Biotech inventions: controversies, case law, uncertainties and financing

The purpose of this post is to give a ‘taste’ of the issues around patenting biotech inventions. Subsequent posts will explore individual topics in more detail.

What is biotech?

The law has had an uneasy relationship 
with complex molecules ...

Biotech is about life and the complex molecules that support it. Biotech inventions often concern genetic material, proteins, the discovery and genetic modification of organisms, the diagnosing and treating of disease and research tools for measuring and manipulating biological properties. Strictly speaking the word ‘biotech’ does not cover all ‘pharmaceutical’ matters or all ‘medical’ matters. However for the purposes of this post the distinctions are being glossed over to focus on the issues being discussed.

The stats

The ‘Facts and Figures 2014’ report from the European Patent Office (EPO) shows ‘Medical Technologies’, ‘Pharmaceuticals’ and ‘Biotech’ occupying positions 1, 9 and 10 in a ranking of technical fields by number of European patent filings. The world’s best-selling drug in 2013 was a ‘biologic’, an antibody protein called Humira. Reports from the UK government (see here) and the Organization for Economic Cooperation and Development (OECD) (see here) show the growing contribution of biotech to the economy and its tremendous long term potential.



Van Gogh always found it more difficult to
paint genetically modified flowers

Controversies

The patenting of ‘life’ creates ethical dilemmas. However in Europe these have mostly been dealt with by the EU Biotech Directive which has been incorporated into the European Patent Convention (see the EPO’s explanation of that here). Essentially the vast majority of biotech inventions are considered patentable on ethical grounds. However, The Court of Justice of the EU (CJEU) has subsequently had to decide on fundamental issues raised by patenting of embryo stem cells in Brüstle (see Katposts here and here) and International Stem Cell Corporation v Comptroller (see Katpost here).

The patenting of medicines leads to the ‘access to medicines’ debate (see Katpost here). Essentially that is about patents causing drugs to be unaffordable for many people in the developing world. The cost of drugs is now also an issue in the developed world as they become ever more expensive. However this Kat also realises these are complicated problems with no easy answer.

Case law and uncertainties

Biotech case law is complicated and forever changing. The question of whether medical inventions relating to administration schedules are patentable in Europe was only settled in 2010 by the EPO Enlarged Board’s decision G2/08 (see Katpost on G2/08 here and on issues relating to Swiss-style medical use claims here). However in day to day practice a biotech patent attorney will continue to face many uncertainties in exactly what a medical use can cover, such as: 

- to what extent can a medical use claim define substances or diseases functionally?


Aquinas dreaded considering
 the ethics of biotech

- to what extent can it incorporate additional steps before the actual treatment, such as a diagnostic step?

In the very important field of ‘antibodies’ case law seems to be getting stricter and stricter on how antibodies need to be defined in patent applications, and the amount of structural information that needs to be given (see this page of the EPO’s ‘Case Law of the Boards of Appeal’).

Quite fundamental issues are still being decided. For example the EPO Enlarged Board is presently considering the patentability of plants derived by essentially biological processes in G2/12 and G2/13 (see IPKat post here). The level of data needed in a patent application is a constant issue for biotech inventions, and in practice one gets the feelings it is a stricter test for medical inventions (see for example T1616/09 discussed on Patlit here). Ethical issues can impact examination, for example in trying to amend claims to exclude unethical matter (see for example decision T1441/13 which shows the difficulties of disclaiming certain embryo stem cells).

However for the moment the uncertainties we have in Europe in patenting biotech inventions are dwarfed by the tremendous uncertainty created in the US by the Supreme Court decisions Mayo and Myriad and the fact that Guidance issued from United States Patent and Trademark Office (USPTO) based on these decisions is yet to be finalised (see Katpost here).

Financing

Having done the due diligence Quentin
finally decided to invest in biotech

Biotech research and development (R&D) is expensive, and the early part of it is often carried out when less resources are available. During the R&D process a substantial value of small biotech companies may reside in the patent portfolio, and so filing patent applications is a crucial part of the business model. Sometimes the patent portfolio is all that a biotech company might have to show how well it is doing. Investors and collaborators like to see patent applications having been filed before they decide to enter into commercial agreements with biotech companies (see Katpost here on the role of IP in financing). In these circumstances patent strategy needs careful consideration. The portfolio needs to be built as quickly as possible, but taking into account future patent costs and future R&D.

The task of biotech patent attorneys is to cope somehow with all of the above, and in doing so they have the opportunity of making a meaningful contribution to an industry which has still to realise most of its potential.

Five further posts on biotech will be published at weekly intervals. The posts will be about:

- the ethics of patenting biotech
- biotech case law
- patent strategies for protecting biotech inventions
- biotech financing and patent portfolios
- a summing up of all the posts and if needed responses to readers comments.