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More than 20 years ago Chief Justice Warren Burger kickstarted an industry. In Diamond v. Chakrabarty (1980) Burger used the phrase “anything under the sun that is made by man” to describe what kinds of inventions are patentable. In Chakrabarty, the Court found that genetically engineered bacteria useful for cleaning up oil spills were patentable. Many believe this decision propelled the tremendous growth of the biotechnology industry. Human genes have been around for at least as long as humans. Yet until recently, human genes and proteins had never been used to develop new therapies or to diagnose or cure disease. By delivering a comprehensive understanding of human biological responses to disease and drugs, genomics promises to improve health care. But it requires an enormous effort and multiple technologies to identify and characterize genes and to understand the roles that they play in key pathological and toxicological responses. These discoveries require enormous investments. Contrary to Ms. Caulfield’s assertion, the discovery of novel genes does not involve “little invention.” Incyte Genomics Inc. has spent hundreds of millions of dollars discovering and characterizing genes and proteins. While it may be apparent to many that the human genome is a good place to look for genes, the discovery and characterization of a gene requires significant invention in both the design of experiments and the analysis of data. Ms. Caulfield’s article seems to make much of the distinction between discovery and invention. It is perhaps worth reminding the reader that the constitutional provision on which the patent system is based refers only to discovery. The Constitution gives Congress the mandate “to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive right to their respective Writings and Discoveries.” There are lots of compounds in nature that the biopharmaceutical industry has developed as drugs and other treatments. Interferons, interleukins and insulin are found in nature, but not in a therapeutic form. If a company extracts the compound from its natural setting, purifies it, identifies its structure and determines how to use it — for example, how it affects human health — it has a patentable industrial invention. Without patent protection, those in the private sector who make genomic discoveries would have to choose between maintaining their discovery as a trade secret; allowing free access to the fruits of their inventions (not a very attractive economic proposition); or simply discontinuing their efforts. None of these alternatives does much to advance science or the useful arts. Those who doubt the impact of patent protection on the availability of biotechnology funding should look at the infamous Clinton-Blair announcement in 2000. At the time, President Clinton was misquoted as opposing gene patents just as the first draft of the human genome was nearing completion. The biotechnology sector lost over $5 billion in market capitalization that day. Even after the president’s remarks were clarified the next day, it took six months for the biotechnology capital markets to recover. Companies that rely on these markets for research and development funding need a healthy patent environment in order to contribute to scientific progress. In that case, a perceived threat to free-market protection of intellectual property drove investors away from biotechnology and research. In the future, changes in public policy will have a similar effect. Attempts to weaken or eliminate patent protections or to bar or limit exclusive licensing are just the sort of policy shifts that will curtail biotechnology companies in their quest to better the health of all Americans. Like many of those who oppose gene patents, Ms. Caulfield argues that they impede research, and as with the others, she supplies no data to support her claims. In contrast, clinical trial data show that the discovery of even a single important drug target — even if it is patented — can have a big effect on the development of new drugs. A recent search of a database of clinical trials disclosed more than 150 different trials involving VEGF and EGF receptors — proteins involved in cancer — even though many of these receptors are patented. Thus, the discovery of a single class of important targets can launch a tremendous amount of research and development. If the goal of the patent system is to promote innovation, an important drug target — by definition a “research tool” — would seem like exactly the sort of discovery that deserves protection. These same clinical trial data also suggest that the nonexclusive licensing of those targets is the optimum way of maximizing innovation. Incyte Genomics, which is often referred to as one of the leading holders of patents on genes and proteins, has for years licensed its patents on genes and proteins for use as drug targets on a nonexclusive basis. The patent system is most effective when the cost of invention is high but the cost to copy the invention is low; put another way, patents protect against free riders. Gene-based inventions are the nearly perfect context to apply patents. It is expensive and risky to discover and characterize genes, but easy to copy those discoveries. In this regard, it is noteworthy that Affymetrix’s major products require the identification and characterization of full or partial genes. In other words, Affymetrix’s products are most useful if the customer possesses the inventions that Affymetrix now argues should be available for free. While Affymetrix’s desire to avoid paying royalties is perhaps understandable, it is not a sound basis for making public policy. Lee Bendekgey is the general counsel of Incyte Genomics Inc., and Diana Hamlet-Cox is the company’s vice president of intellectual property.

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