new developments in biotechnology: patenting lifeÑspecial

New Developments in Biotechnology:Patenting Life—Special Report

April 1989

NTIS order #PB89-196612

—.

Recommended Citation:

U.S. Congress, Office of Technology Assessment, New Developments in Biotechnology:Patenting Life--Special Report, OTA-BA-370 (Washington, DC: U.S. Government PrintingOffice, April 1989).

Library of Congress Catalog Card Number 88-600596

For sale by the Superintendent of DocumentsU.S. Government Printing Office, Washington, DC 20402-9325

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

Foreword

Since the discovery of recombinant DNA technology in the early 1970s, biotechnologyhas become an essential tool for many researchers and industries. The potential ofbiotechnology has spurred the creative genius of inventors seeking to improve the Nation’shealth, food supply, and environment. In 1980, the Supreme Court ruled that a livingmicro-organism could be patented. Subsequently, the U.S. Patent and Trademark Office heldthat certain types of plant and animal life constituted patentable subject matter.

This special report is the fifth in a series of OTA studies being carried out under anassessment of “New Developments in Biotechnology,” requested by the House Committee onEnergy and Commerce and the House Committee on Science, Space, and Technology. Thisreport reviews U.S. patent law as it relates to the patentability of micro-organisms, cells,plants, and animals; as well as specific areas of concern, including deposit requirements andinternational considerations. The report includes a range of options for congressional actionrelated to the patenting of animals, intellectual property protection for plants, and enablementof patents involving biological material.

The first publication in OTA’s assessment of “New Developments in Biotechnology”was Ownership of Human Tissues and Cells, the second was Public Perceptions ofBiotechnology, the third was Field-Testing Engineered Organisms, and the fourth was U.S.Investment in Biotechnology. OTA was assisted in preparing this study by a panel of advisors,a workshop group, and reviewers selected for their expertise and diverse points of view on theissues covered by the assessment. OTA gratefully acknowledges the contribution of each ofthese individuals. As with all OTA reports, responsibility for the content of the special reportis OTA’s alone. The special report does not necessarily constitute the consensus orendorsement of the advisory panel, the workshop group, or the Technology AssessmentBoard.

u JOHN H. GIBBONSDirector

New Developments in BiotechnologyAdvisory Panel

Bernadine P. Healy, Panel ChairThe Cleveland Clinic Foundation

Timothy B. AtkesonSteptoe & JohnsonWashington, DC

David BlumenthalBrigham and Women’s Hospital Corp.Cambridge, MA

Hon. Edmund G. Brown, Jr.Reavis & McGrathLos Angeles, CA

Nancy L. BucWeil, Gotshal & MangesWashington, DC

Mark F. CantleyConcertation Unit for Biotechnology

in EuropeBrussels, Belgium

Alexander M. CapronUniversity of Southern CaliforniaLos Angeles, CA

Jerry D. CaulderMycogen Corp.San Diego, CA

Lawrence I. GilbertUniversity of North CarolinaChapel Hill, NC

Conrad A. IstockThe University of ArizonaTucson, AZ

Edward L. KorwekHogan & HartsonWashington, DC

Richard KrasnowInstitute for International EducationWashington, DC

Cleveland, OH

Sheldon KrimskyTufts UniversityMedford, MA

Joshua LederbergThe Rockefeller UniversityNew York, NY

William E. MarshallPioneer Hi-Bred International, Inc.Johnston, IA

Ronald L. MeeusenSandoz Crop Protection Corp.Palo Alto, CA

Robert B. NicholasMcDermott, Will & EmeryWashington, DC

Eric J. StanbridgeUniversity of California, IrvineIrvine, CA

James M. TiedjeMichigan State UniversityEast Lansing, MI

Kunio ToriyamaNat. Fed. of Agri. Coop. Assn. of JapanTokyo, Japan

Pablo D.T. ValenzuelaChiron Corp.Emery vine, CA

Thomas E. WagnerOhio UniversityAthens, OH

NOTE: OTA is grateful for the valuable assistance and thoughtful critiques provided by the Advisory Panel members. The viewsexpressed in this OTA report, however, are the sole responsibility of the Office of Technology Assessment.

iv

OTA Project StaffNew Developments in Biotechnology: Patenting Life

Roger C. Herdman, Assistant Director, OTAHealth and Life Sciences Division

Gretchen S. Kolsrud, Biological Applications Program Manager

Gary B. Ellis, Project Director

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

Robyn Y. Nishimi, Analyst

Luther Val Giddings, Analyst1

Blake M. Cornish, Research Analyst2

Editor

Bart Brown, Baltimore, MD

Support Staff

Sharon Kay Oatman, Administrative Assistant

Lori B. Idian, Secretary/Word Processing Specialism

ContractorsAmerican Type Culture Collection, Rockville, MD

Baruch A. Brody, Baylor College of Medicine, Houston

John Kinsman, La Valle, WIWilliam H. Lesser, Cornell University, Ithaca, NY

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

TX

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

Robbins & Laramie, Washington, DC

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

Sandra R. Segal, Washington, DCJane Stein, Washington, DC

Acknowledgment to Other OTA Staff

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

Gladys B. White, Analyst, Biological Applications Program

IT~()@ January 1989.2Though May 1988.

Contents

Chapterl. Summary, Policy Issues, and Options for Congressional Action . . . . . . . . . . . . . . . . . . . . . . 32. Introduction and Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293. Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ......................00.. 374. Patenting of Micro-Organisms and Cells ...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 515. Intellectual Property and Plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 696. Patenting of Animals-Scientific and Regulatory Considerations . . . . . . . . . . . . . . . . . . . . . 937. Patenting of Animals—Economic Considerations . . . . . . . . . . . . . . . . . . . . .. .. ... ... ... ..1158. Patenting of Animals-Ethical Considerations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....1279. Deposit Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

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

A. Selected Sections, 35 United States Code, Patents . . . . . . . . . . . ........................169B. Patents: Questions and Answers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ................172C. Proposed Rules on Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....................174D. Participants, OTA Workshop on Federal Regulation and Animal Patents . . . . . . . . . . ....178E. List of Contractor Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..................179F. Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...,..,........180G. List of Acronyms and Glossary of Terms, . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ............183

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

vi

Chapter 1

Summary, Policy Issues, andOptions for Congressional Action

“Last month the government granted its first patent on something that can look you in the eye. Isthis small step for a mouse a giant leap backward or forward for mankind?”

The New Republic, May 23, 1988.

CONTENTSPage

INTELLECTUAL PROPERTY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Patents . . . . . . . . . . . . .. . . . . . . . . . . . ........0 . . . . . . . . . . . . . . . . 0 . . . . . . . . . . . . . . . . . . . . .Copyrights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Trade Secrets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Plant Variety Protection . . . . . . . . . .. .. .. .. .. .. .. .. .. .. ... ... ... ..$.. . . . . . . . . . . . . . .

PATENTING OF MICRO-ORGANISMS AND CELLS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .The Chakrabarty Case.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Post-Chakrabarty Events and Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

INTELLECTUAL PROPERTY PROTECTION AND PLANTS . . . . . . . . . . . . . . . . . . . . . .Plant Patent Act of 1930.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Plant Variety Protection Act of 1970. . . . . . . . . . . . . . . . . . .. .. .. . .. .. .. .. . . . . . . . . .Utility Patents for Plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .....Comparison of Different Forms of Plant Intellectual Property Protection . . . . . . . . . . . . .

PATENTING OF ANIMALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Producing Transgenic Animals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... ........Species Barriers and Species Integrity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Federal Regulation and Animal Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Economic Considerations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Ethical Considerations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..+

DEPOSIT Considerations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .INTERNATIONAL PROTECTION FOR MICRO-ORGANISMS, PLANTS,

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

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

44557777899

10111112121316161718

212122

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

FiguresFigure Pagel-1. Patents Issues in Biotechnology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...... . . . . . . . . . . . 3l-2. Figures, Mousetrap and Mouse Patents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

TablesTable Pagel-l. Comparison, Utility Patents and Plant Patents . . . . . . ............... . . . . . . . . . . . . . 12l-2. Comparison, Utility Patents and Plant Variety Protection Certificates. . . . . . . . . . . . . . 12l-3. Advantages of Mice for Research in Gene Transplantation. . . . . . . . . . . . . . . . . . . . . . . 14l-4. Arguments For and Against Patenting Transgenic Animals. . . . . . . . . . . . . . . . . . . . . . . 18l-5. Fees, Deposit for Patent Purposes.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21l-6. International Agreements and Biotechnology Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Chapter 1

Summary, Policy Issues, and Options for Congressional Action

Intellectual property protection, which forpurposes of this report is defined as that areaof the law involving patents, copyrights,trademarks, trade secrets, and plant varietyprotection, is not new. The concept of patents,for example, can be traced to ancient Greece,and as developed by English common law, wasdefined as the grant by the sovereign to a subjectunder some authority, title, franchise, or prop-erty. In the United States, the concept ofintellectual property rights can be found in theU.S. Constitution (Art. I; Sec. 8), which givesCongress the power “to promote the Progress ofScience and useful Arts, by securing for limitedTimes to Authors and Inventors the exclusiveright to their respective Writings and Discover-ies.” Subsequently, Congress enacted this Na-tion’s first patent and copyright laws in 1790.

Much in biotechnology, on the other hand,is relatively new. In the past 15 years, dramaticnew developments in the ability to select andmanipulate genetic material have created height-ened interest in the commercial uses of livingorganisms. Biotechnology, broadly defined, in-cludes any technique that uses living organisms(or parts of organisms) to make or modifyproducts, to improve plants or animals, or todevelop micro-organisms for specific uses. Al-though people have used organisms since thedawn of civilization to improve agriculture,animal husbandry, baking, and brewing, it is thenovel uses of such biological techniques (e.g.,recombinant DNA techniques, cell fusion tech-niques, monoclinal antibody technology, andnew bioprocesses for commercial production)that have caught the imagination of manypeople.

Patents have come to be viewed by many asvital to protecting commercial interests andintellectual property rights in biotechnology. In1987 alone, the U.S. Patent and TrademarkOffice (PTO) issued 1,476 biotechnology pat-ents, up from 1,232 in 1986 (figure 1-1). About

6,900 biotechnology patent applications werepending as of January 1988. The wide-reachingpotential applications of biotechnology lie closeto many of the world’s major problems—malnutrition, disease, energy availability andcost, and pollution.

One novel result of the development ofbiotechnology is the creation and patenting ofinventions that are themselves alive. Thepatenting of new life forms raises arguments infavor of and against the issuance of such patents.Most recently, public debate has centered onpatenting of animals. Such debate is to beexpected when an old and relative] y well-settledbody of law must be applied to unforeseentechnologies. The debate over whether topermit the patenting of living organismsfrequently goes beyond simple questions ofthe appropriateness of patents per se, focus-ing instead on the consequences of the com-mercial use of patented organisms or theunderlying merits of biotechnology itself.Discussion regarding the patenting of a geneti-cally engineered organism, for example, canturn to the environmental application of theorganism (e.g., the field test of a micro-organism that is patented), the welfare of the

Figure l-l—Patents Issued in Biotechnology

Number of patents.----I

-3 -

4 ● New Developments in Biotechnology: Patenting Life

organism (if it’s an animal), scientific questions(e.g., whether the method of creating the organ-ism represents a radical departure from tradi-tional scientific or breeding methods), ethicalissues (e.g., the morality of creating novelorganisms or transferring genetic informationbetween species), and economic considerations(e.g., whether the Federal Government shouldfinance biotechnology-related research). Oneinherent difficulty in examining the patent-ing of living organisms is determining whicharguments raised are novel and directlyrelated to patent issues, as opposed to thosequestions that would exist independent ofpatent considerations.

This report, the fifth in a series on newdevelopments in biotechnology,l analyzes someof the legal, scientific, economic, ethical, andpractical considerations raised by the patentingof micro-organisms, cells, plants, and animals.The primary focus of this report is on subjectmatter patentability—what can and cannotbe patented, as enacted by Congress underthe patent statute and interpreted by thecourts. Other issues related to intellectual prop-erty and biotechnology, such as infringementand international harmonization, are beyond thescope of this report.

INTELLECTUAL PROPERTYRooted in the Constitution, intellectual prop-

erty law provides a personal property interest inthe work of the mind. Modern intellectualproperty law consists of several areas of law:patent, copyright, trademark, trade secret, andbreeders’ rights.

Patents

A patent is a grant issued by the U.S.Government giving the patent owner the right toexclude all others from making, using, or selling

The US. Constitution provides that “Congress shall havethe power. . . To promote the Progress of Science anduseful Arts, by securing for limited Times to Authors andInventors the exclusive Right to their respective Writings

and Discoveries.”

the invention within the United States, and itsterritories and possessions, during the term ofthe patent (35 U.S.C. 154). A patent may begranted to whoever invents or discovers anynew, useful, and nonobvious process, machine,manufacture, composition of matter, or any newand useful improvement of these items (35U.S.C. 101). A patent may also be granted onany distinct and new variety of asexuallyreproduced plant (35 U.S.C. 161) or on any new,original, and ornamental design for an article ofmanufacture (35 U.S.C. 171).

The first patent act was enacted by Congressin 1790, providing protection for “any new anduseful art, machine, manufacture, or composi-tion of matter, or any new and useful improve-ment [thereof].” Subsequent patent statuteswere enacted in 1793, 1836, 1870, and 1874,which employed the same broad language as the1790 Act. The Patent Act of 1952 replaced “art”with “process” as patentable subject matter (35

]~ller ~ep~~ ~ the ~~s~ent of New &velopments in Biotechnology Me: ownersh@ Of Hnn TiSSUeS uti Ceffs, OTA-BA-337(Washington, DC: U.S. Government Printing Office, March 1987); Public Perceptions of Biotechnology, OTA-BP-BA45 (Springfield, VA:National Tmhnical Information Services, May 1987); Fie/d-Tesring Engineered Organisms: Genetic and Ecological Issues, OTA-BA-350(Lancaster, PA: ‘kchnomic Publishing Co., Inc., May 1988); US. Investment in Biorechnofogy, OTA-BA-3tX) (Springfield, VA: National lkchnicalInformation Semices, July 1988).

Chapter 1---Summary, Policy Issues, and Options for Congressional Action ● 5

U.S.C. 101). The Committee Reports accompa-nying the 1952 Act demonstrate that Congressintended patentable subject matter to include“anything under the sun that is made by man.”However, the Supreme Court has held that lawsof nature, physical phenomena, and abstractideas are not patentable.

Patents have many of the attributes of per-sonal property (35 U.S.C. 261). Property isgenerally viewed as a bundle of legally pro-tected interests, including the right to possessand to use, to transfer by sale and gift, and toexclude others from possession. Patents aredesigned to encourage inventiveness by grant-ing to inventors and assignees a limited propertyright—the right to exclude others from practic-ing the invention for a period of 17 years. Inreturn for this limited property right, the inven-tor is required to file a written patent applicationdescribing the invention in full, clear, concise,and exact terms, setting forth the best modecontemplated by the inventor, so as to enableany person skilled in the art of the invention tomake and use it. Although a patent excludesothers from making, using, or selling theinvention, it does not give the patent ownerany affirmative rights to do likewise. As withother forms of property, the right to make,use, or sell a patented invention may beregulated by Federal, State, or local law.

Patents are more difficult to obtain than otherforms of intellectual property protection. Allapplications are examined by PTO, which isresponsible for issuing patents if all legalrequirements are met. Once obtained, the en-forceability of a utility patent is maintained bythe payment of periodic maintenance fees.

Copyrights

Copyrights, like patents, find their domesticroots in the Constitution, “. . . securing forlimited Times to Authors. . . the exclusive rightto their . . . Writings . . .“ Historically, the term“writings” has been interpreted broadly. Thecopyright statute (17 U.S.C. 102(a)) defines a

writing as that which is “fixed in any tangiblemedium of expression, now known or laterdeveloped, from which they can be perceived,reproduced, or otherwise communicated, eitherdirectly or with the aid of a machine or device.”Copyright protection is expressly provided foreight categories of works: literary; musical;dramatic; pantomimes and choreographic; picto-rial, graphic, and sculptural; motion pictures andother audiovisual works; sound recordings; andcomputer programs.

A copyright does not protect an idea, butrather the expression of the idea. Copyrightsalso do not extend to any procedure, process,system, method of operation, concept, principle,or discovery, regardless of the form in which itis described, explained, illustrated, or embodied(17 U.S.C. 102(b)). Copyright protects thewritings of an author against copying, andprotects the form of expression rather than thesubject matter of the writing.

Trademarks

A trademark is a distinctive mark, motto,device, or emblem that a manufacturer stamps,prints, or otherwise affixes to goods, so they canbe identified in the market, and their source ororigin be vouched for. The law of trademarks isgoverned by both Federal and State law. Federaltrademark law stems from the Trademark Act of1946 (15 U.S.C. 1115-1127, popularly knownas the Lanham Act), which provides for theregistration of trademarks, service marks, certifi-cation marks, and collective marks. Each Statehas an administrative registration system that isgenerally parallel to but autonomous fromsystems in other States and from the Federalsystem. Prior to 1989, Federal trademark registra-tion had a term of 20 years, which could berenewed if continuous use of the mark wasshown. Under new law (Public Law 100-667),however, Federal trademark registrations have arenewable term of 10 years and a party can applyfor Federal registration based on an “intent touse” the mark.


Thomas Jefferson authored the first U.S. patent statute, enacted by Congress in 1790.The patent law embodied his philosophy that “ingenuity should receive a liberal encouragement.”


Trade Secrets

Trade secret protection is governed by Statelaw, and extends to information used in a tradeor business that is maintained secret by its ownerand provides a competitive business advantageover those not having the information. A plan,process, tool, mechanism, chemical compound,customer list, and formula are all examples ofinformation that can be maintained as tradesecrets. Affirmative steps must be taken by anemployer to keep information secret (e.g., bylimiting access or by contract), so that the secretis disclosed in confidence only to those havinga reasonable need to know (e.g., employees).Once the information becomes publicly known,it loses its status as a trade secret.

U.S. trade secret law has been fashioned topromote two beneficial ends. It encouragescommercial morality and fair-dealing, and itencourages research and innovation. It does not,however, promote disclosure, which is one ofthe end results of a patent.

Plant Variety Protection

Plant variety protection provides patent-likeprotection for breeders of certain sexually repro-duced plants. Like patents, plant variety protec-tion is governed by Federal statute (see subse-quent discussion on Plant Variety ProtectionAct). However, the plant variety protectionstatute is administered by the U.S. Departmentof Agriculture (USDA), not PTO.

PATENTING OFMICRO-ORGANISMS AND CELLS

Patents on biotechnological processes datefrom the early days of the United States. LouisPasteur received a patent for a process offermenting beer. Acetic acid fermentation andother food patents date from the early 1800s,while therapeutic patents in biotechnology wereissued as early as 1895.

The development of recombinant DNA tech-nology (rDNA)—the controlled joining of DNA

from different organisms—has resulted ingreatly increased understanding of the geneticand molecular basis of life. Following the firstsuccessful directed insertion of recombinantDNA into a host micro-organism in 1973,scientific researchers began to recognize thepotential for directing the cellular machinery todevelop new and improved products and proc-esses in a wide variety of industrial sectors.Many of these products were micro-organisms(microscopic living entities) or cells (the small-est component of life capable of carrying on allessential life processes). With the developmentof recombinant DNA technology, the potentialof patenting the living organism resulting fromthe technology arose.

Prior to 1980, PTO would not grant patentsfor such inventions, deeming them to be “prod-ucts of nature” and not statutory subject matteras defined by 35 U.S.C. 101. Although patentapplications were rejected if directed to livingorganisms per se, patent protection was grantedfor many compositions containing living things(e.g., sterility test devices containing livingmicrobial spores, food yeast compositions, vac-cines containing attenuated bacteria, milky sporeinsecticides, and various dairy products). In theabsence of congressional action, it took acatalytic court decision to clarify the issue ofpatentability of living subject matter.

The Chakrabarty Case

The Supreme Court’s single foray into bio-technology occurred in 1980 with its ruling inthe patent law case of Diamond v. Chakrabarty.Chakrabarty had developed a genetically modi-fied bacterium capable of breaking down multi-ple components of crude oil. Because thisproperty was not possessed by any naturallyoccurring bacteria, Chakrabarty invention wasthought to have significant value for cleaning upoil spills.

Chakrabarty’s claims to the bacteria wererejected by PTO on two grounds:


micro-organisms are “products of nature;”andas living things, micro-organisms are notpatentable subject matter under 35 U.S.C.101.2

Following two levels of appeals, the case washeard by the U.S. Supreme Court, which in a 5-4ruling, held that a live, human-made micro-organism is patentable subject matter underSection 101 as a “manufacture" or “composi-tion of matter.” The court reached severalconclusions in analyzing whether the bacteriacould be considered patentable subject matterwithin the meaning of the statute:

●

●

●

●

●

The plain meaning of the statutory lan-guage indicated Congress’ intent that thepatent laws be given wide scope. The terms“manufacture” and “composition of mat-ter” are broad terms, modified by theexpansive term “any.”The legislative history of the patent statutesupported a broad construction that Con-gress intended patent protection to include“anything under the sun made by man.”Although laws of nature, physical phenom-ena, and abstract ideas are not patentable,Chakrabarty’s micro-organism was a prod-uct of human ingenuity having a distinctname, character, and use.The passage of the 1930 Plant Patent Act(affording patent protection for certainasexually reproduced plants) and the 1970Plant Variety Protection Act (providingprotection for certain sexually reproducedplants) does not evidence congressionalunderstanding that the terms “manufac-ture” or “composition of matter” do notinclude living things.The fact that genetic technology was unfore-seen when Congress enacted Section 101does not require the conclusion that micro-organisms cannot qualify as patentable

●

subject matter until Congress expresslyauthorizes such protection.Arguments against patentability based onpotential hazards that may be generated bygenetic research should be addressed toCongress and the executive branch forregulation or control, not to the judiciary.

Post-Chakrabarty Events and Trends

The Chakrabarty decision and subsequentactions by Congress and the executive branchprovided great economic stimulus to patent-ing of micro-organisms and cells, which inturn provided stimulus to the growth of thebiotechnology industry in the 1980s. In addi-tion to the Chakrabarty decision, revisions inFederal patent policy promoted increased pat-enting of inventions in general, including livingorganisms and related processes. The Patent andTrademark Amendments of 1980 (Public Law96-517) as amended in 1984 (Public Law98-620) encourage the patenting and com-mercialization of government-funded inven-tions by permitting small businesses and non-profit organizations to retain ownership ofinventions developed in the course of federallyfunded research.

These policies, which gave statutory prefer-ence to small businesses and nonprofit organiza-tions, were extended to larger businesses byExecutive order in 1983. The Technology Trans-fer Act of 1986 (Public Law 99-502) grantedFederal authority to form consortia with privateconcerns. An Executive order issued in 1987further encouraged technology transfer pro-grams, including the transfer of patent rights togovernment grantees.

Increased patenting of biotechnology inven-tions has led to litigation, primarily related topatent infringement issues. Already, patent bat-tles are being fought over interleukin-2, tissueplasminogen activator, human growth hormone,

2S~[ion 101. Inventions palcn~~bk. Whoever invents or discovers any new and useful process, machine, manufacture, or composition Of matter, orany new and useful improvement thereof, may obtain a patent thercfor, subject to the conditions and requirements of this title.

Chapter 1--Summary, Policy Issues, and Options for Congressional Action ● 9

alpha interferon, factor VIII, and use of dualmonoclinal antibody sandwich immunoassayin diagnostic test kits. It is likely that patentlitigation relating to biotechnology will increasegiven the complex web of partially overlappingpatent claims, the high value of products, theproblem of prior publication, and the fact thatmany companies are pursuing the same prod-ucts.

One negative trend arising from the increasein patent applications is the inability of PTO toprocess biotechnology applications in a timelymanner. The number of these applications hasseverely challenged the process and examina-tion capabilities of PTO. In March 1988, PTOreorganized its biotechnology effort into aseparate patent examining group. As of July1988,5,850 biotechnology applications had notyet been acted on. Currently, approximately15 months lapse, on average, before examina-tion of a biotechnology application initiates,and an average of 27 months passes beforethe examination process is completed bygrant of the patent or abandonment of theapplication. Turnover among patent exam-iners, lured to the private sector by higher pay,is cited as a significant reason for the delay inreviewing patents.

INTELLECTUAL PROPERTYPROTECTION AND PLANTS

To date, plants are the sole life form forwhich Congress has expressly permitted in-tellectual property protection. Federal statu-tory protection of ownership rights in newplants has existed for almost 60 years. Today,two Federal statutes, a decision by PTOBoard of Appeals, and recognized tradesecret law provide a variety of protection forinventions that constitute plant life.

Plant Patent Act of 1930

Prior to 1930, plant breeding and researchdepended primarily on federally funded agricul-tural experiment stations and the limited endeav-

ors of amateur breeders to develop new disease-resistant, cold-tolerant, or medicinal varieties.Financial incentives for private sector breederswere inadequate, since the breeders’ sole finan-cial reimbursement was through high salesprices of comparatively few reproductions dur-ing the first 2 or 3 years after the variety’s initialavailability. Once a variety left a breeders’hands, it could be reproduced in unlimitedquantity by anyone.

In 1930, Congress enacted the Plant PatentAct (PPA) to extend patent protection to newand distinct asexually propagated varieties otherthan tuberpropagated plants. The PPA was thefirst and remains the only law passed byCongress specifically providing patent pro-tection for living matter.

Design, plant patent 641, rose plant.


except for asexually reproduced plants coveredby PPA.

The Plant Variety Protection Act (PVPA) wasenacted by Congress in 1970 to encourage thedevelopment of new, sexually reproduced plantsby providing an economic incentive for compa-nies to undertake the costs and risks inherent inproducing new varieties and hybrids. AlthoughPVPA is not formally part of the patent act andis not administered by PTO, the protection itprovides to breeders of new plant varieties iscomparable to patent protection. Upon applica-tion to, and examination by USDA, a plantvariety certificate may issue on any novelvariety of sexually reproduced plant (other thanfungi, bacteria, or first generation hybrid).Amendments in 1980 added protection for sixvegetable crops, and extended coverage to 18years so PVPA would be consistent with UPOVprovisions.

PVPA includes two important exclusions to acertificate holder’s protection:

. research exemption that precludes a breed-er from excluding others from using theprotected variety to develop new varieties;and

. farmer’s exemption that allows individu-als whose primary occupation is growingcrops for sale, for other than reproductivepurposes, to save protected seed for use ontheir farm or for sale to people whoseprimary occupation also is growing crops.

From 1970 through 1988, 2,783 applicationsfor plant variety protection certificates werefiled at USDA for some 100 different crops. ByDecember 31, 1988, 2,133 certificates had beenissued and 274 applications were pending.Another 376 applications have been abandoned,withdrawn, declared ineligible, or denied.

Utility Patents for Plants

Although Diamond v. Chakrabarty held thatliving things, namely micro-organisms, werepatentable, the specific issue of whether utility

patents could be issued for plants was notaddressed by the Supreme Court. Subsequently,in 1985, PTO’s Board of Patent Appeals andInterferences ruled in Ex parte Hibberd that acorn plant containing an increased level oftryptophan, an amino acid, was patentablesubject matter under 35 U.S.C. 101.

Since the Hibberd ruling, utility patents havebeen granted on plants, even though protectionwas already available under PPA or PVPA.There are no statutory exemptions from in-fringement for a plant utility patent—in contrastto PVPA, the holder of a plant utility patent canexclude others from using the patented varietyto develop new varieties.

Comparison of Different Forms of PlantIntellectual Property Protection

Utility patents, when the requirements can besatisfied, generally offer broader protection forthe same plant than would be available underPPA or PVPA (tables 1-1 and 1-2). Althoughtrade secret protection is available, plants are bynature ill-suited to such protection since theyoften cannot be confined to an enclosed space,and some plants are easily reproduced andgrown.

An OTA survey of universities, nurseries,seed companies, and biotechnology firms foundan array of opinions on intellectual propertyprotection of plants, especially regarding utilitypatents. Many respondents viewed utility pat-ents as beneficial and necessary to provideadequate protection for new varieties. Someseed companies, however, expressed concernabout utility patents, including: restriction ofgermplasm, industry concentration, and domi-nation of the industry by large conglomerates.

From a practical perspective, it is unclear thatany single approach to protecting plant intellec-tual property will be the most productive.Accordingly, present strategies involve multipleapproaches based on several factors, includingcrop type, farmer’s exemption under PVPA,


Table l-l-Comparison, Utility Patents andPlant Patents .

[Statute]Utility patents Plant patents(35 U.S.C. 101) (35 U.S.C. 161)

No limit on number of claims Limited to single claimCan cover plant parts May not cover plant parts

(e.g., flowers, fruits, nuts)Can cover sexually Cannot cover sexually

reproduced varieties reproduced varietiesStringent disclosure required Less stringent disclosure requiredFees for patent filing and Fees for patent filing and

maintenance higher than maintenance lower thanfees for plant patents fees for utility patents

SOURCE: OffKX of T-logy Assessment, 1989.

Table 1-2-Comparison, Utility Patents andPlant Variety Protection Certificates

[Statute]Plant variety protection

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

Not limited to a single variety Limited to a specific varietyExtensive scope of Limited to a specific variety

protection (e.g., plant,seeds, plant parts, genes,specific traits, processes)

Can cover asexually Cannot cover asexuallyreproduced varieties reproduced varieties

No farmer’s exemption Farmer’s exemptionNo research exemption Research exemptionProtection commences when Protection commences when

patent issues certificate is filed.SOURCE: Office of Technology Assessment, 1989.

litigation, licenses, research exemption underPVPA, and deposit.

PATENTING OF ANIMALS

In April 1987, the Board of Patent Appealsand Interferences ruled that polyploid oysterswere patentable subject matter. Subsequently,PTO announced that it would henceforth con-sider nonnaturally occurring nonhuman mul-ticellular living organisms, including animals,to be patentable subject matter under generalpatent law. This statement initiated broad debateand the introduction of legislation concerningthe patenting of animals.

The first animal patent was issued in April1988 to Harvard University for mammals ge-netically engineered to contain a cancer-causinggene (U.S. 4,736,866). Exclusive license topractice the patent went to E.I. du Pont deNemours & Co., which was the major sponsorof the research. The patented mouse was geneti-cally engineered to be unusually susceptible tocancer, thus facilitating the testing of carcino-gens and of cancer therapies. Specifically, thepatent covers “a transgenic nonhuman eukaryo-tic animal (preferably a rodent such as a mouse)whose germ cells and somatic cells contain anactivated oncogene sequence introduced into theanimal. . . which increases the probability of thedevelopment of neoplasms (particularly malig-nant tumors) in the animal.” In November 1988,du Pont announced its intention to begin sales ofthe patented “oncomouse” in early 1989. The1987 PTO policy and the 1988 issuance of thefirst patent on a transgenic animal spurred publicdebate on scientific, regulatory, economic, andethical issues.

Producing Transgenic Animals

Most potentially patentable animals are likelyto be transgenic animals produced via recombi-nant DNA techniques or genetic engineering.Transgenic animals are those whose DNA, orhereditary material, has been augmented by

Chapter 1--Summary, Policy Issues, and Options for Congressional Action . 13

adding DNA from a source other than parentalgermplasm, usually from different animals orfrom humans.

Laboratories around the world are conductingresearch that involves inserting genes fromvertebrates (including humans, mammals, orother higher organisms) into bacteria, yeast,insect viruses, or mammalian cells in culture. Avariety of techniques, most developed fromearly bacterial research, can now be used toinsert genes from one animal into another. Thesetechniques are known by a number of exoticnames: microinjection, cell fusion, electropo-ration, retroviral transformation, and others. Ofthe currently available scientific techniques,microinjection is the method most commonlyused and most likely to lead to practicalapplications in mammals in the near future.Other methods of gene insertion may becomemore widely used in the future as techniquesare refined and improved. If protocols forhuman gene therapy, now being developed inanimal models, or laboratory cultures of mam-malian cells prove successful and broadly adapt-able to other mammals, other gene insertiontechniques could supplant microinjection.

Although the number of laboratories workingwith transgenic animals remains small (no morethan a few hundred, worldwide), and researcherswith the required skill and experience are notcommon, the number of research programsusing these techniques has grown steadily inrecent years. For reasons of convenience, muchresearch involving transgenic mammals contin-ues to be done using mice, although programsusing several larger mammals have made sig-nificant progress. (see table 1-3). It is antici-pated that some animals of research utility orsubstantial economic importance will be-come more common as subjects of transgenicmodifications in the near future (within 5 to10 years). Beyond mice, the major researchefforts involving transgenic modificationsfocus on cattle, swine, goats, sheep, poultry,and fish.

Producing transgenic animals by microinjec-tion, although tedious, labor intensive, andinefficient (only a small fraction of injected eggsdevelop into transgenic animals), comparesfavorably in at least three respects with tradi-tional breeding techniques:

●

●

●

The rapidity with which a specific gene canbe inserted into a desired host means thatthe time it takes to establish a line ofanimals carrying the desired trait ismuch reduced.The specific gene of interest can be trans-ferred with great confidence, if not effi-ciency, and if proper purification protocolsare followed, without any accompanying,unwanted genetic material.With proper preparation, genes from al-most any organism can be inserted intothe desired host, whether it is a mouse orsome other animal. Historically, geneticmaterial exchanged by classical hybridiza-tion (crossbreeding) could only be trans-ferred between closely related species ordifferent strains within a species.

If there is a fundamental difference arisingfrom the new techniques, it is that breedershave greatly augmented ability to move genesbetween organisms that are not close geneticrelatives (e.g., human and mouse, or humanand bacterium). Most transgenic animal re-search in the near future will likely focus ontraits involving a single gene. Manipulation ofcomplex traits influenced by more than onegene, however, such as the amount of growthpossible on a limited food regimen, or behav-ioral characteristics, will develop more slowly(perhaps within 10 to 30 years) because ofgreater technical difficulty and the current lackof understanding of how such traits are con-trolled by genes.

Species Barriers and Species Integrity

Some concern has been raised over negativeimpacts transgenic animals might have on theirown species, based on the assertion that transfer-


Table 1-3-Advantages of Mice for Research inGene Transplantation

. A warm blooded mammal with many similarities to humans ingenetics and physiology.

. Small organism, easy to maintain in the laboratory, can beraised in substantial numbers easily and quickly, at modestexpense.

● Compared to other mammals, genetics and physiology verywell known.

. Available in a variety of different, well characterized, geneticallyconsistent lines for use in different types of studies.

SOURCE: Office of TectwIology Assessment, 1989.

ring genes between species transgresses naturalbarriers between species, and thus violates their“integrity” or identity.

Modem biologists generally think of speciesas reproductive communities or populations.They are distinguished by their collective mani-festation of ranges of variation with respect tomany different characteristics or qualities simul-taneously. The parameters that limit theseranges of variation are fluid and variable them-selves: different species may have substantiallydifferent genetic population structures, and agiven species may look significantly different inone part of its range than it does in another whilestill demonstrably belonging to the same genepool or reproductive community. Althoughresearch into the nature of species continues tobe vigorous, marked by much discussion anddisagreement among specialists, general agree-ment among biologists exists on at least onepoint: nature makes it clear that there is nouniversal or absolute rule that all species arediscretely bounded in any generally consis-tent manner.

The issue of species integrity is more com-plex and subtle than that of species barriers. If aspecies can be thought of as having integrity asa biological unit, that integrity must, because ofthe nature of species, be rooted in the identity ofthe genetic material carried by the species.Precisely how a species might be definedgenetically is not yet apparent.

Any genetic definition of species, groundedin the perception of a species as a dynamicpopulation, rather than a unit, cannot be simple;it must be statistical and complex. Therefore, toviolate the “integrity” of a species it is notsufficient to find a particular gene, oncewidespread throughout the species, now en-tirely replaced by a different gene. Suchchanges occur repeatedly throughout the evolution-ary history of a lineage and are described asmicroevolutionary. These changes are usuallyinsufficient to alter a species in any fundamen-tal way or to threaten any perceived geneticintegrity.

If it is possible to challenge the integrity of aspecies, it would have to be by changing ordisrupting something fundamental in its geneticarchitecture, organization, or function. Mam-mals like mice, cattle, or humans may containfrom 50,000 to 100,000 or more genes. What-ever it is in the organization and coordination ofactivity between these genes that is fundamentalto their identity as species, it is not likely to bedisrupted by the simple insertion or manipula-tion of the small number of genes (fewer than20) that transgenic animal research will involvefor the foreseeable future.

The right of a species to exist as a separate,identifiable creature has no known founda-tion in biology. Species exist in nature asreproductive communities, not as separate crea-tures. The history of systematic and taxonomy(the disciplines of naming and describing spe-cies) demonstrates that species’ existence hasoften been independent of scientists’ shiftingunderstanding or abilities to discern this exis-tence. Furthermore, most of the domestic ani-mals that are now the subjects of transgenicresearch (with the possible exception of somefish), and are likely to be for the foreseeablefuture, are already the products of centuries, andin many cases millennia, of human manipula-tion.


Photo credit: Library of Congress

Line drawing, early 1900s, Old Jersey Cow and Improved Jersey Cow.


Federal Regulation and Animal Patents

To gain an understanding of the potential useand regulation of genetically altered animalsthat might be patented, OTA asked selectedFederal agencies the following questions:

How are genetically altered animals cur-rently used in research, product develop-ment, and mission-oriented activities con-ducted or funded by your agency?What are the potential uses of such animalsduring the next 5 years?How does (or would) your agency regulatesuch animal use? What statutes, regula-tions, guidelines, or policy statements arerelevant?

Several agencies currently use transgenicanimals. The National Institutes of Health iscurrently the largest user of such animals forbiomedical research projects. USDA has con-ducted research on the genetics of animals formany years. USDA’s Agricultural ResearchService reported projects involving the use ofgrowth hormone in sheep and swine, andchickens engineered by recombinant DNA tech-nology to be resistant to avian leukosis virus.USDA’s Cooperative Research Service is in theearly stages of supporting extramural researchprojects involving genetically engineered ani-mals. The National Science Foundation (NSF)currently funds research involving transgenicanimals in a range of experiments, all involvinglaboratory animals. With the use of transgenicanimals becoming central to whole lines ofinvestigation, NSF expects that work with suchanimals will increase. The Agency for Interna-tional Development (AID) funds research in-volving conventional and transgenic animals atinternational research centers that are onlypartially funded by the United States. Accord-ingly, AID has minimal control over suchresearch activities.

Several Federal agencies regulate experi-mental use or commercial development ofgenetically altered animals. Because current

statutes regulate various uses and protections foranimals, no single Federal policy governs alluses of genetically altered animals. In theabsence of a single policy, Federal agencies willrely on existing statutes, regulations, and guide-lines to regulate transgenic animal research andproduct development. Current federallyfunded research efforts could lead to patentson animals. The patentability of an animalhowever, does not affect the manner in whichthe animal would be regulated by any Fed-eral agency.

Economic Considerations

Economic considerations will influence theorder in which different transgenic animals areproduced for commerce. Transgenic animalsused for biomedical research are likely to bedeveloped first, primarily due to extensiveresearch in this area. Transgenic agriculturalanimals are also likely to be produced, although

USDA animal physiologist Dr. Vernon Pursel examines apig born with a bovine growth hormone gene inserted in theembryo. Scientists hope to produce leaner and fastergrowing pigs using less feed. To date, these animals havebeen lethargic and have had health problems. As part of along term research effort, USDA hopes current studies willlead to better understanding of how growth hormone works

and how to better control it.

Chapter 1-Summary, Policy Issues, and Options for Congressional Action ● 17

large-scale commercial production of such live-stock and poultry is unlikely in the near future(5 to 10 years).

The largest economic sectors likely to beinfluenced by animal patents are the differ-ent markets for agricultural livestock andsome sectors of the pharmaceutical industry.The principal agricultural markets involve poul-try, dairy, and red meat. These markets areorganized quite differently, and are subject todifferent degrees of economic concentration.Poultry is most concentrated (though still dif-fuse by the standards of other industries, such asautomobiles) and the dairy and red meat sectorsmuch more diffuse. Different economic forcesare important in markets as well: Federal pricesupports are of major importance in the dairymarket, while the market for poultry is moreopen and competitive.

It is difficult to predict the manifoldconsequences of any particular approach toprotecting intellectual property, especiallyacross so wide a range of economic activity asthat spanned by patentable animals. Thisrange embraces diverse sectors of the agricul-tural livestock markets, pharmaceutical andother chemical production, as well as academicresearch or industrial testing. The economics ofpatenting and the effect on inventors and con-sumers will be determined by the potential useof the animal, its market, its reproduction rate,and its relative value.

The existence of animal patents and thedegree to which they are employed in thedifferent markets may introduce some neweconomic relationships. It is not now clear thatthese are likely to have any substantially adverseeffects on the major markets or existing marketforces. The same types of pressures that havedriven economic choices in the past are likelyto continue to dictate them in the future. If aninnovation increases costs (e.g., if a patentedanimal costs more than the unpatented alterna-tive) it is unlikely to be adopted unless it

commensurately increases outputs or prod-uct values. It therefore seems that although costsavings can be anticipated to follow from animalpatenting in some areas (e.g., pharmaceuticalproduction or drug testing), innovations attribut-able to patented animals are likely to advancemore slowly in low margin operations such asraising beef cattle. -

In some cases, efficient alternatives to protec-tion of intellectual property via patents arefeasible. Trade secrets or contractual arrange-ments might serve well where the animalsinvolved have a high intrinsic value and arelimited in number (e.g., animals used for phar-maceutical production). When faced with thecomplexity of the markets for pork or beefproduction, however, such alternatives areclearly less practical, although the same com-plexity complicates any scheme for enforcementor royalty collection associated with patentinganimals per se.

Ethical Considerations

A number of ethical issues have been raisedin regards to patenting animals. Many of thesearguments focus on the consequences that couldoccur subsequent to the patenting of animals.Other arguments focus on religious, philosophi-cal, spiritual, or metaphysical grounds. Thesearguments have been used to support and opposethe concept of animal patenting (see table 1-4).

Many arguments relating to the consequencesof animal patenting are difficult to evaluatesince they are speculative, relying on factualassertions that have yet to occur or be proven.Arguments based largely on theological, philo-sophical, spiritual, or metaphysical considera-tions are likewise difficult to resolve, since theyusually require the assumption of certain pre-suppositions that may not be shared by otherpersons. Thus, such arguments are not likely tobe reconciled with those persons holding oppos-ing and often strongly held beliefs.


Table 14-Arguments For and Against PatentingTransgenic Animals

Arguments for patenting transgenic animals:● Patent law regulates inventiveness, not commercial uses of

inventions● Patenting promotes useful consequences, such as new prod-

ucts and research into solutions of problems.. Patenting is necessary if the Nation’s biotechnology industry is

to be able to compete internationally.. If patenting is not permitted, inventors will resort to trade secret

protection, which could hinder the sharing of useful information.● Patenting rewards innovation and entrepreneurship.

Arguments against patenting animals:

● Patenting raises metaphysical and theological concerns (e.g.,promotes a materialistic conception of life, raises issues of thesanctity of human worth, violates species integrity).

● Patenting will lead to increased animal suffering and inappropri-ate human control over animal life.

● Other countries do not permit the patenting of animals, leadingto potential adverse economic implications for the Third World.

. Patenting promotes environmentally unsound policies.

. Patenting produces excessive burdens on American agricul-ture (increased costs to consumers, concentration in produc-tion of animals, payment of royalties for succeeding genera-tions of animals).

SOURCE: Ofhce of Twhnology Assessment, 1989.

Most arguments that have been raisedboth for and against the patenting of animalsconcern issues that would be materiallyunchanged whether patents are permitted ornot. Most arguments center on issues thatexisted prior to the current patenting debate(e.g., animal rights, the effect of high technol-ogy on American agriculture, the distribu-tion of wealth, international competitiveness,the release of novel organisms into the envi-ronment). It is unclear that patenting per sewould substantially uses or relates to animals.

Many concerns about the consequences ofpatenting can be addressed by appropriate regula-tions or statutes, rather than by amendments topatent law. Other arguments, particularly thoseof theological, philosophical, spiritual, or meta-physical origin, need to be debated more fullyand articulated more clearly.

DEPOSIT CONSIDERATIONSIn 1949, PTO began recommending that

patent applications for inventions involvingmicro-organisms should include the deposit ofthe pertinent micro-organism with a culturecollection. Although not a formal requirement,patent examiners advised applicants that incases where words alone were not sufficient todescribe the invention adequately, a deposit wasadvisable.

Currently, patent applications for inventionsinvolving micro-organisms, plasmids, vectors,cells, plant tissues, seeds, and other biologicalmaterials that are not generally available orreproducible without undue experimentation bypersons skilled in the pertinent field are oftensupported by a deposit in a recognized patentdepository.

Biotechnology presents a unique administra-tive issue in that it is the only art knownwhere words alone may be incapable ofdescribing an invention sufficiently to enableone skilled in the art to make and use it in areproducible manner. Whether or not a depositis necessary is a decision made on a case-by-case basis. The decision generally takes intoaccount the reproducibility of the inventionbased on a written description alone, the level ofskill in the art, the teachings of the prior art, andthe availability of the starting materials. Al-though not automatically requiemployed in many cases to meet the requirementthat a patent provide enablement or the bestmode of practicing an invention.

PTO first published guidelines on the depositof micro-organisms in 1971. In 1977, establish-ment of the Budapest Treaty required contract-ing states that allow or require the deposit ofmicro-organisms as part of their patent proce-dure to recognize the deposit of a micro-organism with any International DepositaryAuthority. In 1985, the Court of Appeals for theFederal Circuit held that the enablement pro-vision of the patent statute did not require a

Chapter 1-Summary, Policy Issues, and Options for Congressional Action ● 19

Figure 1-2-Figures, Mousetrap and Mouse Patents

FIG I

/

FIG 3

Above--Two figures were submitted for U.S. Pat-ent No. 661,068, the mousetrap, which was issuedin 1900. The invention is “a trap of simple construc-tion which can be manufactured inexpensively” inwhich “the bait cannot be removed without releasingthe engaging jaw.”

FIG 4

FIG 5

FIG 6

Right column—Eight figures were submitted forU.S. Patent No. 4,736,866, “Transgenic Non-Human Mammals,” which was issued in 1988. Theinvention “features a transgenic non-human eu-karyotic animal (preferably a rodent such as amouse) whose germ, cells and somatic cells containan activated oncogene sequence introduced intothe animal, or an ancestor of the animal, at anembryonic stage.” The eight figures represent plas-mids, activated oncogene fusions, and a probe.

SOURCE Office of Technology Assessment, 1989; adapted from U.S. Patents 661,068 (1900) and 4,736,866 (1988)

20 . New Developments in Biotechnology: Patenting Life

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

Cloned strawberry plants in a growth chamber.

deposit in a recognized depository by the filingdate of the patent application, but only beforethe issuance of the patent. In 1988, PTOpublished proposed rules for deposit of bio-logical materials for patent purposes (see app.C). These rules, if adopted formally by PTO,will assist the inventor and the depository indefining the position of PTO on deposits.

A culture depository accepts, maintains, anddistributes cultures of micro-organisms, viruses,cells, or other genetic-type material. The depositof seeds and plant tissue culture has becomeestablished practice. A depository maybe publicor private; nonprofit or for profit. The main

function of a public culture depository is preserva-tion and distribution of reference cultures thatserve as standards for users in the scientific andeducational communities (table 1-5).

The new patentable status of animalsraises the possibility that PTO will encourageor require deposit of animal forms to supportcertain patent applications. To date, no ani-mal has been deposited with a depository. Inthe case of the first animal patent granted (U.S.4,736,866), the deposit requirement was satis-fied not by deposit of a mouse or other animal,but by deposit of the cancer-causing genesintended for transfer into an animal. DNAplasmids bearing those genes were deposited. Inthe patent, the inventors describe detailed instruc-tions for inserting those genes into mouseembryos to produce transgenic mice.

The patenting of animals could cause prob-lems for a depository if deposit of the animal isrequired. Currently no depository is willing toaccept the deposit of animals for the followingreasons:

The cost of facilities and expertise thatmight be needed to maintain animals wouldbe prohibitive.A depository maintaining animals for pat-ent purposes might be subject to adversepublicity.If it were necessary to maintain the animal,a depository might need to grow anothersample to prove the replication of theanimal. After growth of the animal, dis-posal might not be acceptable, and, there-fore, maintenance of progeny would benecessary.How would a depository make samples ofthe animal available? Grow more animals?Maintenance of many animal types for thecurrent required period of 30 years wouldnot be practical or possible, as their lifespans are shorter than 30 years.

The deposit of animal embryos may notpresent the same difficulties as long as the

Chapter 1--Summary, Policy issues, and Options for Congressional Action . 21

Table 1-5-Fees, Deposit for Patent Purposes

Fee, 30 years of maintenance and viability testing on a culturedeposited for patent Purposes:American Type Culture Collection

Rockville, MD . . . . . . . . . . . . . . . . . . . . . . . . . . . $670In Vitro International, Inc.

Linthicum, MD . . . . . . . . . . . . . . . . . . . . . . . . . . $610Northern Regional Research Laboratory

Peoria. IL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $500SOURCE: Office of Technology Assessment, 1988.

embryos can be successfully frozen and recov-ered. To date, at least 13 species of animalembryos (cattle, mice, rats, rabbits, hamsters,sheep, goats, horses, cats, antelopes, and threespecies of nonhuman primates) have been suc-cessfully frozen and recovered.

INTERNATIONAL PROTECTIONFOR MICRO-ORGANISMS,

PLANTS, AND ANIMALSIntellectual property protection of micro-

organisms, plants, animals, and biological proc-esses is of increasing concern to the worldcommunity. Subject matter patentability is animportant consideration facing an inventor whowants to patent living matter in a foreigncountry.

In addition, international subject matter pat-entability is one element of the current debate inthe United States regarding the scope of patent-able subject matter. For example, those whofavor patenting of animals point out that othercountries either permit or do not expresslyexclude the possibility of such patents. Oppo-nents of patenting of animals conclude that othernations expressly exclude or have yet to issuepatents on animals.

International Agreements andLaws of Other Countries

Several international treaties and agreementsare relevant to biological inventions (table 1-6).These agreements are efforts by member coun-tries to harmonize various procedural and sub-

stantive elements of international patent prac-tice. The patenting of animals is not the subjectof any existing treaty. Of the existing agree-ments, the European Patent Convention (EPC)is most relevant to the substantive issue ofpatenting plants and animals.

Article 52(1) of EPC defines patentablesubject matter as inventions which are suscepti-ble to industrial application, which are new, andwhich involve an inventive step.

This definition is extraordinarily general andbroad. Rather than providing a precise, positivedefinition of patentable subject matter, EPCinstead takes the approach of narrowing thisbroad definition by explicitly specifying nega-tive restrictions thereto. One such exclusion isArticle 53(b), which stipulates that Europeanpatents will not be issued for plant or animalvarieties and essentially biological processes forthe production of plants and animals (with theexception of microbiological processes or theproducts thereof).

Although plant varieties are specifically ex-cluded, there is no general exclusion for plants.According to the Technical Board of Appeal ofthe European Patent Office (EPO), EPC Article53(b) prohibits only the patenting of plantswhich are in the genetically fixed form of a plantvariety, i.e., a specific variety such as the rose“Peace” or the wheat cultivar “Chinese Spring.”Thus, EPO will grant utility patent (generic)protection for plants, for example, where a genehas been inserted into a plant (e.g., corn havinggene X), but is not fixed in a single plant variety(e.g., corn inbred A having gene X). Similarly,a process for transforming a plant to insert adesired gene would be patentable because humanintervention played a greater role in the finalresult than biological forces. This viewpoint hasbeen adopted by the Swiss patent office as wellas by EPO, which in early 1988 granted a patenton a technique for increasing protein content offorage crops such as alfalfa and for plantsproduced with the aid of that technique. This


Table l-6-international Agreements andBiotechnology Patents

Entered Number ofAgreement into force signatories

Paris Union Convention . . . . July 7, 1884 97Budapest Treaty . . . . . . . . . . Aug. 19, 1980 22Patent Cooperation Treaty . . Jan. 24, 1978 40European Patent

Convention . . . . . . . . . . . . Oct. 7, 1977 13Union for the Protection of

New Varieties of Plants . . . Aug. 10, 1968 17SOURCE: Office of Technology Assessment, 1989.

decision arguably opens the door for plant andanimal patenting in Europe, subject to thespecific treatment of European patents on acountry-by-country basis. In October 1988, theEuropean Communities Council published aproposed directive recommending that plantsand animals that are not in the genetically fixedand stable form of a variety be patentable subjectmatter. The proposed directive will be debatedby European Community nations as part of theprogram for the completion of the internalEuropean market in 1992.

Differences exist between nations regard-ing intellectual property protection of bio-technological inventions, including the issueof, what constitutes patentable subject mat-ter. Patent protection is widely available formicro-organisms, as are various forms ofpatents and breeder’s certificates for plantlife. Any projection of the number of nationspermitting animal patents must be consid-ered speculative in the absence of patentprosecution in this area. To date, only theUnited States has both announced a policypermitting patents on animal life forms andissued a patent on an animal inventedthrough biotechnological techniques, althoughat least 9 such patent applications have beenfiled in Europe (see box l-A). It is likely thatother nations will issue such patents in thefuture. The Japanese patent office, for example,recently issued an internal notice announcing itsintention to grant patents on nonhuman animalsif they meet the requirements of their patent law.

POLICY ISSUES AND OPTIONS FORCONGRESSIONAL ACTION

Three policy issues relevant to patenting ofliving organisms were identified during thecourse of this study. They are:

● patenting of animals,● intellectual property protection for plants,

and

. enablement of patents involving biologicalmaterial.

Associated with each policy area are optionsthat Congress might consider, ranging fromtaking no action to making major changes. Someof the options involve direct legislative action.Others are oriented to the actions of the execu-tive branch that involve congressional oversightor direction. The order in which the issues andoptions are presented should not imply theirpriority. The options provided for each issue arenot, for the most part, mutually exclusive:adopting one does not necessarily disqualifyothers in the same category or within anothercategory. However, changes in one area couldhave repercussions in others.

ISSUE 1: Should the patenting of animalsbe permitted by the Federal Government?

Option 1.1: Take no action.

Since April 1987, PTO has considered non-naturally occurring nonhuman multicellular liv-ing organisms, including animals, to be patent-able subject matter. Congress could take noaction if it determines that the present PTOpolicy is adequate for such inventions. If Con-gress takes no action, patent claims for animalswill be reviewed by PTO, and such claims willnot be rejected under 35 U.S.C. 101 as beingdirected to nonstatutory subject matter. Claimsdirected to or including a human being will notbe considered to be patentable subject matterunder 35 U.S.C. 101 on the grounds that alimited but exclusive property right in a human

Chapter 1—Summary, Policy Issues, and Options for Congressional Action ● 23

Box l-A—Patenting of Animals: Nine Applications for European PatentsUnder U.S. law, the contents and status of a patent application are maintained in confidence by the Patent and

Trademark Office (35 U.S.C. 122). Such is not the case with patent applications filed in Europe, which are published18 months after their original filing date. At least nine applications claiming animals have been filed with theEuropean Patent Office (EPO), and each has also been filed with the U.S. Patent and Trademark Office. Of the nineapplications, six are from U.S. inventors, and one (from Harvard College) has received a U.S. patent.

The applications generally cover methods for creating transgenic animals, methods for producing animals thatexpress biological substances, and the final product of both methods (i.e., the animals). The nine applications havepriority dates ranging from June 1984 (Harvard College) to April 1987. A summary of the nine applications:

● Method for transferring organic or inorganic substances to egg cells or somatic cells of animals andcompositions for use #herein. A method for transferring organic or inorganic substances to egg cells orsomatic cells of animals by combining sperm of the respective type, optionally modified by chemical orphysical means, with vesicles or granulae containing the desired organic or inorganic substances andsubsequently contacting the loaded sperm with egg cells or somatic cells under intracorporal or extracorporalconditions. The invention also includes animals produced by the method. Applicant: Transgene (Bad Soden,West Germany).

● Peptide production. A method that involves incorporating a DNA sequence coding for a peptide into thegene of a mammal (such as a sheep) coding for a milk whey protein so that the DNA sequence is expressedin the mammary gland of the adult female mammal. The substance may be a protein such as a bloodcoagulation factor. Applicant: Pharmaceutical Proteins Ltd. (Cambridge, Great Britain).

. Transgenic animals. A method for creating new breeds of animals that involves: 1) obtaining a recentlyfertilized ovum; 2) isolating a gene sample of a characterizing hormone homologous with the ovum; 3)introducing the gene sample into the male pronucleus of the ovum prior to fusion with the female pronucleusto form a single cell embryo; and 4) subsequently implanting the ovum into a suitably prepared femaleanimal. Applicant: Luminus PTY Ltd. (Adelaide, Australia).

● Expression of heterologous proteins by transgenic lactating mammals. Mammals capable of expressingrecombinant proteins by lactation are produced by micro-injection of recombinant DNAs that contain novelexpression systems into fertilized ova. Applicant: Immunex (Seattle, WA).

. Method for producing transgenic animals. A method for producing a transgenic eukaryotic animal havingan increased probability of developing neoplasms by introducing an activated oncogene sequence. Theanimal may be used in testing a material suspected of being carcinogenic or of conferring protection againstcarcinogens. Applicant: President and Fellows of Harvard College (Cambridge, MA).

● Transgenic mammal containing heterologous gene. A process for producing a transgenic mammal,especially a mouse that contains and expresses a heterologous gene, especially the human insulin gene. Themice are useful for studies of pharmacological and drug reactions. Applicant: The General Hospital Corp.(Boston, MA).

● Transgenic animals secreting desired proteins into milk. Animals expressing proteins useful in thetreatment, prevention, or diagnosis of human disease (e.g., t-PA and hepatitis B surface antigen). Applicant:Integrated Genetics, Inc. (Framingham, MA).

● DNA sequences to target proteins to the mammary gland for efficient secretion. A method of targeting specificgenes to the mammary gland which results in the efficient synthesis and secretion of biologically importantmolecules. Further, a transgenic mammal having the ability to reproduce itself and being suitable for thesecretion of biologically active agents into its milk. Applicant: Baylor College of Medicine (Houston, TX).

. Procedure for transplanting a donor bovine embryo into a recipient ovocyte, and bovine embryo created by thisprocedure. The invention concerns a procedure to transplant bovine donor nuclei from an embryo intoenucleated recipient oocytes. Applicant: N.L. First, F. Barnes, R.S. Rather, and J.M. Robl (Madison, WI).

The European Patent Office’s view on patenting living material is based strictly on the provisions of theEuropean Patent Convention, which permit patenting of certain life forms if they are novel, inventive, andindustrially applicable, if the invention is not contrary to public order, and does not cover plant or animal varietiesper se. According to EPO, “the use to which certain inventions are put must be the subject of other legislation, apartfrom patent law,” thereby balancing “the inventor’s rightful claim to recognition and economic reward” with “thepublic’s legitimate right to be protected. . . from any possible dangers to which technology may expose it.”SOURCE: OffiCC of ‘IMnology Assessment, 198% adapted km “Patenting of Life Forms,” European Paknt OiKce, 1988.


being is prohibited by the Thirteenth Amend-ment to the U.S. Constitution.

Option 1.2: Enact a moratorium on theissuance of animal patents.

Congress could enact a moratorium on theissuance of animal patents. The duration of sucha moratorium-based either on time or onfulfillment of particular conditions-could bespecifically mandated by Congress. A morato-rium would allow further opportunity for publicdebate on the economic, ethical, and publicpolicy issues of patenting animals and could beused to gather information from Federal agen-cies regarding the regulation and use of suchanimals. Enactment of a moratorium, however,would be the first time Congress has so acted tolimit subject matter patentability. Such actioncould serve as a precedent for future moratori-ums to limit the kinds of inventions that could bepatented. A moratorium could decrease researchand investment in the production of new inven-tions that are animals.

Option 1.3: Enact an animal variety pro-tection statute modeled after the Plant VarietyProtection Act.

Congress could enact a statute providinganimal breeders with rights similar to thoseenjoyed by plant breeders under the PlantVariety Protection Act. A combination of se-lected elements found in the plant varietyprotection statute (e.g., USDA registration, afarmer’s exemption, a research exemption, an18-year term of protection) could be used toaddress specific concerns raised by animalpatenting. Such a statute, however, would raisemany of the same issues found in the legislativehistory of the Plant Variety Protection Act (e.g.,industry concentration, genetic diversity, effectsof exemptions, mandatory deposit). If enactedwithout congressional examination of utilitypatent protection, such a statute could provideinventors with an additional statutory safeguardfor intellectual property protection of animal

inventions; conversely, issues raised by pat-enting could remain unresolved.

Option 1.4: Enact a statute amending thepatent law to address the patenting of animals.

Congress could amend the patent statute toaddress specific issues raised by the patenting ofanimals. Such action would indicate congres-sional intent that patenting of animals is permit-ted and could address unresolved issues such asexceptions from infringement, patent specifica-tion, or selected limitations on subject matterpatentability.

One provision that has already proven conten-tious is an exception from infringement forpersons whose occupation is farming. Toonarrow an exception could result in extensiveand costly compliance that would outweighintended benefits. On the other hand, too broadan exception could deprive inventors of rewardsfor certain animal inventions or stifle researchand development in animal agriculture.

During the 100th Congress, on September 13,1988, the House of Representatives passed theTransgenic Patent Animal Reform Act (HouseRule 4970). The bill implicitly acknowledgedthe patentability of nonhuman animals andprovided for an exemption from liability forfarmers who reproduce patented animals. Thebill was not brought to a vote in the Senate.

Option 1.5: Enact a statute explicitly pro-viding for patents on animals.

Congress has the authority to expand orrestrict the kinds of inventions that are pat-entable. Currently, 35 U.S.C. 101 permits pat-ents on any new and useful process, machine,manufacture, or composition of matter. Patentprotection has also been explicitly extended toplants (35 U.S.C. 161) and designs (35 U.S.C.171). By amending the patent statute to includepatents on animals, Congress would erase anydoubt regarding whether animals are intended tobe patentable subject matter. Such a statutecould also include any limitations or exceptions


to subject matter patentability on animals,deposit, or infringement. Such action, however,is presently unnecessary if Congress’ sole intentis to permit the patenting of animals, and couldbe interpreted by future court action as limitingthe patentability of certain kinds of inventions inthe absence of explicit congressional action.

Option 1.6: Enact a statute prohibiting theissuance of patents on animals.

Congress could amend 35 U.S.C. 101 toexplicitly prohibit the issuance of patents onanimals. Such action would bar the patenting ofanimals per se, while still permitting the patent-ing of processes that produce novel animals. Aprohibition could result in a redirection ofinvestment in medical and agricultural research.This could slow the invention of new and usefulanimals that could be used for production offood, pharmaceuticals, and medical researchtools. A prohibition could also serve as aprecedent for limiting the patentability of technolo-gies that are currently unimagined or to regulatesubject matter that is perceived to be immoral orinadequately regulated.

ISSUE 2: Is the current statutory frame-work of intellectual property protection forplants appropriate?


There are four principal means for inventorsto protect plants—plant patents, Plant VarietyProtection Certificates, utility patents, and tradesecrets. The first two are forms of plant protec-tion expressly permitted by Congress throughlegislation: the Plant Patent Act of 1930 and thePlant Variety Protection Act of 1970. Thou-sands of plants are protected by the fourmechanisms.

Absent congressional action, inventors willcontinue to seek protection for plant intellectualproperty by balancing the factors inherent ineach of the four approaches. Inventors employa strategy that balances crop type, farmer’sexemption under PVPA, litigation, licenses,

research exemption under PVPA, deposit con-siderations, and other factors. Inventors use nosingle approach to protecting plant intellectualproperty, as the different forms of plant protec-tion each have unique advantages and disadvan-tages. The present system provides inventorsmuch flexibility.

With regard to germplasm, inventors willlikely continue to seek protection through theavenue they deem most appropriate or advanta-geous. Germplasm exchange would continue onan ad hoc basis. Some parties claim thatintellectual property protection for plants inter-feres with exchange of germplasm.

Option 2.2: Direct the Secretary of Agricul-ture to report on the effect of the farmer’scrop/seed exemption under the Plant VarietyProtection Act of 1970.

In passing the Plant Variety Protection Act of1970, Congress permitted farmers to save pro-tected seed for subsequent crop production ontheir farms without being considered as infring-ing upon the Plant Variety Protection Certificateholder. Farmer-saved seed is a common practicefor crops such as wheat, cotton, and soybeans.Complaints about abuses of the farmer’s exemp-tion, notably from seed companies, have beenlodged with the U.S. Department of Agriculture,which enforces the PVPA. USDA may bemoving toward a clarification of the limits of thefarmer’s exemption.

Congress could direct the Secretary of Agri-culture to collect information and report on thepractical impact of the farmer’s exemption. Ofparticular interest would be the degree to whichproperty rights of PVPC holders are compro-mised by the farmer’s exemption and thedimensions of the economic benefit reaped byfarmers exercising their rights under PVPA.

Option 2.3: Direct the Secretary of Agricul-ture to report on the impact that plant protectionhas on germplasm exchange.


Congress could direct the Secretary of Agri-culture to report on the impact that proprietaryinterests in plants had on germplasm exchange.To date, any information on the issue is anecdo-tal. Because all interested parties agree that freeexchange of germplasm is necessary to continueprogress in agricultural research and develop-ment and in plant biotechnology, a comprehen-sive analysis examining trends in plant protec-tion and germplasm exchange could reveal thata problem exists, that no problem exists, orcould direct attention to potential problems.

ISSUE 3: Is the current system of patentenablement adequate for biological mate-rial?


Congress could take no action if it determines35 U.S.C. 112 in its present form adequatelyaddresses patent specification requirements forbiological inventions. Currently, a deposit ofliving material is sometimes required in order tomeet the requirement that the invention bedescribed in such terms as to enable any personskilled in the art to make and use the inventionin the best mode contemplated. Deposit iscurrently considered on a case-by-case basis forpatent applications involving biological mate-rial. Under this course of action, it is unlikely

that whole animals will be deposited, sincetransgenic animals will be derived from knownand readily available animals and developedusing known reproducible processes. The courtswould likely be called upon to interpret thevalidity of PTO policies regarding deposit anddisputes of fact and law arising from the current,broad statutory language.

Option 3.2: Enact a statute providing PTOCommissioner with the authority to set condi-tions for the deposit of biological material.

If Congress determines that PTO requiresadditional authority to regulate the deposit ofmaterials, it could amend 35 U.S.C. 112 toexpressly provide such authority. Such actionwould provide PTO with the express authorityand flexibility to maintain an enablement policythat expressly addresses biological material, andcould lessen the need for court interpretation ofdeposit requirements under Section 112. Suchaction, however, could lead to required depositof every living organism for which a patent issought. This would set a separate and unequalspecification standard for inventions that arebiological in nature and could be unduly bur-densome for the inventor, deposit facility, orboth.

Chapter 2

Introduction and Overview

“On the outskirts of Washington, DC, sits the U.S. Patent and Trademark Office. On long shelvesand in wood cases, it houses the more than 4.75 million U.S. patents issued since 1790. In recentyears this venerable office has seen a new kind of patent: genetically modified living matter, rangingfrom microorganisms to mammals.”

Elizabeth CorcoranScientific American, September 1988

CONTENTS

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .WHAT IS A PATENT?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .HISTORY OF PATENTING LIVING ORGANISMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

ORGANIZATION OF THE REPORT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .CHAPTER P REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

293131313132323333

BoxBox Page

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

Table Page2-1. Patents Issued in Biotechnology.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Chapter 2

Introduction and Overview

INTRODUCTIONThis report examines some of the legal, economic,

ethical, religious, and practical considerations raisedby the patenting of micro-organisms, cells, plants,and animals. This introductory chapter provides acontext for the report’s more technical material byreviewing the historical background of intellectualproperty protection for living organisms.

Intellectual property protection, which forpurposes of this report is defined as that area ofthe law involving patents, copyrights, trade-marks, trade secrets, and plant variety protec-tion, is not new. The concept of patents, forexample, has its roots in English law, where it wasdefined as the grant by the sovereign to a subjectunder some authority, title, franchise, or property.English common law is the root of much ofAmerican law. In the United States, the concept ofintellectual property rights can be found in the U.S.Constitution (Article 1, Section 8), which givesCongress the power “to promote the Progress ofScience and useful Arts, by securing for limitedTimes to Authors and Inventors the exclusive rightto their respective Writings and Discoveries.” In1790, Congress enacted this Nation’s first patent law(giving inventors a limited, exclusive right for theirinventions) and copyright law (giving authors pro-tection for the expression of their ideas).

Biotechnology, on the other hand, is relativelynew. In the past 15 years, dramatic new develop-ments in the ability to select and manipulate geneticmaterial have created heightened interest in thecommercial uses of living organisms. Biotech-nology, broadly defined, includes any technique thatuses living organisms (or parts of organisms) tomake or modify products, to improve plants oranimals, or to develop micro-organisms for specificuses. Although people have used organisms sincethe dawn of civilization to improve agriculture,animal husbandry, baking, and brewing, it is thenovel uses of such biological techniques (e.g.,recombinant DNA techniques, cell fusion tech-niques, monoclinal antibody technology, new biopro-

cesses for commercial production) that have caughtthe imagination of many people.

Patents have come to be viewed by many as vitalto protecting commercial interests and intellectualproperty rights in biotechnology. In 1987 alone, theU.S. Patent and Trademark Office (PTO) issued1,476 biotechnology patents, up from 1,232 in 1986(table 2-1 ). About 6,900 biotechnology patent appli-cations were pending as of January 1988 (7). Thewide-reaching potential applications of biotech-nology lie close to many of the world’s majorproblems—malnutrition, disease, energy availabil-ity and cost, and pollution. Biotechnology canchange the way we live due to its potential toproduce new, safer, and more cost-effective products(15). In order to develop these new products,research and discovery resulting in the creation ofnew inventions must occur.

One novel result of the development of biotech-nology is the creation and patenting of inventionsthat are themselves alive. Where once a credo ofinvention was to build a better mousetrap, U.S. lawnow permits the patenting of a new and useful mouse(see box 2-A).

The patenting of new life forms raises argumentsin favor of and against the issuance of such patents.Most recently, public debate has centered on thepatenting of animals (8,9). Such debate is to beexpected when an old and relatively well-settledbody of law must be applied to unforeseen technolo-gies. Some proponents of patenting new life formscite benefits of fostering innovation and technologytransfer, rewarding creativity, and providing full

Table 2-l—Patents Issued in Biotechnology

Year Number of patents issued

1983 ..., ., ., . . . . . . . . . . . . . . . . . . . 1,0181984 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,1141985 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,0761986 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,2321987 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,476SOURCE: ‘U.S. Patent and Trademark Otfia Issues 1,476 Biotechnology Patents in

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

– 2 9 –


Box 2-A—A Political History of Patenting Life1873 Louis Pasteur awarded patent 141,072 with a 1987 In Ex Parte Allen, the Patent Appeals Board

claim for a yeast. determines that multicellular animals are pat-1930 Plant Patent Act permits patenting of certain entable subject matter.

asexually reproducing plants, thus allowing the 1987 The U.S. Senate adopts a moratorium onfirst patents on life forms. animal patents as part of a supplemental

1970 Plant Variety Protection Act provides patent- appropriations bill. The moratorium is droppedlike protection for sexually reproducing plants. in House-Senate conference.

1973 The first recombinant DNA organisms are 1987 House Resolution 3119, a bill to amend Titlegenerated. 35 of the United States Code to prohibit the

1975 The Asilomar Conference urges adoption of patenting of genetically altered or modifiedguidelines for recombinant DNA research, animals is introduced in the U.S. House ofsetting a precedent of scrutiny and caution in Representatives, but dies as the 100th Congressrecombinant DNA research. adjourns.

1980 The Patents and Trademarks Amendments 1988 Senate bill 2111, to amend Title 35 of the(Public Law 98-620) grant title to nonprofit United States Code to prohibit the patentingand small businesses whose research was of genetically altered or modified animals, isfederally funded. introduced in the U.S. Senate, but dies as the

1980 Genentech’s initial public offering raises 100th Congress adjourns.public awareness of the commercial possi- 1988 First animal patent (4,736,866) is issued tobilities of genetic engineering. Harvard University for a genetically engi-

1980 Stanford University and the University of neered mouse.California San Francisco are awarded the 1988 House Resolution 4970, the Transgenic Ani-Cohen-Boyer patent on the basic technique of mal Patent Reform Act is passed by the U.S.gene splicing. House of Representatives, but dies as the 100th

1985 Ex Parte Hibbard establishes that plants are Congress adjourns.patentable subject matter under general utilitypatent provisions.

SOURCE: Office of Technology Assessment, 1989.

disclosure of inventions to further advance the state environmental application of the organism (e.g., theof scientific research and technological develop-ments. Some opponents of patenting believe thatowning and manipulating living organisms is un-ethical, while others fear the economic conse-quences of patenting on various sectors of theeconomy (e.g., the effect of patented animals onlivestock farmers).

The debate over whether to permit the patent-ing of organisms frequently goes beyond simplequestions of the appropriateness of patents perse, focusing instead on the consequences of thecommercial use of patented organisms or theunderlying merits of biotechnology itself. Discus-sion regarding the patenting of a genetically engi-neered organism, for example, can turn to the

field test of a micro-organism that is patented), thewelfare of the organism (if it is an animal), scientificquestions (e.g., whether the method of creating theorganism represents a radical departure from tradi-tional scientific or breeding methods), ethical issues(e.g., the morality of creating novel organisms ortransferring genetic information between species),and economic considerations (e.g., whether theFederal Government should finance biotechnology-related research). One inherent difficulty in exam-ining the patenting of living organisms is deter-

mining which arguments raised are novel anddirectly related to patent issues, as opposed tothose questions that would exist independent ofpatent considerations.

Chapter 2—introduction and Overview ● 31

WHAT IS A PATENT?A U.S. patent is a form of property granted by the

Federal Government to an inventor giving theinventor the right to exclude others from making,using, or selling the invention for a stated period oftime (35 U.S.C. 154). Patents may be issued for anew and useful process, machine, manufacture, orcomposition of matter (35 U.S.C. 101 or so-calledutility patents) or for asexually reproduced plants(35 U.S.C. 161-164).

The rationale behind the patent law is simple: tofoster innovation, inventors must be guaranteedsome degree of exclusivity on their inventions inorder to be assured a reasonable profit and to justifythe risks of development. In return for a patent, theinventor discloses how the invention works so thatthe knowledge is available to the public and othersmay build upon that knowledge.

HISTORY OF PATENTINGLIVING ORGANISMS

Louis Pasteur was awarded a patent in 1873 (U.S.141 ,072) which had as one of its claims a yeast, freefrom organic germs of disease, as an article ofmanufacture. This patent was the first of several“living matter” patents to be issued in the UnitedStates. Other early patents were issued on bacterialand viral vaccines. As a general rule, these patentsclaimed an organism in an inert carrier or in an inertculture medium (3).

Although no formal policy was issued barring thepatenting of living organisms, the enactment byCongress of the Plant Patent Act of 1930 (35 U.S.C.161-164) (which specifically permitted patent pro-tection for asexually reproduced plants) was seen bymany as standing for the proposition that in theabsence of explicit congressional action, livingmatter itself was not patentable.

Patenting of Micro-Organisms and Cells

In 1980, the Supreme Court in the case ofChakrabarty v. Diamond (4) ruled in a 5-4 decisionthat a “manmade” micro-organism could be pat-ented, in this case a bacterium engineered tobreakdown four of the main components of crude oil.The decision rested in part on the premise that thepatent statute as passed by Congress made no

distinction between living and nonliving subjectmatter. Prior to the Court decision in Chakrabarty,PTO had considered micro-organisms products ofnature, and thus not themselves patentable. Thedecision was hailed by some as assuring thiscountry’s technological future and was denouncedby others as creating Aldous Huxley’s “Brave NewWorld.” It left unclear whether patents would bepermitted on higher life forms, The Court expresslyrefused to consider the potential hazards of thetechnology, saying

[w]hatever their validity, the contentions nowpressed on us should be addressed to the politicalbranches of the Government, the Congress, and theExecutive, and not to the courts.

Ananda M. Chakrabarty, then a research microbi-ologist with the General Electric Co., developed theoil-eating microbe using four naturally occurringplasmids—small circles of DNA that are not part ofa cell’s chromosomes—to confer the ability todegrade four different components of crude oil on asingle strain of bacteria. Since the microbe itselfwould be the product sold, anyone would be able tosecure and reproduce the organism for their ownbenefit, unless it was patented; therefore, Chakra-barty could not rely on trade secrecy to protect hisinvention, Initially, PTO granted Chakrabarty apatent on the process by which the microbe wasdeveloped and on the combination of the carrier(straw) and the bacterium. The Patent Office wouldnot, however, grant a patent for the organism itself,contending that living things other than plants,which are specifically covered by the Plant PatentAct of 1930 and the Plant Variety Protection Act of1970 (see chs. 3 and 5), could not be patented.However, the U.S. Court of Customs and PatentAppeals reversed this decision, and this reversal wasultimately upheld by the Supreme Court.

Patenting of Plants

Although Congress had in 1930 expressly acted tocreate patent protection for asexually reproducedplants, the Chakrabarty decision opened up the issueof whether general patent law could be used toprovide protection for any new and useful plant.

In 1985, the Board of Patent Appeals and Interfer-ences (a review body within PTO) ruled that plants,


seeds, and plant tissue cultures were proper subjectmatter for utility patents (6). This constituted thefirst time that utility patents were granted formulticellular organisms.

Patenting of Animals

In April 1987, the Board of Patent Appeals andInterferences ruled that polyploid oysters werepatentable subject matter (5). Subsequently, PTOannounced that it would henceforth consider “non-naturally occurring nonhuman multicellular livingorganisms, including animals, to be patentablesubject matter” under general patent law. Thisstatement initiated broad debate and the introductionof legislation concerning the patenting of animals.

The first animal patent was issued in April 1988to Harvard University, for genetically engineeredmammals, such as mice (U.S. 4,736,866). Exclusivelicense to practice the patent went to E.I. du Pont deNemours & Co., which was the major sponsor of theresearch. The patented mouse was genetically engi-neered to be very susceptible to cancer, thusfacilitating the testing of carcinogens and of cancertherapies. Specifically, the patent covers a transge-nic nonhuman eukaryotic animal (preferably arodent such as a mouse) whose germ cells andsomatic cells contain an activated oncogene se-quence introduced into the animal . . . whichincreases the probability of the development ofneoplasms (particularly malignant tumors) in theanimal.

The first animal patent prompted newspapereditorials both pro and con. One editorial stated,

. . . companies must have a way to protect theirinvestments in research and innovation . . . It wouldbe a travesty for Congress to halt this process(1).

But another countered,

When it acts on animal patent applications, thePatent Office is in effect making public policydecisions with no public input. In a field with asfar-reaching implications as genetic engineering,that should not be allowed to happen (2).

PTO had 21 other patents on genetically engi-neered animals pending at the time the mouse patentwas granted. Three bills on the subject of animalpatenting were introduced in the 100th Congress.One bill, H.R. 4970, passed the House of Representa-tives (9).

ORGANIZATION OF THE REPORTThis special report is the fifth publication in

OTA’s assessment New Developments in Biotechnol-ogy.1 The purpose of this special report is to reviewU.S. patent law as it relates to the patenting ofmicro-organisms and cells, plants, and animals. Theprimary focus of this report is on subject matterpatentability—what can and cannot be patented,as enacted by Congress under the patent statuteand interpreted by the courts. This report does notfocus on issues related to process patent protectionor issues related to the harmonization of interna-tional patent law.

Chapter 3 presents an overview of intellectualproperty law. Chapter 4 reviews issues related to thepatenting of micro-organisms and cells. Chapter 5examines intellectual property protection relating toplant life: plant patents, plant variety protectioncertificates, trade secrets, and utility patents. Chap-ters 6, 7, and 8 examine the scientific, regulatory,economic, and ethical issues related to the patentingof animals. Chapter 9 addresses deposit considera-tions. Chapter 10 reviews international subjectmatter protection for micro-organisms, cells, plants,and animals.

This report does not address in detail the follow-ing issues, which are the subjects of related OTAreports:

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intellectual property issues associated withmapping and sequencing the human genome(12);patents and intellectual property rights consid-erations related to commercial investment andindustrial competitiveness (15);property rights related to the ownership ofhuman tissues and cells (14);

3Emiier repo~s in the assessment of New Developments in Biotechnology are: Ownership of Human Tirsues and Ceh--Speciai Repon,OTA-BA-337 (Washington. DC: U.S. Government Printing Office, March 1987); Background Paper: Public Perceptions of Biotechnology,OTA-BP-BA-45 (Springfield, VA: National ‘Ikchnical Information Service, May 1987); Field-Testing Engineered Organisms: Genetic andEcological Issues--special Report, OTA-BA-350 (Lancaster, PA: Twhnomic Publishing Co., Inc., May 1987); New Developments in Biotechnology:U.S. Investmetipeciai Report, OTA-BA-360 (Springfield, VA: National Tbchnical Information Service, July 1988).

Chapter 2–--Introduction and Overview ● 33. . . . —

Photo credit: Gretchen S Kolsrud

Four reports published under OTA’s assessment of NewDevelopments in Biotechnology.

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international patent law considerations otherthan subject matter patentability (11 );genetic and ecological consequences of envi-ronmental release of micro-organisms, plants,and animals (13);technologies to maintain biological diversity(16); anduse of animals in research, testing, and educa-tion (10).

SUMMARYPatents on certain life forms have been permitted

since the Plant Patent Act of 1930. The range of lifeforms susceptible to patenting has broadened, most

significantly with the decision in Diamond v.Chakrabarty that a micro-organism could be pat-ented; in Ex parte Hibberd that plants, seeds, andplant tissue cultures are patentable subject matterunder the general patent laws; and in Ex parte Allenthat a multicellular animal was patentable subjectmatter.

The patenting of living organisms, particularlyanimals, raises a number of ethical, economic,emotional, and practical issues, which are addressedin this report. The premise that life forms arepatentable, and particularly that higher animals arepatentable, has engendered considerable politicalcontroversy.

CHAPTER 2 REFERENCES

J.

2.

3.

4.5. .

6.

7.

8.

9.

10.

Chicogo Tribune, “On Patented Mouse, &t ReasonRule,” Apr. 17, 1988.Christian Science Monitor, “Don’t Jump into De-signer Genes,” The Christian Science Monitor, Apr.25, 1988.Cooper, I. P., Biotechnology and the Law, $2.02 (NewYork, NY: Clark Boardman, 1985).13iamwzd v, Chakrabarty, 447 U.S. 303 (1980).Exparte Allen, 2 USPQ 2d 1425 (PTO Bd. Pat. App.& Int. 1987).Exparte Hibberd, 227 USPQ 473 (PTO Bd. Pat. App.& Int. 1985).Klausner, A., “Patent Office Reorganizes BiotechCoverage,” Biotechnology 6(4):368, April 1988.U.S. Congress, Committee on the Judiciary, Subcom-mittee on Courts, Civil Liberties, and the Ministrat-ion of Justice, Hearings on Patents and the Constitu-tion: Transgenic Animals, Serial No. 23 (Washing-ton, DC: U.S. Government Printing Office, 1988).U.S. Congress, House Committee on the Judiciary,Report 100-888, Transgenic Animal Patent RefbrmAcf, to accompany H.R. 4970 (Washington, DC: U.S.Government Printing Office, 1988).U.S. Congress, Office of Technology Assessment,Alternatives to Animal Use in Rescurch, Testing, andtiiucufion (Springfield, VA: National TechnicalInformation Service, February 1986).


11. U.S. Congress, Office of Technology Assessment,Commercial Biotechnology: An International Analy-sis (Elmsford, NY: Pergamon Press, Inc., January1984),

12. U.S. Congress, Office of Technology Assessment,Mapping Our Genes-The Genome Projects: HowBig? How Fast? OTA-BA-373 (Washington, DC:U.S. Government Printing Office, April 1988).

13. U.S. Congress, Office of Technology Assessment,New Developments in Biotechnology-Field- TestingEngineered Organisms: Genetic and EcologicalIssues, OTA-BA-350 (Lancaster, PA: TechnomicPublishing Co., Inc., May 1988),

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

Human Tissues and CellMpecialReport, OTA-BA-337 (Springfield, VA: National Technical informa-tion Service, March 1987).

15. U.S. Congress, Office of Technology Assessment,New Developments in Biotechnology: U.S.lnvestme~Special Report, OTA-BA-360 (Springfield, VA:National Technical Information Service, July 1988).

16. U.S. Congress, Office of Technology Assessment,Technologies to Maintain Biological Diversity, OTA-F-330 (Washington, DC: U.S. Government PrintingOffice, March 1987).

Chapter 3

Intellectual Property

“The Congress shall have the power. . . To promote the Progress of Science and useful Arts, bysecuring for limited Times to Authors and Inventors the exclusive Right to their respective Writingsand Discoveries.”

United States (institutionArticle I, Section 8

“Ingenuity should receive a liberal encouragement.”Thomas Jefferson

CONTENTSPage

INTRODUCTION . . . . . . . . . .PATENTS . . . . . . . . . . . . . . . . .

Subject Matter and Utility.Novelty . . . . . . . . . . . . . . . . .

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

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

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

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nonobvious Subject Matter. ...., . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .How a Patent Is Obtained.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .The Patent Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Protection ofPatent Rights

COPYRIGHTS

Patent Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .in Inventions Made With Federal Assistance . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .,.,

TRADEMARKS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .TRADE SECRETS, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .CHAPTER 3 REFERENCES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Figures

3-1.3-2.3-3.

All Patents and a List of Patentees AreThe Eight Categories of CopyrightableA Sampling of Trademarks.. . . . . . . . . .

3737373940404141434344464647

Published Each Week by PRO. . . . . . . . . . . . . 42Subject Matter.. . . . . . . . . . . . . . .

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

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

TableTable Page3-1. Patent Examining Groups. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Chapter 3

Intellectual Property

INTRODUCTIONIntellectual property law—which provides a per-

sonal property interest in the work of the mind—hasits roots in ancient Greece, and developed in thecommon law of European nations (2). The Framersof the U.S. Constitution assured Congress’ broadpower to “promote the Progress of Science anduseful Arts, by securing for limited times to authorsand inventors the exclusive right to their respectivewritings and discoveries” (Article I, Section 8).

Pursuant to its constitutional powers under thisclause, Congress subsequently pained statutes pro-viding for the granting of patents and copyrights.Two other areas of law, trademark and trade secret,were enacted to protect commercial use of distinc-tive marks and secret information. Protection ofintellectual property is crucial to all areas ofinventive inquiry, including biotechnology. Thepurpose of this chapter is to explain basic conceptsof intellectual property law; specifically, what con-stitutes a patent, copyright, trademark, and tradesecret. Intellectual property protection specificallydesigned for plant life is discussed in chapter 5.

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

giving the patent owner the right to exclude allothers from making, using, or selling the inventionwithin the United States, its territories, and posses-sions during the term of the patent (35 U.S.C. 154).A patent may be granted to whoever invents ordiscovers any new, useful, and nonobvious process,machine, manufacture, composition of matter, orany new and useful improvement of these items (35U.S.C. 101). A patent may also be granted on anydistinct and new variety of plant (35 U.S.C. 161) oron any new, original, and ornamental design for anarticle of manufacture (35 U.S.C. 171).

The first patent act was enacted by Congress in1790. It embodied Thomas Jefferson’s philosophythat “ingenuity should receive a liberal encourage-merit. ” The first patent act provided protection for“any new and useful art, machine, manufacture, orcomposition of matter. or any new and useful

improvement [thereof].” Subsequent patent statuteswere enacted in 1793, 1836, 1870, and 1874, whichemployed the same broad language as the 1790 Act.The Patent Act of 1952 replaced “art” with “process”as patentable subject matter (35 U.S.C. 101). TheCommittee Reports accompanying the 1952 Actdemonstrated that Congress intended patentablesubject matter to include “anything under the sunthat is made by man.” However, the Supreme Courthas held that laws of nature, physical phenomena,and abstract ideas are not patentable.

Patents are designed to encourage inventive-ness by granting to inventors a limited propertyright—the right to exclude others from practic-ing the invention for a period of 17 years. Apatent does not grant the inventor any affirma-tive right to use an invention. Use maybe regulatedby Federal, State, or local law. In the United States,patent law is exclusively Federal (35 U.S.C. 1 etseq.; 28 U.S.C. 1338(a)). Of the various forms ofintellectual property protection, patents are the mostdifficult to obtain, since strict examination is re-quired. However, once obtained, a patent is gener-ally easy to maintain, requiring only the periodicpayment of maintenance fees during the life of thepatent (35 U.S.C. 41(b)).

How does an invention become patented? OneFederal judge has spoken of three doors which mustbe opened in order to obtain patent protection (5).The first door is subject matter jurisdiction andutility. The second concerns novelty. The third andfinal “door” to be opened involves the issue ofobviousness. Once these three “doors” have beenopened, a patent (i.e., a grant issued by the U.S.Government giving a property right from the Gov-ernment to one or more individuals) can result.These three barriers to patentability are covered by35 U.S.C. 101, 102, and 103 respectively.

Subject Matter and Utility

A patent may issue to “[w]hoever invents ordiscovers any new and useful process, machine,manufacture, or composition of matter, or anynew and useful improvement thereof. . . “ (35

-37-

Chapter 3--Intellectual Property ● 39

U.S.C. 101). Known as utility patents, they aredivided into three classes by the U.S. Patent andTrademark Office (PTO) for examination purposes:chemical, electrical, and mechanical (see table 3-l).Approximately 1,400 utility patents are grantedevery week by the U.S. Government (8).

Under section 101, the invention must:

● fall into one of four broad categories-process,machine, manufacture, or composition of mat-ter;

. be a new invention or a new and useful im-provement of an existing invention; and

. be useful.

Congress and the courts have given a widemeaning to subject matter patentability (i.e., whatconstitutes a process, machine, manufacture, orcomposition of matter). The expansive terms used inthe patent statute have been interpreted to “includeanything under the sun made by man” (7). Althoughthe subject matter of things that may be patentableis broad, it is not unlimited. Laws of nature, physicalphenomena, and abstract ideas cannot be patented

Table 3-l—Patent Examining Groups

Group

Chemical examining groups:General metallurgical, inorganic, petroleum

and electrical chemistry, and engineering . . . . . . . . . . . 110Organic chemistry. . . . . . . . . . . . . . . . . . . . . ., . . . . . . . . . . 120Specialized chemical industries and chemical

engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130High-polymer chemistry, plastics, coating, photography,

stock material, and compositions . . . . . . . . . . . . . . . . . . 150Biotechnology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180

Electrical examining groups:Industrial electronics, physics, and related

elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210Special law administration , . . . . . . . . . . . . . . . . . . . . . . . . . 220Packages, cleaning, textiles, and geometric

instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230Electronic and optical systems and devices ., , . . . . . . . . . 240Communications, Measuring, Testing, and

Lamp/Discharge Group . . . . . . . . . . . . . . . . . . . . . . . . . . 250Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290

Mechanical examining groups:Handling and transporting media. . . . . . . . . . . . . . . . . . . . . 310Material shaping, article manufacturing, and tools . . . . . . 320Mechanical technologies and husbandry personal

treatment information . . . . . . . . . . . . . . . . . . . . . . . . . . . , 330Solar, heat, power, and fluid engineering devices . . . . . . . 340General constructions, petroleum, and mining

engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350SOURCE U S. Patent and Trademark Office, 1989

(7,11,13,22). The rule that discovery of a law ofnature cannot be patented rests not on the notion thatnatural phenomena are not processes, but rather onthe more fundamental understanding that they arenot the kind of discoveries that patent law wasdesigned to protect; mere recognition of existingphenomena or relationships carries with it no rightsto exclude others from its enjoyment (22),

In addition to the types of patents permitted undersection 101, two other types of subject matter patentsare issued under U.S. law:

Patents for plants (35 U.S.C. 161-164). Apatent for a plant may be issued to the inventorof any distinct and new variety of plant,including cultivated sports, mutants, hybrids,and newly found seedlings, other than a tuber-propogated plant or a plant found in an unculti-vated state. Plant patents are discussed infurther detail in chapter 5.Patents for designs (35 U.S.C. 171-173). Sucha patent may issue to the inventor of any new,original, and ornamental design for an article ofmanufacture. Unlike other types of patents(which have a term of 17 years), design patentshave a term of 14 years.

Utility or usefulness of an invention is generallyan easy hurdle for patent applicants. This cart beshown by experimental data, commercial use, orthrough the drawings or description of the patentapplication.

Novelty

Although section 101 requires that art inventionmust be new, it does not explain what constitutesnovelty, To determine the requirement for novelty,one must look to section 102, the second barrier inthe path of an invention for which a patent is sought.

In order for an invention or discovery to meet thestatutory requirement for novelty, it must be new; itshould not have previously existed through the workof others (8).

Under section 102, a patent can be denied underseveral conditions including:

. if the invention was known or used by others inthe United States or patented or described in aprinted publication in the United States or a


●

●

●

foreign country before the invention claimed bythe application for patent;if the invention was patented or described in aprinted publication in the United States or aforeign country, or sold or used in the UnitedStates more than 1 year prior to the date of theapplication for a patent in the United States;the invention was abandoned; andif the invention was made in the United Statesby another person who has not abandoned,suppressed, or concealed it. In such cases,determining the priority of invention becomesimportant.

Nonobvious Subject Matter

Even if an invention is found to be new and usefuland is statutory subject matter, a patent may still bedenied on grounds of obviousness, the third doorthat must be opened. Obviousness is the subject ofsection 103 of the patent code. In addition to noveltyand utility, the statute states that a patent may not beobtained “if the differences between the subjectmatter sought to be patented and the prior art aresuch that the subject matter as a whole would havebeen obvious at the time the invention was made toa person having ordinary skill in the art to which thesubject matter pertains” (35 U.S.C. 103).

Obviousness addresses the degree of differencebetween the invention sought to be patented and thatwhich is known or available (the so-called “priorart”) to a person skilled in the relevant field oftechnology. Evidence of prior art (e.g., existingpatents, publications) is evaluated not only for whatit expressly teaches, but also for what it would fairlysuggest to one of ordinary skill in the relevant fieldof technology (9), Since an invention may be newbut still be obvious, a determination as to whether ornot the proposed invention is obvious needs to bemade. The test for determining obviousness wasexpressed by the Supreme Court in 1966 (14):

. determine the scope and content of the prior art;

. ascertain the differences between the prior artand the claims at issue; and

. resolve the level of ordinary skill in the pertinentart.

In addition, the Court stated that secondaryconsiderations such as commercial success, long felt

but unsolved needs, and the failure of others mayberelevant to particular situations.

How a Patent Is Obtained

An application for a patent must generally bemade by the inventor, must be in writing, contain aspecification, a drawing (where necessary), claims,and an oath that the inventor believes himself orherself to be the original and first inventor of that forwhich patent protection is sought (35 U.S.C. 111-113, 1 15).

The specification is the written description of theinvention, describing the manner and process ofmaking and using it “in such full, clear, concise, andexact terms” as to enable any person skilled in the artto which it pertains to make and use the same, andsetting forth the “best mode contemplated by theinventor” of carrying out the invention (35 U.S.C.112). The specification includes one or more claims,which particularly points out and distinctly claimsthe subject matter which the applicant regards as theinvention. The claims represent the metes andbounds of the property to be protected. As in a titleto real property, the claims stake out the patentholder’s territory, and any encroachment on thatparticular territory constitutes infringement (4). Forbiotechnology -related inventions, particularly micro-organisms, it is sometimes impossible for theapplicant to fully describe the invention as requiredby statute. In such cases, the applicant may berequired to deposit a specimen of the micro-organism to meet the enablement requirement (35U.S.C. 114). Issues related to deposit are discussedin chapter 9.

The patent application can be made by theindividual inventor, by two or more inventorsjointly, by legal representatives of deceased orincapacitated inventors, or under certain circum-stances by a person to whom the inventor hasassigned a proprietary interest in the invention (35U.S.C. 116-1 18). The actual filing date of theapplication is important, for that date becomes thepresumed date of the invention, or the prioritydate. The presumption is that patent applications anddocuments published after the priority date do notconstitute prior art for purposes of the filed patentapplication.

Chapter 3-Intellectual Property ● 41

Once the application is filed, it is referred to aprimary examiner at PTO, who makes the determina-tion as to whether a patent should issue (35 U.S.C.131) (table 3-l). After the application is filed, thereis generally give-and-take written correspondencebetween the patent examiner resigned to the applica-tion and the applicant. Often, the examiner will findseveral prior art references in addition to those foundin the patent application that limit or precludepatentability of the claimed invention. These areprovided to the applicant, who may in turn respondwith amendments to the claims, information, orarguments to distinguish the claimed invention fromthe prior art. This procedure whereby the applicantattempts to demonstrate the patentability of theclaimed invention is called “prosecuting” a patentapplication (8).

If, after examination, the examiner determinesthat any claim of a patent application is unpatent-able, the claim is rejected and the applicant is sonotified with reasons for the rejection. The applicanthas a right to automatic reconsideration of therejection of the claims, as long as a request is madewithin 6 months (35 U.S.C. 132-133). An applicantwhose claims have been finally rejected may appealthe decision of the primary examiner to the Board ofPatent Appeals and Interferences, which consists ofthe PTO Commissioner, Deputy Commissioner,Assistant Commissioners, and the examiners-in-chief of the various examining sections. Each appealis heard by at least three members of the Board ofPatent Appeals and Interferences, as designated bythe Commissioner (35 U.S.C. 7, 134).

An applicant dissatisfied with the decision in anappeal to the Board may either file an appeal with theU.S. Court of Appeals for the Federal Circuit or filea civil action against the Commissioner in the U.S.District Court for the District of Columbia (35U.S.C. 141, 145). Appeals of interference actions(establishing the priority of an invention) operate ina similar manner (35 U.S.C. 141, 146). For theapplicant who chooses to appeal to the DistrictCourt, a trial de novo (i.e., a new hearing) isconducted (15). One advantage of a trial de novo isthat the applicant may be able to introduce additionalevidence into the prosecution record (3).

The Patent Term

Once obtained, a patent has a term of 17 years,assuming that maintenance fees are paid (35 U.S.C.154) (see figure 3-1 ). Maintenance fees are notrequired for design and plant patents. Exceptions tothis general term of 17 years are design patents,which have a term of 14 years, or certain utilitypatents where the term has been extended for up toan additional 5 years (35 U.S.C. 156). Where apatent claims a product (limited to a human drugproduct, medical device, a food or color additive)that has undergone regulatory review prior toapproval for commercial marketing or use by theFood and Drug Administration, the patent may beeligible for an extension of the patent term for up to5 years if certain conditions are satisfied,

Protection of Patent Rights

Patents have the attributes of personal property(35 U.S.C. 261). Property is generally viewed as abundle of legally protected interests, including theright to possess and to use, to transfer by sale andgift, and to exclude others from possession. Propertycan be tangible (e.g., animals, furniture, merchan-dise) or intangible (e.g., copyrights, stocks, annui-ties). Patents are intangible personal property; aviolation of that personal property right constitutesinfringement, which is defined in the patent statuteas the making, using. or selling of any patentedinvention without authority of the patent owner (35U.S.C. 271).

The remedy for patent infringement is by civilaction (35 U.S.C. 281). Monetary damages may berecovered, and an injunction may also be granted inorder to prevent the violation of any patent right (35U.S.C. 282). In awarding damages for infringement,a court must award at least the amount of areasonable royalty; a court may, at its discretion,award increased damages up to three times the levelfound or assessed. In exceptional cases, attorney’sfees can be awarded by the court (35 U.S.C. 285).

A patent that has been issued can be reexamined.This can occur at the request of any person citingprior art and paying the requisite reexamination feeor by the initiative of the Commissioner (35 U.S.C.302, 303). Once initiated, patent reexaminationfollows the procedural steps of an initial patentexamination. All reexaminations, however, must be


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

SOURCE’ Wrious pages from the Oificial Gazetfw of the Urs’lwd States and Trademark Office, Dac. 27, 19S8,


conducted by PTO with “special dispatch” (35U.S.C. 305).

Patent Rights in Inventions Made WithFederal Assistance

Beginning in 1981, a uniform patent policy wentinto effect regarding ownership of inventions madeusing Federal funds by small businesses and non-profit organizations. The purpose is “to promote theutilization of inventions arising from federallysupported research and development, to encouragethe maximum protection of small business firms . . .[and] to promote collaboration between commercialconcerns and nonprofit organizations including uni-versities . . . “ (35 U.S.C. 200). This law, the Gov-ernment Patent Policy Act of 1980 (Public Law96-517) and additional amendments added in 1984(Public Law 98-620), replaced 26 different agencypolicies then in effect (24).

Under the law, nonprofit organizations (e.g.,universities, nonprofit scientific or educational organi-zations) or small businesses (i.e., independentlyowned and operated with fewer than 500 employees)can elect to retain title to any invention resultingfrom any funding agreement (including grants,contracts, or cooperative agreements) with anyFederal agency. In order to retain title, such electionmust be within a reasonable time, normally 2 years.If the contractor does not elect to retain title withinthe appropriate time, the Federal agency may taketitle (35 U.S.C. 202(c)(2)). If the contractor retainstitle, the Federal agency retains a nonexclusivelicense to practice the invention worldwide (35U.S.C. 202(c)). The Federal agency also retainsmarch-in rights (i.e., the ability to intercede) torequire the granting of a license if the invention isnot practiced within a reasonable time. Such march-in rights are limited (35 U.S.C. 203) and have notbeen used by a Federal agency nor interpreted by thecourts (23). In 1983, a Presidential Memorandumextended the policies of the patent statute tocontractors other than nonprofit organizations andsmall businesses (i.e., large businesses), thus allow-ing almost all contractors to retain title to inventionscreated with Federal support (21).

During the 5 years following passage of the 1980patent law amendments, patent applications byuniversities and hospitals for inventions involving

human biological increased more than 300 percentas compared with the preceding 5-year period andconstituted 22 percent of all patent applications filedby these institutions (25).

COPYRIGHTSCopyrights, as patents, find their domestic roots in

the Constitution, ” . . . securing for limited Times toAuthors . . . the exclusive right to their . . . Writ-ings.” Historically, the term *’writings” has beeninterpreted broad] y. The copyright statute(17 U.S.C.102(a)) defines a writing as that which is “fixed inany tangible medium of expression. now known orlater developed, from which they can be perceived,reproduced, or otherwise communicated, either di-rectly or with the aid of a machine or device.”Copyright protection is expressly provided for eightcategories of works: literary; musical; dramatic;pantomimes and choreographic; pictorial. graphic,and sculptural; motion pictures and other audio-visual works; sound recordings; and computerprograms (see figure 3-2).

A copyright does not protect an idea. but rather theexpression of the idea. Copyrights also do not extendto any procedure, process, system, method ofoperation, concept, principle, or discovery, regard-less of the form in which it is described, explained,illustrated, or embodied (17 U.S.C. 102(b)).

Copyright protects the writings of an authoragainst copying, and protects the form of expressionrather than the subject matter of the writing.Copyright protection, for example, would extend toa writing that describes a machine. Such protectionwould prevent others from copying that description;it would not prevent others from writing a descrip-tion of their own or from making or using themachine itself (26).

One writer on intellectual property law hassuggested that DNA molecules are copyrightable asexpress information, comparing DNA molecules tocomputer programs; both are sets of instructions(18). The U.S. Copyright Office, however, hasunofficially stated that DNA molecules and genesequences do not constitute copyright subject mat-ter, a position that would likely extend to engineeredproteins (6). Even if such information was copyright-able, the protection afforded would arguably beinferior to that provided by a patent, since under

—


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


copyright law, the author of such information couldnot prevent others from independently making orsequencing the same information (12).

TRADEMARKSA trademark is a distinctive mark, motto, device,

or emblem that a manufacturer stamps, prints, orotherwise affixes to goods so that they may beidentified in the market and their source or origin bevouched for. The law of trademarks is governed byboth Federal and State law. Federal trademark lawstems from the Trademark Act of 1946 (15 U.S.C.1115-1127, popularly known as the Lanham Act), asamended in 1988 (Public Law 100-667). Each Statehas an administrative registration system that isgenerally parallel to but autonomous from the

system in other States and from the Federal system(10). For those marks which qualify, Federal regis-tration is preferable to State registration because itprovides nationwide protection; State registrationonly affords protection within the State of registra-tion.

Trademarks are designed to protect the publicagainst false and deceptively marked goods and tosecure to the owner of the mark the good will of thebusiness (27). For example, “Sanka” designates abrand of decaffeinated coffee. “Bib” the “MichelinMan” is the symbol for a brand of tires. A stylizedpenguin designates those books published by Pen-guin Books; and the color pink is a trademark forresidential insulation manufactured by Owens-Coming (16,20) (see figure 3-3).


Figure 3-3-A Sampling of Trademarks

OMEGA

soulRCE Office of Technology Assessment, 1989.


A Federal trademark may issue to persons whouse or intend to use a trademark in commerce (priorto the 1988 amendments, only trademarks already inuse could be registered). Trademarks, unlike patents,must be used in order to maintain registration.Federal trademark registration has a term of 10years, which can be renewed if continuous use of themark is shown.

As applied to biotechnology proprietary rights,trademarks can be useful to indicate the source ofcommercial products, but such marks do not preventa subsequent competitor from lawfully developingthe same product and marketing it under a newtrademark that is not confusingly similar to thetrademark of the original manufacturer (6).

TRADE SECRETSTrade secret protection extends to information

used in one’s trade or business that is maintainedsecret by its owner and provides a competitivebusiness advantage over those not having theinformation. A plan, process, tool, mechanism,chemical compound. customer list, or formula are allexamples of information that can be maintained astrade secrets. Affirmative steps must be taken by anemployer to keep information secret (e.g., by limit-ing access or by contract). Once the informationbecomes publicly known it loses its status as a tradesecret.

Trade secrets are the subject of State law. Thetheft of a trade secret is a tort and action lies againstthe “thief’ for misappropriation. It is not considereda misappropriation if one obtained trade secretinformation and did not know that such informationwas a trade secret. However, the trade secret ownermay have a cause of action against the disclosingparty for wrongful disclosure of the trade secret.

Trade secret law in the United States has beenfashioned to promote two beneficial ends. It encour-ages commercial morality and fair-dealing, and itencourages research and innovation. It does not,however, promote disclosure to the public, which isone of the end results of a patent.

In Kewanee Oil v. Bicron Corp. (19), the SupremeCourt found trade secret law to be compatible withpatent law, stating that:

Certainly the patent policy of encouraging inven-tion is not disturbed by the existence of another formof incentive to invention. In this respect the twosystems are not and never would be in conflict.

In support of its decision in Kewanee, the Court in1979 held in Aaronson v. Quick Point Pencil Co. (1 )that a contract for royalties on a product wasenforceable even though the product was unpatent-able. The Court was seeking to prevent the suppres-sion from the market of innovative products whichdo not achieve the level of patentability, and therebyencourage trade secret law where it is not inconsis-tent with the aims of the patent system. Quick PointPencil Co. had placed great value on an innovationdisclosed to it in confidence and paid for the right tobe the first in the marketplace, knowing that a patentmight not issue.

Trade secret rights require that a trade secret bedisclosed in confidence only to those having areasonable need to know (e.g., employees). Theserights require that measures be taken to preventdisclosure of the trade secret to the public or tocompetitors. Companies generally identify whatinformation constitutes trade secrets so that it willhave enforceable rights. A person entering into aconfidential relationship with a trade secret holder,therefore, must know what is considered to be a tradesecret. If a trade secret is disclosed in a nonconfiden-tial manner, it is lost forever.

Patent applications are held in confidence andnondisclosure rules apply during the pendency of anapplication (35 U.S.C. 122). A member of the publicmust obtain permission from the owner of a patentapplication to obtain access to the file. Abandonedpatent applications are similarly not generally avail-able to the public, except under special circum-stances. Confidential patent information can bemaintained as a trade secret. However, once a patentissues, the information contained in it is madeavailable to the public, in order to encourage furtherinnovation.

SUMMARYVarious forms of American law protect the

intellectual property rights of inventors, authors, andholders of commercially useful trademarks andsecrets. Of primary relevance to this report is onearea of intellectual property law—patent law—

Chapter 3-Intellectual Property ● 47

which is of increasing importance to biotechnologyresearch and development. Subsequent chapters willaddress the patentability of micro-organisms andcells, plants, and animals.

1.

2.

3.

4.

5.

6.

7.8.

9.

10.

11,

12.

13.14.

CHAPTER 3 REFERENCESAuronson v. Quick Point Pencil Co., 440 U.S. 257(1978).Adler, R., “Biotechnology as an Intellectual Prop-erty,” Science 224(4647):357-363, 1984.Adler, R., Finnegan, Henderson, Farabow, Garret &Dunner, Washington, DC, personal communication,Sept. 2, 1988.Amemick, B. A., Patent LaH’ for the Nonlaw>qer: AGuide for the Engineer, Technologist, and Manager(New York, NY: Mm Nostrand Reinhold Co., 1986).Application of Bergy, 596 F.2d 952 (CCPA 1979,opinion of Judge Giles Rich).Bahn, P. R., and Hultquist, S. J., “Engineered Proteinsas Intellectual Property,” Genetic Engineering New’s7(3):18-19, March 1987.Diamond v. Chakrabarty, 447 U.S. 303 (1980).Drabiak, J., “Patents, Copyrights, and Trademarks: aPrimer on Protecting Intellectual Property WorkProduct,” Southern Illinois University Law Journul11( 1):1-28, Fall 1986.Electro-Nucleonics v. Mossinghofi, 592 F. Supp. 608(DC, 1984).Evans, L. E., “A Primer on Trademark and ServiceMarks,” Texas Bar Journal 50(3):258-265, March1987.Funk Brothers Seed Co. v. Kalo Inoculant Co., 333U.S. 127 (1948).Giesser, J., Patent and Trademark Affairs, Sandoz,East Hanover, NJ, personal communication, Aug. 19,1988.Gottschalk v. Benson, 409 U.S. 63 (1972).Graham v. John Deere Co,, 383 U.S. 1 (1966).

15.16.

17.18.

19.20.

21.

22.23.

24.

25.

26.

27.

Hoover Co. v. Coe, 325 U.S. 79 (1945).Hubbard, J., *’Think Pink! Color Can Be a Trade-mark,” Washington & Lee Law Re}*iew 43(4):1433-1467, Fall 1986.In re Hall, 781 F.2d 897 (Fed. Cir 1986).Kayton, I., “Copyright in Genetically EngineeredWorks,” George Washington Unii’ersity Law Review191 (1982).Kewanee Oil v. Bicron Corp., 416 U.S. 470 (1974).Landes, W., and Posner, R., “Trademark Law: anEconomic Perspective,” The Journal of Luw andEconomics 30(2):260-309, October 1987.Memorandum dated Feb. 18, 1983 from the Presidentto the heads of the Executive Departments andAgencies on Government Patent Policy, 19 WeeklyComp. Pres. Dec. 252.Parker v. Flook, 437 U.S. 584 (1978).Rosenfeld, S,, The Committee on Science and Law,The Association of the Bar of the City of New York,Sharing of Research Results in a Federally Spon-sored Gene Mapping Project, contract No. H3-5130.0, submitted to the U.S. Congress, Office ofTechnology Assessment, Washington, DC, Aug. 26,1987.U.S. Congress, House Judiciary Committee, HouseReport No. 96-1307(1) to accompany H.R, 6933(Washington, DC, 1980).U.S. Congress, Office of Technology Assessment,Newf Developments in Biotechnology: Ownership ofHuman Tissues and Cells---Special Report, OTA-13A-337 (Washington, DC: U.S. Government PrintingOffice, March 1987).U.S. Department of Commerce, Patent and Trade-mark Office, “General Information Concerning Trade-marks,” GPO No. C 21.2:T67, Washington, DC,1986.Wrist-Rocket Manufacturing. Co., Inc. v. Saunders,379 F.2d 846 (D. C. Neb.1974), affirmed in part,reversed in part on other grounds, 516 F.2d 846 (8thCir., 1975).

Chapter 4

Patenting of Micro-Organismsand Cells

“The grant or denial of patents on micro-organisms is not likely to put an end to genetic researchor its attendant risks. The large amount of research that has already occurred when no researcherhad sure knowledge that patent protection would be available suggests that legislative or judicialfiat as to patentability will not deter the scientific mind from probing into the unknown any morethan Canute could command the tides. ”

Chief Justice Warren BurgerChakrabarty v.. Diamond

“Those companies in the private sector which are investing hundreds of millions of dollars in thisnew science do not accept the theory that patents are unimportant. Such a concept is particularlyrepugnant to patent-conscious, research-intensive pharmaceutical firms dealing in global marketswith drugs which require staggering investments of time and money before ultimately yielding acommercial return. To them the patent shelter is paramount. It is quite literally their sole incentivefor risk taking.”

William DuffeyPatent Lawyer, Monsanto

CONTENTSPage

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51PROCESS PATENT PROTECTION PRIOR TO 1980. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51THE CHAKRABARTY CASE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51POST-CHAKRABARTY EVENTS AND TRENDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Federal Patent Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54Patents and the Commercialization of Biotechnology.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55Patent Activity Following Chakrabarty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55Emerging Patent Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56U.S. Patent and Trademark Office Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60CHAPTER 4 REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

FiguresFigure Page4-1. The Structure of DNA.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514-2. Recombinant DNA: The Technique of Recombining Genes From One Species

With Those From Another . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 524-3. Patent Activity Class 935, Genetic Engineering.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 634-4. Patent Activity Class 435, Chemistry: Molecular Biology and Microbiology . . . . . . . 64

TablesTable Page4-1. Class 935, Genetic Engineering. ........ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 614-2. Class 435, Chemistry: Molecular Biology and Microbiology . . . . . . . . . . . . . . . . . . . . . . 624-3. Patents: Applications and Ownership, by Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

Chapter 4

Patenting of Micro-Organisms and Cells

INTRODUCTIONThe development of recombinant DNA technol-

ogy in the 1970s led to debate on many policyquestions, one of which concerned the patenting ofliving matter. The purpose of this chapter is todiscuss process patent protection available prior to1980, the Supreme Court’s landmark decision per-mitting the patenting of living matter (in this casebacteria), and several patent-related events andtrends that occurred or were identified subsequent tothe Supreme Court case.

PROCESS PATENT PROTECTIONPRIOR TO 1980

Patents on biotechnological developments datefrom the early days of the United States patentsystem. Louis Pasteur received a patent for a processof fermenting beer. Acetic acid fermentation andother food patents date from the early 1800s, whiletherapeutic patents in biotechnology were issued asearly as 1895. The first patent for isolating nucleicacid was issued in 1945, and the first patent forpreparing ribonucleic acid by a fermentation processwas issued in 1966. Until the recent advances inbiotechnology, such process patent applicationswere examined primarily by the U.S. Patent andTrademark Office’s (PTO) examining group infermentation chemistry (18). Since March 1988, aspecial biotechnology examining group handlesthese patent applications.

The development of recombinant DNA technology—the joining of DNA from different organisms—hasresulted in greatly increased understanding of thegenetic and molecular basis of life (see figure 4-l).Following the first successful directed insertion ofrecombinant DNA in a host micro-organism in 1973,scientific researchers began to recognize the poten-tial for directing the cellular machinery to developnew and improved products and processes in a widevariety of industrial sectors (see figure 4-2). Many ofthese products were micro-organisms (microscopicliving entities) or cells (the smallest component oflife capable of carrying on all essential life proc-

esses). With the development of rDNA technologyarose the issue of patenting the inventive results ofthe technology.

Prior to 1980, PTO would not grant patents forsuch inventions, deeming them to be “products ofnature” and not statutory subject matter as definedby 35 U.S.C. 101.1 Although patent applicationswere rejected if directed to living organisms per se,patent protection was granted for many composi-tions containing living things (e.g., sterility testdevices containing living microbial spores, foodyeast compositions, vaccines containing attenuatedbacteria, milky spore insecticides, and various dairyproducts) (18). In the absence of congressionalaction, it took a catalytic court decision to clarify theissue of patentability of living subject matter.

THE CHAKRABARTY CASEThe Supreme Court’s single foray into biotech-

nology occurred in 1980 with its ruling in the patentlaw case of Diamond v. Chakrabarty (4).

Figure 4-l-The Structure of DNA


Isec.tion )()/. /nventjom Patgnt&/e. whoever invents or discowrs any new and useful process, machine, manufacture, or composition of matter, orany new and useful Jmprwemern thereof, may obtain a patent thercfor, subject to t.k conditions and requirements of this title.

–5 1-

.


Ananda Chakrabarty, a microbiologist at theGeneral Electric Research and Development Centerin Schenectady, New York, had developed a geneti-cally engineered (but not recombinant) bacteriumcapable of breaking down multiple components ofcrude oil. Because this property was not possessedby any naturally occurring bacteria, Chakrabarty’sbacterium was thought to have significant value forthe cleanup of oil spills.

Chakrabarty filed a patent application asserting36 claims relating to “a bacterium from the genusPseudomonas containing therein at least two stableenergy-generating plasmids, each of said plasmidsproviding a separate hydrocarbon degradative path-way.” The patent claims were of three types:

● process claims for the method of producing thebacteria;

. claims for an inoculum comprised of a carriermaterial floating on water (e.g., straw); and

. product claims for the bacteria.

The patent examiner allowed the claims for theprocess and for the inoculum but rejected the claimsfor the bacteria on two grounds: 1) micro-organismsare “products of nature” and 2) as living things,micro-organisms are not patentable subject matterunder 35 U.S.C. 101. Chakrabarty appealed therejection of these claims to the PTO Board ofAppeals. The Board reversed the examiner on thefirst ground, concluding that the new bacteria werenot products of nature, because Pseudomonas bacte-ria containing two or more different energy-generating plasmids are not naturally occurring. Thesecond ground of rejection—that the bacteria did notconstitute statutorily protectable subject matter—was affirmed.

Chakrabarty then appealed the PTO decision tothe Court of Customs and Patent Appeals, whichreversed the decision (3). Judge Rich, writing for themajority in the split decision, relied upon an earlierlower court decision which held that the fact thatmicro-organisms are alive is without legal signifi-cance for purposes of the patent law (9).2 The casewas then appealed to the U.S. Supreme Court by theGovernment. The Supreme Court, in a 5-4 ruling,held that a live, human-made micro-organism ispatentable subject matter under section 101 as a“manufacture>’ or “composition of matter.”

Figure 4-2-Recombinant DNA: The Technique ofRecombining Genes From One Species With Those

From Another

Restriction enzymes recognize sequences along the DNA andcan chemically cut the DNA at those sites. This makes it possibleto remove selected genes from donor DNA molecules to form therecombinant DNA. The recombinant molecule can then beinserted into a host organism and large amounts of the clonedgene, the protein that is coded for by the DNA, or both, can beproduced.


How did the Court reach its conclusion? Becausethe case involved statutory construction, i.e., themeaning of the language of the statute and the intentof the legislature in enacting the statute, the Courtconducted an analysis of the language and legisla-tive history of section 101. In so doing, the Courtreached the following conclusions:

. In looking at the plain meaning of the statu-tory language, words are to be interpreted astaking their ordinary, contemporary, commonmeaning. In addition, courts should not readinto the patent laws limitations and conditionswhich the legislature has not expressed (23).Therefore, the terms “manufacture” and “com-position of matter” must be interpreted inaccordance with their dictionary definitions.Because both terms are expansive in theirmeaning, and are modified in the statutorylanguage by the expansive term “any,” Con-gress plainly contemplated that the patent laws

2Allhough tie su~me Cow decided to hear both the Ber~ and Chakrabar@ cases, Bergy wiLhdrew his Ckim so only the C’hakra&W cw w=argued.

Chapter 4--Patenting of Micro-Organisms and Cells ● 53

1

BACKGROUND OF THE INVENTION

‘

1

SOURCE: U S Patant and Trademark Ofhca


would be given wide scope. Federal courtsshould not read into patent laws limitations andconditions which the legislature has not ex-pressed.

● The legislative history of the patent statutealso supports a broad construction. Congressoriginally adopted Jefferson’s view that “inge-nuity should receive a liberal encouragement.”Jefferson’s original subject matter statutorylanguage remained virtually intact through fiverewrites of the patent statute spanning 187years. Indeed, committee reports accompany-ing the most recent patent act revision “informus that Congress intended statutory subjectmatter to include anything under the sun madeby man.”

. Laws of nature, physical phenomena, andabstract ideas are not patentable. New min-erals discovered in the earth, a new plant foundin the wild, Einstein’s celebrated law of E=mc2,and Newton’s law of gravity were all cited bythe Court as “manifestations of. . . nature, freeto all men and reserved exclusively to none.”Unlike such manifestations, Chakrabarty’s micro-organism was a product of human ingenuityhaving a distinct name, character, and use.

. The passage of the 1930 Plant Patent Act(PPA) (affording patent protection for certainasexually reproduced plants) and the 1970Plant Variety Protection Act (PVPA) (pro-viding protection for certain sexually repro-duced plants) does not evidence congressionalunderstanding that the terms “manufacture” or“composition of matter” do not include livingthings.

● The fact that genetic technology was unfore-seen when Congress enacted Section 101 doesnot require the conclusion that micro-organisms cannot qualify as patentable subjectmatter until Congress expressly authorizessuch protection.

● Arguments against patentability based onpotential hazards that may be generated bygenetic research should be addressed to theCongress and the Executive for regulation orcontrol, not to the Judiciary.

The dissenting opinion opposed the patentabilityof living things and concluded that PPA and PVPAevidenced Congress* understanding, at least from

1930, that living things were not patentable subjectmatter. The dissenters reasoned that if living thingswere patentable, then “the plants included in thescope of the 1930 [PPA] and 1970 [PVPA] Actscould have been patented without new legislation.”Because Congress thought it had to legislate in orderto make agricultural “human-made inventions pat-entable” in 1930, and because bacteria were specifi-cally excluded from coverage in the PVPA, thedissenters reasoned that “Congress plainly legislatedin the belief that Section 101 does not encompassliving organisms.”

Although Chakrabarty held that a live, human-made micro-organism was patentable, the specificissue of whether plants and animals are patentablewas not addressed. The Chakrabarty decision did,however, provide the judicial framework for PTO tolater determine that plants and animals were patent-able subject matter under the U.S. Code (see chs. 5and 6). Many observers agree that the Chakrabartydecision provided great economic stimulus to pat-enting of micro-organisms and cells, which in turnprovided stimulus to the growth of the biotech-nology industry in the 1980s. One patent examinernotes, however, that even without Chakrabarty,some aspects of patenting of recombinant DNAtechnology probably would not have been adverselyaffected since plasmids, phage, and viruses are notliving and thus would have been ultimately em-braced as patentable subject matter (18).

POST-CHAKRABARTY EVENTSAND TRENDS

Federal Patent Policy

In addition to the Chakrabarty decision, revisionsin Federal patent policy encouraged increased pat-enting of living organisms and related processes.Prior to 1980, no single patent policy existed forgovernment-supported research, despite the FederalGovernment’s preeminence in biotechnology-related research funding. Instead, each Federalagency developed its own rules, resulting in 26different patent policies. Under this system, onlyabout 4 percent of some 30,000 government-ownedpatents were licensed. Furthermore, the governmentpolicy of granting nonexclusive licenses discour-aged private investment, since a company lacking anexclusive license was unlikely to pay the cost of

Chapter 4---Patenting of Micro-Organisms and Cells ● 55

developing, producing, and marketing a product.Thus, potentially valuable research remained unex-ploited.

To resolve this problem, Congress passed thePatent and Trademark Amendments of 1980 (PublicLaw 96-517) as amended in 1984 (Public Law98-260) to promote efforts to develop a uniformpatent policy that would encourage cooperativerelationships and to commercialize government-funded inventions. From 1980 through 1984 patentapplications by universities and hospitals for inven-tions containing human biological increased morethan 300 percent as compared to the previous 5-yearperiod (20).

The policies adopted by Congress in 1980 and1984, which gave statutory preference to smallbusinesses and nonprofit organizations, were ex-tended to larger businesses (with some exceptions)in 1983 (12). The Technology Transfer Act of 1986(Public Law 99-502) granted Federal authority toform consortia with private concerns. ExecutiveOrder 12591, issued in 1987, further encouragedtechnology transfer programs, including the transferof patent rights to government grantees. In combina-tion with the Chakrabarty decision, these actionshelped spur patent activity.

Patents and the Commercialization ofBiotechnology

The Chakrabarty decision helped to precipitateincreased research and development, assuring thecommercialization of biotechnology in the UnitedStates. The commercialization of biotechnology wasthe focus of an earlier report in OTA’s NewDevelopment in Biotechnology assessment series(21). In that report, OTA noted that patent protec-tion of biotechnology products is a major unre-solved issue that presents a potential barrier tocommercialization.

Patents are very important to commercial entities.For an emerging biotechnology company, patentscan help attract venture capital, collaborative ar-rangements, and new research and developmentleads. Investors watch biotechnology patent devel-opments and sometimes react quickly to news. Theinitial public offering of stock by Genentech in 1980set a Wall Street record for the fastest price per shareincrease ($35 to $89 in 20 minutes); the initial public

offering by Cetus in 1980 set a record for the largestamount of money raised in an initial public offering($1 15 million) (19). In September 1986, Genen-tech’s stock dropped 10.5 points following the newsthat Hoffmann-La Roche had sued it for infringinga patent for human growth hormone. Genentech’sstock rose the previous year when it sued Burroughs-Wellcome (PLC) in Great Britain for allegedlyinfringing a British patent on tissue plasminogenactivator (21 ).

By 1987, 403 American companies dedicated tobiotechnology and 70 established corporations withsignificant investments in biotechnology yielded anestimated 35,900 jobs, including 18,600 scientistsand engineers. Combined, U.S. industry is spending$1.5 billion to $2.0 billion annually in biotech-nology research and development. On average,dedicated biotechnology companies—those entre-preneurial ventures started specifically to commercial-ize innovations in biotechnology—have filed fewerbiotechnology patent applications than larger, diver-sified firms that use biotechniques—1.5 v. 10applications, respectively, in 1986. This is likely dueto a greater institutional capacity to file multiplepatents in the larger, more diversified companies(21).

Patent Activity Following Chakrabarty

Although Chakrabarty addressed the subjectmatter patentability of a human-made micro-organism, i.e., a patent on the end product, manypatent law developments involve the use of suchmicro-organisms and cells in processes that couldbe patented. Data compiled by PTO within the first3 years of the Chakrabarty decision focused on sixareas of U.S. patent activity relating to micro-organisms and cells (22). The six areas present across-section of the types of patents issued in thisfield.

Mutation/Genetic Engineering

Patents in this emerging area within biotech-nology refer to laboratory processes for producing astable, inheritable change in the genotype of ananimal, a plant, or a micro-organism. This can beaccomplished by artificially inducing a structuralchange in a gene or through the incorporation ofgenetic material from an outside source (e.g., a


chemically synthesized or modified gene). Patents inthis area include methods of modifying plasmids bychemical or biochemical processes.

Probably the best known patent in this area isPatent 4,237,224, covering the process for produc-ing biologically functioning molecular chimeras.Soon after the Chakrabarty decision, Stanley N.Cohen and Herbert Boyer (at Stanford Universityand the University of California at San Francisco,respectively) patented a process for inserting foreigngenetic material into a bacterial plasmid, a techniquewidely used in recombinant DNA research. TheCohen-Boyer patent was assigned to their universi-ties, who split royalty payment income receivedfrom those wishing to use the patented process. By1987, the Cohen-Boyer patent was Stanford’s topearning patent ($1.7 million annually), surpassingthe former leader, a 1971 patent on the FM synthe-sizer chip used in music synthesizers (2),

Enzymes Per Se

An enzyme is a protein that acts as a catalyst,speeding the rate at which a biochemical reactionproceeds, but not altering its direction or nature. Animportant tool in biotechnology, patents in this areahave included products (enzymes per se and enzymecompositions) and processes for preparing, separat-ing, purifying, and treating enzymes.

Immobilized Enzymes

Immobilization of an enzyme occurs when theenzyme or microbe is bonded to a carrier orentrapped within a carrier. The carrier materialphysically confines the enzyme or microbe, makingthem more stable when exposed to changes inreaction conditions. Binding often makes the en-zyme insoluble, offering additional economic ad-vantages. Examples of such bonded or entrappedenzymes include enzymes chemically or physicallybonded to a water-soluble matrix, enzymes con-tained within a polymer or gel, and enzymesabsorbed in resin.

Tissue and Cell Culture

Tissue and cell culture refers to the propagation ofcells removed from organisms in a laboratoryenvironment that has strict sterility, temperature,

and nutrient requirements. Techniques in this areaare of extreme importance to the medical sciencesfor the production of vaccines, pharmaceuticals, andantibodies. Patents in the area include those cover-ing processes, apparatus and nutrient media thatpermit the growth and maintenance of cell lines, aswell as cell lines per se.

Starch Hydrolysates

Hydrolysis is a chemical process of decomposi-tion involving splitting of a chemical bond andaddition of the elements of water. Patents in this areainclude those covering processes for synthesizingmonosaccharides by the action of an enzyme ormicro-organism. An example of such a process is thehydrolysis of starch to sugar.

Amino Acids

Amino acids are the building blocks of proteins.Each different protein is made up of a specificsequence of amino acids—which number some 20molecules—with the unique sequence coded for byDNA. Patents in the area include processes forpreparing alpha or beta amino acids and salts by abiological transformation of matter.

Emerging Patent Litigation

Early patents in the biotechnology field haveresulted in the emergence of patent litigation.Factors leading to litigation include the presence ofpioneer inventions, high value-added products, majorinvestments, and personality factors. Where litiga-tion is avoided, mitigating factors can includeeconomic considerations and the ability of parties toenter into licensing or cross-licensing arrangements(1 1). Courts are being asked to determine whetherpatent holders have met the requisite requirementsof novelty, usefulness, and nonobviousness. Inaddition, issues relating to the scope of claims,infringement, and enforcement of patents haveoccurred.

Uncertainty over patent protection is likely to becostly and will undoubtedly influence the researchand development strategy of many companies.Eighty-five percent of large companies respondingto an OTA survey indicated that they expect topursue trade secret protection for biotechnology

Chapter 4-Patenting of Micro-Organisms and Cells ● 57

The patent awarded to Stanley Cohen and Herbert Boyer in 1980. This patent has since become StanfordUniversity’s top earning patent ($1.7 million annually).

[11] 4,237,224Cohen et al. [45] Dec. 2, 1980

[54] PROCESS FOR PRODUCINGBIOLOGICALLY FUNCTIONALMOLECULAR CHIMERAS

[75] Inventors:

[73] Assignee:

[21] Appl. No.:

[22] Filed:

Stanley N. Cohen, Portola Valley;Herbert W. Boyer, Mill Valley, bothof Calif.

Board of Trustees of the LelandStanford Jr. University, Stanford,Calif.

1,021

Jan. 4, 1979

Related U.S. Application Data

[63] Continuation-in-part of Ser. No. 959,288, Nov. 9, 1978,which is a continuation-in-part of Ser. No. 687,430,May 17, 1976, abandoned, which is a continuation-inpart of Ser. No. 520,691, Nov. 4, 1974.

[51] Int. cl.~ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C12P 21/W[52] U.S. Cl . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 435/68; 435/172;

435/231; 435/183; 435/317; 435/849; 435/820;435/91; 435/207; 260/1 12.5 S; 260/27R; 435/212

[58] Field of Search . . . . . . . . . . . . . . 195/1, 28 N, 28 R, 112,195/78, 79; 435/68, 172, 231, 183

[56] References Cited

U.S. PATENT DOCUMENTS

3,813,316 5/1974 Chakrabarty . . . . . . . . . . . . . . . . . . . . . . 195/28 R

OTHER PUBLICATIONSMorrow et al., Proc. Nat. Acad. Sci. USA, vol. 69, pp.3365-3369, NOV. 1972.Morrow et al., Proc. Nat. Acad. Sci. USA, vol. 71, pp.1743-1747, May 1974.Hershfield et al., Proc. Nat. Acad. Sci. USA, vol. 71,pp. 3455 et seq. (1974).Jackson et al., Proc. Nat. Acad. Sci. USA, vol. 69, pp.2904-2909, Oct. 1972.

Mertz et al., Proc. Nat. Acad. Sci. USA, vol. 69, pp.3370-3374, Nov. 1972.Cohen, et al., Proc. Nat. Acad. Sci. USA, vol. 70, pp.1293-1297, May 1973.Cohen et al., Proc. Nat. Acad. Sci. USA, vol. 70, pp.3240-3244, Nov. 1973.Chang et al., Proc. Nat. Acad. Sci, USA, vol. 71, pp.1030-1034, Apr. 1974.Ullrich et al., Science vol. 196, pp. 1313-1319, Jun.1977.Singer et al., Science vol. 181, p. 1114 (1973).Itakura et al., Science vol. 198, pp. 1056-1063 Dec.1977.Komaroff et al., Proc. Nat. Acad. Sci. USA, vol. 75, pp.3727-3731, Aug. 1978.Chemical and Engineering News, p. 4, May 30, 1977.Chemical and Engineering News, p. 6, Sep. 11, 1978.

Primary Examiner—Alvin E. TanenholtzAttorney, Agent, or Firm--Bertram 1. Rowland

[57] ABSTRACT

Method and compositions are provided for replicationand expression of exogenous genes in microorganisms.Plasmids or virus DNA are cleaved to provide linearDNA having ligatable termini to which is inserted agene having complementary termini, to provide a bio-logically functional replicon with a desired phenotypi-cal property. The replicon is inserted into a microor-ganism cell by transformation. Isolation of the transfor-mants provides cells for replication and expression ofthe DNA molecules present in the modified plasmid.The method provides a convenient and efficient way tointroduce genetic capability into microorganisms forthe production of nucleic acids and proteins, such asmedically or commercially useful enzymes, which mayhave direct usefulness, or may find expression in theproduction of drugs, such as hormones, antibiotics, orthe like, fixation of nitrogen, fermentation, utilization ofspecific feedstocks, or the like.

14 Claims, No Drawings

SOURCE: Office of Technology Licensing, Stanford University


Photo credit: Robyn Nishimi

Human cells in culture

lines in addition to patent protection, although patentprotection is more desirable for many companies(21). When intellectual property rights are unclear,valuable resources are invested in expensive andtime-consuming litigation.

Infringement

The patenting of micro-organisms and cells andrelated processes have, in several early cases,involved issues resulting from questions of patentinfringement. Patent infringement issues arisemainly in three contexts: literal infringement, in-fringement through the doctrine of equivalents, ornoninfringement through exceptions from infringe-ment.

Literal infringement occurs whenever a personwithout authority makes, uses, or sells any productor process that is covered by the patent claims withinthe United States during the term of the patent (35U.S.C. 271(a)). This is the most common form ofinfringement litigation. In addition to literal, orstatutory infringement, the Supreme Court hasestablished the rule that in order to prevent aninfringer from stealing the benefit of a patentedinvention, a patentee may proceed against theproducer of a product or process if it performssubstantially the same function in substantially thesame way to obtain the same result (7). This is therule of the doctrine of equivalents. The rule appliesin instances where the accused product or process inquestion does not constitute literal infringement, yetremains an “equivalent” of the patented invention.

In one case, a court found that certain “antibodyfragments” do the same thing in essentially the sameway as previously patented whole antibodies and,therefore, infringe the patent *’either literally or bythe doctrine of equivalents” (8). From this case itseems possible that the doctrine of equivalents isapplicable to other areas of biotechnology as well.

In biotechnology, the most relevant exemptionfrom patent infringement is the experimental useexception, a court-created doctrine which holds thatan experiment with a patented invention for the solepurpose of gratifying true scientific inquiry orphilosophical curiosity does not attack the right of apatentee, and thus does not constitute infringement.

In 1984, the Court of Appeals for the FederalCircuit decided that “the limited use of a patenteddrug for testing and investigation strictly related toFood and Drug Administration (FDA) drug approvalrequirements during the . . . term of the patent” didnot fall within the experimental use exemption, andthus constituted infringement (15). Roche, the plain-tiff, held a patent on the brand name prescriptionsleeping drug “Dalmane.” Bolar, a generic drugmanufacturer, began taking steps near the end of theterm of Roche’s patent. to gain FDA approval of ageneric drug equivalent. Bolar’s actions (bioequivalencytests) were conducted pursuant to the requirementsof the Federal Food, Drug, and Cosmetic Act(FDCA) (21 U.S.C. 301-392), which govern actionsrequired for FDA drug approval.

Chapter 4-Patenting of Micro-Organisms and Ceils ● 59

Roche argued that Bolar’s use of the patenteddrug constituted infringement. Bolar argued thatFDCA requirements created a conflict with thepatent infringement statute; because FDCA in-creased the time necessary for FDA drug approval,and because the patent code did not allow forFDA-mandated testing until the end of the patentterm, the patentees “gain for themselves . . . a defacto monopoly of upwards of two years” bypreventing the testing of a generic drug until thepatent expires. Although admitting that it usedDalmane, Bolar claimed that the use was “experi-mental.” The court found that Bolar’s use did not fallwithin the narrow confines of the experimental usedoctrine, and thus infringed Roche’s patent.

In the wake of Roche, Congress amended thepatent code (Public Law 98-417) to allow a statutoryexemption with respect to human drug productswhich in part overruled the court decision. Thus, itis “not. . . an act of infringement to make, use, orsell a patented invention . . . solely for uses reason-ably related to the development and submission ofinformation under a Federal law which regulated themanufacture, use, or sale of drugs” (35 U.S.C. 271(e)(l)).

Where the testing of a patented drug is found tobe not solely for purposes of meeting FDAapproval requirements, however, the testing willstill be found to constitute infringement. A 1987case tested the limits of this provision. In ScrippsClinic and Research Foundation v. Genentech (16),the plaintiff, owner of a patent for blood-clottingfactor VIII:C, brought an infringement suit againstGenentech, which defended by arguing that all itsuses of the factor VIII:C, though not solely forpurposes related to FDA testing, bore some reason-able relationship to such purposes and hence fit thenew 271 (e) exception. The court disagreed withGenentech, finding that actions taken by the com-pany (e.g., preparation of a European patent and thedevelopment of an agreement to commerciallymarket Factor VIII:C) constituted more than waspermitted by statute, which creates an exceptionsolely for the development and submission ofinformation required by a Federal law.

271 (c)(l ). A strict interpretation of the statute couldresult in slower development of generic copies ofpreviously patented organisms. A looser interpreta-tion could result in infringers taking advantage, earlyin a patent’s term, of the amendment in circum-stances where it was not intended to operate (10).

Scope of Protection

A significant issue presented by several casesinvolves the scope of protection for naturally occur-ring proteins as opposed to those that have beengenetically engineered. Although a protein found innature is not patentable, purified compositions of theprotein may be patented.

An example of this involves current developmentof tissue plasminogen activator (tPA), a geneticallyengineered protein drug that helps to dissolve bloodclots in patients who have suffered heart attacks.Genentech, Inc. received FDA approval in 1987 tomarket its form of tPA. During the first 5 monthsfollowing government approval, sales totaled $100million (1). Subsequently, Genentech received exclu-sive license to a patent claiming broad protection forthe way tPA acts on blood clots (U.S. 4,752,603) (6).Nonetheless, other companies also filed patentapplications for their forms of tPA, based on smallchanges in the molecular structure of the drug.

The scope of protection (i.e., whether patentprotection will be on the fundamental characteristicsand uses of an organism or product, or on the slight

It remains unclear how other courts will interpretexemption from infringement issues raised by theapplication of various fact patterns to Section

60 . New Developments in Biotechnology: Patenting L@

modifications of the organism or product) is an issuethat will determine the degree of exclusivity thatpatent holders will enjoy. The Patent Office and thecourts have a long history of experience in dealingwith questions of claim scope (17), but compara-tively little experience in applying this law tobiotechnology inventions. Until court decisionsresolve emerging issues, neither a patentee nor thepatentee’s competitors can be entirely clear on thelimits of patent claim enforcement (5).

Already, patent battles are being fought overInterleukin-2, tissue plasminogen activator, humangrowth hormone, hybridoma technology, alpha in-terferon, factor VIII, and use of dual monoclinalantibody sandwich immunoassay in diagnostic testkits. Companies receiving basic product patents arein court enforcing their rights against infringementor defending the patent grant in opposition orrevocation proceedings. It is likely that patentlitigation in biotechnology will increase given thecomplex web of partially overlapping patent claims,the high-value products, the problem of prior publi-cation, and the fact that many companies are chasingthe same products (21).

U.S. Patent and Trademark Office Activity

The majority of biotechnology patent applicationsinvolving micro-organisms and cells fit into one oftwo classes established by PTO for examinationpurposes. Class 935 is a comprehensive cross--reference collection of patents and other technicaldocuments relating to genetic engineering technol-ogy. Within the Class 935 are various subclasses(see table 4-l). Micro-organisms per se that are notprovided for in other classes are listed in Class 435,Chemistry: Molecular Biology and Microbiology(see table 4-2).

Patent activity in both areas has increased dra-matically during the past 10 years, both as a functionof application filing date (that date when theapplication is filed) and patent grant date (the date ofthose patents which issued) (see figures 4-3 and 4-4).In both classes, the majority of patentees areAmericans, and the vast majority of patents areowned by U.S. corporations (see table 4-3).

A recent survey of genetic engineering patentsconfirms the dominance of U.S. inventors in the areaof biotechnology patents as related to pharmaceuti-

cals and health care (14). The PharmaceuticalManufacturers Association found that of 1,476biotechnology patents issued by PTO in 1987, some206 used techniques of the “new biotechnology.”Fully 80 percent of these patents (159) were of U.S.origin, as opposed to only 20 percent (40) fromforeign sources. Within the United States, corpora-tions accounted for 45 percent of the patents (89),nearly 21/2 times as many patents as U.S. uni-versities.

One negative trend from the increase of patentapplications is the inability of PTO to processbiotechnology applications in a timely manner. Thenumber of biotechnology patent applications hasseverely challenged the process and examinationcapabilities of PTO. In March 1988, PTO reorga-nized its biotechnology effort into a separate patentexamining group. As of July 1988, 5,850 biotech-nology applications had not yet been acted on.Currently, it is approximately 15.5 months, onaverage, before examination of a biotechnologyapplication is initiated, and an average of 27months before the examination process is com-pleted by grant of the patentor abandonment ofthe patent application (24). Turnover among patentexaminers, lured to the private sector by higher pay,is cited as a significant reason for the delay inreviewing patents (21 ).

SUMMARYPrior to 1980, the U.S. Patent and Trademark

Office did not grant patents on living organisms perse, deeming such organisms to be outside the scopeof statutory subject matter. This policy was reversedby the Supreme Court’s landmark decision inDiamond v. Chakrabarty in 1980, a case involvinga genetically engineered bacterium capable of break-ing down multiple components of crude oil. TheChakrabarty decision, in concert with revisions toFederal patent policy, led to increased numbers ofpatent applications for living micro-organisms andcells, as well as related processes. The majority ofsuch patents are filed by U.S. inventors and ownedby U.S. corporations. Patent activity is one measureof the increased commercialization of biotech-nology during the 1980s. One predictable and costlyresult has been the emergence of patent infringementlitigation, as patent holders and alleged infringersattempt to define the scope of biotechnology patent


Table 4-l--Class 935, Genetic Engineering

1

23456789

10

111213

141516

17181920212223

2425262728


Table 4-2-Class 435, Chemistry:Molecular Biology and Microbiology

This class provides for the following subjectmatter when not provided for elsewhere:

A process of using a micro-organism or enzyme to synthesizea chemical product.A process of treating a material with a micro-organism orenzyme to separate, liberate, or purify a preexisting sub-stance.An in vitro process of measuring and testing in which:(1) A micro-organism or enzyme is used to determine the

presence or identity of a compound or composition in asample.

(2) A micro-organism is identified by propagation.(3) An enzyme is identified by its catalytic activity.(4) The presence of micro-organisms is detected.(5) A live micro-organism is used in an antigen antibody test

as an antigen.A process of propagating a micro-organism.A process in which the genetic structure of a micro-organismor extrachromosomal genetic structure is altered.A process of organ or tissue maintenance.A process of mashing or malting.Apparatus claimed or solely disclosed as for A-G.Micro-organisms per se or the subcellular parts thereof.Enzymes, immobilized enzymes or enzyme containing com-positions not otherwise provided for and the processes forpurifying enzymes or forming immobilized enzymes.Compositions claimed or solely disclosed as for the propa-gation of micro-organisms or for measuring and testingprocesses in C above.

SOURCE: U.S. Patent and Trademark Office, 1988

Table 4-3-Patents: Applications and Ownership,by Class

Class935 435

Percent of applications, US inventor . . . . . . . . . . 77 59Percent of applications, foreign inventor . . . . . . . 23 41Percent of patents, corporate owned . . . . . . . . . . 91 88Percent of patents, government owned . . . . . . . . 4 4

SOURCE: U.S. Patent and Trademark Office, 1988.

protection. It is unclear at this time what the result ofsuch litigation will be. One negative result ofincreased numbers of biotechnology patent applica-tions is PTO’s inability to examine such applicationsin a timely manner.

CHAPTER 4 REFERENCES1.

2.

Andrews, E. L., “The Complex bgai Issues in TPAFight,” New York Times, July 2, 1988.Barinaga, M, “Stanford Still on Top,” Nature 332(6161):192, Mar. 17, 1988.

3,

4.5.

6.

7.

8.

9.10.

1 i.

12,

13.

14.

15.

16.

17.

18.

19.

20.

Chukrabarty v. Diamond, 571 F.2d 40 (C. C.P.A.1978).Diamond v. Chakrabarty, 477 U.S. 303 (1980).Duffey, W,, “The Marvelous Gifts of Biotech: WillThey Be Nourished or Stifled by Our InternationalPatent Laws?” Symposium on the Protection ofBiotechnologicai Inventions, World Intellectual Prop-erty Organization and Cornell University, Ithaca,NY, June 1987.Ezzell, C., “Genentech Gets Patent Protection forTissue Plmminogen Activator,’’ Nature,333(6176) :79O,1988.Graver Tank & Manufacturing Co., Inc. v. Linde AirProducts Co., 339 U.S. 605 (1949).Hvbritech v. Monoclinal Antibodies, Inc., 802 F.2d1367 (Fed. Cir. 1986)./n re Bergy, 563 F.2d 1031, 195 USPQ 344 (1977).Janicke, P. M., attorney, Arnold, Durkee & White,Houston, TX, personal communication, Aug. 24,1988.Kamy, G., attorney, Dickstein, Shapiro & Morin,Vienna, VA, personal communication, Aug. 26,1988.Memorandum dated Feb. 18, 1983, from the Presi-dent to the Heads of the Executive Departments andAgencies on Government Patent Policy, 19 WeeklyComp. Pres. Dec. 252.Nelicin, D., Science as Intellectual Property (NewYork, NY; Macmillan, 1984).Pharmaceutical Manufacturers Association, “up-date: Biotechnology Products in Development,*’ Juiy1988.Roche Products Inc. v. Bolar Pharmaceutical Co.,733 F.2d 858 (Fed. Cir. 1984).Scripps Clinic and Research Foundation v. Genen-tech, 666 F.Supp 1379 (N.D. Cai. 1987).Sibley, K. D., “Factuai Inquiries in Deciding theQuestion of Enablement,” 70 J. Pat. Off. Soc. 115(1988).Tanenholtz, Alvin E., “Genetic Engineering—Technological Trends From the Perspective of a U.S.PTO Examiner,” Fourth Annual Biotechnology LawInstitute (Clifton, NJ: Prentice Hall Law & Business,1988).U.S. Congress, Office of Technology Assessment,Commercial Biotechnology: An International Analy-sis, OTA-BA-218 (Elmsford, NY: Pergamon Press,January 1984).U.S. Congress, Office of Technology Assessment,New Developments in Biotechnology: Ownership ofHuman Tissue sandCells-Specia lReport, OTA-BA-337 (Washington, DC: U.S. Government PrintingOffice, March 1987).


Figure 4-3-Patent Activity Class 935, Genetic Engineering

P a t e n t s200

150

100

5 0

.u

200

150

100

50

0

By patent grant date 1978-87

/

w——

I I

P a t e n t s

I

SOURCE. U S Patant and Trademark Othce, 1989.


Figure 4-4-Patent

Patents

Activity Class 435, Chemistry: Molecular Biologyand Microbiology

1,080

8 1 0

5 4 0

2 7 0

0

1,080

8 1 0

5 4 0

2 7 0

0

1978 1979 1980 1981 1982 1983 1984 1985 1986 1987

Patents

By application f i l ing date 1975-84

9 8 3 1984

SOURCE: U.S Patent and Trademark (Mice. 1989.

Chapter 4-Patenting of Micro-Organisms and Cells 65

21. U.S. Congress, Office of Technology Assessment, 23. United States v. Dublilier Condenser C’orp., 289 U.S.New Development.~ in Biotechnology: U.S. lnvestment-- 178 (1933).Special Report, OTA-BA-360 (Springfield, VA:National Technical Information Service, July 1988). 24. %n Horn, C., Deputy Solicitor, U.S. Patent and

22. U.S. Dep~rnent of Commerce, Patent and Trade- Trademark Office, Washington, DC, personal com-mark Office, OffIce of Technology Assessment and munication, September 1988.Forecast, Patent Prqfiles-biotechnology: 1982 Up-date (Washington, DC, September 1983).

Chapter 5

Intellectual Property and Plants

—

CONTENTSPage

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69HISTORICAL PERSPECTIVE OF PROPRIETARY PROTECTION OF PLANTS.... . 70

The Plant Patent Act of 1930. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71The Plant Variety Protection Act of 1970. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72Utility Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

COMPARISON OF DIFFERENT FORMS OF PLANT INTELLECTUALPROPERTY PROTECTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

Plant Patents v. Plant Variety Protection Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76Plant Patents v. Utility Patents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76Plant Variety Protection Certificates v. Utility Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76Trade Secret Law...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

INTELLECTUAL PROPERTY AND THE U.S. SEED AND PLANT INDUSTRIES... 78Choosing and Managing Plant Protection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78Hybrid Corn. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82Soybeans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82Tomato Seeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83Plant Biotechnology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

IMPACTS OF PLANT PROTECTION ON U.S. AGRICULTURE . . . . . . . . . . . . . . . . . . . . 84Economic Impacts of Plant Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85Germplasm and Plant Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87CHAPTER 5 REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

BoxesBox Page5-A. The Plant Patent Act of 1930: Judicial Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 725-B. The Plant Variety Protection Act of 1970: Judicial Interpretation. . . . . . . . . . . . . . . . . 755-C. Survey of Universities, Seed Companies, Nurseries, and

Biotechnology Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

TablesTable Page

5-1. Plant Patents Issued. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 735-2. PlantVariety Protection Certificates Granted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 765-3. Number of Utility Patents issued for Plants by Crop. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 765-4. U.S. Soybean Breeding Research By Private Industry Before and After

the Plant Variety Protection Act of 1970. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

Chapter 5

Intellectual Property and Plants

INTRODUCTIONIntellectual property protection for living organ-

isms is not a novel or recent phenomenon. Proprie-tary protection specifically for plant varieties hasevolved in the United States over the last 60 years.Plants are the sole life form for which the U.S.Congress has expressly permitted intellectualproperty protection.

Two Federal statutes specifically confer owner-ship rights to new plant varieties: the Plant PatentAct of 1930 (PPA) (35 U.S.C. 161-164) and the PlantVariety Protection Act of 1970 (PVPA) (7 U.S.C.2321 et seq.). The Supreme Court decision inDiamond v. Chakrabarty (8), coupled with Ex parteHibberd (16), affords individuals the additionaloption of seeking a utility patent (35 U.S.C. 101) toprotect a novel plant variety. Inventors have theopportunity to protect their plant discoveriesthrough three different mechanisms based on threedifferent, and not necessarily exclusive, statutes.Credentialed protection of plants encompasses threeforms: plant patents, Plant Variety Protection Cer-tificates (PVPCs), and utility patents. Together withtrade secrets, they cover thousands of differentplants and varieties.

Historically, what has been the economic impactof patent and patent-like protection of plants? Havebiotechnological advances altered the situation? Inaddition to providing economic incentives to de-velop new plants and varieties, have there been otherramifications of proprietary protection of plants?Are there perspectives from the evolution of plantprotection that are pertinent to the debate sur-rounding animal utility patents?

This chapter examines the history of intellectualproperty protection of plants and the relevantFederal statutes. Different mechanisms of protectionare compared, to highlight advantages and limita-tions. The impact of intellectual property rights onboth the U.S. seed industries and the public interestis also discussed.

Two forms of intellectual property protection ofplants are not discussed in this chapter: trademarks

and seed certification. Since 1956, trademarks arenot allowed on seed and plant varieties under theFederal Seed Act (7 U.S.C. 1551 et seq.). Althoughtrademarks on ornamental crops, which are notspecifically excluded under the Federal Seed Act,could be a looming issue (31). And, while Federaland State regulations for seed certification areimportant protection methods for some crops, suchas potatoes (45), this chapter focuses on the legal andeconomic issues of the three principal means forinventors to protect plants-plant patents, PVPCs,and utility patents.

DEFINITIONSAsexually reproduced plants are usually repro-

duced commercially by cuttings, grafting, and bud-ding, but not by seeds. Asexual reproduction assuresthe production of plants that are exactly the same.A sexually reproduced plants include floweringplants, such as roses, chrysanthemums, Africanviolets, and lilies; fruits, such as peaches, apples,oranges, grapes, and strawberries; nuts, such aspecans and walnuts; shrubs, such as azaleas, hollies,and lilacs; conifers; and broadleaf trees.

Sexually reproduced plants reproduce by seed.These plants include varieties (often called inbreds)such as corn, sorghum, and sunflowers. Inbreds areused to produce hybrids, which are the commercialproduct. Hybrids can neither be used to derive theoriginal parent inbreds nor be used to producecommercial seed. Sexually reproduced plants alsoinclude nonhybrid varieties, such as wheat andsoybean, which are the commercial product. Theirprogeny can be used for commercial seed.

Plant patents, authorized by PPA, protect plantvarieties that have been asexually reproduced, in-cluding cultivated sports,l mutants, hybrids, andnewly found seedlings. They cannot be obtained forplants reproduced from seeds, tubers (e.g., Irishpotatoes or Jerusalem artichokes), and wild varietiesfound in nature that are not asexually reproduced.Bulbs, corms, stolons, and rhizomes are not consid-ered to be within the tuber exception. For a period of

I A SpOr-I is an individud Cxhibi[ing a sudden deviation from type beyond the normal limits of variation, usually as a resuh Of mulation.

-69-

— —


Photo credit: Artmaster Book Co.

17 years, a plant patent holder can exclude othersfrom asexually reproducing, selling, or using theplant so produced. The Patent and Trademark Office(PTO) issues plant patents.

Plant Variety Protection Certificates, author-ized by PVPA, provide a form of protection for new,distinct, uniform, and stable varieties of sexuallyreproducing plants, except fungi, bacteria, tuber-propagated or uncultivated plants, and first-generation hybrids. PVPA is administered by thePlant Variety Protection Office (PVPO) within theU.S. Department of Agriculture (USDA). UnderPVPA, the breeder can exclude others from selling,offering for sale, reproducing (sexually or asexu-ally), producing a hybrid from the variety, andimporting or exporting the protected variety. Twoexemptions limit the certificate holder’s protection:farmers may save seed for crop production, andbreeders may use the protected variety to producenew varieties-the so-called research exception.Furthermore, the Secretary of Agriculture can re-quire the certificate owner to grant licenses to thirdparties if it is in the public interest. The period ofexclusion is 18 years (7 U.S.C. 2483(b)).

Utility patents, issued under general patent lawby the PTO, can be granted for plant inventions (35U.S.C. 101) (8,16). Patents issued can claim plants,seeds, plant varieties, plant parts (e.g., fruit and

flowers), processes of producing plants, plant genes,and hybrids. Utility patents for plants and varietiesprovide 17 years of protection for the owner. Chapter3 discusses the requirements that inventions, includ-ing plants, must meet to be patentable.

This chapter reserves the term “plant patent” onlyfor applications protected under PPA, and uses“utility patent” for plants covered by general patentprotection (35 U.S.C. 101).

HISTORICAL PERSPECTIVEOF PROPRIETARY PROTECTION

OF PLANTSGranting inventors an exclusive right to their

creations for a limited time is authorized in theConstitution, and patents have been available since1790 pursuant to statute. Until the late 1920s,

, w? w Ml ,%:%[

Photo credit: U.S. Patent and Trademark Office

Design, plant patent 641, rose plant.

Chapter 5-Intellectual Property and Plants ● 71

however, three factors were thought to weighagainst patenting plants and plant varieties:

●

●

●

first, the sentiment that plant varieties wereproducts of nature and thus not patentableunder the general patent statute (33);second, the view that a new plant variety couldnot be adequately described to comply with thedescription requirements of the general patentstatutes (35); andthird, the legislature’s conclusion that plantbreedingallowmaterial

In resolvingcourts, anddeliberation

was not sufficiently reproducible tofor stable, uniform, and true-to-typesuitable for patent protection (29).

these and other issues, Congress, thePTO have developed a history of

s that span nearly six decades of debateabout proprietary protection of plants.

The Plant Patent Act of 1930

Prior to 1930, plant breeding and research de-pended, for the most part, on federally fundedagricultural experiment stations or limited endeav-ors of amateur breeders to develop new disease-resistant, cold-tolerant, drought-tolerant, or medici-nal varieties. Yet while such goals loomed importantto agricultural development, financial incentives forthe U.S. private sector to develop new varieties wereinadequate to recover research and developmentcosts and earn a sufficient profit. Once a new varietyleft a breeder’s hands, it could be reproduced inunlimited quantity by anyone. The breeder’s soleopportunity for financial reimbursement wasthrough high sales prices of comparatively fewreproductions during the first 2 or 3 years after thevariety’s initial availability. Private industry soughtgreater returns through plant protection legislationto offset increased investments of capital andencourage plant development (39).

In 1930, Congress enacted PPA into law. PPAallows protection for new and distinct asexuallypropagated varieties other than tuber-propagatedplants. It did not extend to a right to exclude othersfrom propagating the patented plant by seeds. At thetime, it was thought that seeds lacked capability toreproduce true-to-type.

Two additional requirements for issuance of plantpatents were of concern: whether all plants wereproducts of nature (33) and whether a complete,

Photo credit: U.S. Patent and Trademark Office

Design, plant patent 2,566, ash tree.

written disclosure of the invention was possible (35).In enacting PPA, Congress concluded that the workof the breeder was an aid to nature and thus apatentable invention (39). Addressing the secondpoint of contention, Congress recognized the inher-ent difficulty in describing a new plant variety andrelaxed the written description requirement (35U.S.C. 162) by permitting it to be in accordance withtraditional botanical descriptions (39).

PPA was designed to encourage new varietydevelopment and to afford agriculture the benefits ofthe patent system. At the time, American agriculturerecently had suffered from “phony peach disease”which had threatened the peach supply upon whichthe State of Georgia was so dependent, and “chestnutblight*’ which had virtually destroyed an entiretimber source. It was believed that plant breederscould produce new disease-resistant, drought-resistant, and cold-resistant varieties of plants toextend the range of fruit crops and blunt the effect ofextremes in weather patterns.

. . . .. .


Protection under PPA is for only a singlevariety (e.g., the rose “Peace”) and not a group ofvarieties having a common trait (e.g., a rose havingwhite flowers). It is an open question as to whetherplant patent protection extends to plant parts, such asflowers, fruit, and cuttings, which may be the actualcommercial embodiment of the variety, yet may beincapable of asexually reproducing the plant ( 17,46).Deposit of the plant is not required under PPA. Box5-A describes some judicial interpretation pertinentto PPA.

Since 1930, over 6,000 plant patents have beenissued by PTO (see table 5-1) (41). Among plantpatents that have been issued include those forornamental flowering plants, ornamental trees, fruittrees, nut trees, and grapes,

The Plant Variety Protection Act of 1970

As with pre-PPA plant breeding work, between1930 and 1970 developing new sexually reproducedvarieties (i.e., nonhybrid cultivars that are purestrains and breed true) was primarily undertaken by

Box S-A—The Plant Patent Act of 1930: Judicial Interpretation

The mere existence of a variety that had been asexually reproduced is not sufficient to prohibit a plant patent,if the distinctive characteristics of the variety and its value were not appreciated by anyone prior to the discoveryby the inventor or no one had known of the existence of the variety.

This finding was clarified in a case involving a chrysanthemum, Yoder Brothers, Inc. v. California-FloridaPlant Corp. et al. In Yoder Brothers, the court said, “the whole key to the invention of a new plant is the discoveryof new traits plus the foresight and appreciation to take the step of asexual reproduction.” The court also determinedthat the requirement of distinctness for plants essentially replaced the requirements of utility and nonobviousnessfor utility patents. In Yoder Brothers, the court also concluded that infringement under PPA was either the asexualreproduction of a patented plant or selling or using a plant so reproduced. The court held that it was not necessaryto show production of the whole plant and that the taking of plant material or cuttings was sufficient to findinfringement,

In Pan-American Plant Company v. Matsui, again involving a chrysanthemum, the court set forth the list ofcharacteristics that distinguishes two varieties. (This list was originally set forth in the legislative history of PPA.)In this case, the plant patent owner destroyed a chrysanthemum, which was not disease-resistant, for which a plantpatent was later issued. The inventor substituted a disease-resistant chrysanthemum variety developed by a thirdparty by a mutational event similar to the original patented plant. This disease-resistant variety was marked withthe number of the patented plant. The court concluded that the replacement chrysanthemum was not the patentedplant, based on the disease-resistance characteristic not being specified in the plant patent.

In determining infringement, the court considers the characteristics of the alleged infringing variety and thedescription in the plant patent. If there is no match, infringement is not found. In Kim Brothers v. Hagler, forexample, the court concluded the size and color of the allegedly infringing nectarines were not the same as the sizeand color of the patented nectarines described and shown in the plant patent.

In addition, the court requires proof of an asexual reproduction of the patented plant (i.e., a physicalappropriation from one of the patented plants). When asexual reproduction has been established, a finding ofinfringement will result. In Armstrong Nurseries, Inc. v. Smith, et al., the court found infringement as a result ofthe asexual reproduction of the patented roses and the sale of the asexually reproduced plants. The court also heldthat providing material for asexual reproduction was an active inducement to infringe and that assisting in the saleof the roses was a contributory infringement.SOURCES: office of Technology Assemntmt, 1989; Armstrong Nurseries, Inc v. Smith et u1., 170 F. Supp. 519 (ED. Tex. 1958); Cole Nursery Co. V. Youdath

Perennial Gardens, Inc., 17 F. Supp. 159 (N.D. Ohio 1936); Kim Brothers v. }{agler. 276 F.2d 259 (9th Cir. 1960); Langrock, P., Journal of the PatenIOffice Society 41:787, 1959; Nichofson v. Bailey, 182 F. Supp. 509 (SC. Fla., Orlando Div., 1960); Pan-Amertcari Plan[ Company v. Matsui, 433 F.Supp. 693 (N.D. Cal. 1977); U.S. Congress, .%na;e Comsm[@c on Agriculture, Nutsition, and Forestry. Plant Var/ety Protection Act, hearings beforethe Subcornrn mee on Agricultural Research and General Leglslamrn, June 17-18, 1980 (W’ashirtgfon, DC: U.S. Oovernmen[ pruning Office, 1980);Yoder Brothers, Inc v. Caitf_ornia-Fiorida Plant Corp. et al., 537 F.2d 1347 (5th Cu. 1976).

Chapter 5--Intellectual Property and Plants ● 73

Table 5-l—Plant Patents Issued

Number granted between

Cropa 1931-62 1963-68 1969-73 1974-78 1979-83 1984-87

African violet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ., . . .Almond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Apple . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Azalea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Begonia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Camellia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Carnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Chrysanthemum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Fuchsia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Gladiolus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Grape . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Kalanchoe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Nectarine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Peach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Plum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Poinsettia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Rose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Strawberry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Annual average . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9

494

3850

133273010

1512513

1,0613053

0152240

056

383

5380

14291814

2328

108

129

1734

74

1168

0855

2529

617

14113

111

4511362728

133

155069

3329301622

23918

189

541533

770

1099

00

1614173414

0232

21162

497

174

111

83128

10

143023303115

20114

227Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,207 647 556 946 808 907aPartial listingof mostcommon plants, representing from 70t079 percentof plant patents fortha time period.

SOURCES: American Aasoctafiono fNurserymen, Plant Patents with Common Names, 1931-1862; 19631968; 1969-1973; 1974.1978 (WSSM9ton, DC: Aneriin Asaociatin ofNurserymen, 1963; 1969, 1974; 1981)

plant breeders at State agricultural experimentstations. With the acceptance that sexually reproduc-ing plants can replicate "true-to-type,” private indus-try sought increased financial incentives to invest inresearch and development of new nonhybrid culti-vars. At the time, breeders in private industryworked primarily with corn and sorghum, of whichthe commercial product is hybrids, with somebreeding efforts for alfalfa, cotton, sugar beets, andcertain other vegetables.

In addition to stimulating private investment indeveloping sexually reproduced varieties, interna-tional events influenced U.S. deliberations to protectsexually reproduced plants (34). In 1961, a numberof European countries formed the InternationalUnion for the Protection of New Varieties of Plants(UPOV) to provide national breeders’ rights. MostEuropean countries had laws offering legal protec-tion to plant breeders, but U.S. breeders had no lawprotecting their innovations, except for asexuallyreproduced plants covered by PPA. Concern thatU.S. agriculture and domestic breeders would beata competitive disadvantage in international marketsfor seed (and for food, feed,and fiber crops producedfrom them), weighed in favor of actions to provideprotection for sexually reproduced plants.

Following an unsuccessful 1968 attempt to amendPPA to include sexually reproduced plants, PVPAbecame law in 1970, Again, PVPA was enacted toencourage the development of novel, sexually repro-duced plants by providing an economic incentive forcompanies to undertake the costs and risks inherentin producing new varieties and hybrids. The protec-tion extends only to a single variety and not to agroup of varieties having a common trait. In 1980,amendments to the original act added protection forsix vegetable crops, and protection for woodyvarieties was extended from 17 to 18 years. Con-gress extended coverage to 18 years so that PVPAwould be consistent with UPOV, which stipulated18 years as the minimum term for the protection ofwoody plants (see ch. 10).

Two important exclusions to a certificate holder’sprotection under PVPA are specifically stated. First,a breeder cannot exclude others from using theprotected variety to develop new varieties (researchexemption), and second, a right to save seed/crop(farmer’s exemption) is provided. According to thisexemption, it is not an infringement for individualswhose primary farming occupation is growing cropsfor sale for other than reproductive purposes to saveprotected seed and use that seed in the production of


Sec.2321.2322.2323.2324.2325.2326.2327.

2328.2329.2330.2331.

CHAPTER 57—PLANT VARIETY PROTECTION

SUBCHAPTER I—PLANT VARIETY PROTECTION OFFICEPART A-ORGANIZATION AND PUBLICATIONS

Establishment.Seal.Organization.Restrictions on employees as to interest in plant variety protection.Repealed.Regulations.Plant Variety Protection Board.(a) Appointment.(b) Functions of Board.(c) Compensation of Board.Library.Register of protected plant varieties.Publications.Copies for public libraries.

P ART B - LEGAL P ROVISIONS AS TO THE P LANT V ARIETY P R O T E C T ION O F F I C E

2351.2352.2353.2354.2355.2356.2357.

2371.2372.

Day for taking action falling on Saturday, Sunday, or holiday.Form of papers filed.Testimony in Plant Variety Protection Office cases.Subpoenas; witnesses.Effect of defective execution.Regulations for practice before the Office.Unauthorized practice.

PART C—PLANT VARIETY PROTECTION FEES

Plant variety protection fees.Payment of plant variety protection fees; return of excess amounts.

SUBCHAPTER II—PROTECTABILITY OF PLANT VARIETIES ANDCERTIFICATES OF PROTECTION

PART D - PROTECTABILITY OF P LANT V ARIETIES

2401. Definitions and rules of construction.2402. Right to plant variety protection; plant varieties protectable.2403. Reciprocity limits.2404. Public interest in wide usage.

PART E-APPLICA TIONS; FORM; WHO MAY FILE; RELATING BACK: CONFIDENTIALITY

2421. Application for recognition of plant variety rights.2422, Content of application.2423. , Joint breeders.2424. Death or incapacity of breeder.2425. Benefit of earlier filing date.2426. Confidential status of application.2427. Publication.

Ch. 57 PLANT VARIETY PROTECTION

2441.2442.2443.

2461.2462.2463.

2481.2482.2483.2484.2485.2486.

2501.2502.2503.2504.

PART F—EXAMINATIONS: RESPONSE TIME; INITIAL APPEALS

Examination of application.Notice of refusal; reconsideration.Initial appeal.

PART G-APPEALS TO COURTS AND OTHER REVIEW

Appeals.Civil action against Secretary.Appeal or civil action in contested cases,

PART H-CERTIFICATES OF PLANT VARIETY PROTECTION

Plant variety protection.How issued.Contents and term of plant variety protection.Correction of Plant Variety Protection Office mistake.Correction of applicant’s mistake.Correction of named breeder.

PART I—REEXAMINATION AFTER ISSUE. AND CONTESTED PROCEEDINGS

Reexamination after issue.Priority contest.Effect of adverse final judgment or of nonaction.Interfering plant variety protection.

SUBCHAPTER HI-PLANT VARIETY PROTECTION AND RIGHTS

2531.2532.

2541.2542.2543.2544.2545.

2561.2562.2563.2564.2565.2566.2567.2568.2569.

PART J-OWNERSHIP AND ASSIGNMENT

Ownership and assignment.Ownership during testing.

P A R T K — INFRINGEMENT OF P LANT V ARIETY P R O T E C T I O N

Infringement of plant variety protection.Grandfather clause.Right to save seed; crop exemption.Research exemption.Intermediary exemption.

PART L-REMEDIES FOR INFRINGEMENT OF PLANT VARIETYPROTECTION, AND OTHER ACTIONS

Remedy for infringement of plant variety protection.Presumption of validity; defenses.Injunction.Damages.Attorney fees.Time limitation on damages.Limitation of damages; marking and notice.False marking; cease and desist orders.Nonresident proprietors; service and notice.

Contents, plant variety protection statute.

a crop on their farm. Additionally, these farmers cansell the protected seed to people whose primaryoccupation also is growing crops. The farmer’sexemption has been subjected to judicial interpreta-tion (see box 5-B).

From 1970 through 1988, 2,783 applications forplant variety protection certificates were filed atUSDA for some 100 different crops. By December31, 1988,2,133 certificates had been issued and 274applications were pending. Another 376 applica-

tions have been abandoned, withdrawn, declaredineligible, or denied (see table 5-2).

Utility Patents

Although Diamond v. Chakrabarty held thatliving things, namely micro-organisms, were patent-able (8) (see ch. 4), the specific issue of whetherutility patents could be issued for plants was notexpressly addressed by the Supreme Court. Subse-quently, in 1985, PTO’s Board of Patent Appealsand Interferences (BPAI) ruled in Ex parte Hibberd

Chapter 5-----Intellectual Property and Plants . 75

Box 5-B—The Plant Variety Protection Act of 1970: Judicial Interpretation

One provision of PVPA subjected to judicial interpretation is the farmer’s exemption. In Delta and Pine LandCo. v. Peoples Gin Co., the court concluded that the farmer’s exemption did not apply to either a nonprofitagricultural cooperative that arranged sales of a protected variety or to a company dispensing the protected varietywithout giving notice that it was protected, The court felt that the intervention of a third party to act as a broker orsales agent would frustrate the basic purpose of PVPA because the third party was larger in size than a single farmerand would be more aggressive. After concluding the farmer’s exemption did not apply, the court concluded therewas infringement because the variety had been sold, delivered (7 U.S.C. 2541(1)), and dispensed without notice ofit being protected (7 U.S.C. 2541(6)); and these actions were instigated or actively induced (7 U.S.C. 2541(8)).

A second case, Asgrow Seed Co. v. Kunkle Seed Co., Inc. et al., also involved the farmer’s exemption. Theissue was whether the primary farming occupation of the defendant is growing crops for sale for other thanreproductive purposes. The district court refused to grant a preliminary injunction preventing the sale of seed of aprotected variety of soybeans. The district court based its decision on the fact that less than half the total volumeof seed produced by the defendant was sold for reproductive purposes. The plaintiff alleged that the defendant’sprimary occupation was to sell seed, as evidenced by its sale of 1.42 million pounds of the specific protected seed(not including additional public varieties which were sold), increasing the acreage to grow such seed, and intent tosell as much seed as possible, even though less than half of the farm income came from the sale of the specificprotected seed. The Court of Appeals for the Federal Circuit affirmed the district court’s decision.

SOURCES: Office of Tdmology Assessrnsnt, 19S9; Asgrow SeedCo. v. Kunkfe Seed Compmty, /nc ef af., Appsal No. S7-1402 (Couri of Appeals for ths kieralCircuil), appeal from W.D, LA, Alexandria Divisi(m; Delta and Pine Lund Co v. Peoples Gin Co,, 694 F.2d 1012 (5tb Cir. 1983).

that corn plants, seeds, and plant tissue culturecontaining an increased level of tryptophan, anamino acid, were patentable subject matter under 35U.S.C. 101 even though such plants could beprotected under PVPA ( 16).

The Hibberd application contained claims di-rected to plants, seeds, tissue cultures, hybrid plants,and hybrid seeds. The PTO examiner rejected theclaims, asserting that although human-made lifeforms, including plants, were patentable under 35U.S.C. 101 as a result of Chakrabarty, plants wereexcluded from utility patent protection by the priorenactment of PPA and PVPA. The examiner main-tained that both laws set forth how and under whatconditions plant life should be protected. In otherwords, the examiner maintained that PPA and PVPAwere the exclusive forms of protection for plantsspecified in each law.

After considering the many aspects of the case,the BPAI disagreed with the examiner and held thatplants. varieties, seeds, and plant tissue culturescould be protected by utility patent. The BPAI notedthat the availability of one form of statutory protec-tion does not preclude the availability of protectionunder another form.

Since the 1985 Hibberd ruling ( 16), plants havebeen considered to constitute patentable subjectmatter under the patent laws governing utilitypatents. There are statutory exemptions from in-fringing a plant utility patent—in contrast to PVPA,the holder of a plant utility patent can exclude othersfrom using the patented variety to develop newvarieties. Table 5-3 lists the number of utility patentsissued by crop type.

COMPARISON OFDIFFERENT FORMS OF PLANT

INTELLECTUAL PROPERTYPROTECTION

As described earlier, Federal proprietary protec-tion of plants encompasses three forms: plantpatents, PVPCs, and utility patents. Trade secrets,governed by State law, represent a fourth mecha-nism of protection. Although each method of pro-tection differs in some respect, not all methods aremutually exclusive. This section compares thedifferent forms of protection available to plantinventors.


Table 5-2-Plant Variety protection CertificatesGranted

Table 5-3-Number of Utility Patents Issuedfor Plants by Crop

Number granted between Crop NumberCrop 1971-1985 1971 -1987a

--Soybeans . . . . . . . . . . . . . . . . . 244 (37)b 430 (59)Peas . . . . . . . . . . . . . . . . . . . . . 113 (o) 187 (0)Beans . . . . . . . . . . . . . . . . . . . . 110 (2) 169 (4)Wheat . . . . . . . . . . . . . . . . . . . . 127 (36) 159 (44)Cotton . . . . . . . . . . . . . . . . . . . . 102 (13) 151 (21)Corn . . . . . . . . . . . . . . . . . . . . . 12 (2) 78 (0)Lettuce . . . . . . . . . . . . . . . . . . . 44 (o) 69 (0)Ryegrass . . . . . . . . . . . . . . . . . 23(1) 64(2)Fescue . . . . . . . . . . . . . . . . . . . 22(1) 61(9)Alfalfa . . . . . . . . . . . . . . . . . . . . 25(6) 49(10)Barley . . . . . . . . . . . . . . . . . . . . 14(2) 36(3)Marigold . . . . . . . . . . . . . . . . . . 25(0) 34(o)Bluegrass . . . . . . . . . . . . . . . . . 19(3) 33(3)Tomato . . . . . . . . . . . . . . . . . . . 9(o) 28(4)Onion . . . . . . . . . . . . . . . . . . . . 14(0) 25(4)Watermelon . . . . . . . . . . . . . . . l o ( l ) 24(6)Tobacco . . . . . . . . . . . . . . . . . . 14(0) 22(o)Cauliflower . . . . . . . . . . . . . . . . 19(0)Oats . . . . . . . . . . . . . . . . . . . . . 16(8) 21 (12)Rice . . . . . . . . . . . . . . . . . . . . . 12(0) 14(0)China aster . . . . . . . . . . . . . . . lo(o) 11 (o)● ToDac. 1, 1967.bF@um}n~rent~~si~~tes thaWmbarOfW~CVtiti05.

SOURCES:R.E. Evenson, “tntalleotual Property RigMs and Agribuamass Researchand Dewlopmanv Implications for the PutWo Agriouitural ResearchSysbm; ArrrericanJournal ofAgfict@ra/ Econanics65:967-975, 1963.K.H. Evans, Piant &iatyProtactronO ffi@, US. Oapartmentof AgncuLture, Belkvilb, MD, personal communkdons, October and December1967.

Plant Patents v. Plant Variety ProtectionCertificates

PPA provides rights, through plant patents, toplant breeders and horticulturists who discover ordevelop new and distinct plant varieties and propa-gate them by asexual reproduction. In contrast,PVPC holders under PVPA are granted protectionfor discovering or developing new, uniform, stable,and distinctive plant varieties that are propagated bysexual reproduction. Protection under PPA andPVPA complement each other in providing protec-tion for new varieties of plants-asexually repro-duced by plant patents and sexually reproducedby PVPCs.

Plant Patents v. Utility Patents

Utility patents provide protection for plants,including asexually reproduced plants such as thoseincluded within PPA, as well as plant parts (e.g.,flowers, fruits, and nuts) and hybrids, which areexcluded from PPA. Also seeds and plants withdefined physical traits can be protected through

Corn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Sunflowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6soybeans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Wheat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42a

● For wvo patents the claims Irtoluda both com and wheat, therefore the total number ofpatents is 42.


utility patents. Utility patents for plants, when therequirements can be satisfied, offer broadercoverage than would be available for the sameplant under PPA.

Advantages of obtaining a utility patent for anasexually reproduced plant are many. A plant patentis limited to a single claim; a utility patent need notbe so limited. Perhaps the most significant advan-tage of the utility patent is that it provides broadprotection for inventions that can affect more than asingle variety and can cover plant parts includingflowers, nuts, fruits, and cuttings that do notasexually produce a plant. Further, no requirementexists for utility patents that an infringing plant beproduced asexually from the patented plant, hencesexual reproduction of the protected variety is alsocovered. Finally, in theory, a utility patent canprotect any plant having an inserted gene, rather thana single variety containing that gene. Also, protec-tion is not dependent on whether the plant is sexuallyor asexually reproduced.

One disadvantage of utility patents is that thedescription requirement is more stringent than thatrequired for a plant patent. In order to satisfy thisrequirement for utility patents, placing the plant orseed on deposit may be necessary (depending onwhether or not the production of the plant can beenabled by words alone).

Plant Variety Protection Certificates v.Utility Patents

As is the case with plant patents, utility patentsoffer broader protection for the same plant thanwould be offered through PVPCs.


Photo cradit: Natwnal Agricultural Lbrary

Compared to PVPCs, several aspects of utilitypatent coverage for sexually reproduced plantsappear advantageous to plant breeders. A utilitypatent is not limited to the specific variety described;it can protect the specific variety, as well as othervarieties having the same traits and functionalproperties, Hybrids are specifically excluded fromplant variety protection but are fully protectable byutility patents. Extensive scope of coverage is

another significant advantage of utility patents overPVPCs. Utility patents can protect the plant, seed,plant parts, genes, plants having a specific physicaltrait, and processes for developing new varieties andhybrids.

Another key difference is that utility patentstatutes do not provide for a farmer’s exemption.Consequently, if anyone other than the patent ownermakes, uses, or sells the seed for reproductivepurposes, it is an infringement of the utility patent,subject to judicial enforcement. Another advantageof protecting plants with utility patents is that thereis no research exemption (i.e., it is an infringementof the utility patent to use the patented plant orvariety in developing a new variety or hybrid).Finally, compulsory licensing cannot be mandatedby any Federal agency for a utility patent. Incompulsory licensing under PVPA, the Secretary ofAgriculture directs the PVPC holder to grant alicense to a third party if the Secretary determinessuch a license is in the public interest. The ownerreceives a reasonable royalty but has no option andmust grant the license.

An advantage of PVPCs over utility patents is thatthe latter have stringent description requirementsthat may necessitate the deposit of the plant or seed,which is publicly available when the utility patentissues. Although PVPA requires a seed deposit, thepresent PVPO policy is that the majority of depos-ited seed is not available to the general public. Oneother advantage of PVPCs is that protection isafforded to the new variety before the issuance of thecertificate. With proper notice, coverage initiateswhen the seed is dispensed.

There is a perception that certainty in obtaining aPVPC is greater than for a utility patent (31),although some reviewers believe there is no differ-ence (2).

Trade Secret Law

Trade secrets, in addition to plant patents, PVPCs,and utility patents, are also an important form ofplant protection. Trade secrets are the subject ofState law (see ch. 3). Trade secret rights can beprotected in laboratories and factories where themovement of outsiders is confined and security ismaintained. Academic researchers probably viewtrade secrets less favorably, since they hinder


publication efforts (36). If a trade secret is disclosedin a nonconfidential manner, it is lost forever. Withsecrecy a legal prerequisite to a trade secret, it can bedifficult to use trade secrecy as a form of protection:some secrets may be known, for example, to manyemployees (l).

In some respects, plants are, by their nature,ill-suited to trade secret protection since they oftencannot be easily confined to an enclosed space, thusmaking them susceptible to theft by outsiders. Someplants are easily grown from only a portion of theparent or, if the plant is an inbred, from a seed—ifsomeone obtains inbred seeds, plants from thoseseeds can be easily reproduced. Theft of secret plantvarieties jeopardizes producers potential compensationfor their investment of creative effort, time, anddollars. Nevertheless, some inventors within theagricultural and horticultural industries successfullyemploy trade secret protection by not releasing theparents of hybrids that they sell.

Plant patent, PVPC, and utility patent applica-tions are kept in confidence by PTO, and nondis-closure rules apply while an application is pending.The owner of the application controls public accessto the file. Abandoned applications also generallyare not available to the public, except under particu-lar circumstances. However, once a plant patent,utility patent, or PVPC is granted, the information itcontains is publicly available. Accordingly, thesestatutory modes of patent protection encourage thedisclosure of new plants allowing the public tobenefit from their use (12).

INTELLECTUAL PROPERTY ANDTHE U.S. SEED AND PLANT

INDUSTRIESSaving and bartering seed by farmers, once the

norm, have evolved into corporate enterprises thatdepend on developing and selling seeds and plants.Agriculture is the principal client, however, orna-mental and nursery products are also important.Expenditures for seeds, bulbs, plants, and treesaccounted for 5-7 percent of a typical farmer’s total1985 operating cost and totaled $3.37 billion,nationwide (40). This is a relatively low portion ofthe operating cost, but is of prime importance to thesuccess of the farming operation (12).

.

Photo credit: Artmaster Book Co

Profitability and innovation in the U.S. seed andplant industries rely on their ability to legally protecttheir products. This section analyzes the generalcriteria companies consider when making decisionsabout protecting plant inventions. Selected plant andseed industries are also discussed to identify impor-tant issues related to different sectors,

Choosing and Managing Plant Protection

The different forms of intellectual property are notequivalent in value or utility for all segments of theseed and plant industries. An OTA survey ofuniversities, nurseries, seed companies, and biotech-nology firms found an array of opinions on intellec-tual property protection of plants especially on plantutility patents (see box 5-C).

Opportunities for proprietary protection vary notonly with the biology of different plants but on legalgrounds as well. It may be possible to obtaindifferent forms of protection on the same plantinvention. If the invention, for example, related tothe treatment of apple trees so that all the fruitripened for harvest on the same day, a utility patentcould be granted on apple trees so treated, and a plantpatent granted on one or more specific varieties of

Chapter 5-Intellectual Property and Plants . 79

apple tree so treated. Any concern about doubleprotection or a time extension of the exclusionaryrights could be addressed by a terminal disclaimer(i.e., an instrument whereby the patent ownerdisclaims a portion of the term of a patent so that itexpires on the same day as another patent) andcovenants that both patents will be enforceable solong as they are commonly owned (42).

With respect to double protection for sexuallyreproduced plants, an overlap in the statutory subjectmatter of PVPA and 35 U.S.C. 101 exists and wasacknowledged by BPAI in Hibberd. However, themere presence of an overlap does not precludeobtaining more than one type of protection (21). Atpresent, one company has obtained both PVPCs andutility patents for two inbred corn lines (20).

Although no one approach to protecting plantintellectual property appears to be the mostproductive, the choice is generally clear for aspecific plant. Present strategies therefore involvemultiple approaches based on several factors. Somekey components to consider in reaching decisionsabout plant protections are crop type, farmer’sexemption under PVPA, litigation, licenses, re-search exemption under PVPA, and deposit.

Crop Type

Proprietary protection varies fundamentally fromcrop to crop. Although crops can be classified bytheir natural reproductive processes, some crops canbe propagated either sexually or asexually. Thus, itis the practical method by which a crop propagule ismade that determines the intellectual property pro-tection available for that crop. Further, in addition toutility patents for crops, new processes to producepropagules are also potentially patentable.

Farmer’s Exemption Under PVPA

The farmer’s exemption provision of PVPAreflects farming practices dating back to the Nationagricultural beginnings; practices that include re-taining seed for upcoming planting cycles, as well asusing seed for barter. Strictly unique to PVPA, theprovision allows farmers to retain protected seed forplanting and for sale to others whose principaloccupation is also farming. It is the only provision of

PVPA that has been subject to judicial interpretation(box 5-B).

In effect, farmers can compete, to a limiteddegree, directly with the seed industry that devel-oped the variety, as long as the primary occupationof the farmer is production agriculture. Farmer-saved seed is a common practice for several crops,including wheat, cotton, and soybeans (25). Basedon a USDA survey of 1986 plantings, only 54percent of the soybean seed planted was purchasedand only 60 percent of wheat seed planted waspurchased (26). As a result, from an industryperspective, property rights under PVPA are consid-ered inferior to utility patents and plant patents (24),and the net effect of the exemption is that PVPCholders will seldom profit as extensively as theirvariety is grown. Ironically, the more successful anew variety, the lesser the percentage of the seed thatwill be sold by the originator (12).

To circumvent the difficulties seed companiesperceive about the farmer% exemption, increasedprotection through utility patents could besought. At present, anecdotal evidence indicatesthat industries are considering this option, butproceeding cautiously since utility patents alsoare not without problems (31). Because morecomplaints about the farmer’s exemption than anyother are received by PVPO, and owing to concernthat utility patents could undermine PVPA, thePVPO Advisory Board appointed a committee toexamine this provision (15). The committee hasrecommended that USDA promulgate a rule clarify-ing the limits of a farmer’s entitlement to sell theprotected variety produced (43).

Litigation

Litigation is intrinsic to all types of intellectualproperty protection of plants. However, this in-volves substantial cost to assert or defend claims. Acompany should expect to spend a minimum of$500,000 for litigating important utility patents (17).Not all patents on plant-related claims can commer-cially support such costs. An average variety of corn,soybean, or wheat may remain profitable for only5-10 years, although the occasional extraordinaryvariety, such as Pioneer Hi-Bred 3780, has been soldfor more than 20 years (31). Although experiencewith utility patents of plants is minimal at present, it


Box 5-C--Survey of Universities, Seed Companies, Nurseries, and Biotechnology Companies

OTA obtained the views of 39 biotechnology companies, seed companies, nurseries, and universities aboutintellectual property protection for plants and varieties in general, and utility patents in particular.

There-was strong agreement that PVPCs, plant patents, utility patents, and trade secrets have been or will bebeneficial, and that all four types of protection will provide an incentive to develop new varieties. A majority wantedboth PVPC and plant utility patent protection, and expected that intellectual property protection of plants would notinterfere with the development of new varieties or inbreds. A majority did not want compulsory licensing for newvarieties or inbreds and desired worldwide standardization of plant protection.

Both industry and universities support all types of intellectual property protection of plants. Although mostsectors favorably view plant utility patents, seed companies-on average—adopt a more neutral position. Theoverall neutral position by seed companies on many of the questions reflected differences in opinion betweenunaffiliated seed companies (less favorably inclined toward utility patents) and seed companies affiliated with thechemical or pharmaceutical industry (more approving of utility patents of plants).

Overall, biotechnology companies favored the protection provided by utility patents because they protect plantparts, processes, and genes. A majority of the universities favor all types of intellectual property protection for plantlife, although trade secrets are more skeptically viewed by universities than other sectors. Nurseries strongly supportplant patents and protection for asexually reproduced plants. Nurseries also favor utility patents, probably becausethey protect plant parts.

Reaction to utility patents for plants was equivocal. Many viewed utility patents as beneficial and necessaryto provide adequate protection for new varieties, while at the same time not interfering with new varietaldevelopment. Unaffiliated seed companies, however, expressed concern about utility patents. These concernsincluded: restriction of germplasm, industry concentration, and domination of the industry by large conglomerates.Some of the concerns expressed by these seed companies are the same as those expressed during congressionalhearings on the 1980 amendments to the Plant Variety Protection Act.

Concern by seed companies about broad protection of plants also is reflected in views on compulsory licensing.Unaffiliated seed companies prefer compulsory licensing for utility patents, but they are not as concerned aboutcompulsory licensing of PVPCs. It appears these seed companies have less concern with restriction of access togermplasm if it is on a variety-by-variety basis, as opposed to a physical trait basis.

The perspective of unaffiliated seed companies on compulsory licensing is opposite to that of thebiotechnology companies. This difference could result, in part, from the knowledge and perception concerningutility patents by the two sectors. Seed companies that favor compulsory licensing for plant utility patents have beenoperating profitably under the current seed business environment. These generally established companies could beconcerned that any changes resulting from plant utility patents could lead to possible negative effects on theirbusinesses. For the most part, these seed companies are less familiar with the utility patent system than arebiotechnology companies and are concerned about having access to a major development that is patented—accessthat could be denied by the patentee unless there is compulsory licensing. Some developments that could be ofinterest include yield, herbicide resistance, disease resistance, and seed content (e.g., oil, starch, or protein). Sincemany of these developments will probably result from using new technologies (e.g., cell culture or geneticengineering) rather than from classical breeding, the unaffiliated seed companies may view utility patents asinterfering in new varietal development.

In contrast, biotechnology companies have grown up with the utility patent system and recognize its value tothem, Biotechnology companies fund research with the expectation of future financial return and consider utilitypatents essential to insure adequate return on the initial investment. They may feel that compulsory licensing ofpatents could significantly affect financial returns from their research and, consequently, oppose compulsorylicensing.

Chapter 5-Intellectual Property and Plants ● 8 1

There is a strong preference among companies primarily involved with biotechnology for utility patentprotection for their plant inventions. Compulsory licensing is strongly disapproved. Some companies also expressedthe belief that utility patents for plants are important and yield significant benefits for everyone and desire no changein the patentability of plants.

Seed companies indicate that all four mechanisms for plant protection have provided an incentive to developnew varieties and have been beneficial for their organizations. Compared to the other sectors, many seed companiesexpress concern that utility patents of plants could interfere in the development of new varieties and inbreds. And,in contrast to biotechnology companies, seed companies further demonstrate this concern by having a preferencefor compulsory licensing with plant utility patents. Some seed companies state that a company having plant utilitypatents could refuse to license a new biotechnology or other plant development to competing companies. On theother hand, the majority of the seed industry companies generally view plant utility patents as having a beneficialeffect on their business and as providing art incentive to develop new varieties.

Other views expressed by seed companies include: the undesirability of restriction of access to germplasm byplant utility patents, the belief that plant variety protection would be sufficient if it were strengthened, the necessityof a good database for PTO, and a concern that large conglomerates with ready capital could dominate the industry.

Universities expressed less concern than seed companies that plant utility patents would interfere with newvarietal development. University respondents generally perceived PVPCs, utility patents, and plant patents aseffective types of protection for universities. But, trade secret protection was viewed as a less favorable form ofprotection.

Nurseries strongly support PPA, which allows plant patents for asexually reproduced plants. Nurseries alsofavor the other forms of plant protection and advocate standardizing plant protection worldwide. Of the four sectorssurveyed, nurseries most strongly opposed compulsory licensing. Other concerns and comments expressed bynurseries principally focus on strengthening plant patent protection to include plant parts.SURVEY RESPONDENTS: Biotechnology companies-Agracetus; Blosource Geneucs Corp.; Calgene; EniChem Americas, 1x.; Molecular Genetics, Isw.;

Monsanto Co.; NPI; Plant Genetics, Inc.; Sungene Twhrtolo&es Corp. Seed compan@.+-Agncultural Alumni Seed Improvement Association;Agrlgenetics, Corp., Cal/West Seeds; Cargill, Inc.; Dekalb-Pfizer Genct]cs: Edw. J. Funk & Sons, Inc.; GarsI Seed Co.; Holden’s Foundation Seeds, Inc.;Hoegemeyer Hybrids; Illinois Foundation Seeds, Inc.; J.G. Limited, Inc., Mike Brayton Seeds, Inc.; Nickorsort American Plant; Northrup King Co.; PetoSeed Co., Inc.; Pioneer Hi-Bred Internatiortd, Inc.; United Agrisecd. Irsc , The Upjohn Co.; W. Atlee Burpee; Wyffels Hybrida, htc. Universities---iowaState University, Otuo State Utuvemity; Purdue University; Rutgers Umverslty, Univem!y of IIlinms; Umversity of Mirttwot a; University of Wisconsin.Nurstries-The Conart-Pyle Co.; Jaeksmt & Perkins Co.; Mikkelserts, Inc.

SOURCES: Office of Twttnology Assessment, 1989; J.L. Ihnen, R.T. Gallegos, and R.J. Jondle, %tcllectual property Protection for Plants and Varieties,” umtractdocument prepared fm the Office of Tmhnology Assessment, U.S. Congress, November 1987.

is reasonable to speculate that for crops where theprofit margins are small, or for varieties for whichthe total market is small, litigation costs could weighin proprietary protection decisionmaking. And, asmentioned earlier, while the farmer’s exemption haspresented litigation problems for PVPC protection(see box 5-B), the perception exists that there ismore certainty in obtaining a PVPC than a utilitypatent. Some, however, believe there is no differ-ence (2).

Licenses

In general, licensing agreements can resolvepatent litigation and enhance profitability; they arecentral to intellectual property management, includ-ing protection of plants. One aspect of licensing is

unique to plants: compulsory licensing by theSecretary of Agriculture under PVPA when in thepublic interest. In principle, decisions to seek aPVPC versus a utility patent may factor in themandatory licensing provision of PVPA, which isabsent in general patent law. Since PVPA wasenacted in 1970, however, no Secretary of Agricul-ture has exercised this authority. Compulsory licens-ing was supported by seed companies and opposedby biotechnology firms surveyed by OTA (see box5-c).

Research Exemption Under PVPA

Neither 35 U.S.C. 101 nor PPA provide forunencumbered research uses of protected plants. In

I


sharp contrast, and again as part of the public interestfocus of PVPA, varieties covered by PVPCs canexpressly be used for research purposes. Companieswith plant breeding research programs must evaluateconcerns that improvements in their PVPC-protected plants can be directly used, withoutcompensation, in breeding programs by their com-petitors. Despite such concerns, a company thatbases its research program on commercial varietiesof competitors will probably be a consistent followerin a marketplace that rewards innovation (7). Someargue, however, that there exists a plethora offollowers who need not invest in breeding researchbecause of the exemption, indicating a major disin-centive keeping the level of investment, and henceinnovation, in plant research lower than for humanand veterinary biologics (27).

Deposit

Deposit considerations are important aspects of acompany’s management of plant intellectual prop-erty because of the risk taken when a biologicaldeposit (e.g., seed) is made. Under PVPA, statutorydeposit requirements exist, but access to the depos-ited material requires permission from the PVPCholder. In contrast, deposit for utility patents issuedby PTO requires unrestricted access to depositedseed after a patent has issued. This type of deposit isconsidered substantially more risky than depositunder PVPA and provides a more accessible mecha-nism through which a patent can be pirated. Proof ofpirating shifts from documenting access (underPVPA) to the pursuit of litigation to prove actualpirating.

Hybrid Corn

Hybrid corn seed is the largest seed industry in thecountry, with domestic sales of approximately $1.4billion in 1985 (40). Examining proprietary protec-tion of corn is interesting since the method used toproduce hybrid corn varieties gives the companysubstantial control over the varieties without pro-prietary protection. Inbred parental lines are cross-bred to produce high-yielding hybrid seed with“hybrid vigor.” Commonly, a hybrid yields morethan twice as much grain as its seed parents (13).But, unlike seed for nonhybrid crops, seed from aharvest from a planting of hybrid seed cannot be

saved and used for additional high-yield plantingcycles. Since hybrid vigor from subsequent progenydeclines, the producer must return to the source fornew seed to maintain the highest yields. Thus,hybrid seeds have “internal genetic protection,” andde facto force the user back to the supplier.

PVPA specifically excludes protection of first-generation hybrid varieties, and therefore onlyinbred parental lines can be protected under PVPA.Protecting the parental lines under PVPA requiresdisclosure of the genetic nature of the plants, andprotection is limited to 18 years. However, byprotecting the parental plants as trade secrets,breeders can use the successful inbreds indefinitelyto develop new inbred lines and hybrids. Histori-cally, the hybrid corn industry has depended heavilyon trade secret protection of parental lines (18).Through November 1987, only 78 PVPCs for corn,about 2 percent of all PVPCs, had been issued (table5-2) (15).

The Hibberd ruling specifically involved cornseed (16) and clearly opened the possibility of a newavenue of proprietary protection for this and othercrops. Of the 42 utility patents of plants granted byPTO, 11 are for corn (table 5-3). Coupled with thehigher issuance rate of PVPCs for corn (table 5-2),indications are that both of these protection mecha-nisms will be used increasingly by the hybrid cornindustry.

Several crops are grown as hybrid varieties, suchas onions and sorghum. Many characteristics of thecorn industry apply to the sorghum industry. How-ever, the onion industry is more similar to the tomatoseed case study discussed in a following section.

Soybeans

The value of the U.S. soybean seed industry wasapproximately $630 million in 1985 (31). This valuerepresents both sales plus the value of seed plantedby the farmer from soybeans stored from theprevious year’s harvest. Farmer-retained seed repre-sents a significant portion of soybean seed plantedannually in the United States. As mentioned earlier,a USDA survey indicates that in 1986,46 percent ofsoybean seed planted was from grower storage,ranging from 20-68 percent among different grow-ing areas (26). Private soybean varieties haveincreased steadily since the mid-1970s, when public


variety use dominated by a 3-1 margin. The numberof acres planted with private varieties is estimated tohave tripled between 1976 and 1982.- .

The soybean sector might be an indicator ofindustry perceptions of PVPA. Since PVPA wasenacted, 427 PVPCs, almost 23 percent of the total,have been issued for this crop. Although soybeansappear to be a favored crop for this mechanism ofplant protection, concern about farmer-retained seedremains serious (31), and utility patents couldbecome increasingly important (see table 5-4).Industry concerns about the research and farmer’sexemptions under PVPA could drive them to seekbroader coverage on soybean innovations.

Tomato Seeds

The tomato seed industry is two distinct industries--tomato varieties grown for processing and tomatovarieties grown for fresh market. This examinationfocuses on seed producers for tomato processing,since plant protection features of this sector reflectissues similar to those for other crops (e.g., onion).

California is the principal locale for the process-ing tomato seed industry, growing 217,000 acres in1985 (82 percent of the industry’s total acreage).Two types of processing tomatoes are grown:open-pollinated and hybrid varieties. Approximately65 to 70 percent of processing tomato acreage is inopen-pollinated varieties (32). Seed costs per acre

Photo credit: U.S. Department of Agriculture

Soybean cells in dish at left have grown roots after a soil organism, Agrobacterium tumefaciens, inserted root-producing genes intothem. Without added genes, soybean cells grow into unorganized clumps (right).


Table 5-4--U.S. Soybean Breeding ResearchBy Private Industry Before and After the

Plant Variety Protection Act of 1970

Year Companies Breeders

1966 . . . . . . . . . . . . . . . . . 2 21971 . . . . . . . . . . . . . . . . . 6 61964 . . . . . . . . . . . . . . . . . 30 63

SOURCE: C.A. Brim, ‘Plant Braeding, Devdopment From an &tto a High-T~hmlogyIndustrial Activity,” Symposium on tha Profeclion of Bio@chnologicalInventions, Juna 4.5, 19S7 (Ithaca, NY in press).

for farmers is approximately $25 to $45 per poundfor open-pollinated varieties and $200 per pound forhybrids. The retail market for open-pollinated varie-ties is approximately $4 million and for hybridvarieties about $12 million (45).

Although the ratio in cost per pound to the farmerbetween the two types of seed is not reflected in themarket differences, some farmers continue to plantexpensive hybrid seed because of contracts withprocessors to deliver specified goods. Most impor-tant, hybrids also perform better in terms of overallquality and yield. The planting rate is about 1 lb peracre for open-pollinated seed; about 0.5 to 0.6 lb peracre for hybrid seed (45).

Since 1980, open-pollinated varieties and inbredtomato parental lines can be covered under PVPA,and PVPO has granted 28 PVPCs for tomatoes.However, skepticism similar to that for corn existsabout the usefulness of protecting inbred parentaltomato lines (31). Reservations exist about thedesirability of protecting hybrid tomatoes withutility patents, since a single hybrid tomato varietymight not justify the expense of enforcement (32).Unlike corn or soybean seed, the average tomatovariety’s lifetime is only 4-5 years. Furthermore,annual sales from a single variety are far lower.Thus, although corporate strategies to protect polli-nating tomatoes will probably continue to rely onPVPCs, the useful role of utility patents in the hybridvariety sector is unclear due to market life of theproduct.

Plant Biotechnology

Commercial application of plant biotechnology isa developing industry. A 1987 OTA survey of nearly300 dedicated biotechnology companies revealedthat 12.5 percent focus (primarily and secondarily)

on plant agriculture (37). In 1985, industrial researchexpenditures for biotechnological applications tocrops were estimated at $90 million (30). With highexpectations that the marriage of biotechnology and traditional agricultural research will be a criticalfactor in the near future, the patent strategies ofcompanies involved in this partnership could besignificant.

Two factors play an important role in influencingintellectual property strategies by the plant biotech-nology industry: the technologies used and theexperiences of the researched with proprietaryprotection. In the first instance, utility patent statutesare primarily applicable to discoveries resultingfrom recombinant DNA-related research. Althoughfew patents have issued, case law precedent estab-lished for recombinant DNA applications in thebiomedical sector could influence corporate ap-proaches in plant biotechnology protection. Sec-ondly, experience with intellectual property by mostcompanies involved in plant biotechnology gener-ally means experience with utility patents. In fact,biotechnology companies report they are favorablyinclined toward utility patent protection of theirinventions (see box 5-C).

As new developments in plant biotechnologymove to the forefront and companies involved inthese efforts become familiar with nonutility pro-prietary protection, PVPA and PPA could receiveincreased attention. At present, however, this sectorappears to favor utility patent protection for plants inorder to adequately recover the high costs ofresearch and development.

IMPACTS OF PLANTPROTECTION ON U.S.

AGRICULTUREIntellectual property protection of plants has

influenced and continues to influence the directionof seed and plant research and development. On onehand, intellectual property rights stimulated and arecritical to maintaining investment in plant varietydevelopment. Innovation must be protected andrewarded to realize a continuing flow of dollars toagricultural research and development (14,43). Onthe other hand, some individuals are concerned thatincreased patent activity results in the privatizationof agriculture and has adverse consequences for


Photo ti”t: Ak/Mia/Ifo Cotp.

Larvae were allowed to feed on a transgenic tomato plant (right) and a normal plant (left). After 7 days, the plant that was geneticallyengineered for tolerance to the insect is relatively intact, whereas the normal plant has been destroyed.

small farmers (5,9,23). Furthermore, in enactingPVPA, Congress recognized the essential role plantsand seeds occupy in U.S. society, and specificallyaddressed concerns beyond the economics of in-creasing plant innovation. This section analyzesboth economic and social impacts of intellectualproperty protection of plants,

Economic Impacts of Plant Protection

Since the enactment of PVPA and the Chakra-barty and Hibberd decisions, private sector interesthas blossomed (38). Beginning with the passage ofPPA in 1930, the primary development of new,asexually reproduced varieties moved from govern-ment experiment stations to private industry. Thenumber of issued plant patents and the size of the

present-day nursery industry may reflect the positiveeconomic effects of PPA (20). The increased privateinvestment in plant breeding resulting from PPAwas widely discussed during deliberations on PVPA.

Some view the option of seeking plant utilitypatents as pivotal to sparking progress and increas-ing dollar flow in the industry by providing both thescope of protection needed to encourage newresearch investment and the rapid dissemination ofinformation describing the new technology resultingfrom plant research (44). This is especially true foremerging applications of plant biotechnology (seebox 5-C). And, although the availability of utilitypatent protection provides economic stimulus to theseed and plant industries, one analysis indicates thatbecause utility patents do not provide a farmer’s

Chapter 5-Intellectual Property and Plants . 87

(4), although the same analysis concluded that thoseincreases were not unremovable or unjustified.

Germplasm and Plant Protection

Greater awareness of potential profits to beaccrued from patenting genes (and products) has ledto a rush to file under the existing patent laws (14).To many in both the public and corporate sectors,increased patent activity is tying up (or has thepotential to tie up) germplasm (10,11,14,19). Someargue that a noticeable slowing in the free exchangeof germplasm that existed prior to patenting hasoccurred (10,1 1,1 9). In effect, they argue that thebiological domain was once public domain but hasshifted to a private property right (10). One analysisfound that after enactment, PVPA had probablyreduced the flow and exchange of information andgermplasm from private companies to universitiesbut had increased the flow from universities toprivate plant breeders (4). In the case of utilitypatents, others argue that they do not stifle freeexchange (44). The grant of protection, by its verynature, promotes disclosure of new and useful plantmaterials, so all benefit (12).

One commentator has proposed creating a Na-tional Library of Germplasm Resources to holdmandatory biological deposits of all patented andPVPA-protected living forms. The intent of such anentity is to make germplasm readily available forresearch purposes and to offset trends towardprivatization of germplasm (1).

To date. any information regarding the impactof intellectual property protection of plants ongermplasm is largely anecdotal. In any case,advances in plant breeding and agri-biotechnologyrequire a free-moving, international exchange ofgermplasm. A comprehensive analysis examiningtrends in plant protection and germplasm exchangecould reveal whether a problem exists or directattention to potential problems.

SUMMARYAlthough in the United States an exclusive right

to an invention is as old as the Constitution, until thelate 1920s the sentiment was largely held that plantvarieties were not patentable under the generalpatent statute. In deciding to expressly provideintellectual property protection for asexually repro-

duced plants, Congress concluded that the work ofthe breeder was an aid to nature and thus theresulting plant was a patentable invention. In theintervening six decades, U.S. proprietary protectionfor plants and varieties has further evolved. Today,two Federal statutes specifically confer ownershiprights to plant innovations: the Plant Patent Act of1930 and the Plant Variety Protection Act of 1970.The rulings in Diamond v. Chakrabarty and Ex parteHibberd clarify the option of utility patent coveragefor plants and seeds. Thousands of plants are nowprotected by four major mechanisms: plant patents,Plant Variety Protection Certificates, utility patents,and trade secrets.

The Plant Patent Act of 1930 was designed toencourage new variety development and affordagriculture the benefits of the utility patent system.Protection under PPA is patent-like and encom-passes asexually propagated varieties other thantuber-propagated plants (at that time, sexually repro-ducing plants were not thought to breed “true-to-type”). Plant patents are issued by PTO. Sinceenactment, over 6,000 plant patents for a wide rangeof varieties have been issued, including ornamentalflowering plants, ornamental trees, fruit and nuttrees, and grapes.

With the realization that sexually reproducingplants can replicate “true-to-type,” Congress passedthe Plant Variety Protection Act of 1970 to provideproprietary protection for this class of plants. Withthis act, Congress specifically granted two exclu-sions to a certificate holder’s protection underPVPA: the research exemption and the farmer’sexemption. Under the former, a PVPC holder cannotexclude others from using the protected variety todevelop new varieties. In the second instance,individuals whose primary farming occupation isgrowing crops for sale, other than for reproductivepurposes, can save protected seed for subsequentcrop production on their farm, without being consid-ered infringing upon the certificate holder. Thesefarmers also can sell the protected seed to peoplewhose primary occupation is growing crops. Todate, the farmer’s exemption is the only provision ofPVPA subject to judicial interpretation. Fungi,bacteria, tuber-propagated or uncultivated plants,and first-generation hybrids are not protected byPVPA. PVPCs are issued by USDA and, through


Photo credit: U.S. Department of Agriculture

Scientist holds ajar containing two small peach tree shoots capable of resisting leaf spot.

1987, over 1,800 PVPCs for approximately 100 involves multiple approaches based on factors suchdifferent crops had been issued. as crop type, farmer’s exemption under PVPA,

litigation, licenses, research exemption under PVPA,The different forms of plant protection each have and deposit.

unique advantages and - disadvantages. Overall,utility patents appear more advantageous thanplant patents and PVPCs because they offerbroader coverage, including protection of plantparts and seeds. On the other hand, althoughlitigation expenses are involved with each type ofprotection, costs associated with protecting utilitypatents can be especially substantial. From a practi-cal perspective, no single approach to protectingplant intellectual property exists. Present strategy

The history of intellectual property protectionof plants could be particularly germane to thepresent debate surrounding patenting animals.Plants are the sole life form for which the U.S.Congress has expressly permitted intellectualproperty protection. In particular, congressionalprovisions to protect research and farming interestsseem pertinent, although both are not withoutcontroversy. Results from an OTA survey of indus-


try and university attitudes toward intellectual prop-erty protection of plants were equivocal-especiallyattitudes about utility patents. Access to plants forresearch to develop new varieties was the issue forwhich consensus was most lacking. Seed companiesin particular are concerned about access to germ-plasm protected by utility patents and fear new plantvariety development will be impeded. The surveydid not address the farmer’s exemption of PVPA,although evidence indicates widespread discontentwithin industry about the provision. On the otherhand, a complete prohibition of farmer-saved seedscould cost farmers $500 million annually.

Profitability and innovation of U.S. nurseries,seed companies, and plant biotechnology firmsdepend on their ability to legally protect theirproducts. Innovation must be rewarded with suffi-cient protection to ensure a continuing flow ofinvestment in plant research and development. Yet,in its most recent deliberations on plant protection—PVPA—Congress recognized the essential roleplants and seeds occupy in U.S. society and specifi-cally addressed concerns beyond the economics ofincreasing plant innovation. Maintaining a contin-ued balance of both societal and economic goalsresulting from U.S. proprietary protection of plantsis essential.

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Ethical Dimensions,” Science, Technology, & Humankidues 12(1):31-49, 1987.Crosbie, T., Garst Seed Co., Ames, IA, personalcommunication, November 1987.Diamond v. Chakrabarty, 447 U.S. 303 (1980).Doyle, J., Altered Harvest: Agriculture, Genetics,and the Fate of the World’s Food Supply (New York,NY: Viking, 1985).Doyle, J., Environmental Policy Institute, Washing-ton, DC, personal communication, July 1987.Doyle, J., “Public and Private Sector Roles in theFunding of Agricultural Biotechnology Research,”contract document prepared for the OffIce of Tech-nology Assessment, U.S. Congress, June 1987.Duffett, B. S., Jr., Attorney, Bums, Deane, Swecker &Mathis, Alexandria, VA, personal communication,August 1988.Eberhart, S. A., U.S. Department of AgricultureNational Seed Storage Laboratory, Foti Collins, CO,personal communication, October 1987.Edwards, 1., “Biotech Industry Should ConsiderImpact of Plant Patents on Future of Crop Improve-ment,” Genetic Engineering News 7(8):4, 1987.Evans, K. H., Plant Variety Protection Offke, U.S.Department of Agriculture, Beltsville, MD, personalcommunications, October, December 1987.Exparte Hibberd, 227 USPQ 443 (PTO Bd. Pat. App.& Int. 1985).Feit, I. N., Attorney, Hoffmann & Baron, Jericho, NY,personal communications, September 1987; May1987; August 1988.Frey, N. M., Pioneer Hi-Bred International, Inc.,Johnston, IA, personal communication, July 1987.Hall, A. E., University of California, Riverside, Riv-erside, CA, personal communications, July, October1987.Ihnen, J. L., Gallegos, R.T., and Jondle, R. J., “Intel-lectual Property Protection For Plants and Wrieties,”contract document prepared for the OffIce of Tech-nology Assessment, U.S. Congress, November 1987./n re Yardley, 493 F.2d 1389 (CCPA 1974).Kloppenburg, J., First the Seed: The Political Econ-omy of Plant Biotechnology, 1492-2000 (New York,NY: Cambridge University Press, 1987).Kloppenburg, J., and Kenney, M., “Biotechnology,Seeds, and the Restructuring of Agriculture,” Jnsur-gent Sociologist 12(3):3-17, 1984.Lesser, W. H., “The Impacts of Seed Patents,” NorthCentral Journal of Agricultural Economics 9(1):37-48, 1987.Isser, W. H., and Masson, R. T., An EconomicAnalysis of the Plant Variety Protection Act (Wash-ington, DC: American Seed Trade Association,1985).


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McElroy, R., Economic Research Service, U.S.Department of Agriculture, Washington, DC, per-sonal communication, November 1987.Meeusen, R., Sandoz Crop Protection, Palo Alto, CA,personal communication, May 1988.Merges, R., Columbia University School of Law,testimony before the U.S. House of Representatives,Committee on the Judiciary, July 22, 1987.Misrock, S. L., Attorney, Pennie & Edmonds, NewYork, NY, personal communication, Aug. 18, 1988.National Science Foundation, Biotechnology Re-search und Development Activities in lndustr-y: 1984and 1985, NSF Special Report 87-311 (Washington,DC: National Science Foundation, 1987).Patterson, R. J., “Agricultural Applications and theEconomic Impact of Patents on Plant Breeding,”contract document prepared for the OffIce of Tech-nology Assessment, U.S. Congress, February 1988.Thomas, P., Peto Seeds, Inc., Woodland, CA, per-sonal communication, October 1987.Thorne, H., “Relation of Patent Law to NationalProducts,” Journal of the Patent Ofice Society 6:23,19~3.U.S. Congress, House Committee on Agriculture,Plant Viriety Protection Act, House Report No.91-1605 (Washington, DC: U.S. Government Print-ing Office, 1970).U.S. Congress, House Committee on Patents, PlantPafenfs, hearings before the Committee, Apr. 9, 1930(Washington, DC: U.S. Government Printing Office,1930).U.S. Congress, Office of Technology Assessment,Commercial Biotechnology: An International Anuly -sis, OTA-BA-218 (Elmsford, NY: Pergamon Press,Inc., 1984).

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(Spnngfield,VA: National Technical Information Service, July1988).

U.S. Congress, Office of Technology Assessment,Te~,hnology, Public Policy, and the Changing Struc-ture of American Agriculture, OTA-F-285 (Wash-ington, DC: U.S. Government Printing Office, 1986).

U.S. Congress, Senate Committee on Patents, PlantPatents, Senate Report No. 315 (Washington$ DC:U.S. Government Printing Office, 1930).

U.S. Department of Agriculture, Agricultural Statis-tics 1986 (Washington, DC: U.S. Government Print-ing Office, 1987).

U.S. Department of Commerce, U.S. Patent andTrademark Office, O@ial Gazette of the UnitedStates Patent and Trademark Office 1082(4) (Wash-ington, DC: U.S. Government Printing Office, 1987).

Mm Horn, C. E., Deputy Solicitor, Patent and Trade-mark Office, Department of Commerce, Washington,DC, personal communication, Aug. 23, 1988.

Williams, S. B., Jr., Upjohn Co., Kalamazoo, MI,perasonal communications, November 1987; August1988.

Williams, S. B., Jr,, “Utility Product Patent Protectionfor Plant Wrieties,” Trends in Bio(echnolqgy 4(2):33-39, 1986.

Wochok, 2. S., Plant Genetics Inc., Davis, CA,personal communications, April 1987; August 1988.

Yoder Brothers, Inc. v. California-Florida PlantCorp. et al., 537 F.2d 1347 (5th Cir. 1976).

Chapter 6

Patenting of Animals—Scientificand Regulatory Considerations

“The real issue is not whether animals can or should be patented, but what things it is reasonableto permit humans to do to animals. Patenting simply adds another incentive to profit-makingorganizations to pursue certain lines of animal experimentation, and makes this pursuit seem morelegitimate.”

George AnnasHastings Center Report, August 1987

“I think a lot of people believe there is a moral imperative to fight disease and hunger. Patentinganimals is consistent with and furthers this imperative. ”

Geoff KarnyPatent Attorney, Vienna, VA

“The best way to predict the future is to invent it. ”John Sculley

Chairman, Apple computers,Odyssey: Pepsi to Apple

CONTENTSPage

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93MODERN TECHNIQUES FOR PRODUCING TRANSGENIC ANIMALS. . . . . . . . . . 93

Gene Insertion into Bacteria. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95Gene Insertion into Animals: Microinjection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95Where These Techniques Are Likely to Lead. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97Species and Transgenic Animals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

FEDERAL REGULATION AND ANIMAL PATENTS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 102U.S. Patent and Trademark Office. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102National Institutes of Health . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102Alcohol, Drug Abuse, and Mental Health Administration. . . . . . . . . . . . . . . . . . . . . . . . . 105U.S. Department of Agriculture.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106Food and Drug Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108Environmental Protection Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108National Science Foundation. ...., . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108Agency for International Development. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109Fish and Wildlife Service (U.S. Department of the Interior). . . . . . . . . . . . . . . . . . . . . . . 109National Aeronautics and Space Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110U.S. Department of Energy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110CHAPTER PREFERENCES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110

BoxesBox Page6-A. PTO Policy on Patenting of Animals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 936-B. Patent Number 4,736,866--The “Harvard Mouse’’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 996-C. Federal Statutes, Regulations, and Guidelines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

FiguresFigure Page6-l, Replication of DNA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 946-2. DNA Cloning With Vectors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 966-3. Process of Producing a Transgenic Mouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 966-4. Microinjection of Gene Into a Mouse Cell, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

TableTable Page6-1. Advantages of Mice for Research in Gene Transplantation.. . . . . . . . . . . . . . . . . . . . . 95

Chapter 6

Patenting of Animals—Scientific and Regulatory Considerations

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

Board of Appeals and Interferences, relying onprecedent opinions by the Supreme Court and PTOBoard of Appeals (5,8) in 1987 held that claimedpolyploid oysters were patentable subject matter (7).Subsequent to this decision, PTO issued a policystatement announcing that it considered “nonnatu-rally occurring nonhuman multicellular living or-ganisms, including animals, to be patentable subjectmatter” (box 6-A).

Considerations of the patentability of human-engineered animals have raised a variety of issues.These include questions about the economic impli-cations of allowing or not allowing animals to be

patented; the Federal regulatory apparatus withrespect to transgenic animals; and ethical questionsrelevant to the patenting of animals. Ethical ques-tions are examined in chapter 8. Some economicimplications are outlined in chapter 7. Regulatoryissues are explored below, following an introductionto some of the relevant scientific and technicalbackground.

MODERN TECHNIQUES FORPRODUCING TRANSGENIC

ANIMALSMost potentially patentable animals are likely to

be transgenic animals produced via recombinantDNA (deoxyribonucleic acid) technique or genetic

Box 6-A—PTO Policy on Patenting of AnimalsA decision by the Board of Appeals and Patent Interferences in Ex parte Allen (Bd. App. & Int. April 3, 1987)

held that claimed polyploid oysters are nonnaturally occurring manufacture or compositions of matter within themeaning of 35 U.S.C. 101. The Board relied upon the opinion of the Supreme Court in Diamond v. Chakrabarty,447 U.S. 303,206 USPQ 193 (1980) as it had done in Ex parte Hibberd, 227 USPQ 443 (Bd. App. & Int. 1985),as controlling authority that the Congress intended statutory subject matter to “include anything under the sun thatis made by man.” The Patent and Trademark Office now considers nonnaturally occurring nonhuman multicellularliving organisms, including animals, to be patentable subject matter within the scope of 35 U.S.C. 101.

The Board’s decision does not affect the principle and practice that products found in nature will not beconsidered to be patentable subject matter under 35 U.S.C. 101 and/or 102. An article of manufacture or compositionof matter occurring in nature will not be considered patentable unless given a new form, quality, properties, orcombination not present in the original article existing in nature in accordance with existing law. See e.g., FunkBros., Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 76 USPQ 280 (1948); American Fruit Growers v. Brogdex,283 U.S. 1, 8 USPQ 131 (1931); Ex parte Grayson, 51 USPQ 413 (Bd. App. 1941).

A claim directed to or including within its scope a human being will not be considered to be patentable subjectmatter under 35 U.S.C. 101. The grant of a limited, but exclusive property right in a human being is prohibited bythe Constitution. Accordingly, it is suggested that any claim directed to a nonplant multicellular organism whichwould include a human being within its scope include the limitation “nonhuman” to avoid this ground of rejection.The use of a negative limitation to define the metes and bounds of the claimed subject matter is a permissible formof expression. In re Wakefield, 422 F.2d 897, 164 USPQ 636 (CCPA 1970).

Accordingly. the Patent and Trademark Office is now examining claims directed to multicellular livingorganisms, including animals. To the extent that the claimed subject matter is directed to a nonhuman “nonnaturallyoccurring manufacture or composition of matter—a product of human ingenuity” (Diamond v. Chakrabarty), suchclaims will not be rejected under 35 U.S.C. 101 as being directed to nonstatutory subject matter.

Date: 4-7-87s/ Donald J. Quigg

Assistant Secretary and Commissionerof Patents and Trademarks

SOURCE: U.S. Patent and Trademark Office, 1987.

-93-


engineering. Transgenic animals are those to whoseDNA, or hereditary material, has been added DNAfrom a source other than parental germplasm,usually from different animals or from humans. Thefollowing section describes the most common of thenew techniques researchers use to move genesbetween animals, and compares them with historicalbreeding practices in animal breeding and hus-bandry. It also looks ahead to predict potentialapplications of these new techniques.

Laboratories around the world are conductingsubstantial research that involves inserting genesfrom vertebrates (including humans and other mam-mals) into bacteria, yeast, insect viruses, or mam-malian cells in culture. This research is aimedprimarily at increasing understanding of the organiza-tion and function of the hereditary material, DNA(figure 6-l). DNA, packaged in genes, encodesinformation that directs the construction and regu-lates the function of all higher organisms. DNAaccomplishes this by modulating the enormousvariety of biochemical activities in living cells.Understanding has advanced to the level that somebacteria, yeast, or cell cultures can now be used asfactories for the production of high-quality pharmaceu-ticals such as human insulin, interferon, or growthhormone for use in the treatment of human diseaseor for other purposes. The equipment and personneltraining requirements for such work are, as scientificresearch goes, modest.

A variety of techniques, most developed fromearly bacterial research, can now be used to insertgenes from one animal into another. These tech-niques are known by a number of exotic names:microinjection, cell fusion, electroporation, retrovi-ral transformation, and others. This section focuseslargely on microinjection, because it is now themethod most commonly used and most likely to leadto practical applications in mammals. Other methodsof gene insertion may become more widely used inthe future as techniques are refined and improved. Ifprotocols for human gene therapy now being devel-oped in animal models or laboratory cultures ofmammalian cells prove successful and broadlyadaptable to other mammals, other gene insertiontechniques may well supplant microinjection.

In the early 1980s, researchers developed tech-niques for producing transgenic animals to the

Figure 6-l—Replication of DNA

When DNA replicates, the original strands unwind and serve astemplates for the building of new, complementary strands. Thedaughter molecules are exact copies of the parent, each daughterhaving one of the parent strands.SOURCE: Offti Of Tednology A8sessmenl, 19S9.

extent that they could be applied successfully withproperly trained and skilled staff and about $50,000worth of equipment (2,24). Rearing and mainte-nance facilities for the most commonly used re-search organism, the mouse, cost between $10,000and $100,000 annually (3) (table 6-l). Comparable

Chapter 6--Patenting of Animals--Scientific and Regulatory Considerations ● 95

Table 6-1—Advantages of Mice for Research inGene Transplantation

. A warm-blooded mammal with many similarities to humans ingenetics and physiology.

. Small organism, easy to maintain in the lab, can be raised insubstantial numbers easily and quickly, at modest expense.

. Compared to other mammals, genetics and physiology verywell known.

. Available in a variety of different, well-characterized, geneticallyconsistent lines for use in different types of studies.

SOURCE’ Office of Technology Assessment, 1989.

facilities for larger organisms (e.g., swine, cattle) aremore expensive.

Although the number of laboratories workingwith transgenic animals remains small (no more thana few hundred, worldwide) and researchers with therequired skill and experience are not common, thenumber of research programs using these techniqueshas grown steadily in recent years (3). For reasons ofconvenience, much research involving transgenicmammals continues to be done using mice (table6-l), although research programs on several largermammals have made significant progress. It isanticipated that some animals of research utility orsubstantial economic importance will become morecommon as subjects of transgenic modifications inthe near future (within 5 to 10 years). Beyond mice,the major research efforts involving transgenicmodifications focus on cattle, swine, sheep, poultry,and fish.

Gene Insertion Into Bacteria

Procedures to produce transgenic organisms (thosethat have integrated DNA from foreign sources)were first developed in bacteria (28). The techniquesfor introducing a foreign gene into a bacterium andachieving normal expression and function are fairlysimple. Certain bacterial enzymes, known as restric-tion enzymes, recognize specific, short sequences ofDNA (ranging from 4 to 12 nucleotide base pairs inlength) and cut the DNA molecule where these sitesoccur. Using these restriction enzymes (over 400 areknown, capable of cutting DNA molecules at over100 different recognition sequences) it is possible toextract an entire gene that has been identified in thehereditary material of an organism. This gene can belinked with a DNA molecule, called a vector, which

is then inserted into a bacterium. The vector can existin the bacterial cell, carrying along with it theinserted gene (figure 6-2). It is by this method thata gene coding for the production of human insulin,for example, can be excised from human DNA andinserted into the bacterium Escherichia coli. Thealtered bacterium then produces quantities of humaninsulin that can be extracted and administered tohuman diabetics to help treat their disease.

Gene Insertion Into Animals: Microinjection

Inserting a gene from one animal into the cells ofanother animal (as opposed to a bacterium) is morecomplicated and, at present, less precise. One of theways in which animals differ from bacteria is thatanimal cells generally do not contain free floating,independently replicating DNA particles, or plas-mids, of the type that can be used to transport geneticmaterial between different cells. To compensate forthis lack of a convenient delivery vehicle, research-ers most commonly will inject highly purified copiesof the gene of interest directly into the fertilizedanimal egg. Shortly thereafter, the fertilized egg issurgically implanted in a female’s reproductivetract. This injection process is quite delicate, andonly a small fraction of injected eggs (perhaps 1 to5 percent) develop into transgenic animals (figure6-3).

In experiments with mice, the fertilized eggs areplaced under a special microscope, positioned, andheld in place by a special glass tube that can bemoved with a micromanipulator (a sensitive set ofmechanical manipulators), Another glass tube witha smaller tip is then used to penetrate through the eggmembrane into the pronucleus, the cellular subunitwithin which will develop the nucleus. The penetrat-ing tube carries a small amount of a buffer solutionthat delivers numerous highly purified copies of thegene of interest (figure 6-4). The injected eggs arethen placed back into the appropriate location in thereproductive tract of a receptive female mouse,which gestates the eggs and brings them to term.

Overall, microinjection is tedious, labor inten-sive, and inefficient. Aside from the problemsinherent in any system that must rely on delicate andsensitive micromanipulations, additional disadvan-tages stem from the current lack of knowledgeconcerning how to direct inserted DNA to a particu-


Figure 6-2-DNA Cloning With Vectors

DNA to be Cloned

Vector DNA

Cut DNA with RestrictionEnzyme that Recognizes a

Specific DNA Sequence (+)

u

Joining of VectorDNA Fragments withDNA Fragments to beCloned Using theEnzyme DNA Ligase

Multiplication of Bacteria To YieldMany Identical Copies of Fragments


Figure 6-3-Process of Producing a Transgenic Mouse

Fertilized eggs are collected, injected with cloned DNA, andtransferred to a pseudopregnant foster mother. Two strategies aregenerally taken in analyzing transgenic mice. If the response ofthe transgene to environmental stimuli or developmental regula-tion is to be examined, it is best to establish a transgenic line ofmice.SOURCE: Sally A. Camper, Fox Chase Cancer Center.

lar or appropriate site for integration into the newhost chromosome. In an accomplished laboratory, ofevery 100 eggs that are collected perhaps 85 percentof them prove suitable for injection; of these injectedeggs, about 60 survive the injection procedure; 6 ofthe injected eggs that are returned to the host motherresult in live births, and 1 or 2 will producetransgenic mice (3). This is the method that was usedto introduce the gene encoding human growthhormone into mice, resulting in larger-than-usualmice (2). It is also the method used to produce micethat secrete the anti-clotting agent tissue plasmino-gen activator (tPA) in their milk (11 ).

As crude and tedious as this process is, itcompares favorably in at least three respects withthose techniques for producing comparable animalsthat have long been used (e.g., selective breeding):

Chapter 6-Patenting of Animals--Scientific and Regulatory Considerations ● 97

Figure 6-4--Microinjection of Gene Into a Mouse Cell

The egg is held on the right by a holding pipet under suction, andthe needle containing the DNA solution is positioned at the left(upper panel). A successful injection results in the obviousswelling of the pronucleus; compare lower panel with the upperpanel.SOURCE R.L Brmster and M E. Trubauer, UniversNy of Pennsylvania, Schcml of

Veterinary Mechcme.

. The rapidity with which a specific gene can beinserted into a desired host means that the timeit takes to establish a line of animals carrying(and expressing) the desired trait is muchreduced. It is theoretically possible to producea line carrying the desired trait after as little asone generation. In contrast, it takes manygenerations of selective breeding to establish adesired trait (usually a polygenic trait, onecontrolled by several genes) in a line with aminimum of additional, unwanted characteris-tics—something that was not always possible.

●

●

The specific gene of interest can be transferredwith great confidence, if not efficiency, and ifproper purification protocols are followed,without any accompanying, unwanted ge-netic material. With the breeding methods thatanimal breeders have been using for centuries,the transfer of the desired gene (which was noteven recognized as a gene, or a discretehereditary unit, until 1900) was often accompa-nied by the simultaneous transfer of largeamounts of additional genetic material whichoften complicated or confounded the objectivesof the breeding programs as extraneous varyingfactors were introduced (e.g., changes in tem-perament or disease resistance).

With the proper preparation, genes from almostany organism can be inserted into the desiredhost, whether it is a mouse or some otheranimal. Historically, genetic material exchangedby classical hybridization (crossbreeding) couldonly be transferred between closely relatedspecies or different strains within a species.

Where These Techniques Are Likely to Lead

Previous methods of gene transfer have been usedfor thousands of years to alter animals, plants, andmicrobes to serve human purposes (25). Many feelthe new techniques involve no radical, qualitativedeparture from historical practices but simply enableplant and animal breeders to do the same things theyhave always done, but more quickly, easily, andpredictably (22). If there is a fundamental differencebrought by the new techniques, it is that breedershave a greatly augmented ability to move genesbetween organisms that are not close genetic rela-tives (e.g., human and mouse or human and bacte-rium). Generally it would have been impossible tomake these gene transfers with the methods previ-ously available. But most students of species andspecies formation are in general agreement thatnothing in transgenic animal research or its potentialcommercial applications brings any significantthreats to species; such threats, rather, are moreeasily found in patterns of land use planning orhabitat destruction resulting from other humanactivities.

It is reasonable to expect that transgenic tech-niques will be used in much the same way historical


techniques have been used, to similar ends. Eco-nomic considerations will have the major influenceon the order in which different transgenic animalsare produced for commercial use. Transgenic ani-mals designed for biomedical research are likelyto be patented first. Although transgenic agri-cultural animals such as livestock and poultrycan be expected to be produced in the near future,the view most widely held among researchers isthat it may be 10 years or more before commer-cial herds or flocks of transgenic livestock areproduced. Under optimistic assumptions, produc-tion may be possible within 3 to 4 years, though fewscientists regard this scenario as likely.

The first animal actually patented was a mouseengineered by researchers at Harvard University foruse in studies of carcinogenicity (box 6-B). Mosttransgenic animal research in the near future willlikely focus on traits involving a single gene, oftenwith associated control sequences. Already singlegenes have been introduced into animals allowingthem to produce substances they previously couldnot. Other examples of potentially patentable trans-genic animals include the mouse that produces tPAand the introduction of the human growth hormonegene into mice and pigs producing larger, leaneranimals. Genes might also be introduced into ananimal to give it the ability to resist disease orparasites. However, manipulation of complex traitsinfluenced by more than one gene such as theamount of growth possible on a limited foodregimen or behavioral characteristics, will developmore slowly (perhaps within 10 to 30 years) becauseof greater technical difficulty and current lack ofunderstanding about how such traits are controlledby genes. It is reasonable to suppose that smallermarkets, such as domestic pets, will also seeapplications of the new techniques as they becomemore efficient and economical.

Much transgenic animal research is aimed atincreasing understanding of human diseases andtherefore involves the insertion of genes fromhumans into other organisms. Much research notaimed at human disease also involves the inser-tion of human genes into animals. The principalreason for this is convenience: the growingamount of research aimed at identifying, extract-ing, and characterizing human genes means that

they will become more common and available.The range of genetic variation within any speciesand the fundamental similarity in genetic structureand organization between all mammals often makeit impossible to tell, simply from looking at anisolated gene or nucleotide sequence, what speciesit was derived from. Lacking any essential, identify-ing link between a gene and the organism that carriesit, the convenience of using the most readilyavailable genetic material will be the decisive factorin selecting genes for insertion into other organisms.

It is unlikely that genes from animals will beintroduced into humans in the near future, forreasons of biology if not of ethics, psychology, oraesthetics. Society is approaching somatic cellhuman gene therapy with considerable caution evenwhen it involves the transfer of human genes (26). Inthe absence of any compelling biological reasons(which have not yet emerged) it does not appear thatany researchers are presently planning to insert intohumans, genes originating in other animals. Ad-vances in DNA chemistry and protein engineeringmay ultimately make some (but not all) suchquestions moot, as the ability to entirely synthesizegenes that would direct the construction of specificgene products advances.

Species and Transgenic Animals

Some concern has been raised over negativeimpacts transgenic animals might have on their ownspecies. At least one opponent of animal patents hasasserted that transferring genes between speciestransgresses natural barriers between species, violat-ing their integrity or their identity (23). To evaluatethe quality or magnitude of such an alleged danger,it is useful to consider historical notions of speciesidentity and what biologists now feel it means for anindividual organism to belong to a given species.

Before Darwin, a species was conceived of as astatic, unitary group or type of organism. Individualsbelonging to such a group were so classified becausethey were felt to embody or reflect certain essentialor ideal characteristics. This definition of specieswas first systematically applied to living things bythe Swedish biologist Carolus Linnaeus (1707-1778). Such an approach has clear roots in Platonicphilosophy, however, which can be traced directly to

Chapter 6--Patenting of Animals-Scientific and Regulatory Considerations ● 99

Box 6-B—Patent Number 4,736,866—The “Harvard Mouse”

““4

%X0 cradt. ka Wymar@grrra

On April 12, 1988, the U.S. Patent Office issued the first patent of a living animal to Harvard Professor PhilipLeder and Timothy A. Stewart of San Francisco, California. The patent was assigned to the President and Fellowsof Harvard College. The patent claims “a transgenic nonhuman eukaryotic animal (preferably a rodent such as amouse) whose germ cells and somatic cells contain an activated oncogene sequence. ” The claim cited a mouse intowhich had been inserted a gene that causes an increased propensity for the mouse to develop cancerous tumors. Suchmice can be used to test materials suspected of being carcinogens. These tests “can be extremely sensitive” and “willpermit suspect materials to be tested in much smaller amounts than . . . used in current animal carcinogenicitystudies. ” The patent points out that this “will minimize one source of criticism of current (testing) methods, that theirvalidity is questionable because the amounts of the tested material used is greatly in excess of amounts to whichhumans are likely to be exposed.”

Such transgenic mice “can also be used as tester animals for materials . . . thought to confer protection againstthe development of” cancerous tumors (e.g., antioxidants such as beta-carotene or Vitamin E).

The precise language of the patent described several similar lines of laboratory mice that had been engineeredby the insertion of an activated oncogene sequence, specifically, the mouse “myc” (myelocytomatosis) gene undercontrol of a promoter or regulatory gene sequence derived from the mouse mammary tumor virus (MMTV LTR).Gene fusions of the myc and MMTV LTR genes were created and inserted into fertilized one-cell mouse eggs viamicro-injection. The treated eggs were then implanted in receptive female mice and the offspring were raised, usedto establish laboratory populations, and then analyzed for incorporation and expression of the inserted genes.

The actual patent coverage is broad, embracing virtually any species of “transgenic nonhuman mammal all ofwhose germ cells and somatic cells contain a recombinant activated oncogene sequence introduced into saidmammal, or an ancestor of said mammal, at an embryonic stage.”SOURCE: U.S. Patent and Trademark Office, U.S. Patent No. 4,736,866 (1988).

the “Allegory of the Cave” developed in Plato’s cal and biological thought throughout the middleRepublic (13,19,21,). Aristotle’s understanding of ages reflected this Platonic approach (17,20,21).species was similar, and many aspects of philosophi- Such thinking was increasingly felt to be inadequate

and was challenged during the Renaissance. It wasfinally repudiated by Darwin in The Origin ofSpecies in 1859.

Darwin introduced the idea of species as dynamicand necessarily transitory populations united bydescent from a common ancestor but nonethelesscomprising different individuals varying with re-spect to many different characteristics. In Darwin’stime, however, there was not yet a science ofgenetics. nor was there any material understandingof the mechanisms of heredity. This made itimpossible to understand the means by whichspecies are formed or maintain continuity throughtime. Nonetheless, Darwin succeeded in changingthe thinking of biologists about species from aperspective that was essentially Platonic, or topolog-

ical, to one that is population-based and considersvariation within a population as integral to the natureof species rather than distracting and incidental.

Building upon this paradigmatic shift in biologi-cal thought, modem biologists now generally thinkof species as reproductive communities, or popu-lations. They are distinguished by their collectivemanifestation of ranges of variation with respectto many different characteristics or qualitiessimultaneously. The parameters that delimit theseranges of variation are fluid and variable themselves:different species may have substantially differentgenetic population structures, and a given speciesmay look significantly different in one part of itsrange than it does in another while still demonstrablybelonging to the same gene pool, or reproductive


community (6). One species may exchange little orno genetic material with related or adjacent species,while another may seem to be almost promiscuous,interbreeding frequently with a neighboring, relatedspecies. Sometimes this gene flow (or introgression)produces peculiar populations that are different fromeither parent population and capable of interbreed-ing with one or both. In other cases, though genesmay move more or less freely between species andgenes from one species can be detected in individu-als of another, biologists still have no difficulty indetermining the species to which an individualbelongs (9,19,29). Although research into the natureof species continues to be vigorous, marked by muchdiscussion and disagreement among specialists,general agreement among biologists exists on atleast one point: nature makes it clear that there is nouniversal or absolute rule that all species arcdiscretely bounded in any generally consistentmanner.

The issue of species integrity is more complexand subtle than that of species barriers. If a speciescan be thought of as having integrity as a biologicalunit, that integrity must, because of the nature ofspecies, be rooted in the identity of the geneticmaterial carried by the species. Precisely how aspecies might be defined genetically is not yetapparent. This issue is presently the subject of a greatdeal of intellectual excitement and ferment amongthose seeking to understand the nature of species. Itis clear, however, that a genetic definition mustembrace the possibility of a wide spectrum ofvariation in DNA sequence and organization simul-taneously over many different portions of the geneticmaterial of an organism (16). Any genetic definitionof species must also embrace dramatic geneticmutations and malformations (19) that occur natu-rally. Individual examples of mutations are oftenunusual, but common in the aggregate, and notviewed as violating anything essential to the speciesin which they are found.

In short, any genetic definition of speciesgrounded in the perception of a species as a dynamicpopulation, rather than a unit, cannot be simple; itmust be statistical and complex. Therefore, toviolate the “integrity” of a species it is notsufficient to find a particular gene, once wide-spread throughout the species, now entirelyreplaced by a different gene. Such changes occur

repeatedly throughout the evolutionary history of alineage and are described as microevolutionary.These changes are usually insufficient to alter aspecies in any fundamental way or to threaten anyperceived genetic integrity. (27).

If it is possible to challenge the integrity of aspecies, it would have to be by changing ordisrupting something fundamental in its geneticarchitecture, organization, or function. Mammalslike mice, cattle, or humans may contain from50,000 to 100,000 or more genes (4,9). Whatever itis in the organization and coordination of activitybetween these genes that is fundamental to theiridentity as species is not likely to be disrupted by thesimple insertion or manipulation of small numbersof genes (fewer than 20) that transgenic animalresearch will involve for the foreseeable future. Anydisruption of the genetic basis of species identitywould most likely be accomplished by causing afundamental change in the patterns of transmissionby which hereditary information is passed from onegeneration to the next, e.g., impeding gene flowbetween populations that would otherwise com-mingle. Such a change in patterns must make itimpossible, or at the very least difficult, for furthergenetic information to be transmitted between gen-erations.

Changes in the patterns of transmission are knownin some plants, insects, fish, and amphibians. Theyare much less easily accomplished in warm-bloodedvertebrates, especially those likely to be subjects oftransgenic research in the foreseeable future. Ingeneral, the biological characteristics crucial to suchfundamental changes are most often controlled byseveral, or more likely many, genes distributedthroughout the animal’s genome and acting in acoordinated manner. Regulatory genes may often beinvolved, controlling the timing or levels of expres-sion of one or more of the genes that specify thestructure of a particular protein or enzyme (12,18).It is beyond the ability of current techniques tomanipulate such characteristics with any significantprecision.

In this context, it should also be observed that“the right of a species to exist as a separate,identifiable creature>> (23) has no known founda-tion in biology. Species exist in nature as reproduc-tive communities, not as separate creatures, and


these reproductive communities are, by standards ofgeologic time, temporary. The history of systematicand taxonomy (the disciplines of naming anddescribing species) demonstrates that species’ exis-tence has often been independent of scientists’shifting understanding or abilities to discern theirexistence. Furthermore, most of the domestic ani-mals that are now the subjects of transgenic research(with the possible exception of some fish), and arelikely to be for the foreseeable future, are already theproducts of centuries, and in many cases millennia,of human manipulation. Some observers think itreasonable to consider many domesticated animalsas artificial species. Whatever integrity these speciesmay once have had as biological units has alreadybeen far more compromised by human interventionthan transgenic manipulations are likely to producewithin the next decade or longer.

FEDERAL REGULATION ANDANIMAL PATENTS

To gain an understanding of the potential use andregulation of genetically altered animals that mightbe patented, OTA asked several Federal agencies’the following questions:

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o

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How are genetically altered animals currentlyused in research, product development, andmission-oriented activities conducted orfunded by your agency?What are the potential uses of such animalsduring the next 5 years?How does (or would) your agency regulate suchanimal use? What statutes, regulations. guide-lines, or policy statements are relevant?

Eleven agencies responded to OTA’s inquiry: theU.S. Patent and Trademark Office; the U.S. Depart-ment of Agriculture (Agricultural Research Service,Animal and Plant Health Inspection Service, Coop-erative State Research Service, Food Safety andInspection Service, and Office of Agricultural Bio-technology); the Food and Drug Administration; theEnvironmental Protection Agency; the NationalScience Foundation; the National Institutes ofHealth; the Alcohol, Drug Abuse, and Mental Health

Administration; the Agency for International Devel-opment; the Department of Interior (Fish andWildlife Service); the National Aeronautics andSpace Administration; and the Department of En-ergy (box 6-C).

U.S. Patent and Trademark Office

The Patent and Trademark Office (PTO), withinthe Department of Commerce, administers lawsrelating to the granting of patents for inventions.PTO examines applications; issues, records, andpublishes patents that are granted; and maintainsfacilities for use by the public to examine issuedpatents and records. PTO has no jurisdiction overquestions of infringement or enforcement of patentsnor over matters relating to promotion or utilizationof patents or inventions. PTO does not use geneti-cally altered animals in any activity nor regulate theuse of such animals. The agency is, however,responsible for determining whether to grant patentsfor such animals.

PTO anticipates an increase in the number ofapplications for genetically altered animals as a wayof protecting inventions, since more people arelikely to define their invention in terms of theultimate product—the modified animal.

National Institutes of Health

Approximately half of the National Institutes ofHealth’s (NIH’s) research projects require the use ofanimals. There is no way to establish exactly howmany of these research animals are geneticallyaltered, but a significant proportion are thought to beso altered. Transgenic mice are used to study thebasic biology of disease processes, including AIDS.The work focuses on analysis of how genes functionin regulating cell specificity and the production ofcellular products. In some cases, the potential existsfor commercial drug production using transgenicanimals.

Over the next 5 years, biomedical research willlikely use transgenic animals in studies of diverseareas of abnormal development, birth defects, andchronic degenerative disease. Much work will center

10TA contac~~ Federd ~encies list~ as having ~gulatory responsibility under the Coordinated Framework for Regulation of Biotechnology(see Federui Regis/er, June 26, 1986, page 23301 et seq.) or membership in the Interagency Research Animal Committee, a focal point for Federalagencies to discuss issues involving all animal species used in biomedical research and testing. A workshop on Federal regulation and animal patentswas conducted by OTA on Dec. 11, 1987.


Box 6-C-Federal Statutes, Regulations, and GuidelinesListed below is a synopsis of Federal statutes, regulations, and guidelines cited by Federal agencies at the OTA

workshop of December 11, 1987.

Animal Welfare ActCitation: 7 U.S.C. 2131-2155; 9 CFR 1-12.

Governs the transportation, sale, and handling of certain animals. As defined, an animal means any live or deaddog, cat, monkey (nonhuman primate mammal), guinea pig, hamster, or rabbit.

Coordinated Framework for Regulation of BiotechnologyCitation: 51 FR 23301-23393

Notice issued by the Office of Science and Technology Policy describing Federal policies regulating the safetyof biotechnology research and products. Policy statements were issued by the Food and Drug Administration, theEnvironmental Protection Agency, Department of Agriculture, Occupational Safety and Health Administration, andNational Institutes of Health.

Endangered Species ActCitation: 16 U.S.C 1531-1543.

Could possibly apply if a Federal action potentially affected a species protected by the Act (see discussionunder Fish and Wildlife section of text).

Federal Insecticide, Fungicide, and Rodenticide ActCitation: 7 U.S.C. 136-136y.

FIFRA is a licensing statute under which EPA regulates the sale, distribution, and use of pesticides. Pursuantto this authority, EPA has routinely reviewed and registered micro-organisms for years.

Federal Meat Inspection ActCitation: 21 U.S.C. 601-695; 9 CFR 301-381,

Poultry Products Inspection ActCitation: 21 U.S.C. 451-470; 9 CFR Chapter 301-381.

These Acts require the Food Safety and Inspection Service to inspect cattle, sheep, swine, goats, equine,poultry, and food products prepared from them that are intended for use as human food to assure that they arewholesome, not adulterated, and properly labeled, marked, and inspected.

Food, Drug, and Cosmetics ActCitation: 21 U.S.C. 301-392; 21 CFR 100-169 (regulations regarding food for human consumption).

Provides for regulatory oversight, approval, certification, and labeling of food, drugs and devices, andcosmetics.

Guide for the Care and Use of Laboratory AnimalsCitation: U.S. Department of Health and Human Services, Public Health Service, National Institutes of Health,Publication No. 85-23, Bethesda, Md., Revised 1985.

Guide for the proper care and humane treatment of animals used in research. For purposes of the Guide,laboratory animals include any warm-blooded vertebrate animal used in research, testing, and education. The Guidedeals with farm animals in the context of their use in biomedical research, not with their use in research onproduction agriculture.

Guidelines for Research Involving Recombinant DNA MoleculesCitation: 51 Fed. Reg. 16958, May 7, 1986 for most recent full version.

The Guidelines specify practices for constructing and handling (i) recombinant DNA molecules and (ii)organisms and viruses containing recombinant DNA molecules. They are applicable to all recombinant DNAresearch within the United States or its territories which is conducted at or sponsored by an institution that receivesany support for recombinant DNA research from NIH. Any individual receiving support for research involvingrecombinant DNA must be associated with or sponsored by an institution that can and does assume the

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responsibilities assigned in the Guidelines. Recombinant DNA experiments involving whole animals or plants iscovered under Section III-B-4.

Health Research Extension ActCitation: Public Law 99-158

Amended the Public Health Service Act to provide for statutory authority for and recognition of the PHS Policyon Humane Care and Use of Laboratory Animals by Awardee Institutions. The Act also contained provisions forthe development of alternatives to animal use in research.

Public Health Service Policy on Humane Care and Use of Laboratory AnimalsCitation: U.S. Department of Health and Human Services, National Institutes of Health, Office for Protection fromResearch Risks, Bethesda, Md., Revised 1986.

Revised in 1986, this policy is used by all agencies of the Public Health Service and most Federal agenciesto govern animal use. Unlike the Animal Welfare Act, the PHS policy applies to all vertebrate animals.

Lacey ActCitation: 16 U.S.C. 701-718

Mandates the duties and powers of the Department of Interior to preserve migratory game and wild birds.Authority for Fish and Wildlife Service to enforce laws and regulations adopted by separate States.

Toxic Substances Control ActCitation: 15 U.S.C. 2601-2654.

TSCA gives EPA jurisdiction over the manufacturing, processing, distribution, use, and disposal of all“chemical substances” in commerce or intended for entry into commerce that are not specifically covered by otherregulatory authorities (e.g. foods, drugs, cosmetics, and pesticides). TSCA’s applicability to regulating life formsthat are products of biotechnology is based on the interpretation that living organisms are “chemical substances”under the act (i.e. “any organic. . . substance of a particular molecular identity, including. . . any combination ofsuch substances occurring in whole or in part as a result of a chemical reaction or occurring in nature . . “). EPAdoes not anticipate regulating genetically engineered animals under TSCA.

U.S. Government Principles for the Care and Use of Vertebrate AnimalsUsed in ‘Ming, Research, and Training

Citation: 50 FR 20864 (1983)A memorandum of understanding between APHIS, NIH, and FDA to exchange information on animal welfare

concerns and compliance with policies.

Virus-Serum Toxin ActCitation: 21 U.S.C. 151-157; 9 CFR 101-123.

APHIS would regulate the importation, interstate movement, and release into the environment of geneticallyaltered animals when a biologic product (all viruses, serums, toxins, and analogous products of natural or syntheticorigin, such as diagnostics, antitoxins, vaccines, and live micro-organisms; and the antigenic or immunizingcomponents of micro-organisms intended for use in the diagnosis, treatment, or prevention of diseases of animals)is used.SOURCE ~lce of Ttiqy Assessment, 1989.

on manipulating DNA so that it can be expressed in Authorities relied upon by NIH for the care andspecific organs. The targeted insertion of genes to use of genetically altered animals include: therepair defective chromosomes, which is not possible Animal Welfare Act; the Health Research Extensiontoday, could become an important tool in combating Act; the Guide for the Care and Use of Laboratorydisease in coming years. NIH researchers caution Animals; and the U.S. Government Principles for thethat the final characterization of animal models is a Care and Use of Vertebrate Animals Used incomplex matter and is going to take time. Testing, Research, and Training.

Chapter 6--Patenting of Animals--Scientific and Regulatory Considerations . 105

The only policy specifically addressing use ofgenetically altered animals is the NIH Guidelinesfor Research Involving Recombinant DNA Mole-cules. According to NIH, the Guidelines for Re-search Involving Recombinant DNA Moleculesapply more to the tools of the transgenic worker,such as bacterial cell lines, than to the animalsthemselves. The Guidelines specify practices forconstructing and handling recombinant DNA mole-cules and organisms and viruses containing recom-binant DNA molecules. The Guidelines apply to allrecombinant DNA research within the United Statesor its territories that is conducted at or sponsored byan institution that receives any support for recombi-nant DNA research from NIH. Any individualreceiving support for research involving recombi-nant DNA must be associated with or sponsored byan institution that can and does assume the responsi-bilities assigned in the Guidelines. RecombinantDNA experiments involving whole animals arecovered under Section III-B-4. The NIH Recombi-nant DNA Advisory Committee has approved addi-tional guidelines to cover experimentation on trans-genic animals. These establish containment guide-lines for animals whose genome has been altered bythe introduction of recombinant DNA into the germline, as well as experiments involving viable recom-binant DNA-modified micro-organisms tested onwhole animals.

According to NIH, the Guidelines will likelyapply to the majority of research involving transge-nic animals as recombinant DNA techniques areusually used in such research. For example, recom-binant DNA techniques are commonly used toproduce cells that are often used in microinjection.The determining factor is whether recombinantDNA techniques are used during the experiment.The Guidelines would not apply, for example, insome instances where unaltered or “naked” DNA ismicroinjected (10).

The Guide for the Care and Use of LaboratoryAnimals addresses institutional policies, laboratoryanimal husbandry, veterinary care, and physicalplant requirements for all NIH-funded researchusing warm-blooded vertebrate animals. The Guide,among other things, lists procedures for animalresearch involving hazardous agents.

In addition, NIH has animal care and use commit-tees which are charged with reviewing all studiesinvolving animals and recommending whether stud-ies using animals should be performed. Researchersmust submit a review of animal care and use for eachstudy, including details about the facilities where theanimals will be kept, to the NIH Office of Protectionfrom Research Risks. A protocol or project can bereferred to the NIH Biosafety Committee if furtherquestions about safety are raised. An example ofsuch a review involves a study in which genes fromthe human immunodeficiency virus will be intro-duced into mice.

All grantees must abide by NIH’s guidelines. Themain sanction for violating the guidelines is suspen-sion of funding. The American Association forAccreditation of Laboratory Animal Care also re-quires its members to follow the guidelines.

NIH has applied for patents stemming from pastwork, Interest in applying for patents has beenstimulated by the passage of the Federal TechnologyTransfer Act (Public Law 96-502), which allowsFederal laboratories to enter into cooperative re-search with private sector parties.

Alcohol, Drug Abuse, and Mental HealthAdministration

The Alcohol, Drug Abuse, and Mental HealthAdministration (ADAMHA) researchers mostly usehuman pedigree studies as a way to identify specificgenes for associated diseases. In a few cases animalmodels have been used—for example in studyingpredispositions to alcohol consumption and drugabuse—but researchers have not yet isolated thegenes that may be associated with those predisposi-tions.

To date, ADAMHA researchers have not usedtransgenic animals. Within the next 5 years, how-ever, research with transgenic animals is likely to beundertaken, particularly for research animal modeluse. Commercial products are not anticipated.ADAMHA grantees and researchers must follow thesame regulations as those receiving NIH funds.

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U.S. Department of Agriculture

The U.S. Department of Agriculture (USDA) isresponsible for both enhancing and protecting Ameri-can agriculture. It carries out these responsibilitiesthrough research and regulation. USDA has con-ducted research on the genetics of animals for manyyears. In addition to crossbreeding, genetic engi-neering provides a means to accelerate the rate atwhich researchers can improve the efficiency ofanimal production and the resistance of animals todisease.

The Agricultural Research Service (ARS) re-ported on two research projects involving geneti-cally engineered animals. One entails studies ofsheep and swine that have been altered by theaddition of an extra growth hormone gene. Thealtered animals have been produced from fertilizedeggs to which the gene has been added by micro-injection. The objective of this work is to improveproduction characteristics such as growth rates andfat content of meat. The second project involveschickens engineered by recombinant DNA technol-ogy to be resistant to the avian leukosis virus, whichcauses a serious poultry disease.

In both cases, the genetic changes were permanentand transmittable to offspring. Avian leukosis resis-tance has been passed on through three descendantgenerations of chickens, demonstrating that theinserted gene has become a stable component of the

Transgenic pig born at the USDA laboratory inBeltsville, MD.

chickens’ hereditary material. The success of thistype of work depends on the vector used to deliverthe additional gene.

The efficiency of producing transgenic animalsfrom the microinjection technique has so far beenlow—less than 1 percent in all experimental animalsused. This illustrates that a considerable amount ofwork and technique is involved in developing ananimal that is functionally transgenic.

In those animals expressing the new gene, theelevated level of growth hormone led to significantreductions in the amount of fat on the animal carcass.However, adverse effects on the animals have alsobeen reported. The transgenic swine were morelethargic, arthritic, and susceptible to stress thanstandard breeds of domestic swine. According toARS, more research is needed to learn how toovercome these drawbacks.

Barring unexpected breakthroughs, transgenicsheep and swine are not likely to become availablefor use in conventional livestock production systemswithin the next 10 years. Research on disease-resistant chickens could move faster, and genes of aharmless strain of avian leukosis virus could be inthe parent poultry stock within 5 years. The sameclass of virus that causes avian leukosis occurs inother animals, so the technique used with chickenscould conceivably be used to control other diseasesin farm animals.

The Cooperative State Research Service (CSRS),which supports extramural research primarily at landgrant universities and agricultural experimentalstations, is in the early stages of developing geneti-cally engineered animals. The work currently spon-sored focuses on increasing knowledge about mo-lecular structure, function, regulation, and expres-sion of animal, microbial, and viral genes, with thegoal of improving biological efficiency and diseaseresistance in domestic animals. Examples of re-search funded under the animal molecular biologyprogram include: enhancement of disease resistancein genetically engineered swine, gene transfer to thegermline of chickens using retroviral vectors, andgene transfer in fish.

Over the next 5 years, research on geneticallyaltered animals could increase knowledge aboutgenetic maps of animals, specific genes of agricul-


tural importance, and tissue-specific and time-specific expression of genes in animals. This work,in turn, could be used to improve growth and feedefficiency, reproductive efficiency, and disease re-sistance.

The Animal and Plant Health Inspection Serv-ice (APHIS) is responsible for reviewing the geneticengineering techniques used before the alteredanimal is released from containment and for examin-ing the capacity of the foreign genetic material in thehost animal to cause disease. APHIS also exercisesregulatory responsibilities related to the AnimalWelfare Act which, among other provisions, re-quires protection of research animals. Although theAnimal Welfare Act applies to all federally fundedresearch, it applies to just six kinds of animals----cats,dogs, rabbits, hamsters, guinea pigs, and nonhumanprimates-and excludes other rodents and farmanimals.

APHIS’ authority to regulate the importation,interstate movement, and release into the environ-ment of genetically altered animals as biologicalproducts derives from the Virus-Serum-Toxin Act.By definition, a biological product includes anti-genic or immunizing components of micro-organisms intended for use in the diagnosis, treat-ment, or prevention of diseases in animals (9 CFR101 .2(w)). The release from containment of geneti-cally engineered animals is regulated under experi-mental production, distribution, and evaluation ofbiological products prior to licensing (9 CFR 103).If the means to produce a particular trait is not abiological product, as so defined, but is from a cellline or cell culture, APHIS could use its existingauthority to regulate the introduction of such geneticmaterial as an “organism” (9 CFR 122(e)). If themeans used to produce the genetically altered animalis by introducing a retrovirus into the host animal,the altered animal could be regulated as a “vector”(9 CFR 122.l(f)).

APHIS is currently working with the Food andDrug Administration (FDA’s) Center for VeterinaryMedicine to develop a joint licensing and registra-tion procedure for products that are classified as botha biologic and a drug.

Two other regulatory mechanisms are the FederalMeat Inspection Act and the Poultry ProductsInspection Act, which require the USDA’s Food

Safety and Inspection Service (FSIS) to inspectcattle, sheep, swine, goats, equines, poultry, andfood products prepared from them that are intendedfor use as human food to assure that they arewholesome, not adulterated, and properly labeled (9CFR 301-381).

One example of applying these regulations togenetically engineered animals is to see if thegenetic transfer of one hormone stimulates theproduction of another hormone, such as estrogen. Ifso, the FDA, which is the primary agency responsi-ble for regulating veterinary drugs, would be re-quired to prescribe a withdrawal time for thegenetically transferred hormone so that the meat ofthe animal did not contain the hormone when theanimal was slaughtered. FSIS would determine,based on the evidence submitted, whether the meatwas adulterated. FSIS also requires information tosupport a claim, for example, that an animal with agenetically transferred growth hormone has less fat.

Four categories of inspection exist for animalslaughter and inspection. Mandatory inspection isrequired for a number of species (cattle, sheep,swine, goats, equines, and poultry) under regulationsmandated by the Federal Meat Inspection Act andthe Poultry Products Inspection Act (9 CFR 301-335and 9 CFR 381.1-381.311). The second classifica-tion, voluntary inspection, establishes a fee-for-service reimbursement program for the inspection ofrabbits, domesticated reindeer, and buffalo (9 CFR350,352,354). A third category, conditional inspec-tion, is intended mainly for research or experimentalanimals (9 CFR 309.17 and 381.75). A fourthcategory covers custom processing of food animals(e.g., blends of game meat and inspected meat) thatmay be slaughtered for the sole use of the owner butmay not be inspected or sold (9 CFR 303). Thesecategories have been used to determine the methodof inspection for so-called “cattalo” (resulting fromdirect crossbreeding of cattle and buffalo) and“beefalo” (a cross of three-eighths buffalo andfive-eighths cattle). The precedent is a phenotypiccriterion based on the physical appearance of theanimal rather than on the genetic makeup (14). FSIShas proposed that legislation be considered to assurethat lines of animals derived from geneticallyengineered animals are considered as belonging tothe parent species.


To date, USDA does not have any patentspending for transgenic animals. However, applica-tions for patents may be expected in the future.

Food and Drug Administration

FDA regulates food products for consumption,human and veterinary drugs, and medical devices(USDA regulates veterinary biologic). As primarilya regulatory agency, FDA is not involved in researchwith genetically engineered research animals.

The primary regulatory tools used by FDA are theFood, Drug, and Cosmetic Act and the Public HealthService Act. These laws cover human foods, veteri-nary drugs, the use of those drugs in food-producinganimals, and human drugs and biological. Thestatutes apply to any product that is the result of atransgenic expression in an animal. According toFDA, this kind of regulation is an extension of whatis currently done with more conventional technolo-gies. As noted in the discussion of USDA research,if a drug is being used in a food animal, FDAregulations require that a certain withdrawal time beestablished before the animal can be slaughtered, toassure that the level of drug in the food chain doesnot exceed that which is safe for human consump-tion.

FDA has labeling authority for foods. The stan-dard for labeling is to avoid anything that is false ormisleading. Although the issue has not been for-mally raised, labels have been submitted wheremanufacturers wanted consumers to know that thefood was a product of biotechnology. As for drugsand biological, recombinant insulin has been mar-keted without a specific notification that recombi-nant DNA technology was used to make it.

Responsibility for regulating food additives alsofalls under FDA’s jurisdiction. Additives may not beincluded in a food product unless they are generallyrecognized as safe, or a petition for their use has beenreviewed and approved by FDA. If a GRAS foodsubstance is produced using a biotechnology proc-ess, in contrast to conventional methods, FDAwould review it to ensure that the additive is stillclassified as GRAS, and that no new constituentshave been added during the process.

Environmental Protection Agency

Genetically engineered animals are not currentlyused in any of the activities conducted or funded bythe Environmental Protection Agency (EPA). It isnot clear whether the patentability of animals wouldhave any impact on EPA’s work. EPA-fundedresearch is now carried out only on micro-organisms, but it is conceivable that the agencyeventually would fund research on macro-organisms, including animals.

The Federal Insecticide, Fungicide, and Rodenti-cide Act (FIFRA) and the Toxic Substances ControlAct (TSCA) are the two statutes EPA uses toregulate biotechnology products.

Under FIFRA, the sale, distribution, and use ofpesticides can be approved by EPA only if thepesticide will not cause “unreasonable” adverseeffects to humans or the environment. Under thisauthority, EPA has routinely reviewed and regis-tered micro-organisms.

TSCA gives EPA jurisdiction over the manufac-turing, processing, distribution, use, and disposal ofall chemical substances in commerce, or intendedfor commerce, that are not specifically covered byother regulatory agencies. These include foods,drugs, cosmetics, and pesticides. EPA has taken theposition that living organisms are “chemical sub-stances” under the Act. EPA’s current regulatorypolicy for TSCA is directed to the review ofmicro-organisms. At this time, it is not EPA’s intentor policy to regulate higher forms of life underTSCA.

EPA does not have primary authority to reviewthe broader environmental consequences of sub-stances not covered by FIFRA or TSCA. In thosecases, the agencies involved have the authority andresponsibility for review under the National Envi-ronmental Policy Act (NEPA). However, EPA hasthe responsibility to review assessments made byother agencies.

National Science Foundation

The National Science Foundation (NSF) currentlyfunds research involving transgenic animals rangingfrom using recombinant DNA technology to transferspecific mouse genes between inbred strains-amore precise and rapid method to achieve the results

Chapter 6-Patenting of Animals--Scientific and Regulatory Considerations ● 109

of traditional mouse breeding—to introducing genesfor various growth factors between species with thehope of producing agricultural animals that growfaster and larger on the same or less feed. To date,NSF has supported such work only on laboratoryanimals and has not dealt with questions of large,domesticated animals. With the use of transgenicanimals becoming central to whole lines of investi-gation, work with such animals is expected toexpand as more genes are cloned and identified.

NSF is a research-oriented institution and not aregulatory agency, but it has endorsed the NIHGuidelines for Research Involving RecombinantDNA Molecules and the latest proposed changes tothe guidelines, These guidelines, plus Federal stan-dards for good animal practice, form the regulatoryframework of NSF. All grantees must follow theseguidelines and provide written documentation thatthey have abided by them. In addition, NSF requiresall grantees to submit written documentation thatthey are abiding by Federal animal welfare regula-tions.

According to NSF, the essential reasons forregulating the use of transgenic animals are toprevent escape of any animal from an animal facilityand to minimize possible escape from individualcages. It is NSF’s position that the single mostsignificant objective of control related to transgenicanimals is to prohibit uncontrolled breeding betweentransgenic and conventional animals until the geneconstruction is well understood and the genotyperecognized as desirable for continued researchpurposes.

Agency for International Development

Most of the Agency for International Develop-ment’s (AID’s) funding for research involvingconventional and transgenic animals goes towardtraining personnel and to international researchcenters. These centers are financed by several donorcountries. The United States provides only about 20percent of the core budget in these centers. Accord-ingly, it has minimal control over research activities.In a related move, the NIH Recombinant DNAAdvisory Committee is studying whether it hasjurisdiction over the use of N] H-funded research inforeign countries.

In the relatively few cases where AID grantees arethe direct contractors—for example, malaria vaccineresearchers in U.S. universities—NIH guidelines arefollowed for health-related research, and USDAguidelines are followed for agricultural research.Grantees are required to file the appropriate notifica-tion with the corresponding agency. Transgenicanimals imported into the United States would bereviewed under existing regulations in the appropri-ate agency (e.g., USDA/APHIS).

Fish and Wildlife Service(U.S. Department of the Interior)

The Fish and Wildlife Service undertakes selec-tive breeding to manage and preserve species, suchas to increase production at fish hatcheries, toenhance genetic diversity in species with reducedpopulations, or for standardized laboratory testanimals. This work does not involve geneticallyaltered animals in the context of genetically engi-neered, nonnaturally occurring populations. How-ever. under extreme circumstances, it may be that theselectively bred genotypes are not represented innaturally occurring populations, but only in thelaboratory.

Photo credit: Rex Dunham, Auburn University

At top, a transgenic carp containing trout growth hormonegene; bottom, normal carp.


The Fish and Wildlife Service does not anticipatethat it will have any uses of its own for geneticallyaltered animals in the next 5 years. There has beensome discussion of using transgenic fish to combatthe effects of acid rain. The Fish and WildlifeService does not consider this acceptable becausealtering target fish species alone would not maintaina healthy ecosystem and the present system wouldcontinue to degrade. Ecologically, it is better to tryto attack the problem at its source rather thanreconstruct an entire ecosystem to live with theconsequences.

The Fish and Wildlife Service has several regula-tory policies that relate to protecting the geneticintegrity of wild stocks, the maintenance of naturalhabitat, and the protection of biological diversity. Italso has authority over State regulations concerningthe control or impact of migratory species, exoticspecies, or any fish or game species that crossesState lines. However, in most cases it lacks theauthority to regulate the use of transgenic animals.Any involvement would require stretching the lawand regulations meant for other purposes (15).

The Endangered Species Act could be used, forexample, if a genetically engineered animal poten-tially affects a species protected by the Act. TheNational Environmental Policy Act also could beused to review or comment on Federal agencyactions affecting the use of genetically alteredspecies. Anything that might give a competitiveedge to one species within an ecosystem coulddrastically alter the whole balance of the ecosystem.

National Aeronautics and SpaceAdministration

The National Aeronautics and Space Administra-tion (NASA) does not undertake or fund anyresearch involving genetically engineered animals,and the Agency has no such work projected over thenext 5 years. All NASA research involving animalsfollows NIH’s guidelines.

U.S. Department of Energy

According to the Department of Energy’s Officeof Health and Environmental Research, no researchis currently being supported in the area of geneti-cally engineered animals. Genetically variant ani-

mals used by the Department have been developedthrough classical breeding programs (1).

SUMMARYThe U.S. Patent and Trademark Office in April

1987 issued a notice that “it considers nonnaturallyoccurring nonhuman multicellular organisms, in-cluding animals, to be patentable subject matterwithin the scope” of patent laws. The first patent ona transgenic animal was issued on April 12, 1988,assigned to Harvard University, for a mouse to beused in cancer research. The Patent Office policy hasspurred debate regarding whether animals should bepatentable subject matter.

The majority of animals likely to be patentablewill be produced via microinjection or, eventually,other more precise recombinant DNA techniques.Such manipulations cannot, however, be consideredto “violate species integrity” or “species barriers” inany meaningful biological sense. Manipulationsnow possible, contemplated, or likely in the foresee-able future are, in fact, less likely to disrupt thecomplex, coadapted gene complexes most often feltto be important to the formation and stability ofspecies than practices of selective breeding used fordecades or centuries.

Several Federal agencies regulate the experimen-tal use or commercial development of geneticallyaltered animals. Because current statutes regulatevarious uses and protections for animals, no singleFederal policy governs all uses of genetically alteredanimals. In the absence of a single policy, Federalagencies will rely on existing statutes, regulations,and guidelines to regulate transgenic animal re-search and product development. Current federallyfunded research efforts may lead to patents onanimals; however, the patentability of an animaldoes not affect the manner in which the animalwould be regulated by any Federal agency.

1.

2.

CHAPTER 6 REFERENCESBarnhart, Benjamin J., Office of Health and Environ-mental Research, Office of Energy Research, Depart-ment of Energy, Washington, DC, personal commu-nication, Dec. 4, 1987.Brinster, R, L., et al., “Somatic Expression of HerpesThymidine Kinase in Mice Following Injection of aFusion Gene Into Eggs,” Cell 27:223-231, 1981.

Chapter 6---Patenting of Animals--Scientific and Regulatory Considerations

3.

4.

5.6,

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

Camper, S. A., “Research Applications of TransgenicMice,” BioTechniques 5(7):638-650, 1987.Damell, J., Imdish, H., and Baltimore, D., h401ecu/arCell Biology (New York, NY: Scientific AmericanBooks, 1986).Diamond v. Chakrabart?’, 477 U.S. 303 (1980).Endler, J. A., Geographic Variation, Speciation, andClines (Princeton, NJ: Princeton University Press,1977).Exparte Allen, 2 USPQ 2d 1425 (PTO Bd. Pat. App.& Int. 1987).Exparre Hibberd, 227 USPQ 473 (PTO Bd. Pat. App.& Int. 1985).Futuyma, D. J., Evolutionary Biology, 2d ed. (Sunder-land, MA: Sinauer, 1987).Gartland, William J,, Executive Secretary, Recombi-nant DNA Advisory Committee, National Institutesof Health, Bethesda, Md., personal communication,Jan. 15, 1988.Gordon, K., et al., “Production of Human TissuePlasminogen Activator in Transgenic Mouse Milk,”Biotechnology 5(1 1): 1183-87, 1987.Gould, S. J., Ontogeny and Phylogeny (Cambridge,MA: Harvard University Press, 1977).Hamilton, E., and Cairns, H. (eds.), P/a/o: TheCollected Dialogues, Including the Letters (Prince-ton, NJ, Princeton University Press, 1978).Jones, Daniel D., “bgal and Regulatory Aspects ofGenetically Engineered Animals,” Genetic Engi-neering of Animals (New York, NY: Plenum Publish-ing Corp. 1986).LaRoe, E. T., Director, Cooperative Research UnitsCenter, U.S. Fish and Wildlife Service, “FederalRegulation and Animal Patents,” workshop held byOffice of Technology Assessment, U.S. Congress,tkC. 11, 1987.l-ewontin, R. C., The Genetic Basis of EvolutionalChange (New York, NY: Columbia University Press,1974).

17,

18,

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20.

21.

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23.

24.

25.

26.

27.

28.

29,

Lovejoy, A.O., The Great Chain of Being (Cam-bridge, MA: Harvard University Press, 1936).Mac Intyre, R.J. (cd.), Molecular Evolutionary Genet-ics (New York, NY: Plenum Press, 1985),

Mayr, E., Animal Species and Evolution (Cambridge,MA: Harvard University Press, 1963).Mayr, E., Evolution and the Diversity of Life (Cam-bridge, MA: Harvard University Press, 1976).Mayr, E., The Growth of Biological Thought: Diver-sity, Evolution, and Inheritance (Cambridge, MA:University Press, 1982).National Academy of Sciences, Introduction ofRecombinant DNA-Engineered Organisms Into theEnvironment: Key Issues (Washington, DC: NationalAcademy Press, 1987).Rifkin, J., htter to William Gartland, FederalRe.gis/er 49(184):37016, Sept. 20, 1984.Rubin, G. M., and Spradling, A. C., “Genetic Transformation of Drosophila germ line chromosomes,”Science 218:348ff, 1982.Stubbe, H., History of Genetics From PrehistoricTimes to the Rediscovery of Mendel’s Luws (Cam-bridge, MA: Massachusetts institute of TechnologyPress, 1972).U.S. Congress, Office of Technology Assessment,Human Gene Therapy, OTA-BP-BA-32 (Washing-ton, DC: U.S. Government Printing Office, Decem-ber 1984).

U.S. Congress, Office of Technology Assessment,Field-Testing Engineered Organisms: Genetic andEco/ogica/ Issues, OTA-BA-350 (Washington, DC:U.S. Government Printing Office, May 1988).Watson, J. D., et al., Molecular Biology of the Gene,4th ed. (Reading, MA: Benjamin/Cummings, 1987).White, M.J.D., Modes of Speciation (San Francisco,CA: W,H. Freeman & Co., 1978).

Chapter 7

Patenting of Animals—Economic Considerations

‘*Farmers, and agriculture in general, are the obvious losers in the patenting of animals. This massivetransfer o! farmer decision making power regarding livestock, to a few large corporations, alongwith royalty payments to these patent holders, will further erode family farmers’ chances ofsurvival. ”

John KinsmanWisconsin Family Farm Defense Fund

“Improved breeds that produce more milk with a lower cost of production, or that resist commondiseases, will help the small farmer stay competitive by reducing farm costs and/or increasing thevalue of the commodity. ”

Richard GodownIndustrial Biotechnology Association

"At the moment, if our food survival was dependent on transgenics, we would be eating fish andmice. ”

Neal FirstUniversity of Wisconsin—Madison

CONTENTS

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .THE MAJOR

TheTheThe

LIVESTOCKSector . . . . . . .

Dairy Sector, .......,

MARKET SECTORS. ......,. . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..,.,, .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Red-Meat Sectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .LIKELY ECONOMIC IMPACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .CHAPTER 7 REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

BoxesBox7-A. The Marketing of Oncomouse. . . . . . . . . . . . . .7-B. Royalty Collection . . . . . . . . .. ... .. .$.......

FigureFigure7-1. Four Classes of Animals Potentially Affected

Table

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

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

by Intellectual

Page

115115115116117117123123

Page. . . . . . . . . . . . . . . . . . . . 121. . . . . . . . . . . . . . . . . . . . 122

PageProperty . . . . . . . . . . . . 119

Table Page

7-1. Commercial Slaughter, 1986. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115

Chapter 7

Patenting of Animals—Economic Considerations

INTRODUCTIONEvaluation of the patent system is in one sense a

cost-benefit analysis, weighing the benefits of pat-ents against the cost of creating statutory monopo-lies. Patents may stimulate new research, hastenproduct development, and enlarge the pool ofinventors in certain areas. However, patents mayalso raise barriers to market entry or impede the flowof information and mobility of production factors(4).

To begin to understand the economic implicationsof permitting or prohibiting the patenting of animals,it is necessary to consider the likely consequences ofeither policy for inventors, producers, and consum-ers of patented animals. Rescinding the presentprotection of transgenic animals as intellectualproperty would result in market forces acting indifferent ways than if animals continue to bepatentable. An evaluation of the manner in whichthese market forces might react requires a review ofthe salient features of the major market sectors likelyto be affected. The market for agricultural livestockis foremost among these, including the poultry,dairy, and red meat sectors. Because animals areused as models in the study of diseases and forproduct testing, the pharmaceutical and biomedicalresearch communities also stand to be affected byanimal patent decisions. And although progress inresearch on transgenic fish makes it possible thataquiculture markets might be affected relativelyearly, these markets are smaller in size. No examina-tion of the likely impacts of patented animals inaquiculture markets is ventured in this chapter.

Building upon a brief review of these majormarket sectors, this chapter presents a preliminarysurvey of impacts that might be expected fromanimal patenting, as well as some expected difficul-ties in royalty collection posed by various marketstructures.

THE MAJOR LIVESTOCKMARKET SECTORS

Livestock, including poultry, is the largest com-ponent of the agriculture sector in the United States.In 1982 this large and widespread market produced

53 percent of the cash value of all farm sales andinvolved more than two-thirds of all farms, distrib-uted throughout all 50 states (12). The major marketsectors are poultry (including broilers and eggs),dairy, and red meats (including cattle, hogs, andsheep) (table 7-l).

The Poultry Sector

Broiler Chickens

Post World War II developments in management,marketing, and poultry breeding led to the emer-gence of a new agricultural product, the broilerchicken. If present trends continue, by the turn of thecentury per capita consumption of chicken maysurpass that of beef. The broiler market has twomajor components: producers and integrators/processors.

The birds are typically owned by integrators, whocontract first with producers to raise the birds (takingabout 7 weeks), which they sell then to processors.Processors are usually owned by integrators, orcontract exclusively with them. Most production isconcentrated in the Southeast and South-CentralStates where feed is easily accessible and the climategenerally congenial. Market concentration amongintegrators, although historically low, has increasedin recent years. The largest four integrators areestimated to account for approximately 50 percent ofU.S. broiler production (8). Market competitionexists between large supermarket buyers. In 1982,80 percent of broilers produced came from one-thirdof the nearly 53,000 farms involved (7).

Concentration is even higher among breeders whosell chicks to the integrators, who in turn supplycontract producers. Three breeding firms control 90

Table 7-l--Commercial Slaughter, 1986

Chickens . . . . . . . . . . . . . . . . . 5,437,024,000 (hatched)4,646,312,000 (raised)

Turkeys . . . . . . . . . . . . . . . . . . 225,380,000 (hatched)204,216,000 (raised)

Hogs . . . . . . . . . . . . . . . . . . . . . 79,598,200Cattle . . . . . . . . . . . . . . . . . . . . 37,288,300Sheep & Lambs. . . . . . . . . . . . 5,635,000SOURCE” U S Department Of Agwulture, Agrtcuflura/ Sfaristics 1987

-115-


percent of the market in female birds, while the sameproportion of male birds is controlled by four firms.

Eggs

In the past 25 years, annual per capita consump-tion of eggs has fallen from 320 to 250, illustratingthat egg production is a declining enterprise. In 1982there were fewer than 10,000 producers (less than 4percent of the total) maintaining more than 500,000laying hens. An estimated 37 percent of all eggsproduced come from large producers, some havingmore than 5 million birds in production (6). Declin-ing consumption and economies of scale are likelyto lead to an increase in market concentration.Economic statistics demonstrate that earnings aredepressed, however, suggesting that competitioncontinues to shape the markets. Pricing is closelylinked to market reports from the United StatesDepartment of Agriculture (USDA) or commercialsources.

Photo credit: U S Depeftment of Agrtcutture

The Dairy Sector

The dairy sector differs fundamentally from eitherpoultry or red meats due in part to the majorimportance of the Federal milk marketing ordersystem (2,1 1). Efficiency has doubled over the past20 years with the number of cows required toproduce a given volume of milk decreasing by half.

Production occurs in all States (in part due toFederal pricing systems). The leading producers (byvolume) are Wisconsin, California, New York, andMinnesota. Most dairy farms are small familyoperations, carrying between 40 and 100 head. Suchoperations are typically found throughout the Mid-west and Northeast, and they differ markedly inscale from the larger operations common in the Westand Southwest. In California it is not uncommon foroperations to milk 600-800 cows (3). Virtually alloperations breed their own replacement stock, with

Chapter 7—Patenting of Animals-Economic Considerations ● 117

one breed (Holstein-Friesian) accounting for 90percent of dairy cattle.

Dairy cattle must produce calves annually toremain productive. This leads to one of the importantsecondary products of the dairy industry, bull calvesfor dairy beef veal. Bulls for natural breeding arepurchased locally, but 60 to 65 percent of themilking cows are bred artificially and 25 percent ofthe breeding age heifers are bred artificially. Semenproducers are dominated by four major companies,two of which are cooperatives. About 20 percent ofthe registered herd operations produce breedingbulls which generate substantial income, often 50percent or more of the total (6).

The Red Meat SectorsBeef

The beef cattle subsector is the largest componentof the market for agricultural livestock and the mostcomplex. In 1982 there were 34.2 million beef cattledistributed among 1 million farms. Most farms aresmall, numbering fewer than 20 head. On suchfarms, cattle raising is typically an enterprise supple-mentary to other farming activity.

The complexity of the beef subsector can beattributed to its division into two major components—calf production and cattle feeding. Calf productioninvolves beef cattle through the first 6-18 months oflife, raised principally in the Dakotas, Texas, Okla-homa, and the Southeast. Calves are sold to feedlotoperations where they are grain fed and fattened forslaughter. Feedlot operations are concentrated in thegrain rich areas of the western corn belt States, theTexas high plains, Arizona, and California. About 5percent of the total number of feedlots providedslightly more than 60 percent of the cattle slaugh-tered in 1982.

Because of the large numbers of producersgeographically separated from the major feedlots,most cattle pass through the hands of several brokersand are sold multiple times between birth andslaughter. This factor makes it more difficult to trackand monitor beef cattle individually than to track anyother major agricultural animal.

Pork

Pork production has been consolidated significant yover the past decade. Coordinated operations that

carry individual hogs from birth to slaughter ("farrow-to-finish”) account for 75 percent of all production.In 1982, 315,000 farms were listed as producinghogs, with 50 percent of total production contributedby 10 percent of the farms. This means that smallerfarms, comprising 90 percent of total farms, pro-duced only half of total production. The USDAestimates a 1988 herd size of 53.8 million head.

Lamb

Sheep comprise a small and diminishing subsec-tor of the U.S. livestock market. Total herd sizedeclined from 50 to 10 million between 1945 and1985. In 1982, 100,000 farms raised a total of 12.4million sheep. Half of these farms carried fewer than50 head. Nearly 85 percent are sold directly fromproducers to one of only 14 sheep packers in thecountry.

LIKELY ECONOMIC IMPACTSIt is difficult to predict the manifold consequences

of any particular approach to protecting intellectualproperty, especially across so wide a range ofeconomic activity as that spanned by patentableanimals. This range embraces diverse sectors of theagricultural livestock markets, pharmaceutical orother chemical production, and academic research orindustrial testing. This section briefly examineslikely impacts of patenting animals upon inventors,users or producers, and consumers.

The patent system was devised as a means toallow inventors and innovators a method of recoup-


MoiD cmdt: Chuda Tti#o

ing their investments in intellectual property, while, been employed or preferred. Chief among these haveat the same time, stimulating the development of been secrecy and contractual arrangements.additional innovations and inventions. Although Companies opting for secrecy rely on tradepatenting seems the most direct and least cumber- secrets and seek to conceal crucial details or keysome method of satisfying both objectives simulta- processes from competitors. This enables a recoveryneously, there are other means that have sometimes of investments in intellectual property; however,

Chapter 7—Patenting of Animals-Economic Considerations . 119

further innovation by other inventors is in the formof imitation (which does not compensate the inven-tor), as opposed to patent enablement (which does).

Companies relying on contractual arrange-ments can negotiate agreements with users of theirproducts or processes in such ways that will permitrecovery of investments. Negotiations carry sub-stantial risks of disclosure, however, that couldthreaten the recovery of such investments. Further-more, because users may intentionally or negligentlybreach a confidential agreement, inventors may bereluctant to contract with parties who do not have"deep pockets.” The likely consequences of the useof patenting v. trade secrets or contractual arrange-ments are considered below.

Four distinct animal classes that might be affectedby one or another method of intellectual propertyprotection are 1) disease models, 2) production ofpharmaceuticals, 3) poultry, and 4) livestock (figure7-l).

Impacts on Inventors

Class 1—High-value disease model animals pre-sent a situation in which secrecy does not seem auseful approach. The precise genetic changes incor-porated into the transgenic animal, as well as themethod of inducing the changes and other relevantbiological data, are all likely to be crucial to thosewho wish to devise studies or tests using the animals.Such information is also important to the interpreta-tion and understanding of test results. Secrecy alsostands contrary to historical traditions of opennessand free exchange in academic research.

Contractual arrangements may offer an alter-native to patenting. The number of major researchinstitutions or corporations likely to use suchanimals is limited and the likely users can beidentified. Violations of either contractual agree-ments or patent law are likely to be detected since thepublic confidence essential to acceptance of testresults or data would entail disclosure of essentialdetails about the animals used. However, a systemrelying on individual contractual arrangements be-tween inventors/innovators and users would likelybe more complex and variable than that entailed byexisting patent law, though it could bring theadvantage of flexibility.

Class 2—High-value animals, such as those usedin pharmaceutical production, could be protected bya system of trade secrets. Relatively small herds oftransgenic animals (e.g., 100 head of dairy cattle)could be used to produce significant supplies ofhuman pharmaceuticals, such as tPA or othercompounds for treating heart attack victims or bloodclotting factor VIII for treating some forms ofhemophilia. Existing arrangements between compa-nies and the U.S. Food and Drug Administrationmight suffice for ensuring product safety whileguarding against the disclosure of confidentialbusiness information. Contracts might also be adapt-able to such arrangements. Patenting and licensing

Figure 7-l-Four Classes of Animals PotentiallyAffected by Intellectual Property

Animals used in biomedical research, such as the so-called “Har-vard Mouse,” U.S. patent 4,736,866.

Class 2- Production of Pharmaceuticals

In the early stages of research, small animals (e.g. mice) are thesubjects of Ihis type of research. If successful, this research willIater be conducted on larger, milk-producing animals (e.g. cattle)for the production of pharmaceuticals used by humans.

Class 3- Low Value, Rapidly Reproducing

Poultry is an example of this class.

Class 4- Low Value, Slowly Reproducing

Cattle and other red meat animals are examples of this class.

SOURCE: office Of hchnotqy ASS9SSllWlt, 19S9.


arrangements could serve the same ends, however,without diverting valuable resources from produc-tion efforts to trade secret protection or contractenforcement. It seems likely that neither tradesecrets nor contracts would be as effective instimulating innovation as the disclosure required forpatents.

High-value animals used as breeding stock couldprobably be protected effectively either by patents orby today’s practice of close monitoring and controlunder a system of contracts or trade secrets.

Class 3—Low-value, high reproductive rate ani-mals, such as poultry, probably cannot be protectedeffectively by a system of trade secrets, The largenumber of different contract farms and turnoveramong personnel involved would make enforcementof secrecy a huge task. The relatively smallernumbers of integrators and processors might makecontractual arrangements practical and there areprecedents. However, it seems that a smoothlyfunctioning patent system would serve equally well,obviating many of the problems that might followfrom high turnover rates of valuable personnel incompetitive market sectors.

Class 4—Low-value, low-reproductive rate ani-mals like cattle or other red meat animals constitutethe most complicated case. Low reproductive ratesmean technological innovations to the animalsthemselves (as opposed to processes for raising orprocessing) will be relatively slow to disseminate(although embryo transfer technologies may speedthe process). These market subsectors typicallyoperate with low net margins, meaning changes thatmight substantially increase production costs willnot be adopted quickly unless they bring a commen-surate increase in returns. The large numbers ofindividuals involved, in terms of farms, shippers,and processors, as well as animals, are additionalcomplicating factors. Secrecy does not seem feasiblebecause of cost and logistics, and contracts seemonly slightly more practical. The large numbers ofindividual animals and the extended and complexpaths they follow to market mean significant diffi-culties would be associated with any effort to recouppatent royalties linked to individual animals.

One economic analysis (6) suggests that “every-thing else held constant, small firms benefit more

from patents than large ones due to the penchant ofsmall firms to license technology and the impedi-ment such firms face when attempting to enterproduction with limited capital and managerialreserves. ” Others point out that larger firms patentmore often and further note that licenses could begranted from trade secrets as well as patents. Ineither case, it is possible that much of the relevantactivity could be covered by negotiation of arelatively small number of contracts (5).

Impacts on Users/Producers (Licensees)

The likely impacts of animal patents on differentusers or producers will vary with the type oftransgenic animal involved and the structure of themarket sectors associated with them. The discussionin this section follows the same breakdown oftransgenic animals into separate classes as presentedabove.

Class 1— Disease models serve a specializedfunction in the esoteric realm of biomedical re-search. Such research now uses many differentanimal disease models. The availability of patentingfor transgenic animals may lead to more of thesemodels relying on transgenic animals in the future.Patenting may result in researchers paying higherprices for such animals or finding their reproductionrights limited or restricted. In many cases, however,the existence of new, patented animals may cut thetime needed for studies to generate data of statisticalsignificance. It has been estimated that the firstanimal patented, the so called “Harvard Mouse,”may lead to some tests for chemical carcinogenicitybeing compressed from 3 years to 3 months induration (9) (box 7-A). If this is realistic, net costsfor experimental animals as well as the total numberof animals used in such studies could drop dramati-cally in spite of substantial increases in the cost ofindividual animals used.

It should also be noted that precedent exists forpatent holders to make such animals available toresearchers free or at minimal cost, sometimes forcosts of shipping and handling alone, or otherwiseon a not-for-profit basis. There is, however, nocompelling reason that such arrangements shouldeither be universal or necessarily continue wherethey now exist.

Chapter 7—Patenting of Animals--Economic Considerations . 121—

Box 7-A—The Marketing of Oncomouse

U.S. patent 4,736,866 for transgenic non-human mammals was issued by PTO on April 12,1988. Seven months later, on November 15, the E.I.DuPont de Nemours & Co. of Wilmington, DEannounced that it would commence sale of “Onco-mouse” in early 1989.

Oncomouse (so named because it carriesactivated human cancer genes) was developed atHarvard University. DuPont was a major sponsor ofthe research and owns exclusive rights to the patent.The first oncomice will sell for $50-$100, five to tentimes the price of an ordinary laboratory mouse. Itis unknown how large the initial market for the micewill be. DuPont will handle the orders for the mice,which will be bred by Charles River BiotechnicalServices (a Bausch and Lomb Company) in Massa-chusetts.SOURCE: Office of Technology Assessment, 1989.

Class 2—Animals producing pharmaceutical prod-ucts, in contrast to the other three classes of animalsdiscussed here, in many respects constitute a newindustry. It stands to displace only a portion of itsprimary competitor, microbial fermentation. Be-cause of the strong possibility of protection viameans other than patents (e.g., trade secrets orcontractual arrangements) it is by no means clearthat patents on the animals will always be soughteven where possible. Therefore. it seems likely thatthe availability or unavailability of such patents neednot have any major disrupting impact on users, as themarkets will develop in accord with whicheverpractice obtains.

Classes 3 and 4—If (poultry and livestock) arepatented, it seems that patent holders might attemptto collect royalties from users. Collection could bea complex process; it is not clear whether developerswould seek to recoup the entire cost of developmentfrom initial sales. Yet, because of the self-replicatingabilities of animals, once sold the invention willeffectively enter into common public use whether ornot royalties or registration fees are paid. Onedifficulty is monitoring a patented animal. If theroyalty on such an animal is high, it creates anincentive to divert animals, semen, and eggs bythose possessing the animal. For example, fruit trees

have long been patented, but royalties collected forsuperior varieties have remained modest (10).

With broilers there are relatively few integratorswho hold title to the birds. Genetically engineeredchickens could be sold to the integrator’s hatcherysupply operations. Monitoring these few, large,easily identifiable operations would be fairly straight-forward. Egg producing operations are more in-volved due to the larger number of primary custom-ers. The relatively small number of hatcheriesthrough which the industry operates, however,makes it seem likely that royalty collection arrange-ments could remain tractable. Existing breeders arelikely to become involved with any patented poultry,if not as owners of the patents, then as incorporatorsof the licensed traits into production birds anddistribution of stock to hatcheries.

The pork subsector also seems to be relativelyopen to adopting royalty collection measures. Largefarrow-to-finish operations are essentially self-contained. Through either contract production orother contractual arrangements it may be feasible tocollect royalties, for example, on all hogs shipped topackers. Additional stipulations might restrict salesto packers only, thereby reducing the probability ofimproper diversions. Large existing breeders wouldlikely become involved in the commercialization,multiplication, and distribution of patented pigs. It isnot clear that patenting would bring any majorreorganizations in this subsector.

Smaller operations, however. might well be af-fected. The numerous farms specializing in feederpig production or finishing would be more difficultfor a patent holder to monitor. With increasingproduction by very large operations, a tendency mayemerge to provide patented animals preferentially tothe larger operations. The existence of animalpatents might, then, increase some of the existingpressures toward concentration in pork production.

Incorporating royalty collection into the beef anddairy cattle subsectors would be far more compli-cated. Calving throughout the year on the numerousfarms involved would make royalty collection adifficult and expensive process as applied to dairycattle. Incorporating royalty collection into the beefsector would be even more involved. The geographi-cal separation of calf production and cattle feeding,the numerous producers, and the variety of breeds

involved would all combine to make monitoring amonumental problem. For these reasons, contractscalling for one-time payment of royalties or registra-tion fees could make logistical sense, providing thepatented animal made economic sense in thesetypically low-margin operations.

At this early stage it seems that royalty collectionon patented cattle would be forbiddingly difficultand complex without fundamental change in thestructure and organization of the beef and dairysubsectors. It is not clear how this might beaccomplished, and the size and structure of themarkets make this seem most unlikely (box 7-B).Sheep present similar problems, except that as amuch smaller subsector it would theoretically bemore easy to adapt. Whatever the eventual arrange-ment, royalties on dairy or beef cattle would appearto be far less easily collected than with either poultryor hogs. Because of this, an economically viabledevelopment in cattle will probably require a much

that needed in either poultry or hogs, if royaltycollection is the only means to recoup the cost todevelopers of innovations. Such dramatic increasesin production efficiency are likely to be difficult toaccomplish since cattle are biologically the leastefficient converters of feed grain to meat.

Incorporating patented animals into existing produc-tion methods will be driven by economics. If apatented animal is engineered to carry a new trait,and if the trait reduces costs by 10 cents per pound,then the farmer could perhaps pay as much as (butnever more than) the equivalent of 10 cents perpound more for the patented animal. At prices abovethat threshold it would be more economical tocontinue using the nonpatented animal. Thus, aslong as traditional breeds remain available they willprovide caps on how much can be charged forpatented alternatives. The continued existence oftraditional breeds does not seem threatened exceptpossibly with poultry, where pure stocks are closely

higher-improvement in production efficiency, than held by a few firms (1).

Box 7-B—Royalty CollectionOnce a patent is granted, the patent holder has the right to keep others from making, using, or selling the

invention during the 17-year patent term. It is common practice for a patent holder to permit others to use artinvention upon payment of a royalty or licensing fee. In the absence of an agreement with a patent holder, a personwho makes, uses, or sells the invention is liable to the patent holder for infringement.

Royalty collection is one element of the debate on the patenting of animals that has engendered public debateand legislation. Some argue that the ability of a patent holder to collect royalties on an invention is a basic right underthe U.S. patent system. Others argue that the collection of royalties for various classes of patented animals will beburdensome if not impossible. During the 100th Congress, the House of Representatives passed H.R. 4970, theTransgenic Animal Patent Reform Act, which said, in part:

It shall not be an act of infringement for a person whose occupation is farming to reproduce a patented transgenic farmanimal through breeding, use such animal in the farming operation, or sell such animal or the offspring of such animal.

However, the bill held that it would be an act of infringement:for a person to sell the germ cells, semen, or embryos of a patented transgenic farm animal.

Several opinions and proposals have been advocated during congressional consideration of the royalty issue.These include:

. the creation of broad-based exemptions for various users (e.g.. farmers);● the creation of limited exemptions if certain conditions are met (e.g., farms operating as single family

enterprises, limited gross receipts, total acreage, number of animals);. limiting royalty collection to a specified number of generations of a patented animal;. the creation of a tribunal, based on the Copyright Royalty Tribunal, to set rates and distribute funds for

certain classes of patented animals;● a prohibition on animal patents, which would remove any royalty issue from the patenting context; and . no action by the Congress, thereby relying on existing patent infringement provisions for patented animals.


Chapter 7—Patenting of Animals--Economic Considerations ● 123

Impacts on Consumers

Class 1—Disease model laboratory animals willbe distributed to a limited number of consumers, i.e.,researchers. Even if patented animals are not distrib-uted freely in this sector, the cost impact of patentedanimals is likely to be a small part of the total costof health care. As research leads to products thatapproach commercialization, increased activity byprivate firms might be anticipated. In terms of finalcosts, as noted above, if new models developed areless costly or more efficient than existing models orlead to more effective treatment and preventionmethods the net effect could be lower costs forindividuals.

Class 2—Pharmaceutical production work in thisarea is primarily directed towards finding moreeconomical or effective methods of producing cur-rently available products. This effort should result ina decline in costs to consumers. There is no reasonto expect that the existence of such products willincrease concentration in the pharmaceutical sector.Indeed, the entry of new firms may well take placeas is suggested by the experience with biotech-nology companies and pharmaceutical firms to date.

Classes 3 and 4—The poultry and livestocksectors operate now as competitive industries, whichsuggests that the benefits of cost-reducing techno-logical developments could, in the long term. bepassed on to consumers. However, if royalties equalthe cost saving associated with the new genes, thenthe farmer’s cost of production is the same as beforeand the consumer gets none of the cost savings of thenew technology. The consumer arguably does notcare whether the price they pay is for royalties or theold inputs (10). Benefits to producers are most likelyto accrue to successful early adopters of innovations.What is not clear is how patented animals mightcontribute to anticompetitive pressures. If they causeanticompetitive market pressures to increase, otheravenues are available for redress (e.g., antitrust orantimerger law).

SUMMARYThe largest economic sectors likely to be influ-

enced by an increase in animal patents are thedifferent markets for agricultural livestock and

possibly some sectors of the pharmaceutical indus-try. The principal agricultural markets involvepoultry, dairy, and red meat. These markets areorganized quite differently and are subject to differ-ent degrees of economic concentration. Poultry ismost concentrated (though still diffuse by otherindustry standards, e.g., automobiles) with the dairyand red meat sectors being much more diffuse.Different economic forces are important in theseveral markets as well. Federal price supports are ofmajor importance in the dairy market, while themarket for poultry is more open and competitive.

The existence of animal patents and the degreethey are employed in the different markets mayintroduce some new economic relationships. It is notnow clear that these are likely to have any substan-tially adverse effects on the major markets orexisting market forces. The same types of pressuresthat have driven economic choices in the past arelikely to continue to dictate them in the future—if aninnovation increases costs (e.g., if a patented animalcosts more than the unpatented alternative), it isunlikely to be adopted unless it increases outputs orproduct values commensurately. It therefore seemsthat although cost savings can be anticipated tofollow from animal patenting in some areas (e.g.,pharmaceutical production or drug testing) innova-tions due to patented animals are likely to advancemore slowly in low margin operations such as theraising of beef cattle.

In some cases, efficient alternatives to protectionof intellectual property protection via patents arefeasible. Trade secrets or contractual arrangementsmight serve well where the animals involved have ahigh intrinsic value and are limited in number, e.g.,animals used for pharmaceutical production or forbreeding stock. When faced with the complexity ofthe markets for pork or beef production, however,such alternatives are clearly less practical, althoughthe same complexity complicates any scheme forenforcement or royalty collection associated withpatenting.

1

CHAPTER 7 REFERENCESAbplanalp, H., “Inbred Lines as Genetic Resources ofChickens,” Third World Congress of Genetics Ap-plied to Livestock Production (Lincoln, NE: Univer-sity of Nebraska, Institute of Agriculture and NaturalResources, 1986).


2. Babb, E. M., et al., “Milk Marketing Orders, ’’Federu/Murketing Programs in Agriculture: Issues andOptions (Danville, IL: Interstate Printers and Pub-lishers, 1983).

3. Butler, L. J., University of California-Davis, Depart-ment of Agricultural Economics, personal communi-cation, Oct. 19, 1988.

4. Butler, L. J., and Marion, B. W., “The Impacts ofPatent Protection on the U.S. Seed Industry andPublic Plant Breeding,” Monograph #16, Depart-ment of Agricultural Economics, University of Wis-consin, September 1985.

5. Kuchler, F., Office of Agricultural Biotechnology,Office of the Secretary, U.S. Department of Agricul-ture, Washington, DC, personal communication,Aug. 18, 1988.

6. hsser, W., ‘*Commercial Applications and Eco-nomic Impact of Patented Animals,” contract reportprepared for the U.S. OffIce of Technology Assess-ment. June 1988.

7. Marion, B. W., The Organization and Performance ofthe U.S. Food System (bxington, MA: hxingtonBooks), 1986.

8. Marion, B. W., University of Wisconsin, Departmentof Agricultural Economics, Madison, WI, personalcommunication, Oct. 28, 1988.

9. Raines, L. J., Director for Governmental Affairs,Industrial Biotechnology Association, personal commu-nication, August 1988.

10. Schmid, A. A., Department of Agricultural Econom-ics, Michigan State University, East Lansing, MI,personal communication, Oct. 21, 1988.

11. U.S. Congress, Office of Technology Assessment,Alternatives to Animal Use in Research, Testing, andEdu[u[ion (Washington, DC: U.S. Government Print-ing Office, OTA-BA-273, February 1986).

12. U.S. Department of Commerce, Bureau of theCensus, “1982 Census of Manufacturers IndustrySeries: Meat Products,” MC82- 1-20A, March 1985.

Chapter 8\

Patenting of Animals—Ethical Considerations

“I know I’m not supposed to get on a soapbox, but how can anybody say this kind of developmentis unethical or wrong?”

Donald J. QuiggCommissioner of Patents

“In one regulatory stroke, the Patent Office reduced the entire animal kingdom to the lowly statusof a commercial commodity, indistinguishable from electric toasters and automobiles.”

Jeremy RifkinFoundation on Economic Trends

"

. . . Congress intended statutory subject matter to include anything under the sun made by man.”Chief Justice Warren Burger

majority opinion, Chakrabarty v. Diamond

“What has been is what will be, and what has been done is what will be done; and there is nothingnew under the sun.”

Ecclesiastes 1:9

CONTENTSPage

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127ARGUMENTS FOR PATENTING TRANSGENIC ANIMALS . . . . . . . . . . . . . . . . . . . . . 127

Patent Law Regulates Inventiveness, Noncommercial Uses. . . . . . . . . . . . . . . . . . . . . . . 127Patenting Promotes Useful Consequences.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128Patenting Is Necessary for the United States To Compete in an

International Marketplace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129Patenting Is Preferable to Trade Secrets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129Patenting Rewards Innovation and Entrepreneurship. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130

ARGUMENTS AGAINST PATENTING TRANSGENIC ANIMALS . . . . . . . . . . . . . . . . 130Metaphysical and Theological Arguments Opposing Patenting. . . . . . . . . . . . . . . . . . . . . 130Patenting Involves Inappropriate Treatment of Animals. . . . . . . . . . . . . . . . . . . . . . . . . . . 133Opposition to Patenting From an International Perspective . . . . . . . . . . . . . . . . . . . . . . . . 135Patenting Promotes Environmentally Unsound Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . 136Patenting Produces Excessive Burdens on American Agriculture. . . . . . . . . . . . . . . . . . . 136

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137CHAPTER 8 REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137

BoxBox Page

8-A. Statement, Consultation on Respect for Life and the Environment. . . . . . . . . . . . . . . 134

Chapter 8

Patenting of Animals—Ethical Considerations

INTRODUCTIONA number of ethical issues have been raised in

discussions regarding the patenting of animals. Thischapter summarizes arguments regarding the patent-ing of animals that have been offered publicly andwhich claim to have an ethical component. Asubstantive evaluation of these arguments is beyondthe scope of this chapter. Many arguments claiminga moral or ethical basis have, by their own admis-sion, not been fully formulated to date (hence, onerationale for a legislative moratorium on the grant-ing of patents on animals) ( 15).

The range of opinion on the rights and wrongs ofusing animals to satisfy human needs is as broad asthe political spectrum itself. Interest in the moralstatus of animals and the rights, duties, and obliga-tions owed by humans to animals has been longdebated from religious and philosophical viewpoints(30). The ability to patent animals introduces a newlegal concept in the notion of ownership of animals—a limited, exclusive, intangible property right–-thatdid not exist previously. Some argue that such aproperty right differs little from previous notions ofaccepted human ownership and control of animals;others disagree, claiming that profound issues areraised.

In considering various ethically founded argu-ments, the question is raised: Is this issue one that isuniquely related to patenting of animals? In otherwords, would the issue exist independently of anydebate on animal patenting?

ARGUMENTS FOR PATENTINGTRANSGENIC ANIMALS

Patent Law Regulates Inventiveness,Not Commercial Uses

Patent law defines what is a patentable inventionand describes the process that applicants mustundertake in applying for a patent (see ch. 3). Thepatent statute, though detailed in proceduralrequirements regarding the application, issu-ance, maintenance, and reexamination of a pat-

ent, is silent on subsequent use or commercialapplication of a patented invention. This stems inpart from the constitutional roots of patent law, ascompared to constitutional powers permitting Con-gress to regulate commerce. The constitutional roleof patents is “to Promote the Progress of Science anduseful Arts.” Other congressional powers, mostimportantly the right to regulate commerce, havebeen used to enact statutes regulating health, safety,the environment, and market forces. Some propo-nents of animal patenting argue that it is beyond thereasonable scope of patent law to regulate the use ofthe invention, and that the Patent and TrademarkOffice (PTO) is ill-equipped to make ethical deter-minations regarding the possible uses of the morethan 4 million patents it has granted.

The lone statutory exception to the propositionthat patents should be denied for inventions is theInventions Secrecy Act (35 U.S.C. 181-188), allow-ing the withholding of patents in cases where theirissuance is deemed to be detrimental to nationalsecurity. This law has been used to withhold patentsinvolving the use of special nuclear material oratomic energy and inventions having significantutility in the conduct of aeronautical and spaceactivities (7). Department of Defense agencies haveresponsibility under the act for reviewing relevantpatent applications and asking PTO for a secrecyorder.

Other than under the narrow confines of theInventions Secrecy Act, the only way to stop theissuance of a patent on public policy grounds is toshow that the invention has no possible use (utilityis a requirement of patentability). In one case, a courtdetermined that a drug had no utility because “ofextreme toxicity to the point of immediate deathunder all conditions of its sole contemplated use”(l). As for suggested illegal or immoral uses ofpatented inventions, limited court rulings (mainlyinvolving patents on gambling devices) suggest thatpatents can be denied only if the invention hasabsolutely no other use other than an illegal orimmoral one. This standard is extremely difficult tomeet (6,19).

–127-


Using patent law to regulate a specific technology(in this case, the issuance of patents on livinginventions) could have unforeseen consequences.One issue is whether potential adverse consequencesare even relevant to patenting. Should, for example,patents be denied to certain inventions that are usefulbut potentially harmful (e.g., a new cigarette filter,a firearm)? If commercial consequences are to be arelevant factor for determining patentability, whoshould make such decisions? The patent systemcould be used to regulate the use of the technologyby denying to inventors the usual rewards ofinventiveness-hindering science and the usefularts, as opposed to promoting them. A precedentcould be set that could be used to hinder thedevelopment of technologies not yet foreseen. Un-less it can be shown that patented animals are soinherently dangerous or illegal as to have no possibleutility or threaten the national security within themeaning of the Inventions Secrecy Act, it appearsthat laws regulating commerce, not the patent law,are the proper statutory venues for addressing theethical questions surrounding the uses of patentedanimals.

Some opponents of patenting animals are troubledby arguments based on what body of law isappropriate for regulating possible consequences ofanimal patenting on the grounds that such discussionavoids substantive discussion of animal patentingper se (2).

Patenting Promotes Useful Consequences

The basic purpose of the patent laws is found inthe section of the Constitution that authorizes thecreation of such a system. Congress is given thepower “to Promote the Progress of Science and theuseful Arts, by securing for limited Times to Authorsand Inventors the exclusive Right to their respectiveWritings and Discoveries” (U.S. Constitution, Arti-cle 1; Section 8).

Proponents of animal patents argue that grantingpatents increases the incentives for inventors todevelop useful inventions. Some would see thisargument as a purely pragmatic one, appealing toconsiderations of social policy and lacking anyethical component. Others would disagree with sucha characterization. Defending social institutions onthe grounds that they lead to desirable consequences

(such as encouraging inventions) is a form of ethicalreasoning, usually called consequentialist reason-ing, that has substantial ethical significance, even ifmost would agree that it is only one of manydifferent ethical arguments that should be consid-ered.

Consequentialist reasoning that outlines thebenefits of patenting animals is the basis of themost widely used argument by proponents ofpatenting. In testifying before Congress on June 11,1987, the Assistant Commissioner for Patents as-serted:

By granting the right to exclude others, the lawprovides an incentive for those who create anddevelop new technology . . . The grant of patentrights has in fact encouraged research and provideduseful new products including research into solu-tions of problems such as those associated withgenetic disorders and increasing food yields (29).

Similar claims have been advanced by others onbehalf of the biotechnology industry (12,13), somesegments of the agricultural community (27), andsome research scientists (5,32).

By their nature, consequentialist arguments pro-vide greater or lesser support for a social policydepending upon the probability of the outcome (thehigher the probability, the stronger the support) andupon the perceived desirability of the outcome (themore desirable the outcome, the stronger the sup-port). This feature makes their support difficult toassess in particular cases, since it is often difficult topredict how desirable the outcomes will be and howlikely they are to occur.

Such a situation exists with respect to patentinganimals. Will benefit accrue from the developmentof biotechnologically derived animals that are pat-ented? How likely is it that such benefits willactually be produced, and how soon? To what degreewould such developments fail to take place ifpatenting is not permitted? The answers to thesequestions are unknown. Nevertheless, the rapidexpansion of biotechnology suggests that manyindividuals and companies are prepared to investtime and capital on the assumption that biotech-nology in general, and transgenic animals in particu-lar, hold promise for useful, marketable advances.Coupled with the U.S. experience that patents

Chapter 8---Patenting of Animals--Ethical Considerations ● 129

generally encourage inventions, many argue there issubstantial consequentialist support for the patent-ing of transgenic animals.

Yet, considering the logic of such consequential-ist reasoning demands that possible harms also beconsidered. Animal suffering, hardship for the smallfarmer, and reduction in genetic diversity are allpotential consequences cited by opponents of animalpatenting.

Patenting Is Necessary for theUnited States To Compete in an

International Marketplace

Arguments for patenting transgenic animals onconsequentialist grounds usually refer to such directbeneficial consequences as improving the foodsupply, providing animal models for the study ofhuman diseases, and providing a means to producepharmaceuticals more efficiently. Additionally, someproponents of animal patents often argue thatallowing such patenting is necessary if the Na-tion’s biotechnology industry is to be able tocompete internationally.

America’s competitiveness is the centerpiece forinternational trade discussions today. Intellectualproperty is a prominent component of that ability tocompete. America’s competitiveness can be strength-ened by providing more effective legal protection forAmerican technology. Congress would be going inthe wrong direction to consider limiting protectionfor biotech inventions . . . (12)

Again, some would see this argument as purelypragmatic, appealing to social policy considerationsand lacking an ethical component, and that it isappropriate for a society to adopt measures forpromoting economic growth in an increasinglycompetitive international marketplace. If patentingtransgenic animals could make a significant contri-bution to promoting such growth, an additional lineof consequentialist reasons for supporting the pat-enting of such animals would result. At present,however, the precise legal situation governing thepatenting of animals throughout the world is unclear.

Patenting Is Preferable to Trade Secrets

A final consequentialist argument revolvesaround the fact that patents are not the only way toprotect intellectual property. With inventions from

biotechnologies, the most likely alternative wouldbe to view such developments as trade secrets. Ifpatents, for example, are not allowed for transgenicanimals, then inventors could attempt to protect theircommercial value by treating them as trade secrets.Some argue that this could have negative conse-quences for society.

These individuals propose that such negativeconsequences would flow from a central provisionof patent law: disclosure. In order to obtain a patent,one must submit a complete specification, which isa description that would enable one skilled in therelevant art to make and use the invention. In orderto aid disclosure, one can deposit the invention indepositories that will provide samples on requestafter the patent is issued (see ch. 9). In either case,this so-called enablement requirement provides newinformation that can be, and historically has been,used by scientists and competing companies todevelop alternatives to and improvements on thepatented invention. If companies resort to tradesecret protection of intellectual property rights intransgenic animals because patent protection foranimals is unavailable, then information sharingcould be limited. Further, trade secret protectionmay be a more limited option when animals canreproduce the trait (35).

Patenting, therefore, can promote research bycontributing to the growth of publicly availableknowledge. Science works in a building blockfashion—one discovery building on another-andscientists must have access to the discoveries. Thus,patents, even with the delays involved in publishing,are probably preferable to trade secret protection(27). One example involves cortisone, the pioneer-ing patented discovery in the steroid hormone field.Cortisone was promptly followed by a host ofnoninfringing competitive inventions by others,each of which was stimulated by the initial disclo-sure by the cortisone inventor (1 1).

It is argued by some opponents of animal patentsthat research and development of new animalvarieties has occurred in the absence of patentprotection. If patent protection does not extend toanimals per se, patent protection would still exist forrelated processes. Further, trade secret protectionwould provide some measure of intellectual propertyprotection for inventions of new animals.


Patenting Rewards Innovation andEntrepreneurship

The arguments for patenting animals presented tothis point have been consequentialist arguments.This section examines a nonconsequentialist line ofreasoning reflected in the following:

The moral justification for legal practices likepatenting and copyright have received scant atten-tion in the literature of ethics. The general rationalefor both the copyright and patent systems is that theyencourage the investment of time and energy in theact of creating . . . Unless and until these reveredsystems produce serious harm to human or animalwelfare, they should be preserved intact as anethically appropriate way of acknowledging theinitiative and creativity of authors and inventors(33).

Two different ethical justifications for patentinglie within these remarks. The first, a fundamentalconsequentialist argument, is that the system ofpatents encourages greater public knowledge bycreating a contract between the inventor and theGovernment, rewarding those who disclose theirinventions. The second is the nonconsequentialistargument that inventors are entitled to patents as anacknowledgment of their efforts; it is this line that isfurther explored.

Several different ethical bases for any systemof property rights exist and each can be appliedto intellectual property rights as well. One discus-sion (14) divides them into forward looking argu-ments (the appeals to consequences discussed above)and backward looking arguments. The latter justifyproperty rights as entitlements to the fruits of one’slabor and draw upon themes derived from JohnLocke’s seminal discussion of property rights (20).Applied to the area of patenting transgenic animals,the conclusion can be reached that inventors areentitled to patent rights as a way of giving them thefruits of their labor when that intellectual labor is forthe promotion of science.

Although many would agree with this conclusion,two points are raised by it. First, it introduces intopatent law amoral theme not normally present in thisarea of the law. Nevertheless, it could be a legitimatetheme to introduce and seems to capture some ofwhat those working in the field say about their rightsto a patent.

Second, such entitlements could make less sensein the context of corporate and university research,especially federally funded research, than in the areaof individual research(3). In any area, an entitlementto the fruits of one’s labor needs to be balancedagainst considerations of public need to the fruits ofthat labor. Perhaps, however, that balancing isalready accomplished by satisfaction of the enable-ment requirement, which allows others to use theinformation to develop other ways of meeting publicneeds without infringing on the patent.

ARGUMENTS AGAINSTPATENTING TRANSGENIC

ANIMALS

Metaphysical and Theological ArgumentsOpposing Patenting

Many fundamental arguments opposing patentingdraw upon metaphysical (i.e., abstract or transcen-dental philosophical concerns about the fundamen-tal nature of reality) and theological claims tosupport their position. They raise questions aboutthe meaning of and relations among living creaturesand the world they inhabit. This section examinesconcerns articulated by a range of opponents toanimal patents.

Shortly after the Chakrabarty decision, in whichthe Supreme Court ruled that a living micro-organism was patentable, a number of questionsabout the patentability of living organisms of anysize or complexity were raised. For example:

Consider first the implicit teaching of our wise men,that a living organism is no more than a compositionof matter, no different from the latest perfume orinsecticide. What about other living organisms—goldfish, bald eagles, horses? What about humanbeings? Just compositions of matter? Here are deepphilosophical questions to which the Court has givenlittle thought, but in its eagerness to serve innova-tion, it has, perhaps unwittingly, become the teacherof philosophical materialism (18).

This argument rests on the fact that the majorityin Chakrabarty found the organism to be a manufac-ture or composition of matter. Still, the statuteauthorizing patents refers to “ . . . any new anduseful process, machine, manufacture, or composi-tion of matter” as patentable objects, and the

Chapter 8----Patenting of Animals--Ethical Considerations ● 131

Photo credit: American Philosophical Society

Eugenics Building, Kansas Free Fair, 1929. Livestock judging occurred at this site.

relevant micro-organism only fell under this descrip- even if they are much more than that. The Court,tion. This aspect of the decision was also the basis of however, was required to regard living organisms ascriticism by a working party of the World Council of such compositions for purposes of patenting them;Churches: that is, they saw their material composition as the

The U.S. Supreme Court decision on patenting of lifecrucial statutory factor, as opposed to other factors

forms rested upon a specific, highly reductivethat are not part of the patent statute (e.g., theirchanging nature, ability to reproduce, etc.) (21).conception of life, which sought to remove any

distinction between living and nonliving matter that A second, separate argument is raised in thecould serve as an obstacle to the patenting of livingbut unnatural organisms (34).

following passage:

It cart be argued that it would be inappropriate forThe combining of human genetic traits with animals,with the results to be patented and owned, raises

society to adopt a policy advocating a materialistic unique moral, ethical, and theological questions,conception of life. It is true that all material objects, such as the sanctity of human worth, which must beincluding human beings, are compositions of matter, examined (25).


One example is the introduction of genes forhuman growth hormone into farm animals to pro-duce more rapid rates of growth. The sanctity ofhuman worth is a fundamental moral principle ofsociety, standing behind society's beliefs, forexample, that humans cannot be killed or mis-treated and are entitled to freedom from enslave-ment. A sanctity of human worth principle seems toencompass at least the following two elements:

. the life of the entity in question is of sufficientvalue that it can be taken only in the mostextreme circumstances (e.g., self-defense); and

● the individual is free to act as it desires, for itshould not be treated as a mere means for othersto attain their ends.

By using animals for food, most of societyascribes less significance to the lives of animals thanto humans. By allowing animals to be owned byhumans who can raise them for use as food, forbreeding, as a source of various byproducts (e.g.,wool), as objects to be entered into competitions, oras pets, most of society demonstrates that it issometimes or often willing to treat animals as meansto human ends while also insisting that unnecessaryanimal suffering be eliminated. Overall, as currentlyconstituted, society appears able and willing todistinguish between human and other animal life.

, Does recombinant DNA technology break downbarriers between human and other animal life? If itwere possible (and it is neither possible now norlikely possible in the foreseeable future) to geneti-cally alter animals so they had more of thosecapacities and features (e.g., the capacity to formmoral judgments or the capacity to experience thebeautiful and the sublime) seen as distinctive tohumans, then society could face difficult ethicalquestions as to how these creatures should be treatedand as to whether a sharp distinction betweenhumans and other animals can be maintained. Atpresent, these issues do not appear to be raised byany of the genetic alterations of animals that willlikely be produced in the foreseeable future (see ch.6). Still, rapid advances in genetics have fostereddebate regarding a most sensitive issue--couldhuman beings be patented? Although no attemptshave been made to test this issue, PTO has publiclystated that living matter must be nonhuman in orderto be patentable subject matter, and the House of

Representatives has passed a bill prohibiting thepatenting of human beings (H.R. 4970, 100thCongress).

Another set of interconnected arguments cen-ters on humanity's control over nature, its re-sponsibility toward nature, and the need topreserve individual animals and protect speciesintegrity. These lines of reasoning are central issuesof metaphysical and theological disquiet aboutpatenting animals, and are reflected in the following:

When the National Council of Churches has issuedthis statement of concern, it comes from the back-ground of Judeo-Christian thinking about how werelate to the natural environment. In a nutshell thatbackground says that we have a responsibility forpreserving the integrity of the creation, and forworking with it in order to preserve its intrinsicvalues. . . the doctrine of trust in legal parlance issynonymous to what we are talking about theologi-cally or religiously when we think about therelationship of the creation to humanity. The Judeo-Christian view says that the creation is, in essence,held in trust; there are limitations on what we can do.We have a responsibility to see that its integrity ispreserved. This background has led to legislationsuch as endangered species laws, animal welfarelaws, [and] laws regarding environmental quality(15).

Although this reflects one viewpoint, others arguethat a traditional Judeo-Christian image is that ofman’s dominion over nature (24). Calvin, for exam-ple, repeatedly commented on the fact that Godcreated all things for man’s sake. It is in recentyears that the theme of stewardship over natureemerged as an idea of increasing importance. Thetraditional concept of a steward or trustee is the ideaof a person who manages property for the benefit ofother persons (present and future) who are itsowners. The traditional concept of stewardship ortrusteeship suggests that property held in trust can beradically transformed by trustees if it serves the bestinterest of its human owners, present and future. Onehumanistic notion of stewardship--one sufficient todefend environmental protection statutes and per-haps endangered species laws (23)—is the conceptthat humans must treat the property they own as atrust for those human beings who will follow infuture generations. The Judeo-Christian view ofstewardship of creation is not management ofproperty for other persons; rather, that all creation

Chapter 8--Patenting of Animals-Ethical Considerations ● 133

belongs to God, and is to be managed with that inmind. Opinions vary as to degree of management,from a reverential view that seeks to avoid consump-tive use to a position that endorses responsible useof the earth’s resources for human ends (4), Relig-ious notions view stewardship as a way to thank theCreator (22).

Some have reinforced these theological consid-erations by appealing to the metaphysical concept ofthe “telos” (nature) of animals (26). Some opponentsof animal patents claim that animals have a right tohave their “telos” respected, and that patenting oftransgenic animals is immoral because it sanctionsan immoral violation of this right to an inviolable“telos.”

One group of ethicists, environmentalists, animalrights advocates, and theologians met in April 1988to urge a moratorium on the patenting of animals as“a matter of deep philosophical and spiritual con-cern.” The group issued a statement addressinggenetic engineering and the patenting of animals(box 8-A).

Patenting Involves inappropriateTreatment of Animals

In the current debate surrounding patenting ani-mals, the animal welfare community has assumed aleadership role opposing such patenting. Severalmembers of this community have presented anumber of arguments in testimony before Congress.This section considers three of these arguments.

Argument One

Developing transgenic animals, encouraged bypatenting, will lead to more animal suffering thanchanges produced through selective breedingand crossbreeding.

Some advocates of this point of view claim thatgenetic engineering, unlike traditional breedingpractices, permits the rapid exchange of genesbetween unrelated species, resulting in experimentswith unpredictable results and increased suffering byanimals (16). This argument appeals to an ethicalclaim that animal suffering is wrong and should beavoided. It is an argument that is consonant withmost moral views about animals.

The present body of knowledge describes adiversity of attitudes towards animal suffering (30).Cartesian (followers of the French mathematicianand philosopher, René Descartes, 1596-1650) havebeen least sympathetic to any concern about suchsuffering. Thomas Aquinas and Immanuel Kantviewed the ethical significance of humanenesstoward animals as due to the way in which itencourages humans not to be cruel to each other. TheBenthamite tradition (after the English philosopherJeremy Bentham, 1748-1832), however, sees animalsuffering and human suffering as morally similar toeach other. Some contemporary Benthamites allowfor significant differences in degree. Finally, somecontemporary thinkers have advanced the idea thatanimals have a presumptive right not to be harmed(25).

Despite the range of opinions, recent Federallegislation (including the Animal Welfare Act of1985) and regulations (including the 1985 PublicHealth Service policy) covering animal researchindicate that U.S. society accepts the idea thatanimal suffering has ethical significance and thatinhumane treatment of animals should be avoided.These actions mandate costly improvements inanimal care, and thus, likely indicate that societyaccepts that human interests do not always outweighanimal interests. Nevertheless, the fact that theconduct of the research per se is not regulated,except for rules covering anesthetizing animals,could be interpreted as meaning that our societybelieves that human interests, on balance, takeprecedence over animal interests. Thus, argumentsregarding animal suffering could be evaluated inlight of current Federal policy, keeping in mind thatthose who ascribe even greater ethical significanceto animal suffering will continue to be troubled,While current regulatory mechanisms protect someanimals against inhumane treatment in the researchthat patenting will encourage, not all animals aretreated equally. The Animal Welfare Act, for exam-ple, does not apply to rodents, birds, and farmanimals intended for use as food or livestock (30).The Public Health Service regulations apply only tofederally funded research (30). Thus, Federal cover-age of animal welfare is arguably incomplete. Oneobserver points out:

134 ● New Developments in Biotechnology?: Patenting Life

Box 8-A-Statement, Consultation on Respect for Life and the EnvironmentOn Ethics and Theology

We affirm that humanity and all of nature live in a relationship of mutuality and interaction in covenant withthe Creator.

We recognize that the human species is not in right relationship with the rest of creation; and that ourtransgression lies in our continued abuse of the creation and our desire to remake it in our own image as a meansof satisfying exclusively human ends. Redemption includes not only personal salvation but also the restoration ofthe natural world and establishment of a relationship that will protect the integrity of creation,

The ethical, environmental, socioeconomic and theological ramifications of genetic engineering and patentingof life are profound. They point to the probability that the integrity and future of creation will be placed in evengreater jeopardy if our power over the genes of life is not exercised prudently and with reverence to help to restorethe covenant: to heal the Earth and ourselves,On the Patenting of Animals

We urge that a moratorium should be declared on the patenting of animals.1. The 1987 ruling by the U.S. Patent Office made possible the patenting of genetically altered animal life

forms. This decision is a matter of deep philosophical and spiritual concern. It portends fundamental changes in thepublic’s perception of, and attitude towards animals, which would be regarded as human creations, inventions, andcommodities, rather than as God’s creation and subjects of nature.

2. The decision was hasty, preempting the necessary debate. There was not a sufficient number of publichearings, the concerns found in some of the reports (such as those from the National Council of Churches and theHumane Society of the United States) were not adequately addressed, and the relevance of philosophical and ethicalconsiderations was not weighed sufficiently.

Matters needing sustained public debate include: the current practice of combining human with nonhumangenetic material, unknown risks to human life, the probable suffering of the animals in question, provision for theirhumane care, the risk of adverse environmental impacts, and the possibility of deleterious economic and socialeffects on farmers and consumers worldwide.New Creation Institute Department of Environmental Justice and SurvivalMissoula, MT United Methodist Board of Church & Society

National Council of Churches Washington, DC

New York, NY Center for the Respect of Life and the Environment

International Network for Religion and Animals The Humane Society of the United States

Silver Spring, MD Washington, DC

Foundation on Economic Trends Presbyterian Church (USA)

Washington, DC New York, NY

The ethical issues related to interspecies genetransfers or the patenting of animals will probably beclarified if they are distinguished analytically fromthe animal welfare question . . . Further, the goal ofsecuring more humane treatment can be, and isbeing, approached directly through such means aslegislation and regulations . . . (33).

Some have suggested that genetic engineering of

leukosis virus. However, it is not yet apparentwhether patents will result in increased animalsuffering. Although the first patent (U.S. 4,736,866)was seen by many as an aid to cancer research, themammals which are the subject matter of that patentare designed to be genetically engineered to moreeasily develop cancer. One view centers on thepossibility that more animals will be subjected to

farm animals could minimize animal suffering by induced cancer. An opposing view is that fewerengineering disease-resistant traits into farm ani- animals will be needed, since fewer geneticallymals ( 17). An example of this would be the attempt engineered (and hence, patentable) animals will beto engineer chickens to be resistant to the avian needed in order to achieve statistically significant

Chapter 8--Patenting of Animals--Ethical Considerations 135

research results previously obtained by using non-patented mice.

Argument Two

Patenting reflects an inappropriate sense ofhuman control over animal life and an underesti-mation of the value of nonhuman life.

Argument Three

Patenting animal life is the first step towards adecline in the belief in the sanctity and dignity oflife.

Unlike the first argument, which appeals only tothe ethical claim that animal suffering is wrong andshould be avoided, the second and third argumentsappeal to the inherent respect or sanctity of everyunique being. Under this viewpoint, patenting ofanimals reflects a human arrogance toward otherliving creatures and ignores the spiritual intercon-nectedness of all life (16). Supporters of this viewgenerally ascribe great value to every creature’scontinued existence and flourishing. Opponents ofthis viewpoint argue that a society that generallyuses animals for food cannot be viewed as commit-ted to a belief in the inherent sanctity of every uniquebeing, or that an overriding moral imperative (e.g.,fighting hunger, disease) requires the use of animalsin a manner which permits patenting.

Opposition to Patenting From anInternational Perspective

Several opponents of patenting animals haveraised concerns that draw upon the observation thatU.S. decisions about patents must be seen in globalperspective. This section examines two concernsarising from this perspective: the argument thatpatenting of transgenic animals must be wrongbecause so many countries have explicitly bannedthe patenting of new types of animals; and theargument that patenting will only exacerbate theproblem of inequality between developed countriesand developing countries, Each concern is examinedseparately.

Opponents of patenting note that most coun-tries in the developed world do not permit animalpatents, especially members of the European

Patent Convention (EPC) (see ch. 10). This argu-ment could have some ethical significance in debat-ing the argument that patenting is required tomaintain American competitiveness. Those oppos-ing this argument note:

●

●

●

the present lack of certainty as to how manycountries would permit such patents,that other countries have not yet fully debatedthe subject of animal patenting, andthat ethical issues are not defined nor settled bycounting how many countries do or do notallow a particular practice.

For example, a practice accepted by many coun-tries even for a long period of time (e.g., slavery)may nevertheless be profoundly immoral, while apractice rejected by many countries even for a longperiod of time (e.g., divorce) may nevertheless bemorally acceptable. Still, there is some force to theargument, and this suggests that the basis ofwidespread legal prohibition on the patenting ofanimals should be examined to analyze the delibera-tions of countries that have banned the practice. Atpresent, however, ethical lessons from internationalconsideration of the issue are inconclusive becauseof uncertainties about the extent and basis ofinternational opposition.

The second ethical concern raised pertains towhether patenting animals is inappropriate be-cause of potential adverse economic implicationsfor the Third World. For example:

One (issue) is applying high technologies likeagricultural biotechnology to countries that mightnot be able to afford them-or the social andeconomic consequences they spawn. The genes ofhigh-tech agriculture lodged in every new cropvariety or livestock breed can carry with them highcapital and extensive infrastructure costs . . . Sec-ondly, there are questions of access. If, for reasons ofcompetitiveness, we begin to hoard scientific ad-vances for commercial and/or political reasons, andonly make such discoveries and developmentsavailable for a price, that can only breed mistrust andanger and invite charges of technological imperial-ism from other nations (10).

This argument has both a consequentialist compo-nent (patenting and the biotechnology it encourageswill lead to bad results for underdeveloped coun-tries) and an equity component (it is unfair for more


developed countries to imperialistically exploit lessdeveloped countries through biotechnology and itspatenting). Difficult ethical and factual issues areraised by such claims. For example, some propo-nents of animal patenting claim that many of thepotential results of animal patents (e.g., new vac-cines, disease resistant animals) will more benefitdeveloping nations than developed nations. Further,no consensus exists regarding a well-developed orgenerally accepted theory of justice for the interna-tional context, one that would enable evaluation ofthe ethical aspects of the relations between thedeveloped and developing worlds. And despiteconcerns, the Patent and Trademark Office isprobably not the most appropriate place to structurea morally appropriate program for the internationaleconomic order. At the least, such a measure lacksprecedent.

Patenting Promotes EnvironmentallyUnsound Policies

The development of transgenic animals encour-aged by a system of patenting is also a concern ofsome opponents of animal patents. Two differentenvironmental issues have been raised in connectionwith patenting animals,

The first concerns the environmental impact ofreleasing transgenic animals into the wild. Somebelieve that the encouragement offered by patentingshould be withheld at least until better environ-mental protection laws are passed. The question ofpossible environmental impacts of genetically engi-neered organisms has been examined by OTAelsewhere in detail (31). While potential problemscould arise, adequate review offers a high likelihoodof preventing or preempting such problems. Further-more, nothing now being pursued seems likely toresult in any environmental problem that would beunique to transgenic animals, widespread, or diffi-cult to control. Indeed, it has not been demonstratedthat patenting animals is at all likely to increase theprobability of an environmental problem. It ispossible, however, that as the technology advances,applications of engineered organisms may emergethat could carry a higher probability of producing anenvironmental problem than anything now contem-plated. If and when such a situation develops,appropriate regulatory or legislative remedies couldbe applied.

A second argument has been raised by some, thatbiotechnology developments fostered by a system ofpatenting (including transgenic animals) could leadto a dangerous decline in the genetic diversity ofimportant animal populations (8). On the other handmany argue that increased diversity could be a resultof biotechnological advancements (9).

Patenting Produces Excessive Burdens onAmerican Agriculture

America’s agricultural community is divided overthe question of the patenting of transgenic animals.What are the arguments used by the opponents ofpatenting within the agricultural community andwhat are their ethical, theological, or philosophicaldimensions? Three prominent arguments include:

1.

2.

3.

In

animal patents will result in increased costs toconsumers as producers are forced to payroyalties to the owner of animal patents;animal patents will result in an unfortunateconcentration in the production of animals assmall farmers are forced out by the high costsof the royalties; andpatent holders will reap unfair benefits fromtheir royalties as they obtain royalties on thesucceeding generations of the patented ani-mals when they reproduce themselves.

the case of increased costs to consumers,three ethical components can be identified: unfa-vorable consequences of consumers having to paymore for their food; the injustice of consumerstransferring wealth to the more affluent corpora-tions; and the injustice of a few corporationscontrolling the food supply. These arguments relyupon an economic assessment of the impact ofpatented animals on consumer prices (see ch. 6). Iffood costs increase because of animal patents, thenthis line of reasoning could be important. Defendersof patenting argue that economic evidence indicatesthat costs do not rise due to patents and that even ifcosts did rise, they would reflect added value beingvoluntarily chosen by consumers. The arguments ofincreased consolidation within the agricultural in-dustry is similarly rooted in economics. Because noconsensus exists about the positive or negativeimpact industry concentration has had on agricul-ture, it is difficult to judge the ethical consequencesof such concentration.

Chapter 8--Patenting of Animal--Ethical Considerations ● 137

The third argument raised is, however, unique.It challenges the legitimacy of animal patents on thegrounds that self-reproducing animals should not bepatented, because breeders would unfairly have topay a fee each time the patented animal theypurchased reproduces. At present it is unclearwhether patent rights are enforceable over futuregenerations (see ch. 7), although some would arguethat there is something unfair about patent rightsbeing enforceable over future generations and aboutthe royalty fee covering future breeding rights. Someproponents of patenting, however, claim that farm-ers will make an economic judgment on whether thepatented animal is preferable to the unpatentedanimal.

SUMMARYArguments with ethical components for and

against the patenting of animals have been summa-rized. There are significant consequentialist argu-ments for allowing such patenting. They are bal-anced by consequentialist concerns about the effectsthat could occur if animals are patented. Becausethey are based on factual assertions that have yet tobe proven, these consequentialist arguments arespeculative. Other arguments based on philosophi-cal, metaphysical, and theological considerationsare likewise difficult to evaluate since they usuallyrequire the assumption of certain presuppositionsthat may not be shared by other persons. Sucharguments are not likely to be reconciled betweenpersons holding opposing and often strongly heldbeliefs.

Most consequentialist arguments that have beenraised both for and against the patenting of animalsconcern issues that would be materially unchangedwhether patents are permitted or not, since mostarguments center on issues that existed prior to thecurrent patenting debate (e.g. animal rights, theeffect of high technology on American agriculture,the distribution of wealth, international competitive-ness, the release of novel organisms into theenvironment). It is unclear that patenting per sewould substantially redirect the way society usesor relates to animals. Some argue that this uncer-tainty supports the notion of a moratorium orprohibition of animal patenting. Others argue thatany practical and consequentialist concerns raisedby the patenting of animals can be addressed by

appropriate regulations or possibly statutes, ratherthan by amendments to patent law.

1.

2.

3.

4.

5.

6.

7.8.

9.

10.

11.

12.

13.

CHAPTER 8 REFERENCESApplication of Anthony, 414 F.2d 1383 (CCPA,1969).Barker, V. L., Secretary, Higher Education Programsand Resources, United Church Board for HomelandMinistries, New York, NY, personal communication,Aug. 2, 1988.Becker, L., Property Righls (London: Routledge andKegan Paul, 1977).Boyce, J. R., Assistant Director of Scientific Activi-ties, American Veterinary Medical Association, Schaum-berg, IL, personal communication, Aug. 8, 1988.Brill, W., testimony before U.S. Congress, Commit-tee on the Judiciary, Subcommittee on Courts, CivilLiberties, and the Administration of Justice, Patentsand the Constitution: Transgenic Animals, hearingsJune 11, July 22, Aug. 21, and Nov. 5, 1987(Washington, DC: U.S. Government Printing Office,1988).Chicago Patent Corp. v. Gence, Inc., 124 F.2d 725(1941).Chisum on Patents, $1.05(2).Doyle, J., A/tered Harvest (New York, NY; VikingPress, 1985).Doyle$ J., “Biotechnology Research and AgriculturalStability,” Issues in Science and Technology, vol. 2,fall 1985, pp. 111-124.Doyle, J., “Ethical Aspects of Biotechnology” (un-dated document).Duffey, W. H., “The Marvelous Gifts of Biotech: WillThey Be Nourished or Stifled by Our InternationalPatent Laws?” Symposium on the Protection ofBiotechnological Inventions, World Intellectual Prop-erty Organization and Cornell University, Ithaca,NY, June 1987.Duffey, W. H,, testimony before U.S. Congress,Committee on the Judiciary, Subcommittee onCourts, Civil Liberties, and the Administration ofJustice, Patents and the Constitution: TransgenicAnimals, hearings June 11, July 22, Aug. 21, andNov. 5, 1987 (Washington, DC: U.S. GovernmentPrinting Office, 1988).Godown, R. D., testimony before U.S. Congress,Committee on the Judiciary, Subcommittee onCourts, Civil Liberties, and the Administration ofJustice, Patents and the Constitution: TransgenicAnimals, hearings June 11, July 22, Aug. 21, andNov. 5, 1987 (Washington, DC: U.S. GovernmentPrinting Office, 1988).


14,

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Goldman, A. H., “Ethical Issues in Proprietary Re-strictions on Research Results,” Science Technologyand Human Values, vol. 12, winter 1987, pp. 22-30.Granberg-Michaelson, W., testimony before U.S.Congress, Committee on the Judiciary, Subcommit-tee on Courts, Civil Liberties, and the Administrationof Justice, Patents and the Corwtitution: TransgenicAnima/s, hearings June 11, July 22, Aug. 21, andNov. 5, 1987 (Washington, DC: U.S. GovernmentPrinting Office, 1988).Hoyt, J. A., testimony before U.S. Congress, Commit-tee on the Judiciary, Subcommittee on Courts, CivilLiberties, and the Ministration of Justice, Patentsand the Constitution: Transgenic Animals, hearingsJune 11, July 22, Aug. 21, and Nov. 5, 1987(Washington, DC: U.S. Government Printing Office,1988).Industrial Biotechnology Association, “Animal Pat-ents: Myths and Fact..” (undated document).Kass, L., “Patenting Life,” Toward a More NaturalScience (New York, NY: Free Press, 1985).Koppe v. Burnstingle, 29 F.2d 923 (D. Ct. R. I., 1929).Imcke, J., Second Treatise on Government (Indian-apolis, IN: Hackett Publishing Co., 1980).Murray, TH., Director, Center for Biomedical Eth-ics, Case Western Reserve University, Cleveland,OH, personal communication, Aug. 10, 1988.Nelson, J. R., Director, The Institute of Religion at theTexas Medical Center, Houston, TX, personaI com-munication, Aug. 22, 1988.Norton, B., Why Preserve Natural Variety (Prince-ton, NJ: Princeton University Press, 1987).Passmore, J., Man’s Responsibility for Nature (Lxm-don: Duckworth, 1974).Regan, T,, The Case for Animal Rights (Berkeley,CA: University of California Press, 1983).Rollin, B., Animal Rights and Human Morality(Buffalo, NY: Prometheus Books, 1981).Sorensen, A. A., testimony before U.S. Congress,Committee on the Judiciary, Subcommittee onCourts, Civil Liberties, and the Mministration ofJustice, Patents and the Constitution: Transgenic

28.

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Animals, hearings June 11, July 22, Aug. 21, andNov. 5, 1987 (Washington, DC: U.S. GovernmentPrinting Office, 1988).Statement of Religious baders Against AnimalPatenting (undated document).Tegtmeyer, R. D., testimony before U.S. Congress,Committee on the Judiciary, Subcommittee onCourts, Civil Liberties, and the Ministration ofJustice, Patents and the Constitution: TransgenicAnima/s, hearings June 11, July 22, Aug. 21, andNov. 5, 1987 (Washington, DC: U.S. GovernmentPrinting Office, 1988).U.S. Congress, Office of Technology Assessment,Alternatives to Animal Use in Research, 7esting, andEducation, OTA-BA-273 (New York, NY: MarcelDekker, February 1986).U.S. Congress, Office of Technology Assessment,New Developments in Biotechnology: Fieid-TestingEngineered OrganismApecial Report, OTA-BA-350 (Lancaster, PA: Technomic Publishing Co., Inc.,May 1988).Walsh, L., testimony before U.S. Congress, Commit-tee on the Judiciary, Subcommittee on Courts, CivilLiberties, and the Mministmtion of Justice, Patentsand the Constitution: Transgenic Animals, hearingsJune 11, July 22, Aug. 21, and Nov. 5, 1987(Washington, DC: U.S. Government Printing Office,1988).Walters, L., testimony before U.S. Congress, Com-mittee on the Judiciary, Subcommittee on Courts,Civil Liberties, and the Administration of Justice,Patents and the Corntitution: Transgenic Animals,hearings June 11, July 22, Aug. 21, and Nov. 5, 1987(Washington, DC: U.S. Government Printing Office,1988).World Council of Churches, Working Group Sub-Unit on Church and Society, “Manipulating Life,”73, Church and Society (September/October 1982).Zimbleman, R. G., Executive Vice President, Ameri-can Society of Animal Science, Bethesda, MD,personal communication, Aug. 12, 1988.

Chapter 9

Deposit Considerations

“No other arts are known, nor were any suggested, where words alone may be incapable ofdescribing an invention sufficiently to enable one skilled in the art to make and use it in areproducible manner.”

U.S. Patent and Trademark OfficeProposed Rule, Deposit of Biological Materials for Patent Purposes

CONTENTSPage

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141INDEPENDENT DEPOSITORIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

American Type Culture Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141Northern Regional Research Laboratory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142Institute of Microbiology, Rutgers University.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142In Vitro International, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142

DEPOSIT ISSUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142Patent and Trademark Office Guidelines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143Role of the Independent Depository . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146

HOW ARE DEPOSITS MADE AND MAINTAINED.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147ACCESS TO SAMPLES ON DEPOSIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148POSSIBLE METHODS OF DEPOSIT FOR PATENTED PLANTS

AND ANIMALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149IMPACT OF PATENTED ANIMALS ON INDEPENDENT DEPOSITORIES . . . . . . . 150SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150CHAPTER PREFERENCES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151

TablesTable Page9-1. Selected U.S. Depositories and Strains Accepted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1429-2. institutions Having Acquired the Status of International Depositary Authority. . . . 145

—

Chapter 9

Deposit Considerations

INTRODUCTIONIn 1949, the Patent and Trademark Office (PT0)

began recommending to inventors that patent appli-cations for an invention involving a micro-organismshould include the deposit of the pertinent micro-organism with a culture collection. Although not aformal requirement, patent examiners advised appli-cants that in cases where words alone were notsufficient to describe the invention adequately, adeposit was advisable.

On July 8, 1949, Parke Davis Co. deposited aculture of Streptomyces venezuelae in the AmericanType Culture Collection (ATCC) which was as-signed ATCC number 10712. It is listed in U.S.Patent 2,483,892 (process for the manufacture ofchloramphenicol) which was issued October 4,1949.

In August 1949, American Cyanamid Companydeposited a culture of Streptomyces aureofacienswith the Agricultural Research Service CultureCollection, better known as the Northern RegionalResearch Laboratory (NRRL). It was assignedNRRL number 2209 and is listed in U.S. Patent2,482,055 (for the production of aureomycin) whichwas issued September 13, 1949.

These two historic deposits for patent purposeswere apparently the first in the world. They stand asforerunners to the current practice that patentapplications for inventions involving micro-organisms, plasmids, vectors, cells, plant tissues,seeds, and other biological materials that are newlyisolated, novel, manmade, or not generally availableto the public on a long-term basis be supported by adeposit in a recognized patent depository.

Whether or not a deposit is necessary is a decisionmade on a case-by-case basis. The decision gener-ally takes into account the reproducibility of theinvention based upon a written description alone, thelevel of skill in the art, the teaching of the prior art,and the availability of starting materials. Althoughnot automatically required, a deposit is employed inmany cases to meet the requirement that a patentprovide enablement or the best mode of practicing aninvention (10).

INDEPENDENT DEPOSITORIESA culture depository accepts, maintains, and

distributes cultures of micro-organisms, viruses,cells, or other genetic-type material. A depositorymay be public or private; nonprofit or for-profit. Themain function of a public culture depository is thepreservation and distribution of reference culturesthat serve as standards for users in the scientific andeducational communities.

A culture collection also improves the strains inthe collection as much as possible. The depository,for example, insures that strains are named andclassified correctly and uses the best methods topreserve the cultures in their original state (i.e., notmutated). In addition, public depositories communi-cate information learned about the cultures in theircare through publications, workshops, and othermeans.

Among organizations accepting deposits in theUnited States, there are currently three depositories(table 9-1) recognized for patent purposes under theBudapest Treaty on the International Recognition ofthe Deposit of Microorganisms for the Purpose ofPatent Procedure (see ch. 10). One other depositoryexisted until 1968.

American Type Culture Collection

The American Type Culture Collection (12301Parklawn Drive, Rockville, MD 20852) is a private,nonprofit institution organized in 1925 for thepurposes of acquiring, preserving, and distributingcultures of micro-organisms to scientists. Its Boardof Directors is composed of scientists elected from19 major scientific societies in the United States and2 in Canada. Since 1949, ATCC has served as adepository for patent purposes (the first formalrecognition of ATCC for patent deposit purposeswas provided in a 1952 letter from PTO). In 1949,only bacteria and fungi were accepted for patentpurposes.

ATCC, responding to the needs of the patentcommunity, has grown to include many other typesof biological material. It now holds an estimated8,000 deposits for patent purposes, which include

-141-


Table 9-1-Selected U.S. Depositories and Strains Accepted

Depository Kinds of cultures accepted Number of cultures on hand

American Type Culture Collection (ATCC)

Agricultural Research Culture Collection/Northern Regional Research Collection(NRRL)

In Vitro international, Inc. (lVI)

Algae, animal viruses, bacteria, cell 1949-1985 estimated 500lines, fungi, hybridomas, oncogenes, 1988-1987 7,500plant viruses, plasmids, plant tissue,cultures, phages, protozoa, seeds, and yeasts.

Nonpathogenic cultures of bacteria and fungi 1949-1987 estimated 3,000that can be preserved by freeze drying.

Algae, animal viruses, bacteria (and with plasmids), 1983-1987 100bacteriophages, cell lines, fungi, plant viruses,protozoa, and seeds

SOURCE: B.A. BrandOn, ‘Daposit Requirements for Micmorgsnisms, Plants, and Animals in U.S. Patant Claims,” contract re~rl premrad for tha Office of Tachnolow Assessment,-.U.S. Congrass, December 1987.

algae, animal viruses, bacteria, cell lines, fungi,hybridomas, oncogenes, plant viruses, plasmids,plant tissue cultures, phages, protozoa, seeds, andyeasts. It was the first depositary institution acquir-ing the status of International Depositary Authority(IDA) in 1981 under the Budapest Treaty, which isadministered by the World Intellectual PropertyOrganization (WIPO).

At its inception, ATCC did not charge for depositof a culture for patent purposes; but since 1952, a feehas been charged for the deposit and distribution ofcultures deposited for patent purposes. In 1988, thefee was $670 for 30 years of maintenance andviability testing.

Northern Regional Research Laboratory

The Northern Regional Research Laboratory,(1815 N. University Street, Peoria, IL 61604) wasestablished in 1940 as part of the U.S. Department ofAgriculture (USDA) for the study of micro-organismsof agricultural and industrial importance. Since1949, it has also served as a patent depository fornonpathogenic micro-organisms that are not diffi-cult to grow. There are approximately 3,000 cultureson deposit.

At its inception, NRRL charged no fee; but since1983, a fee has been charged for the deposit anddistribution of cultures deposited for patent pur-poses. In 1987, the fee was $500 for 30 years ofmaintenance and viability testing. NRRL acquiredthe status of International Depositary Authority in1981.

Institute of Microbiology, Rutgers University

The Institute of Microbiology at Rutgers Univer-sity (IMRU) accepted its first deposit for patentpurposes in 1952, and served as a depository forbacterial cultures involved in patents until 1968. Atthat time, IMRU discontinued the acceptance ofcultures for patent purposes. In 1978, all cultures ondeposit at IMRU for patent purposes were trans-ferred to ATCC, where they are maintained today.

In Vitro International, Inc.

In Vitro International, Inc., (IV]) (611 (P) Ham-monds Ferry Road, Linthicum, MD 21090), wasincorporated in 1983 as a for-profit company for thepurpose of accepting cultures for patent purposes. Itacquired the status of International DepositaryAuthority in 1983. The 1987 fee for 30 years ofmaintenance and viability testing of a culturedeposited for patent purposes was $610. There areapproximately 100 cultures on deposit.

IVI is the first for-profit repository for patentdeposits. Generally, the necessity for many types ofprofessional expertise to handle the various culturedeposits makes it an unprofitable venture.

DEPOSIT ISSUESU.S. patents in microbiology had their beginning

in 1873 when the first patent dealing with microbiol-ogy was granted to Louis Pasteur (U.S. 141,072).That patent included a claim to a biologically pureculture of a micro-organism. Since the granting ofthat historic patent to the Pasteur Institute, many

Chapter 9--Deposit Considerations . 143

hundreds of patents have been issued on microbio-logical processes.

The practice of making deposits of micro-organismsbegan in 1949 with the first historic deposits atATCC and NRRL and this practice was followeduntil 1970 when it was challenged in the U.S. Courtof Customs and Patent Appeals (CCPA) (8). CCPA,in a landmark decision, approved, but did notrequire, this practice.

Patent and Trademark Office Guidelines

The first published guidelines by PTO on thedeposit of micro-organisms for patent purposes

appeared in the Official Gazette in 1971 (17). Inthese, PTO adopted the procedure approved byCCPA in 1970 (8) as complying with (but notrequired by) the statutory requirements of 35 U.S.C.112 for an adequate disclosure of the micro-organisms required to carry out the invention. PTOsaid:

(1) the applicant, no later than the effective U.S.filing date of the application, has made adeposit of a culture of the microorganisms ina depository affording permanence of thedeposit and ready accessibility thereto by thepublic if a patent is granted, under conditionswhich assure

Photo credit: American Type Culture Collection

Tanks for maintaining samples in liquid nitrogen.


(a)

(b)

that access to the culture will be availableduring pendency of the patent applicationto one determined by the Commissioner tobe entitled thereto under Rule 14 of theRules of Practice in Patent Cases and 35U.S.C. 112 andthat all restrictions on the availability to thepublic of the culture so deposited will beirrevocably removed upon the granting ofthe patent;

(2)

(3)

such deposit is referred to in the body of thespecification as filed and is identified bydeposit number, name and address of thedepository, and the taxonomic description tothe extent available is included in the specifi-cation; andthe applicant or his assigns has providedassurance of permanent availability of theculture to the public through a depositorymeeting the requirements of (l).

In 1975, an important decision was reached inFeldman v. Aunstrup (5) in which the court held thatthe use of a theretofore unknown strain in an oldprocess was patentable due to the prior unavailabil-ity of the strain. Feldman v. Aunstrup also expandedthe scope of the type of depository PTO wouldaccept—that is, private, nongovernmental, non-U. S., or even for-profit type depositories.

In 1977, establishment of the Budapest Treatyrequired contracting states that allow or require thedeposit of micro-organisms as part of their patentprocedure to recognize the deposit of a micro-organism with any International Depositary Author-ity. Any such institution must be approved byWIPO. To acquire the status of IDA, a depositaryinstitution must comply with the requirements of theBudapest Treaty. Acquisition of IDA status must berequested by the contracting state or territory inwhich the IDA is located. The procedure for theacquisition of IDA status is specified in the Treaty.No contracting state may require compliance withrequirements different from or additional to thoseprovided in the Treaty.

The Budapest Treaty was modified in 1980 andthe United States became a contracting party inAugust 1980 when the Treaty became effective. Asof January 1988, there were 22 countries party to theTreaty, There are 19 International Depositary Authori-

ties under the Treaty, three of which are located inthe United States (table 9-2). PTO has accepted therequirements of the Treaty as meeting depositrequirements.

In 1985, another landmark decision, In re Lundak(9), was handed down by the Court of Appeals forthe Federal Circuit. PTO had refused to grant apatent to Lundak because the claimed cell line wasnot deposited with a recognized depository as of thefiling date of the patent application. It had been ondeposit in Lundak’s laboratory. The Court concludedthat the only requirement regarding enablementduring the pendency of the patent application wasthat a specimen of the cell line be made available toPTO should the Office so request, as authorized by35 U.S.C. 114. The Court held Lundak’s depositwith ATCC, which was made a few days after filingbut prior to issuance of his patent and which isreferred to in his specification, met the statutoryrequirements for enablement.

Patent applicants may not be wholly safe inrelying on the Lundak decision as a general proposi-tion that deposits can always be made after the U.S.filing date. Lundak was exceptional in that there wasonly a 7-day gap between deposit and filing.Moreover, the Lundak specification was descrip-tively complete in regard to taxonomic description.There was little dispute as to the identity of thedeposited material and the material described in thespecification (3).

It is noteworthy that a deposit made under theLundak doctrine does not satisfy deposit require-ments abroad. U.S. applicants, therefore, as a rule,will lose the possibility to claim the Paris Conven-tion’s Priority Right (Article 4) (see ch. 10) if theydeposit with independent depositories later than theU.S. filing date (13).

In 1988, PTO published a notice of proposed rulemaking for deposit of biological materials for patentpurposes (see app. C) (15). These rules, if adoptedformally by PTO, will assist the inventor and thedepository in defining the position of PTO ondeposits. A 1987 advance notice of the proposedrules (14) stimulated written comments from 20sources to PTO. The majority of the comments weredirected to the conditions of the release or availabil-ity of a culture once a patent is granted.


Table 9-2—institutions Having Acquired the Status of International Depositary Authority

Centraalbureau voor Schimmelcultures (CBS)

Collection Nationale de Cultures de Micro-organismes(CNCM)

Culture Collection of Algae and Protozoa (CCAP)

Culture Collection of the CAB InternationalMycological Institute (CMI CC)

Deutsche Sammlung von Mikroorganismen (DSM)

European Collection of Animal Cell Cultures (ECACC)

Fermentation Research Institute (FRI)

Institute of Microorganism Biochemistry and Physiologyof the USSR Academy of Science (IBFM)

In vitro International, Inc. (IVl)

National Bank for Industrial Microorganisms andCell Cultures (NBIMCC)

Name of depository Address

Agricultural Research Culture Collection 1815 N. University StreetNorthern Regional Research Laboratory (NRRL) Peoria, IL 61604

American Type Culture Collection (ATCC) 12301 Parklawn DriveRockville, MD 20852

Australian Government Analytical Laboratories (AGAL) Commonwealth Department of Administrative ServicesNew South Wales Regional Laboratory1 Suakin StreetPymble, New South WalesAustralia 2073

Oosterstraat 1Postbus 273NL-3740 AG BaarnNetherlands

Institut Pasteur28, rue du Dr Roux75724 Paris Cedex 15France

Freshwater Biological AssociationWinderrnere LaboratoryThe Ferrey HouseFar SawreyAmbleside, Cumbria LA22 0LPUnited KingdomScottish Marine Biological AssociationDunstaffnage Marine Research LaboratoryP.O. Box 3Oban, Argyll PA344ADUnited Kingdom

CAB International Mycological InstituteFerry LaneKew, SurreyTW93AFUnited Kingdom

Gesellschaft fur BiotechnologischeForschung mbHGrisebachstr. 83400 GöttingenFederal Republic of Germany

Vaccine Research and Production LaboratoryPublic Health Laboratory ServiceCentre for Applied Microbiology and ResearchPorton DownSalisbury, Wiltshire SP4 0JGUnited Kingdom

Agency of Industrial Science and TechnologyMinistry of International Trade and Industry1-3, Higashi 1-chomeYatabe-machiTsukuba-gun, Ibaraki-ken 305Japan

Pushchino-na-OkeUSSR-142292 Moscow RegionSoviet Union

611 (P) Hammonds Ferry RoadLinthicum, MD 21090

Block 2125, Lenin Blvd.SofiaBulgaria Continued next page


Table 9-2—institutions Having Acquired the Status of International Depositary Authority-Continued

Name of depository Address

National Collection of Agricultural and IndustrialMicroorganisms (NCAIM)

National Collection of Industrial Bacteria (NCIB)

National Collection of Type Cultures (NCTC)

National Collection of Yeast Cultures (NCYC)

USSR Research Institute for Antibiotics of the USSRMinistry of the Medical and Microbiological Industry(VNIIA)

USSR Research Institute for Genetics and MicroorganismBreeding of the USSR Ministry of the Medical andMicrobiological Industry (VNII Genetika)

University of HorticultureDepartment of MicrobiologySomloi ut 14-16l-t-l 118 BudapestHungary

The National Collections of Industrialand Marine Bacteria Ltd.P.O. Box 31135 Abbey RoadAberdeen AB98DGUnited Kingdom

Central Public Health Laboratory61 Colindale AvenueLondon NW95HTUnited Kingdom

AFRC Institute of Food ResearchNorwich LaboratoryColney LaneNorwich NR47VAUnited KingdomNagatinskaya Street 3-aUSSR-1 13105 Moscow

Soviet Union

Dorozhnaya Street No. 8USSR-1 13545 MOSCOW

Soviet Union

SOURCE: Pdaptad from Industrial Property, pp. 24-30 (January 1988).

The rules proposed in 1988 by PTO would continueand clarify both long-standing PTO practices andjudicially developed principles of patent law. Theproposed rules prescribe:

●

●

●

●

●

●

conditions under which a deposit may be made;kinds of materials that may be deposited;the type of depository acceptable to PTO;the time for making the original deposit;procedures and obligations applicable to themaking and maintaining of a deposit, and itspossible replacement; andthe term of a deposit.

The proposed rules make clear that the material,if the patent application enables it, must be publiclyavailable. This can be accomplished by making adeposit of the material or making it otherwisepublicly available, Commercial availability from thepatent owner or another party would satisfy therequirement of public availability for U.S. patentpurposes (7).

It is noteworthy that the deposit system is notintended to resolve substantive issues of patent law

or to anticipate matters that are more properly left tocontentious patent office proceedings or court juris-diction. The responsibility for performance of thedeposited material rests on the shoulders of theapplicant, who must face the consequences of aninvalid patent in the event of failure of the deposit toperform (3).

Role of the Independent Depository

The role of the depository is to retain and be aconvenient source of the inventor’s deposit. It is anobjective entity—independent of the patent applicant/patentee and PTO. It is not the role of the depositoryto provide legal advice or to know about the legalrequirements of the patenting system. However, inorder for a depository to facilitate the deposits ofcultures, it has become necessary to know the legalrequirements for deposit in the United States andinternationally. In the United States, for example, itis possible to make a deposit up until the date apatent is granted, but if an applicant wishes to claimthe U.S. filing date as his priority date when filing inother countries. it is necessary for the deposit to have


been made by the date of filing of the patentapplication in the United States.

In some cases, the patent culture depository is thefirst place inventors contact when they believe theyhave made a patentable invention. In other cases,depositories are asked to advise inventors on whe-ther a deposit is necessary in order to disclose thebest mode of carrying out the invention, as requiredin the United States, or to disclose how to make andhow to use the invention (i.e., an enablement of theinvention), as required in almost all countries.Inventors often do not understand the traditionalfunction of the depository (1),

In order to assist biotechnology patenting, onedepository has arranged an annual “BiotechnologyPatent Conference” at which U.S. patent attorneysand agents, PTO examiners, patent attorneys fromJapan and Europe, and patent depository staffacquaint inventors and attorneys practicing in thisfield with information on patent disclosure and

Photo credit: American Type Culture Collection

Glove box for handling special cultures.

claim requirements, as well as depository practicesregarding patents (l).

Many depositories have had to expand the typesof material accepted and to develop expertise in themaintenance and growing of materials never beforeanticipated. In 1982, for instance, no depository inthe world accepted plant tissue cultures for patentpurposes. In response to this need, ATCC developedthe expertise to maintain a collection of plant tissuecultures, and in 1983 began accepting this material(and later on, seeds) for patent purposes.

None of the depositories at this date acceptsanimal life. ATCC has been asked by at least oneinventor if it will accept an animal form, and iscurrently considering the consequences of doing so(l).

HOW ARE DEPOSITS MADEAND MAINTAINED

Any depository approved by WIPO meets therequirements of the Budapest Treaty and is, there-fore, acceptable for PTO purposes. In addition,patents have been granted based on deposits ininstitutions that do not meet the requirements of theBudapest Treaty, although PTO has no standardprocedure for recognizing depositories other thanthose recognized under the Budapest Treaty (16).

In most cases, procuring cultures is easily accom-plished by requesting the culture in question andpaying the depository’s fee. In a few cases, procur-i n g c u l t u r e s i s m o r e c o m p l i c a t e d a n d t i m e -consuming. The patent depository in Japan, forexample, requires a number of forms and a power ofattorney. In a few instances, depositories in othercountries have denied access to a culture eventhough it was cited in a U.S. Patent as on deposit, andprobably legally available without restriction to thepublic (1).

The Department of Commerce requires an exportlicense before export of many types of micro-organisms (including most bacteria and viruses)outside the United States. The depository must applyfor the license, which sometimes delays the requestfor 2-3 weeks. In some cases, USDA or theDepartment of Health and Human Services requiresan import permit before allowing cultures into the


United States. This can also delay the receipt ofcultures from outside the United States.

Generally, cultures involved in the patent processmust be made available either when the patent isissued (as under the U.S. patent system) or when thepatent application is published (as under the Euro-pean patent system). If an issued patent cites andrelies on the use of a culture deposited at a patentdepository for the enablement of the claimed inven-tion, the depository is obligated to make the cultureavailable to the public upon request and payment ofa fee. The European Patent Office (EPO) mustcertify one’s right to a culture if the patent applica-tion has been published by its office, but therequestor must agree to use the culture for researchpurposes only and not to redistribute it to anotherparty, unless this requirement has been waived bythe depositor. Also, under the EPO system, aninventor may choose an option that requires theculture to be made available through an expert;experts are approved by the EPO President.

ACCESS TO SAMPLES ONDEPOSIT

The availability of samples from U.S. deposito-ries for cultures involved in the patenting process isstraightforward. If the depository number and theU.S. Patent number are known, the culture may berequested, and it is routinely made available. Obtain-ing cultures from depositories outside the UnitedStates can be delayed and, since the depositories arenot always knowledgeable of U.S. patent require-ments, on occasion requests have been denied. Therehave been few reasons given for such denial. Acollection in the Soviet Union, for example, impliedthat someday, perhaps, the requested culture wouldbe made available. Several years later it still has notbeen made available. Another collection in theNetherlands simply stated a requested culture wasnot available, with no reason given. There is norecord of a U.S. depository ever denying access tosomeone eligible to receive a culture (l).

Mere citation to a deposit in a U.S. Patent is notnecessarily an indication of its unconditional acces-sibility once the patent is granted. The deposit isaccessible only where it is required to make or usethe claimed invention. In one case, for example,PTO determined that certain deposited material was

not required for enablement even though cited in thepatent, and a request for PTO to certify that therequestor was entitled to samples was denied (16).

Some patent owners contend that free access to adeposit is more revealing than the patent disclosureand therefore amounts tosuperdisclosure(12). Someowners of hybridoma patents, for example, object tomaking their deposits available to the general publicat little or no cost. They contend that this practiceamounts to giving away their invention plus all ofthe know-how they might have been able to sellseparately. Their claim of loss, however, may beexaggerated. Knowledge of how to produce andmaintain hybridoma cells in culture does not gener-ally permit large-scale operation. The latter methodsmust either be reverse-engineered or the knowledgepurchased separately (2).

The Budapest Treaty and PTO require a culture tobe maintained for 30 years from date of deposit, or5 years after the most recent request for a sample,whichever is longer. In addition, PTO requires theculture to be on deposit for at least the enforceablelife of the U.S. Patent plus 6 years for statute oflimitations on infringement.

The 30-year maintenance requirement, if depositis made at the time of filing for a patent, assures inmost cases that the culture is available for a periodof time after a patent has expired. In most instances,therefore, the public has reasonable access afterpatent expiration, since the normal life of a U.S.

Chapter 9--Deposit Considerations ● 149

Patent is about 17 years. (An additional 6 years forstatute of limitations on infringement is not consid-ered part of the patent life.) Should deposit andissuing of the patent occur years apart and actuallyconsume part or ail of 30 years, periodic requests ofthe deposit will still ensure that it is maintained bythe depository after patent expiration.

International Depositary Authorities must post abond to ensure that, in the event of the default of adepository, sufficient funds would be available totransfer patent cultures to another depository.

Inventors are required to agree to replace culturesif they are lost, or die, during the “30 years plus 5“’deposit period. In cases where inventors or theirheirs or assignees are unable to replace a culture, thepatent may be invalidated. In most cases, a patent isassigned to a company or institution, and replace-ments are a corporate responsibility, not an individ-ual one. In rare cases, the nonpayment of a mainte-nance fee to a depository could result in the return ofthe culture to the inventor, thereby placing the patentin jeopardy. In most cases the fee is paid in advance,thereby alleviating the problem. There appear to beadequate safeguards for the safekeeping of a patentculture during the required storage period.

Some U.S. companies have expressed concernabout free access to a deposit once the patent issues.At present, nothing prevents a foreign competitorfrom obtaining the deposit and duplicating andselling the invention abroad. These American compa-nies advocate that the U.S. adopt a law similar to thatof West Germany, which requires that an individualobtaining a sample be contractually bound to use thedeposit material only for experimental or researchpurposes. PTO does not currently have authority toplace such conditions on deposits (6).

POSSIBLE METHODS OFDEPOSIT FOR PATENTEDPLANTS AND ANIMALS

Inventors are now depositing seeds and planttissue cultures to support patent applications. Thefirst plant tissue deposit at ATCC was in 1983 andthe first seed deposit in 1985. Since that timeapproximately 40 plant tissue and seed deposits havebeen made. And, in administering the Plant Variety

Protection Act, USDA requires a deposit of 2,500seeds for the grant of a Plant Variety ProtectionCertificate.

The deposit of seeds and plant tissue culture hasbecome an established practice. Although there arefew depositories worldwide which accept suchdeposits, there are two in the United States thatdo-American Type Culture Collection and In VitroInternational, Inc. In addition, USDA maintains avast seed depository at Ft. Collins, CO.

There is no requirement under the utility patentstatute for the deposit of a plant or seed. A depositof a plant or seed is only required where reproduc-tion of the plant or seed cannot be reliably achievedfrom the disclosure in the patent application. In theusual case, an enabling disclosure can be made forgenetically engineered plants and seeds. Accord-ingly, deposits of plants and seeds will usually notbe required (4).

Photo credit Diversity, Genetic Resources Communications Systems, Inc.

Plant culture.


The new patentable status of animals raises thepossibility that PTO will encourage or require thedeposit of animal forms to support certain patentapplications. Already ATCC has received a requestfrom an inventor’s attorney to consider acceptingoyster larvae to support a patent application in PTO.

To date, no animal has been deposited with adepository. In the case of the first animal patentgranted, U.S. Patent 4,736,866, the deposit require-ment was satisfied, not by deposit of a mouse orother animal, but by deposit of the cancer-causinggenes intended for transfer into an animal. DNAplasmids bearing those genes were deposited atATCC. In the patent, the inventors describe detailedinstructions for inserting those genes into mouseembryos to produce transgenic mice.

It is not practical to maintain or make availablewhole animals, but the maintenance of embryos in afrozen state may be possible. If culturing fertilizedova to the blastula stage as an indicator that growthof the animal would occur is feasible, and would bean acceptable test of viability, it may not beimpractical to maintain and make available animalforms. What constitutes “viability” must be defined.This is also coupled with acceptability of statisticalprobability that the ovum/embryo would be capableof implantation and successful gestation.

IMPACT OF PATENTED ANIMALSON INDEPENDENT

DEPOSITORIESThe patenting of animals could cause problems

for a depository if deposit of the animal is required.Currently there is no depository willing to accept thedeposit of animals for the following reasons:

●

●

●

The cost of facilities and expertise that might beneeded to maintain animals would be prohibi-tive.A depository maintaining animals for patentpurposes might be subject to adverse publicity.If it were necessary to maintain the animal, adepository might need to grow another sampleto prove the replication of the animal. Aftergrowth of the animal, disposal might not beacceptable, and, therefore, maintenance of prog-eny would be necessary.

●

●

How would a depository make samples of theanimal available? Grow more animals?Maintenance of many kinds of animals for thecurrent required period of 30 years would notbe practical or possible, as their life spans areshorter than 30 years.

The deposit of animal embryos may not presentthe same difficulties, as long as the embryos can besuccessfully frozen and recovered. To date, at least13 species of animal embryos (cattle, mice, rats,rabbits, hamsters, sheep, goats, horses, cats, ante-lopes, and three species of nonhuman primates) havebeen successfully frozen and recovered, and manythousands of live young from frozen mice and cattleembryos have been produced (1 1). U.S. Patents4,380,997 and 4,419,986 were issued in 1983 for theprocess of freezing animal embryos. If culturingthawed animal embryos to the blastula stage is atechnically feasible and acceptable test for viability,patent depositories may be willing to accept animalembryos for deposit. If deposit of animal forms isdesirable for patent purposes, PTO will need todevelop specific guidelines for such deposits.

SUMMARYThe practice of depositing micro-organisms to

provide enablement or the best mode of practicing an

Chapter 9--Deposit Considerations ● 151

invention has been in place since 1949, although adeposit is not always required. The ability to patentnovel life forms created through biotechnology, asheld in the Chakrabarty case, and the ability toprotect plants with a utility patent as held in theHibberd case, has resulted in increased patenting inthese areas and thereby increased deposits of micro-organisms, cells, and plants. The deposit of micro-organisms, plants, and similar material in support ofa patent application is a well-established practice,though not all problems associated with this practicehave been resolved.

Depositories facilitate the deposit of cultures forpatent purposes by providing current information ondeposit requirements, and by developing the exper-tise necessary to maintain new types of material asneeded. There are currently three institutions in theUnited States that have achieved the status ofInternational Depositary Authority under the Buda-pest Treaty and are so recognized by the WorldIntellectual Property Organization. These and othersmay accept and maintain cultures to meet PTOrequirements.

With PTO policy holding that nonnaturally occur-ring, nonhuman, multicellular living organisms,including nonhuman animals, are patentable, thefirst animal patent was issued in 1988. The enable-ment requirement of the first animal patent wassatisfied by deposit of genes—but not live animals.Enablement by deposit of animal forms is not likelyto be required to support many animal patentapplications. Yet deposit of animals or embryos maybe necessary for some inventions. There are prob-lems associated with the deposit of animal life thatneed to be examined and guidelines concerningthese deposits need to be developed.

CHAPTER 9 REFERENCES1. Brandon, B. A., “Deposit Requirements for Microor-

ganisms, Plants, and Animals in U.S. Patent Claim s,”

2.

3.

4.

5.6,

7.

8.9.

10.

11.

12.

13.

14.

15.

16.

17.

contract report prepared for the Office of TechnologyAssessment, U.S. Congress, December 1987.Casey, W. L., Jr., and Moss, L. S., “IntellectualProperty Rights and Biotechnology,” Idea 27(4):251-267, 1986.Crespi, S., Patent Consultant, Sussex, England,personal communication, August, 1988.Feit, I. N., Attorney, Hoffmann & Baron, Jericho, NY,personal communication, Aug. 18, 1988.Feldman v. Aunstrup, 517 F.2d 1351 (CCPA, 1975).Giesser, J. M., Patent and Trademark DepartmentSandoz, E. Hanover, NJ, personal communication,Aug. 19, 1988.Ihnen, J. L., Attorney, Robbins & Laramie, Washing-ton, DC , personal communication, Aug. 22, 1988.In re Argoudelis, 434 F.2d 1390 (CCPA, 1970).In re Lundak, 723 F.2d 1216 (CAFC, 1985).Karny, G. M., Attorney, Dickstein, Shapiro& Morin,Vienna, VA, personal communication, Aug. 26,1988.Leibo, S., Rio Vista International, Inc., San Antonio,TX, personal communication, November 1987.Moss, L. S., Professor, Department of Economics,Babson College, Babson Park, MA, personal com-munication, Aug. 22, 1988.Straus, J., Professor and Department Head, Max-Planck Institute for Patent Law, Munich, FederalRepublic of Germany, personal communication,Aug. 29, 1988.U.S. Department of Commerce, Patent and Trade-mark Office, “Deposit of Biological Materials forPatent Purposes; Advance Notice of Proposed Rule-making,” Federal Register 52(174):34080-34093,1987.U.S. Department of Commerce, Patent and Trade-mark Office, “Deposit of Biological Materials forPatent Purposes; Notice of Proposed Rulemaking,”Federal Register 53(194):39420-39432, 1988.Van Horn, C. E., Deputy Solicitor, Patent and Trade-mark Office, Department of Commerce, Washington,DC, personal communication, Aug. 23, 1988.Wahl, R, A., U.S. Patent Quarterly 169:6, 1971.

Chapter 10

International Protection forMicro-Organisms, Plants

and Animals

“The European Patent Office’s view on the patenting of living material is based strictly on theprovisions of the European Patent Convention, which do permit patenting of certain elements of lifeforms providing they are novel, inventive, and industrially applicable, In the field of’ living matter,however, the patent system imposes two broad restrictions, namely the invention should not becontrary to ‘ordre public and morality, and should not cover plant nor animal varieties per se. ”

European Patent Office, Introduction to“Patenting of Life Forms,” a compilation of nine

published patent applications on animal life forms.

CONTENTSPage

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155INTERNATIONAL AGREEMENTS RELEVANT TO BIOLOGICAL

INVENTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155Paris Union Convention. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155Patent Cooperation Treaty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157European Patent Convention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158Budapest Treaty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158International Union for the Protection of New Varieties of Plants. . . . . . . . . . . . . . . . . . 159

INTERNATIONAL PROTECTION FOR MICRO-ORGANISMS, PLANTS,AND ANIMALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160

European Patent Convention Countries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160National Patent Laws of EPC Members. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162Eastern Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163South America. ..,....,. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164People’s Republic of China. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165CHAPTER 10 REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165

BoxBox Page10-A. Council of the European Communities Proposal on the Legal Protection of

Biotechnological Inventions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162

TablesTable Page10-1. International Agreements and Biotechnology Patents . . . . . . . . . . . . . . . . . . . . . . . . . . 15510-2. Member Countries, Paris Union Convention. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15610-3. Member Counties, Patent Cooperation Treaty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15710-4. Member Countries, European Patent Convention. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15810-5. Member Countries, Budapest Treaty on the International Recognition of

Micro-organisms for the Purposes of Patent Procedure. . . . . . . . . . . . . . . . . . . . . . . . . 15910-6. Member Countries, Union for the protection of New Varieties of Plants. . . . . . . . . 159

Chapter 10

International Protection forMicro-Organisms, Plants and Animals

INTRODUCTIONIntellectual property protection of micro-

organisms, plants, animals, and biological processesis of increasing concern to the world community.The purpose of this chapter is to describe interna-tional agreements relevant to the protection ofbiological inventions and to summarize existingintellectual property protection in various nations.International patent practice raises a multitude ofcomplex issues beyond the scope of this report.Emphasis in this chapter is given to subjectmatter jurisdiction, in order to determine to whatdegree micro-organisms, plants, and animals areprotectable.

INTERNATIONAL AGREEMENTSRELEVANT TO BIOLOGICAL

INVENTIONSFormal patent statutes were first enacted by

England (1623), the United States (1790), andFrance (1791). The development of the laws in thesethree nations influenced the subsequent develop-ment of patent protection in the remaining countries,most of which were enacted in the late 1800s (5). Asinternational trade grew, the need for harmonizedprotection of intellectual property rights was real-ized.

Intellectual property protection is enhanced byseveral international agreements that provide comityin the area of patents, plant breeder’s certificates,and deposit. This section examines five agreementsthat are relevant to biological inventions (table1o-1 ).

Pan-s Union Convention

The Paris Union Convention is a universal treatyestablishing certain basic rights for residents andnationals of its member countries to protect indus-trial property rights (patents, utility models, indus-

trial designs, trademarks, service marks, trade names,indications of source and unfair competition) underthe laws of other member countries. The originalConvention was signed in 1883 by 11 countries.Nine revision conferences have been held during thetreaty’s first century of existence;1 as of 1988, morethan 90 nations were members of the Paris Union(table 10-2). The Union is administered by theWorld Intellectual Property Organization (WIPO)which was created by a Convention signed in 1967.The Convention came into force in 1970, and WIPObecame a United Nations (UN) specialized agency in1974.

The Paris Union Convention addresses four broadcategories:

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international public law regulating rights andobligations of the member states;provisions that require or permit member statesto legislate within the field of industrial prop-erty;provisions relating to the substantive law re-garding rights and obligations of private par-ties, but only to the extent of requiring domesticlaw to be applied to these parties; andprovisions containing rules of substantive lawregarding rights and obligations of privateparties that govern various situations.

Article 1(4) of the Convention defines the term“patents” broadly as including “the various kinds

Table 10-1--International Agreements andBiotechnology Patents

Agreement Entered Number ofSignatories into Force Signatories

Budapest Treaty . . . . . . . . . . Aug. 19, 1980 22Patent Cooperation Treaty . . Jan. 24, 1978 40European Patent

Convention . . . . . . . . . . . . Oct. 7, 1977 13Union for the Protection of

New Varieties of Plants . . . Aug. 10, 1968 17Paris Union Convention . . . . July 7, 1884 97SOURCE: Office of Technology Assessment, 1989.

]Rom~ in 1 g86, Ma~d in 1890, B~~~]~ in ]897 ~d 1900,” washin~on in ]911, The Hague in 1925, ~ndon in 1934, Lis&m in 1958, tind St~k-

holm in 1967.

–155–


of industrial patents recognized by the laws of thecountries of the Union, such as patents of impor-tation, patents of improvement, patents andcertificates of addition, etc.” Such broad languagepermits any of the forms of industrial patents grantedunder the laws of the member countries to beincluded.

National Treatment

The keystone of the Convention is the principle ofnational treatment, which provides, as regards theprotection of industrial property, nationals of anycountry of the Union to enjoy in all other countriesof the Union the advantages that their respectivelaws grant to their own nationals. The purpose is toeliminate discrimination under national law againstforeigners, who in turn must observe the conditionsand formalities imposed upon nationals. This basicright is designed to protect foreign applicants againstdiscrimination by placing them on equal footingwith national applicants.

Right of Priority

A practical and important right granted by theConvention is the right of priority, which enablesany resident or national of a member country to firstfile a patent application in any member country andthereafter to file a patent application for the sameinvention in any of the other member countrieswithin 12 months of the original filing, The effect isthat the subsequently filed applications will enjoythe right of priority established by the first filingdate. Once established, the right of priority providesa defense against any patent defeating acts that mayhave occurred during the priority period (i.e.,between the first filing and subsequent filing).

The right of priority could be particularly signifi-cant for biotechnology inventions, since the 12-month priority period may be essential to complywith culture deposit requirements. In at least oneinstance, a German applicant was unable during thepriority period to perfect a deposit of a tissue culturein the only European depository that was capable ofaccepting the deposit (7).

Working Requirements

The Convention does not place an obligation ofworking the invention. It only limits the extent

Table 10-2-Member Countries,Paris Union Convention

—Algeria Korea, Republic ofArgentinaAustraliaAustriaBahamasBarbadosBelgiumBeninBrazilBulgariaBurkina FasoBurundiCameroonCanadaCentral African RepublicChadChinaCongoCubaCyprusCzechoslovakiaDenmarkDominican RepublicEgyptFinlandFranceGabonGerman Democratic RepublicGermany, Federal Republic ofGhanaGreeceGuineaGuinea—BissauHaitiHoly SeeHungaryIcelandIndonesiaIranIraqIrelandIsraelItalyIvory coastJapanJordanKenyaKorea, Democratic People’s

Republic ofSOURCE: Office of Technology Assessment, 1989.

LebanonLibyaLiechtensteinLuxemborgMadagascarMalawiMaltaMauritaniaMauritiusMexicoMonacoMongoliaMoroccoNetherlandsNew ZealandNigerNigeriaNorwayPhilippinesPolandPortugalRomaniaRwandaSan MarinoSenegalSouth AfricaSoviet UnionSpainSri LankaSudanSurinameSwedenSwitzerlandSyriaTogoTrinidad and TobagoTunisiaTurkeyUgandaUnited KingdomUnited Republic of TanzaniaUnited StatesUruguayViet NamYugoslaviaZaireZambiaZimbabwe

national law may provide for not working thepatented invention.

The Convention places several limitations onmember countries regarding the domestic law thatthey can enact to obligate the working of a patentedinvention, particularly the remedies that may beemployed. For example, forfeiture of a patent maynot occur except where the granting of a compulsory

Chapter 10--International Protection for Micro-Organisms, Plants and Animals ● 157

license is not sufficient to prevent the abuses.Forfeiture, revocation, and compulsory licensescannot occur until specific time periods have elapsed(e.g., a compulsory license may not be applied forbefore the expiration of 4 years from the filing of apatent application or 3 years from the granting of apatent, whichever occurs last).

For owners of biotechnology inventions, workingrequirements represent perhaps the most serious lossof effective patent protection in foreign countries. If,because of the obligation for a patentee to makefreely available a sample of the deposited organism,it proves to be easier for competitors within suchforeign countries to practice certain biologicalinventions without technological assistance from thepatentee, there may be more of a temptation for thecompetition to seek a compulsory license or revoca-tion or forfeiture of the patent (29).

Article 19 of the Paris Convention permits mem-ber nations to enter into separate agreements for theprotection of industrial property, as long as thoseagreements do not contravene the provisions of theConvention. Under this provision several multina-tional agreements (e.g., European Patent Conven-tion, Budapest Treaty) have been concluded.

Patent Cooperation Treaty

The Patent Cooperation Treaty (PCT) is a world-wide convention open to membership to any ParisConvention country. It entered into force in 1978and as of 1988 applied to 40 countries (table 10-3).PCT is not a convention dealing with substantiverequirements as each signatory determines patenta-bility under its own domestic law. Instead, PCTrelates to procedural requirements to simplify thefiling, searching, and publication of internationalpatent applications. Multiple filings are eliminated,as are duplicate filing costs.

These procedural steps are carried out in essen-tially two stages—the international stage and thenational stage (35 U.S.C. 361-376). The interna-tional stage begins when an applicant files theinternational patent application with one of thereceiving offices (generally the national patentoffice of the country in which the applicant is aresident or national). An international search is then

conducted by an appropriate international searchingauthority (ISA). In the case of U.S.-initiated applica-tions, ISA is the U.S. Patent and Trademark Office(PTO) or the European Patent Office (EPO). Follow-ing the international search, the application is sent tothe international bureau—the WIPO in Geneva—which then publishes the application and providescopies to each of the designated offices in thecountries where protection is sought. The applicantthen provides to each designated office a translation(as necessary) and any required national fee to beginthe national stage. The application is then subjectedto national procedures in each of the designatedcountries.

Since PCT does not contain any definition ofpatentable subject matter, any invention that ispatentable under the laws of the member countriesmay be made the subject of an international applica-tion under PCT. However, in view of the nonpatentabil-ity of certain inventions (such as plant and animalvarieties) in several member countries, ISA is notrequired to provide an international search report ifthese inventions are the subject of internationalapplications (36). Further, the PCT application doesnot contain any requirements regarding the depositof micro-organisms or the description of the charac-teristics of a deposited micro-organism.

Table 10-3-Member Countries, PatentCooperation Treaty

AustraliaAustriaBarbadosBelgiumBeninBrazilBulgariaCameroonCentral African RepublicChadCongoDenmarkFinlandFranceGabonGermanyGreat BritainHungaryItalyJapanKorea, Democratic People’s

Republic of

Korea, Republic ofLiechtensteinLuxembourgMadagascarMalawiMaliMauritaniaMonocoNetherlandsNorwayRomaniaSenegalSoviet UnionSri LankaSudanSwedenSwitzerlandTogoUnited States



European Patent Convention

The existence of a patchwork of traditionalnational patent systems in the member states of theEuropean Common Market was recognized as creat-ing a potential conflict both with the need for freemovement of goods and against anticompetitiveacts. Therefore in October 1973, 14 Europeancountries signed the Convention on the Grant ofEuropean Patents. To date, 13 countries are mem-bers of that Convention, which came into force in1977 (table 10-4).

The European Patent Convention (EPC) is actu-ally a system of law, common to all of the membercountries, established for the granting of so-calledEuropean patents. Primarily, the Convention estab-lishes a single supranational EPO with a uniformprocedural system for the centralized filing, search-ing, examination, and opposition with respect to asingle European patent application. If granted, apatent matures into a bundle of individual Europeanpatents, one for each of the countries designated bythe applicant. This European granting system andthe resulting European patents exist in parallel withthe conventional national granting procedures andresulting national patents. The ultimate goal is foreach of the member countries to adopt in its nationallaw the same substantive and procedural law ofpatents set forth in EPC.

An additional goal is to reduce the cost ofobtaining patent protection by avoiding duplicatefiling, searching, and examination; by minimizingthe number of translations that must be made; and byeconomizing on the use of professional time, both onthe part of the applicant’s domestic patent represen-tatives and those located in countries where filing isanticipated (6).

Table 10-4--Member Countries, EuropeanPatent Convention

Austria LiechtensteinBelgium LuxembourgFrance NetherlandsGermany, Federal Republic of SpainGreat Britain SwedenGreece SwitzerlandltalySOURCE: Office of Technology Assessment, 1989.

Budapest Treaty

United States applicants wishing to file patentapplications involving micro-organism-related in-ventions face many practical problems resultingfrom:

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the lack of information about national lawrequirements governing micro-organism de-posits,the lack of uniformity of such national require-ments. andthe fact that certain national laws require adeposit within that country-even in the case ofapplications claiming priority based upon afirst-filed application in another country wherea deposit has already been made.

The Budapest Treaty on the International Recog-nition of the Deposit of Microorganisms for thePurposes of Patent Procedure is a vehicle for solvingthese problems. It entered into force in 1980 and itprovides that member states recognize for their ownpatent procedures a deposit of a micro-organismstrain made in another country. As of 1988, 22countries were signatories to the Budapest Treaty(table 10-5).

The backbone of the Budapest Treaty is theprovision for a series of International DepositaryAuthorities (IDAs). In order to qualify as an IDA, adepository institution must be located in the territoryof a member country, and have assurances that theinstitution complies, and will continue to comply,with the requirements essential for it to permanentlycarry out its tasks under the treaty (10). As ofDecember 1987, a total of 18 depository institutionshad acquired IDA status; of these, 3 are located in theUnited States (see ch. 9).

Perhaps the most important aspect of the Buda-pest Treaty is the provision for recognition by allmember nations of a deposit in a single IDA. Thisdeposit may be made in any IDA. Once the depositis made, two facts are recognized: the deposit wasmade on the indicated date, and any sample fur-nished by IDA is a sample of the micro-organismwhich was deposited on that date (9).

Many aspects regarding micro-organism depositsare left up to national law as many nations are notprepared to accept this degree of harmonization. The


Table 10-5-Member Countries, Budapest Treatyon the International Recognition of Micro-organisms

for the Purposes of Patent Procedure

AustraliaAustriaBelgiumBulgariaDenmarkFinlandFranceGermany, Federal Republic ofHungaryItalyJapan

Korea, Republic ofLiechtensteinNetherlandsNorwayPhilippinesSoviet UnionSpainSwedenSwitzerlandUnited KingdomUnited States


treaty contains specific requirements for IDAs.These include the acceptance of a deposit, the periodof storage, the right to redeposit, viability testing,secrecy, the furnishing of samples, and import/export restrictions. These requirements are dis-cussed in more detail in chapter 8.

International Union for the Protection of NewVarieties of Plants

It became evident to many European countriesduring the 1950s that the rights of plant breederswere entirely overlooked in many countries. In fact,the patent laws of many foreign countries specifi-cally excluded the patenting of any type of life form.An international conference was held in Paris in1957 for the purpose of drafting a convention forprotecting new plant varieties. The Convention wassigned in 1961 and entered into force in 1968.

The International Union for the Protection of NewVarieties of Plants (UPOV) was designed “torecognize and to ensure to the breeder of a new plantvariety . . . the right to a special title of protection orof a patent. ” The UPOV’s goal was to provide amodel for the adoption of breeders’ rights statutes inindividual countries. Countries which desired toprovide breeders’ rights could model their statutesafter UPOV and could join the convention to enjoythe reciprocity between countries provided by theConvention.

The United States was not an original party toUPOV. Numerous conferences were held during the1970s in an attempt to resolve substantive differ-ences between UPOV and U.S. patent law. Theseefforts were culminated successfully in the revisedAct of October 23, 1978, to which there are now 17signatories (table 10-6). According to the revisedtext, both sexually reproduced and vegetativelypropagated (i.e., asexually reproduced) plants cart beprotected, as determined by the individual members.In order to obtain protection in each membercountry, it is necessary to file a separate applicationin each country. There is no central filing system andinternational protection is not available by filing inonly one member country. A breeder who developsa new variety has an exclusive right to produce andsell that variety. In all member states, except theUnited States, new varieties are subject to officialfield trials to establish that the conditions forprotection are satisfied (31).

The UPOV Convention requires that each pro-tected variety have a specific, unique name formarketing purposes. The Convention provides thateither plant variety protection or patent protection beavailable for a new variety. This provision waswaived for countries, such as the United States,which had other forms of protection available beforeit acceded to the Convention.

The UPOV does have limitations. National lawsof UPOV member nations may provide protectiononly for a limited number of plant genera or species.Protection offered by UPOV member states, there-fore, differs considerably according to the lists ofprotected taxa (33). Hence, reciprocity betweennations can be key to actual protection.

Table 10-6-Member Countries, Unionfor the Protection of New Varieties of Plants

BelgiumDenmarkFrameGermany, Federal Republic ofHungaryIrelandIsraelItaly

NetherlandsNew ZealandSouth AfricaSpainSwedenSwitzerlandUnited KingdomUnited States

SOURCE: Office of Technology h~wnentt IWO.


INTERNATIONAL PROTECTIONFOR MICRO-ORGANISMS,

PLANTS, AND ANIMALSThe issue of what constitutes patentable subject

matter is of increasing concern, particularly as aresult of developing law in the United States. Thissection reviews subject matter protection of livingorganisms in several nations.

European Patent Convention Countries

PatentableSubject Matter

● Article 52(1) of EPCdefines patentable subjectmatter as: inventions whichare susceptible of indus-trial application, which arenew, and which involvean inventive step. Thisdefinition is extraordinarily

general and broad. Rather than providing a defini-tive, positive definition of patentable subject matterEPC instead takes the approach of narrowing thisbroad definition by explicitly specifying negativerestrictions thereto.

Thus, under Article 52(2), the term “inventions”in the above definition is limited by excluding thefollowing:

discoveries, scientific theories, and mathemati-cal methods-including naturally occurringproducts;aesthetic creations;schemes, rules, and methods for performingmental acts, playing games, or doing business;programs for computers; andpresentations of information.

As a further restriction on the part of the definitionstating ‘*inventions which are susceptible of indus-trial application,” Article 52(4) further excludes“methods for the treatment of the human or animalbody by surgery or therapy and diagnostic methodspracticed on the human or animal body.” Thisprovision does not apply, however, to products, andin particular to substances or compositions, for usein any of the excluded methods.

Article 53(b) stipulates that European patents willnot issue for plant or animal varieties and essentiallybiological processes for the production of plants andanimals (with the exception of microbiologicalprocesses or the products thereof). There are tworeasons for this approach, which EPC membernations adopted in 1973. First, it was felt thatgranting patents in this area would create legal andadministrative difficulties. Second, plant varietyprotection enacted in several European nations wasseen as the only applicable system concerning thatcategory of inventions (4).

The question of whether a process is “essentiallybiological” depends on the extent of technicalhuman intervention in the process. If such interven-tion plays a significant part in determining orcontrolling the desired result, the process would notbe excluded. According to EPC, essentially biologi-cal processes and specific plant varieties, regardlessof whether they were produced by breeding orgenetic engineering, are not patentable.

Although plant varieties are specifically ex-cluded, there is no general exclusion for plants.According to the Technical Board of Appeal of EPO,EPC Article 53(b) prohibits only the patenting ofplants which are in the genetically fixed form of aplant variety (i.e., a specific variety such as the rose“Peace” or the wheat cultivar “Chinese Spring”).Thus, EPO will grant utility patent (generic) protec-tion to plants, for example, where a gene has beeninserted into a plant (e.g., corn having gene X) but isnot fixed in a single plant variety (e.g., corn inbredA having gene X). Similarly, a process for transform-ing a plant to insert a desired gene would bepatentable because human intervention played agreater role in the final result than biological forces.This viewpoint has been adopted by the Swiss PatentOffice as well as by EPO, which in early 1988granted a patent on a technique for increasing theprotein content of forage crops (such as alfalfa) andfor plants produced with the aid of the technique.Arguably, this decision opens the door for plant andanimal patenting in Europe (14,17,19).

Although plant and animal varieties and “essen-tially biological” processes are specifically excludedfrom patentable subject matter, EPC does not appearto, in principle, exclude entirely the patenting of


microbiological inventions in any of the followingmajor classes:

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micro-organisms per se (including viruses, celllines, etc.),processes for producing micro-organisms,processes using micro-organisms,products obtained from microbiological proc-esses, andDNA/RNA molecule or subcellular units (e.g.,plasmids).

Plant variety protection is limited in EPC coun-tries. In most countries the only varieties that can beprotected under breeders’ rights statutes are thosespecifically set forth in varietal lists compiled byeach individual country. Varietal lists are differentfrom country to country, these lists, periodicallyupdated, include sexually reproduced plants (e.g.,corn, wheat, and sorghum), asexually reproducedplants (e.g., roses, peach trees, and lilies), and alsotrees and woody plants (e.g., poplar, firethorn, andelm). The varieties are protected for 15-30 years(generally 20-25 years) from the issue date of thecertificate.

Heightened interest in the patenting of livingmatter led to a proposal by the Commission of theEuropean Communities on the legal protection ofbiotechnological inventions (13) (box 10-A).

National Patent Laws of EPC Members

The national patent laws of EPC member nationsgenerally complement convention provisions. Gen-erally, micro-organisms are patentable, but animaland plant varieties are not (31). A sample of severalmember nations follows.

Belgium

Belgium’s revised patent law, effective in 1986,conforms with the European Patent Convention interms of patentable subject matter. Micro-organismsare patentable, while animals and plant species andtheir varieties are not patentable. Belgium is amember of UPOV.

Federal Republic of Germany

West Germany case law has recognized thepatentability of micro-organisms for years. After

deciding in 1969 that patents could be obtained forinventions in the field of biology (in this case, amethod of breeding animals) (28), the GermanFederal Supreme Court specifically held, in 1975,that micro-organisms per se constituted patentablesubject matter (3). West Germany permits patentingof plant varieties that are not the subject matter of thespecific plant variety law.

France

French law corresponds to the EPC in mostrespects relevant to biotechnology (6). A plantvariety law was passed in 1970 (Law 70-489), andFrance ratified the UPOV 1978 text in 1983. France,like West Germany, permits patenting of plantvarieties that are not the subject matter of thespecific plant variety law.

Switzerland

The Swiss Federal Intellectual Property officeamended its guidelines in 1986 regarding the exami-nation of patent applications in the field of biotech-nology (14). The new guidelines held that:

product claims [will be admitted] relating to wholeplants or their propagating material (seeds, tubers,cuttings, etc) but in which no variety is specified, i.e.,claims containing only characters that are valid forseveral varieties (for example a whole genus). In thiscontext the variety notion must be interpreted as inthe Plant Variety Protection Law . . . i.e., by refer-ence to the criteria of homogeneity, stability, anddistinctness from other plant varieties.

As regards “inventions relating to animals, theapplicable criteria will be the same for plants” (34).One commentator has noted that in Switzerland, atleast, if one introduces a foreign gene into an animalby microinjection, and claims the resulting geneti-cally engineered animal without limitation to anyparticular variety (breed) of animal, the claim wouldbe potentially patentable (14).

United Kingdom

The British patent act of 1977 adopted the EPCdefinition of patentable subject matter, and inven-tions concerning plants and animals are protectableonly at the cellular level (e.g., a patent issued


claiming a cell culture system comprising cellsderived from the baby golden hamster fibroblast cellline) (6).

Australia

Australian law permitspatents for “any mannerof new manufacture,” butit specifically excludes sub-stances capable of beingused as food or medicineconsisting only of mix-

tures of known ingredients and the processes forproducing them (2).

A 1976 case held that living things (specifically anew micro-organism) could be patented. The Aus-tralian Patent Office appears to hold a positionsimilar to the U.S. PTO as regards patenting of livingorganisms:

i.e., no distinction is to be made solely on the basisthat a claimed product or process is, or uses, a living

organism. Higher life forms will not be treated anydifferently than lower forms such as micro-organisms (1)

Australia, currently not a member of UPOV, offersa 20-year certificate for plant variety protection.

Eastern Europe

Eastern European na-tions generally grant, atthe option of the appli-cant, either a patent or aninventor’s certificate. Forcertain categories of sub-ject matter, only an inven-tor’s certificate can be ob-

tained. An inventor’s certificate is a form of recog-nition granted by socialist states to inventors. It doesnot grant to the inventor the exclusive right to use theinvention or to preclude others from doing so but,rather, signifies that the invention is state property.Typically, the inventor is entitled to compensationby the state for it’s use of the invention. Because


their economies are comprised mainly of state-controlled enterprises, no infringement occurs bystate use of the invention.

Soviet Union

The Soviet Union grants patents and inventor’scertificates for inventions covering “any new techni-cal solution of a problem in any field of the nationaleconomy.” New strains of micro-organisms areexpressly recognized as inventions.

Although the USSR is not a member of UPOV,protection is available for new varieties and hybridsof agricultural crops and other cultivated plantsthrough an inventor’s certificate. Likewise, an in-ventor’s certificate can be issued for new breeds offarm animals and poultry, new breeds of fur-bearinganimals, and new species of mulberry silkworms.

Bulgaria

According to thepatent protection for

Czechoslovakia

U.S. PTO, Bulgariaanimals (35).

provides

In Czechoslovakia, inventions relating to medica-ments, substances obtained through chemical proc-esses, foodstuffs, and micro-organisms used inindustrial manufacturing are protectable only byinventors’ certificates (16).

German Democratic Republic

East Germany’s 1984 patent law, which allowspatents for “technical solutions that are character-ized by novelty, industrial applicability, and techno-logical progress,” specifically includes micro-biological processes as patentable subject matter.Specifically excluded, however, are solutions for thediagnosis, prevention, and treatment of humandiseases, plant varieties and animal breeds, andstrains of micro-organisms (6).

Hungary

Hungary’s patent act has, since 1970, permittedpatents for new plant varieties and animal breeds, aswell as processes for obtaining them. The Patent

Act, last revised in 1983, permits patents for plantvarieties and animal breeds “if they are distinguish-able, novel, homogeneous, stable, and have beengiven a variety denomination apt for registration”(18). Processes involving the use and preparation ofmicro-organisms are patentable, although productsof these inventions are not patentable. As a result,the situation in Hungary is generally the reverse ofthat in most other countries (6).

Poland

Under Polish Law, neither patents nor inventor’scertificates are granted for new plant varieties andanimal breeds or for processes for curing disease.Patents may not be obtained for foodstuffs, pharma-ceutical products, or products obtained by chemicalprocesses-although processes for producing thenamed products are patentable (27).

Romania

According to the U.S. PTO, Romania providespatent protection for animals (35).

Yugoslavia

Plant and animal varieties and essentially biologi-cal processes for the production of plants or animalsare excluded from patent protection in Yugoslavia(4).

Japan

a patentable inventionutilizes a law of nature inthe highly advancedcreation-of technical ideas

(21 ). The Japanese patent office currently precludesprotection for inventions producing or utilizingrecombinant DNA in higher animals, based on astatutory exclusion of inventions detrimental topublic order, morality, or health (6).

Japan has been granting patent varieties for plantsand processes of producing plants. Prior to 1970, an


invention relating to the production of plants (e.g., amethod for cultivating mushrooms or a method forblooming irises) could be patented in Japan. Plantsper se were not believed patentable because theywere considered neither an invention nor reproduc-ible. In 1970, the Japanese patent office set up anewexamination standard and began granting patents onplants themselves, provided the plant was an artifi-cially cultivated one and belonged to a group havingcharacteristic features which would differentiate itfrom all other groups.

The Japanese patent office recently issued aninternal notice announcing its intention to grantpatents on nonhuman animals if they meet therequirements of the patent law. The office isexpected to draft guidelines regarding the examina-tion of such patents.

South America

Argentina

Argentina, although nota member of UPOV, hasenacted plant varietyprotection. The 10-20 yearright applies to the seeds,fruits, bulbs, tubers, buds,and graftings of the newvariety. Patent protectiondoes not extend to plantvarieties.

Although patent protection extends to new indus-trial products, new means, and new applications ofknown means for obtaining an industrial result orproduct, pharmaceuticals are specifically excludedfrom patent protection. No policy has been estab-lished regarding the patentability of geneticallyengineered animals (6).

Brazil

Brazilian patent law contains an exclusion againstprotection for the discovery of varieties or species ofmicro-organisms. This exclusion has been cited asgrounds for excluding biotechnology patents, de-spite the fact that 2,000 such applications have beenfiled (6). Pharmaceuticals and the processes for

obtaining them are not patentable. Also, no plantvariety or plant patent protection exists. Because ofthe growth of biotechnology in Brazil, the PatentOffice has formed a committee to examine, withother governmental entities, potential solutions (30).

Chile

Chile is not a party to any patent-related bilateraltreaty, and its trademark department has no policy orprovisions regarding intellectual property protectionfor biotechnological products. The nation’s law onseeds permits trademark protection on seed varie-ties, with a goal of protecting standards of purity andquality of seeds (25).

North America

Canada

The Canadian patentact, last amended in-1987,defines the term “inven-tion” as being “any newand useful art, process,machine, manufacture or

\ 1 composition of matter, or

Patents are not grantedfor processes to medically treat humans and animals.Naturally occurring substances prepared orproduced by microbiological processes and intendedfor use as food or medicine cannot be claimed per sebut must be claimed in process-dependent form (12).As a result, product patents are more available nowthan prior to 1987 (8). In 1984, the Canadian patentoffice held that a mixture of fungi was patentable,since the claimed fungi met the test of being“sufficiently different from known species that it canbe said that its creation involved the necessaryelement of inventive ingenuity” (20)0 The PatentOffice, however, later rejected a claim for a varietyof soybean obtained by crossbreeding (15). Therejection was upheld by the Federal Court ofAppeals, which held that the claimed soybean didnot come within the “common or ordinary meaning”of a manufacture or composition of matter (26). This


court decision is current] y on appeal to the CanadianSupreme Court.

Mexico

At present, biotechnology products and processesmay not be patented in Mexico (32). This willchange in 1997 as a result of recent legislative actionpermitting protection for a wide range of biotech-nological processes (33).

People’s Republic of China

The People’s Republicof China adopted a newpatent law effective in 1985,The law protects invention-creations, is to promotethe development of sci-ence and technology formeeting the needs of social-ist modernization, In Chi-nese law, “invention-

creations” means inventions, utility models, anddesigns. Inventions cover any new technical solu-tion relating to a product, a process, or an improve-ment. A utility model is any new technical solutionrelating to the shape, structure, or combination of aproduct that is fit for practical use. No patent rightscan issue for any invention-creation that is contraryto the laws of the state or social morality or that isdetrimental to public interest. Article 25 specificallyprecludes patent rights for scientific discoveries,rules and methods for mental activities, methods forthe diagnosis or treatment of diseases, pharmaceuti-cal products and substances obtained by a chemicalprocess, and animal and plant varieties (24).

SUMMARYA number of differences exist between nations

regarding intellectual property protection for bio-technological inventions. Included in these differ-ences is the issue of what constitutes patentablesubject matter. Several international agreements arerelevant to the worldwide protection of biologicalinventions. These agreements concern basic intel-lectual property rights and procedural mechanismsinvolved in international patent practice (e.g., filing

and deposit). One agreement, the InternationalConvention for the Protection of New Varieties ofPlants, addresses plant breeders’ rights to a specialtitle of protection or a patent for this type of lifeform. No treaties or international agreements existconcerning animals as patentable subject matter.

Various analyses of the laws of other nationsindicate that patent protection on animals is permis-sible or theoretically possible in a number of nations,Any projection of the number of nations permittinganimal patents must be considered speculative in theabsence of patent prosecution in this area. To date,only the United States has both announced a policypermitting patents on nonhuman animal life formsand issued a patent on an animal invented throughbiotechnological techniques.

1.2.3.4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

CHAPTER 10 REFERENCESAustralian Off. J. Pat., 1980, page 1162.Australian Patents Act, Sec. 155(1).Baekerhefe (Baker’s Yeast), 6 (IC 207 (1975).Baeumer, L,, “Protection of Inventions in the Field ofBiotechnology,” Symposium on the Protection ofBiological Inventions, World Intellectual PropertyOrganization and Cornell University, Ithaca, N. Y.,June 1987.Beier, F. K., Crespi, R. S., Straus, J., Biotechnologyand Patent Protection (Paris: OECD, 1985).Ben~ S. A., Schwaab, R. L., Conlin, D. G., Jeffery,D. D., Intellectual Property Rights in BiotechnologyWorldwide (New York, NY: Stockton Press, 1987).Boeters, H. D., “Erfahrungen bei der Hinterlegungvon Gewebekulturen,” Mitt, 1982, p. 73.Buchanan, J., Policy Analyst, Consumer and Corpo-rate Affairs Canada, personal communication, Aug.26, 1988.Budapest Treaty on the International Recognition ofthe Deposit of Microorganisms for the Purposes ofPatent Procedure, Art. 3(l)(a).Budapest Treaty on the International Recognition ofthe Deposit of Microorganisms for the Purposes ofPatent Procedure, Art. 6(1) and 6(2).Canadian Patent ACL Revised Statutes of Canada, ch.P-4, Sec. 2 (1987).Canadian Patent Act, Revised Statues of Canada, ch.P-4, Sec. 14(1) (1987).Commission of the European Communities, “pro-posal for a Council Directive on the Legal Protectionof Biotechnological Inventions,” Brussels, Oct. 17,1988.Cooper, I., Biotechnology and the Luw, Sec. 6.05(New York, NY: Clark Boardman Co, Ltd., 1988).


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Cooper, I., Biotechnology and the Law, Sec. 10.08(New York, NY: Clark Boardman Co, Ltd., 1988).Czechoslovakian Patent Law, Art. 28 (1972).Dickson, D., “Europe Grants First Patent on Plants,”Science, 240(4856):1 142, May 27, 1988.Hungarian Patents Act II of 1%9, Sec. 67-71 (1983).Ihnen, J. L,, Attorney, Laramie & Robbins, Washing-ton, DC, personal communication, August, 1988.[n re Abitibi Co., 62 CPR 2d 81 (1982).Japanese Patent Law, Sec. 1 (1978).Law 70-489, Plant Wriety Act of 1970.Martin, C. C., “U.S. and Japan Join Effort to SupportProtection of Intellectual Property,” Genetic Engi-neering News, 8(5):12-13, May 1988.Moga, T., “China’s Patent Law Considered andCompared,” University of Detroit Law Review,64(3): 343-449, Spring 1987.Obach, S., “Recent Development of Industrial Prop-erty Rights in Chile,” California Western Intern-ational Law Journal, 17:327-341, Summer 1987.Pioneer Hi-Bred, Ltd. v. Commissioner of Patentsand Trademarks —:491 (Fed, Ct. App., Mar. 11,1987).Polish Law on Inventive Activity, Sec. 2, and 12(1972).Rote Taube (Red Dove), 1 IIC 136 (1970).Schwaab, R. L., Jeffery, D. D., Conlin, D.G., U.S. andForeign Intellectual Property Luw Relating to Bio-

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/ogical Inventions, contract submitted to the U.S.Congress, Office of Technology Assessment, Wash-ington, D. C,, 1984.

Siemsen, P.D. and Correa, J. A., “Recent Developments of Industrial Property Rights in Brazil,”California Western International Law Journal, 17:320-326, Summer 1987.

Smolders, W., Patents and Trademarks Division,Sandoz, Basle, Switzerland, personal communica-tion, Aug. 19, 1988.

Soni, M., “Recent Developments of Industrial Prop-erty Rights in Mexico,” Cahyornia Western interna-tional Law Journal, 17:342-348, Summer 1987.

Straus, J., Professor of Intellectual Property Law,Max Planck Institute, Munich, Federal Republic ofGermany, personal communication, Aug. 29, 1988.Swiss Patents, Designs and Trademark Gazette,Edition A, Mar. 27, 1986, quoted in Cooper, I.,Biotechnology and the L.uw, Sec. 6.05 (New York,NY: Clark Boardman Co, Ltd., 1988).Mm Horn, C., “Federal Regulation and AnimalPatents,” workshop held by the U.S. Congress, Offkeof Technology Assessmen~ Dec. 11, 1987.

MM Horn, C., Deputy Solicitor, U.S. Patent andTrademark Office, Washington, DC, personaI com-munication, Aug. 23, 1988.

Appendixes

Appendix A

Selected Sections, 35 United States Code, Patents

Section 101. Inventions patentable

Whoever invents or discovers any new and usefulprocess, machine, manufacture, or composition of matter,or any new and useful improvement thereof, may obtaina patent therefor, subject to the conditions and require-ments of this title.

Section 102. Conditions for patentability; noveltyand loss of right to patent

A person shall be entitled to a patent unless—(a) the invention was known or used by others in this

country, or patented or described in a printed publicationin this or a foreign country, before the invention thereofby the applicant for patent, or

(b) the invention was patented or described in a printedpublication in this or a foreign country or in public use oron sale in this country, more than 1 year prior to the dateof the application for patent in the United States, or

(c) he has abandoned the invention, or(d) the invention was first patented or caused to be

patented, or was the subject of an inventor’s certificate, bythe applicant or his legal representatives or assigns in aforeign country prior to the date of the application forpatent in this country on an application for patent orinventor’s certificate filed more than 12 months before thefiling of the application in the United States, or

(e) the invention was described in a patent granted onan application for patent by another filed in the UnitedStates before the invention thereof by the applicant forpatent, or on an international application by another whohas fulfilled the requirements of paragraphs (1), (2), and(4) of section 371(c) of this title before the inventionthereof by the applicant for patent, or

(f) he did not himself invent the subject matter soughtto be patented, or

(g) before the applicant’s invention thereof the inven-tion was made in this country by another who had notabandoned, suppressed, or concealed it. In determiningpriority of invention there shall be considered not only therespective dates of conception and reduction to practice oftheir invention, but also the reasonable diligence of onewho was first to conceive and last to reduce to practice,from a time prior to conception by the other.

Section 103. Conditions for patentability;nonobvious subject matter

A patent may not be obtained though the invention isnot identically disclosed or described as set forth in

Section 102 of this title, if the differences between thesubject matter sought to be patented and the prior art aresuch that the subject matter as a whole would have beenobvious at the time the invention was made to a personhaving ordinary skill in the art to which said subjectmatter pertains.

Patentability shall not be negatived by the manner inwhich the invention was made. Subject matter developedby another person, which qualifies as prior art only undersubsection (f) or (g) of Section 102 of this title, shall notpreclude patentability under this section where the subjectmatter and the claimed invention were, at the time theinvention was made, owned by the same person or subjectto an obligation of assignment to the same person.

Section 111. Application for patent

Application for patent shall be made, or authorized tobe made, by the inventor, except as otherwise provided inthis title, in writing to the Commissioner. Such applica-tion shall include: (1) a specification as prescribed bySection 112 of this title; (2) a drawing as prescribed bySection 113 of this title; and (3) an oath by the applicantas prescribed by Section 115 of this title. The applicationmust be accompanied by the fee required by law. The feeand oath may be submitted after the specification and anyrequired drawing are submitted, within such period andunder such conditions, including the payment of asurcharge, as may be prescribed by the Commissioner.Upon failure to submit the fee and oath within suchprescribed period, the application shall be regarded asabandoned, unless it is shown to the satisfaction of theCommissioner that the delay in submitting the fee andoath was unavoidable. The filing date of an applicationshall be the date on which the specification and anyrequired drawing are received in the Patent and Trade-mark Office,

Section 112. SpecificationThe specification shall contain a written description of

the invention, and of the manner and process of makingand using it, in such full, clear, concise, and exact termsas to enable any person skilled in the art to which itpertains, or with which it is most nearly connected, tomake and use the same, and shall set forth the best modecontemplated by the inventor of carrying out his inven-tion.

The specification shall conclude with one or moreclaims particularly pointing out and distinctly claiming

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the subject matter which the applicant regards as hisinvention.

A claim maybe written in independent or, if the natureof the case admits, in dependent or multiple dependentform.

Subject to the following paragraph, a claim in depend-ent form shall contain a reference to a claim previously setforth and then specify a further limitation of the subjectmatter claimed. A claim in dependent form shall beconstrued to incorporate by reference all the limitations ofthe claim to which it refers.

A claim in multiple dependent form shall contain areference, in the alternative only, to more than one claimpreviously set forth and then specify a further limitationof the subject matter claimed. A multiple dependent claimshall not serve as a basis for any other multiple dependentclaim. A multiple dependent claim shall be construed toincorporate by reference all the limitations of the particu-lar claim in relation to which it is being considered.

An element in a claim for a combination may beexpressed as a means or step for performing a specifiedfunction without the recital of structure, material, or actsin support thereof, and such claim shall be construed tocover the corresponding structure, material, or actsdescribed in the specification and equivalents thereof.

Section 113. Drawings

The applicant shall furnish a drawing where necessaryfor the understanding of the subject matter sought to bepatented. When the nature of such subject matter admitsof illustration by a drawing and the applicant has notfurnished such a drawing, the Commissioner may requireits submission within a time period of not less than 2months from the sending of a notice thereof. Drawingsubmitted after the filing date of the application may notbe used (i) to overcome any insufficiency of the specifica-tion due to lack of an enabling disclosure or otherwiseinadequate disclosure therein, or (ii) to supplement theoriginal disclosure thereof for the purpose of interpreta-tion of the scope of any claim.

Section 114. Models, specimens

The Commissioner may require the applicant to furnisha model of convenient size to exhibit advantageously theseveral parts of his invention.

When the invention relates to a composition of matter,the Commissioner may require the applicant to furnishspecimens or ingredients for the purpose of inspection orexperiment.

Section 119. Benefit of earlier filing date inforeign country; right of priority

An application for patent for an invention filed in thiscountry by any person who has, or whose legal representa-tives or assigns have, previously regularly filed anapplication for a patent for the same invention in a foreigncountry which afford similar privileges in the case ofapplications filed in the United States or to citizens of theUnited States, shall have the same effect as the sameapplication would have if filed in this country on the dateon which the application for patent for the same inventionwas first filed in such foreign country, if the applicationin this country is filed within 12 months from the earliestdate on which such foreign application was filed; but nopatent shall be granted on any application for patent for aninvention which had been patented or described in aprinted publication in any country more than 1 year beforethe date of the actual filing of the application in thiscountry, or which had been in public use or on sale in thiscountry more than 1 year prior to such filing.

No application for patent shall be entitled to this rightof priority unless a claim therefor and a certified copy ofthe original foreign application, specification, and draw-ings upon which it is based are filed in the Patent andTrademark Office before the patent is granted, or at suchtime during the pendency of the application as required bythe Commissioner not earlier that 6 months after the filingof the application in this country. Such certification shallbe made by the patent office of the foreign country inwhich filed and show the date of the application and of thefiling of the specification and other papers. The Commis-sioner may require a translation of the papers filed if notin the English language and such other information as hedeems necessary.

In like manner and subject to the same conditions andrequirements, the right provided in this section may bebased upon a subsequent regularly filed application in thesame foreign country instead of the first filed foreignapplication, provided that any foreign application filedprior to such subsequent application has been withdrawn,abandoned, or otherwise disposed of, without having beenlaid open to public inspection and without leaving anyrights outstanding, and has not served, nor thereafter shallserve, as a basis for claiming a right of priority.

Applications for inventors’ certificates filed in aforeign country in which applicants have a right to apply,at their discretion, either for a patent or for an inventor’scertificate shall be treated in this country in the samemanner and have the same effect for purpose of the rightof priority under this section as applications for patents,subject to the same conditions and requirements of thissection as apply to applications for patents, provided suchapplicants are entitled to the benefits of the Stockholm

App. A--Selected Sections, 35 United States Code, Patents ● 171

Revision of the Paris Convention at the time of suchfiling.

Section 120. Benefit of earlier filing date in theUnited States

An application for patent for an invention disclosed inthe manner provided by the first paragraph of Section 112of this title in an application previously filed in the UnitedStates, or as provided by Section 363 of this title, whichis filed by an inventor or inventors named in thepreviously filed application shall have the same effect, asto such invention, as though filed on the date of the priorapplication, if filed before the patenting or abandonmentof or termination of proceedings on the first application oron an application similarly entitled to the benefit of thefiling date of the first application and if it contains or isamended to contain a specific reference to the earlier filedapplication.

Section 122. Confidential status of applications

Applications for patents shall be kept in confidence bythe Patent and Trademark Office and no informationconcerning the same given without authority of theapplicant or owner unless necessary to carry out theprovisions of any Act of Congress or in such specialcircumstances as may be determined by the Commis-sioner.

Section 154. Contents and term of the patentEvery patent shall contain a short title of the invention

and a grant to the patentee, his heirs or assigns, for theterm of 17 years, subject to the payment of fees asprovided for in this title, of the right to exclude othersfrom making, using, or selling the invention throughoutthe United States, referring to the specification for theparticulars thereof. A copy of the specification anddrawings shall be annexed to the patent and be a partthereof,

Section 161. Patents for plants

Whoever invents or discovers and asexually repro-duces any distinct and new variety of plant, includingcultivated sports, mutants, hybrids, and newly foundseedlings, other than a tuberpropagated plant or a plantfound in an uncultivated state, may obtain a patenttherefor, subject to the conditions and requirements of thistitle.

The provisions of this title relating to patents forinventions shall apply to patents for plants, except asotherwise provided.

Section 162. Description, claim

No plant patent shall be declared invalid for noncompli-ance with Section 112 of this title if the description is ascomplete as is reasonably possible.

The claim in the specification shall be in formal termsto the plant shown and described.

Section 163. Grant

In the case of a plant patent the grant shall be of the rightto exclude others from asexually reproducing the plant orselling or using the plant so reproduced.

Section 164. Assistance of Department ofAgriculture

The President may by Executive order direct theSecretary of Agriculture, in accordance with the requestsof the Commissioner, for the purpose of carrying intoeffect the provisions of this title with respect to plants (1)to furnish available information of the Department ofAgriculture, (2) to conduct through the appropriate bureauor division of the Department research upon specialproblems, or (3) to detail to the Commissioner officersand employees of the Department.

Appendix B

Patents: Questions and Answers

Answers to Questions Frequently Asked

Question l—What do the terms “patent pending” and “patent applied for” mean?Answer—They are used by a manufacturer or seller of an article to inform the public that an application for patent on that

article is on file in the Patent and Trademark Office. The law imposes a fine on those who use these terms falsely todeceive the public.

Question 2—Is there any danger that the Patent and Trademark Office will give others information contained inmy application while it is pending?

Answer—No. All patent applications are maintained in the strictest secrecy until the patent is issued. After the patent isissued, however, the Office file containing the application and all correspondence leading up to issuance of the patentis made available in the Files Information Room for inspection by anyone. In addition, copies of these files may bepurchased from the Office.

Question 3-May I write directly to the Patent and Trademark Office about my application after it is filed?Answer—Yes. The Office will answer an applicant’s inquiries as to the status of the application and inform you whether

your application has been rejected, allowed, or is awaiting action. However, if you have a patent attorney or agent, theOffice will not correspond with both you and your attorney concerning the merits of your application. All commentsconcerning your application should be forwarded through your attorney or agent.

Question 4-Is it necessary to go to the Patent and Trademark Office to transact business concerning patentmatters?

Answer—No. Most business with the Office is conducted by correspondence. However, interviews regarding pendingapplications can be arranged with examiners, if necessary, and are often helpful.

Question 5—If two or more persons work together to make an invention, to whom will the patent be granted?Answer—If each had a share in the ideas forming the invention, they are joint inventors and a patent will be issued jointly

on the basis of a proper patent application. If, on the other hand, one of these persons has provided all of the ideas forthe invention and the other has only followed instructions in making it, the person who contributed the ideas isconsidered the sole inventor and the patent application and patent shall be in his name alone.

Question 6-If one person furnishes all of the ideas to make an invention and another employs him or furnishesthe money for building and testing the invention, should the patent application be filed by them jointly?

Answer—No, The application must be signed by the true inventor and filed in the Patent and Trademark Office, in theinventor’s name. This is the person who furnishes the ideas, not the employer or person who furnishes the money.

Question 7—Does the Patent and Trademark Office control the fees charged by patent attorneys and agents fortheir services?

Answer—No. This is a matter between you and your patent attorney or agent in which the Office takes no part. To avoidmisunderstanding you may wish to ask for estimate charges for: (a) the search, (b) preparation of the patent application,and (c) Patent and Trademark Office prosecution.

Question 8--Will the Patent and Trademark Office help me select a patent attorney or agent to make my patentsearch or prepare and prosecute my patent application?

Answer—No. The Office cannot make this choice for you. However, your own friends or general attorney may help youin making a selection from among those listed as registered practitioners on the Office roster. Also, some barassociations operate lawyer referral services that maintain lists of patent lawyers available to accept new clients.

Question 9-Will the Patent and Trademark Office advise me as to whether a certain patent promotionorganization is reliable and trustworthy?

Answer—No. The Office has no control over such organizations and does not supply information about them. It isadvisable, therefore, to check on the reputation of invention promotion firms before making any commitments. It issuggested that you obtain this information by inquiring with the Better Business Bureau of the city in which the

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App. B-Patents: Questions and Answers ● 173

organization is located, or with the bureau of commerce and industry or bureau of consumer affairs of the State in whichthe organization has its place of business. You may also undertake to make sure that you are dealing with reliablepeople by asking your own patent attorney or agent or by inquiring of others who may know the organization.

Question 10--Are there any organizations in my area which can tell me how and where I may be able to obtainassistance in developing and marketing my invention?

Answer—Yes. In your own or neighboring communities you may inquire of such organizations as chambers of commerceand banks. Many communities have locally financed industrial development organizations which can help you locatemanufacturers and individuals who might be interested in promoting your idea.

Question n-Are there any State government agencies that can help me in developing and marketing myinvention?

Answer—Yes, In nearly all States there are State planning and development agencies or departments of commerce andindustry which seek new product and process ideas to assist manufacturers and communities in the State. If you donot know the names or addresses of your State organizations you can obtain this information by writing to the Governorof your State.

Question 12-Can the Patent and Trademark Office assist me in developing and marketing my patent?Answer—The Office cannot act or advise concerning business transactions or arrangements involved in the development

and marketing of an invention. However, the Office will publish, at the request of a patent owner, a notice in the OfficialGazette that the patent is available for licensing or sale. The fee for this service is $7.

SOURCE: U.S. Patent and Trademark Office, General Information Concerning Patents, 1986.

Appendix C

Proposed Rules on Deposit

Department of Commerce

Patent and Trademark Office37 CFR Part 1

Deposit of Biological Materials for Patent Purposes;Notice of Proposed Rulemaking

October 6, 1988

(a) Deposit of Biological Material

Section 1.200 Biological material.Section 1.201 Need to make a deposit.Section 1.202 Acceptable depository.Section 1.203 Time of making an original deposit.Section 1.204 Replacement of deposit.Section 1.205 Term of deposit.Section 1.206 Viability of deposit.Section 1.207 Furnishing of samples.Section 1.208 Examination procedures.

Section 1.200: Biological material.For the purposes of these regulations pertaining to the

deposit of biological material for patent purposes, theterm biological material shall include material that iscapable of self-replication either directly or indirectly.Representative examples include bacteria, fungi includ-ing yeast, algae, protozoa, eukaryotic cells, cell lines,hybridomas, plasmids, viruses, plant tissue cells, lichens,and seeds. Viruses, vectors, cell organelles, and othernonliving material existing in and reproducible from aliving cell may be deposited by deposit of the host cellcapable of reproducing the nonliving material.

Section 1.201: Need to make a deposit.(a) Where a claimed invention is, or relies on, a

biological material which is not known and readilyavailable to the public and which cannot be described inwriting alone, the disclosure may include a deposit of abiological material deposited in a depository and underconditions complying with these regulations.

(b) Biological material need not be deposited if it isknown and readily available to the public or can be madeor isolated without undue experimentation from knownand readily available material. Samples will be consideredto be readily available even though some requirement oflaw or regulation of the United States or of the country inwhich the depository institution is located permits accessto the material only under conditions imposed for safety,public health, or similar reasons.

(c) The reference to a specific organism or otherbiological material in a specification disclosure does notcreate any presumption that the specific material isnecessary to satisfy 35 U.S.C. 112 or that a deposit inaccordance with these regulations is required.

Section 1.202: Acceptable depository.(a) A deposit shall be made in:

(1) Any International Depositary Authority (IDA) asestablished under the Budapest Treaty on the Interna-tional Recognition of the Deposit of Microorganismsfor the Purposes of Patent Procedure, or

(2) any other depository recognized to be suitable bythe Office, Suitability will be determined by theCommissioner on the basis of the administrative andtechnical competence, and agreement of the depositoryto comply with the terms and conditions applicable todeposits for patent purposes. The Commissioner mayseek the advice of impartial consultants from thebiotechnology industry or governmental agencies onthe suitability of a depository. The depository must:

(i) Have a continuous existence;(ii) Exist independent of the control of the

depositor;(iii) Possess the staff and facilities sufficient to

examine the viability of a deposit and store thedeposit in a manner which ensures that it is keptviable and uncontaminated;

(iv) Provide for sufficient safety measures tominimize the risk of losing biological materialdeposited with it;

(v) Be impartial and objective; and(vi) Furnish samples of the deposited material in

an expeditious and proper manner.

(b) If any depository under paragraph (a) of this sectiondefaults or discontinues the performance of any of thetasks it should perform, the Office will recognize as asubstitute in any pending application or patent a deposit,which must be viable if the biological material is of a kindcapable of self-replication, made with an IDA or deposi-

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App. C--Proposed Rules on Deposit . 175

tory recognized to be suitable by the Office which istransferred to said depository from the defaulting deposi-tory in the manner required for replacing a deposit underSection 1.204.

(c) A depository seeking status under paragraph (a) (2)of this section must direct a communication to theCommissioner which shall:

(1) Indicate the name and address of the depositoryto which the communication relates;

(2) Contain detailed information as to the capacity ofthe depository to comply with the requirements ofparagraph (b) of this section, including information onits legal status, scientific standing, staff and facilities;

(3) Indicate that the depository intends to beavailable, for the purposes of deposit, to any depositorunder these same conditions;

(4) Where the depository intends to accept fordeposit only certain kinds of biological material,specify such kinds;

(5) Indicate the amount of any fees that thedepository will, upon acquiring the status of suitabledepository under paragraph (a)(2) of this section,charge for storage, viability statements and furnishingsof samples of the deposit.(d) A depository having status under paragraph (a) of

this section limited to certain kinds of biological materialmay extend such status to additional kinds of biologicalmaterial by directing a communication to the Commis-sioner in accordance with paragraph (c) of this section. Ifa previous communication under paragraph (c) of thissection is of record, items in common with the previouscommunication may be incorporated by reference.

(e) Once a depository is recognized to be suitable by theCommissioner or has defaulted or discontinued itsperformance under this section, notice thereof will bepublished in the Official Gazette of the Patent andTrademark Office.

Section 1.203: Time of making an originaldeposit.

(a) An original deposit maybe made at any time beforefiling an application for patent or, pursuant to a require-ment that will be made by the examiner no later than thedate the Notice of Allowance and Issue Fee Due is mailed,during pendency of the application for patent.

(b) When the original deposit is made after the effectivefiling date of an application for patent, the applicant shallpromptly submit a verified statement from a person in aposition to corroborate the fact, and shall state, that thebiological material which is deposited is the samebiological material described in the application as filed,except if the person is an attorney or agent registered topractice before the Office, in which case the statementneed not be verified.

Section 1.204: Replacement of deposit(a) Where a depository possessing the original deposit

cannot furnish samples of the deposit for any reason, thedepository shall, promptly after having noted its inabilityto furnish samples, notify the depositor of such inability,indicating the cause thereof. Subject to paragraphs (e), (f),and (g) of this section, the depositor shall be required tomake a replacement deposit of the biological materialwhich was originally deposited within three months ofreceiving notification that the depository cannot furnishsamples. The period for satisfying this requirement isextendable upon petition, only for sufficient cause, andfor a reasonable time specified. Any request for suchextension must be filed on or before the day on which theaction is due, but in no case will the mere filing of therequest effect any extension. The replacement shall bemade in any acceptable depository under Section 1.202(a).

(b) An applicant or patent owner shall notify the Officein writing, in each application or patent affected, as soonas reasonably possible after a replacement deposit ismade. This notification shall state the name and addressof the depository, the accession number for the deposit,the date of making the deposit, the results of a viabilitytest if applicable (as Provided for in Section 1.206), thereason for making the replacement deposit, and include averified statement, except that if made by an attorney oragent registered to practice before the Office, the state-ment need not be verified. If the replacement depositrelates to a pending application, the statement shall be bya person in a position to corroborate the fact, and shallstate, that the biological material which is deposited as areplacement is identical to that originally deposited. Thenotification shall be placed in the relevant application orpatent file.

(c) A depositor’s failure to replace a deposit within thetime required by this section may cause the application orpatent involved to be treated in any office proceeding asif no deposit were made.

(d) In the event a deposit is replaced, the Office willapply a rebuttable presumption of identity between theoriginal and the replacement deposit is relied upon duringany Office proceeding.

(e) Where an application is still pending, the time formaking a replacement deposit shall be the same as thetime for making an original deposit under Section1.203(a). The applicant shall promptly notify the Officeafter receiving notice that the depository possessing theoriginal deposit cannot furnish samples of the deposit forany reason. A replacement deposit may be made duringthis time for any reason, including where the depositorycan furnish samples but the original deposit has becomecontaminated or has lost its capability to function asdescribed in the specification.


(f) In no case is a replacement deposit of a biologicalmaterial necessary where the biological material, inaccordance with Section 1.201(b), need not be deposited.

(g) NO replacement deposit of the biological material isnecessary where a viable deposit is in the depository butthe depository for national security, health or environ-mental safety reasons is unable to provide samples torequesters outside of the jurisdiction where the depositoryis located.

(h) A patentee may not replace a viable deposit wherethe depository can furnish samples. Nothing in theseregulations is intended to prohibit a patentee from makingan additional deposit of a biological material where anearlier deposit, otherwise viable, has become contami-nated or has lost its capability to function as described inthe specification.

Section 1.205: Term of deposit.A deposit shall be made for a term of at least thirty (30)

years after the date of a viable deposit and at least five (5)years after the most recent request for the furnishing of asample of the deposited biological material was receivedby the depository. In any case, samples must be storedunder agreements that would make them available beyondthe enforceable life of the patent for which the deposit wasmade.

Section 1.206: Viability of deposit.(a) A deposit of biological material that is capable of

self-replication either directly or indirectly must be viableat the time of deposit and during the term of deposit.Viability may be tested by the depository. The test mustconclude only that the deposited material is capable ofreproduction. No evidence is necessarily required regard-ing the ability of the deposited material to perform anyfunction described in the patent application.

(b) A viability statement for each deposit of a biologicalmaterial defined in paragraph (a) of this section not madeunder the Budapest Treaty on the International Recogni-tion of the Deposit of Microorganisms for the Purposes ofPatent Procedure must be filed in the application and mustcontain:

(1) The name and address of the depository;(2) The name and address of the depositor;(3) The date of deposit;(4) The identity of the deposit and the accession

number given by the depository;(5) The date of the viability test;(6) The procedures used to obtain a sample if the test

is not done by the depository; and(7) A statement that the deposit is capable of

reproduction.

(c) If a viability test indicates that the deposit is notviable upon receipt, or the examiner cannot, for scientificor other valid reasons, accept the statement of viability

received from the applicant, the examiner shall proceed asif no deposit has been made. The examiner will accept theconclusion set forth in a viability statement issued by adepository recognized under Section 1.202(a).

Section 1.207: Furnishing of samples.(a) The deposit must be made under conditions that

assure that:

(1) Access to the deposit will be available duringpendency of the patent application making reference tothe deposit to one determined by the Commissioner tobe entitled thereto under Section 1.14 and 35 U.S.C.122 and

(2) Subject to paragraphs (b) and (c)of this section,all restrictions imposed by the depositor on theavailability to the public of the deposited material willbe irrevocably removed upon the granting of the patent.

(b) The depository may contract with the depository torequire that samples of a deposited biological materialshall be furnished only if a request for a sample, during theterm of the patent:

(1) Is in writing, signed and dated;(2) Contains the name and address of the requesting

party and the accession number of the deposit; and(3) Is communicated in writing by the depository to

the depositor along with a copy of the request, the dateon which the sample was furnished, and the name andaddress of the party to whom the sample was furnished.

(c) the depositor may require that sample of a depositedbiological material shall be furnished only if the request-ing party has agreed in writing, not to make the depositedbiological material or any biological material derivedtherefrom available during the term of the patent to anythird party without the written permission of the deposi-tor, and to assume the burden of proof concerningcompliance with the agreement. With the exception of theCommissioner and an acceptable depository under Sec-tion 1.202 in which the requesting party has made a newdeposit for patent purposes of the deposited biologicalmaterial or any biological material derived therefrom, anyperson or entity other than the requesting party and thedepositor shall be deemed to be a third party under thisparagraph. For the purposes of this paragraph, anybiological material shall be deemed to be derived from thedeposited biological material if it is replicated from, orwould not have been produced but for access to, thedeposited biological material, provided that the derivedmatter still exhibits the essential characteristics of thedeposited biological material.

(d) Upon request, the Office will certify whether thedeposit has been stated to have been made underconditions which make it available to the public as of the

App. C-Proposed Rules on Deposit 177

issue date of the patent grant provided the requestcontains:

(1) The name and address of the depository:(2) The accession number given to the deposit;(3) The patent number and issue date of the patent

referring to the deposit; and(4) The name and address of the requesting party.

Section 1.208: Examination procedures.(a) The examiner shall determine pursuant to Section

1.104 in each application if a deposit is needed, in caseone has not been made, or if a deposit actually made isacceptable for patent purposes. A deposit accepted in anyacceptable depository under Section 1.202(a) shall beaccepted for patent purposes if made under conditionscomplying with Section 1.207(a). If a deposit is requiredand has not been made or replaced in accordance withthese regulations, the examiner shall in an Office actionreject the affected claims in the application under theappropriate provision of 35 U.S.C. 112, explaining whya deposit actually made cannot be accepted.

(b) The applicant shall respond to a rejection underparagraph (a) of this section by:

(1) Making an acceptable original or replacementdeposit or assuring the Office in writing that anacceptable deposit will be made on or before the dateof payment of the issue fee, or

(2) Establishing that the involved biological materialis known and readily available to the public, or

(3) Arguing why a deposit is not required under thecircumstances of the application considered. Otherreplies to the examiner’s action shall be considernon-responsive. The rejection will be repeated untileither paragraph (b)(l) or (b)(2) of this section issatisfied or the examiner is convinced that a deposit isnot required.

(c) If an application is otherwise in condition forallowance except for the required deposit and the Officehas received a written assurance that an acceptable depositwill be made on or before payment of the issue fee, theOffice will mail to the applicant a Notice of Allowanceand Issue Fee Due together with a requirement that therequired deposit be made within three months. The periodfor satisfying this requirement is expendable under 37CFR 1.136. Failure to make the required deposit inaccordance with this requirement will result in abandon-ment of the application for failure to prosecute.

(d) For each deposit made pursuant to these regula-tions, the specification shall contain:

(1) Accession number for the deposit;(2) Date of the deposit;(3) Taxonomic description of the deposit; and(4) Name and address of the depository.

SOURCE: U.S. Federal Register, 1988: 53(194), 39420-39432.

Appendix D

Participants, OTA Workshop on Federal Regulationsand Animal Patents

Participant@ Workshop on Federal Regulation and Animal PatentsDecember 11, 1987

Stanley AbramsonEnvironmental Protection AgencyWashington, DC

David BeierHouse Subcommittee on Courts, Civil Liberties

and Administration of JusticeWashington, DC

David BerkowitzU.S. Department of AgricultureWashington, DC

Mary ClutterNational Science FoundationWashington, DC

Joel CohenAgency for International DevelopmentWashington, DC

Mary Ann DanelloFood and Drug AdministrationRockville, MD

William FurtickAgency for International DevelopmentWashington, DC

Roger GerritsU.S. Department of AgricultureWashington, DC

Alan GoldhammerIndustrial Biotechnology AssociationWashington, DC

Thora HalsteadNational Aeronautics and Space AdministrationWashington, DC

Diane HoffmanUniversity of Maryland School of LawBaltimore, MD

Edward Korwek, Workshop ChairHogan & HartsonWashington, DC

Edward LaRoeU.S. Department of the InteriorWashington, DC

Terry MedleyU.S. Department of AgricultureWashington, DC

Margaret MellonNational Wildlife FederationWashington, DC

George ShibleyU.S. Department of AgricultureWashington, DC

Lana SkirbollAlcohol, Drug Abuse, and Mental Health AdministrationRockville, MD

Ann SorensenAmerican Farm Bureau FederationPark Ridge, IL

Charles Van HornU.S. Patent and Trademark OfficeWashington, DC

Charles WarrenU.S. Patent and Trademark OfficeWashington, DC

Arthur WhiteU.S. Patent and Trademark OfficeWashington, DC

Ann WhiteheadU.S. Department of AgricultureWashington, DC

Richard WyattNational Institutes of HealthBethesda. MD

Daniel JonesU.S. Department of AgricultureWashington, DC

--178–

Appendix E

List of Contractor Documents

For this special report, OTA commissioned reports on various topics. The manuscripts of the following contractreports are available from the National Technical Information Service, 5285 Port Royal Road, Springfield, VA, 22161,telephone (703) 487-4650.

“Intellectual Property Protection for Plants and Varie- “Ethical Issues Related to the Patenting of Animals,”ties,” Jeffrey L. Ihnen, Robbins & Laramie, Washington, Baruch A. Brody, Baylor College of Medicine, Houston,DC. TX.

“Requirements for Deposit of Micro-organisms, Plants, “Commercial Applications and Economic Impact ofand Animals and the Role of the Independent Deposi- Patented Animals,” William Lesser, Cornell University,tory,” Bobbie A. Brandon, American Type Culture Ithaca, NY,Collection, Rockville, MD.

“Agricultural Applications and the Economic Impact ofPatents on Plant Breeding,” Richard J. Patterson, R.J.Patterson and Associates, Research Triangle Park, NC.

--179–

Appendix F

Acknowledgments

>

OTA would like to thank the members of the advisory panel, workshop participants, contractors, and the manyindividuals and organizations that supplied information for the study. In addition, OTA acknowledges the followingindividuals for their comments on drafts of this report.

Stanley H. AbramsonKing & SpaldingWashington, DC

Reid AdlerFinnegan, Henderson, Farabow,

Garrett & DunnerWashington, DC

George J. Annas,Boston UniversityBoston, MA

Geraldine F. BaldwinPennie & EdmondsNew York, NY

Rev. Verlyn L. BarkerUnited Church Board for Homeland

MinistriesNew York, NY

John BartonStanford Law SchoolStanford, CA

Benjamin C. BoluskyNational Association of Plant Patent

OwnersWashington, DC

John R. BoyceAmerican Veterinary Medical

AssociationSchaumburg, IL

Bobbie BrandonAmerican Type Culture CollectionRockville, MD

Ludwig BaeumerWorld Intellectual Property

OrganizationGeneva, Switzerland

Monica Broderick-CantwellUniversity of FloridaGainesville, FL

Baruch A. BrodyBaylor College of MedicineHouston, TX

Marcia D. BrodyAmerican Veterinary Medical

AssociationWashington, DC

James BuchananConsumer and Corporate Affairs

CanadaHull, Quebec, Canada

L.J. (Bees) ButlerUniversity of CaliforniaDavis, CA

Noel J. ByrneUniversity of LondonLondon, England

James A. CairnsSandier & GreenblumArlington, VA

Arthur CaplanUniversity of MinnesotaMinneapolis, MN

Terence J. CentnerThe University of GeorgiaAthens, GA

Gary ComstockWestern Rural Development CenterCorvallis, OR

Stephen CrespiPatent ConsultantSussex, United Kingdom

Kurt Darr,Ethics ForumMcLean, VA

Janet V. Dorigan,U.S. Office of Science and

Technology PolicyWashington, DC

Hubert E. DubbFlieser, Dubb, Meyer& LovejoySan Francisco, CA

John H. DuesingCIBA-GEIGY AGBase], Switzerland

–180--

Benton S. Duffett, Jr.Bums, Deane, Swecker & MathisAlexandria, VA

William H. DuffeyMonsanto Co.St. Louis, MO

Donald DuvickPioneer Hi-Bred InternationalDes Moines, IA

Steve EberhartNational Seed Storage LaboratoryColorado State UniversityFort Collins, CO

Robert EvensonYale UniversityNew Haven, CT

Peter FarnhamAmerican Society for Biochemistry

and Molecular BiologyBethesda, MD

Irving FeitHoffmann and BarronJericho, NY

Michael W. FoxThe Humane Society of the United

statesWashington, DC

Joanne M. GiesserSandozEast Hanover, NJ

John GolenskiSociety for Bioethics ConsultationBerkeley, CA

Joseph H. GuthFish & NeaveNew York, NY

Eric M. HallermanUniversity of MinnesotaSt. Paul, MN

Norman D HansonFelfe & LynchNew York, NY

App. F--Acknowledgments ● 181

Burke HealeySouthern Cross RanchDavis, OK

Maureen HinkleNational Audubon SocietyWashington, DC

Diane E. HoffmanUniversity of Maryland Law SchoolBaltimore, MD

Michael F. HutgensUniversity of IllinoisUrbana, IL

Warren HyerAmerican Biotechnology AssociationPrinceton, NJ

Jeffrey L. IhnenRobbins & LaramieWashington, DC

Paul M. JanickeArnold, White & DurkeeHouston, TX

Daniel D. JonesU.S. Department of AgricultureWashington, DC

Geoffrey KarnyDickstein, Shapiro and MorinVienna, VA

Daniel J. KevlesCalifornia Institute of TechnologyPasadena, CA

John KinsmanLaValle, WI

Walter N. KimMinnesota Mining and Manufacturing

co.St. Paul, MN

Robert W. KraussFederation of American Societies for

Experimental BiologyBethesda, MD

Fred KuchlerU.S. Department of AgricultureWashington, DC

David LambertAmerican Seed Trade AssociationWashington, DC

William LesserCornell UniversityIthaca, NY

Laurel A. LeachAnimal Health InstituteAlexandria, VA

John E. LynchFelfe & LynchNew York, NY

Arlene MacLinWashington, DC

Patrick MahaffyE.M. Warbug PincusNew York, NY

Bruce W. MarionUniversity of WisconsinMadison, WI

Foil W. McLaughlinNorth Carolina Crop Improvement

AssociationRaleigh, NC

Terry MedleyU.S. Department of AgricultureWashington, DC

Robert MergesBoston University School of LawBoston, MA

S. Leslie MisrockPennie & EdmondsNew York, NY

Albert S. MoraczewskiPope John XXIII Medical-Moral

Research & Education CenterHouston, TX

Ray MoseleyUniversity of FloridaGainesville, FL

Lawrence MossBabson CollegeWellesley, MA

Thomas H. MurrayCase Western Reserve UniversityCleveland, OH

J. Robert NelsonTexas Medical CenterHouston, TX

Richard NelsonHolstein AssociationBrattleboro, VT

John R. NorellProvesta Corp.Bartlesville, OK

Robert J. NorthMerck & Co., Inc.Rahway, NJ

Marvin D. PaceAmerican Breeders ServiceDeForest, WI

Tom PalmerCompetitive Enterprise InstituteWashington, DC

Richard K. PerrinNorth Carolina State UniversityRaleigh, NC

Walter PlosilaMontgomery County High

Technology Council, Inc.Rockville, MD

Brenda D. Politi, D.V.M.SmithKline Beckman Animal Health

ProductsWest Chester, PA

David PramerRutgers UniversityWaksman Institute of MicrobiologyPiscataway, NJ

Lisa RainesIndustrial Biotechnology AssociationWashington, DC

Bernard E. RollinColorado State UniversityFort Collins, CO

Andrew RowanTufts UniversityBoston, MA

Vernon W. RuttanUniversity of MinnesotaSt. Paul, MN

Mark SagoffUniversity of MarylandCollege Park, MD


A. Allan SchmidMichigan State UniversityEast Lansing, MI

John W. SchnellerSpencer & FrankWashington, DC

Philip M. ShapiroIntegrated GeneticsFramingham, MA

W. Rodney SharpDNA Plant TechnologyCinnaminson, NJ

Robert ShawFranklin Pierce Law CenterConcord, NH

Peggy ShriverNational Council of ChurchesNew York, NY

Ken SibleyBell, Seltzer, Park & GibsonRaleigh, NC

Fred SmithCompetitive Enterprise InstituteWashington, DC

Ralph E. SmithColorado State UniversityFort Collins, CO

Walter SmoldersSandoz Ltd.Basel, Switzerland

A. Ann SorensenAmerican Farm Bureau FederationPark Ridge, IL

A. David SpevakLaurel, MD

Joseph StrausMax Planck Institute of Patent LawMunichFederal Republic of Germany

William SzkrybaloPharmaceutical Manufacturers

AssociationWashington, DC

J. Donald ToddAnimal Health InstituteAlexandria, VA

Sue TolinVirginia TechBlacksburg, VA

Charles E. Van HornU.S. Patent and Trademark OfficeWashington, DC

Keith WalkerPlant GeneticsDavis, CA

Robert J. WallUSDA/ARSBeltsville, MD

Marc A. WesselsInternational Network for Religion

and AnimalsNorth Wales, PA

Luther WilliamsNational Institutes of HealthBethesda, MD

Sidney B. Williams, Jr.The Upjohn CompanyKalamazoo, MI

Zachary WochokPlant Genetics, Inc.Davis, CA

Herbert M. WolfsonE.I. du Pont de Nemours and

Company, Inc.Wilmington, DE

Donald H. ZarleyZarley, McKee, Thomte, Voorhees

& SeaseDes Moines, IA

Robert G. ZimblemanAmerican Society of Animal ScienceBethesda, MD

Appendix G

List of Acronyms and Glossary of Terms

List of Acronyms

ADAMHA — Alcohol, Drug Abuse, and Mental Health

AIDAIDS

ARSATCCBPAICCPACSRSDNAEPAEPCEPOFDAFDCAFIFRA

FSISIDAIMRU

ISAIVIMMTVNASA

NEPANIHNRRL

NSFOTA

PCTPLPPA

PVPAPVPCPVPORNA(PATSCAUN

Administration— Agency for International Development— Acquired Immunodeficiency Syndrome— Animal and Plant Health Inspection Serv-

ice— Agricultural Research Service (USDA)— American Type Culture Collection— Board of Patent Appeals and Interferences— U.S. Court of Customs and Patent Appeals— Cooperative State Research Service (USDA)— deoxyribonucleic acid— Environmental Protection Agency— European Patent Convention— European Patent Office— Food and Drug Administration— Federal Food, Drug and Cosmetic Act— Federal Insecticide, Fungicide, and Rodenti-

cide Act— Food Safety and Inspection Service (USDA)— International Depositary Authority— Institute of Microbiology at Rutgers Uni-

versity— international searching authority— In Vitro International, Inc.— mouse mammary tumor virus— National Aeronautics and Space Administra-

tion— National Environmental Policy Act— National Institutes of Health— Northern Regional Research Laboratory

(Agricultural Research Service CultureCollection)

— National Science Foundation—Office of Technology Assessment (U.S.

Congress)— Patent Cooperation Treaty— Public Law— Plant Patent Act of 1930— U.S. Patent and Trademark Office— Plant Variety Protection Act— Plant Variety Protection Certificate— Plant Variety Protection Office (USDA)— ribonucleic acid— tissue plasminogen activator—Toxic Substances Control Act— United Nations

International Union for the Protection ofNew Varieties of Plants

USDA — United States Department of Agriculture—World International Property Organiza-

tion

Glossary of TermsAmino acid: Any of a group of 20 molecules that are

linked together in various combinations to formproteins. Each different protein is made up of a specificsequence of these molecules with the unique sequencecoded for by DNA.

Animal: A nonhuman living being with a capacity forspontaneous movement and a rapid motor response tostimulation. Animals can be divided into two groups,invertebrates (animals without backbones) and verte-brates (animals with backbones).

Animal deposit: The new patentable status of animalsraises questions about their placement in depositoriesas part of the patent application process. To date noanimal has been deposited in a depository, and thedeposit of whole animals would not be practical, but itis conceivable that the maintenance of frozen embryosin depositories might be possible provided that theembryos can be successfully frozen and recovered. Seedeposit and depositories.

Animal patents: The patenting of nonhuman transgenicanimal life forms. The United States is currently theonly country that has issued a patent for an animaldeveloped using biological techniques, The ability topatent animals introduces a new legal concept ofanimal ownership and raises a number of ethical,economic, and practical issues.

Asexual reproduction: As used in this report—reproduction of plants by purely vegetative meanswithout the function and interaction of the two sexes.Examples of asexually reproduced plants are roses,peach trees, and lilies.

Bacterium (pi. bacteria): Any of a group of one-celledmicro-organisms having round, rodlike, spiral, orfilamentous bodies that are enclosed by a cell wall ormembrane and lack fully differentiated nuclei.

Biotechnology: any technique that uses living organismsor substances from those organisms to make or modifya product, to improve plants or animals, or to developmicro-organisms for specific uses. These techniquesinclude the use of novel technologies such as recombi-nant DNA, cell fusion, and other new bioprocesses.See genetic engineering and recombinant DNA.

-183-

——


Budapest Treaty on the International Recognition ofthe Deposit of Microorganisms for the Purposes ofPatent Procedure: This Treaty, established in 1977,became effective in 1980. It requires that thosecontracting states, which allow or require the depositof micro-organisms as part of their patent procedures,deposit these micro-organisms in a recognized Inter-national Depository Authority (IDA) that complieswith Treaty requirements, and maintain them there for30 years. Three IDAs are currently recognized in theUnited States. See depositories and InternationalDepositary Authority.

Carrier: See vector.Cell: The smallest component of life. A membrane-bound

protoplasmic body capable of carrying on all essentiallife processes. A single cell unit is a complex collectionof molecules with many different activities all inte-grated to form a functioning, self-assembling, self-regulating, and self-reproducing biological unit.

Cell culture: The propagation of cells removed frommulticellular organisms in a laboratory environmentthat has strict sterility, temperature, and nutrientrequirements. The term is also used to refer to anyparticular individual sample.

Cell fusion: The joining of the membrane of two cells,thus creating a single hybrid cell that contains thenuclear matter from the parent cells.

Chakrabarty decision: A landmark 1980 Supreme Courtdecision holding that a live, human-made, micro-organism, that had been genetically engineered in alaboratory by Ananda Chakrabarty, was patentable asa “manufacture” or “composition of matter”.

Chromosome: A thread-like structure contained in thenucleus of a cell that carries the genes that conveyhereditary characteristics.

Claim: The part of the patent that points out and distinctlyclaims the subject matter that the applicant regards asthe invention. Claims represent the metes and boundsof the property to be protected. See specification.

Consequential reasoning: A form of ethical reasoningthat analyzes the consequences of a particular action(e.g., the encouragement and development of newinventions). Consequentialist reasoning has been usedto outline the pros and cons of patenting animals.

Copyright: Copyright protection applies to eight catego-ries of works: literary; musical; dramatic; pantomimeand choreographic; pictorial, graphic and sculptural;motion pictures and audio-visual work; sound record-ing; and computer programs. Copyright protects theexpression of an idea, not the idea itself.

Cultivar: An international term denoting certain culti-vated plants that are clearly distinguishable fromothers by one or more characteristics and which whenreproduced retain those characteristics. In the United

States “variety” is considered to be synonymous withcultivar (derived from cultivated variety). See plantvariety.

Deoxyribonucleic acid (DNA): The molecule in chro-mosomes that is the repository of genetic informationin all organisms (with the exception of a small numberof viruses in which the hereditary material is ribonu-cleic acid—RNA). The information coded by DNAdetermines the structure and function of an organism.

Deposit: Placement of micro-organisms, vectors, cells,plant tissues, seeds, and other biological materials thatare newly isolated, novel, manmade, or not generallyavailable to the public on a long-term basis, inrecognized patent depositories as part of the patentapplication process. See animal deposit and deposito-ries.

Depositories: A facility that accepts, maintains, classi-fies, and distributes cultures of micro-organisms,viruses, cells, and other genetic and biological mate-rial. Since 1983, a few depositories have begun toaccept seeds and plant tissue cultures, but to date nodepository has accepted any animal. Depositories canbe public, private, for profit, or nonprofit. Threedepositories in the United States are currently recog-nized as International Depositary Authorities (IDAs)for patent purposes. See Budapest Treaty and Interna-tional Depositary Authority.

Enzyme: Any of a group of catalytic proteins that areproduced by living cells and that mediate and providechemical processes without themselves being de-stroyed or altered.

Eukaryote: A cell or organisms with a membrane-bound,structurally discrete nucleus and other well-developedsubcellular compartments. Eukaryotes include all organ-isms except viruses, bacteria, and blue-green algae.

First generation hybrid: The first generation resultingfrom a cross mating of two distinctly different parentaltypes.

Gene: The fundamental physical and functional unit ofheredity, the portion of a DNA molecule that is madeup of an ordered sequence of nucleotide base pairs thatproduce a specific product or have an assignedfunction.

Genetic engineering: Technologies (including recom-binant DNA methods) used by scientists to isolategenes from an organism, manipulate them in thelaboratory, and insert them stably in another organism.See recombinant DNA and biotechnology.

Genotype: The genetic constitution of an organism asdistinguished from its physical appearance (pheno-type).

Germplasm: The total genetic variability, represented bygerm cells or seeds, available to a particular populationof organisms.

App. G--List of Acronyms and Glossary of Terms ● 185

Harvard mouse: A transgenically engineered mousedeveloped at Harvard and patented in April 1988, thefirst animal ever to be patented, The Harvard mousewas engineered to be unusually susceptible to cancerand was developed for use in the testing of carcinogensand cancer therapies.

Hybrid: An offspring of a cross between two geneticallyunlike and individual plants or animals.

Hybridoma: A new cell resulting from the fusion of aparticular type of immortal tumor cell line, a myeloma,with an antibody-producing B lymphocyte. Cultures ofsuch cells are capable of continuous growth andspecific (i.e., monoclinal) antibody production.

Hydrolysis: A chemical process of decomposition in-volving the splitting of a chemical bond and theaddition of the elements of water.

Immobilized enzymes: Enzymes that are bonded to acarrier or trapped within a carrier, making them morestable when exposed to changes in reaction conditions.

Inoculum: Material introduced into a living organism.Intellectual property: That area of the law involving

patents, copyrights, trademarks, trade secrets, andplant variety protection.

International Depositary Authority (IDA): Deposi-tories recognized for patent purposes under the Buda-pest Treaty. Such depositories must be located in amember country and must comply with requirementsessential for them to carry out their tasks in compliancewith the Treaty. As of January 1988, a total of 19institutions had acquired IDA status; 3 are in theUnited States. See deposit.

Invention: An original device, contraption, or processdeveloped after study and experiment. Geneticallyengineered animals, plants. and micro-organisms havebeen recognized as patentable forms of biologicalinvention in the United States, but this is not always thecase in other countries, especially where animals areconcerned.

March-in-rights: The right of a Federal agency tointercede and require the granting of a license if aninvention is not practiced.

Microinjection: A technique used for the insertion ofgenes from one cell into another cell, in which highlypurified copies of a specific gene of interest areinjected into a cell. Copies of one specific gene ofinterest can be injected into a fertilized animal egg. Theegg is then surgically implanted in a female animal’sreproductive tract.

Micro-organisms: Minute, microscopic, or submicro-scopic living organisms (e.g., bacteria, mycoplasma,and viruses.)

Monoclinal antibodies: Identical antibodies that rec-ognize a single specific antigen and are produced by aclone of specialized cells.

National treatment: A key principle of the Paris UnionConvention, which provides that, with regard to theprotection of industrial property, nationals of anycountry of the Union are to enjoy in any of the othercountries of the Union the advantages that theirrespective laws concerning industrial property grant totheir own nationals, See Paris Union Convention.

Neoplasm: A new growth of tissue serving no physi-ological function (e.g. a tumor).

Novelty: One of the criteria used in the evaluation ofpatent applications. The invention or discovery beingevaluated must be new and must not have previouslyexisted through the work of others in order to beaccepted on the grounds of novelty.

Obviousness: Obviousness is one of the criteria used inthe evaluation of patent applications, Obviousnessaddresses the degree of difference between the inven-tion being evaluated and that which is already knownand available. See prior art.

Oncogenesis: The induction or formation of tumors.Paris Union Convention: A universal treaty that estab-

lishes certain basic rights for residents and nationals ofits member countries to protect industrial propertyrights (patents, utility models, industrial designs,trademarks, service marks, trade names, indications ofsource and unfair competition) under the laws of othermember countries. The Convention is administered bythe World Intellectual Property Organization (WIPO).See national treatment.

Patent: A patent is a grant issued by the U.S. Governmentthrough the U.S. Patent and Trademark Office (PTO)that gives the patent owner the right to exclude allothers from making, using, or selling a patentedinvention within the United States and its territoriesand possessions for the term of the patent (17 years).A patent does not grant the inventor any affirmativeright to use an invention. Laws of nature, physicalphenomena, and abstract ideas cannot be patented.Patents have come to be viewed by many as vital forthe protection of commercial and intellectual interestsin the uses and products of various biotechnologytechniques. The implications of patenting living organ-isms are the subject of some debate.

Patent infringement: Patent encroachment in a way thatviolates the personal property rights of the patentholder.

Plant breeding: The development of plants with certaindesirable characteristics, such as disease resistance andimproved harvestability and cold tolerance.

Plant patents: Authorized by the Plant Patent Act of1930, plant patents protect asexually reproduced plantvarieties, including cultivated sports, mutants, hybrids,and newly found seedlings. They cannot be obtained


for tubers or wild varieties found in nature that are notasexually reproduced.

Plant variety: Cultivated plants that are clearly distin-guishable from others by one or more characteristics,and that when reproduced retain those distinguishingcharacteristics. See cultivar.

Plant variety protection: Patent-like protection forcertain sexually produced plants. Plant variety protec-tion is governed by Federal statute (the Plant VarietyProtection Act), which is administered by the U.S.Department of Agriculture.

Plant variety protection certificate (PVPC): A cer-tificate authorized by the Plant Variety Protection Actthat provides a form of protection for new, distinct,uniform, and stable varieties of sexually reproducinguncultivated plants, and first-generation hybrids.

Plasmid: An extrachromosomal, circular piece of DNAfound in the cytoplasm and capable of replicating andsegregating independently of the host chromosome.See vector.

Polyploid: Having a chromosome number that is greaterthan two of the monoploid number. Polyploid oysterswere among the first nonnaturally occurring, nonhu-man, multicellular, living organisms to be declaredpatentable subject matter.

Prior art: That which is already known or available, partof the criteria of obviousness used in evaluating patentapplications. See obviousness.

Recombinant DNA: A broad range of techniques involv-ing the controlled manipulation of the genetic materialof organisms. These techniques and their productshave enormous potential in the development of newand improved products and processes in a wide varietyof industrial sectors. The term is often used synony-mously with genetic engineering. It is also used todescribe a DNA molecule constructed by geneticengineering techniques composed of DNA from differ-ent individuals or species. See biotechnology andgenetic engineering.

Restriction enzymes: Certain bacterial enzymes thatrecognize specific short sequences of DNA and cut theDNA where these sites occur. Restriction enzymes canbe used to isolate a gene that has been identified in thehereditary material of an organism.

Right of Priority: A right granted by the Paris UnionConvention of 1970, which enables any resident ornational of a country to first file a patent application inany member country and thereafter to file a patentapplication for the same invention in any othermember country within 12 months of the originalfiling, thus ensuring that the subsequently filed appli-cations enjoy the right of priority established by thefirst filing date.

Seed: A mature ovule, consisting of an embryonic plattogether with a store of food, all surrounded by aprotective coat. A seed usually develops following thefertilization of an egg cell by a male generative cellfrom a pollen grain.

Sexual reproduction: Reproduction that occurs as aresult of the interaction between the two sexes. Inplants, sexual reproduction occurs when a female eggcell is fertilized by a male generative cell from a pollengrain. Examples of sexually reproduced plants arecorn, wheat, and sorghum.

Somatic cell: One of the cells of the body that make upthe tissues, organs, and parts of the individual, otherthan the germ cells.

Specification: For purposes of this assessment, a specifi-cation is the written part of a patent application thatdescribes an invention and the manner and process ofmaking it and using it clearly and concisely. Thespecification also includes one or more claims. Seeclaim.

Sport: A plant or a part of a plant that abruptly shows anoticeable difference in appearance. Examples are adeeper red in a red apple, or an unusual color or shapein a flower. If these changes are the result of a truemutation they may be maintained by vegetative meansonce they have occurred.

Species: Reproductive communities and populations thatare distinguished by their collective manifestation ofranges of variation with respect to many differentcharacteristics and qualities.

Species barrier: The idea that there is a natural barrierbetween species that preserves their integrity oridentity. This idea has no known foundation inbiology. The parameters that limit the ranges andvariations of species are fluid and variable, and speciesexist as reproductive communities rather than asseparate creatures.

Species integrity: The idea that a species has integrity asa biological unit. This would have to be based on theidentity of the genetic material carried by the species.However, it is not clear how a species might be definedgenetically, and this issue is the subject of debateamong those seeking to understand the nature ofspecies.

Taxonomy: The discipline of naming and describingspecies of plants and animals and their orderlyclassification according to their presumed naturalcharacteristics and relationships.

Tissue culture: The propagation of tissue removed fromorganisms in a laboratory environment that has strictsterility, temperature, and nutrient requirements.

Tissue plasminogen activator (tPA): A geneticallyengineered protein drug that helps to dissolve bloodclots in patients who have suffered heart attacks.

App. G--List of Acronyms and Glossary of Terms ● 187

Trademark: A distinctive mark, motto, device, oremblem that a manufacturer stamps, prints, or other-wise affixes to his goods so that they can be identifiedin the market and their source or origin vouched for.Trademarks are governed by Federal and State law.

Trade secret: Information used in a trade or business thatis kept secret by its owner to provide a competitivebusiness advantage (e.g. a plan, process, tool, mecha-nism, chemical compound, customer list, or formula).Protection of trade secrets is governed by State law.

Transgenic animals: Animals whose hereditary DNAhas been augmented by the addition of DNA from asource other than parental germplasm usually fromanother animal or a human, in a laboratory, using

recombinant DNA techniques. At the moment, most ofthe research in this field is done on mice, but majorresearch efforts in transgenic animal modification arealso focusing on cattle, swine, sheep, poultry, and fish.

Utility patents: Usefulness or utility is one of the criteriaused to evaluate patent applications, Utility patents arepatents issued to inventors of any new and usefulprocess, machine, manufacture, or composition or anynew and useful improvement thereof.

Vector: A carrier or transmission agent. In the context ofrecombinant DNA technology, a vector is the DNAmolecule used to introduce foreign DNA into hostcells. Recombinant DNA vectors include plasmids,bacteriophages, and other forms of DNA.

.—

Index

Index

Aaronson v. Quick Point Pencil Co., 46Agency for International Development (AID), use and

regulation of genetically altered animals by, 16, 109Agreements, international

concerning biological inventions, 21, 155-159see also individual agreements

Agricultural Research Service (ARS)--USDA, use andregulation of genetically engineered animals by, 16, 106

Agricultural Research Service Culture Collection. See NorthernRegional Research Laboratory

Agricultureimpacts of plant protection on U. S., 84-87proprietary protection variation among crops used in, 79,82-

84transgenic animal patenting’s effects on, 136-137see also individual crop types

Alcohol, Drug Abuse, and Mental Health Administration(ADAM HA ), use and regulation of genetically engineered-animals by. 105

American Association for Accreditation of Laboratory AnimalCare, 105

American Fruit Growers v. Brogdex, 93American Type Culture Collection (ATCC), 141-142, 147, 149,

150Animal and Plant Health Inspection Service (APHIS)--

(USDA), use and regulation of genetically engineeredanimals by, 107

Animalshistory of patenting, 32intellectual property protection’s economic impacts on four

classes of, 17, 119-123see also Cattle; Livestock; Poultry; Transgenic animals

Animal Welfare Act of 1985, 103, 104, 107, 133Annas, George, 91 Applications, patent

requirements for, 40-41time required for PTO examination of, 9, 60

Argentina, patent law in, 164Aristotle. 99Arizona. beef cattle production in, 117Armstrong Nurseries, Inc. v. Smith et. al., 72Asgrow Seed Co. v. Kunkle Seed Co., Inc. et. al., 75Asilomar Conference, 30Australia, intellectual property law in, 162Australian Patent Office, 162

Barnes, F., 23Baylor College of Medicine (Texas), 23Beef. See Cattle; LivestockBelgium, national patent law of, 161Biotechnology

definition of, 3intellectual property protection strategies in industry

involving plant, 84patent activity in emerging areas of, 55-56patent litigation related to, 8-9,56-60

patents’ impact on commercialization of, 8,55see also DNA

Board of Patent Appeals and Interferences (BPAI)—PTO, 41Ex parte Allen decision by, 93utility patent ruling by, 11, 31-32, 74-75, 79

Bolar Pharmaceutical Co., 58-59Boyer, Herbert, 56Brave New World, 31Brazil, patent law in, 164Breeding

European laws concerning plant, 159gene insertion techniques use in future, 13,97-98PPA encouragement of, 9-10,71-72,85PVPA encouragement of. 10-11,72-73,85-87

British Patent Act of 1977, 161Budapest Treaty on the International Recognition of the Deposit

of Microorganisms for the Purpose of Patent Procedure, 18,141, 142, 144, 147, 158-159

Bulgaria, intellectual property law in, 163Burger, Warren, 49, 125Burroughs-Wellcome (PLC)--U. K., 55

California, 83beef cattle production in, 117milk production in, 116

California, University of (San Francisco), 30,56Canada, patent law in, 164-165Canadian Patent Act, 164Canadian Patent Office, 164Cattle

beef, 117dairy, 116-117see also Livestock

Cetus, stock offering by, 55Chakrabarty, Ananda, 31,52Charles River Biotechnical Services, 121Chickens. See PoultryChile, intellectual property law in, 164Cohen, Stanley N., 56Cohen-Boyer patent, 30,56Commercialization, patents’ impact on biotechnology, 8,55Commission of the European Communities, 161, 162Congress, U.S.

issues and options for, 22-26patent policies adopted by, 30,32,55subject matter patentability intended by, 5, 37, 39

Contracting. See LicensingCooperative State Research Service (CSRS)—USDA, use and

regulation of genetically engineered animals by, 16, 106-107

Coordinated Framework for Regulation of Biotechnology,103

Copyright Office, U. S., subject matter policy of, 43Copyrights, basic concepts and workings of, 5,43-44Corcoran, Elizabeth, 27

--191–

.


Corn, proprietary protection methods used in seed industry forhybrid, 82

Court of Customs and Patent Appeals, U.S. (CCPA), depositdecision by, 143

Courts. See Court of Customs and Patent Appeals, U. S.; Liti-gation; Supreme Court, U.S.

Culture depositories. See International Depositary AuthoritiesCzechoslovakia, intellectual property protection in, 163

Darwin, Charles, 98, 100Data collection

on Federal regulation of genetically altered animals, 16, 102-110

on post-Chakrabarty biotechnology-related patent activity,55-56

on seed and plant industries’, universities’, and nurseries’opinions concerning intellectual property protection, 11,78,80-81

Delta & Pine Land Co. v. Peoples Gin Co., 75Department of Agriculture, U.S. (USDA), 24,70

deposit issues and, 147, 149egg pricing link to market reports from, 116farmer’s exemption abuses, limitations and, 25,79pork production estimate by, 117PVPA administration by, 7, 11,74soybean planting survey by, 79, 83use and regulation of genetically engineered animals by, 16,

106-108Department of Commerce, U.S. (DOC), 147Department of Defense, U.S. (DoD), 127Department of Energy, U.S. (DOE), use and regulation of

genetically engineered animals by, 110-111Department of Health and Human Services, U.S. (DHHS), 147Deposit

access to samples on, 148-149considerations when choosing plant protection methods, 82issues involving, 18-21, 142-147maintenance, 147-148methods for plant and animal, 149-150PPA and, 72PTO policy on, 18-20,26, 143-146, 148

Depositories. See International Depositary AuthoritiesDesign patents

as type of subject matter patent, 38see also Patents; Subject matter

Diamond v. Chakrabarty, 7-8,31,33,93biotechnology R&D encouragement from ruling in, 54,55,

85-87details of decision in, 51-54ethical questions raised by, 130-137patent activity following, 8-9,55-56,60

DNA (Deoxyribonucleic acid)as copyright subject matter, 43-44development of technology for recombinant, 51Federal Government research involving recombinant, 16,

102-110NIH guidelines for research involving recombinant, 105techniques for producing transgenic animals, 12-13,93-98see also Biotechnology

Duffey, William, 49

du Pont de Nemours & Co., E. I., 12,32, 121

Economicsof animal patenting on the Third World, 135-136of biotechnology-related R&D, 55of farmer’s exemption prohibition, 86of on-farm agricultural seed and plant use, 78of private plant breeding, 9, 11,71,73, 85-87of royalty collection from animal patents, 121-122of seed industries, 82, 84of transgenic animal patenting on consumers, 115, 123of transgenic animal patenting on inventors, 16-17, 119-120,

123, 115of transgenic animal patenting on users and

producers (licensees), 115, 120-122, 123of transgenic animal research, 94-95

Endangered Species Act, 103, 110Environmental Protection Agency, U.S. (EPA), use and

regulation of genetically engineered animals by, 108Ethics, involved in animal patenting, 17-18,30-31, 127-137Europe, 147

animal patent applications in, 23, 156, 158intellectual property laws of counties in Eastern, 162-163patentable subject matter in, 22, 160UPOV formation in, 10,73see also European Common Market

European Common Market (EC), 162European Patent Convention and, 158see a/so Europe: individual member counties of

European Patent Convention (EPC), 21,23animal patenting opposition by members of, 135national patent laws in member countries of, 161-162patentable subject matter in member countries, 160-161purpose and workings of, 158see also individual signatories of

European Patent Office (EPO), 21,23, 148, 157, 158, 160Ex parte Allen, 30, 33,93Ex parte Grayson, 93Ex parte Hibberd

biotechnology R&D encouragement from ruling on, 85utility patent use ruling in, 11, 30, 33,74-75, 93

Farmers, PVPA exemption for, 11,25,73-74,79,83,86Federal Food, Drug, and Cosmetic Act (FDCA), 58-59,103,108Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA),

103, 108Federal Meat Inspection Act, 107Federal Republic of Germany (FRG), national patent law of,

149, 161Feldman v. Aunstrup, 144First, Neal, 23, 113Fish and Wildlife Service (FWS)—Department of the Interior,

use and regulation of genetically engineered animals by,109-110

Food and Drug Administration, U.S. (FDA), 59Center for Veterinary Medicine, 107effect on patent term of regulatory review by, 41patent infringement and drug approval-related testing

required by, 58

Index . 193

use and regulation of genetically engineered animals by, 108Food Safety and Inspection Service (FSIS)—USDA, use and

regulation of genetically engineered animals by, 107-108France, national patent law of, 161Funk Bros. Seed Co. v. Kalo Inoculant Co., 93

Genentech, Inc., stock offering by, 30,55General Electric Co., 31, 52General Hospital Corp., The (Massachusetts), 23Genetically engineered animals. See Transgenic animalsGenetic engineering. See BiotechnologyGeorgia, “phony peach disease” in, 71German Democratic Republic (G.D.R. ). patent law in, 163Germplasm, impact of plant protection on exchange of, 25-26,

87Godown, Richard, 113Government, U.S. Federal

genetically altered animal regulation by, 16, 102-110milk price supports, 17, 116patent rights for inventions made with assistance from, 43post-Chakrabarty events and trends in patent policy of, 8-9,

54-55see also individual agencies of

Government Patent Policy Act of 1980,8,43,55Guide for the Care and Use of Laboratory Animals, 103, 105Guidelines

Patent and Trademark Office deposit, 18-20, 143-146, 148for Research Involving Recombinant DNA Molecules (NIH),

103-104, 105, 109, 110see also Policy; Regulation

Harvard mouse. See OncomouseHarvard University, 12,23,30,32,98,99, 121Health Research Extension Act, 104History

of intellectual property law, 4-12, 37of plant property protection, 9-12, 70-75of species integrity philosophy, 14, 98-102

Hoffman-La Roche, 55Hungary, patent law in, 163Huxley, Aldous, 31

Immunex (Washington State), 23Incentives, economic, for private plant breeding research, 9, 11,

71,73,85-87Industry

choosing and managing plant protection by seed and plant,78-82

features of dairy, 116-117features of poultry, 115-116features of red meat production, 117intellectual property criteria considered by, 11, 78-84R&D expenditures by biotechnology, 55

Infringement, patentdefinition of and remedy for,41litigation involving, 8-9, 58-59

In re Lundak, 144In re Wakefield, 93Institute of Microbiology, Rutgers University (IMRU), 142Integrated Genetics, Inc. (Massachusetts), 23

Intellectual property, 4-7,37,46-47comparison of various forms of protection for, 11-12, 75-78economic impacts on four classes of animals from protecting,

17, 119-123effect on U.S. agriculture of protecting plant, 84-87history of plant protection-related, 9-12, 70-75international agreements concerning protection of, 21-22,

155-159plants and, 9-12,69,87-89U.S. seed and plant industry criteria for choosing protection

for, 11, 78-84see also Copyrights; Patents; Trademarks; Trade secrets

International Depositary Authorities (IDAs), 18, 20, 141-142,144, 145-146, 149.158-159

impact of deposit of patented animals on, 20-21, 150role of, 19, 146-147

International searching authority (ISA), 157International Union for the Protection of New Varieties of Plants

(UPOV)breeders’ rights protection through, 10,73, 165workings and purpose of, 159, 161, 163, 164

Inventions Secrecy Act, 127-128In Vitro International, Inc. (IVI), 142, 149

Japanbiotechnology deposit and, 147patent law in, 163-164

Japanese Patent Office, 22, 163, 164Jefferson, Thomas, 35,37,54

Karny, Geoff.91Kewanee Oil v. Bicron Corp., 46Kim Brothers v. Hagler, 72Kinsman, John, 113

Lacey Act, 104Lanham Act. See Trademark Act of 1946Leder, Philip, 99Legislation

language changes in patent, 37worldwide national patent, 161, 165see also individual statutes

Licensingconsiderations when choosing plant protection methods, 81-

82impacts of animal patenting on users/producers, 120-122

Linnaeus, Carolus, 98Litigation

biotechnology-related patent infringement. 8-9,58-59considerations when choosing plant protection methods, 79-

81post-Chakrabarty patent, 8-9,56-60see also individual legal cases

Livestockeconomic impacts of transgenic animal patenting on

production of, 17, 120, 121-122, 123overview of major market sectors producing/using, 115-117see also Animals; Cattle; Poultry; Transgenic animals

Locke, John, 130Luminus PTY Ltd. (Australia), 23


Mexico, intellectual property protection in, 165Microinjection, viability of gene insertion using, 13,95-97Minnesota, milk production in, 116Models, animals as disease, 119, 120, 123Monitoring. See RegulationMorality. See Ethics

National Aeronautics and Space Administration (NASA), useand regulation of genetically engineered animals by, 110

National Council of Churches, 132, 134National Environmental Policy Act (NEPA), 108, 110National Institutes of Health (NIH), use and regulation of

genetically engineered animals by, 16, 102-105National Science Foundation (NSF), use and regulation of

genetically engineered animals by, 16, 108-109Netherlands, The, 148New York State, milk production in, 116North Dakota, beef cattle production in, 117Northern Regional Research Laboratory (NRRL)--USDA, 141,

142Novelty, as requirement for patent issuance, 39-40

Oklahoma, beef cattle production in,l 17Oncomouse

marketing of, 121patenting of, 12,23,30,32,98,99

Origin of Species, The, 100Owens-Corning, 44

Pun-American Plant CO. v. Matsui, 72Paris Union Convention

description, workings, and purpose of, 155-157members of, 156priority right of, 144, 156

Parke Davis Co., 141Pasteur, Louis, 7,30,31,51, 142Patent Act of 1952, congressional intent expressed in Commit-

tee Reports accompanying, 4-5, 37Patent and Trademark Amendments. See Government Patent

Policy Act of 1980Patent and Trademark Office, U.S. (PTO)

animal patenting policy of, 12,93biotechnology patents issued by, 3,29classes of utility patents used by, 39deposit guidelines, 18-20,26, 143-146, 148enablement policy of, 26as international searching authority, 157post-Chakrabarty patent activity by, 8-9,55-56,60use and regulation of genetically engineered animals by, 102

Patent Cooperation Treaty (PCT), 157Patents

arguments against issuance of transgenic animal, 130-137arguments for issuance of transgenic animal, 127-130barriers to issuance of, 37-40basic concepts, workings, and requirements of, 4-5,37-43definition of, 31economic impacts of transgenic animal, 16-17, 115, 117-123effect on biotechnology commercialization of, 8,55history of plant, animal, cell, and micro-organism,31 -32method for obtaining, 40-41

process protection available using (prior to 1980),51protection of rights granted by, 8-9,41-43,58-59term of, 5, 11,39,41,70,73, 148-149see also Design patents; Plant patents; Process patents; Utility

patentsPenguin Books, 44People’s Republic of China (P.R.C.), patent law in, 165Pharmaceutical Manufacturers Association, 60Pharmaceutical Proteins Ltd. (U.K.), 23Pharmaceuticals, transgenic animals used in production of, 17,

119-120, 121, 123Plant Patent Act of 1930 (PPA)

goals and strategy of, 9-10,25,30,31,33,71-72, 85judicial interpretation of, 72plant patents authorization by, 69-70,73,75,76Supreme Court’s analysis of, in Chakrabarty ruling, 8,54

Plant patentsdefinition of, 69-70protection available using PVPCs and utility patents v., 76-77as type of subject matter patent, 39

Plantsdefinitions of asexually and sexually produced, 60history of intellectual property protection relating to, 9-12,

31-32,70-75methods for depositing, 149

Plant Variety Protection Act of 1970 (PVPA), 24,30,31amendments to, 11,30, 80farmers exemption under, 11,25,73-74,79,83,86goals and strategy of, 10-11,25,72-74judicial interpretation of, 75research exemption under, 11, 73, 82seed deposit required under, 20, 149Supreme Court’s analysis of, in Chakrabarty ruling, 8,54USDA administration of, 7, 11,74

Plant Variety Protection Certificates (PVPCs), 25definition of, 70exclusions to, 11, 73-74protection available using plant patents and utility patents v.,

76,77seed deposit required for issuance of, 20, 149

Plant Variety Protection Office (PVPO)--USDA, 70Plato, 99Poland, intellectual property law in, 163Policy

copyright subject matter, 43NIH genetically altered animal, 103-104, 105post-Chakrabarty events and trends in Federal patent, 8-9,54-

55transgenic animal patenting and environmental, 136

Poultryeconomic impacts of transgenic animal patenting on produc-

tion of, 17, 120, 121-122, 123sector overview, 115-116

Poultry Products Inspection Act, 103, 107Prather, R. S., 23Process patents

protection (prior to 1980) available using, 51see also Patents

Public Health Service Act, 108

Index 195

Public Health Service Policy on Humane Care and Use ofLaboratory Animals, 104, 133

Quigg, Donald J., 93, 125

Regulationof genetically altered animals by Federal Government agen-

cies, 16, 102-110see also Guidelines

Republic, 99Research

Chakrabarty decision’s impact on biotechnology-related, 8,54, 55

exemption to PVPA, 11, 73, 82Federal Government recombinant DNA, 16, 102-110gene insertion techniques used in transgenic animal produc-

tion, 13, 92-98plant protection methods use influence on seed and plant, 84-

87PPA encouragement of, 9-10,71-72, 85PVPA encouragement of, 11, 72-73, 85-87relationship of germplasm exchange, patent protection, and,

25-26Rich, Judge, 52Rifkin, Jeremy, 125Rob], J. M., 23Roche Products Inc., 58-59Romania, patent protection in, 163

Scripps Clinic and Research Foundation v. Genentech, 59Sculley, John, 91South Dakota, beef cattle production in, 117Soybeans, proprietary protection methods used in seed industry

for, 82-83Species

impacts of transgenic animals on integrity of, 13-14, 98-102right to exist, 15, 101-102

Standards. See Guidelines; RegulationsStanford University (California), 30,56Stewart, Timothy A., 99Subject matter

categories for copyright protection, 43jurisdiction and patentability, 37-39obviousness and patentability, 40

Subject matter patents. See Design patents; Plant patents; Utilitypatents

Supreme Court, U, S., 11,74biotechnology ruling by, 8-9,31,51-54subject matter patentability limited by, 37, 39, 130-131test for determining obviousness expressed by, 40trade secret law decisions by, 46

Swiss Federal Intellectual Property Office, 21, 160, 161Switzerland, national patent law of, 161

Technology Transfer Act of 1986,8,55, 105Texas, beef cattle production in, 117Tomatoes, proprietary protection methods used in seed industry

for, 83-84Toxic Substances Control Act (TSCA), 104, 108Trademark Act of 1946,5,44Trademarks, basic concepts and workings of, 5,44-46Trade secrets, 25

as alternative to patent use, 17, 118-119, 120, 123.129basic concepts and workings of, 7,46plant protection available using plant patents, utility patents,

and PVPCs V., 77-78Transgene (F.R.G.), 23Transgenic Animal Patent Reform Act (HR 4970), 24,30,32,

122Transgenic animals

arguments against patenting, 18, 130-137arguments for patenting, 18, 127-130economic impacts from patenting, 16-17, 115.117-123impact on species integrity from, 13-14, 98-102methods and impacts of depositing, 20-21, 150royalty collection from patents on, 121-122techniques for producing, 12-13,92-98see also Animals; Cattle; Livestock; Poultry

Treaties. See Agreements, international

Union of Soviet Socialist Republics (U. S. S. R.)deposit access in, 148intellectual property law in, 163

United Kingdom (U.K.), national patent law of, 161-162United Nations (U.N.), 155United States (U.S.). See Government, U.S. FederalU.S. Government Principles for the Care and Use of Vertebrate-

Animals Used in Testing, Research, and Training, 104Utility, as requirement for patent issuance, 39Utility patents, 25

definition of, 70plant protection using, 11,74-75protection available using plant patents and PVPCs v., 76-77three classes of, 39see also Patents

Virus-Serum Toxin Act, 104

Wisconsin, milk production in, 116World Council of Churches, 131World Intellectual Property Organization (WIPO), 142, 144,

155, 157

Yoder Brothers Inc. v. California-Florida Plant Corp. et al., 72Yugoslavia, patent protection in, 163

Related OTA Reports

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New Developments in Biotechnology, 1: Ownership of Human Tissues and Cells-Special Report.OTA-BA-337, 3/87; 176 pages. GPO stock #052-003-01060-7; $7.50.NTIS order #PB 87-207 536/AS. Also available in hardback from J.P. Lippincott, Co., Philadelphia, PA(800) 638-3030.

New Developments in Biotechnology, 2: Public Perceptions of Biotechnology-Background Paper.OTA-BP-BA-45, 5/87; 136 pages. NTIS order #PB 87-207 544/AS.

New Developments in Biotechnology, 3: Field-Testing Engineered Organisms: Genetic and EcologicalIssues--Special Report.OTA-BA-350, 5/88; 160 pages. NTIS order #PB 88-214 101/AS.Also available in hardback from Technomic Publishing Co., Inc., Lancaster, PA (717) 291-5609.

New Developments in Biotechnology, 4: U.S. Investment in Biotechnology-Special Report.OTA-BA-360, 7/88; 304 pages. NTIS order #PB 88-246 939/AS.Free summary available.

Mapping Our Genes—The Genome Projects: How Big, How Fast?OTA-BA-373, 4/88; 232 pages. GPO stock #052-003-01106-9; $10.00.NTIS order #PB 88-212 402/AS. Also available in paper cover from Johns Hopkins University Press,Baltimore, MD (301) 338-6907.

NOTE: Reports arc available from the U.S. Government Printing Office, !Wperintcndcnt of Documents, Washington, D.C. 20402-9325 (202-783-3238);and lhe National lkchnical Information Service, 5285 Port Royal Road, Springfield, VA 22161-0001 (703-487-4650).

U.S. GOVERNMENT PRINTING OFFICE : 198$) O - 8+139 : QL 3