Bradford Lyerla, partner at Jenna & Block and moderator of the panel, began the session by noting: “I don t think the prevailing sentiment up here is disapproval; I think the prevailing sentiment is concern. This is a worried group.”
Sherry Knowles, principal at Knowles Intellectual Property Strategies, was more outspoken.
“I think the guidelines that were promulgated by the Patent Office are horrifying to the pharmaceutical and biotech industry. That is probably the nicest thing I could say about them. According to the utility guidelines that came out in March this year, not only is no natural product patentable in the US, arguably derivatives of natural products may also not be patentable. That is a clear change in the law.”
She said the guidelines include a number of questions to find out if something is patentable. The first is: is it a natural product and does it include chemicals derived from natural sources such as antibiotics and proteins. Knowles noted that 47% of drugs over the past 30 years include derivatives of natural products.
“According to the guidelines, if it is not a natural product you look at whether it is ‘markedly different’ from the natural product. That’s the test. Of course that is clear as mud and that will be defined over time in case law. But let’s say two-thirds of approved drugs that are derived from natural products are markedly different you are still down to 390 drugs over the past 30 years that arguably under the utility guidelines are not patentable. I find that horrifying. I am very concerned,” she said.
Joseph Contrera, patent counsel at Johns Hopkins Technology Transfer, shared Knowles’ concern. He said the guidelines meant that the USPTO was ignoring the part of the statute that referred to discoveries.
“I think horrified is a minor adjective I would use when I read those guidelines. It occurred to me that now I know how the USPTO is getting rid of its backlog because that is pretty much everything we do at Hopkins. I don’t know how the Patent Office got from we are not going to patent a particular gene to we are not going to patent any natural product. I don’t know how they went down that slope.
“It seems like the courts walked away from part of the patent statute, which says it is who discovers or invents. You go back to all these really big inventions like [vitamin] B12. All these things were isolated and purified because someone had to go through the process of isolating it, purifying it and working out what it does. Now it seems like the patent office is issuing guidelines saying isolating and purifying isn’t going to get you anywhere, and it needs to be markedly different. From Hopkins’ point of view now we are worried about how markedly different all our diagnostics and derivatives of known products are they going to be.”
Jason Garbell, senior manager and senior patent attorney at Novozymes North America, said the rule at least gives predictability.
“To some extent, though, you can’t argue with them at least taking one position and trying to give guidance to the industry,” he said. "Maybe the rule is bad but having a rule helps because it gives predictability about where it is going. I don’t think the guidelines at the patent office are going to be the end point but it is a starting point for that."
He said guidelines around the Myriad decision would affect the earlier stages much more than the later stages. Novozymes is a business to business company.
“Our traditional model is finding natural products – enzymes, microorganisms – then working with a variety of customers. That model to some extent has gone so we need to get closer to our customers. That is a challenge because there are interests that some of our customers such as Procter & Gamble have in maintaining their interests. At the same time, we are trying to see the bright side of Myriad. It is better for us to get closer to our customers, it is better for us to know what is happening and how to craft claim inventions in a way that is innovating human intervention,” he said.
Denise Hickey, senior director intellectual property strategy at AbbVi, noted that industry organisations have not been proactive in response to the Myriad case, which drew a line between isolated DNA and synthetic DNA known as cDNA. She said the Myriad decision could be seen as logical but is concerned about its ramifications.
“The view is it is a product of nature and so shouldn’t be patentable and cDNA is not a product of nature so is. They split the baby and they didn’t split it in a way that was particularly severe on its face for the bio pharmaceutical therapeutic industry. The diagnostic industry might have a few more problems in that regard. But I think the problem is the ball that is rolling down the hill. It is the ensuing litigation and interpretation that could affect the industry more broadly and make it that much more difficult for them to make sure they have the level of exclusivity they need to justify the investments necessary to create their products,” she said.