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Opeskin, Brian; Finlay, Anne --- "Gene Patenting and Human Health: the ALRC Discussion Paper" [2004] ALRCRefJl 13; (2004) 84 Australian Law Reform Commission Reform Journal 55


Reform Issue 84 Autumn 2004

This article appeared on pages 55 – 58 of the original journal.

Gene patenting and human health: The ALRC Discussion Paper

By Brian Opeskin and Anne Finlay*

The Australian Law Reform Commission (ALRC) has released its second major consultative document—Gene Patenting and Human Health (DP 68)—in its inquiry into gene patenting and human health.

DP 68 makes nearly 50 proposals for reform, which are specifically targeted to ensure gene patents work as effectively and equitably as possible.

The release of DP 68 followed an extensive round of public consultations after the release of an Issues Paper in July 2003.[1] The ALRC received 65 submissions and conducted nearly 50 targeted consultations with stakeholders, involving many hundreds of individuals. The submissions came from individuals, organisations and government departments spanning a wide range of interests.

The submissions

A number of submissions expressed the view that the patent system works reasonably well across all fields of technology, including human genetics. On this view any problems with gene patents are no more than might be expected in any new field of human endeavour. At the other end of the spectrum were those who considered the patent system to be fundamentally flawed in its application to all technologies. The problem was said to stem from the inadequacies of the examination process, combined with the incentive for patent offices to be overly generous in their grant of patents because their revenues depend on receipt of patent fees.

Between these extremes were the far more numerous submissions and consultations in which concerns were expressed about the patenting of genetic materials and technologies—ranging from mild dissatisfaction with particular arrangements, to strenuous objections to the way in which the patent system deals with genetic materials and technologies.

Submissions that criticised gene patents identified a broad range of concerns, including the following:

• Patent legislation fails to take sufficient account of ethical considerations, such as whether human genetic sequences are a proper subject matter for a statutory monopoly.

• Human genetic sequences should not be patentable because they are discoveries, not inventions. Alternatively, the level of inventiveness required to isolate and purify human genetic material is insufficient to justify the grant of a patent.

• Patents granted over genetic materials and technologies are often too broad, and are granted without proper evidence that the invention is useful.

• Patents over genetic materials and technologies are too easily granted in Australia, in comparison with overseas patent offices; and patent examiners should be more highly skilled in assessing applications in the field of biotechnology.

Many submissions directed their attention to the manner in which gene patents are exploited in the marketplace by a patent holder or its licensee. Again, many different views were expressed, including the following:

• Restrictive licensing practices limit access to medical genetic testing, and compromise the quality of such testing, to the detriment of public health.

• Exploitation of the monopoly rights conferred by gene patents drives up the cost of medical genetic testing beyond a fair and equitable level, to the detriment of public health.

• Licensing practices restrict access to genetic materials and technologies for research purposes. Negotiating licences for a large number of related or overlapping gene patents is problematic due to the high transaction costs and lack of expertise of many researchers.

• The use of gene patents in research should be exempt from claims of patent infringement, so as to facilitate research, not hinder it.

The ALRC received a broad range of comments and opinions about the actual or potential effects of gene patents, including anecdotal accounts about research or healthcare being hindered by gene patents, or by the commercial strategies of patent holders. However, many of the concerns related to possible future problems and were based on assumptions that may or may not be borne out with time—for example, assumptions about the future development of the market in medical genetic testing, or the intentions of patent holders with regard to the exploitation and enforcement of particular gene patents. The inquiry found limited evidence that gene patents or licensing practices have had any significant adverse impact on the conduct of genetic research or on healthcare provision in Australia to date.

The inquiry’s approach to reform

In drafting its proposals for reform, the inquiry took as its starting point an acceptance of the fundamental objective of the patent system in seeking to encourage innovation by granting limited monopoly rights. The ALRC has not been asked to undertake a wholesale review of intellectual property laws or the patent system, but (under the terms of reference) to examine ways in which the patent system can be changed to “further the health and economic benefits of genetic research and genetic and related technologies”.

Because of the limited evidence of current problems, the ALRC has been cautious in its approach, believing that major change should be proposed only in response to demonstrated problems. This is particularly so given that such changes may have uncertain flow-on effects; for example, on future investment and innovation in genetic technologies, and on the development of the biotechnology industry.

However, the ALRC has also sought to ensure that patent laws and practices are sufficiently flexible and robust to anticipate and respond to future problems. The proposals in DP 68 are more often directed to influencing patent practices than to proposing substantive changes to patent law. In addition, the ALRC suggests that state and federal governments take a more pro-active approach to monitoring gene patents.

Constraints on reform

Aside from lack of evidence about current problems, other factors constrain the ALRC from proposing major changes to the patent system. One of these is the scope of the inquiry’s terms of reference, which limit the ALRC’s inquiry to the impact of patenting laws and practices related to “genes and genetic and related technologies”.

In general, the ALRC does not believe it is appropriate to propose changes to the Patents Act 1990 (Cth) that are specific to genetic materials or technologies because this would complicate and fragment Australia’s patent laws. However, while there are cogent reasons for seeking to maintain the technology-neutral nature of the Patents Act, the inquiry believes there is scope for technology-specific regulation through guidelines and principles issued by the Patent Office (that is, IP Australia) and other relevant institutions.

Legislative reform directed specifically to genetic materials and technologies would also lead to divergence between Australian patent law and that of major industrialised countries—with implications for investment in the Australian biotechnology sector. The adoption of specific laws for genetic materials and technologies may also have implications for Australia’s obligations under various trade agreements with other countries.

Some proposals, therefore, have been framed so as to apply to all patented inventions. These include proposals made in relation to an experimental use defence, Crown use and acquisition, and compulsory licensing. In some cases, the decision to propose reforms that are applicable to all patentable inventions was bolstered by submissions identifying similar problems with respect to other patentable subject matter. In other cases, the uncertain implications of reform on other patentable subject matter constituted one reason not to propose change at all.

Reform proposals

The 49 proposals for reform in DP 68 are directed to:

• improving patent law and practice concerning the patenting of genetic materials and technologies, including through proposed amendments to the Patents Act and changes in the practices and procedures of IP Australia, patent examiners and the courts;

• improving patent law and practice concerning the exploitation of gene patents, including in relation to new defences to claims of patent infringement, Crown use and the compulsory licensing of gene patents;

• ensuring that publicly funded research, where commercialised, results in appropriate public benefit, including through the adoption of appropriate patent practices;

• encouraging universities and other publicly funded research institutions to raise the awareness of researchers about patenting issues and the commercialisation of research;

• ensuring that Australian research institutions and biotechnology companies are adequately skilled to deal with issues concerning commercialisation and the licensing of patented inventions;

• establishing mechanisms for monitoring the implications of gene patents for research and healthcare so that governments have the ability to intervene where gene patents are considered to have an adverse impact, either in specific cases or systemically; and

• applying competition law to business practices involving patented genetic inventions.

Most proposals do not require legislative change but involve the development of new or revised guidelines, or other action by government and non-government bodies involved with various aspects of the patent system or its impact on research, biotechnology or healthcare. These bodies include: IP Australia; the Australian Competition and Consumer Commission (ACCC); the Australian Research Council; the National Health and Medical Research Council; Biotechnology Australia; AusBiotech Ltd; and the Australian Health Ministers’ Advisory Council.

One suite of proposals concerns Patent Office practices. DP 68 proposes that IP Australia should develop examination guidelines to explain how the criteria for patentability apply to inventions involving genetic materials and technologies. Additionally, the inquiry suggests that IP Australia should continue to enhance its current efforts to provide all Australian patent examiners with continuing education in areas of technology relevant to their particular specialty and that it should also review and update its education programs regularly so that new developments can be incorporated as required. Another proposal concerns the use of expert advisors by IP Australia.

Similarly, the ALRC proposes that courts should continue to develop procedures to allow judges to benefit from the advice of assessors or scientific advisors in litigation involving gene patents. This is a matter of particular importance to the Federal Court, which hears and determines most patent litigation in Australia.

Other non-legislative proposals are directed to the relationship between the patent system and the three sectors to which the ALRC is required to have regard—namely, research, biotechnology and healthcare. For example, the ALRC proposes that Biotechnology Australia take steps to assist universities and biotechnology companies in commercialising inventions involving genetic materials and technologies.

Commonwealth, state and territory health departments are encouraged to monitor the ongoing impact of gene patents and to consider whether to intervene in patent proceedings where particular gene patents are thought to have an adverse impact on healthcare provision. These reforms are intended to ensure that problems are identified at an early stage. Similarly, the ALRC suggests there may be a role for Australia’s competition regulator, the ACCC, in monitoring any anti-competitive conduct by gene patent holders and licensees.

Broadly, the proposals seek to recognise both the generality and longevity of the patents system, on the one hand, and the new challenges generated by human genetic science and technology, on the other. There are many different points at which the patent system may be reformed to address the actual and anticipated problems posed by the patenting of genetic materials and technologies. This does not mean that reform should be sought at every point, but rather that intervention—where needed—should be directed to those places where it will be most effective.

The final phase

The proposals outlined in DP 68 will be further refined during the next phase of the inquiry in response to further consultations and submissions. Some proposals will become recommendations in the final report; others may be discarded and others may be amended in the light of feedback. In addition, DP 68 contains a number of questions seeking further information. Some of these may also form the basis for recommendations in the final report, which is due by 30 June 2004.

* Brian Opeskin and Professor Anne Finlay are Commissioners of the Australian Law Reform Commission. Both are working on the current inquiry into gene patenting and human health.

Endnotes

{1} Australian Law Reform Commission, Gene Patenting and Human Health (IP 27, 2003).


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