New Developments in Biotechnology 5 Patenting Life

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Recommended Citation:

U.S. Congress, Office of Technology Assessment, NewDevelopments 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.)


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OTA Project Staff

New 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. OConnor, Study Director and Legal Analyst

Robyn Y. Nishimi, Analyst

Luther Val Giddings, Analyst1

Blake M. Cornish,Research Analyst

2

Editor

Bart Brown, Baltimore, MD

Support Staff

Sharon Kay Oatman,Administrative Assistant

Lori B. Idian, Secretary/Word Processing Specialism

Contractors

American Type Culture Collection, Rockville, MD

Baruch A. Brody, Baylor College of Medicine, Houston

John Kinsman, La Valle, WI

William H. Lesser, Cornell University, Ithaca, NY

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

TX

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

Robbins & Laramie, Washington, DC

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

Sandra R. Segal, Washington, DC

Jane Stein, Washington, DC

Acknowledgment to Other OTA Staff

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

Gladys B. White,Analyst, Biological Applications Program

IT~()@ January 1989.2Though May 1988.


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Contents

Chapter

l. 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 AnimalsEconomic Considerations . . . . . . . . . . . . . . . . . . . . .. .. ... ... ... ..1158. Patenting of Animals-Ethical Considerations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....1279. Deposit Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

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

Appendix

A. Selected Sections, 35 United States Code, Patents . . . . . . . . . . . ........................169B. Patents: Questions and Answers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ................172

C. 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


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

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BoxBox Page

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

FiguresFigure Page

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

TablesTable Page

l-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. . . . . . . . . . . . . . . . . . . . . . . 18

l-5. Fees, Deposit for Patent Purposes.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21l-6. International Agreements and Biotechnology Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22


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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-tions 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 modify

products, 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 worlds major problemsmalnutrition, 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-settled

body 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-lPatents Issued in Biotechnology

Number of patents.----I

-3-


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4 qNew Developments in Biotechnology: Patenting Life

organism (if its 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 novel

organisms 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 new

developments 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 subject

matter patentabilitywhat 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 PROPERTY

Rooted 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 to

exclude 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 asexually

reproduced 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@ OfHnnTiSSUeS 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 . Investmentin Biorechnofogy, OTA-BA-3tX) (Springfield, VA : National lkchnicalInformation Semices, July 1988).


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Chapter1---Summary, Policy Issues, and Options for Congressional Action q 5

U.S.C. 101). The Committee Reports accompa-nying the 1952 Act demonstrate that Congressintended patentable subject matter to includeanything under the sun that is made by man.However, the Supreme Court has held that laws

of 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 propertyrightthe 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 be

regulated 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 domestic

roots in the Constitution, . . . securing forlimited Times to Authors. . . the exclusive rightto their . . . Writings . . . Historically, the termwritings 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 is

governed 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 was

shown. 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.


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6qNew Developments in Biotechnology: Patenting Life

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

,- , .. ~ ~ , 1 ; " ~

Photo eredt: Gilbert Stuart's "EdgBhill Portrait of Thomas Jefferson. Jointly owned by MonticsNo, the Thomas Jefferson Memorial Foundation,and the National Portrait GaH9fY, Smithsonian Institution. Purchase funds provided by the Regents of the Smithsonian Institution,the TrustfHls of the Thomas Jefferson Memorial Foundation, Inc., and the Enid and Crosby Kemper Foundation.


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Chapter 1---Summary, Policy Issues, and Options for Congressional Action q 7

Trade Secrets

Trade secret protection is governed by Statelaw, and extends to information used in a tradeor business that is maintained secret by its owner

and 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 OF

MICRO-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 and

other 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 organismshas 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 a

catalytic court decision to clarify the issue ofpatentability of living subject matter.

The Chakrabarty Case

The Supreme Courts 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 naturally

occurring bacteria, Chakrabarty invention wasthought to have significant value for cleaning upoil spills.

Chakrabartys claims to the bacteria wererejected by PTO on two grounds:


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micro-organisms are products of nature;and

as 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:

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q

q

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The plain meaning of the statutory lan-guage indicated Congress intent that thepatent laws be given wide scope. The termsmanufacture 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 includeanything under the sun made by man.Although laws of nature, physical phenom-ena, and abstract ideas are not patentable,Chakrabartys 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

q

subject matter until Congress expresslyauthorizes such protection.Arguments against patentability based onpotential hazards that may be generated bygenetic research should be addressed to

Congress 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 in

Federal 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 to

patent 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.


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Chapter 1--Summary, Policy Issues, and Options for Congressional Action q 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 overlapping

patent 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 ofPTO 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 of1930

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 sales

prices of comparatively few reproductions dur-ing the first 2 or 3 years after the varietys initialavailability. Once a variety left a breedershands, 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.


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PPA doe no ex end 0 p an p opagated byeed when PPA wa ena ed wa hough haeed a ked he apab y 0 rep odu e ue 0ype Pro e on on y fo a ng e ar e ye g he ro e Pea e no a group of ar e eha ng a ommon tra e g a 0 e ha ng wh eflowe Addre ng he p ob em of whe he aomp ete w tten d 0 ure of he n en onwa po b e fo a p an PPA re axed he w tende p on requ remen fo u h n en on byperm ng 0 be n a 0 dan e w h trad onabo an a de np on S n e 930 6 500 p anpa en ha e been ued by PTO

w pm m scp ttaced adm m p

Plant Variety Protection Act of1970Comme a and n ema ona de e opmen

be ween 930and 970 nfluen edde be a onn he Un ted S a e 0 poe exua y rep 0du ed p an P an breede de e oped newexua y rep odu ng p an ha ou d ep ateue 0 ype These ar e e howe e ou dno be pa en ed unde PPA In 96 e e aEu opean oun e fo med he In e na onaUn on 0 he Pro e on of New Var e e ofPan UPOV 0 P 0 de na ona b eedegh Un ke breede n UPOV oun e USb eede had no aw poe ng he n en on

Pho crfJdi Agric 56

9 R be G back P ctce mag ed 5 000 me


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Chapter 1--Summary, Policy Issues, andOptions for Congressional Action q 11

except for asexually reproduced plants coveredby PPA.

The Plant Variety Protection Act (PVPA) wasenacted by Congress in 1970 to encourage the

development 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 holders protection:

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

. farmers 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

AlthoughDiamond 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, PTOs Board of Patent Appeals andInterferences ruled in Exparte Hibberdthat acorn plant containing an increased level of

tryptophan, an amino acid, was patentablesubject matter under 35 U.S.C. 101.

Since theHibberdruling, 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 patentin 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, farmers exemption under PVPA,


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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: OffKXof T-logy Assessment, 1989.

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

[Statute] Plant variety protectionUtility 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 farmers exemption Farmers 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 an

activated 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


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Chapter 1--Summary, Policy Issues, and Options for Congressional Action q15

Photo credit: Library of Congress

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

I \11'1.1.\ I )1 .11' I: \' 1'11\\ .


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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. USDAs 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.USDAs 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 animals

used 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 a

pig 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.


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Chapter 1-Summary, Policy Issues, and Options for Congressional Action q 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 be

influenced 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 price

supports 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 academic

research 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 patented

animal 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 beef

production, 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.


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Table 14-Arguments For and Against PatentingTransgenic Animals

Arguments for patenting transgenic animals:

q Patent law regulates inventiveness, not commercial uses ofinventions

qPatenting promotes useful consequences, such as new prod-

ucts and research into solutions of problems.. Patenting is necessary if the Nations biotechnology industry isto be able to compete internationally.

. If patenting is not permitted, inventors will resort to trade secretprotection, which could hinder the sharing of useful information.

q Patenting rewards innovation and entrepreneurship.

Arguments against patenting animals:

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

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

qOther 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 ofTwhnology Assessment, 1989.

Most arguments that have been raised

both for and against the patenting of animals

concern issues that would be materially

unchanged whether patents are permitted or

not. Most arguments center on issues that

existed prior to the current patenting debate(e.g., animal rights, the effect of high 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 se

would 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 those

of theological, philosophical, spiritual, or meta-physical origin, need to be debated more fully

and articulated more clearly.

DEPOSIT CONSIDERATIONS

In 1949, PTO began recommending thatpatent 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 often

supported 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


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Chapter 1-Summary, Policy Issues, and Options for Congressional Action q 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 columnEight figures were submitted for

U.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)


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20 . New Developments in Biotechnology: Patenting Life

l%ob credit: U.S. @afiment of AgricultureCloned 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 the

current 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


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22 q New Developments in Biotechnology: Patenting Life

Table l-6-international Agreements andBiotechnology Patents

Entered Number ofAgreement into force signatories

Paris Union Convention . . . . July 7, 1884 97Budapest Treaty . . . . . . . . . . Aug. 19, 1980 22

Patent Cooperation Treaty . . Jan. 24, 1978 40European PatentConvention . . . . . . . . . . . . Oct. 7, 1977 13

Union for the Protection ofNew Varieties of Plants . . . Aug. 10, 1968 17

SOURCE: 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 plants

and 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 for

micro-organisms, as are various forms ofpatents and breeders 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 that

other 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 FOR

CONGRESSIONAL ACTION

Three policy issues relevant to patenting ofliving organisms were identified during the

course of this study. They are:

q patenting of animals,

q 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 animals

be 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 being

directed 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


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Chapter 1Summary, Policy Issues, and Options for Congressional Action q23

Box l-APatenting of Animals: Nine Applications for European Patents

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

applications, six are from U.S. inventors, and one (from Harvard College) has received a U.S. patent.The applications generally cover methods for creating transgenic animals, methods for producing animals 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:

qMethod for transferring organic or inorganic substances to egg cells or somatic cells ofanimals 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).

qPeptide 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 blood

coagulation factor. Applicant: Pharmaceutical Proteins Ltd. (Cambridge, Great Britain).. Transgenic animals. A method for creating new breeds of animals that involves: 1) obtaining a recently

fertilized ovum; 2) isolating a gene sample of a characterizing hormone homologous with the ovum; 3)introducing the gene sample into the male pronucleus of the ovum prior to fusion with the female pronucleusto form a single cell embryo; and 4) subsequently implanting the ovum into a suitably prepared femaleanimal. Applicant: Luminus PTY Ltd. (Adelaide, Australia).

qExpression of heterologous proteins by transgenic lactating mammals. Mammals capable of expressing

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

qTransgenic 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).

q 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).

qDNA 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 Offices view on patenting living material is based strictly on the provisions of the

European Patent Convention, which permit patenting of certain life forms if they are novel, inventive, 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 inventors rightful claim to recognition and economic reward with thepublics 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.


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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 to

limit 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 providing

animal 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, afarmers 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, effects

of 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 extensive

and 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 for

farmers who reproduce patented animals. Thebill was not brought to a vote in the Senate.

Option 1.5:Enact a statute explicitly pro-vidingfor 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


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Chapter 1---Summary, Policy Issues, and Options for Congressional Action q25

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 limiting

the patentability of certain kinds of inventions inthe absence of explicit congressional action.

Option 1.6:Enacta 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 plantsplant 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 will

continue to seek protection for plant intellectualproperty by balancing the factors inherent ineach of the four approaches. Inventors employa strategy that balances crop type, farmersexemption 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 ofAgricul-

ture to report on the effect of the farmerscrop/seed exemption under the Plant VarietyProtection Act of1970.

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 farmers 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 thefarmers exemption.

Congress could direct the Secretary of Agri-culture to collect information and report on thepractical impact of the farmers exemption. Ofparticular interest would be the degree to whichproperty rights of PVPC holders are compro-mised by the farmers 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.


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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 action

would 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.


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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 Corcoran

Scientific American, September 1988


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

2931

31

31

31

32323333

BoxBox Page

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

Table Page

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


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Box 2-AAPolitical History of Patenting Life

1873 Louis Pasteur awarded patent 141,072 with a 1987 InEx 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 the1987 The

U.S. Senate adopts a moratorium onfirst patents on life forms. animal patents as part of a supplemental1970 Plant Variety Protection Act provides patent- appropriations bill. The moratorium is dropped

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

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

recombinant DNA research. adjourns.

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

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

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

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

1980 Genentechs initial public offering raises100th 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

1985Ex 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 per

se, 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 ofliving organisms is deter-mining which arguments raised are novel anddirectly related to patent issues, as opposed tothose questions that would exist independent ofpatent considerations.


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Chapter 2introduction and Overview q 31

WHAT IS A PATENT?

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

Federal Government to an inventor giving the

inventor the right to exclude others from making,

using, or selling the invention for a stated period 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 others

may 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 severalliving 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 inert

culture medium (3).Although no formal policy was issued barring the

patenting 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 of

Chakrabarty 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 this

countrys technological future and was denouncedby others as creating Aldous Huxleys 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 occurringplasmidssmall circles of DNA that are not part ofa cells chromosomesto 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 reproduced

plants, 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,


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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 AnimalsIn April 1987, the Board of Patent Appeals and

Interferences 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 engineered

mammals, 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 the

animal.

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 REPORT

This special report is the fifth publication inOTAs 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 matterpatentabilitywhat 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 protection

or 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 pate