{BLR 1539} DNA Fingerprinting - FDA - Intellectual Property - Venture Capital - SWORDS - HGP - NIH - Venter Application

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12 Biotechnology Law Report 553 (Number 5, September-October 1993)CONFERENCE REPORT{BLR 1539} DNA Fingerprinting-FDA-Intellectual Property-Venture Capital-SWORDS-HGP-NIH-Venter Application.BIOTECHNOLOGY AT THE ABA~ Presentations at the Annual Meeting of the American Bar AssociationBy Gerry J. ElmanNEW YORK, N.Y. 9/5-12/93-Several presentations at this year's ABA AnnualMeeting were of interest to those working in biotechnology.DNA FINGERPRINTING"As a tool for use by the legal system, DNA analysis has arrived" was the messagetrumpeted by the three laboratories exhibiting at the meeting. Roche Biomdical LaboratoriesIdentity Testing Services (Research Triangle Park, N.C. 1-800-533-0567), Genetic Design,Inc. (Greensboro, N.C. 1-800-247-9540), and Lifecodes Corporation (Stamford, CT 1-800-543-3263) each paid about $2,500 for an exhibit booth at the New York Hilton to expose theirservices to some 19,000 registrants at the annual convention of the national organization ofAmerican lawyers. Each of the companies offers identity testing for criminal and civil casesand paternity testing services.SECTION OF SCIENCE AND TECHNOLOGYOn August 9, the ABA Section of Science and Technology presented an educationalprogram on Biotechnology Products and Inventions. Moderated by Cynthia Lee Foulke, ofBanner, Birch, McKie & Beckett (Washington, D.C.), the program included presentations byPaul M. Hyman of Hyman, Phelps & McNamara, P.C. (Washington, D.C.), William LarryRespess (Ligand Pharmaceuticals, Inc., San Diego, Cal.), Joseph M. Skerpon (also with theBanner Birch firm), Kate H. Murashige of Morrison & Foerster (Washington, D.C.), andCharles F. Warren, Deputy Director of the Biotechnology Examining Group (1800), U.S.Patent and Trademark Office.News from the FDAPaul Hyman, a prominent Food and Drug lawyer, reported that Dr. Henry Miller, longinvolved with policy issues regarding biotechnology, had just announced his resignation fromthe Food and Drug Administration (FDA). Hyman added that Miller has made some speechesand writings critical of current developments in the government and has urged public educationto counter "emotionalism" about biotechnology products. Hyman observed that the FDA madea big "to-do" about the first biotechnology product to get through an accelerated approvalprocess, interferon- for multiple sclerosis, calling it a "meaningful therapeutic ... for seriousillness" (see below in this issue at ).12 Biotechnology Law Report 554 (Number 5, September-October 1993)Raising Money for BiotechnologyLarry Respess explained the small company's perspective regarding intellectualproperty rights. He commented that it is now very difficult to raise money for biotechnology inthe public markets since the 1991-1992 boom. Innovative strategies are needed, and many ofthem were pioneered by Genentech, the first good, successful biotechnology company, addingthat Chiron and Amgen have come along as well. Such strategies include sponsored researchagreements, where a large pharmaceutical company pays a biotechnology company to developa product that the pharmaceutical company will sell on the market exclusively.Another strategy is the joint venture, exemplified by that between Amylin (a venture-capital-funded biotechnology company) and Glaxo, one of the largest pharmaceuticalcompanies. The companies each pay 50% of joint development expenses and share 50/50 inthe results. Amylin, however, has the option of refraining from putting in cash but insteadselling its common stock to Glaxo. Another such venture is the one between LigandPharmaceuticals and Allergan.Research and development partnerships were pioneered by Genentech and were verypopular a few years ago, Respess observed, before the 1986 Tax Reform Act limited thewriteoff for passive losses.More recently, "SWORDs" (stock warrants on research and development), also knownas "SPARCs" (special-purpose accelerated research corporation), have been developed. Theyinvolve the purchase of units consisting of shares of a new company to do the R&D andwarrants to purchase shares in the old company. Approximately $400 million has been raisedby biotechnology companies using this vehicle.Developments in PatentsJoseph Skerpon discussed recent decisions of the U.S. Court of Appeals for theFederal Circuit involving the disclosure necessary to obtain patent claims for biotechnologyinventions.Kate Murashige, who recently moved to the East Coast from Silicon Valley, observedthat the applications filed by the National Institutes of Health for patents on short DNAsequences with no known biological function (the Venter application) raise questions of utility(35 U.S.C. 101). About the Brenner v. Manson case (383 U.S. 519 [1965]), she remarkedthat there's "really not much guidance there at all." She commented that nobody's questioningthe utility of the polymerase chain reaction (PCR) technique, but that plays out in uses; e.g., tomap chromosomes, shovel up genes, and in screening, such as for drugs for treating cancer.Murashige observed that there are "two prongs to the utility question": (1) what is the nature ofthe utility? (does it have to be a consumer use?); and (2) a standard of proof (are there really"incredible utilities"?). She commented that the law is "extremely unclear in this area."Charles Warren presented the view from the Patent and Trademark Office (PTO). Heexplained that one should be careful to include sufficient exemplary disclosure in patentapplications for biotechnology inventions, because patent examiners are now applying the July20, 1993 decision of the Court of Appeals of the Federal Circuit in In re Wright (46 BNAPTCJ 269). In that case, the Court upheld the Examiner's rejection under the first paragraph of35 U.S.C. 112 that the disclosure had failed to "enable" the subject matter of the claims, inthat undue experimentation would be necessary to practice the invention to the extent claimed.The sworn statements submitted in response to the rejection were held to be insufficient toovercome the Examiner's conclusion. Warren's presentation is reproduced above in this issueat .12 Biotechnology Law Report 555 (Number 5, September-October 1993)HUMAN GENOME PROJECTOn August 6, the National Conference of Special Court Judges presented a program onthe Human Genome Project (HGP): Are My Genes Off Limits? The speakers were Lori B.Andrews (Senior Research Fellow with the American Bar Foundation), Michael J. Astrue,formerly of the NIH (who recently jointed Biogen Corporation as General Counsel), StephanieKanwit (Vice President and Head of Health Claims Litigation, Aetna Life and Casualty),Frances H. Miller (Boston University School of Law), and Victor B. Penchaszadeh, M.D.(Beth Israel Medical Center, New York City). The participants discussed various public policyissues, especially the availability of genetic information for purposes of determininginsurability.Gerry J. Elman, of Elman Wilf & Fried, Media, Penn.,is the Editor in Chief of BLR# # #PATENTS{BLR 1540} Japan.GAO OUTLINES PROBLEMS U.S. COMPANIESFACE WITH JAPANESE PATENT OFFICE;ADVICE FROM ENAYATIA new report from the General Accounting Office (GAO), based on a survey of high-technology U.S. companies, draws attention to the problems firms face in obtaining patentprotection in Japan. The report also describes instances in which the U.S. firms felt they hadbeen discriminated against. Indeed, it seems that companies are, in effect, prevented fromobtaining intellectual property protection in Japan.The GAO discusses differences between the U.S. patent system and that of Japan,where patents are considered a means of advancing the use of technology rather than aprotection of the rights of the inventor. The report also discusses a frequently bothersomefeature of the Japanese system: that of publishing patent applications soon after they aresubmitted (Kokai; "laid open") and allowing unlimited time for the filing of oppositions to thegranting of the patent (Kokoku). The GAO was told of instances in which competitors hadused the opposition mechanism to delay or prevent the issuance of a patent.The requirement that patent applications be filed in Japanese is another problem.(Although English translations must be provided to the U.S. Patent and Trademark Office, theapplication can be filed in any language.) The average cost of filing a patent in the UnitedStates was said to be $1390, whereas an application of the same size filed in Japan costs anaverage of $4772. (Higher charges by Japanese patent attorneys contribute to the latterfigure.)