Nearly two years have passed since the National Institutes ofHealth dropped a bombshell on biotechnology by applying forpatents on thousands of human DNA sequences.

On Thursday, the congressional Office of TechnologyAssessment held a workshop on DNA patents, chaired byRobert Merges, a patent lawyer and professor of law at BostonUniversity. Last August, the OTA was asked to look into theissues raised by the patents by senators Mark Hatfield, R-Ore.,Edward Kennedy, D-Mass., and Dennis DeConcini, D-Ariz.,chairman of the Subcommittee on Patents, Copyrights andTrademarks.

One key issue was somewhat philosophical: whether humangene are patentable. Hatfield has introduced legislation callingfor a temporary ban on patenting human genes. But thepanelists agreed that the notion that human gene patents weresomehow improper defied rationality.

The panel also discussed whether the NIH patents would slowresearch and commercialization. Leslie Meyer Leon, a legalassistant at Fish & Richardson in Boston, recounted how anacademic client had labored for five years on a gene, only tohear that NIH had applied to patent the genes. "How longbefore I find out whether my gene is claimed in (former NIHresearcher J. Craig) Venter's patent?" the client asked Leon.

Easy solutions are elusive, however. For one thing, the linebetween technology for research and for end-use is blurred."The concept of research exemptions (from patents) wasexplored in draft legislation a few years ago," said Lisa Raines,vice president for government relations at the IndustrialBiotechnology Association, "and it raised more questions than itanswered."

A consensus was reached, though, that patents of DNAfragments should not infringe upon patents of complete genes,and vice-versa.

Discussing another licensing issue, Raines suggested that thetransaction costs of licensing the NIH patents could outweighany benefits. "Should the federal government be placingimpediments to an industry it has said should remain worldleaders?" she asked.

Toward the end of the workshop, Merges said that NIH mightnot even license the patents. He said Congress could mandatelicensing, and hinted that there might be protections for peopleusing sequences "for something quite different from somethingthe sequence patent discloses."

The issue of cross-licensing also arose. "The Justice Departmentis currently interpreting the Hart-Scott-Rodino Act to the effectthat exclusive licensing of a patent may be tantamount to themerger of the two companies, and may require review byJustice and a waiting period prior to that license beingfinalized," Raines said. "Some deals are being scuttled."

While Merges said he would "talk serious licensing (agreementswith a competitor) before I bet the company" on a lawsuit,Raines explained that the economics of the biotechnologycapital markets made it a lose-lose proposition for smallercompanies because profits would have to be spread too thin foreither (competitor) to thrive."

OTA's staff will use the information from the workshop, as wellas from papers by panel members, in their analysis of issues inpatenting human DNA, to be published in July 1994. OTAreports examine alternatives, but do not makerecommendations to Congress.

-- David C. Holzman Washington Editor

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