

The value of the U.S. soybean seed industry was

approximately $630 million in 1985 (31). This value

represents both sales plus the value of seed planted

by the farmer from soybeans stored from the

previous year’s harvest. Farmer-retained seed represents a significant portion of soybean seed planted

annually in the United States. As mentioned earlier,

a USDA survey indicates that in 1986,46 percent of

soybean seed planted was from grower storage,

ranging from 20-68 percent among different growing areas (26). Private soybean varieties have

increased steadily since the mid-1970s, when public
Chapter 5-Intellectual Property and Plants ● 83

variety use dominated by a 3-1 margin. The number

of acres planted with private varieties is estimated to

have tripled between 1976 and 1982.

- .

The soybean sector might be an indicator of

industry perceptions of PVPA. Since PVPA was

enacted, 427 PVPCs, almost 23 percent of the total,

have been issued for this crop. Although soybeans

appear to be a favored crop for this mechanism of

plant protection, concern about farmer-retained seed

remains serious (31), and utility patents could

become increasingly important (see table 5-4).

Industry concerns about the research and farmer’s

exemptions under PVPA could drive them to seek

broader coverage on soybean innovations.

Tomato Seeds

The tomato seed industry is two distinct industries--

tomato varieties grown for processing and tomato

varieties grown for fresh market. This examination

focuses on seed producers for tomato processing,

since plant protection features of this sector reflect

issues similar to those for other crops (e.g., onion).

California is the principal locale for the processing tomato seed industry, growing 217,000 acres in

1985 (82 percent of the industry’s total acreage).

Two types of processing tomatoes are grown:

open-pollinated and hybrid varieties. Approximately

65 to 70 percent of processing tomato acreage is in

open-pollinated varieties (32). Seed costs per acre

Photo credit: U.S. Department of Agriculture

Soybean cells in dish at left have grown roots after a soil organism, Agrobacterium tumefaciens, inserted root-producing genes into

them. Without added genes, soybean cells grow into unorganized clumps (right).
84 ● New Developments in Biotechnology: Patenting Life

Table 5-4--U.S. Soybean Breeding Research

By Private Industry Before and After the

Plant Variety Protection Act of 1970

Year Companies Breeders

1966 . . . . . . . . . . . . . . . . . 2 2

1971 . . . . . . . . . . . . . . . . . 6 6

1964 . . . . . . . . . . . . . . . . . 30 63

SOURCE: C.A. Brim, ‘Plant Braeding, Devdopment From an &tto a High-T~hmlogy

Industrial Activity,” Symposium on tha Profeclion of Bio@chnological

Inventions, Juna 4.5, 19S7 (Ithaca, NY in press).

for farmers is approximately $25 to $45 per pound

for open-pollinated varieties and $200 per pound for

hybrids. The retail market for open-pollinated varieties is approximately $4 million and for hybrid

varieties about $12 million (45).

Although the ratio in cost per pound to the farmer

between the two types of seed is not reflected in the

market differences, some farmers continue to plant

expensive hybrid seed because of contracts with

processors to deliver specified goods. Most important, hybrids also perform better in terms of overall

quality and yield. The planting rate is about 1 lb per

acre for open-pollinated seed; about 0.5 to 0.6 lb per

acre for hybrid seed (45).

Since 1980, open-pollinated varieties and inbred

tomato parental lines can be covered under PVPA,

and PVPO has granted 28 PVPCs for tomatoes.

However, skepticism similar to that for corn exists

about the usefulness of protecting inbred parental

tomato lines (31). Reservations exist about the

desirability of protecting hybrid tomatoes with

utility patents, since a single hybrid tomato variety

might not justify the expense of enforcement (32).

Unlike corn or soybean seed, the average tomato

variety’s lifetime is only 4-5 years. Furthermore,

annual sales from a single variety are far lower.

Thus, although corporate strategies to protect pollinating tomatoes will probably continue to rely on

PVPCs, the useful role of utility patents in the hybrid

variety sector is unclear due to market life of the

product.

Plant Biotechnology

Commercial application of plant biotechnology is

a developing industry. A 1987 OTA survey of nearly

300 dedicated biotechnology companies revealed

that 12.5 percent focus (primarily and secondarily)

on plant agriculture (37). In 1985, industrial research

expenditures for biotechnological applications to

crops were estimated at $90 million (30). With high

expectations that the marriage of biotechnology and

traditional agricultural research will be a critical

factor in the near future, the patent strategies of

companies involved in this partnership could be

significant.

Two factors play an important role in influencing

intellectual property strategies by the plant biotechnology industry: the technologies used and the

experiences of the researched with proprietary

protection. In the first instance, utility patent statutes

are primarily applicable to discoveries resulting

from recombinant DNA-related research. Although

few patents have issued, case law precedent established for recombinant DNA applications in the

biomedical sector could influence corporate approaches in plant biotechnology protection. Secondly, experience with intellectual property by most

companies involved in plant biotechnology generally means experience with utility patents. In fact,

biotechnology companies report they are favorably

inclined toward utility patent protection of their

inventions (see box 5-C).

As new developments in plant biotechnology

move to the forefront and companies involved in

these efforts become familiar with nonutility proprietary protection, PVPA and PPA could receive

increased attention. At present, however, this sector

appears to favor utility patent protection for plants in

order to adequately recover the high costs of

research and development.

IMPACTS OF PLANT

PROTECTION ON U.S.

AGRICULTURE

Intellectual property protection of plants has

influenced and continues to influence the direction

of seed and plant research and development. On one

hand, intellectual property rights stimulated and are

critical to maintaining investment in plant variety

development. Innovation must be protected and

rewarded to realize a continuing flow of dollars to

agricultural research and development (14,43). On

the other hand, some individuals are concerned that

increased patent activity results in the privatization

of agriculture and has adverse consequences for
Chapter 5--Intellectual Property and Plants ● 85

Photo ti”t: Ak/Mia/Ifo Cotp.

Larvae were allowed to feed on a transgenic tomato plant (right) and a normal plant (left). After 7 days, the plant that was genetically

engineered for tolerance to the insect is relatively intact, whereas the normal plant has been destroyed.

small farmers (5,9,23). Furthermore, in enacting

PVPA, Congress recognized the essential role plants

and seeds occupy in U.S. society, and specifically

addressed concerns beyond the economics of increasing plant innovation. This section analyzes

both economic and social impacts of intellectual

property protection of plants,

Economic Impacts of Plant Protection

Since the enactment of PVPA and the Chakrabarty and Hibberd decisions, private sector interest

has blossomed (38). Beginning with the passage of

PPA in 1930, the primary development of new,

asexually reproduced varieties moved from government experiment stations to private industry. The

number of issued plant patents and the size of the

present-day nursery industry may reflect the positive

economic effects of PPA (20). The increased private

investment in plant breeding resulting from PPA

was widely discussed during deliberations on PVPA.

Some view the option of seeking plant utility

patents as pivotal to sparking progress and increasing dollar flow in the industry by providing both the

scope of protection needed to encourage new

research investment and the rapid dissemination of

information describing the new technology resulting

from plant research (44). This is especially true for

emerging applications of plant biotechnology (see

box 5-C). And, although the availability of utility

patent protection provides economic stimulus to the

seed and plant industries, one analysis indicates that

because utility patents do not provide a farmer’s
86 ● New Developments in Biotechnology: Patenting Life
Chapter 5-Intellectual Property and Plants . 87

(4), although the same analysis concluded that those

increases were not unremovable or unjustified.

Germplasm and Plant Protection

Greater awareness of potential profits to be

accrued from patenting genes (and products) has led

to a rush to file under the existing patent laws (14).

To many in both the public and corporate sectors,

increased patent activity is tying up (or has the

potential to tie up) germplasm (10,11,14,19). Some

argue that a noticeable slowing in the free exchange

of germplasm that existed prior to patenting has

occurred (10,1 1,1 9). In effect, they argue that the

biological domain was once public domain but has

shifted to a private property right (10). One analysis

found that after enactment, PVPA had probably

reduced the flow and exchange of information and

germplasm from private companies to universities

but had increased the flow from universities to

private plant breeders (4). In the case of utility

patents, others argue that they do not stifle free

exchange (44). The grant of protection, by its very

nature, promotes disclosure of new and useful plant

materials, so all benefit (12).

One commentator has proposed creating a National Library of Germplasm Resources to hold

mandatory biological deposits of all patented and

PVPA-protected living forms. The intent of such an

entity is to make germplasm readily available for

research purposes and to offset trends toward

privatization of germplasm (1).

To date. any information regarding the impact

of intellectual property protection of plants on

germplasm is largely anecdotal. In any case,

advances in plant breeding and agri-biotechnology

require a free-moving, international exchange of

germplasm. A comprehensive analysis examining

trends in plant protection and germplasm exchange

could reveal whether a problem exists or direct

attention to potential problems.

SUMMARY

Although in the United States an exclusive right

to an invention is as old as the Constitution, until the

late 1920s the sentiment was largely held that plant

varieties were not patentable under the general

patent statute. In deciding to expressly provide

intellectual property protection for asexually reproduced plants, Congress concluded that the work of

the breeder was an aid to nature and thus the

resulting plant was a patentable invention. In the

intervening six decades, U.S. proprietary protection

for plants and varieties has further evolved. Today,

two Federal statutes specifically confer ownership

rights to plant innovations: the Plant Patent Act of

1930 and the Plant Variety Protection Act of 1970.

The rulings in Diamond v. Chakrabarty and Ex parte

Hibberd clarify the option of utility patent coverage

for plants and seeds. Thousands of plants are now

protected by four major mechanisms: plant patents,

Plant Variety Protection Certificates, utility patents,

and trade secrets.

The Plant Patent Act of 1930 was designed to

encourage new variety development and afford

agriculture the benefits of the utility patent system.

Protection under PPA is patent-like and encompasses asexually propagated varieties other than

tuber-propagated plants (at that time, sexually reproducing plants were not thought to breed “true-totype”). Plant patents are issued by PTO. Since

enactment, over 6,000 plant patents for a wide range

of varieties have been issued, including ornamental

flowering plants, ornamental trees, fruit and nut

trees, and grapes.

With the realization that sexually reproducing

plants can replicate “true-to-type,” Congress passed

the Plant Variety Protection Act of 1970 to provide

proprietary protection for this class of plants. With

this act, Congress specifically granted two exclusions to a certificate holder’s protection under

PVPA: the research exemption and the farmer’s

exemption. Under the former, a PVPC holder cannot

exclude others from using the protected variety to

develop new varieties. In the second instance,

individuals whose primary farming occupation is

growing crops for sale, other than for reproductive

purposes, can save protected seed for subsequent

crop production on their farm, without being considered infringing upon the certificate holder. These

farmers also can sell the protected seed to people

whose primary occupation is growing crops. To

date, the farmer’s exemption is the only provision of

PVPA subject to judicial interpretation. Fungi,

bacteria, tuber-propagated or uncultivated plants,

and first-generation hybrids are not protected by

PVPA. PVPCs are issued by USDA and, through
88 ● New Developments in Biotechnology: Patenting Life

Photo credit: U.S. Department of Agriculture

Scientist holds ajar containing two small peach tree shoots capable of resisting leaf spot.

1987, over 1,800 PVPCs for approximately 100 involves multiple approaches based on factors such

different crops had been issued. as crop type, farmer’s exemption under PVPA,

litigation, licenses, research exemption under PVPA,

The different forms of plant protection each have and deposit.

unique advantages and - disadvantages. Overall,

utility patents appear more advantageous than

plant patents and PVPCs because they offer

broader coverage, including protection of plant

parts and seeds. On the other hand, although

litigation expenses are involved with each type of

protection, costs associated with protecting utility

patents can be especially substantial. From a practical perspective, no single approach to protecting

plant intellectual property exists. Present strategy

The history of intellectual property protection

of plants could be particularly germane to the

present debate surrounding patenting animals.

Plants are the sole life form for which the U.S.

Congress has expressly permitted intellectual

property protection. In particular, congressional

provisions to protect research and farming interests

seem pertinent, although both are not without

controversy. Results from an OTA survey of indus-
Chapter 5-Intellectual Property and Plants ● 89

try and university attitudes toward intellectual property protection of plants were equivocal-especially

attitudes about utility patents. Access to plants for

research to develop new varieties was the issue for

which consensus was most lacking. Seed companies

in particular are concerned about access to germplasm protected by utility patents and fear new plant

variety development will be impeded. The survey

did not address the farmer’s exemption of PVPA,

although evidence indicates widespread discontent

within industry about the provision. On the other

hand, a complete prohibition of farmer-saved seeds

could cost farmers $500 million annually.

Profitability and innovation of U.S. nurseries,

seed companies, and plant biotechnology firms

depend on their ability to legally protect their

products. Innovation must be rewarded with sufficient protection to ensure a continuing flow of

investment in plant research and development. Yet,

in its most recent deliberations on plant protection—

PVPA—Congress recognized the essential role

plants and seeds occupy in U.S. society and specifically addressed concerns beyond the economics of

increasing plant innovation. Maintaining a continued balance of both societal and economic goals

resulting from U.S. proprietary protection of plants

is essential.

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Chapter 6

Patenting of Animals—Scientific

and Regulatory Considerations

“The real issue is not whether animals can or should be patented, but what things it is reasonable

to permit humans to do to animals. Patenting simply adds another incentive to profit-making

organizations to pursue certain lines of animal experimentation, and makes this pursuit seem more

legitimate.”

George Annas

Hastings Center Report, August 1987

“I think a lot of people believe there is a moral imperative to fight disease and hunger. Patenting

animals is consistent with and furthers this imperative. ”

Geoff Karny

Patent Attorney, Vienna, VA

“The best way to predict the future is to invent it. ”

John Sculley

Chairman, Apple computers,

Odyssey: Pepsi to Apple
CONTENTS

Page

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

MODERN TECHNIQUES FOR PRODUCING TRANSGENIC ANIMALS. . . . . . . . . . 93

Gene Insertion into Bacteria. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

Gene Insertion into Animals: Microinjection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

Where These Techniques Are Likely to Lead. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

Species and Transgenic Animals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

FEDERAL REGULATION AND ANIMAL PATENTS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

U.S. Patent and Trademark Office. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

National Institutes of Health . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

Alcohol, Drug Abuse, and Mental Health Administration. . . . . . . . . . . . . . . . . . . . . . . . . 105

U.S. Department of Agriculture.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106

Food and Drug Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

Environmental Protection Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

National Science Foundation. ...., . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

Agency for International Development. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

Fish and Wildlife Service (U.S. Department of the Interior). . . . . . . . . . . . . . . . . . . . . . . 109

National Aeronautics and Space Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110

U.S. Department of Energy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110

CHAPTER PREFERENCES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110

Boxes

Box Page

6-A. PTO Policy on Patenting of Animals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

6-B. Patent Number 4,736,866--The “Harvard Mouse’’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

6-C. Federal Statutes, Regulations, and Guidelines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

Figures

Figure Page

6-l, Replication of DNA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

6-2. DNA Cloning With Vectors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

6-3. Process of Producing a Transgenic Mouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

6-4. Microinjection of Gene Into a Mouse Cell, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

Table

Table Page

6-1. Advantages of Mice for Research in Gene Transplantation.. . . . . . . . . . . . . . . . . . . . . 95
Chapter 6

Patenting of Animals—

Scientific and Regulatory Considerations

INTRODUCTION

The U.S. Patent and Trademark Office (PTO)

Board of Appeals and Interferences, relying on

precedent opinions by the Supreme Court and PTO

Board of Appeals (5,8) in 1987 held that claimed

polyploid oysters were patentable subject matter (7).

Subsequent to this decision, PTO issued a policy

statement announcing that it considered “nonnaturally occurring nonhuman multicellular living organisms, including animals, to be patentable subject

matter” (box 6-A).

Considerations of the patentability of humanengineered animals have raised a variety of issues.

These include questions about the economic implications of allowing or not allowing animals to be

patented; the Federal regulatory apparatus with

respect to transgenic animals; and ethical questions

relevant to the patenting of animals. Ethical questions are examined in chapter 8. Some economic

implications are outlined in chapter 7. Regulatory

issues are explored below, following an introduction

to some of the relevant scientific and technical

background.

MODERN TECHNIQUES FOR

PRODUCING TRANSGENIC

ANIMALS

Most potentially patentable animals are likely to

be transgenic animals produced via recombinant

DNA (deoxyribonucleic acid) technique or genetic

Box 6-A—PTO Policy on Patenting of Animals

A decision by the Board of Appeals and Patent Interferences in Ex parte Allen (Bd. App. & Int. April 3, 1987)

held that claimed polyploid oysters are nonnaturally occurring manufacture or compositions of matter within the

meaning of 35 U.S.C. 101. The Board relied upon the opinion of the Supreme Court in Diamond v. Chakrabarty,

447 U.S. 303,206 USPQ 193 (1980) as it had done in Ex parte Hibberd, 227 USPQ 443 (Bd. App. & Int. 1985),

as controlling authority that the Congress intended statutory subject matter to “include anything under the sun that

is made by man.” The Patent and Trademark Office now considers nonnaturally occurring nonhuman multicellular

living organisms, including animals, to be patentable subject matter within the scope of 35 U.S.C. 101.

The Board’s decision does not affect the principle and practice that products found in nature will not be

considered to be patentable subject matter under 35 U.S.C. 101 and/or 102. An article of manufacture or composition

of matter occurring in nature will not be considered patentable unless given a new form, quality, properties, or

combination not present in the original article existing in nature in accordance with existing law. See e.g., Funk

Bros., Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 76 USPQ 280 (1948); American Fruit Growers v. Brogdex,

283 U.S. 1, 8 USPQ 131 (1931); Ex parte Grayson, 51 USPQ 413 (Bd. App. 1941).

A claim directed to or including within its scope a human being will not be considered to be patentable subject

matter under 35 U.S.C. 101. The grant of a limited, but exclusive property right in a human being is prohibited by

the Constitution. Accordingly, it is suggested that any claim directed to a nonplant multicellular organism which

would include a human being within its scope include the limitation “nonhuman” to avoid this ground of rejection.

The use of a negative limitation to define the metes and bounds of the claimed subject matter is a permissible form

of expression. In re Wakefield, 422 F.2d 897, 164 USPQ 636 (CCPA 1970).

Accordingly. the Patent and Trademark Office is now examining claims directed to multicellular living

organisms, including animals. To the extent that the claimed subject matter is directed to a nonhuman “nonnaturally

occurring manufacture or composition of matter—a product of human ingenuity” (Diamond v. Chakrabarty), such

claims will not be rejected under 35 U.S.C. 101 as being directed to nonstatutory subject matter.

Date: 4-7-87

s/ Donald J. Quigg

Assistant Secretary and Commissioner

of Patents and Trademarks

SOURCE: U.S. Patent and Trademark Office, 1987.

-93-
94 ● New Developments in Biotechnology: Patenting Life

engineering. Transgenic animals are those to whose

DNA, or hereditary material, has been added DNA

from a source other than parental germplasm,

usually from different animals or from humans. The

following section describes the most common of the

new techniques researchers use to move genes

between animals, and compares them with historical

breeding practices in animal breeding and husbandry. It also looks ahead to predict potential

applications of these new techniques.

Laboratories around the world are conducting

substantial research that involves inserting genes

from vertebrates (including humans and other mammals) into bacteria, yeast, insect viruses, or mammalian cells in culture. This research is aimed

primarily at increasing understanding of the organization and function of the hereditary material, DNA

(figure 6-l). DNA, packaged in genes, encodes

information that directs the construction and regulates the function of all higher organisms. DNA

accomplishes this by modulating the enormous

variety of biochemical activities in living cells.

Understanding has advanced to the level that some

bacteria, yeast, or cell cultures can now be used as

factories for the production of high-quality pharmaceuticals such as human insulin, interferon, or growth

hormone for use in the treatment of human disease

or for other purposes. The equipment and personnel

training requirements for such work are, as scientific

research goes, modest.

A variety of techniques, most developed from

early bacterial research, can now be used to insert

genes from one animal into another. These techniques are known by a number of exotic names:

microinjection, cell fusion, electroporation, retroviral transformation, and others. This section focuses

largely on microinjection, because it is now the

method most commonly used and most likely to lead

to practical applications in mammals. Other methods

of gene insertion may become more widely used in

the future as techniques are refined and improved. If

protocols for human gene therapy now being developed in animal models or laboratory cultures of

mammalian cells prove successful and broadly

adaptable to other mammals, other gene insertion

techniques may well supplant microinjection.

In the early 1980s, researchers developed techniques for producing transgenic animals to the

Figure 6-l—Replication of DNA

When DNA replicates, the original strands unwind and serve as

templates for the building of new, complementary strands. The

daughter molecules are exact copies of the parent, each daughter

having one of the parent strands.

SOURCE: Offti Of Tednology A8sessmenl, 19S9.

extent that they could be applied successfully with

properly trained and skilled staff and about $50,000

worth of equipment (2,24). Rearing and maintenance facilities for the most commonly used research organism, the mouse, cost between $10,000

and $100,000 annually (3) (table 6-l). Comparable
Chapter 6--Patenting of Animals--Scientific and Regulatory Considerations ● 95

Table 6-1—Advantages of Mice for Research in

Gene Transplantation

. A warm-blooded mammal with many similarities to humans in

genetics and physiology.

. Small organism, easy to maintain in the lab, can be raised in

substantial numbers easily and quickly, at modest expense.

. Compared to other mammals, genetics and physiology very

well known.

. Available in a variety of different, well-characterized, genetically

consistent lines for use in different types of studies.

SOURCE’ Office of Technology Assessment, 1989.

facilities for larger organisms (e.g., swine, cattle) are

more expensive.

Although the number of laboratories working

with transgenic animals remains small (no more than

a few hundred, worldwide) and researchers with the

required skill and experience are not common, the

number of research programs using these techniques

has grown steadily in recent years (3). For reasons of

convenience, much research involving transgenic

mammals continues to be done using mice (table

6-l), although research programs on several larger

mammals have made significant progress. It is

anticipated that some animals of research utility or

substantial economic importance will become more

common as subjects of transgenic modifications in

the near future (within 5 to 10 years). Beyond mice,

the major research efforts involving transgenic

modifications focus on cattle, swine, sheep, poultry,

and fish.

Gene Insertion Into Bacteria

Procedures to produce transgenic organisms (those

that have integrated DNA from foreign sources)

were first developed in bacteria (28). The techniques

for introducing a foreign gene into a bacterium and

achieving normal expression and function are fairly

simple. Certain bacterial enzymes, known as restriction enzymes, recognize specific, short sequences of

DNA (ranging from 4 to 12 nucleotide base pairs in

length) and cut the DNA molecule where these sites

occur. Using these restriction enzymes (over 400 are

known, capable of cutting DNA molecules at over

100 different recognition sequences) it is possible to

extract an entire gene that has been identified in the

hereditary material of an organism. This gene can be

linked with a DNA molecule, called a vector, which

is then inserted into a bacterium. The vector can exist

in the bacterial cell, carrying along with it the

inserted gene (figure 6-2). It is by this method that

a gene coding for the production of human insulin,

for example, can be excised from human DNA and

inserted into the bacterium Escherichia coli. The

altered bacterium then produces quantities of human

insulin that can be extracted and administered to

human diabetics to help treat their disease.

Gene Insertion Into Animals: Microinjection

Inserting a gene from one animal into the cells of

another animal (as opposed to a bacterium) is more

complicated and, at present, less precise. One of the

ways in which animals differ from bacteria is that

animal cells generally do not contain free floating,

independently replicating DNA particles, or plasmids, of the type that can be used to transport genetic

material between different cells. To compensate for

this lack of a convenient delivery vehicle, researchers most commonly will inject highly purified copies

of the gene of interest directly into the fertilized

animal egg. Shortly thereafter, the fertilized egg is

surgically implanted in a female’s reproductive

tract. This injection process is quite delicate, and

only a small fraction of injected eggs (perhaps 1 to

5 percent) develop into transgenic animals (figure

6-3).

In experiments with mice, the fertilized eggs are

placed under a special microscope, positioned, and

held in place by a special glass tube that can be

moved with a micromanipulator (a sensitive set of

mechanical manipulators), Another glass tube with

a smaller tip is then used to penetrate through the egg

membrane into the pronucleus, the cellular subunit

within which will develop the nucleus. The penetrating tube carries a small amount of a buffer solution

that delivers numerous highly purified copies of the

gene of interest (figure 6-4). The injected eggs are

then placed back into the appropriate location in the

reproductive tract of a receptive female mouse,

which gestates the eggs and brings them to term.

Overall, microinjection is tedious, labor intensive, and inefficient. Aside from the problems

inherent in any system that must rely on delicate and

sensitive micromanipulations, additional disadvantages stem from the current lack of knowledge

concerning how to direct inserted DNA to a particu-
96 ● New Developments in Biotechnology: Patenting Life

Figure 6-2-DNA Cloning With Vectors

DNA to be Cloned

Vector DNA

Cut DNA with Restriction

Enzyme that Recognizes a

Specific DNA Sequence (+)

u

Joining of Vector

DNA Fragments with

DNA Fragments to be

Cloned Using the

Enzyme DNA Ligase

Multiplication of Bacteria To Yield

Many Identical Copies of Fragments

SOURCE: Office of Technology Assessment, 1989.

Figure 6-3-Process of Producing a Transgenic Mouse

Fertilized eggs are collected, injected with cloned DNA, and

transferred to a pseudopregnant foster mother. Two strategies are

generally taken in analyzing transgenic mice. If the response of

the transgene to environmental stimuli or developmental regulation is to be examined, it is best to establish a transgenic line of

mice.

SOURCE: Sally A. Camper, Fox Chase Cancer Center.

lar or appropriate site for integration into the new

host chromosome. In an accomplished laboratory, of

every 100 eggs that are collected perhaps 85 percent

of them prove suitable for injection; of these injected

eggs, about 60 survive the injection procedure; 6 of

the injected eggs that are returned to the host mother

result in live births, and 1 or 2 will produce

transgenic mice (3). This is the method that was used

to introduce the gene encoding human growth

hormone into mice, resulting in larger-than-usual

mice (2). It is also the method used to produce mice

that secrete the anti-clotting agent tissue plasminogen activator (tPA) in their milk (11 ).

As crude and tedious as this process is, it

compares favorably in at least three respects with

those techniques for producing comparable animals

that have long been used (e.g., selective breeding):
Chapter 6-Patenting of Animals--Scientific and Regulatory Considerations ● 97

Figure 6-4--Microinjection of Gene Into a Mouse Cell

The egg is held on the right by a holding pipet under suction, and

the needle containing the DNA solution is positioned at the left

(upper panel). A successful injection results in the obvious

swelling of the pronucleus; compare lower panel with the upper

panel.

SOURCE R.L Brmster and M E. Trubauer, UniversNy of Pennsylvania, Schcml of

Veterinary Mechcme.

. The rapidity with which a specific gene can be

inserted into a desired host means that the time

it takes to establish a line of animals carrying

(and expressing) the desired trait is much

reduced. It is theoretically possible to produce

a line carrying the desired trait after as little as

one generation. In contrast, it takes many

generations of selective breeding to establish a

desired trait (usually a polygenic trait, one

controlled by several genes) in a line with a

minimum of additional, unwanted characteristics—something that was not always possible.

●

●

The specific gene of interest can be transferred

with great confidence, if not efficiency, and if

proper purification protocols are followed,

without any accompanying, unwanted genetic material. With the breeding methods that

animal breeders have been using for centuries,

the transfer of the desired gene (which was not

even recognized as a gene, or a discrete

hereditary unit, until 1900) was often accompanied by the simultaneous transfer of large

amounts of additional genetic material which

often complicated or confounded the objectives

of the breeding programs as extraneous varying

factors were introduced (e.g., changes in temperament or disease resistance).

With the proper preparation, genes from almost

any organism can be inserted into the desired

host, whether it is a mouse or some other

animal. Historically, genetic material exchanged

by classical hybridization (crossbreeding) could

only be transferred between closely related

species or different strains within a species.

Where These Techniques Are Likely to Lead

Previous methods of gene transfer have been used

for thousands of years to alter animals, plants, and

microbes to serve human purposes (25). Many feel

the new techniques involve no radical, qualitative

departure from historical practices but simply enable

plant and animal breeders to do the same things they

have always done, but more quickly, easily, and

predictably (22). If there is a fundamental difference

brought by the new techniques, it is that breeders

have a greatly augmented ability to move genes

between organisms that are not close genetic relatives (e.g., human and mouse or human and bacterium). Generally it would have been impossible to

make these gene transfers with the methods previously available. But most students of species and

species formation are in general agreement that

nothing in transgenic animal research or its potential

commercial applications brings any significant

threats to species; such threats, rather, are more

easily found in patterns of land use planning or

habitat destruction resulting from other human

activities.

It is reasonable to expect that transgenic techniques will be used in much the same way historical
98 ● New Developments in Biotechnology: Patenting Life

techniques have been used, to similar ends. Economic considerations will have the major influence

on the order in which different transgenic animals

are produced for commercial use. Transgenic animals designed for biomedical research are likely

to be patented first. Although transgenic agricultural animals such as livestock and poultry

can be expected to be produced in the near future,

the view most widely held among researchers is

that it may be 10 years or more before commercial herds or flocks of transgenic livestock are

produced. Under optimistic assumptions, production may be possible within 3 to 4 years, though few

scientists regard this scenario as likely.

The first animal actually patented was a mouse

engineered by researchers at Harvard University for

use in studies of carcinogenicity (box 6-B). Most

transgenic animal research in the near future will

likely focus on traits involving a single gene, often

with associated control sequences. Already single

genes have been introduced into animals allowing

them to produce substances they previously could

not. Other examples of potentially patentable transgenic animals include the mouse that produces tPA

and the introduction of the human growth hormone

gene into mice and pigs producing larger, leaner

animals. Genes might also be introduced into an

animal to give it the ability to resist disease or

parasites. However, manipulation of complex traits

influenced by more than one gene such as the

amount of growth possible on a limited food

regimen or behavioral characteristics, will develop

more slowly (perhaps within 10 to 30 years) because

of greater technical difficulty and current lack of

understanding about how such traits are controlled

by genes. It is reasonable to suppose that smaller

markets, such as domestic pets, will also see

applications of the new techniques as they become

more efficient and economical.

Much transgenic animal research is aimed at

increasing understanding of human diseases and

therefore involves the insertion of genes from

humans into other organisms. Much research not

aimed at human disease also involves the insertion of human genes into animals. The principal

reason for this is convenience: the growing

amount of research aimed at identifying, extracting, and characterizing human genes means that

they will become more common and available.

The range of genetic variation within any species

and the fundamental similarity in genetic structure

and organization between all mammals often make

it impossible to tell, simply from looking at an

isolated gene or nucleotide sequence, what species

it was derived from. Lacking any essential, identifying link between a gene and the organism that carries

it, the convenience of using the most readily

available genetic material will be the decisive factor

in selecting genes for insertion into other organisms.

It is unlikely that genes from animals will be

introduced into humans in the near future, for

reasons of biology if not of ethics, psychology, or

aesthetics. Society is approaching somatic cell

human gene therapy with considerable caution even

when it involves the transfer of human genes (26). In

the absence of any compelling biological reasons

(which have not yet emerged) it does not appear that

any researchers are presently planning to insert into

humans, genes originating in other animals. Advances in DNA chemistry and protein engineering

may ultimately make some (but not all) such

questions moot, as the ability to entirely synthesize

genes that would direct the construction of specific

gene products advances.

Species and Transgenic Animals

Some concern has been raised over negative

impacts transgenic animals might have on their own

species. At least one opponent of animal patents has

asserted that transferring genes between species

transgresses natural barriers between species, violating their integrity or their identity (23). To evaluate

the quality or magnitude of such an alleged danger,

it is useful to consider historical notions of species

identity and what biologists now feel it means for an

individual organism to belong to a given species.

Before Darwin, a species was conceived of as a

static, unitary group or type of organism. Individuals

belonging to such a group were so classified because

they were felt to embody or reflect certain essential

or ideal characteristics. This definition of species

was first systematically applied to living things by

the Swedish biologist Carolus Linnaeus (1707-

1778). Such an approach has clear roots in Platonic

philosophy, however, which can be traced directly to
Chapter 6--Patenting of Animals-Scientific and Regulatory Considerations ● 99

Box 6-B—Patent Number 4,736,866—The “Harvard Mouse”

““4

%X0 cradt. ka Wymar@grrra

On April 12, 1988, the U.S. Patent Office issued the first patent of a living animal to Harvard Professor Philip

Leder and Timothy A. Stewart of San Francisco, California. The patent was assigned to the President and Fellows

of Harvard College. The patent claims “a transgenic nonhuman eukaryotic animal (preferably a rodent such as a

mouse) whose germ cells and somatic cells contain an activated oncogene sequence. ” The claim cited a mouse into

which had been inserted a gene that causes an increased propensity for the mouse to develop cancerous tumors. Such

mice can be used to test materials suspected of being carcinogens. These tests “can be extremely sensitive” and “will

permit suspect materials to be tested in much smaller amounts than . . . used in current animal carcinogenicity

studies. ” The patent points out that this “will minimize one source of criticism of current (testing) methods, that their

validity is questionable because the amounts of the tested material used is greatly in excess of amounts to which

humans are likely to be exposed.”

Such transgenic mice “can also be used as tester animals for materials . . . thought to confer protection against

the development of” cancerous tumors (e.g., antioxidants such as beta-carotene or Vitamin E).

The precise language of the patent described several similar lines of laboratory mice that had been engineered

by the insertion of an activated oncogene sequence, specifically, the mouse “myc” (myelocytomatosis) gene under

control of a promoter or regulatory gene sequence derived from the mouse mammary tumor virus (MMTV LTR).

Gene fusions of the myc and MMTV LTR genes were created and inserted into fertilized one-cell mouse eggs via

micro-injection. The treated eggs were then implanted in receptive female mice and the offspring were raised, used

to establish laboratory populations, and then analyzed for incorporation and expression of the inserted genes.

The actual patent coverage is broad, embracing virtually any species of “transgenic nonhuman mammal all of

whose germ cells and somatic cells contain a recombinant activated oncogene sequence introduced into said

mammal, or an ancestor of said mammal, at an embryonic stage.”

SOURCE: U.S. Patent and Trademark Office, U.S. Patent No. 4,736,866 (1988).

the “Allegory of the Cave” developed in Plato’s cal and biological thought throughout the middle

Republic (13,19,21,). Aristotle’s understanding of ages reflected this Platonic approach (17,20,21).

species was similar, and many aspects of philosophi- Such thinking was increasingly felt to be inadequate
and was challenged during the Renaissance. It was

finally repudiated by Darwin in The Origin of

Species in 1859.

Darwin introduced the idea of species as dynamic

and necessarily transitory populations united by

descent from a common ancestor but nonetheless

comprising different individuals varying with respect to many different characteristics. In Darwin’s

time, however, there was not yet a science of

genetics. nor was there any material understanding

of the mechanisms of heredity. This made it

impossible to understand the means by which

species are formed or maintain continuity through

time. Nonetheless, Darwin succeeded in changing

the thinking of biologists about species from a

perspective that was essentially Platonic, or topological, to one that is population-based and considers

variation within a population as integral to the nature

of species rather than distracting and incidental.

Building upon this paradigmatic shift in biological thought, modem biologists now generally think

of species as reproductive communities, or populations. They are distinguished by their collective

manifestation of ranges of variation with respect

to many different characteristics or qualities

simultaneously. The parameters that delimit these

ranges of variation are fluid and variable themselves:

different species may have substantially different

genetic population structures, and a given species

may look significantly different in one part of its

range than it does in another while still demonstrably

belonging to the same gene pool, or reproductive
Chapter 6--Patenting of Animals--Scientific and Regulatory Considerations ● 101

community (6). One species may exchange little or

no genetic material with related or adjacent species,

while another may seem to be almost promiscuous,

interbreeding frequently with a neighboring, related

species. Sometimes this gene flow (or introgression)

produces peculiar populations that are different from

either parent population and capable of interbreeding with one or both. In other cases, though genes

may move more or less freely between species and

genes from one species can be detected in individuals of another, biologists still have no difficulty in

determining the species to which an individual

belongs (9,19,29). Although research into the nature

of species continues to be vigorous, marked by much

discussion and disagreement among specialists,

general agreement among biologists exists on at

least one point: nature makes it clear that there is no

universal or absolute rule that all species arc

discretely bounded in any generally consistent

manner.

The issue of species integrity is more complex

and subtle than that of species barriers. If a species

can be thought of as having integrity as a biological

unit, that integrity must, because of the nature of

species, be rooted in the identity of the genetic

material carried by the species. Precisely how a

species might be defined genetically is not yet

apparent. This issue is presently the subject of a great

deal of intellectual excitement and ferment among

those seeking to understand the nature of species. It

is clear, however, that a genetic definition must

embrace the possibility of a wide spectrum of

variation in DNA sequence and organization simultaneously over many different portions of the genetic

material of an organism (16). Any genetic definition

of species must also embrace dramatic genetic

mutations and malformations (19) that occur naturally. Individual examples of mutations are often

unusual, but common in the aggregate, and not

viewed as violating anything essential to the species

in which they are found.

In short, any genetic definition of species

grounded in the perception of a species as a dynamic

population, rather than a unit, cannot be simple; it

must be statistical and complex. Therefore, to

violate the “integrity” of a species it is not

sufficient to find a particular gene, once widespread throughout the species, now entirely

replaced by a different gene. Such changes occur

repeatedly throughout the evolutionary history of a

lineage and are described as microevolutionary.

These changes are usually insufficient to alter a

species in any fundamental way or to threaten any

perceived genetic integrity. (27).

If it is possible to challenge the integrity of a

species, it would have to be by changing or

disrupting something fundamental in its genetic

architecture, organization, or function. Mammals

like mice, cattle, or humans may contain from

50,000 to 100,000 or more genes (4,9). Whatever it

is in the organization and coordination of activity

between these genes that is fundamental to their

identity as species is not likely to be disrupted by the

simple insertion or manipulation of small numbers

of genes (fewer than 20) that transgenic animal

research will involve for the foreseeable future. Any

disruption of the genetic basis of species identity

would most likely be accomplished by causing a

fundamental change in the patterns of transmission

by which hereditary information is passed from one

generation to the next, e.g., impeding gene flow

between populations that would otherwise commingle. Such a change in patterns must make it

impossible, or at the very least difficult, for further

genetic information to be transmitted between generations.

Changes in the patterns of transmission are known

in some plants, insects, fish, and amphibians. They

are much less easily accomplished in warm-blooded

vertebrates, especially those likely to be subjects of

transgenic research in the foreseeable future. In

general, the biological characteristics crucial to such

fundamental changes are most often controlled by

several, or more likely many, genes distributed

throughout the animal’s genome and acting in a

coordinated manner. Regulatory genes may often be

involved, controlling the timing or levels of expression of one or more of the genes that specify the

structure of a particular protein or enzyme (12,18).

It is beyond the ability of current techniques to

manipulate such characteristics with any significant

precision.

In this context, it should also be observed that

“the right of a species to exist as a separate,

identifiable creature>> (23) has no known foundation in biology. Species exist in nature as reproductive communities, not as separate creatures, and
102 ● New Developments in Biotechnology: Patenting Life

these reproductive communities are, by standards of

geologic time, temporary. The history of systematic

and taxonomy (the disciplines of naming and

describing species) demonstrates that species’ existence has often been independent of scientists’

shifting understanding or abilities to discern their

existence. Furthermore, most of the domestic animals that are now the subjects of transgenic research

(with the possible exception of some fish), and are

likely to be for the foreseeable future, are already the

products of centuries, and in many cases millennia,

of human manipulation. Some observers think it

reasonable to consider many domesticated animals

as artificial species. Whatever integrity these species

may once have had as biological units has already

been far more compromised by human intervention

than transgenic manipulations are likely to produce

within the next decade or longer.

FEDERAL REGULATION AND

ANIMAL PATENTS

To gain an understanding of the potential use and

regulation of genetically altered animals that might

be patented, OTA asked several Federal agencies’

the following questions:

●

o

●

How are genetically altered animals currently

used in research, product development, and

mission-oriented activities conducted or

funded by your agency?

What are the potential uses of such animals

during the next 5 years?

How does (or would) your agency regulate such

animal use? What statutes, regulations. guidelines, or policy statements are relevant?

Eleven agencies responded to OTA’s inquiry: the

U.S. Patent and Trademark Office; the U.S. Department of Agriculture (Agricultural Research Service,

Animal and Plant Health Inspection Service, Cooperative State Research Service, Food Safety and

Inspection Service, and Office of Agricultural Biotechnology); the Food and Drug Administration; the

Environmental Protection Agency; the National

Science Foundation; the National Institutes of

Health; the Alcohol, Drug Abuse, and Mental Health

Administration; the Agency for International Development; the Department of Interior (Fish and

Wildlife Service); the National Aeronautics and

Space Administration; and the Department of Energy (box 6-C).

U.S. Patent and Trademark Office

The Patent and Trademark Office (PTO), within

the Department of Commerce, administers laws

relating to the granting of patents for inventions.

PTO examines applications; issues, records, and

publishes patents that are granted; and maintains

facilities for use by the public to examine issued

patents and records. PTO has no jurisdiction over

questions of infringement or enforcement of patents

nor over matters relating to promotion or utilization

of patents or inventions. PTO does not use genetically altered animals in any activity nor regulate the

use of such animals. The agency is, however,

responsible for determining whether to grant patents

for such animals.

PTO anticipates an increase in the number of

applications for genetically altered animals as a way

of protecting inventions, since more people are

likely to define their invention in terms of the

ultimate product—the modified animal.

National Institutes of Health

Approximately half of the National Institutes of

Health’s (NIH’s) research projects require the use of

animals. There is no way to establish exactly how

many of these research animals are genetically

altered, but a significant proportion are thought to be

so altered. Transgenic mice are used to study the

basic biology of disease processes, including AIDS.

The work focuses on analysis of how genes function

in regulating cell specificity and the production of

cellular products. In some cases, the potential exists

for commercial drug production using transgenic

animals.

Over the next 5 years, biomedical research will

likely use transgenic animals in studies of diverse

areas of abnormal development, birth defects, and

chronic degenerative disease. Much work will center

10TA contac~~ Federd ~encies list~ as having ~gulatory responsibility under the Coordinated Framework for Regulation of Biotechnology

(see Federui Regis/er, June 26, 1986, page 23301 et seq.) or membership in the Interagency Research Animal Committee, a focal point for Federal

agencies to discuss issues involving all animal species used in biomedical research and testing. A workshop on Federal regulation and animal patents

was conducted by OTA on Dec. 11, 1987.
Chapter 6--Patenting of Animals--Scientific and Regulatory Considerations ● 103

Box 6-C-Federal Statutes, Regulations, and Guidelines

Listed below is a synopsis of Federal statutes, regulations, and guidelines cited by Federal agencies at the OTA

workshop of December 11, 1987.

Animal Welfare Act

Citation: 7 U.S.C. 2131-2155; 9 CFR 1-12.

Governs the transportation, sale, and handling of certain animals. As defined, an animal means any live or dead

dog, cat, monkey (nonhuman primate mammal), guinea pig, hamster, or rabbit.

Coordinated Framework for Regulation of Biotechnology

Citation: 51 FR 23301-23393

Notice issued by the Office of Science and Technology Policy describing Federal policies regulating the safety

of biotechnology research and products. Policy statements were issued by the Food and Drug Administration, the

Environmental Protection Agency, Department of Agriculture, Occupational Safety and Health Administration, and

National Institutes of Health.

Endangered Species Act

Citation: 16 U.S.C 1531-1543.

Could possibly apply if a Federal action potentially affected a species protected by the Act (see discussion

under Fish and Wildlife section of text).

Federal Insecticide, Fungicide, and Rodenticide Act

Citation: 7 U.S.C. 136-136y.

FIFRA is a licensing statute under which EPA regulates the sale, distribution, and use of pesticides. Pursuant

to this authority, EPA has routinely reviewed and registered micro-organisms for years.

Federal Meat Inspection Act

Citation: 21 U.S.C. 601-695; 9 CFR 301-381,

Poultry Products Inspection Act

Citation: 21 U.S.C. 451-470; 9 CFR Chapter 301-381.

These Acts require the Food Safety and Inspection Service to inspect cattle, sheep, swine, goats, equine,

poultry, and food products prepared from them that are intended for use as human food to assure that they are

wholesome, not adulterated, and properly labeled, marked, and inspected.

Food, Drug, and Cosmetics Act

Citation: 21 U.S.C. 301-392; 21 CFR 100-169 (regulations regarding food for human consumption).

Provides for regulatory oversight, approval, certification, and labeling of food, drugs and devices, and

cosmetics.

Guide for the Care and Use of Laboratory Animals

Citation: U.S. Department of Health and Human Services, Public Health Service, National Institutes of Health,

Publication No. 85-23, Bethesda, Md., Revised 1985.

Guide for the proper care and humane treatment of animals used in research. For purposes of the Guide,

laboratory animals include any warm-blooded vertebrate animal used in research, testing, and education. The Guide

deals with farm animals in the context of their use in biomedical research, not with their use in research on

production agriculture.

Guidelines for Research Involving Recombinant DNA Molecules

Citation: 51 Fed. Reg. 16958, May 7, 1986 for most recent full version.

The Guidelines specify practices for constructing and handling (i) recombinant DNA molecules and (ii)

organisms and viruses containing recombinant DNA molecules. They are applicable to all recombinant DNA

research within the United States or its territories which is conducted at or sponsored by an institution that receives

any support for recombinant DNA research from NIH. Any individual receiving support for research involving

recombinant DNA must be associated with or sponsored by an institution that can and does assume the

Continued next page
104 ● New Developments in Biotechnology: Patenting Life

Continued from previous page

responsibilities assigned in the Guidelines. Recombinant DNA experiments involving whole animals or plants is

covered under Section III-B-4.

Health Research Extension Act

Citation: Public Law 99-158

Amended the Public Health Service Act to provide for statutory authority for and recognition of the PHS Policy

on Humane Care and Use of Laboratory Animals by Awardee Institutions. The Act also contained provisions for

the development of alternatives to animal use in research.

Public Health Service Policy on Humane Care and Use of Laboratory Animals

Citation: U.S. Department of Health and Human Services, National Institutes of Health, Office for Protection from

Research Risks, Bethesda, Md., Revised 1986.

Revised in 1986, this policy is used by all agencies of the Public Health Service and most Federal agencies

to govern animal use. Unlike the Animal Welfare Act, the PHS policy applies to all vertebrate animals.

Lacey Act

Citation: 16 U.S.C. 701-718

Mandates the duties and powers of the Department of Interior to preserve migratory game and wild birds.

Authority for Fish and Wildlife Service to enforce laws and regulations adopted by separate States.

Toxic Substances Control Act

Citation: 15 U.S.C. 2601-2654.

TSCA gives EPA jurisdiction over the manufacturing, processing, distribution, use, and disposal of all

“chemical substances” in commerce or intended for entry into commerce that are not specifically covered by other

regulatory authorities (e.g. foods, drugs, cosmetics, and pesticides). TSCA’s applicability to regulating life forms

that are products of biotechnology is based on the interpretation that living organisms are “chemical substances”

under the act (i.e. “any organic. . . substance of a particular molecular identity, including. . . any combination of

such substances occurring in whole or in part as a result of a chemical reaction or occurring in nature . . “). EPA

does not anticipate regulating genetically engineered animals under TSCA.

U.S. Government Principles for the Care and Use of Vertebrate Animals

Used in ‘Ming, Research, and Training

Citation: 50 FR 20864 (1983)

A memorandum of understanding between APHIS, NIH, and FDA to exchange information on animal welfare

concerns and compliance with policies.

Virus-Serum Toxin Act

Citation: 21 U.S.C. 151-157; 9 CFR 101-123.

APHIS would regulate the importation, interstate movement, and release into the environment of genetically

altered animals when a biologic product (all viruses, serums, toxins, and analogous products of natural or synthetic

origin, such as diagnostics, antitoxins, vaccines, and live micro-organisms; and the antigenic or immunizing

components of micro-organisms intended for use in the diagnosis, treatment, or prevention of diseases of animals)

is used.

SOURCE ~lce of Ttiqy Assessment, 1989.

on manipulating DNA so that it can be expressed in Authorities relied upon by NIH for the care and

specific organs. The targeted insertion of genes to use of genetically altered animals include: the

repair defective chromosomes, which is not possible Animal Welfare Act; the Health Research Extension

today, could become an important tool in combating Act; the Guide for the Care and Use of Laboratory

disease in coming years. NIH researchers caution Animals; and the U.S. Government Principles for the

that the final characterization of animal models is a Care and Use of Vertebrate Animals Used in

complex matter and is going to take time. Testing, Research, and Training.
Chapter 6--Patenting of Animals--Scientific and Regulatory Considerations . 105

The only policy specifically addressing use of

genetically altered animals is the NIH Guidelines

for Research Involving Recombinant DNA Molecules. According to NIH, the Guidelines for Research Involving Recombinant DNA Molecules

apply more to the tools of the transgenic worker,

such as bacterial cell lines, than to the animals

themselves. The Guidelines specify practices for

constructing and handling recombinant DNA molecules and organisms and viruses containing recombinant DNA molecules. The Guidelines apply to all

recombinant DNA research within the United States

or its territories that is conducted at or sponsored by

an institution that receives any support for recombinant DNA research from NIH. Any individual

receiving support for research involving recombinant DNA must be associated with or sponsored by

an institution that can and does assume the responsibilities assigned in the Guidelines. Recombinant

DNA experiments involving whole animals are

covered under Section III-B-4. The NIH Recombinant DNA Advisory Committee has approved additional guidelines to cover experimentation on transgenic animals. These establish containment guidelines for animals whose genome has been altered by

the introduction of recombinant DNA into the germ

line, as well as experiments involving viable recombinant DNA-modified micro-organisms tested on

whole animals.

According to NIH, the Guidelines will likely

apply to the majority of research involving transgenic animals as recombinant DNA techniques are

usually used in such research. For example, recombinant DNA techniques are commonly used to

produce cells that are often used in microinjection.

The determining factor is whether recombinant

DNA techniques are used during the experiment.

The Guidelines would not apply, for example, in

some instances where unaltered or “naked” DNA is

microinjected (10).

The Guide for the Care and Use of Laboratory

Animals addresses institutional policies, laboratory

animal husbandry, veterinary care, and physical

plant requirements for all NIH-funded research

using warm-blooded vertebrate animals. The Guide,

among other things, lists procedures for animal

research involving hazardous agents.

In addition, NIH has animal care and use committees which are charged with reviewing all studies

involving animals and recommending whether studies using animals should be performed. Researchers

must submit a review of animal care and use for each

study, including details about the facilities where the

animals will be kept, to the NIH Office of Protection

from Research Risks. A protocol or project can be

referred to the NIH Biosafety Committee if further

questions about safety are raised. An example of

such a review involves a study in which genes from

the human immunodeficiency virus will be introduced into mice.

All grantees must abide by NIH’s guidelines. The

main sanction for violating the guidelines is suspension of funding. The American Association for

Accreditation of Laboratory Animal Care also requires its members to follow the guidelines.

NIH has applied for patents stemming from past

work, Interest in applying for patents has been

stimulated by the passage of the Federal Technology

Transfer Act (Public Law 96-502), which allows

Federal laboratories to enter into cooperative research with private sector parties.

Alcohol, Drug Abuse, and Mental Health

Administration

The Alcohol, Drug Abuse, and Mental Health

Administration (ADAMHA) researchers mostly use

human pedigree studies as a way to identify specific

genes for associated diseases. In a few cases animal

models have been used—for example in studying

predispositions to alcohol consumption and drug

abuse—but researchers have not yet isolated the

genes that may be associated with those predispositions.

To date, ADAMHA researchers have not used

transgenic animals. Within the next 5 years, however, research with transgenic animals is likely to be

undertaken, particularly for research animal model

use. Commercial products are not anticipated.

ADAMHA grantees and researchers must follow the

same regulations as those receiving NIH funds.
106 ● New Developments in Biotechnology: Patenting Life

U.S. Department of Agriculture

The U.S. Department of Agriculture (USDA) is

responsible for both enhancing and protecting American agriculture. It carries out these responsibilities

through research and regulation. USDA has conducted research on the genetics of animals for many

years. In addition to crossbreeding, genetic engineering provides a means to accelerate the rate at

which researchers can improve the efficiency of

animal production and the resistance of animals to

disease.

The Agricultural Research Service (ARS) reported on two research projects involving genetically engineered animals. One entails studies of

sheep and swine that have been altered by the

addition of an extra growth hormone gene. The

altered animals have been produced from fertilized

eggs to which the gene has been added by microinjection. The objective of this work is to improve

production characteristics such as growth rates and

fat content of meat. The second project involves

chickens engineered by recombinant DNA technology to be resistant to the avian leukosis virus, which

causes a serious poultry disease.

In both cases, the genetic changes were permanent

and transmittable to offspring. Avian leukosis resistance has been passed on through three descendant

generations of chickens, demonstrating that the

inserted gene has become a stable component of the

Transgenic pig born at the USDA laboratory in

Beltsville, MD.

chickens’ hereditary material. The success of this

type of work depends on the vector used to deliver

the additional gene.

The efficiency of producing transgenic animals

from the microinjection technique has so far been

low—less than 1 percent in all experimental animals

used. This illustrates that a considerable amount of

work and technique is involved in developing an

animal that is functionally transgenic.

In those animals expressing the new gene, the

elevated level of growth hormone led to significant

reductions in the amount of fat on the animal carcass.

However, adverse effects on the animals have also

been reported. The transgenic swine were more

lethargic, arthritic, and susceptible to stress than

standard breeds of domestic swine. According to

ARS, more research is needed to learn how to

overcome these drawbacks.

Barring unexpected breakthroughs, transgenic

sheep and swine are not likely to become available

for use in conventional livestock production systems

within the next 10 years. Research on diseaseresistant chickens could move faster, and genes of a

harmless strain of avian leukosis virus could be in

the parent poultry stock within 5 years. The same

class of virus that causes avian leukosis occurs in

other animals, so the technique used with chickens

could conceivably be used to control other diseases

in farm animals.

The Cooperative State Research Service (CSRS),

which supports extramural research primarily at land

grant universities and agricultural experimental

stations, is in the early stages of developing genetically engineered animals. The work currently sponsored focuses on increasing knowledge about molecular structure, function, regulation, and expression of animal, microbial, and viral genes, with the

goal of improving biological efficiency and disease

resistance in domestic animals. Examples of research funded under the animal molecular biology

program include: enhancement of disease resistance

in genetically engineered swine, gene transfer to the

germline of chickens using retroviral vectors, and

gene transfer in fish.

Over the next 5 years, research on genetically

altered animals could increase knowledge about

genetic maps of animals, specific genes of agricul-
Chapter 6--Patenting of Animals--Scientific and Regulatory Considerations ● 107

tural importance, and tissue-specific and timespecific expression of genes in animals. This work,

in turn, could be used to improve growth and feed

efficiency, reproductive efficiency, and disease resistance.

The Animal and Plant Health Inspection Service (APHIS) is responsible for reviewing the genetic

engineering techniques used before the altered

animal is released from containment and for examining the capacity of the foreign genetic material in the

host animal to cause disease. APHIS also exercises

regulatory responsibilities related to the Animal

Welfare Act which, among other provisions, requires protection of research animals. Although the

Animal Welfare Act applies to all federally funded

research, it applies to just six kinds of animals----cats,

dogs, rabbits, hamsters, guinea pigs, and nonhuman

primates-and excludes other rodents and farm

animals.

APHIS’ authority to regulate the importation,

interstate movement, and release into the environment of genetically altered animals as biological

products derives from the Virus-Serum-Toxin Act.

By definition, a biological product includes antigenic or immunizing components of microorganisms intended for use in the diagnosis, treatment, or prevention of diseases in animals (9 CFR

101 .2(w)). The release from containment of genetically engineered animals is regulated under experimental production, distribution, and evaluation of

biological products prior to licensing (9 CFR 103).

If the means to produce a particular trait is not a

biological product, as so defined, but is from a cell

line or cell culture, APHIS could use its existing

authority to regulate the introduction of such genetic

material as an “organism” (9 CFR 122(e)). If the

means used to produce the genetically altered animal

is by introducing a retrovirus into the host animal,

the altered animal could be regulated as a “vector”

(9 CFR 122.l(f)).

APHIS is currently working with the Food and

Drug Administration (FDA’s) Center for Veterinary

Medicine to develop a joint licensing and registration procedure for products that are classified as both

a biologic and a drug.

Two other regulatory mechanisms are the Federal

Meat Inspection Act and the Poultry Products

Inspection Act, which require the USDA’s Food

Safety and Inspection Service (FSIS) to inspect

cattle, sheep, swine, goats, equines, poultry, and

food products prepared from them that are intended

for use as human food to assure that they are

wholesome, not adulterated, and properly labeled (9

CFR 301-381).

One example of applying these regulations to

genetically engineered animals is to see if the

genetic transfer of one hormone stimulates the

production of another hormone, such as estrogen. If

so, the FDA, which is the primary agency responsible for regulating veterinary drugs, would be required to prescribe a withdrawal time for the

genetically transferred hormone so that the meat of

the animal did not contain the hormone when the

animal was slaughtered. FSIS would determine,

based on the evidence submitted, whether the meat

was adulterated. FSIS also requires information to

support a claim, for example, that an animal with a

genetically transferred growth hormone has less fat.

Four categories of inspection exist for animal

slaughter and inspection. Mandatory inspection is

required for a number of species (cattle, sheep,

swine, goats, equines, and poultry) under regulations

mandated by the Federal Meat Inspection Act and

the Poultry Products Inspection Act (9 CFR 301-335

and 9 CFR 381.1-381.311). The second classification, voluntary inspection, establishes a fee-forservice reimbursement program for the inspection of

rabbits, domesticated reindeer, and buffalo (9 CFR

350,352,354). A third category, conditional inspection, is intended mainly for research or experimental

animals (9 CFR 309.17 and 381.75). A fourth

category covers custom processing of food animals

(e.g., blends of game meat and inspected meat) that

may be slaughtered for the sole use of the owner but

may not be inspected or sold (9 CFR 303). These

categories have been used to determine the method

of inspection for so-called “cattalo” (resulting from

direct crossbreeding of cattle and buffalo) and

“beefalo” (a cross of three-eighths buffalo and

five-eighths cattle). The precedent is a phenotypic

criterion based on the physical appearance of the

animal rather than on the genetic makeup (14). FSIS

has proposed that legislation be considered to assure

that lines of animals derived from genetically

engineered animals are considered as belonging to

the parent species.
108 ● New Developments in Biotechnology: Patenting Life

To date, USDA does not have any patents

pending for transgenic animals. However, applications for patents may be expected in the future.

Food and Drug Administration

FDA regulates food products for consumption,

human and veterinary drugs, and medical devices

(USDA regulates veterinary biologic). As primarily

a regulatory agency, FDA is not involved in research

with genetically engineered research animals.

The primary regulatory tools used by FDA are the

Food, Drug, and Cosmetic Act and the Public Health

Service Act. These laws cover human foods, veterinary drugs, the use of those drugs in food-producing

animals, and human drugs and biological. The

statutes apply to any product that is the result of a

transgenic expression in an animal. According to

FDA, this kind of regulation is an extension of what

is currently done with more conventional technologies. As noted in the discussion of USDA research,

if a drug is being used in a food animal, FDA

regulations require that a certain withdrawal time be

established before the animal can be slaughtered, to

assure that the level of drug in the food chain does

not exceed that which is safe for human consumption.

FDA has labeling authority for foods. The standard for labeling is to avoid anything that is false or

misleading. Although the issue has not been formally raised, labels have been submitted where

manufacturers wanted consumers to know that the

food was a product of biotechnology. As for drugs

and biological, recombinant insulin has been marketed without a specific notification that recombinant DNA technology was used to make it.

Responsibility for regulating food additives also

falls under FDA’s jurisdiction. Additives may not be

included in a food product unless they are generally

recognized as safe, or a petition for their use has been

reviewed and approved by FDA. If a GRAS food

substance is produced using a biotechnology process, in contrast to conventional methods, FDA

would review it to ensure that the additive is still

classified as GRAS, and that no new constituents

have been added during the process.

Environmental Protection Agency

Genetically engineered animals are not currently

used in any of the activities conducted or funded by

the Environmental Protection Agency (EPA). It is

not clear whether the patentability of animals would

have any impact on EPA’s work. EPA-funded

research is now carried out only on microorganisms, but it is conceivable that the agency

eventually would fund research on macroorganisms, including animals.

The Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and the Toxic Substances Control

Act (TSCA) are the two statutes EPA uses to

regulate biotechnology products.

Under FIFRA, the sale, distribution, and use of

pesticides can be approved by EPA only if the

pesticide will not cause “unreasonable” adverse

effects to humans or the environment. Under this

authority, EPA has routinely reviewed and registered micro-organisms.

TSCA gives EPA jurisdiction over the manufacturing, processing, distribution, use, and disposal of

all chemical substances in commerce, or intended

for commerce, that are not specifically covered by

other regulatory agencies. These include foods,

drugs, cosmetics, and pesticides. EPA has taken the

position that living organisms are “chemical substances” under the Act. EPA’s current regulatory

policy for TSCA is directed to the review of

micro-organisms. At this time, it is not EPA’s intent

or policy to regulate higher forms of life under

TSCA.

EPA does not have primary authority to review

the broader environmental consequences of substances not covered by FIFRA or TSCA. In those

cases, the agencies involved have the authority and

responsibility for review under the National Environmental Policy Act (NEPA). However, EPA has

the responsibility to review assessments made by

other agencies.

National Science Foundation

The National Science Foundation (NSF) currently

funds research involving transgenic animals ranging

from using recombinant DNA technology to transfer

specific mouse genes between inbred strains-a

more precise and rapid method to achieve the results
Chapter 6-Patenting of Animals--Scientific and Regulatory Considerations ● 109

of traditional mouse breeding—to introducing genes

for various growth factors between species with the

hope of producing agricultural animals that grow

faster and larger on the same or less feed. To date,

NSF has supported such work only on laboratory

animals and has not dealt with questions of large,

domesticated animals. With the use of transgenic

animals becoming central to whole lines of investigation, work with such animals is expected to

expand as more genes are cloned and identified.

NSF is a research-oriented institution and not a

regulatory agency, but it has endorsed the NIH

Guidelines for Research Involving Recombinant

DNA Molecules and the latest proposed changes to

the guidelines, These guidelines, plus Federal standards for good animal practice, form the regulatory

framework of NSF. All grantees must follow these

guidelines and provide written documentation that

they have abided by them. In addition, NSF requires

all grantees to submit written documentation that

they are abiding by Federal animal welfare regulations.

According to NSF, the essential reasons for

regulating the use of transgenic animals are to

prevent escape of any animal from an animal facility

and to minimize possible escape from individual

cages. It is NSF’s position that the single most

significant objective of control related to transgenic

animals is to prohibit uncontrolled breeding between

transgenic and conventional animals until the gene

construction is well understood and the genotype

recognized as desirable for continued research

purposes.

Agency for International Development

Most of the Agency for International Development’s (AID’s) funding for research involving

conventional and transgenic animals goes toward

training personnel and to international research

centers. These centers are financed by several donor

countries. The United States provides only about 20

percent of the core budget in these centers. Accordingly, it has minimal control over research activities.

In a related move, the NIH Recombinant DNA

Advisory Committee is studying whether it has

jurisdiction over the use of N] H-funded research in

foreign countries.

In the relatively few cases where AID grantees are

the direct contractors—for example, malaria vaccine

researchers in U.S. universities—NIH guidelines are

followed for health-related research, and USDA

guidelines are followed for agricultural research.

Grantees are required to file the appropriate notification with the corresponding agency. Transgenic

animals imported into the United States would be

reviewed under existing regulations in the appropriate agency (e.g., USDA/APHIS).

Fish and Wildlife Service

(U.S. Department of the Interior)

The Fish and Wildlife Service undertakes selective breeding to manage and preserve species, such

as to increase production at fish hatcheries, to

enhance genetic diversity in species with reduced

populations, or for standardized laboratory test

animals. This work does not involve genetically

altered animals in the context of genetically engineered, nonnaturally occurring populations. However. under extreme circumstances, it may be that the

selectively bred genotypes are not represented in

naturally occurring populations, but only in the

laboratory.

Photo credit: Rex Dunham, Auburn University

At top, a transgenic carp containing trout growth hormone

gene; bottom, normal carp.
110 ● New Developments in Biotechnology: Patenting Life

The Fish and Wildlife Service does not anticipate

that it will have any uses of its own for genetically

altered animals in the next 5 years. There has been

some discussion of using transgenic fish to combat

the effects of acid rain. The Fish and Wildlife

Service does not consider this acceptable because

altering target fish species alone would not maintain

a healthy ecosystem and the present system would

continue to degrade. Ecologically, it is better to try

to attack the problem at its source rather than

reconstruct an entire ecosystem to live with the

consequences.

The Fish and Wildlife Service has several regulatory policies that relate to protecting the genetic

integrity of wild stocks, the maintenance of natural

habitat, and the protection of biological diversity. It

also has authority over State regulations concerning

the control or impact of migratory species, exotic

species, or any fish or game species that crosses

State lines. However, in most cases it lacks the

authority to regulate the use of transgenic animals.

Any involvement would require stretching the law

and regulations meant for other purposes (15).

The Endangered Species Act could be used, for

example, if a genetically engineered animal potentially affects a species protected by the Act. The

National Environmental Policy Act also could be

used to review or comment on Federal agency

actions affecting the use of genetically altered

species. Anything that might give a competitive

edge to one species within an ecosystem could

drastically alter the whole balance of the ecosystem.

National Aeronautics and Space

Administration

The National Aeronautics and Space Administration (NASA) does not undertake or fund any

research involving genetically engineered animals,

and the Agency has no such work projected over the

next 5 years. All NASA research involving animals

follows NIH’s guidelines.

U.S. Department of Energy

According to the Department of Energy’s Office

of Health and Environmental Research, no research

is currently being supported in the area of genetically engineered animals. Genetically variant animals used by the Department have been developed

through classical breeding programs (1).

SUMMARY

The U.S. Patent and Trademark Office in April

1987 issued a notice that “it considers nonnaturally

occurring nonhuman multicellular organisms, including animals, to be patentable subject matter

within the scope” of patent laws. The first patent on

a transgenic animal was issued on April 12, 1988,

assigned to Harvard University, for a mouse to be

used in cancer research. The Patent Office policy has

spurred debate regarding whether animals should be

patentable subject matter.

The majority of animals likely to be patentable

will be produced via microinjection or, eventually,

other more precise recombinant DNA techniques.

Such manipulations cannot, however, be considered

to “violate species integrity” or “species barriers” in

any meaningful biological sense. Manipulations

now possible, contemplated, or likely in the foreseeable future are, in fact, less likely to disrupt the

complex, coadapted gene complexes most often felt

to be important to the formation and stability of

species than practices of selective breeding used for

decades or centuries.

Several Federal agencies regulate the experimental use or commercial development of genetically

altered animals. Because current statutes regulate

various uses and protections for animals, no single

Federal policy governs all uses of genetically altered

animals. In the absence of a single policy, Federal

agencies will rely on existing statutes, regulations,

and guidelines to regulate transgenic animal research and product development. Current federally

funded research efforts may lead to patents on

animals; however, the patentability of an animal

does not affect the manner in which the animal

would be regulated by any Federal agency.

1.

2.

CHAPTER 6 REFERENCES

Barnhart, Benjamin J., Office of Health and Environmental Research, Office of Energy Research, Department of Energy, Washington, DC, personal communication, Dec. 4, 1987.

Brinster, R, L., et al., “Somatic Expression of Herpes

Thymidine Kinase in Mice Following Injection of a

Fusion Gene Into Eggs,” Cell 27:223-231, 1981.
Chapter 6---Patenting of Animals--Scientific and Regulatory Considerations

3.

4.

5.

6,

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

Camper, S. A., “Research Applications of Transgenic

Mice,” BioTechniques 5(7):638-650, 1987.

Damell, J., Imdish, H., and Baltimore, D., h401ecu/ar

Cell Biology (New York, NY: Scientific American

Books, 1986).

Diamond v. Chakrabart?’, 477 U.S. 303 (1980).

Endler, J. A., Geographic Variation, Speciation, and

Clines (Princeton, NJ: Princeton University Press,

1977).

Exparte Allen, 2 USPQ 2d 1425 (PTO Bd. Pat. App.

& Int. 1987).

Exparre Hibberd, 227 USPQ 473 (PTO Bd. Pat. App.

& Int. 1985).

Futuyma, D. J., Evolutionary Biology, 2d ed. (Sunderland, MA: Sinauer, 1987).

Gartland, William J,, Executive Secretary, Recombinant DNA Advisory Committee, National Institutes

of Health, Bethesda, Md., personal communication,

Jan. 15, 1988.

Gordon, K., et al., “Production of Human Tissue

Plasminogen Activator in Transgenic Mouse Milk,”

Biotechnology 5(1 1): 1183-87, 1987.

Gould, S. J., Ontogeny and Phylogeny (Cambridge,

MA: Harvard University Press, 1977).

Hamilton, E., and Cairns, H. (eds.), P/a/o: The

Collected Dialogues, Including the Letters (Princeton, NJ, Princeton University Press, 1978).

Jones, Daniel D., “bgal and Regulatory Aspects of

Genetically Engineered Animals,” Genetic Engineering of Animals (New York, NY: Plenum Publishing Corp. 1986).

LaRoe, E. T., Director, Cooperative Research Units

Center, U.S. Fish and Wildlife Service, “Federal

Regulation and Animal Patents,” workshop held by

Office of Technology Assessment, U.S. Congress,

tkC. 11, 1987.

l-ewontin, R. C., The Genetic Basis of Evolutional

Change (New York, NY: Columbia University Press,

1974).

17,

18,

19.

20.

21.

22.

23.

24.

25.

26.

27.

28.

29,

Lovejoy, A.O., The Great Chain of Being (Cambridge, MA: Harvard University Press, 1936).

Mac Intyre, R.J. (cd.), Molecular Evolutionary Genetics (New York, NY: Plenum Press, 1985),

Mayr, E., Animal Species and Evolution (Cambridge,

MA: Harvard University Press, 1963).

Mayr, E., Evolution and the Diversity of Life (Cambridge, MA: Harvard University Press, 1976).

Mayr, E., The Growth of Biological Thought: Diversity, Evolution, and Inheritance (Cambridge, MA:

University Press, 1982).

National Academy of Sciences, Introduction of

Recombinant DNA-Engineered Organisms Into the

Environment: Key Issues (Washington, DC: National

Academy Press, 1987).

Rifkin, J., htter to William Gartland, Federal

Re.gis/er 49(184):37016, Sept. 20, 1984.

Rubin, G. M., and Spradling, A. C., “Genetic Trans

formation of Drosophila germ line chromosomes,”

Science 218:348ff, 1982.

Stubbe, H., History of Genetics From Prehistoric

Times to the Rediscovery of Mendel’s Luws (Cambridge, MA: Massachusetts institute of Technology

Press, 1972).

U.S. Congress, Office of Technology Assessment,

Human Gene Therapy, OTA-BP-BA-32 (Washington, DC: U.S. Government Printing Office, December 1984).

U.S. Congress, Office of Technology Assessment,

Field-Testing Engineered Organisms: Genetic and

Eco/ogica/ Issues, OTA-BA-350 (Washington, DC:

U.S. Government Printing Office, May 1988).

Watson, J. D., et al., Molecular Biology of the Gene,

4th ed. (Reading, MA: Benjamin/Cummings, 1987).

White, M.J.D., Modes of Speciation (San Francisco,

CA: W,H. Freeman & Co., 1978).
Chapter 7

Patenting of Animals—

Economic Considerations

‘*Farmers, and agriculture in general, are the obvious losers in the patenting of animals. This massive

transfer o! farmer decision making power regarding livestock, to a few large corporations, along

with royalty payments to these patent holders, will further erode family farmers’ chances of

survival. ”

John Kinsman

Wisconsin Family Farm Defense Fund

“Improved breeds that produce more milk with a lower cost of production, or that resist common

diseases, will help the small farmer stay competitive by reducing farm costs and/or increasing the

value of the commodity. ”

Richard Godown

Industrial Biotechnology Association

"At the moment, if our food survival was dependent on transgenics, we would be eating fish and

mice. ”

Neal First

University of Wisconsin—Madison
CONTENTS

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

THE MAJOR

The

The

The

LIVESTOCK

Sector . . . . . . .

Dairy Sector, .......,

MARKET SECTORS. ......,. . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..,.,, .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Red-Meat Sectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

LIKELY ECONOMIC IMPACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER 7 REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Boxes

Box

7-A. The Marketing of Oncomouse. . . . . . . . . . . . . .

7-B. Royalty Collection . . . . . . . . .. ... .. .$.......

Figure

Figure

7-1. Four Classes of Animals Potentially Affected

Table

. . . . . . . . . . . . . .

. . . . . . . . . . . . . ,

by Intellectual

Page

115

115

115

116

117

117

123

123

Page

. . . . . . . . . . . . . . . . . . . . 121

. . . . . . . . . . . . . . . . . . . . 122

Page

Property . . . . . . . . . . . . 119

Table Page

7-1. Commercial Slaughter, 1986. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Chapter 7

Patenting of Animals—Economic Considerations

INTRODUCTION

Evaluation of the patent system is in one sense a

cost-benefit analysis, weighing the benefits of patents against the cost of creating statutory monopolies. Patents may stimulate new research, hasten

product development, and enlarge the pool of

inventors in certain areas. However, patents may

also raise barriers to market entry or impede the flow

of information and mobility of production factors

(4).

To begin to understand the economic implications

of permitting or prohibiting the patenting of animals,

it is necessary to consider the likely consequences of

either policy for inventors, producers, and consumers of patented animals. Rescinding the present

protection of transgenic animals as intellectual

property would result in market forces acting in

different ways than if animals continue to be

patentable. An evaluation of the manner in which

these market forces might react requires a review of

the salient features of the major market sectors likely

to be affected. The market for agricultural livestock

is foremost among these, including the poultry,

dairy, and red meat sectors. Because animals are

used as models in the study of diseases and for

product testing, the pharmaceutical and biomedical

research communities also stand to be affected by

animal patent decisions. And although progress in

research on transgenic fish makes it possible that

aquiculture markets might be affected relatively

early, these markets are smaller in size. No examination of the likely impacts of patented animals in

aquiculture markets is ventured in this chapter.

Building upon a brief review of these major

market sectors, this chapter presents a preliminary

survey of impacts that might be expected from

animal patenting, as well as some expected difficulties in royalty collection posed by various market

structures.

THE MAJOR LIVESTOCK

MARKET SECTORS

Livestock, including poultry, is the largest component of the agriculture sector in the United States.

In 1982 this large and widespread market produced

53 percent of the cash value of all farm sales and

involved more than two-thirds of all farms, distributed throughout all 50 states (12). The major market

sectors are poultry (including broilers and eggs),

dairy, and red meats (including cattle, hogs, and

sheep) (table 7-l).

The Poultry Sector

Broiler Chickens

Post World War II developments in management,

marketing, and poultry breeding led to the emergence of a new agricultural product, the broiler

chicken. If present trends continue, by the turn of the

century per capita consumption of chicken may

surpass that of beef. The broiler market has two

major components: producers and integrators/

processors.

The birds are typically owned by integrators, who

contract first with producers to raise the birds (taking

about 7 weeks), which they sell then to processors.

Processors are usually owned by integrators, or

contract exclusively with them. Most production is

concentrated in the Southeast and South-Central

States where feed is easily accessible and the climate

generally congenial. Market concentration among

integrators, although historically low, has increased

in recent years. The largest four integrators are

estimated to account for approximately 50 percent of

U.S. broiler production (8). Market competition

exists between large supermarket buyers. In 1982,

80 percent of broilers produced came from one-third

of the nearly 53,000 farms involved (7).

Concentration is even higher among breeders who

sell chicks to the integrators, who in turn supply

contract producers. Three breeding firms control 90

Table 7-l--Commercial Slaughter, 1986

Chickens . . . . . . . . . . . . . . . . . 5,437,024,000 (hatched)

4,646,312,000 (raised)

Turkeys . . . . . . . . . . . . . . . . . . 225,380,000 (hatched)

204,216,000 (raised)

Hogs . . . . . . . . . . . . . . . . . . . . . 79,598,200

Cattle . . . . . . . . . . . . . . . . . . . . 37,288,300

Sheep & Lambs. . . . . . . . . . . . 5,635,000

SOURCE” U S Department Of Agwulture, Agrtcuflura/ Sfaristics 1987

-115-
116 ● New Developments in Biotechnology: Patenting Life

percent of the market in female birds, while the same

proportion of male birds is controlled by four firms.

Eggs

In the past 25 years, annual per capita consumption of eggs has fallen from 320 to 250, illustrating

that egg production is a declining enterprise. In 1982

there were fewer than 10,000 producers (less than 4

percent of the total) maintaining more than 500,000

laying hens. An estimated 37 percent of all eggs

produced come from large producers, some having

more than 5 million birds in production (6). Declining consumption and economies of scale are likely

to lead to an increase in market concentration.

Economic statistics demonstrate that earnings are

depressed, however, suggesting that competition

continues to shape the markets. Pricing is closely

linked to market reports from the United States

Department of Agriculture (USDA) or commercial

sources.

Photo credit: U S Depeftment of Agrtcutture

The Dairy Sector

The dairy sector differs fundamentally from either

poultry or red meats due in part to the major

importance of the Federal milk marketing order

system (2,1 1). Efficiency has doubled over the past

20 years with the number of cows required to

produce a given volume of milk decreasing by half.

Production occurs in all States (in part due to

Federal pricing systems). The leading producers (by

volume) are Wisconsin, California, New York, and

Minnesota. Most dairy farms are small family

operations, carrying between 40 and 100 head. Such

operations are typically found throughout the Midwest and Northeast, and they differ markedly in

scale from the larger operations common in the West

and Southwest. In California it is not uncommon for

operations to milk 600-800 cows (3). Virtually all

operations breed their own replacement stock, with
Chapter 7—Patenting of Animals-Economic Considerations ● 117

one breed (Holstein-Friesian) accounting for 90

percent of dairy cattle.

Dairy cattle must produce calves annually to

remain productive. This leads to one of the important

secondary products of the dairy industry, bull calves

for dairy beef veal. Bulls for natural breeding are

purchased locally, but 60 to 65 percent of the

milking cows are bred artificially and 25 percent of

the breeding age heifers are bred artificially. Semen

producers are dominated by four major companies,

two of which are cooperatives. About 20 percent of

the registered herd operations produce breeding

bulls which generate substantial income, often 50

percent or more of the total (6).

The Red Meat Sectors

Beef

The beef cattle subsector is the largest component

of the market for agricultural livestock and the most

complex. In 1982 there were 34.2 million beef cattle

distributed among 1 million farms. Most farms are

small, numbering fewer than 20 head. On such

farms, cattle raising is typically an enterprise supplementary to other farming activity.

The complexity of the beef subsector can be

attributed to its division into two major components—

calf production and cattle feeding. Calf production

involves beef cattle through the first 6-18 months of

life, raised principally in the Dakotas, Texas, Oklahoma, and the Southeast. Calves are sold to feedlot

operations where they are grain fed and fattened for

slaughter. Feedlot operations are concentrated in the

grain rich areas of the western corn belt States, the

Texas high plains, Arizona, and California. About 5

percent of the total number of feedlots provided

slightly more than 60 percent of the cattle slaughtered in 1982.

Because of the large numbers of producers

geographically separated from the major feedlots,

most cattle pass through the hands of several brokers

and are sold multiple times between birth and

slaughter. This factor makes it more difficult to track

and monitor beef cattle individually than to track any

other major agricultural animal.

Pork

Pork production has been consolidated significant y

over the past decade. Coordinated operations that

carry individual hogs from birth to slaughter ("farrowto-finish”) account for 75 percent of all production.

In 1982, 315,000 farms were listed as producing

hogs, with 50 percent of total production contributed

by 10 percent of the farms. This means that smaller

farms, comprising 90 percent of total farms, produced only half of total production. The USDA

estimates a 1988 herd size of 53.8 million head.

Lamb

Sheep comprise a small and diminishing subsector of the U.S. livestock market. Total herd size

declined from 50 to 10 million between 1945 and

1985. In 1982, 100,000 farms raised a total of 12.4

million sheep. Half of these farms carried fewer than

50 head. Nearly 85 percent are sold directly from

producers to one of only 14 sheep packers in the

country.

LIKELY ECONOMIC IMPACTS

It is difficult to predict the manifold consequences

of any particular approach to protecting intellectual

property, especially across so wide a range of

economic activity as that spanned by patentable

animals. This range embraces diverse sectors of the

agricultural livestock markets, pharmaceutical or

other chemical production, and academic research or

industrial testing. This section briefly examines

likely impacts of patenting animals upon inventors,

users or producers, and consumers.

The patent system was devised as a means to

allow inventors and innovators a method of recoup-
118 . New Developments in Biotechnology: Patenting Life

MoiD cmdt: Chuda Tti#o

ing their investments in intellectual property, while, been employed or preferred. Chief among these have

at the same time, stimulating the development of been secrecy and contractual arrangements.

additional innovations and inventions. Although Companies opting for secrecy rely on trade

patenting seems the most direct and least cumber- secrets and seek to conceal crucial details or key

some method of satisfying both objectives simulta- processes from competitors. This enables a recovery

neously, there are other means that have sometimes of investments in intellectual property; however,
Chapter 7—Patenting of Animals-Economic Considerations . 119

further innovation by other inventors is in the form

of imitation (which does not compensate the inventor), as opposed to patent enablement (which does).

Companies relying on contractual arrangements can negotiate agreements with users of their

products or processes in such ways that will permit

recovery of investments. Negotiations carry substantial risks of disclosure, however, that could

threaten the recovery of such investments. Furthermore, because users may intentionally or negligently

breach a confidential agreement, inventors may be

reluctant to contract with parties who do not have

"deep pockets.” The likely consequences of the use

of patenting v. trade secrets or contractual arrangements are considered below.

Four distinct animal classes that might be affected

by one or another method of intellectual property

protection are 1) disease models, 2) production of

pharmaceuticals, 3) poultry, and 4) livestock (figure

7-l).

Impacts on Inventors

Class 1—High-value disease model animals present a situation in which secrecy does not seem a

useful approach. The precise genetic changes incorporated into the transgenic animal, as well as the

method of inducing the changes and other relevant

biological data, are all likely to be crucial to those

who wish to devise studies or tests using the animals.

Such information is also important to the interpretation and understanding of test results. Secrecy also

stands contrary to historical traditions of openness

and free exchange in academic research.

Contractual arrangements may offer an alternative to patenting. The number of major research

institutions or corporations likely to use such

animals is limited and the likely users can be

identified. Violations of either contractual agreements or patent law are likely to be detected since the

public confidence essential to acceptance of test

results or data would entail disclosure of essential

details about the animals used. However, a system

relying on individual contractual arrangements between inventors/innovators and users would likely

be more complex and variable than that entailed by

existing patent law, though it could bring the

advantage of flexibility.

Class 2—High-value animals, such as those used

in pharmaceutical production, could be protected by

a system of trade secrets. Relatively small herds of

transgenic animals (e.g., 100 head of dairy cattle)

could be used to produce significant supplies of

human pharmaceuticals, such as tPA or other

compounds for treating heart attack victims or blood

clotting factor VIII for treating some forms of

hemophilia. Existing arrangements between companies and the U.S. Food and Drug Administration

might suffice for ensuring product safety while

guarding against the disclosure of confidential

business information. Contracts might also be adaptable to such arrangements. Patenting and licensing

Figure 7-l-Four Classes of Animals Potentially

Affected by Intellectual Property

Animals used in biomedical research, such as the so-called “Harvard Mouse,” U.S. patent 4,736,866.

Class 2- Production of Pharmaceuticals

In the early stages of research, small animals (e.g. mice) are the

subjects of Ihis type of research. If successful, this research will

Iater be conducted on larger, milk-producing animals (e.g. cattle)

for the production of pharmaceuticals used by humans.

Class 3- Low Value, Rapidly Reproducing

Poultry is an example of this class.

Class 4- Low Value, Slowly Reproducing

Cattle and other red meat animals are examples of this class.

SOURCE: office Of hchnotqy ASS9SSllWlt, 19S9.
120 ● New Developments in Biotechnology: Patenting Life

arrangements could serve the same ends, however,

without diverting valuable resources from production efforts to trade secret protection or contract

enforcement. It seems likely that neither trade

secrets nor contracts would be as effective in

stimulating innovation as the disclosure required for

patents.

High-value animals used as breeding stock could

probably be protected effectively either by patents or

by today’s practice of close monitoring and control

under a system of contracts or trade secrets.

Class 3—Low-value, high reproductive rate animals, such as poultry, probably cannot be protected

effectively by a system of trade secrets, The large

number of different contract farms and turnover

among personnel involved would make enforcement

of secrecy a huge task. The relatively smaller

numbers of integrators and processors might make

contractual arrangements practical and there are

precedents. However, it seems that a smoothly

functioning patent system would serve equally well,

obviating many of the problems that might follow

from high turnover rates of valuable personnel in

competitive market sectors.

Class 4—Low-value, low-reproductive rate animals like cattle or other red meat animals constitute

the most complicated case. Low reproductive rates

mean technological innovations to the animals

themselves (as opposed to processes for raising or

processing) will be relatively slow to disseminate

(although embryo transfer technologies may speed

the process). These market subsectors typically

operate with low net margins, meaning changes that

might substantially increase production costs will

not be adopted quickly unless they bring a commensurate increase in returns. The large numbers of

individuals involved, in terms of farms, shippers,

and processors, as well as animals, are additional

complicating factors. Secrecy does not seem feasible

because of cost and logistics, and contracts seem

only slightly more practical. The large numbers of

individual animals and the extended and complex

paths they follow to market mean significant difficulties would be associated with any effort to recoup

patent royalties linked to individual animals.

One economic analysis (6) suggests that “everything else held constant, small firms benefit more

from patents than large ones due to the penchant of

small firms to license technology and the impediment such firms face when attempting to enter

production with limited capital and managerial

reserves. ” Others point out that larger firms patent

more often and further note that licenses could be

granted from trade secrets as well as patents. In

either case, it is possible that much of the relevant

activity could be covered by negotiation of a

relatively small number of contracts (5).

Impacts on Users/Producers (Licensees)

The likely impacts of animal patents on different

users or producers will vary with the type of

transgenic animal involved and the structure of the

market sectors associated with them. The discussion

in this section follows the same breakdown of

transgenic animals into separate classes as presented

above.

Class 1— Disease models serve a specialized

function in the esoteric realm of biomedical research. Such research now uses many different

animal disease models. The availability of patenting

for transgenic animals may lead to more of these

models relying on transgenic animals in the future.

Patenting may result in researchers paying higher

prices for such animals or finding their reproduction

rights limited or restricted. In many cases, however,

the existence of new, patented animals may cut the

time needed for studies to generate data of statistical

significance. It has been estimated that the first

animal patented, the so called “Harvard Mouse,”

may lead to some tests for chemical carcinogenicity

being compressed from 3 years to 3 months in

duration (9) (box 7-A). If this is realistic, net costs

for experimental animals as well as the total number

of animals used in such studies could drop dramatically in spite of substantial increases in the cost of

individual animals used.

It should also be noted that precedent exists for

patent holders to make such animals available to

researchers free or at minimal cost, sometimes for

costs of shipping and handling alone, or otherwise

on a not-for-profit basis. There is, however, no

compelling reason that such arrangements should

either be universal or necessarily continue where

they now exist.
Chapter 7—Patenting of Animals--Economic Considerations . 121—

Box 7-A—The Marketing of Oncomouse

U.S. patent 4,736,866 for transgenic nonhuman mammals was issued by PTO on April 12,

1988. Seven months later, on November 15, the E.I.

DuPont de Nemours & Co. of Wilmington, DE

announced that it would commence sale of “Oncomouse” in early 1989.

Oncomouse (so named because it carries

activated human cancer genes) was developed at

Harvard University. DuPont was a major sponsor of

the research and owns exclusive rights to the patent.

The first oncomice will sell for $50-$100, five to ten

times the price of an ordinary laboratory mouse. It

is unknown how large the initial market for the mice

will be. DuPont will handle the orders for the mice,

which will be bred by Charles River Biotechnical

Services (a Bausch and Lomb Company) in Massachusetts.

SOURCE: Office of Technology Assessment, 1989.

Class 2—Animals producing pharmaceutical products, in contrast to the other three classes of animals

discussed here, in many respects constitute a new

industry. It stands to displace only a portion of its

primary competitor, microbial fermentation. Because of the strong possibility of protection via

means other than patents (e.g., trade secrets or

contractual arrangements) it is by no means clear

that patents on the animals will always be sought

even where possible. Therefore. it seems likely that

the availability or unavailability of such patents need

not have any major disrupting impact on users, as the

markets will develop in accord with whichever

practice obtains.

Classes 3 and 4—If (poultry and livestock) are

patented, it seems that patent holders might attempt

to collect royalties from users. Collection could be

a complex process; it is not clear whether developers

would seek to recoup the entire cost of development

from initial sales. Yet, because of the self-replicating

abilities of animals, once sold the invention will

effectively enter into common public use whether or

not royalties or registration fees are paid. One

difficulty is monitoring a patented animal. If the

royalty on such an animal is high, it creates an

incentive to divert animals, semen, and eggs by

those possessing the animal. For example, fruit trees

have long been patented, but royalties collected for

superior varieties have remained modest (10).

With broilers there are relatively few integrators

who hold title to the birds. Genetically engineered

chickens could be sold to the integrator’s hatchery

supply operations. Monitoring these few, large,

easily identifiable operations would be fairly straightforward. Egg producing operations are more involved due to the larger number of primary customers. The relatively small number of hatcheries

through which the industry operates, however,

makes it seem likely that royalty collection arrangements could remain tractable. Existing breeders are

likely to become involved with any patented poultry,

if not as owners of the patents, then as incorporators

of the licensed traits into production birds and

distribution of stock to hatcheries.

The pork subsector also seems to be relatively

open to adopting royalty collection measures. Large

farrow-to-finish operations are essentially selfcontained. Through either contract production or

other contractual arrangements it may be feasible to

collect royalties, for example, on all hogs shipped to

packers. Additional stipulations might restrict sales

to packers only, thereby reducing the probability of

improper diversions. Large existing breeders would

likely become involved in the commercialization,

multiplication, and distribution of patented pigs. It is

not clear that patenting would bring any major

reorganizations in this subsector.

Smaller operations, however. might well be affected. The numerous farms specializing in feeder

pig production or finishing would be more difficult

for a patent holder to monitor. With increasing

production by very large operations, a tendency may

emerge to provide patented animals preferentially to

the larger operations. The existence of animal

patents might, then, increase some of the existing

pressures toward concentration in pork production.

Incorporating royalty collection into the beef and

dairy cattle subsectors would be far more complicated. Calving throughout the year on the numerous

farms involved would make royalty collection a

difficult and expensive process as applied to dairy

cattle. Incorporating royalty collection into the beef

sector would be even more involved. The geographical separation of calf production and cattle feeding,

the numerous producers, and the variety of breeds
involved would all combine to make monitoring a

monumental problem. For these reasons, contracts

calling for one-time payment of royalties or registration fees could make logistical sense, providing the

patented animal made economic sense in these

typically low-margin operations.

At this early stage it seems that royalty collection

on patented cattle would be forbiddingly difficult

and complex without fundamental change in the

structure and organization of the beef and dairy

subsectors. It is not clear how this might be

accomplished, and the size and structure of the

markets make this seem most unlikely (box 7-B).

Sheep present similar problems, except that as a

much smaller subsector it would theoretically be

more easy to adapt. Whatever the eventual arrangement, royalties on dairy or beef cattle would appear

to be far less easily collected than with either poultry

or hogs. Because of this, an economically viable

development in cattle will probably require a much

that needed in either poultry or hogs, if royalty

collection is the only means to recoup the cost to

developers of innovations. Such dramatic increases

in production efficiency are likely to be difficult to

accomplish since cattle are biologically the least

efficient converters of feed grain to meat.

Incorporating patented animals into existing production methods will be driven by economics. If a

patented animal is engineered to carry a new trait,

and if the trait reduces costs by 10 cents per pound,

then the farmer could perhaps pay as much as (but

never more than) the equivalent of 10 cents per

pound more for the patented animal. At prices above

that threshold it would be more economical to

continue using the nonpatented animal. Thus, as

long as traditional breeds remain available they will

provide caps on how much can be charged for

patented alternatives. The continued existence of

traditional breeds does not seem threatened except

possibly with poultry, where pure stocks are closely

higher-improvement in production efficiency, than held by a few firms (1).

Box 7-B—Royalty Collection

Once a patent is granted, the patent holder has the right to keep others from making, using, or selling the

invention during the 17-year patent term. It is common practice for a patent holder to permit others to use art

invention upon payment of a royalty or licensing fee. In the absence of an agreement with a patent holder, a person

who makes, uses, or sells the invention is liable to the patent holder for infringement.

Royalty collection is one element of the debate on the patenting of animals that has engendered public debate

and legislation. Some argue that the ability of a patent holder to collect royalties on an invention is a basic right under

the U.S. patent system. Others argue that the collection of royalties for various classes of patented animals will be

burdensome if not impossible. During the 100th Congress, the House of Representatives passed H.R. 4970, the

Transgenic Animal Patent Reform Act, which said, in part:

It shall not be an act of infringement for a person whose occupation is farming to reproduce a patented transgenic farm

animal through breeding, use such animal in the farming operation, or sell such animal or the offspring of such animal.

However, the bill held that it would be an act of infringement:

for a person to sell the germ cells, semen, or embryos of a patented transgenic farm animal.

Several opinions and proposals have been advocated during congressional consideration of the royalty issue.

These include:

. the creation of broad-based exemptions for various users (e.g.. farmers);

● the creation of limited exemptions if certain conditions are met (e.g., farms operating as single family

enterprises, limited gross receipts, total acreage, number of animals);

. limiting royalty collection to a specified number of generations of a patented animal;

. the creation of a tribunal, based on the Copyright Royalty Tribunal, to set rates and distribute funds for

certain classes of patented animals;

● a prohibition on animal patents, which would remove any royalty issue from the patenting context; and 

. no action by the Congress, thereby relying on existing patent infringement provisions for patented animals.

SOURCE: Office of Technology Assessment, 1989.
Chapter 7—Patenting of Animals--Economic Considerations ● 123

Impacts on Consumers

Class 1—Disease model laboratory animals will

be distributed to a limited number of consumers, i.e.,

researchers. Even if patented animals are not distributed freely in this sector, the cost impact of patented

animals is likely to be a small part of the total cost

of health care. As research leads to products that

approach commercialization, increased activity by

private firms might be anticipated. In terms of final

costs, as noted above, if new models developed are

less costly or more efficient than existing models or

lead to more effective treatment and prevention

methods the net effect could be lower costs for

individuals.

Class 2—Pharmaceutical production work in this

area is primarily directed towards finding more

economical or effective methods of producing currently available products. This effort should result in

a decline in costs to consumers. There is no reason

to expect that the existence of such products will

increase concentration in the pharmaceutical sector.

Indeed, the entry of new firms may well take place

as is suggested by the experience with biotechnology companies and pharmaceutical firms to date.

Classes 3 and 4—The poultry and livestock

sectors operate now as competitive industries, which

suggests that the benefits of cost-reducing technological developments could, in the long term. be

passed on to consumers. However, if royalties equal

the cost saving associated with the new genes, then

the farmer’s cost of production is the same as before

and the consumer gets none of the cost savings of the

new technology. The consumer arguably does not

care whether the price they pay is for royalties or the

old inputs (10). Benefits to producers are most likely

to accrue to successful early adopters of innovations.

What is not clear is how patented animals might

contribute to anticompetitive pressures. If they cause

anticompetitive market pressures to increase, other

avenues are available for redress (e.g., antitrust or

antimerger law).

SUMMARY

The largest economic sectors likely to be influenced by an increase in animal patents are the

different markets for agricultural livestock and

possibly some sectors of the pharmaceutical industry. The principal agricultural markets involve

poultry, dairy, and red meat. These markets are

organized quite differently and are subject to different degrees of economic concentration. Poultry is

most concentrated (though still diffuse by other

industry standards, e.g., automobiles) with the dairy

and red meat sectors being much more diffuse.

Different economic forces are important in the

several markets as well. Federal price supports are of

major importance in the dairy market, while the

market for poultry is more open and competitive.

The existence of animal patents and the degree

they are employed in the different markets may

introduce some new economic relationships. It is not

now clear that these are likely to have any substantially adverse effects on the major markets or

existing market forces. The same types of pressures

that have driven economic choices in the past are

likely to continue to dictate them in the future—if an

innovation increases costs (e.g., if a patented animal

costs more than the unpatented alternative), it is

unlikely to be adopted unless it increases outputs or

product values commensurately. It therefore seems

that although cost savings can be anticipated to

follow from animal patenting in some areas (e.g.,

pharmaceutical production or drug testing) innovations due to patented animals are likely to advance

more slowly in low margin operations such as the

raising of beef cattle.

In some cases, efficient alternatives to protection

of intellectual property protection via patents are

feasible. Trade secrets or contractual arrangements

might serve well where the animals involved have a

high intrinsic value and are limited in number, e.g.,

animals used for pharmaceutical production or for

breeding stock. When faced with the complexity of

the markets for pork or beef production, however,

such alternatives are clearly less practical, although

the same complexity complicates any scheme for

enforcement or royalty collection associated with

patenting.

1

CHAPTER 7 REFERENCES

Abplanalp, H., “Inbred Lines as Genetic Resources of

Chickens,” Third World Congress of Genetics Applied to Livestock Production (Lincoln, NE: University of Nebraska, Institute of Agriculture and Natural

Resources, 1986).
124 ● New Developments in Biotechnology: Patenting Life

2. Babb, E. M., et al., “Milk Marketing Orders, ’’Federu/

Murketing Programs in Agriculture: Issues and

Options (Danville, IL: Interstate Printers and Publishers, 1983).

3. Butler, L. J., University of California-Davis, Department of Agricultural Economics, personal communication, Oct. 19, 1988.

4. Butler, L. J., and Marion, B. W., “The Impacts of

Patent Protection on the U.S. Seed Industry and

Public Plant Breeding,” Monograph #16, Department of Agricultural Economics, University of Wisconsin, September 1985.

5. Kuchler, F., Office of Agricultural Biotechnology,

Office of the Secretary, U.S. Department of Agriculture, Washington, DC, personal communication,

Aug. 18, 1988.

6. hsser, W., ‘*Commercial Applications and Economic Impact of Patented Animals,” contract report

prepared for the U.S. OffIce of Technology Assessment. June 1988.

7. Marion, B. W., The Organization and Performance of

the U.S. Food System (bxington, MA: hxington

Books), 1986.

8. Marion, B. W., University of Wisconsin, Department

of Agricultural Economics, Madison, WI, personal

communication, Oct. 28, 1988.

9. Raines, L. J., Director for Governmental Affairs,

Industrial Biotechnology Association, personal communication, August 1988.

10. Schmid, A. A., Department of Agricultural Economics, Michigan State University, East Lansing, MI,

personal communication, Oct. 21, 1988.

11. U.S. Congress, Office of Technology Assessment,

Alternatives to Animal Use in Research, Testing, and

Edu[u[ion (Washington, DC: U.S. Government Printing Office, OTA-BA-273, February 1986).

12. U.S. Department of Commerce, Bureau of the

Census, “1982 Census of Manufacturers Industry

Series: Meat Products,” MC82- 1-20A, March 1985.
Chapter 8

\

Patenting of Animals—

Ethical Considerations

“I know I’m not supposed to get on a soapbox, but how can anybody say this kind of development

is unethical or wrong?” Donald J. Quigg

Commissioner of Patents

“In one regulatory stroke, the Patent Office reduced the entire animal kingdom to the lowly status

of a commercial commodity, indistinguishable from electric toasters and automobiles.”Jeremy Rifkin

Foundation on Economic Trends

"

. . . Congress intended statutory subject matter to include anything under the sun made by man.”

Chief Justice Warren Burger

majority opinion, Chakrabarty v. Diamond

“What has been is what will be, and what has been done is what will be done; and there is nothing

new under the sun.” Ecclesiastes 1:9
CONTENTS

Page

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

ARGUMENTS FOR PATENTING TRANSGENIC ANIMALS . . . . . . . . . . . . . . . . . . . . . 127

Patent Law Regulates Inventiveness, Noncommercial Uses. . . . . . . . . . . . . . . . . . . . . . . 127

Patenting Promotes Useful Consequences.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128

Patenting Is Necessary for the United States To Compete in an

International Marketplace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129

Patenting Is Preferable to Trade Secrets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129

Patenting Rewards Innovation and Entrepreneurship. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130

ARGUMENTS AGAINST PATENTING TRANSGENIC ANIMALS . . . . . . . . . . . . . . . . 130

Metaphysical and Theological Arguments Opposing Patenting. . . . . . . . . . . . . . . . . . . . . 130

Patenting Involves Inappropriate Treatment of Animals. . . . . . . . . . . . . . . . . . . . . . . . . . . 133

Opposition to Patenting From an International Perspective . . . . . . . . . . . . . . . . . . . . . . . . 135

Patenting Promotes Environmentally Unsound Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . 136

Patenting Produces Excessive Burdens on American Agriculture. . . . . . . . . . . . . . . . . . . 136

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137

CHAPTER 8 REFERENCES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137

Box

Box Page

8-A. Statement, Consultation on Respect for Life and the Environment. . . . . . . . . . . . . . . 134
Chapter 8

Patenting of Animals—Ethical Considerations

INTRODUCTION

A number of ethical issues have been raised in

discussions regarding the patenting of animals. This

chapter summarizes arguments regarding the patenting of animals that have been offered publicly and

which claim to have an ethical component. A

substantive evaluation of these arguments is beyond

the scope of this chapter. Many arguments claiming

a moral or ethical basis have, by their own admission, not been fully formulated to date (hence, one

rationale for a legislative moratorium on the granting of patents on animals) ( 15).

The range of opinion on the rights and wrongs of

using animals to satisfy human needs is as broad as

the political spectrum itself. Interest in the moral

status of animals and the rights, duties, and obligations owed by humans to animals has been long

debated from religious and philosophical viewpoints

(30). The ability to patent animals introduces a new

legal concept in the notion of ownership of animals—

a limited, exclusive, intangible property right–-that

did not exist previously. Some argue that such a

property right differs little from previous notions of

accepted human ownership and control of animals;

others disagree, claiming that profound issues are

raised.

In considering various ethically founded arguments, the question is raised: Is this issue one that is

uniquely related to patenting of animals? In other

words, would the issue exist independently of any

debate on animal patenting?

ARGUMENTS FOR PATENTING

TRANSGENIC ANIMALS

Patent Law Regulates Inventiveness,

Not Commercial Uses

Patent law defines what is a patentable invention

and describes the process that applicants must

undertake in applying for a patent (see ch. 3). The

patent statute, though detailed in procedural

requirements regarding the application, issuance, maintenance, and reexamination of a patent, is silent on subsequent use or commercial

application of a patented invention. This stems in

part from the constitutional roots of patent law, as

compared to constitutional powers permitting Congress to regulate commerce. The constitutional role

of patents is “to Promote the Progress of Science and

useful Arts.” Other congressional powers, most

importantly the right to regulate commerce, have

been used to enact statutes regulating health, safety,

the environment, and market forces. Some proponents of animal patenting argue that it is beyond the

reasonable scope of patent law to regulate the use of

the invention, and that the Patent and Trademark

Office (PTO) is ill-equipped to make ethical determinations regarding the possible uses of the more

than 4 million patents it has granted.

The lone statutory exception to the proposition

that patents should be denied for inventions is the

Inventions Secrecy Act (35 U.S.C. 181-188), allowing the withholding of patents in cases where their

issuance is deemed to be detrimental to national

security. This law has been used to withhold patents

involving the use of special nuclear material or

atomic energy and inventions having significant

utility in the conduct of aeronautical and space

activities (7). Department of Defense agencies have

responsibility under the act for reviewing relevant

patent applications and asking PTO for a secrecy

order.

Other than under the narrow confines of the

Inventions Secrecy Act, the only way to stop the

issuance of a patent on public policy grounds is to

show that the invention has no possible use (utility

is a requirement of patentability). In one case, a court

determined that a drug had no utility because “of

extreme toxicity to the point of immediate death

under all conditions of its sole contemplated use”

(l). As for suggested illegal or immoral uses of

patented inventions, limited court rulings (mainly

involving patents on gambling devices) suggest that

patents can be denied only if the invention has

absolutely no other use other than an illegal or

immoral one. This standard is extremely difficult to

meet (6,19).

–127-
128 ● New Developments in Biotechnology: Patenting Life

Using patent law to regulate a specific technology

(in this case, the issuance of patents on living

inventions) could have unforeseen consequences.

One issue is whether potential adverse consequences

are even relevant to patenting. Should, for example,

patents be denied to certain inventions that are useful

but potentially harmful (e.g., a new cigarette filter,

a firearm)? If commercial consequences are to be a

relevant factor for determining patentability, who

should make such decisions? The patent system

could be used to regulate the use of the technology

by denying to inventors the usual rewards of

inventiveness-hindering science and the useful

arts, as opposed to promoting them. A precedent

could be set that could be used to hinder the

development of technologies not yet foreseen. Unless it can be shown that patented animals are so

inherently dangerous or illegal as to have no possible

utility or threaten the national security within the

meaning of the Inventions Secrecy Act, it appears

that laws regulating commerce, not the patent law,

are the proper statutory venues for addressing the

ethical questions surrounding the uses of patented

animals.

Some opponents of patenting animals are troubled

by arguments based on what body of law is

appropriate for regulating possible consequences of

animal patenting on the grounds that such discussion

avoids substantive discussion of animal patenting

per se (2).

Patenting Promotes Useful Consequences

The basic purpose of the patent laws is found in

the section of the Constitution that authorizes the

creation of such a system. Congress is given the

power “to Promote the Progress of Science and the

useful Arts, by securing for limited Times to Authors

and Inventors the exclusive Right to their respective

Writings and Discoveries” (U.S. Constitution, Article 1; Section 8).

Proponents of animal patents argue that granting

patents increases the incentives for inventors to

develop useful inventions. Some would see this

argument as a purely pragmatic one, appealing to

considerations of social policy and lacking any

ethical component. Others would disagree with such

a characterization. Defending social institutions on

the grounds that they lead to desirable consequences

(such as encouraging inventions) is a form of ethical

reasoning, usually called consequentialist reasoning, that has substantial ethical significance, even if

most would agree that it is only one of many

different ethical arguments that should be considered.

Consequentialist reasoning that outlines the

benefits of patenting animals is the basis of the

most widely used argument by proponents of

patenting. In testifying before Congress on June 11,

1987, the Assistant Commissioner for Patents asserted:

By granting the right to exclude others, the law

provides an incentive for those who create and

develop new technology . . . The grant of patent

rights has in fact encouraged research and provided

useful new products including research into solutions of problems such as those associated with

genetic disorders and increasing food yields (29).

Similar claims have been advanced by others on

behalf of the biotechnology industry (12,13), some

segments of the agricultural community (27), and

some research scientists (5,32).

By their nature, consequentialist arguments provide greater or lesser support for a social policy

depending upon the probability of the outcome (the

higher the probability, the stronger the support) and

upon the perceived desirability of the outcome (the

more desirable the outcome, the stronger the support). This feature makes their support difficult to

assess in particular cases, since it is often difficult to

predict how desirable the outcomes will be and how

likely they are to occur.

Such a situation exists with respect to patenting

animals. Will benefit accrue from the development

of biotechnologically derived animals that are patented? How likely is it that such benefits will

actually be produced, and how soon? To what degree

would such developments fail to take place if

patenting is not permitted? The answers to these

questions are unknown. Nevertheless, the rapid

expansion of biotechnology suggests that many

individuals and companies are prepared to invest

time and capital on the assumption that biotechnology in general, and transgenic animals in particular, hold promise for useful, marketable advances.

Coupled with the U.S. experience that patents
Chapter 8---Patenting of Animals--Ethical Considerations ● 129

generally encourage inventions, many argue there is

substantial consequentialist support for the patenting of transgenic animals.

Yet, considering the logic of such consequentialist reasoning demands that possible harms also be

considered. Animal suffering, hardship for the small

farmer, and reduction in genetic diversity are all

potential consequences cited by opponents of animal

patenting.

Patenting Is Necessary for the

United States To Compete in an

International Marketplace

Arguments for patenting transgenic animals on

consequentialist grounds usually refer to such direct

beneficial consequences as improving the food

supply, providing animal models for the study of

human diseases, and providing a means to produce

pharmaceuticals more efficiently. Additionally, some

proponents of animal patents often argue that

allowing such patenting is necessary if the Nation’s biotechnology industry is to be able to

compete internationally.

America’s competitiveness is the centerpiece for

international trade discussions today. Intellectual

property is a prominent component of that ability to

compete. America’s competitiveness can be strengthened by providing more effective legal protection for

American technology. Congress would be going in

the wrong direction to consider limiting protection

for biotech inventions . . . (12)

Again, some would see this argument as purely

pragmatic, appealing to social policy considerations

and lacking an ethical component, and that it is

appropriate for a society to adopt measures for

promoting economic growth in an increasingly

competitive international marketplace. If patenting

transgenic animals could make a significant contribution to promoting such growth, an additional line

of consequentialist reasons for supporting the patenting of such animals would result. At present,

however, the precise legal situation governing the

patenting of animals throughout the world is unclear.

Patenting Is Preferable to Trade Secrets

A final consequentialist argument revolves

around the fact that patents are not the only way to

protect intellectual property. With inventions from

biotechnologies, the most likely alternative would

be to view such developments as trade secrets. If

patents, for example, are not allowed for transgenic

animals, then inventors could attempt to protect their

commercial value by treating them as trade secrets.

Some argue that this could have negative consequences for society.

These individuals propose that such negative

consequences would flow from a central provision

of patent law: disclosure. In order to obtain a patent,

one must submit a complete specification, which is

a description that would enable one skilled in the

relevant art to make and use the invention. In order

to aid disclosure, one can deposit the invention in

depositories that will provide samples on request

after the patent is issued (see ch. 9). In either case,

this so-called enablement requirement provides new

information that can be, and historically has been,

used by scientists and competing companies to

develop alternatives to and improvements on the

patented invention. If companies resort to trade

secret protection of intellectual property rights in

transgenic animals because patent protection for

animals is unavailable, then information sharing

could be limited. Further, trade secret protection

may be a more limited option when animals can

reproduce the trait (35).

Patenting, therefore, can promote research by

contributing to the growth of publicly available

knowledge. Science works in a building block

fashion—one discovery building on another-and

scientists must have access to the discoveries. Thus,

patents, even with the delays involved in publishing,

are probably preferable to trade secret protection

(27). One example involves cortisone, the pioneering patented discovery in the steroid hormone field.

Cortisone was promptly followed by a host of

noninfringing competitive inventions by others,

each of which was stimulated by the initial disclosure by the cortisone inventor (1 1).

It is argued by some opponents of animal patents

that research and development of new animal

varieties has occurred in the absence of patent

protection. If patent protection does not extend to

animals per se, patent protection would still exist for

related processes. Further, trade secret protection

would provide some measure of intellectual property

protection for inventions of new animals.
130 ● New Developments in Biotechnology: Patenting Life

Patenting Rewards Innovation and

Entrepreneurship

The arguments for patenting animals presented to

this point have been consequentialist arguments.

This section examines a nonconsequentialist line of

reasoning reflected in the following:

The moral justification for legal practices like

patenting and copyright have received scant attention in the literature of ethics. The general rationale

for both the copyright and patent systems is that they

encourage the investment of time and energy in the

act of creating . . . Unless and until these revered

systems produce serious harm to human or animal

welfare, they should be preserved intact as an

ethically appropriate way of acknowledging the

initiative and creativity of authors and inventors

(33).

Two different ethical justifications for patenting

lie within these remarks. The first, a fundamental

consequentialist argument, is that the system of

patents encourages greater public knowledge by

creating a contract between the inventor and the

Government, rewarding those who disclose their

inventions. The second is the nonconsequentialist

argument that inventors are entitled to patents as an

acknowledgment of their efforts; it is this line that is

further explored.

Several different ethical bases for any system

of property rights exist and each can be applied

to intellectual property rights as well. One discussion (14) divides them into forward looking arguments (the appeals to consequences discussed above)

and backward looking arguments. The latter justify

property rights as entitlements to the fruits of one’s

labor and draw upon themes derived from John

Locke’s seminal discussion of property rights (20).

Applied to the area of patenting transgenic animals,

the conclusion can be reached that inventors are

entitled to patent rights as a way of giving them the

fruits of their labor when that intellectual labor is for

the promotion of science.

Although many would agree with this conclusion,

two points are raised by it. First, it introduces into

patent law amoral theme not normally present in this

area of the law. Nevertheless, it could be a legitimate

theme to introduce and seems to capture some of

what those working in the field say about their rights

to a patent.

Second, such entitlements could make less sense

in the context of corporate and university research,

especially federally funded research, than in the area

of individual research(3). In any area, an entitlement

to the fruits of one’s labor needs to be balanced

against considerations of public need to the fruits of

that labor. Perhaps, however, that balancing is

already accomplished by satisfaction of the enablement requirement, which allows others to use the

information to develop other ways of meeting public

needs without infringing on the patent.

ARGUMENTS AGAINST

PATENTING TRANSGENIC

ANIMALS

Metaphysical and Theological Arguments

Opposing Patenting

Many fundamental arguments opposing patenting

draw upon metaphysical (i.e., abstract or transcendental philosophical concerns about the fundamental nature of reality) and theological claims to

support their position. They raise questions about

the meaning of and relations among living creatures

and the world they inhabit. This section examines

concerns articulated by a range of opponents to

animal patents.

Shortly after the Chakrabarty decision, in which

the Supreme Court ruled that a living microorganism was patentable, a number of questions

about the patentability of living organisms of any

size or complexity were raised. For example:

Consider first the implicit teaching of our wise men,

that a living organism is no more than a composition

of matter, no different from the latest perfume or

insecticide. What about other living organisms—

goldfish, bald eagles, horses? What about human

beings? Just compositions of matter? Here are deep

philosophical questions to which the Court has given

little thought, but in its eagerness to serve innovation, it has, perhaps unwittingly, become the teacher

of philosophical materialism (18).

This argument rests on the fact that the majority

in Chakrabarty found the organism to be a manufacture or composition of matter. Still, the statute

authorizing patents refers to “ . . . any new and

useful process, machine, manufacture, or composition of matter” as patentable objects, and the
Chapter 8----Patenting of Animals--Ethical Considerations ● 131

Photo credit: American Philosophical Society

Eugenics Building, Kansas Free Fair, 1929. Livestock judging occurred at this site.

relevant micro-organism only fell under this descrip- even if they are much more than that. The Court,

tion. This aspect of the decision was also the basis of however, was required to regard living organisms as

criticism by a working party of the World Council of such compositions for purposes of patenting them;

Churches: that is, they saw their material composition as the

The U.S. Supreme Court decision on patenting of life crucial statutory factor, as opposed to other factors

forms rested upon a specific, highly reductive that are not part of the patent statute (e.g., their

changing nature, ability to reproduce, etc.) (21). conception of life, which sought to remove any

distinction between living and nonliving matter that A second, separate argument is raised in the could serve as an obstacle to the patenting of living

but unnatural organisms (34). following passage:

It cart be argued that it would be inappropriate for The combining of human genetic traits with animals,

with the results to be patented and owned, raises

society to adopt a policy advocating a materialistic unique moral, ethical, and theological questions,

conception of life. It is true that all material objects, such as the sanctity of human worth, which must be

including human beings, are compositions of matter, examined (25).
132 ● New Developments in Biotechnology: Patenting Life

One example is the introduction of genes for

human growth hormone into farm animals to produce more rapid rates of growth. The sanctity of

human worth is a fundamental moral principle of

society, standing behind society's beliefs, for

example, that humans cannot be killed or mistreated and are entitled to freedom from enslavement. A sanctity of human worth principle seems to

encompass at least the following two elements:

. the life of the entity in question is of sufficient

value that it can be taken only in the most

extreme circumstances (e.g., self-defense); and

● the individual is free to act as it desires, for it

should not be treated as a mere means for others

to attain their ends.

By using animals for food, most of society

ascribes less significance to the lives of animals than

to humans. By allowing animals to be owned by

humans who can raise them for use as food, for

breeding, as a source of various byproducts (e.g.,

wool), as objects to be entered into competitions, or

as pets, most of society demonstrates that it is

sometimes or often willing to treat animals as means

to human ends while also insisting that unnecessary

animal suffering be eliminated. Overall, as currently

constituted, society appears able and willing to

distinguish between human and other animal life.

, Does recombinant DNA technology break down

barriers between human and other animal life? If it

were possible (and it is neither possible now nor

likely possible in the foreseeable future) to genetically alter animals so they had more of those

capacities and features (e.g., the capacity to form

moral judgments or the capacity to experience the

beautiful and the sublime) seen as distinctive to

humans, then society could face difficult ethical

questions as to how these creatures should be treated

and as to whether a sharp distinction between

humans and other animals can be maintained. At

present, these issues do not appear to be raised by

any of the genetic alterations of animals that will

likely be produced in the foreseeable future (see ch.

6). Still, rapid advances in genetics have fostered

debate regarding a most sensitive issue--could

human beings be patented? Although no attempts

have been made to test this issue, PTO has publicly

stated that living matter must be nonhuman in order

to be patentable subject matter, and the House of

Representatives has passed a bill prohibiting the

patenting of human beings (H.R. 4970, 100th

Congress).

Another set of interconnected arguments centers on humanity's control over nature, its responsibility toward nature, and the need to

preserve individual animals and protect species

integrity. These lines of reasoning are central issues

of metaphysical and theological disquiet about

patenting animals, and are reflected in the following:

When the National Council of Churches has issued

this statement of concern, it comes from the background of Judeo-Christian thinking about how we

relate to the natural environment. In a nutshell that

background says that we have a responsibility for

preserving the integrity of the creation, and for

working with it in order to preserve its intrinsic

values. . . the doctrine of trust in legal parlance is

synonymous to what we are talking about theologically or religiously when we think about the

relationship of the creation to humanity. The JudeoChristian view says that the creation is, in essence,

held in trust; there are limitations on what we can do.

We have a responsibility to see that its integrity is

preserved. This background has led to legislation

such as endangered species laws, animal welfare

laws, [and] laws regarding environmental quality

(15).

Although this reflects one viewpoint, others argue

that a traditional Judeo-Christian image is that of

man’s dominion over nature (24). Calvin, for example, repeatedly commented on the fact that God

created all things for man’s sake. It is in recent

years that the theme of stewardship over nature

emerged as an idea of increasing importance. The

traditional concept of a steward or trustee is the idea

of a person who manages property for the benefit of

other persons (present and future) who are its

owners. The traditional concept of stewardship or

trusteeship suggests that property held in trust can be

radically transformed by trustees if it serves the best

interest of its human owners, present and future. One

humanistic notion of stewardship--one sufficient to

defend environmental protection statutes and perhaps endangered species laws (23)—is the concept

that humans must treat the property they own as a

trust for those human beings who will follow in

future generations. The Judeo-Christian view of

stewardship of creation is not management of

property for other persons; rather, that all creation
Chapter 8--Patenting of Animals-Ethical Considerations ● 133

belongs to God, and is to be managed with that in

mind. Opinions vary as to degree of management,

from a reverential view that seeks to avoid consumptive use to a position that endorses responsible use

of the earth’s resources for human ends (4), Religious notions view stewardship as a way to thank the

Creator (22).

Some have reinforced these theological considerations by appealing to the metaphysical concept of

the “telos” (nature) of animals (26). Some opponents

of animal patents claim that animals have a right to

have their “telos” respected, and that patenting of

transgenic animals is immoral because it sanctions

an immoral violation of this right to an inviolable

“telos.”

One group of ethicists, environmentalists, animal

rights advocates, and theologians met in April 1988

to urge a moratorium on the patenting of animals as

“a matter of deep philosophical and spiritual concern.” The group issued a statement addressing

genetic engineering and the patenting of animals

(box 8-A).

Patenting Involves inappropriate

Treatment of Animals

In the current debate surrounding patenting animals, the animal welfare community has assumed a

leadership role opposing such patenting. Several

members of this community have presented a

number of arguments in testimony before Congress.

This section considers three of these arguments.

Argument One

Developing transgenic animals, encouraged by

patenting, will lead to more animal suffering than

changes produced through selective breeding

and crossbreeding.

Some advocates of this point of view claim that

genetic engineering, unlike traditional breeding

practices, permits the rapid exchange of genes

between unrelated species, resulting in experiments

with unpredictable results and increased suffering by

animals (16). This argument appeals to an ethical

claim that animal suffering is wrong and should be

avoided. It is an argument that is consonant with

most moral views about animals.

The present body of knowledge describes a

diversity of attitudes towards animal suffering (30).

Cartesian (followers of the French mathematician

and philosopher, René Descartes, 1596-1650) have

been least sympathetic to any concern about such

suffering. Thomas Aquinas and Immanuel Kant

viewed the ethical significance of humaneness

toward animals as due to the way in which it

encourages humans not to be cruel to each other. The

Benthamite tradition (after the English philosopher

Jeremy Bentham, 1748-1832), however, sees animal

suffering and human suffering as morally similar to

each other. Some contemporary Benthamites allow

for significant differences in degree. Finally, some

contemporary thinkers have advanced the idea that

animals have a presumptive right not to be harmed

(25).

Despite the range of opinions, recent Federal

legislation (including the Animal Welfare Act of

1985) and regulations (including the 1985 Public

Health Service policy) covering animal research

indicate that U.S. society accepts the idea that

animal suffering has ethical significance and that

inhumane treatment of animals should be avoided.

These actions mandate costly improvements in

animal care, and thus, likely indicate that society

accepts that human interests do not always outweigh

animal interests. Nevertheless, the fact that the

conduct of the research per se is not regulated,

except for rules covering anesthetizing animals,

could be interpreted as meaning that our society

believes that human interests, on balance, take

precedence over animal interests. Thus, arguments

regarding animal suffering could be evaluated in

light of current Federal policy, keeping in mind that

those who ascribe even greater ethical significance

to animal suffering will continue to be troubled,

While current regulatory mechanisms protect some

animals against inhumane treatment in the research

that patenting will encourage, not all animals are

treated equally. The Animal Welfare Act, for example, does not apply to rodents, birds, and farm

animals intended for use as food or livestock (30).

The Public Health Service regulations apply only to

federally funded research (30). Thus, Federal coverage of animal welfare is arguably incomplete. One

observer points out:
134 ● New Developments in Biotechnology?: Patenting Life

Box 8-A-Statement, Consultation on Respect for Life and the Environment

On Ethics and Theology

We affirm that humanity and all of nature live in a relationship of mutuality and interaction in covenant with

the Creator.

We recognize that the human species is not in right relationship with the rest of creation; and that our

transgression lies in our continued abuse of the creation and our desire to remake it in our own image as a means

of satisfying exclusively human ends. Redemption includes not only personal salvation but also the restoration of

the natural world and establishment of a relationship that will protect the integrity of creation,

The ethical, environmental, socioeconomic and theological ramifications of genetic engineering and patenting

of life are profound. They point to the probability that the integrity and future of creation will be placed in even

greater jeopardy if our power over the genes of life is not exercised prudently and with reverence to help to restore

the covenant: to heal the Earth and ourselves,

On the Patenting of Animals

We urge that a moratorium should be declared on the patenting of animals.

1. The 1987 ruling by the U.S. Patent Office made possible the patenting of genetically altered animal life

forms. This decision is a matter of deep philosophical and spiritual concern. It portends fundamental changes in the

public’s perception of, and attitude towards animals, which would be regarded as human creations, inventions, and

commodities, rather than as God’s creation and subjects of nature.

2. The decision was hasty, preempting the necessary debate. There was not a sufficient number of public

hearings, the concerns found in some of the reports (such as those from the National Council of Churches and the

Humane Society of the United States) were not adequately addressed, and the relevance of philosophical and ethical

considerations was not weighed sufficiently.

Matters needing sustained public debate include: the current practice of combining human with nonhuman

genetic material, unknown risks to human life, the probable suffering of the animals in question, provision for their

humane care, the risk of adverse environmental impacts, and the possibility of deleterious economic and social

effects on farmers and consumers worldwide.

New Creation Institute Department of Environmental Justice and Survival

Missoula, MT United Methodist Board of Church & Society

National Council of Churches Washington, DC

New York, NY Center for the Respect of Life and the Environment

International Network for Religion and Animals The Humane Society of the United States

Silver Spring, MD Washington, DC

Foundation on Economic Trends Presbyterian Church (USA)

Washington, DC New York, NY

The ethical issues related to interspecies gene

transfers or the patenting of animals will probably be

clarified if they are distinguished analytically from

the animal welfare question . . . Further, the goal of

securing more humane treatment can be, and is

being, approached directly through such means as

legislation and regulations . . . (33).

Some have suggested that genetic engineering of

leukosis virus. However, it is not yet apparent

whether patents will result in increased animal

suffering. Although the first patent (U.S. 4,736,866)

was seen by many as an aid to cancer research, the

mammals which are the subject matter of that patent

are designed to be genetically engineered to more

easily develop cancer. One view centers on the

possibility that more animals will be subjected to

farm animals could minimize animal suffering by induced cancer. An opposing view is that fewer

engineering disease-resistant traits into farm ani- animals will be needed, since fewer genetically

mals ( 17). An example of this would be the attempt engineered (and hence, patentable) animals will be

to engineer chickens to be resistant to the avian needed in order to achieve statistically significant
Chapter 8--Patenting of Animals--Ethical Considerations 135

research results previously obtained by using nonpatented mice.

Argument Two

Patenting reflects an inappropriate sense of

human control over animal life and an underestimation of the value of nonhuman life.

Argument Three

Patenting animal life is the first step towards a

decline in the belief in the sanctity and dignity of

life.

Unlike the first argument, which appeals only to

the ethical claim that animal suffering is wrong and

should be avoided, the second and third arguments

appeal to the inherent respect or sanctity of every

unique being. Under this viewpoint, patenting of

animals reflects a human arrogance toward other

living creatures and ignores the spiritual interconnectedness of all life (16). Supporters of this view

generally ascribe great value to every creature’s

continued existence and flourishing. Opponents of

this viewpoint argue that a society that generally

uses animals for food cannot be viewed as committed to a belief in the inherent sanctity of every unique

being, or that an overriding moral imperative (e.g.,

fighting hunger, disease) requires the use of animals

in a manner which permits patenting.

Opposition to Patenting From an

International Perspective

Several opponents of patenting animals have

raised concerns that draw upon the observation that

U.S. decisions about patents must be seen in global

perspective. This section examines two concerns

arising from this perspective: the argument that

patenting of transgenic animals must be wrong

because so many countries have explicitly banned

the patenting of new types of animals; and the

argument that patenting will only exacerbate the

problem of inequality between developed countries

and developing countries, Each concern is examined

separately.

Opponents of patenting note that most countries in the developed world do not permit animal

patents, especially members of the European

Patent Convention (EPC) (see ch. 10). This argument could have some ethical significance in debating the argument that patenting is required to

maintain American competitiveness. Those opposing this argument note:

●

●

●

the present lack of certainty as to how many

countries would permit such patents,

that other countries have not yet fully debated

the subject of animal patenting, and

that ethical issues are not defined nor settled by

counting how many countries do or do not

allow a particular practice.

For example, a practice accepted by many countries even for a long period of time (e.g., slavery)

may nevertheless be profoundly immoral, while a

practice rejected by many countries even for a long

period of time (e.g., divorce) may nevertheless be

morally acceptable. Still, there is some force to the

argument, and this suggests that the basis of

widespread legal prohibition on the patenting of

animals should be examined to analyze the deliberations of countries that have banned the practice. At

present, however, ethical lessons from international

consideration of the issue are inconclusive because

of uncertainties about the extent and basis of

international opposition.

The second ethical concern raised pertains to

whether patenting animals is inappropriate because of potential adverse economic implications

for the Third World. For example:

One (issue) is applying high technologies like

agricultural biotechnology to countries that might

not be able to afford them-or the social and

economic consequences they spawn. The genes of

high-tech agriculture lodged in every new crop

variety or livestock breed can carry with them high

capital and extensive infrastructure costs . . . Secondly, there are questions of access. If, for reasons of

competitiveness, we begin to hoard scientific advances for commercial and/or political reasons, and

only make such discoveries and developments

available for a price, that can only breed mistrust and

anger and invite charges of technological imperialism from other nations (10).

This argument has both a consequentialist component (patenting and the biotechnology it encourages

will lead to bad results for underdeveloped countries) and an equity component (it is unfair for more
136 . New Developments in Biotechnology: Patenting Life

developed countries to imperialistically exploit less

developed countries through biotechnology and its

patenting). Difficult ethical and factual issues are

raised by such claims. For example, some proponents of animal patenting claim that many of the

potential results of animal patents (e.g., new vaccines, disease resistant animals) will more benefit

developing nations than developed nations. Further,

no consensus exists regarding a well-developed or

generally accepted theory of justice for the international context, one that would enable evaluation of

the ethical aspects of the relations between the

developed and developing worlds. And despite

concerns, the Patent and Trademark Office is

probably not the most appropriate place to structure

a morally appropriate program for the international

economic order. At the least, such a measure lacks

precedent.

Patenting Promotes Environmentally

Unsound Policies

The development of transgenic animals encouraged by a system of patenting is also a concern of

some opponents of animal patents. Two different

environmental issues have been raised in connection

with patenting animals,

The first concerns the environmental impact of

releasing transgenic animals into the wild. Some

believe that the encouragement offered by patenting

should be withheld at least until better environmental protection laws are passed. The question of

possible environmental impacts of genetically engineered organisms has been examined by OTA

elsewhere in detail (31). While potential problems

could arise, adequate review offers a high likelihood

of preventing or preempting such problems. Furthermore, nothing now being pursued seems likely to

result in any environmental problem that would be

unique to transgenic animals, widespread, or difficult to control. Indeed, it has not been demonstrated

that patenting animals is at all likely to increase the

probability of an environmental problem. It is

possible, however, that as the technology advances,

applications of engineered organisms may emerge

that could carry a higher probability of producing an

environmental problem than anything now contemplated. If and when such a situation develops,

appropriate regulatory or legislative remedies could

be applied.

A second argument has been raised by some, that

biotechnology developments fostered by a system of

patenting (including transgenic animals) could lead

to a dangerous decline in the genetic diversity of

important animal populations (8). On the other hand

many argue that increased diversity could be a result

of biotechnological advancements (9).

Patenting Produces Excessive Burdens on

American Agriculture

America’s agricultural community is divided over

the question of the patenting of transgenic animals.

What are the arguments used by the opponents of

patenting within the agricultural community and

what are their ethical, theological, or philosophical

dimensions? Three prominent arguments include:

1.

2.

3.

In

animal patents will result in increased costs to

consumers as producers are forced to pay

royalties to the owner of animal patents;

animal patents will result in an unfortunate

concentration in the production of animals as

small farmers are forced out by the high costs

of the royalties; and

patent holders will reap unfair benefits from

their royalties as they obtain royalties on the

succeeding generations of the patented animals when they reproduce themselves.

the case of increased costs to consumers,

three ethical components can be identified: unfavorable consequences of consumers having to pay

more for their food; the injustice of consumers

transferring wealth to the more affluent corporations; and the injustice of a few corporations

controlling the food supply. These arguments rely

upon an economic assessment of the impact of

patented animals on consumer prices (see ch. 6). If

food costs increase because of animal patents, then

this line of reasoning could be important. Defenders

of patenting argue that economic evidence indicates

that costs do not rise due to patents and that even if

costs did rise, they would reflect added value being

voluntarily chosen by consumers. The arguments of

increased consolidation within the agricultural industry is similarly rooted in economics. Because no

consensus exists about the positive or negative

impact industry concentration has had on agriculture, it is difficult to judge the ethical consequences

of such concentration.
Chapter 8--Patenting of Animal--Ethical Considerations ● 137

The third argument raised is, however, unique.

It challenges the legitimacy of animal patents on the

grounds that self-reproducing animals should not be

patented, because breeders would unfairly have to

pay a fee each time the patented animal they

purchased reproduces. At present it is unclear

whether patent rights are enforceable over future

generations (see ch. 7), although some would argue

that there is something unfair about patent rights

being enforceable over future generations and about

the royalty fee covering future breeding rights. Some

proponents of patenting, however, claim that farmers will make an economic judgment on whether the

patented animal is preferable to the unpatented

animal.

SUMMARY

Arguments with ethical components for and

against the patenting of animals have been summarized. There are significant consequentialist arguments for allowing such patenting. They are balanced by consequentialist concerns about the effects

that could occur if animals are patented. Because

they are based on factual assertions that have yet to

be proven, these consequentialist arguments are

speculative. Other arguments based on philosophical, metaphysical, and theological considerations

are likewise difficult to evaluate since they usually

require the assumption of certain presuppositions

that may not be shared by other persons. Such

arguments are not likely to be reconciled between

persons holding opposing and often strongly held

beliefs.

Most consequentialist arguments that have been

raised both for and against the patenting of animals

concern issues that would be materially unchanged

whether patents are permitted or not, since most

arguments center on issues that existed prior to the

current patenting debate (e.g. animal rights, the

effect of high technology on American agriculture,

the distribution of wealth, international competitiveness, the release of novel organisms into the

environment). It is unclear that patenting per se

would substantially redirect the way society uses

or relates to animals. Some argue that this uncertainty supports the notion of a moratorium or

prohibition of animal patenting. Others argue that

any practical and consequentialist concerns raised

by the patenting of animals can be addressed by

appropriate regulations or possibly statutes, rather

than by amendments to patent law.

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

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and Resources, United Church Board for Homeland

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Boyce, J. R., Assistant Director of Scientific Activities, American Veterinary Medical Association, Schaumberg, IL, personal communication, Aug. 8, 1988.

Brill, W., testimony before U.S. Congress, Committee on the Judiciary, Subcommittee on Courts, Civil

Liberties, and the Administration of Justice, Patents

and the Constitution: Transgenic Animals, hearings

June 11, July 22, Aug. 21, and Nov. 5, 1987

(Washington, DC: U.S. Government Printing Office,

1988).

Chicago Patent Corp. v. Gence, Inc., 124 F.2d 725

(1941).

Chisum on Patents, $1.05(2).

Doyle, J., A/tered Harvest (New York, NY; Viking

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Doyle$ J., “Biotechnology Research and Agricultural

Stability,” Issues in Science and Technology, vol. 2,

fall 1985, pp. 111-124.

Doyle, J., “Ethical Aspects of Biotechnology” (undated document).

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They Be Nourished or Stifled by Our International

Patent Laws?” Symposium on the Protection of

Biotechnological Inventions, World Intellectual Property Organization and Cornell University, Ithaca,

NY, June 1987.

Duffey, W. H,, testimony before U.S. Congress,

Committee on the Judiciary, Subcommittee on

Courts, Civil Liberties, and the Administration of

Justice, Patents and the Constitution: Transgenic

Animals, hearings June 11, July 22, Aug. 21, and

Nov. 5, 1987 (Washington, DC: U.S. Government

Printing Office, 1988).

Godown, R. D., testimony before U.S. Congress,

Committee on the Judiciary, Subcommittee on

Courts, Civil Liberties, and the Administration of

Justice, Patents and the Constitution: Transgenic

Animals, hearings June 11, July 22, Aug. 21, and

Nov. 5, 1987 (Washington, DC: U.S. Government

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138 ● New Developments in Biotechnology: Patenting Life

14,

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and Human Values, vol. 12, winter 1987, pp. 22-30.

Granberg-Michaelson, W., testimony before U.S.

Congress, Committee on the Judiciary, Subcommittee on Courts, Civil Liberties, and the Administration

of Justice, Patents and the Corwtitution: Transgenic

Anima/s, hearings June 11, July 22, Aug. 21, and

Nov. 5, 1987 (Washington, DC: U.S. Government

Printing Office, 1988).

Hoyt, J. A., testimony before U.S. Congress, Committee on the Judiciary, Subcommittee on Courts, Civil

Liberties, and the Ministration of Justice, Patents

and the Constitution: Transgenic Animals, hearings

June 11, July 22, Aug. 21, and Nov. 5, 1987

(Washington, DC: U.S. Government Printing Office,

1988).

Industrial Biotechnology Association, “Animal Patents: Myths and Fact..” (undated document).

Kass, L., “Patenting Life,” Toward a More Natural

Science (New York, NY: Free Press, 1985).

Koppe v. Burnstingle, 29 F.2d 923 (D. Ct. R. I., 1929).

Imcke, J., Second Treatise on Government (Indianapolis, IN: Hackett Publishing Co., 1980).

Murray, TH., Director, Center for Biomedical Ethics, Case Western Reserve University, Cleveland,

OH, personal communication, Aug. 10, 1988.

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Texas Medical Center, Houston, TX, personaI communication, Aug. 22, 1988.

Norton, B., Why Preserve Natural Variety (Princeton, NJ: Princeton University Press, 1987).

Passmore, J., Man’s Responsibility for Nature (Lxmdon: Duckworth, 1974).

Regan, T,, The Case for Animal Rights (Berkeley,

CA: University of California Press, 1983).

Rollin, B., Animal Rights and Human Morality

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Sorensen, A. A., testimony before U.S. Congress,

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Nov. 5, 1987 (Washington, DC: U.S. Government

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Patenting (undated document).

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Committee on the Judiciary, Subcommittee on

Courts, Civil Liberties, and the Ministration of

Justice, Patents and the Constitution: Transgenic

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Nov. 5, 1987 (Washington, DC: U.S. Government

Printing Office, 1988).

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Walsh, L., testimony before U.S. Congress, Committee on the Judiciary, Subcommittee on Courts, Civil

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Chapter 9

Deposit Considerations

“No other arts are known, nor were any suggested, where words alone may be incapable of

describing an invention sufficiently to enable one skilled in the art to make and use it in a

reproducible manner.”

U.S. Patent and Trademark Office

Proposed Rule, Deposit of Biological Materials for Patent Purposes
CONTENTS

Page

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

INDEPENDENT DEPOSITORIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

American Type Culture Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

Northern Regional Research Laboratory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142

Institute of Microbiology, Rutgers University.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142

In Vitro International, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142

DEPOSIT ISSUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142

Patent and Trademark Office Guidelines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143

Role of the Independent Depository . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146

HOW ARE DEPOSITS MADE AND MAINTAINED.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

ACCESS TO SAMPLES ON DEPOSIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148

POSSIBLE METHODS OF DEPOSIT FOR PATENTED PLANTS

AND ANIMALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149

IMPACT OF PATENTED ANIMALS ON INDEPENDENT DEPOSITORIES . . . . . . . 150

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150

CHAPTER PREFERENCES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151

Tables

Table Page

9-1. Selected U.S. Depositories and Strains Accepted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142

9-2. institutions Having Acquired the Status of International Depositary Authority. . . . 145
Chapter 9

Deposit Considerations

INTRODUCTION

In 1949, the Patent and Trademark Office (PT0)

began recommending to inventors that patent applications for an invention involving a micro-organism

should include the deposit of the pertinent microorganism with a culture collection. Although not a

formal requirement, patent examiners advised applicants that in cases where words alone were not

sufficient to describe the invention adequately, a

deposit was advisable.

On July 8, 1949, Parke Davis Co. deposited a

culture of Streptomyces venezuelae in the American

Type Culture Collection (ATCC) which was assigned ATCC number 10712. It is listed in U.S.

Patent 2,483,892 (process for the manufacture of

chloramphenicol) which was issued October 4,

1949.

In August 1949, American Cyanamid Company

deposited a culture of Streptomyces aureofaciens

with the Agricultural Research Service Culture

Collection, better known as the Northern Regional

Research Laboratory (NRRL). It was assigned

NRRL number 2209 and is listed in U.S. Patent

2,482,055 (for the production of aureomycin) which

was issued September 13, 1949.

These two historic deposits for patent purposes

were apparently the first in the world. They stand as

forerunners to the current practice that patent

applications for inventions involving microorganisms, plasmids, vectors, cells, plant tissues,

seeds, and other biological materials that are newly

isolated, novel, manmade, or not generally available

to the public on a long-term basis be supported by a

deposit in a recognized patent depository.

Whether or not a deposit is necessary is a decision

made on a case-by-case basis. The decision generally takes into account the reproducibility of the

invention based upon a written description alone, the

level of skill in the art, the teaching of the prior art,

and the availability of starting materials. Although

not automatically required, a deposit is employed in

many cases to meet the requirement that a patent

provide enablement or the best mode of practicing an

invention (10).

INDEPENDENT DEPOSITORIES

A culture depository accepts, maintains, and

distributes cultures of micro-organisms, viruses,

cells, or other genetic-type material. A depository

may be public or private; nonprofit or for-profit. The

main function of a public culture depository is the

preservation and distribution of reference cultures

that serve as standards for users in the scientific and

educational communities.

A culture collection also improves the strains in

the collection as much as possible. The depository,

for example, insures that strains are named and

classified correctly and uses the best methods to

preserve the cultures in their original state (i.e., not

mutated). In addition, public depositories communicate information learned about the cultures in their

care through publications, workshops, and other

means.

Among organizations accepting deposits in the

United States, there are currently three depositories

(table 9-1) recognized for patent purposes under the

Budapest Treaty on the International Recognition of

the Deposit of Microorganisms for the Purpose of

Patent Procedure (see ch. 10). One other depository

existed until 1968.

American Type Culture Collection

The American Type Culture Collection (12301

Parklawn Drive, Rockville, MD 20852) is a private,

nonprofit institution organized in 1925 for the

purposes of acquiring, preserving, and distributing

cultures of micro-organisms to scientists. Its Board

of Directors is composed of scientists elected from

19 major scientific societies in the United States and

2 in Canada. Since 1949, ATCC has served as a

depository for patent purposes (the first formal

recognition of ATCC for patent deposit purposes

was provided in a 1952 letter from PTO). In 1949,

only bacteria and fungi were accepted for patent

purposes.

ATCC, responding to the needs of the patent

community, has grown to include many other types

of biological material. It now holds an estimated

8,000 deposits for patent purposes, which include

-141-
142 ● New Developments in Biotechnology: Patenting Life

Table 9-1-Selected U.S. Depositories and Strains Accepted

Depository Kinds of cultures accepted Number of cultures on hand

American Type Culture Collection (ATCC)

Agricultural Research Culture Collection/

Northern Regional Research Collection

(NRRL)

In Vitro international, Inc. (lVI)

Algae, animal viruses, bacteria, cell 1949-1985 estimated 500

lines, fungi, hybridomas, oncogenes, 1988-1987 7,500

plant viruses, plasmids, plant tissue,

cultures, phages, protozoa, seeds, and yeasts.

Nonpathogenic cultures of bacteria and fungi 1949-1987 estimated 3,000

that can be preserved by freeze drying.

Algae, animal viruses, bacteria (and with plasmids), 1983-1987 100

bacteriophages, cell lines, fungi, plant viruses,

protozoa, and seeds

SOURCE: B.A. BrandOn, ‘Daposit Requirements for Micmorgsnisms, Plants, and Animals in U.S. Patant Claims,” contract re~rl premrad for tha Office of Tachnolow Assessment, -.

U.S. Congrass, December 1987.

algae, animal viruses, bacteria, cell lines, fungi,

hybridomas, oncogenes, plant viruses, plasmids,

plant tissue cultures, phages, protozoa, seeds, and

yeasts. It was the first depositary institution acquiring the status of International Depositary Authority

(IDA) in 1981 under the Budapest Treaty, which is

administered by the World Intellectual Property

Organization (WIPO).

At its inception, ATCC did not charge for deposit

of a culture for patent purposes; but since 1952, a fee

has been charged for the deposit and distribution of

cultures deposited for patent purposes. In 1988, the

fee was $670 for 30 years of maintenance and

viability testing.

Northern Regional Research Laboratory

The Northern Regional Research Laboratory,

(1815 N. University Street, Peoria, IL 61604) was

established in 1940 as part of the U.S. Department of

Agriculture (USDA) for the study of micro-organisms

of agricultural and industrial importance. Since

1949, it has also served as a patent depository for

nonpathogenic micro-organisms that are not difficult to grow. There are approximately 3,000 cultures

on deposit.

At its inception, NRRL charged no fee; but since

1983, a fee has been charged for the deposit and

distribution of cultures deposited for patent purposes. In 1987, the fee was $500 for 30 years of

maintenance and viability testing. NRRL acquired

the status of International Depositary Authority in

1981.

Institute of Microbiology, Rutgers University

The Institute of Microbiology at Rutgers University (IMRU) accepted its first deposit for patent

purposes in 1952, and served as a depository for

bacterial cultures involved in patents until 1968. At

that time, IMRU discontinued the acceptance of

cultures for patent purposes. In 1978, all cultures on

deposit at IMRU for patent purposes were transferred to ATCC, where they are maintained today.

In Vitro International, Inc.

In Vitro International, Inc., (IV]) (611 (P) Hammonds Ferry Road, Linthicum, MD 21090), was

incorporated in 1983 as a for-profit company for the

purpose of accepting cultures for patent purposes. It

acquired the status of International Depositary

Authority in 1983. The 1987 fee for 30 years of

maintenance and viability testing of a culture

deposited for patent purposes was $610. There are

approximately 100 cultures on deposit.

IVI is the first for-profit repository for patent

deposits. Generally, the necessity for many types of

professional expertise to handle the various culture

deposits makes it an unprofitable venture.

DEPOSIT ISSUES

U.S. patents in microbiology had their beginning

in 1873 when the first patent dealing with microbiology was granted to Louis Pasteur (U.S. 141,072).

That patent included a claim to a biologically pure

culture of a micro-organism. Since the granting of

that historic patent to the Pasteur Institute, many
Chapter 9--Deposit Considerations . 143

hundreds of patents have been issued on microbiological processes.

The practice of making deposits of micro-organisms

began in 1949 with the first historic deposits at

ATCC and NRRL and this practice was followed

until 1970 when it was challenged in the U.S. Court

of Customs and Patent Appeals (CCPA) (8). CCPA,

in a landmark decision, approved, but did not

require, this practice.

Patent and Trademark Office Guidelines

The first published guidelines by PTO on the

deposit of micro-organisms for patent purposes

appeared in the Official Gazette in 1971 (17). In

these, PTO adopted the procedure approved by

CCPA in 1970 (8) as complying with (but not

required by) the statutory requirements of 35 U.S.C.

112 for an adequate disclosure of the microorganisms required to carry out the invention. PTO

said:

(1) the applicant, no later than the effective U.S.

filing date of the application, has made a

deposit of a culture of the microorganisms in

a depository affording permanence of the

deposit and ready accessibility thereto by the

public if a patent is granted, under conditions

which assure

Photo credit: American Type Culture Collection

Tanks for maintaining samples in liquid nitrogen.
144 ● New Developments in Biotechnology: Patenting Life

(a)

(b)

that access to the culture will be available

during pendency of the patent application

to one determined by the Commissioner to

be entitled thereto under Rule 14 of the

Rules of Practice in Patent Cases and 35

U.S.C. 112 and

that all restrictions on the availability to the

public of the culture so deposited will be

irrevocably removed upon the granting of

the patent;

(2)

(3)

such deposit is referred to in the body of the

specification as filed and is identified by

deposit number, name and address of the

depository, and the taxonomic description to

the extent available is included in the specification; and

the applicant or his assigns has provided

assurance of permanent availability of the

culture to the public through a depository

meeting the requirements of (l).

In 1975, an important decision was reached in

Feldman v. Aunstrup (5) in which the court held that

the use of a theretofore unknown strain in an old

process was patentable due to the prior unavailability of the strain. Feldman v. Aunstrup also expanded

the scope of the type of depository PTO would

accept—that is, private, nongovernmental, nonU. S., or even for-profit type depositories.

In 1977, establishment of the Budapest Treaty

required contracting states that allow or require the

deposit of micro-organisms as part of their patent

procedure to recognize the deposit of a microorganism with any International Depositary Authority. Any such institution must be approved by

WIPO. To acquire the status of IDA, a depositary

institution must comply with the requirements of the

Budapest Treaty. Acquisition of IDA status must be

requested by the contracting state or territory in

which the IDA is located. The procedure for the

acquisition of IDA status is specified in the Treaty.

No contracting state may require compliance with

requirements different from or additional to those

provided in the Treaty.

The Budapest Treaty was modified in 1980 and

the United States became a contracting party in

August 1980 when the Treaty became effective. As

of January 1988, there were 22 countries party to the

Treaty, There are 19 International Depositary Authorities under the Treaty, three of which are located in

the United States (table 9-2). PTO has accepted the

requirements of the Treaty as meeting deposit

requirements.

In 1985, another landmark decision, In re Lundak

(9), was handed down by the Court of Appeals for

the Federal Circuit. PTO had refused to grant a

patent to Lundak because the claimed cell line was

not deposited with a recognized depository as of the

filing date of the patent application. It had been on

deposit in Lundak’s laboratory. The Court concluded

that the only requirement regarding enablement

during the pendency of the patent application was

that a specimen of the cell line be made available to

PTO should the Office so request, as authorized by

35 U.S.C. 114. The Court held Lundak’s deposit

with ATCC, which was made a few days after filing

but prior to issuance of his patent and which is

referred to in his specification, met the statutory

requirements for enablement.

Patent applicants may not be wholly safe in

relying on the Lundak decision as a general proposition that deposits can always be made after the U.S.

filing date. Lundak was exceptional in that there was

only a 7-day gap between deposit and filing.

Moreover, the Lundak specification was descriptively complete in regard to taxonomic description.

There was little dispute as to the identity of the

deposited material and the material described in the

specification (3).

It is noteworthy that a deposit made under the

Lundak doctrine does not satisfy deposit requirements abroad. U.S. applicants, therefore, as a rule,

will lose the possibility to claim the Paris Convention’s Priority Right (Article 4) (see ch. 10) if they

deposit with independent depositories later than the

U.S. filing date (13).

In 1988, PTO published a notice of proposed rule

making for deposit of biological materials for patent

purposes (see app. C) (15). These rules, if adopted

formally by PTO, will assist the inventor and the

depository in defining the position of PTO on

deposits. A 1987 advance notice of the proposed

rules (14) stimulated written comments from 20

sources to PTO. The majority of the comments were

directed to the conditions of the release or availability of a culture once a patent is granted.
Chapter 9--Deposit Considerations . 145

Table 9-2—institutions Having Acquired the Status of International Depositary Authority

Centraalbureau voor Schimmelcultures (CBS)

Collection Nationale de Cultures de Micro-organismes

(CNCM)

Culture Collection of Algae and Protozoa (CCAP)

Culture Collection of the CAB International

Mycological Institute (CMI CC)

Deutsche Sammlung von Mikroorganismen (DSM)

European Collection of Animal Cell Cultures (ECACC)

Fermentation Research Institute (FRI)

Institute of Microorganism Biochemistry and Physiology

of the USSR Academy of Science (IBFM)

In vitro International, Inc. (IVl)

National Bank for Industrial Microorganisms and

Cell Cultures (NBIMCC)

Name of depository Address

Agricultural Research Culture Collection 1815 N. University Street

Northern Regional Research Laboratory (NRRL) Peoria, IL 61604

American Type Culture Collection (ATCC) 12301 Parklawn Drive

Rockville, MD 20852

Australian Government Analytical Laboratories (AGAL) Commonwealth Department of Administrative Services

New South Wales Regional Laboratory

1 Suakin Street

Pymble, New South Wales

Australia 2073

Oosterstraat 1

Postbus 273

NL-3740 AG Baarn

Netherlands

Institut Pasteur

28, rue du Dr Roux

75724 Paris Cedex 15

France

Freshwater Biological Association

Winderrnere Laboratory

The Ferrey House

Far Sawrey

Ambleside, Cumbria LA22 0LP

United Kingdom

Scottish Marine Biological Association

Dunstaffnage Marine Research Laboratory

P.O. Box 3

Oban, Argyll PA344AD

United Kingdom

CAB International Mycological Institute

Ferry Lane

Kew, SurreyTW93AF

United Kingdom

Gesellschaft fur Biotechnologische

Forschung mbH

Grisebachstr. 8

3400 Göttingen

Federal Republic of Germany

Vaccine Research and Production Laboratory

Public Health Laboratory Service

Centre for Applied Microbiology and Research

Porton Down

Salisbury, Wiltshire SP4 0JG

United Kingdom

Agency of Industrial Science and Technology

Ministry of International Trade and Industry

1-3, Higashi 1-chome

Yatabe-machi

Tsukuba-gun, Ibaraki-ken 305

Japan

Pushchino-na-Oke

USSR-142292 Moscow Region

Soviet Union

611 (P) Hammonds Ferry Road

Linthicum, MD 21090

Block 2

125, Lenin Blvd.

Sofia

Bulgaria Continued next page
146 ● New Developments in Biotechnology: Patenting Life

Table 9-2—institutions Having Acquired the Status of International Depositary Authority-Continued

Name of depository Address

National Collection of Agricultural and Industrial

Microorganisms (NCAIM)

National Collection of Industrial Bacteria (NCIB)

National Collection of Type Cultures (NCTC)

National Collection of Yeast Cultures (NCYC)

USSR Research Institute for Antibiotics of the USSR

Ministry of the Medical and Microbiological Industry

(VNIIA)

USSR Research Institute for Genetics and Microorganism

Breeding of the USSR Ministry of the Medical and

Microbiological Industry (VNII Genetika)

University of Horticulture

Department of Microbiology

Somloi ut 14-16

l-t-l 118 Budapest

Hungary

The National Collections of Industrial

and Marine Bacteria Ltd.

P.O. Box 31

135 Abbey Road

Aberdeen AB98DG

United Kingdom

Central Public Health Laboratory

61 Colindale Avenue

London NW95HT

United Kingdom

AFRC Institute of Food Research

Norwich Laboratory

Colney Lane

Norwich NR47VA

United Kingdom

Nagatinskaya Street 3-a

USSR-1 13105 Moscow

Soviet Union

Dorozhnaya Street No. 8

USSR-1 13545 MOSCOW

Soviet Union

SOURCE: Pdaptad from Industrial Property, pp. 24-30 (January 1988).

The rules proposed in 1988 by PTO would continue

and clarify both long-standing PTO practices and

judicially developed principles of patent law. The

proposed rules prescribe:

●

●

●

●

●

●

conditions under which a deposit may be made;

kinds of materials that may be deposited;

the type of depository acceptable to PTO;

the time for making the original deposit;

procedures and obligations applicable to the

making and maintaining of a deposit, and its

possible replacement; and

the term of a deposit.

The proposed rules make clear that the material,

if the patent application enables it, must be publicly

available. This can be accomplished by making a

deposit of the material or making it otherwise

publicly available, Commercial availability from the

patent owner or another party would satisfy the

requirement of public availability for U.S. patent

purposes (7).

It is noteworthy that the deposit system is not

intended to resolve substantive issues of patent law

or to anticipate matters that are more properly left to

contentious patent office proceedings or court jurisdiction. The responsibility for performance of the

deposited material rests on the shoulders of the

applicant, who must face the consequences of an

invalid patent in the event of failure of the deposit to

perform (3).

Role of the Independent Depository

The role of the depository is to retain and be a

convenient source of the inventor’s deposit. It is an

objective entity—independent of the patent applicant/

patentee and PTO. It is not the role of the depository

to provide legal advice or to know about the legal

requirements of the patenting system. However, in

order for a depository to facilitate the deposits of

cultures, it has become necessary to know the legal

requirements for deposit in the United States and

internationally. In the United States, for example, it

is possible to make a deposit up until the date a

patent is granted, but if an applicant wishes to claim

the U.S. filing date as his priority date when filing in

other countries. it is necessary for the deposit to have
Chapter 9--Deposit Considerations . 147

been made by the date of filing of the patent

application in the United States.

In some cases, the patent culture depository is the

first place inventors contact when they believe they

have made a patentable invention. In other cases,

depositories are asked to advise inventors on whether a deposit is necessary in order to disclose the

best mode of carrying out the invention, as required

in the United States, or to disclose how to make and

how to use the invention (i.e., an enablement of the

invention), as required in almost all countries.

Inventors often do not understand the traditional

function of the depository (1),

In order to assist biotechnology patenting, one

depository has arranged an annual “Biotechnology

Patent Conference” at which U.S. patent attorneys

and agents, PTO examiners, patent attorneys from

Japan and Europe, and patent depository staff

acquaint inventors and attorneys practicing in this

field with information on patent disclosure and

Photo credit: American Type Culture Collection

Glove box for handling special cultures.

claim requirements, as well as depository practices

regarding patents (l).

Many depositories have had to expand the types

of material accepted and to develop expertise in the

maintenance and growing of materials never before

anticipated. In 1982, for instance, no depository in

the world accepted plant tissue cultures for patent

purposes. In response to this need, ATCC developed

the expertise to maintain a collection of plant tissue

cultures, and in 1983 began accepting this material

(and later on, seeds) for patent purposes.

None of the depositories at this date accepts

animal life. ATCC has been asked by at least one

inventor if it will accept an animal form, and is

currently considering the consequences of doing so

(l).

HOW ARE DEPOSITS MADE

AND MAINTAINED

Any depository approved by WIPO meets the

requirements of the Budapest Treaty and is, therefore, acceptable for PTO purposes. In addition,

patents have been granted based on deposits in

institutions that do not meet the requirements of the

Budapest Treaty, although PTO has no standard

procedure for recognizing depositories other than

those recognized under the Budapest Treaty (16).

In most cases, procuring cultures is easily accomplished by requesting the culture in question and

paying the depository’s fee. In a few cases, procuring cultures is more complicated and time -

consuming. The patent depository in Japan, for

example, requires a number of forms and a power of

attorney. In a few instances, depositories in other

countries have denied access to a culture even

though it was cited in a U.S. Patent as on deposit, and

probably legally available without restriction to the

public (1).

The Department of Commerce requires an export

license before export of many types of microorganisms (including most bacteria and viruses)

outside the United States. The depository must apply

for the license, which sometimes delays the request

for 2-3 weeks. In some cases, USDA or the

Department of Health and Human Services requires

an import permit before allowing cultures into the
148 ● New Developments in Biotechnology: Patenting Life

United States. This can also delay the receipt of

cultures from outside the United States.

Generally, cultures involved in the patent process

must be made available either when the patent is

issued (as under the U.S. patent system) or when the

patent application is published (as under the European patent system). If an issued patent cites and

relies on the use of a culture deposited at a patent

depository for the enablement of the claimed invention, the depository is obligated to make the culture

available to the public upon request and payment of

a fee. The European Patent Office (EPO) must

certify one’s right to a culture if the patent application has been published by its office, but the

requestor must agree to use the culture for research

purposes only and not to redistribute it to another

party, unless this requirement has been waived by

the depositor. Also, under the EPO system, an

inventor may choose an option that requires the

culture to be made available through an expert;

experts are approved by the EPO President.

ACCESS TO SAMPLES ON

DEPOSIT

The availability of samples from U.S. depositories for cultures involved in the patenting process is

straightforward. If the depository number and the

U.S. Patent number are known, the culture may be

requested, and it is routinely made available. Obtaining cultures from depositories outside the United

States can be delayed and, since the depositories are

not always knowledgeable of U.S. patent requirements, on occasion requests have been denied. There

have been few reasons given for such denial. A

collection in the Soviet Union, for example, implied

that someday, perhaps, the requested culture would

be made available. Several years later it still has not

been made available. Another collection in the

Netherlands simply stated a requested culture was

not available, with no reason given. There is no

record of a U.S. depository ever denying access to

someone eligible to receive a culture (l).

Mere citation to a deposit in a U.S. Patent is not

necessarily an indication of its unconditional accessibility once the patent is granted. The deposit is

accessible only where it is required to make or use

the claimed invention. In one case, for example,

PTO determined that certain deposited material was

not required for enablement even though cited in the

patent, and a request for PTO to certify that the

requestor was entitled to samples was denied (16).

Some patent owners contend that free access to a

deposit is more revealing than the patent disclosure

and therefore amounts tosuperdisclosure(12). Some

owners of hybridoma patents, for example, object to

making their deposits available to the general public

at little or no cost. They contend that this practice

amounts to giving away their invention plus all of

the know-how they might have been able to sell

separately. Their claim of loss, however, may be

exaggerated. Knowledge of how to produce and

maintain hybridoma cells in culture does not generally permit large-scale operation. The latter methods

must either be reverse-engineered or the knowledge

purchased separately (2).

The Budapest Treaty and PTO require a culture to

be maintained for 30 years from date of deposit, or

5 years after the most recent request for a sample,

whichever is longer. In addition, PTO requires the

culture to be on deposit for at least the enforceable

life of the U.S. Patent plus 6 years for statute of

limitations on infringement.

The 30-year maintenance requirement, if deposit

is made at the time of filing for a patent, assures in

most cases that the culture is available for a period

of time after a patent has expired. In most instances,

therefore, the public has reasonable access after

patent expiration, since the normal life of a U.S.
Chapter 9--Deposit Considerations ● 149

Patent is about 17 years. (An additional 6 years for

statute of limitations on infringement is not considered part of the patent life.) Should deposit and

issuing of the patent occur years apart and actually

consume part or ail of 30 years, periodic requests of

the deposit will still ensure that it is maintained by

the depository after patent expiration.

International Depositary Authorities must post a

bond to ensure that, in the event of the default of a

depository, sufficient funds would be available to

transfer patent cultures to another depository.

Inventors are required to agree to replace cultures

if they are lost, or die, during the “30 years plus 5“’

deposit period. In cases where inventors or their

heirs or assignees are unable to replace a culture, the

patent may be invalidated. In most cases, a patent is

assigned to a company or institution, and replacements are a corporate responsibility, not an individual one. In rare cases, the nonpayment of a maintenance fee to a depository could result in the return of

the culture to the inventor, thereby placing the patent

in jeopardy. In most cases the fee is paid in advance,

thereby alleviating the problem. There appear to be

adequate safeguards for the safekeeping of a patent

culture during the required storage period.

Some U.S. companies have expressed concern

about free access to a deposit once the patent issues.

At present, nothing prevents a foreign competitor

from obtaining the deposit and duplicating and

selling the invention abroad. These American companies advocate that the U.S. adopt a law similar to that

of West Germany, which requires that an individual

obtaining a sample be contractually bound to use the

deposit material only for experimental or research

purposes. PTO does not currently have authority to

place such conditions on deposits (6).

POSSIBLE METHODS OF

DEPOSIT FOR PATENTED

PLANTS AND ANIMALS

Inventors are now depositing seeds and plant

tissue cultures to support patent applications. The

first plant tissue deposit at ATCC was in 1983 and

the first seed deposit in 1985. Since that time

approximately 40 plant tissue and seed deposits have

been made. And, in administering the Plant Variety

Protection Act, USDA requires a deposit of 2,500

seeds for the grant of a Plant Variety Protection

Certificate.

The deposit of seeds and plant tissue culture has

become an established practice. Although there are

few depositories worldwide which accept such

deposits, there are two in the United States that

do-American Type Culture Collection and In Vitro

International, Inc. In addition, USDA maintains a

vast seed depository at Ft. Collins, CO.

There is no requirement under the utility patent

statute for the deposit of a plant or seed. A deposit

of a plant or seed is only required where reproduction of the plant or seed cannot be reliably achieved

from the disclosure in the patent application. In the

usual case, an enabling disclosure can be made for

genetically engineered plants and seeds. Accordingly, deposits of plants and seeds will usually not

be required (4).

Photo credit Diversity, Genetic Resources Communications Systems, Inc.

Plant culture.
150 ● New Developments in Biotechnology: Patenting Life

The new patentable status of animals raises the

possibility that PTO will encourage or require the

deposit of animal forms to support certain patent

applications. Already ATCC has received a request

from an inventor’s attorney to consider accepting

oyster larvae to support a patent application in PTO.

To date, no animal has been deposited with a

depository. In the case of the first animal patent

granted, U.S. Patent 4,736,866, the deposit requirement was satisfied, not by deposit of a mouse or

other animal, but by deposit of the cancer-causing

genes intended for transfer into an animal. DNA

plasmids bearing those genes were deposited at

ATCC. In the patent, the inventors describe detailed

instructions for inserting those genes into mouse

embryos to produce transgenic mice.

It is not practical to maintain or make available

whole animals, but the maintenance of embryos in a

frozen state may be possible. If culturing fertilized

ova to the blastula stage as an indicator that growth

of the animal would occur is feasible, and would be

an acceptable test of viability, it may not be

impractical to maintain and make available animal

forms. What constitutes “viability” must be defined.

This is also coupled with acceptability of statistical

probability that the ovum/embryo would be capable

of implantation and successful gestation.

IMPACT OF PATENTED ANIMALS

ON INDEPENDENT

DEPOSITORIES

The patenting of animals could cause problems

for a depository if deposit of the animal is required.

Currently there is no depository willing to accept the

deposit of animals for the following reasons:

●

●

●

The cost of facilities and expertise that might be

needed to maintain animals would be prohibitive.

A depository maintaining animals for patent

purposes might be subject to adverse publicity.

If it were necessary to maintain the animal, a

depository might need to grow another sample

to prove the replication of the animal. After

growth of the animal, disposal might not be

acceptable, and, therefore, maintenance of progeny would be necessary.

●

●

How would a depository make samples of the

animal available? Grow more animals?

Maintenance of many kinds of animals for the

current required period of 30 years would not

be practical or possible, as their life spans are

shorter than 30 years.

The deposit of animal embryos may not present

the same difficulties, as long as the embryos can be

successfully frozen and recovered. To date, at least

13 species of animal embryos (cattle, mice, rats,

rabbits, hamsters, sheep, goats, horses, cats, antelopes, and three species of nonhuman primates) have

been successfully frozen and recovered, and many

thousands of live young from frozen mice and cattle

embryos have been produced (1 1). U.S. Patents

4,380,997 and 4,419,986 were issued in 1983 for the

process of freezing animal embryos. If culturing

thawed animal embryos to the blastula stage is a

technically feasible and acceptable test for viability,

patent depositories may be willing to accept animal

embryos for deposit. If deposit of animal forms is

desirable for patent purposes, PTO will need to

develop specific guidelines for such deposits.

SUMMARY

The practice of depositing micro-organisms to

provide enablement or the best mode of practicing an
Chapter 9--Deposit Considerations ● 151

invention has been in place since 1949, although a

deposit is not always required. The ability to patent

novel life forms created through biotechnology, as

held in the Chakrabarty case, and the ability to

protect plants with a utility patent as held in the

Hibberd case, has resulted in increased patenting in

these areas and thereby increased deposits of microorganisms, cells, and plants. The deposit of microorganisms, plants, and similar material in support of

a patent application is a well-established practice,

though not all problems associated with this practice

have been resolved.

Depositories facilitate the deposit of cultures for

patent purposes by providing current information on

deposit requirements, and by developing the expertise necessary to maintain new types of material as

needed. There are currently three institutions in the

United States that have achieved the status of

International Depositary Authority under the Budapest Treaty and are so recognized by the World

Intellectual Property Organization. These and others

may accept and maintain cultures to meet PTO

requirements.

With PTO policy holding that nonnaturally occurring, nonhuman, multicellular living organisms,

including nonhuman animals, are patentable, the

first animal patent was issued in 1988. The enablement requirement of the first animal patent was

satisfied by deposit of genes—but not live animals.

Enablement by deposit of animal forms is not likely

to be required to support many animal patent

applications. Yet deposit of animals or embryos may

be necessary for some inventions. There are problems associated with the deposit of animal life that

need to be examined and guidelines concerning

these deposits need to be developed.

CHAPTER 9 REFERENCES

1. Brandon, B. A., “Deposit Requirements for Microorganisms, Plants, and Animals in U.S. Patent Claim s,”

2.

3.

4.

5.

6,

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

17.

contract report prepared for the Office of Technology

Assessment, U.S. Congress, December 1987.

Casey, W. L., Jr., and Moss, L. S., “Intellectual

Property Rights and Biotechnology,” Idea 27(4):251-

267, 1986.

Crespi, S., Patent Consultant, Sussex, England,

personal communication, August, 1988.

Feit, I. N., Attorney, Hoffmann & Baron, Jericho, NY,

personal communication, Aug. 18, 1988.

Feldman v. Aunstrup, 517 F.2d 1351 (CCPA, 1975).

Giesser, J. M., Patent and Trademark Department

Sandoz, E. Hanover, NJ, personal communication,

Aug. 19, 1988.

Ihnen, J. L., Attorney, Robbins & Laramie, Washington, DC , personal communication, Aug. 22, 1988.

In re Argoudelis, 434 F.2d 1390 (CCPA, 1970).

In re Lundak, 723 F.2d 1216 (CAFC, 1985).

Karny, G. M., Attorney, Dickstein, Shapiro& Morin,

Vienna, VA, personal communication, Aug. 26,

1988.

Leibo, S., Rio Vista International, Inc., San Antonio,

TX, personal communication, November 1987.

Moss, L. S., Professor, Department of Economics,

Babson College, Babson Park, MA, personal communication, Aug. 22, 1988.

Straus, J., Professor and Department Head, MaxPlanck Institute for Patent Law, Munich, Federal

Republic of Germany, personal communication,

Aug. 29, 1988.

U.S. Department of Commerce, Patent and Trademark Office, “Deposit of Biological Materials for

Patent Purposes; Advance Notice of Proposed Rulemaking,” Federal Register 52(174):34080-34093,

1987.

U.S. Department of Commerce, Patent and Trademark Office, “Deposit of Biological Materials for

Patent Purposes; Notice of Proposed Rulemaking,”

Federal Register 53(194):39420-39432, 1988.

Van Horn, C. E., Deputy Solicitor, Patent and Trademark Office, Department of Commerce, Washington,

DC, personal communication, Aug. 23, 1988.

Wahl, R, A., U.S. Patent Quarterly 169:6, 1971.
Chapter 10

International Protection for

Micro-Organisms, Plants

and Animals

“The European Patent Office’s view on the patenting of living material is based strictly on the

provisions of the European Patent Convention, which do permit patenting of certain elements of life

forms providing they are novel, inventive, and industrially applicable, In the field of’ living matter,

however, the patent system imposes two broad restrictions, namely the invention should not be

contrary to ‘ordre public and morality, and should not cover plant nor animal varieties per se. ”

European Patent Office, Introduction to

“Patenting of Life Forms,” a compilation of nine

published patent applications on animal life forms.
CONTENTS

Page

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155

INTERNATIONAL AGREEMENTS RELEVANT TO BIOLOGICAL

INVENTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155

Paris Union Convention. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155

Patent Cooperation Treaty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157

European Patent Convention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158

Budapest Treaty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158

International Union for the Protection of New Varieties of Plants. . . . . . . . . . . . . . . . . . 159

INTERNATIONAL PROTECTION FOR MICRO-ORGANISMS, PLANTS,

AND ANIMALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160

European Patent Convention Countries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160

National Patent Laws of EPC Members. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161

Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162

Eastern Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163

South America. ..,....,. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164

North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164

People’s Republic of China. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165

CHAPTER 10 REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165

Box

Box Page

10-A. Council of the European Communities Proposal on the Legal Protection of

Biotechnological Inventions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162

Tables

Table Page

10-1. International Agreements and Biotechnology Patents . . . . . . . . . . . . . . . . . . . . . . . . . . 155

10-2. Member Countries, Paris Union Convention. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156

10-3. Member Counties, Patent Cooperation Treaty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157

10-4. Member Countries, European Patent Convention. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158

10-5. Member Countries, Budapest Treaty on the International Recognition of

Micro-organisms for the Purposes of Patent Procedure. . . . . . . . . . . . . . . . . . . . . . . . . 159

10-6. Member Countries, Union for the protection of New Varieties of Plants. . . . . . . . . 159
Chapter 10

International Protection for

Micro-Organisms, Plants and Animals

INTRODUCTION

Intellectual property protection of microorganisms, plants, animals, and biological processes

is of increasing concern to the world community.

The purpose of this chapter is to describe international agreements relevant to the protection of

biological inventions and to summarize existing

intellectual property protection in various nations.

International patent practice raises a multitude of

complex issues beyond the scope of this report.

Emphasis in this chapter is given to subject

matter jurisdiction, in order to determine to what

degree micro-organisms, plants, and animals are

protectable.

INTERNATIONAL AGREEMENTS

RELEVANT TO BIOLOGICAL

INVENTIONS

Formal patent statutes were first enacted by

England (1623), the United States (1790), and

France (1791). The development of the laws in these

three nations influenced the subsequent development of patent protection in the remaining countries,

most of which were enacted in the late 1800s (5). As

international trade grew, the need for harmonized

protection of intellectual property rights was realized.

Intellectual property protection is enhanced by

several international agreements that provide comity

in the area of patents, plant breeder’s certificates,

and deposit. This section examines five agreements

that are relevant to biological inventions (table

1o-1 ).

Pan-s Union Convention

The Paris Union Convention is a universal treaty

establishing certain basic rights for residents and

nationals of its member countries to protect industrial property rights (patents, utility models, industrial designs, trademarks, service marks, trade names,

indications of source and unfair competition) under

the laws of other member countries. The original

Convention was signed in 1883 by 11 countries.

Nine revision conferences have been held during the

treaty’s first century of existence;1 as of 1988, more

than 90 nations were members of the Paris Union

(table 10-2). The Union is administered by the

World Intellectual Property Organization (WIPO)

which was created by a Convention signed in 1967.

The Convention came into force in 1970, and WIPO

became a United Nations (UN) specialized agency in

1974.

The Paris Union Convention addresses four broad

categories:

●

international public law regulating rights and

obligations of the member states;

provisions that require or permit member states

to legislate within the field of industrial property;

provisions relating to the substantive law regarding rights and obligations of private parties, but only to the extent of requiring domestic

law to be applied to these parties; and

provisions containing rules of substantive law

regarding rights and obligations of private

parties that govern various situations.

Article 1(4) of the Convention defines the term

“patents” broadly as including “the various kinds

Table 10-1--International Agreements and

Biotechnology Patents

Agreement Entered Number of

Signatories into Force Signatories

Budapest Treaty . . . . . . . . . . Aug. 19, 1980 22

Patent Cooperation Treaty . . Jan. 24, 1978 40

European Patent

Convention . . . . . . . . . . . . Oct. 7, 1977 13

Union for the Protection of

New Varieties of Plants . . . Aug. 10, 1968 17

Paris Union Convention . . . . July 7, 1884 97

SOURCE: Office of Technology Assessment, 1989.

]Rom~ in 1 g86, Ma~d in 1890, B~~~]~ in ]897 ~d 1900,” washin~on in ]911, The Hague in 1925, ~ndon in 1934, Lis&m in 1958, tind St~kholm in 1967.

–155–
156 ● New Developments in Biotechnology: Patenting Life

of industrial patents recognized by the laws of the

countries of the Union, such as patents of importation, patents of improvement, patents and

certificates of addition, etc.” Such broad language

permits any of the forms of industrial patents granted

under the laws of the member countries to be

included.

National Treatment

The keystone of the Convention is the principle of

national treatment, which provides, as regards the

protection of industrial property, nationals of any

country of the Union to enjoy in all other countries

of the Union the advantages that their respective

laws grant to their own nationals. The purpose is to

eliminate discrimination under national law against

foreigners, who in turn must observe the conditions

and formalities imposed upon nationals. This basic

right is designed to protect foreign applicants against

discrimination by placing them on equal footing

with national applicants.

Right of Priority

A practical and important right granted by the

Convention is the right of priority, which enables

any resident or national of a member country to first

file a patent application in any member country and

thereafter to file a patent application for the same

invention in any of the other member countries

within 12 months of the original filing, The effect is

that the subsequently filed applications will enjoy

the right of priority established by the first filing

date. Once established, the right of priority provides

a defense against any patent defeating acts that may

have occurred during the priority period (i.e.,

between the first filing and subsequent filing).

The right of priority could be particularly significant for biotechnology inventions, since the 12-

month priority period may be essential to comply

with culture deposit requirements. In at least one

instance, a German applicant was unable during the

priority period to perfect a deposit of a tissue culture

in the only European depository that was capable of

accepting the deposit (7).

Working Requirements

The Convention does not place an obligation of

working the invention. It only limits the extent

Table 10-2-Member Countries,

Paris Union Convention

—

Algeria Korea, Republic of

Argentina

Australia

Austria

Bahamas

Barbados

Belgium

Benin

Brazil

Bulgaria

Burkina Faso

Burundi

Cameroon

Canada

Central African Republic

Chad

China

Congo

Cuba

Cyprus

Czechoslovakia

Denmark

Dominican Republic

Egypt

Finland

France

Gabon

German Democratic Republic

Germany, Federal Republic of

Ghana

Greece

Guinea

Guinea—Bissau

Haiti

Holy See

Hungary

Iceland

Indonesia

Iran

Iraq

Ireland

Israel

Italy

Ivory coast

Japan

Jordan

Kenya

Korea, Democratic People’s

Republic of

SOURCE: Office of Technology Assessment, 1989.

Lebanon

Libya

Liechtenstein

Luxemborg

Madagascar

Malawi

Malta

Mauritania

Mauritius

Mexico

Monaco

Mongolia

Morocco

Netherlands

New Zealand

Niger

Nigeria

Norway

Philippines

Poland

Portugal

Romania

Rwanda

San Marino

Senegal

South Africa

Soviet Union

Spain

Sri Lanka

Sudan

Suriname

Sweden

Switzerland

Syria

Togo

Trinidad and Tobago

Tunisia

Turkey

Uganda

United Kingdom

United Republic of Tanzania

United States

Uruguay

Viet Nam

Yugoslavia

Zaire

Zambia

Zimbabwe

national law may provide for not working the

patented invention.

The Convention places several limitations on

member countries regarding the domestic law that

they can enact to obligate the working of a patented

invention, particularly the remedies that may be

employed. For example, forfeiture of a patent may

not occur except where the granting of a compulsory
Chapter 10--International Protection for Micro-Organisms, Plants and Animals ● 157

license is not sufficient to prevent the abuses.

Forfeiture, revocation, and compulsory licenses

cannot occur until specific time periods have elapsed

(e.g., a compulsory license may not be applied for

before the expiration of 4 years from the filing of a

patent application or 3 years from the granting of a

patent, whichever occurs last).

For owners of biotechnology inventions, working

requirements represent perhaps the most serious loss

of effective patent protection in foreign countries. If,

because of the obligation for a patentee to make

freely available a sample of the deposited organism,

it proves to be easier for competitors within such

foreign countries to practice certain biological

inventions without technological assistance from the

patentee, there may be more of a temptation for the

competition to seek a compulsory license or revocation or forfeiture of the patent (29).

Article 19 of the Paris Convention permits member nations to enter into separate agreements for the

protection of industrial property, as long as those

agreements do not contravene the provisions of the

Convention. Under this provision several multinational agreements (e.g., European Patent Convention, Budapest Treaty) have been concluded.

Patent Cooperation Treaty

The Patent Cooperation Treaty (PCT) is a worldwide convention open to membership to any Paris

Convention country. It entered into force in 1978

and as of 1988 applied to 40 countries (table 10-3).

PCT is not a convention dealing with substantive

requirements as each signatory determines patentability under its own domestic law. Instead, PCT

relates to procedural requirements to simplify the

filing, searching, and publication of international

patent applications. Multiple filings are eliminated,

as are duplicate filing costs.

These procedural steps are carried out in essentially two stages—the international stage and the

national stage (35 U.S.C. 361-376). The international stage begins when an applicant files the

international patent application with one of the

receiving offices (generally the national patent

office of the country in which the applicant is a

resident or national). An international search is then

conducted by an appropriate international searching

authority (ISA). In the case of U.S.-initiated applications, ISA is the U.S. Patent and Trademark Office

(PTO) or the European Patent Office (EPO). Following the international search, the application is sent to

the international bureau—the WIPO in Geneva—

which then publishes the application and provides

copies to each of the designated offices in the

countries where protection is sought. The applicant

then provides to each designated office a translation

(as necessary) and any required national fee to begin

the national stage. The application is then subjected

to national procedures in each of the designated

countries.

Since PCT does not contain any definition of

patentable subject matter, any invention that is

patentable under the laws of the member countries

may be made the subject of an international application under PCT. However, in view of the nonpatentability of certain inventions (such as plant and animal

varieties) in several member countries, ISA is not

required to provide an international search report if

these inventions are the subject of international

applications (36). Further, the PCT application does

not contain any requirements regarding the deposit

of micro-organisms or the description of the characteristics of a deposited micro-organism.

Table 10-3-Member Countries, Patent

Cooperation Treaty

Australia

Austria

Barbados

Belgium

Benin

Brazil

Bulgaria

Cameroon

Central African Republic

Chad

Congo

Denmark

Finland

France

Gabon

Germany

Great Britain

Hungary

Italy

Japan

Korea, Democratic People’s

Republic of

Korea, Republic of

Liechtenstein

Luxembourg

Madagascar

Malawi

Mali

Mauritania

Monoco

Netherlands

Norway

Romania

Senegal

Soviet Union

Sri Lanka

Sudan

Sweden

Switzerland

Togo

United States

SOURCE: Office of Technology Assessment, 1989.
158 ● New Developments in Biotechnology: Patenting Life

European Patent Convention

The existence of a patchwork of traditional

national patent systems in the member states of the

European Common Market was recognized as creating a potential conflict both with the need for free

movement of goods and against anticompetitive

acts. Therefore in October 1973, 14 European

countries signed the Convention on the Grant of

European Patents. To date, 13 countries are members of that Convention, which came into force in

1977 (table 10-4).

The European Patent Convention (EPC) is actually a system of law, common to all of the member

countries, established for the granting of so-called

European patents. Primarily, the Convention establishes a single supranational EPO with a uniform

procedural system for the centralized filing, searching, examination, and opposition with respect to a

single European patent application. If granted, a

patent matures into a bundle of individual European

patents, one for each of the countries designated by

the applicant. This European granting system and

the resulting European patents exist in parallel with

the conventional national granting procedures and

resulting national patents. The ultimate goal is for

each of the member countries to adopt in its national

law the same substantive and procedural law of

patents set forth in EPC.

An additional goal is to reduce the cost of

obtaining patent protection by avoiding duplicate

filing, searching, and examination; by minimizing

the number of translations that must be made; and by

economizing on the use of professional time, both on

the part of the applicant’s domestic patent representatives and those located in countries where filing is

anticipated (6).

Table 10-4--Member Countries, European

Patent Convention

Austria Liechtenstein

Belgium Luxembourg

France Netherlands

Germany, Federal Republic of Spain

Great Britain Sweden

Greece Switzerland

ltaly

SOURCE: Office of Technology Assessment, 1989.

Budapest Treaty

United States applicants wishing to file patent

applications involving micro-organism-related inventions face many practical problems resulting

from:

●

●

●

the lack of information about national law

requirements governing micro-organism deposits,

the lack of uniformity of such national requirements. and

the fact that certain national laws require a

deposit within that country-even in the case of

applications claiming priority based upon a

first-filed application in another country where

a deposit has already been made.

The Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the

Purposes of Patent Procedure is a vehicle for solving

these problems. It entered into force in 1980 and it

provides that member states recognize for their own

patent procedures a deposit of a micro-organism

strain made in another country. As of 1988, 22

countries were signatories to the Budapest Treaty

(table 10-5).

The backbone of the Budapest Treaty is the

provision for a series of International Depositary

Authorities (IDAs). In order to qualify as an IDA, a

depository institution must be located in the territory

of a member country, and have assurances that the

institution complies, and will continue to comply,

with the requirements essential for it to permanently

carry out its tasks under the treaty (10). As of

December 1987, a total of 18 depository institutions

had acquired IDA status; of these, 3 are located in the

United States (see ch. 9).

Perhaps the most important aspect of the Budapest Treaty is the provision for recognition by all

member nations of a deposit in a single IDA. This

deposit may be made in any IDA. Once the deposit

is made, two facts are recognized: the deposit was

made on the indicated date, and any sample furnished by IDA is a sample of the micro-organism

which was deposited on that date (9).

Many aspects regarding micro-organism deposits

are left up to national law as many nations are not

prepared to accept this degree of harmonization. The
Chapter 10--International Protection for Micro-Organisms, Plants and Animals ● 159

Table 10-5-Member Countries, Budapest Treaty

on the International Recognition of Micro-organisms

for the Purposes of Patent Procedure

Australia

Austria

Belgium

Bulgaria

Denmark

Finland

France

Germany, Federal Republic of

Hungary

Italy

Japan

Korea, Republic of

Liechtenstein

Netherlands

Norway

Philippines

Soviet Union

Spain

Sweden

Switzerland

United Kingdom

United States

SOURCE: Office of Technology Assessment, 1989.

treaty contains specific requirements for IDAs.

These include the acceptance of a deposit, the period

of storage, the right to redeposit, viability testing,

secrecy, the furnishing of samples, and import/

export restrictions. These requirements are discussed in more detail in chapter 8.

International Union for the Protection of New

Varieties of Plants

It became evident to many European countries

during the 1950s that the rights of plant breeders

were entirely overlooked in many countries. In fact,

the patent laws of many foreign countries specifically excluded the patenting of any type of life form.

An international conference was held in Paris in

1957 for the purpose of drafting a convention for

protecting new plant varieties. The Convention was

signed in 1961 and entered into force in 1968.

The International Union for the Protection of New

Varieties of Plants (UPOV) was designed “to

recognize and to ensure to the breeder of a new plant

variety . . . the right to a special title of protection or

of a patent. ” The UPOV’s goal was to provide a

model for the adoption of breeders’ rights statutes in

individual countries. Countries which desired to

provide breeders’ rights could model their statutes

after UPOV and could join the convention to enjoy

the reciprocity between countries provided by the

Convention.

The United States was not an original party to

UPOV. Numerous conferences were held during the

1970s in an attempt to resolve substantive differences between UPOV and U.S. patent law. These

efforts were culminated successfully in the revised

Act of October 23, 1978, to which there are now 17

signatories (table 10-6). According to the revised

text, both sexually reproduced and vegetatively

propagated (i.e., asexually reproduced) plants cart be

protected, as determined by the individual members.

In order to obtain protection in each member

country, it is necessary to file a separate application

in each country. There is no central filing system and

international protection is not available by filing in

only one member country. A breeder who develops

a new variety has an exclusive right to produce and

sell that variety. In all member states, except the

United States, new varieties are subject to official

field trials to establish that the conditions for

protection are satisfied (31).

The UPOV Convention requires that each protected variety have a specific, unique name for

marketing purposes. The Convention provides that

either plant variety protection or patent protection be

available for a new variety. This provision was

waived for countries, such as the United States,

which had other forms of protection available before

it acceded to the Convention.

The UPOV does have limitations. National laws

of UPOV member nations may provide protection

only for a limited number of plant genera or species.

Protection offered by UPOV member states, therefore, differs considerably according to the lists of

protected taxa (33). Hence, reciprocity between

nations can be key to actual protection.

Table 10-6-Member Countries, Union

for the Protection of New Varieties of Plants

Belgium

Denmark

Frame

Germany, Federal Republic of

Hungary

Ireland

Israel

Italy

Netherlands

New Zealand

South Africa

Spain

Sweden

Switzerland

United Kingdom

United States

SOURCE: Office of Technology h~wnentt IWO.
160 ● New Developments in Biotechnology: Patenting Life

INTERNATIONAL PROTECTION

FOR MICRO-ORGANISMS,

PLANTS, AND ANIMALS

The issue of what constitutes patentable subject

matter is of increasing concern, particularly as a

result of developing law in the United States. This

section reviews subject matter protection of living

organisms in several nations.

European Patent Convention Countries

Patentable

Subject Matter

● Article 52(1) of EPC

defines patentable subject

matter as: inventions which

are susceptible of industrial application, which are

new, and which involve

an inventive step. This

definition is extraordinarily

general and broad. Rather than providing a definitive, positive definition of patentable subject matter

EPC instead takes the approach of narrowing this

broad definition by explicitly specifying negative

restrictions thereto.

Thus, under Article 52(2), the term “inventions”

in the above definition is limited by excluding the

following:

discoveries, scientific theories, and mathematical methods-including naturally occurring

products;

aesthetic creations;

schemes, rules, and methods for performing

mental acts, playing games, or doing business;

programs for computers; and

presentations of information.

As a further restriction on the part of the definition

stating ‘*inventions which are susceptible of industrial application,” Article 52(4) further excludes

“methods for the treatment of the human or animal

body by surgery or therapy and diagnostic methods

practiced on the human or animal body.” This

provision does not apply, however, to products, and

in particular to substances or compositions, for use

in any of the excluded methods.

Article 53(b) stipulates that European patents will

not issue for plant or animal varieties and essentially

biological processes for the production of plants and

animals (with the exception of microbiological

processes or the products thereof). There are two

reasons for this approach, which EPC member

nations adopted in 1973. First, it was felt that

granting patents in this area would create legal and

administrative difficulties. Second, plant variety

protection enacted in several European nations was

seen as the only applicable system concerning that

category of inventions (4).

The question of whether a process is “essentially

biological” depends on the extent of technical

human intervention in the process. If such intervention plays a significant part in determining or

controlling the desired result, the process would not

be excluded. According to EPC, essentially biological processes and specific plant varieties, regardless

of whether they were produced by breeding or

genetic engineering, are not patentable.

Although plant varieties are specifically excluded, there is no general exclusion for plants.

According to the Technical Board of Appeal of EPO,

EPC Article 53(b) prohibits only the patenting of

plants which are in the genetically fixed form of a

plant variety (i.e., a specific variety such as the rose

“Peace” or the wheat cultivar “Chinese Spring”).

Thus, EPO will grant utility patent (generic) protection to plants, for example, where a gene has been

inserted into a plant (e.g., corn having gene X) but is

not fixed in a single plant variety (e.g., corn inbred

A having gene X). Similarly, a process for transforming a plant to insert a desired gene would be

patentable because human intervention played a

greater role in the final result than biological forces.

This viewpoint has been adopted by the Swiss Patent

Office as well as by EPO, which in early 1988

granted a patent on a technique for increasing the

protein content of forage crops (such as alfalfa) and

for plants produced with the aid of the technique.

Arguably, this decision opens the door for plant and

animal patenting in Europe (14,17,19).

Although plant and animal varieties and “essentially biological” processes are specifically excluded

from patentable subject matter, EPC does not appear

to, in principle, exclude entirely the patenting of
Chapter 10--International Protection for Micro-Organisms, Plants and Animals ● 161

microbiological inventions in any of the following

major classes:

●

●

●

●

●

micro-organisms per se (including viruses, cell

lines, etc.),

processes for producing micro-organisms,

processes using micro-organisms,

products obtained from microbiological processes, and

DNA/RNA molecule or subcellular units (e.g.,

plasmids).

Plant variety protection is limited in EPC countries. In most countries the only varieties that can be

protected under breeders’ rights statutes are those

specifically set forth in varietal lists compiled by

each individual country. Varietal lists are different

from country to country, these lists, periodically

updated, include sexually reproduced plants (e.g.,

corn, wheat, and sorghum), asexually reproduced

plants (e.g., roses, peach trees, and lilies), and also

trees and woody plants (e.g., poplar, firethorn, and

elm). The varieties are protected for 15-30 years

(generally 20-25 years) from the issue date of the

certificate.

Heightened interest in the patenting of living

matter led to a proposal by the Commission of the

European Communities on the legal protection of

biotechnological inventions (13) (box 10-A).

National Patent Laws of EPC Members

The national patent laws of EPC member nations

generally complement convention provisions. Generally, micro-organisms are patentable, but animal

and plant varieties are not (31). A sample of several

member nations follows.

Belgium

Belgium’s revised patent law, effective in 1986,

conforms with the European Patent Convention in

terms of patentable subject matter. Micro-organisms

are patentable, while animals and plant species and

their varieties are not patentable. Belgium is a

member of UPOV.

Federal Republic of Germany

West Germany case law has recognized the

patentability of micro-organisms for years. After

deciding in 1969 that patents could be obtained for

inventions in the field of biology (in this case, a

method of breeding animals) (28), the German

Federal Supreme Court specifically held, in 1975,

that micro-organisms per se constituted patentable

subject matter (3). West Germany permits patenting

of plant varieties that are not the subject matter of the

specific plant variety law.

France

French law corresponds to the EPC in most

respects relevant to biotechnology (6). A plant

variety law was passed in 1970 (Law 70-489), and

France ratified the UPOV 1978 text in 1983. France,

like West Germany, permits patenting of plant

varieties that are not the subject matter of the

specific plant variety law.

Switzerland

The Swiss Federal Intellectual Property office

amended its guidelines in 1986 regarding the examination of patent applications in the field of biotechnology (14). The new guidelines held that:

product claims [will be admitted] relating to whole

plants or their propagating material (seeds, tubers,

cuttings, etc) but in which no variety is specified, i.e.,

claims containing only characters that are valid for

several varieties (for example a whole genus). In this

context the variety notion must be interpreted as in

the Plant Variety Protection Law . . . i.e., by reference to the criteria of homogeneity, stability, and

distinctness from other plant varieties.

As regards “inventions relating to animals, the

applicable criteria will be the same for plants” (34).

One commentator has noted that in Switzerland, at

least, if one introduces a foreign gene into an animal

by microinjection, and claims the resulting genetically engineered animal without limitation to any

particular variety (breed) of animal, the claim would

be potentially patentable (14).

United Kingdom

The British patent act of 1977 adopted the EPC

definition of patentable subject matter, and inventions concerning plants and animals are protectable

only at the cellular level (e.g., a patent issued
162 . New Developments in Biotechnology: Patenting Life

claiming a cell culture system comprising cells

derived from the baby golden hamster fibroblast cell

line) (6).

Australia

Australian law permits

patents for “any manner

of new manufacture,” but

it specifically excludes substances capable of being

used as food or medicine

consisting only of mixtures of known ingredients and the processes for

producing them (2).

A 1976 case held that living things (specifically a

new micro-organism) could be patented. The Australian Patent Office appears to hold a position

similar to the U.S. PTO as regards patenting of living

organisms:

i.e., no distinction is to be made solely on the basis

that a claimed product or process is, or uses, a living

organism. Higher life forms will not be treated any

differently than lower forms such as microorganisms (1)

Australia, currently not a member of UPOV, offers

a 20-year certificate for plant variety protection.

Eastern Europe

Eastern European nations generally grant, at

the option of the applicant, either a patent or an

inventor’s certificate. For

certain categories of subject matter, only an inventor’s certificate can be obtained. An inventor’s certificate is a form of recognition granted by socialist states to inventors. It does

not grant to the inventor the exclusive right to use the

invention or to preclude others from doing so but,

rather, signifies that the invention is state property.

Typically, the inventor is entitled to compensation

by the state for it’s use of the invention. Because
Chapter 10--International Protection for Micro-Organisms, Plants and Animals ● 163

their economies are comprised mainly of statecontrolled enterprises, no infringement occurs by

state use of the invention.

Soviet Union

The Soviet Union grants patents and inventor’s

certificates for inventions covering “any new technical solution of a problem in any field of the national

economy.” New strains of micro-organisms are

expressly recognized as inventions.

Although the USSR is not a member of UPOV,

protection is available for new varieties and hybrids

of agricultural crops and other cultivated plants

through an inventor’s certificate. Likewise, an inventor’s certificate can be issued for new breeds of

farm animals and poultry, new breeds of fur-bearing

animals, and new species of mulberry silkworms.

Bulgaria

According to the

patent protection for

Czechoslovakia

U.S. PTO, Bulgaria

animals (35).

provides

In Czechoslovakia, inventions relating to medicaments, substances obtained through chemical processes, foodstuffs, and micro-organisms used in

industrial manufacturing are protectable only by

inventors’ certificates (16).

German Democratic Republic

East Germany’s 1984 patent law, which allows

patents for “technical solutions that are characterized by novelty, industrial applicability, and technological progress,” specifically includes microbiological processes as patentable subject matter.

Specifically excluded, however, are solutions for the

diagnosis, prevention, and treatment of human

diseases, plant varieties and animal breeds, and

strains of micro-organisms (6).

Hungary

Hungary’s patent act has, since 1970, permitted

patents for new plant varieties and animal breeds, as

well as processes for obtaining them. The Patent

Act, last revised in 1983, permits patents for plant

varieties and animal breeds “if they are distinguishable, novel, homogeneous, stable, and have been

given a variety denomination apt for registration”

(18). Processes involving the use and preparation of

micro-organisms are patentable, although products

of these inventions are not patentable. As a result,

the situation in Hungary is generally the reverse of

that in most other countries (6).

Poland

Under Polish Law, neither patents nor inventor’s

certificates are granted for new plant varieties and

animal breeds or for processes for curing disease.

Patents may not be obtained for foodstuffs, pharmaceutical products, or products obtained by chemical

processes-although processes for producing the

named products are patentable (27).

Romania

According to the U.S. PTO, Romania provides

patent protection for animals (35).

Yugoslavia

Plant and animal varieties and essentially biological processes for the production of plants or animals

are excluded from patent protection in Yugoslavia

(4).

Japan

a patentable invention

utilizes a law of nature in

the highly advanced

creation-of technical ideas

(21 ). The Japanese patent office currently precludes

protection for inventions producing or utilizing

recombinant DNA in higher animals, based on a

statutory exclusion of inventions detrimental to

public order, morality, or health (6).

Japan has been granting patent varieties for plants

and processes of producing plants. Prior to 1970, an
164 ● New Developments in Biotechnology: Patenting Life

invention relating to the production of plants (e.g., a

method for cultivating mushrooms or a method for

blooming irises) could be patented in Japan. Plants

per se were not believed patentable because they

were considered neither an invention nor reproducible. In 1970, the Japanese patent office set up anew

examination standard and began granting patents on

plants themselves, provided the plant was an artificially cultivated one and belonged to a group having

characteristic features which would differentiate it

from all other groups.

The Japanese patent office recently issued an

internal notice announcing its intention to grant

patents on nonhuman animals if they meet the

requirements of the patent law. The office is

expected to draft guidelines regarding the examination of such patents.

South America

Argentina

Argentina, although not

a member of UPOV, has

enacted plant variety

protection. The 10-20 year

right applies to the seeds,

fruits, bulbs, tubers, buds,

and graftings of the new

variety. Patent protection

does not extend to plant

varieties.

Although patent protection extends to new industrial products, new means, and new applications of

known means for obtaining an industrial result or

product, pharmaceuticals are specifically excluded

from patent protection. No policy has been established regarding the patentability of genetically

engineered animals (6).

Brazil

Brazilian patent law contains an exclusion against

protection for the discovery of varieties or species of

micro-organisms. This exclusion has been cited as

grounds for excluding biotechnology patents, despite the fact that 2,000 such applications have been

filed (6). Pharmaceuticals and the processes for

obtaining them are not patentable. Also, no plant

variety or plant patent protection exists. Because of

the growth of biotechnology in Brazil, the Patent

Office has formed a committee to examine, with

other governmental entities, potential solutions (30).

Chile

Chile is not a party to any patent-related bilateral

treaty, and its trademark department has no policy or

provisions regarding intellectual property protection

for biotechnological products. The nation’s law on

seeds permits trademark protection on seed varieties, with a goal of protecting standards of purity and

quality of seeds (25).

North America

Canada

The Canadian patent

act, last amended in1987,

defines the term “invention” as being “any new

and useful art, process,

machine, manufacture or

\ 1 composition of matter, or

Patents are not granted

for processes to medically treat humans and animals.

Naturally occurring substances prepared or

produced by microbiological processes and intended

for use as food or medicine cannot be claimed per se

but must be claimed in process-dependent form (12).

As a result, product patents are more available now

than prior to 1987 (8). In 1984, the Canadian patent

office held that a mixture of fungi was patentable,

since the claimed fungi met the test of being

“sufficiently different from known species that it can

be said that its creation involved the necessary

element of inventive ingenuity” (20)0 The Patent

Office, however, later rejected a claim for a variety

of soybean obtained by crossbreeding (15). The

rejection was upheld by the Federal Court of

Appeals, which held that the claimed soybean did

not come within the “common or ordinary meaning”

of a manufacture or composition of matter (26). This
Chapter 10--International Protection for Micro-Organisms, Plants and Animals ● 165

court decision is current] y on appeal to the Canadian

Supreme Court.

Mexico

At present, biotechnology products and processes

may not be patented in Mexico (32). This will

change in 1997 as a result of recent legislative action

permitting protection for a wide range of biotechnological processes (33).

People’s Republic of China

The People’s Republic

of China adopted a new

patent law effective in 1985,

The law protects inventioncreations, is to promote

the development of science and technology for

meeting the needs of socialist modernization, In Chinese law, “inventioncreations” means inventions, utility models, and

designs. Inventions cover any new technical solution relating to a product, a process, or an improvement. A utility model is any new technical solution

relating to the shape, structure, or combination of a

product that is fit for practical use. No patent rights

can issue for any invention-creation that is contrary

to the laws of the state or social morality or that is

detrimental to public interest. Article 25 specifically

precludes patent rights for scientific discoveries,

rules and methods for mental activities, methods for

the diagnosis or treatment of diseases, pharmaceutical products and substances obtained by a chemical

process, and animal and plant varieties (24).

SUMMARY

A number of differences exist between nations

regarding intellectual property protection for biotechnological inventions. Included in these differences is the issue of what constitutes patentable

subject matter. Several international agreements are

relevant to the worldwide protection of biological

inventions. These agreements concern basic intellectual property rights and procedural mechanisms

involved in international patent practice (e.g., filing

and deposit). One agreement, the International

Convention for the Protection of New Varieties of

Plants, addresses plant breeders’ rights to a special

title of protection or a patent for this type of life

form. No treaties or international agreements exist

concerning animals as patentable subject matter.

Various analyses of the laws of other nations

indicate that patent protection on animals is permissible or theoretically possible in a number of nations,

Any projection of the number of nations permitting

animal patents must be considered speculative in the

absence of patent prosecution in this area. To date,

only the United States has both announced a policy

permitting patents on nonhuman animal life forms

and issued a patent on an animal invented through

biotechnological techniques.

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

CHAPTER 10 REFERENCES

Australian Off. J. Pat., 1980, page 1162.

Australian Patents Act, Sec. 155(1).

Baekerhefe (Baker’s Yeast), 6 (IC 207 (1975).

Baeumer, L,, “Protection of Inventions in the Field of

Biotechnology,” Symposium on the Protection of

Biological Inventions, World Intellectual Property

Organization and Cornell University, Ithaca, N. Y.,

June 1987.

Beier, F. K., Crespi, R. S., Straus, J., Biotechnology

and Patent Protection (Paris: OECD, 1985).

Ben~ S. A., Schwaab, R. L., Conlin, D. G., Jeffery,

D. D., Intellectual Property Rights in Biotechnology

Worldwide (New York, NY: Stockton Press, 1987).

Boeters, H. D., “Erfahrungen bei der Hinterlegung

von Gewebekulturen,” Mitt, 1982, p. 73.

Buchanan, J., Policy Analyst, Consumer and Corporate Affairs Canada, personal communication, Aug.

26, 1988.

Budapest Treaty on the International Recognition of

the Deposit of Microorganisms for the Purposes of

Patent Procedure, Art. 3(l)(a).

Budapest Treaty on the International Recognition of

the Deposit of Microorganisms for the Purposes of

Patent Procedure, Art. 6(1) and 6(2).

Canadian Patent ACL Revised Statutes of Canada, ch.

P-4, Sec. 2 (1987).

Canadian Patent Act, Revised Statues of Canada, ch.

P-4, Sec. 14(1) (1987).

Commission of the European Communities, “proposal for a Council Directive on the Legal Protection

of Biotechnological Inventions,” Brussels, Oct. 17,

1988.

Cooper, I., Biotechnology and the Luw, Sec. 6.05

(New York, NY: Clark Boardman Co, Ltd., 1988).
166 ● New Developments in Biotechnology: Patenting Life

15.

16,

17.

18.

19,

20.

21.

22.

23.

24.

25.

26.

27.

28.

29.

Cooper, I., Biotechnology and the Law, Sec. 10.08

(New York, NY: Clark Boardman Co, Ltd., 1988).

Czechoslovakian Patent Law, Art. 28 (1972).

Dickson, D., “Europe Grants First Patent on Plants,”

Science, 240(4856):1 142, May 27, 1988.

Hungarian Patents Act II of 1%9, Sec. 67-71 (1983).

Ihnen, J. L,, Attorney, Laramie & Robbins, Washington, DC, personal communication, August, 1988.

[n re Abitibi Co., 62 CPR 2d 81 (1982).

Japanese Patent Law, Sec. 1 (1978).

Law 70-489, Plant Wriety Act of 1970.

Martin, C. C., “U.S. and Japan Join Effort to Support

Protection of Intellectual Property,” Genetic Engineering News, 8(5):12-13, May 1988.

Moga, T., “China’s Patent Law Considered and

Compared,” University of Detroit Law Review,

64(3): 343-449, Spring 1987.

Obach, S., “Recent Development of Industrial Property Rights in Chile,” California Western International Law Journal, 17:327-341, Summer 1987.

Pioneer Hi-Bred, Ltd. v. Commissioner of Patents

and Trademarks —:491 (Fed, Ct. App., Mar. 11,

1987).

Polish Law on Inventive Activity, Sec. 2, and 12

(1972).

Rote Taube (Red Dove), 1 IIC 136 (1970).

Schwaab, R. L., Jeffery, D. D., Conlin, D.G., U.S. and

Foreign Intellectual Property Luw Relating to Bio30.

31.

32,

33.

34.

35.

36.

/ogical Inventions, contract submitted to the U.S.

Congress, Office of Technology Assessment, Washington, D. C,, 1984.

Siemsen, P.D. and Correa, J. A., “Recent Develop

ments of Industrial Property Rights in Brazil,”

California Western International Law Journal, 17:320-

326, Summer 1987.

Smolders, W., Patents and Trademarks Division,

Sandoz, Basle, Switzerland, personal communication, Aug. 19, 1988.

Soni, M., “Recent Developments of Industrial Property Rights in Mexico,” Cahyornia Western international Law Journal, 17:342-348, Summer 1987.

Straus, J., Professor of Intellectual Property Law,

Max Planck Institute, Munich, Federal Republic of

Germany, personal communication, Aug. 29, 1988.

Swiss Patents, Designs and Trademark Gazette,

Edition A, Mar. 27, 1986, quoted in Cooper, I.,

Biotechnology and the L.uw, Sec. 6.05 (New York,

NY: Clark Boardman Co, Ltd., 1988).

Mm Horn, C., “Federal Regulation and Animal

Patents,” workshop held by the U.S. Congress, Offke

of Technology Assessmen~ Dec. 11, 1987.

MM Horn, C., Deputy Solicitor, U.S. Patent and

Trademark Office, Washington, DC, personaI communication, Aug. 23, 1988.
Appendixes
Appendix A

Selected Sections, 35 United States Code, Patents

Section 101. Inventions patentable

Whoever invents or discovers any new and useful

process, machine, manufacture, or composition of matter,

or any new and useful improvement thereof, may obtain

a patent therefor, subject to the conditions and requirements of this title.

Section 102. Conditions for patentability; novelty

and loss of right to patent

A person shall be entitled to a patent unless—

(a) the invention was known or used by others in this

country, or patented or described in a printed publication

in this or a foreign country, before the invention thereof

by the applicant for patent, or

(b) the invention was patented or described in a printed

publication in this or a foreign country or in public use or

on sale in this country, more than 1 year prior to the date

of the application for patent in the United States, or

(c) he has abandoned the invention, or

(d) the invention was first patented or caused to be

patented, or was the subject of an inventor’s certificate, by

the applicant or his legal representatives or assigns in a

foreign country prior to the date of the application for

patent in this country on an application for patent or

inventor’s certificate filed more than 12 months before the

filing of the application in the United States, or

(e) the invention was described in a patent granted on

an application for patent by another filed in the United

States before the invention thereof by the applicant for

patent, or on an international application by another who

has fulfilled the requirements of paragraphs (1), (2), and

(4) of section 371(c) of this title before the invention

thereof by the applicant for patent, or

(f) he did not himself invent the subject matter sought

to be patented, or

(g) before the applicant’s invention thereof the invention was made in this country by another who had not

abandoned, suppressed, or concealed it. In determining

priority of invention there shall be considered not only the

respective dates of conception and reduction to practice of

their invention, but also the reasonable diligence of one

who was first to conceive and last to reduce to practice,

from a time prior to conception by the other.

Section 103. Conditions for patentability;

nonobvious subject matter

A patent may not be obtained though the invention is

not identically disclosed or described as set forth in

Section 102 of this title, if the differences between the

subject matter sought to be patented and the prior art are

such that the subject matter as a whole would have been

obvious at the time the invention was made to a person

having ordinary skill in the art to which said subject

matter pertains.

Patentability shall not be negatived by the manner in

which the invention was made. Subject matter developed

by another person, which qualifies as prior art only under

subsection (f) or (g) of Section 102 of this title, shall not

preclude patentability under this section where the subject

matter and the claimed invention were, at the time the

invention was made, owned by the same person or subject

to an obligation of assignment to the same person.

Section 111. Application for patent

Application for patent shall be made, or authorized to

be made, by the inventor, except as otherwise provided in

this title, in writing to the Commissioner. Such application shall include: (1) a specification as prescribed by

Section 112 of this title; (2) a drawing as prescribed by

Section 113 of this title; and (3) an oath by the applicant

as prescribed by Section 115 of this title. The application

must be accompanied by the fee required by law. The fee

and oath may be submitted after the specification and any

required drawing are submitted, within such period and

under such conditions, including the payment of a

surcharge, as may be prescribed by the Commissioner.

Upon failure to submit the fee and oath within such

prescribed period, the application shall be regarded as

abandoned, unless it is shown to the satisfaction of the

Commissioner that the delay in submitting the fee and

oath was unavoidable. The filing date of an application

shall be the date on which the specification and any

required drawing are received in the Patent and Trademark Office,

Section 112. Specification

The specification shall contain a written description of

the invention, and of the manner and process of making

and using it, in such full, clear, concise, and exact terms

as to enable any person skilled in the art to which it

pertains, or with which it is most nearly connected, to

make and use the same, and shall set forth the best mode

contemplated by the inventor of carrying out his invention.

The specification shall conclude with one or more

claims particularly pointing out and distinctly claiming

–169–
170 . New Developments in Biotechnology: Patenting Life

the subject matter which the applicant regards as his

invention.

A claim maybe written in independent or, if the nature

of the case admits, in dependent or multiple dependent

form.

Subject to the following paragraph, a claim in dependent form shall contain a reference to a claim previously set

forth and then specify a further limitation of the subject

matter claimed. A claim in dependent form shall be

construed to incorporate by reference all the limitations of

the claim to which it refers.

A claim in multiple dependent form shall contain a

reference, in the alternative only, to more than one claim

previously set forth and then specify a further limitation

of the subject matter claimed. A multiple dependent claim

shall not serve as a basis for any other multiple dependent

claim. A multiple dependent claim shall be construed to

incorporate by reference all the limitations of the particular claim in relation to which it is being considered.

An element in a claim for a combination may be

expressed as a means or step for performing a specified

function without the recital of structure, material, or acts

in support thereof, and such claim shall be construed to

cover the corresponding structure, material, or acts

described in the specification and equivalents thereof.

Section 113. Drawings

The applicant shall furnish a drawing where necessary

for the understanding of the subject matter sought to be

patented. When the nature of such subject matter admits

of illustration by a drawing and the applicant has not

furnished such a drawing, the Commissioner may require

its submission within a time period of not less than 2

months from the sending of a notice thereof. Drawing

submitted after the filing date of the application may not

be used (i) to overcome any insufficiency of the specification due to lack of an enabling disclosure or otherwise

inadequate disclosure therein, or (ii) to supplement the

original disclosure thereof for the purpose of interpretation of the scope of any claim.

Section 114. Models, specimens

The Commissioner may require the applicant to furnish

a model of convenient size to exhibit advantageously the

several parts of his invention.

When the invention relates to a composition of matter,

the Commissioner may require the applicant to furnish

specimens or ingredients for the purpose of inspection or

experiment.

Section 119. Benefit of earlier filing date in

foreign country; right of priority

An application for patent for an invention filed in this

country by any person who has, or whose legal representatives or assigns have, previously regularly filed an

application for a patent for the same invention in a foreign

country which afford similar privileges in the case of

applications filed in the United States or to citizens of the

United States, shall have the same effect as the same

application would have if filed in this country on the date

on which the application for patent for the same invention

was first filed in such foreign country, if the application

in this country is filed within 12 months from the earliest

date on which such foreign application was filed; but no

patent shall be granted on any application for patent for an

invention which had been patented or described in a

printed publication in any country more than 1 year before

the date of the actual filing of the application in this

country, or which had been in public use or on sale in this

country more than 1 year prior to such filing.

No application for patent shall be entitled to this right

of priority unless a claim therefor and a certified copy of

the original foreign application, specification, and drawings upon which it is based are filed in the Patent and

Trademark Office before the patent is granted, or at such

time during the pendency of the application as required by

the Commissioner not earlier that 6 months after the filing

of the application in this country. Such certification shall

be made by the patent office of the foreign country in

which filed and show the date of the application and of the

filing of the specification and other papers. The Commissioner may require a translation of the papers filed if not

in the English language and such other information as he

deems necessary.

In like manner and subject to the same conditions and

requirements, the right provided in this section may be

based upon a subsequent regularly filed application in the

same foreign country instead of the first filed foreign

application, provided that any foreign application filed

prior to such subsequent application has been withdrawn,

abandoned, or otherwise disposed of, without having been

laid open to public inspection and without leaving any

rights outstanding, and has not served, nor thereafter shall

serve, as a basis for claiming a right of priority.

Applications for inventors’ certificates filed in a

foreign country in which applicants have a right to apply,

at their discretion, either for a patent or for an inventor’s

certificate shall be treated in this country in the same

manner and have the same effect for purpose of the right

of priority under this section as applications for patents,

subject to the same conditions and requirements of this

section as apply to applications for patents, provided such

applicants are entitled to the benefits of the Stockholm
App. A--Selected Sections, 35 United States Code, Patents ● 171

Revision of the Paris Convention at the time of such

filing.

Section 120. Benefit of earlier filing date in the

United States

An application for patent for an invention disclosed in

the manner provided by the first paragraph of Section 112

of this title in an application previously filed in the United

States, or as provided by Section 363 of this title, which

is filed by an inventor or inventors named in the

previously filed application shall have the same effect, as

to such invention, as though filed on the date of the prior

application, if filed before the patenting or abandonment

of or termination of proceedings on the first application or

on an application similarly entitled to the benefit of the

filing date of the first application and if it contains or is

amended to contain a specific reference to the earlier filed

application.

Section 122. Confidential status of applications

Applications for patents shall be kept in confidence by

the Patent and Trademark Office and no information

concerning the same given without authority of the

applicant or owner unless necessary to carry out the

provisions of any Act of Congress or in such special

circumstances as may be determined by the Commissioner.

Section 154. Contents and term of the patent

Every patent shall contain a short title of the invention

and a grant to the patentee, his heirs or assigns, for the

term of 17 years, subject to the payment of fees as

provided for in this title, of the right to exclude others

from making, using, or selling the invention throughout

the United States, referring to the specification for the

particulars thereof. A copy of the specification and

drawings shall be annexed to the patent and be a part

thereof,

Section 161. Patents for plants

Whoever invents or discovers and asexually reproduces any distinct and new variety of plant, including

cultivated sports, mutants, hybrids, and newly found

seedlings, other than a tuberpropagated plant or a plant

found in an uncultivated state, may obtain a patent

therefor, subject to the conditions and requirements of this

title.

The provisions of this title relating to patents for

inventions shall apply to patents for plants, except as

otherwise provided.

Section 162. Description, claim

No plant patent shall be declared invalid for noncompliance with Section 112 of this title if the description is as

complete as is reasonably possible.

The claim in the specification shall be in formal terms

to the plant shown and described.

Section 163. Grant

In the case of a plant patent the grant shall be of the right

to exclude others from asexually reproducing the plant or

selling or using the plant so reproduced.

Section 164. Assistance of Department of

Agriculture

The President may by Executive order direct the

Secretary of Agriculture, in accordance with the requests

of the Commissioner, for the purpose of carrying into

effect the provisions of this title with respect to plants (1)

to furnish available information of the Department of

Agriculture, (2) to conduct through the appropriate bureau

or division of the Department research upon special

problems, or (3) to detail to the Commissioner officers

and employees of the Department.
Appendix B

Patents: Questions and Answers

Answers to Questions Frequently Asked

Question l—What do the terms “patent pending” and “patent applied for” mean?

Answer—They are used by a manufacturer or seller of an article to inform the public that an application for patent on that

article is on file in the Patent and Trademark Office. The law imposes a fine on those who use these terms falsely to

deceive the public.

Question 2—Is there any danger that the Patent and Trademark Office will give others information contained in

my application while it is pending?

Answer—No. All patent applications are maintained in the strictest secrecy until the patent is issued. After the patent is

issued, however, the Office file containing the application and all correspondence leading up to issuance of the patent

is made available in the Files Information Room for inspection by anyone. In addition, copies of these files may be

purchased from the Office.

Question 3-May I write directly to the Patent and Trademark Office about my application after it is filed?

Answer—Yes. The Office will answer an applicant’s inquiries as to the status of the application and inform you whether

your application has been rejected, allowed, or is awaiting action. However, if you have a patent attorney or agent, the

Office will not correspond with both you and your attorney concerning the merits of your application. All comments

concerning your application should be forwarded through your attorney or agent.

Question 4-Is it necessary to go to the Patent and Trademark Office to transact business concerning patent

matters?

Answer—No. Most business with the Office is conducted by correspondence. However, interviews regarding pending

applications can be arranged with examiners, if necessary, and are often helpful.

Question 5—If two or more persons work together to make an invention, to whom will the patent be granted?

Answer—If each had a share in the ideas forming the invention, they are joint inventors and a patent will be issued jointly

on the basis of a proper patent application. If, on the other hand, one of these persons has provided all of the ideas for

the invention and the other has only followed instructions in making it, the person who contributed the ideas is

considered the sole inventor and the patent application and patent shall be in his name alone.

Question 6-If one person furnishes all of the ideas to make an invention and another employs him or furnishes

the money for building and testing the invention, should the patent application be filed by them jointly?

Answer—No, The application must be signed by the true inventor and filed in the Patent and Trademark Office, in the

inventor’s name. This is the person who furnishes the ideas, not the employer or person who furnishes the money.

Question 7—Does the Patent and Trademark Office control the fees charged by patent attorneys and agents for

their services?

Answer—No. This is a matter between you and your patent attorney or agent in which the Office takes no part. To avoid

misunderstanding you may wish to ask for estimate charges for: (a) the search, (b) preparation of the patent application,

and (c) Patent and Trademark Office prosecution.

Question 8--Will the Patent and Trademark Office help me select a patent attorney or agent to make my patent

search or prepare and prosecute my patent application?

Answer—No. The Office cannot make this choice for you. However, your own friends or general attorney may help you

in making a selection from among those listed as registered practitioners on the Office roster. Also, some bar

associations operate lawyer referral services that maintain lists of patent lawyers available to accept new clients.

Question 9-Will the Patent and Trademark Office advise me as to whether a certain patent promotion

organization is reliable and trustworthy?

Answer—No. The Office has no control over such organizations and does not supply information about them. It is

advisable, therefore, to check on the reputation of invention promotion firms before making any commitments. It is

suggested that you obtain this information by inquiring with the Better Business Bureau of the city in which the

–172-
App. B-Patents: Questions and Answers ● 173

organization is located, or with the bureau of commerce and industry or bureau of consumer affairs of the State in which

the organization has its place of business. You may also undertake to make sure that you are dealing with reliable

people by asking your own patent attorney or agent or by inquiring of others who may know the organization.

Question 10--Are there any organizations in my area which can tell me how and where I may be able to obtain

assistance in developing and marketing my invention?

Answer—Yes. In your own or neighboring communities you may inquire of such organizations as chambers of commerce

and banks. Many communities have locally financed industrial development organizations which can help you locate

manufacturers and individuals who might be interested in promoting your idea.

Question n-Are there any State government agencies that can help me in developing and marketing my

invention?

Answer—Yes, In nearly all States there are State planning and development agencies or departments of commerce and

industry which seek new product and process ideas to assist manufacturers and communities in the State. If you do

not know the names or addresses of your State organizations you can obtain this information by writing to the Governor

of your State.

Question 12-Can the Patent and Trademark Office assist me in developing and marketing my patent?

Answer—The Office cannot act or advise concerning business transactions or arrangements involved in the development

and marketing of an invention. However, the Office will publish, at the request of a patent owner, a notice in the Official

Gazette that the patent is available for licensing or sale. The fee for this service is $7.

SOURCE: U.S. Patent and Trademark Office, General Information Concerning Patents, 1986.
Appendix C

Proposed Rules on Deposit

Department of Commerce

Patent and Trademark Office

37 CFR Part 1

Deposit of Biological Materials for Patent Purposes;

Notice of Proposed Rulemaking

October 6, 1988

(a) Deposit of Biological Material

Section 1.200 Biological material.

Section 1.201 Need to make a deposit.

Section 1.202 Acceptable depository.

Section 1.203 Time of making an original deposit.

Section 1.204 Replacement of deposit.

Section 1.205 Term of deposit.

Section 1.206 Viability of deposit.

Section 1.207 Furnishing of samples.

Section 1.208 Examination procedures.

Section 1.200: Biological material.

For the purposes of these regulations pertaining to the

deposit of biological material for patent purposes, the

term biological material shall include material that is

capable of self-replication either directly or indirectly.

Representative examples include bacteria, fungi including yeast, algae, protozoa, eukaryotic cells, cell lines,

hybridomas, plasmids, viruses, plant tissue cells, lichens,

and seeds. Viruses, vectors, cell organelles, and other

nonliving material existing in and reproducible from a

living cell may be deposited by deposit of the host cell

capable of reproducing the nonliving material.

Section 1.201: Need to make a deposit.

(a) Where a claimed invention is, or relies on, a

biological material which is not known and readily

available to the public and which cannot be described in

writing alone, the disclosure may include a deposit of a

biological material deposited in a depository and under

conditions complying with these regulations.

(b) Biological material need not be deposited if it is

known and readily available to the public or can be made

or isolated without undue experimentation from known

and readily available material. Samples will be considered

to be readily available even though some requirement of

law or regulation of the United States or of the country in

which the depository institution is located permits access

to the material only under conditions imposed for safety,

public health, or similar reasons.

(c) The reference to a specific organism or other

biological material in a specification disclosure does not

create any presumption that the specific material is

necessary to satisfy 35 U.S.C. 112 or that a deposit in

accordance with these regulations is required.

Section 1.202: Acceptable depository.

(a) A deposit shall be made in:

(1) Any International Depositary Authority (IDA) as

established under the Budapest Treaty on the International Recognition of the Deposit of Microorganisms

for the Purposes of Patent Procedure, or

(2) any other depository recognized to be suitable by

the Office, Suitability will be determined by the

Commissioner on the basis of the administrative and

technical competence, and agreement of the depository

to comply with the terms and conditions applicable to

deposits for patent purposes. The Commissioner may

seek the advice of impartial consultants from the

biotechnology industry or governmental agencies on

the suitability of a depository. The depository must:

(i) Have a continuous existence;

(ii) Exist independent of the control of the

depositor;

(iii) Possess the staff and facilities sufficient to

examine the viability of a deposit and store the

deposit in a manner which ensures that it is kept

viable and uncontaminated;

(iv) Provide for sufficient safety measures to

minimize the risk of losing biological material

deposited with it;

(v) Be impartial and objective; and

(vi) Furnish samples of the deposited material in

an expeditious and proper manner.

(b) If any depository under paragraph (a) of this section

defaults or discontinues the performance of any of the

tasks it should perform, the Office will recognize as a

substitute in any pending application or patent a deposit,

which must be viable if the biological material is of a kind

capable of self-replication, made with an IDA or deposi-

–174-
App. C--Proposed Rules on Deposit . 175

tory recognized to be suitable by the Office which is

transferred to said depository from the defaulting depository in the manner required for replacing a deposit under

Section 1.204.

(c) A depository seeking status under paragraph (a) (2)

of this section must direct a communication to the

Commissioner which shall:

(1) Indicate the name and address of the depository

to which the communication relates;

(2) Contain detailed information as to the capacity of

the depository to comply with the requirements of

paragraph (b) of this section, including information on

its legal status, scientific standing, staff and facilities;

(3) Indicate that the depository intends to be

available, for the purposes of deposit, to any depositor

under these same conditions;

(4) Where the depository intends to accept for

deposit only certain kinds of biological material,

specify such kinds;

(5) Indicate the amount of any fees that the

depository will, upon acquiring the status of suitable

depository under paragraph (a)(2) of this section,

charge for storage, viability statements and furnishings

of samples of the deposit.

(d) A depository having status under paragraph (a) of

this section limited to certain kinds of biological material

may extend such status to additional kinds of biological

material by directing a communication to the Commissioner in accordance with paragraph (c) of this section. If

a previous communication under paragraph (c) of this

section is of record, items in common with the previous

communication may be incorporated by reference.

(e) Once a depository is recognized to be suitable by the

Commissioner or has defaulted or discontinued its

performance under this section, notice thereof will be

published in the Official Gazette of the Patent and

Trademark Office.

Section 1.203: Time of making an original

deposit.

(a) An original deposit maybe made at any time before

filing an application for patent or, pursuant to a requirement that will be made by the examiner no later than the

date the Notice of Allowance and Issue Fee Due is mailed,

during pendency of the application for patent.

(b) When the original deposit is made after the effective

filing date of an application for patent, the applicant shall

promptly submit a verified statement from a person in a

position to corroborate the fact, and shall state, that the

biological material which is deposited is the same

biological material described in the application as filed,

except if the person is an attorney or agent registered to

practice before the Office, in which case the statement

need not be verified.

Section 1.204: Replacement of deposit

(a) Where a depository possessing the original deposit

cannot furnish samples of the deposit for any reason, the

depository shall, promptly after having noted its inability

to furnish samples, notify the depositor of such inability,

indicating the cause thereof. Subject to paragraphs (e), (f),

and (g) of this section, the depositor shall be required to

make a replacement deposit of the biological material

which was originally deposited within three months of

receiving notification that the depository cannot furnish

samples. The period for satisfying this requirement is

extendable upon petition, only for sufficient cause, and

for a reasonable time specified. Any request for such

extension must be filed on or before the day on which the

action is due, but in no case will the mere filing of the

request effect any extension. The replacement shall be

made in any acceptable depository under Section 1.202(a).

(b) An applicant or patent owner shall notify the Office

in writing, in each application or patent affected, as soon

as reasonably possible after a replacement deposit is

made. This notification shall state the name and address

of the depository, the accession number for the deposit,

the date of making the deposit, the results of a viability

test if applicable (as Provided for in Section 1.206), the

reason for making the replacement deposit, and include a

verified statement, except that if made by an attorney or

agent registered to practice before the Office, the statement need not be verified. If the replacement deposit

relates to a pending application, the statement shall be by

a person in a position to corroborate the fact, and shall

state, that the biological material which is deposited as a

replacement is identical to that originally deposited. The

notification shall be placed in the relevant application or

patent file.

(c) A depositor’s failure to replace a deposit within the

time required by this section may cause the application or

patent involved to be treated in any office proceeding as

if no deposit were made.

(d) In the event a deposit is replaced, the Office will

apply a rebuttable presumption of identity between the

original and the replacement deposit is relied upon during

any Office proceeding.

(e) Where an application is still pending, the time for

making a replacement deposit shall be the same as the

time for making an original deposit under Section

1.203(a). The applicant shall promptly notify the Office

after receiving notice that the depository possessing the

original deposit cannot furnish samples of the deposit for

any reason. A replacement deposit may be made during

this time for any reason, including where the depository

can furnish samples but the original deposit has become

contaminated or has lost its capability to function as

described in the specification.
176 ● New Developments in Biotechnology: Patenting Life

(f) In no case is a replacement deposit of a biological

material necessary where the biological material, in

accordance with Section 1.201(b), need not be deposited.

(g) NO replacement deposit of the biological material is

necessary where a viable deposit is in the depository but

the depository for national security, health or environmental safety reasons is unable to provide samples to

requesters outside of the jurisdiction where the depository

is located.

(h) A patentee may not replace a viable deposit where

the depository can furnish samples. Nothing in these

regulations is intended to prohibit a patentee from making

an additional deposit of a biological material where an

earlier deposit, otherwise viable, has become contaminated or has lost its capability to function as described in

the specification.

Section 1.205: Term of deposit.

A deposit shall be made for a term of at least thirty (30)

years after the date of a viable deposit and at least five (5)

years after the most recent request for the furnishing of a

sample of the deposited biological material was received

by the depository. In any case, samples must be stored

under agreements that would make them available beyond

the enforceable life of the patent for which the deposit was

made.

Section 1.206: Viability of deposit.

(a) A deposit of biological material that is capable of

self-replication either directly or indirectly must be viable

at the time of deposit and during the term of deposit.

Viability may be tested by the depository. The test must

conclude only that the deposited material is capable of

reproduction. No evidence is necessarily required regarding the ability of the deposited material to perform any

function described in the patent application.

(b) A viability statement for each deposit of a biological

material defined in paragraph (a) of this section not made

under the Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of

Patent Procedure must be filed in the application and must

contain:

(1) The name and address of the depository;

(2) The name and address of the depositor;

(3) The date of deposit;

(4) The identity of the deposit and the accession

number given by the depository;

(5) The date of the viability test;

(6) The procedures used to obtain a sample if the test

is not done by the depository; and

(7) A statement that the deposit is capable of

reproduction.

(c) If a viability test indicates that the deposit is not

viable upon receipt, or the examiner cannot, for scientific

or other valid reasons, accept the statement of viability

received from the applicant, the examiner shall proceed as

if no deposit has been made. The examiner will accept the

conclusion set forth in a viability statement issued by a

depository recognized under Section 1.202(a).

Section 1.207: Furnishing of samples.

(a) The deposit must be made under conditions that

assure that:

(1) Access to the deposit will be available during

pendency of the patent application making reference to

the deposit to one determined by the Commissioner to

be entitled thereto under Section 1.14 and 35 U.S.C.

122 and

(2) Subject to paragraphs (b) and (c)of this section,

all restrictions imposed by the depositor on the

availability to the public of the deposited material will

be irrevocably removed upon the granting of the patent.

(b) The depository may contract with the depository to

require that samples of a deposited biological material

shall be furnished only if a request for a sample, during the

term of the patent:

(1) Is in writing, signed and dated;

(2) Contains the name and address of the requesting

party and the accession number of the deposit; and

(3) Is communicated in writing by the depository to

the depositor along with a copy of the request, the date

on which the sample was furnished, and the name and

address of the party to whom the sample was furnished.

(c) the depositor may require that sample of a deposited

biological material shall be furnished only if the requesting party has agreed in writing, not to make the deposited

biological material or any biological material derived

therefrom available during the term of the patent to any

third party without the written permission of the depositor, and to assume the burden of proof concerning

compliance with the agreement. With the exception of the

Commissioner and an acceptable depository under Section 1.202 in which the requesting party has made a new

deposit for patent purposes of the deposited biological

material or any biological material derived therefrom, any

person or entity other than the requesting party and the

depositor shall be deemed to be a third party under this

paragraph. For the purposes of this paragraph, any

biological material shall be deemed to be derived from the

deposited biological material if it is replicated from, or

would not have been produced but for access to, the

deposited biological material, provided that the derived

matter still exhibits the essential characteristics of the

deposited biological material.

(d) Upon request, the Office will certify whether the

deposit has been stated to have been made under

conditions which make it available to the public as of the
App. C-Proposed Rules on Deposit 177

issue date of the patent grant provided the request

contains:

(1) The name and address of the depository:

(2) The accession number given to the deposit;

(3) The patent number and issue date of the patent

referring to the deposit; and

(4) The name and address of the requesting party.

Section 1.208: Examination procedures.

(a) The examiner shall determine pursuant to Section

1.104 in each application if a deposit is needed, in case

one has not been made, or if a deposit actually made is

acceptable for patent purposes. A deposit accepted in any

acceptable depository under Section 1.202(a) shall be

accepted for patent purposes if made under conditions

complying with Section 1.207(a). If a deposit is required

and has not been made or replaced in accordance with

these regulations, the examiner shall in an Office action

reject the affected claims in the application under the

appropriate provision of 35 U.S.C. 112, explaining why

a deposit actually made cannot be accepted.

(b) The applicant shall respond to a rejection under

paragraph (a) of this section by:

(1) Making an acceptable original or replacement

deposit or assuring the Office in writing that an

acceptable deposit will be made on or before the date

of payment of the issue fee, or

(2) Establishing that the involved biological material

is known and readily available to the public, or

(3) Arguing why a deposit is not required under the

circumstances of the application considered. Other

replies to the examiner’s action shall be consider

non-responsive. The rejection will be repeated until

either paragraph (b)(l) or (b)(2) of this section is

satisfied or the examiner is convinced that a deposit is

not required.

(c) If an application is otherwise in condition for

allowance except for the required deposit and the Office

has received a written assurance that an acceptable deposit

will be made on or before payment of the issue fee, the

Office will mail to the applicant a Notice of Allowance

and Issue Fee Due together with a requirement that the

required deposit be made within three months. The period

for satisfying this requirement is expendable under 37

CFR 1.136. Failure to make the required deposit in

accordance with this requirement will result in abandonment of the application for failure to prosecute.

(d) For each deposit made pursuant to these regulations, the specification shall contain:

(1) Accession number for the deposit;

(2) Date of the deposit;

(3) Taxonomic description of the deposit; and

(4) Name and address of the depository.

SOURCE: U.S. Federal Register, 1988: 53(194), 39420-39432.
Appendix D

Participants, OTA Workshop on Federal Regulations

and Animal Patents

Participant@ Workshop on Federal Regulation and Animal Patents

December 11, 1987

Stanley Abramson

Environmental Protection Agency

Washington, DC

David Beier

House Subcommittee on Courts, Civil Liberties

and Administration of Justice

Washington, DC

David Berkowitz

U.S. Department of Agriculture

Washington, DC

Mary Clutter

National Science Foundation

Washington, DC

Joel Cohen

Agency for International Development

Washington, DC

Mary Ann Danello

Food and Drug Administration

Rockville, MD

William Furtick

Agency for International Development

Washington, DC

Roger Gerrits

U.S. Department of Agriculture

Washington, DC

Alan Goldhammer

Industrial Biotechnology Association

Washington, DC

Thora Halstead

National Aeronautics and Space Administration

Washington, DC

Diane Hoffman

University of Maryland School of Law

Baltimore, MD

Edward Korwek, Workshop Chair

Hogan & Hartson

Washington, DC

Edward LaRoe

U.S. Department of the Interior

Washington, DC

Terry Medley

U.S. Department of Agriculture

Washington, DC

Margaret Mellon

National Wildlife Federation

Washington, DC

George Shibley

U.S. Department of Agriculture

Washington, DC

Lana Skirboll

Alcohol, Drug Abuse, and Mental Health Administration

Rockville, MD

Ann Sorensen

American Farm Bureau Federation

Park Ridge, IL

Charles Van Horn

U.S. Patent and Trademark Office

Washington, DC

Charles Warren

U.S. Patent and Trademark Office

Washington, DC

Arthur White

U.S. Patent and Trademark Office

Washington, DC

Ann Whitehead

U.S. Department of Agriculture

Washington, DC

Richard Wyatt

National Institutes of Health

Bethesda. MD

Daniel Jones

U.S. Department of Agriculture

Washington, DC

--178–
Appendix E

List of Contractor Documents

For this special report, OTA commissioned reports on various topics. The manuscripts of the following contract

reports are available from the National Technical Information Service, 5285 Port Royal Road, Springfield, VA, 22161,

telephone (703) 487-4650.

“Intellectual Property Protection for Plants and Varie- “Ethical Issues Related to the Patenting of Animals,”

ties,” Jeffrey L. Ihnen, Robbins & Laramie, Washington, Baruch A. Brody, Baylor College of Medicine, Houston,

DC. TX.

“Requirements for Deposit of Micro-organisms, Plants, “Commercial Applications and Economic Impact of

and Animals and the Role of the Independent Deposi- Patented Animals,” William Lesser, Cornell University,

tory,” Bobbie A. Brandon, American Type Culture Ithaca, NY,

Collection, Rockville, MD.

“Agricultural Applications and the Economic Impact of

Patents on Plant Breeding,” Richard J. Patterson, R.J.

Patterson and Associates, Research Triangle Park, NC.

--179–
Appendix F

Acknowledgments

>

OTA would like to thank the members of the advisory panel, workshop participants, contractors, and the many

individuals and organizations that supplied information for the study. In addition, OTA acknowledges the following

individuals for their comments on drafts of this report.

Stanley H. Abramson

King & Spalding

Washington, DC

Reid Adler

Finnegan, Henderson, Farabow,

Garrett & Dunner

Washington, DC

George J. Annas,

Boston University

Boston, MA

Geraldine F. Baldwin

Pennie & Edmonds

New York, NY

Rev. Verlyn L. Barker

United Church Board for Homeland

Ministries

New York, NY

John Barton

Stanford Law School

Stanford, CA

Benjamin C. Bolusky

National Association of Plant Patent

Owners

Washington, DC

John R. Boyce

American Veterinary Medical

Association

Schaumburg, IL

Bobbie Brandon

American Type Culture Collection

Rockville, MD

Ludwig Baeumer

World Intellectual Property

Organization

Geneva, Switzerland

Monica Broderick-Cantwell

University of Florida

Gainesville, FL

Baruch A. Brody

Baylor College of Medicine

Houston, TX

Marcia D. Brody

American Veterinary Medical

Association

Washington, DC

James Buchanan

Consumer and Corporate Affairs

Canada

Hull, Quebec, Canada

L.J. (Bees) Butler

University of California

Davis, CA

Noel J. Byrne

University of London

London, England

James A. Cairns

Sandier & Greenblum

Arlington, VA

Arthur Caplan

University of Minnesota

Minneapolis, MN

Terence J. Centner

The University of Georgia

Athens, GA

Gary Comstock

Western Rural Development Center

Corvallis, OR

Stephen Crespi

Patent Consultant

Sussex, United Kingdom

Kurt Darr,

Ethics Forum

McLean, VA

Janet V. Dorigan,

U.S. Office of Science and

Technology Policy

Washington, DC

Hubert E. Dubb

Flieser, Dubb, Meyer& Lovejoy

San Francisco, CA

John H. Duesing

CIBA-GEIGY AG

Base], Switzerland

–180--

Benton S. Duffett, Jr.

Bums, Deane, Swecker & Mathis

Alexandria, VA

William H. Duffey

Monsanto Co.

St. Louis, MO

Donald Duvick

Pioneer Hi-Bred International

Des Moines, IA

Steve Eberhart

National Seed Storage Laboratory

Colorado State University

Fort Collins, CO

Robert Evenson

Yale University

New Haven, CT

Peter Farnham

American Society for Biochemistry

and Molecular Biology

Bethesda, MD

Irving Feit

Hoffmann and Barron

Jericho, NY

Michael W. Fox

The Humane Society of the United

states

Washington, DC

Joanne M. Giesser

Sandoz

East Hanover, NJ

John Golenski

Society for Bioethics Consultation

Berkeley, CA

Joseph H. Guth

Fish & Neave

New York, NY

Eric M. Hallerman

University of Minnesota

St. Paul, MN

Norman D Hanson

Felfe & Lynch

New York, NY
App. F--Acknowledgments ● 181

Burke Healey

Southern Cross Ranch

Davis, OK

Maureen Hinkle

National Audubon Society

Washington, DC

Diane E. Hoffman

University of Maryland Law School

Baltimore, MD

Michael F. Hutgens

University of Illinois

Urbana, IL

Warren Hyer

American Biotechnology Association

Princeton, NJ

Jeffrey L. Ihnen

Robbins & Laramie

Washington, DC

Paul M. Janicke

Arnold, White & Durkee

Houston, TX

Daniel D. Jones

U.S. Department of Agriculture

Washington, DC

Geoffrey Karny

Dickstein, Shapiro and Morin

Vienna, VA

Daniel J. Kevles

California Institute of Technology

Pasadena, CA

John Kinsman

LaValle, WI

Walter N. Kim

Minnesota Mining and Manufacturing

co.

St. Paul, MN

Robert W. Krauss

Federation of American Societies for

Experimental Biology

Bethesda, MD

Fred Kuchler

U.S. Department of Agriculture

Washington, DC

David Lambert

American Seed Trade Association

Washington, DC

William Lesser

Cornell University

Ithaca, NY

Laurel A. Leach

Animal Health Institute

Alexandria, VA

John E. Lynch

Felfe & Lynch

New York, NY

Arlene MacLin

Washington, DC

Patrick Mahaffy

E.M. Warbug Pincus

New York, NY

Bruce W. Marion

University of Wisconsin

Madison, WI

Foil W. McLaughlin

North Carolina Crop Improvement

Association

Raleigh, NC

Terry Medley

U.S. Department of Agriculture

Washington, DC

Robert Merges

Boston University School of Law

Boston, MA

S. Leslie Misrock

Pennie & Edmonds

New York, NY

Albert S. Moraczewski

Pope John XXIII Medical-Moral

Research & Education Center

Houston, TX

Ray Moseley

University of Florida

Gainesville, FL

Lawrence Moss

Babson College

Wellesley, MA

Thomas H. Murray

Case Western Reserve University

Cleveland, OH

J. Robert Nelson

Texas Medical Center

Houston, TX

Richard Nelson

Holstein Association

Brattleboro, VT

John R. Norell

Provesta Corp.

Bartlesville, OK

Robert J. North

Merck & Co., Inc.

Rahway, NJ

Marvin D. Pace

American Breeders Service

DeForest, WI

Tom Palmer

Competitive Enterprise Institute

Washington, DC

Richard K. Perrin

North Carolina State University

Raleigh, NC

Walter Plosila

Montgomery County High

Technology Council, Inc.

Rockville, MD

Brenda D. Politi, D.V.M.

SmithKline Beckman Animal Health

Products

West Chester, PA

David Pramer

Rutgers University

Waksman Institute of Microbiology

Piscataway, NJ

Lisa Raines

Industrial Biotechnology Association

Washington, DC

Bernard E. Rollin

Colorado State University

Fort Collins, CO

Andrew Rowan

Tufts University

Boston, MA

Vernon W. Ruttan

University of Minnesota

St. Paul, MN

Mark Sagoff

University of Maryland

College Park, MD
182 ● New Developments in Biotechnology: Patenting Life

A. Allan Schmid

Michigan State University

East Lansing, MI

John W. Schneller

Spencer & Frank

Washington, DC

Philip M. Shapiro

Integrated Genetics

Framingham, MA

W. Rodney Sharp

DNA Plant Technology

Cinnaminson, NJ

Robert Shaw

Franklin Pierce Law Center

Concord, NH

Peggy Shriver

National Council of Churches

New York, NY

Ken Sibley

Bell, Seltzer, Park & Gibson

Raleigh, NC

Fred Smith

Competitive Enterprise Institute

Washington, DC

Ralph E. Smith

Colorado State University

Fort Collins, CO

Walter Smolders

Sandoz Ltd.

Basel, Switzerland

A. Ann Sorensen

American Farm Bureau Federation

Park Ridge, IL

A. David Spevak

Laurel, MD

Joseph Straus

Max Planck Institute of Patent Law

Munich

Federal Republic of Germany

William Szkrybalo

Pharmaceutical Manufacturers

Association

Washington, DC

J. Donald Todd

Animal Health Institute

Alexandria, VA

Sue Tolin

Virginia Tech

Blacksburg, VA

Charles E. Van Horn

U.S. Patent and Trademark Office

Washington, DC

Keith Walker

Plant Genetics

Davis, CA

Robert J. Wall

USDA/ARS

Beltsville, MD

Marc A. Wessels

International Network for Religion

and Animals

North Wales, PA

Luther Williams

National Institutes of Health

Bethesda, MD

Sidney B. Williams, Jr.

The Upjohn Company

Kalamazoo, MI

Zachary Wochok

Plant Genetics, Inc.

Davis, CA

Herbert M. Wolfson

E.I. du Pont de Nemours and

Company, Inc.

Wilmington, DE

Donald H. Zarley

Zarley, McKee, Thomte, Voorhees

& Sease

Des Moines, IA

Robert G. Zimbleman

American Society of Animal Science

Bethesda, MD
Appendix G

List of Acronyms and Glossary of Terms

List of Acronyms

ADAMHA — Alcohol, Drug Abuse, and Mental Health

AID

AIDS

ARS

ATCC

BPAI

CCPA

CSRS

DNA

EPA

EPC

EPO

FDA

FDCA

FIFRA

FSIS

IDA

IMRU

ISA

IVI

MMTV

NASA

NEPA

NIH

NRRL

NSF

OTA

PCT

PL

PPA

PVPA

PVPC

PVPO

RNA

(PA

TSCA

UN

Administration

— Agency for International Development

— Acquired Immunodeficiency Syndrome

— Animal and Plant Health Inspection Service

— Agricultural Research Service (USDA)

— American Type Culture Collection

— Board of Patent Appeals and Interferences

— U.S. Court of Customs and Patent Appeals

— Cooperative State Research Service (USDA)

— deoxyribonucleic acid

— Environmental Protection Agency

— European Patent Convention

— European Patent Office

— Food and Drug Administration

— Federal Food, Drug and Cosmetic Act

— Federal Insecticide, Fungicide, and Rodenticide Act

— Food Safety and Inspection Service (USDA)

— International Depositary Authority

— Institute of Microbiology at Rutgers University

— international searching authority

— In Vitro International, Inc.

— mouse mammary tumor virus

— National Aeronautics and Space Administration

— National Environmental Policy Act

— National Institutes of Health

— Northern Regional Research Laboratory

(Agricultural Research Service Culture

Collection)

— National Science Foundation

—Office of Technology Assessment (U.S.

Congress)

— Patent Cooperation Treaty

— Public Law

— Plant Patent Act of 1930

— U.S. Patent and Trademark Office

— Plant Variety Protection Act

— Plant Variety Protection Certificate

— Plant Variety Protection Office (USDA)

— ribonucleic acid

— tissue plasminogen activator

—Toxic Substances Control Act

— United Nations

International Union for the Protection of

New Varieties of Plants

USDA — United States Department of Agriculture

—World International Property Organization

Glossary of Terms

Amino acid: Any of a group of 20 molecules that are

linked together in various combinations to form

proteins. Each different protein is made up of a specific

sequence of these molecules with the unique sequence

coded for by DNA.

Animal: A nonhuman living being with a capacity for

spontaneous movement and a rapid motor response to

stimulation. Animals can be divided into two groups,

invertebrates (animals without backbones) and vertebrates (animals with backbones).

Animal deposit: The new patentable status of animals

raises questions about their placement in depositories

as part of the patent application process. To date no

animal has been deposited in a depository, and the

deposit of whole animals would not be practical, but it

is conceivable that the maintenance of frozen embryos

in depositories might be possible provided that the

embryos can be successfully frozen and recovered. See

deposit and depositories.

Animal patents: The patenting of nonhuman transgenic

animal life forms. The United States is currently the

only country that has issued a patent for an animal

developed using biological techniques, The ability to

patent animals introduces a new legal concept of

animal ownership and raises a number of ethical,

economic, and practical issues.

Asexual reproduction: As used in this report—

reproduction of plants by purely vegetative means

without the function and interaction of the two sexes.

Examples of asexually reproduced plants are roses,

peach trees, and lilies.

Bacterium (pi. bacteria): Any of a group of one-celled

micro-organisms having round, rodlike, spiral, or

filamentous bodies that are enclosed by a cell wall or

membrane and lack fully differentiated nuclei.

Biotechnology: any technique that uses living organisms

or substances from those organisms to make or modify

a product, to improve plants or animals, or to develop

micro-organisms for specific uses. These techniques

include the use of novel technologies such as recombinant DNA, cell fusion, and other new bioprocesses.

See genetic engineering and recombinant DNA.

-183-
184 . New Developments in Biotechnology: Patenting Life

Budapest Treaty on the International Recognition of

the Deposit of Microorganisms for the Purposes of

Patent Procedure: This Treaty, established in 1977,

became effective in 1980. It requires that those

contracting states, which allow or require the deposit

of micro-organisms as part of their patent procedures,

deposit these micro-organisms in a recognized International Depository Authority (IDA) that complies

with Treaty requirements, and maintain them there for

30 years. Three IDAs are currently recognized in the

United States. See depositories and International

Depositary Authority.

Carrier: See vector.

Cell: The smallest component of life. A membrane-bound

protoplasmic body capable of carrying on all essential

life processes. A single cell unit is a complex collection

of molecules with many different activities all integrated to form a functioning, self-assembling, selfregulating, and self-reproducing biological unit.

Cell culture: The propagation of cells removed from

multicellular organisms in a laboratory environment

that has strict sterility, temperature, and nutrient

requirements. The term is also used to refer to any

particular individual sample.

Cell fusion: The joining of the membrane of two cells,

thus creating a single hybrid cell that contains the

nuclear matter from the parent cells.

Chakrabarty decision: A landmark 1980 Supreme Court

decision holding that a live, human-made, microorganism, that had been genetically engineered in a

laboratory by Ananda Chakrabarty, was patentable as

a “manufacture” or “composition of matter”.

Chromosome: A thread-like structure contained in the

nucleus of a cell that carries the genes that convey

hereditary characteristics.

Claim: The part of the patent that points out and distinctly

claims the subject matter that the applicant regards as

the invention. Claims represent the metes and bounds

of the property to be protected. See specification.

Consequential reasoning: A form of ethical reasoning

that analyzes the consequences of a particular action

(e.g., the encouragement and development of new

inventions). Consequentialist reasoning has been used

to outline the pros and cons of patenting animals.

Copyright: Copyright protection applies to eight categories of works: literary; musical; dramatic; pantomime

and choreographic; pictorial, graphic and sculptural;

motion pictures and audio-visual work; sound recording; and computer programs. Copyright protects the

expression of an idea, not the idea itself.

Cultivar: An international term denoting certain cultivated plants that are clearly distinguishable from

others by one or more characteristics and which when

reproduced retain those characteristics. In the United

States “variety” is considered to be synonymous with

cultivar (derived from cultivated variety). See plant

variety.

Deoxyribonucleic acid (DNA): The molecule in chromosomes that is the repository of genetic information

in all organisms (with the exception of a small number

of viruses in which the hereditary material is ribonucleic acid—RNA). The information coded by DNA

determines the structure and function of an organism.

Deposit: Placement of micro-organisms, vectors, cells,

plant tissues, seeds, and other biological materials that

are newly isolated, novel, manmade, or not generally

available to the public on a long-term basis, in

recognized patent depositories as part of the patent

application process. See animal deposit and depositories.

Depositories: A facility that accepts, maintains, classifies, and distributes cultures of micro-organisms,

viruses, cells, and other genetic and biological material. Since 1983, a few depositories have begun to

accept seeds and plant tissue cultures, but to date no

depository has accepted any animal. Depositories can

be public, private, for profit, or nonprofit. Three

depositories in the United States are currently recognized as International Depositary Authorities (IDAs)

for patent purposes. See Budapest Treaty and International Depositary Authority.

Enzyme: Any of a group of catalytic proteins that are

produced by living cells and that mediate and provide

chemical processes without themselves being destroyed or altered.

Eukaryote: A cell or organisms with a membrane-bound,

structurally discrete nucleus and other well-developed

subcellular compartments. Eukaryotes include all organisms except viruses, bacteria, and blue-green algae.

First generation hybrid: The first generation resulting

from a cross mating of two distinctly different parental

types.

Gene: The fundamental physical and functional unit of

heredity, the portion of a DNA molecule that is made

up of an ordered sequence of nucleotide base pairs that

produce a specific product or have an assigned

function.

Genetic engineering: Technologies (including recombinant DNA methods) used by scientists to isolate

genes from an organism, manipulate them in the

laboratory, and insert them stably in another organism.

See recombinant DNA and biotechnology.

Genotype: The genetic constitution of an organism as

distinguished from its physical appearance (phenotype).

Germplasm: The total genetic variability, represented by

germ cells or seeds, available to a particular population

of organisms.
App. G--List of Acronyms and Glossary of Terms ● 185

Harvard mouse: A transgenically engineered mouse

developed at Harvard and patented in April 1988, the

first animal ever to be patented, The Harvard mouse

was engineered to be unusually susceptible to cancer

and was developed for use in the testing of carcinogens

and cancer therapies.

Hybrid: An offspring of a cross between two genetically

unlike and individual plants or animals.

Hybridoma: A new cell resulting from the fusion of a

particular type of immortal tumor cell line, a myeloma,

with an antibody-producing B lymphocyte. Cultures of

such cells are capable of continuous growth and

specific (i.e., monoclinal) antibody production.

Hydrolysis: A chemical process of decomposition involving the splitting of a chemical bond and the

addition of the elements of water.

Immobilized enzymes: Enzymes that are bonded to a

carrier or trapped within a carrier, making them more

stable when exposed to changes in reaction conditions.

Inoculum: Material introduced into a living organism.

Intellectual property: That area of the law involving

patents, copyrights, trademarks, trade secrets, and

plant variety protection.

International Depositary Authority (IDA): Depositories recognized for patent purposes under the Budapest Treaty. Such depositories must be located in a

member country and must comply with requirements

essential for them to carry out their tasks in compliance

with the Treaty. As of January 1988, a total of 19

institutions had acquired IDA status; 3 are in the

United States. See deposit.

Invention: An original device, contraption, or process

developed after study and experiment. Genetically

engineered animals, plants. and micro-organisms have

been recognized as patentable forms of biological

invention in the United States, but this is not always the

case in other countries, especially where animals are

concerned.

March-in-rights: The right of a Federal agency to

intercede and require the granting of a license if an

invention is not practiced.

Microinjection: A technique used for the insertion of

genes from one cell into another cell, in which highly

purified copies of a specific gene of interest are

injected into a cell. Copies of one specific gene of

interest can be injected into a fertilized animal egg. The

egg is then surgically implanted in a female animal’s

reproductive tract.

Micro-organisms: Minute, microscopic, or submicroscopic living organisms (e.g., bacteria, mycoplasma,

and viruses.)

Monoclinal antibodies: Identical antibodies that recognize a single specific antigen and are produced by a

clone of specialized cells.

National treatment: A key principle of the Paris Union

Convention, which provides that, with regard to the

protection of industrial property, nationals of any

country of the Union are to enjoy in any of the other

countries of the Union the advantages that their

respective laws concerning industrial property grant to

their own nationals, See Paris Union Convention.

Neoplasm: A new growth of tissue serving no physiological function (e.g. a tumor).

Novelty: One of the criteria used in the evaluation of

patent applications. The invention or discovery being

evaluated must be new and must not have previously

existed through the work of others in order to be

accepted on the grounds of novelty.

Obviousness: Obviousness is one of the criteria used in

the evaluation of patent applications, Obviousness

addresses the degree of difference between the invention being evaluated and that which is already known

and available. See prior art.

Oncogenesis: The induction or formation of tumors.

Paris Union Convention: A universal treaty that establishes certain basic rights for residents and nationals of

its member countries to protect industrial property

rights (patents, utility models, industrial designs,

trademarks, service marks, trade names, indications of

source and unfair competition) under the laws of other

member countries. The Convention is administered by

the World Intellectual Property Organization (WIPO).

See national treatment.

Patent: A patent is a grant issued by the U.S. Government

through the U.S. Patent and Trademark Office (PTO)

that gives the patent owner the right to exclude all

others from making, using, or selling a patented

invention within the United States and its territories

and possessions for the term of the patent (17 years).

A patent does not grant the inventor any affirmative

right to use an invention. Laws of nature, physical

phenomena, and abstract ideas cannot be patented.

Patents have come to be viewed by many as vital for

the protection of commercial and intellectual interests

in the uses and products of various biotechnology

techniques. The implications of patenting living organisms are the subject of some debate.

Patent infringement: Patent encroachment in a way that

violates the personal property rights of the patent

holder.

Plant breeding: The development of plants with certain

desirable characteristics, such as disease resistance and

improved harvestability and cold tolerance.

Plant patents: Authorized by the Plant Patent Act of

1930, plant patents protect asexually reproduced plant

varieties, including cultivated sports, mutants, hybrids,

and newly found seedlings. They cannot be obtained
186 . New Developments in Biotechnology: Patenting Life

for tubers or wild varieties found in nature that are not

asexually reproduced.

Plant variety: Cultivated plants that are clearly distinguishable from others by one or more characteristics,

and that when reproduced retain those distinguishing

characteristics. See cultivar.

Plant variety protection: Patent-like protection for

certain sexually produced plants. Plant variety protection is governed by Federal statute (the Plant Variety

Protection Act), which is administered by the U.S.

Department of Agriculture.

Plant variety protection certificate (PVPC): A certificate authorized by the Plant Variety Protection Act

that provides a form of protection for new, distinct,

uniform, and stable varieties of sexually reproducing

uncultivated plants, and first-generation hybrids.

Plasmid: An extrachromosomal, circular piece of DNA

found in the cytoplasm and capable of replicating and

segregating independently of the host chromosome.

See vector.

Polyploid: Having a chromosome number that is greater

than two of the monoploid number. Polyploid oysters

were among the first nonnaturally occurring, nonhuman, multicellular, living organisms to be declared

patentable subject matter.

Prior art: That which is already known or available, part

of the criteria of obviousness used in evaluating patent

applications. See obviousness.

Recombinant DNA: A broad range of techniques involving the controlled manipulation of the genetic material

of organisms. These techniques and their products

have enormous potential in the development of new

and improved products and processes in a wide variety

of industrial sectors. The term is often used synonymously with genetic engineering. It is also used to

describe a DNA molecule constructed by genetic

engineering techniques composed of DNA from different individuals or species. See biotechnology and

genetic engineering.

Restriction enzymes: Certain bacterial enzymes that

recognize specific short sequences of DNA and cut the

DNA where these sites occur. Restriction enzymes can

be used to isolate a gene that has been identified in the

hereditary material of an organism.

Right of Priority: A right granted by the Paris Union

Convention of 1970, which enables any resident or

national of a country to first file a patent application in

any member country and thereafter to file a patent

application for the same invention in any other

member country within 12 months of the original

filing, thus ensuring that the subsequently filed applications enjoy the right of priority established by the

first filing date.

Seed: A mature ovule, consisting of an embryonic plat

together with a store of food, all surrounded by a

protective coat. A seed usually develops following the

fertilization of an egg cell by a male generative cell

from a pollen grain.

Sexual reproduction: Reproduction that occurs as a

result of the interaction between the two sexes. In

plants, sexual reproduction occurs when a female egg

cell is fertilized by a male generative cell from a pollen

grain. Examples of sexually reproduced plants are

corn, wheat, and sorghum.

Somatic cell: One of the cells of the body that make up

the tissues, organs, and parts of the individual, other

than the germ cells.

Specification: For purposes of this assessment, a specification is the written part of a patent application that

describes an invention and the manner and process of

making it and using it clearly and concisely. The

specification also includes one or more claims. See

claim.

Sport: A plant or a part of a plant that abruptly shows a

noticeable difference in appearance. Examples are a

deeper red in a red apple, or an unusual color or shape

in a flower. If these changes are the result of a true

mutation they may be maintained by vegetative means

once they have occurred.

Species: Reproductive communities and populations that

are distinguished by their collective manifestation of

ranges of variation with respect to many different

characteristics and qualities.

Species barrier: The idea that there is a natural barrier

between species that preserves their integrity or

identity. This idea has no known foundation in

biology. The parameters that limit the ranges and

variations of species are fluid and variable, and species

exist as reproductive communities rather than as

separate creatures.

Species integrity: The idea that a species has integrity as

a biological unit. This would have to be based on the

identity of the genetic material carried by the species.

However, it is not clear how a species might be defined

genetically, and this issue is the subject of debate

among those seeking to understand the nature of

species.

Taxonomy: The discipline of naming and describing

species of plants and animals and their orderly

classification according to their presumed natural

characteristics and relationships.

Tissue culture: The propagation of tissue removed from

organisms in a laboratory environment that has strict

sterility, temperature, and nutrient requirements.

Tissue plasminogen activator (tPA): A genetically

engineered protein drug that helps to dissolve blood

clots in patients who have suffered heart attacks.
App. G--List of Acronyms and Glossary of Terms ● 187

Trademark: A distinctive mark, motto, device, or

emblem that a manufacturer stamps, prints, or otherwise affixes to his goods so that they can be identified

in the market and their source or origin vouched for.

Trademarks are governed by Federal and State law.

Trade secret: Information used in a trade or business that

is kept secret by its owner to provide a competitive

business advantage (e.g. a plan, process, tool, mechanism, chemical compound, customer list, or formula).

Protection of trade secrets is governed by State law.

Transgenic animals: Animals whose hereditary DNA

has been augmented by the addition of DNA from a

source other than parental germplasm usually from

another animal or a human, in a laboratory, using

recombinant DNA techniques. At the moment, most of

the research in this field is done on mice, but major

research efforts in transgenic animal modification are

also focusing on cattle, swine, sheep, poultry, and fish.

Utility patents: Usefulness or utility is one of the criteria

used to evaluate patent applications, Utility patents are

patents issued to inventors of any new and useful

process, machine, manufacture, or composition or any

new and useful improvement thereof.

Vector: A carrier or transmission agent. In the context of

recombinant DNA technology, a vector is the DNA

molecule used to introduce foreign DNA into host

cells. Recombinant DNA vectors include plasmids,

bacteriophages, and other forms of DNA.
Index
Index

Aaronson v. Quick Point Pencil Co., 46

Agency for International Development (AID), use and

regulation of genetically altered animals by, 16, 109

Agreements, international

concerning biological inventions, 21, 155-159

see also individual agreements

Agricultural Research Service (ARS)--USDA, use and

regulation of genetically engineered animals by, 16, 106

Agricultural Research Service Culture Collection. See Northern

Regional Research Laboratory

Agriculture

impacts of plant protection on U. S., 84-87

proprietary protection variation among crops used in, 79,82-

84

transgenic animal patenting’s effects on, 136-137

see also individual crop types

Alcohol, Drug Abuse, and Mental Health Administration

(ADAM HA ), use and regulation of genetically engineeredanimals by. 105

American Association for Accreditation of Laboratory Animal

Care, 105

American Fruit Growers v. Brogdex, 93

American Type Culture Collection (ATCC), 141-142, 147, 149,

150

Animal and Plant Health Inspection Service (APHIS)--

(USDA), use and regulation of genetically engineered

animals by, 107

Animals

history of patenting, 32

intellectual property protection’s economic impacts on four

classes of, 17, 119-123

see also Cattle; Livestock; Poultry; Transgenic animals

Animal Welfare Act of 1985, 103, 104, 107, 133

Annas, George, 91 

Applications, patent

requirements for, 40-41

time required for PTO examination of, 9, 60

Argentina, patent law in, 164

Aristotle. 99

Arizona. beef cattle production in, 117

Armstrong Nurseries, Inc. v. Smith et. al., 72

Asgrow Seed Co. v. Kunkle Seed Co., Inc. et. al., 75

Asilomar Conference, 30

Australia, intellectual property law in, 162

Australian Patent Office, 162

Barnes, F., 23

Baylor College of Medicine (Texas), 23

Beef. See Cattle; Livestock

Belgium, national patent law of, 161

Biotechnology

definition of, 3

intellectual property protection strategies in industry

involving plant, 84

patent activity in emerging areas of, 55-56

patent litigation related to, 8-9,56-60

patents’ impact on commercialization of, 8,55

see also DNA

Board of Patent Appeals and Interferences (BPAI)—PTO, 41

Ex parte Allen decision by, 93

utility patent ruling by, 11, 31-32, 74-75, 79

Bolar Pharmaceutical Co., 58-59

Boyer, Herbert, 56

Brave New World, 31

Brazil, patent law in, 164

Breeding

European laws concerning plant, 159

gene insertion techniques use in future, 13,97-98

PPA encouragement of, 9-10,71-72,85

PVPA encouragement of. 10-11,72-73,85-87

British Patent Act of 1977, 161

Budapest Treaty on the International Recognition of the Deposit

of Microorganisms for the Purpose of Patent Procedure, 18,

141, 142, 144, 147, 158-159

Bulgaria, intellectual property law in, 163

Burger, Warren, 49, 125

Burroughs-Wellcome (PLC)--U. K., 55

California, 83

beef cattle production in, 117

milk production in, 116

California, University of (San Francisco), 30,56

Canada, patent law in, 164-165

Canadian Patent Act, 164

Canadian Patent Office, 164

Cattle

beef, 117

dairy, 116-117

see also Livestock

Cetus, stock offering by, 55

Chakrabarty, Ananda, 31,52

Charles River Biotechnical Services, 121

Chickens. See Poultry

Chile, intellectual property law in, 164

Cohen, Stanley N., 56

Cohen-Boyer patent, 30,56

Commercialization, patents’ impact on biotechnology, 8,55

Commission of the European Communities, 161, 162

Congress, U.S.

issues and options for, 22-26

patent policies adopted by, 30,32,55

subject matter patentability intended by, 5, 37, 39

Contracting. See Licensing

Cooperative State Research Service (CSRS)—USDA, use and

regulation of genetically engineered animals by, 16, 106-

107

Coordinated Framework for Regulation of Biotechnology,

103

Copyright Office, U. S., subject matter policy of, 43

Copyrights, basic concepts and workings of, 5,43-44

Corcoran, Elizabeth, 27

--191–
192 . New Developments in Biotechnology: Patenting Life

Corn, proprietary protection methods used in seed industry for

hybrid, 82

Court of Customs and Patent Appeals, U.S. (CCPA), deposit

decision by, 143

Courts. See Court of Customs and Patent Appeals, U. S.; Litigation; Supreme Court, U.S.

Culture depositories. See International Depositary Authorities

Czechoslovakia, intellectual property protection in, 163

Darwin, Charles, 98, 100

Data collection

on Federal regulation of genetically altered animals, 16, 102-

110

on post-Chakrabarty biotechnology-related patent activity,

55-56

on seed and plant industries’, universities’, and nurseries’

opinions concerning intellectual property protection, 11,

78,80-81

Delta & Pine Land Co. v. Peoples Gin Co., 75

Department of Agriculture, U.S. (USDA), 24,70

deposit issues and, 147, 149

egg pricing link to market reports from, 116

farmer’s exemption abuses, limitations and, 25,79

pork production estimate by, 117

PVPA administration by, 7, 11,74

soybean planting survey by, 79, 83

use and regulation of genetically engineered animals by, 16,

106-108

Department of Commerce, U.S. (DOC), 147

Department of Defense, U.S. (DoD), 127

Department of Energy, U.S. (DOE), use and regulation of

genetically engineered animals by, 110-111

Department of Health and Human Services, U.S. (DHHS), 147

Deposit

access to samples on, 148-149

considerations when choosing plant protection methods, 82

issues involving, 18-21, 142-147

maintenance, 147-148

methods for plant and animal, 149-150

PPA and, 72

PTO policy on, 18-20,26, 143-146, 148

Depositories. See International Depositary Authorities

Design patents

as type of subject matter patent, 38

see also Patents; Subject matter

Diamond v. Chakrabarty, 7-8,31,33,93

biotechnology R&D encouragement from ruling in, 54,55,

85-87

details of decision in, 51-54

ethical questions raised by, 130-137

patent activity following, 8-9,55-56,60

DNA (Deoxyribonucleic acid)

as copyright subject matter, 43-44

development of technology for recombinant, 51

Federal Government research involving recombinant, 16,

102-110

NIH guidelines for research involving recombinant, 105

techniques for producing transgenic animals, 12-13,93-98

see also Biotechnology

Duffey, William, 49

du Pont de Nemours & Co., E. I., 12,32, 121

Economics

of animal patenting on the Third World, 135-136

of biotechnology-related R&D, 55

of farmer’s exemption prohibition, 86

of on-farm agricultural seed and plant use, 78

of private plant breeding, 9, 11,71,73, 85-87

of royalty collection from animal patents, 121-122

of seed industries, 82, 84

of transgenic animal patenting on consumers, 115, 123

of transgenic animal patenting on inventors, 16-17, 119-120,

123, 115

of transgenic animal patenting on users and

producers (licensees), 115, 120-122, 123

of transgenic animal research, 94-95

Endangered Species Act, 103, 110

Environmental Protection Agency, U.S. (EPA), use and

regulation of genetically engineered animals by, 108

Ethics, involved in animal patenting, 17-18,30-31, 127-137

Europe, 147

animal patent applications in, 23, 156, 158

intellectual property laws of counties in Eastern, 162-163

patentable subject matter in, 22, 160

UPOV formation in, 10,73

see also European Common Market

European Common Market (EC), 162

European Patent Convention and, 158

see a/so Europe: individual member counties of

European Patent Convention (EPC), 21,23

animal patenting opposition by members of, 135

national patent laws in member countries of, 161-162

patentable subject matter in member countries, 160-161

purpose and workings of, 158

see also individual signatories of

European Patent Office (EPO), 21,23, 148, 157, 158, 160

Ex parte Allen, 30, 33,93

Ex parte Grayson, 93

Ex parte Hibberd

biotechnology R&D encouragement from ruling on, 85

utility patent use ruling in, 11, 30, 33,74-75, 93

Farmers, PVPA exemption for, 11,25,73-74,79,83,86

Federal Food, Drug, and Cosmetic Act (FDCA), 58-59,103,108

Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA),

103, 108

Federal Meat Inspection Act, 107

Federal Republic of Germany (FRG), national patent law of,

149, 161

Feldman v. Aunstrup, 144

First, Neal, 23, 113

Fish and Wildlife Service (FWS)—Department of the Interior,

use and regulation of genetically engineered animals by,

109-110

Food and Drug Administration, U.S. (FDA), 59

Center for Veterinary Medicine, 107

effect on patent term of regulatory review by, 41

patent infringement and drug approval-related testing

required by, 58
Index . 193

use and regulation of genetically engineered animals by, 108

Food Safety and Inspection Service (FSIS)—USDA, use and

regulation of genetically engineered animals by, 107-108

France, national patent law of, 161

Funk Bros. Seed Co. v. Kalo Inoculant Co., 93

Genentech, Inc., stock offering by, 30,55

General Electric Co., 31, 52

General Hospital Corp., The (Massachusetts), 23

Genetically engineered animals. See Transgenic animals

Genetic engineering. See Biotechnology

Georgia, “phony peach disease” in, 71

German Democratic Republic (G.D.R. ). patent law in, 163

Germplasm, impact of plant protection on exchange of, 25-26,

87

Godown, Richard, 113

Government, U.S. Federal

genetically altered animal regulation by, 16, 102-110

milk price supports, 17, 116

patent rights for inventions made with assistance from, 43

post-Chakrabarty events and trends in patent policy of, 8-9,

54-55

see also individual agencies of

Government Patent Policy Act of 1980,8,43,55

Guide for the Care and Use of Laboratory Animals, 103, 105

Guidelines

Patent and Trademark Office deposit, 18-20, 143-146, 148

for Research Involving Recombinant DNA Molecules (NIH),

103-104, 105, 109, 110

see also Policy; Regulation

Harvard mouse. See Oncomouse

Harvard University, 12,23,30,32,98,99, 121

Health Research Extension Act, 104

History

of intellectual property law, 4-12, 37

of plant property protection, 9-12, 70-75

of species integrity philosophy, 14, 98-102

Hoffman-La Roche, 55

Hungary, patent law in, 163

Huxley, Aldous, 31

Immunex (Washington State), 23

Incentives, economic, for private plant breeding research, 9, 11,

71,73,85-87

Industry

choosing and managing plant protection by seed and plant,

78-82

features of dairy, 116-117

features of poultry, 115-116

features of red meat production, 117

intellectual property criteria considered by, 11, 78-84

R&D expenditures by biotechnology, 55

Infringement, patent

definition of and remedy for,41

litigation involving, 8-9, 58-59

In re Lundak, 144

In re Wakefield, 93

Institute of Microbiology, Rutgers University (IMRU), 142

Integrated Genetics, Inc. (Massachusetts), 23

Intellectual property, 4-7,37,46-47

comparison of various forms of protection for, 11-12, 75-78

economic impacts on four classes of animals from protecting,

17, 119-123

effect on U.S. agriculture of protecting plant, 84-87

history of plant protection-related, 9-12, 70-75

international agreements concerning protection of, 21-22,

155-159

plants and, 9-12,69,87-89

U.S. seed and plant industry criteria for choosing protection

for, 11, 78-84

see also Copyrights; Patents; Trademarks; Trade secrets

International Depositary Authorities (IDAs), 18, 20, 141-142,

144, 145-146, 149.158-159

impact of deposit of patented animals on, 20-21, 150

role of, 19, 146-147

International searching authority (ISA), 157

International Union for the Protection of New Varieties of Plants

(UPOV)

breeders’ rights protection through, 10,73, 165

workings and purpose of, 159, 161, 163, 164

Inventions Secrecy Act, 127-128

In Vitro International, Inc. (IVI), 142, 149

Japan

biotechnology deposit and, 147

patent law in, 163-164

Japanese Patent Office, 22, 163, 164

Jefferson, Thomas, 35,37,54

Karny, Geoff.91

Kewanee Oil v. Bicron Corp., 46

Kim Brothers v. Hagler, 72

Kinsman, John, 113

Lacey Act, 104

Lanham Act. See Trademark Act of 1946

Leder, Philip, 99

Legislation

language changes in patent, 37

worldwide national patent, 161, 165

see also individual statutes

Licensing

considerations when choosing plant protection methods, 81-

82

impacts of animal patenting on users/producers, 120-122

Linnaeus, Carolus, 98

Litigation

biotechnology-related patent infringement. 8-9,58-59

considerations when choosing plant protection methods, 79-

81

post-Chakrabarty patent, 8-9,56-60

see also individual legal cases

Livestock

economic impacts of transgenic animal patenting on

production of, 17, 120, 121-122, 123

overview of major market sectors producing/using, 115-117

see also Animals; Cattle; Poultry; Transgenic animals

Locke, John, 130

Luminus PTY Ltd. (Australia), 23
194 ● New Developments in Biotechnology: Patenting Life

Mexico, intellectual property protection in, 165

Microinjection, viability of gene insertion using, 13,95-97

Minnesota, milk production in, 116

Models, animals as disease, 119, 120, 123

Monitoring. See Regulation

Morality. See Ethics

National Aeronautics and Space Administration (NASA), use

and regulation of genetically engineered animals by, 110

National Council of Churches, 132, 134

National Environmental Policy Act (NEPA), 108, 110

National Institutes of Health (NIH), use and regulation of

genetically engineered animals by, 16, 102-105

National Science Foundation (NSF), use and regulation of

genetically engineered animals by, 16, 108-109

Netherlands, The, 148

New York State, milk production in, 116

North Dakota, beef cattle production in, 117

Northern Regional Research Laboratory (NRRL)--USDA, 141,

142

Novelty, as requirement for patent issuance, 39-40

Oklahoma, beef cattle production in,l 17

Oncomouse

marketing of, 121

patenting of, 12,23,30,32,98,99

Origin of Species, The, 100

Owens-Corning, 44

Pun-American Plant CO. v. Matsui, 72

Paris Union Convention

description, workings, and purpose of, 155-157

members of, 156

priority right of, 144, 156

Parke Davis Co., 141

Pasteur, Louis, 7,30,31,51, 142

Patent Act of 1952, congressional intent expressed in Committee Reports accompanying, 4-5, 37

Patent and Trademark Amendments. See Government Patent

Policy Act of 1980

Patent and Trademark Office, U.S. (PTO)

animal patenting policy of, 12,93

biotechnology patents issued by, 3,29

classes of utility patents used by, 39

deposit guidelines, 18-20,26, 143-146, 148

enablement policy of, 26

as international searching authority, 157

post-Chakrabarty patent activity by, 8-9,55-56,60

use and regulation of genetically engineered animals by, 102

Patent Cooperation Treaty (PCT), 157

Patents

arguments against issuance of transgenic animal, 130-137

arguments for issuance of transgenic animal, 127-130

barriers to issuance of, 37-40

basic concepts, workings, and requirements of, 4-5,37-43

definition of, 31

economic impacts of transgenic animal, 16-17, 115, 117-123

effect on biotechnology commercialization of, 8,55

history of plant, animal, cell, and micro-organism,31 -32

method for obtaining, 40-41

process protection available using (prior to 1980),51

protection of rights granted by, 8-9,41-43,58-59

term of, 5, 11,39,41,70,73, 148-149

see also Design patents; Plant patents; Process patents; Utility

patents

Penguin Books, 44

People’s Republic of China (P.R.C.), patent law in, 165

Pharmaceutical Manufacturers Association, 60

Pharmaceutical Proteins Ltd. (U.K.), 23

Pharmaceuticals, transgenic animals used in production of, 17,

119-120, 121, 123

Plant Patent Act of 1930 (PPA)

goals and strategy of, 9-10,25,30,31,33,71-72, 85

judicial interpretation of, 72

plant patents authorization by, 69-70,73,75,76

Supreme Court’s analysis of, in Chakrabarty ruling, 8,54

Plant patents

definition of, 69-70

protection available using PVPCs and utility patents v., 76-77

as type of subject matter patent, 39

Plants

definitions of asexually and sexually produced, 60

history of intellectual property protection relating to, 9-12,

31-32,70-75

methods for depositing, 149

Plant Variety Protection Act of 1970 (PVPA), 24,30,31

amendments to, 11,30, 80

farmers exemption under, 11,25,73-74,79,83,86

goals and strategy of, 10-11,25,72-74

judicial interpretation of, 75

research exemption under, 11, 73, 82

seed deposit required under, 20, 149

Supreme Court’s analysis of, in Chakrabarty ruling, 8,54

USDA administration of, 7, 11,74

Plant Variety Protection Certificates (PVPCs), 25

definition of, 70

exclusions to, 11, 73-74

protection available using plant patents and utility patents v.,

76,77

seed deposit required for issuance of, 20, 149

Plant Variety Protection Office (PVPO)--USDA, 70

Plato, 99

Poland, intellectual property law in, 163

Policy

copyright subject matter, 43

NIH genetically altered animal, 103-104, 105

post-Chakrabarty events and trends in Federal patent, 8-9,54-

55

transgenic animal patenting and environmental, 136

Poultry

economic impacts of transgenic animal patenting on production of, 17, 120, 121-122, 123

sector overview, 115-116

Poultry Products Inspection Act, 103, 107

Prather, R. S., 23

Process patents

protection (prior to 1980) available using, 51

see also Patents

Public Health Service Act, 108
Index 195

Public Health Service Policy on Humane Care and Use of

Laboratory Animals, 104, 133

Quigg, Donald J., 93, 125

Regulation

of genetically altered animals by Federal Government agencies, 16, 102-110

see also Guidelines

Republic, 99

Research

Chakrabarty decision’s impact on biotechnology-related, 8,

54, 55

exemption to PVPA, 11, 73, 82

Federal Government recombinant DNA, 16, 102-110

gene insertion techniques used in transgenic animal production, 13, 92-98

plant protection methods use influence on seed and plant, 84-

87

PPA encouragement of, 9-10,71-72, 85

PVPA encouragement of, 11, 72-73, 85-87

relationship of germplasm exchange, patent protection, and,

25-26

Rich, Judge, 52

Rifkin, Jeremy, 125

Rob], J. M., 23

Roche Products Inc., 58-59

Romania, patent protection in, 163

Scripps Clinic and Research Foundation v. Genentech, 59

Sculley, John, 91

South Dakota, beef cattle production in, 117

Soybeans, proprietary protection methods used in seed industry

for, 82-83

Species

impacts of transgenic animals on integrity of, 13-14, 98-102

right to exist, 15, 101-102

Standards. See Guidelines; Regulations

Stanford University (California), 30,56

Stewart, Timothy A., 99

Subject matter

categories for copyright protection, 43

jurisdiction and patentability, 37-39

obviousness and patentability, 40

Subject matter patents. See Design patents; Plant patents; Utility

patents

Supreme Court, U, S., 11,74

biotechnology ruling by, 8-9,31,51-54

subject matter patentability limited by, 37, 39, 130-131

test for determining obviousness expressed by, 40

trade secret law decisions by, 46

Swiss Federal Intellectual Property Office, 21, 160, 161

Switzerland, national patent law of, 161

Technology Transfer Act of 1986,8,55, 105

Texas, beef cattle production in, 117

Tomatoes, proprietary protection methods used in seed industry

for, 83-84

Toxic Substances Control Act (TSCA), 104, 108

Trademark Act of 1946,5,44

Trademarks, basic concepts and workings of, 5,44-46

Trade secrets, 25

as alternative to patent use, 17, 118-119, 120, 123.129

basic concepts and workings of, 7,46

plant protection available using plant patents, utility patents,

and PVPCs V., 77-78

Transgene (F.R.G.), 23

Transgenic Animal Patent Reform Act (HR 4970), 24,30,32,

122

Transgenic animals

arguments against patenting, 18, 130-137

arguments for patenting, 18, 127-130

economic impacts from patenting, 16-17, 115.117-123

impact on species integrity from, 13-14, 98-102

methods and impacts of depositing, 20-21, 150

royalty collection from patents on, 121-122

techniques for producing, 12-13,92-98

see also Animals; Cattle; Livestock; Poultry

Treaties. See Agreements, international

Union of Soviet Socialist Republics (U. S. S. R.)

deposit access in, 148

intellectual property law in, 163

United Kingdom (U.K.), national patent law of, 161-162

United Nations (U.N.), 155

United States (U.S.). See Government, U.S. Federal

U.S. Government Principles for the Care and Use of VertebrateAnimals Used in Testing, Research, and Training, 104

Utility, as requirement for patent issuance, 39

Utility patents, 25

definition of, 70

plant protection using, 11,74-75

protection available using plant patents and PVPCs v., 76-77

three classes of, 39

see also Patents

Virus-Serum Toxin Act, 104

Wisconsin, milk production in, 116

World Council of Churches, 131

World Intellectual Property Organization (WIPO), 142, 144,

155, 157

Yoder Brothers Inc. v. California-Florida Plant Corp. et al., 72

Yugoslavia, patent protection in, 163
Related OTA Reports

●

●

●

●

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New Developments in Biotechnology, 1: Ownership of Human Tissues and Cells-Special Report.

OTA-BA-337, 3/87; 176 pages. GPO stock #052-003-01060-7; $7.50.

NTIS order #PB 87-207 536/AS. Also available in hardback from J.P. Lippincott, Co., Philadelphia, PA

(800) 638-3030.

New Developments in Biotechnology, 2: Public Perceptions of Biotechnology-Background Paper.

OTA-BP-BA-45, 5/87; 136 pages. NTIS order #PB 87-207 544/AS.

New Developments in Biotechnology, 3: Field-Testing Engineered Organisms: Genetic and Ecological

Issues--Special Report.

OTA-BA-350, 5/88; 160 pages. NTIS order #PB 88-214 101/AS.

Also available in hardback from Technomic Publishing Co., Inc., Lancaster, PA (717) 291-5609.

New Developments in Biotechnology, 4: U.S. Investment in Biotechnology-Special Report.

OTA-BA-360, 7/88; 304 pages. NTIS order #PB 88-246 939/AS.

Free summary available.

Mapping Our Genes—The Genome Projects: How Big, How Fast?

OTA-BA-373, 4/88; 232 pages. GPO stock #052-003-01106-9; $10.00.

NTIS order #PB 88-212 402/AS. Also available in paper cover from Johns Hopkins University Press,

Baltimore, MD (301) 338-6907.

NOTE: Reports arc available from the U.S. Government Printing Office, !Wperintcndcnt of Documents, Washington, D.C. 20402-9325 (202-783-3238);

and lhe National lkchnical Information Service, 5285 Port Royal Road, Springfield, VA 22161-0001 (703-487-4650).

U.S. GOVERNMENT PRINTING OFFICE : 198$) O - 8+139 : QL 3