The Patent Scylla
The patent holder of a basic element of a technology can command all applications of that technology by forcing parties developing the applications to acquire licenses. Moreover, multiple parties may hold different patent interests in a technology that combines diverse technical elements.
Thus, an end-user may require several licenses to use a product. Furthermore, a patent holder can simply use their patent to block any practice of the patented technology.
U.S. patent laws provide few safe harbors for using patented technologies without license. For example, the Court of Appeals for the Federal Circuit recently held that even academic institutions performing nonprofit, basic scientific research can be liable for patent infringement (Madey v. Duke University).
Another Federal Circuit opinion scaled back one safe harbor provided by Congress to protect parties from patent infringement liability in the course of performing acts for FDA clinical trials, holding that a target was too far upstream of a clinical trial to fall within the acts defining the safe harbor (Integra Lifesciences I, Ltd., et al. v. Merck KgaA et al.). These cases are pending Supreme Court review.
Parties active in integrated genomics will thus continue to be affected by patent developments for some time to come. Indeed, the threat of infringement has led to criticism of some players in the integrated genomics field.
For example, Myriad Genetics, which holds the patent to the BRACAnalysis test for the breast cancer-related gene BRCA, has been criticized for requiring that full sequence testing be done only at its laboratory and for charging a premium price for the test.
The patent holders respond that the high costs, large failure rate, and long lead times to profit necessitate such licensing terms; otherwise, basic research could not progress for lack of sufficient economic incentive.
Notwithstanding the free market rationale for patenting and licensing, some attempts have been made to reduce the risk of patent liability, and thereby reduce costs to the end users, by providing a specific safe harbor to patent infringement for using genomic technology under certain conditions.
In 2002, for example, a bill (H. R. 3967) was introduced to provide for noninfringing uses of patents on genetic sequence information for purposes of research and genetic diagnostic testing, and to require public disclosure of such information in certain patent applications. This legislative initiative appears to have stalled, however.
Another approach to avoiding patent liability or licensing costs may be to perform any infringing screening activities outside of the U.S. and relay the resulting data back on-shore for analysis.
This approach would follow the Federal Circuits recent decision in Bayer AG, et al. v. Housey Pharmaceuticals, Inc., in which the Court held that transmitting data resulting from the off-shore practice of an otherwise infringing process does not constitute patent infringement.
Another potential impediment to the growth of integrated genomics concerns limitations resulting from the need to protect the privacy of persons who utilize the technology.