LONDON _ Europe's biotech industry could suffer if the EuropeanUnion (EU) implements a proposed draft directive on patent legislationaimed at harmonizing the varying laws.In a review of recent developments in intellectual property in thebiotech sector, Nicholas Scott-Ram, of British Biotechnology plc,warns that as currently drafted, the directive "falls far short of itsoriginal aims at harmonization and that a number of deficiencies inEuropean patent law have not been addressed."Harmonization, said Scott-Ram in a paper published in The U.K.Biotechnology Handbook '94 (produced by BioCommerce Data Ltd.and the U.K. BioIndustry Association), "should be based on thestandard criteria of patentability, patent term, inventorship, ownershipand ensuring parity of claim scope. The EU draft directive, which failsto address these basic issues, is unlikely to help this harmonizationprocess, and _ as with the regulations on the use of geneticallymodified organisms _ will not lead to a level playing field withinEurope, but rather a series of different interpretations of thesedirectives by member states according to their various legislativeapparatus."The proposal, by the European Council of Ministers, is known formallyas the Directive on the Legal Protection of Biotechnology Inventions."The purpose of the directive was to try to ensure that patent lawdevelops in a uniform way across the community," explained CedricHoptroff, of the British Patent Office in London. According toDominique Vandergheynst of the European Commission (the Brussels-based European civil service), the directive also set out "to establish aclear frontier between what is patentable and what is excluded."The fate of the directive is unclear, said Hoptroff. This is partlybecause the legislation has to go through a new process that givesmembers of the European Parliament greater input on the fate of newlegislation. Following elections earlier this year, the parliament gainedmany new members, making it even harder to estimate the position itwill take in discussions on the directive.The original directive came from the European Commission. TheCouncil of Ministers, a committee of government ministers from eachmember country, agreed a revised directive, which then went to theparliament. The trouble began when parliament added a number ofamendments. Those amendments, tabled in the name of the Member ofthe European Parliament for Munich, Willi Rothley "appear to prohibitpatenting the human body or parts of it, and only allow process-basedpatents to be granted in rapidly emerging areas like gene therapy." AsScott-Ram interprets it, "the new amendments actually represent asubstantial erosion of what constitutes patentable subject matter asoriginally set out by the European Patent Convention."Directive Still On The TableBecause the parliament did not accept the council's directive, thelegislation now enters the new Co-decision Procedure. The goal is toreach common ground, much like what happens during a U.S.congressional conference committee.Given the new political process and many new parliament memberswho were elected after the parliament first voted to accept the Rothleyamendments, Hoptroff said he wouldn't be surprised if the proposedlegislation is never approved.The commission, parliament and council are expected to conclude theirdebates by the end of the year.Several industry sources told BioWorld that the current systems workfine and the changes would not be welcome. Hoptroff said thatEurope's patent system has moved along steadily since the commissionfirst started thinking about the issue more than five years ago. "Industrysays it is happy about the way things have developed throughoutEurope," he added.Scott-Ram agrees with this assessment. "There is no need for it [thedirective] really." He criticizes the draft directive on a number ofissues. He points to the "dubious logic" where the directive"presupposes that there are two codes of patent law, one forbiotechnology and one for other fields of invention."Scott-Ram also objects to the fact that the directive has "provided afocus for a number of minority interest groups, who do not play anypart in the patenting process, either as users or regulators, to have anincreasingly large say in its drafting." Part of the problem, said Scott-Ram, is that these groups have injected ethical and moral issues into thediscussion. For example, the directive includes the Farmer's Privilege(which allows farmers to re-use, without cost, patent-protected seed)and a requirement for compulsory cross-licensing from holders ofpatents which dominate plant varieties to such users. While the biotechindustry objects to the extension of Farmer's Privilege, for nearly 40years farmers have had the legal right to re-use seeds produced bytraditional plant breeding techniques.These provisions, said Scott-Ram, are of concern to seed manufacturersand other agricultural biotechnology companies and are "likely to bemore detrimental to both farmers and industry in the long run." Thechanges also put Europe at a competitive disadvantage to the U.S. andset a precedent for other minority groups to obtain special rights."Should Ethics Be Addressed Via Patents?Scott-Ram also objects to this strategy on the grounds that "it isquestionable whether ethical and moral issues should be resolvedthrough patents and in particular whether patent examiners arequalified to decide issues such as innovations being contrary to thedignity of man or to weigh benefit to man against suffering toanimals."Tim Behean, of Slaughter and May, a London law firm with a numberof biotech clients, agreed with Scott-Ram's analysis. "Using the patentsystem as a moral platform seems to me to be misconceived," Beheansaid. "Parliament is the proper platform for outlawing things that areimmoral. "Scott-Ram also attacks the so-called Rothley amendments, introducedwhen the directive came up for its second reading in the parliament.The changes would, "have a significant negative impact on theEuropean biotechnology industry," he said.According to Behean, there is no longer a pressing need to change theEuropean patent legislation. Since the commission first started toconsider the subject _ five years ago _ then the European PatentOffice (EPO) in Munich has come to terms with patents applicationsfor living organisms.EPO Application Includes Local Patent ProtectionThe EPO, "has taken over as the route for obtaining patents in Europe,"Behean told BioWorld. "The EPO does it well and is very careful," headds. A single application to the EPO results in local patent protectionthroughout Europe. It is then down to the courts in each country toargue about the local validity. "It is a good system."Behean is "a bit surprised that the biotech industry does not lobby a bitmore seriously and a bit more visibly." Some observers are lessconvinced by the industry's position.Sandra Thomas, of the Science Policy Research Unit (SPRU) at SussexUniversity, Brighton, Sussex, agreed that the patent position, as it nowstands, is "beset with problems" for the biotech industry. Thomas, whohas conducted a number of studies of European patent regime forbiotechnology, is not convinced by all of the complaints emanatingfrom the biotech industry. "Industry does tend to bemoan the state ofregulation in Europe, but we have a more concerned public to satisfy."Vandergheynst, of the commission, also sees the ethical dimension asan important contribution of the proposed directive. "The mostimportant element is the introduction of the ethical dimension," heexplains. This was introduced when the directive came before theparliament for its first reading in October 1992. Vandergheynstmaintains that people are coming to agree with the directive. When itwas first introduced in 1988, "many people thought that it was toocomplex and strange," he adds, "today everybody realizes that thetechnical solutions are very useful." He predicts that there will be anagreement on the directive by the end of the year, with two minoramendments from parliament members. But he anticipates that when itmeets on Sept. 19, the Council of Ministers will reject a thirdamendment on the grounds that it is "inconsistent with the directiveitself."Editor's note: For a copy of The U.K. Biotechnology Handbook '94,write to BioCommerce Data Ltd., 95 High Street, Slough, Berkshire,SL1 1DH, U.K. n

-- Michael Kenward Special To BioWorld Today

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