Proposal for a EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE on the legal protection of biotechnological inventions
Date: 1995-12-13
Institutions: European Commission
Subjects: biotechnology, invention, patent, patent law, right to justice

COMMISSION  OF THE EUROPEAN  COMMUNITIES 

* * * ** 

Brussels,  13.12.1995 
COM(95) 661 final 

95/0350 (COD) 

Proposal  for a 
EUROPEAN  PARLIAMENT  AND COUNCIL DIRECTIVE 

on the legal  protection of biotechnological  inventions 

(presented by the Commission) 

EXPLANATORY  MEMORANDUM 

I.  BACKGROUND 

A.  The need  for  action 

• 
• 
• 
• 

The justification  for  the  initial  proposal 
Rejection  of  the  initial  proposal 
The  current  situation  without  a  directive:  greater  legal  uncertainty 
The need  for  further  Community  action 

B.  Assessment  of  the  joint  text  approved  by  the  Conciliation  Committee  on 

23  January  1995 

C.  The  legal  basis 

II.  THE  MAIN  POINTS  OF  THE  NEW  PROPOSAL 

Inventions  and  discoveries 

A. 
B.  A clear  exclusion  from  patentability  of germ  line gene therapy  on  humans 
C.  Farmer's  privilege  as  regards  breeding  stock 
D.  New  presentation 

III  EXAMINATION  OF  THE  PROVISIONS 

Annex: 

Information  on  the  industries  using  biotechnology 

L 

BACKGROUND 

A. 

THE  NEED  FOR  ACTION 

THE  JUSTIFICATION  FOR  THE  INHTAL  PROPOSAL 

1. 

2. 

3. 

In  1985, the  Commission  White  Paper  on  completing  the  internal  market  stated: 
"Differences  in  intellectual  property  laws  have  a  direct  and  negative  impact  on 
intra-Community  trade  and  on  the  ability  of  enterprises  to  treat  the  common 
market  as a single  environment for  their economic  activities  [...] The picture  has 
recently been further  complicated  by the need to adapt existing  trademark  systems 
to technological change in a number of areas including f... J biotechnology  [...] The 
Commission  accordingly  intends  to propose  to  the  Council  measures  concerning 
patent protection  of  biotechnological  inventions  ...".(1) 

As a result of intensive scientific  research  and major  discoveries over the past  four 
decades  in  molecular  biology,  biotechnology  has  emerged  as  one  of  the  most 
promising  and  crucial  technologies.  Modern  biotechnology  constitutes  a  growing 
range  of  techniques,  procedures  and  processes,  such  as  cell  fusion,  r-DNA 
technology,  biocatalysis,  that  can  be  substituted  for  and  complement  classical 
biotechnologies  of  selective  breeding  and  fermentation.  It  is  science-based,  the 
scientific  input  being  the  most  crucial  element  of  the  technology  trajectory.  The 
gap  between  developments  in  basic  science  and  their  research  and  development 
applications is small  and diminishing. The impact of the processes, techniques  and 
hardware  represented  by  biotechnology  is felt  across  a number  of  sectors:  health 
care,  agriculture,  environmental  protection,  foodstuffs  and  industry. 

Consequently,  when  publishing  its  initial  proposal  in  1988(2),  the  Commission 
noted:  "The primary  purpose  of the modern  patent  system  is to  promote  technical 
innovation  as  the  major  factor  of  economic  growth  by  encouraging  inventive 
activity  through  rewarding  inventors  for  their  creative  efforts.  The  patent  system 
thus  secures  costly  investment  in  research  and  development  and  industrial 
exploitation  of  research  results.  Simultaneously,  the patent  system  encourages  an 
early  and  beneficial  dissemination  of  knowledge  in  the  field  of  activity  involved 
which,  without  such  protection,  might  be  kept  secret"(3). 

The  initial  proposal  highlighted  a  number  of  specific  problems  regarding  the 
application  of  the  patent  system 
the 
interpretation  to  be  given  to  the  conventional  patent-law  concepts  to  be  applied 
from  now on to biological  material that is self-reproducible  or reproducible  within 
a  biological  system.  In  other  words,  how  should  animate  material  be  treated 
compared with inanimate material? The questions raised  concerned the  definitions 
of  the  terms  "subject-matter  of  the  patent",  "invention",  "novelty",  "adequacy  of 
description",  "scope  of  protection",  etc. 

to  biotechnology.  These  concerned 

(i) 

(2) 

(3) 

Commission  White  Paper  for  the  European  Council  in  Milan  (28-29 June  1985) 
"Completing  the  internal  market",  COM(85) 310 final  of  14 June  1985, paragraph  145 
et seq. 
COM(88) 496 final - SYN  159, 17 October  1988; OJ No C 10, 13.1.1989, p. 3. 
Op. cit., paragraph  11, p. 6. 

4 

5. 

6. 

7. 

8. 

The applicable  patent  law is based  on the Convention  on the unification  of  certain 
points of  substantive  law on  patents  for  invention,  concluded  in  Strasbourg  at the 
Council  of  Europe  on  27 November  1963.  Among  other  things,  the  Convention 
defines  the  conditions  governing  patentability  and  determines  a  number  of 
exceptions to patentability(4). The content of the Convention  was incorporated  into 
the  Convention  on  the  grant  of  European  patents,  concluded  in  Munich  on 
5  October  1973.  Seventeen  European  countries  are  now  party 
the 
Munich  Convention  (referred  to below as the European Patent Convention  - EPC), 
fourteen  of  which  are Member  States(5). 

to 

The Member  States' laws on patents for invention have gradually been harmonized 
in  line  with  the  EPC,  i.e.  they  have  incorporated  the  content  of  the  Convention. 
This process is the result of a Declaration on the adjustment  of national patent law, 
adopted  by  the  governments  of  the  Member  States  when  the  Agreement  relating 
to  Community  patents  was  signed(6). 

Thus  the  Member  States'  laws  on  patents  for  invention  and  the  EPC  contain 
provisions  written  over  thirty  years  ago,  at  a  time  when  the  scope  offered  by 
biotechnology  could  not  be  imagined. 

In the absence of a clear response to the questions outlined above, uncertainty  will 
increase.  That  uncertainty  will  hamper  the  free  movement  of  biotechnological 
products  and  investment  in  research  and  development  for  new  biotechnological 
products  and  processes.  How  can  we  be  certain  that  the  Member  States'  patent 
offices  will  all  react  in  the  same  way  when  confronted  with  patent  applications 
relating to the same biotechnological  invention?  And how can  we be sure that the 
national  courts to which  relevant  questions may be referred  will all reach the same 
decision  - for  example,  as  regards  the  scope  of  protection  offered  by  a patent. 

Consequently, the Commission's initial proposal  contained a number of  definitions 
and  rules of  interpretation  designed  to clarify  exactly  what is patentable  and  what 
is  not,  and  to  resolve  the  problems  of  demarcation  with  plant  variety  rights.  The 
proposal  also  contained  provisions  whereby  patent  offices  would  have  had  to 
follow  a  uniform  practice  as  regards  granting  patents  and  assessing  applications. 
Lastly,  the  scope  of  protection  conferred  by  a  patent  for  a  biotechnological 
invention  was  defined. 

(4) 

(5) 

(6) 

The conditions are: novelty, involvement of an inventive step, and industrial application. 
The  exceptions  are: ordre  public or  morality,  plant  or  animal  varieties, and  essentially 
biological processes for the production of plants or animals. 
Finland will be acceding to it very shortly. 
The first version  of  the  Convention  for  the  European  Patent  for  the  common  market, 
known  as  the  Community  Patent  Convention  (CPC),  was  signed  in  Luxembourg  on 
15 December  1975. It now forms part of the Agreement relating to Community patents, 
concluded  in  Luxembourg  on  15 December  1989, which  has not yet  entered  into  force 
(OJ No L 401, 30.12.1989, p. 1). 

9. 

to  public  policy  or  morality,  which  was  common 

The  initial  proposal  was, therefore,  largely  technical  in  character.  Not  that  the 
ethical dimension was ignored but, at that time, it appeared that the exclusion  from 
patentability  of  inventions  the  publication  or  exploitation  of  which  would  be 
contrary 
to  all  the 
Member  States' legislation on patents for invention and to the EPC(7), met the need 
to take  into  account  the ethical  dimension  of biotechnological  inventions.  Further 
harmonization  of  national  laws  did  not  appear  justified,  given  that  they  were 
already  based on a common principle  and that each  case had to be assessed on its 
merits(8). 

REJECTION  OF  THE  INITIAL  PROPOSAL 

the 

10.  On 1 March  1995 the European Parliament concluded the codecision procedure by 
rejecting 
the  Conciliation  Committee  on 
23  January  1995, for  a European  Parliament  and  Council  Directive  on the  legal 
protection  of  biotechnological  inventions(9).  The  measure  is  thus  deemed  not to 
have  been  adopted,  and  the  legal  environment  regarding  biotechnological 
inventions  is  unchanged. 

text,  approved  by 

joint 

T HE  CURRENT  SITUATION  WITHOUT  A  DERECIWE:  GREATER  LEGAL  UNCERTAINTY 

11. 

that 

The  vote  on  1 March  1995  shows 
the 
European  Parliament  was,  ultimately,  not  able  to  accept  the  outcome  of  the 
negotiations within the Conciliation Committee.(10) The Commission has, therefore, 
to  acknowledge  that  the issues  raised  by the legal  protection  of  biotechnological 
inventions  have  still  not  been  resolved  in  a  sure  and  uniform  manner  for  all 
Member  States. The legal uncertainty  that constituted the justification  for the 1988 
proposal  remains. 

the  plenary 

sitting  of 

12.  National  patent  offices  and  the  national  courts  may  always  refer  to  existing 
inventions.  No 
legislation 
technological  field  is  excluded  a  priori  from  patentability,  provided  that  the 
conditions  governing  protection  are  satisfied.  The  vote  on  1 March  may  not, 
therefore,  be interpreted  as requiring  a moratorium  - either de jure  or de  facto, 

indisputably  applies 

to  biotechnological 

that 

13.  But patent law now appears even more incomplete and uncertain than in  1988, and 
it is not realistic to hope that this can always be remedied through an unambiguous 
and equitable  interpretation  shared by all the courts in all the Member  States. The 
most important thing is to assess the ethical  dimension of certain  biotechnological 
inventions  which,  unless  otherwise  clarified  by the legislature,  could  turn  out to 
be a Pandora's box from  which  emotive  issues  are constantly  likely  to emerge. 

14.  Matters  will  not  resolve  themselves  with  time.  An  increasing  number  of  patent 
applications,  including  in  genetic  engineering,  are being  deposited  and  granted. 
Consequently, 
there  will  be  more  and  more  questions  to  resolve.  The 
European  Patent  Office's  statistics  are illuminating  in this  respect  (see Annex). 

(7) 

(8) 

(9) 

(10) 

Article 53(a). 
The classic example of an invention  that must be excluded on grounds of public policy 
or morality  is the letter-bomb. 
C4-0042/95  - 94/0159(COD), doc PE-CONS  3606/1/95, 21.2.95, OJ No C 68,  20.3.95, 
p. 26. 
See paragraphs 27 to 32 below for a summary  of the joint text. 

5 

15. 

Reference  to  the  European  Patent  Office's  activities  is justified  because,  even  if -
by definition  - a directive harmonizing Member  States' legislation may not directly 
influence  the  EPC  and  the  European  Patent  Office's  rulings,  Article  2(2)  of  the 
EPC  states that  "The European patent  shall, in each of  the  Contracting States  for 
which  it is granted, have  the effect  of  and be  subject  to  the same  conditions  as a 
national  patent  granted  by 
in  this 
Convention."  Also,  Article  138  of  the  EPC  states,  among  other  things,  that 
"(I)  Subject  to  the  provisions  of  Article  139,  a  European  patent  may  only  be 
revoked  under the  law  of  a Contracting State,  with  effect for  its  territory, on the 
following  grounds:  (a)  if  the  subject-matter  of  the  European  patent  is  not 
patentable  within  the  terms  of  Articles  52  to 57  ..."(n). 

that  State,  unless  otherwise  provided 

16. 

Consequently,  the  Commission  has  been  forced  to  acknowledge  that  it  is  no  use 
believing  that,  in  the  absence  of  harmonization  of  national  laws  on  patents  for 
invention,  the  EPC  and  the  rulings  of  the  European  Patent  Office  would  prove 
sufficient. 

17.  Nor  does the case-law  of the European  Patent  Office  yet  appear to be very  firmly 
established, and it will take several more years before  it can become the first  point 
of  reference0 2). 

18.  At  present,  therefore,  it  cannot  be  claimed  that  all  European  patents  granted  and 
entering the national  stage in the designated  Contracting  States will be  interpreted 
in  the  same  way,  regardless  of  the  national  court  involved.  Not  only  must  a 
decision  be taken  as to  whether  an  invention  may  be  patented  or not;  the  precise 
scope of the protection  conferred  by a patent must also be ascertained if the holder 
institutes  infringement  proceedings.  In  the  absence  of  clear  reference  points, 
national  courts  may  react  differently.  At  present,  national  courts  are  accustomed 
to  deferring  judgment  pending  the  European  Patent  Office's  final  decisions.  But 
that  will  take  a  long  time  yet  and  will  not,  ultimately,  be  binding  on  national 
courts:  the  latter  will  always  be  free  to  decide  on  the  basis  of  the  interpretation 
they  regard  as  correct. 

19.  As a result of this uncertainty  and  confusion,  some national  legislatures may  wish 
to  react  by  adopting  differing  national  legislative  solutions.  The  objective  of 
harmonizing  Member  States' legislation  in order to ensure the smooth  functioning 
of  the  internal  market  so  as  to  promote  a  more  competitive  economy  could  thus 
be  directly  called  into  question  once  again0 3'. 

( i i) 

(12) 

(13) 

Article  139 of the EPC  concerns  rights  of earlier date or the same date. Articles  52 to 57 
lay  down  the  conditions  governing  patentability.  Article  53  stipulates  the  exceptions  to 
patentability:  "European patents  shall  not  be  granted  in  respect  of:  (a) inventions  the 
publication  or  exploitation  of  which  would  be  contrary  to  "ordre  public"  or  morality, 
provided  that the exploitation  shall not  be deemed  to be so contrary merely  because it is 
prohibited  by  law  or  regulation  in  some  or  all  of  the  Contracting  States;  (h) plant  or 
animal varieties or essentially biological processes for the production  of plants or  mimais; 
this provision  does not  apply  to microbiological processes  or the products thereof." 
For  example,  on  29  July  1995  the  President  of  the  EPO  referred  a  point  of  law  to  the 
EPO's  Enlarged  Board  of  Appeal  in  order  to ensure  uniform  application  of  the  law  and, 
in  particular,  of  Article  53(b)  EPC  (OJ  EPO  9/95, p. 595). 
employment,  Bulletin  EC, 
C«MMftisgioa  White  Paper  Growth,  competitiveness, 
Supplement  6/93, p.  14, Making  the most  of  the single  market.  Paragraphs  35  ma  36 of 
ike  Court of Justice's j»4§weat in Case C-3.50/92, supplementary  protection ©Grtiftcate  fer 
medicinal  products. 

20. 

The Commission  is also obliged  to note that the French  legislature has introduced 
a  new  law:  Law  No  94-653  of  29  July  1994  on  respect  for  the  human  body(14). 
Article  7 of  the  Law  amends  the  first  two  subparagraphs  of  Article  L  611-17 of 
the  intellectual  property  code:  "The  following  shall  not  be  patentable:  (a) 
Inventions  whose  publication  or  implementation  would  be  contrary  to  "ordre 
public"  or morality, provided  that the implementation  of  such an invention  is not 
considered  so  contrary  merely  on  the  grounds  of  a  legislative  or  regulatory 
provision;  consequently, 
its  elements  and  products  and 
knowledge  relating to  the  overall  structure of  a human  gene  or  element  thereof 
may  not, as such, form  the  subject-matter  of  patents." 

the  human  body, 

THE  NEED  FOR  FURTHER  COMMUNITY  ACTION 

21. 

22. 

23. 

24. 

25. 

Following the vote by the European Parliament on  1 March  1995, the objective  of 
harmonizing  national  patent  law  -  by  introducing  provisions  to  ensure  the  free 
movement of biotechnological  products and the smooth functioning  of the internal 
market  -  still  remains  to  be  achieved  as  regards  the  legal  protection  of 
biotechnological  inventions.  Thus  practical  shape  has  still  not  been  given  to  this 
measure,  which  was  announced  by  the  White  Paper  on  completing  the  internal 
market. 

The  observations  made  in  1988  with  regard  to  the  shortcomings  of  the  legal 
environment  for  biotechnological  inventions  are  all  the  more  valid  today.  The 
evident  legal  uncertainty  is  bound  to  prevent  the  necessary  answers  being  given 
to  the  questions  now  arising  with  increased  urgency. 

French  Law  No  94-653  of  29  July  1994  is  a  sign  that  the  Member  States' 
legislatures  will  not  be  able  to  put  up  with  the  current  situation  for  very  much 
longer. 

It  should  also  be  noted  that  economic  forecasts  regarding  the  world  market  for 
biotechnological  products  have become  more specific  and refined  since the  initial 
proposal  was  published.  In  1988,  following  a  study  carried  out  in  1986,  the 
world  market  by  the  year  2000  was  estimated  to  be  worth  USD  40  billion05). 
According  to  the  latest  estimates, the  world  market  in  the year  2000  is valued  at 
ECU  83.3  billion  (see  Annex).  Accordingly,  the  Molitor  group  stresses  that: 
"The  Commission  should put forward  as soon as possible  a new  proposal for  the 
legal protection  of biotechnological  inventions  in order to avoid further  increasing 
the gap between  the legislative framework  for  investment  in the EU  and its  main 
competitive  countries"^6). 

The  industry  that  invests  the  most  in  perfecting  new  products  based  on 
biotechnologies is the pharmaceutical  industry. In this connection, the  Commission 
should mention Council Regulation (EEC) No 1768/92 of 18 June  1992 concerning 
the creation  of  a supplementary  protection  certificate  for  medicinal  products.  The 
Regulation  is  designed  precisely  to  promote,  in  Europe,  the  long  and  costly 
research  involved in perfecting  medicinal products. The aim is to provide equitable 
compensation  for  the  effective  reduction  in  the  protection  offered  by  the  patent, 
which  is  caused  by  granting  authorization  to  place  medicinal  products  on  the 
market.(17) The supplementary  protection  certificate  for  medicinal  products  confers 

(14) 

(15) 

(16) 

(17) 

French  Official  Gazette of 30 July  1994. 
COM(88) 496, op. cit., paragraph  19, p. 8. 
Report  of  Ae  group  of  independent  experts  on  legislative  and  administrative 
simplification, Brussels, 21.6.1995, COM(95) 288 final/2, proposal  5, p.  IS. 
OJ N@  L  1S2, 2.7 1992, p.  1. The fourth  recital  of  the  Regulation  refers  to  the p#@$g»t 
situatioa loading to a lack of protection  which penalizes pharmaceutical research. 

7 

the same rights as conferred  by the basic patent (Article  5 of Regulation  1768/92). 
It would be paradoxical  to accept a measure which, while designed to increase the 
European  pharmaceutical  industry's  competitiveness, merely  confirms  a system of 
protection  that  -  as  regards  medicinal  products  made  using  biotechnological 
processes  -  will  become  increasingly  unsatisfactory  unless  it  is  clarified  and 
adjusted. 

A number  of  medicinal  products  are  indeed  being  produced  using  biotechnology 
(see  figures  quoted  in  the  Annex),  as  is  noted  in  Council  Regulation  (EEC) 
No  2309/93  of  22  July  1993  laying  down  Community  procedures  for 
the 
authorization  and supervision  of medicinal products  for human  and veterinary  use 
and  establishing  a  European  Agency  for  the  Evaluation  of  Medicinal  Products. 
Part  A  of  the  Annex  to  the  Regulation  specifically  refers  to  the  possibility  that 
certain  medicinal  products  may be derived  from  elements of the human  body  and 
points  out  that  some  biotechnological  processes  make  it  mandatory  for  the 
Community  to  grant  authorization  for  placement  on  the  market08).  The  industry 
therefore  needs  to  know  to  what  extent  it  will  be  able  to  protect  its  investments 
in  perfecting  new  medicinal  products. 

ASSESSMENT  OF THE JOINT TEXT APPROVED BY THE CONCILIATION  COMMITTEE ON 
23  JANUARY  1995 

The  conciliation  procedure  was  initiated  because,  on  19  September  1994, 
the  Council  was  unable 
the 
European  Parliament  at  second  reading(19). 

the  amendments 

supported  by 

to  accept 

26. 

B. 

27 

28.  On  23  January  1995  the  Conciliation  Committee  approved  a  joint  proposal. 
Discussion  centred  on new wording for  the tenth  recital  of the  Council's  common 
position  (which  became  the  twelfth  recital  of  the  joint  text).  It  had  to  be 
determined  whether  the  words  "as  such"  in  point  (a)  of the  second  subparagraph 
of Article  2(3)  differentiated  sufficiently  between  a discovery  and an invention  as 
regards body  elements of human  origin:(20) "On this basis, the following  inter alia 
shall be unpatentable: (a) the human  body  or parts of  the human  body  as such ...". 
Eventually  a  compromise  was  reached  within  the  Conciliation  Committee:  the 
words  "as such"  were  retained  in  the  twelfth  recital,  which  was  reworded.  But 
there  is  still  some  doubt,  since  the  Council  and  the  European  Parliament  have 
made  contradictory  statements  regarding  the  interpretation  of  that  recital. 

(18) 

(19) 

(20) 

0J No L 214, 24.8.1993, p. 1. The Annex is on page 21, and Part A refers to recombinant 
DNA technology, controlled  expression  of genes coding for  biologically  active proteins 
in prokaryotes and eukaryotes including transformed mammalian cells, and hybridoma and 
monoclonal  antibody  methods. Part B of the Annex lists the types of medicinal products 
that  may be placed  on  the market  once the Commission  has granted  authorization.  The 
list includes new medicinal products derived  from  human blood or human plasma. 
The opinion  (first  reading) was delivered on 29.10.1992, OJ No C 305, 23.11.1992. The 
Commission  presented  an  amended  proposal  on  16.12.1992, COM(92)  589  SYN  159, 
OJ No  C  44,  16.2.1993,  p.  36.  The  Council  adopted  a common  position  on  7.2.1994 
(Common  position  (EC)  No  4/94,  OJ  No  C  101, 9.4.1994,  p.  65).  The  Commission 
communicated  its  views  on  the  common  position  to  the  European  Parliament  on 
17.2.1994, SEC(94) 275 final - COD 159. The three amendments supported by Parliament 
at the  second  reading  arc  included  in  Parliament's  decision  of  5.5.1994, OJ No  C 205, 
25.7.1994,  p.  307.  The  Commission's  opinion  on  those  three  amendments  is  given  in 
document  COM(94) 245 final - COD  159, 9.6.1994. 
$ae  explanatory  memorandum  to  the  report  by  Parliament's  delegation  to  the 
Conciliation  Committee, 23.2.1995, PE 211.520/def. 

8 

29. 

30. 

31. 

32. 

(21) 

(22) 

The other problem  to which  a solution  seemed to have been found  in the joint text 
was  the  deletion  of  "automatic"  in  the  thirteenth  recital  (which  became  the 
fifteenth  recital of the joint text). That recital  explained the limits of the exception 
to patentability  in point  (b)  of  the  second  subparagraph  of  Article  2(3)  regarding 
"processes for  modifying  the  genetic  identity  of  the  human  being  contrary  to 
human  dignity".  The thirteenth  recital  of  the  common  position  stated that, even if 
it were possible to obtain  a patent  for  a process for  modifying  the genetic  identity 
of  the  human  being,  "that would  in  no  way  imply  automatic  recognition  of  the 
patentability  and legitimacy  of  what  is known  as germ  line gene  therapy ...". The 
use  of the  adjective  "automatic"  could  suggest  that  there  might  be  non-automatic 
cases permitting  recognition  of the patentability  and legitimacy  of  what is known 
as germ  line  gene therapy(21). 

The Conciliation  Committee  also brought point  (c) of the second  subparagraph  of 
Article  2(3), which concerns the exclusion from patentability of transgenic animals 
where  certain  conditions  are  not  met,  into  line  with  the  fifteenth  recital  of  the 
common position  (which became the seventeenth recital of the joint text). The aim 
was to  incorporate  into  the  article  itself  the  criterion  of  proportionality  set out  in 
the  recital,  in  order  to  assess  correctly  the  acceptability  of  the  "suffering  or 
physical  handicaps inflicted  on  the animals"  in  relation  to  the  substantial  benefit 
represented  by  the  invention. 

The  Commission  should  point  out that the  criterion  of  proportionality  is  justified 
particularly  in  view  of  Council  Directive  86/609/EEC  of  24 November  1986  on 
the  approximation  of  laws,  regulations  and  administrative  provisions  of  the 
Member  States regarding the protection of animals used for experimental and other 
scientific  purposes(22). 

Lastly,  the  European  Parliament's  delegation  to  the  Conciliation  Committee 
stressed  the  need  to  provide  for  a  derogation  in  respect  of  breeding  stock, 
analogous  to that provided  for  in respect  of  farmers  in  Article  12 of the  common 
position.  By  way  of  compromise,  the  Commission  had  proposed  a  declaration 
[unofficial  translation]: "Once a provision  has been  introduced,  under  Community 
law  concerning  the production  of  animal  varieties, that  will  enable farmers  to  use 
protected livestock  for  breeding purposes on their own farms  in order to  replenish 
their  stock, the Commission  undertakes to take due account of that provision  with 
a  view  to  incorporating  a corresponding  derogation  into  the  Directive." 

The  purpose  of  this  therapy  is  to  remedy  genetic  changes  that  cause  serious  diseases, 
thereby preventing  them  from  being passed  on to future  generations  (Opinion No  4 of the 
Commission's  group  of  advisers on  biotechnological  ethics, "The  ethical  aspects  of  gene 
therapy"). 
OJ  No  L  358,  18.12.1986,  p.  1.  Article  3  of  the  Directive  states  that:  "This  Directive 
applies  to  the  use  of  animals  in  experiments  which  are  undertaken  for  one  of  the 
following  purposes: 
(a) 

the  development,  manufacture,  quality,  effectiveness  and safety  testing  of  drugs, 
foodstuffs  and other substcmces  or products: 
for  the avoidance, prevention,  diagnosis  or treatment  of  disease, ill-health or other 
abnormality  or their effects  in mem, mimais  or plcmts; 
for  the assessment, detection, regulation or modification  of physiological  conditions 
in man,  animals or plants; 
the protection  of  the natural environment  in  the  interests  of  the health  or welfare 
of  man  or animal " 

(i) 

(ii) 

(b) 

C. 

THE  LEGAL BASIS 

33. 

34. 

35. 

Since  the  objectives  of  the  present  proposal  are  the  same  as  those  of  the  original 
1988  proposal,  namely  to  ensure  the  free  movement  of  patented  biotechnological 
products  by  harmonizing  Member  States'  laws  so  as  to  clarify  the  legislative 
environment  for  such  products,  the  Commission  proposes  retaining  Article  100a 
of  the  EC  Treaty  as  the  legal  basis(2j). 

In  drawing  up  the  proposal,  the  Commission  took  due  account  of  the  provisions 
of  Article  7c  of  the  Treaty  and  noted  that  there  is  currently  no  need  to  lay  down 
special  provisions  or  to  provide  for  exceptions. 

Similarly,  the  Commission  examined  the  question  of  the  high  level  of  protection 
required  with  regard  to  health,  safety,  environmental  protection  and  consumer 
protection  under  Article  100a(3)  of  the  Treaty.  In  this  connection  the  Commission 
wishes  to  emphasize,  in  particular,  that  harmonization  of  national  laws  on  patents 
for  invention  may  be  carried  out  only  in  accordance  with  a  legal  framework  that 
already  exists  or  is  to  be  devised  concerning  health,  safety,  environmental  and 
consumer  protection(24).  A patent  for  invention  does  not  confer  the  right  to  exploit 
an  invention  without  restriction.  A  patent  merely  enables  the  holder  to  prohibit 
third  parties  from  using 
terms  of 
competition  rules,  a  patent  confers  a  purely  negative  right  of  exclusion  and  not  a 
positive  right  of  exploitation. 

invention  without  authorization.  In 

the 

The  proposal  takes  into  account  the  Community's  international  commitments  and, 
in  particular,  is  compatible  with  Articles  27  and  30  of  the  Agreement  on 
trade-related  aspects  of  intellectual  property  rights,  annexed  to  the  Agreement 
establishing  the  World  Trade  Organization^  \ 

The  proposal  is  also  compatible  with  the  Convention  on  Biological  Diversity,  in 
particular  Article  16(5)(26* 

(23) 

(24) 

(25) 

(26) 

Paragraph  59  of  Court  of  Justice  Opinion  1/94  of  15 November  1994.  Paragraph  33  of 
Court  of  Justice judgment  in  Case  C-350/92,  op. cit. 
For example,  Directive 90/219/EEC of 23 April  1990 on the contained  use of genetically 
modified  micro-organisms  and  Directive  90/220/EEC  of 23  April  1990 on  the  deliberate 
release into the environment  of genetically  modified  organisms  (OJ No L  117,  8.5.1990), 
Regulation  (EEC) No  2309/93  of  22 July  1993  laying  down  Community  procedures  for 
the authorization  and supervision  of medicinal products for human  and veterinary use and 
establishing  a European  Agency  for  the Evaluation  of Medicinal  Products (OJ No L 214, 
24.8.1993),  Directive  90/679/EEC  of  26 November  1990  on  the  protection  of  workers 
from  risks  related  to exposure to biological  agents  at work  (OJ No  L 374, 31.12.1990) as 
amended  by  Directive  93/88/EEC  of  12 October  1993  (OJ No  L 268, 29.10.1993). 
Council  Decision  94/800/EC  of  22  December  1994  concerning  the  conclusion  of  the 
in  the  Uruguay  Round  multilateral  negotiations  (1986-1994) 
agreements  reached 
( O J N o L 3 3 6,  23.12.1994, p.  1). 
Council  Decision  93/626/EEC  of  25  October  1993  concerning  the  conclusion  of  the 
Convention  on  Biological  Diversity  (OJ No  L 309,  13.12.1993, p.  1). 

10 

D. 

THE MAIN  POINTS  OF THE NEW  PROPOSAL 

A. 

INVENTIONS  AND  DISCOVERIES 

36. 

37. 

The  essential  aim  of  the  new  proposal  is  to  clarify  the  distinction  between  what 
is  patentable  and  what  is  not.  In  other  words,  its  purpose  is  to  confirm  that 
discoveries  may  not  be  regarded  as  patentable  inventions.  Clarification  has 
proved  necessary  following  the  discussions  regarding  the  twelfth  recital  of  the 
Conciliation  Committee's  joint  proposal,  which  concerned  the  patentability  of 
inventions  "incorporating industrially applicable elements  obtained  in a technical 
manner from  the human  body  in  such away  that they  can no  longer be ascribed 
to a particular individual"{11). 

Clearly,  on  no  account  may  harmonization  of  national  laws  on  patents  for 
invention  depart  from  the  basic  principles  of  patent  law.  In  order  to  qualify  for 
protection,  the  conditions  governing  patentability  -  novelty,  involvement  of  an 
inventive  step,  and  potential  for  industrial  application  - must  be  satisfied(28).  The 
consistent  application  of  patent  law  highlights  two  further  conditions  deriving 
directly  from  the  essential  requirement  to  comply  with  the  three  conditions 
governing  patentability: 

the  invention  must  be  such  that  a person  skilled  in  the  art  can  reproduce  it 
(on  the  information  contained  in  the  patent  application),  and 

the  invention  must  be  of  a technical  nature,  in  the  sense  that  it  must  relate 
to  a  technical  field,  must  concern  a  technical  problem  and  must  possess 
technical  characteristics  that can be  set out in the form  of  claims that  define 
the  subject-matter  for  which  protection  is  sought. 

38. 

The patent law currently  applicable in Europe, whether it be the Convention  on the 
grant  of  European  patents  (EPC)  or  the  Member  States'  laws,  does  not  define  an 
invention  as  such:  an  invention  is identified  by  reference  to  the  conditions  listed 
in the previous paragraph. However, the patent law currently  applicable in Europe 
does  contain  a non-exhaustive  list  of  what  may  not  be  regarded  as  an  invention: 
the  exclusions  are either  abstract  in  character  (e.g.  discoveries,  scientific  theories, 
etc.),  or  non-technical  (e.g.  aesthetic  creations  or  presentations  of  information). 
Thus  an  invention  must  be  both  practical  and  technical. 

39.  Accordingly,  as  regards  the  concept  of  a  discovery,  the  Directives  on  the 
examinations  carried  out  by  the  European  Patent  Office  contain  an  interpretation 
based  on  the  consistent  application  of  patent  law  in  Europe:  "If  a man finds  out 
a  new  property  of  a  known  material  or  article,  that  is  mere  discovery  and 
unpatentable.  If  however,  aman  puts  that property  to practical use he has made 
an  invention  which  may  be  patentable.  For  example,  the  discovery  that  a 
particular known  material  is  able  to  withstand  mechanical  shock  would  not  be 
patentable, but a railway sleeper made from  that material could well be patentable. 
To find  a substance freely  occurring in nature is also mere discovery  and therefore 
unpatentable.  However,  if a substance found  in nature has first  to be isolated from 
its  surroundings  and  a  process  for  obtaining  it  is  developed,  that  process  is 
patentable.  Moreover,  if  the substance can be properly  characterised either by its 
structure, by  the process  by  which  it  is obtained or by  other parameters and it is 

(27) 
(28) 

Doc. PE-CONS 3606/1/95, 21.2.1995, p. 4. 
Article  1 of the Strasbourg  Convention  clearly  states  that:  "... An  invention  which  does 
not comply with  these conditions  shall  not be the subject  of a valid  patent." 

11 

'new ' in the absolute sense of  having  no previously  recognised existence,  then the 
substance per  se may  be patentee le"{29\ 

40. 

41. 

Scientific  theories  constitute  a general  instance  of  discovery:  for  example,  while 
the  physical  theory  of  semi conductivity  is  not  patentable,  new  semiconductor 
devices  and  processes  for  their  manufacture  may  well be. 

To sum up, it is fair to say that an invention  is something that provides a technical 
solution  to  a technical  problem.  The technical  solution  may  include  elements  that 
are  excluded  from  patentability,  but  that  will  entail  the  whole  invention  being 
unpatentable  only  where the  application  for  protection  confines  itself  to  elements 
that  are  excluded  from  patentability/303  The  essential  factor  is  the  technological 
contribution,  given  that  this  constitutes  the  human  input  and  that  the  same  result 
cannot  possibly  be  achieved  simply  through  the  interplay  of  the  laws  of  nature. 

42.  Assessment of the technological contribution is carried out objectively  under patent 
law. The benchmark  for  assessing the extent of this contribution  is the state of the 
art  as  comprised  by  "everything made  available  to  the  public  by  means  of  a 
written or oral description, by  use, or in any other way,  before the date of  filing 
of  the European patent application1^^. 

43. 

In  accordance  with the principles  explained  above,  a element  of  the human  body 
that  has  not  been  obtained  with  the  aid  of  a  technological  process,  but  simply 
detached,  removed  or  collected,  may  not  be  regarded  as  a patentable  invention. 
Thus a limb, an organ  or  a bodily  fluid  (e.g.  sperm, blood,  tears or  sweat)  cannot 
be  patentable.  Regardless  of  whether  the  limb,  organ  or  bodily  fluid  concerned 
ranks  as  a  discovery,  the  question  arises  as  to  what  constitutes  the  technical 
solution  applied to a technical problem. Moreover, that question  must be answered 
with  reference  to  the  state  of  the  art.  In  this  instance,  a  sensible  answer  to  these 
questions  that  refers  to technology  is not  possible. 

44. 

The  question  as to the  patentability  of  sequences  of  nucleotides  of  human  origin 
must be understood  in the light of the above-mentioned  principles. Clearly, DNA  -
which  is made  up of  some three billion  basic pairs (adenine  (A) with thymine  (T) 
guanine (G), with  cytosine (C))  - is not patentable in its natural  state in the human 
body, since it is a naturally occurring  substance. But what about individual  genes? 

45.  DNA is the chemical  basis for  some  100 000 genes in the genetic code. The order 
in  which  the  basic  pairs  occur  constitutes  the  genes'  coded  information.  All  the 
genes  gather  together  in  the  form  of  chromosomes  representing  the  genetic 
inheritance  of  a  cell  or  of  a  living  organism.  That  inheritance  is  passed  on  to 
descendent  cells  and  organisms. 

46.  A cell's DNA is an inert store of information  that does not renew or destroy  itself. 
When  a gene's information  is to be  expressed,  it must  first  be  copied  in the  form 
of  a  messenger  RNA  molecule.  Proteins  are  the  decoding  products  of  these 
RNAm's. The genetic information  is expressed  in the course of the line of  descent 
from  gene to RNAm  to protein. Proteins  are the molecules that  actually  carry  out 
the  genes'  instructions.  The  code  that  makes  it  possible  to  determine  a  protein's 
structure  (the  amino-acid  sequence)  functions  according  to  a system  of  universal 
correspondence.  This  applies  equally  to  bacteria  and  mammals:  one  amino  acid 
corresponds to three successive bases. Nature has selected just twenty  amino  acids 
as the  building  blocks  of  life,  and  these  are present  in  all  living  organisms. 

(29) 

(30) 

(31) 

Guidelines for Examination  in the European  Patent Office,  Part C, Chapter IV, point 2.3. 
Article 52(4) EPC, which has been incorporated into legislation in all the Member States. 
Article 54(2) EPC, which has been incorporated  into legislation in all the Member States. 

12 

47. 

48. 

49. 

The points set out in the preceding three paragraphs  are laws of nature that  cannot 
possibly  be covered  by patent  law. Beyond that,  in the case of genes the question 
is  whether  the  conditions  governing  patentability  may  be  satisfied  as  regards 
certain  products  or processes  related  to the processes  of life  itself. 

The  answer  is  provided  by  the  conditions  governing  patentability  set  out  in 
paragraph  37 and the Directive on the examination  referred  to in paragraph  39: if 
the  coding  region  of  a  gene  is  identified(32),  if  a  process  for  obtaining  it  is 
perfected(  },  if  it  can  be  distinguished  by  its  structure(34)  and  if  this  biological 
material  provides  a  technical  solution  to  a  technical  problem(35),  then  it  is 
patentable. Clearly, all these operations are highly technical and can be carried out 
only  in accordance  with  the laws of nature  applicable  in the case  concerned, just 
as the new molecules that go to make up patentable medicinal products are subject 
to the laws of organic  chemistry  applying  to  compounds  of  carbon. 

The state of the art regarding DNAc provides an objective  criterion. The additional 
DNA  containing  the  copy  of the genes'  coding  regions  in the form  of RNAm  is 
cloned  in  bacteria.  Those  bacteria  may  constitute  a  genomic  bank  or  a bank  of 
DNAc. Those banks provide an accurate  measure of the state of the art so that an 
assessment  can be made  as to  whether  the conditions  of novelty,  involvement of 
an  inventive  step, and industrial  application  have  been met. 

50.  Accordingly,  since  nucleic  acids  obtained  from  the  human  body  do  not  have  a 
specific  technical purpose, they  cannot be patented. How are the criteria  inventive 
step and industrial  application to be applied to the subject-matter  of an  application 
for  a  patent  for  invention  if  there  is  no  ready  measure  of  their  extent?  An 
invention  is deemed  to involve  an inventive  step  if  "having regard to the state of 
the art, it is not obvious  to a person skilled  in the art".  Industrial  application  is 
deemed  to  be  possible  if  the  invention  "can be  made  or  used  in  any  kind  of 
industry,  including  agriculture".  If the specific  technical  purpose of an invention 
is  not  known,  then  these  two  conditions  cannot  be  satisfied  because  there  is no 
state  of the art against  which  to make  an  assessment. 

51.  As regards the conventional  principles of patent  law, there is thus no difficulty  in 
distinguishing between a discovery  and an invention  with reference to elements of 
human  origin.  Elements  isolated  from  the human  body  by  means  of  a  technical 
process  are  artificial  and  thus  qualify  as  inventions,  since  they  are  technical 
solutions  invented  by  man  in  order  to  solve  technical  problems.  Nature  is 
incapable of producing  this type of element by itself.  The techniques employed in 
order  to  isolate  such  elements  from  the  human  body  work  only  by  means  of 
human  intervention. 

(32) 

(33) 

(34) 

(35) 

In  a gene there is only one part  that provides  the code for the protein.  There are other 
parts  that  regulate  expression,  known  as  regulatory  or  instigator  regions  and  located 
mainly upstream  from  the coded messages defining  the structure of the coded protein. 
With the aid of restricting enzymes and the PCR technique, enabling a specific region of 
a  whole  genome  to be detected  on the basis  of a single  cell  by replicating  it  in  large 
quantities in  vitro. 
That is to say the succession  of ATGC bases determined by sequencing. 
For  example,  if the coded  protein  is  known,  recombinant  bacteria  can be cloned  (i.e. 
bacteria carrying extraneous DNA and capable of breeding in the form of colonies), along 
with  DNAc  (copies  of  RNAm  from  cells  representing  genuinely  functional  genetic 
information)  in  order  to  obtain  a  recombinant  protein.  The  recombinant  protein  is 
artificial,  as is the DNAc taken as a basis. In the case in point, the technical  solution to 
a  technical  problem  is the possibility  of reproducing  ex vivo  a substance  that  nature 
normally produces only via human beings: e.g. erythropoietine, factor VIII, etc. 

13 

52. 

53. 

In  the  course  of  the  discussions  within  the  Conciliation  Committee,  Parliament 
stressed that the words  "as such"  - the aim of  which  was to distinguish  the natural 
.  elements  of  the  human  body  to  be  excluded  from  patentability  -  gave  the 
impression  of  making  discoveries  patentable, which  they  cannot be.  Accordingly, 
in  order  to  clarify  the  question  of  the  patentability  of  elements  of  human  origin, 
it  appears  sensible  not  to  include  the  words  "as such"  in  the present  proposal.  At 
the same time, a clarification  has been  included  in order to highlight  the technical 
possibilities  offered  by  an  invention  in  respect  of  a element  of  human  origin. 

The  technical  discussion  concerning  the  difference  between  a  discovery  and  an 
invention  as regards  elements  of human  origin  took  place  against the background 
of interpretative  guidelines  as to exclusion  from  patentability  on grounds of being 
contrary  to public order or public  morality. But the aspects  explained  above make 
it  possible  to  establish  that  this  question  of  difference  is  a  technical  one.  Thus 
patent  law  may  not,  in itself,  affect  the fundamental  principle  excluding  all  rights 
of ownership in respect of the human being. A gene or a cell, in their natural  state, 
must be excluded from  patentability because they cannot be regarded as patentable 
inventions. In this respect, patent  law does not have to  adopt  an  ethical  stance  for 
reasons  of  public  policy  or  morality.  It  has only  to  observe  its own  principles. In 
the  Commission's  view,  in  the  interests  of  clarity  the  rule  of  law  relating  to  this 
question  of  excluding  from  patentability  elements  of  the human  body  that  cannot 
be regarded  as inventions should be tackled within  a more appropriate  framework. 
Thus  the  conventional  system  of  patent  law  established  by  the  laws  of  all  the 
Member  States  and  by  the  EPC  will  be  observed. 

B. 

A  CLEAR EXCLUSION  FROM PATENTABILITY  OF GERM LINE GENE THERAPY ON HUMANS 

54. 

Point  (b)  of  the  second  subparagraph  of  Article  2(3)  of  the  Conciliation 
Committee's  joint  text  excluded  from  patentability  "processes for  modifying  the 
genetic  identity  of  the  human  being  contrary to human  dignity".  Two  criticisms 
were  made  of  this  Article.  Firstly,  it  was  considered  that  it  would  introduce  an 
exception  to the  exclusion provided  for  by  Article  52(4) of the EPC, under  which 
methods  for  treatment  of  the  human  or  animal  body  by  surgery  or  therapy  and 
diagnostic  methods practised  on the human  or  animal  body  are not to be regarded 
as inventions  which  are  susceptible  of  industrial  application.  Secondly,  the  article 
was  criticized  for  not  adopting  a clear  stance  on principle  against  germ  line  gene 
therapy. 

55.  As  regards  this  position  of  principle  against  germ  line  gene  therapy  that  should 
have  been  or  should  be  taken  when  harmonizing  national  laws  on  patents  for 
invention  in  respect  of  biotechnological  inventions,  the  Commission  can  only 
emphasize  that  patent  law  cannot  allow  itself  to  adopt  a  position  on  principle 
erga omnes.  Two  important  recent  statements  by  committees  on  ethics  serve  to 
stress  the  complexity  of  the  issue  and  the  difficulty  of  taking  a  final  decision(36). 
While  it  may  not  be  possible  to  adopt  an  ethical  stance  on  principle  that  may 
extend beyond the scope of a directive harmonizing  legislation on  biotechnological 
inventions,  there  is  no  doubt  that  the  present  proposal  may  clearly  exclude  from 
patentability  germ  line  gene  therapy  on  humans. 

(3o) 

Opinion No 4 of the Commission's group of advisers on biotechnological ethics, regarding 
ethical  aspects  of  gene  therapy,  and  the  August  1994  report  by  the  sub-committee  on 
human  gene  therapy  of  the  UNESCO  International  Bioethics  Committee,  concerning 
therapeutic  applications of genetic engineering. 

14 

C. 

FARMER'S PRIVILEGE  AS  REGARDS  BREEDING  STOCK 

56. 

include  a  derogation  similar 

The Conciliation  Committee's joint text did not provide for the direct  introduction 
into  patent  law  of  farmer's  privilege  as regards  breeding  stock:  it  referred  to  the 
future  introduction  of  Community  legislation  on  animal  variety  rights,  which 
would 
in  Article  14  of 
Council  Regulation (EC) No 2100/94 of 27 July  1994 on Community plant variety 
rights(37). Consequently,  when  the time  came the Commission  would have been  in 
a position  to  propose  a  specific  derogation  to  be  incorporated  into  legislation  on 
patents  for  invention,  as had  been  done for  the product  of  a harvest  in  Article  12 
of  the  Conciliation  Committee's joint  text. 

to  that  contained 

57. 

To  clarify  the  situation,  the  Commission  proposes  that  preferential  treatment  for 
farmers  in  respect  of  breeding  stock  be  introduced  directly  into  patent  law. 

D. 

NEW PRESENTATION 

58. 

In  order to make the proposal  for  a Directive  clearer, it seems appropriate to  alter 
its  structure.  Definitions  are  now  given  at the  beginning  of  the  text,  followed  by 
provisions  on  patentability.  In  accordance  with  the  structure  of  Member  States' 
legislation  and the EPC, the first description  given is of what may not be regarded 
as a patentable invention. The extent of,  and exclusions from, patentability  are then 
specified.  Finally,  exclusion  from  patentability  on  grounds  of  public  policy  or 
morality  is  clarified. 

HI. 

EXAMINATION  OF THE PROVISIONS 

59. 

This  Article  now  comprises  two  paragraphs. 

Article  1 

The  first  is  taken  over  from  Article  1 of  the  Conciliation  Committee's joint  text 
(referred  to  below  simply  as the joint  text)(38).  It  states that  the proposal  fits  into 
the existing  framework  of  legislation  on patents  for  invention  and  is not  intended 
to  introduce  patent  law  applying  specifically  to  living  matter. 

The second  is taken over from  Article  18 of the joint text. It  seems appropriate to 
point  out  at  the  beginning  of  the  proposal  that  patent  law  may  on  no  account 
depart  from  the  general  common  law  on  monitoring  the  applications  of  research 
and  exploitation  or  the  commercialization  of  its results. 

Article  2 

60. 

This  Article  is new  and  not  taken  over  directly  from  the joint  text. 

It  contains  three  definitions. 

The first defines biological  material as any material containing genetic  information 
that  is  self-reproducible  or  reproducible  within  a biological  system.  This  is  taken 
over  from  Article  2(2)  of  the joint  text. 

(37) 

(38) 

OJNoL227,  1.9.1994, p. 1. 
Doc. PE-CONS 3606/1/95, 21.2.1995. 

15 

The  second  defines  a  microbiological  process  as  any  process  involving  or 
performed  upon  or  resulting  in  microbiological  material.  A process  consisting  of 
a  succession  of  steps  is  to  be  treated  as  a  microbiological  process  if  at  least  one 
essential  step  of  the process  is  microbiological.  This  definition  is taken  from  the 
second  sentence  of  Article  5(1)  and  from  Article  5(2)  of  the  joint  text. 
Microbiological  matenal,  therefore,  means  any  biological  material  made  up  of 
micro-organisms or cellttlar or subcellular biological material derived from plants, 
animals or the human body. 

The third defines  in  essentially  biological  process  for the production  of plants or 
animals  as tny  process  which,  taken  as  a whole,  exists  in  nature or  is not  more 
than  a natural  plant or  animal  breeding  process.  This  définition  is  based  on  the 
third sentence of  Article  6 of  the joint text. 

61. 

This  Article  comprises  two  paragraphs. 

Article  3 

The  first  stipulates that the human  body  and  its elements  in their  natural  state  are 
not  to  be  considered  patentable  inventions.  It  places  point  (a)  of  the  second 
subparagraph  of  Article  2(3)  of  the joint  text  in  a technical  context.  Article  3 of 
the proposal  is thus  intended  to  fit  in with  the  conventional  system  of patent  law. 

The  words  "as such", which  gave  rise  to the  difficulty  in interpretation  regarding 
the distinction  between  a discovery  and an invention  in relation to elements of the 
human body,  have  not  been  included. 

The  first  paragraph  states that  "The human  body  and  its  elements  in  their natural 
state are  not  to  be  considered  patentable  inventions."  The phrase  in  italics  draws 
the distinction  between  a discovery  and  an invention.  As already  explained  above 
(paragraph  51), patentability  applies to something that is artificial  in the sense that 
it  is  a  technical  solution  to  a  technical  problem  and  has  been  invented  by  man. 
Conversely,  a  discovery  concerns  something  natural.  The  need  to  draw  a  clear 
distinction  provides  the  justification  for  referring,  in  the  second  paragraph,  to  a 
technical  process  in  contrast  to  what  is  natural.  Thus  the  words  "in  their  natural 
state"  are  used  to  stress  that  elements  of  the  human  body  are  to  be  treated  as 
discoveries  and  not  to  be  considered  as  inventions. 

The second paragraph  stipulates that biological material of human origin may  form 
the  subject-matter  of  an  invention. 

This provision  is necessary  in order  to  make  clear  that  elements  of  human  origin 
must  satisfy  the  conditions  governing  patentability  before  they  can  be  considered 
inventions. 

The clearest way of highlighting the requirement for  there to be an invention  is to 
stress the  fundamental  principle  of  patent  law:  in  order  to  qualify  for  protection, 
the  subject-matter  must  constitute  a technical  solution  to  a  technical  problem.  It 
thus proves  essential  to  stress the industrial  application  requirement.  All  technical 
activity  is  covered,  since  patent  law  defines  the  condition  as  follows:  "An 
invention shall be  considered  as susceptible  of  industrial application if  it  can be 
made  or used in any kind  of  industry,  including  agriculture. " 

The industrial  application  of  an  invention  is specified  in the description  that  must 
be  submitted  when  the  patent  application  is  filed.  The  description  must  be 
sufficiently  clear  and  comprehensive  for  someone  skilled  in  the  art to  be  able  to 
carry  it out.  Accordingly,  it  must: 

specify  the  technical  field  to  which  the  invention  relates; 

16 

indicate the previous  state of  the  art; 

explain  the  invention  such  that  the  technical  problem  and  the  solution  can 
be  understood; 

specify  in  detail  at  least  one  way  of  making  or  doing  the  thing  invented. 

Descriptions  of  nucleotide  and  amino-acid  sequences  in  patent  applications  have 
now  been  standardized  under  World  Intellectual  Property  Organization  (WIPO) 
standard  ST.23(39). 

There  is thus no problem  in  affirming  that patent  law places  at the  disposal  of  all 
interested  parties  the  scientific  information  relating  to  the  invention.  All  patent 
applications  are  published.  Consequently,  obtaining  a  patent  can  in  no  way  be 
taken  as  indicative  of  a  wish  to  stifle  research.  Patent  law  is  absolutely  clear  on 
this  point,  since  it  states  that  it  does  not  extend  to  "acts done for  experimental 
purposes  relating to  the subject-matter of  the patented  invention,<40\ 

An  element  of  human  origin  that  is  capable  of  industrial  application  must  be 
"isolated from  the human body  or  otherwise produced  by  means of  a technical 
process".  This  form  of  words  has  been  chosen  in  order  to  show,  as  clearly  as 
possible, that the patentable  element  is no  longer  in  its natural  state in the human 
body.(41) It  is the  result  of  an  artificial  process. 

The  restricting  enzymes  technique,  which  enables  a  nucleotide  sequence  to  be 
isolated  from  the  genetic  code, and  ACP, which  enables a nucleotide  sequence  to 
be  replicated  in vitro  in  a large  quantity,  can  work only  after  human  intervention. 
The wording  "isolated from  the human  body  or otherwise produced  by  means of 
a  technical  process"  should  therefore  be  taken  in  the  context  of  these  two 
techniques. 

The  second  paragraph  ends  with  the  words  "even  if  the structure of  that  element 
is identical to  that of a natural element".  This wording is taken from  the  twelfth 
recital  of  the  joint  text,  and  was  suggested  by  Parliament's  delegation  to  the 
Conciliation  Committee.  It  needs  to  be  included  in  the  main  body  of  the  text 
because  the  chemical  structure  of  an  element  isolated  from  the  human  body  by 
means  of  a  technical  process  that  may  form  the  subject-matter  of  an  invention 
capable of industrial  application  might be identical to the chemical structure of the 
element  such  as it  occurs  naturally  inside the  human  body.  This  is so  in  the  case 
of  enzymes, for  example. 

Article  4 

62. 

The  first  paragraph  is  based  on  Article  2(1)  of  the  joint  text,  and  states  that 
biological  material  is  patentable. 

The second paragraph  is based on Article 3 of the joint text. It confirms  that plants 
and animals and elements thereof are to be patentable as biological material. There 
is one  exception, however:  plant  and  animal  varieties  as such, in  accordance  with 
Article  53(b) of  the EPC. 

(39) 

(40) 

(41) 

Supplement No 2 to EPO Official  Journal  No 12/1992. 
Article  27(b)  of  the  Luxembourg  Agreement  relating  to  Community  patents.  The 
Agreement  has  not  yet  entered  into  force,  but  this  Article  has  been  incorporated  into 
legislation in all the Member States. 
See earlier in paragraph  61. 

17 

Article  5 

63. 

This  Article  is  based  on  the  first  sentence  of  Article  5 of  the joint  text.  It  states 
that  microbiological  processes  and products  obtained  by  means  of  such  processes 
are  to  be  patentable.  The  latter  point  was  not  included  in  the joint  text,  but  it  is 
helpful  to  follow  the  wording  of  Article  53(b)  of  the  EPC  (which  has  been 
incorporated  into  legislation  in  all  the  Member  States). 

Article  6 

64. 

This  is  based  on  the  first  sentence  of  Article  6  of  the joint  text,  and  states  mat 
essentially  biological  processes for  the production  of plants  or  animals  are not  to 
be  patentable. 

65. 

This  is based  on  Article  4 of  the joint  text. 

Article  7 

It  states  that  uses  of  plant  or  animal  varieties  and  processes  for  their  production, 
other than  essentially  biological  processes for the production  of plants or animals, 
are to  be  patentable. 

66. 

This  is based  on  Article  7 of  the joint  text. 

A rticle 8 

It states that the subject-matter  of  an invention  concerning  a biological  material  is 
not to be considered  a discovery  or lacking  in novelty  merely  on the grounds that 
it formed  part  of a naturally  existing  material. This Article merely  emphasizes the 
need  for  an  invention  to  be  a technical  solution  to  a technical  problem.  In  order 
not  to  be  regarded  as  a  discovery  (see  paragraph  32  of  this  Explanatory 
Memorandum)  or  as  lacking  novelty,  it  must  constitute  a technical  advance.  The 
invention  may  be  based  on  something  that  already  existed  in  nature  which  it 
transforms  and  distinguishes. 

Article  9 

67. 

This  is based  on points  (b)  and  (c) of  the  second  subparagraph  of  Article  2(3)  of 
the joint  text. 

It  concerns  exclusions from  patentability  on grounds  of public policy  or morality. 
The  aim  is to  establish  two  general  guidelines  (rather  than  three,  as there  were in 
the joint  text  -  see  paragraph  53)  on  which  to  base  future  interpretations  of  this 
possibility  for  exclusion.  Such  interpretation  should  be a genuine  reflection  of the 
ethical  dimension  of  biotechnological  inventions. 

Point  (a)  restates,  in  simplified  form,  point  (b)  of  the  second  subparagraph  of 
Article  2(3)  of  the joint  text. 

Its purpose is to reflect  the detailed  discussions  held  on the  scope of the joint  text 
as  regards  the  exclusion  from  patentability  of  processes  that  alter  the  genetic 
identity  of  human  beings. 

To that end, it is proposed to exclude directly  from  patentability  "methods of germ 
line  gene  thereby  on  humans,"  i.e.  therapy  that  could  alter  reproductive  cells 
capable  of  transmitting  genetic  material  to  descendants. 

Point  (b) is identical  to point  (c) of the second  subparagraph  of  Article  2(3) of the 
joint  text. 

18 

68. 

This  is based  on  Article  9 of  the joint  text. 

Article  10 

The  first  paragraph  stipulates  that  the  protection  conferred  by  a  patent  on  a 
biological  material possessing, as a result of the invention,  specific  characteristics 
is  to  extend  to  any  biological  material  derived  from  that  biological  material 
through  multiplication  or  propagation  in  an  identical  or  different  form  and 
possessing  the  same  characteristics. 

The  second  paragraph  provides  for  the  same  extent  of  protection  as  regards  a 
process enabling a biological  material to be produced possessing, as a result of the 
invention,  specific  characteristics. 

69. 

This  is  based  on  Article  10 of  the joint  text. 

Article  11 

It  states  that  the  protection  conferred  by  a  patent  on  a  product  containing  or 
consisting  of  genetic information  is to  extend to  all  material  in which  the  product 
is  incorporated  and  in  which  the  genetic  information  is contained  and  expressed. 

information 
It  should  be  noted  at  this  point  that  the  concept  of  genetic 
automatically  makes  reference  to  a  material  substratum  on  which  it  is  based, 
namely  deoxyribonucleic  acid.  The  order  in  which  the  four  bases A T G  C occur 
constitutes  the  genes'  coded  information.  Such  information  cannot  be  considered 
to  be  the  same  as the  scientific  information  contained,  for  example,  in  scientific 
publications.  But  the  dissemination  of  knowledge  through  the  publication  of  a 
patent application  contributes to the expansion of scientific  knowledge  concerning 
biotechnology. 

70. 

This  is based  on  Article  11 of  the joint  text. 

Article  12 

It  states  that  the  protection  referred  to  in  Articles  10  and  11 is  not  to  extend  to 
biological  material  obtained  from  the  multiplication  or  propagation  of  biological 
material  marketed  in  the  territory  of  a Member  State  by  the  holder  of  the  patent 
or  with  his  consent,  if  the  multiplication  or  propagation  necessarily  results  from 
the  application  for  which  the biological  material  was marketed,  provided  that  the 
obtained material  is not subsequently  used for  other multiplication  or propagation. 

71. 

The  first  paragraph  is based  on  Article  12 of  the joint  text. 

Article  13 

It  provides  for  a derogation  from  Articles  10 and  11 as  regards  the  scope  of  the 
protection  conferred  by  a patent  on  a biotechnological  invention. 

The  derogation  concerns  the  sale,  to  farmers,  of  patented  propagating  material. 
Farmers  are  authorized  to  use  the  product  of  their  harvests  for  propagating 
purposes  on  their  own  farms.  The  scope  of  this  derogation  and  detailed  rules 
governing  it  are  confined  to  those  of  the corresponding  Community  plant  variety 
rights,  i.e.  Article  14 of  Regulation  (EC)  No  2100/94  of  27  July  1994. 

19 

The  second  paragraph  is new. 

It  introduces  a  derogation  from  Articles  10  and  11  in  respect  of  the  sale,  to 
farmers,  of  patented  breeding  stock.  Farmers  are  to  be  authorized  to  use  the 
protected livestock  for breeding purposes on their own farms, in order to replenish 
their  numbers. 

The third  paragraph  is  also  new. 

It  concerns the  extent  and the  conditions  of the  derogation  in  respect  of  breeding 
stock. Since there are, as yet, no specific  Community provisions concerning animal 
variety  rights,  the  extent  and  conditions  are  to  be  determined  by  national  laws, 
regulations  and  practices. 

72. 

This  is based  on  Article  13 of  the joint  text. 

Article  14 

It  introduces  a  system  of  compulsory  cross-licensing  where  a  breeder  cannot 
acquire or exploit  a variety  right  without  infringing  a prior patent,  and vice versa. 

Two  conditions  have  to  be  met  when  submitting  a  licence  application  to  the 
competent  authority  in  the  Member  State  concerned: 

the  applicant  must  demonstrate  that  he  has  applied  unsuccessfully  to  the 
holder  of  the  patent  or  of  the  plant  variety  right  to  obtain  a  contractual 
licence,  and 

that  exploitation  of the plant  variety  or  the  invention  constitutes  significant 
technical  progress. 

73. 

This  is based  on  Article  14 of  the joint  text. 

Article  15 

It  concerns  the  deposit  of,  and  access  to,  a  biological  material  which  is  not 
available  to  the  public  and  which  cannot  be  described  in  a patent  application  in 
such  a manner  as to  enable the invention  to be  reproduced  by  a person  skilled  in 
the  art. 

In  this  case,  the  written  description  of  the  invention  must  be  supplemented  by  a 
physical  component  accessible  at  least  to  the  international  depositary  authorities 
which  acquired  this  status  by  virtue  of  Article  7  of  the  Budapest  Treaty  of 
28  April  1977 on the International Recognition of the Deposit of Micro-organisms 
for  the  Purposes  of  Patent  Procedure. 

At  15 April  1995,  35  countries  were  party  to  the  Budapest  Treaty,  including  12 
Member  States  (Ireland,  Luxembourg  "and  Portugal  are  not  yet  party  to  it). 
Recognition has been accorded to 28 international  depositary  authorities, including 
12 in  the  Member  States. 

74. 

This  is based  on  Article  15 of  the joint  text. 

Article  16 

It  concerns  the  re-deposit  of  a  biological  material  which  ceases  to  be  available 
from  aie  recognized  depositary  institution,  either  because  that  institution  has  lost 
its  status  or because  the biological  material  is no  longer  "live". 

20 

75. 

This  is based  on  Article  16 of  the joint  text. 

Article  17 

It  confirms  that, if  the  subject-matter  of  a patent  is a process for  obtaining  a new 
product,  the  reversal  of  the  burden  of  proof  also  applies  to  biotechnological 
inventions. 

Anyone  other  than  the  holder  of  the  patent  will  be  required  to  prove  that  he  has 
not  made  the  new  product  by  means  of  the  patented  process. 

The  principle  of  reversal  of  the  burden  of  proof  is  set  out  in  Article  35  of  the 
Community  Patent  Convention  and  must  be  regarded  as  a fundamental  principle 
of  European  patent  law  on  which  the Directive  has  to  be  based. 

76. 

This  is based  on  Article  19 of  the joint  text. 

Article  18 

is  the  standard  final  provision  regarding  the  bringing 

It 
into  force,  by 
Member  States,  of  the  laws,  regulations  and  administrative  provisions  necessary 
to  comply  with  the  Directive.  The  deadline  for  doing  so  will  be  stipulated  at  the 
appropriate  stage. 

77. 

This  is based  on  Article  20  of  the joint  text. 

Article  19 

It states that the Directive is to enter into force  on the  day of its publication  in the 
Official  Journal  of  the European  Communities, in  accordance  with  Article  191 of 
the  Treaty. 

Article  20 

78. 

This  is based  on  Article  21  of  the joint  text. 

It  states that  the  Directive  is  addressed  to  the  Member  States. 

79.  Article  8 of  the joint  text  has not  been  incorporated  into  the  draft  proposal. 

It  concerned  the  patentability  of  processes  comprising  a  succession  of  steps,  one 
or more of which involve a method of treatment of the animal body by  surgery  or 
therapy  or  a  diagnostic  method  practised  on  the  animal  body. 

The  original  purpose  of  this  Article  was  to  provide  for  very  specific  cases 
involving  the transfer  of  embryos between  animals. It has since become  clear that 
this  is not  a biotechnological  problem. 

80.  Nor  has  Article  17 of  the joint  text  been  incorporated. 

It laid down transitional  provisions regarding the derogation  in respect of the sale, 
to  a farmer,  of propagating  material  by the holder  of  a patent  or with his  consent. 
The  transitional  arrangements  have  since  been  superseded  by  the  full  entry  into 
force,  on 27  April  1995, of  Council  Regulation  (EC)  No  2100/94  on  Community 
plant  variety  rights. 

21 

INFORMATION  ON  THE  INDUSTRIES  USING  BIOTECHNOLOGY 

ANNEX 

While the actual economic prospects of the biotechnology  product market have not 
immediately  matched the hopes pinned  on the industrial  openings for  applications 
of  this  new  technology,  the  forecasts  for  the  year  2000  show  the  market  really 
taking  off  (see  following  table  in  billions  of  ecus,  source:  CEFIC-SÂGB,  1994): 

Medicinal 
products 
1.2 

23.9 

Chemicals 

0.1 

14.6 

Agriculture  & 
foodstuffs 
2.4 

40.0 

Environment 

Plant 

Total 

0.4 

2 

1.0 

2.8 

5.1 

83.3 

Current 
market 
Market  in 
2000 

The data available for  the medicinal products sector make it possible to assess more 
accurately  the position  of European firms compared  with their competitors from  the 
lists 
United  States  and  Japan.  The  following 
top  15 
table 
"biopharmaceutical"  firms  by  turnover  generated 
from  medicinal  products 
manufactured  using biotechnological  processes  and products  under  licence  (source: 
Datamonitor,  1994): 

the  world's 

Company 

1993 sales 
(own  products) 
$  millions 

1993  sales 
(+products  under  licence) 
$  millions 

Amgen 
Eli  Oily 
Novo  Nordisk 
J&J 
Schering-Plough 
S-B 
Genentech 
Chugai 
Sankyo 
Pharmacia 
Merck & Co 
Roche 
Ares-Serono 
Genzyme 
Hoechst 

1 306 
830 
797 
625 
597 
479 
457 
404 
377 
336 
290 
250 
199 
125 
121 

I 

2 208 
896 
1 003 
625 
597 
479 
1 773 
404 
377 
336 
290 
250 
199 
125 
121 

| 

As  can  be  seen  from  the  above  table,  seven  US  firms  are  among  the  top  15,  with  four 
among  the  top  five:  Amgen,  Eli  Lilly,  J&J,  Schering-Plough,  Genentech,  Merck  &  Co, 
and  Genzyme. 

22 

The  six  European  firms  are  Novo  Nordisk,  S-B,  Pharmacia,  Roche,  Ares-Serano  and 
Hoechst. 

Two  Japanese  firms  are  listed:  Chugai  and  Sankyo. 

The  following  table  showing  the  number  of  entities  involved  at  the  clinical  and 
post-clinical  development  stages  in  the  fields  of  biotechnology  and  immunology 
highlights  the  lead  that  the  United  States  has  over  the  rest  of  the  world 
(source:  Heinz  Redwood,  1993): 

Origin 

United  States 
Japan 
Europe 
Other 
Total 

No. of  entities 
(clinical  stage) 
101 
12 
46 
16 
175 

1 

Expressed  in  percentages,  the  picture  is  as  follows: 

Origin 

_ _ _ _ _ _ _ _ _ _ _ _ _ _ __ 

United  States 
Japan 
Europe 
Other 
Total 

j 

No. of  entities 
(clinical  stage) 
58% 
7% 
26% 
9% 
100% 

No. of  entities 
(post-clinical  stage) 
29 
16 
10 
6 
61 

No. of  entities 
(post-clinical  stage) 
48% 
26% 
16% 
10% 
100% 

j 

I 

The  above  figures  show  the  leading  position  held  by  the  United  States.  A  similar 
picture  emerges  if  we  look  at  the  European  Patent  Office  (EPO)'s  figures  for  the 
number  of  biotechnology  patent  applications  it  received  and  the  number  of  such 
patents  it granted  between  1990 and  1994: 

23 

Applications  for a  European  patent in the fîeld of  biotechnology: 

Origin 
EPO 
member 
countries 
Japan 
U n i t ed 
States 
Other 
Total 

1990 
176 

1991 
199 

1992 
266 

1993 
231 

1994 
247 

75 
146 

30 
427 

73 
195 

23 
490 

73 
219 

40 
598 

59 
342 

49 
681 

69 
262 

42 
620 

Total 
1119 

349 
1164 

184 
2816 

Expressed  in  percentages: 

Europe  . 
39.7% 

United  States 
41.3% 

Japan 
12.4% 

Other 
6.6% 

The  aggregate  percentages  for  all  fields  of  technology  over  the  same  period  are  as 
follows: 

Europe 
48.60% 

United  States 
28% 

Japan 
19.40% 

European patents granted in the  field  of  biotechnology: 

Other 
4% 

Origin 
EPO 
member 
countries 
Japan 
U n i t ed 
States 
Other 
Total 

1990 
36 

1991 
44 

1992 
54 

1993 
93 

1994 
106 

Total 
333 

33 
38 

1 
108 

41 
62 

3 
150 

41 
77 

5 
177 

. 

46 
76 

8 
223 

40 
114 

11 
271 

201 
367 

28 
929 

Expressed  in  percentages: 

Europe 
35.8% 

United States 
39.5% 

Japan 
21.6% 

Other 
3.1% 

24 

The  aggregate  percentages  for  all  fields  of  technology  over  the  same  period  are  as 
follows: 

Europe 
54.2% 

United  States 
23% 

Japan 
19.8% 

Other 
3% 

The  above  figures  show  that  United  States  firms  have  a  much  stronger  presence  on  the 
European  biotechnology  market  than  in  all  other  fields  of  technology. 

• 

As regards European firms' presence on the United  States market, a study  published 
in  March  1995 by Pharmaceutical  Research  and Manufacturers  of America  entitled 
"Biotechnology  drug  research  has  come  of  age"  states  that  140 patents  relating  to 
genetic-engineering medicinal products were granted by the United States Patent and 
Trade  Mark  Office  in  1994  The  breakdown  of  those  patents  by  country  of  origin 
was  as  follows: 

United  States 
109 

Europe 
16 

. 

Japan  > 

to 

Other 
5 

Total 
140 

25 

Proposal  for  a 
EUROPEAN  PARLIAMENT  AND  COUNCIL  DIRECTIVE 

on  the  legal  protection  of  biotechnological  inventions 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article  100a thereof, 

Having  regard  to  the proposal  from  the  Commission03, 

Having  regard  to  the  Opinion  of  the  Economic  and  Social  Committee(2), 

Acting  in  accordance  with  the  procedure  laid  down  in  Article  189b  of  the  Treaty0), 

(1)  Whereas  biotechnology  and  genetic  engineering  are  playing  an  increasingly 
important role in a broad range of industries and the protection of  biotechnological 
inventions  will  certainly  be  of  fundamental  importance  for  the  Community's 
industrial  development; 

(2)  Whereas  the  investments  required  in  research  and  development,  particularly  for 
genetic  engineering, are especially  high  and  especially  risky  and the possibility  of 
recouping  that  investment  can  only  effectively  be  guaranteed  through  adequate 
legal  protection; 

(3)  Whereas  without  effective 

and  harmonized  protection 

throughout 

the 

Member  States  such  investments  might  well  not  be  made; 

(4)  Whereas following  the European  Parliament's  rejection  of the joint  text,  approved 
by  the  Conciliation  Committee,  for  a European  Parliament  and Council  Directive 
on the  legal  protection  of biotechnological  inventions(4), the European  Parliament 
and  the  Council  have  determined  that  the  legal  protection  of  biotechnological 
inventions  cannot  be  left  as  it  currently  stands; 

(5)  Whereas  differences  exist  in  the  legal  protection  of  biotechnological  inventions 
offered  by the  laws and practices of the Member  States; whereas such  differences 
could  create barriers to trade and to the proper  functioning  of the interna! market; 

(6)  Whereas  such  differences  in  legal  protection  could  well  become  greater  as 
Member  States adopt new and different  legislation  and administrative practices, or 
as national  case  law  interpreting  such  legislation  develops  differently; 

(7)  Whereas  the  uncoordinated  development  of  national  laws  on  the  legal  protection 
of  biotechnological  inventions  in  the  Community  could  result  in  the  creation  of 
new disincentives  to trade, to  the  detriment  of  the industrial  development  of  such 
inventions  and  of  the  smooth  operation  of  the  internal  market; 

(1) 
(2) 

(3) 

(4) 

OJ No C 
OJ No C 

OJNo  C 68, 20.3.1995, p. 26. 

26 

(8)  Whereas  the  legal  protection  of  biotechnological  inventions  does  not  necessitate 
the creation of  a separate body  of law in place of the rules of national  patent  law; 
whereas  the  rules  of  national  patent  law  remain  the  essential  basis  for  the  legal 
protection of biotechnological  inventions; whereas, however, they must be adapted 
or  added  to  in  certain  specific  respects  in  order  to  take  full  account  of 
technological  developments  involving  biological  material  which  also  fulfil  the 
requirements  for  patentability; 

(9)  Whereas  harmonization  of  the  laws  of  the  Member  States  is necessary  to  clarify 
certain  concepts  in  national  laws  originating  in  certain  international  patent  and 
plant variety  conventions  which  have led to some  uncertainty  as to the  possibility 
of  protecting  biotechnological  inventions  concerning  plant  matter  and  certain 
microbiological  inventions,  concepts  such  as  the  exclusion  from  patentability  of 
plant and animal varieties and of essentially biological processes for the production 
of  plants  and  animals; 

(10)  Whereas the Community's  legal  framework  for  the protection  of  biotechnological 
inventions  can  be  limited  to  laying  down  certain  principles  as  they  apply  to  the 
patentability  of  biological  material  as  such  -  such  principles  being  intended  in 
particular  to  determine  the  difference  between  inventions  and  discoveries  with 
regard to the patentability  of certain elements of human origin  - and can be  further 
limited  to  defining  the  scope  of  the  protection  accorded  by  a  patent  on  a 
biotechnological  invention,  to the  right to use  a deposit  mechanism  in  addition  to 
written  descriptions,  to  a  reversal  of  the  burden  of  proof  and  to  the  option  of 
obtaining non-exclusive compulsory licences in respect of interdependence between 
plant  varieties  and  inventions; 

(11)  Whereas  a  patent  for  invention  does  not  authorize  the  holder  to  implement  that 
invention,  but  merely  entitles  him  to  prohibit  third  parties  from  exploiting  it  for 
industrial and commercial  purposes; whereas, consequently, substantive patent law 
cannot  serve to call  into question  national  and  Community  law on the  monitoring 
of  research  and  of  the  use  or  commercialization  of  its  results,  notably  from  the 
point  of  view  of  the  requirements  of  public  health,  safety,  environmental 
protection,  animal  welfare,  the  preservation  of  genetic  diversity  and  compliance 
with  certain  ethical  standards; 

(12)  Whereas  no  prohibition  or  exclusion  exists  in  national  or  European  patent  law 
(Munich  Convention)  which  precludes  a  priori  the  patentability  of  biological 
matter; 

(13)  Whereas  it should  be specified  that  knowledge  relating to the human  body  and to 
its elements in their natural state falls  within the realm of scientific  discovery  and 
may not, therefore,  be  regarded  as patentable  inventions; whereas  it follows  from 
this  that  substantive  patent  law  is  not  capable  of  prejudicing  the  basic  ethical 
principle  excluding  all  ownership  of  human  beings; 

(14)  Whereas  significant  progress  in  the  treatment  of  diseases  has  already  been  made 
thanks to medicinal products derived or otherwise produced from  elements isolated 
from  the human  body,  and  medicinal  products  resulting  from  a technical  process 
aimed  at obtaining  elements  similar  in  structure  to  those  existing  naturally  in  the 
human body and whereas, consequently, the patent system should promote research 
aimed  at  obtaining  such  elements; 

(15)  Whereas, therefore,  it should be made clear that an invention  capable of industrial 
application  and  based  on  an  element  isolated  from  the  human  body  or  otherwise 
produced  by  means of  a technical  process  is patentable,  even  where  the  structure 
of  that  element  is  identical  to  that  of  a  natural  element,  since  no  patent  may  be 
interpreted  as covering  an  element  of  the  human  body  in  its  natural  environment 
forming  the  basic  subject  of  the  invention, 

27 

(16)  Whereas  such  an  element  isolated  from  the  human  body  or  otherwise  produced 
may not be regarded  as unpatentable  in the same way  as an element of the human 
body  in its natural  state, that  is to say,  may not be  equated  with  a discovery,  since 
the element  isolated  is the result of the technical  processes  used to identify,  purify 
and  classify  it  and  to  reproduce  it  outside  the  human  body,  techniques  which 
human  beings  alone  are  capable  of  puting  into  practice  and  which  Nature  is 
incapable  of  accomplishing  by  itself; 

(17)  Whereas, in order  to  determine  the extent  to  which  plant  and  animal  varieties  are 
to  be  excluded  from  patentability,  it  should  be  specified  that  the  exclusion 
concerns  those  varieties  as  such  and  that,  consequently,  it  does  not  prejudice  the 
patentability  of plants or animals obtained by means of a process at least one stage 
of which is essentially microbiological, irrespective of the basic biological  material 
to  which  that  process  is  applied; 

(18)  Whereas,  for  the  purposes  of  determining  whether  or  not  it  is possible  to  patent 
essentially biological processes for obtaining plants or animals, human intervention 
and  the  effects  of  that  intervention  on  the  result  obtained  must  be  taken  into 
account; 

(19)  Whereas  national  patent  laws  for  inventions  contain  provisions  as  to  the  criteria 
for  allowing  or  excluding  patentability,  including  provisions  to  the  effect  that  a 
patent  may  not  be  granted  in  respect  of  inventions  whose  publication  or 
exploitation  would  be  contrary  to  public  policy  or  morality; 

(20)  Whereas  such  a reference  to public policy  and  morality  should  be included  in  the 
operative part of this Directive in order to bring out the fact that some applications 
of biotechnological  inventions, by virtue of some of their  consequences or  effects, 
are  capable  of  offending  against  them; 

(21)  Whereas  it  must  be  determined  whether  applications  offend  against  public  policy 
and  morality  in  each  specific  case,  by  means  of  an  appraisal  of  the  values 
involved,  whereby  the  benefit  to  be  derived  from  the  invention,  on the one  hand, 
is weighed and evaluated  against any risks associated therewith, and any  objections 
based  on  fundamental  principles  of  law,  on  the  other  hand; 

(22)  Whereas the operative part of this Directive  should  also include  an illustrative  list 
of  inventions  excluded  from  patentability  so  as  to  provide  national  courts  and 
patent  offices  with  a  general  guide  to  interpreting  the  reference  to  public  policy 
or  morality; 

(23)  Whereas such moral  considerations must be given greater weight in appraising the 
patentability  of biotechnological  inventions, both on account of the  subject-matter 
of  this  branch  of  science,  namely  living  matter,  and  because  of  the  often 
far-reaching  implications  of  the  inventions  to  be  examined;  whereas  these 
considerations  do  not,  however,  change  the  nature  of  patent  law  as  a  primarily 
technical  body  of  law  and  are  no  substitute  for  the  other  legal  checks  which 
biotechnological  inventions  are  required  to  undergo  from  the  start  of  their 
development  or  at the  marketing  stage,  particularly  with  regard  to  safety; 

(24)  Whereas,  in  view  of  the  importance  and  the  controversial  nature  of  the 
unprecedented  questions  raised  by  germ  line  gene  therapy,  it  is  important 
from  patentability  any  methods  of  treatment  of 
to  exclude  unequivocally 
human  beings  based  on  it; 

28 

(25)  Whereas processes  for  modifying  the genetic  identity  of  animals which  are  likely 
to  cause  them  suffering  or  physical  handicaps  without  any  substantial  benefit  to 
man  or  animal,  and  also  animals  resulting  from  such processes  must be  excluded 
from  patentability  insofar  as the  suffering  or  physical  handicaps  inflicted  on  the 
animals  concerned  are  out  of  proportion  to  the  objective  pursued; 

(26)  Whereas, in view of the fact  that the function  of  a patent is to reward the inventor 
for his creative efforts  by  granting an exclusive but time-bound  right,  and thereby 
to  encourage  inventive  activities,  the  holder  of  the  patent  should  be  entitled  to 
prohibit  the  use  of  patented  self-reproducible  material  in  situations  analogous  to 
to  prohibit  such  use  of  patented, 
those  where 
non-self-reproducible  products, namely in respect of the production of the patented 
product  itself; 

it  would  be  permitted 

(27)  Whereas  it  is  necessary  to  provide  for  a  first  derogation  from  the  rights  of  the 
holder  of  the  patent  when  the  propagating  material  incorporating  the  protected 
invention  is sold  to  a farmer  for  farming  purposes  by  the  holder  of  the  patent  or 
with his  consent;  whereas  that initial  derogation  must  authorize the  farmer  to  use 
the  product  of  his  harvest  for  further  multiplication  or  propagation  on  his  own 
farm;  whereas the  extent  and the conditions  of that  derogation  must be limited  in 
accordance  with 
(EC) 
No  2100/94(5); 

the  extent  and  conditions  set  out 

in  Regulation 

(28)  Whereas  only  the  fee  envisaged  under  Community  plant  variety  rights  as  a 
condition  for  applying the derogation  from  Community  plant variety  rights can be 
required  of  the  farmer; 

(29)  Whereas, however, the holder of the patent may  defend  his rights against  a  farmer 
abusing the derogation  or  against the breeder  who has developed the plant  variety 
incorporating  the  protected 
if  the  latter  fails  to  adhere  to  his 
commitments; 

invention 

(30)  Whereas  a  second  derogation  from  the  rights  of  the  holder  of  the  patent  must 
authorize  the  farmer  to  use  the  protected  livestock  for  breeding  purposes  on  his 
own  farm,  in  order  to  replenish  their  numbers, 

(31)  Whereas  the  extent  and  the  conditions  of  that  second  derogation  should  be 
laws,  regulations  and  practices,  since  there  is  no 

determined  by  national 
Community  legislation  on  animal  variety  rights; 

(32)  Whereas,  in  the  field  of  exploitation  of  new  plant  characteristics  resulting  from 
genetic  engineering,  guaranteed  access  must,  on payment  of  a fee,  be  granted  in 
a  Member  State  in  the  form  of  a  compulsory  licence  where,  in  relation  to  the 
genus  or  species  concerned,  public  interest  demands  the  exploitation  of  the  plant 
variety  for  which  the  licence  is  requested  and  the  plant  variety  represents 
significant  technical  progress; 

(33)  Whereas,  in  the  field  of  the  use  of  new  plant  characteristics  resulting  from  new 
plant  varieties  in  genetic  engineering,  guaranteed  access  against  a  fee  must  be 
granted  in  the  form  of  a  compulsory  licence  where  public  interest  demands  the 
exploitation  of  the  invention  for  which  the  licence  is  requested  and  where  the 
invention  represents  significant  technical  progress, 

(5) 

OJNo  L227,  1.9.1994, p. 1. 

29 

HAVE ADOPTED  THIS DIRECTIVE: 

CHAPTER I 
Patentability 

Article  1 

1. 

2. 

Member  States shall protect biotechnological  inventions under national patent law. 
Member  States  shall  if  necessary  adjust  their  national  patent  law to  take  account 
of  the  provisions  of  this  Directive. 

This Directive  shall  be  without  prejudice  to national  and Community  laws on  the 
monitoring  of  research  and  of  the  use  or  commercialization  of  its results. 

For  the  purposes  of  this  Directive, 

Article  2 

1. 

2. 

3. 

1. 

2. 

1. 

2. 

"biological  material"  means  any  material  containing  genetic  information  and 
capable  of  self-reproduction  or  of  being  reproduced  in  a biological  system; 

"microbiological  process"  means  any  process  involving  or  performed  upon  or 
resulting  in microbiological  material;  a process consisting of  a succession of  steps 
shall  be  treated  as  a  microbiological  process  if  at  least  one  essential  step  of  the 
process  is  microbiological; 

"essentially  biological  process  for  the production  of plants or animals" means any 
process  which,  taken  as  a  whole,  exists  in  nature  or  is  not  more  than  a  natural 
plant-breeding  or  animal-breeding  process. 

Article  3 

The  human  body  and  its  elements  in  their  natural  state  shall  not  be  considered 
patentable  inventions. 

Notwithstanding  paragraph  1,  the  subject  of  an  invention  capable  of  industrial 
application  which relates to an element isolated from  the human body or otherwise 
produced by  means of a technical  process shall be patentable, even if the  structure 
of  that  element  is  identical  to  that  of  a natural  element. 

Article  4 

The  subject  of  an  invention  shall  not  be  considered  unpatentable  merely  on  the 
grounds  that  it  is  composed  of,  uses  or  is  applied  to  biological  material. 

Biological  material, including plants and animals, as well as elements of plants and 
animals obtained by means of a process not essentially biological, except plant and 
animal  varieties  as  such,  shall  be  patentable. 

A rticle 5 

Microbiological  processes  and  products  obtained  by  means  of  such  processes  shall  be 
patentable. 

Article  6 

Essentially  biological  processes  for  the  production  of  plants  or  animais  shall  not  be 
patentable. 

30 

Article  7 

Uses of plant or animal  varieties and processes for their production, other than  essentially 
biological  processes  for  the production  of  plants  or  animals,  shall  be  patentable. 

Article  8 

The  subject  of  an  invention  concerning  a  biological  material  shall  not  be  considered  a 
discovery  or lacking  in novelty  merely  on the grounds that  it already  formed  part of the 
natural  world. 

Article  9 

1. 

Inventions  shall be considered  unpatentable  where exploitation  would be  contrary 
to  public  policy  or  morality;  however,  exploitation  shall  not  be  deemed  to  be  so 
contrary  merely  because  it  is prohibited  by  law  or  regulation. 

2. 

On  the  basis  of  paragraph  1, the  following  shall  be  considered  unpatentable: 

(a)  methods  of  human  treatment  involving  germ  line  gene  therapy; 

(b)  processes  for  modifying  the  genetic  identity  of  animals  which  are  likely  to 
cause  them  suffering  or  physical  handicaps  without  any  substantial  benefit 
to man or animal, and also animals resulting from  such processes,  whenever 
the  suffering  or  physical  handicaps  inflicted  on  the  animals  concerned  are 
disproportionate  to  the  objective  pursued. 

CHAPTER  n 
Scope  of  protection 

Article  10 

1. 

2. 

The  protection  conferred  by  a patent  on  a biological  material  possessing  specific 
characteristics  as  a result  of the  invention  shall  extend  to  any  biological  material 
derived  from  that biological  material  through  multiplication  or propagation  in an 
identical  or  divergent  form  and  possessing  those  same  characteristics. 

The  protection  conferred  by  a  patent  on  a  process  that  enables  a  biological 
material  to  be  produced  possessing  specific  characteristics  as  a  result  of  the 
invention  shall extend to biological  material  directly obtained through that process 
and to  any  other  biological  material  derived  from  the biological  material  directly 
obtained  through  multiplication  or  propagation  in  an  identical  or  divergent  form 
and  possessing  those  same  characteristics.  That  protection  shall  not  affect  the 
exclusion  from  patentability  of  plant  and  animal  varieties  as  such,  pursuant  to 
Article  4(2). 

Article  11 

The  protection  conferred  by  a  patent  on  a  product  containing  or  consisting  of  genetic 
information  shall extend to all material, save as provided  for in Article 3(1), in which the 
product is incorporated  and in which  the genetic  information  is contained  and  expressed. 

31 

Article  12 

The  protection  referred  to  in  Articles  10 and  11  shall  not  extend  to  biological  material 
obtained  from  the  multiplication  or  propagation  of  biological  material  marketed  in  the 
territory  of  a  Member  State  by  the  holder  of  the  patent  or  with  his  consent,  if  the 
multiplication  or  propagation  necessarily  results  from  the  application  for  which  the 
biological  material  was marketed, provided that the obtained  material is not  subsequently 
used  for  other  multiplication  or  propagation. 

Article  13 

1. 

2. 

3. 

By  way  of  derogation  from  Articles  10 and  11,  the  sale  of  propagating  material 
to  a  farmer  by  the  holder  of  the  patent  or  with  his  consent  for  agricultural  use 
implies  authorization  for 
to  use  the  product  of  his  harvest 
for  reproduction  or  propagation  by  him  on  his  own  farm,  the  scope  of  and 
procedure  for  this  derogation  corresponding  to  those  under  Article  14  of 
Regulation  (EC)  No  2100/94. 

the  farmer 

By  way  of  derogation  from  Articles  10  and  11,  the  sale  of  breeding  stock  to  a 
farmer  by the holder of the patent or with his consent implies authorization  for the 
farmer  to  use  the  protected  livestock  for  breeding  purposes  on  his  own  farm,  in 
order  to  replenish  their  numbers. 

The  extent  and the  conditions  of the  derogation  provided  for  in paragraph  2 shall 
be  determined  by  national  laws, regulations  and  practices. 

CHAPTER  m 
Compulsory  cross-licensing 

Article  14 

1.  Where  a breeder  cannot  acquire or  exploit  a plant variety  right  without  infringing 
a prior patent, he may  apply  for  a compulsory  licence for non-exclusive  use of the 
invention  protected  by  such  patent  inasmuch  as  the  licence  is  necessary  for  the 
exploitation  of  the  plant  variety  to  be  protected,  subject  to  payment  of  an 
appropriate  royalty.  Member  States  shall  provide  that  where  such  a  licence  is 
granted,  the  holder  of  the  patent  will  be  entitled  to  a cross-licence  on  reasonable 
terms  to  use the  protected  variety. 

2.  Where  the  holder  of  a  patent  on  a  biotechnological  invention  cannot  exploit  it 
without  infringing  a  prior  plant  variety  right,  he  may  apply  for  a  compulsory 
licence  for  non-exclusive  use  of  the  plant  variety  protected  by  that  right,  subject 
to payment of an appropriate royalty. Member  States shall provide that where such 
a  licence  is  granted,  the  holder  of  the  variety  right  will  be  entitled  to  a 
cross-licence  on  reasonable  terms  to  use  the  protected  invention. 

3. 

Applicants  for  the  licences  referred  to  in  paragraphs  1 and  2  must  demonstrate 
that: 

(a) 

(b) 

they  have  applied  unsuccessfully  to  the  holder  of  the  patent  or  of  the  plant 
variety  right  to  obtain  a  contractual  licence; 

exploitation  of  the  plant  variety  or  the  invention  for  which  the  licence  is 
requested  is  dictated  by  the  public  interest  and  the  plant  variety  or  the 
invention  constitutes  significant  technical  progress. 

4. 

Each  Member  State  shall  designate  the  authority  or  authorities  responsible  for 
granting the licence. The licence  shall be granted  principally  for  the supply  of the 
domestic  market  of  the  Member  State  which  has  granted  the  licence. 

32 

CHAPTER IV 
Deposit, access  and re-deposit of  a biological  material 

Article  15 

1.  Where  an  invention  involves  the  use  of  or  concerns  a biological  material  which 
is not available to the public and which  cannot be described in a patent  application 
in  such  a manner  as to  enable the  invention  to  be  reproduced  by  a person  skilled 
in the art, the description  shall be considered  inadequate for the purposes of patent 
law  unless: 

(a) 

(b) 

(c) 

the biological  material  has  been  deposited,  no  later  than  the  date on  which 
the patent application  was filed, with  a recognized  depositary  institution.  At 
least  the  international  depositary  authorities  which  acquired  this  status  by 
virtue  of  Article  7  of  the  Budapest  Treaty  of  28  April  1977  on  the 
International Recognition of the Deposit of Micro-organisms for the Purposes 
of  Patent  Procedure,  hereinafter  referred  to  as the  "Budapest  Treaty",  shall 
be  recognized; 

the  application  as  filed  contains  such  relevant  information  as is available  to 
the  applicant  on  the  characteristics  of  the biological  material  deposited; 

the  patent  application  states  the  name  of  the  depositary  institution  and  the 
accession  number. 

2. 

Access  to  the  deposited  biological  material  shall  be  provided  through  the  supply 
of  a  sample: 

(a) 

up  to  the  first  publication  of  the  patent  application,  only  to  those  persons 
who  are  authorized  under  national  patent  law; 

(b)  between  the  first  publication  of  the  application  and  the  granting  of  the 
patent,  to  anyone  requesting  it  or,  if  the  applicant  so  requests,  only  to  an 
independent  expert; 

(c) 

after  the  patent  has  been  granted,  and  notwithstanding  revocation  or 
cancellation  of  the  patent,  to  anyone  requesting  it. 

3. 

The  sample  shall  be  supplied  only  if  the  person  requesting  it  undertakes,  for  the 
term  during  which  the patent  is  in  force: 

(a) 

not  to  make  it  or  any  matter  derived  from  it  available  to  third  parties;  and 

(b)  not to use it or any biological  matter derived from  it except for  experimental 

purposes 

unless  the  patent  holder  or  applicant,  as  applicable,  expressly  waives  such  an 
undertaking. 

At the  applicant's  request, where  an application  is refused  or withdrawn,  access to 
the  deposited  material  shall  be  limited  to  an  independent  expert  for  twenty  years 
from  the date on which the patent application  was  filed.  In that case, paragraph  3 
shall  apply. 

The applicant's  requests referred  to in point  (b) of paragraph  2 and in paragraph  4 
may  only  be  made  up  to  the  date  on  which  the  technical  preparations  for 
publishing  the  patent  application  are  deemed  to  have been  completed. 

4. 

5. 

33 

Article  16 

If  the  biological  material  deposited  in  accordance  with  Article  14  ceases  to  be 
available from  the recognized depositary  institutions, a new deposit of the material 
shall  be  permitted  on  the  same  terms  as those  laid  down  in  the Budapest  Treaty. 

Any  new  deposit  shall  be  accompanied  by  a  statement  signed  by  the  applicant 
certifying  that  the  newly  deposited  biological  material  is  the  same  as  that 
originally  deposited. 

CHAPTER V 
Burden of  proof 

Article  17 

If  the  subject-matter  of  a  patent  is  a process  for  obtaining  a new  product,  then, 
when  the  same product  is produced  by  any  other  party, it  shall, in the  absence  of 
proof  to the  contrary,  be  deemed  to have  been  obtained  by  the  patented  process. 

In the  adduction  of proof  to the  contrary, the legitimate interests of the  defendant 
in protecting  his  manufacturing  and  business  secrets  shall  be  taken  into  account. 

1. 

2. 

1. 

2. 

CHAPTER VI 
Final  provisions 

Article  18 

1. 

Member  States  shall  bring  into  force  the  laws,  regulations  and  administrative 
provisions necessary  to  comply  with this Directive  not later than  1 January  2000. 
They  shall  immediately  inform  the  Commission  thereof. 

When Member States adopt these provisions, these shall contain  a reference to this 
Directive  or  shall  be  accompanied  by  such  reference  at  the  time  of  their  official 
publication.  The procedure for  such reference  shall be adopted by Member  States. 

2. 

Member  States  shall  communicate  to  the  Commission  the  text  of  the  main 
provisions of national  law which they  adopt in the field covered by this Directive. 

Article  19 

This Directive shall  enter  into force  on the twentieth  day following  that of its publication 
in  the  Official  Journal  of  the  European  Communities. 

This Directive  is  addressed  to the  Member  States. 

Article  20 

Done  at  Brussels, 

For  the  European  Parliament 
The  President 

For  the  Council 
The  President 

34 

FINANCIAL  STATEMENT 

TITLE OF MEASURE 

Proposal  for  a  European  Parliament  and  Council  Directive  on  the  legal  protection  of 
biotechnological  inventions. 

DESCRIPTION 

The purpose of the measure is to harmonize national laws on patents for  biotechnological 
inventions,  with  a  view  to  achieving  uniform  practices  by  patent  offices  and  uniform 
national  case-law.  Harmonization  is necessary  in  order  to  ensure  the  free  movement  of 
biotechnological  products  and  the  proper  functioning  of  the  internal  market. 

The  measure  has no  financial  implications  for  the  Community  budget. 

35 

IMPACT OF THE PROPOSAL 
ON  BUSINESSES 
(and particularly  SMEs) 

1.  WHY  IS COMMUNITY  LEGISLATION  NECESSARY? 

In  order  to harmonize,  at  Community  level,  Member  States'  legislation  on  the  legal 
protection  of  biotechnological  inventions,  with  a  view  to  achieving  the  following 
objectives: 

(a)  to  improve  the  operation  of  the  internal  market  for  patented  biotechnological 

products,  so  as to  ensure  their  free  movement; 

(b)  to  prevent  distortions  of  competition  for  firms  using  biotechnology; 

(c)  to ensure that research and development in biotechnology  enjoy  appropriate legal 

protection  thanks  to  harmonization  of  Member  States'  legislation; 

(d)  to  improve  the  competitiveness  of  industry  using  biotechnology; 

(e)  to  take  due  account  of  the  ethical  dimension  of  biotechnological  inventions. 

2.  WHICH INDUSTRIES  WILL BE AFFECTED? 

(a)  The  measure  will  benefit  manufacturers  of  biotechnological  products,  and 

particularly  firms  that  base  their  activities  on  research. 

(b)  According  to a study  published  by  Ernst & Young  in  1995, 485  firms  would  be 
affected  in  Europe.  Of  those,  81%  employ  less  than  50  people,  and  45% were 
founded  after  1986. They  cover a wide range of activities: pharmacy,  chemicals, 
agriculture,  foodstuffs,  the  environment  and  plant.  While  investment  in  the 
research  and  development  of  new  biotechnological  products  is high,  the  return 
on  that  investment  is  uncertain  because  the  legal  protection  offered  by  the 
system  of  patents  for  invention  is  not  as  clear-cut  as  in  other  areas  of 
technology.  The proposed  measure  is such  that it would apply  to all  firms  using 
biotechnology,  whatever  their  size. 

(c)  There  is  no  reason  to  suppose  that  particular  geographical  areas  will  benefit 

more  than  others  from  the  measure. 

3.  WHAT  MUST  BUSINESSES  DO  IN  ORDER  TO  COMPLY  WITH  THE 

MEASURE? 

The  firms  affected  will  not  be  required  to  take  any  special  steps  in  order  to  benefit 
from  the  planned  legislative  harmonization. 

4.  WHAT ARE THE LIKELY  ECONOMIC EFFECTS  OF THE MEASURE? 

(A)  ON  EMPLOYMENT 

Clarifying  the  legislative  environment  for  biotechnological  inventions  will 
provide  innovative  firms  in the various  industries using biotechnology  with  an 
incentive to continue or even increase their investment in research. Establishing 
an  appropriate 
the  protection  of  biotechnological 
for 
inventions  will  encourage  innovation.  Consequently,  the  boost  given  to 
employment  will  be  most  noticeable  in  the  research  field. 

legal  framework 

36 

(B)  ON  INVESTMENT  AND  THE  ESTABLISHMENT  OF  NEW  BUSINESSES 

it 

law  also  applies 

is  clear  that  patent 

Harmonization of legal protection for biotechnological inventions should enable 
the  firms  concerned  to  feel  far  more  certain  about  recouping  their  costs  and 
investment.  Once 
to 
biotechnological  products,  patent  holders  will  realize  that  the  possible  return 
on  sums  invested  in  perfecting  such  products  enjoys  a  much  greater  legal 
guarantee. Patent law does not, of course, guarantee that there will be a market 
for  any  given  product,  but  at  least  research  findings  cannot  be  turned  to 
advantage  by  those  not  involved  in  making  the  necessary  initial  investment. 
This is a powerful  incentive for setting up new businesses in order to undertake 
leading-edge research in biotechnology  and then market the results. The sector's 
great promise is borne out by Ernst & Young's figures,  which  show that  many 
of  the  firms  concerned  are newly  established  and  small. 

in  full 

(C)  ON  THE COMPETITIVENESS  OF BUSINESSES 

The  Commission  White  Paper  Growth,  competitiveness,  employment  -  The 
challenges and ways  forward  into  the 21st  century{x) places  special  emphasis 
on  the  responsibility  of  governments  and  the  Community  in  creating  an 
environment  that  is  as  conducive  as  possible  to  businesses'  competitiveness. 
Firms  using  biotechnology  must  be  able  to  contribute  increasingly  to  the 
European  Union's balance  of payments  surplus. In order to do so, they  need to 
be  able  to  occupy  a  position  that  accurately  reflects  both  their  domestic  and 
international  competitiveness,  so  as  not  to  be  left  behind  by  developments  in 
other  parts  of  the  world. 

5.  DOES  THE  PROPOSAL  CONTAIN  MEASURES  THAT  TAKE  PARTICULAR 

ACCOUNT OF SMEs? 

The harmonization  measures  contained  in  the proposal  are not  particularly  designed 
to  assist  small  and  medium-sized  enterprises,  although  they  will  be  able  to  benefit 
equally  from  them. 

6.  CONSULTATION 

In  drawing  up the proposal, the Commission  departments  consulted  widely  with  the 
sectors concerned  and with various interest groups. In line with the wishes  expressed 
by  Parliament,  the  purpose  of  the  consultations  was  to  ensure  that  the  legislation 
governing  patents  for  invention  would  be  clear  and  unambiguous,  that  it  would 
contain precise definitions,  and that it would distinguish clearly between  unpatentable 
discoveries  and  patentable  inventions. 

(EBCIF), 

the  European  Federation  of  Pharmaceutical 

The  Commission  departments  were  in  contact  with,  or received  written  submissions 
from:  the  European  Patent  Office  (EPO),  the  Union  of  Industrial  and  Employers' 
Confederations  of  Europe  (UNICE),  the  European  Board  of  Chemical  Industry 
Federations 
Industry 
Associations (EFPIA), the European  Secretariat of National Bioindustry  Associations 
(ESNBA),  the  Seed  Committee  of  the  Common  Market  (COSEMCO),  Greenpeace, 
the  Chartered  Institute  of  Patent  Agents,  the  Animal  Cell  Technology  Platform 
(ACTEP), the Green Industry  Biotechnology  Platform  (GIBiP), the  Senior  Advisory 
Group  on  Biotechnology  (SAGB), the  Agence  Nationale  pour  la Valorisation  de  la 
Recherche  (ANVAR),  Friends  of  the  Earth  (Europe),  the  Bioindustry  Association 
(BIA)  and  the British  Union  for  the  Abolition  of  Vivisection  (BUAV). 

(i) 

Bulletin  of the European  Communities, Supplement 6/93. 

37 

ISSN 0254-1475 

COM(95) 661  final 

DOCUMENTS 

EN 

06  15 

Catalogue number  : CB-CO-95-753-EN-C 

ISBN 92-77-98437-6 

Qfâce for Officiai Publications of the European Communities 

L-2985 Luxembourg