WASHINGTON _ House legislators here have introduced a bill thatchanges patent laws in order to better protect biotechnology companiesfrom foreign competitors. Although the four-year debate over this issuehas been an arcane one, biotechnology advocates say it's critical to theindustry.At issue is the manner in which the U.S. Patent and Trademark Office(PTO) grants patents for processes. The proposed legislation (HR4307) would simplify and provide certainty in the determination ofpatentability of processes using or making novel and "nonobvious"products. It would accomplish this by amending Title 35 of the U.S.Code with respect to applications for process patents."The tragedy today is that an American inventor of a remarkable newbiotechnology process can face unfair foreign competition withoutredress," Lisa Raines, Genzyme Corp.'s vice president of governmentrelations, told the House Judiciary committee's subcommittee onIntellectual Property and Judicial Administration yesterday. "Thatsituation undermines confidence in the patent law and ultimately in therole of Congress to redress grievances."At the subcommittee hearing, supporters of HR 4307 includedbiotechnology and pharmaceutical company representatives andClinton administration officials. Executives from IBM Corp. and TheDow Chemical Company opposed the change in patent law.Under current law, inventors cannot prevent foreign competitors fromimporting products made by a process which uses a material patentedin the U.S., unless they have patent protection for that process. Butcompanies cannot always obtain patents for processes. For example, acompany that develops a protein drug typically files a patent for theDNA sequence of the protein, the vector used to transfect the host cellto produce the protein, the host cell itself and, last but not least, theend-product protein.However, if the protein is one that has already been discovered andcharacterized by scientists, such as a protein that occurs naturally in thehuman body, it may not be patentable as an end-product. In that case,the next best thing is to get a patent on the process used to producecommercial quantities of the protein.Courts Inconsistent On Process PatentsBut due to inconsistent court precedents on process patents, the PTOtends to grant companies patents for the individual components _DNA sequence, vector, host cell _ but not for the process.The confusing situation leaves biotechnology companies vulnerable toforeign competitors who could take the individual componentsoffshore, combine them using the unpatented process, and then importthe end-product back into the U.S. Because neither the end-product northe process is protected, the inventing company has no legal recourse toprevent this from happening."Foreign piracy of U.S. technology through exploitation of a legalloophole such as this should not be tolerated," said the Clintonadministration's administrator for legislation and international affairs,Michael Kirk.The political battle over this legislation has been a tortuous one in partbecause, as Raines says, "patent attorneys are a conservative bunch"and are loath to any tinkering with patent law. Subcommittee chairmanWilliam Hughes accused HR 4307's opponents on Thursday of"ritualistic acts of obeisance" to patent laws conceived and written longbefore the advent of genetic engineering.But Roger Smith, assistant general counsel at IBM, argued that HR4307 would "throw out 200 years of U.S. law" and permit claims to begranted on obvious, well documented processes so long as they wereused to produce patentable products."If the creation of a novel computer element, for example, amicroprocessor, can result in the patenting not only of that element, butof potentially every known program that can be run on the newmicroprocessor, enormous economic power is bestowed upon thepatent owner," complained Smith.But Kirk said that the scenario painted by computer industry executivesabout possible negative consequences of HR 4307 was unlikely. "Fromthe standpoint of commercial reality, I don't believe we will see adeluge of patent applications from computer manufacturers that areloaded up with process claims."Raines said that HR 4307 has a good chance of passing the House thisyear. A similar bill regarding process patents has already passed in theSenate. If and when the House approves HR 4307, the only remainingstep would be a conference between the two chambers to reconcile thebills or a full Senate vote on the House bill.
-- Lisa Piercey Washington Editor
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