WASHINGTON -- The Biotechnology Patent Protection Act of1993 received another boost as G. Kirk Raab, Genentech Inc.'schief executive officer and newly appointed chairman of theBiotechnology Industry Organization (BIO), testified before theSubcommittee on Intellectual Property and JudicialAdministration on Wednesday.

The difficulty that the legislation (H.R. 760) seeks to mitigate isa loophole in patent law, due to conflicting legal precedents,which allows the products of U.S.-protected biotechnologyprocess patents to be imported, said Michael Kirk, acting headof the U.S. Patent and Trademark Office (PTO).

"I'd like to mention how I make decisions," said Raab. "Whenwe are looking at new products, I talk to scientists, physiciansand accountants, and they give me a fairly clear understandingof the risks, which are very dramatic, that I am going to take aswe spend $350 million developing products.

"Then my patent attorney comes in. I ask about the risks, andhe says, 'I don't know.' I try to get him to explain it in layterms and when I finish the conversation, I don't know either.I feel like I'm with Alice in Wonderland.

"I look at what happened to Amgen -- they settled (withGenetics Institute Inc. over a patent for erythropoietin) afterspending millions of dollars. ... I tend to try to becomeconservative.

"For example, we are working on a very exciting product. ... Iknow a very large pharmaceutical company is consideringproducing this outside of the U.S. so they can use thisuncertainty (of the patent laws) to come in and competeagainst Genentech.

"We surveyed the 21 companies who make up our association'spatent committee," said Raab. Fifteen companies said they hadimmediate patent-related problems, and 19 said they facedsuch problems. "This is a sword hanging over all of our heads."

European countries offer stronger protection for biotechnology;Raab said this could drain investment funds from the U.S. Forexample, Amgen Inc.'s patent for erythropoietin, which thecompany spent six years defending in the U.S., has been upheldby two European countries and the European patent office.

Legislators hesitate to make exceptions for specific industriesunder patent law, but earlier efforts to provide thebiotechnology industry with broad protection have failed togain political support.

When asked about the possibility that other industries mightdemand the same protection biotechnology is seeking, Raabreplied that biotechnology was unique in that its products are"created by God and discovered by industry."

PTO Chief Kirk said that the administration could accept atightly crafted amendment to the patent laws along the lines ofTitle II of H.R. 760 that would address the problems facing thebiotechnology industry. Title II concerns patents of materials,while Title I concerns process patents.

Kirk suggested that adding protections for innocent purchasers(unaware that the product is imported) and narrowing thedefinition of biotechnological material would make the billmore politically palatable. The current definition should belimited to genetically engineered host cells, transgenic animalsand plants, and cell fusion products or nucleotide sequences, hesaid.

Asked by subcommittee Chairman William Hughes which titlethey preferred, both Raab and Steven Odre, vice president forintellectual property at Amgen, said they would opt for Title II,material protection.

-- David C. Holzman Washington Editor

(c) 1997 American Health Consultants. All rights reserved.

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