By Randall Osborne

Editor

When the U.S. Patent and Trademark Office (PTO) last month nailed down its final version of guidelines for gene-based patents, the popular press jumped on the story with vigor seldom seen in the coverage of a governmental bureau occupied largely with paperwork.

This, after all, was human genes.

Never mind that the new rules looked much like the old rules ­ or at least like the interim revision of the old rules, which had been published a year earlier.

The PTO said the gene invention must be "specific, credible and substantial," with well-established, clearly discernible utility. Earlier, it only had to be "specific and credible."

Reports trumpeted how the "bar had been raised" (it had), although the Biotechnology Industry Organization (BIO) said the guidelines followed the way the industry generally has been operating.

Meanwhile, other PTO news went almost unnoticed.

Starting Nov. 29, 2000, the PTO said it would begin publishing patent applications 18 months after the effective filing date.

Unlike Europe, the U.S. "traditionally has published nothing until [the application] became a patent," said Brigid Quinn, PTO spokeswoman. "Our average is 25 months from application to issuance."

The 18-month rule followed by other countries was adopted late last year in the U.S., following the requirements of the American Inventors Protection Act of 1999. "I put in the press release that this is 'one of the most fundamentally significant changes to the U.S. patent system in this century,'" Quinn said.

Few seemed to care.

"Nobody follows the patent system closely enough to realize this is a big deal," she told BioWorld Financial Watch. "It seems esoteric to people. The [gene patent] guidelines were something the mainstream press could focus on."

Patent seekers can be excluded from publication if they attest to the PTO at the time of filing that they have not filed an application in a foreign country, and will not do so.

Under the old rules, patent applications filed in Europe and the U.S. simultaneously (as they often are) remained secret for 18 months, after which details of the European patents became known. Competitors and would-be competitors in the U.S. could inspect the overseas documents to determine potential clashes. But, if the patent was published in the U.S. only, it could remain under wraps for about two years.

Could the new arrangement cut down on patent lawsuits?

"The applications become prior art," Quinn said. In other words, filers get patent protection earlier ­ and may ask for publication even sooner than 18 months, under the new rules.

"We'll be publishing applications as early as March," she said.

Lila Feisee, Washington-based BIO's director of federal government relations and intellectual property, said the publication rule change is not hugely important, since most companies file in the U.S. and Europe at the same time.

But the new system will make for more convenience, creating "a win-win situation for everybody. It puts competitors on notice. You can either decide to shift your strategy, or realize you need to start protecting your turf" to avoid court squabbling later, she said.

The change also will move the world closer to a uniform patent process.

"That's definitely what they're moving toward," Feisee told BioWorld Financial Watch. "We just have to make sure the world follows the rules the way we do."

As genomics yields more findings ­ and disputes such as the recently concluded, costly three-year battle between Amgen Inc., of Thousand Oaks, Calif., and Cambridge, Mass.-based Transkaryotic Therapies Inc. (TKT) and Aventis Pharma AG, of Frankfurt, Germany, over erythropoietin ­ biotechnology firms are increasingly alert to the importance of dodging patent lawsuits.

In late January, a U.S. District Court judge ruled in favor of Amgen's patents for Epogen, for anemia. TKT is appealing. A similar battle is being waged in Europe.

In tandem with the publication rule, the new gene patent guidelines, overplayed as they've been, will help by requiring more specific explanations by filers. But they will also cause "a lot of companies in functional genomics to say, 'This shows how important what we're doing is,'" predicted Bruce Carter, president and CEO of ZymoGenetics Inc.

"What they're really saying is, 'I don't have any intellectual property,'" he added.

A privately held spin-off of Novo Nordisk A/S, ZymoGenetics is working on protein therapeutics ­ and gathering patents fast, although (like the change in PTO publication rules) it hardly gets the press attention of its publicly held competitors, Human Genome Sciences Inc. (HGS), of Rockville, Md., and Genentech Inc., of South San Francisco.

"Our parent company was allowing us to build this portfolio away from the glare of publicity," Carter told BioWorld Financial Watch. "We have had the luxury of generating all this property to work on."

A survey done by ZymoGenetics of its patent position related to HGS and Genentech was hampered somewhat by publication rules, Carter said.

"You can only do such an analysis up to 18 months ago," he said. "The analysis we did is on first to file. That's the most objective way to go about things. You don't know when somebody invented, but first to file is on record."

In the protein-therapeutics space, he said, HGS came in first, ZymoGenetics second, and Genentech third.

"I think we have about 175 issued patents, and we have filings on over 500 proteins that we believe have the potential to be therapeutics," Carter said.

New rules mean the PTO "is saying, 'Hey, don't come to us with any Mickey Mouse applications,'" he said, and working with proteins ensures an avoidance of the Disney realm.

"What we'll find at the end of the day is that people who filed individual patents on a protein may well have enough utility," Carter said. "The patents we're filing, we're getting issued. The ones in danger are the so-called 'omnibus patents,' where you have a lot of gene sequences in one patent application."

ZymoGenetics was "worried that some of the [expressed sequence tag] patents would mess us up, but we had really focused on saying, 'You got to have a full-length protein and you've got to show utility,'" Carter said. HGS has done a similarly good job in that area, he added.

"A lot of companies, like Millennium [Pharmaceuticals Inc., of Cambridge, Mass.] and Incyte [Genomics Inc., of Palo Alto, Calif.], have spent a lot of time identifying targets," he said. "They're looking at a medicinal chemical approach. We're looking for just a small subset. If it was a dartboard, we'd say we're only throwing at a small segment of the dartboard."

Tight focus will be the smartest way to go, as patent rules become more stringent, and publication more quick, said Carter. His missionary zeal for protein therapeutics, he said, caused some at Novo Nordisk to compare him to Billy Graham.

"There's only one EPO, and that was emphasized again in the case of TKT, and there's only one Neupogen [Amgen's stimulator of white blood cells in cancer patients, which has been on the market since 1991]," Carter said.

"Amgen is able to drive toward a market cap as large as [Eli Lilly and Co., of Indianapolis] because they have two exclusive proteins," he said. Amgen has a market cap of about $72 billion, Lilly's is about $91 billion.

"There are numerous ACE [angiotensin-converting enzyme] inhibitors, calcium antagonists, beta blockers, and serotonin uptake inhibitors," Carter said. "What you want in this business is exclusivity." *