APPENDIX VOLUME VI (Pages A4530-A7340) No. 2010-1406 United States Court of Appeals for the Federal Circuit ______
THE ASSOCIATION FOR MOLECULAR PATHOLOGY, THE AMERICAN COLLEGE OF MEDICAL GENETICS, THE AMERICAN SOCIETY FOR CLINICAL PATHOLOGY, THE COLLEGE OF AMERICAN PATHOLOGISTS, HAIG KAZAZIAN, MD, ARUPA GANGULY, PHD, WENDY CHUNG, MD, PHD, HARRY OSTRER, MD, DAVID LEDBETTER, PHD, STEPHEN WARREN, PHD, ELLEN MATLOFF, M.S., ELSA REICH, M.S., BREAST CANCER ACTION, BOSTON WOMEN’S HEALTH BOOK COLLECTIVE, LISBETH CERIANI, RUNI LIMARY, GENAE GIRARD, PATRICE FORTUNE, VICKY THOMASON, and KATHLEEN RAKER,
Plaintiffs-Appellees,
v.
UNITED STATES PATENT AND TRADEMARK OFFICE,
Defendant, and
MYRIAD GENETICS, INC.,
Defendant-Appellant,
(caption continued on inside cover)
Appeal From The United States District Court For The Southern District of New York In Case No. 09-CV-4515, Senior Judge Robert W. Sweet
APPENDIX VOLUME VI (Pages A4530-A7340)
BRIAN M. POISSANT ISRAEL SASHA MAYERGOYZ GREGORY A. CASTANIAS LAURA A. CORUZZI JONES DAY JONES DAY EILEEN FALVEY 77 West Wacker Drive 51 Louisiana Avenue, N.W. JONES DAY Chicago, IL 60601 Washington, D.C. 20001 222 East 41st Street (312) 782-3939 (202) 879-3939 New York, NY 10017 (212) 326-3939 (additional counsel listed on inside cover)
Attorneys for Defendants-Appellants Myriad Genetics, Lorris Betz, Roger Boyer, Jack Brittain, Arnold B. Combe, Raymond Gesteland, James U. Jensen, John Kendall Morris, Thomas Parks, David W. Pershing, and Michael K. Young
and
LORRIS BETZ, ROGER BOYER, JACK BRITTAIN, ARNOLD B. COMBE, RAYMOND GESTELAND, JAMES U. JENSEN, JOHN KENDALL MORRIS, THOMAS PARKS, DAVID W. PERSHING, and MICHAEL K. YOUNG, in their official capacity as Directors of the University of Utah Research Foundation,
Defendants-Appellants.
Of counsel for Defendant-Appellant Myriad Genetics, Inc.:
JAY Z. ZHANG BENJAMIN G. JACKSON MYRIAD GENETICS, INC. 320 Wakara Way Salt Lake City, UT 84108 (801) 883-3328
TABLE OF CONTENTS
VOLUME I
JUDGMENTS AND ORDERS APPEALED FROM Opinion Denying Defendant’s Motion To Dismiss of November 1, 2009 ...... A1
Amended Opinion Denying Defendant’s Motion for Summary Judgment and Order of April 2, 2010 ...... A89
Judgment of April 19, 2010 ...... A248
PATENTS-IN-SUIT U.S. Patent No. 5,693,473...... A259
U.S. Patent No. 5,709,999...... A362
VOLUME II U.S. Patent No. 5,710,001...... A469
U.S. Patent No. 5,747,282...... A569
U.S. Patent No. 5,753,441...... A673
U.S. Patent No. 5,837,492...... A775
U.S. Patent No. 6,033,857...... A870
VOLUME III PACER DOCKET SHEET ...... A968
PLEADINGS AND OTHER PAPERS Complaint filed May 12, 2009...... A1034
Defendant United States Patent and Trademark Office’s Memorandum of Law in Support of Motion to Dismiss and Notice ...... A1101 Defendants Myriad Genetics et al. Memorandum of Law in Support of Defendant’s Motion to Dismiss and Notice ...... A1120
Declaration of Barry R. Satine...... A1142
Exhibit 1 of Ravicher Declaration — Letter to B. Satine...... A1256
Declaration of Madhuri Hegde, Ph.D...... A1282
Declaration of Wendy Chung, MD, Ph.D...... A1302
Declaration of Roger Hubbard, Ph.D...... A1342
Declaration of Jeffrey A. Kant, MD, Ph.D...... A1357
Cover page and first page of Exhibit 2 of Ganguly Declaration ...... A1436
Declaration of Harry Ostrer, M.D...... A1462
Declaration of David H. Ledbetter, Ph.D...... A1505
Declaration of Ellen T. Matloff, M.S...... A1550
Declaration of Lisbeth Ceriani...... A1593
Declaration of Runi Limary ...... A1597
Declaration of Genae Girard...... A1601
Declaration of Patrice Fortune...... A1605
Declaration of Vicky Thomason...... A1609
Declaration of Kathleen Raker...... A1613
Plaintiffs’ Notice and Memorandum of Law in Support of Motion for Summary Judgment; Plaintiffs’ Rule 56.1 Statement of Material Facts ...... A1634
Declaration of Sir John E. Sulston, Ph.D...... A2439
Declaration of Wayne W. Grody, M.D., Ph.D...... A2464
Declaration of Debra G.B. Leonard, M.D., Ph.D...... A2555
Declaration of Christopher E. Mason ...... A2601
- 2 - Declaration of Myles W. Jackson ...... A2614
Declaration of Elizabeth Swisher, M.D...... A2642
Declaration of Mildred Cho, Ph.D...... A2670
Declaration of Shobita Parthasarathy, Ph.D...... A2697
Declaration of Dr. Susan M. Love...... A2725
Declaration of Mark Sobel...... A2750
Declaration of Madhuri Hegde, Ph.D...... A2752
Declaration of Michael S. Watson, Ph.D...... A2769
Declaration of Wendy Chung, MD, Ph.D...... A2772
Declaration of John R. Ball...... A2809
Declaration of Roger Hubbard, Ph.D...... A2812
Declaration of John Scott...... A2824
Declaration of Jeffrey A. Kant, MD, Ph.D...... A2827
Declaration of Haig H. Kazazian, Jr., M.D...... A2848
Declaration of Arupa Ganguly, Ph.D...... A2887
Exhibit 1 of Ganguly Declaration — Letter from Myriad to Kazazian...... A2907
Declaration of Harry Ostrer, M.D...... A2932
Exhibit 1 of Ostrer Declaration — Letter from Myriad to Kazazian ...... A2964
Declaration of David. H. Ledbetter, Ph.D...... A2975
Declaration of Ellen T. Matloff, M.S...... A3020
Declaration of Elsa W. Reich, M.S...... A3034
Declaration of Barbara A. Brenner ...... A3054
Declaration of Lisbeth Ceriani...... A3063
- 3 - Declaration of Runi Limary ...... A3067
Declaration of Genae Girard...... A3071
VOLUME IV Declaration of Patrice Fortune...... A3075
Declaration of Vicky Thomason...... A3079
Declaration of Kathleen Raker...... A3083
Brief for Amici Curiae, March of Dimes Foundation, et al...... A3099
Brief for Amici Curiae, American Medical Association, et al...... A3141
Brief for Amici Curiae, National Women’s Health Network, et al...... A3188
Brief for Amici Curiae, The International Center for Technology Assessment, et al...... A3240
Exhibit 1 of Satine Declaration — Response to Letter from D. Ravicher ...... A3364
Myriad Defendants’ Notice and Memorandum of Law (1) In Support of Their Motion for Summary Judgment and (2) In Opposition to Plaintiffs' Motion for Summary Judgment; Defendant’s Statement and Counterstatement to Plaintiffs’ Rule 56.1 SMF...... A3429
Declaration of Dr. Gregory C. Critchfield...... A3638
VOLUME V
Declaration of John J. Doll ...... A3699
Portion of Exhibit 13 of Doll Declaration — US Patent No. 6,180,337 ...... A4241
Declaration of Dr. Mark A. Kay ...... A4286
Declaration of Nancy J. Linck, J.D., Ph.D...... A4395
- 4 - VOLUME VI Declaration of Dr. Philip R. Reilly ...... A4530
Declaration of William E. Rusconi...... A4702
Declaration of Joseph Schlessinger, Ph.D...... A4719
Declaration of Dr. Donna Shattuck ...... A4769
Declaration of Dr. Mark Skolnick ...... A4800
Declaration of Joseph Straus...... A4831
Declaration of Dr. Sean Tavtigian ...... A5192
Brief for Amicus Curiae, Biotechnology Industry Organization ...... A5293
Declaration of Dennis Bissonnette...... A5570
Brief of Amicus Curiae Genetic Alliance ...... A5583
Memorandum in Support of Motion for Leave to File Brief Amici Curiae, BayBio et al...... A5674
Brief for Amici Curiae, BayBio et al...... A5679
Brief for Amici Curiae, Rosetta Genomics, Ltd., et al...... A6539
Declaration of Emanuel Petricoin, Ph.D...... A6763
Boston Patent Law Association’s Amicus Brief...... A6801
Declaration of Emanuel Petricoin, Ph.D...... A6837
Memorandum of Law (1) in Further Support of Plaintiffs’ Motion for Summary Judgment Against all Defendants and (2) in Opposition to the Myriad Defendants’ Motion for Summary Judgment and (3) in Opposition to Defendant United States and Patent and Trademark Office’s Motion for Judgment on the Pleadings...... A6886
Plaintiffs’ Counterstatement to the Myriad Defendants’ Rule 56.1 Statement of Material Facts ...... A6944
- 5 - Declaration of Robert L. Nussbaum, M.D...... A6958
Supplemental Declaration of Christopher E. Mason ...... A7015
Declaration of Roger D. Klein, MD, JD...... A7026
Declaration of Joseph E. Stiglitz, Ph.D...... A7052
Declaration of Fiona E. Murray, Ph.D...... A7123
Exhibit 2 of Declaration of Thomas B. Kepler, “Metastasizing patent claims on BRCA1,” Kepler et. al ...... A7228
Supplemental Declaration of Ellen T. Matloff, MS ...... A7270
Brief for Amicus Curiae, Kevin E. Noonan, pro se...... A7281
Motion for Leave to File Amicus Curiae Brief, Kevin E. Noonan, pro se...... A7316
Motion for Leave to File Amicus Curiae Brief, Professor Kenneth Chahine ...... A7339
VOLUME VII Myriad Defendants’ Memorandum in Reply to Plaintiffs’ Opposition to Myriad Defendants’ Motion for Summary Judgment ...... A7362
Exhibit 1 of Declaration of Laura A. Coruzzi, sections of the file histories corresponding to U.S. Patent Nos. 5,709,999, 5,710,001, 5,753,441, and 6,033,857 ...... A7409
Exhibit 2 of Declaration of Laura A. Coruzzi, Patrice Watson et al., Detecting BRCA2 Protein Truncation in Tissue Biopsies to Identify Breast Cancers That Arise in BRCA2 Gene Mutation Carriers...... A7454
Exhibit 3 of Declaration of Laura A. Coruzzi, International Patent. Application No. PCT/US2008/080358 (WO2009/052417) ...... A7461
Exhibit 4 of Declaration of Laura A. Coruzzi, Amir A. Jazaeri et al., Gene Expression Profiles of BRCA1-Linked, BRCA2-Linked, and Sporadic Ovarian Cancers, 94(13) J. Natl. Cancer Inst., 990 (2002) ....A7511
- 6 - Exhibit 5 of Declaration of Laura A. Coruzzi, International Patent Application No. PCT/US2003/004688 (WO 2003/068054) ...... A7523
Myriad Defendants’ Notice of Appeal...... A7840
TRANSCRIPTS OF HEARINGS Transcript of Oral Argument of February 2, 2010...... A7844
CERTIFICATE OF SERVICE ......
- 7 - Case 1:09-cv-04515-RWS Document 167 Filed 12/23/2009 Page 1 of 20
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
ASSOCIATION FOR MOLECULAR PATHOLOGY; AMERICAN COLLEGE OF MEDICAL GENETICS; AMERICAN SOCIETY FOR CLINICAL PATHOLOGY; COLLEGE OF AMERICAN PATHOLOGISTS; HAIG No. 09 Civ. 4515 (RWS) KAZAZIAN, MD; ARUPA GANGULY, PhD; WENDY CHUNG, MD, PhD; HARRY OSTRER, MD; DAVID ECF Case LEDBETTER, PhD; STEPHEN WARREN, PhD; ELLEN MATLOFF, M.S.; ELSA REICH, M.S.; BREAST CANCER DECLARATION OF ACTION; BOSTON WOMEN’S HEALTH BOOK DR. PHILIP R. REILLY COLLECTIVE; LISBETH CERIANI; RUNI LIMARY; GENAE GIRARD; PATRICE FORTUNE; VICKY THOMASON; KATHLEEN RAKER,
Plaintiffs,
-against-
UNITED STATES PATENT AND TRADEMARK OFFICE; MYRIAD GENETICS; LORRIS BETZ, ROGER BOYER, JACK BRITTAIN, ARNOLD B. COMBE, RAYMOND GESTELAND, JAMES U. JENSEN, JOHN KENDALL MORRIS, THOMAS PARKS, DAVID W. PERSHING, and MICHAEL K. YOUNG, in their official capacity as Directors of the University of Utah Research Foundation,
Defendants.
I, Philip R. Reilly, hereby declare that:
I. EDUCATION AND BACKGROUND
1. I currently hold the position of Venture Partner at Third Rock Ventures in Boston,
Massachusetts. Third Rock Ventures is a venture capital company whose mission is to create transformational life science companies through close collaboration with members of the
scientific and business communities. My qualifications, experience, and a list of my publications are set forth in my curriculum vitae, attached hereto as Exhibit 1.
A4530 Case 1:09-cv-04515-RWS Document 167 Filed 12/23/2009 Page 2 of 20
2. I am Adjunct Professor of Law at Suffolk University School of Law in Boston,
Massachusetts where I teach a seminar in Biomedical Policy and Law. I previously held
teaching positions at Cornell University, Tufts University School of Medicine, Harvard Medical
School, and Brandeis University. I am a member of the Board of Trustees of Cornell University.
3. I am trained in and have been board certified in both internal medicine and clinical genetics. I have also been a member of the Massachusetts Bar since 1973.
4. I received my J.D. in 1973 from Columbia University in New York, New York and practiced as an attorney from 1975 to 1977 at the law firm of Powers & Hall in Boston,
Massachusetts. For a number of years thereafter, I had a part-time practice at Powers & Hall.
5. I received my M.D. in 1981 from Yale University in New Haven, Connecticut and completed my internship and residency in the Department of Medicine at Boston City Hospital in
Boston, Massachusetts. From 1982 to 1983, I was a Professor of Law at the University of
Houston. Between 1983 and 1985, I completed my residency. Thereafter, I became a Staff
Physician and then, ultimately, Executive Director of the Eunice Kennedy Shriver Center for
Mental Retardation, Inc., which was at the time affiliated with Massachusetts General Hospital, in Waltham, Massachusetts.
6. From 2000 to 2006, I was Chairman of the Board and CEO of Interleukin
Genetics, Inc. in Waltham, Massachusetts. During the same time, I was also Director of Clinical
Genetics. Interleukin Genetics was then and still is a publicly traded company with a focus on developing DNA-based risk assessment tests and preventative and therapeutic products to reduce or ameliorate those risks.
7. I chaired the social issues committee of the American Society of Human Genetics during the 1990’s. I also served for three years on the Board of Directors of the American
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Society of Human Genetics. In my capacity as chair of the social issues committee, I authored or co-authored numerous position papers on important public policy issues related to human genetics that were adopted by the American Society of Human Genetics.
8. I was president of the American Society of Law and Medicine and Ethics (at the time, including about 3,000 members) in 2002 and 2004. I also served on its Board of Directors.
9. In the 1990’s, I was heavily involved in advising leading companies in developing and/or commercializing gene-based diagnostics and therapeutics, including diagnostic tests. This was a time when the field of biotechnology was rapidly developing and a period when many genes were being associated with risk for disease. In particular, many companies turned to me for advice regarding the ethical and legal issues they needed to consider in connection with the new gene based diagnostic tests they were creating. Such companies included, for example,
Myriad Genetics, Genzyme Corporation, Collaborative Research, Inc., and Vivigen, Inc. for which I served as a member of the Board of Directors. I further advised biotechnology companies such as Millennium Pharmaceuticals, Inc., GlaxoSmithKline, and Pharmacia.
10. I have served as a member of several advisory boards, including the SmithKline
Beecham Genomics Advisory Board, and was Chair of the SmithKline Beecham Clinical
Genetics, Ethics and Public Policy Advisory Board. From about 1995 to 2000, I was a member of the Clinical Advisory Board of Myriad Genetics. I assisted Myriad in identifying ethical considerations related to the BRCA1 and BRCA2 genetic tests that were developed, and played an important role in developing Myriad’s patient consent forms. It was my experience during those years that the entire scientific and clinical team at Myriad showed deep concern for the best interest of patients. For example, Myriad tried to ensure that as many patients as possible had
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access to the test. Importantly, Myriad also strived to ensure that patients were given the results of their genetic tests in a responsible and compassionate manner.
11. For several years, I was an advisor to the Biotechnology Industry Organization
(“BIO”). BIO is well-regarded and the world's largest biotechnology organization, providing advocacy, business development and communications services for more than 1,200 members worldwide. In my capacity as an advisor, I helped to develop a number of position statements for BIO including in areas such as genetic testing.
12. I am an author of numerous peer-reviewed academic articles and books on topics such as the ethical, legal, and social issues related to genetics. From the 1990’s to about 2003, I was frequently a public speaker on the topic of genetics, the future of medicine, and bioethics. I have given approximately 500 speeches on these topics during my career.
13. In my capacity as CEO at Interleukin Genetics, I became familiar with the workings of the United States patent system. I was also involved in drafting or reviewing some of the company’s patent applications.
14. I keep apprised of the literature regarding the impact of United States intellectual property law and policy on the development and commercialization of science and technology, particularly with respect to biotechnology.
II. BASIS OF OPINION
15. In preparing this declaration, I have been provided and considered the following:
(1) the Complaint filed in connection with this proceeding; (2) Plaintiffs’ Memorandum of Law in Support of Motion for Summary Judgment; (3) Plaintiffs’ Rule 56.1 Statement of Material
Facts; (4) the Declaration of Dr. Mildred Cho, dated August 17, 2009 (“Cho”); (5) Cho, MK et al., 2003, Effects of Patents and Licenses on the Provision of Clinical Genetic Testing Services,
J. Mol. Diagnostics 5(1):3-8 (cited in paragraph 11 of the Cho Declaration) (Exhibit 2; “Cho
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2003”); (6) Merz and Cho, 2005, What are gene patents and why are people worried about
them?, Community. Genet. 8(4):203-08 (Exhibit 3; “Merz and Cho”); (7) Declaration of Dr.
Wendy Chung, dated July 30, 2009 (“Chung”); (8) BIO 2009 Member Survey: Technology
Transfer and the Biotechnology Industry, located at
http://bio.org/ip/techtransfer/PDF.TECH.TRANSFER.PRESENTATION.10.25.pdf (last printed
on December 11, 2009) (Exhibit 4; “BIO Survey”); (9) The Economic Impact of Licensed
Commercialized Inventions Originating in Research, 1996-2007: Final Report to the
Biotechnology Industry Organization, September 3, 2009, located at
http://www.bio.org/ip/techtransfer/BIO_final_report_9_3_09_rev_2.pdf (last printed on
December 11, 2009) (Exhibit 5; “BIO Study”); (10) Walsh et al., 2005, “View from the Bench:
Patents and Material Transfers” Science 309:2002-03 (Exhibit 6; “Walsh”); and (11) Bremer et al., August 14, 2009, The Bayh-Dole Act and Revisionism Redux, Patent, Trademark &
Copyright Journal (Exhibit 7; “Bremer”).
III. PATENTS PROVIDE THE ESSENTIAL INCENTIVE FOR THE DEVELOPMENT AND COMMERCIALIZATION OF NEW TECHNOLOGIES
16. Patents provide a bona fide net social benefit. First, patents are essential in obtaining capital investment in the development and commercialization of technological breakthroughs. Second, patents encourage the sharing of technological advances through the disclosure requirements of the applicable patent laws and regulations, thus enabling the public to take advantage of these developments after the patents expire.
17. The net social benefit provided by patents is especially striking for patents in the life sciences arena. Numerous biotechnology-based clinical applications, especially, gene-based applications, would not be available today without patents. There are many diagnostic tests based on patented isolated DNA molecules or methods of detecting mutations therein. Examples
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of such tests include the DNA tests for cystic fibrosis (a severe lung disease) which are based on
the CFTR gene, and for Fragile X syndrome (a leading cause of inherited mental retardation),
which is based on the FMR1 gene. There are today many other DNA based diagnostic tests
secured by patents. Similarly, there are many therapeutic products based on patented isolated
DNA molecules or their recombinant protein products, including recombinant erythropoietin
(“EPO”) to treat anemia, and recombinant human granulocyte colony-stimulating factor (“G-
CSF”) to treat cancer patients receiving chemotherapy and bone marrow transplants.
18. The patent system is essential to attract investors. Without the incentive provided
by the patent system, investors would be much less likely to invest in new and potentially life-
saving technologies. Patents, through the promise of a limited period of market exclusivity,
provide investors with an opportunity to recoup their initial investment and ultimately, derive
commercial benefit therefrom.
19. Indeed, Dr. Mildred Cho has recognized that “[p]atents are clearly seen as a
necessary stimulus for the infusion of venture and risk capital in the bio-technology industry . .
..” Merz and Cho at p. 6.
20. As Venture Partner of Third Rock Ventures, my work includes the analysis and
valuation of intellectual property portfolios and, most importantly, patent portfolios in the life
sciences sector. I have come to understand that intellectual property protection is essential to
biotechnology and pharmaceutical companies that must invest up to hundreds of millions of
dollars in research and development over many years to bring their diagnostic and therapeutic
products to market. Patents enable these companies to acquire the capital needed for diagnostic
and drug development testing by providing a necessary period of market exclusivity.
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21. In the case of genetic testing companies, the limited period of exclusivity
provided by a patent is almost always required to secure sufficient capital needed to establish
testing capability on a clinical scale. As CEO of Interleukin Genetics, I personally found this to be the case.
22. I recently reviewed a survey published in 2009 by BIO of 150 biotechnology member companies in the therapeutic and diagnostic healthcare industry. (See Exhibit 4, BIO
Survey). The survey revealed that the majority of companies (61%) stated they generally in- license projects that are in the pre-clinical or Phase I stage of development, and thus still require substantial R&D investment and commercialization risk by the licensee (See Exhibit 4, BIO
Survey at 13). A substantial majority (77%) of the respondents without approved products indicated that they expect to spend 5-15 years and over $100 million developing a commercial product (See Exhibit 4, BIO Survey at 25, 28). These expenditures far exceed most initial research funding by the federal government.
23. The net social benefit of the patent system accrues both to the biotechnology sector and to the patients it hopes to serve. This is true with regard to patents related to isolated
DNA molecules.
IV. PATENTS PROMOTE INFORMATION DISCLOSURE
24. The patenting of human isolated DNA molecules is not in conflict with the notion that science would advance more rapidly if researchers are allowed to take advantage of free access to knowledge. Part of the quid pro quo of the patent system is that inventors, in exchange for a limited period of patent exclusivity, must provide a sufficient description of the patented
invention so that others may improve upon it.
25. Moreover, patents do not necessarily operate as an absolute monopoly. Although
a patent grants the right to exclude others from making, using, and selling or importing into the
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United States the patented invention for a limited term, the patent holder must still respect the
intellectual property rights of third parties in the same field of the invention. Thus, the patentee
may not be able to practice the invention covered by the patent without a license from the third
party.
26. In addition, the patent system promotes more disclosure than otherwise might
occur if, for example, trade secrets were the only means to exclude competitors, at least in the
commercial sector. For example, one of the most well-known products sold throughout the
world is Coca-Cola (or “Coke”). It is generally known that although various formulas have been introduced since the 1880’s, the various formulas have and still are protected by trade secrets.
This period of time far exceeds the limited period of market exclusivity that a patents can
provide.
V. THE PATENT SYSTEM WORKS AS THE FOUNDING FATHERS INTENDED
27. The Constitution recognizes the need “[t]o promote the Progress of Science and
useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” United States Constitution, Article 1, Section 8, clause 8.
28. A historical example of the success of the patent system comes from the area of federally funded research. In 1980, in response to concerns about U.S. competitiveness in the global economy, Congress enacted the Bayh-Dole Act.
29. In 1980, Congress enacted Bayh-Dole to address concerns regarding barriers to commercial development affecting non-governmental entities such as universities and small business firms. Some of the stated objectives of the Act include: (1) utilization of inventions arising from federally supported research or development; (2) to promote collaboration between commercial entities and nonprofit organizations, including universities; and (3) to promote the
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commercialization and public availability of inventions made in the United States by United
States industry and labor. 35 U.S.C. § 200.
30. As reported in the BIO Survey discussed above, the vast majority of the surveyed
biotechnology companies license technology from universities (76%) (Exhibit 4, BIO Survey at
17). Moreover, half of the companies surveyed reported that they were founded on the basis of
obtaining an in-licensing agreement (Exhibit 4, BIO Survey at 28).
31. Patents also have a significant and positive influence on the United States
economy. A 2009 study released by BIO illustrates the importance of university-industry
research and development partnerships based on in-licensing of patents. (See Exhibit 5; BIO
Study). The study reports that university-licensed products commercialized by industry created
more than 279,000 new jobs across the United States during the 12-year period between 1996
and 2007 (See Exhibit 5, BIO Study at p. 8). Further, the study states that “[w]ithout accounting
for product substitution effects, we estimate that over the period 1996 to 2007, university
licensing agreements based on product sales contributed at least $47 billion and [possibly] as
much as $187 billion to the U.S. GDP. A moderately conservative estimate based on 5% royalty
rates yields a total contribution to GDP for this period of more than $82 billion.” (Exhibit 5, BIO
Study at p. 32).
32. In a 2009 article published by Bremer and colleagues the authors concluded that
“[r]eams of objective data exist supporting the conclusion that the Bayh-Dole Act greatly
improved the commercialization of federally-funded research . . . and that the public sector-
private sector partnerships which were generated under the [Bayh-Dole] Act are essential both to the well being and the competitive position of the United States.” (Exhibit 7, Bremer Article).
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33. It is my understanding that the University of Utah Research Foundation, an owner
or part-owner of at least some of the patents at issue in this case, obtained federal funding in
connection with BRCA1 and BRCA2 research. I further understand that Myriad, the exclusive
licensee of the patents at issue in this case, developed and commercialized its breakthrough
diagnostic tests through the investment of a significant amount of venture and risk capital. The
BRCA1 and BRCA2 story is just one of the many positive examples of the impact of the Bayh-
Dole Act.
34. Further, I believe that the incentives of the patent system were instrumental in
Myriad’s discovery of the correct BRCA1 and BRCA2 sequence and characterization of its true
structure, which has enhanced BRCA1 and BRCA2 research by its disclosure to the public.
35. Finally, from my experience in industry, post-invention development costs far
exceed pre-invention and research expenditures. In the case of the BRCA1 and BRCA2 genes, for example, although the U.S. Government may have granted millions of dollars in the initial research that led to the patents at issue in this case. Myriad almost certainly spent far more in development and commercialization in order to bring its groundbreaking sequencing tests rapidly
to the market.
36. Given the immense importance of the existing patent portfolio to the
biotechnology industry, it would be far wiser to have any important policy shifts be made
prospectively by Congress after sustained public debate. I believe that the policy arguments are
better left to the parts of government where they are better addressed—in Congress and in the
U.S. Patent and Trademark Office.
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VI. PATENTS ON ISOLATED DNA PROMOTE RESEARCH AND ADVANCE CLINICAL DEVELOPMENT
37. Plaintiffs have voiced the concern that gene patents impede scientific research and
clinical development by creating an atmosphere of apprehension of patent infringement in the research community. Underlying such concern appears to be the assumption that such patents
cover the genes as they are found in the human body.
38. Patents such as the patents-in-suit have served to advance research and the
practice of medicine and benefit patients. I am not aware of any credible evidence that Myriad’s
patents impede or have impeded basic research.
39. Isolated and purified DNA molecules are chemically, structurally, and
functionally different from genes in their native states as they exist in the human body.
40. Thus, the notion that genes and their mutations, alterations, or variations are
naturally occurring substances that should not be patented is misplaced. Genes as they are found in the human body are not patentable subject matter.
41. Data cited to support the notion that patents impede research or diagnostic test development is at best inconclusive. This conclusion is echoed in part by an article co-authored by Dr. Mildred Cho. In the article, the authors conclude that “[l]ittle is known about how gene patents are being used and whether they are having a net beneficial or detrimental effect on scientific research and commercial product development.” (Exhibit 3, Merz and Cho at p. 6).
The authors also state that “[t]here is little evidence that early fears about gene patenting placing substantial restraints on research and clinical medicine have come to fruition.” (Exhibit 3, Merz and Cho at Abstract, p. 1).
42. Further, in a 2005 article published in the journal Science, John P. Walsh and colleagues report the findings from a survey conducted on 414 biomedical researchers in
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universities, government, and nonprofit institutions to determine the effect of patents on
biomedical research and material transfers. (Exhibit 6, Walsh at p. 2002). The researchers found
that “few academic bench scientists currently pay much attention to the others’ patents.” Id.
Moreover, of the “32 respondents who were aware of relevant IP, four reported changing their research approach and five delayed completion of an experiment by more than one month. No one reported abandoning a line of research. Thus, of 381 academic scientists . . . none were stopped by the existence of patents, and even modifications or delays were rare.” Id.
43. The sheer volume of scientific publications on BRCA1/2 genes and their gene
products belies the purported impediment in basic research. On December 10, 2009, I performed
a search using the term “BRCA1” in the PubMed database1 which retrieved almost 7,000
references. A similar PubMed search conducted using the term “BRCA2” retrieved over 4,000
references.
44. Moreover, the BRCA1 and BRCA2 patents at issue in this case do not appear to
have impeded clinical research. A search on the website ClinicalTrials.gov2 on December 19,
2009 using the term “BRCA1” retrieved 77 clinical trials that have been completed, are ongoing,
or are actively recruiting subjects. Using the search term “BRCA2,” 58 clinical trials were
retrieved that have been completed, are ongoing, or are actively recruiting subjects.
45. From my experience, the sharing of research tools was not inhibited by IP protection. For example, during my tenure as Executive Director at the Eunice Kennedy Shriver
Center for Mental Retardation, an institute that focused on neuroscience research, the scientists
1 PubMed at the website pubmed.org is a free search engine for accessing citations, abstracts and some full text articles on life sciences and biomedical topics. PubMed is maintained by United States National Library of Medicine at the National Institutes of Health. 2 ClinicalTrials.gov is a registry of federally and privately supported clinical trials conducted in the United States and around the world. It is a service provided by the National Institutes of Health.
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with whom I had the privilege to work routinely acquired valuable substances, materials, and information under material transfer agreements from both academe and industry.
46. I note that in her declaration, Dr. Cho concludes that “patents on genes used for clinical diagnostics inhibit the conduct of research to further the development of improvements to genetic tests.” Cho ¶ 24. I strongly disagree. I would be curious to see how Dr. Cho herself would reconcile her statement quoted above with her own article published just a few years ago, which states that “[t]here is little evidence that early fears about gene patenting placing substantial restraints on research and clinical medicine have come to fruition.” (Exhibit 3, Merz and Cho at p. 6).
47. Moreover, I note that the surveys conducted by Dr. Cho and cited in her declaration included many clinical geneticists who were involved in or overseeing genetic testing laboratories that were intended to generate a profit. Thus, many of these geneticists charge for genetic testing themselves. For example, in her 2003 article, Dr. Cho and colleagues performed a telephonic survey of all laboratory directors in the United States who were members of the
Association for Molecular Pathology (“AMP”) or who were listed on the GeneTest.org website.
(Exhibit 2, Cho 2003 at p. 3). I further note that AMP is a plaintiff in the present proceeding. I
believe that the study was biased towards individuals or laboratories many of whom stand to gain
should the patents at issue become invalidated.
48. The results obtained through Dr. Cho’s telephonic survey published in 2003 at
most represent a snapshot of opinions of a 122 laboratory directors at that time. (Exhibit 2, Cho
2003 at p. 3). Dr. Cho was clearly aware of the limitations of her own study. She concluded that
“our data do not directly address the question or whether patents and restrictive licensing
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practices have affected the cost and quality of genetic tests, or hindered new research.” (Exhibit
2, Cho 2003 at p. 8).
49. Based on the above, any concerns that human “gene” patents impede basic
scientific and/or clinical research are not supported by the evidence. The sheer amount of
research being conducted and the number of scientific articles being published regularly on the
BRCA1 and BRCA2 genes and their protein products, for example, provide strong evidence that
research is not impeded.
VII. PATENTS ON ISOLATED DNA PROMOTE ADVANCES IN MEDICINE AND ENHANCE THE QUALITY OF PATIENT CARE
50. Another concern voiced by Plaintiffs is that “gene” patents impede advancements
in medicine and clinical development. Again, Dr. Cho was clearly aware of the limitations of
her own study. She concluded that “our data do not directly address the question or whether
patents and restrictive licensing practices have affected the cost and quality of genetic tests, or hindered new research.” (Exhibit 2, Cho 2003 at p. 8).
51. The reality is quite the opposite. As discussed above, without the promise of a
period of market exclusivity provided by patents and the infusion of venture and risk capital
derived therefrom, companies that capitalize on innovation simply would not be created. Their products would not be brought to market, to the clinic, and most importantly, to patients. This of course, holds true for companies such as Myriad and its BRCA1/2 diagnostic tests.
52. Intellectual property is essential to innovation in health care. In my capacity as venture partner, I help to start companies that develop treatments for rare genetic disorders for which there is no adequate current therapy. An example is a company to develop a recombinant protein to treat a rare genetic disorder, namely X-linked hypohidrotic ectodermal dysplasia. The decision to fund this company with significant capital was critically dependent on an assessment
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of the quality of the relevant intellectual property. Without the promise of a period of market exclusivity provided by the patent law, this investment would not have been made.
53. Without strong patent protection, the many biotechnology-based medical advances, such as Myriad’s BRCA1/BRCA2 genetic based testing, would not be developed.
54. Yet another concern voice by the Plaintiffs about “gene” patents is that they harm patients by interfering with their ability to get a second opinion and to make informed decisions about their health and medical care. I disagree. Indeed the term “second opinion” is not used properly. In the clinic, the term “second opinion” is used to refer to the interpretation of diagnostic tests and their implications for treatment. It would be quite unusual to have a patient’s DNA sequenced a second time in a second laboratory. If, however, there were any doubts regarding the accuracy of the test, re-sequencing with the proper controls would normally be performed by the original provider. The term, second opinion, generally refers to the interpretation of a test result and which therapeutic options to follow based thereon.
55. As an internist and clinical geneticist, it is my understanding that once a patient has his or her genes sequenced, e.g., the BRCA1 and/or BRCA2 genes, the patient generally does not get his or her genes re-sequenced. In the absence of any doubts regarding the accuracy of the original test, re-sequencing of the patient’s genes would be an unnecessary use of resources.
56. The situation is analogous to a person who obtains an MRI and whose physician then diagnoses a disorder and subsequently recommends a course of treatment. The patient is free to take the MRI images to another physician for a second opinion. Again however, obtaining another MRI just a short time thereafter would be an unnecessary use of resources, and it is unlikely that an insurance plan would cover a second MRI.
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VIII. TEST RESULTS GENERATED IN RESEARCH LABORATORIES SHOULD NOT BE COMMUNICATED TO PATIENTS
57. Plaintiffs have complained that because of the patents at issue in this case, they are unable to share the results of any genetic testing performed and that this goes against their ethical obligations. In particular, Dr. Chung in her declaration states the following: “[a]s a
researcher, I believe I have an ethical responsibility to offer my test subjects access to
information about their genes. In order to meet this ethical responsibility, I offer my research
subjects the option of finding out their results. As a result of the patents, I can only do that by
sending samples to Myriad Genetics to test the sample [sic] so I can communicate that
information to the patients.” Chung ¶14.
58. While I respect Dr. Chung’s eagerness to help her “test subjects,” Dr. Chung
appears to confuse information generated during the course of research with information
generated within a legally certified diagnostic laboratory. I believe it would be illegal to provide
results of genetic testing for clinical use if the laboratory is not Clinical Laboratory Improvement
Amendments (“CLIA”)-certified. In order for a laboratory to provide a clinical test result to a
patient, it must be CLIA-certified. In addition, New York State, where Dr. Chung operates her
research laboratory, imposes additional licensing requirements on DNA testing, which could
take, in my personal experience, a year or more to satisfy.
59. It is my impression, based on many years of interacting with academic
researchers, that the majority of academic researchers operating laboratories (as opposed to
CLIA-certified laboratories) do not believe that they should share test results with subjects
outside of the standard clinical setting.
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IX. PATENTS SUCH AS THE ONES AT ISSUE ARE CRITICAL TO A NASCENT AND BURGEONING INDUSTRY
60. I believe that the emerging field of personalized medicine promises dramatic improvements in health care. The opportunity to develop new therapies based on the genetic dissection of complex disorders raises the realistic hope for individualized treatment plans.
61. The future of personalized medicine will require understanding the biological and physiological significance of variations in genes like BRCA1 and BRCA2, and designing ways to use them in preventative and therapeutic interventions. By identifying and targeting faulty genes before they wreak havoc in the cells of the human body, medicine has the chance to save countless lives.
62. Patents upon the Myriad inventions, and similar ones, have had and will continue to have a positive impact on clinical practice and research. The granting of patents in this area has not had a negative impact on breast or ovarian cancer research and clinical practice, and clinical practice has not been harmed. To the contrary, patents on these isolated molecular diagnostic tools are important, indeed essential, to create the incentives for the immense effort involved in their discovery, and for the expense involved in bringing them to market. The incentives provided by patents fuel discovery and commercialization in emerging technologies such as medical diagnostics, resulting in social and health benefits for future generations.
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LIST OF EXHIBITS 1 Curriculum vitae 2 Cho, MK et al., 2003, Effects of Patents and Licenses on the Provision of Clinical Genetic Testing Services, J. Mol. Diagnostics 5(1):3-8 3 Merz and Cho, 2005, What are gene patents and why are people worried about them?, Community. Genet. 8(4):203-08 4 BIO 2009 Member Survey: Technology Transfer and the Biotechnology Industry, located at http://bio.org/ip/techtransfer/PDF.TECH.TRANSFER.PRESENTATION.10.25.pdf (last printed on December 11, 2009) 5 The Economic Impact of Licensed Commercialized Inventions Originating in Research, 1996-2007: Final Report to the Biotechnology Industry Organization, September 3, 2009, located at http://www.bio.org/ip/techtransfer/BIO_final_report_9_3_09_rev_2.pdf (last printed on December 11, 2009) 6 Walsh et al., 2005, “View from the Bench: Patents and Material Transfers” Science 309:2002-03 7 Bremer et al., August 14, 2009, The Bayh-Dole Act and Revisionism Redux, Patent, Trademark & Copyright Journal
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A4549 Case 1:09-cv-04515-RWS Document 167-2 Filed 12/23/2009 Page 1 of 14
A4550 Case 1:09-cv-04515-RWS Document 167-2 Filed 12/23/2009 Page 2 of 14 CURRICULUM VITAE
Name: Philip Raymond Reilly
Address: 145 Monument Street, Concord, MA 01742
Date of Birth: October 3, 1947
Place of Birth: Albany, NY
Citizenship: United States of America
Marital Status: Married (Nancy), three children (Thomas, Sarah, Christopher).
Education: 1965-1969 B.A. Cornell University 1970-1973 J.D. Columbia University 1973-1975 University of Texas (Human Genetics)
1977-1981 M.D. Yale University
Licensed to practice both law and medicine in Massachusetts. Board Certified in Internal Medicine and Clinical Genetics
Current Positions Venture Partner, Third Rock Ventures, Boston, MA; (I work to start companies to treat rare genetic disorders.) Adjunct Professor of Law, Suffolk University. (I teach a seminar in biomedical policy and law).
Prior Positions 2000-2006 CEO, Interleukin Genetics, Inc. 2000-2006 Chairman of the Board, Interleukin Genetics, Inc.
I was responsible for all aspects of running personalized medicine company that focused on the genetics of inflammation. I oversaw a growing patent portfolio, raised multiple rounds of capital, supported shareholder relations, re-listed the company on a stock exchange (AMEX), and played in key role in complying with Sarbanes-Oxley requirements. I oversaw the build-out of a state of the art DNA testing laboratory, as well as the successful effort to gain CLIA certification. Between 2000 and 2003, I rebuilt the company, hiring each of the first 20 employees.
1990-2000 Executive Director, Eunice Kennedy Shriver Center For Mental Retardation, Inc., Waltham, MA 02452 1985-1990 Director, Primary Care Program, Shriver Center; 1987-1998 Director, UAP, Shriver Center
1 A4551 Case 1:09-cv-04515-RWS Document 167-2 Filed 12/23/2009 Page 3 of 14
Internships and Residencies:
1973 Summer intern (Fellowship award) Institute for Society, Ethics and the Life Sciences, Hastings-on-Hudson, New York 1981-1982 Intern, Department of Medicine, Boston City Hospital, Boston, MA 1983-1985 Resident, Department of Medicine, Boston City Hospital
Research Fellowships:
1973-1975 Research Associate, Medical Genetics, University of Texas Graduate School, Houston, Texas (Dr. Margery Shaw)
Licensure and Certification:
1973 Massachusetts Bar Association 1981 Certified to practice medicine in Massachusetts (#49965) 1983 Board Certification in Internal Medicine 1990 Board Certification in Clinical Genetics 1993 Founding Fellow, American College of Medical Genetics
Academic Appointments:
1985-1992 Instructor in Neurology, Harvard Medical School 1992-1998 Assistant Professor of Neurology, Harvard Medical School 1992-1995 Adjunct Professor of Legal Studies, Brandeis University 1998-2000 Assistant Professor, (Genetics) Tufts Medical School Fall 2008 Visiting Professor, Cornell University 2008-2009 Adjunct Professor of Law, Suffolk Las School
Hospital Appointments:
1984-1986 Emergency Room Staff Physician (part-time), Leonard Morse Hospital, Natick, Massachusetts 1985 –2000 Physician, Shriver Center for Mental Retardation, Waltham, Massachusetts 1986-1988 Medical Director, Shriver Center for Mental Retardation, Waltham, Massachusetts 1987–1992 Clinical Assistant, Department of Neurology, Massachusetts General Hospital, Boston, MA; 1992-1999 Assistant Professor, Department of Neurology, Harvard Medical School
2 A4552 Case 1:09-cv-04515-RWS Document 167-2 Filed 12/23/2009 Page 4 of 14 Other Professional Positions and Consulting (Selected):
1975-1976 Attorney, Powers & Hall, Boston, MA
1976-1977 Fellow, Program in Law, Science and Medicine, Yale Law School, New Haven, Connecticut
1978-1990 Legal editor, Medical Liability Monitor (140 Published columns)
1984-1992 Consultant, Vivigen, Inc. Santa, Fe, NM
1985 -1990 Attorney, Powers & Hall, Boston, Massachusetts
1985-1986 Joseph P. Kennedy, Jr. Foundation Fellow in Geriatrics and Mental Retardation, Shriver Center, Waltham, Massachusetts
1990-1992 Member, Vivgen Board of Directors
1986-1993 Consultant, Collaborative Research, Inc., Bedford, Massachusetts
1993 - 1995 Consultant, Integrated Genetics, Inc., Framingham, Massachusetts
1994 - 1999 Member, SmithKline Beecham Genomics Advisory Board
1995 - 1999 Chair, SmithKline Beecham Clinical Genetics, Ethics and Public Policy Advisory Board
1995 - 2004 Consultant, Myriad Genetics, Inc., Salt Lake City, Utah
1995 - 2002 Consultant, Millennium Pharmaceuticals, Inc., Cambridge, MA
Awards and Honors:
1977 American Bar Association Gavel Award “in recognition of a distinguished contribution to public understanding of the American system of law and justice” bestowed for my book, Genetics, Law and Social Policy (Harvard University Press, 1977)
1981 Book Award for scholastic excellence, presented upon graduation from Yale University School of Medicine
1984 Offered Chief Residency, Medicine, Boston City Hospital
Major Committee Assignments (Selected):
National, and Regional:
3 A4553 Case 1:09-cv-04515-RWS Document 167-2 Filed 12/23/2009 Page 5 of 14 1976-1977 Member, NAS/NRC Committee on Public Information in the Prevention Of Occupational Cancer
1990-1992 Member, NAS/NRC Committee on DNA Typing and Forensic Science
1991-1992 Member, Advisory Committee to the National Museum of Health and Medicine on DNA Testing of President Lincoln’s Tissue
1991-1993 Member, Task Force on Genetic Information and Insurance of the NIH- DOE Working Group on Ethical, Legal, and Social Implications of Human Genome Research
1991-1993 Member, Liaison Panel to the Institute of Medicine Committee on Assessing Genetic Risks
1987 - New England Regional Genetics Group Prenatal Testing Committee
1995 - Member, Federal Bureau of Investigation, DNA Advisory Board
Hospital:
1986-1988 Member, Massachusetts General Hospital Committee for Presymptomatic Huntington’s Disease Testing.
Memberships, Offices and Committee Assignments in Professional Societies (Selected):
1982-1989 Member, Social Issue Committee, American Society of Human Genetics 1988-1989 Chair, Ad Hoc Committee on Individual Identification by DNA Technology, American Society of Human Genetics 1989-1993 Chair, Social Issues Committee, American Society of Human Genetics 1990-1993 Ad Hoc Committee on Cystic Fibrosis Testing, American Society of Human Genetics 1994 -1997 Member, Public Policy Committee, American Society of Human Genetics 1994 -1997 Member, Ad Hoc Genome Database Committee, American Society of Human Genetics 1994 -1997 Bylaws Committee, American Society of Human Genetics 1996 -1999 Board of Directors, American Society of Human Genetics
Major Career Interests:
Genetic Screening, Genetic Counseling, Legal Medicine, Prevention of Mental Retardation, DNA Forensics, Science and Public Policy, History of Genetics, Education of Physicians about Genetics
Teaching Experience:
1973-1975 Adjunct Assistant Professor of Law, Bates College of Law, University of Houston 1977-1978 Visiting Lecturer, University of North Carolina School of Medicine, Chapel Hill (Summer Terms) 4 A4554 Case 1:09-cv-04515-RWS Document 167-2 Filed 12/23/2009 Page 6 of 14 1981 Visiting Associate Professor, Institute for the Inter-Professional Study of Health Law, University of Texas Health Science Center (Feb.1-May30) 1981-1982 Director Health Law Institute, University of Houston Law Center and University of Texas health science Center Houston Texas 1985 -1999 Instructor, Department of Neurology, Harvard Medical School 1987-1993 Lecturer, Genetics Course, Harvard Medical School 1992 -1995 Adjunct Professor in Legal Studies, Brandeis University (Seminar on “Genetics, aw and Social Policy” offered to masters degree students in genetic counseling)
Major Administrative Responsibilities:
1987 -1990 Director, University Affiliated Program, Shriver Center for Mental Retardation, Waltham, Massachusetts 1990 -2000 Executive Director, Shriver Center for Mental Retardation, Waltham, MA
Editorial Responsibilities:
1987-1993 Editorial Board, American Journal of Medical Genetics 1990 -1993 Editorial Board, Genetic Resource 1990 -1993 Editor in Chief, Exceptional Physician Newsletter
Reviewer for: Am J Human Genetics, Am J Med Genetics, JAMA, Science
Bibliography:
Books:
The Strongest Boy in the World, Cold Spring Harbor Laboratory Press, New York, 2006 (New expanded edition, 2008).
Is It In Your Genes? Cold Spring Harbor Laboratory Press, New York, 2004
Abraham Lincoln’s DNA and Other Adventures in Genetics, Cold Spring Harbor Laboratory Press, New York, 2002
The Surgical Solution: A History of Involuntary Sterilization in the United States, Johns Hopkins University Press, 1990
To Do No Harm, Auburn House, Dover, Massachusetts, 1985
Genetics, Law, and Social Policy, Harvard University Press, 1977
Original Reports (Medical):
1. Reilly P. Informed Consent. NEJM. 1974; 290: 520.
5 A4555 Case 1:09-cv-04515-RWS Document 167-2 Filed 12/23/2009 Page 7 of 14 2. Reilly P. Sickle Cell Screening. Am J of Public Health. 1974; 64: 656.
3. Reilly P. Recombinant DNA Research. Science 1977; 195: 132-133
4. Reilly P. Mass Neonatal Screening in 1977. Am J of Human Genetics, 1977; 29: 302-304
5. Reilly P. When should an investigator share raw data with the subjects? IRB: A Review of Human Subjects Research. Vol 1 (9) 1980: pp.4-5.
6. Reilly P. The Surgical Solution. Perspectives in Biology and Medicine. 1983; 26: 637-656.
7. Reilly P. Genetic Counseling: The Sorrow and The Policy. The Hastings Center Report. 1983; pp. 40-42.
8. Schwartz DA, Reilly PR. The Choice Not to be Resuscitated. J Am Geriatrics Soc. 1986; 34: 807-881.
9. Reilly P. Genetic screening: An Overview. Genetic Resource. 1987; 3: (10) 4-9
10. Reilly P. Involuntary sterilization in the United States: A surgical solution. Quarterly Review of Biol. 1987: 62: 153-170.
11. Reilly P. Impact of presymptomatic tests on physician practice. Genetic Resource. 1989; 5 (1) 29-32.
12. Li FP, Garber JE, Friend SH, Strong LC, Patenaude AF, Juengst ET, Reilly PR, Correa P, Fraumeni JF Jr. Commentary: Recommendations on predictive testing For germ line p53 mutations among cancer-prone individuals. J Nat’l cancer Inst. 1992; 84: 1156-1160.
13. Reilly PR. Ethical issues in the use of human growth hormone treatments in Down Syndrome. In: Growth Hormone Treatment in Down’s Syndrome. (Castells S. and Wisniewski KE. (eds). Chicester, Wiley 1992; pp.233-244.
14. Wertz D. Fanos J, Reilly PR. Genetic Testing for Children and Adolescents. JAMA, 1994; 272; 875-881.
15. Reilly PR. Screening for Genetic Diseases: Diagnostic and Carrier Status Availability. Encyclopedia of U.S. Biomedical Policy. Submitted, 1994.
16. Reilly PR. Physician responsibility in conducting genetic testing. Monograph: Nat’l Breast Cancer Institute. JNCI IN Press 1995.
17. Goldgar, D and Reilly P (editorial) A BRCA1 mutation in the Askkenazim. Nature Genetics 1995.
Books & Book Reviews (Medical):
1. Reilly, P. Genetics, Law, and Social Policy, Harvard University Press, 6 A4556 Case 1:09-cv-04515-RWS Document 167-2 Filed 12/23/2009 Page 8 of 14 Cambridge, 1975 (Book).
2. Reilly P. Screening Workers: Privacy, Procreation and Prevention. In: Reproduction: The New Frontier in Occupational and Environmental Health Research. Lockey JE, Lemarters GK, Keye WR, Jr. (eds). Alan R. Liss, Inc. New York. 1984; pp. 1-15 (Chapter)
3. Reilly P. Adverse Reproductive Outcome. In: The New Frontier in Occupational And Environmental Health Research. Lockey JE, Lemarters GK, Keye WR, Jr. (eds). Alan R. Liss, Inc., New York. 1984; pp., 157-160. (Chapter)
4. Reilly P. Eugenical sterilization in the United States. IN: Milunsky A, Annas G, (eds). Genetics and the Law III, New York: Plenum Press, 1985; 227-241 (Chapter)
5. Reilly P. To Do No Harm, Auburn House Publishing Co,, Dover, MA. A Memoir of Medical Education 1987; pp. 1-275. (Book).
6. Reilly P. Smith’s Recognizable Patterns of Human Malformation (4th Edition). In: Jones K. (ed), Dysmorphology and Clinical Genetics. Saunders, 1989; 3: 50-52. (Review)
7. Reilly P. Reflections on the use of DNA Forensic Science and Privacy Issues. In: Ballantyn J, Sensabaugh G, Witkowski J, (eds) DNA Technology and Forensic Science. Cold Spring Harbor Laboratory Press. 1989; pp. 43-54. (Chapter)
8. Kohn R, Martyak B, Reilly PR. Blepharoptosis-blepharophimosis-epicanthus Inversus-telecanthus. In: Mary Louise Buyse, MD Editor-in-Chief. Birth Defects Encyclopedia. Blackwell Scientific Center for Birth Defects Information Services, Inc. In Association with Blackwell Scientific Publications, Inc. Dover, Mass. 1990; pp. 228-229 (Chapter)
9. Reilly P, Foreword, Genetic Screening. In: Knoppers B, Laberge C. (eds). From Newborns to DNA Typing. Excerpta Medica, Amsterdam, 1990.
10. Reilly P. The Surgical Solution: A History of Involuntary Sterilization in The United States. The Johns Hopkins University Press. 1991; pp.1-190. (Book).
11. Reilly P. Medicolegal aspects – USA. In: Prenatal Diagnosis and Screening DJH Brock, CH Rodeck, MA Ferguson-Smith (eds). Churchill Livingston, London 1992; pp. 761-768 (Chapter)
12. Reilly PR. Genetic Testing as a Tool for Clinical Risk Assessment. In: Promoting Community Health: The role of the Academic Health Center WD Skelton, M Osterweis (eds). Association of Academic Health Centers. Washington, DC. 1993; pp. 13-33 (Chapter)
13. Reilly PR. Screening for the abnormal baby. In: Health Care for Women 7 A4557 Case 1:09-cv-04515-RWS Document 167-2 Filed 12/23/2009 Page 9 of 14 And Babies, Sachs, B. ed. 1995; In Press (Chapter)
14. Reilly, P. “Molecular Memoir” The Strands of Life: The Science of DNA and The Art of Education, autobiography of Robert Sinsheimer. JAMA (Book Review). 1995; 273 (5) 423-424.
15. Reilly, P. Culture Clash: Law and Science in America. By Stephen Goldberg. Am J Human Genetics (Book Review) 1995. 56:1010.
16. Reilly, P. Agrarian Eugenics (Book Review) Sex, Race, and Science: Eugenics in the Deep South by Edward J. Larson Med Humanities Rev In Press 1995.
Academic Publications (Legal):
1. Reilly P. Sickle cell anemia: Science and Legislation. Case and Comment. June, 1973; 46-47
2. Reilly P. Sickle Cell Anemia Legislation. J of Legal Medicine. pp. 36-40, November 1973; pp. 36-40
3. Reilly P. Sickle Cell Anemia Legislation. J of Legal Medicine. September 1973; pp.39-48.
4. Reilly P. Legal Status of the Unborn. Lancet. 1974; 16:1207.
5. Reilly P. Genetic Screening Legislation. Am J Human Genetics. 1974; 27: 120.
6. Milunsky A, Reilly P. The New genetics: Emerging Medico-Legal Issues in the Prenatal Diagnosis of Hereditary Disorders. Am J Law Med. 1975; 1: 71-88.
7. Reilly P. Genetic Counseling and the Law. University of Houston Law Review. 1975; 12: 640-669.
8. Reilly P. Recent Developments in State Supported Genetic Screening (Letter). Am J Human Genetics. 1975; 27: 691.
9. Reilly P. The XYY Syndrome in the Courts. The Latest Case. Am J Human Genetics. 1976; 28: 299.
10. Reilly P. Ethical and Scientific Issues Posed by Human Uses of Molecular Genetics. Annals of the New York Academy of Sciences, Vol 265, Am J Human Genetics. 1977; 29: 321-322.
11. Riskin L, Reilly P. Remedies for improper disclosure by genetic data banks. Rutgers-Camden Law Review. 1977; 8:480-506
12. Reilly P. Government support of genetic services. Social Biology. 1978; 27: 23-32.
8 A4558 Case 1:09-cv-04515-RWS Document 167-2 Filed 12/23/2009 Page 10 of 14 13. Reilly P. HLA Tests in the Courts. Am J Hum Genetics. 1981; 33: 1007- 1009.
14. Reilly P. Genetics and the Law II. Biosciences. 1981; p. 397.
15. Reilly P. Surrogate Mothers: Beyond Ethics and Legality. Am Med News. 1981; p. 18.
16. Reilly P. Evolution, education and the First Amendment. San Jose Studies VIII 1982; 3:94-106
17. Reilly P. The Virginia racial integrity act revisited. Am J Med Genetics. 1983; 16: 483-492.
18. Reilly P. New Genetic Tests and Our Right to Privacy. Med Ethics. 1987; 4 (1): 7-10.
19. Reilly P. Counselor Liability in Risk Communications (Part I). Perspectives In Genetic Counseling. 1988; 10 (3): 1-6.
20. Reilly P. Counselor Liability in Risk Communications (Part II). Perspectives In Genetic Counseling. 1988; 10 (4): 1-6.
21. Reilly P. Querying the genetic quest. (Review of Reproductive Genetics and the Law). Hastings Center Report. 1988; 18 (2): 39-40.
22. Reilly P. Heroes from Medicine’s Past. (Review of the Doctors by Sherwin Nuland, Knopf). Yale Alumni Magazine. 1988; p.24.
23. Reilly P. Ethical, legal, and social issues in genetics. Current Opinion in Pediatrics. 1989; 1: 448-452.
24. Reilly P. Genetic testing and the Law. In Biotechnology Law for the 1990’s: Analysis and Perspective (Special Report 4), Washington, DC Bureau of National Affairs. 1989; pp. 73-94.
25. Reilly P. Reflections on the use of DNA forensic science and privacy issues. DNA Tech and Forensic Sci. Banbury Report. 1989; 32: 43-54.
26. Reilly P. Ethical and legal issues in the medical care of retarded persons. Midwest Medical Ethics. 1990: 6 (2&3): 3-5
27. Reilly P. Advisory Statement by the Panel on DNA Testing of Abraham Lincoln’s Tissue. Quarterly Publication of the Nat’l Museum of Health and Medicine. Spring, 1991; pp. 43-47.
28. McEwen JE, Reilly PR. State Legislative Efforts to Regulate Use and Potential Misuse of Genetic Information. Am J Human Genetics. 1992; 51: 637-647.
29. McEwen JE, McCarty K, Reilly PR. A Survey of State Insurance Commissioners Concerning Genetic Testing and Life Insurance. Am J Human Genetics 1992; 9 A4559 Case 1:09-cv-04515-RWS Document 167-2 Filed 12/23/2009 Page 11 of 14 51: 785-792.
30. McEwen JE, McCarty K, Reilly PR. A Survey of Medical Directors of Life Insurance Companies Concerning Use of Genetic Information. Am J Human Genetics 1993; 52(7) 44-45.
31. McEwen JE, Reilly PR. A Review of State Legislation on DNA Forensic Databanking. Am J Human Genetics. 1994; 54: 941-958.
McEwen, JE, and Reilly, PR. Stored Guthrie Cards as DNA “Banks”. Am J Human Genetics. 1994; 55: 196-200.
32. McEwen JE, Reilly PR. Genetic Testing and Screening-VI. Legal Issues. Encyclopedia of Bioethics, MacMillan Publishing Company. 1995. 1000-1005.
33. McEwen JE, Reilly PR. Genetic Screening Legislation. Encyclopedia of Bioethics. 1995.
34. Reilly PR. Public policy and legal issues raised by advances in genetic Screening and testing. Symposium: Law and Science at the Crossroads, Vol. XXVII. Suffolk University Law School. 1995; In Press.
35. McEwen JE, Reilly PR. A Survey of State Crime Laboratories Regarding DNA Forensic Databanking. Am J Human Genetics. 1995; 56: 1477-1486.
37. Reilly PR. Screening for Genetic Diseases: Diagnostic and Carrier Status Availability, Cost, Legal Regulations. Encyclopedia of US Biomed Policy. 1995. In Press.
38. Reilly PR. Genetics and the Law. Encyclopedia of Bioethics. 1995. Vol 2; 967-976.
39. Reilly PR. Legal Issues in Genetic Medicine. In: Emery and Rimoin’s Principles and Practice of Medical Genetics. New York: Churchill Livingston, In Press. 1995.
Films:
1. McEwen, JE, Small, D, and Reilly PR (executive director). 1995. Banking Your Genes (A broadcast quality 32 minute educational film about privacy issues Raised by DNA banking in forensics and clinical medicine. This film is Distributed through Fanlight Productions in Boston.)
Books and Other Monographs – Legal
1. Reilly P. The Role of Law in the Prevention of Genetic Disease. In: Milunsky A, (ed). The Prevention of Genetic Disease and Mental Retardation. Saunders, Philadelphia. 1975; pp. 422-441.
2. Reilly P. Genetic Screening Legislation. Advances in Human Genetic, V.2. Harris and Hirschhorn, (eds). Plenum Press, New York. 1975 pp. 319-376. 10 A4560 Case 1:09-cv-04515-RWS Document 167-2 Filed 12/23/2009 Page 12 of 14
3. Reilly P. State Supported Mass Genetic Screening. In: Milunsky A., Annas G, (eds). Genetics and the Law. New York: Plenum Press. 1976; pp. 159-184.
4. Reilly P. Committee on Public Information in the Prevention of Occupational Cancer. Informing Workers and Employers About Occupational Cancer. Washington, DC National Academy of Sciences 1977; (Monograph 42 pages).
5. Reilly P. Genetics, Law, and Social Policy. Cambridge, Harvard University Press. 1977: (275 pages)
6. Reilly P. Genetic Counseling: A Legal Perspective. In: Hsia et al. (eds). Counseling in Genetics. New York: Alan R. Liss, Inc. 1979; pp. 311-328.
7. Reilly P, Mulunsky A. Medicolegal Aspects of Prenatal Diagnosis. In: Milunsky A, (ed). Genetic Disorders and the Fetus, New York: Plenum Press. 1979: 603- 620.
8. Reilly P. Professional Identification: Issues in Licensing and Certification. Genetic Counseling: Facts, Values and Norms. In: Capron A, et al. (eds). The National Foundation-March of Dimes Birth Defects: Original Article Series, Volume XV (2) New York: Alan R. Liss, Inc. 1979; pp. 291-305.
9. Reilly P. Legal Perspectives of MSAFP screening. In: Gastel B. et al. (eds). Maternal Serum Alpha-Fetoprotein: Prenatal Screening and Diagnosis of Neural Tube Defects, Washington DC. US Department of Health and Human Services, Office of Health Research, Statistics and Technology. 1981; 89:61.
10. Reilly P. Adverse reproductive outcome. Legal Viewpoint. Ibid. 1984; pp.157- 160.
11. Reilly P. The Legal Needs of the Health Care Consumer. Legal Viewpoint. Ibid. 1984: pp. 145-149.
12. Reilly P. The legal profession. In: Weiss-Bernhardt BO, Paul NW, (eds) Genetic Disorders and Birth Defects in Families and Society: Toward Interdisciplinary Understanding. March of Dimes Birth Defects Foundation, White Plains, New York. 1984; pp 36-37.
13. Reilly, P. The Legal Needs of the Health Care Consumer. In. Genetic Disorders And Birth Defects in Families and Society: Toward Interdisciplinary Understanding. Weiss J, Bernhardt BO, Paul NW (eds). March of Dimes Birth Defects Foundation, White Plains, New York. 1984; pp. 145-149.
14. Reilly P. Legal issues in keeping dead mothers alive during pregnancy. In: Evans M, Fletcher J, Dixler A, Schulman J, (eds). Philadelphia: JP Lippincott Company. 1989; pp. 307-311.
15. Reilly PR. Rights, Privacy and Genetic Screening. The Yale J of Biol and Med. 1991; 64: 43-45.
11 A4561 Case 1:09-cv-04515-RWS Document 167-2 Filed 12/23/2009 Page 13 of 14 16. Reilly PR. Gene Dreams, In: Wall Street Academia, and the Rise of Biotechnology. R. Teitelman (ed). JAMA 1991; 265: 1319-1320.
17. Reilly PR. Legal Issues in Genetic Medicine. In: Emery and Rimoin’s Principles And Practice of Medical Genetics. New York: Churchill Livingston, 1994, Submitted.
Other Articles (Selected):
1. Reilly P. Genes and the Law. Med Dimensions. 1975; pp. 45-46.
2. Reilly P. There’s Another Side to Genetic Screening. Prism. 1976; pp.55-57.
3. Reilly P. Case Dismissed! Impact in Am Med New. 1976; pp.5-6.
4. Reilly P. The Case Against Countersuits. Impact in Am Med New. 1977; pp.3-6.
5. Reilly P. Business is Booming for the Health Lawyers. Impact in Am Med News. 1977; pp. 9-10.
6. Reilly P. A Lawyer Goes to Medical School. Impact in Am Med News. 1978; pp. 16-18.
7. Reilly P. How Legal is Laetrile? Osteopath Phys. 1978; pp.38-39.
8. Reilly P. A New Quinlan Controversy. Osteopath Phys. 1978; p.37.
9. Reilly P. Defining Brain Death. Osteopath Phys. 1978; p. 44.
10. Reilly P. Child Abuse Reporting Laws. Osteopath Phys. 1978; p. 37.
11. Reilly P. The Bakke Case: Who Really Won? Osteopath Phys. 1978; p.43.
12. Reilly P. Columnist for Malpractice Lifeline, A Monthly Newsletter. 144 Columns Written for this Newsletter. 1978-1990.
13. Reilly P. Nurse is Acquitted after Controversial Mercy Killing Trial. Am Med New. 1981; p. 3:40-41.
14. Reilly P. Mercy Killing Figure Faces Probe. Am Med News. 1982; p. 18.
15. Reilly P. Injection Laws Latest Ground in Death Penalty Fight. Am Med News. 1982; p. 32.
16. Reilly P. Brain Death. Resident and Staff Phys. 1982; pp. 95-98.
17. Reilly P. MD Share Tips on Surviving Clerkships. Am Med News. 1982; p. 36.
18. Reilly P. A Wrongful Life. Resident and Staff Phys. 19082; pp. 71-72.
12 A4562 Case 1:09-cv-04515-RWS Document 167-2 Filed 12/23/2009 Page 14 of 14 19. Reilly P. The Verdict Prompts Painful Memories. Am Med News. 1983; pp 4-6, 16.
20. Reilly P. The Legal Status of Artificial Insemination. Med Times. 1983; pp. 53- 56.
21. Reilly P. Physician Countersuits. Med Times. 1983; pp. 13-17.
22. Reilly P. Resident and Staff Physician. Med Times 1983; pp. 71, 74-75. 23. Reilly P. Antitrust Law Engulfs Physicians. Med Times. 1983; pp. 60-65.
24. Reilly P. Will state Hospital rules Hurt Care: Am Med News. 1983; pp. 3, 23-24.
25. Reilly P. Providing Care for the Older Mentally Retarded. Am Med News. 1985; p. 37.
26. Reilly p. Physician Defends Feeding Man in Coma. Am Med News. 1986; p.46.
27. Reilly P. Journalist Captures Medical Student’s Third Year. (Book Review of Medicine Man by David Black) Am Med News. 1986; p. 45.
28. Reilly PR. Am Society Human Genetics Statement on Genetics and Privacy: Testimony to the United States Congress. 1992; 50: 640-642.
29. Reilly PR. Fundamental Questions of Cystic Fibrosis Testing. Medical Ethics. 1992; Vol. 7 p.5.
30. Reilly PR. DNA Banking. Am J Human Genetics. 1992; 51: 1169-1170.
31. Reilly PR. DNA Testing and the Law. Helix Editorial. 1992; pp. 48-49.
32. Biography: Harry Hamilton Laughlin. American National Biography. Oxford University Press. 1994; In Press.
Posters and Abstracts
1. Rowley PT, Relias MZ, Baumback LI, Collins DL, Corson VI, Davenport SL, Fleisher LD, Geller I, Harrod MJ, Hogge WA, Keats BJ, Nussbaum RI, Ostrer H, Reilly PR, Scriver CR, Speer MC. An Experiment in Community Outreach Task Force for Public Awareness in New Orleans. ASHG Annual Meeting, Montreal, Canada. October 18-21, 1994.
2. Reilly, PR and Wertz, DC. Laboratory practices and policies in genetic testing of children: a survey of helix member. ASHG Annual Meeting, Minneapolis, 1995
13 A4563 Case 1:09-cv-04515-RWS Document 167-3 Filed 12/23/2009 Page 1 of 7
A4564 Case 1:09-cv-04515-RWS Document 167-3 Filed 12/23/2009 Page 2 of 7
Journal of Molecular Diagnostics, Vol. 5, No. 1, February 2003 Copyright © American Society for Investigative Pathology and the Association for Molecular Pathology Special Article
Effects of Patents and Licenses on the Provision of Clinical Genetic Testing Services
Mildred K. Cho,* Samantha Illangasekare,* censes have had a significant effect on the ability of Meredith A. Weaver,* Debra G. B. Leonard,† and clinical laboratories to develop and provide genetic Jon F. Merz‡ tests. Furthermore, our findings suggest that clinical geneticists feel that their research is inhibited by pat- From the Center for Biomedical Ethics,* Stanford University, Palo ents. The effects of patents and licenses on patients’ Alto, California; and the Department of Pathology and access to tests, and the costs and quality thereof, Laboratory Medicine† and the Center for Bioethics,‡ University of remains to be determined. (J Mol Diagn 2003, 5:3–8) Pennsylvania, Philadelphia, Pennsylvania
Patents were created to provide incentives for the pro- duction of innovative products that could benefit the pub- The growth of patents that include genetic sequences lic. It is argued that patents have been critical to the has been accompanied by concern about their impact growth and maintenance of the pharmaceutical indus- on the ability of physicians to provide clinical genetic try.1,2 In this industry particularly, patents are seen as testing services and to perform research. Therefore, necessary to enhance an inventor’s ability to recoup the we conducted a survey of clinical laboratory directors substantial investments of many years and hundreds of that perform DNA-based genetic tests to examine po- millions of dollars necessary to bring a new drug or tential effects. We performed a telephone survey be- device to market. However, it has been proposed that tween July and September in 2001 of all laboratory patents are not necessarily an effective incentive for the directors in the United States who were members of development of clinical genetic diagnostic tests.3 For the Association for Molecular Pathology or who were example, it may only take weeks or months to go from a listed on the GeneTests.org website. One hundred research finding that a particular genetic variant is asso- thirty-two of 211 (63%) laboratory directors were in- ciated with a disease to a clinically validated genetic terviewed. Ten of these were excluded because they test.4 Furthermore, the need to license multiple patents did not conduct DNA-based genetic tests. Almost for the development of a multigenic genetic test may all performed genetic tests for clinical purposes. inhibit the development of such tests. Thus, some have Half performed tests for research purposes as well. suggested that patents and their associated licenses Twenty-five percent of respondents reported that may be inhibitory to the translation of genetic findings into they had stopped performing a clinical genetic test diagnostic tests.3 because of a patent or license. Fifty-three percent of An increase in the number of patents that cover ge- respondents reported deciding not to develop a new netic sequences has raised concerns about the impact of clinical genetic test because of a patent or license. In these patents on the ability of physicians to provide clin- total, respondents were prevented from performing ical genetic testing services and perform research nec- 12 genetic tests, and all of these tests were among essary to refine or develop new tests or therapeutics.4,5 those performed by a large number of laboratories. Some of the concerns are that patents and restrictive We found 22 patents that were relevant to the perfor- licensing practices for genetic tests may decrease ac- mance of these 12 tests. Fifteen of the 22 patents cess to testing services, increase test costs, or decrease (68%) are held by universities or research institutes, the quality of testing. On the other hand, others are con- and 13 of the 22 patents (59%) were based on re- cerned that, without intellectual property protection, re- search funded by the United States Government. Over- all, respondents reported that their perceptions of the effects of patents on the cost, access, and devel- Supported by the National Human Genome Research Institute of the opment of genetic tests, or data sharing among re- National Institutes of Health (grant no. 1 R01 HG02034). searchers, were negative. In contrast, most respon- Accepted for publication October 23, 2002. dents felt that patents did not have an effect on the Address reprint requests to Mildred K. Cho, 701A Welch Rd., Suite quality of testing. We conclude that patents and li- 1105, Palo Alto, CA 94304. E-mail: [email protected]. A4565 3 Case 1:09-cv-04515-RWS Document 167-3 Filed 12/23/2009 Page 3 of 7
4 Cho et al JMD February 2003, Vol. 5, No. 1
search would not be done to make the discoveries on Table 1. Institutional Affiliation of Respondents* which genetic tests are based, and the test would not be n developed after the discovery was made. Institutional affiliation (%) Previously, we conducted a pilot study to examine the Company 19 (16) effects of patents and licenses on the practice of clinical University 73 (60) genetic testing.5 To conduct a more comprehensive Federal 16 (13) Nonprofit 80 (66) study and update our previous findings, we conducted a Private hospital 64 (52) systematic survey of clinical laboratory directors in the Other 10 (8.2) United States that perform DNA-based genetic tests to *Totals do not add up to 100% because response options were not examine the impact of patents and licenses on the pro- mutually exclusive. vision of clinical genetic testing services.
decided not to develop a clinical test because of a patent Materials and Methods or license; and the respondent’s perception of how strongly patents had affected access to, quality, and Sampling costs of testing, or the ability to do research. The survey included one open-ended question asking whether par- Our sampling frame was all laboratories in the United ticipants thought there were any ethical issues raised by States who were members of the Association for Molec- patents on genetic tests and another to allow participants GeneTests.org ular Pathology or who were listed on the to add any additional comments. For the purposes of the website. We identified directors or the representative of survey, respondents were told that we defined genetics each laboratory most knowledgeable about impacts of tests as DNA-based tests to predict or diagnose disease patents and licenses on the laboratory’s practice. Labo- (not including tests to detect infectious agents). ratory directors were identified from the 1998 printed Association for Molecular Pathology Test Directory (the most recent directory available), and from the GeneTests. Analysis org website on June 18, 2001. (GeneTests is a website maintained by the University of Washington and funded Our analysis included descriptive summary statistics on by the National Institutes of Health, the United States respondent characteristics (eg, role in the laboratory, Department of Energy, and the Health Resources and type of testing performed) and proportion of respondents Services Administration. The website lists laboratories in reporting particular effects of patenting on the laboratory. North America and elsewhere that perform genetic tests if they request inclusion on the website.) The Association for Molecular Pathology Directory identified 95 laboratory Results directors who perform genetic tests. The search of Response Rate and Respondent Characteristics GeneTests.org identified 127 laboratory directors. An ad- ditional 6 laboratory directors were added from a com- Of 211 laboratory directors contacted, 132 responded, prehensive updated listing of clinical laboratory directors yielding a total response rate of 63%. Of these, 10 were provided by GeneTests, for a total of 133. We combined not included for further analysis because they reported this sample of 133 directors from GeneTests with the that they did not perform DNA-based genetic tests. The sample of 95 from Association for Molecular Pathology final number of responses analyzed was 122 (58%). Re- and eliminated 17 duplicates for a final sample of 211 spondents did not differ significantly from nonrespon- laboratory directors. dents in the likelihood of being from a for-profit or non- profit institution (chi-square test, P ϭ 0.37). The majority of respondents were directors of univer- Survey sity laboratories. The institutional affiliation of respon- We conducted a telephone survey of the selected labo- dents is shown in Table 1. Sixty-one respondents (50%) ratory directors between July and September in 2001. We were from laboratories that conducted clinical laboratory attempted to contact each director by phone up to ap- tests only, 60 (50%) were from laboratories that con- proximately three times, followed by one e-mail contact to ducted laboratory tests for both research and clinical establish an interview time. A small proportion (ϳ10 peo- purposes, and 1 laboratory conducted tests for research ple) was contacted by e-mail because their staff indi- purposes only. One hundred fourteen respondents (93%) cated this as their preferred method of communication. were laboratory directors, and the remainder were labo- The survey consisted of 95 closed-ended questions ratory supervisors, technologists, or other laboratory that addressed the following topics: the setting in which staff. the respondent worked; the categories of tests performed by the respondent’s laboratory (eg, genetic, paternity, Licensing Practices infectious diseases, and so forth); whether the respon- dent held any patents or licenses for procedures, de- Ninety-one respondents (75%) said that their laboratories vices, or reagents used in clinical testing; whether the held a license to use a patented method, device, or laboratory had been prevented from performing or had reagent, and 90 of the 91 said that they had a license to A4566 Case 1:09-cv-04515-RWS Document 167-3 Filed 12/23/2009 Page 4 of 7
Patents, Licenses, and Genetic Testing 5 JMD February 2003, Vol. 5, No. 1 conduct the polymerase chain reaction. Twenty-five lab- holders, laboratory directors at companies were signifi- oratories (27%) had a license to perform a genetic test. cantly more likely to report being prevented from provid- These licenses were for tests to detect a wide variety of ing a test (10 of 14, 71%) than laboratory directors at conditions, including hereditary breast and ovarian can- universities (12 of 50, 24%) (P ϭ 0.001). cer (BRCA1/BRCA2), Canavan disease, hereditary Sixty-four (53%) respondents answered yes to the hemochromatosis, and fragile X syndrome, among oth- question, “Have you ever decided not to develop or ers. Eighty-four respondents (69%) said that they paid perform a test/service for clinical or research purposes royalties to use a patented method or reagent. because of a patent?” Laboratory directors at companies were slightly more likely to report that they had decided not to develop or perform a test (12 of 19, 63%) than Effects of Patents and Licenses on Clinical those at universities (36of 73, 49%) but this difference Genetic Testing Services was not statistically significant (P ϭ 0.28). Seventy-nine respondents (65%) said that their laborato- ries had been contacted by a patent or license holder Opinions about Effects of Patents on Genetic regarding the laboratory’s potential infringement of a patent by performance of a genetic test. These notifica- Testing tions were for several different genetic tests, including Respondents were asked to rate the effect of gene pat- Apolipoprotein E genotyping, hereditary hemochromato- ents on various aspects of clinical genetic tests. They sis, fragile X syndrome, BRCA1/BRCA2, Canavan dis- were asked to provide these ratings based on their per- ease, Charcot-Marie-Tooth disease, spinocerebellar ceptions of clinical laboratories in the Unite States that ataxia, and Duchenne muscular dystrophy, among oth- provide genetic testing. Means and distributions of rat- ers. Twenty laboratories had received notification for one ings for their perceptions of laboratories in general are test, and 51 had received notifications for up to three shown in Table 3. Mean ratings indicate that respondents tests, but 26 labs had received notifications for four or thought that patients access to testing had been de- more tests. creased by patenting, costs of testing for laboratories Thirty respondents (25%) answered yes to the ques- had increased, and costs of testing for patients had tion, “Has notification from a patent holder or licensee increased. Respondents thought that the laboratory’s ever prevented you from continuing to perform any clin- ability to develop tests had been decreased, but that test ical test or service that you had developed and were quality had only been modestly affected. Respondents offering?” The 12 tests that laboratories had reported reported on average that information sharing between ceasing to perform are shown in Table 2. In searching the laboratories had decreased and that the ability of labo- US Patent and Trademark database of patents on Janu- ratories to do research had been decreased modestly by ary 15, 2002, we found 22 patents that were relevant to patents. However, analysis of the distribution of ratings the performance of these 12 tests. Fifteen of the 22 pat- (Table 3) shows that virtually all laboratory directors felt ents (68%) are held by universities or research institutes, that patents have had a negative effect on all aspects of one by an individual, and the rest by for-profit companies. clinical testing, except on the quality of testing. A few Thirteen of the 22 patents (59%) were based on research respondents felt that patents were beneficial to test de- funded by the United States Government. The patents velopment more generally. For example, one respondent were issued from October 1994 to June 2001. The re- said, “I don’t think that the argument that we can’t re- search leading to these patents was published between search or do more testing because of patents is valid. December 1988 and August 1996 in research articles Without patents, people wouldn’t be able to test because that we found in MEDLINE. the technology would just be published and sitting in To put these 12 tests into context, we searched the someone’s lab book. People shouldn’t be complaining GeneTests database and found that, in June 2001, 461 that they can’t run tests. They should just pay.” There genetic tests were offered as a clinical service. The vast were no significant differences between average re- majority of the tests was for rare disorders and not per- sponses of laboratory directors from companies com- formed by many laboratories; 394 of the tests were per- pared to those from universities. formed by 10 or fewer laboratories, whereas 67 of the tests were done by 11 or more laboratories. However, all of the 12 tests that laboratories had stopped performing were performed by 11 or more laboratories, as reported Discussion by GeneTests in June 2001. The number of laboratories performing these tests ranged from 11 (for Charcot- Effects of Patents and Licenses on Clinical Marie-Tooth disease) to 97 (for fragile X syndrome). Genetic Testing Services Of the 30 laboratories that reported being prevented from performing a test, 17 reported being prevented from Our findings suggest that a substantial fraction of labo- performing one test and 12 laboratories had been pre- ratories in the United States that provide genetic tests vented from performing more than one test (one labora- have been affected by patents and licenses. Almost two- tory director did not respond to this question). Of those thirds of the laboratory directors in our sample had been who had reported being contacted by patent or license contacted by a patent- or license-holder about the labo- A4567 Case 1:09-cv-04515-RWS Document 167-3 Filed 12/23/2009 Page 5 of 7
6 Cho et al JMD February 2003, Vol. 5, No. 1
Table 2. Genetic Tests that Some Laboratories Stopped Performing Because of Patents
No. of Gov’t respondents funded that stopped work performing Patent Patent leading to Genetic test this test U.S. patent no.* filing date issue date Patent holder invention† Apolipoprotein E (Apo E) 9 US5508167 4/13/94 4/16/96 Duke University X US6027896 4/15/98 2/22/00 Duke University X US5716828 2/10/98 5/15/95 Duke University X Hereditary breast/ovarian 9 US5753441 1/5/96 5/19/98 Myriad Genetics, Inc. cancer (BRCA1) (BRCA1) (BRCA1/BRCA2) US6051379 12/2/97 4/18/00 Oncormed, Inc. (BRCA2) (BRCA2) Duchenne/Becker 5 US5541074 11/21/94 7/30/96 The Children’s X muscular dystrophy Medical Center Corporation Hereditary 5 US5705343 2/9/96 1/6/98 Mercator Genetics, hemochromatosis Inc. (HFE) US5712098 4/16/96 1/27/98 Mercator Genetics, Inc. US5753438 5/8/95 5/19/98 Mercator Genetics, Inc. Myotonic dystrophy 4 US5955265 4/14/95 9/21/99 Massachusetts X Institute of Technology; University of Wales College of Medicine US5977333 4/14/95 11/2/99 Massachusetts X Institute of Technology; University of Wales College of Medicine Canavan disease 4 US5679635 9/9/94 10/21/97 Miami Children’s Hospital Research Institute Spinocerebellar ataxia 4 US5834183 6/28/94 11/10/98 Regents of the X (SCA1) (SCA1, SCA2, SCA3, (SCA1) University of SCA6) Minnesota (SCA1) US5741645 6/6/95 4/21/98 Regents of the X (SCA1) (SCA1) University of Minnesota (SCA1) US6251589 5/18/98 6/26/01 SRL, Inc. (SCA2) (SCA2) US5840491 Kakizuka, A. (SCA3) US5853995 1/7/97 12/29/98 Research X (SCA6) (SCA6) Development Foundation (SCA6) Adenomatous polyposis 2 US5352775 8/8/91 10/4/94 Johns Hopkins X of the colon University Charcot-Marie Tooth type 1 US5780223 6/6/91 4/26/94 Baylor College of X 1A (CMT-1A, CMT-X) (CMT-1A) Medicine (CMT-1A) US5691144 6/5/96 11/25/97 Athena Diagnostics, Inc. Fragile X syndrome 1 US6107025 5/24/91 8/22/00 Baylor College of X Medicine Huntington disease 1 US4666828 8/15/84 5/19/87 The General Hospital X Corporation Factor V Leiden 1 US5874256 2/21/97 2/23/99 Rijks Universiteit (activated protein C for thrombophilia)
*For patents filed with the U.S. Patent and Trademark office that were most relevant to the performance of the clinical genetic test of interest. †As indicated in the U.S. patent. ratory’s potential infringement of a patent by performance sponsored research. If these patents are inhibiting commer- of a genetic test. The majority of the patent holders enforc- cialization of genetic tests, our findings would suggest that ing their patents were universities or research institutes, and the Bayh-Dole Act may not enhance technology transfer of more than half of their patents resulted from government- this kind of invention in the intended manner. A4568 Case 1:09-cv-04515-RWS Document 167-3 Filed 12/23/2009 Page 6 of 7
Patents, Licenses, and Genetic Testing 7 JMD February 2003, Vol. 5, No. 1
Table 3. Opinions about Effects of Patents on Genetic Testing
No. (%) No. (%) indicating No. (%) indicating negative indicating positive Mean Patents have: effect* no effect* effect* rating (n)†
Made testing more or less accessible to patients, or no effect? 107 (89) 10 (8.3) 3 (2.5) Ϫ1.8 (120) (less access to testing) (no effect) (more access to testing) Ϫ3 Ϫ2 Ϫ1 0 123 Decreased or increased the cost of testing to labs, or no effect? 115 (96) 4 (3.3) 1 (0.83) Ϫ2.2 (120) (increased cost) (no effect) (decreased cost) Ϫ3 Ϫ2 Ϫ1 0 123 Decreased or increased the cost of testing to the patient, or had no effect? 107 (91) 10 (8.5) 1 (0.85) Ϫ2.0 (118) (increased cost) (no effect) (decreased cost) Ϫ3 Ϫ2 Ϫ1 0 123 Increased or decreased the ability to develop a test, or no effect? 105 (91) 10 (8.6) 1 (0.86) Ϫ2.0 (116) (decreased ability) (no effect) (increased ability) Ϫ3 Ϫ2 Ϫ1 0 123 Increased or decreased the quality of testing services in labs, or no effect? 53 (45) 61 (51) 5 (4.2) Ϫ0.8 (119) (decreased quality) (no effect) (increased quality) Ϫ3 Ϫ2 Ϫ1 0 123 Resulted in more or less sharing of information among researchers, or no effect? 98 (85) 16 (14) 1 (0.87) Ϫ1.7 (115) (less sharing) (no effect) (more sharing) Ϫ3 Ϫ2 Ϫ1 0 123 Has resulted in an increased or decreased ability to do research, or no effect? 79 (67) 35 (30) 4 (3.4) Ϫ1.1 (118) (decreased ability) (no effect) (increased ability) Ϫ3 Ϫ2 Ϫ1 0 123
*Percentages do not always add up to 100 because of rounding error. †Not all respondents answered all questions.
As a result of patent- or license-holders exercising their dramatically in the last 3 years.5 They are also generally intellectual property rights, one-quarter of the laboratory consistent with a 1999 laboratory survey concerning test- directors in our sample stopped performing a genetic test ing for hemochromatosis.4 However, with the explosion in that they had been offering. In addition, just more than the discovery of new genes and the likely development of half of the laboratory directors had decided not to de- many commercially viable genetic tests (including those velop or perform a test specifically because of intellectual designed to predict susceptibility to prevalent conditions property considerations (eg, knowledge of the existence and those to predict responses to drugs), these practices or possible future existence of a patent or license). may change. One reason may be that intellectual prop- All but one of our respondents represented laborato- erty could be perceived to be more important for niche ries that performed genetic testing for clinical, as op- markets created by pharmacogenomics research. posed to research, purposes. Thus, the implications of these results are fully applicable to the availability of genetic testing in clinical settings. These results also suggest an impact on hospital budgets, to the extent that Opinions about Effects of Patents and Licenses hospitals are forced to send laboratory tests out to a on Genetic Testing licensed laboratory at a higher cost to the institution than if they were to perform the tests in-house. Although the It was striking that virtually no respondents, including absolute number of genetic tests that the laboratories in those from commercial laboratories, thought that the ef- our sample stopped performing is not large, and the fects of patents and licenses on the cost, access, and proportion of all tests offered is not high, the tests that development of genetic tests have been positive. In con- laboratories have stopped performing seem to have high trast, most respondents thought that patents did not have clinical relevance because they detect common alleles a significant impact on the quality of testing (although and/or are relatively commonly used in clinical practice. nearly half stated that the effects were somewhat nega- Laboratories at companies seem to be more affected tive). Our data indicate that United States laboratory di- than university laboratories in their ability to continue to rectors performing genetic tests think that gene patents perform tests that they had been offering, but not neces- hinder rather than facilitate clinical genetic testing. In sarily more affected in their decision to develop new addition, our data suggest that laboratory directors may tests. This may indicate that companies are more likely to feel more strongly than genetics researchers that patents be challenged for patent infringement activities than uni- have a negative effect on research; a recent survey of the versities. members of the American Society of Human Genetics These findings are virtually identical to those we ob- found that 46% of the respondents feel that patents have tained in a pilot study of laboratory directors conducted in delayed or limited their research, whereas two thirds of November 1998,5 suggesting that patenting and licens- laboratory directors in our survey felt that patents inhibit ing practices affecting genetic tests has not changed research.6 This may point to a more pronounced effect of A4569 Case 1:09-cv-04515-RWS Document 167-3 Filed 12/23/2009 Page 7 of 7
8 Cho et al JMD February 2003, Vol. 5, No. 1 patents on clinical genetic testing research than other affected the cost and quality of genetic tests, or hindered kinds of research. new research. Nevertheless, the practitioners in the United States who perform these tests on a daily basis overwhelmingly feel that costs, both to laboratories and to Conclusion and Limitations of the Study patients, have been increased. Such increases can only lead to limited access. In addition, a lower number of We conclude that patents and licenses have a significant laboratories performing the tests could lead to lower test negative effect on the ability of clinical laboratories to quality, less test method innovation, and less clinical continue to perform already developed genetic tests, and research. Although patents may have provided incen- that these effects have not changed substantially tives to conduct the basic research underlying the ge- throughout the past 3 years. Furthermore, the develop- netic tests, the reported inhibition of clinical testing and ment of new genetic tests for clinical use, based on research does not bode well for our ability to fully and published data on disease-gene associations, and infor- efficiently use the results of the Human Genome Project mation sharing between laboratories, seemed to be in- and related work. hibited. Our study does not address the issue of whether patents provided a major incentive for the initial research that led to the patent and development of the genetic Acknowledgments tests that the laboratories subsequently stopped provid- We thank the survey respondents for their willing partic- ing. However, our findings here and elsewhere4 demon- ipation. strate that laboratories are able to quickly translate pub- lished data into clinical tests without the incentives provided by patents, and that laboratories are stopped References from performing tests after patents issue. This suggests that patents are not critical for the development of an 1. Poste G: The case for genomic patenting. Nature 1995, 378:534–536 invention into a commercially viable service when the 2. Doll J: The patenting of DNA. Science 1998, 280:689–690 invention is the finding of an association between a ge- 3. Heller M, Eisenberg R: Can patents deter innovation? The anticom- mons in biomedical research. Science 1998, 280:698–701 netic variant and a particular condition. 4. Merz J, Kriss A, Leonard D, Cho M: Diagnostic testing fails the test: Despite the reduced number of clinical laboratories the pitfalls of patents are illustrated by the case of haemochromatosis. offering specific clinical genetic tests, we do not know Nature 2002, 415:577–579 whether patients who were denied access to these tests 5. Cho M: Ethical and legal issues in the 21st century. Preparing for the had testing performed by another laboratory. Further- Millennium: Laboratory Medicine in the 21st Century. Washington, DC, AACC Press, 1998 pp 47–53 more, our data do not directly address the question of 6. Rabino I: How human geneticists in US view commercialization of the whether patents and restrictive licensing practices have Human Genome Project. Nat Genet 2002, 29:15–16
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A4571 NIH Public Access Author Manuscript Community Genet. Author manuscript; available in PMC 2008 January 30.
I-AAto aucitNHP uhrMnsrp NIH-PA Author Manuscript NIH-PA Author Manuscript NIH-PA Author Manuscript Published in final edited form as: Community Genet. 2005 ; 8(4): 203–208.
What Are Gene Patents and Why Are People Worried about Them?
Jon F. Merza and Mildred K. Chob a Department of Medical Ethics, University of Pennsylvania School of Medicine, Philadelphia, Pa b Stanford Center for Biomedical Ethics, Stanford University, Stanford, Calif., USA
Abstract This article examines what it means to patent a gene. Numerous ethical concerns have been raised about the effects of such patents on clinical medical practice as well as on research and development. We describe what kinds of inventions are covered by human gene patents, give several examples and summarize the small body of empirical research performed in the US examining the effects of these patents. There is little evidence that early fears about gene patenting placing substantial restraints on research and clinical medicine have come to fruition. Nonetheless, there are areas of concern, and policy makers, physicians and the public should be alert to ensure that the net social benefits of patenting human genes are maintained.
Keywords Gene patent; Genetic invention; Drug licensing
Introduction Nearly 30,000 human genes have been patented in the US [R. Cook-Degan, pers. commun.]. Patents will often be secured in countries throughout the world where the patent owner thinks there may be a viable market. Patents are granted by the US government to inventors for new, non-obvious and useful inventions and discoveries, and similar standards of patentability are applied around the globe. A patent grants to its owner the right to exclude others from making, using or selling a patented machine or composition of matter, or using a patented method, typically for a period of 20 years from the date of filing a patent application. In contrast to trade secrets (which must be kept secret by their owner and do not protect against independent invention), patents require disclosure that teaches the world how to make and use an invention, rewarding the inventor with a period of exclusivity during which time profits may be earned from its commercialization.
Throughout the developed world, patents are awarded following an examination by a patent agency (e.g., the European Patent Office, the US Patent and Trademark Office). Examination procedures ensure that inventions fulfill the standards for patentability, and that the patent grants protection only for that which has been invented, and no more. The patent claim defines
Case 1:09-cv-04515-RWS Document 167-4 Filed 12/23/2009 Page 2 of 8 the scope of patent protection. Typically, there is a negotiation between the inventor and the patent examiner, with the former trying to get very broad protections, and the latter seeking to allow a patent narrowly restricted to the technological improvements made by an invention and disclosed in the specification. Broad claims may often be granted for breakthrough inventions, such as those on the polymerase chain reaction (PCR), recombinant technology, gene knock-out methods and even for individual gene sequences. Because broad claims to
Jon F. Merz, Department of Medical Ethics, University of Pennsylvania School of Medicine, 3401 Market Street, Suite 320, Philadelphia, PA 19104-3308 (USA), Tel. +1 215 573 8107, Fax +1 215 573 3036, E-Mail [email protected].
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inventions such as a sequence or a recombinant protein are so basic, they cannot easily be invented around, and any improvements are likely to require licenses before they can be used
I-AAto aucitNHP uhrMnsrp NIH-PA Author Manuscript NIH-PA Author Manuscript NIH-PA Author Manuscript commercially. In biotechnology, such licenses may be impossible to secure, since the owners of the dominant patents are likely to depend upon them to maintain market exclusivity [1,2]. In any technology, broad claims will create a disincentive for downstream development and improvements [3].
A patent grants what is called a negative right, i.e., the right to enjoin others from using the claimed invention without permission. A patent owner may turn to the government – through lawsuits for infringement – to use its judicial and police powers to block others from making, using or selling the invention and to collect damages from those who infringe. A patent does not grant its owner the positive right to use an invention, as its use or application may be subject to legal restraints (e.g., human cloning) or regulatory licensing requirements (e.g., drugs and medical devices). Likewise, there is no legal compunction for a patent owner to ‘work’ or license others to use a patented invention, and, as a general rule, a patent may even be used wholly to keep products from coming to market [4]. Exceptions have been recognized for compulsory licensing of patented inventions when deemed necessary to protect public health and welfare (such as weapons and drugs) [5]. The US Federal Government retains ‘march-in’ rights to patents resulting from federally funded research if the inventions are not developed for practical application or if necessary to alleviate health or safety needs which are not reasonably satisfied (although this right has never been exercised) [6].
Human gene patents result from the cloning and description of the sequence of a gene, the role or function of which is somewhat understood. As cloning and sequencing capabilities rapidly evolved in the 1980s, patent applications on human genes were filed in increasing numbers. Questions concerning the wisdom of patenting genes were highlighted by the 1991 patent application filed by the US National Institutes of Health that was subsequently amended to cover thousands of expressed sequence tags. Expressed sequence tags are unique nucleotide strings, randomly culled out of the genome, which have no known function other than as a distinctive marker. These applications were ultimately withdrawn, but in 2001, the concerns over the scope of gene patents led the US Patent and Trademark Office to clarify its patentability standard for genes, requiring that a patent applicant make a credible assertion of specific and substantial utility of the genetic invention [7,8].
Gene patents cover three distinct types of invention: (1) diagnostics, (2) compositions of matter and (3) functional uses. We discuss each in turn, providing examples, highlights of areas of concern and what is known about each. This overview is centered on US patent law and what is known about how gene patents are being used in the US. Some of the problems discussed have begun to spill over to Europe, Canada and Australia, as discussed elsewhere in this issue. This is not meant to be a comprehensive international review [9], but only an attempt to demonstrate the breadth of gene patents, discuss concerns about how they are being used and summarize relevant empirical data.
Diagnostic Uses The first type of genetic ‘invention’ covers testing of genetic differences. We have referred to
Case 1:09-cv-04515-RWS Document 167-4 Filed 12/23/2009 Page 3 of 8 these types of patents as ‘disease gene patents’, because they claim the characterization of an individual’s genetic makeup at a disease-associated locus when performed for the purpose of diagnosis or prognosis [10]. These patents typically cover all known methods of testing, including the use of hybridization, Southern analysis, PCR and even DNA chips. Since the fundamental discovery patented is the statistical observation of a genetic difference and a phenotypic difference (such as the occurrence of disease), then any method for testing for that genetic difference can be covered by the patent [11].
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Well-known examples of disease gene patents include those covering genes implicated in breast and ovarian cancers (BRCA1 and BRCA2), colon cancers (HNPCC, FAP), cystic
I-AAto aucitNHP uhrMnsrp NIH-PA Author Manuscript NIH-PA Author Manuscript NIH-PA Author Manuscript fibrosis (CFTR), hemochromatosis (HFE) and a growing number of neurological diseases including late-onset Alzheimer’s disease (Apo-E), Canavan disease, Charcot-Marie-Tooth disease (CMT-1A, CMT-X), spinal muscular atrophy (SMN1), spinocerebellar ataxia (SCA1– 12) and others.
There are several characteristics of genes and disease gene patents that demonstrate how the genome is being divided up by small patent claims to overlapping genetic territory. First, any one gene may have multiple patents claiming the diagnosis of different polymorphisms. Thus, several patents have been issued for testing of different mutations in the CFTR gene [12]. Further, some diseases (at least the phenotypic expressions of them) are caused by multiple genes, such as Charcot-Marie-Tooth disease [13]. Questions about ownership and access get messy when there are many hundreds of known mutations in multiple causative genes, as exemplified by BRCA1 and BRCA2, for which there are at least a dozen US patents on tests of these two genes [14]. Finally, patents can issue on the same exact molecular test when it is performed for different diagnostic or prognostic purposes. For example, an Apo-E test, in which the number of E2, E3 and E4 alleles carried by a patient is assessed, can be performed for each of the following patented uses: (1) determining whether a patient is at risk of early onset Alzheimer’s disease [15]; (2) assessing an Alzheimer’s disease patient’s prognosis [16]; (3) determining a course of therapy based on pharmacogenetic receptivity [17], and (4) assessing a patient’s prostate cancer risk [18]. Apo-E is also used for the assessment of cardiovascular risk, but this use has not been patented. In these cases, a patent thicket is created that can lead to difficulties in securing licenses and expenses in paying multiple ‘stacked’ royalties to multiple patent owners [19].
To the best of our knowledge, the owners of the overwhelming majority of issued gene patents have not aggressively enforced their rights against clinical molecular diagnostics laboratories. Nonetheless, a majority of genetics laboratories across the US report that they have had one or more of the above disease gene patents asserted against them [20,21]. In some cases, these patent owners have been willing to grant a license to laboratories performing a home-brew test. Per test royalties of which we have become aware include USD 2 for the F508 mutation of CFTR (University of Michigan), USD 5 for Gaucher’s disease (Scripps Institute), USD 12.50 for Canavan disease (Miami Children’s Hospital) and reportedly more than USD 20 for HFE (Bio-Rad). In some cases, an up-front license fee (not tied to volume) has been demanded as well [22]. While these royalties arguably reduce access and create problems for laboratories, they must be examined in the context of the US commercial, profit-centered health care system.
Clinical as well as research laboratories typically pay royalties for the use of patented technologies. For example, the price of widely-used PCR machines and reagents includes a premium paid for the use of the patented technologies. In addition, a royalty of about 9% is paid for all testing done by licensed laboratories [21]. As discussed in great detail by Nicol [23], the most recent patents enforced against biotechnology companies and testing laboratories are those that claim the extremely broad uses of intronic and extra-gene sequences for generating haplotypes and identifying allelic variation [24]. Disease gene patents vary in significant ways from these more typical patented tools that are used by laboratories for testing
Case 1:09-cv-04515-RWS Document 167-4 Filed 12/23/2009 Page 4 of 8 for a variety of specific disease genes. Critically, since a disease gene patent claims all methods of testing for a specific gene, there is no plausible way of working around these patents and the patents may be used to monopolize a test.
Fortunately, in only a handful of cases, patent owners have refused to grant licenses to laboratories to allow them to perform specific tests. In a few cases, patent owners have used the patents to monopolize the testing service, requiring physicians and laboratories to send
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samples for testing to the owner or its specified licensees. Thus, tests for breast and ovarian cancer genes (Myriad Genetics) and a set of neurological disorders (Athena Diagnostics) are
I-AAto aucitNHP uhrMnsrp NIH-PA Author Manuscript NIH-PA Author Manuscript NIH-PA Author Manuscript generally available from only these commercial laboratories. SmithKline Beecham Clinical Laboratories made a brief attempt at capturing the testing market for hemochromatosis before the business unit was sold to Quest Diagnostics, which then transferred ownership to Bio-Rad [22]. Myriad has extended its reach beyond the US borders, seeking to enforce its BRCA patents in, amongst others, France [25], Canada [26] and the UK [27]. The test for Canavan disease, despite being easily included in panel assays that many laboratories can run, was restricted to selected laboratories around the US by the patent owner, Miami Children’s Hospital [28].
In these cases, laboratories have been told where patient samples must be sent to have the patented tests performed and how much it will cost. Being compelled to stop providing testing services has serious implications for the ability of molecular pathologists to maintain currency in their field, to treat their patients with comprehensive medical services, to train residents and fellows, to perform research and to run their laboratories in an efficient manner. Hospital-based laboratories must often absorb part of the fixed monopoly costs of the tests which they are compelled to offer patients but for which health insurance may not cover the full price. Seen in this light, these patents raise the costs of clinical services and restrict physicians’ ability to practice medicine [4,29].
Compositions of Matter The second broad type of genetic invention relates to compositions of matter (i.e., chemicals and materials), including the isolated and purified gene (cDNA) and all derivative products (e.g., recombinant proteins or drugs, viral vectors and gene transfer ‘therapies’, transfected cells, cell lines and higher order animal models in which the patented gene has been inserted or knocked out). According to the Biotechnology Industry Organization, there are more than 200 biotechnology drugs and vaccines that have been approved by the US Food and Drug Administration [30], and more than 370 drugs are in clinical trials [31].
Patents on human genetic compositions of matter cover a broad array of chemicals and technologies. For example, human insulin, human growth hormone and many other proteins that can be isolated and purified from human blood or urine can be patented. Further, synthesized products can be covered by various patent claims, including (1) claims to the sequences used (both the sequence to be transcribed into RNA and proteins as well as promoter sequences); (2) the virus or other vectors containing the claimed sequence; (3) transfected cells, cell lines and nonhuman organisms created and used in these processes, and, perhaps most importantly, (4) the proteins or other therapeutic products made by these claimed processes. The last, called ‘product by process’ claims, allow patent owners to prohibit the use or sale of products made by the claimed processes, regardless of where the product is made.
Functional Use Finally, a third and emerging class of gene patents is that which claims the functional use of a gene. These patents are based on discovery of the role genes play in disease or other bodily and cellular functions or pathways, and claim methods and compositions of matter (typically called ‘small molecule’ drugs) used to up- or downregulate the gene. Note that these drugs are Case 1:09-cv-04515-RWS Document 167-4 Filed 12/23/2009 Page 5 of 8 not likely gene products, but rather other types of chemicals found to effect gene functioning, and the drugs are likely patentable themselves as unique chemical entities useful as therapy. For example, a patent that was recently invalidated claimed methods and compositions of matter for the selective inhibition of the Cox-2 gene, which prevents inflammation and pain. The patent was invalidated because the patentee, the University of Rochester, failed to disclose a chemical entity that would perform such selective inhibition [32]. The patent claimed the mechanism by which three drugs that later came to market work: Celebrex, which is co-
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marketed by Pharmacia (of which Searle is part) and Pfizer, Pfizer’s Bextra and Merck’s Vioxx. Each one of these chemical entities may be patented as a new, non-obvious and useful drug
I-AAto aucitNHP uhrMnsrp NIH-PA Author Manuscript NIH-PA Author Manuscript NIH-PA Author Manuscript for the treatment of inflammation and pain, but the Cox-2 patent attempted to claim all drugs that work by manipulating the function of the target gene.
A similar case to the Cox-2 litigation involves a patent awarded to Harvard and Massachusetts Institute of Technology and exclusively licensed to Ariad Pharmaceuticals. The patent claims the basic regulation of any genes by reducing intracellular activity of the transcription factor NF-kB [33]. Upon award of the patent, Ariad sued Eli Lilly for infringement by their osteoporosis drug Evista and their sepsis drug Xigris and has asserted the patent against numerous other companies. Lilly’s patent applications for these two compounds predate the filing of the NF-kB application [34]. Ariad should have a hard time winning, both because, like the selective Cox-2 inhibition patent, the NF-kB patent fails to disclose specific agents for regulating the factor and because the company is trying to assert its patent in a way that would remove from the market chemical entities that predated the discovery and disclosure of the functional pathway by which those drugs work.
Finally, we have the case of Viagra. Pfizer, which has had its erectile dysfunction drug Viagra on the market for several years, recently received a patent claiming the molecular pathway by which Viagra works. The patent claims any selective PDE5 inhibitor used to treat impotence [35]. Immediately upon allowance of its patent in late 2002, Pfizer sued Bayer and GlaxoSmithKline for their drug Levitra and Eli Lilly and their partner Icos for their drug Cialis, while both drugs were proceeding towards the Food and Drug Administration approval (and have since been approved) [36]. The difference between the Viagra case and the Cox-2 case is that Pfizer actually has and claims a specific class of drugs that work by the claimed functional pathway. Whether this is an adequate basis on which to allow Pfizer to lay claim to all drugs that work by the same molecular mechanism is a fundamental legal question that looms over the pharmaceutical industry.
Concerns about Gene Patents and Research One of the primary concerns about human gene patents is that they will make it more difficult to perform research, thereby delaying or impeding discovery and development of diagnostics and therapeutics [37]. In the US, there is no statutory research exemption, but only an extremely narrow court-defined exemption. As recently summarized by the Court of Appeals for the Federal Circuit in a lawsuit against Duke University, ‘regardless of whether a particular institution or entity is engaged in an endeavor for commercial gain, so long as the act is in furtherance of the alleged infringer’s legitimate business and is not solely for amusement, to satisfy idle curiosity or for strictly philosophical inquiry, the act does not qualify for the very narrow and strictly limited experimental use defense’ (italics added) [38]. Duke was not excused from potential infringement of patents covering laboratory equipment simply because the equipment was used solely for research and educational purposes, which the Court found to be the core of Duke’s business. A strong argument can be made that the research exemption should be much broader, encompassing research aimed at better understanding of the claimed invention, such as how it works and whether it works as taught by the patent, how to improve upon it and how to work around it. Indeed, practically speaking, this may in fact be how patents
Case 1:09-cv-04515-RWS Document 167-4 Filed 12/23/2009 Page 6 of 8 are most commonly used. As a colleague stated it, research on the invention should be exempt while research using the invention is infringement [P. Ducor, pers. commun.]. As mentioned earlier, the patent law trades a period of exclusivity for disclosure, and competitors should not have to wait for the period of exclusivity to end before learning from that disclosure and attempting to improve upon it. The fact that competition occurs is shown by a simple example: a US patent search for different combinations of PDE or PDE5 or phosphodiesterase and
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erectile or dysfunction in patent claims yields 76 patents assigned to 18 different companies and 2 universities [39]. I-AAto aucitNHP uhrMnsrp NIH-PA Author Manuscript NIH-PA Author Manuscript NIH-PA Author Manuscript Little is known about how gene patents are being used and whether they are having a net beneficial or detrimental effect on scientific research and commercial product development. Patents are clearly seen as a necessary stimulus for the infusion of venture and risk capital in the bio-technology industry; the role patents play in motivating academic researchers is less clear. Some data have been generated about the licensing of biotechnology patents. These studies suggest that most genetic inventions are not patented, but when they are, they are being licensed on exclusive terms [40,41]. In turn, researchers and firms appear to have developed various strategies to minimize the potential detrimental effects of the patents, including taking licenses when possible, inventing around patent inventions, going offshore, using publicly available resources, litigation and infringement [42]. Nonetheless, much remains unknown about the effects of these practices on basic research and commercial competition.
Conclusion In conclusion, we see that ‘gene patents’ cover a broad range of invention. Each type has its own potential uses and marketable products, and each raises potential problems depending on how the patents are used in the relevant marketplace. Much remains unknown, and indeed, the market is still adapting to these patents. Thus, it is extremely important to continue to study and monitor how gene patents are being used, licensed and enforced in order to develop policy interventions if deemed necessary.
Acknowledgements This paper is a substantially modified version of Merz JF: Disease gene patents; in Fuchs J, Podda M (eds): Encyclopedia of Medical Genomics and Proteomics. New York, Dekker, 2004. Support for underlying research for this article has been provided by the Ethical, Social and Legal Issues Program of the National Human Genome Research Institute of the US National Institutes of Health (HG02034). Thanks are extended to the many colleagues and collaborators who have worked with us on the various studies cited, especially Debra Leonard and Michelle Henry, and thanks to Michelle Henry and Tony Holtzman for comments on previous drafts of this paper.
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BIO 2009 Member 2009 BIO Survey • • • • Collect Biotechnology on Industry’s Information Technology Transfer Portfolios
GOALS • •
Technology Transfer Biotech & the Industry A4581 Tuesday, October 27, 2009 3 3 Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 4 of 43 4 of Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case Most University License Agreements Have Non-Commercial Research, Particular Field Milestone and of Use, Clauses Which Are Monitored to Ensure Compliance The Ability Exclusive to Obtain an License is Critical to the Ability to Research & Develop a Commercially Available Product Majority Have of Companies License Agreements Universities with & Pharma/ Most of Biotech - Companies Which Are With Entities U.S. Have Not Majority Do License of Companies Agreements Federal with Government Half of the Companies Were of a License the Basis on Founded Agreement After Obtaining Initial License Companies’ Increase Employment Numbers Several Spend Companies Years Significant and of Dollars Developing Amounts Licensed Technology CommerciallyInto Available Products
BIO 2009 Member 2009 BIO Survey • • • • • • •
KEY FINDINGS •
Technology Transfer Biotech & the Industry A4582 Tuesday, October 27, 2009 4 4
Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 5 of 43 5 of Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case of Survey ParticipantsSurvey of
Employees Products Revenues/Assets Company Structure
• • • • PROFILE OF PARTICIPANTS •
A4583 Profile Tuesday, October 27, 2009 5 Private 5 Type of Company N=150 CompaniesN=150 Public Is Is Your Public orCompany Private? Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 6 of 43 6 of Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case
0
30 15 60 45 % of Companies of %
A4584
Profile Participants of Survey
49% were public and (N=74) 51% were private (N=76).
150 BIO member150 BIO companies participated in survey. Tuesday, October 27, 2009 6 >1000 6 101-1000 Number of Employees
Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 7 of 43 7 of Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case <100 How Many Employees Does How Many Employees Does Your Have? Company
0
10 40 30 20 70 60 50 % of Companies of %
A4585
Profile Participants of Survey
19% had over 1000 employees. 54% had fewer than 50 employees.
The majority of these companies are small with fewer than 100 employees (63%). Tuesday, October 27, 2009 7 Public (Product) 62% - No ProductMarket62% - No on 35% - Product Market on Private (Product) 7 Public Product) (No Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 8 of 43 8 of Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case Does Does Your Have a Product Company the Market? on Private Product) (No
0
10 20 30 40 50 % of Companies of %
A4586
Profile Participants of Survey
3% gave no response (N/R)
35% have a product on the market (6% were private and 29% were private). were public.
Most (62%) of theMost these companies do not yet have a commercial product (41% were private and 21% Tuesday, October 27, 2009 8 No Response (N/R) No Other Market Phase 8 Phase III Phase II Phase of Development for Lead Product Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 9 of 43 9 of Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case Phase I Preclinical
0 5
10 20 15 30 25 35 % of Companies of %
A4587
Profile Participants of Survey
What Stage of Development Stage is What Your Lead Product Marketed No Product) with (Companies In?
56% of companies have lead products in Phase II and III stages of development. Tuesday, October 27, 2009 9 N/R
Already Marketing >10 yrs 9 Years From Market 3 to 10 yrs Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 10 of 43 10 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case 1 to 3 yrs How Many Years From Having a Marketed Product? <1 yr
0
10 20 30 40 % of Companies of %
A4588
Profile Participants of Survey
35.3% of the companies surveyed have a product on themarket.
Most companiesMost with no marketed product are 3-10 years away fromhaving a marketed product (34%). Tuesday, October 27, 2009 10 10 Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 11 of 43 11 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case are in II or III Stage Phase of Development. Companies with Marketed Represent Products Mid and Large Biotech Companies the Market that are 3-10 Years Away from Commercialization. Over Half of Lead Products Represents a Public Mix of & Private Companies areMost Small Companies with Product on No SUMMARY OF SURVEY PARTICIPANTS • • • •
A4589
Profile Participants of Survey
28.7% have more than 6 products in development.
Majority (65.4%) have products 5 or less in development.
36% Have a Biologic Lead Product (Lg. Protein, Sm. Protein, Vaccine).
product. 41% of companies’ lead product is a small molecule and 24% have a large molecule protein lead
Other Findings: Tuesday, October 27, 2009 11 11
Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 12 of 43 12 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case
Number of In-Licenses Exclusive Non-Exclusive vs. What Entities Biotech In-License Has Agreements With Finding In-License Opportunities Stage of DevelopmentIn-Licenses Occur BIOTECH IN-LICENSES BIOTECH • • • • • •
Biotechnology In-Licensing A4590 Tuesday, October 27, 2009 12 N/R Other Online Social Media Fed. Gov. Websites Univ. Websites 12
Email/Call Tech Transfer
Opportunities Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 13 of 43 13 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case
Literature Sources Most Common Method of Identifying Licensing Opportunities Method of Identifying Most Common Colleagues Finding Biotech In-Licensing Conferences
0 5
10 15 20 25 30
% of Companies of %
A4591
colleagues (25%) and literature sources (24%).
Conferences were the most common method of identifying licensing opportunities (30%) followed by Tuesday, October 27, 2009 13 N/R Other Market Phase 13 Phase III
Phase II
Companies with No Marketed No with ProductCompanies Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 14 of 43 14 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case Phase I
Phase of Development for In-Licensed Technology Biotech In-Licensing Preclinical
0 10 20 30 50 40 % of Companies of %
At At of Development Stage Does What Your Generally Company In-License a Product?
A4592
NOTE: Other may represent licenses for compounds or manufacturing processes. 61% obtained license in preclinical I stage or Phase of development.
Almost half of the companies obtained a license in the pre-clinical stage (45%). Tuesday, October 27, 2009 14 N/R Not At All Important 14
Somewhat Important
Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 15 of 43 15 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case Very Important Biotech In-Licensing Extremely Important
0
15 30 45 60
% of Companies of %
A4593
develop a commercially available product.
79% of companies surveyed said the ability to obtain an exclusive license is important to their ability to
Tuesday, October 27, 2009 How Important is How Important Ability Obtain Exclusive to License to a CommerciallyAbility to R&D Available Product? 15 No Response No 51-100% 26-50% 15 5-25% U.S. EntitiesU.S. % of In-License Agreements With Entities U.S. <5% Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 16 of 43 16 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case None 95%: Have License Agreements 5%: License No Agreements BiotechIn-Licensing With What % of Company’s % of What In-License Agreements Are With Entities? U.S.
0
20 40 80 60
% of Companies of %
A4594
45% have over 3/4ths of their in-license agreements entities. with U.S.
71% of companies have over half of their in-license agreements entities. with U.S. Tuesday, October 27, 2009 16 No Response No 51-100% 23%: Have License Agreements 69%: License No Agreements 26-50% 16 5-25% <5% Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 17 of 43 17 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case % of In-License Agreements With Federal Government Federal Government None 0 What % of In-License % of What Agreements Are Federal with Government?
40 30 20 10 70 60 50 BiotechIn-Licensing With
% of Companies of %
A4595
19% of companies have less than 25% of their in-license agreementswith the federal government.
69% of the companies surveyed do not have an in-license agreement with the federal government. Tuesday, October 27, 2009 17 No Response No 51-100% 76%: Have License Agreements 27%: License No Agreements 26-50% 17 5-25% Universities <5 Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 18 of 43 18 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case % of In-License Agreements With Universities/Research Institutions None What % of In-License % of What Agreements Are With Universities? 0
10 30 20 40
BiotechIn-Licensing With % of Companies of %
A4596
in-license agreements with universities).
31.4% have over half of their in-license agreements with universities (19% have more than 3/4th of their Tuesday, October 27, 2009 18 No Response No 51-100% 26-50% 18 5-25% <5% Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 19 of 43 19 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case % of In-License Agreements with Pharma/Biotech Companes None 77%: Have License Agreements 19%: License No Agreements
0 BiotechIn-Licensing With
What % of In-License % of What Agreements Are With Pharma/Biotech Companies? 20 10 30 40 50
Pharma/Biotech Companies Companies of %
A4597
47% stated over 1/2 of their in-license agreements are with pharma/biotech companies.
36% of companies stated that 3/4th of their in-license agreements are with pharma/biotech companies, Tuesday, October 27, 2009 19 19 Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 20 of 43 20 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case
Ability to Obtain Exclusive License is Critical to Ability to Research & Develop a Publicly Available Treatment or Therapy Most Companies Most Obtain a License in Pre-Clinical or Phase I Stage of Development Licensing Opportunities are at Found Conferences, Among Colleagues and in the Literature SUMMARY OF BIOTECH IN-LICENSING • • • Biotech In-Licensing
• A4598 Tuesday, October 27, 2009 20 20 Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 21 of 43 21 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case
Biotech Companies NOT DO Most have In-License Agreements with the Federal Government Most haveMost In-License Agreements with Universities/Research Institutions and Pharma/ Most of In-LicenseMost Agreements are with U.S. Entities SUMMARY OF IN-LICENSE BIOTECH PARTNERS • • • Biotech In-Licensing
• A4599 Tuesday, October 27, 2009 21
21 Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 22 of 43 22 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case
Biotech Industry Company Resources Company History
IMPACT OF ON BIOTECH IN-LICENSES INDUSTRY • • •
Impact In-Licensing of on A4600 Tuesday, October 27, 2009 22
No Response No 22 No Yes Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 23 of 43 23 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case Company History
0
40 30 20 10 60 50 BiotechIn-Licensing & % of Companies of %
Was Your a License of Obtaining On the Basis Founded Company Agreement?
A4601
62% of private companies were founded on obtaining a license 40% of public vs. companies.
50% of companies were founded on the basis of obtaining a license agreement and 48% were not. Tuesday, October 27, 2009 23 DK/ 26% 10.8% 40.8% Refused >15 8.1% 12.7% 17.1% 6-15 10% 5.3% 12.2% 23
<10 77% 39.5% 58.1%
<5 Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 24 of 43 24 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case 34.2% 51.4% 68.9%
Company History #
All Public Private Number of Employees Prior to Obtaining 1st Tech Transfer License Employees BiotechIn-Licensing &
A4602
58.1% of companies had <10 employees prior to obtaining first tech transfer license. Tuesday, October 27, 2009 24 DK/ 24% 8.1% 28.7% 16.2% 39.5% 40.8% Refused 6% 0% 0% >200 2.7% 5.3% 11.8% 4% 0% 5.3% 1.4% 7.9% 9.2% 100-199 0% 2.7% 6.8% 5.3% 50-99 12.7% 18.4% 0% 6% 24 1.3% 1.3% 1.4% 40-49 12.2% 8% 4% 6.6% 3.9% 9.5% 4.1%
30-39
1st 1st Tech Transfer License Fewer 10 Employees than 8% 6.6% 8.7% 6.8% 9.5%
20-29
10.5% Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 25 of 43 25 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case 27% 20% 10% 2.6% 10-19
17.6% 13.2%
Company History
<10 6.6% 28.7% 19.3% 47.3% 32.4% 10.5% 2-5 Yrs. After Obtaining License had Only 19.3% of Companies Number of Employees & 2-5 yrs. 1-2 yrs. Added After Obtaining BiotechIn-Licensing & # All All Public Public
2-5 yrs 1-2 yrs Private Private 1-2 yrs. 2-5 yrs. 2-5 yrs. 1-2 yrs.
Employees
A4603
between 10 and 100 employees.
2-5 afterYrs. obtaining license only 19.3% of companies had fewer than 10 employees and 42% had Tuesday, October 27, 2009 25 No Response No >15 yrs. 25 5-15 yrs. Yrs. Yrs. Will Spend Developing Product Companies with No Marketed No Product with Companies Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 26 of 43 26 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case
Company Resources < 5 yrs. BiotechIn-Licensing &
NOTE: Figures Represent Small Molecule, Large Molecule Diagnostic Lead Products and
0 20 40 60 80 % of Companies of %
Avg. # of (ProjectedYrs. or Actual) Company Will for R&D on Spend Lead Product from Initial License to Commercialization
A4604
17% said it will take 2-5 yrs. from time of initial product to commercialization.
77.4% of companies without a marketed product stated it will take to 5-15 yrs. develop lead product Tuesday, October 27, 2009 26 No Response No >15 yrs. 26 Yrs. Spent DevelopingYrs. Product 5-15 yrs. Companies with a Marketed with ProductCompanies Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 27 of 43 27 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case Company Resources <5 yrs. BiotechIn-Licensing & NOTE: Figures Represent Small Molecule, Large Molecule Diagnostic Lead Products and
0 10 20 30 40 50 % of Companies of %
Avg. # of for R&D on Spent Yrs. Lead Productfrom Initial License to Commercialization
A4605
34% of companies with a marketed product stated it took 2-5 yrs. 44% of companies stated it took < 5 years.
42% of companies stated it took between to 5-15 yrs. develop lead product into a marketed product Tuesday, October 27, 2009 27 27 Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 28 of 43 28 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case
Company Resources 39% Spent > $100 M 39% Spent > $500 M 21% Spent 15% Project Will >$500 M Spend 60% Project Will >$100 M Spend BiotechIn-Licensing & NOTE: Figures Represent Small Molecule, Large Molecule Diagnostic Lead Products and
Companies Companies With a Marketed Product Companies Companies With Marketed No Product A4606 Tuesday, October 27, 2009 28
28 Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 29 of 43 29 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case Biotech Industry
Employees Majority of Companies With Marketed No Product Expect to Spend 5-15 Years Developing a Product and Spend > $100 M 2-5 Yrs. After Obtaining License Only 19% had <10 Half of Companies Were on Basis of Obtaining Founded a License Agreement Prior to Obtaining a License 58% of the Companies had < 10 Employees
BIOTECH INDUSTRYBIOTECH SUMMARY IMPACT OF ON IN-LICENSES • • • •
•
Impact In-Licensing of on A4607 Tuesday, October 27, 2009 29 29
Agreements Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 30 of 43 30 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case
Calculating Value In-License Payment Structures Hardest/Easiest Part of Negotiations Length of Time to Complete Negotiations BiotechIn-License BIOTECH IN-LICENSE IN-LICENSE BIOTECH AGREEMENTS • • • •
• A4608 Tuesday, October 27, 2009 30 No Response No >24 mo. 18-24 mo. 30 12-18 mo. 6 -12 mo. Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 31 of 43 31 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case 3-6 mo. Avg. of Amount Time to Complete In-License an Agreement 0-3 mo.
0
10 30 20 40 50 % of Companies of %
A4609
Biotech In-LicensingNegotiations
public companies 1.3%). (12% vs. Same with public and private except more private companies stated it only took less than 3 mo. than
49% of companies stated it takes 3-6 mo. to complete a license agreement (31% stated it took 6-12 mo.) Tuesday, October 27, 2009 31
Warranties
Sub-License Provision
Termination Clauses
Exclusivity 31
Background IP
Diligence Requirement Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 32 of 43 32 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case
What is the Hardest Part of In-Licensing Negotiations?
Patents
Monetary Terms
0
40
30
20
A4610 10 Biotech In-LicensingNegotiations
% of Companies of % second with 11% of companies id. this as the most difficult part of negotiations.
36% of companies stated monetary terms are the hardest part of the negotiations.Exclusivity was Tuesday, October 27, 2009 32 No Response No Know-How Warranties Sub-License Provision Termination Clauses Exclusivity 32 Background IP Diligence Requirement Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 33 of 43 33 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case What is the Easiest Part is the What of In-License Negotiations? Monetary Terms Patents
Confidentiality/Pub.
0
10
20 30
40 A4611 Biotech In-LicensingNegotiations
% of Companies of %
followed by patents (13%).
37% of companies stated confidentiality and publications were the easiest part of the negotiations Tuesday, October 27, 2009 33 No Response No Other 33 Cost Approach Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 34 of 43 34 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case Market Approach Future Rev. Approach Metric Your Company Typically to Calculate Uses ValueOpportunity of In-Licensing 0 15 30 45 60
A4612Companies of %
Biotech In-LicensingNegotiations
and cost approach defined was as dollars required to bring a product to market.
discount to future cash market flows, approach defined was as value of comparative technologies/assets market approach the was second most common (22%). Future Revenue Approach defined was as
The majority of companies stated they use the future revenue approach to calculate value (55%). A Tuesday, October 27, 2009 34 34 Structures Upfront Payments Milestone Payments
Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 35 of 43 35 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case
Running RoyaltiesProduct On Running BiotechIn-Licensing Payment 64% Stated Over64% Stated 1/2 Upfront of Licenses Include Payment
73% Stated Over73% Stated Royalties 1/2 Running of Licenses Include A4613
66% Stated Over66% Stated 1/2 Milestone of Licenses Include Payments
milestone payments.
66% of companies stated that over 1/2 of their licenses and 45% stated 9/10 of their licenses included
upfront payments.
64% of companies stated that over 1/2 of their licenses and 42% stated 9/10 of their licenses included 73% stated over 1/2 of their licenses and stated 62% over 3/4 of their licenses include running royalties.
90% of companies have running royalties provisions. Tuesday, October 27, 2009 35 No Response No > $250 M 35 Amount of RoyaltiesPaid Out $25-$250 M Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 36 of 43 36 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case
<$25 M How Much Has How Much Has YourPaid Royalty Payments? on Out Company
0
Biotech In-LicensingPayments 10 20 30 40 50
% of Companies of %
A4614
(19% DK/Refused - all public companies.) $250 M. $250 M.
49% of companies have paid out 16% have <$25 M, paid and $25- $250 M, 16% have paid out over Tuesday, October 27, 2009 36
36
Agreements Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 37 of 43 37 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case
BiotechIn-License
Easiest Part of Negotiations and Monetary Terms as the Difficult Most 55% of the Companies Future Use Revenue Approach and Market 22% Use Approach to Calculate Value Confidentiality/Publications Identified was as the 49% of Companies Stated it Typically Takes 3-6 mo. to Complete Negotiations - 31% Stated it Takes mo. 6-12 SUMMARYOF IN-LICENSE BIOTECH NEGOTIATIONS • • •
•
A4615
dollars required to bring a product to market.
approach defined was as value of comparative technologies/assets and cost approach defined was as part of negotiations. Future Revenue Approach defined was as discount to future cash market flows,
37% of companies said confidentiality the was easiest and 36% stated monetary terms the was hardest Tuesday, October 27, 2009 37 37
Agreements Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 38 of 43 38 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case
Agreements 49% of Companies Have Paid in < $25 M Royalties, 16% Have Paid and 16% $25-$250M Have Paid M >$250 on Milestones,Payments Upfront and Running Royalty Payments in Over 1/2 of License Majority of Companies Have Payments Based BiotechIn-License SUMMARYOF PAYMENT IN-LICENSE BIOTECH STRUCTURES • •
• A4616 Tuesday, October 27, 2009 38 38 Universities Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 39 of 43 39 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case
Particular Field Provisions of Use Milestone Provisions Oversight Non-Commercial Research Provisions Exclusive Non-Exclusive vs.
BIOTECH IN-LICENSING IN-LICENSING BIOTECH WITH UNIVERSITIES • • • • • BiotechIn-Licensing With
• A4617 Tuesday, October 27, 2009 39 39 Universities Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 40 of 43 40 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case BiotechIn-Licensing With
license agreements universities with are exclusive. 5.8% of companies stated that none of their none that 5.8% of companies stated in- 21.3% of companies stated less than 1/2 of in-license less than stated 21.3% of companies agreements universities with are exclusive.
license agreements universities with are exclusive. 60% of companies surveyed stated 3/4 of their surveyed stated 60% of companies in- A4618 Tuesday, October 27, 2009 40 40 Universities Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 41 of 43 41 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case BiotechIn-Licensing With
1/2License of Agreements Milestones). Include 67.6% of Companies Stated Exclusive Stated License67.6% of Companies Agreements With Universities MilestoneInclude With Penalty or Provisions Revocations Over (59% Stated 53% of Companies Stated Exclusive Stated License53% of Companies Agreements With Universities LimitedInclude Field Provisions of Use Over (42% Stated 1/2 of License Agreements LimitedInclude Field Use). of Include Non-CommercialInclude Research Provisions Over (46% Stated 1/2 Include Non-Commercial Research). 57% of Companies Stated Exclusive Stated License57% of Companies Agreements With Universities
A4619
Only 13% stated they had no exclusive license agreements with milestone provisions (N/R=9%)
(N/R=16%).
Only 31% stated they had no exclusive license agreements with limited field of use provisions commercial research provisions (N/R=27%).
Only 17% stated they had no exclusive license agreements with universities that did not contain non- Tuesday, October 27, 2009 41 41
Milestone Clauses Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 42 of 43 42 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case
a Penalty Due to Non-Compliance a Penalty to Non-Compliance Due With 31% of Companies Have Had a LicenseCompanies 31% of
Revoked, Restricted,Revoked, Renegotiatedor Paid
Oversight of Biotech In-Licensing
A4620
have had to pay a penalty due to non-compliance with milestone clauses.
21% of companies have had a license restricted or renegotiated, 7% have had a license revoked, and 3% Tuesday, October 27, 2009 42 42 Universities Case 1:09-cv-04515-RWS Document 167-5 Filed 12/23/2009 Page 43 of 43 43 Page 12/23/2009 Filed 167-5 Document 1:09-cv-04515-RWS Case Research Milestones Provisions, w/Penalties and Particular Field Provisions of Use 31% of Companies Have Had a License Revoked, Restricted, Renegotiated or Paid a Penalty Due to Non-Compliance With Milestone Clauses Majority of In-License Agreements Have Non-Commercial Majority of In-License Agreements are Exclusive But There Are Significant Numbers of Non-Exclusive Licenses SUMMARY OF BIOTECH IN-LICENSES WITH UNIVERSITIES • • •
BiotechIn-Licensing With • A4621 Tuesday, October 27, 2009 Case 1:09-cv-04515-RWS Document 167-6 Filed 12/23/2009 Page 1 of 54
A4622 Case 1:09-cv-04515-RWS Document 167-6 Filed 12/23/2009 Page 2 of 54
The Economic Impact of Licensed Commercialized Inventions Originating in University Research, 1996-2007
The Economic Impact of Licensed Commercialized Inventions Originating in University Research, 1996-2007
Final Report to the Biotechnology Industry Organization September 3, 2009
Project Team: David Roessner, Jennifer Bond, Sumiye Okubo, Mark Planting
Final Report 8/31/09 Page 0
A4623 Case 1:09-cv-04515-RWS Document 167-6 Filed 12/23/2009 Page 3 of 54 The Economic Impact of Licensed Commercialized Inventions Originating in University Research, 1996-2007
Table of Contents
Table of Contents ...... 1
Project Team ...... 2
Acknowledgments ...... 2
EXECUTIVE SUMMARY...... 3
Project Overview ...... 10
Economic Significance of University Research: History and Trends ...... 12
Empirical Evidence of the Economic Impact of University Research and Licensing ...... 20
Estimating the Economic Impact of University Licensing ...... 22 Using the I-O Model to Assess the Impact of University Licensing ...... 22 Estimating the Total Annual Economic Impact of University-Licensed Products ...... 23 The Data ...... 25
Results ...... 32 Impact Estimates, Basic Model ...... 32 GDP Impact Estimates, Accounting for Product Substitution Effects ...... 36
Summary and Discussion ...... 38
References ...... 42
Appendix A Empirical Evidence of the Economic Impact of University Research and Licensing: an Overview of the Literature ...... 45
Appendix B The Bureau of Economic Analysis National Input-Output Model: a Brief Description ...... 50
Final Report 9/3/09 Page 1
A4624 Case 1:09-cv-04515-RWS Document 167-6 Filed 12/23/2009 Page 4 of 54 The Economic Impact of Licensed Commercialized Inventions Originating in University Research, 1996-2007
Project Team
This project was conducted by a small group of consultants headed by Dr. David Roessner, Professor of Public Policy Emeritus, Georgia Institute of Technology and Associate Director, Science and Technology Policy Program, SRI International. Other key project team members include Ms. Jennifer Bond, Senior Advisor for International Affairs for the Council on Competitiveness and former Director of the Science & Engineering Indicators Program at the National Science Foundation; Dr. Sumiye Okubo, former Associate Director for Industry Accounts at the Commerce Department’s Bureau of Economic Analysis; and Mr. Mark Planting, former chief of research on the use and development of U.S. input-output accounts at the Bureau of Economic Analysis.
Acknowledgments
We owe substantial debts of gratitude to many people who made this project possible, especially to AUTM members and staff who helped us obtain estimates of royalty rates charged on deals based on product sales. They include Janna Tom, Anne Chasser, Pat Jones, Dana Bostrom, Lori Pressman, Ashley Stevens, John Fraser, Richard Kordal, Kevin Cullen and Richard Colman. We also thank the respondents from university technology transfer offices who provided information on the royalty rates they charge. Others who helped in a number of other ways include Patricia Cotton, Brian Wright, Maryann Feldman, and Steve Merrill. We are also grateful to Joe Allen and John Ritter, who were instrumental in moving an idea to reality, for introducing us to key staff at BIO, and for their continuing advice and encouragement. Finally, we thank Ted Buckley, Lila Feisee, Tom Dilenge, Margarita Noriega and their colleagues at BIO who provided financial support, encouragement, and hard questions that made this project better than it otherwise would have been. However, all errors of fact or interpretation in this report are ours.
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EXECUTIVE SUMMARY Study Objectives
University research and research-related activities contribute in many important ways to the national economy, notably through increased productivity of applied R&D in industry due to university-developed new knowledge and technical know-how, provision of highly valued human capital embodied in faculty and students, development of equipment and instrumentation used by industry in production and research, and creation of concepts and prototypes for new products and processes. These benefits are enabled primarily through publications, conferences, information exchange via consulting and collaborative research, and hiring of trained students. This report develops estimates of the economic impact of just one of these research-related activities, licensing of university intellectual property, clearly an impact of major significance for the economy but by no means the largest source of the total impact of university research.
Methods and Data
There are several relatively sophisticated methods that could be used to estimate the economic value to the nation of innovations based in university research (e.g. consumer surplus estimates for specific innovations), but most would require costly data collection and/or threaten the proprietary interests of innovating firms. This report presents the results of a modest yet rigorous approach that makes use of existing Association of University Technology Managers (AUTM) annual survey data and relatively straightforward economic calculations. Using data from annual AUTM surveys of U.S. universities, it is possible to develop systematic, conservative estimates of the economic impacts on the United States of twelve years of university-industry research collaborations. Although “deals” between university technology licensing offices and private firms take many forms, such as one-time flat fees, taking equity positions in university-based start-ups, and even in some rare cases donating intellectual property (IP) to nonprofits for charitable purposes, in many cases universities base licensing fees on the percentage of sales of new products developed using the university-based IP. Annual AUTM survey data are available on the licensing income from universities responding to the survey, typically numbering about 140. Licensing income data by reporting institution are available from 1996 through 2007. With these data as a base, we combine the AUTM survey results with other data and employ the Commerce Department’s Bureau of Economic Analysis (BEA) Input-Output (I-O) model to develop estimates of the annual national economic impact of university licensed products that have been commercialized and generated sales. These impact estimates take two forms: the change in gross output of all industries due to the university
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A4626 Case 1:09-cv-04515-RWS Document 167-6 Filed 12/23/2009 Page 6 of 54 The Economic Impact of Licensed Commercialized Inventions Originating in University Research, 1996-2007 licensed products in the marketplace, and the impact on Gross Domestic Product (GDP) of university licensed products.
Figure S-1, below, provides a schematic representation of how we calculated annual estimates of the impact of university-licensed products on the U.S. GDP. Verbally, it is the sum of the estimated direct impact of university licensed products and the direct impact of university expenditures of their total (gross) licensing income. The direct impact of university licensed products is, in turn, derived from the ratio of university licensing income from “running royalties” to the royalty rates (based on percentage of product sales) charged by universities. This ratio yields an annual estimate of the additional revenues to firms generated from sales of products based on university-licensed intellectual property. The I-O model converts this figure into the changes in income (compensation, indirect business taxes, and gross operating surplus—i.e., profits) of companies operating under sales-based university licensing agreements, which together constitutes the contribution to GNP. Also, university expenditures attributable to licensing income have direct impacts on the economy in two ways: first, via expenditures of gross royalty income (for salaries, equipment, overhead costs, etc.) and second, via expenditures of research income from firms that contract for R&D with the university as a direct consequence of the licensing agreement. This is accounted for by the second term in the model.
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Figure S-1: Estimating the Total Annual Economic Impact of University-Licensed Products
ESTIMATED TOTAL ESTIMATED DIRECT ANNUAL ECONOMIC ANNUAL ECONOMIC ESTIMATED DIRECT IMPACT OF IMPACT OF + ANNUAL ECONOMIC UNIVERSITY- = UNIVERSITY- IMPACT OF LICENSED LICENSED UNIVERSITY PRODUCTS PRODUCTS LICENSING
Where
UNIVERSITY LICENSING INCOME FROM RUNNING ADDITIONAL ESTIMATED DIRECT ROYALTIES REVENUES TO CONTRIBU- ANNUAL ECONOMIC MANUFACTURING I-O TION TO IMPACT OF = = FIRMS RESULTING MODEL GDP UNIVERSITY- FROM SALES OF LICENSED “TYPICAL” ROYALTY PRODUCTS BASED PRODUCTS RATE (% OF PRODUCT ON UNIVERSITY SALES) CHARGED BY LICENSES UNIVERSITIES
And
GROSS ANNUAL ESTIMATED DIRECT ANNUAL VALUE OF ANNUAL ECONOMIC UNIVERSITY RESEARCH IMPACT OF = LICENSING + CONTRACTS
UNIVERSITY INCOME DUE TO LICENSING PRIOR LICENSES
Figure S-2 shows how we estimated the change in gross output of all industries due to the university licensing of products. Gross output is a measure of economic activity, but is not GDP. The impact is the sum of sales of companies generated by the licensing agreements plus the change in output at universities (additional income from licensing plus additional research funds attributable to the licensing) plus the changes in gross output of all other industries that directly and indirectly provide inputs to the universities. Note that “institutional expenditures” represent university licensing income that national accountants classify as consumption expenditures.
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Figure S-2: Estimating the Annual Impact of University-Licensed Products on Industry Gross Outputs
ESTIMATED INDIRECT ESTIMATED TOTAL ANNUAL IMPACT OF ANNUAL ECONOMIC IMPACT OF UNIVERSITY- INSTITUTIONAL = + UNIVERSITY LICENSING LICENSED PRODUCTS EXPENDITURES ON INDUSTRY GROSS ON OTHER INDUSTRIES OUTPUT
Where
ANNUAL GROSS VALUE OF ANNUAL RESEARCH INSTITUTIONAL = UNIVERSITY + CONTRACTS EXPENDITURES LICENSING DUE TO INCOME PRIOR LICENSES
And
ANNUAL ESTIMATED INDIRECT GROSS VALUE OF UNIVERSITY OUTPUT ANNUAL ECONOMIC ANNUAL RESEARCH MULTIPLIER(S) FROM BEA IMPACT OF UNIVERSITY CONTRACTS + x INPUT/OUTPUT TABLES UNIVERSITY LICENSING = LICENSING DUE TO ON OTHER INDUSTRIES INCOME PRIOR LICENSES
Results1
Impact of University Licensing on GDP. The model generates annual values for sales revenues with a range of assumptions about royalty rates: 2%, 5%, and 10%; outputs from the I-O model under these three assumptions; and estimates of the total change in GDP due to university- licensed product sales under the three royalty rate assumptions. No assumptions are made here about product substitution rates, and the additional impact generated from university income from license-related contract R&D is not included in the calculations. Under a moderately conservative assumption (conservative from the perspective of the magnitude of model’s impact estimate), a 5% royalty rate, over the 12-year range of our data university licensing based on product sales contributed $2.6 billion to the U.S. GDP in 1996, and $16.8
1 Tabulations of the data and results summarized here are presented in Tables 4 and 5, pages 32 and 34, of the full report. Final Report 9/3/09 Page 6
A4629 Case 1:09-cv-04515-RWS Document 167-6 Filed 12/23/2009 Page 9 of 54 The Economic Impact of Licensed Commercialized Inventions Originating in University Research, 1996-2007 billion in 2007. Under a less conservative but realistic assumption (2% royalty rate), the annual contribution to GDP ranged from $5.9 billion in 1996 to more than $38.8 billion in 2007. Without accounting for product substitution effects, we estimate that over the period 1996 to 2007, university licensing agreements based on product sales contributed at least $47 billion and as much as $187 billion to the U.S. GDP. A moderately conservative estimate based on 5% royalty rates yields a total contribution to GDP for this period of more than $82 billion. The large range of these estimates illustrates clearly the high sensitivity of our results to assumptions about the royalty rates charged by universities on license agreements based on product sales. These results are depicted graphically below.
Impact of University Licensing on Industry Gross Output. Using the model depicted in Figure S- 2, which generates estimates of the contribution to industry gross output due to university- licensed products, we calculated the total output produced annually by university licensing revenues, the direct employment generated by these revenues, and the total change in industry gross outputs due to this licensing activity. We again calculated a range of estimates based on the royalty rates charged in sales-based licensing agreements. Under a moderately conservative assumption (5% royalty rates), as a result of university licensing annual industrial output increased by $6.3 billion in 1996 and by $39.7 billion in 2007. Using a less conservative assumption (2% royalty rates),2 the annual contribution to industry output grew from $14.7
2 Note that because royalty rates are in the denominator of the model’s calculations, a lower royalty rate yields higher estimated product sales and thus higher economic impact. Final Report 9/3/09 Page 7
A4630 Case 1:09-cv-04515-RWS Document 167-6 Filed 12/23/2009 Page 10 of 54 The Economic Impact of Licensed Commercialized Inventions Originating in University Research, 1996-2007 billion in 1996 to nearly $94.9 billion in 2007. Summing over the entire 12 years for which we have data, we estimate that the total contribution of university licensing to gross industry output at least $108.5 billion and as much as $457.1 billion (again without accounting for product substitution effects). A moderately conservative estimate based on 5% royalty rates yields an estimated impact of university licensing on total industry output over 1996-2007 of $195.6 billion.
Impact of University Licensing on Employment. The national I-O model, based on empirical data, also calculates the number of jobs directly created per million dollars of final purchases and thus provides estimates of the total number of jobs created annually due to university- licensed products. This ranged from about 9,000 jobs in 1996 to 41,000 in 2007. We estimate that over the entire 12-year period, university-licensed products created more than 279,000 jobs.
Accounting for Product Substitution Effects in the GDP Impact Estimates. In principle, product displacement effects could range from 0 percent, when the new product displaces no existing products or services, to 100 percent, when it completely displaces them. These ranges (rather than misleading “typical” or “average” values) provide a way to generate conservative estimates of the increase in GDP due to university licensing of intellectual property, accounting for the wide range of royalty rates charged by universities and for substitution effects when new products are first introduced into the marketplace. Given that there are standard ways to estimate substitution rates for a large portfolio of new products, we used three assumptions:
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5%, 10%, and 50% substitution, with the latter probably excessively conservative. Under a conservative royalty rate assumption, 5%, the estimated total change in GDP over the 12 year period ranges from $41.1 billion to $78.1 billion, depending upon the substitution rate assumed. Using a 2% royalty rate assumption, the estimated total change in GDP ranges from $93.3 billion to $177.2 billion. We do not show the similar calculations for contribution to changes in total industry output or employment under these different assumptions, but of course the results are proportionately similar.
Observations
Our approach to estimating the impact of university licensing employs a number of features that we believe provide far more valid and complete estimates of national economic impact than have previously been available, while at the same time incorporating many assumptions that lead to conservative results. Our model is relatively simple and transparent, and affords users the opportunity to enter their own best estimates of appropriate royalty rates, to which the model results are highly sensitive. As far as the validity of our estimates is concerned, our approach employs a national input-output model that accounts for the fact that sales revenue estimates do not themselves represent economic impact. Sales revenue estimates, however generated, include the industry purchases of intermediate inputs; further, they do not account for the expenditures of those revenues for multiple purposes before having a final impact on value added or GDP. Our approach accounts for the fact that university expenditures of their licensing income has significant direct and induced economic impact and thus should be included in any national (or, for that matter, regional) impact estimates. Indeed, our model can be used with regional input-output models and royalty data from individual universities to generate estimates of the economic impact of individual universities. Finally, although we were unable to obtain consistent data on university income from license-related R&D contracts, these too add to the economic impact of university licensing.
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Project Overview
It is widely known that university-industry research interactions and collaborations have grown substantially over the past several decades. Collaborations take many forms, ranging from university licensing of inventions based in federally funded research, to industry participation in major federally-funded university-based research consortia, to direct industry support of university-based research projects. New companies also are frequently formed around innovations based on university research. Private firms increasingly have recognized that research partnerships with universities provide a wide range of benefits, only some of which take specific economic forms such as new and improved products, processes, and services; other benefits are access to students and graduates with specialized knowledge who can be interns, employees, or consultants. While only a fraction of industry-university research collaborations result in intellectual property (IP) that is successfully commercialized by private firms, universities also own intellectual property rights to inventions derived from billions of dollars annually of federal funding. They seek to maximize the public benefits of this research by licensing these discoveries to private firms to ensure maximum access to the technology by the general public.
There are several relatively sophisticated methods that could be used to estimate the economic value to the nation of innovations based in university research (e.g. consumer surplus estimates for specific innovations), but most would require costly data collection and/or threaten the proprietary interests of innovating firms. We present here the results of a modest approach that makes use of existing Association of University Technology Managers (AUTM) annual survey data and relatively straightforward economic calculations. Using data from annual AUTM surveys of U.S. universities, it is possible to develop systematic, conservative estimates of the economic impacts on the United States of twelve years of university-industry research collaborations. Although “deals” between university technology licensing offices and private firms take many forms, such as one-time flat fees, taking equity positions in university-based start-ups, and even in some rare cases donating IP to nonprofits for charitable purposes, in many cases universities base licensing fees on the percentage of sales of new products developed using the university-based IP. Annual AUTM survey data are available on the licensing income from all U.S. universities responding to the survey, typically numbering about 140. Licensing income data by reporting institution are available from 1996 through 2007. With these data as a base, we combine the AUTM survey results with other data and employ the Commerce Department’s Bureau of Economic Analysis (BEA) Input-Output (I-O) model to
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A4633 Case 1:09-cv-04515-RWS Document 167-6 Filed 12/23/2009 Page 13 of 54 The Economic Impact of Licensed Commercialized Inventions Originating in University Research, 1996-2007 develop estimates of the annual national economic impact of university licensed products that have been commercialized and generated sales. These impact estimates take two forms: the change in gross output of all industries due to the university licensed products in the marketplace, and the impact on Gross Domestic Product (GDP) of university licensed products.
The “core” of this report describes the data used to generate these estimates, the models used to develop the estimates, and the results obtained. However, it is important to place these results in context, since the economic impact of university licensing of products is only one of the many economic impacts of university research and education, and almost certainly not the largest one. In addition to placing this particular type of university output in the context of other outputs with significant economic impact, it is also necessary to place the impact of university licensing of intellectual property in historical context. Thus the next section of this report presents historical trends in university licensing of intellectual property and related outputs. The subsequent section shifts the focus to the results of empirical studies of the impact of university research generally and of university licensing particularly. Then, we present the details of our work: the data used in our model, the model itself, and the results. The final section discusses our results, noting especially the assumptions and caveats that should be kept in mind in interpreting them.
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Economic Significance of University Research: History and Trends
Although the intellectual property aspects of university-industry relationships have assumed salience recently in policy debates about the appropriate role of universities in technology commercialization, university-based applied research in areas of interest to industry is not new. During the latter part of the 19th century and well into the 20th, much university research was actually oriented toward the economic interests of the states in which they resided (and from which they drew their primary support). A small number of elite, private institutions struggled to increase the amount of basic research done on campus, as their counterparts in Europe had been doing for some time. It was not until the period following World War II that American research universities assumed the role as the primary performers of the nation’s basic research (Geiger, 1986; Rosenberg and Nelson, 1994; Mowery and Rosenberg, 1989; Atkinson and Blanpied, 2008).
The direct commercial value of knowledge generated from university research is only one of a wide range of outputs that have economic significance. In a synthesis of prior research, Goldstein, Maier, and Luger (1995) list eight outputs of research universities that can lead to economic impacts:
1. Generation of new knowledge; 2. Creation of human capital; 3. Transfer of existing know-how (tacit knowledge); 4. Technological innovation; 5. Capital investment; 6. Regional leadership; 7. Production of knowledge infrastructure; and 8. Influence on the regional milieu.
In their recent review of methods for assessing the economic impacts of universities, Drucker and Goldstein (2007) expand on several of the more significant (and more easily characterized) of these outputs. They note that, since their origins in the Middle Ages, universities’ primary reason for existence has been the formulation and dissemination of knowledge and wisdom. Research-intensive universities have recognized that development of human capital has been an accompanying objective, difficult to separate from the research function itself. “The development of human capital is intrinsic in the process of establishing new knowledge as faculty, students, and researchers develop their own intellectual and technical skills; [it] also occurs through activities such as distance learning, industrial extension, and community
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A4635 Case 1:09-cv-04515-RWS Document 167-6 Filed 12/23/2009 Page 15 of 54 The Economic Impact of Licensed Commercialized Inventions Originating in University Research, 1996-2007 education programs.” (p. 22) Knowledge and technology transfer focus on application of existing knowledge to solve problems and improvement of products and processes, functions that initially (in the U.S.) were central to land grant universities but are now recognized as highly important for all research universities, public and private. The creation of technological innovations at the university frequently leads to patenting, licensing, and the formation of start-up companies by faculty and students.
Obviously, the economic implications of some of these outputs are more easily measured and assessed than others. Traditional approaches have focused on the regional impacts of direct spending and regional investments of universities; others have extended this to include the effects of human capital creation and induced regional migration. More recent approaches have considered the effects of knowledge creation, knowledge infrastructure development, technological innovation, and technology transfer.
Sampat (2003) provides a similar but shorter list that focuses more sharply on the more readily recognized and assessed economic outputs of university research:
Creation of economically useful scientific and technological information, which helps increase the efficiency of applied R&D in industry; Provision of skills or human capital to students and faculty members and helping to create networks of scientific and technological capabilities; Development of equipment and instrumentation used by firms in production or research; Creation of prototypes for new products and processes. (pp. 55-56)
Sampat makes several points that are relevant to the purposes of this report. He notes that the relative importance of the different channels through which these outputs diffuse (or are “transferred”) to industry has varied by industry and over time. Such channels include hiring of students and faculty, consulting relationships between faculty and firms, publications, conference presentations, informal interactions with industry researchers, university start-up companies, and licensing of university patents. Recent studies show that both faculty and private firms in most industries consider the primary channels through which learning occurs to be publications, conferences, and informal information exchange (Cohen, Nelson, and Walsh, 2002; Agrawal and Henderson, 2002). Also, several studies of the benefits that companies derive from membership in National Science Foundation-funded university-industry research centers (e.g., Engineering Research Centers, Industry/University Cooperative Research Centers) show that access to students and faculty and to new ideas and research results, rather than technology per se, are consistently the most frequently cited benefits of center membership
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(Feller, Ailes, and Roessner, 2002; Roessner, 2000). So, although the focus of this report is clearly on the economic impact of university licensing, this represents only one of many outputs from university research that are highly valued in the economy.
Despite the “ivory tower” label sometimes attached to U.S. universities, this is now a gross misrepresentation of reality. In fact, our research universities have been among the most important economic institutions of the twentieth century (Atkinson and Blanpied, 2008). “Most economic historians agree that the rise of American technological and economic leadership in the postwar era was based in large part on the strength of the American university system” (Sampat, 2003: 56). Many other countries viewed the university-industry collaborations found in the United States as a competitive advantage and sought to duplicate the underlying conditions supporting these trends (Neal, Smith and McCormick, 2008). Patenting of university research outputs is by no means a phenomenon of the past few decades only. Although growth in university patenting accelerated dramatically beginning in the 1980s, the history of university patenting extends back to the 1920s (see Figures 1 and 2). Indicators of academic patenting are mixed in recent years. The U.S. Patent and Trademark Office reports that patent grants to universities have declined since 2002, but other indicators suggest continued expansion of activities related to patents and patent/licensing revenues, such as invention disclosures, patent applications, and revenue-generating licenses. For example, Figure 2 shows that the number of new university license agreements/options have grown steadily in recent years from 1,079 in 1991 to 4,201 in 2005.
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Figure 1: Patents Issued to U.S. Research Universities, 1925-1995
Source: Sampat (2003), page 60.
Source: AUTM annual surveys, various years, and National Science Board, 2008.
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Until the latter part of the twentieth century, however, universities generally did not wish to engage directly in the patenting and licensing process, largely because they viewed such activities as possibly compromising their commitments to openness and knowledge dissemination. In these early years, most universities avoided intellectual property issues, and the few that did become involved either contracted out their patent management activities to third party organizations such as the Research Corporation (founded in 1912), or set up separate, non-profit foundations such as the Wisconsin Alumni Research Foundation (created in 1924). Beginning with MIT in 1937 and continuing into the post WWII period, universities signed “invention administration agreements” (IAA) with Research Corporation, specifying that all necessary services would be provided by Research Corporation, for which the Corporation would retain a portion of royalty income, with the remainder going to the university. Figure 3, below, shows the proportion of Carnegie research universities that had such agreements between 1940 and 1980.
Figure 3: Proportion of Carnegie Research Universities with IAAs with Research Corporation, 1940-1980
Source: Sampat (2003): page 58.
A number of forces beginning in the 1970s brought about significant changes in university patent policies, manifested most obviously in the decision by many research universities to establish internal technology transfer offices, thus internalizing the functions previously performed by the Research Corporation. Figure 4 shows the number of additional universities
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“entering into” internal technology transfer activities during each five-year period between 1921 and 1990, with “entering into” defined by AUTM as having a minimum of 0.5 Full Time Equivalents (FTEs) devoted to such activities. Research Corporation noted in its Annual Report that by the mid-1970s most major research universities were considering establishing internal technology transfer offices (Sampat 2003, p. 59).
Figure 4: Year of "Entry" into Technology Transfer Activities, 1921-1990
Source: Sampat (2003), page 60.
Among the several forces at work during the 1960s and 70s, prior to passage of the Bayh-Dole Act in 1980, were:
Commercial applications resulting from the growth of “use oriented” basic research in fields such as molecular biology; A decline in federal and other funding for university research; University frustration with Research Corporation’s failure to return licensing revenues as called for in the IAAs; Court rulings and shifts in federal policy that made it easier to patent research results in biomedicine. (Mowery, et al., 2001; Mowery and Sampat, 2001).
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According to Mowery, et al. (2001), beginning in the 1960s important federal research agencies began to allow universities to patent and license results from federally-funded research. The Department of Defense allowed universities to retain title to patents resulting from DOD research, provided that DOD retained control of the patents for military application. Both HEW and NSF negotiated Institutional Patent Agreements (IPA) with individual universities, which eliminated the need for case-by-case reviews of the disposition of individual academic inventions. The universities whose patent filings were increasing during this period were participants in these IPA agreements (J. Allen, personal communication, March 23, 2009). In addition, the Court of Appeals for the Federal Circuit (CAFC) was established in 1982 to “serve as the court of final appeal for patent cases throughout the federal judiciary . . . the CAFC soon emerged as a strong champion of patentholder rights” (p. 103). The IPAs were, in a sense, an administrative form of many of the agency-wide provisions of the Bayh-Dole Act, enacted in 1980 and implemented in 1981. In any event, as Mowery et al. (2002) note, “growth during the 1970s in patenting, licensing, licensing income, or in the establishment of independent technology transfer offices, was dwarfed by the surge in all of these activities after 1981.” (p. 104)
Time-series data on a variety of indicators of the level of activities related to commercialization of university research consistently show that, while universities engaged in such actions as early as the 1920s, an enormous surge in the rate of activity took place after the Bayh-Dole Act became law in 1980. Although the trend data may suggest, prima facie, that Bayh-Dole is to a significant extent responsible for the economic consequences of university- based technology transfer and commercialization activities during the past twenty-five years, there is currently considerable debate about this. Mowery and his colleagues, for example, are skeptical of the causal links, arguing that there is little empirical evidence that Bayh-Dole substantially increased the contributions of university research to the U.S. economy. Based on national university patenting data and detailed historical data from Columbia, Stanford, and Berkeley, they argue that commercialization activity would have grown in the absence of Bayh- Dole, that the evidence on low rates of commercialization before passage of Bayh-Dole is weak, and that patenting and licensing frequently are not necessary for the development and commercialization of publicly funded, university-based inventions (Mowery, et al., 2004, pp. 183-184). However, these conclusions and those of other skeptics concerning the apparent economic significance of Bayh-Dole have been challenged strongly in a recently published article by Bremer, Allen, and Latker (2009). They conclude that “Reams of objective data exist supporting the conclusion that the Bayh-Dole Act greatly improved the commercialization of federally-funded research . . . and that the public sector-private sector partnerships which were generated under the Act are essential both to the well being and the competitive position of
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A4641 Case 1:09-cv-04515-RWS Document 167-6 Filed 12/23/2009 Page 21 of 54 The Economic Impact of Licensed Commercialized Inventions Originating in University Research, 1996-2007 the United States” (p. 2). Our concern here, however, is not the contribution that the Bayh- Dole Act did or did not make to the economic impact of university-based licensing of technology, but rather to estimate quantitatively the contribution that one component of the output of university-based research makes to our national economy.
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Empirical Evidence of the Economic Impact of University Research and Licensing
In 2003 the National Academy of Engineering issued a report titled The Impact of Academic Research on Industrial Performance (NAE, 2003). The study sought to assess and document the contribution that university research made to five diverse industries: network systems and communications; financial services; medical devices and equipment; transportation, distribution, and logistics services; and aerospace. These industries illustrate the wide range of contributions of academic research to industrial performance: trained graduates; new knowledge emerging from research; and development of tools, prototypes, and products. They also illustrate different patterns of collaboration with universities and different mechanisms for taking advantage of academic contributions. The study concluded that “Academic research has made substantial contributions to all five industries, ranging from graduates at all levels trained in modern research techniques to fundamental concepts and key ideas based on basic and applied research to the development of tools, prototypes, and marketable products, processes, and services” (p. 2). The study also noted that quantitative evidence of the impact of university research on industrial performance was largely lacking. A number of efforts are ongoing to improve metrics of innovation outputs, technology transfer, and commercialization of R&D results including those at the National Science Foundation (NSF), the Association of Public and Land-Grant Universities (APLU—formerly NASULGC), the Association of American Universities (AAU), AUTM, and the Organisation for Economic Co-operation and Development (OECD). In response to the need to provide qualitative as well as quantitative information on the economic and social contributions of university R&D, AUTM has also launched The Better World Project, which provides case studies of examples such as Taxol, Alegra, Google, holograms, etc. The latest report, 2009 Better World Report, focuses on health (AUTM, 2009).
There is considerable evidence that the most important contribution that universities make to industry is through their outputs of research results and well-trained scientists and engineers, which increase the productivity of industrial R&D (Nelson, 1986; Rosenberg and Nelson, 1994; Klevorick et al., 1995).3 Industrial scientists rely primarily on the existing stock of knowledge in carrying out their research, so are likely to use existing knowledge at least as much as new knowledge. Sometimes, though, advances in basic science lead fairly quickly to new products and processes, with biotechnology (employing knowledge of the principles of recombinant DNA, for example) an obvious case. Mansfield (1991) surveyed R&D executives from 76 major U.S. firms, asking them to estimate the proportion of new products and processes their firms had produced over a ten-year period that could not have been developed (without substantial
3 For a concise review of the literature on the contributions of academic research to industrial innovation, see Chapter 8 in National Science Board, Science and Engineering Indicators 1996. Final Report 9/3/09 Page 20
A4643 Case 1:09-cv-04515-RWS Document 167-6 Filed 12/23/2009 Page 23 of 54 The Economic Impact of Licensed Commercialized Inventions Originating in University Research, 1996-2007 delay) without the results of academic research that had been conducted during the previous 15 years. The responses indicated that about 11 percent of new products and 9 percent of new processes could not have been developed without the results of academic research. Using these results together with information on the value of sales of new products and the cost savings associated with use of new processes, Mansfield estimated that the social return to investment in academic research was 28 percent.
There is also evidence that academic research is increasingly important to industry. A survey of 1,478 industry R&D lab managers conducted in 1994 by Carnegie Mellon University researchers found that two-thirds of the industries surveyed showed that university research was at least “moderately important” to their R&D. Also, as we saw in an earlier section of this report, the number of patents granted to universities has increased dramatically over the past several decades, as have start-up companies based in university research. Disclosures filed with university technology management offices grew from 13,700 in 2003 to 15,400 in 2005. Likewise, new U.S. patent applications filed by respondents to annual AUTM surveys also increased, from 7,200 in 2003 to 9,500 in 2004 and 9,300 in 2005. The annual number of startup companies established as a result of university-based inventions rebounded after 2 years of downturns in 2002 and 2003 to more than 400 in both 2004 and 2005, and were reported at 555 in the 2007 AUTM survey (National Science Board, 2008; AUTM, 2007).
There is a substantial literature on the broader economic impact of universities (only some studies consider the impact of research as a separate activity), but it consists largely of studies of the impact that universities have had on their regional economies. National impact studies are rare, and the few that have been done focus on the impact of publicly-funded (usually federal) research on the national economy, and most do not separate out university research impacts. In Appendix A we summarize selected studies to illustrate typical approaches used and results obtained to provide a broader context for the specific impact estimates of university licensing we have developed. We stress that licensing of intellectual property is only a minor portion of the activities engaged in by universities that have economic value, so that the total economic impact of universities greatly exceeds that generated through licensing. Appendix A is not intended to be a full literature review; rather, it illustrates the various types of studies that have been done and helps place this report and its results into context.
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Estimating the Economic Impact of University Licensing
The BEA national I-O model and data from AUTM provided the basis for our estimates of the national economic impact of university licensing. Two estimates of impacts are made. One measures the impact of university licensing on gross domestic product (GDP), and the other, its impact on other industries’ production (gross output). Our estimates cover a 12-year period, 1996–2007.
The national I-O model allows users to assess the impact of specified events on economic activity. The model shows the relationship between final demand and industry production, and may be used to evaluate the interrelationships among industries and the relationships between industries and the commodities they use and produce. It is used to derive input-output requirement tables. These requirements tables show the level of industry gross output or employment required to produce a specified level of final uses.4
Using the I-O Model to Assess the Impact of University Licensing
The I-O model is used to measure two different but equally important impacts of university licensing on the economy: the impact on GDP and the impact on other industries production (gross output).
The first is the direct impact of university-licensed products on GDP. It takes into account both licensing receipts of universities and output resulting from licensing agreements. University licensing receipts are part of the output of universities, and include additional license-related sponsored research. It is assumed that all licensing receipts are spent, for example, on additional research equipment and materials, graduate student support, and faculty salaries. These licensing receipts are added to output resulting from licensing agreements. Firms generate sales of new products – goods and services – based on the licensed technology. The contribution to GDP from the sales of these products is the value added of the industries producing them. This contribution is estimated using the ratio of value added to gross output (or sales) of the products produced under the licensing agreements. These ratios are derived from the input-output tables.
The second impact measures that of university licensing on industry gross output or production. It includes the direct effect of expenditures of university royalty receipts (including additional
4 A more complete discussion of the Input-Output model can be found in Appendix B. Final Report 9/3/09 Page 22
A4645 Case 1:09-cv-04515-RWS Document 167-6 Filed 12/23/2009 Page 25 of 54 The Economic Impact of Licensed Commercialized Inventions Originating in University Research, 1996-2007 sponsored research for the university generated by its licenses), and the indirect effect on the output or employment of universities as well as all other industries. These university expenditures require other industries that supply goods and services to the universities to increase their output. Licensing and license-related research income is multiplied by the I-O total requirements multipliers to estimate the gross output of all other industries required to support the additional expenditures resulting from licensing and license-related research income.
Estimating the Total Annual Economic Impact of University-Licensed Products
Figure 5, below, provides a schematic representation of how we calculated annual estimates of the impact of university licensed products on the U.S. GDP. Verbally, it is the sum of the estimated direct impact of university licensed products and the direct impact of university expenditures of their total (gross) licensing income. The direct impact of university licensed products is, in turn, derived from the ratio of university licensing income from “running royalties”5 to the royalty rates (based on percentage of product sales) charged by universities. This ratio yields an annual estimate of the additional revenues to firms generated from sales of products based on university-licensed intellectual property. The I-O model converts this figure into the changes in income (compensation, indirect business taxes, and gross operating surplus—i.e., profits) of companies operating under sales-based university licensing agreements, which together constitutes the contribution to GNP. Also, university expenditures attributable to licensing income have direct impacts on the economy in two ways: first, via expenditures of gross royalty income (for salaries, equipment, overhead costs, etc.) and second, via expenditures of research income from firms that contract for R&D with the university as a direct consequence of the licensing agreement. This is accounted for by the second term in the model.
5 AUTM defines running royalties as royalties earned on and tied to the sale of products. Excluded from this number are license issue fees, payments under options, termination payments, and the amount of annual minimums not supported by sales. Also excluded from this amount is cashed-in equity. Many universities take equity positions in start-ups in lieu of royalties. The exclusion of these equity payments in our model adds to the conservative nature of our estimates.
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Figure 5: Estimating the Total Annual Economic Impact of University-Licensed Products
ESTIMATED TOTAL ESTIMATED DIRECT ANNUAL ECONOMIC ANNUAL ECONOMIC ESTIMATED DIRECT IMPACT OF IMPACT OF + ANNUAL ECONOMIC UNIVERSITY- = UNIVERSITY- IMPACT OF LICENSED LICENSED UNIVERSITY PRODUCTS PRODUCTS LICENSING
Where
UNIVERSITY LICENSING INCOME FROM RUNNING ADDITIONAL ESTIMATED DIRECT ROYALTIES REVENUES TO CONTRIBU- ANNUAL ECONOMIC MANUFACTURING I-O TION TO IMPACT OF = = FIRMS RESULTING MODEL GDP UNIVERSITY- FROM SALES OF LICENSED “TYPICAL” ROYALTY PRODUCTS BASED PRODUCTS RATE (% OF PRODUCT ON UNIVERSITY SALES) CHARGED BY LICENSES UNIVERSITIES
And
GROSS ANNUAL ESTIMATED DIRECT ANNUAL VALUE OF ANNUAL ECONOMIC UNIVERSITY RESEARCH IMPACT OF = LICENSING + CONTRACTS
UNIVERSITY INCOME DUE TO LICENSING PRIOR LICENSES
Figure 6 shows how we estimated the change in gross output of all industries due to the university licensing of products. Gross output is a measure of economic activity, but is not GDP. The impact is the sum of sales of companies generated by the licensing agreements plus the change in output at universities (additional income from licensing plus additional research funds attributable to the licensing) plus the changes in gross output of all other industries that directly and indirectly provide inputs to the universities. Note that “institutional expenditures” represent university licensing income that national accountants classify as consumption expenditures.
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Figure 6: Estimating the Annual Impact of University-Licensed Products on Industry Gross Outputs
ESTIMATED INDIRECT ESTIMATED TOTAL ANNUAL IMPACT OF ANNUAL ECONOMIC IMPACT OF UNIVERSITY- INSTITUTIONAL = + UNIVERSITY LICENSING LICENSED PRODUCTS EXPENDITURES ON INDUSTRY GROSS ON OTHER INDUSTRIES OUTPUT
Where
ANNUAL GROSS VALUE OF ANNUAL RESEARCH INSTITUTIONAL = UNIVERSITY + CONTRACTS EXPENDITURES LICENSING DUE TO INCOME PRIOR LICENSES
And
ANNUAL ESTIMATED INDIRECT GROSS VALUE OF UNIVERSITY OUTPUT ANNUAL ECONOMIC ANNUAL RESEARCH MULTIPLIER(S) FROM BEA IMPACT OF UNIVERSITY CONTRACTS + x INPUT/OUTPUT TABLES UNIVERSITY LICENSING = LICENSING DUE TO ON OTHER INDUSTRIES INCOME PRIOR LICENSES
The Data
We used data from AUTM annual surveys to estimate the impact of royalty-related income of universities and sales from products produced from the licensing agreements. AUTM surveys provide information for the years 1996-2007 on: Gross royalty income paid to universities from licensing; and Running royalties paid to the universities based on product sales.
The royalty-related income paid to universities multiplied by the total requirements multiplier for educational institutions gives the value of gross output in all industries necessary to satisfy the university expenditures of licensing-related income; this is the indirect impact of university
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A separate, but equally important impact is the contribution of the new products created by the university licensing program to industry value added, or GDP. The value of annual sales of products produced as a result of licensing university technologies is estimated using information on the royalty rates paid to universities based on the annual sales of products, and AUTM survey data on running royalty income received by universities based on product sales. Because of data limitations, a range of sales is estimated, based on information on royalty rates we obtained with the cooperation of AUTM members and staff. Royalty rates based on product sales differ among universities and by industrial sector; also, the derived sales estimates do not take into account the effect that new products have on sales of substitute goods already on the market. Hence, several scenarios are assumed. Royalty rates charged by universities typically range from 2% to 10%, depending on the industry involved and other factors. In principle, product displacement effects could range from 0 percent, when the new product displaces no existing products or services, to 100 percent, when it completely displaces them. These ranges (rather than misleading “typical” or “average” values) provide a way to generate conservative estimates of the increase in GDP due to university licensing of intellectual property, accounting for the wide range of royalty rates charged by universities and for substitution effects when new products are first introduced into the marketplace.
To develop information about “typical” royalty rates charged by universities on which to base our impact estimates, we enlisted the aid of a number of individual university technology transfer officers from various regions of the country and current and former members of the AUTM Public Policy Committee. With their help, we obtained royalty rate information from twelve research universities representing a range of sizes, types (public and private), and geographic locations. The following table (Table 1) summarizes the results of this effort.
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Table 1: Royalty Rates Charged by Twelve U.S. Universities for License Fees Based on Product Sales.
University Life sciences Software Other Overall A 4-6% 10-20% 0.5-3% Processes 1-3% B 10%+ 0.25% composition of matter 4- 6% C 2-3%
Devices 5% D therapeutics 1-2% Devices 4-5% E “higher” therapeutics 1-2% F 8% (health plus IT) 3-4% (mostly medical G 4% devices)
4-5% (mostly life H sciences) I 1-2% J About 5% K 4.4% L 5-8% AUTM and other sources in the literature6 suggest that about 60-75% of university licensing income is based in the life sciences,7 another 10-20% in IT/electronics/software, and the remainder in all other fields. This distribution and the results in the table show that it would be difficult and misleading to identify an “average” royalty rate (our respondents strongly resisted this). For these reasons, we decided on a wide range of royalty rates to use in our model: 2%, 5%, and 10%. Note that since royalty rate figures appear in the denominator of the model, the higher royalty rates yield lower estimates of economic impact. Moreover, since they are relative small numbers, the resulting economic impact estimates are highly sensitive to the royalty rates used in the model.8 One reason for including such a wide range of royalty rates in
6 Graff, et al. (2002) present data on the average percentage of a university’s total licensing revenues by academic field: medicine, 55.2%, engineering and physics 24.1%, agriculture 9.1%, computer science 5.1%, other 6.6%. Mowery, et al. (2001) report field-of-technology patterns in licensing for the University of California, Stanford, and Columbia. 75% of disclosures for Columbia were in biomedicine and most of the rest in software and electronics; at the University of California, about 65% were biomedical; at Stanford just 20% were biomedical and 30% in software. 7 The AUTM Annual Licensing & Activity Survey defines life sciences as all works derived from such disciplines as biology, medicine, chemistry (basic), pharmacy, medical devices, and those involving human physiology and psychology, including discipline-related inventive subject matter such as software and educational material.
8 Our discussions with experienced university technology transfer officers suggest that this range is itself subject to considerable debate. Royalty rates may be weighted and skewed towards the lower end of the range and actual royalty fees may turn out to be lower than originally reported due to a number of factors; royalties are often offset Final Report 9/3/09 Page 27
A4650 Case 1:09-cv-04515-RWS Document 167-6 Filed 12/23/2009 Page 30 of 54 The Economic Impact of Licensed Commercialized Inventions Originating in University Research, 1996-2007 our calculations is that users of our model can get a rough feel for the differences in impact that industry sector makes; for example, the data in Table 1 suggest that the 10% rate is appropriate for only very limited industry sectors, sectors that represent only a small proportion of most university licensing portfolios.
Recent data on royalty rates for technology reported in Parr, Royalty Rates for Technology (www.ipresearch.com) illustrate the distribution of royalty rates for technology licensing agreements in the U.S. Although the data shown graphically in Figure 7 are for all industries and include both university and private firm licenses, the shape of the distribution, if not the details, shows the inappropriateness of using an average or some other single figure to develop economic impact estimates for university licensing.
Figure 7: Royalty Rate Distribution Chart from Parr (2009).
Source: Parr, 2008, Figure 2, p. 16.
by sublicensing to other firms; “debundling” clauses in which the price of an active ingredient in a pharmaceutical is subtracted out of the royalty base calculation; and companies often return to renegotiate royalty fees. In any case, university licensing portfolios exhibit a range of royalty rates, perhaps 2-10%, with the lower rates typically dominating. Final Report 9/3/09 Page 28
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For displacement or substitution effects, there is no standard approach. Under these circumstances, we made what we believe to be a set of reasonable assumptions in order to arrive at a plausible range of product displacement rates:
1. It is highly unlikely that the effect of these new products, when first introduced, will have substantial displacement effects on existing products over the short run. They more frequently are highly innovative products, new to the marketplace, and sometimes result in entirely new industries or changes in behavior rather than merely improvements over or direct substitutes for existing ones, and therefore unlikely to directly displace something in widespread current use. This assumption would lead toward estimates below 50% substitution.
2. A 0% assumption means no market substitution effects whatever on existing products, which also seems unrealistic. Yet small perturbations over a reasonably short period (say 5 years) seem most likely, and this also points to use of substitution rates toward the lower end.
We therefore used substitution rate estimates of 5, 10, and 50 percent in our calculations. Anyone wishing to use alternative assumptions using our base estimates can of course do so easily.
The following two pairs of tables (Tables 2 and 3) and charts (Figures 8 and 9) show the annual AUTM data on running royalties and total royalty income for U.S. universities for the years 1996-2007.9
Table 2: Running Royalties for U.S. Universities, 1996-2007, in millions
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Millions $282.11 $314.75 $390.33 $475.04 $558.96 $636.56 $786.74 $829.26 $810.15 $855.94 $968.57 $1,806.97
N= 125 122 124 133 138 136 150 158 154 150 153 153
Source: AUTM annual surveys
9 The increase in royalty income in 2007 is a real increase and is primarily due to the sale by New York University of their worldwide royalty interest in Remicade(R) to Royalty Pharma for $650 million in cash up-front plus additional payments should yearly sales of Remicade(R) exceed certain agreed sales hurdles. NYU retains the portion of the Remicade(R) royalty interest payable to the NYU researchers who are responsible for the development of Remicade(R). So the dramatic increase in 2007 represents royalty income based on estimated future sales that normally would be apportioned in future years, based on the agreed-upon royalty rates. There are likely to be similar agreements with less dramatic effects reflected in the royalty income data for other years and other universities. Final Report 9/3/09 Page 29
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Table 3: Licensing Income Received by U.S. Universities, 1996-2007, millions of dollars
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Millions $365.22 $482.79 $613.55 $675.47 $1,099.89 $868.28 $997.83 $1,033.61 $1,088.47 $1,774.97 $1,511.58 $2,098.78
N= 125 122 124 133 138 136 150 158 154 150 153 153
Source: AUTM annual surveys.
Unfortunately, consistent and complete annual data for 1996-2007 are not available from AUTM on the value of research contracts received by universities that were directly related to previous licensing agreements signed between the university and the contracting companies.
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Omitting this element in the calculations is another indication that the impact estimates we calculated are on the conservative side.
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Results
Impact Estimates, Basic Model
Table 4, below, shows the calculated values resulting from application of the model represented in Figure 5, above. The model generates annual values for sales revenues with a range of assumptions about royalty rates: 2%, 5%, and 10%; outputs from the I-O model under these three assumptions; and estimates of the total change in GDP due to university-licensed product sales under the three royalty rate assumptions. No assumptions are made here about product substitution rates, and the additional impact generated from university income from license-related contract R&D is not included in the calculations. Under a moderately conservative assumption (conservative from the perspective of the magnitude of model’s impact estimate), a 5% royalty rate, over the 12-year range of our data university licensing based on product sales contributed $2.6 billion to the U.S. GDP in 1996, and $16.8 billion in 2007. Under a less conservative but realistic assumption (2% royalty rate), the annual contribution to GDP ranged from $5.9 billion in 1996 to more than $38.8 billion in 2007. Without accounting for product substitution effects, we estimate that over the period 1996 to 2007, university licensing agreements based on product sales contributed at least $47 billion and as much as $187 billion to the U.S. GDP. A moderately conservative estimate based on 5% royalty rates yields a total contribution to GDP for this period of more than $82 billion. The large range of these estimates illustrates clearly the high sensitivity of our results to assumptions about the royalty rates charged by universities on license agreements based on product sales.
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Table 4: Annual Change in U.S. GDP due to University-licensed Products, Selected Royalty Rates, 1996-2007
Value Income Income total total sales sales sales added from I-O from I-O Income total change change revenues revenues revenues ratio model model from I-O change in in GDP in GDP (2% (5% (10% from (2% (5% model (10 total GDP (2% (5% (10% running royalty royalty royalty U.S. I-O royalty royalty % royalty licensing royalty royalty royalty royalty rate) rate) rate) tables rate) rate) rate) income rate) rate) rate) Year millions millions millions millions millions millions millions millions millions millions millions 1996 $282.11 $14,106 $5,642 $2,821 0.39 $5,485 $2,194 $1,097 $365.22 $5,851 $2,559 $1,462 1997 $314.75 $15,737 $6,295 $3,147 0.39 $6,120 $2,448 $1,224 $482.79 $6,603 $2,931 $1,707 1998 $390.33 $19,517 $7,807 $3,903 0.40 $7,849 $3,139 $1,570 $613.55 $8,462 $3,753 $2,183 A4656 1999 $475.04 $23,752 $9,501 $4,750 0.40 $9,482 $3,793 $1,896 $675.47 $10,158 $4,468 $2,572 2000 $558.96 $27,948 $11,179 $5,590 0.40 $11,159 $4,463 $2,232 $1,099.89 $12,258 $5,563 $3,332 2001 $636.56 $31,828 $12,731 $6,366 0.40 $12,576 $5,030 $2,515 $868.28 $13,444 $5,899 $3,383 2002 $786.74 $39,337 $15,735 $7,867 0.41 $16,123 $6,449 $3,225 $997.83 $17,121 $7,447 $4,223 2003 $829.26 $41,463 $16,585 $8,293 0.40 $16,507 $6,603 $3,301 $1,033.61 $17,541 $7,637 $4,335 2004 $810.15 $40,508 $16,203 $8,102 0.40 $16,371 $6,548 $3,274 $1,088.47 $17,460 $7,637 $4,363 2005 $855.94 $42,797 $17,119 $8,559 0.39 $16,495 $6,598 $3,299 $1,774.97 $18,270 $8,373 $5,074 2006 $968.57 $48,429 $19,371 $9,686 0.40 $19,143 $7,657 $3,829 $1,511.58 $20,654 $9,169 $5,340 2007 $1,806.97 $90,349 $36,139 $18,070 0.41 $36,652 $14,661 $7,330 $2,098.78 $38,750 $16,759 $9,429 Total $435,770 $174,308 $87,154 $186,572 $82,195 $47,403 Note: Value added ratio = 0.3774 from 2005 I-O table for manufacturing.
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Using the model depicted in Figure 6, above, which generates estimates of the contribution to industry gross output due to university-licensed products, we calculated the total output produced annually by university licensing revenues, the direct employment generated by these revenues, and the total change in industry gross outputs due to this licensing activity (Table 5). We again calculated a range of estimates based on the royalty rates charged in sales-based licensing agreements. Under a moderately conservative assumption (5% royalty rates), as a result of university licensing annual industrial output increased by $6.3 billion in 1996 and by $39.7 billion in 2007. Using a less conservative assumption (2% royalty rates), the annual contribution to industry output grew from $14.7 billion in 1996 to nearly $94.9 billion in 2007. Summing over the entire 12 years for which we have data, we estimate that the total contribution of university licensing to gross industry output at least $108.5 billion and as much as $457.1 billion (again without accounting for product substitution effects). A moderately conservative estimate based on 5% royalty rates yields an estimated impact of university licensing on total industry output over 1996-2007 of $195.6 billion.
The I-O model also calculates the number of jobs directly created per million dollars of final purchases and thus provides estimates of the total number of jobs created annually due to university-licensed products. This ranged from about 9,000 jobs in 1996 to 41,000 in 2007. We estimate that over the entire 12-year period, university-licensed products created more than 279,000 jobs.
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Table 5: Annual Change in U.S. Industry Output due to University-licensed Products for Selected Royalty Rates, 1996-2007
total total total sales sales sales change change change in output employment revenues revenues revenues in output in output output multiplier output of multiplier (2% (5% (10% (2% (5% (10% licensing from U.S. other total from U.S. IO employ- royalty royalty royalty royalty royalty royalty income I-O tables industries output tables ment rate) rate) rate) rate) rate) rate)
year millions millions millions thousands millions millions millions millions millions millions 1996 $365.22 0.72 $263 $628 0.026 9 $14,106 $5,642 $2,821 $14,734 $6,270 $3,449
A4658 1997 $482.79 0.72 $348 $830 0.026 13 $15,737 $6,295 $3,147 $16,568 $7,125 $3,978 1998 $613.55 0.69 $424 $1,038 0.026 16 $19,517 $7,807 $3,903 $20,554 $8,844 $4,941 1999 $675.47 0.69 $467 $1,142 0.025 17 $23,752 $9,501 $4,750 $24,894 $10,643 $5,892 2000 $1,099.89 0.72 $788 $1,888 0.024 27 $27,948 $11,179 $5,590 $29,836 $13,067 $7,478 2001 $868.28 0.71 $614 $1,482 0.024 21 $31,828 $12,731 $6,366 $33,310 $14,213 $7,848 2002 $997.83 0.68 $678 $1,675 0.023 23 $39,337 $15,735 $7,867 $41,013 $17,410 $9,543 2003 $1,033.61 0.67 $697 $1,731 0.022 23 $41,463 $16,585 $8,293 $43,194 $18,316 $10,023 2004 $1,088.47 0.67 $727 $1,815 0.021 23 $40,508 $16,203 $8,102 $42,323 $18,018 $9,917 2005 $1,774.97 0.69 $1,225 $3,000 0.021 37 $42,797 $17,119 $8,559 $45,797 $20,119 $11,559 2006 $1,511.58 0.69 $1,044 $2,556 0.020 30 $48,429 $19,371 $9,686 $50,984 $21,927 $12,241 2007 $2,098.78 0.69 $1,444 $3,543 0.020 41 $90,349 $36,139 $18,070 $93,891 $39,682 $21,612 Total 279 $457,097 $195,636 $108,482 Notes: Output multiplier is millions of dollars of indirect output per million dollars of final purchases of education services. Employment multiplier is the number of jobs (thousands) per million dollars of final purchases. Multipliers are for education. Employment multiplier = 0.021; output multiplier = 0.73.
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GDP Impact Estimates, Accounting for Product Substitution Effects
In this section we calculate the effects of product substitution on estimates of GDP impact. As noted in the previous section, we use three “reasonable” assumptions: 5%, 10%, and 50% substitution, with the latter probably excessively conservative. The results are shown below in Tables 6 and 7, with Table 6 calculated with a conservative 5% royalty rate assumed, and Table 7 with a 2% assumption. Under a conservative royalty rate assumption, 5%, the estimated total change in GDP over the 12 year period ranges from $41.1 billion to $78.1 billion, depending upon the substitution rate assumed. Using a 2% royalty rate assumption, the estimated total change in GDP ranges from $93.3 billion to $177.2 billion. We do not show the similar calculations for contribution to changes in total industry output or employment under these different assumptions, but of course the results are proportionately similar.
Table 6: Total Estimated Change in GDP Due to University-Licensed Products, 1996-2009, Basic Model Assuming 5% Royalty Rates and Three Alternative Product Substitution Rates
total total total total change in change in change in change in GDP (5% GDP, 5% GDP, 10% GDP, 50% royalty rate) substitution substitution substitution Year millions 1996 $2,559 $2,431 $2,303 $1,280 1997 $2,931 $2,784 $2,638 $1,465 1998 $3,753 $3,565 $3,378 $1,877 1999 $4,468 $4,245 $4,022 $2,234 2000 $5,563 $5,285 $5,007 $2,782 2001 $5,899 $5,604 $5,309 $2,949 2002 $7,447 $7,075 $6,702 $3,724 2003 $7,637 $7,255 $6,873 $3,818 2004 $7,637 $7,255 $6,873 $3,818 2005 $8,373 $7,954 $7,536 $4,187 2006 $9,169 $8,710 $8,252 $4,584 2007 $16,759 $15,921 $15,083 $8,380 Total $82,195 $78,085 $73,976 $41,098 Note: 0.3774 value added ratio from 2005 I-O table for manufacturing
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Table 7: Total Estimated Change in GDP Due to University-Licensed Products, 1996-2009, Basic Model Assuming 2% Royalty Rates and Three Alternative Product Substitution Rates
total total total total change change in change in change in in GDP (2% GDP, 5% GDP, 10% GDP, 50% royalty rate) substitution substitution substitution Year millions 1996 $5,851 $5,558 $5,266 $2,925 1997 $6,603 $6,273 $5,942 $3,301 1998 $8,462 $8,039 $7,616 $4,231 1999 $10,158 $9,650 $9,142 $5,079 2000 $12,258 $11,646 $11,033 $6,129 2001 $13,444 $12,772 $12,099 $6,722 2002 $17,121 $16,265 $15,409 $8,561 2003 $17,541 $16,664 $15,787 $8,771 2004 $17,460 $16,587 $15,714 $8,730 2005 $18,270 $17,357 $16,443 $9,135 2006 $20,654 $19,621 $18,589 $10,327 2007 $38,750 $36,813 $34,875 $19,375 Total $186,572 $177,244 $167,915 $93,286
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Summary and Discussion
University research and research-related activities contribute in many important ways to the national economy, notably through increased productivity of applied R&D in industry due to university-developed new knowledge and technical know-how, provision of highly valued human capital embodied in faculty and students, development of equipment and instrumentation used by industry in production and research, and creation of concepts and prototypes for new products and processes. These benefits are enabled primarily through publications, conferences, information exchange via consulting and collaborative research, and hiring of trained students. This report documents the economic impact of just one of these research-related activities, licensing of university intellectual property, clearly an impact of major significance for the economy but by no means the largest source of the total impact of university research.
Although some are inclined to consider the “entrepreneurial university” as a relatively sudden, almost discontinuous feature of recent academic life, in fact the economic significance of universities has been recognized since the late 19th century; only the relative importance and sheer size of the various outputs listed above have changed. One especially obvious change is evidenced by the trends in university patenting and licensing of intellectual property, which began in the 1920s but accelerated dramatically in the last twenty-five years. In the 1970s most large, research-intensive universities took steps to manage their intellectual property internally rather than contract it out, so that now university offices of technology transfer are a common feature of university administrative structures. Although there is widespread agreement that university licensing of intellectual property has considerable economic significance, there is very little published, well-documented empirical evidence of its actual impact.
Our review of the literature found few examples of studies that sought to estimate the impact of university research on the U.S. national economy. However, a Canadian study used input- output modeling to estimate that an annual investment (1994-5) of $4.8 billion in university research added $1.5 billion to Canada’s GDP and created 13,000 jobs. Accounting for the effects of university research over the long-term using total factor productivity methods yielded a total contribution to GDP of $15.5 billion. Most U.S. studies do not single out the impact of university research, but rather estimate the regional economic impact of all university activities, treating them primarily as sources of additional expenditures in the region. Some studies identify separately the (relatively modest) impact of university-based start-ups on the regional economy and employment. A typical example of the former is a study of the impact of Cornell University on the state of New York for the academic year 2004-5. The results were an
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In one of the rare studies that focused on the economic impact of university licensing, staff of the MIT licensing office surveyed a sample of MIT licensees in 1993 to obtain information on pre-production investment and jobs created. Projecting their results to the entire MIT portfolio, they estimated an induced investment of $922 million and an employment impact of about 2,300 FTEs. They then used AUTM data to project their results to the national level using two methods. One method resulted in a national impact estimate of $2.5 billion in pre- production investment; the second resulted in an estimate of $5 billion. These investment levels were estimated to contribute employment gains of between 20,000 and 40,000.
An AUTM internal study conducted in 1993 used an approach similar to ours in that it resulted in an estimated $17 billion in product sales attributable to university-based licenses, with a related estimate of 137,000 jobs “supported.” AUTM used the same approach in 2002 with 2000 data. They assumed a range of 2-4% royalty rates and calculated estimates of sales increases of between $17 billion and 35 billion, 125,000-250,000 jobs supported, and tax payments of $2.5-5 billion. These AUTM calculations did not employ standard measures of economic performance such as value added or GDP (sales revenue estimates alone include purchases of intermediate inputs used to produce the outputs). Nor did they apply I-O employment output multipliers to data on total industry output estimates generated by licensing income, instead apparently estimating employment impact by calculating the number of jobs that could be supported (loaded average salary) by the total sales revenues generated by products based in university licenses.
Our approach to estimating the impact of university licensing employs a number of features that we believe provide considerably more valid and complete estimates of national economic impact, while at the same time incorporating many assumptions that lead to very conservative results. As far as the validity of our estimates is concerned, our approach employs a national input-output model that accounts for the fact that sales revenue estimates do not themselves represent economic impact. As noted above, sales revenue estimates, however generated, include the industry purchases of intermediate inputs; and they do not account for the expenditures of those revenues for multiple purposes before having a final impact on value added or GDP. Furthermore, our approach accounts for the fact that university expenditures of their licensing income has significant direct and induced economic impact and thus should be included in any national (or, for that matter, regional) impact estimates. Finally, although we
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We have been very careful to employ conservative assumptions at all points requiring that some judgments be made. First, we used ranges rather than average or median values for key parameters for which there are no reliable data, or for which the distribution of data within the range are unknown but almost certainly skewed. Second, we provided a means for accounting for product substitution effects using a wide range of reasonable rates. Finally, we have made the model and calculations as simple and transparent as possible, so that anyone with a spreadsheet can take our model and the data and enter their own set of assumptions. This seems to be the most appropriate way to generate estimates, since choice of the assumptions should be up to the user.
There are a number of refinements and next steps that would further enhance these estimates. They depend largely on access to data that either do not now exist or are not publicly available. Probably the most important step would be to obtain detailed, representative data on the licensing portfolios of U.S. universities. This would enable more accurate assumptions to be made about the range of royalty rates to enter into the model, thereby reducing the wide range of impact estimates generated. Second, we know that impact estimates will vary by economic sector, so that as sectoral breakdown data become available, even using very broad categories, they can be introduced into the model to generate sector-specific impacts. Ideally, sectoral breakdowns are desirable for ranges of royalty rates charged and for total licensing income and running royalties. Then, I-O output and employment multipliers can be adjusted to reflect more accurately the contribution of industries involved. Third, more complete and internally consistent annual data on the contract R&D income generated by university licenses would be highly desirable and could easily be entered into the calculations called for in our model.
Although somewhat outside the scope of our effort, models similar to ours could be constructed for estimating the national economic impact of pre-production investments in university-licensed technology. This would require sizeable effort and expense, given that the data must be acquired at individual universities, but it may be feasible to develop a representative sample of universities and follow the Pressman, et al. approach, combined with our approach to estimating impact on GDP and employment, to generate national economic impact estimates of pre-production investments. Adding these results to ours would yield even more accurate estimates of university licensing’s important contribution to the national economy. Additionally, in the absence of detailed data on which licenses are exclusive vs. nonexclusive, we could not account for the fact that in some cases (e.g. nonexclusive licenses) the university IP may not be fully responsible for the new product and its sales. Of course, additional research on the economic impact of other manifestations of the value of university
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IP, notably start-ups and the taking of equity positions, would further expand our knowledge of the economic impact of university research and licensing. Finally, it should be noted that our model can be used to estimate the regional economic impact of single universities by employing a regional input-output model and the university’s own data on licensing income and range of royalty rates. Since individual universities have a much better idea of the range of royalty rates they use and the distribution of licenses by industry, they can generate a narrower range of impact estimates than we have been able to do with national data and widely ranging assumptions concerning royalty rates.
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Appleseed, Inc. Cornell University: Economic Impact on New York State. February 2007.
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Atkinson, Richard C., and William A. Blanpied. “Research Universities: Core of the U.S. Science and Technology System”; Technology in Society, 30, pp. 30-48, 2008.
AUTM Annual Licensing & Activity Survey, FY2007 Survey Summary.
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Bremer, H., Allen, J., and Latker, N.J. “The Bayh-Dole Act and Revisionism Redux,” Patent, Trademark & Copyright Journal, 8/14/09.
Cohen, W., Florida, R., Randazzese, L., and Walsh, J. “Industry and the Academy: Uneasy Partners in the Case of Technological Advance,” in R. Noll, ed., Challenges to Research Universities, Brookings, 1998.
Cohen, W.M, Nelson, R.R., at al. “Links and Impacts: The Influence of Public Research on Industrial R&D.” Management Science 48, 1 (2002): 1-23.
Connecticut Center for Economic Analysis, The Economic Impact of Research at the University of Connecticut and the University Health Center, April 2005. http://ccea.uconn.edu.
Drucker, J. and Goldstein, H. “Assessing the Regional Economic Development Impacts of Universities: A Review of Current Approaches,” International Regional Science Review 30, 1 (January 2007): 20-46.
Feller, Irwin, Catherine P. Ailes, and David Roessner, “Impacts of Research Universities on Technological Innovation in Industry: Evidence from Engineering Research Centers,” Research Policy, 31, 3 (2002): 457-474
Geiger, R. To Advance Knowledge: The Growth of American Research Universities, 1900-1940, New York: Oxford University Press, 1986.
Goldstein, H.A., Maier, G., and Luger, M.I. “The University as an Instrument for Economic and Business Development: U.S. and European Comparisons.” In D.D. Dill and B. Sporn, eds. Emerging Patterns of Social Demand and University Reform: Through a Glass Darkly. Elmsford, NY: Pergamon, 1995. Final Report 9/3/09 Page 42
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Graff, G., Heiman, A., and Zilberman, D. “University Research and Offices of Technology Transfer,” California Management Review 45 (2002): 88-115.
Horowitz, Karen J. and Mark A. Planting, Concepts and Methods of the Input-Output Accounts, U.S. Bureau of Economic Analysis, U.S. Department of Commerce (September 2006).
Klevorick, A, Levin, R., Nelson, R.R., and Winter, S. “On the Sources and Significance of Interindustry Differences in Technological Opportunities,” Research Policy 24 (1995): 185-205. Kramer, P.B., Scheibe, S.L., Reavis, D.Y., and Berneman, L.P., “Induced Investments and Jobs Produced by Exclusive Patent Licenses—A Conformatory Study.” AUTM Journal, 9 (1997): 43- 56.
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Martin, F. “The Economic Impact of Canadian University R&D,” Research Policy 27 (1998): 677- 687.
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Mowery, D., Nelson, R. R., Sampat, B.N., and Ziedonis, A.A., Ivory Tower and Industrial Innovation: University-Industry Technology Transfer before and after the Bayh-Dole Act. Stanford University Press, 2004.
Mowery, D.C., Nelson, R.R., Sampat, B.N., and Ziedonis, A.A. “The Growth of Patenting and Licensing by U.S. Universities: An Assessment of the Effects of the Bayh-Dole Act of 1980.” Research Policy 30 (2001): 99-119.
Mowery, D.C., and Sampat, B.N. “University Patents, Patent Policies, and Patent Policy Debates, 1925-1980.” Industrial and Corporate Change 10 (2001): 781-814.
National Academy of Engineering, The Impact of Academic Research on Industrial Performance. National Academies Press, 2003.
National Science Board, Science and Engineering Indicators 2008. National Science Foundation, 2008.
National Science Board, Research and Development: Essential Foundation for U.S. Competitiveness in a Global Economy, NSB, January, 2008.
Neal, Homer A., Smith, Tobin L. and McCormick, Jennifer B. Beyond Sputnik: U.S. Science Policy in the 21st Century. The University of Michigan Press, 2008.
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Nelson, R.R. “Institutions Supporting Technical Advance in Industry,” American Economic Review 76 (1986): 186-189.
Organisation for Economic Co-operation and Development (OECD). “Blue Sky II 2006”; What Indicators for Science, Technology and Innovation Policies in the 21st Century?
Parr, Russell I. “Royalty Rates & License Fees for Technology,” les Nouvelles, March 2009: 15 17.
Roessner, David. Outcomes and Impacts of the State/Industry University Cooperative Research Centers (S/IUCRC) Program. Arlington, VA: SRI International, October 2000. Final Report to the National Science Foundation Engineering Education and Centers Division.
Rosenberg, Nathan, and Nelson, Richard. “American Universities and Technical Advance in Industry,” Research Policy, 23 (1994): 325-348.
Sampat, B.V. “Recent Changes in Patent Policy and the ‘Privatization’ of Knowledge: Causes, Consequences, and Implications for Developing Countries.” In Knowledge Flows and Knowledge Collectives: Understanding the Role of Science and Technology Policies in Development, Consortium for Science, Policy and Outcomes, Arizona State University, 2003.
Pressman, L. “What is Known and Knowable about the Economic Impact of University Technology Transfer Programs?” presented at the 2002 annual meeting of the National Association of State Universities and Land Grant Colleges, Chicago, IL, 2002.
Pressman, L., Guterman, S.K., Abrams, I., Geist, D.E., and Nelsen, L.L. “Pre-Production Investment and Jobs Induced by MIT Exclusive Patent Licenses: A Preliminary Model to Measure the Economic Impact of University Licensing,” AUTM Journal, 7 (1995): 28-48.
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Appendix A
Empirical Evidence of the Economic Impact of University Research and Licensing: an Overview of the Literature
An interesting and, possibly, unique study of the national economic impact of university research was done by Canadian researchers and applied to their own country (Martin, 1998; Martin and Trudeau, 1998). Martin and Trudeau first estimated the gross static impact of university research spending using a standard input-output model. The results showed that an annual investment of $4.8 billion in university research (AY 1994-95) “sustained” $5 billion in GDP and supported 81,000 full-time jobs. The authors note that this procedure overestimates the impact because it does not take into account the alternative use of resources. When sources of overestimation were eliminated, the net addition to GDP was $1.5 billion and 13,000 jobs in 1994-95. Martin and Trudeau then point out that input-output models treat all expenditures as having equal impact on the economy—a sports stadium would produce the same static impact as would equal expenditures on genetics or new materials research. But research results--new knowledge--affect industrial productivity over the long term. Accounting for the effects of university research on total factor productivity yielded a total net contribution of university R&D to Canadian GDP of $15.5 billion, corresponding to 150,000 to 200,000 jobs.10
Drucker and Goldstein (2007) identify and review four methodological approaches to investigating the impacts of universities on regional economies: single-university impact studies, surveys, knowledge-production functions, and cross-sectional and quasi-experimental designs. They conclude that “the majority of empirical analyses do demonstrate that the impacts of university activities on regional economic development are considerable” (p. 40). A typical example of a single-university impact study is the report on the economic impact of research at the University of Connecticut conducted by the Connecticut Center for Economic Analysis (2005). Using a standard approach to estimating regional impact (input-output modeling and research-related output counts), about $188 million in external funding flowed into UConn programs in FY 2003. Through multiplier effects, expenditure of these funds for salaries and equipment created 5,113 jobs, added $397 million in new Gross State Product, and generated $283 million in new personal income in the long run. In addition, spin-off firms created about 150 new jobs.
10 Martin and Trudeau simply divided $15.5 billion by a range of average loaded salary figures to obtain these “supported” employment estimates. They do not represent an estimate of actual employment increase. Final Report 9/3/09 Page 45
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Using a similar approach, Appleseed, Inc., studied the economic impact of Cornell University on the state of New York (Appleseed, 2007), reporting that the university’s direct and indirect expenditures during the academic year 2004-5 generated more than $3.3 billion in economic activity in the state, directly or indirectly accounted for 36,000 jobs, and generated $173 million in state and local tax revenues. In addition, research activity led to creation of 28 spin-off companies. Appleseed (which specializes in these kinds of studies) was commissioned by eight major research universities in the Boston area to estimate their collective impact on the regional economy. Expenditures of $3.9 billion had a collective regional economic impact of more than $7 billion in 2000. The institutions employed nearly 49,000 people, and their spending supported an additional 37,000 jobs. The eight universities assisted in the start-up of 41 new companies and granted 280 licenses to private ventures; licensing of technologies by these eight universities in 2000 generated $44.5 million in income. Focusing on the economic impact of university-related start-up companies alone, a University of Washington report cited data from the year 2000 for a cumulative 150 start-ups: 7100 direct jobs created, $1.5 billion in sales revenues, and $25 billion in stock market capitalization (U. of Washington, nd).
A shortcoming of these kinds of impact studies is that universities are, for impact estimate purposes, treated no differently than any organization that generates expenditures in the regional economy. The unique roles of universities in creating new knowledge and human capital are largely ignored, yet it is just these research-related activities and outputs that are of interest to us in this report. The problem is that converting the value of these outputs into monetized form is difficult, at best. Still, it is essential to acknowledge explicitly the enormous value to the economy of university research and human capital outputs in order to provide the appropriate context for our own impact estimates of university licensing is to be presented. Indeed, the economic impact of all university knowledge and technology transfer activities is considerably larger than the impact of licensed intellectual property alone.
Licensing income to universities based on ownership of intellectual property is, of course, an obvious indicator of the economic value of university research. Patent income to U.S. universities grew from about $200 million in 1991 to over $1.2 billion in 2000 (Graff, et al., 2002). However, it is important to re-emphasize a point made earlier, namely that patenting and licensing is just one channel through which research knowledge is transferred to industry, and likely not among the most important ones. The Carnegie Mellon survey of industrial lab managers referred to above (Cohen, et al., 1998) showed that only 10 percent of those responding said that licensing agreements with universities were “moderately” or “very” important to their R&D activities; more important were publications, informal channels, public meetings and conferences, consulting, and contract research.
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In a rare effort to estimate the economic impact of university licensing, Pressman and her colleagues (Pressman, et al., 1995) at the MIT Technology Licensing Office surveyed a sample of MIT licensees to obtain information on pre-production investment and jobs created, as a complement to prior estimates of post-production economic impacts by AUTM staff of product sales and jobs created based on 1993 data from the AUTM survey on royalty income.11 The authors defined pre-production investment as “Money spent developing new products and efficient ways to produce and market these products. It excludes the costs of producing (or investment required to produce) mature products” (p. 30). The information collected from licensees pertained to a sample of MIT’s 1993 portfolio of 205 active, exclusive licenses—18 in the physical sciences and 19 in the biotech sample. The total self-reported investment by the sample licensees was $205 million, and the total number of full time equivalents (FTEs) generated was 470. The authors then extrapolated the sample results to the entire portfolio, yielding an induced investment estimate of $922 million and employment estimate of about 2,300 FTEs. The authors then went one step further and extrapolated from the MIT license data to university licenses as a whole, using AUTM data. They used two methods: one based on the MIT results of induced investment per license per year, and a second based on induced investment compared with licensing revenue to the university. This first method yielded an estimate of $2.5 billion for pre-production investment associated with all university licenses per year. The second method yielded an estimate to total induced investment nationally of $5 billion in 1993. These investment levels were, in turn, estimated to contribute 20,000 to 40,000 jobs to the national economy—before sales of licensed products.
In a confirmatory study to the MIT effort published in 1997, counterparts to the MIT TLO staff at the University of Pennsylvania’s Center for Technology Transfer used the same approach to estimate the induced investments and jobs produced by exclusive patent licenses. The Penn portfolio consisted of 43 exclusive, active, patent licenses generated $151 million in induced investments and created 242 full-time jobs. Their extrapolation to all universities using 1995 AUTM data yielded a national estimate of induced investments of $4.6 billion and 27,000 jobs created (Kramer, et al., 1997).
The 1993 AUTM estimate of the post-production economic impact of university licensing cited above appears to employ an approach that includes elements of the one we developed for this study. Although details of the method are not published, evidently AUTM used estimates of average royalty rates for 1993 to estimate product sales for that year generated from AUTM data on licensing revenues received by member organizations. To estimate the number of jobs
11 The post-production study referred to in Pressman, et al., 1995 has not been published. The results yielded estimates of $17 billion in new product sales and 137,000 jobs in 1993. This study used royalty rate data to estimate new product sales attributable to university-based licensing, and in that respect used a portion of the approach we describe in this report. Final Report 9/3/09 Page 47
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The National Science Board’s Science and Engineering Indicator report series has traditionally incorporated indicators of academic outputs and impacts—including numbers of science and engineering (S&E) students graduated at various levels, trends in S&E literature, and patenting and licensing activities of universities. The following Appendix Table A-1 provides some of the patenting and licensing activity data presented in Science and Engineering Indicators 2008.
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Appendix table A-1 Academic patenting and licensing activities: 1991–2005
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Activity indicator (98) (98) (117) (120) (127) (131) (132) (132) (139) (142) (139) (156) (165) (164) (158) Millions of dollars Net royaltiesa NA NA 195.0 217.4 239.1 290.1 391.1 517.3 583.0 1,012.0 753.9 868.9 866.8 924.8 1,588.1 Gross royaltiesa 130.0 172.4 242.3 265.9 299.1 365.2 482.8 613.6 675.5 1,108.9 868.3 997.8 1,033.6 1,088.4 1,775.0 Royalties paid to others NA NA 19.5 20.8 25.6 28.6 36.2 36.7 34.5 32.7 41.0 38.8 65.5 54.4 67.8 Unreimbursed legal fees expended 19.3 22.2 27.8 27.7 34.4 46.5 55.5 59.6 58.0 64.2 73.4 90.1 101.3 109.2 119.1 Number A4672 Invention disclosures received 4,880 5,700 6,598 6,697 7,427 8,119 9,051 9,555 10,052 10,802 11,259 12,638 13,718 15,002 15,371 New U.S. patent applications filed 1,335 1,608 1,993 2,015 2,373 2,734 3,644 4,140 4,871 5,623 5,784 6,509 7,203 9,462 9,306 U.S. patents granted NA NA 1,307 1,596 1,550 1,776 2,239 2,681 3,079 3,272 3,179 3,109 3,450 3,268 2,944 Startup companies formed NA NA NA 175 169 184 258 279 275 368 402 364 348 425 418 Revenue-generating licenses/options 2,210 2,809 3,413 3,560 4,272 4,958 5,659 6,006 6,663 7,562 7,715 8,490 8,976 9,543 10,251 New licenses/options executedb 1,079 1,461 1,737 2,049 2,142 2,209 2,707 3,078 3,295 3,569 3,300 3,660 3,855 4,087 4,201 Equity licenses/options NA NA NA NA 99 113 203 210 181 296 328 373 316 318 278
NA = not available aOne-year spikes in royalty data reflect extraordinary one-time payments. bData prior to 2004 may not be comparable with data for 2004 and beyond due to change in survey wording. NOTES: Number of institutions reporting given in parentheses. Data from nonuniversity hospitals and medical institutes not included. SOURCE: Association of University Technology Managers, AUTM Licensing Survey (various years) and Science and Engineering Indicators 2008
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Appendix B
The Bureau of Economic Analysis National Input-Output Model: a Brief Description
The national I-O model allows users to assess the impact of specified events on economic activity. There are two broad applications of the basic model. The first is the economic accounting model and the other is the analytical model. The accounting model provides a framework for examining the relationship between final purchases (equivalent to gross domestic product, or GDP) and industry gross output. It shows the relationship between the producing sectors, final demand, and income by industry. It also shows industry purchases of goods and services that are used as inputs to produce goods and services commodities. These commodities in turn are inputs for other industries, or are purchases by final users.12 As employed in this study, the accounting model is used to estimate the impact of university licensing on GDP.
The easiest way to see how the model can be used to analyze this impact is first to look at what national economic accountants call the “Input-Output Table” (Table B-1). The main section of this table, section F, illustrates the commodities (goods and services) that are used by industries in the economy.
Table B-1.—Sample Input-Output Table Industries Final Uses Total Output
F Y X Industries
Value Added V Total Output X
Gross output (sections X), the principal I-O measure of output, includes the value of what is produced and subsequently used by other industries in their production processes (intermediate products or inputs), as well as the value of what is produced and sold to final users (i.e., final products). Gross output is sometimes referred to as “gross duplicated domestic output,” because it counts both the industry output that is recorded as final product and the
12 See Horowitz and Planting, 2006, and www.bea.gov, Industry Accounts. Final Report 8/31/09 Page 50
A4673 Case 1:09-cv-04515-RWS Document 167-6 Filed 12/23/2009 Page 53 of 54 The Economic Impact of Licensed Commercialized Inventions Originating in University Research, 1996-2007 industry output that is purchased by other industries for use as inputs to their production processes.
Industry “value added” (section V) is defined as the value of an industry’s sales to other industries and to final users minus the value of its purchases to produce its output (section F); its purchases from other industries are called intermediate inputs in the accounts. Value added is a non-duplicative measure of production that, when aggregated across all industries, equals the gross domestic product (GDP) for the economy. This measure for industries can be seen in section V of Table B-1. Value added is the sum of: compensation of employees, taxes on production and imports, less subsidies, and gross operating surplus (or more commonly known as profits). Value added or GDP excludes intermediate purchases. Another way to measure GDP is to sum all final uses, represented in section Y of Table B-1. This sum includes: personal consumption expenditures; private fixed investment; changes in inventories; exports of goods and services; imports of goods and services; and government consumption expenditures and gross investment. The sum of the final uses equals the sum of all industries’ value added.
The second application of the I-O framework is an analytical model that is derived from the accounting model. It is used to show the relationship between final demand and industry production. Industry production is usually measured in terms of gross output, income, or employment. The model may be used to evaluate the interrelationships among industries and the relationships between industries and the commodities they use and produce. The analytical model is derived from the input-output table, usually referred to as the total requirements tables; a brief description of the calculation of the total requirements is shown in Table B-2. The input-output requirements tables are analytical tables designed to show the level of industry gross output or employment required to produce a specified level of final uses.
Final Report 9/3/09 Page 51
A4674 Case 1:09-cv-04515-RWS Document 167-6 Filed 12/23/2009 Page 54 of 54 The Economic Impact of Licensed Commercialized Inventions Originating in University Research, 1996-2007
Table B-2. Derivation of the Total Requirements Multipliers Step Definitions X -- column in I-O matrix representing industry gross output Y – column in I-O matrix representing final uses of industry output F – Intermediate portion of the use table (inputs to industries) A – matrix of industry inputs as a portion of total industry output (direct requirements matrix) Direct requirements A = Fx-1 where x is a matrix with gross output on the main diagonal of the matrix. Total requirements X – AX = Y (I-A)X = Y X = (I-A)-1 Y
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A4675 Case 1:09-cv-04515-RWS Document 167-7 Filed 12/23/2009 Page 1 of 3
A4676 Case 1:09-cv-04515-RWS Document 167-7 Filed 12/23/2009 Page 2 of 3 POLICY FORUM SCIENCE AND LAW aware of relevant IP, four reported changing their research approach and five delayed completion of an experiment by more than View from the Bench: 1 month. No one reported abandoning a line of research. Thus, of 381 academic scien- tists, even including the 10% who claimed Patents and Material Transfers to be doing drug development or related downstream work, none were stopped by 1,2 1 3 John P.Walsh, * Charlene Cho, Wesley M. Cohen the existence of third-party patents, and even modifications or delays were cholars have argued that the growing rare, each affecting around 1% of our number of patents on research inputs LOGISTIC REGRESSION PREDICTING sample. In addition, 22 of the 23 Smay now impede upstream, noncom- RECEIVING REQUESTED MATERIAL respondents to our question about mercial research by creating an “anticom- Variable Estimate costs reported that there was no fee mons” in which rights holders may impose for the patented technology, and the excessive transaction costs or make the Scientific competition –0.058 ± 0.029* 23rd respondent said the fee was in acquisition of licenses and other rights too Academic supplier 0.007 ± 0.005 the range of $1 to $100. Thus, for the burdensome to permit the pursuit of scien- MTA 0.012 ± 0.004** time being, access to patents on tifically and socially worthwhile research Patented 0.005 ± 0.007 knowledge inputs rarely imposes a (1, 2). Alternatively, owners of the rights significant burden on academic bio- over key upstream discoveries may restrict Patent status unknown –0.004 ± 0.004 medical research. follow-on research through the exercise of Drug –2.217 ± 0.683** Our research thus suggests that exclusivity (3, 4). The prospect of financial Values ± SEM. *P < 0.05; **P < 0.01. “law on the books” need not be the gain from upstream research has raised the same as “law in action” if the law on further concern that academics are becom- the books contravenes a community’s ing more reluctant to share information, developing a business plan, had a startup, norms and interests (9, 12). Although the findings, or research materials (5, 6). In had a process or product in the market, or new survey did not explicitly ask respon- 2003, a small-sample interview study sug- had licensing income]. dents their opinions about a research gested that, despite numerous patents on Although common, patents in this field exemption, our results suggest that in- upstream discoveries, academic researchers are not typically used to restrict access to fringement remains of only slight concern. have accessed knowledge without the antic- the knowledge that biomedical scientists In contrast, research on clinical diagnostic ipated frictions (7). Receiving material require. To begin with, few academic bench testing (13, 14) suggests that when the requested from other researchers could, scientists currently pay much attention to research is itself also a commercial activity, however, prove problematic (8, 9). others’ patents. Only 5% (18 out of 379) patent holders are more likely to assert and The Madey v. Duke decision of 2002 regularly check for patents on knowledge clinical researchers more likely to abandon raised anew the question of the impact of inputs related to their research. Only 2% infringing activities. research tool patents on biomedical (i.e., 8) have begun checking for patents in In addition to examining access to others’ research by clarifying that there was no the 2 years since Madey v. Duke, which sug- intellectual property, we consider the extent general research exemption shielding aca- gests little impact of the decision. Five per- to which scientists can access the tangible demic researchers from infringement liabil- cent had been made aware of intellectual research materials and data created by other ity (10). This very visible decision and con- property (IP) relevant to their research labs, highlighted as another source of fric- tinuing concerns over the impact of through a notification letter sent either to tion that may be impeding biomedical inno- research tool patents on academic science them or their institution, which differs little vation (5, 8, 15). Indeed, concerns about prompted our current study. from the 3% who reported having received increasing noncompliance with material We report findings from a survey of 414 such notification 5 years ago (prior to the transfer requests have prompted the National biomedical researchers in universities, gov- Madey v. Duke decision). Furthermore, Institutes of Health to issue guidelines ernment, and nonprofit institutions (11). In although 22% of respondents report being designed to encourage the exchange of mate- this group of academic, biomedical notified by their institutions to respect rials created with federal funding (16). researchers, 19% currently receive industry patent rights (versus 15%, 5 years ago), About 75% of our academic respondents funding for their research (representing 4% such notification did not appreciably affect made at least one request for a material in of their research budget); 22% applied for a the likelihood of checking for patents— the past 2 years. On average, academics patent in the past two years, with an average 5.9% of those receiving such instruction made about seven requests for materials to of 0.19 patent applications per year per checked for patents versus 4.5% of those other academics and two requests to indus- respondent; 35% have some business activ- not receiving instruction. try labs in the past 2 years. However, 19% ity [i.e., have participated in negotiations Only 32 out of 381 respondents (8%) of our respondents report that their most over rights to their inventions, have begun believed they conducted research in the recent request for a material was denied prior 2 years using information or knowl- (17). Moreover, noncompliance with such 1Department of Sociology, University of Illinois at edge covered by someone else’s patent. requests appears to be growing (see sup- Chicago, Chicago, IL 60607 USA. 2University of Tokyo, However, even for the few who were aware porting online text). Campbell and col- Tokyo, Japan. 3Duke University, Durham, NC 27708, and the National Bureau of Economic Research, of others’ patents, those third-party patents leagues (5) reported that, among genomics Cambridge, MA 02138, USA. *Author for correspon- did not have a large impact on their researchers, about 10% of requests were dence. E-mail: [email protected] research. Of the 32 respondents who were denied in the 3 years, 1997–99. For the A4677 2002 23 SEPTEMBER 2005 VOL 309 SCIENCE www.sciencemag.org Published by AAAS Case 1:09-cv-04515-RWS Document 167-7 Filed 12/23/2009 PageP OLICY 3 of 3 FORUM genomics researchers in our sample, the than 1 month. Moreover, in almost all cases, cation across investigators because of denial rate for 2003–04 was 18% (95% con- there was no immediate fee for the requested denied access impedes scientific progress, fidence interval, ±3.7%). material. However, for 8% of research input this is cause for concern. In contrast, if such Over a 1-year period, an average of one requests, negotiating the MTA stopped the redirection reduces duplicative research or in six respondents reported that delays in research for more than 1 month. Although increases the variety of projects pursued, receiving materials from other academics MTAs do not commonly entail delays or social welfare may even increase (20, 21). In caused at least one project they were work- impose fees, they frequently come with con- addition, it is not clear whether patent policy ing on to suffer a greater than 1-month ditions. MTAs, especially from industry sup- contributes to restricted access to materials, delay, a substantial delay in a fast-moving pliers, often include demands for reach- although the commercial activities fostered research field. Noncompliance by other through rights of some form. Of executed by patent policy do seem to restrict sharing, academics with research input requests MTAs, 29% had reach-through claims, and as do the burden of producing the materials resulted in about 1 in 14 scientists abandon- 16% provided for royalties. Twenty-six per- and scientific competition. ing at least one of their projects each year. cent of MTAs imposed publication restric- Scientific progress in biomedicine may We conducted two regression analyses tions. Requests for drugs were the most be well served by a study of the welfare to probe the reasons for noncompliance (see likely to yield such a restriction, with 70% of impacts of restrictions on material transfers, supporting online text). The first examined such agreements including some restriction and, if warranted, greater diligence in the whether the respondent’s most recent on publication of the research results using monitoring and enforcement of the applica- request was satisfied (see table, p. 2002). the transferred drug. ble NIH guidelines. Statistically significant predictors of non- As a case study, we also collected data compliance included a measure of scien- from an additional 93 academic scientists References and Notes tific competition (i.e., the number of com- who are conducting research on one of three 1. M.A. Heller, R. S. Eisenberg, Science 280, 698 (1998). 2. C. Shapiro, in Innovation Policy and the Economy, A. peting labs) and whether the requested signaling proteins (CTLA-4, EGF, and NF- Jaffe, J. Lerner, S. Stern, Eds. (MIT Press, Cambridge, material was itself a drug. The patent status κB) that are patent-intensive research areas 2000), pp. 119–150. of the requested material had no significant with enormous commercial interest, involv- 3. R. P. Merges, R. R. Nelson, Columbia Law Rev. 90, 839 (1990). effect on noncompliance. A second analysis ing large pharmaceutical firms, small 4. S. Scotchmer, J. Econ. Perspect. 5, 29 (1991). with other variables—particularly charac- biotechnology firms, and universities. 5. E. G. Campbell et al., JAMA 287, 473 (2002). teristics of the prospective supplier—exam- These are the very conditions where issues 6. J. P.Walsh,W. Hong, Nature 422, 801 (2003). ined predictors of the number of times the of access to IP should be evident. Although 7. J. P. Walsh, W. M. Cohen, A. Arora, Science 299, 1021 (2003). respondent failed to comply with requests the incidence of adverse consequences due 8. R. S. Eisenberg, in Expanding the Boundaries of (see table, this page). Here, the burden of to restricted access to IP was more manifest Intellectual Property, R. C. Dreyfuss, D. L. Zimmerman, compliance (i.e., number of requests per here than in the random sample, it was still H. First, Eds. (Oxford Univ. Press, Oxford, 2001), pp. 223–250. dollar of funding); scientific competition; infrequent (only 3% of respondents report- 9. R. Merges, Soc. Philos. Policy Found. 13, 145 (1996). and commercial orientation (i.e., whether ed stopping a project in the past 2 years 10. R. S. Eisenberg, Science 299, 1018 (2003). the respondent has engaged in any of the because of a patent). On the other hand, 11. This sample represents a 40% response rate. Methodological details are available on Science business activities listed above) increase the access to materials was even more problem- Online. likelihood of noncompliance. Finally, the atic in these areas than in the random sam- 12. R. C. Ellickson, Order Without Laws (Harvard Univ. number of respondent publications, indica- ple (18). For example, 30% of researchers Press, Cambridge, MA, 1991). tive of respondent eminence or the opportu- in these fields did not receive their last 13. J. Merz, A. Kriss, D. Leonard, M. Cho, Nature 415, 577. (2002). nity cost of responding, also increases the requested material. 14. M. Cho, S. Illangasekare, M.Weaver, D. Leonard, J. Merz, likelihood of noncompliance. Our results offer little empirical basis for J. Mol. Diagn. 5, 3 (2003). In addition to these regressions, we also claims that restricted access to IP is cur- 15. National Research Council, Sharing Publication- Related Data and Materials (National Academies Press, asked respondents directly why they denied rently impeding biomedical research, but Washington, DC, 2003). requests. The major self-reported reasons for there is evidence that access to material 16. Department of Health and Human Services, in Fed. noncompliance included the cost and/or effort research inputs is restricted more often, and Regist., 64, 72090 (1999). 17. The supplier estimate of noncompliance is much involved and protecting the ability to publish, individual research projects can suffer as a lower—about half of the consumers’ estimate. One with commercial incentives much less promi- consequence. To the extent that any redirec- can assume that the truth lies in between these two nent (5, 18). We find, however, the multivari- tion of a scientist’s research effort or reallo- numbers. ate regression analysis to be more credi- 18. J. P. Walsh, C. Cho, W. M. Cohen, Patents, Material Transfers, and Access to Research Inputs in Biomedical ble than the self-reported relationships NEGATIVE BINOMIAL REGRESSION Research: Report to the National Academy of Sciences for the following reasons: (i) it uses a (2005) (www.uic.edu/~jwalsh/NASReport.html). PREDICTING NUMBER OF REFUSALS 19. S. Rynes et al., Hum. Resource Manag. 43, 381 (2004). more objective measure of commercial TO SEND REQUESTED MATERIAL orientation, while controlling for the 20. J. R. Cole, S. Cole, Science 178, 368 (1972). Variable Estimate 21. P. Dasgupta, E. Maskin, Econ. J. 97, 581 (1987). effects of other variables and (ii) it is less 22. The authors acknowledge the financial support and likely to be influenced by a “socially Commercial orientation 0.010 ± 0.004* guidance of the Committee on Intellectual Property Rights in Genomic and Protein-Related Inventions of desirable response bias” that leads aca- Scientific competition 0.078 ± 0.040* the National Academies’ Board on Science, demics to subordinate less socially Publications 0.075 ± 0.037* Technology, and Economic Policy and Program on desirable incentives (e.g., commerce) Science, Technology and Law. The committee’s final Request burden 0.038 ± 0.019* compared with more desirable ones report will be published this fall.We thank E. Campbell, Budget 0.008 ± 0.042 R. Cook-Deegan, R. Kneller, S. Merrill, P. Reid, and three (e.g., intellectual challenge) (19). referees for their comments; and M. Jiang for research We also considered costs and bur- Industry funding 0.006 ± 0.005 assistance. dens associated with material transfer Drug discovery 0.000 ± 0.007 agreements (MTAs). Only 42% of Supporting Online Material Male –0.008 ± 0.004† www.sciencemag.org/cgi/content/full/309/5743/2002/ requests required an MTA, and only DC1 11% of requests for research inputs led Values ± SEM. *P < 0.05; †P < 0.10. to an MTA negotiation lasting more 10.1126/science.1115813 A4678 www.sciencemag.org SCIENCE VOL 309 23 SEPTEMBER 2005 2003 Published by AAAS Case 1:09-cv-04515-RWS Document 167-8 Filed 12/23/2009 Page 1 of 23
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Results for: bayh-dole Patent, Trademark & Copyright Journal: All Issues > 2009 > 08/14/2009 > Analysis A4680 & Perspective > The Bayh-Dole Act and Revisionism Redux
78 PTCJ 483
PATENTS Follow these links for other Contrary to claims by its critics, the Bayh-Dole Act of 1980 continues to provide a superb framework for recent articles related to: government-funded research to benefit Americans and improve the lives of citizens worldwide. Topics: The Bayh-Dole Act and Revisionism Redux Legislation By Howard Bremer, Joseph Allen, and Norman J. Latker Patents Howard Bremer is patent counsel emeritus at the Wisconsin Alumni Research Foundation, Madison, Wis. Joseph Allen is president of Allen & Associates Inc., Bethesda, Ohio. Norman J. Latker is a patent lawyer with Browdy & Technology Transfer Niemark, Washington, D.C. Summary It is no secret that the U.S. economy faces serious challenges. However, the United States has tremendous advantages for succeeding in the technology markets creating wealth in the 21st century, if we choose to utilize them.
That choice lies with the policy makers and depends upon their recognizing the inherent strengths of the U.S. innovation system. This paper focuses on a key component of that innovation chain: the combination of our unparalleled research universities and the entrepreneurial spirit which drives the private sector functioning under the auspices of the Bayh-Dole Act of 1980. 1 That partnership has turned the results of publicly funded science into products, jobs, and companies benefiting U.S. taxpayers both economically and through an improved quality of life.
1 University and Small Business Patent Procedure Act, P.L. 96-517, 1980 (commonly referenced as the Bayh-Dole Act or http://news.bna.com/ptln/PTLNWB/split_display.adp?fedfid=141384...=9896844&doctypeid=1&type=date&mode=doc&split=0&scm=PTLNWB&pg=0 (1 of 22) [12/14/2009 8:52:09 AM] Patent, Trademark & Copyright Journal simply, Bayh-Dole). Case 1:09-cv-04515-RWS Document 167-8 Filed 12/23/2009 Page 3 of 23
While that linkage is generally believed to have been very successful, a persistent school of critics has charged that that is not the case. These advocates have become more vocal in recent years, urging policy makers to make changes in the Bayh-Dole Act to correct what they view as its shortcomings. Their arguments can be summarized as follows: • The importance and influence of the Bayh-Dole Act is overrated, or at least unproven.
• Key data Congress used to pass the Bayh-Dole Act—the small number of 28,000 government owned patents that were licensed—was misleading.
• Bayh-Dole is not a model that should be adopted by developing countries because of its emphasis on patent ownership. Rather what should be adopted is the pre-Bayh-Dole model of technology dissemination stressing open access to scientific discoveries.
It is unfortunate that some policy makers appear to be accepting the critics' arguments at face value. However, it is important to note that these critics lack the perspective of the pre-Bayh-Dole era, and the difficulties encountered in turning government funded research into tangible commercial and social benefits for the taxpaying public.
Reversing that trend, the Bayh-Dole Act encouraged the private sector to invest billions of dollars to develop inventions made in whole or in part with government-supplied (i.e., taxpayer's) dollars to market-ready products. This partnership between research universities and the private sector created millions of jobs for Americans, significant wealth for the United States, and a higher standard of living, while helping to re-establish the United States as the technology innovation leader in a growing and increasingly competitive global economy. A4681 Because the critics' recommended changes to Bayh-Dole would have a profound—and potentially very harmful— impact on the ability of the United States to respond to renewed international economic competition in the 21st century, any changes must be very carefully considered.
Therefore, it is our purpose to examine the levied charges against Bayh-Dole with the actual facts, and to set the record straight. Thus examined, the authors of this article firmly believe that the common revisionist arguments against Bayh-Dole are unfounded, finding a basis in anecdotal evidence or incorrect interpretations of data, where logical conclusions should have pointed in another direction.
Reams of objective data exist supporting the conclusion that the Bayh-Dole Act greatly improved the commercialization of federally-funded research, that the system is working very well, and that the public sector- private sector partnerships which were generated under the Act are essential both to the well being and the competitive position of the United States.
That these conclusions are correct is strongly reinforced by the fact that our most serious economic rivals have or are now adopting their own versions of Bayh-Dole to enable them to better compete with the United States. Such imitation is the most sincere form of economic flattery.
It would be ironic, indeed, if U.S. policy makers chose this critical moment to weaken the well-established U.S. innovation system which is the envy of the world. That viable and functioning system is needed more than ever at this critical time to maintain a prosperous U.S. economy in an increasingly high technology world. The choice is ours to make. BACKGROUND The United States, Europe, and Asia are gearing up for a new round of competition to create wealth from high technology industries driving the international economy. In many ways, this is a replay of the 1970s and 80s when it appeared that Japan and Germany were riding the wave of the future—and many predicted that America's best http://news.bna.com/ptln/PTLNWB/split_display.adp?fedfid=141384...=9896844&doctypeid=1&type=date&mode=doc&split=0&scm=PTLNWB&pg=0 (2 of 22) [12/14/2009 8:52:09 AM] Patent, Trademark & Copyright Journal days were behind it. Case 1:09-cv-04515-RWS Document 167-8 Filed 12/23/2009 Page 4 of 23
At that time, the United States had lost its lead in traditional fields like automotives, electronics, steel, etc. Many experts confidently predicted that Japan and Germany would soon eclipse the United States in the few remaining markets where it led.
However, these predictions did not come true. Instead, the United States enjoyed a tremendous burst of entrepreneurial activity that restored its competitive advantage and laid the groundwork for decades of economic growth. This turnaround came through the adoption of many new policies that were hotly debated at the time. One of those was the passage of the Bayh-Dole Act of 1980. Here's how the Economist Technology Quarterly 2 summarized its impact:
2 “Innovation's Golden Goose,” The Economist Technology Quarterly (editorial), Dec. 14, 2002.
Remember the technological malaise that befell America in the late 1970's? Japan was busy snuffing out Pittsburgh's steel mills, driving Detroit off the road, and beginning the assault on Silicon Valley. Only a decade later, things were very different. Japanese industry was in retreat. An exhausted Soviet Empire threw in the towel. Europe sat up and started investing heavily in America. Why the sudden reversal of fortunes? Across America, there had been a flowering of innovation unlike anything seen before.
Possibly the most inspired piece of legislation to be enacted in America over the past half-century was the Bayh-Dole Act of 1980. Together with amendments in 1984 and augmentations in 1986, this unlocked all the inventions and discoveries that had been made in laboratories throughout the United States with the help of taxpayers' money.
A4682 More than anything, this single policy helped to reverse America's precipitous slide into industrial irrelevance.
Further on the article summarized the law:
The Bayh Dole Act did two big things at a stroke. It transferred ownership of an invention or discovery from the government agency that had helped to pay for it to the academic institution that had carried out the actual research. And it ensured that the researchers involved got a piece of the action.
Overnight, universities across America became hotbeds of innovation, as entrepreneurial professors took their inventions (and graduate students) off campus to set up companies of their own. Since 1980, American universities have witnessed a tenfold increase in the patents they generate, spun off more than 2,200 firms to exploit research done in their labs, created 260,000 jobs in the process, and now contribute $40 billion annually to the U.S. economy. America's trading partners have been quick to follow suit. Odd then, that the Bayh-Dole act should now be under such attack in America.
Federally Funded Inventions Not Commercialized. Before examining the specific charges being used to attack the law, it is helpful to examine why Congress enacted the Bayh-Dole Act, and what it does.
Prior to 1980, inventions which resulted from research supported by federal funding were rarely developed into commercial products. Because most government-funded inventions derive from the conduct of basic research, they are at a very early stage in their development. Consequently, it requires substantial time and investment by the private sector to turn them into commercially useful products and processes.
It is frequently estimated that product development requires at least ten development dollars for every dollar spent in conducting the original research. Developing new drugs to market ready condition can cost between $800 million to $1.3 billion and consume more than a decade of time. Even with such a resource commitment, commercial success is far from a sure thing. Many more products fail in the marketplace than succeed. Without an ability to protect http://news.bna.com/ptln/PTLNWB/split_display.adp?fedfid=141384...=9896844&doctypeid=1&type=date&mode=doc&split=0&scm=PTLNWB&pg=0 (3 of 22) [12/14/2009 8:52:09 AM] Patent, Trademark & Copyright Journal such investments, commercialCase development 1:09-cv-04515-RWS is not possible. Document 167-8 Filed 12/23/2009 Page 5 of 23
Federal policies before 1980 mandated that any invention made with federal funding—whether made by employees, contractors or grantees—would be assigned to the government. They were then generally made available to all applicants through non-exclusive licenses. Thus, a company foolish enough to develop a federally- funded invention could not protect its investment in commercialization since competitors could gain equal access to the technology from the federal government with the additional knowledge that the invention was feasible and there was a market for it.
It became clear that such government policies rarely turned the results of government-funded research into commercially available goods. A series of presidential policy memoranda, dating back to the Kennedy administration, did allow contractors or grantees to petition funding agencies to acquire ownership of government-funded inventions they had made on a case-by-case basis. Decisions on such petitions by the various agencies could take 18 months or more and were generally negative. In the few situations when agencies did grant a petition, they usually also attached many restrictions on the use of the invention.
Not surprisingly, that general policy discouraged innovative small business firms from accepting federal research contracts because the inability to control resulting inventions undercut their capacity to compete in commercial markets. Additionally, federal agencies and their employees could not receive royalties if their discoveries were commercialized.
President Lincoln, himself a patent owner, envisioned the patent system as “adding the fuel of interest to the fires of genius.” With regard to federally-funded research, it was evident that those fires were extinguished. This was no small loss because the federal government was funding the majority of basic research—precisely where A4683 breakthrough inventions were most likely to occur—and approximately 50 percent of all the research and development in the country at the time.
IPAs Point the Way to Bayh-Dole. The National Institutes of Health finally recognized that this general policy was not effective in promoting technology transfer. It was apparent that few, if any, NIH funded discoveries were ever commercialized. Consequently, in the 1970s NIH adopted an administrative policy allowing universities with the proven capability to manage inventions, to own inventions made with NIH support. Termed the “Institutional Patent Agreement,” this was the precursor to a revolution in federal patent policies. That program proved so successful that it was later adopted by the National Science Foundation.
However, the IPA program was undermined during the Carter administration when the secretary of Health and Human Welfare (now Health and Human Services) attempted to halt the program, and the department later even sought to fire its creator. This reversal prompted several leading universities to approach Sens. Birch Bayh (D-Ind.) and Robert Dole (R-Kan.) requesting that the IPA program be made statutory and binding on all federal agencies, and that it be extended to small business contractors.
One important piece of data examined by the Senate Judiciary Committee as it considered the bill was that the government was licensing less than five percent of the 28,000 patents on inventions that it had amassed. Universities and small companies presented compelling evidence that potentially important discoveries would never be developed as long as the government took them away from their creators. Thus, government policies destroyed the very incentives for development which the patent system was intended to foster. Bayh and Dole stated that such inefficiencies denied U.S. taxpayers the full benefits of their investment in publicly funded research.
Ownership, Licensing: Incentives to Innovation. Congress agreed with the senators' conclusion and in 1980 overwhelmingly passed the Bayh-Dole Act. The statute encourages the development of inventions made by nonprofit organizations and small business http://news.bna.com/ptln/PTLNWB/split_display.adp?fedfid=141384...=9896844&doctypeid=1&type=date&mode=doc&split=0&scm=PTLNWB&pg=0 (4 of 22) [12/14/2009 8:52:09 AM] Patent, Trademark & Copyright Journal companies through the use Caseof federal 1:09-cv-04515-RWS funds by: Document 167-8 Filed 12/23/2009 Page 6 of 23 • Allowing ownership of such inventions to reside in those entities;
• Providing universities the discretion to license their inventions and discoveries under terms that encourage prompt commercialization through university-industry partnerships;
• Stipulating that a percentage of royalties generated through successful commercialization efforts be shared with inventors. Royalties can also be used to pay for administrative costs associated with technology transfer, with the balance remaining designated to fund additional research, or for educational purposes;
• Providing that preferences be given to licensing small businesses and requiring substantial U.S. manufacturing where an exclusive license is granted for the United States;
• Allowing the government to practice the invention royalty free for governmental and treaty purposes; and
• Allowing the government to “march in” to require additional licensing if legitimate efforts were not being made by a licensee to develop the invention, or in situations where the licensee cannot produce sufficient quantities to meet a pressing national need (an action that has not been necessary in practice).
Congress, subsequent to the passage of the Bayh-Dole Act, created the U.S. Court of Appeals for the Federal Circuit, which has restored faith in that patent system and in the reliability of U.S. patents. Congress also enacted the Small Business Innovation Research Act 3 to bring more technologically cutting-edge companies into government research. The SBIR built upon the assurances of the Bayh-Dole Act that small companies would
A4684 own inventions they made with federal funding.
3 Small Business Innovation Development Act of 1982, Pub. L. 97-219, July 22, 1982, 96 Stat. 217.
Bayh-Dole brought into play important factors and resources which other nations simply could not match: 1. The U.S. government funds far more R&D than other national governments, much of which lies in basic research where breakthrough technologies are most likely to occur.
2. This research is largely conducted at universities and other nonprofit institutions that remain world leaders in their respective technological fields.
3. Bayh-Dole permitted translation of this investment in science into practical applications which met important health, safety, environmental, food production, and other critical needs.
4. The United States is the acknowledged leader in entrepreneurship and the forming of small, high- technology companies which take the lead in driving new markets. Many of these companies are spun out of universities because of Bayh-Dole.
5. A key asset of these small companies in attracting venture funding and competing in technology markets against larger companies are the patents they own or license. Those patents not only offer protection for their commercial position, but an opportunity to recoup and reward the business risks that have been assumed.
6. Thus, the U.S. patent system was a significant factor in spurring the revival of American competitiveness.
Skeptics Doubt Success of Reform. Even though the impact of the Bayh-Dole Act seemed evident as the United States enjoyed the reversal of fortune described in the Economist Technology Quarterly editorial, a small group of academics began questioning it. http://news.bna.com/ptln/PTLNWB/split_display.adp?fedfid=141384...=9896844&doctypeid=1&type=date&mode=doc&split=0&scm=PTLNWB&pg=0 (5 of 22) [12/14/2009 8:52:09 AM] Patent, Trademark & Copyright Journal Their arguments can be summarizedCase 1:09-cv-04515-RWS as follows: Document 167-8 Filed 12/23/2009 Page 7 of 23 • Bayh-Dole really wasn't that important. Universities were commercializing inventions anyway.
• Key data Congress used to pass the Bayh-Dole Act—the small number of 28,000 government owned patents that were licensed—was misleading.
• Bayh-Dole is not a model that should be adopted by developing countries because of its emphasis on patent ownership. Rather, what should be adopted is the pre-Bayh-Dole model of technology dissemination stressing open access to scientific discoveries.
In the next section the authors review each of those charges in greater detail and in the light of the admonition of Ralph Waldo Emerson: “Numbers serve to discipline rhetoric. Without them it is too easy to follow flights of fancy, to ignore the world as it is and to remold it nearer the heart's desire.” The Bayh-Dole Act and Revisionist Attacks The Bayh Dole Act of 1980 is now almost 30 years old. There are not many pieces of legislation that have maintained their viability and significance in a rapidly changing environment for as long. However, it is being subjected to revisionist interpretations of its effects, benefits, and the fundamental needs which caused its inception, passage and implementation.
Representative of these viewpoints is a paper by Bhaven N. Sampat, 4 and later papers by critics such as Arti Rai and Robert Cook-Deegan, 5 as well as the writings of Rebecca Eisenberg. 6 A4685 4 “Private Parts: Patents and Academic Research in the Twentieth Century,” Bhaven N. Sampat, p. 32, available at http://www. card.iastate.edu/research/stp/papers/SAMPAT-Nov-03.pdf.
5 See e.g., A. So et al. “Is Bayh-Dole Good for Developing Countries? Lessons from the Experience,”PLoS Biology 6(10):e262. Oct. 28, 2008. 6 Rebecca S. Eisenberg “Public Research and Private Development: Patents and Technology Transfer in Government Sponsored Research,” 82 Va. L. Rev. 1663 (1996).
Sampat states:
The political history of Bayh-Dole in Section 4 revealed that it was passed based on little solid evidence that the status quo ante resulted in low rates of commercialization of university inventions. More remarkably, the hearings completely ignored the possibility of potential negative effects of increased patenting and licensing on open science and on other channels of technology and knowledge transfer.
Nevertheless, the discussion in Section 5 suggests that the net effects of Bayh-Dole (and the rise of university patenting and licensing activity more generally) on innovation, technology transfer, and economic growth remains unclear, and much more research is necessary on that front. As such, while current efforts to emulate Bayh-Dole type policies in other OECD countries (see OECD 2002) are misguided (or at least premature), we also do not have enough evidence to suggest that major changes to the Bayh-Dole act are necessary in the United States.
Tech Transfer Impact Questioned. Thus, the fundamental premise is that the Bayh-Dole Act was not as influential in promoting the transfer of technology as has been credited to it, and it could be a serious mistake for other countries to emulate it.
The first part of the argument is based on assertions by Rebecca Eisenberg that experts at the time misunderstood why so few of the 28,000 government-managed patents were being utilized before Bayh-Dole. This failure http://news.bna.com/ptln/PTLNWB/split_display.adp?fedfid=141384...=9896844&doctypeid=1&type=date&mode=doc&split=0&scm=PTLNWB&pg=0 (6 of 22) [12/14/2009 8:52:09 AM] Patent, Trademark & Copyright Journal to commercialize the inventionsCase represented 1:09-cv-04515-RWS by those patents Document was a key 167-8 piece of evidenceFiled 12/23/2009 presented at Page the hearings 8 of 23 on the bill. Supporters of Bayh-Dole said that it showed that the old patent policies (whereby government took inventions away from their creators—the government “title policy”) were ineffective and detrimental to achieving subsequent commercialization.
David Mowrey et al. further postulate that: “The theory behind Bayh-Dole was that companies needed exclusive patent rights to develop and commercialize the results of university research.” 7
7 David C. Mowery, et al. “The Growth of Patent and Licensing by U.S. Universities: An assessment of the Effects of the Bayh-Dole Act of 1980,” 30 Res. Pol. 99, 117.
Actually, the driving force and theory behind Bayh-Dole was that the public was not reaping the full potential benefit from the taxpayer's support of basic research, with expenditures for such support amounting to billions of dollars each year. Passage of the Bayh-Dole Act represented the ultimate step in a long term effort toward reshaping government patent policy, and was Congress' response to the paramount question:
In whose hands—the federal government or the inventing organization—is the ownership and management of federally-funded inventions best placed to promote the prompt development of important discoveries for the benefit of the U.S. taxpayer?
It is not denied that at about the same time the Bayh-Dole Act was passed, there was a confluence of forces which had an effect upon universities' technology-transfer efforts. However, we find the proposition advanced by the critics to be a flawed conclusion. The congressional intent for enacting the law is made abundantly clear in the provisions Bayh and Dole wrote in the legislation as the Policy and Objectives of the Act in 1980 (35 U.S.C. §200): A4686 It is the policy and objective of the Congress to use the patent system to promote the utilization of inventions arising from federally supported research or development; to encourage maximum participation of small business firms in federally supported research and development efforts; to promote collaboration between commercial concerns and nonprofit organizations, including universities; to ensure that inventions made by nonprofit organizations and small business firms are used in a manner to promote free competition and enterprise, to promote the commercialization and public availability of inventions made in the United States by United States industry and labor; to ensure that the Government obtains sufficient rights in federally supported inventions to meet the needs of the Government and protect the public against nonuse or unreasonable use of inventions; and to minimize the costs of administering policies in this area.
That the effect of the act was so profound, beneficial, and far-reaching is because of several primary factors: 1. It established a uniform patent policy for all agencies of the federal government.
2. It changed the presumption of title to inventions made in whole or in part with federal monies from the government to universities, other nonprofit institutions and small business.
3. It established a certainty of title in such inventions which encouraged the private sector to engage in relationships with university and nonprofit research organizations leading to the development and commercial use of many inventions for the public benefit.
4. The protection offered by the chosen vehicle for technology-transfer—the U.S. patent system—provides needed incentives for the private sector to undertake the considerable risk and expense necessary to take early stage university discoveries from the laboratory to the marketplace. Strong patent protection is also vital to small businesses, which have obtained the vast majority of licenses from universities, so they can engage the venture capital community for needed funding—and for protection against the incursion of dominant companies in their markets. http://news.bna.com/ptln/PTLNWB/split_display.adp?fedfid=141384...=9896844&doctypeid=1&type=date&mode=doc&split=0&scm=PTLNWB&pg=0 (7 of 22) [12/14/2009 8:52:09 AM] Patent, Trademark & Copyright Journal Case 1:09-cv-04515-RWS Document 167-8 Filed 12/23/2009 Page 9 of 23 Experience in the period before enactment of the Bayh-Dole Act clearly established that ownership and management by universities of their inventions was clearly a superior policy than what had preceded it. For example, there had been an utter failure to commercialize university inventions when the National Institutes of Health had retained all rights to inventions made in whole or in part with federal money and adopted a non-exclusive licensing stance for those inventions. As the Comptroller General of the United States later testified: 8
8 Testimony of Elmer B. Staats, Comptroller General of the United States, before the Senate Judiciary Committee on S. 414, the University and Small Business Patent Procedures Act, May 16, 1979, Report No. 96-11, p. 37.
[W]e reported that HEW was taking title for the Government to inventions resulting from research in medicinal chemistry. This was blocking development of these inventions and impeding cooperative efforts between universities and the commercial sector.
We found that hundreds of new compounds developed at university laboratories had not been tested and screened by the pharmaceutical industry because manufacturers were unwilling to undertake the expense without some possibility of obtaining exclusive rights to further development of a promising product.
IPAs Launched, Then Stalled. Therefore, a revolutionary approach was announced. NIH established and adopted its IPA program allowing universities with established technology-transfer offices to own and manage inventions made with NIH funding. The program began at NIH in 1968 and was so successful that the National Science Foundation adopted it in 1973.
A4687 Here's how the Senate Judiciary Committee summarized the impact of the IPA program:
“Since instituting the I.P.A. program a number of potentially important new drugs initially funded under HEW research have been delivered to the public through the involvement of private industry in developing, testing, and marketing these discoveries. Prior to the I.P.A. program, however, not one drug had been developed and marketed from HEW research because of a lack of incentives to the private sector to commit the time and money needed to commercialize these discoveries.” 9
9 University and Small Business Patent Procedures Act, Report of the Committee on the Judiciary, U.S. Senate, on S. 414, Dec. 12, 1979, Rep. No. 96-480, p. 21.
The program continued in achieving success, but during the Carter administration efforts were made to end it because of the personal philosophy of the new secretary of Health, Education and Welfare (the agency is now Health and Human Services). That philosophy, much like those of many of the current critics of the Bayh-Dole Act, called for a return to case-by-case determination by NIH of whether university inventions made with its funding should be retained by NIH, or the ownership transferred to the universities for management. The Comptroller General testified that such determinations were taking “from 8 to 15 months to complete.” 10
10 Id. at 37.
It was this movement to end the most successful patent policy in any federal agency that led universities to approach Bayh and Dole, arguing that effective patent policies must have a legislative mandate so they could not be changed at the whim of a political appointee.
The potential to arbitrarily make changes in patent policies at the agency level, and the adherence to a non- exclusive licensing mandate established a lack of predictability unnerving and unacceptable to potential industrial partners. Companies simply would not expend the sizeable amounts of private sector time and money http://news.bna.com/ptln/PTLNWB/split_display.adp?fedfid=141384...=9896844&doctypeid=1&type=date&mode=doc&split=0&scm=PTLNWB&pg=0 (8 of 22) [12/14/2009 8:52:09 AM] Patent, Trademark & Copyright Journal needed to turn patented universityCase 1:09-cv-04515-RWS based early stage technologies Document into 167-8 marketable Filed products 12/23/2009 if the government Page 10 of 23 could change the rules at a whim.
Shortly after introducing their bill, Bayh and Dole held a press conference using examples of potentially important medical discoveries that were being strangled in red tape because of NIH's weakening of the IPA program.
Dole compiled a list of “29 important medical discoveries that had been delayed from 9 months to well over a year before HEW were able to reach a determination whether or not the agency would retain patent rights. Follow-up review has shown no improvement in HEW's performance.” 11
11 The GAO patent policy study presented to the Senate Judiciary Committee on May 16, 1979 also found that the Department of Energy frequently takes up to 15 month to process these patent ownership requests from its contractors.
As a result, a rapid succession of senators, from across the political spectrum began to sign on as co-sponsors of the proposed Bayh-Dole bill.
While the current critics acknowledge the connection between the IPA programs and the Bayh-Dole Act, the dramatic impact that they collectively had on the commercialization of university inventions tends to be downplayed. For example, Sampat et al. 12 state:
12 Rep. No. 96-480 at 21.
“Bayh-Dole was passed in the throes of the ‘competitiveness crisis' of the 1970's and 1980's in the belief that
A4688 the requirement to obtain IPAs or waivers and the frequently inconsistent policies of federal funding agencies regarding these agreements (especially regarding exclusive licensing) impeded technology transfer and commercialization of federally funded research results. In particular, the framers of the legislation argued that if universities could not be granted clear title to patents that allowed them to license rights to patented inventions exclusively, firms would lack the incentive to develop and commercialize university inventions.”
And then in a footnote, the authors add, “this argument was based on ‘evidence’ that government-owned patents had lower utilization rates than those held by contractors, evidence that Eisenberg (1996) has shown to be faulty…..” [note: the Eisenberg evidence will be addressed later in this paper].
The authors do recognize the existence of the IPA program and some of those same authors in an earlier paper 13 more extensively acknowledge their awareness of that program. However, they tend to minimize the connection between the advent of the IPAs, and increasing university sector patenting and licensing when most of the predominant research universities were operating under such agreements.
13 “Changes in University Patent Quality after the Bayh-Dole Act: a Re-Examination,” Bhaven N. Sampat et al., 21 International Journal of Industrial Organization 1371 (2003).
Statistics Show IPAs Spurred Innovation. Interestingly, in looking at the actual data, the increase in the filing of patent applications on the results of extramural research sponsored by HEW and NSF directly correlates with the increased participation in their IPA programs. 14 15
14 Mowery, 30 Res. Pol. 99; see also S.414 Rep. No. 96-480. 15 Government Patent Policy: Institutional Patent Agreements, Hearings before the Subcommittee on Monopoly and Anticompetitive Activities of the Select Committee on Small Business, U.S. Senate, 95th Congress, 2nd Session, Part I, May 22- 23, June 20, 21, 26, 1978, pp. 147-50. http://news.bna.com/ptln/PTLNWB/split_display.adp?fedfid=141384...=9896844&doctypeid=1&type=date&mode=doc&split=0&scm=PTLNWB&pg=0 (9 of 22) [12/14/2009 8:52:09 AM] Patent, Trademark & Copyright Journal Case 1:09-cv-04515-RWS Document 167-8 Filed 12/23/2009 Page 11 of 23 Here are the numbers for HEW (then the parent agency for NIH):
1968 1969 1970 1971 1972 1973 1974 1975 1976 16IPA participants 17 24 34 39 41 50 57 61 66 17Patent applications by HEW contractors 35 51 50 44 76 79 118
16 Federal Council for Science and Technology Report on Government Patent Policy, Combined Dec. 31, 1973 through Dec. 31, 1976, p. 424. 17 See Note 14 supra. Thus, patent applications increased over 300 percent between 1970 and 1976 at HEW as the IPA program expanded.
The numbers are even more striking for the National Science Foundation after it implemented the IPA program in 1973.
1970 1971 1972 1973 1974 1975 1976 18IPA participants N/A N/A N/A N/A 11 11 13 19Patent applications by contractors 6 2 4 8 17 40 67
18 Note 15, supra. A4689 19 Note 14, supra. NSF had an 800 percent increase in patent applications between 1973-1976 as its IPA program kicked in.
These data substantiate a strong correlation between the incentives of patent ownership and management under the IPA program with the subsequent rise in patent applications on university inventions made with federal support. Since the IPA program was essentially later codified by the Bayh-Dole Act, it is only fair to credit these new approaches to federal patent policies with the increases in university patenting.
Yet the critics seem reluctant to clearly acknowledge this connection. Here's how they describe this phenomenon: 20
20 University Patents and Patent Policy Debates in the USA, 1925-1980, Industrial and Corporate Change. Vol. 10, Number 3, 2001.
“… Figure 9 shows that institutions with IPAs dominated the growth of university patenting during the 1970's.
Nonetheless, although IPAs may have encouraged entry by lowering the costs of patenting and licensing, fewer than half of entrant institutions had IPAs. Moreover, Figure 10 shows that patenting during the 1970s grew for entrants with IPAs and entrants without IPAs. The diffusion of IPAs alone does not explain entry by universities into patenting.
Analysis of the contributions to entry of these various factors—increased inter-institutional dispersion of federal research funding, the growth of IPAs, the rising costs and inefficiencies in Research Corporation's ‘central broker’ model, and reduced aversion to university patenting generally and in biomedical technologies in particular—remains an important task for future research. All of these factors appear to have influenced growth in university patenting in the 1970s. Interestingly, only one of these factors (the IPAs) represented a change in federal policy toward the patenting of publicly funded research. It is likely that a similar diverse range of factors, and not the Bayh-Dole Act alone, underpinned the continued growth of U.S. university patenting after 1980.”
http://news.bna.com/ptln/PTLNWB/split_display.adp?fedfid=14138...9896844&doctypeid=1&type=date&mode=doc&split=0&scm=PTLNWB&pg=0 (10 of 22) [12/14/2009 8:52:09 AM] Patent, Trademark & Copyright Journal Case 1:09-cv-04515-RWS Document 167-8 Filed 12/23/2009 Page 12 of 23
What is striking about this conclusion is that their Figure 9 clearly illustrates the impact of IPAs on university patenting. The chart shows that while the IPA program was the only one of the factors cited as “a change in federal A4690 policy toward patenting publicly funded research,” it clearly made a dramatic and sustained impact that was not occurring without it.
http://news.bna.com/ptln/PTLNWB/split_display.adp?fedfid=14138...9896844&doctypeid=1&type=date&mode=doc&split=0&scm=PTLNWB&pg=0 (11 of 22) [12/14/2009 8:52:09 AM] Patent, Trademark & Copyright Journal Case 1:09-cv-04515-RWS Document 167-8 Filed 12/23/2009 Page 13 of 23 A4691
Even their Figure 10 underscores the importance of the IPA program on university patenting. IPA participants double the number of reported patents between 1973 and 1975. The increase of reported inventions by IPA participants increases almost 400 percent between 1974 and 1976 according to the Figure. Even more striking, as the IPA program starts to grow at the National Science Foundation, and participants increase at NIH as shown in our own chart above, IPA schools permanently pass those not in the program in 1976—and never look back.
MIT: Bayh-Dole Beneficiary. The impact of Bayh-Dole on individual universities like MIT, which had already been active in technology transfer, is also illustrative. Some might argue that Bayh-Dole did not really impact the legal structure of patent ownership at MIT, because MIT had an existing agreement with the government that generally gave it ownership of its inventions. However, Bayh-Dole did have a major impact because it pushed MIT as well as other universities to recognize that utilizing inventions for the benefit of society could often be best accomplished through commercialization —which required the cooperation and risk taking of the private sector.
For example, a novel and patented chemical entity projected for use as a new pharmaceutical product did not benefit patients unless it was available commercially. Likewise, a newly discovered material or alloy would not make aircraft lighter and stronger unless it could be made commercially.
Within one year of MIT's rethinking its licensing activities as a result of Bayh-Dole, the number of licenses that it issued increased nearly 1000 percent. During the next 20 years, the MIT Technology Licensing Office helped in the formation of nearly 800 new companies. A recent study of MIT spin-off companies shows that if the active companies founded by MIT graduates formed an independent nation, their revenues would make that nation at least the 17th largest economy in the world. 21 http://news.bna.com/ptln/PTLNWB/split_display.adp?fedfid=14138...9896844&doctypeid=1&type=date&mode=doc&split=0&scm=PTLNWB&pg=0 (12 of 22) [12/14/2009 8:52:09 AM] Patent, Trademark & Copyright Journal
21 See: http://web.mit.edu/newsoffice/2009/kauffman-study-0217.html?tr=y&auid=4551551Case 1:09-cv-04515-RWS Document 167-8 Filed 12/23/2009] Page 14 of 23
While MIT clearly was spinning out companies before the passage of Bayh-Dole, the rate of new company formation based upon MIT inventions and discoveries increased almost exponentially after its enactment.
Another point that the critics advance as a basis for the increase of university patenting, making it appear to undercut the influence of Bayh-Dole, was the large subsequent infusion of federal money, primarily through NIH, in the support of life science research. However, the IPA program and later the Bayh-Dole Act were critical incentives for recipient universities to file patent applications to protect important discoveries emanating from research supported by such monies. This would not have happened if NIH had retained its policy to take title to inventions made in whole or in part with NIH funds.
Clearly, it was the incentive of patent ownership and, the certainty of title accompanying ownership upon which the private sector could rely in a licensing arrangement that spurred the increase of university patenting under the IPA program. The patenting activity accelerated even more after Bayh-Dole was enacted because it applied uniformly to all federal funding agencies and all universities in receipt of federal funds in support of research activities could then engage in technology transfer activities.
Thus, there is little doubt that the negotiation, establishment, and existence of the IPAs were of predominant importance in the rapid growth of the university technology transfer function. Moreover, those agreements and the provisions in them were the template for the Bayh-Dole Act. Fundamentally, Bayh-Dole is a codification of terms and provisions of the IPAs. Indeed, when Bayh and Dole first introduced the bill in 1978, they used several inventions whose development was threatened by the Carter administration's undermining of the IPA program
A4692 as examples of the need for legislation.
Additional data support the proposition that the Bayh-Dole Act, drawing on the preceding IPA program, was a decisive factor in the promotion and growth of the technology transfer profession in the university, nonprofit and small business sectors of the economy. Simple statistical evidence, such as the rapid growth of membership in the Association of University Technology Managers as well as the number of technology transfer offices established within the university community—from about 30 in 1972 to approximately 300 in 2007-08—bear that out.
New Companies, New Products. Moreover, data presented in the annual AUTM Licensing Survey which show increasing year-to-year activities in invention disclosures, patenting, and licensing are also evidence of the positive effects of the Bayh-Dole Act. The ultimate measure of the wisdom in passage of the Bayh-Dole Act and its success in transferring technology for the public benefit—the Act's primary objective—can be found in a compilation by AUTM titled “The Better World Report.” Those reports list and describe some of the university technology-based inventions that have been developed for the market place contributing to the health, safety and welfare of the public—a virtual panoply of inventions in many and diverse scientific disciplines.
Additionally, consider the following evidence of the impact of the law: 22 • University technologies helped create 5,724 new companies in the U.S. since the enactment of the Bayh-Dole Act in 1980. In FY 2006 alone, 553 new companies were spun off based upon campus discoveries and inventions. Astoundingly, that is more than two new companies formed each working day of the year. Formation of new, technology based companies drive state economic development.
• University research created 4,350 new products from FY1998–2006, with 697 introduced in FY 2006 alone. This means that 1.32 new products were introduced every day for that period. Such success is unique to the U.S.
• Federally funded research at universities and federal laboratories resulted in 130 new drugs, vaccines, or in vivo diagnostic devices being developed for public use. Many of these discoveries were treatments for infectious http://news.bna.com/ptln/PTLNWB/split_display.adp?fedfid=14138...9896844&doctypeid=1&type=date&mode=doc&split=0&scm=PTLNWB&pg=0 (13 of 22) [12/14/2009 8:52:09 AM] Patent, Trademark & Copyright Journal diseases and new cancerCase therapies. 1:09-cv-04515-RWS The majority of licenses Document initially 167-8 went to small Filed companies 12/23/2009 licensed Page under 15 of 23 the provisions of the Bayh-Dole Act. 23
• There were almost 5,000 existing active university licenses in FY 2006—each representing a university- industry partnership. The majority of such licenses were with small businesses and start-up companies. Although the bulk of licensing arrangements were non-exclusive the majority of exclusive licenses issued were to small businesses and start-up companies, which require strong patent protection to succeed in highly competitive markets against larger, established and well financed competitors.
22 Association of University Technology Managers (AUTM): U.S. Licensing Activity Survey, 2006. 23 The Contribution of Public Sector Research to the Discovery of New Drugs. Jonathan J. Jensen, Kathrine Wyller, Eric R. London, Sabami K. Chatterjee, Fiona E. Murray, Mark L. Rohrbaugh and Ashley J. Stevens; poster presented at 2008 AUTM Annual Meeting with updated information.
Important health related and life-saving discoveries commercialized under Bayh-Dole include:
Cisplatin and carboplatin cancer therapeutic —Michigan State University
Hepatitis B vaccine—University of California, University of Washington
Vitamin D metabolites and derivatives —University of Wisconsin-Madison
Human growth hormones—City of Hope Medical Center
A4693 Taxol—Florida State University
Citracal® calcium supplement—University of Texas Southwest Medical Center
There was nothing even remotely approximating these successes outside of the IPA program and its subsequent uniform application across all federal agencies caused by the enactment of the Bayh-Dole Act.
The “evidence” 24 disproving the commonly held theory that government-owned inventions had lower utilization rates than those held by contractors (read universities) is based on an article by Rebecca Eisenberg. 25
24 Note 12, supra 25 Note 7, supra
This same argument is repeated by critics such as Arti Rai and Robert Cook-Deegan in their article “Is Bayh-Dole Good for Developing Countries? Lessons from the US Experience.” 26 That paper, intended to warn other countries of the “dangers” in adopting a Bayh-Dole type law, includes the following:
26 Note 5, supra
Nevertheless, many advocates of adopting similar initiatives in other countries overstate the impact of BD in the US… They also cite data (originally used by US proponents of the Act) on the low licensing rates for the 28,000 patents owned by the US government before BD to imply that the pre-BD legal regime was not conductive to commercialization. But as Eisenberg has argued, that figure is misleading because the sample largely comprised patents (funded by the Department of Defense) to which firms had already declined the option of acquiring exclusive title. Moreover, these figures are of questionable relevance to debates about public sector research institutions, because most of the patents in question were based on government-funded research conducted http://news.bna.com/ptln/PTLNWB/split_display.adp?fedfid=14138...9896844&doctypeid=1&type=date&mode=doc&split=0&scm=PTLNWB&pg=0 (14 of 22) [12/14/2009 8:52:09 AM] Patent, Trademark & Copyright Journal by firms, not universitiesCase 1:09-cv-04515-RWS or government labs. Document 167-8 Filed 12/23/2009 Page 16 of 23
As will be shown, this assertion is wrong on both counts.
Value Realized From DOD Innovations. In her referenced paper, Eisenberg maintains that the primary argument against government ownership was a statistical one based on the testimony of numerous witnesses that only a small percentage of the estimated 28,000-30,000 government patents had been successfully licensed and exploited commercially. She further submits that “the statistical evidence presented was inadequate to document this claim” because it “reflected a huge selection bias; as it consisted largely of inventions made by contractors whose research was sponsored by DOD… that could have retained title to the patents if they had wanted to do so.”
On the basis of her analysis, Eisenberg concludes, “It is hardly surprising that few firms were interested in taking licenses from the Government to patents that had already been rejected by contractors that could have been owned by them outright if they had found them at all commercially interesting.”
Eisenberg alleged that 17,632 of the 28,021 inventions in the government patent portfolio were made by Department of Defense contractors, waived to the government because they lacked commercial importance.
However, review of the actual data indicates that Eisenberg's conclusion is simply wrong.
The evidence that fewer than 5 percent of government-owned inventions were being successfully licensed came from the 1976 Federal Council for Science and Technology combined report. 27
A4694 27 Note 15, supra. Graphic In her paper, Eisenberg fails to note that the 1976 report clearly establishes that the 17,632 DOD patents include:
(1) 7,046 U.S. patents granted during the 1970-1976 reporting period to DOD employees obligated to assign their rights to DOD; and
(2) 2,594 U.S. patents based on reported inventions during the 1970-76 reporting period from contractors.
(3) In addition, some portion of these 2,594 contractor generated inventions were taken from universities and other non-profits that, because of the DOD title policy then in place prior to the passage of the Bayh-Dole Act, had no choice but to assign their inventions to the government.
Combining the two categories above totals 9,640 patents accrued to the DOD patent portfolio during the 1970- 76 reporting period or about one half of the 17,632 DOD patents identified in the report.
The remaining 7,992 patents (17,632 - 9,640) are unexpired patents granted and assigned to DOD prior to 1970 that remained open for licensing within the 1970-76 reporting period. Since there are no data in the ’76 report indicating the source of patents granted before 1970, it is not unreasonable to assume that the ratio of these patents is approximately equal to that of the 1970-76 reporting period. That is, they were about 70 percent government-employee-generated, and about 30 percent contractor-generated (including universities and nonprofit organizations).
Accordingly, of the 7,992 patents granted before 1970, 5,594 would be government-employee-generated patents, and 2,702 would be contractor-generated patents. Thus, the total DOD employee-generated patents would be 12,640 (7,046 plus 5,594) and the total DOD contractor-generated patents would be 4,992 (2594 plus 2398). http://news.bna.com/ptln/PTLNWB/split_display.adp?fedfid=14138...9896844&doctypeid=1&type=date&mode=doc&split=0&scm=PTLNWB&pg=0 (15 of 22) [12/14/2009 8:52:09 AM] Patent, Trademark & Copyright Journal Since DOD employee-generatedCase patents1:09-cv-04515-RWS came from cutting-edge Document federal 167-8 laboratories Filed like 12/23/2009 the Naval Medical Page Center 17 of 23 at Bethesda, Md., or the Walter Reed hospitals in Washington D.C., they most certainly do not fit Eisenberg's characterization as “rejected” inventions without commercial interest. Nor do they fall within her definition of “contractor” inventions.
The remaining 4,992 patents generated by actual DOD contractors most certainly do not support Eisenberg's allegation that the patents available for licensing “reflected a huge selection bias; (consisting) largely of inventions made by contractors whose research was sponsored by DOD.”
The DOD contractor-generated portion of the government patent portfolio amounts to no more than 18 percent (4,992 out of 28,021) rather than the 63 percent (17,632 out of 28,021) erroneously alleged by Eisenberg.
There is also no empirical or documentary evidence advanced that even the 18 percent of the government patent portfolio as identified above are based on inventions “rejected by contractors” as not “at all commercially interesting,” as alleged by Eisenberg.
This is because an unidentified number of these 5,296 patents were generated by university and other nonprofit contractors and were simply taken by DOD under its existing patent policies, whether they had commercial potential or not.
It's not even possible to support Eisenberg's contention that there was little commercial value in the unknown subset of patents from for-profit contractors. Most large company contractors of the time kept their government and commercial research operations segregated because of fears that federal agencies would try to assert ownership to important discoveries. In addition, some percentage of this category of inventions was generated by small
A4695 business contractors, who like universities, had no choice but to assign any inventions made to DOD. Thus, Eisenberg's assertion is not even proven in the limited subset of industry contractors.
In summary, the revisionists' theory that the supporters of the Bayh-Dole Act misinterpreted the lack of commercialization of 28,000 government owned inventions does not hold up. The actual data speak for itself and strongly belies that theory.
Model for Developing Countries? The revisionists are also turning their sights abroad. An article by several critics, “Is Bayh Dole Good for Developing Countries? Lessons from the U.S. Experience,” 28 warns of the dangers of following the U.S. model in a series of recitations of virtually every objection the critics have advanced the past 30 years. Building their case, the critics say:
28 See Note 5, supra.
Finally, and most importantly, the narrow focus on licensing of patented inventions ignores the fact that most of the economic contributions of public sector research institutions have historically occurred without patents through dissemination of knowledge, discoveries, and technologies by means of journal publications, presentations at conferences and training of students.
Such arguments present a false dichotomy. Bayh-Dole has not harmed the dissemination of knowledge in the United States, nor has it prevented journal publications, presentations for the training of students, etc. Indeed, it complements the historic mission of university research by making its contribution to social good much more tangible and immediate through the creation of new products directly benefiting the taxpaying public.
More fundamentally, how developing countries in a competitive global economy can hope to prosper by putting their university research freely into the public domain (as the authors advise) is not addressed. The experience in the United States, as previously discussed, certainly does not support this contention. http://news.bna.com/ptln/PTLNWB/split_display.adp?fedfid=14138...9896844&doctypeid=1&type=date&mode=doc&split=0&scm=PTLNWB&pg=0 (16 of 22) [12/14/2009 8:52:09 AM] Patent, Trademark & Copyright Journal Case 1:09-cv-04515-RWS Document 167-8 Filed 12/23/2009 Page 18 of 23 Unless innovative companies have the incentive of strong intellectual property laws, they cannot undertake the considerable risk and expense of product development. Thus, public sector research lies fallow, despite the claims of the critics. Rather than following the same course that failed in the United States before Bayh-Dole, developing countries would be well advised to heed other advisors.
South American economist Hernando De Soto's groundbreaking book, The Mystery of Capital, 29 forcefully demonstrates that the fundamental weakness of perennially underdeveloped countries is the inability of their citizens to establish clear ownership of their property, both physical and intellectual. Without the incentive of ownership, wealth creation is not possible.
29 Harnando De Soto, The Mystery of Capital, Why Capitalism Triumphs in the West and Fails Everywhere Else, Basic Books, 2006.
At its founding the United States was also a “developing country.” One of the primary reasons for the American Revolution was an imperial system that doomed its colonies to remain only the providers of raw materials devoid of manufacturing capabilities. It was to reverse this unjust and subservient role and develop a society based on internal innovation that the Founding Fathers placed the intellectual property protection provision in Article I, Section 8 of the Constitution. Their faith in creating such incentives through a strong and viable patent system was well placed.
As President Abraham Lincoln aptly stated, without a patent system “any man might instantly use what another had invented; so that the inventor had no special advantage from his own invention. The patent system changed this; secured to the inventor, for a limited time, the exclusive use of his invention and thereby added the fuel of
A4696 interest to the fire of genius, in the discovery and production of new and useful things.”
Strangely, the modern critics think the way to innovation is by turning Lincoln's dictum on its head. They could not be more wrong.
As inventor Frederick Cottrell said while founding Research Corporation for Science Advancement: “ … a number of meritorious patents given to the public absolutely free have never come upon the market chiefly because what is everybody's business is nobody's business.”
It was precisely because inventors could secure protection for their discoveries and inventions that in the 20th century a huge era of U.S. innovation resulted. It can be hardly disputed that because of that protection the benefits to humanity have been unprecedented. While the critics bemoan the ability of the patent system to grant such ownership of intellectual property, the only alternatives are open source technology or trade secrets, neither of which provides similar motivation and incentives for innovation. It is truly the protection that the patent system creates that makes the commercial development of ground breaking discoveries possible.
Developing countries would do well to consider these hard-won lessons when urged by external “experts” to freely give the results of their research away. Interestingly, South Africa recently enacted a Bayh-Dole–type law to help integrate its research universities fully into its economy. That a country, which changed so dramatically under leaders like Nelson Mandela, can look past the speculative fears of the critics, and lay the ground work for a confident future should give hope to us all.
Bayh-Dole and Scientific Progress. Critics have also raised concerns that Bayh-Dole harms the advancement of science. Interestingly, unlike the anecdotes which are the presumed basis for that allegation, data shows that the law has substantially contributed to the U.S. economy, and that U.S. science is actually better because of university-industry research collaborations. Additionally, university researchers are successfully balancing patenting and publishing, and not shifting their focus away from fundamental research. http://news.bna.com/ptln/PTLNWB/split_display.adp?fedfid=14138...9896844&doctypeid=1&type=date&mode=doc&split=0&scm=PTLNWB&pg=0 (17 of 22) [12/14/2009 8:52:09 AM] Patent, Trademark & Copyright Journal Case 1:09-cv-04515-RWS Document 167-8 Filed 12/23/2009 Page 19 of 23 In 2005, according to the President's Council of Advisors on Science and Technology, 30 fully 29 percent of articles authored worldwide by scientists and engineers were from the U.S.
30 University-Private Sector Research Partnerships in the Innovation Ecosystem, President's Council of Advisors on Science and Technology, November 2008, p.22
Publication and citation of scientific results in peer-reviewed journals is one common metric for evaluating research outputs…. The United States remains the world leader in citations of S&E (science and engineering) research articles. The number of U.S. articles with co-authors by sector is a metric that can be used as an indicator of public-private research partnerships. Between 1995 and 2005, co-authorship with academic institutions increased by 10.3 percent, the largest percentage point increase of all cross-sector co-authorships.
This comingling of the best and brightest minds in the public and private sectors in authoring joint scientific publications was fostered by the Bayh-Dole Act. Before passage, industry segregated its most creative researchers from university collaborations because the federal government could assert ownership rights in resulting inventions when federal support of university research was also present.
The health of U.S. scientific publications is also reflected in the findings of the National Science Board's Science and Engineering Indicators reports. 31 Traditionally, about three fourths of all U.S. scientific and engineering publications come from academia. In its 2008 report, it found:
31 Science and Engineering Indicators, National Science Board. 2008, Volume I, p. 5-7, NSB 08-01.
A4697 Although the U.S. share of world article output and article citations has declined, the influence of U.S. research articles has increased, as indicated by the percentage of U.S. articles that are among the most highly cited world-wide. In 1995, authors from U.S. institutions had 73% more articles in the top 1% of cited articles in all S&E fields than would be expected based on U.S. total article output; in 2005, the percentage had grown to 83%.
That the share of U.S. scientific papers has fallen is because of the huge explosion of international publications, particularly from Asia. However, while the percentage of U.S. publications has decreased, their scientific impact has increased.
Scientific papers by U.S. researchers are the most cited across every field of science. 32 The number of citations by other authors is the standard criteria for determining the significance of a scientific publication in its field. The report explains: 33
32 Id. at 5-41. 33 Id. at 5-49 to 5-50.
In other words, a country whose research has high influence would have higher shares of its articles in higher citation percentiles.
This is the case in every field for U.S. articles—only U.S. publications display the ideal relationship of consistently higher proportions of articles in the higher percentiles of article citations across the period.
However, when citation rates are normalized by the share of articles during the citation period to produce an index of highly cited articles, the influence of U.S. articles is shown to increase…. In other words, the United States had 83% more articles than expected in the 99th percentile of cited articles in 2005, while the European Union had 16% fewer than expected and the Asia-10 had 59% fewer than expected. http://news.bna.com/ptln/PTLNWB/split_display.adp?fedfid=14138...9896844&doctypeid=1&type=date&mode=doc&split=0&scm=PTLNWB&pg=0 (18 of 22) [12/14/2009 8:52:09 AM] Patent, Trademark & Copyright Journal The United States ranked numberCase 1:09-cv-04515-RWS one in every broad science Document and engineering 167-8 field Filed surveyed 12/23/2009 in the study Page for 202005. of 23It also held this ranking in 1995.
Another classic argument espoused by the critics is that Bayh-Dole lures academic researchers away from basic research toward applied research in order to attract industry sponsors. Of course, it is precisely because university researchers are doing fundamental research that industry either cannot do, or chooses not to do, that makes academic alliances so attractive. The National Science Foundation looked at that allegation, and here is what it found: 34
34 Science and Engineering Indicators, National Science Board. 2006 (two volumes)
Has Academic R&D Shifted Toward More Applied Work?
Emphasis on exploiting the intellectual property that results from the conduct of academic research is growing… Some observers believe that emphasis has been accompanied by a shift away from basic research and toward the pursuit of more utilitarian, problem-oriented questions.
We lack definitive data to address this issue. As indicated earlier in the chapter, it is often difficult to make clear distinctions among basic research, applied research, and development. Sometimes basic and applied research can be complementary to each other and embodied in the same research. Some academic researchers may obtain ideas for basic research from their applied research activities.
Two indicators, however, bear on this issue. One indicator is the share of all academic R&D expenditures directed to basic research. Appendix table 5-1 does not show any decline in the basic research share since the late 1980's. A4698 The second indicator is the response to a question S&E (science and engineering) doctorate holders in academia were asked about their primary or secondary work activities, including four R&D functions: basic research, applied research, design and development.
As figure 5-33 (reproduced below) shows, for those employed in academia who reported research as their primary activity, involvement in basic research declined slightly between 1993 and 2003, from 62% to 61% probably not statistically significant. The available data, although limited, provide little evidence to date of a shift toward more applied work. 35
35 Science and Engineering Indicators, National Science Board 2006, Volume 1, NSB 06-01, p. 5-36.
Figure 5-33 Graphic Once again, by examining the data, the critics' charges are unsubstantiated and incorrect.
To reinforce what the Bayh-Dole Act has contributed to the U.S. economy and the worldwide benefit of mankind one need only to look at the inventions listed below, in addition to those listed previously. Of course, these represent only a small sample of commercialized inventions derived from basic research in academia and which were generated in diverse disciplines by different university research institutions. Among such inventions and discoveries are the following:
rDNA technology, central to the biotechnology industry—Stanford University and University of California;
TRUSOPT® (dorzolamide) ophthalmic drop for glaucoma—University of Florida;
Hotbot internet search engine—University of California, Berkeley; http://news.bna.com/ptln/PTLNWB/split_display.adp?fedfid=14138...9896844&doctypeid=1&type=date&mode=doc&split=0&scm=PTLNWB&pg=0 (19 of 22) [12/14/2009 8:52:09 AM] Patent, Trademark & Copyright Journal Ultrasonic removalCase of dental 1:09-cv-04515-RWS plaque—University of Document Washington; 167-8 Filed 12/23/2009 Page 21 of 23
Lycos® internet search engine—Carnegie Mellon University;
Mosaic web browser—University of Illinois, Urbana-Champaign;
Yahoo internet search engine—Stanford University; and
Cardiovascular and magnetic resonance imaging techniques—University of Wisconsin, Madison. Conclusion The Bayh-Dole Act has clearly exceeded the expectations of its authors and of Congress, and is as viable and needed in today's economic crisis as it was in 1980. Its contributions to the benefit of the United States and its citizens were recognized by a resolution of the U. S. House of Representatives on Dec. 6, 2006 as follows:
The Bayh-Dole Act (Public Law 96-517) has made substantial contributions to the advancement of scientific and technological knowledge, fostered dramatic improvements in public health and safety, strengthened the higher education system in the United States, served as a catalyst for the development of new domestic industries that have created tens of thousands of new jobs for American citizens, strengthened States and local communities across the country, and benefited the economic and trade policies of the United States.
Moreover, an important factor which is often overlooked is that the success of the Bayh-Dole Act in motivating technology transfer has been accomplished without cost to the taxpayer. In other words, no separate appropriation of government (read taxpayers') funds were needed to establish or manage the effort. Yet, its contributions to the U.S. economy and to its citizens, as well as citizens of the world, has been exemplary. A4699 For example, in fiscal year 1999 U.S. economic impact models showed that $40.9 billion could be attributed to academic licensing, and that 270,900 jobs were created. 36
36 AUTM Licensing Survey, FY 1999 pp. 1, 3, 7, 8. Economic numbers derived from Ashley J. Steven's approach entitled “Measuring Economic Impact,” AUTM Advanced Licensing Course, Phoenix, Dec. 1994.
Why was the Bayh-Dole Act a determinative factor in the evolution of university technology transfer? There are a number of reasons that the critics conveniently overlook: 1. It produced order out of chaos because it established a uniform government patent policy. Prior to the Bayh-Dole Act, when federal monies were utilized in whole or in part in the making of an invention there were some 20 agency policies depending on where the research was funded. Indeed, there was frequently more than one patent policy in an agency covering different programs. Because universities receive federal funds from a wide number of sources, this made it extremely difficult, if not impossible, to sort out the applicable policies and restrictions on patenting and licensing by the university. The most restrictive of the policies generally controlled, but all funding agency policies applicable had to be considered as did the bureaucratic climate and restrictions within a given agency. Consequently, with the exception of the IPA program—it was seldom that a federally supported university invention found its way into the marketplace.
2. Bayh-Dole was the first statutory authority for government agencies to obtain, hold, and license patents generated within government laboratories. This greatly increased the effective management of important inventions made by federal employees, previously languishing without development.
3. It was the template for the subsequently passed Federal Technology Transfer Act, which promoted technology transfer from federal laboratories and recognized the contributions of federally employed inventors. Indeed, the first version of this legislation by Senator Dole was written as an amendment to Bayh-Dole.
4. It called for the sharing of royalties collected by the contractor with inventors, thus recognizing their http://news.bna.com/ptln/PTLNWB/split_display.adp?fedfid=14138...9896844&doctypeid=1&type=date&mode=doc&split=0&scm=PTLNWB&pg=0 (20 of 22) [12/14/2009 8:52:09 AM] Patent, Trademark & Copyright Journal imaginative scientific contributionsCase 1:09-cv-04515-RWS and supplying them withDocument the incentive 167-8 to consider Filed 12/23/2009 the practical applications Page 22 of of 23 the results of their research. It also promoted the contractor's use of the expertise of inventors in the technology transfer function.
5. It promoted collaboration among scientists having diverse funding from different federal sources to explore and embrace interdisciplinary approaches to solving scientific challenges.
6. It promoted the science-innovation interface through the establishment of a new university-industry relationship because of the certainty of title to inventions retained by universities under the provisions of the act. This was, and still is, the critical element for private sector development of inventions for the marketplace.
7. It promoted private sector as well as government investment in university research.
8. It promoted innovation and the attendant creation of jobs through, in part, its mandate to give preference to U. S. industry and small business in technology transfer practices.
9. It protected confidential information in the possession of the contractor and its licenses from undue and untimely disclosure—a prime consideration to the private sector in a globally competitive economy.
10. It preserves certain rights in the government to protect the public against nonuse or unreasonable use of inventions supported in whole or in part with taxpayer's money.
11. It provides the university and nonprofit sectors the possibility for generating income to support research and educational activities through the technology transfer function. A4700 To now suggest that the Bayh-Dole Act was not a critical factor in the development of university technology transfer, and that this evolution would have occurred anyway is simply not a supportable premise.
Prior to the passage of the Bayh-Dole Act, and the predecessor IPAs, the environment in which technology transfer existed was, at best, inhospitable, and at worst, hostile. That environment slowly progressed, through creation of the IPA program, and a succession of unpassed legislation to the enactment of the Bayh-Dole Act–into an environment that actually encouraged technology-transfer.
The result has been of tremendous benefit to the U.S. taxpayer in terms of the availability of important new products —particularly in biomedicine—and improved international competitiveness. Indeed, the U.S. is widely recognized as the most efficient nation on the world in the integration of its research universities into the national economy. The proof is in the number of competing nations seeking to adopt the Bayh-Dole model abroad. This movement is occurring despite the writings and efforts of many critics.
Unfortunately, the Bayh-Dole Act of 1980 has come under relentless scrutiny and attack through the efforts of revisionist historians and their rhetorical pronouncements, with little basis in empirical data. These activities would resurrect the same policies that clearly failed prior to the enactment of the IPAs and the Bayh-Dole Act.
It seems strange that a piece of legislation, which arose out of clearly failed preceding policies almost 30 years ago and which has proven its worth, is now again being decried on many of the same bases as were raised against its initial passage.
Outspoken claims, with little basis in empirical evidence, under the guise of guardianship of the public interest provide a rich field for the cultivation of political power and special interests.
One must recognize that such initiatives are extremely dangerous in an evolving technologically-focused, increasingly fragile, global economy. Intellectual property and its ownership have become the preferred currency for economic growth, where invention and innovation are the hallmarks of not only technological leadership but http://news.bna.com/ptln/PTLNWB/split_display.adp?fedfid=14138...9896844&doctypeid=1&type=date&mode=doc&split=0&scm=PTLNWB&pg=0 (21 of 22) [12/14/2009 8:52:09 AM] Patent, Trademark & Copyright Journal of survival. Case 1:09-cv-04515-RWS Document 167-8 Filed 12/23/2009 Page 23 of 23
The authors of this article fully acknowledge that improvement can always be made in the technology-transfer system. It is always possible to find licensing decisions that could be open to criticism or universities that are more difficult to deal with than others. But, it is important to note the difference between poor implementation of Bayh-Dole as opposed to blaming Bayh-Dole for suboptimal practices.
The bottom line is that the Bayh-Dole Act, over its 30 years of implementation, continues to provide a superb framework for government funded research to benefit Americans through job and wealth-creation and to improve the lives of citizens of the worldwide community. This is a lesson it would be well to remember, and perhaps one that the critics could take to heart.
As Nietzsche said: “Convictions are more dangerous foes of the truth than lies.”
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A4701 ISSN 1522-4325 Copyright © 2009, The Bureau of National Affairs, Inc. | Copyright FAQs | Internet Privacy Policy | BNA Accessibility Statement | License Reproduction or redistribution, in whole or in part, and in any form, without express written permission, is prohibited except as permitted by the BNA Copyright Policy. http://www.bna.com/corp/index.html#V
http://news.bna.com/ptln/PTLNWB/split_display.adp?fedfid=14138...9896844&doctypeid=1&type=date&mode=doc&split=0&scm=PTLNWB&pg=0 (22 of 22) [12/14/2009 8:52:09 AM] Case 1:09-cv-04515-RWS Document 168 Filed 12/23/2009 Page 1 of 5
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
ASSOCIATION FOR MOLECULAR PATHOLOGY; AMERICAN COLLEGE OF MEDICAL GENETICS; AMERICAN SOCIETY FOR CLINICAL PATHOLOGY; COLLEGE OF AMERICAN PATHOLOGISTS; HAIG No. 09 Civ. 4515 (RWS) KAZAZIAN, MD; ARUPA GANGULY, PhD; WENDY CHUNG, MD, PhD; HARRY OSTRER, MD; DAVID ECF Case LEDBETTER, PhD; STEPHEN WARREN, PhD; ELLEN MATLOFF, M.S.; ELSA REICH, M.S.; BREAST CANCER DECLARATION OF ACTION; BOSTON WOMEN'S HEALTH BOOK WILLIAM E. RUSCONI COLLECTIVE; LISBETH CERIANI; RUNI LIMARY; GENAE GIRARD; PATRICE FORTUNE; VICKY THOMASON; KATHLEEN RAKER,
Plaintiffs,
-against-
UNITED STATES PATENT AND TRADEMARK OFFICE; MYRIAD GENETICS; LORRIS BETZ, ROGER BOYER, JACK BRITTAIN, ARNOLD B. COMBE, RAYMOND GESTELAND, JAMES U. JENSEN, JOHN KENDALL MORRIS, THOMAS PARKS, DAVID W. PERSHING, and MICHAEL K. YOUNG, in their official capacity as Directors of the University ofUtah Research Foundation,
Defendants.
I, William Rusconi, declare:
1. In 1983 I received a B. S. in molecular biology, with minors in German, chemistry and psychology, from Vanderbilt University, Nashville, Tennessee. In
1994 I received an M.B .A. (MM) with maj ors in marketing, finance, and international business, while making the Dean's List in 1993-1994, from the
Kellogg Graduate School of Management at Northwestern University, Evanston,
A47021 Case 1:09-cv-04515-RWS Document 168 Filed 12/23/2009 Page 2 of 5
Illinois. In 1982 I was a genetic engineering intern with the U.S. Environmental
Protection Agency-IERL, Toxics Staff, in Cincinnati, Ohio.
2. I am Senior Vice President of Marketing at Myriad Genetic
Laboratories, Inc. ("Myriad"). I also oversee Myriad's Managed Care department.
These departments are responsible for Myriad's patient and physician awareness and education efforts and for Myriad's ongoing relationships with insurance payors.
3. Myriad has undertaken extensive efforts and incurred significant expense for over 13 years to secure insurance reimbursement for Myriad's
BRACAnalysis® test for as many appropriate patients as possible. Myriad has nearly a dozen full-time staff members whose sole responsibility is securing criteria, medical policy, and coverage with the numerous insurance payors in the
United States. This process includes educating payors on hereditary cancer syndromes and professional society guidelines for genetic testing.
4. 'Afterconsiderable time and expense, this effort has borne substantial fruit, much to the benefit of patients. Myriad has received reimbursement for its
BRACAnalysis® test for patients from over 2,600 different health insurance payors from every state. Myriad is a "participating provider" under 25 state Medicaid programs. These payors encompass over 80,000 distinct health insurance plan groups covering more than 130 million lives. Additionally, Myriad's
BRACAnalysis® test is reimbursed under Medicare.
5. Until Myriad is approved by each state as a "participating provider," we cannot offer testing to that state's Medicaid patients. Myriad has been pursuing
Medicaid coverage for years and has secured "participating provider" status in 25
A47032 Case 1:09-cv-04515-RWS Document 168 Filed 12/23/2009 Page 3 of 5
states. Unfortunately, while Myriad continues its efforts to secure Medicaid coverage in all states, Myriad has not yet been granted "participating provider" status in some states, which may create gaps.in coverage for some patients.
6. However, Myriad provides free testing to indigent patients. For example, Myriad has a financial assistance program that allows for free testing for patients meeting specific criteria. Further, in 2009 Myriad began granting free
BRACAnalysis® testing to The Cancer Resource Foundation (CRF) to be distributed to needy Massachusetts patients at CRF's discretion (i.e., based upon medical and financial criteria of CRF's choice). This is the type of program under which
MassHealth patients such as Plaintiff Ceriani have an opportunity to receive
BRACAnalysis® testing at no cost.
7. Since identifying and characterizing the BRCA genes, Myriad has spent over $200 million raising patient and physician awareness about hereditary breast and ovarian cancer and promoting BRCA testing.
- 8. For physicians, Myriad: pfovides 'web--base"d, print arid in-person' education (including professional society meetings, regional education events, etc.); contributes to numerous journal publications that help in hereditary breast and ovarian cancer ("HBOC") education and awareness; has produced thousands of hours of CME material on HBOC; has produced office-based tools to help doctors to identify and counsel patients; employs regional medical specialists who assist physicians in understanding HBOC testing and their test results; and maintains a detailed website with extensive resources for doctors and other health care professionals.
A47043 Case 1:09-cv-04515-RWS Document 170 Filed 12/23/2009 Page 1 of 14
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK ------x
ASSOCIATION FOR MOLECULAR ) PATHOLOGY; AMERICAN COLLEGE ) OF MEDICAL GENETICS; AMERICAN ) SOCIETY FOR CLINICAL ) PATHOLOGY; COLLEGE OF ) No. Civil Action No. 09-4515 (RWS) AMERICAN PATHOLOGISTS; HAIG ) KAZAZIAN, MD; ARUPA GANGULY, ) PhD; WENDY CHUNG, MD, PhD; ) ECF Case HARRY OSTRER, MD; DAVID ) LEDBETTER, PhD; STEPHEN ) WARREN, PhD; ELLEN MATLOFF, ) M.S.; ELSA REICH, M.S.; BREAST ) DECLARATION OF JOSEPH CANCER ACTION; BOSTON WOMEN’S ) SCHLESSINGER. PH.D. HEALTH BOOK COLLECTIVE; ) LISBETH CERIANI; RUNI LIMARY; ) GENAE GIRARD; PATRICE FORTUNE; ) VICKY THOMASON; KATHLEEN ) RAKER, ) ) Plaintiff, ) ) -against- ) ) UNITED STATES PATENT AND ) TRADEMARK OFFICE; MYRIAD ) GENETICS; LORRIS BETZ, ROGER ) BOYER, JACK BRITTAIN, ARNOLD B. ) COMBE, RAYMOND GESTELAND, ) JAMES U. JENSEN, JOHN KENDALL ) MORRIS, THOMAS PARKS, DAVID W. ) PERSHING, and MICHAEL K. YOUNG, ) in their official capacity as Directors of the ) University of Utah Research Foundation, ) ) Defendant. ) ) ) ) ) )
------x
A4719 Case 1:09-cv-04515-RWS Document 170 Filed 12/23/2009 Page 2 of 14
I, Joseph Schlessinger hereby declare that:
1. I am the Chairman of the Department of Pharmacology at Yale University School of Medicine and William H. Prusoff Professor since 2001. Prior to my appointment at Yale, I was the Director of the Skirball Institute for Biomolecular Medicine at New York University
(NYU) Medical Center from 1998–2001 and the Milton and Helen Kimmelman Professor and
Chairman of the Department of Pharmacology at NYU Medical School from 1990–2001. I was also a member of the faculty of the Weizmann Institute from 1978–1991 and the Ruth and
Leonard Simon Professor of Cancer Research in the Department of Immunology from 1985–
1991. My qualifications, experience and list of my publications are set forth in my curriculum vitae attached hereto as Exhibit 1. (Ex. 1)
2. I received a B.Sc. degree in Chemistry and Physics in 1968 (magna cum laude), and a M.Sc. degree in chemistry (magna cum laude) in 1970 from the Hebrew University in
Jerusalem. I obtained my Ph.D. degree in biophysics from the Weizmann Institute of Science in
1974. From 1974–1976, I was a postdoctoral fellow in the Departments of Chemistry and
Applied Physics at Cornell University, and from 1977–1978, I was a visiting fellow in the immunology branch of the National Cancer Institute of NIH.
3. In addition to my academic appointments, I was a Research Director at Meloy laboratory in Rockville, Maryland and later on in Rorer Biotechnology in King of Prussia,
Pennsylvania from 1985–1990. Thereafter, I co-founded Sugen, Inc. in 1991. One of the pipeline products developed at Sugen (SU11248) was ultimately approved by the FDA (Sutent or
Sunitinib) for treating gastrointestinal stromal tumors, renal cell carcinoma and endocrine pancreatic cancer . In 2001, I co-founded Plexxikon, a company that uses a pioneering
2
A4720 Case 1:09-cv-04515-RWS Document 170 Filed 12/23/2009 Page 5 of 14
9. I reviewed the following documents: Plaintiffs’ Memorandum of Law in Support of Motion for Summary Judgment (“Memo”); Plaintiffs’ Rule 56.1 Statement of Material Facts
(“SMF”); Declaration of Sir John Sulston, Ph.D. of August 17, 2009 (“Sulston”); Declaration of
Christopher E. Mason of August 20, 2009 (“Mason”); and Declaration of Myles W. Jackson of
August 18, 2009 (“Jackson”).
10. As a scientist practicing in both the academic and industrial biotechnology/pharmaceutical arenas, I have experience with patents. I am a named inventor on a number of patents relating to screening methods and therapeutics. I have been asked to share my observations on the impact that patents have on research and development in the biotechnology field, and the role that patents have in bringing diagnostic and therapeutic products to the market making them available to patients. I am not a lawyer and express no legal opinion.
BACKGROUND
11. By way of background, genes are hereditary units contained within chromosomes
– threadlike parts of the nucleus of cells in the body. The body does not have a mechanism for isolating genes, contrary to what I read in the Memo at p. 25 citing Jackson, ¶¶ 26-31 and Mason
¶¶ 11-12. A gene is part of a chromosome and is always surrounded by proteins.
12. Chromosomes are composed of DNA (deoxyribonucleic acid) and proteins.
DNA is a chemical composition -- a polymer of building blocks called “nucleotides”. Each nucleotide is composed of a deoxyribose sugar, a phosphate and one of four nitrogenous bases: adenine (A), guanine (G), thymine (T), and cytosine (C). DNA is double stranded and the
5
A4723 Case 1:09-cv-04515-RWS Document 170 Filed 12/23/2009 Page 6 of 14
strands are crosslinked via the bases – A always links with T and G always links with C. A
DNA molecule can be characterized by the sequence of the bases in the DNA polymer.
13. A gene on its own cannot do anything – other parts of the cell are required for a gene to have its biological effect. In general, this is to make one or more proteins vital to the structure and function of cells in the body. To do this, the gene’s DNA is first copied or
“transcribed” into RNA (ribonucleic acid) – a polymer of nucleotides that differ from DNA, each unit composed of a ribose sugar, a phosphate and one of four bases: adenine (A), guanine (G), uracil (U), and cytosine (C). For transcription, the DNA “unzips” and one of the DNA strands serves as the template for RNA assembly – A always links to U; G always links to C. The RNA transcript is then processed to form messenger RNA (mRNA) that is “translated” into a polypeptide (another biopolymer composed of building blocks called amino acids) which is a component of proteins responsible for the functions vital to the cell.
14. The RNA transcribed from a gene is processed into one or more messenger RNAs
(“mRNAs”) through a process called splicing in which portions of the RNA transcript that are not required for protein production are removed. Alternative splicing is a process in which different portions of the RNA transcript are reconnected in multiple ways. These different mRNAs resulting from transcription of one gene may then be translated into different polypeptides. Thus, a single gene may code for multiple mRNAs and protein products.
15. Using enzymatic reactions, a DNA molecule can be synthesized that is complementary to an mRNA (cDNA). But this DNA molecule would capture only one splice variant expressed from the gene. Thus, contrary to statements made by the plaintiffs, a cDNA is not necessarily informationally identical to the gene in the body. The plaintiffs’ basis for this --
6
A4724 Case 1:09-cv-04515-RWS Document 170 Filed 12/23/2009 Page 7 of 14
the old dogma of “one gene, one enzyme” -- is dead. SMF, ¶¶ 59, 61, 62; Mason, ¶¶ 9, 28-29,
32-33.
DECIPHERING THE STRUCTURE OF A GENE AND FUNCTION OF ITS PRODUCTS
16. Deciphering the structure of a gene and the function of its products is very relevant for diagnostics and drug development. If you do not know the sequence of a gene and the function of its products, you cannot design diagnostics and therapies to treat patients. The genome has been sequenced and published. But the raw sequence data does not tell you where a particular gene is exactly located and most importantly, the structure and function of the protein or proteins expressed from the gene.
17. I am puzzled by Dr. Sulston’s view that an isolated DNA molecule cannot be an invention. He seems to rationalize his conclusion by simplifying DNA to an arrangement of letters that carries biological information dictated by nature that is identical to the information of its genomic counterpart. See Sulston, ¶¶ 10-19. Categorizing isolated genes as natural products/information that should be relegated to the public domain seems to me a bit superficial.
18. If you look hard enough, all things have natural origins. There are many examples of “natural products” that have been patented. Some examples of patented, small molecule “natural products” are antibiotics (e.g., penicillin), chemotherapeutics (e.g., taxol, mitomycin C) and statins (e.g., lovastatin). Larger biomolecular “natural products,” i.e., proteins, have been patented as well, such as antibodies, erythropoietin, interferon and proteins that control blood clotting such as tissue plasminogen activator (TPA), streptokinase, and urokinase.
DNA molecules whose biological function has been revealed by research should be treated in the
7
A4725 Case 1:09-cv-04515-RWS Document 170 Filed 12/23/2009 Page 8 of 14
same manner. There is no difference between discovering the function of a gene and developing a diagnostic, and discovering a new natural chemical product and developing a new drug.
19. I disagree with Dr. Sulston’s assessment that DNA is only information. See
Sulston, ¶ 13-17. DNA is not merely a linear digital code consisting of a sequence of letters.
DNA is a chemical composition – a polymer of building blocks called nucleotides. Each nucleotide is composed of a deoxyribose sugar, a phosphate and one of four nitrogenous bases: adenine, guanine, thymine and cytosine. Those bases are represented by the letters A, G, T, and
C, respectively. The letters are just designations assigned to the nucleotides so that we can easily depict a DNA molecule. This system is analogous to the chemical formulas we use for describing other chemical compounds. For example, the chemical formula for water is H2O, where “H” represents a hydrogen atom, “2” represents the number of hydrogen atoms present in the compound, and “O” represents an oxygen atom.
20. Sequencing the genome yields information that is fantastically important, but it does not tell you the exact location of the gene and most importantly what function is specified by the gene or by a mutated disease causing gene. I can understand why one should not be allowed to patent DNA without having any knowledge about its function, but an isolated DNA where the function of its products has been determined is a different story - here, an invention has been made. Moreover, if you figure out a direct link or an association between a gene sequence and a cause for or if you figure out the correlations or associations between a gene sequence and an increased risk for a specific disease, this discovery can be used to develop diagnostics and drugs that help people. I do not see any reason why a patent should not be awarded for such inventions.
8
A4726 Case 1:09-cv-04515-RWS Document 170 Filed 12/23/2009 Page 9 of 14
21. To decipher the function of the proteins expressed from a gene takes a lot of work, ingenuity and luck. We have only 20,000 genes (humans have fewer genes than rice!). To manage all of the traits manifested by a human being, strategies evolved to use the limited supply of genes to provide all the functions needed by the body. For example, alternative splicing of
RNA transcribed from a gene is a mechanism the cell uses to generate multiple mRNAs and their encoded protein products from each gene to provide the functions necessary for survival.
Alternative splicing greatly increases the diversity of proteins that can be encoded by the genome.
22. In my field, there are approximately 518 genes that encode for protein kinases.
On average, five alternatively spliced products result from the expression of each protein kinase gene, and this does not take into account the post-translational modifications of the resulting polypeptides and proteins which lead to regulation. Thus, there are at least 2,500 forms of protein product(s) that result from the expression of over 518 genes that encode the protein kinases.
23. In other situations, fully functional proteins are encoded by two or more genes.
For example, antibodies, receptors, ion channels and many other proteins are composed of multiple polypeptides each encoded by different genes, e.g., mammalian cytochrome c oxidase has 13 different polypeptide subunits with 3 being coded by a mitochondrial and nuclear genes and 10 by a nuclear gene. Tomitake Tsukihara, et al., 1995, “Structures of Metal Sites of
Oxidized Bovine Heart Cytochrome c Oxidase at 2.8 Å” Science 269:1069-1074 (Exhibit 2).
24. One approach to deciphering the function of a protein is to isolate or synthesize the DNA containing the gene and use it to produce protein product(s) to study their biochemical
9
A4727 Case 1:09-cv-04515-RWS Document 170 Filed 12/23/2009 Page 10 of 14
functions. This requires first deciphering the sequence of the gene responsible for expression of the protein.
25. In another approach, you can use genetics to eliminate the gene from the genome of a cell or laboratory animal (sometimes referred to as “knocking out” the gene). If you are lucky and the gene is not redundant, you can figure out what the gene product does by observing the loss or gain of biochemical or physiological function in the cell or animal. For example, for tumor suppressor genes, like the BRCA genes, the elimination of the gene in these experiments should result in a loss of the protective function and increase the animal’s risk for developing cancer.
26. In my view, a scientist who, using his ingenuity and aided by a little luck, spends a great deal of time and effort to investigate and discover what a gene product does and how to use it, has made an invention.
27. Once the scientist has deciphered the function of the gene’s products, synthetic
DNAs can be designed for diagnostics, cells can be engineered for drug screening, and therapeutics can be developed. The isolated DNA acquires functions it did not have as a gene in the body. Unlike genes in the body which are chemically bound in the chromosomes, isolated
DNA molecules or their fragments can be used as a probe or primer for diagnostics, to synthesize proteins for therapeutic use, and/or for drug screening.
28. A probe or a primer can be used to detect target DNAs or RNAs based on its ability to bind, i.e., hybridize, to its complementary nucleotide strand. A nucleotide strand is complementary to another when the bases of one strand are properly paired with the bases of the
10
A4728 Case 1:09-cv-04515-RWS Document 170 Filed 12/23/2009 Page 11 of 14
other, i.e., A always pairs with T (U in RNA) and G always pairs with C. For example, the complementary strand to a DNA molecule represented by ATCG will be depicted as TAGC.
29. An isolated DNA molecule can be used as a probe to identify target DNAs or
RNAs in sample that are complementary to the arrangement of the probe’s bases. In this application, the DNA probe is tagged with a molecular marker, e.g., a radioactive isotope, and contacted with the sample under appropriate conditions to allow for hybridization. After washing away unbound material, the detection of the radioactive isotope in the sample indicates hybridization of the DNA probe to a complementary target.
30. An isolated DNA can also be used as a primer to amplify a specific region of a
DNA strand (the DNA target) by a process called polymerase chain reaction (“PCR”). In this approach, primers complementary to the target region along with an enzyme called DNA polymerase are added to a sample under appropriate reaction conditions. The primer serves as a starting point for synthesis of a new DNA strand complementary to the target DNA which serves as a template. The reaction is repeated to allow for amplification of the synthesized fragments. A gene in the body cannot be used as a probe or primer.
PATENTS ARE CRITICAL FOR RESEARCH AND DEVELOPMENT
31. In my experience in the biotechnology industry, companies would not be able to raise money to do the research needed to develop diagnostic and therapeutic products without patent protection. Scientists involved in the Human Genome Project have been very fortunate to have the financial backing of organizations such as the Wellcome Trust. Ironically, the income used to establish the Wellcome Trust was derived from Burroughs Wellcome, a pharmaceutical company that amassed a fortune selling patented drugs. Most institutions do not have the luxury
11
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UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
ASSOCIATION FOR MOLECULAR PATHOLOGY; AMERICAN COLLEGE OF MEDICAL GENETICS; AMERICAN SOCIETY FOR CLINICAL PATHOLOGY; COLLEGE OF AMERICAN PATHOLOGISTS; HAIG No. 09 Civ. 4515 (RWS) KAZAZIAN, MD; ARUPA GANGULY, PhD; WENDY CHUNG, MD, PhD; HARRY OSTRER, MD; DAVID ECF Case LEDBETTER, PhD; STEPHEN WARREN, PhD; ELLEN MATLOFF, M.S.; ELSA REICH, M.S.; BREAST CANCER DECLARATION OF ACTION; BOSTON WOMEN'S HEALTH BOOK DR. DONNA COLLECTIVE; LISBETH CERIANI; RUNI LIMARY; SHATTUCK GENAE GIRARD; PATRICE FORTUNE; VICKY THOMASON; KATHLEEN RAKER,
Plaintiffs,
-against-
UNITED STATES PATENT AND TRADEMARK OFFICE; MYRIAD GENETICS; LORRIS BETZ, ROGER BOYER, JACK BRITTAIN, ARNOLD B. COMBE, RAYMOND GESTELAND, JAMES U. JENSEN, JOHN KENDALL MORRIS, THOMAS PARKS, DAVID W. PERSHING, and MICHAEL K. YOUNG, in their official capacity as Directors of the University of"(Jta4Res~arch]?()und~tioB', Defe~dants.
I, Donna Shattuck,declare under penalty of perjury:
1. I received my B.A. in Biology from SUNY Binghamton, my Ph.D. in
Microbiology in 1982 from the University of Virginia, and performed postdoctoral training at Washington University in St. Louis. A copy of my curriculum vitae and a list of my research publications are attached as Exhibits 1 & 2, respectively.
1 A4769 Case 1:09-cv-04515-RWS Document 171 Filed 12/23/09 Page 2 of 14
2. I was employed by Myriad Genetics, Inc. between July 1, 1993 and
July 1,2009. At Myriad I held several senior positions, including Vice President of P-opulation Genetics at the time of my departure.
3. I was personally involved in the identification of the BRCAl gene as a breast and ovarian cancer susceptibility gene. In that proj ect, I led the mutation screening effort, resequencing the newly isolated candidate genes to detect mutations that co-segregate with breast cancer cases. I am one of the named inventors in United States Patent Nos. 5,693,473, 5,709,999, 5,710,001, 5,747,2.82,
& 5,753,441.
4. The identification of BRCAl required the positional cloning approach.
In positional cloning of the BRCAl gene, the following steps were necessary:
(a) obtaining DNA samples from large, well-documented families with
inherited breast cancer;
(b) discovering appropriate polymorphic markers in tbeBRCA1. ~egion;
(c) typing individuals from suitable families with suitable polymorphic
markers to yield a sufficiently small chromosomal region containing the
BRCAl gene;
(d) identifying gene structures within that small chromosomal region; and
(e) identifying causal mutations in the gene structures that segregate with
breast cancer in a statistically significant manner, but not with control or
non-cancer patients.
2 A4770 Case 1:09-cv-04515-RWS Document 171 Filed 12/23/09 Page 3 of 14
5. Each of the above steps required substantial effort and technical difficulties had to be overcome in each. Indeed, the BRCAl gene would not have been identified had failure occurred in anyone of the identified steps.
THE ART TAUGHT SEVERAL DIFFERENT GENOMIC REGIONS FOR
BRCAl
6. Even in September of 1994, when Myriad and its collaborators (the
University of Utah and the NIEHS, an institute within the NIH) had identified the
BRCA 1 gene, there was still a great deal of puzzling information in the public domain with regard to the chromosomal location of the BRCAl gene. Such puzzling information led to a general state of confusion and frustration within the field.
7. For example, as shown in Exhibit 3, while Albertsen et al. 1 disclosed that BRCA1 was located between markers D17S776 and D17S78, Smith et al. 2 taught that BRCAlshouldbe betwe~n Dl7S702and EDH17D, which region does not actually contain the BRCAl gene. Moreover, Jones et al. 3 suggested that the
BRCA1 gene was in the region between 1A 1.3B and D 17S78, which is actually distal to the BRCAl gene. In addition, Cropp et al. 4 incorrectly localized BRCAl to a small region between D17S846 andD17S746.
1 Albertsen etal., A physical map and candidate genes in the BRCA 1 region on chromosome 17q12-21, NAT. GENET., 8:387-91 (1994). 2 Smith et al., Localisation of the breast-ovarian cancer susceptibility gene (BRCA 1) on 17q 12- 21 to an interval of< or = 1 eM, GENES CHROM. CANCER, 10:71-6 (1994). 3 Jones et al., The detailed characterisation of a 400 kb cosmid walk in the BRCAI region: identification and localisation of 10 genes including a dual-specificity phosphatase, HUM. MOL. GENET., 11:1927-34 (1994). 4 Cropp et al., Evidence for involvement ofBRCA1 in sporadic breast carcinomas, CANCER RES., 54:2548-51 (1994).
3 A4771 Case 1:09-cv-04515-RWS Document 171 Filed 12/23/09 Page 4 of 14
8. Given the confusion, a skilled artisan would not have known in which chromosomal region to look for the BRCAl gene. Indeed, it would have required a great deal of effort to analyze and identify genes in each of the suggested regions and to then determine if the genes harbor mutations that co-segregate with breast cancer in individual members of breast cancer families (kindreds).
EXTENSIVE FAMILY PEDIGREE ANALYSIS AND SAMPLE COLLECTION
WERE CRITICAL THROUGHOUT THE SEARCH FOR BRCAl
9. One of the keys to the Myriad Collaboration's success in characterizing BRCA 1 was the large, well documented, and highly informative collection of family pedigrees (breast and ovarian cancer kindreds) it had in its possession, and the numerous DNA samples obtained from many members of these kindreds. This was particularly important because during the period of the discovery of BRCA1, competition and rivalries between research groups led to the competing groups fervently protecting their samples and kindreds, and not sharing kindreds and samples with each other.
10. Large and informative kindreds are essential for successful linkage analysis. The families need be large in order to provide sufficient statistical power for the analysis. The families need be informative, i.e., exhibiting clear co inheritance of mutations within the BRCAl gene with the disease, such that segregation of a BRCAl susceptibility allele can be deciphered by statistical means.
As a matter of fact, even some large families with a large number of individuals afflicted with breast cancer were more confusing than helpful in the search for
BRCA1. This is because the cancer running through these families could have been due to susceptibility genes other than BRCA1. For example, Exhibit 4 illustrates
4 A4772 Case 1:09-cv-04515-RWS Document 171 Filed 12/23/09 Page 5 of 14 that Kindreds 1911 and 1927 both have over 9 affected individuals, yet the LOD scores derived from these families were not useful in identifying BRCA 1 by linkage analysis.
11. It was well-recognized in the field that the Myriad Collaboration had gathered and characterized the largest and best breast cancer kindred collections.
This was largely due to decades of extensive effort by Dr. Mark Skolnick, a pioneer of family collection and pedigree analysis for linkage analysis. See D. Skolnick.
Dr. Skolnick was the leader of the Myriad Collaboration and is a named inventor in
United States Patent Nos. 5,710,001, 5,747,282, & 5,753,441.
12. Indeed, our Kindred 2082 was the largest and best breast cancer kindred known. As shown in Exhibits 4 and 5, Kindred 2082 has 51 breast cancer cases and 22 ovarian cases. With kindreds such as Kindred 2082, as well as other inventive approaches, we were able to narrow the putative BRCAl region to about
600 kb by linkage analysis, thereby making the isolation and of the BRCAl gene possible.
13. The large and informative family collections in the Myriad
Collaboration's possession were also critical in identifying mutations in the BRCAl gene that co-segregated with disease in the breast and ovarian cancer pedigrees.
14. Again as illustrated by Kindreds 1925, 1911 and 1927 in Exhibit 4, some families don't harbor BRCAl mutations, even though they have a large number of apparently inherited breast cancer cases. If a skilled person only had such families in their collection, and even if he or she were able to isolate a small portion of the chromosome l;1arboring a breast or ovarian cancer risk gene through linkage analysis and candidate gene isolation, he or she would still have not been
5 A4773 Case 1:09-cv-04515-RWS Document 171 Filed 12/23/09 Page 6 of 14 able to recognize that that gene is indeed the BRCAl gene. Unlike the process of isolating genes based on biochemical functions (e.g., erythropoietin gene), a disease gene is identified via positional cloning only when a causal mutation that exists within that gene is found to co-segregate with the disease in question.
SUITABLE FAMILIES WITH USEFUL POLYMORPHIC MARKERS HELPED
NARROW DOWN A WORKABLE CHROMOSOMAL REGION CONTAINING
THE BRCAI GENE
15. In this respect, it is worth noting that after we isolated a candidate gene which corresponded to the BRCAl gene, we selected 8 priority families for mutation screening or resequencing. 5 of these families were found to harbor segregating BRCAl mutations. In three of these families, the mutations were either a nonsense change (i.e., a stop codon) or frameshift mutations resulting in premature stop codons. Such mutations immediately informed us that they are deleterious mutations that result in alterations in the structure and functions of the protein encoded by the gene, which is consistent with a tumor suppressor mutation resulting in the phenotype of breast cancer. In fact, at the time this work was being conducted BRCAl was suspected to be a classic tumor suppressor gene like the p53 gene.
16. With the technology available in 1994, only a limited number of families could be comprehensively screened for mutations. Having large and informative families and correctly choosing the families for resequencing were extremely important technical decisions that lead to the Myriad Collaboration's success.
6 A4774 Case 1:09-cv-04515-RWS Document 171 Filed 12/23/09 Page 7 of 14
THE MYRIAD COLLABORATION DEFIED CONVENTION IN ITS SEARCH
FOR BRCAl
17. Another step we undertook that, in hindsight, appeared to be critical to our success was that in addition to yeast artificial chromosomes (YACs), we used
PI and BAC clones in candidate gene identification. This was in contrast to both the general custom in the art of using only YACs in positional cloning, ~ and to our competitors' touting the use of YACs and cosmids specifically in the BRCAl effort. 6
18. YACs were commonly used in the art because they can accommodate large genomic DNA fragments (100-1000 kb), thereby making genomic cloning and gene identification and analysis within a large chromosomal region more convenient due to their sheer size. It was also thought that the size of YACs would make it more likely that an entire gene would be contained within one or very few
YAC clones.
19. BACs (bacteria artificial chromosomes) are bacteria-based and can accommodate, on average, inserts of about 150kb, while bacteriophage-based PI clones typically have inserts of about 50-85 kb.
20. We used PI and BAC clones to physically map the BRCAl region, to partially sequence the genomic DNA, and to isolate cDNAs, primarily because we recognized that they were more stable and more manageable in size. Indeed, at least three of the nine YACs isolated in our BRCAl physical mapping studies
5 Watson, James D., Gilman, M., Witkowski, J.A., and Zoller, M. 1992. Recombinant DNA, 2nd edition. pp. 590-4. Scientific American Books, New York. 6 See Weber et al., Familial breast cancer. Approaching the isolation of a susceptibility gene, CANCER, 74:1013-20 (1994); Friedman et al., The search for BRCAl, CANCER RES., 54:6374-82 (1994); Jones et al., supra note 3.
7 A4775 Case 1:09-cv-04515-RWS Document 171 Filed 12/23/09 Page 8 of 14 contained deletions. 7 More illustrative is the fact that the group led by Mary-Claire.
King recognized after our publication of the BRCAI gene that the YAC-derived genomic clone they were analyzing actually had a deletion at the site of the BRCA1 gene. Indeed, Dr. Mary-Claire King proclaimed in one scientific conference after our discovery of the BRCA1 gene that "P1 and BACs are the winners of the day."
21. It was later recognized that the genomi~ DNA in the BRCAI region has one of the highest densities of Alu repeats ever reported. Smith et al. 8 examined
326 loci in GenBank for repeat structures. Only three genes have Alu densities greater than BRCAl. 9 Alu repeats are well known to cause large DNA rearrangements such as deletions and duplications. Apparently, the high density of
Alurepeats in the BRCAI region exacerbated the problem of instability and insert rearrangements associated with YACs, but all of this is based on hindsight (i.e., the
Alu repeats were only discovered because we provided the structure of the gene).
At the time we selected PI and BACs, it was by no means obvious to a skilled person to avoid YACs and use PI and BACs. Our heavy reliance on PI and BACs may even have seemed a mistake to most others in the field since it required analyzing many more smaller clones, which was regarded as being much less efficient than analyzing a few large YAC clones.
22. Another step we took that contributed to our success was our adoption of a novel hybrid selection technique, i.e., a modified version of hybrid selection. Io
7 See Harshman et al., Comparison of the positional cloning methods used to isolate the BRCA1 gene, HUM. MOL. GENET., 4:1259-66 (1995). 8 Smith et al., Complete genomic sequence and analysis of 117 kb of human DNA containing the gene BRCA1, GENOME RES., 6:1029-49 (1996). 9 Id. at 1044. 10 See Harshman et al., supra.note 7; Hattier et al., Monitoring the efficacy of hybrid selection during positional cloning: the search for BRCA1, MAMM. GENOME, 6:873-9 (1995).
8 A4776 Case 1:09-cv-04515-RWS Document 171 Filed 12/23/09 Page 9 of 14
23. Generally, in hybrid selection (also called solution hybrid capture), biotinylated cloned, genomic DNA is used as a probe for hybridization in a solution of target cDNA. The hybridized probe with cDNA annealed to it is then captured by avidin on magnetic beads and the hybridized cDNA can subsequently be washed off from the beads. The cDNA is then PCR~amplified. The amplified, enriche~ cDNA can then be cloned and re-screened with genomic DNA to confirm the hybridization and the positive clones sequenced.
24. Specifically, in the Myriad team's novel modified version of this technique of hybrid selection, the probe was first rendered single stranded by treatment of restriction fragments of cloned genomic DNA (from the PI, BAC and cosmid clones) with exonuclease III. The largely single-stranded probe DNA was then reacted with photo-activatable biotin and UV light to generate the final probe for hybridization. This modification minimized the competitive renaturation of probe structures during hybridization, thereby increasing hybridization efficiency and sensitivity. 11
25. The second modification relates to target cDNA synthesis. "First, mRNA was treated with DNase prior to cDNA synthesis. This process diminished the possibility of contamination from genomic DNA. Second, cDNA synthesis involved the use of two separate primers for first and second strand synthesis. This improved the cloning efficiency of the amplified products and allowed some types of artefactual products to be identified easily." In addition, the primers
11 See Hattier et at., ;upra note 10.
9 A4777 Case 1:09-cv-04515-RWS Document 171 Filed 12/23/09 Page 10 of 14 incorporated into the cDNAs at the 5' and 3' ends are different, allowing immediate recognition of the orientation of the captured cDNAs. I2
26. Overall, a total of 39 independent candidate gene fragments (CGFs) were isolated by this modified hybrid selection technique. Our modified hybrid selection proved to be the most effective method used in the search for candidate genes. I3 In fact, Dr. Roger Wiseman, a major Myriad collaborator excitedly declared that the method is "the closest thing to magic" he has seen. I4
MYRIAD COLLABORATION PIECED TOGETHER THE EVIDENCE TO
ARRIVE AT THE TRUE STRUCTURE OF BRCAl
27. The first assembly of the BRCAl gene from segments of eDNA identified also presented great challenges to us. It is now known - because of our discovery - that the BRCA1 gene has 24 exons (22 of which are coding) with a long open reading frame of 5,592 nucleotides distributed over 100 kb. Completion, for the fjrst time, of a gene of so many exons and containing such large exons (exon 11 being more than 3.4 kb) certainly required some ingenuity and avoidance of sequence errors. As discussed above, the BRCA1 gene could only be identified by finding mutations present in affected members of certain kindreds. If an incomplete open reading frame was mistakenly believed to be complete, segregating mutations located in the missing portion of the coding frame might have been missed and the BRCA 1 gene might have not been identified. Of course, only after the complete gene is known can its structure can be easily analyzed.
12 See id. 13 See Harshman et al., supra note 7. 14 See The Glittering Prize, NAT. GENET., 8:105-6 (1994).
10 A4778 Case 1:09-cv-04515-RWS Document 171 Filed 12/23/09 Page 11 of 14
28. Indeed, four of the CGFs were alternative splice forms of BRCAl missing various exons. The alternative splice forms invariably resulted in truncated proteins after translation. If the Myriad Collaboration had stopped there
- believing such CGFs to be represent complete open reading frames - the full length cDNA would not have been assembled, and important causal mutations might have been missed in the mutation screening of the kindreds.
29. Because of its sheer size, a full-length BRCAl cDNA was never identified in our screens. The full coding structure was deduced by piecing together non-overlapping cDNA fragments. As shown in Exhibit 6, many cDNA fragments were isolated. Even minor sequence errors could have led to the obliteration of an open reading frame, and the BRCA 1 gene would not have been recognized and causal mutations would not have been discovered even in the largest and most informative kindreds. Again, only after the complete cDNA structure is known can it be reproduced easily by follow-on researchers.
BRCAl WAS SURPRISINGLY FOUND TO NOT FOLLOW THE
TRADITIONAL TUMOR SUPPRESSOR MODEL
30. T'hroughout the search for BRCAl it was widely assumed in the field that the gene we sought encoded a classic tumor suppressor. Typical tumor suppressor genes such as the previously known APC and p53 genes are involved in both familial and sporadic cancers. The following is quoted from a news report on our findings in the journal Science:
31. "As the name implies, tumor suppressors act as "brakes" on the conversion of a normal healthy cell into a cancerous one, and their loss or inactivation leads to cancer. Breast cancer had seemed to follow the classic model
11 A4779 Case 1:09-cv-04515-RWS Document 171 Filed 12/23/09 Page 12 of 14 of a tumor suppressor at work: In about one half of sporadic, and all familial, cancers a stretch of chromosome 17 where researchers had been searching for
BRCA 1 is lost from tumor cells, suggesting that BRCAl mutations playa role in both types of cancer. But the apparent absence of BRCAl defects in sporadic tumors suggests otherwise.,,15
32. The article went on to quote preeminent genetic epidemiologist Neil
Risch as arguing "that because the gene fails to show all the predicted features of
BRCA 1, the evidence that it really is the long-sought gene is not completely watertight." 16
33. That no somatic mutations were found in the breast or ovarian tumor cells we initially analyzed was reported in Futreal et al. 17 Although unexpected, the lack of somatic mutations in breast or ovarian tumor cells did not detract from our evidence from kindred analysis nor our conviction that the gene we had found was indeed BRCA1. After the publication of the gene we called BRCA1, the scientific community went on to find mutations in this gene in many hereditary breast and ovarian cancer families, confirming our belief that is the gene we had identified was, indeed, the BRCAl gene.
34. This again demonstrates that the discovery of the BRCA 1 gene was by no means a trivial exercise, but a scientific accomplishment that required many inventive steps, not the least of which was to contradict the scientific dogma of the time.
15 Rachel Nowak, Breast Cancer Gene Offers Surprises, Science, 265: 1796-9 (1994). 16 See id. 17 Futreal et al., BRCA1 mutations in primary breast and ovarian carcinomas, Science, 266:120 2 (1994).
12 A4780 Case 1:09-cv-04515-RWS Document 171 Filed 12/23/09 Page 13 of 14
Pursuant to 28 USC § 1746, I declare under penalty of perjury that the foregoing is_true and correct.
Donna Shattuck, Ph.D
o~ceVV\~ Executed ------,02.\ 2009
13 A4781 Case 1:09-cv-04515-RWS Document 171 Filed 12/23/09 Page 14 of 14
A4782 Case 1:09-cv-04515-RWS Document 171-1 Filed 12/23/09 Page 1 of 2
A4783 Case 1:09-cv-04515-RWS Document 171-1 Filed 12/23/09 Page 2 of 2 SHATTUCK DECLARATION EXHIBIT 1
DONNA M. SHATTUCK
ACADEMIC BACKGROUND
PhD Microbiology. University of Virginia, Charlottesville, VA BA Biology. SUNY, Binghamton, NY
PROFESSIONAL EXPERIENCE
Myriad Genetics, Inc. Salt Lake City, Utah Vice President, Population Genetics 2003 - 2009 Vice President Metabolic Disorder Research 1998 - 2003 Research Director 1996 - 1998 Project Director 1994 - 1995 Senior Scientist 1993 - 1994
• involved in the molecular cloning and analysis of genes responsible for predisposition to human disease.
Agridyne Technologies, Inc. (NPI) Salt Lake City, Utah Research Manager 1992 - 1993 Senior Molecular Biologist 1985 - 1992
•Involved in a project to identify, purify and clone a plant enzyme with the objective of expressing a gene in a microorganism and recovering the product of the enzymatic reaction.
Washington University St. Louis, Missouri Postdoctoral Fellow 1982 - 1985
•Research in collaboration with Roger N. Beachy to characterize the temporal and spatial control of the expression of soybean seed storage protein subunits.
W. Alton Jones Cell Science Center Lake Placid, New York Research Assistant 1974 - 1977
A4784 Case 1:09-cv-04515-RWS Document 171-2 Filed 12/23/09 Page 1 of 6
A4785 Case 1:09-cv-04515-RWS Document 171-2 Filed 12/23/09 Page 2 of 6
SHATTUCK DECLARATION EXHIBIT 2
LIST OF PUBLICATIONS (SELECTED)
Donna M. Shattuck
Patents
17q-Linked Breast and Ovarian Cancer Susceptibility Gene (A method for screening germline for an alteration of a BRCA1 gene) M.H. Skolnick, D.E. Goldgar, Y. Miki, J. Swenson, A. Kamb, K.D. Harshman, D.M. Shattuck-Eidens, S.V. Tavtigian, R.W. Wiseman, P. A. Futreal, issued May 19, 1998. Patent No. 5,753,441.
17q-Linked Breast and Ovarian Cancer Susceptibility Gene (An isolated DNA coding for a BRCA1 polypeptide, said polypeptide having the amino acid sequence set forth in SEQ ID No:2); M.H. Skolnick, D.E. Goldgar, Y. Miki, J. Swenson, A. Kamb, K.D. Harshman, D.M. Shattuck-Eidens, S.V. Tavtigian, R.W. Wiseman, P.A. Futreal, issued May 5, 1998. Patent No. 5,757,282.
17q-Linked Breast and Ovarian Cancer Susceptibility Gene (Screening tumor sample from a human subject for a somatic alteration in a BRCA1 gene); M.H. Skolnick, D.E. Goldgar, Y. Miki, J. Swenson, A. Kamb, K.D. Harshman, D.M. Shattuck-Eidens, S.V. Tavtigian, R.W. Wiseman, P.A. Futreal, issued January 20, 1998. Patent No. 5,710,001.
17q-Linked Breast and Ovarian Cancer Susceptibility Gene (A method for detecting a germline alteration in a BRCA1 gene); D.M. Shattuck-Eidens, J. Simard, F. Durocher, M. Emi, Y. Nakamura, issued January 20, 1998. Patent No. 5,709,999.
Linked Breast and Ovarian Cancer Susceptibility Gene (Isolated DNA comprising altered BRCA1) D.M. Shattuck-Eidens, J. Simard, F. Durocher, M. Emi, Y. Nakamura, issued December 20, 1997. Patent No. 5,693,473.
Chysanthemyl Diphosphate Synthase, Corresponding Genes and Use in Pyrethrin Synthesis; S. Ellenberger, G. Peiser, D. Shattuck-Eidens, R. Bell, C. Hussey and B. Swedlund, issued June, 1995.
Method and Device for Improved Restriction Fragment Length Polymorphism Analysis; T.G.H Helentjaris, S.M. Lee and D.M. Shattuck-Eidens, issued June 28, 1994.
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Selected Publications
Abkevich V, Zharkikh A, Deffenbaugh AM, Frank D, Chen Y, Shattuck D, Skolnick MH, Gutin A, Tavtigian SV. Analysis of missense variation in human BRCA1 in the context of interspecific sequence variation. 2004 J. Med. Genet. 41:492-507.
Timms K, Wagner S, Samuels M, Forbey K, Goldfine H, Jammulapati S, Skolnick M, Hopkins P, Hunt S, Shattuck D. A Mutation in PCSK9 Causing Autosomal-dominant Hypercholesterolemia in a Utah Pedigree. 2004. Human Genetics 114:349-53.
Abkevich V, Camp NJ,. Hensel CH, Neff CD,. Russell DL, Hughes DC, Plenk AM, Lowry MR, Richards RL, Carter C, Frech GC, Stone S, Rowe K, Chau CA, Cortado K, Hunt A, Luce K, O'Neil G, Poarch J, Potter J, Poulsen GH, Saxton H, Bernat- Sestak M, Thompson V, Gutin A, Skolnick MH, Shattuck D, and Cannon-Albright L. 2003. Predisposition Locus for Major Depression at Chromosome 12q22-12q23.2 Am J Hum Genet 73:1271-81.
Stone S, Abkevich V, Hunt SC, Gutin A, Russell DL, Neff CD, Riley R, Frech GC, Hensel CH, Jammulapati S, Potter J, Sexton D, Tran T, Gibbs D, Iliev D, Gress R, Bloomquist B, Amatruda J, Rae PM, Adams TD, Skolnick MH, Shattuck D. 2002. A major predisposition locus for severe obesity, at 4p15-p14 Am J Hum Genet 70:1459- 68.
Hunt SC, Abkevich V, Hensel CH, Gutin A, Neff CD, Russell DL, Tran T, Hong X, Jammulapati S, Riley R, Weaver-Feldhaus J, Macalma T, Richards MM, Gress R, Francis M, Thomas A, Frech GC, Adams TD, Shattuck D, Stone S. 2001. Linkage of body mass index to chromosome 20 in Utah pedigrees. Hum Genet 109:279-85
Frank, T.S., S. Manley, O. Olopade, S. Cummings, J. Garger, B. Bernhardt, K. Antman, D. Russo, M. Wood, L. Mullineau, C. Isaacs, B. Peshkin, S. Buys, V. Venne, P. Rowley, S. Loader, K. Offit, M. Robson, H. Hampel, D. Brener, E. Winer, S. Clark, B. Weber, L. Strong, P. Rieger, M. McClure, B. Ward, D. Shattuck Eidens, A. Oliphant, M. Skolnick. 1998. Sequence analysis of BRCA1 & BRCA2: Correlation of mutations with family history and ovarian cancer risk. J Clin Oncol 16: 2417-2425.
Skolnick MH, Frank T, Shattuck-Eidens D, Tavtigian S. 1997 Genetic susceptibility to breast and ovarian cancer. Pathologie Biologie, 45, No. 3: 245-249.
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Shattuck-Eidens, D., A. Oliphant, M. McClure, C. McBride, J. Gupte, T. Rubano, D. Pruss, S.V. Tavtigian, D.H.-F. Teng, N. Adey, M. Staebell, K. Gumpper, R. Lundstrom, M. Hulick, M. Kelly, J. Holmen, B. Lingenfelter, S. Manley, F. Fujimura, M. Luce, B. Ward, L. Cannon-Albright, L. Steele, K. Offit, T. Gilewski, L. Norton, K. Brown, C. Schulz, H. Hampel, A. Schluger, E. Giulotto, W. Zoli, A. Ravaioli, H. Nevanlinna, S. Pyrhonen, P. Rowley, S. Loader, M.P. Osborne, M. Daly, I. Tepler, P.L. Weinstein, J.L. Scalia, R. Michaelson, R.J. Scott, P.Radice, M.A. Pierotti, J.E. Garber, C. Isaacs, B. Peshkin, M.E. Lippman, M.H. Dosik, M.A. Caligo, R.M. Greenstein, R.Pilarski, B. Weber, R. Burgemeister, T.S. Frank, M.H. Skolnick, A. Thomas. 1997. BRCA1 sequence analysis in women at high risk for susceptibility mutations. JAMA 278: 1242-1250.
Neuhausen, S., T. Gilewski, L. Norton, T. Tran, P. McGuire, J. Swensen, H. Hampel, P. Borgen, K. Brown, M. Skolnick, D. Shattuck-Eidens, S. Jhanwar, D. Goldgar, K. Offit. 1996. Recurrent BRCA2 6174delT mutations in Ashkenazi Jewish women affected by breast cancer. Nature Genetics 13: 126-128.
Caligo MA, Ghimenti C, Cipollini G, Ricci S, Brunetti I, Marchetti V, Olsen R, Neuhausen S, Shattuck-Eidens D, Conte PF, Skolnick MH, Bevilacqua G. 1996. BRCA1 germline mutational spectrum in Italian families from Tuscany: a high frequency of novel mutations. Oncogene, 13:1483-1488.
Neuhausen, S., J. Swensen, Y. Miki, Q. Liu, S. Tavtigian, D. Shattuck-Eidens, A. Kamb, M.R. Hobbs, J. Gingrich, H. Shizuya, U.J. Kim, D. Cochran, P. Futreal, R. Wiseman, H. Lynch, P. Tonin, S. Narod, L. Cannon-Albright, M. Skolnick, D. Goldgar. 1996. Frontiers in Endocrinology, 3:1919-1926.
Couch, F.J., L.M. Farid, M. L. DeShano, S.V. Tavtigian, K. Calzone, Y. Peng, B. Bogden, Q. Chen, S. Neuhausen, D. Shattuck-Eidens, A.K. Godwin, M. Daly, M.S. Holt, S. Sedlacek, J. Rommens, J. Simard, J. Garber, S. Merajver, B.L. Weber. 1996. BRCA2 Germline mutations in male breast cancer cases and breast cancer families. Nature Genetics 13: 123-125.
Durocher, F., P. Tonin, D. Shattuck-Eidens, M.H. Skolnick, S.A. Narod, J. Simard. 1996. Mutation analysis of the BRCA1 gene in 23 families with cases of cancer in the breast, ovary and multiple other sites. Human Molecular Genetics 33:814-819.
Durocher, F., D. Shattuck-Eidens, M. McClure, F. Labrie, M.H. Skolnick, D.E. Goldgar, J Simard. 1996. Comparison of BRCA1 polymorphisms, rare sequence variants and/or missense mutations in unaffected and breast/ovarian cancer populations. Human Molecular Genetics, 5: 835-842.
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Tavtigian, S.V., J. Simard, J. Rommens, F. Couch, D. Shattuck-Eidens, S. Neuhausen,S. Merajver, S. Thorlacius, K. Offit, C. Stoppa-Lyonnet, C. Belanger, R. Bell, S. Berry, R. Bogden, Q. Chen, T. Davis, M. Dumont, C. Frye, T. Hattier, S. Jammulapati, T. Janecki, P. Jian, R. Keherer, J.F. Leblanc, J.T. Mitchell, J. McArthur- Morrison, Y. Peng, C. Samson, M. Schroeder, S.C. Snyder, M. Stringfellow, C. Stoup, B. Swedlund, J. Swensen, D. Teng, A. Thomas, T. Tran, M. Tranchant, J. Weaver- Feldhaus, A.K.C. Wong, H. Chizuya, J.E. Eyfjord, L. Cannon-Albright. 1996. The complete BRCA2 gene and mutations in chromosme 13q-linked kindreds. Nature Genetics 12: 333-337.
Harshman, K., R. Bell, J. Rosenthal, H. Katcher, Z. Gholami, C. Frye, W. Ding, P. Dayananth, K. Eddington, Y. Miki, J. Swenson, R. Phelps, T. Hattier, S. Stone, D. Shaffer, P.A. Futreal, S. Bayer, C. Hussey, T. Tran, K. Richardson, B. Dehoff, R. Wiseman, P. Rosteck, M.H. Skolnick, D. Shattuck-Eidens, A. Kamb. 1995. Comparison of the positional cloning methods used to isolate the BRCA1 gene. Human Molecular Genetics 4(8): 1259-1266.
Hattier, T., R. Bell, D. Shaffer, S. Stone, R.S. Phelps, S.V. Tavtigian, M.H. Skolnick, D.Shattuck-Eidens, A. Kamb. 1995. Monitoring the efficacy of hybrid selection during positional cloning: The search for BRCA1. Mammalian Genome 6: 873.
Shattuck-Eidens, D., M. McClure, J. Simard, F. Labrie, S. Narod, F. Couch, K. Hoskins, B. Weber, L. Castilla, M. Erdos, L. Brody, L. Friedman, E. Ostermeyer, C. Szabo, M-C. King, S. Jhanwar, K. Offit, L. Norton, T. Gilewski, M. Lubin, M. Osborne, D. Black, M. Boyd, M. Steel, S. Ingles, R. Haile, A. Lindblom, H. Olsson, A. Borg, D.T. Bishop, E. Solomon, P. Radice, G. Spatti, S. Gayther, B. Ponder, W. Warren, M. Stratton, Q. Liu, F. Fujimura, C. Lewis, M.H. Skolnick, D.E. Goldgar. 1995. A collaborative survey of 80 mutations in the BRCA1 breast and ovarian cancer susceptibility gene. Implications for presymptomatic testing and screening. JAMA 273:7;535-541.
Simard, J., P. Tonin, F. Durocher, K. Morgan, J. Rommens, S. Gingras, C. Samson, J- F. Leblanc, C. Bélanger, F. Dion, Q. Liu, M. Skolnick, D. Goldgar, D. Shattuck- Eidens, F. Labrie, S.A. Narod. 1994. Common origins of BRCA1 mutations in Canadian breast and ovarian cancer families. Nature Genetics 8:4;392-398.
Miki, Y, J. Swensen, D. Shattuck-Eidens, P.A. Futreal, K. Harshman, S. Tavtigian, Q. Liu, C. Cochran, L.M. Bennett, W. Ding, R. Bell, J. Rosenthal, C. Hussey, T. Tran, M. McClure, C. Frye, T. Hattier, R. Phelps, A. Haugen-Strano, H. Katcher, K. Yakumo, Z. Gholami, D. Shaffer, S. Stone, S. Bayer, C. Wray, R. Bogden, P. Dayananth, J.
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Ward, P. Tonin, S. Narod, P.K. Bristow, F.H. Norris, L. Helvering, P. Morrison, P. Rosteck, M. Lai, J.C. Barrett, C. Lewis, S. Neuhausen, L. Cannon-Albright, D. Goldgar, R. Wiseman, A. Kamb, M.H. Skolnick. 1944. A strong candidate for the breast and ovarian cancer susceptibility gene BRCA1. Science 266: 66-71.
Futreal, P.A., C. Cochran, J. Rosenthal, Y. Miki, J. Swenson, M. Hobbs, L.M. Bennett, A. Haugen-Strano, J. Marks, J.D. Barrett, S. Tavtigian, D. Shattuck-Eidens, A. Kamb, M. Skolnick, R. Wiseman. 1994. Isolation of a diverged homeobox gene, MOX1 from the BRCA1 region on 17q21 by solution hybrid capture. Hum. Mol. Gen. 3: 1359-1364.
Futreal, P.A., Q. Liu, D. Shattuck-Eidens, C. Cochran, K. Harshman, S. Tavtigian, L.M. Bennett, A. Haugen-Strano, J. Swensen, Y. Miki, K. Eddington, M. McClure, C. Frye, J. Weaver-Feldhaus, W. Ding, Z. Gholami, P. Söderkvist, L. Terry, S. Jhanwar, A. Berchuch, J.D. Inglehart, J. Marks, D.G. Ballinger, J.C. Barrett, M.H. Skolnick, A. Kamb, R. Wiseman. 1994. BRCA1 mutations in primary breast and ovarian carcinomas. Science 266: 120-122.
Kamb, A., D. Shattuck-Eidens, R. Eeles, Q. Liu, N.A. Gruis, W. Ding, C. Hussey T. Tran, Y. Miki, J. Weaver-Feldhaus, M. McClure, J.F. Aitken, D.E. Anderson, W. Bergman, R. Frants, D.E. Goldgar, A. Green, R. MacLennan, N.G. Martin, L.J. Meyer, P. Youl, J.J. Zone, M.H. Skolnick, L.A. Cannon-Albright. 1994. Analysis of the p16 gene (CDKN2) as a candidate for the chromosome 9p melanoma susceptibility locus. Nature Genetics 8: 22-26.
Kamb, A., P.A. Futreal, J. Rosenthal, C. Cochran, K.D. Harshman, Q. Liu, R.S. Phelps, S.V. Tavtigian, T. Tran, C. Hussey, R. Bell, Y. Miki, J. Swensen, M.R. Hobbs, J. Marks, L.M. Bennett, J.C. Barrett, R.W. Wiseman, D. Shattuck-Eidens. 1994. Localization of the VHR phosphatase gene and its analysis as a candidate for BRCA1. Genomics 23: 163-167.
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A4791 SHATTUCK DECLARATION EXHIBIT 3 Case 1:09-cv-04515-RWSDocument171-3Filed12/23/09Page2of Confusion in the Art on BRCA Location BRCA1 42.5 Mb 39.5 Mb 41.5 Mb 40.5 Mb A4792 D17S78 D17S776 EDH17D D17S702 D17S846 D17S746 D17S855 1A1.3B D17S857
Albertsen et al., Nature Genetics, 7:472-479 (1994)(D16)
Smith et al., Genes Chrom. Cancer, 10:71-76 (1994)(D28) Jones et al.(Solomon Group), Hum. Mol. Genet., 3:1927- 1938 (1994)(D15) Cropp et al., Cancer Research, 54:2548-2551 (1994)
Albertsen and White are co-authors on D16, D28 and the Positions July 2003 genome assembly Cropp paper. Mazoyer is an author on D16 and D28. D17S846 chr17:40,266,349 D17S746 chr17:40,320,027 Case 1:09-cv-04515-RWS Document 171-4 Filed 12/23/09 Page 1 of 2
A4793 SHATTUCK DECLARATION EXHIBIT 4 Case 1:09-cv-04515-RWSDocument171-4Filed12/23/09Page2of BRCA1 Mutations Found in 5 of 8 of Myriad’s Pedigrees Kindreds Cancer Cases Lod (Breast/Ovarian) Score 2082* 51 / 22 9.49 A4794 2099* 36 / 2 2.36 2035* 18 / 1 2.25 1901* 17 / 1 1.50 1925 7 / 0 0.55 1910* 9 / 0 0.36 1911 13 / 0 -0.20 1927 9 / 0 -0.44
*Kindreds in which deleterious mutations were identified Case 1:09-cv-04515-RWS Document 171-6 Filed 12/23/2009 Page 1 of 2
A4795 SHATTUCK DECLARATION EXHIBIT 5 Case 1:09-cv-04515-RWSDocument171-6Filed12/23/2009Page2of Kindred 2082 A4796 Case 1:09-cv-04515-RWS Document 171-7 Filed 12/23/2009 Page 1 of 3
A4797 SHATTUCK DECLARATION EXHIBIT 6 Case 1:09-cv-04515-RWSDocument171-7Filed12/23/2009Page2of3 Assembly of BRCA1 transcript from cDNA fragments
Alu containing exon 4
1 2 Transcripts marked with
A4798 stars are splice variants which switch reading frames 3 resulting in premature stop
1 codons
No full length cDNA was identified, the full coding Splice variants resulting in truncated BRCA1 sequence was deduced 1 Skip exon 8 and 9 missing 121 bp using non-overlapping 2 Includes exon 4 adding 115 bp fragments 3 Skip exon 8, 9 and 10 missing 3547 bp Case 1:09-cv-04515-RWS Document 171-7 Filed 12/23/2009 Page 3 of 3
A4799 Case 1:09-cv-04515-RWS Document 172 Filed 12/23/2009 Page 1 of 10
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
ASSOCIATION FOR MOLECULAR PATHOLOGY; AMERICAN COLLEGE OF MEDICAL GENETICS; AMERICAN SOCIETY FOR CLINICAL PATHOLOGY; COLLEGE OF AMERICAN PATHOLOGISTS; HAIG No. 09 Civ. 4515 (RWS) KAZAZIAN, MD; ARUPA GANGULY, PhD; WENDY CHUNG, MD, PhD; HARRY OSTRER, MD; DAVID ECF Case LEDBETTER, PhD; STEPHEN WARREN, PhD; ELLEN MATLOFF, M.S.; ELSA REICH, M.S.; BREAST CANCER DECLARATION OF ACTION; BOSTON WOMEN'S HEALTH BOOK DR. MARK SKOLNICK COLLECTIVE; LISBETH CERIANI; RUNI LIMARY; GENAE GIRARD; PATRICE FORTUNE; VICKY THOMASON; KATHLEEN RAKER,
Plaintiffs,
-against-
UNITED STATES PATENT AND TRADEMARK OFFICE; MYRIAD GENETICS; LORRIS BETZ, ROGER BOYER, JACK BRITTAIN, ARNOLD B. COMBE, RAYMOND GESTELAND, JAMES U. JENSEN, JOHN KENDALL MORRIS, THOMAS PARKS, DAVID W. PERSHING, and MICHAEL K. YOUNG, in their official capacity as Directors of the University ofUtah Research Foundation,
Defendants.
I, Mark Skolnick, declare:
1. In 1968 I received a B.A. in economics from the University ofCalifornia at Berkeley.
In 1975 I received a Ph.D. in genetics from Stanford University, Stanford, California.
2. I am a founder ofMyriad Genetics, Inc. ("Myriad") and currently serve as Myriad's
ChiefScientific Officer and am a member ofthe Myriad Board ofDirectors. I was personally involved in the identification and characterization ofthe BRCAl and BRCA2 genes. I am one ofthe named inventors in United States Patent Nos. 5,710,001, 5,747,282, & 5,753,441.
1 A4800 Case 1:09-cv-04515-RWS Document 172 Filed 12/23/2009 Page 2 of 10
3. Myriad's discovery ofBRCA1 and BRCA2 was not a trivial exercise. Nor was
Myriad's molecular cloning ofthe genes, as described in detail in the Declaration ofDonna
Shattuck, the beginning ofthe process. Cloning was instead the culminating step in a series of endeavors on my part that lasted nearly thirty years as well as the significant effort ofdozens of members ofthe collaborating research teams.
Connecting Demography with Genetics
4. The first scientific step in my search for the BRCA genes arose from my interest in demography, the study ofhuman populations. The standard wisdom in the 1960's was that this was a small field that should be studied within the context ofsociology or economics. However, in 1967, as a researcher at the Institute for Population and Urban Research at the University ofCalifornia at
Berkeley, I had the insight that demography could be applied to genetics. I further reasoned that demographic research could be successfully merged with genetic research through the study of individuals in the context ofmultigenerational families, rather than the analysis ofaggregate statistics ofpopulations, such as birth rates, death rates, and migration patterns.
5. During a visit to Stanford, I met Dr. LucaL. Cavalli-Sforza, a professor in the
Genetics Department at Stanford and also Director ofthe Institute ofGenetics, in Pavia Italy. Dr.
Cavalli-Sforza was one ofonly a handful ofprominent population geneticists worldwide, and the only one who had understood the value ofconstructing a genealogy. Dr. Cavalli-Sforza offered me the opportunity to pursue the reconstruction ofgenealogies from Parma Valley, Italy to study gene flow patterns by entering the Ph.D. program at Stanford and also moving to Pavia to work with him.
6. Dr. Cavalli-Sforza had been working on this project since 1955 with little success, largely due to inadequate computing capabilities. In just over 5 years at Stanford, Parma and Pavia,
I was able to integrate ideas for heuristic searches ofsolution spaces, which were part ofthe artificial
2 A4801 Case 1:09-cv-04515-RWS Document 172 Filed 12/23/2009 Page 3 of 10
intelligence program at Stanford, with the data available in Italy to create the first computerized
genealogical reconstruction from parish records.
Computerizing Genealogy to Reveal the Genetics of Cancer
7. While doing my research in Pavia and Parma, I was introduced to three Mormons who had come to establish a project to microfilm Italian parish records as they do worldwide. These interactions introduced me to the vast resources ofthe Utah Genealogical Society in Salt Lake City.
Soon after, in 1973, I was asked by organizers ofa cancer center at the University ofUtah how the
Mormon interest in genealogy could be used to provide a unique aspect to their evolving center. I made a proposal that was audacious at the time: reconstruct the entire Utah Mormon Genealogy from three generation family group sheets and link the genealogy to the Utah Cancer Registry which had a record for each cancer case statewide for the current generation.
8. Rather than looking for evidence ofgenetic predisposition by looking for vertical transmission, the standard approach, we looked for horizontal familial excess (siblings and cousins).
A population based study ofcancer in a genealogy was especially innovative because many researchers at the time saw cancer families as merely an interesting and unimportant anomaly. I, however, had the intuition that a population-based analysis ofcancer would reveal the underlying genetics ofcancer. Although this notion may seem trivial now in light oftoday's molecular understanding ofcancer as a genetic disease, the idea was novel at the time.
9. In order to move my cancer research forward I also had to invent new methods for analysis ofthis database. My colleagues and I created new methods for pedigree analysis, appropriate for the complex pedigrees found in Utah, and I created a method called the Genealogical
Index for analysis ofthe Utah Genealogy. The NIH thought that the Utah Genealogy was important and novel enough to merit the creation ofa resource so that it could be ofmaximal utility in the future.
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Extensive Effort Was Needed to Gather Critical Data from Extensive Cancer Kindreds
10. The next step in the process which led to the discovery ofBRCAl and BRCA2 was the development ofa familial cancer screening clinic, which we used extensively for the study of breast and ovarian cancer, among other familial cancers. Our approach required roughly 100 person years ofeffort over two decades to study tens ofthousands ofmembers oflarge families with clusters ofcancer. This resource was ultimately the key to our success.
Technical Innovations Helped in Finding Inherited Disease-Related Genes
11. However, a final innovative step was required in the 1970's-the concept ofthe use ofDNA sequence polymorphism to map the human genome. We devised a technique called
Restriction Fragment Length Polymorphisms (RFLPs) for genetic mapping, which was an important innovative step in the human genome project.
12. My group's activities turned to mapping and cloning disease-causing genes based on these markers. Given the difficulty offinding the genes in cancer families, we turned our attention to easier targets, to become familiar with the techniques required. We successfully mapped and cloned the gene underlying Alport Syndrome, which was known to be on the X chromosome and was one ofthe first genes to be found with this new technology. We also mapped the gene for neurofibromatosis, NFl, but were not the first to clone it because we did not have a large enough team to compete with the groups ofRay White and Francis Collins.
Private Funding and Corporate Structure Were Critical in Finding BRCAI and in Ensuring the Public's Full Benefit from the Discovery
13. The NFl experience provided a valuable lesson to me: ifI hoped to give the public the full benefit ofmy innovate steps and clone important genes I was going to need adequate funding and a research group large enough to compete in the laborious process ofactually finding the
A48034 Case 1:09-cv-04515-RWS Document 172 Filed 12/23/2009 Page 5 of 10
underlying gene. So when in the fall of 1990 the linkage ofa breast cancer predisposing gene,
BRCA1, to chromosome 17 was announced, I knew that before my pioneering work in cancer genetics could help in finding the underlying gene, I was going to need a competitive team.
14. I was also keenly aware that NIH had awarded Francis Collins a massive genome center grant which would allow him to pursue cloning this gene, and that my group would most likely not be given adequate funds to compete. This in fact turned out to be true. My collaborators and I submitted a small grant proposal to pursue BRCAl, but we were turned down. We were told we didn't have the family material to be competitive, when in fact it was common knowledge that we had spent years collecting the most extraordinary breast cancer families in the world. On resubmission, we were awarded a small grant, with the funding committee stating that we should be allowed to compete even though we did not stand a chance to find the gene.
15. In other words, all the technological, informatic and pedigree innovations we had made were in danger ofdying on the vine for lack offunding. Fortunately, I did not wait for NIH funding. I.was acutely aware ofthe diagnostic importance ofBRCAl. I was also aware that many
.other important discoveries had failed to benefit society due to the lack ofan interested corpor~te party. I decided to create a company, Myriad Genetics, to allow our group to couple adequate molecular resources with our exceptional family data to permit us to discover BRCAI and ensure that the public would benefit from our discovery. I am most proud ofthis strategy, perhaps my most important innovation.
16. Myriad Genetics was founded in May of 1991 when my interest in pursuing the discovery ofthe BRCAI gene coincided with the interest ofa local venture capital group in creating a company in the field ofhuman genetics. In August 1992, we were able to attract a major pharmaceutical company as a corporate collaborator and sponsor who provided $4M in corporate research funding and who also purchased $IM in stock. We also were able to interest Dr. Walter
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Gilbert, who had won a Nobel Prize in 1980 for DNA sequencing and was a founder ofBiogen, to join us. He brought many ideas and talents to the company, but further introduced us to an investment firm that in March of 1993 was able to raise about $8.8M in a private placement offering for Myriad. We found the first mutations in BRCAI in the spring of 1994 and completed a second private placement financing of$9M in February of 1995. In October of 1995 we went public and in
December of 1995 we discovered the BRCA2 gene.
17. Research within a company is very different from research in academia. We were acutely aware that ifwe were to fail to find BRCAI we would have had great difficulty in surviving as a company and that our jobs would be lost. Rather than working for individual recognition, we worked for Myriad's recognition, and a spirit ofcooperation, urgency, and comradery existed that is rare in academia. We also knew that ifwe found BRCAI we would be collectively charged with bringing a diagnostic to market that had enormous significance to many women. I was acutely aware ofthe difficulty ofchanging practice in medicine, ofthe great changes that were required, and ofthe value a commercial effort could bring to helping society.
18. ' This is seldom recognized, but rnanymedical discoveries languish without a corporate interest. In the United States, for example, Myriad has incurred great expense and overcome great difficulty to bring about widespread testing. In Europe, where there is no significant corporate interest, testing is infrequent largely because ofthe lack ofa coordinated educational effort.
The strategy worked: Myriad and its collaborators were able to clone and characterize the BRCAI and BRCA2 genes, as detailed in the Declaration ofDonna Shattuck. Our team was smaller and started later than others, but the excellence ofthe team and our focus on the correct areas ofthe genome provided by our family data allowed us to work at a superior pace. Even our competitors recognized the importance ofour achievement. Natalie Angier, Fierce Competition Marked Fervid
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Race For Cancer Gene, N.Y. Times, September 20, 1994, at Cl (Mary-Claire King described it as
"'beautiful' and 'lovely' and deserving ofall the praise it might win.")
The Real Reason for Criticism ofthe BRCA Patents Is Not philosophical or Ethical, but a Simple Case ofFinancial Self-Interest
19. One ofmy first questions when this lawsuit was filed was "Why now?" Myriad discovered the BRCAl and BRCA2 genes 15 and 13 years ago, respectively, and these discoveries were met with no small amount ofpress coverage. Further, researchers and commentators almost immediately began complaining about gene-related patents. See, e.g., D. Suslton,-r 33. Finally,
Plaintiffs allege Myriad threatened Drs. Kazazian and Ganguly with suit over ten years ago. Why was this suit not brought at that time?
20. I believe there are two primary reasons, both ofwhich are essentially economic. The first reason is a fairly obvious one. Plaintiffs did not have enough financial incentive in the mid- to late 1990s to bring suit because BRCA testing was not very prevalent. Only after Myriad invested
-over-$200M raising awareness, improving education, and securing insurance coverage did the financial incentive ofcommercial infringement reach a level that warranted a lawsuit. Plaintiffs mention numerous labs ready to perform BRCA testing. What Plaintiffs fail to mention is that (1) these labs stand to make a substantial profit doing this kind offree-riding testing and (2) most ofthis testing would not be possible without Myriad's investment in patient and physician awareness and in insurance reimbursement.
21. I believe a second more subtle reason drives many opponents ofgene-related patents: academic protectionism. Myriad's detractors exhibit strange behavior, which is in fact understandable when properly analyzed. They lament patenting even though they patent their discoveries. They claim our efforts are trivial, without any analysis ofwhat led to our success. They utilize the genomic equipment that patents protect, and the patented computer equipment and
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UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
) ) ASSOCIATION FOR MOLECULAR ) PATHOLOGY; AMERICAN COLLEGE OF ) MEDICAL GENETICS; AMERICAN SOCIETY ) Civil Action No. 09-4515 (RWS) FOR CLINICAL PATHOLOGY; COLLEGE OF ) AMERICAN PATHOLOGISTS; HAIG ) KAZAZIAN, MD; ARUPA GANGULY, PhD; ) WENDY CHUNG, MD, PhD; HARRY OSTRER, ) MD; DAVID LEDBETTER, PhD; STEPHEN WARREN, PhD; ELLEN MATLOFF, M.S.; ) ELSA REICH, M.S.; BREAST CANCER ) ACTION; BOSTON WOMEN’S HEALTH ) BOOK COLLECTIVE; LISBETH CERIANI; ) RUNI LIMARY; GENAE GIRARD; PATRICE ) FORTUNE; VICKY THOMASON; KATHLEEN ) RAKER, ) ) ) Plaintiffs, ) ) v. ) ) UNITED STATES PATENT AND ) TRADEMARK OFFICE; MYRIAD GENETICS; ) LORRIS BETZ, ROGER BOYER, JACK ) BRITTAIN, ARNOLD B. COMBE, RAYMOND ) GESTELAND, JAMES U. JENSEN, JOHN ) KENDALL MORRIS, THOMAS PARKS, ) DAVID W. PERSHING, and MICHAEL K. ) YOUNG, in their official capacity as Directors of ) the University of Utah Research Foundation, )
Defendants.
DECLARATION OF JOSEPH STRAUS
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I, Joseph Straus, hereby declare that:
1. I am currently at the Max-Planck-Institute for Intellectual Property, Competition and Tax
Law, Munich, as a Director Emeritus.
2. I studied law at the University of Ljubljana, Slovenia, receiving a law-diploma in 1962. I continued my studies at the University of Munich, Germany, receiving first a certificate in
German private and public law in 1963 and a doctorate of juridical science in 1968. In 1986, I attained habilitation at the University of Ljubljana. I was awarded the honorary grades of a
Doctor Honoris Causa by the University of Ljubljana in 2001 and by the University of
Kragujevac, Serbia, in 2003.
3. From 1968 until 1977, but partly already before, I was in private practice. Since 1977, I have practiced at the Max-Planck-Institute for Foreign and International Patent, Copyright and
Competition Law in Munich, which was renamed in 2002 as the Max-Planck-Institute for
Intellectual Property, Competition and Tax Law. At that Institute, I was first the Head of the
Department primarily responsible for patents and I have been a Director there since 2001 until my retirement as of end of 2008.
4. Between 2001 and 2004, I was the Managing Director of the Institute. Until the end of
2008, I was also the Chair of the Managing Board of the Munich Intellectual Property Law
Center (“MIPLC”), which I co-founded in 2003. My main area of interest is patent law, and in particular, the field of chemical and biotech inventions.
5. The academic positions that I currently hold include Nominated Full Professor for
Intellectual Property Law, University of Ljubljana (since 1986); Professor of Law, University of
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19. I have reviewed the following documents: Plaintiffs’ Memorandum of Law in Support of
Motion for Summary Judgment; Plaintiffs’ Rule 56.1 Statement of Material Facts; Declaration of
Sir John E. Sulston, Ph.D. of August 17, 2009; Declaration of Myles W. Jackson of August 18,
2009; and United States Patent Nos. 5,747,282 (“the ’282 patent”); 5,837,492 (“the ’492 patent”); 5,693,473 (“the ’474 patent”); 5,710,001 (“the ’001 patent”); 5,753,441 (“the ’441 patent”); 6,033,857 (“the ’857 patent”), (collectively “Myriad patents”); Utility Examination
Guidelines, 66 Fed. Reg. 1092 (January 5, 2001), Ex. D (“2001 Guidelines”); Decision of June 6,
2007 of the Opposition Division in connection with the EP 0 705 903 patent (granted May 23,
2001), Ex. E; Board of Appeal Decision T 0666/05 of November 13, 2008 in connection with the
EP 0 705 903 patent, Ex. F; Board of Appeal Decision T 1213/05 of September 27, 2007 in connection with the EP 0 705 902 (granted November 28, 2001), Ex. G; Straus et al., “Genetic
Inventions and Patent Law – An Empirical Survey of Selected German R & D Institutions,”
Published by Max Planck Institute for Intellectual Property, Competition and Tax Law, Munich
2004, Ex. H; Walsh et al., 2005, Science, “View from the Bench: Patents and Material
Transfers,” 309:2002-03, Ex. I (“Walsh 2005”).
I. ISOLATED NUCLEIC ACID PATENTS – A EUROPEAN PERSPECTIVE
A. SCIENTIFIC BACKGROUND
20. Genes are to be understood as fundamental physical and functional units of heredity.
Genes are located in a particular position on a particular chromosome. Genes encode specific functional products, such as a protein or RNA molecule. Genes are of double nature: On the one hand, they are chemical substances or molecules. On the other hand, they are physical carriers of information, i.e., where the actual biological function of this information is coding for proteins.
Thus, inherently genes are multifunctional.
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21. Since the completion of the raw sequence of the human genome not only do we know that we only have some 20,000–25,000 genes, but also that some 40 per cent of the gene products are alternatively spliced. Therefore, genes encode for more than one protein, depending on the combination of exons read in an open reading frame, or even depending on the direction in which the exons are read. Thus, many genes are rendered multifunctional based on this splicing mechanism. Moreover, DNA molecules as physical carriers and information are multifunctional under another important aspect: they hybridize to other DNA molecules, a property I would like to describe as an actually non-biological function. Thus, by virtue of this property, DNA molecules can be used, for instance, as DNA probes, and diagnostic markers.
B. WHAT CONSTITUTES AN INVENTION IN THE CASE OF ,62/$7(' 18&/(,&$&,'PATENTS - A COMPARATIVE ANALYSIS WITH OTHER PRODUCT INVENTIONS 22. Generally, product inventions relate to: synthetic molecules produced in a lab; chemical substances isolated from natural environment; and DNA molecules of human origin, respectively. I will discuss whether essential differences exist between these different forms of chemical compounds, and secondly, if there are such differences, whether they require different legal treatment.
1. Synthetic Molecules
23. Synthetically produced new chemical substances are molecules of an arbitrary formula.
They are new in an absolute sense and are in principle without an actual biological function.
Such molecules are producible in arbitrary – unlimited variations. Finding a first surprising property, for instance a therapeutic effect, of such new, i.e., not pre-existing molecule, even if routinely produced or detected, justifies patent protection. In other words, the essence of the
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3. DNA Molecules
25. As indicated above, human genes are biochemical substances as well as physical carriers of information. They have one or more related or unrelated actual, pre-determined biological function(s). They code for various proteins, for instance receptors, structural or regulatory proteins, etc. They are available – producible – only in limited numbers. The actual goal of research in this area is aimed at identifying and deciphering their actual nucleotide sequences, i.e., the exact location and sequence of the gene, in order to find and exploit its actual and pre- determined biological function(s). This information can be used to make primers and probes for use in diagnostics.
26. Once the actual nucleotide sequences, i.e., the exact location and sequence of the gene, is identified and deciphered, the focus of the invention should be shifted from the “making available” of the DNA, to finding the surprising property(ies), function(s). The identification of a specific open reading frame of a gene will involve “inventive” activity. Thus, “making available of the sequence” is playing the same role as in the case of synthetic molecules and chemical substances isolated from their natural environment. Isolation of such DNA molecules can thus constitute an invention fulfilling all the patentability requirements and deserving
“absolute” protection.
II. A UNIFORM WORLD-WIDE APPROACH TO PATENTING ISOLATED NUCLEIC ACIDS
27. Although the appropriateness of granting patents on isolated DNA and other isolated nucleic acids continues to be publicly debated, the position of the official patent authorities in
OECD has been clear and consistent for some time. From the standpoint of patent offices in
Europe, especially the European Patent Office (“EPO”), genetic material is not seen as a special
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TAVTIGIAN DECLARATION EXHIBIT 1
Curriculum Vitae Last Updated: 09/18/09 PERSONAL DATA Name: Sean Vahram Tavtigian Birth Place: Columbus, OH, USA Citizenship: USA
EDUCATION Years Degree(s) Institution (Area of Study) City, State, Country 1980-1984 B.A. Pomona College (Biology & Chemistry, joint major) Claremont, CA, USA 1985-1992 Ph.D. California Institute of Technology (Molecular biology and biochemistry) Pasadena, CA, USA
ACADEMIC HISTORY Oncological Sciences, University of Utah School of Medicine 2009 to Present Associate professor (Research)
PROFESSIONAL EXPERIENCE Full Time Positions Inclusive years Title, Institution, City, State, Country 1993 to 1996 Senior Scientist, Myriad Genetics Inc, Salt Lake City, UT, USA 1996 to 1998 Director of Cancer Research, Myriad Genetics Inc, Salt Lake City, UT, USA 1998 to 1999 Vice President and Director of Cancer Research, Myriad Genetics Inc, Salt Lake City, UT, USA 1999 to 2002 Vice President, Director of Cancer Research, and Director of the (research) Sequencing and Genotyping Core, Myriad Genetics Inc, Salt Lake City, UT, USA 2002 to 2009 Head of the Genetic Cancer Susceptibility Group, International Agency for Research on Cancer (WHO), Lyon, FRANCE
Part Time Positions Inclusive years Title, Institution, City, State, Country 1994-1996 Adjunct lecturer, University of Utah Dept of Biology, Salt Lake City, UT, USA
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TAVTIGIAN DECLARATION EXHIBIT 1
Editorial Experience Inclusive years Title, Institution, City, State, Country 2009 to present Communicating Editor, Human Mutation, Hoboken, NJ, USA
SCHOLASTIC HONORS Inclusive Honor Type, Institution, City, State, Country years 1984 Phi Beta Kappa, Pomona College, Claremont, CA, USA 1984 Sigma Xi, Pomona College, Claremont, CA, USA 1984 NCAA Division III Academic All-American, Wrestling, Pomona College, Claremont, CA, USA
ADMINISTRATIVE EXPERIENCE
Professional & Scientific Committees Inclusive years Title/Role, Institution, City, State, Country 2001 to 2004 Member, University of Montana Center for Environmental Health Sciences Scientific Advisory Committee, University of Montana, Missoula, MO, USA 2005 to 2009 Member, IARC Cabinet, International Agency for Research on Cancer, Lyon, France
Grant Review Committee/Study Sections Inclusive years Title/Role, Institution/Organization, City, State, Country 1997 Reviewer, Department of Defense Breast Cancer Research Program, Molecular Biology panel, Bethesda, MD, USA 1998 Reviewer, California Breast Cancer Research Program, Molecular Biology panel, San Francisco, CA, USA 1998 Reviewer, Department of Defense Breast Cancer Research Program, Molecular Biology panel, Bethesda, MD, USA 2004 Reviewer, German National Genome Research Network Review Process, Bonn, Germany 2005-2008 Reviewer, Evaluation of European Projects in the field of cancer biology and genetics, European Commission, Brussels, Belgium 2005-2006 Ad hoc Reviewer, Cancer Research UK, London, UK
Symposium/Meeting Chair/Coordinator Inclusive years Title/Role, Institution/Organization/Committee, City, State, Country 2007 Meeting organizer and co-chair, IARC meeting on “Expression array analyses in breast cancer taxonomy”, International Agency for
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Research on Cancer, Lyon, France 2008 Working Group organizer and chair, IARC Working Group on “Unclassified genetic variants in high-risk cancer susceptibility genes”, International Agency for Research on Cancer, Lyon, France 2009 Working Group organizer and co-chair, IARC Working Group on “Unclassified genetic variants in the mismatch repair genes”, International Agency for Research on Cancer, Lyon, France
ACTIVE MEMBERSHIPS IN PROFESSIONAL SOCIETIES Inclusive Title, Institution/Organization, Activity years 1999-present Member, Breast Cancer Information Core (BIC) Steering Committee, coordination of studies on BRCA1 & BRCA2 – particularly analyses of unclassified sequence 2000 variants. 2008-present Chair, Breast Cancer Information Core (BIC) Steering Committee. Member, International Society for Gastrointestinal Hereditary Tumours (InSIGHT) MMR Gene Variant Interpretation Committee, analysis of unclassified genetic variants in the mismatch repair genes.
FUNDING
Active Grants 09/30/2007-06/30/2012 R01 CA121245. “Common and rare sequence variants in breast cancer risk”. Direct costs: US$ 1,733,454 (total over 5 years) Funding Source: US NCI Role: Principal Investigator 4/01/2009-03/31/2014 CRN-87521-IC0898832. “ CIHR Team in prediction and communication of familial risks of breast cancer”. Direct cost funding to Tavtigian lab: CDN$ 47,790 per year. Funding Source: Canadian CIHR Role: Co-Investigator 3/15/2007-2/28/2012 R01 CA116167. “BRCA1 and BRCA2 missense mutations and breast cancer”. Direct cost funding to Tavtigian lab: $ 15,000 per year. (on paper, my contribution ends at the end of Year 3, but the PI is very likely to continue my funding through the end of the grant) Funding source: US NCI Role: Co-Investigator
Past Grants 01/06/2005-31/05/2008 EC Contract 4326 (Cardis). “GENE-RAD-RISK – Radiation exposure at an early age: impact of genotype on breast cancer”. Direct cost Page 3 of 18
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TAVTIGIAN DECLARATION EXHIBIT 1
funding to the Tavtigian lab: US$ 242,900. Funding Source: European Commision Role: Co-Investigator 6/12/2004-5/12/2007 W81XWH-05-01-0156 (Kaaks). “Genetic variation in the mTOR pathway and prostate cancer risk: A study within the European Prospective Investigation Into Cancer and Nutrition (EPIC)”. Direct cost funding to the Tavtigian lab: US$ 122,546. Funding source: USAMRAA, Fort Detrick Role: Co-Investigator 01/30/04-02/28/07 W81XWH-04-1-0271 (Kaaks). “Energy Metabolism and Breast Cancer – The role of fatty acid synthesis genes”. Direct cost funding to the Tavtigian lab: US$ 122,546. Funding source: USAMRAA, Fort Detrick Role: Co-Investigator 06/26/2003-06/26/2005 Contract No 7792 (Tavtigian). “Classification of missense variants in high risk cancer susceptibility genes”. Direct cost funding to the Tavtigian lab: € 30,000. Funding source: (French) Association pour la Recherche sur le Cancer. Role: Principal Investigator.
TEACHING RESPONSIBILITIES/ASSIGNMENTS
Courses Directed 1994-1996. General Biology, Biol 101. Department of Biology, University of Utah. Taught a night school section of the course, 1 quarter per year. Approximately 30 undergraduate students.
Course Lectures 1998, 2000, 2002. Human Genetics and Genomics, Biol 188. Division of Biology, California Institute of Technology. Gave two guest lectures per year. Approximately 30 students, most undergraduate and some graduate. 2002-2003. 7th and 8th Course in Cancer Genetics. European Genetics Foundation and IARC. Gave two lectures per course and lead a workshop. Approximately 50 students, both graduate students and physicians interested in genetic medicine. 2003, 2006, 2007. IARC summer course in cancer epidemiology. International Agency for Research on Cancer. Gave two lectures per course. Approximately 30 students, most epidemiologists from middle income countries around the world.
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2006. Familial Cancer Course. School of Oncology, Madrid, Spain. Gave one lecture on the genetics of prostate cancer. Approximately 50 students, both graduate students and physicians interested in genetic medicine.
Graduate Student Committees 2003. Member, Laure PERRIN-VIDOZ PhD Committee. “Etude de la degradation des ARN messagers porteurs d’un codon de terminasion premature: implication dans la predisposition genetique au cancer du sein & de l’ovaire chez les patients porteurs de mutations germinales du gene BRCA1”. University Claude Bernard – Lyon1. 2006-present. Thesis advisor, Tu Nguyen-Dumont. “Study of differential allelic expression in breast cancer susceptibility genes”, University Claude Bernard - Lyon I 2008-present. Thesis advis for Maxime Vallee. “Development of an Internet tool to assess genetic variants of unknown significance in breast cancer susceptibility genes”, University Claude Bernard - Lyon I.
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PEER-REVIEWED JOURNAL ARTICLES 1. Fujimura, R. K., Tavtigian, S. V., Choy, T. L., & Roop, B. C. (1985). Physical locus of the DNA polymerase gene and genetic maps of bacteriophage T5 mutants. J Virol, 53(2):495-50. 2. Tavtigian, S. V. , Zabludoff, S. D., & Wold, B. J. (1994). Cloning of mid-G1 serum response genes and identification of a subset regulated by conditional myc expression. Mol Biol Cell, 5:375-388 3. Kamb, A., Gruis, N.A., Weaver-Feldhaus, J., Liu, Q., Harshman, K., Tavtigian, S.V., Old, L.J., Stockert, E., Day, R.S., Johnson, B., & Skolnick, M.H. (1994). A Cell Cycle Regulator Potentially Involved in Genesis of Many Tumor Types. Science, 264:436-440. 4. Kamb, A., Futreal, P.A., Rosenthal, J., Cochran, C., Harshman, K.D., Liu, Q., Phelps, R.S., Tavtigian, S.V., Tran, T., Hussey, C., Bell, R., Miki, Y., Swensen, J., Hobbs, M.R., Marks, J., Bennett, L.M., Barret, J.C., Wiseman, R.W., & Shattuck-Eidens, D. (1994). Localization of the VHR Phosphatase Gene and Its Analysis as a Candidate for BRCA1. Genomics, 23:163. 5. Neuhausen, S.L., Swensen, J., Miki, Y., Liu, Q., Tavtigian, S., Shattuck-Eidens, D., …12 authors...Skolnick, M.H., & Goldgar, D.E. (1994). A P1-based physical map of the region from D17S776 to D17S78 containing the breast cancer susceptibility gene BRCA1. Hum Mol Genet, 3:1919-1926. 6. Futreal, P.A., Cochran, C., Rosenthal, J., Miki, Y., Swensen, J., Hobbs, M., Bennett L.M., Haugen-Strano, A., Marks, J., Barrett, J.C., Tavtigian, S.V., Shattuck-Eidens, D., Kamb, A., Skolnick, M., & Wiseman, R.W. (1994). Isolation of a Diverged Homeobox Gene, MOX1, from the BRCA1 Region on 17q21 by Solution Hybrid Capture. Hum Mol Genet, 3:1359. 7. Kamb, A., Liu, Q., Harshman, K., Tavtigian, S.V., & Skolnick, M.H. (1994) Rates of p16 (MTS1) Mutations in Primary Tumors with 9p Loss (response). Science, 265:416. 8. Miki, Y., Swensen, J., Shattuck-Eidens, D., Futreal, P.A., Harshman, K., Tavtigian, S.V., Liu, Q., Cochran, C., Bennett, L.M., Ding, W., Bell, R., Rosenthal, J., Hussey, C., Tran, T., McClure, M., Frye, C., Hattier, T., Phelps, R., Haugen-Strano, A., Katcher, H., Yakumo, K., Gholami, Z., Shaffer, D., Stone, S., Bayer, S., Wray, C., Bogden, R., Dayananth, P., Ward, J., Tonin, P., Narod, S., Bristow, P.K., Norris, F.H., Helvering, L., Morrison, P., Rosteck, P., Lai, M., Barrett, J.C., Lewis, C., Neuhausen, S., Cannon-Albright, L., Goldgar, D., Wiseman, R., Kamb, A., & Skolnick, M.H. (1994). A strong candidate for the breast and ovarian cancer susceptibility gene BRCA1. Science, 266(5182):66-71. 9. Hattier, T., Bell, R., Shaffer, D., Stone, S., Phelps, R., Tavtigian, S.V., Skolnick, M.H., Shattuck-Eidens, D., & Kamb, A. (1995). Monitoring the efficacy of Hybrid Selection During Positional Cloning: The Search for BRCA1. Mamm Genome, 6:873-879. 10. Stone, S., Dayananth, P., Jiang, P., Weaver-Feldhaus, J.M., Tavtigian, S.V., & Kamb, A. (1995). Genomic Structure, Expression, and Mutational Analysis of the P15 (MTS2) Gene. Oncogene, 11:987-991. 11. Stone, S., Jiang, P., Dayananth, P., Tavtigian, S.V., Katcher, H., Parry, D., Peters, G., & Kamb, (1995). A. Complex Structure and Regulation of the P16 (MTS1) Locus. Cancer Res, 55:2988-2994.
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12. Couch, F. J., Farid, L. M., DeShano, M L., Tavtigian, S. V., Calzone, K., Campeau, L., Peng, Y., Bogden, B., Chen, Q., Neuhausen, S., Shattuck-Eidens, D., Godwin, A. K., Daly, M., Radford, D. M., Sedlacek, S., Rommens, J., Simard, J., Garber, J., Merajver, S. & Weber, B. L. (1996) BRCA2 germline mutations in male breast cancer cases and breast cancer families. Nature Genet, 13:123-125. 13. Tavtigian, S.V., Simard, J., Rommens, J., Couch, F., Shattuck-Eidens, D., Neuhausen, S., Merajver, S., Thorlacius, S., Offit, K., Stoppa-Lyonnet, D., Belanger, C., Bell, R., Berry, S., Bogden, R., Chen, Q., Davis, T., Dumont, M., Frye, C., Hattier, T., Jammulapati, S., Janecki, T., Jiang, P., Kehrer, R., Leblanc, J.F., Mitchell, J.T., McArthur-Morrison, J., Nguyen, K., Peng, Y., Samson, C., Schroeder, M., Snyder, S.C., Steele, L., Stringfellow, M., Stroup, C., Swedlund, B., Swensen, J., Teng, D., Thomas, A., Tran, T., Trant, T., Tranchant, M., Weaver-Feldhaus, J., Wong, A.K.C., Shizuya, H., Eyfjord, J.E., Cannon- Albright, L., Labrie, F., Skolnick, M.H., Weber, B., Kamb, A. & Goldgar, D.E. (1996). The complete BRCA2 gene and mutations in chromosome 13q-Linked kindreds. Nature Genet, 12:333-337. 14. Teng, D.H.F., Bogden, R., Mitchell, J., Baumgard, M., Bell, R., Berry, S., Davis.T., Ha, P.C., Kehrer, R., Jammulapati, S., Chen, Q., Offit, K., Skolnick, M.H., Tavtigian, S.V., Jhanwar, S., Swedlund, B.,Wong, A.K.C., & Kamb, A. (1996). Low incidence of BRCA2 mutations in breast carcinoma and other cancers. Nature Genet, 13:241-244. 15. Couch, F.J., Rommens, J.M., Neuhausen, S.L.,.Belanger, C., Dumont, M., Abel, K., Bell, R., Berry, S., Bogden, R., Cannon-Albright, L., Farid, L., Frye, C., Hattier, T., Janecki, T., Jiang, P., Kehrer, R., Leblanc, J.F., McArthur-Morisson, J., McSweeney, D., Miki, Y., Peng, Y., Samson, C., Schroeder, M., Snyder, S.C., Stringfellow, M., Stroup, C., Swedlund, B., Swensen, J., Teng, D., Thakur, S., Tran, T., Tranchant, M., Welver- Feldhaus, J., Wong, A.K.C., Shizuya, H., Labrie, F., Skolnick, M.H., Goldgar, D.E., Kamb, A., Weber, B.L., Tavtigian, S.V.*, & Simard, J. * (1996). Generation of an integrated transcription map of the BRCA2 region on chromosome 13q12-13. Genomics, 36:86-99. 1996. *Authors contributed equally to this work. 16. Thorlacius S, Olafsdottir G, Tryggvadottir L, Neuhausen S, Jonasson JG, Tavtigian SV, Tulinius H, Ogmundsdottir HM, & Eyfjord JE. (1996) A single BRCA2 mutation in male and female breast cancer families from Iceland with varied cancer phenotypes. Nature Genet, 13:117-119. 17. Steck, P.A., Pershouse, M.A., Jasser S.A., Yung, A., Lin, H., Ligon, A.H., Langford, L.A., Baumgard, M.L., Hattier, T., Davis, T., Frye, C., Hu, R., Swedlund, B., Teng, D.H.F., & Tavtigian, S.V. (1997). Identification of a candidate tumour suppressor gene, MMAC1, at chromosome 10q23.3 that is mutated in multiple advanced cancers. Nature Genet, 15: 356-362. 18. Tsou H.C., Teng D.H., Ping X.L., Brancolini V., Davis T., Hu ., Xie X.X., Gruener A.C., Schrager C.A., Christiano A.M., Eng C., Steck P., Ott J., Tavtigian S.V., & Peacocke M. (1997) The role of MMAC1 mutations in early-onset breast cancer: causative in association with Cowden syndrome and excluded in BRCA1-negative cases. Am J Hum Genet, 61:1036-1043. 19. Shattuck-Eidens, D., Oliphant, A., McClure, M., McBride, C., Gupte, J., Rubano, T, Pruss,
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30. Adey, N. B., Huang, L., Ormonde, P. A., Baumgard, M. L., Pero, R., Byreddy, D. V., Tavtigian, S. V. &, Bartel, P. L. (2000). Threonine phosphorylation of the MMAC1/PTEN PDZ binding domain both inhibits and stimulates PDZ binding. Cancer Res, 60:35-37. 31. Wong, A. K., Shanahan, F., Chen, Y., Lian, L., Ha, P., Hendricks, K., Ghaffari, S., Iliev, D., Penn, B., Woodland, A. M., Smith, R., Salada, G., Carillo, A., Laity, K., Gupte, J., Swedlund, B., Tavtigian, S. V., Teng, D. H., & Lees, E. (2000). BRG1, a component of the SWI-SNF complex, is mutated in multiple human tumor cell lines. Cancer Res, 60:6171- 6177. 32. Verhagen, P. C., Zhu, X. L., Rohr, L. R., Cannon-Albright, L. A., Tavtigian, S. V., Skolnick, M. H., & Brothman, A. R. (2000). Microdissection, DOP-PCR, and comparative genomic hybridization of paraffin-embedded familial prostate cancers. Cancer Genetics and Cytogenetics, 122:43-48. 33. Tavtigian, S. V., Simard, J., Teng, D. H-F., Abtin, V., Baumgard, M., Beck, A., Camp, N. J., Carillo, A. R., Chen, Y., Dayananth, P., Desrochers, M., Dumont, M., Farnham, J. M., Frank, D., Frye, C., Ghaffari, S., Gupte, J. S., Hu, R., Iliev, D., Janecki, T., Kort, E. N., Laity, K. E., Leavitt, A., Leblanc, G., McArthur-Morrison, J., Pederson, A., Penn, B., Peterson, K. T., Reid, J. E., Richards, S., Schroeder, M., Smith, R., Snyder, S. C., Swedlund, B., Swensen, J., Thomas, A., Tranchant, M., Woodland, A. M., Labrie, F., Skolnick, M. H., Neuhausen, S., Rommens, J., & Cannon-Albright, L. A. (2001). A strong candidate prostate cancer susceptibility gene at chromosome 17p. Nature Genet, 27(2): 172-180. 34. Teng, D. H-F., Chen, Y., Lian, L., Ha, P. C., Tavtigian, S. V., & Wong, A. K. C. (2001) Mutation analysis of 268 candidate genes in human tumor cell lines. Genomics, 74(3): 352-364. 35. Vesprini, D., Nam, R. K., Trachtenberg, J., Jewett, M. A., Tavtigian, S. V., Emami, M., Ho, M., Toi, A., & Narod, S. A. (2001). HPC2 variants and screen-detected prostate cancer. Am J Hum Genet, 68(4): 912-917. 36. Eng, C, Brody, L. C., Wagner, T. M., Devilee, P., Vijg, J., Szabo, C., Tavtigian, S. V., Nathanson, K. L., Ostrander, E., & Frank, T. S. (2001). Interpreting epidemiological research: blinded comparison of methods used to estimate the prevalence of inherited mutations in BRCA1. J Med Genet, 38(12): 824-833. 37. Fujiwara, H., Emi, M., Nagai, H., Nishimura, T., Konishi, N., Kubota, Y., Ichikawa, T., Takahashi, S., Shuin, T., Habuchi, T., Ogawa, O., Inoue, K., Skolnick, M. H., Swensen, J., Camp, N. J., & Tavtigian, S. V. (2002). Association of common missense changes in ELAC2 ( HPC2) with prostate cancer in a Japanese case-control series. J Hum Genet, 47(12):641-648. 38. Frank, T. S., Deffenbaugh, A. M., Reid, J. E., Hulick, M., Ward, B. E., Lingenfelter, B., Gumpper, K. L., Scholl, T., Tavtigian, S. V., Pruss, D. R., & Critchfield, G. C. (2002). Clinical characteristics of individuals with germline mutations in BRCA1 and BRCA2: analysis of 10,000 individuals. J Clin Oncol, 20:1480-1490. 39. Camp, N. J. & Tavtigian, S. V. (2002). Meta Analysis of Associations of the Ser217Leu and Ala541Thr variants in ELAC2 (HPC2) and Prostate Cancer. Am J Hum Genet, 71:1475-1478. 40. Goff, S. A., Ricke, D., Lan, T. H., Presting, G., Wang, R., Dunn, M., Glazebrook, J., Page 9 of 18
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Sessions, A., Oeller, P., Varma, H., Hadley, D., Hutchison, D., Martin, C., Katagiri, F., Lange, B. M., Moughamer, T., Xia, Y., Budworth, P., Zhong, J., Miguel, T., Paszkowski, U., Zhang, S., Colbert, M., Sun, W. L., Chen, L., Cooper, B., Park, S., Wood, T. C., Mao, L., Quail, P., Wing, R., Dean, R., Yu, Y., Zharkikh, A., Shen, R., Sahasrabudhe, S., Thomas, A., Cannings, R., Gutin, A., Pruss, D., Reid, J., Tavtigian, S., Mitchell, J., Eldredge, G., Scholl, T, Miller, R. M., Bhatnagar, S., Adey, N., Rubano, T., Tusneem, N., Robinson, R., Feldhaus, J., Macalma, T., Oliphant, A., & Briggs, S. (2002). A draft sequence of the rice genome (Oryza sativa L. ssp. japonica). Science, 296(5565):92-100. 41. Aparicio, S., Chapman, J., Stupka, E., Putnam, N., Chia, J. M., Dehal, P., Christoffels, A., Rash, S., Hoon, S., Smit, A., Gelpke, M. D., Roach, J., Oh, T., Ho, I. Y, Wong, M., Detter, C., Verhoef, F., Predki, P., Tay, A., Lucas, S., Richardson, P., Smith, S. F., Clark, M. S., Edwards, Y. J., Doggett, N., Zharkikh, A,, Tavtigian, S. V., Pruss, D., Barnstead, M., Evans, C., Baden, H., Powell, J., Glusman, G., Rowen, L., Hood, L., Tan, Y. H., Elgar, G., Hawkins, T., Venkatesh, B., Rokhsar, D., & Brenner, S. (2002). Whole-genome shotgun assembly and analysis of the genome of Fugu rubripes. Science. 297(5585):1301-1310. 42. Korver, W., Schroeder, M., Guevara, C., Chen, Y., Neuteboom, S., Bookstein, R., Tavtigian, S. V., & Lees, E. (2003). The product of the prostate cancer susceptibility gene ELAC2 localizes to the mitotic spindle and interacts with the g-tubulin complex. Int J Cancer 104(3):283-288. 43. Abkevich, V., Zharkikh, A., Deffenbaugh, A. M., Frank, D., Chen, Y., Shattuck, D., Skolnick, M. H., Gutin, A., & Tavtigian, S. V. (2004) Analysis of missense variation in human BRCA1 in the context of interspecific sequence variation. J. Med. Genet. 41(7):492-507. 44. Goldgar, D. E., Easton, D. F., Deffenbaugh, A. M., Monteiro, A., Tavtigian, S. V., Couch, F. J., & the Breast Cancer Information Core (BIC) Steering Committee. (2004). Integrated Evaluation of DNA Sequence Variants of Unknown Clinical Significance: Application to BRCA1 and BRCA2. Am. J. Hum. Genet., 75(4):535-544. 45. Dumont, M., Frank, D., Moisan, A. M., Tranchant, M., Soucy, P., Breton, R., Labrie, F., Tavtigian, S. V., & Simard, J. (2004). Structure of primate and rodent orthologs of the prostate cancer susceptibility gene ELAC2. Biochimica Et Byophysica Acta, 1679(3):230- 247. 46. Camp, N. J., Swensen, J., Horne, B. D., Farnham, J. M., Thomas, A., Cannon-Albright, L.A.,& Tavtigian, S. V. (2005). Characterization of Linkage Disequilibrium Structure, Mutation History and tagging SNPs and their Use in Association Analyses: ELAC2 and Familial Early-onset Prostate Cancer. Genet Epidemiol, 28(3):232-243. 47. Farnham, J. M., Camp, N., Swensen, J., Tavtigian, S. V., & Cannon-Albright L. (2005). Confirmation of the HPCX prostate cancer predisposition locus in large Utah prostate cancer pedigrees. Hum. Genet,. 116(3):179-185. 48. Wu, K., Hinson, S. R., Ohashi, A., Farrugia, D., Wendt, P., Tavtigian, S. V., Deffenbaugh, A., Goldgar, D. E. & Couch, F. J. (2005). Functional evaluation and cancer risk assessment of BRCA2 unclassified variants. Cancer Res. 65(2):417-26. 49. Phelan, C. M., Api, V., Tice, B., Favis, R., Kwan, E., Barany, F., Manoukian, S., Radice, P., van der Luijt, R. B., van Nesselrooij, B. P. M., Chenevix-Trench, G., KconFab, Caldes, T., de La Hoya, M., Lindquist, S., Tavtigian, S., Goldgar, D., Borg, A., Narod, S. A., & Page 10 of 18
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Monteiro, A. N. A. (2005). Classification of BRCA1 missense variants of unknown clinical significance. J. Med. Genet., 42(2):138-46 50. Chen, Y., Beck, A., Davenport, C. Chen, Y., Shattuck, D. & Tavtigian, S. V. (2005). Characterization of TRZ1, a yeast homolog of the human candidate prostate cancer susceptibility gene ELAC2. BMC Mol Biol, 6(1):12. 51. Al-Alem, U, Li, C., Forey, N., Relouzat, F., Fondanèche, M.-C., Tavtigian, S. V., Wang, Z.-Q., Latour, S. & Yin, L. (2005). Impaired Ig class in Mice Deficient for the X-Linked Lymphoproliferative Disease Gene sap. Blood, 106: 2069-2075. 52. Pettigrew, C., Wayte, N., Lovelock, P. K., Tavtigian, S. V., Chenevix-Trench, G., Spurdle, A. B., & Brown, M. A. (2005). Evolutionary conservation analysis increases the colocalization of predicted ESEs in the BRCA1 gene with missense sequence changes and in-frame deletions, but not polymorphisms. Breast Cancer Res, 7: R929-R939. 53. Lovelock, P. K., Healey, S., Au, W., Sum, E. Y., Tesoriero, A., Wong, E. M., Hinson, S., Brinkworth, R., Bekessy, A., Diez, O., Izatt, L., Solomon, E., Jenkins, M., Renard, H., Hopper, J., Waring, P., Tavtigian, S. V., Goldgar, D., Lindeman, G. J., Visvader, J. E., Couch, F. J., Henderson, B. R., Southey, M., Chenevix-Trench, G., Spurdle, A. B., & Brown, M. A. (2006). Genetic, functional, and histopathological evaluation of two C- terminal BRCA1 missense variants. J Med Genet, 43(1): 74-83. 54. Ware, M. D., de Silva, D., Sinilnikova, O. M., Stoppa-Lyonnet, D., Tavtigian, S. V., & Mazoyer, S. (2006). Does nonsense-mediated mRNA decay explain the ovarian cancer cluster region of the BRCA2 gene? Oncogene, 25(2):323-328. 55. Chenevix-Trench, G., Healey, S., Lakhani, S., Waring, P., Cummings, M., Brinkworth, R., Deffenbaugh, A. M., Burbidge, L. A., Pruss, D., Judkins, T., Scholl, T., Bekessy, A., Marsh, A., Lovelock, P., Wong, M., Tesoriero, A., Renard, H., Southey, M., Hopper, J. L., Yannoukakos, K., Brown, M., Easton, D., Tavtigian, S. V., Goldgar, D., & Spurdle, A. B. (2006). Genetic and histopathologic evaluation of BRCA1 and BRCA2 DNA sequence variants of unknown clinical significance. Cancer Res, 66(4): 2019-27 56. Tavtigian, S. V., Deffenbaugh, A. M., Yin, L., Judkins, T., Scholl, T., Samollow, P. B., de Silva, D., Zharkikh, A., & Thomas, A. (2006). Comprehensive statistical study of 452 BRCA1 missense substitutions with classification of eight recurrent substitutions as neutral. J Med Genet, 43(4): 295-305. 57. Tavtigian, S. V., Samollow, P. B., de Silva, D., & Thomas, A. (2006). An analysis of unclassified missense substitutions in human BRCA1. Fam Cancer, 5(1): 77-88. 58. Mathe, E., Olivier, M., Kato, S., Ishioka, C., Hainaut, P., & Tavtigian, S. V. (2006). Computational approaches for predicting the biological effect of p53 missense mutations: a comparison of three sequence analysis based methods. Nucleic Acids Res, 34(5): 1317- 1325. 59. Avard, D., Bridge, P., Bucci, L. M., Chiquette, J., Dorval, M., Durocher, F., Easton, D., Godard, B., Goldgar, D., Knoppers, B. M., Laframboise, R., Lesperance, B., Plante, M., Tavtigian, S. V., Vezina, H., Wilson, B., & Simard, J. (2006) INHERIT BRCAs. Partnering in Oncogenetic Research – The INHERIT BRCAs Experience: Opportunities and challenges. Fam Cancer, 34(5): 1317-1325. 60. Waddell, N., Jonnalagadda, J., Marsh, A., Grist, S., Jenkins, M., Hobson, K., Taylor, M., Lindeman, G. J., Tavtigian, S. V., Suthers, G., Goldgar, D., Oefner, P. J., Taylor, D., Page 11 of 18
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Grimmond, S., Khanna, K. K., & Chenevix-Trench, G. (2006). Characterization of the breast cancer associated ATM 7271T>G (V2424G) mutation by gene expression profiling. Genes Chromosomes Cancer, 45(12): 1169-1181. 61. Sodha, N., Mantoni, T. S., Tavtigian, S. V., Eeles, R., & Garrett, M. D. (2006). Rare germ line CHEK2 variants identified in breast cancer families encode proteins that show impaired activation. Cancer Res, 66(18): 8966-8970. 62. Durocher, F., Labrie, Y., Soucy, P., Sinilnikova, O., Labuda, D., Bessette, P., Chiquette, J., Laframboise, R., Lepine, J., Lesperance, B., Ouellette, G., Pichette, R., Plante, M., Tavtigian, S. V., & Simard, J. (2006). Mutation analysis and characterization of ATR sequence variants in breast cancer cases from high-risk French Canadian breast/ovarian cancer families. BMC Cancer, 6: 230. 63. Simard, J., Dumont, M., Moisan, A.-M., Gaborieau, V., Vézina, H., Durocher, F., Chiquette, J., Plante, M., Avard, D., Bessette, P., Brousseau, C., Dorval, M., Godard, B., Houde, L., Joly, Y., Lajoie, M.-A., Leblanc, G., Lépine, J., Lespérance, B., Malouin, H., Parboosingh, J., Pichette, R., Provencher, L., Rhéaume, J., Sinnett, D., Samson, C., Simard, J.-C., Tranchant, M., Voyer, P., INHERIT BRCAs, Easton, D., Tavtigian, S.V., Knoppers, B.-M., Laframboise, R., Bridge, P., & David Goldgar. (2007). Evaluation of BRCA1 and BRCA2 mutation prevalence, risk prediction models and a multi-step testing approach in French-Canadian families with high-risk breast and ovarian cancer families. J. Med. Genet., 44(2):107-121. 64. Karchin, R., Monteiro, A. N., Tavtigian, S. V., Carvalho, M. A., & Sali, A. (2007). Functional Impact of Missense Variants in BRCA1 Predicted by Supervised Learning. PLoS Comput Biol, 3(2): e26. 65. Sinilnikova, O. M., McKay, J. D., Tavtigian, S. V., Canzian, F., DeSilva, D., Biessy, C., Monnier, S., Dossus, L., Boillot, C., Gioia, L., Hughes, D. J., Jensen, M. K., Overvad, K., Tjonneland, A., Olsen, A., Clavel-Chapelon, F., Chajes, V., Joulin, V., Linseisen, J., Chang-Claude, J., Boeing, H., Dahm, S., Trichopoulou, A., Trichopoulos, D., Koliva, M., Khaw, K. T., Bingham, S., Allen, N. E., Key, T., Palli, D., Panico, S., Berrino, F., Tumino, R., Vineis, P., Bueno-de-Mesquita, H. B., Peeters, P. H., van Gils, C. H., Lund, E., Pera, G., Quiros, J. R., Dorronsoro, M., Martinez Garcia, C., Tormo, M. J., Ardanaz, E., Hallmans, G., Lenner, P., Berglund, G., Manjer, J., Riboli, E., Lenoir, G. M., & Kaaks, R. (2007). Haplotype-based analysis of common variation in the acetyl-coA carboxylase alpha gene and breast cancer risk: a case-control study nested within the European Prospective Investigation into Cancer and Nutrition. Cancer Epidemiol Biomarkers Prev, 16(3): 409-415. 66. Johnson, N., Fletcher, O., Palles, C., Rudd, M., Webb, E., Sellick, G., Dos Santos Silva, I., McCormack, V., Gibson, L., Fraser, A., Leonard, A., Gilham, C., Tavtigian, S. V., Ashworth, A., Houlston, R., & Peto, J. (2007). Counting potentially functional variants in BRCA1, BRCA2 and ATM predicts breast cancer susceptibility. Hum Mol Genet, 16(9): 1051-57. 67. Petitjean, A., Mathe, E., Kato, S., Ishioka, C., & Tavtigian, S. V.. (2007). Impact of mutant p53 functional properties on TP53 mutation patterns and tumor phenotype: lessons from recent developments of the IARC TP53 database. Hum. Mutat., 28(6): 622-629. 68. Easton, D. F., Deffenbaugh, A. M., Pruss, D., Frye, C., Wenstrup, R. J., Allen-Brady, K., Page 12 of 18
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Tavtigian, S. V., Monteiro, A. N., Iversen, E. S., Couch, F. J., & Goldgar, D. E. (2007). A Systematic Genetic Assessment of 1,433 Sequence Variants of Unknown Clinical Significance in the BRCA1 and BRCA2 Breast Cancer-Predisposition Genes. Am J Hum Genet, 81(5): 873-83. 69. Voegele, C., Tavtigian, S. V., de Silva, D., Cuber, S., Thomas, A., & Le Calvez-Kelm, F. (2007). A Laboratory Information Management System (LIMS) for a high throughput genetic platform aimed at candidate gene mutation screening. Bioinformatics, 23(18): 2504-06. 70. Lovelock, P. K., Spurdle, A. B., Mok, M. T., Farrugia, D. J., Lakhani, S. R., Healey, S., Arnold, S., Buchanan, D., kConFab Investigators, Couch, F. J., Henderson, B. R., Goldgar, D. E., Tavtigian, S. V., Chenevix-Trench, G., Brown, M. A. (2007). Identification of BRCA1 missense substitutions that confer partial functional activity: potential moderate risk variants? Breast Cancer Res, 2007;9(6): R82. 71. Hammet, F., George, J., Tesoriero, A. A., Jenkins, M. A., Schroen, C., Smith, L., Grabosch-Meehan, A., Dite, G., McCredie, M. R., Giles, G. G., Tavtigian, S. V., Hopper, J. L., & Southey, M. C. (2008). Is BRCA2 c.9079 G>A a predisposing variant for early onset breast cancer? Breast Cancer Res Treat, 109(1): 177-179. 72. Spurdle, A. B., Lakhani, S. R., Healey, S., Parry, S., Da Silva, L. M., Brinkworth, R., Hopper, J. L., Brown, M. A., Babikyan, D., Chenevix-Trench, G., Tavtigian, S. V., & Goldgar, D. E. (2008). Clinical classification of BRCA1 and BRCA2 DNA sequence variants: the value of cytokeratin profiles and evolutionary analysis--a report from the kConFab Investigators. J Clin Oncol, 26(10): 1657-63. 73. Tischkowitz, M., Hamel, N., Carvalho, M. A., Birrane, G., Soni, A., van Beers, E. H., Joosse, S. A., Wong, N., Novak, D., Quenneville, L. A., Grist, S. A.; kConFab, Nederlof, P. M., Goldgar, D. E., Tavtigian, S. V., Monteiro, A. N., Ladias, J. A., & Foulkes, W. D. (2008). Pathogenicity of the BRCA1 missense variant M1775K is determined by the disruption of the BRCT phosphopeptide-binding pocket: a multi-modal approach. Eur J Hum Genet, 16(7): 820-832. 74. Farrugia, D. J., Agarwal, M. K., Pankratz, V. S., Deffenbaugh, A. M., Pruss, D., Frye, C., Wadum, L., Johnson, K., Mentlick, J., Tavtigian, S. V., Goldgar, D. E., & Couch, F. J. (2008). Functional assays for classification of BRCA2 variants of uncertain significance. Cancer Res, 68(9): 3523-31. 75. Jordheim, L. P., Nguyen-Dumont, T., Thomas, X., Dumontet, C., & Tavtigian, S. V. (2008). Differential allelic expression in leukoblast from patients with acute myeloid leukemia suggests genetic regulation of CDA, DCK, NT5C2, NT5C3, and TP53. Drug Metab Dispos, 36(12): 2419-2423. 76. Distelman-Menachem, T., Shapira, T., Laitman, Y., Kaufman, B., Barak, F., Tavtigian, S., & Friedman, E. (2009). Analysis of BRCA1/BRCA2 genes' contribution to breast cancer susceptibility in high risk Jewish Ashkenazi women. Fam Cancer, 8(2): 127-133. 77. Tavtigian, S. V., Greenblatt, M. S., Lesueur, F., & Byrnes, G. B. (2008). In silico analysis of missense substitutions using sequence-alignment based methods. Hum Mutat, 29(11): 1327-36. 78. Plon, S. E., Eccles, D. M., Easton, D., Foulkes, W. D., Genuardi, M., Greenblatt, M. S., Hogervorst, F. B., Hoogerbrugge, N., Spurdle, A. B., & Tavtigian, S. V. (2008). Sequence Page 13 of 18
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variant classification and reporting: recommendations for improving the interpretation of cancer susceptibility genetic test results. Hum Mutat, 29(11): 1282-91. 79. Tavtigian, S. V., Byrnes, G. B., Goldgar, D. E., & Thomas, A. (2008). Classification of rare missense substitutions, using risk surfaces, with genetic- and molecular-epidemiology applications. Hum Mutat, 29(11): 1342-54. 80. Tischkowitz, M. D., Yilmaz, A., Chen, L. Q., Karyadi, D. M., Novak, D., Kirchhoff, T., Hamel, N., Tavtigian, S. V., Kolb, S., Bismar, T. A., Aloyz, R., Nelson, P. S., Hood, L., Narod, S. A., White, K. A., Ostrander, E. A., Isaacs, W. B., Offit, K., Cooney, K. A., Stanford, J. L., Foulkes, W. D. (2008). Identification and characterization of novel SNPs in CHEK2 in Ashkenazi Jewish men with prostate cancer. Cancer Lett, 270(1):173-180. 81. Nguyen-Dumont, T., Calvez-Kelm, F. L., Forey, N., McKay-Chopin, S., Garritano, S., Gioia-Patricola, L., De Silva, D., Weigel, R., Sangrajrang, S., Lesueur, F., & Tavtigian, S. V. (2009). Description and validation of high-throughput simultaneous genotyping and mutation scanning by high-resolution melting curve analysis. Hum Mutat, 30(6): 884-90. 82. Arnold, S., Buchanan, D. D., Barker, M., Jaskowski,,L., Walsh, M. D., Birney, G., Woods, M. O., Hopper, J. L., Jenkins, M. A., Brown, M. A., Tavtigian, S. V., Goldgar, D. E., Young, J. P., & Spurdle, A. B. (2009). Hum Mutat, 30(5): 757-70. 83. Garritano, S., Gemignani, F., Voegele, C., Nguyen-Dumont, T., Le Calvez-Kelm, F., De Silva, D., Lesueur, F., Landi, S., & Tavtigian, S. V. (2009). Determining the effectiveness of High Resolution Melting analysis for SNP genotyping and mutation scanning at the TP53 locus. BMC Genet, 10:5. 84. Tavtigian, S. V., Oefner, P. J., Babikyan, D., Hartmann, A., Healey, S., Le Calvez-Kelm, F., Lesueur, F., Byrnes, G. B., Chuang, S.-C., Forey, N., Feuchtinger, C., Gioia, L., Hall, J., Hashibe, M., Herte, B., McKay-Chopin, S., Thomas, A.,Vallée, M. P., Voegele, C., Webb, P. M., Whiteman, D. C. Australian Cancer Study, BCFR, kConFab, Sangrajrang, S., Hopper, J. L., Southey, M. C., Andrulis, I. L., John, E. M., & Chenevix-Trench, G. (2009). Rare, evolutionarily unlikely missense substitutions in ATM confer increased risk of breast cancer. Am J Hum Gen, 85: 427-446. 85. Campa, D., McKay, J., Sinilnikova, O., Hüsing, A., Vogel, U., Hansen, R. D., Overvad, K., Witt, P. M., Clavel-Chapelon, F., Boutron-Ruault, M. C., Chajes, V., Rohrmann, S., Chang- Claude, J., Boeing, H., Fisher, E., Trichopoulou, A., Trichopoulos, D., Palli, D., Villarini, A., Sacerdote, C., Mattiello, A., Tumino, R., Peeters, P. H., van Gils, C. H., Bas Bueno-de- Mesquita, H., Lund, E., Chirlaque, M. D., Sala, N., Suarez, L. R., Barricarte, A., Dorronsoro, M., Sánchez, M. J., Lenner, P., Hallmans, G., Tsilidis, K., Bingham, S., Khaw, K. T., Gallo, V., Norat, T., Riboli, E., Rinaldi, S., Lenoir, G., Tavtigian, S. V., Canzian, F., & Kaaks, R. (2009). Genetic variation in genes of the fatty acid synthesis pathway and breast cancer risk. Breast Cancer Res Treat, Manuscript in press. 86. Garritano, S., Gemignani, F., Palmero, E. I., Olivier, M., Martel-Planche1, G., Le Calvez- Kelm, F., Brugières, L., Vargas, F. R., Brentani, R. R., Ashton-Prolla, P., Landi, S., Tavtigian, S. V., Hainaut, P., & Achatz, M. I. W. (2009). High frequency of the cancer- predisposing TP53 mutation p.R337H in the population of Southern Brazil: evidence for a founder effect. Hum Mutat, Manuscript in press.
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NON PEER-REVIEWED JOURNAL ARTICLES 1. Hung R. J., Hel, O., Tavtigian, S. V., Brennan, P., Boffetta, P., & Hashibe, M. Perspectives on the molecular epidemiology of aerodigestive tract cancers. Mutat Res. 592(1-2): 102-18, 2005. 2. Tavtigian, S.V., Pierotti, M. A., & Børrensen-Dale, A.-L., International Agency for Research on Cancer, Lyon Workshop on “Expression array analyses in breast cancer taxonomy”. Breast Cancer Res, 8: 303. 3. Cardis, E., Hall, J., & Tavtigian, S. V. (2007). Identification of women with an increased risk of developing radiation-induced breast cancer. Breast Cancer Res. 2007; 9(3):106. 4. Tavtigian, S. V., Greenblatt, M. S., Goldgar, D. E., & Boffetta, P. (2008). Assessing pathogenicity: overview of results from the IARC Unclassified Genetic Variants Working Group. Hum Mutat, 29(11): 1261-64. 5. Cotton, R. G., Auerbach, A. D., Axton, M., Barash, C. I., Berkovic, S. F., Brookes, A. J., Burn, J., Cutting, G., den Dunnen, J. T., Flicek, P., Freimer, N., Greenblatt, M. S., Howard, H. J., Katz, M., Macrae, F. A., Maglott D., Möslein, G., Povey, S., Ramesar, R. S., Richards, C. S., Seminara, D., Smith, T. D., Sobrido, M. J., Solbakk, J. H., Tanzi, R. E., Tavtigian, S. V., Taylor, G. R., Utsunomiya, J., & Watson, M. (2008). GENETICS. The Human Variome Project. Science, 322(5903): 861-862. 6. Kaput, J., Cotton, R. G., Hardman, L., Watson, M., Al Aqeel, A. I., Al-Aama, J, Y,, Al-Mulla F., Alonso, S., Aretz, S., Auerbach, A. D., Bapat, B., Bernstein, I. T., Bhak, J., Bleoo, S. L., Blöcker, H., Brenner, S. E., Burn, J., Bustamante, M., Calzone, R., Cambon-Thomsen, A., Cargill, M., Carrera, P., Cavedon, L., Cho, Y. S., Chung, Y. J., Claustres, M., Cutting, G., Dalgleish, R., den Dunnen, J. T., Díaz, C., Dobrowolski, S., dos Santos, M. R., Ekong, R., Flanagan, S. B., Flicek, P., Furukawa, Y., Genuardi, M., Ghang, H., Golubenko, M. V., Greenblatt, M. S., Hamosh, A., Hancock, J. M., Hardison, R., Harrison, T. M., Hoffmann, R., Horaitis, R., Howard, H. J., Barash, C. I., Izagirre, N., Jung, J., Kojima, T., Laradi, S., Lee, Y. S., Lee, J. Y., Gil-da-Silva-Lopes, V. L., Macrae, F. A., Maglott, D., Marafie, M. J., Marsh, S. G., Matsubara, Y., Messiaen, L. M., Möslein, G., Netea, M. G., Norton, M. L., Oefner, P. J., Oetting, W. S., O'Leary, J. C., de Ramirez, A. M., Paalman, M. H., Parboosingh, J., Patrinos, G. P., Perozzi, G., Phillips, I. R., Povey, S., Prasad, S., Qi, M., Quin, D. J., Ramesar, R. S., Richards, C. S., Savige, J., Scheible, D. G., Scott, R. J., Seminara, D., Shephard, E. A., Sijmons, R. H., Smith, T. D., Sobrido, M. J., Tanaka, T., Tavtigian, S. V., Taylor, G. R., Teague, J., Töpel, T., Ullman-Cullere M., Utsunomiya, J., van Kranen, H. J., Vihinen, M., Webb, E., Weber, T. K., Yeager, M., Yeom, Y. I., Yim, S. H., Yoo, H. S. & Contributors to the Human Variome Project Planning Meeting. (2009). Planning the human variome project: the Spain report. Hum Mutat, 30(4): 496-510.
REVIEW ARTICLES 1. Simard, J., Dumont, M., Labuda, D., Sinnett, D., Meloche, C., El-Alfy, M., Berger, L., Lees, E., Labrie, F., & Tavtigian, S. V. (2003). Prostate cancer susceptibility genes: lessons learned and challenges posed. Endocr Relat Cancer 10(2):225-259.
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BOOK CHAPTERS Author, A. A. (Year of publication). Chapter number: Title of work: Capital letter also for subtitle. Publisher, City, State, Country. 1. Tavtigian , S.V. and Le Calvez-Kelm, F. (2007). Chapter XX of: Molecular diagnostics: methods and limitations. In Tim Rebbeck & Claudine Isaacs, editors. Hereditary Breast Cancer, pp 177-203, 2007. CRC Press
CONFERENCE PROCEEDINGS Author(s). (Year). Manuscript tile. Journal/Periodical Title. Volume number: inclusive pages 1. Skolnick, M.H., Frank, T., Shattuck-Eidens, D., & Tavtigian, S. (1997) Genetic susceptibility to breast and ovarian cancer. Symposium: Conferences LILLY 96 Pathol Biol. 45: 245-249. 2. Tavtigian, S. V., Oliphant, A., Shattuck-Eidens, D., Bartel, P. L., Thomas, A., Frank, T. S., Pruss, D., & Skolnick, M. H. (1997). Genomic organization, functional analysis, and mutation screening of BRCA1 and BRCA2. General Motors Cancer Research Foundation: Accomplishments in Cancer Research 1996: 189-204.
ORAL PRESENTATIONS Keynote/Plenary Lectures International Year Author(s). Title of Presentation. Sponsoring Institution/Organization, City, State, Country.
National 2001 Tavtigian, S. V. A strong candidate prostate cancer susceptibility gene at chromosome 17p. American Society of Human Genetics annual meeting. Philadelphia, PA, USA.
Meeting Presentations International Year Author(s). Title of Presentation. Sponsoring Institution/Organization, City, State, Country 2002 Tavtigian, S. V. Inherited Susceptibility to Breast and Ovarian Cancers, National Hereditary Cancer Task Force, Quebec, Canada. 2003 Tavtigian, S. V. “Prostate cancer susceptibility genes”. CHUL Sainte-Foy, Quebec, Canada/7th International Symposium GnRH Analogues in cancer and human reproduction, Amsterdam, The Netherlands. 2003 Tavtigian, S. V. “Missense variants: characterization, classification, and re- classification”. ASHG 53rd Annual Meeting, Los Angeles, CA, USA. 2004 Tavtigian, S. V. “Methodological challenges” Session. Lecture on “Classification Page 16 of 18
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of missense variants in high-risk cancer susceptibility genes”.“Oncogenetics: achievements and challenges” symposium, Montreal, Canada 2005 Tavtigian, S. V. “Molecular characterization and gene discovery”. “Breast Cancer Family Registry Steering Committee meeting”, San Francisco, CA, USA 2006 kConFab AOCS and Family Cancer Clinic meeting, Couran Cove, Australia 2007 Tavtigian, S. V. “Classifying the unclassified: a multi-modal approach”, Hereditary Breast and Ovarian Cancer Foundation, Montreal, Canada. 2007 Tavtigian, S. V. “The problem of unclassified sequence variants in BRCA1 & BRCA2”, Manchester, UK. 2008 Tavtigian, S. V. “In-silico Missense Classification” IARC Working Group Meeting on Unclassified Variants in High-Risk Cancer Susceptibility Genes, International Agency for Research on Caner, Lyon, France. 2008 Greenblatt, M. & Tavtigian, S. V. Lecture “Analysis of unclassified variants in BRCA1 and BRCA2: the BIC approach and planned extension to other high-risk cancer susceptibility genes”, The Human Variome Project Meeting, San Felix de Guixols, Spain 2009 Tavtigian, S. V. “The Integrated Evaluation of UVs: In silico prediction can help!”. European Society of Human Genetics meeting, Vienna, Austria 2009 Tavtigian, S. V. “A model for analysis of unclassified variants in BRCA1 and BRCA2, with potential for extension to the MMR genes“ and chairman of session “Novel methods”, Mutation Detection 2009 symposium, Paphos, Cyprus. 2009 Tavtigian, S. V. “Can In Silico analysis of missense substitutions be applied to the MMR genes?” MMR Unclassified Variants satellite meeting, Düsseldorf, Germany 2009 Tavtigian, S. V. Spurdle, A., & Byrnes, G. B. “Report from the IARC meeting on UVs in the MMR genes” Joint InSiGHT, Human Variome Project, and NIH Colon CFR meeting, Düsseldorf, Germany 2009 Tavtigian, S. V. “Assessing pathogenicity of nucleotide sequence variation”, RNA Splicing and Genetic Diseases workshop, Pasteur Institute, Paris, France. 2009 Tavtigian, S. V. “Variants of unknown significance: Using multiple sources of evidence to classify variants.”BRCA: Fifteen Years of Progress. Third International Symposium on Hereditary Breast and Ovarian Cancer, Montreal, Quebec, Canada.
Invited/Visiting Professor Presentations 2003 Tavtigian, S. V. “Classification of missense variants in BRCA1 & BRCA2”. University of California, Los Angeles, CA, USA. 2005 Tavtigian, S. V. “Missense mutations on BRCA1 and BRCA2”. Institute of Cancer Research, Cancer Genetics Unit, Royal Marsden NHS Foundation Trust, Surrey, United Kingdom. 2007 Tavtigian, S. V. “An integrated multi-modal approach to analysis of unclassified missense substitutions in BRCA1 and BRCA2”. Baylor College of Medicine,
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Houston, TX, USA. 2008 Tavtigian, S. V. Seminar “Integrated analysis of missense substitutions in BRCA1 and BRCA2, Dept. of Genetics, University Medical Center Groningen, The Netherlands.
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UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
ASSOCIATION FOR MOLECULAR PATHOLOGY, et al.,
Plaintiffs, 09 Civ. 4515 (RWS) v. ECF UNITED STATES PATENT AND TRADEMARK OFFICE, et al.,
Defendants.
BRIEF FOR AMICUS CURIAE
Biotechnology Industry Organization
IN SUPPORT OF DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT
Of Counsel: Counsel of Record for Amicus Curiae:
Hans Sauer Jennifer Gordon Biotechnology Industry Organization Steven P. Lendaris 1201 Maryland Ave. S.W., Suite 900 Jennifer C. Tempesta Washington, D.C. 20024 Baker Botts L.L.P. 30 Rockefeller Center New York, NY 10112-4498 (212) 408-2500
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1. An isolated DNA coding for a BRCA1 polypeptide, said polypeptide having the amino acid sequence set forth in SEQ ID NO: 2.
2. The isolated DNA of claim 1, wherein said DNA has the nucleotide sequence set forth in SEQ ID NO:1.
These and the other DNA claims cover compositions of matter, i.e., actual deoxyribonucleic acid
(DNA) molecules, and not merely the information encoded by the nucleotide sequences within
these molecules. Claim 1 of the ’282 patent is a “genus” claim; it encompasses multiple distinct
DNA molecules that share the ability to code for the specified protein molecule. These
molecules include genomic DNA fragments (discussed infra ), cDNA molecules that are manufactured from mRNA (also discussed infra ), as well as synthetic DNA molecules that, through the inherent degeneracy of the genetic code, 2 encode the specified protein. Claim 2, on the other hand, is a “species” claim; it covers a DNA molecule having a sequence identical to the cDNA specified by SEQ ID NO:1.
Significantly, each DNA claim at issue is limited to “isolated” DNA, a key term defined in, e.g., the ’282 patent (Exh. 1 3) at col. 19, ll. 8-18, as follows:
An “isolated” or “substantially pure” nucleic acid (e.g., an RNA, DNA or a mixed polymer) is one which is substantially separated from other cellular components which naturally accompany a native human sequence…, e.g., … many other human genome sequences and proteins. The term embraces a nucleic acid sequence…which has been removed from its naturally occurring environment, and includes recombinant or cloned DNA isolates and chemically synthesized analogs or analogs biologically synthesized by heterologous systems.
2 DNA is a double-stranded molecule (the so-called “double helix”), each strand of which is made up of the nucleotide bases A, C, G and T, strung together like beads on a necklace. Combinations of three nucleotide bases (which form a “codon”) dictate the identity of the amino acids that will get placed in series, in a growing polypeptide (or protein) chain. Because certain amino acids are encoded by more than one codon, the genetic code is called “degenerate” and, thus, multiple DNA molecules having different sequences of codons can code for the same protein. 3 Citations to “Exh. __” refer to the Exhibits attached to the Declaration of Jennifer C. Tempesta in Support of Defendants’ Opposition to Plaintiffs’ Motion for Summary Judgment, submitted contemporaneously herewith.
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It is the term “isolated” that distinguishes the claimed molecules from anything that exists
in nature. The substantial separation from other human genomic sequences and other cellular
components impart utilities (discussed infra ) to the claimed DNA molecules that simply do not
exist for the counterpart natural sequences.
B. Molecular Biology Primer: Genes, mRNA, cDNA And The Proteins They Encode
1. Genomic DNA
Human genes are made of DNA and comprise specific sequences of nucleotides (the
“building blocks” of DNA) that encode particular proteins. They do not exist in nature as
isolated DNA molecules, but rather as segments of extremely long DNA molecules called
chromosomes, 23 pairs of which are carried within human cells. As illustrated in Figure 1A
(Exh. 2), chromosomes reside within the sub-cellular compartment called the nucleus which, in
turn, is located within the cellular cytoplasm, a complex mix of organelles (e.g. mitochondria),
proteins and other cellular substances.
Figure 1A. Chromosome Structure
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Human chromosomes differ in the number of genes they carry. Chromosome 1, for example, is estimated to carry more than 4,000 genes; chromosome 17 (site of the BRCA1 gene) carries between 1,300 – 1,500 genes, and the male sex chromosome Y only about 86. The genes on any given chromosome are chemically connected, but are generally not arranged directly next to each other on the chromosomal DNA. As illustrated in Figure 1B (Exh. 3, Molecular Biology of the Cell , Alberts, Bruce et al. (4th ed. 2002) at Fig. 4-15), interspersed among genes are vast
sequences of DNA that are not known to have any protein-encoding capability at all. In addition,
there are regulatory sequences (responsive to chemical cues from the cellular environment) that
control the timing and amount of the encoded protein that gets produced (or “expressed”) by the
gene. There are no physical landmarks on chromosomes that demarcate the genes from the non-
coding and regulatory regions. Consequently, the identification, location and isolation of
biologically significant genes is no small feat, as is amply set forth the in the ‘282 patent at
col. 7, l. 33 - col. 11, l. 58 for the BRCA1 gene.
Figure 1B. Chromosome & Gene Structure
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As also illustrated in Figure 1B(D), an individual human gene is made up of “exons” and
“introns.” Within an exon is a sequence of nucleotides that encode a stretch of amino acids that make up part of the protein encoded by the gene. Introns are DNA that is interspersed among the exons but do not code for proteins. Together, the nucleotides within the exons and introns make up the DNA sequence of the gene, or “genomic” DNA sequence.
2. mRNA
Genes reside in chromosomes within the cell’s nucleus. The proteins they encode,
however, are made in the cytoplasm of the cell. Therefore, another type of nucleic acid, known
as messenger RNA or mRNA 4, exists that serves as an intermediary in the process of gene expression. As illustrated in Figure 2 (Exh. 4), chromosomal (genomic) DNA is “transcribed” into a primary RNA transcript that contains both exons and introns. By a process called
“splicing”, the introns are excised resulting in an mRNA molecule containing only protein- encoding exons.
Figure 2. mRNA Structure
The mRNA travels out of the nucleus of the cell into the cytoplasm where it is
“translated”, i.e., serves as a template that dictates the sequence of amino acids that are connected to make the protein encoded by the genomic DNA.
4 RNA stands for “ribonucleic acid”, a different chemical compound than DNA and one that is far more susceptible to degradation by cellular enzymes than is DNA.
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Neither transcription nor splicing results in an isolated or purified nucleic acid of any sort. The mRNA molecules so made exist in the complex cytoplasmic milieu, and only for a short time before they are completely degraded by cellular enzymes.
3. Alternative Splicing
When a primary RNA transcript is spliced, the resulting mRNA does not necessarily contain a full complement of exons. Through “alternative splicing”, not only are the introns of the primary transcript excised, but one or more of the exons may be excised as well. This is illustrated in Figure 3 (Exh. 5).
Figure 3. Alternative Splicing Patterns
As shown, the primary RNA transcript (or “pre-mRNA”) copied from a gene with Exons
1, 2A, 2B and 3 can be alternatively spliced to yield mRNAs containing all or less than all of the possible exons. All of these mRNAs can serve as templates for protein production. Thus, a single genomic sequence can potentially generate multiple mRNA templates, which, in turn, will direct the production of multiple distinct proteins. In this respect, a genomic sequence subject to alternative splicing has greater informational content than any mRNA transcript made from it.
The BRCA1 gene is known to code for more than 30 different splice variants. ( See
Exh. 6, Miao Lixia et al., Alternative Splicing of Breast Cancer Associated Gene BRCA1 from
Breast Cancer Cell Line , J. Biochem. and Molecular Bio. 15-21 (2006)). The BRCA2 pre- mRNA sequence is also alternatively spliced, and thus produces multiple distinct protein
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products as well. ( See Exh. 7, Ivan Bieche et al., Increased Level of Exon 12 Alternatively
Spliced BRCA2 Transcripts in Tumor Breast Tissue Compared with Normal Tissue , J. Cancer
Research 2546-2550 (June 1, 1999)).
4. cDNA
“Copy DNA” or “cDNA” does not exist in nature. It is made in the laboratory. Starting with a sample containing mRNA, a scientist adds an artificially synthesized “primer”, a small piece of DNA (or “oligonucleotide”) that binds to one end of the mRNA molecule, as well as a non-human enzyme called “reverse transcriptase” that extends the primer along the mRNA, making a cDNA sequence complementary to that of the mRNA. The mRNA/cDNA hybrid is dissociated and DNA polymerase is used to copy the cDNA strand, creating a double-stranded cDNA molecule. This is illustrated in Figure 4 (Exh. 8). 5
Figure 4. Production of a cDNA Molecule
5 In this illustration, cDNA encoding insulin is used as the example, but what is shown is the general methodology for making cDNA.
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Researchers and medical professionals overwhelmingly use cDNA for most applications because of its stability (compared to mRNA), its ability to encode a single protein (compared to alternatively spliceable genomic DNA) and its greater manipulability (compared to both mRNA and genomic DNA).
III. ARGUMENT
A. The Claimed DNA Molecules Fall Within One or More of the Statutory Classes of Patent-Eligible Subject Matter
Section 101 of the Patent Act defines patent-eligible subject matter as “any new and useful process, machine, manufacture, or composition of matter or any new and useful improvement thereof . . . .” 35 U.S.C. §101. 6 There are notable exceptions to the statutory
classes. In interpreting Section 101, the Supreme Court has repeatedly held that a hitherto
unknown “phenomenon of nature . . . mental processes, and abstract intellectual concepts are not
patentable . . . .” See e.g., Parker v. Flook, 437 U.S. 584, 589 (1978).
However, the ease with which the natural phenomena exception can be twisted, as here, to attack the patent-eligibility of biological compositions of matter has long been recognized:
It only confuses the issue, however, to introduce such terms as “the work of nature” and the “laws of nature.” For these are vague and malleable terms infected with too much ambiguity and equivocation . . . Arguments drawn from such terms for ascertaining patentability could fairly be employed to challenge almost every patent .
Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 134-35 (1948) (Frankfurter, J.
concurring) (emphasis added). 7
6 35 U.S.C. § 101 states in its entirety: Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title. 7 Plaintiffs incorrectly characterize Funk as holding that the mixtures of bacterial strains at issue were patent- ineligible “works of nature”. (Pl. Mem. at 21). On the contrary, the Supreme Court accepted that a product embodying the patentee’s discovery represented subject matter eligible for patent protection if the other applicable tests for patentability were met. They were not. The holding in Funk specifically turned on lack of “invention”; a continued …
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Consequently, the Supreme Court has “cautioned that courts ‘should not read into the patent laws limitations and conditions which the legislature has not expressed.’” Diamond v.
Chakrabarty , 447 U.S. 303, 308 (1980) (citation omitted). Congress intended § 101 to be
interpreted broadly and include “anything under the sun that is made by man” Id . at 309
(citations omitted).
All DNA molecules within the scope of the claims at issue are man-made. No DNA
claim reads on a DNA molecule that exists in nature. Each claimed DNA molecule is a tangible
man-made thing; it is neither an abstraction nor a thought process. Despite Plaintiffs’ efforts to
equate the claimed subject matter with ‘information,’ it is self-evident that each and every
claimed DNA molecule is a chemical compound, falling indisputably within the “composition of
matter” statutory class.
Furthermore, many of the DNA molecules within the scope of the claims also qualify as
“manufactures.” For example, a common way of obtaining DNA molecules within, e.g., the
scope of Claim 1 of the ’282 patent, is by the widely-used polymerase chain reaction (PCR).
(Exh. 1, ’282 patent at col. 17, ll. 15-27). Using the natural sequence as a template, copies of the
DNA are enzymatically synthesized using DNA polymerase and small synthetic pieces of DNA
that serve to “prime” the synthesis. The resulting DNA molecules are man-made
“manufactures.” Similarly, chemical synthesis techniques can be used to make the claimed
DNAs, once again generating completely man-made “manufactures”.
Even in instances where genomic sequences are isolated from cellular materials, this
requires the hand of man. Plaintiffs attempt to minimize the importance of the word “isolated”
in the claims as meaning “nothing more than a gene that has been removed from the body and
separated from surrounding material.” (Pl. Mem. at 4). Plaintiffs overlook that the specific judicially developed criterion that was superseded not by 35 U.S.C. § 101 but by 35 U.S.C. §103 , which requires an invention be “non-obvious.”
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removal of such DNA requires nothing less than its targeted separation from thousands of other cellular components through a series of sophisticated identification and purification steps. The
BRCA1 gene, for example, consists of 84,000 DNA building blocks – “base pairs” – which occupy only a fraction of a percent of the 81 million DNA base pairs of chromosome 17, which, in turn, represents less than 3% of the human genome. In order to be isolated, the BRCA1 DNA must be identified among the 1,300 other genes that occupy that vast length of chromosome 17 and the 25,000 other genes that comprise the human genome. The precise DNA sequence must be enzymatically excised from the rest of the chromosomal DNA, and physically separated by a technique such as gel electrophoresis. Such isolation is not a natural process and unquestionably results in a statutorily sanctioned, patent-eligible composition of matter, if not a manufacture, as well.
Lastly, the claims that are limited to DNA molecules having the sequence of a particular cDNA, e.g., Claim 2 of the ‘282 patent, necessarily are directed to patent-eligible compositions of matter, or indeed, manufactures. This is because cDNA molecules are man-made and do not exist in nature and thus, cannot possible be excluded from 35 U.S.C. § 101 as a “natural phenomenon” or “work of nature.”
B. Courts Have Long Upheld The Patent-Eligibility of Isolated and Purified Natural Substances That Possess New Qualities And Utilities
In a case that is often cited as the first to acknowledge that isolated and purified products of nature are patent-eligible, Judge Learned Hand determined that purified adrenaline, extracted from adrenal glands, was indeed patentable. Parke-Davis & Co. v. H.K. Mulford Co. , 189 F. 95,
103 (S.D.N.Y. 1911). 8 Judge Hand reasoned that the new utility of the purified product
conferred patent-eligibility:
8 As discussed infra Plaintiffs’ attempt to distinguish Parke Davis (Pl. Mem. at 25) is unavailing, as it is based on the fallacy that the human body possesses “a natural process for isolating and purifying genes.”
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[E]ven if it were merely an extracted product without change, there is no rule that such products are not patentable. [The inventor] was the first to make it available for any use by removing it from the other gland-tissue in which it was found, and, while it is of course possible logically to call this a purification of the principle, it became for every practical purpose a new thing commercially and therapeutically. That was a good ground for a patent.
Id . See also Scripps Clinic and Research Foundation v. Genentech, Inc., 666 F. Supp. 1379,
1389 n.6 (N.D. Cal. 1987) (purified Factor VIII:C, an important natural blood clotting protein,
found patent-eligible under 35 U.S.C. § 101); In re Kratz , 592 F.2d 1169 (C.C.P.A. 1979)
(isolated naturally occurring constituent of strawberries responsible for fragrance found patent-
eligible); In re Bergstrom , 427 F.2d 1394 (C.C.P.A. 1970) (USPTO rejection of claims to
substantially pure prostaglandin compounds under 35 U.S.C. § 101 reversed).
Another famous case that advances the Parke Davis concept that purified or isolated
natural compounds are “new and useful”, and hence patent-eligible under 35 U.S.C. § 101, is
Merck & Co. v. Olin Mathieson Chem. Corp., 253 F.2d 156 (4th Cir. 1958). In finding the
claimed vitamin B12 compositions patentable, that court stated:
The compositions of the patent here have all of the novelty and utility required by the Act for patentability. They never existed before; there was nothing comparable to them. If we regard them as a purification of the active principle in natural fermentates, the natural fermentates are quite useless, while the patented compositions are of great medicinal and commercial value. The step from complete uselessness to great and perfected utility is a long one. That step is no mere advance in the degree of purity of a known product . From the natural fermentates, which, for this purpose, were wholly useless and were not known to contain the desired activity in even the slightest degree, products of great therapeutic and commercial worth have been developed. The new products are not the same as the old, but new and useful compositions entitled to the protection of the patent .
Id. at 164-165. (emphasis added).
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In re Merz , 25 C.C.P.A. 1314 (C.C.P.A. 1935), cited by Plaintiffs 9, perhaps most succinctly states the concept that patent eligibility of a purified or isolated natural product flows from its serving purposes that the natural product cannot:
[I]f the process produces an article of such purity that it differs not only in degree but in kind, it may be patentable . If it differs in kind, it may have a new utility in which invention may rest.
Id. at 1314 (emphasis added).
More recent case law has implicitly extended the Parke-Davis, Merck and Merz concept of patent eligibility to isolated and purified DNA molecules. For example, it is well settled that prior to undertaking an analysis of whether a claim meets the requirements of 35 U.S.C. §§ 102,
103, and 112, reviewing courts are required to first determine whether the claimed subject matter is eligible for patent protection under 35 U.S.C. § 101. As stated by the Supreme Court: “[t]he obligation to determine what type of discovery is sought to be patented must precede the determination of whether that discovery is, in fact, new or obvious.” Parker v. Flook , 437 U.S.
584, 593 (1978). This pronouncement is strictly followed by district courts. See, e.g., Ariad
Pharms., Inc. v. Eli Lilly & Co. 529 F. Supp. 2d 106, 116 -117 (D. Mass. 2007) (“The court must
examine what is sought to be patented . . . before any consideration whether that discovery meets
the requirements for patentability under 35 U.S.C. §§ 102, 103 and 112.”) (emphasis in original).
9 Cases cited by Plaintiffs to support their position that isolated and purified natural substances are patent- ineligible are inapposite. To the extent the subject matter discussed in the following cases was deemed not patentable, it was not because the subject matter was patent-ineligible within the meaning of § 101 of the 1952 Patent Act - it was because the subject matter was not novel (in the sense of 35 U.S.C. § 102) or was obvious or not inventive (in the sense of 35 U.S.C. § 103). These cases include Funk Bros. Seed Co. v. Kalo Inculcant Co., 333 U.S. 127 (1948) (composition of nitrogen fixing bacteria not inventive); In re Merz , 25 C.C.P.A. 1314 (C.C.P.A. 1935) (aquamarine not inventive); In re Marden , 18 C.C.P.A. 1046 (C.C.P.A. 1931) (uranium not novel); In re Marden , 18 C.C.P.A. 1057 (C.C.P.A. 1931) (vanadium not novel); General Elec. Co. v. De Forest Radio Co. , 28 F.2d 641 (1928) (tungsten not novel); Cochrane v. Badische Anilon & Soda Fabrik , 111 U.S. 293 (1884) (alizarine not novel);and Am. Wood Paper Co. v. Fibre Disintegrating Co. , 90 U.S. 566 (1874) (cellulose not novel). In Am. Fruit Growers, Inc. v. Brogex Co., 283 U.S. 1 (1931) borax-treated citrus fruit was not considered a “manufacture” under the old statute, 35 U.S.C. § 31, because fruit so-treated did not take on a patentably distinctive use.
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Thus, the cases addressing whether purified and isolated DNA molecules are patentable under sections of the patent statute other than § 101 implicitly recognize that those DNA molecules are subject to patent protection under § 101. See , e.g., In re Kubin , 561 F.3d 1351
(Fed. Cir. 2009) (claim to DNA encoding the p38 protein affirmed as unpatentable under
35 U.S.C. § 103; patent-eligibility not questioned); In re Deuel , 51 F.3d 1552, 1560 (Fed. Cir.
1995) (reversing PTO decision rejecting claims directed to a “purified and isolated DNA
sequence consisting of a sequence encoding human heparin binding growth factor of 168 amino
acids having the following amino acid sequence . . .”); Amgen, Inc. v. Chugai Pharm. Co., Ltd. ,
927 F.2d 1200, 1206 (Fed. Cir. 1991), cert. denied , 502 U.S. 856 (affirming patentability of claims directed to, inter alia , a “purified and isolated DNA sequence consisting essentially of a
DNA sequence encoding human erythropoietin.”); Fiers v. Revel , 984 F.2d 1164 (Fed. Cir. 1993)
(affirming priority of invention to party that met enablement requirement of § 112, ¶ 1 for a claim directed to a “DNA which consists essentially of a DNA which codes for a human fibroblast interferon-beta polypeptide”).
BIO agrees with Plaintiffs that our Supreme Court has never squarely addressed the patent-eligibility of isolated and purified DNA molecules. However, BIO submits that the failure of the parties to the foregoing cases to raise the 35 U.S.C. § 101 issue (or for that matter, constitutional issues) as well as the Supreme Court’s denial of certiorari in the Amgen case, amply illustrates the wide acceptance of isolated DNA molecules as patent-eligible subject matter in accord with Parke-Davis and its progeny. Respectfully, this Court should refrain from altering the status quo.
C. The Claimed DNA Molecules Differ In Kind From Natural Sequences
Despite Plaintiffs’ arguments to the contrary, the claimed isolated DNA molecules differ
in structure, function, utility, and information content from natural BRCA1 and BRCA2 sequences. So significant are these differences that the claimed DNAs have qualities that make
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them differ in kind from native sequences and are more than sufficient to confer patent- eligibility.
1. Isolated BRCA DNA Molecules Can Be Put To Uses That Natural BRCA DNA Sequences Cannot
BRCA DNA sequences within their native setting, i.e., within a large and complex chromosome, in the midst of other chromosomes and all the hundreds of other components of a cell, are essentially inaccessible and under the control of the physiology of the human in which they reside. They serve whatever their natural purpose is within a cell but can be put to virtually no practical diagnostic or therapeutic applications.
Isolating a DNA molecule imparts new utility, structure and function that does not exist in nature. Isolation of DNA creates discrete molecules that can be manipulated by molecular biological techniques. Isolation of DNA removes it from other cellular substances (such as other nucleic acids and proteins) that can contaminate or otherwise interfere with techniques, apparatus, and assays, involved in the new uses to which DNA is put.
As noted previously, all DNA claims at issue are limited to isolated DNA molecules.
The patents-in-suit contemplate putting the claimed isolated DNA molecules to important diagnostic and therapeutic uses that make them functionally distinct from the natural sequences.
For example, the ’282 patent discloses the DNA molecules of the invention can be subjected to direct DNA sequencing to detect DNA sequence variations of diagnostic and prognostic importance. (Exh. 1, ’282 patent at col. 12, ll. 26-28; col. 13, ll. 10-16). In such a diagnostic setting, the isolated DNA molecule is not serving the natural function of protein production. Its sequence is providing a diagnosis or prognosis of a particular disease state.
Furthermore, gene therapy with wild-type BRCA sequences is contemplated, whereby the claimed wild-type DNA molecules are put into vectors, which, in turn, can be introduced into cells in need of the wild-type sequences. ( See, e.g., Exh. 1, ’282 patent at col. 32, l. 34 - col. 33,
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l. 20). In addition, introduction of the claimed cDNA molecules into bacteria for the production of tumor suppressing proteins that may be used therapeutically is also contemplated. ( Id . at col.
34, ll. 39-63). Neither of these important utilities could be served without first isolating the
desired DNA molecule from its natural setting. Moreover, unlike a natural wild-type sequence
within a healthy woman, the isolated wild-type DNA molecules can be copied many times over
and serve the functions of preventing or curing breast cancers in sick (or potentially sick) women
who lack the wild-type genes, either by way of gene therapy or recombinant production of a
therapeutic protein. Surely these uses make the claimed molecules functionally, and patentably,
distinct from the natural sequences, in accordance with the holdings of Parke-Davis and Merck .
2. The Claimed Isolated cDNA Molecules Are Not Only Functionally Distinct, They Are Structurally And Informationally Distinct From Natural Sequences
Several of the challenged claims, e.g., Claim 2 of the ‘282 patent, claim a non-natural cDNA sequence that is structurally different from the DNA sequence of a natural BRCA gene.
For example, the natural genomic BRCA1 sequence has a length of approximately 84 kilobases
(84,000 base pairs), making it a relatively large gene by human standards. However, the claimed cDNA comprises only 5.9 kb less than 1/10 th the length of the natural gene. This disparity arises because the sections that actually encode the BRCA1 gene product within the natural gene
(exons) are interrupted by 23 long regions (introns) − together comprising more than 90% of the gene’s length - which encode no protein. As explained in more detail supra , the claimed cDNA is therefore an artificial DNA construct from which natural, non-coding regions have been eliminated and in which the rest of the gene has been reconfigured to form one contiguous protein-coding DNA sequence that does not exist in nature. Thus, in terms of structure, the claimed isolated cDNA molecules differ significantly in kind from the natural BRCA sequences.
Moreover, the claimed isolated cDNA molecules have a function and information content
that differs from natural BRCA genes. The natural BRCA1 and BRCA2 sequences are subject to
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alternative splicing (discussed supra ) and thus encode multiple proteins. On the other hand,
cDNA encodes a single protein. The cDNA claims at issue, such as Claim 2 of the ’282 patent,
recite a sequence that encodes only one protein. Thus, contrary to Plaintiffs’ position, the
claimed cDNAs are informationally distinct; they are incapable of coding for the full range of
proteins the natural sequences encode. Surely, such specific, man-made molecules, capable of
serving all the new utilities described in the preceding section, in no way mimic nor usurp nature
such that their patentability should be denied on Section 101 grounds.
3. Plaintiff’s Scientific Reasons For Distinguishing Parke-Davis And Its Progeny Are Factually Incorrect
Attempting to avoid well-reasoned and controlling precedent, Plaintiffs incorrectly
distinguish Parke-Davis as:
[u]npersuasive in the gene patent context for scientific reasons. Whereas the human body does not possess a natural process for purifying adrenaline, the human body does possess a natural process for isolating and purifying genes. D. Jackson ¶¶ 26-29, D. Mason ¶¶ 11-12.
(Pl. Mem. at 25).
Through their experts, Jackson and Mason, Plaintiffs suggest that the natural process of
transcribing genomic DNA into mRNA is the body’s method to isolate and purify genes. This
assertion is scientifically incorrect. As noted above, the process of transcribing a genomic DNA
sequence into an mRNA molecule does not result in the isolation or purification of the genomic
sequence, but rather the production of a chemically and structurally distinct mRNA copy of only
a portion of the information carried in that genomic sequence. Furthermore, the production of an
mRNA molecule occurs within the context of the cellular milieu and the resulting mRNA,
therefore, is neither isolated nor purified. Given that the end-product of transcription is an
mRNA molecule that: (1) is composed of RNA nucleotides and not DNA nucleotides;
(2) includes less information than the genomic sequence and (3) exists in an unisolated,
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unpurified state within the cellular milieu, it is untenable to argue that such a molecule corresponds to an isolated or purified copy of the genomic DNA sequence. Moreover, for reasons including its inherent chemical instability, mRNA cannot be put to the uses an isolated and purified DNA molecule can, such as those claimed in the patents in suit. Thus, the holdings of Parke-Davis and its progeny unquestionably support the patent eligibility of the claimed
isolated DNA molecules.
D. The USPTO Finds Isolated and Purified DNA Molecules Patent-Eligible in Accord with “Well-Established Principles”
The USPTO has analyzed the issue of whether isolated and purified natural substances
are patent-eligible in view of the relevant case law and comments received from the public. See
generally USPTO Utility Examination Guidelines, 66 Fed. Reg. 1092 (2001). This analysis is
highly instructive and confirms that isolated and purified DNA molecules are indeed entitled to
patent protection:
An isolated and purified DNA molecule that has the same sequence as a naturally occurring gene . . . is eligible for a patent as a composition of matter or as an article of manufacture because that DNA molecule does not occur in that isolated form in nature . . . Patenting compositions or compounds isolated from nature follows well-established principles, and is not a new practice. For example, Louis Pasteur received U.S. Patent 141,072 in 1873, claiming “[y]east, free from organic germs of disease, as an article of manufacture.”
***
Like other chemical compounds, DNA molecules are eligible for patents when isolated from their natural state and purified . . . .
Id. (emphasis added).
E. The Patent Eligibility of Isolated DNA Molecules Provides Incentives That Lead To Life-Enhancing Diagnostics and Therapeutics
Claims like those of the patents-in-suit have been a key foundation supporting the
massive investment of time and capital that is necessary to bring life-enhancing DNA-based
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diagnostics and therapeutics to the public. In the United States alone, more than $30 billion was invested in biotechnology-related research and development in 2008. (Exh. 9, Ernst & Young,
Beyond Borders, Global Biotechnology Report 2009 at 34). The average capitalized cost of bringing a single biotechnology-related therapeutic to market exceeds $1.2 billion once the basic research, clinical trials, and post-approval testing is combined. (Exh. 10, Henry Grabowski,
Follow-On Biologics: Data Exclusivity and the Balance Between Innovation and Competition ,
Nature Reviews Drug Discovery at 4 (May 12, 2008)). New therapeutics typically take eight years of clinical development, not to mention what often amounts to years of pre-clinical research. ( Id . at 3).
Investing in biotechnology is not only expensive, it is also fraught with risk. ( Id . at 3).
For every successful therapeutic, numerous candidate therapeutics are dropped, often only after large investments of time and capital have been made. ( Id .). Even with a vigilant strategy of
eliminating all but the most successful candidates, only a minority of the therapeutics that begin
human clinical trials ultimately obtain FDA approval. ( Id .). In light of the clear risk to an
investor’s resources, raising the necessary funds to support biotechnology research and
development requires the expectation that reasonable financial returns will flow from those
therapeutics that do indeed make it to market. Currently, that expectation relies primarily on the
short term exclusivity afforded to patented products . (Exh. 11, Henry Grabowski et al., The
Market for Follow-On Biologics: How Will It Evolve , Health Affairs, 25(5): 1291-1301, 1299
(2006)).
Patents on isolated DNA molecules have featured prominently in biotechnology success
stories. Amgen, for example, was awarded U.S. Patent No. 4,703,008 (“the ’008 patent”), which
includes claims to isolated DNA molecules encoding the human protein erythropoietin. (Exh.
12, the ’008 patent). Amgen was awarded this patent for its pioneering work with isolated
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erythropoietin-encoding DNA that would ultimately change the face of anemia treatment around the world. For example, a lack of sufficient erythropoietin is the primary cause of anemia associated with renal failure and, prior to Amgen’s development of their DNA-encoded erythropoietin therapeutic, “Epogen®”, a full 25% of renal patients on dialysis required regular blood transfusions. (Exh. 13, Wolfgang Jelkmann, Molecular Biology of Erythropoietin , Internal
Medicine, 43(8):649-659 (August 2004)). However, once Epogen® became available, the need for such blood transfusions was virtually eliminated. (Exh. 14, Amgen Press Release entitled
“FDA Clears Epogen For Treatment Of Anemia In Children On Dialysis” (Nov. 4, 1999)). The use of patented, isolated DNA encoding erythropoietin created a supply of this vital therapeutic protein that never existed before.
Amgen’s erythropoietin patent estate has also been a significant factor in the overall value investors have attributed to the company. On Monday, January 22, 2001, when the District
Court for the District of Massachusetts upheld the validity of certain of Amgen’s erythropoietin patents, Amgen’s stock value increased more than 10% in a single day. Amgen v. Hoechst
Marion Roussel, Inc ., 126 F. Supp. 2d 69 (D. Mass. 2001); (Exh. 15, New York Times,
Technology Briefing: Biotech; Amgen Shares Rise On Rulings (Jan. 23, 2001)). Further
illustrating the point that patents relating to human genes improve and save lives, Amgen’s
market capitalization has allowed the company to continue to make significant investments in
developing new applications for Epogen®, including for treatment of chemotherapy-related
anemia, as well as developing entirely new therapeutics for diseases such as rheumatoid arthritis
and colon cancer.
Another particularly well known example of how patents to isolated DNA molecules can
lead to significant medical breakthroughs involves the former Chiron Corporation, which now
operates as Novartis Vaccines & Diagnostics. After engaging in a near decade long struggle to
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that will be predictive, personalized, preventive and participatory . . . .” 12 Such advances in the progress of science would be impossible if entire bodies of knowledge were being turned over to private control by the USPTO as asserted by the Plaintiffs. (Pl. Mem. at 37).
In April 2009, the USPTO issued its 50,000 th patent with at least one claim to a nucleic
acid sequence. 13 Even with this rapid increase in the number of patents claiming nucleic acids,
recent empirical research into 22 of the most common genetic diagnostic tests has shown that
gene patents have not produced so-called “patent thickets”, which are collections of patents that
have the effect of impeding research. 14 Similarly, in a study comparing the level of secrecy in
science prior to and after the advent of gene patenting, the researchers were unable to establish a
significant relationship between patenting and scientific secrecy, particularly in the field of
experimental biology. 15 Thus, any arguments that suggest gene patents are functioning to stifle
research or are causing investigators to be more secretive about their work are simply
unsupported by the empirical data.
To be sure, previous policy studies by the National Research Council (see above), the
OECD 16 , The Australian Law Reform Commission 17 and the Federal Trade Commission 18 have identified concerns with the operation of the patent system as it relates to genetic technology or biotechnology innovation more generally. While generally concluding that the intellectual
12 Exh. 22, Charles Auffray et al., Systems Medicine: the Future of Medical Genomics and Healthcare , Genome Med. 1(2): doi:10.1186/gm2 (2009). 13 Exh. 23, Chandrasekharan et al., Gene patents and personalized medicine - what lies ahead? , Genome Med. 1:92 ( 2009). 14 Exh. 24, Isabelle Huys et al., Legal uncertainty in the area of genetic diagnostic testing, Nature Biotechnology, 27(10): 903, 909 (2009) (“In conclusion, the present analysis and accompanying observations do not point to the existence of a wide patent thicket in genetic diagnostic testing.”). 15 Exh. 25, Wei Hong et al., For Money or Glory? Commercialization, Competition, and Secrecy in the Entrepeneurial University, Sociological Quarterly, 50:145-171 (2009). 16 See Genetic Inventions, Intellectual Property Rights, and Licensing Practices (2002); available at http://www.oecd.org/dataoecd/42/21/2491084.pdf. 17 See Genes and ingenuity: Gene Patents and Human Health, ALRC 99, 2004, available at: http://www.austlii.edu.au/au/other/alrc/publications/reports/99/_4.html . 18 See To Promote Innovation: The Proper Balance of Competition and Patent law and Policy, 2003, available at: http://www.ftc.gov/os/2003/10/innovationrpt.pdf .
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UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
ASSOCIATION FOR MOLECULAR PATHOLOGY, et al.,
Plaintiffs, v. 09 Civ. 4515 (RWS)
UNITED STATES PATENT AND ECF Case TRADEMARK OFFICE, et al.,
Defendants
BRIEF OF AMICUS CURIAE GENETIC ALLIANCE IN OPPOSITION TO CERTAIN POSITIONS OF THE PLAINTIFFS
David S. Forman Charles T. Collins-Chase Mai-Trang D. Dang Mary R. Henninger Brenda J. Huneycutt Mukta Jhalani Laura P. Masurovsky FINNEGAN, HENDERSON, FARABOW, GARRETT & DUNNER, L.L.P. 901 New York Avenue, N.W. Washington, D.C. 20001-4413 (202) 408-4000
Counsel for Amicus Curiae Genetic Alliance
A5583 Case 1:09-cv-04515-RWS Document 190 Filed 12/31/2009 Page 11 of 35
Genetic Alliance wants to see not only diagnostic tests developed and made available to
the public, but also the development of effective treatments. It recognizes the importance of
patents to provide incentives and protections for investment in the discovery and
commercialization of diagnostics, drugs, and other treatment modalities. The wholesale
invalidation sought by plaintiffs of all patents on isolated DNA molecules (and on all compounds
isolated and purified from natural sources) would impede the necessary investment, committed
development, and commercialization of effective products and treatments for a whole range of
genetic and other diseases. Genetic Alliance believes that invalidating all such patents is an
inappropriate vehicle for remedying the problems alleged by the plaintiffs, and that less extreme
remedies may be available for the problems that the plaintiffs allege.
II. ISOLATED DNA MOLECULES CLAIMED IN PATENTS ARE NOT “PRODUCTS OF NATURE”
A. “Gene” Patents Actually Claim Isolated DNA Molecules, Which Are Chemical Compounds
Plaintiffs mischaracterize what a so-called “gene” patent claim actually encompasses.2
While plaintiffs argue that “gene” patents claim the “information” in a gene, and by extension
the gene’s function, the claims at issue here cover specific molecules, i.e., isolated DNA
molecules.3 They are chemical compounds. Amgen, Inc. v. Chugai Pharm. Co., 927 F.2d 1200,
1206 (Fed. Cir. 1991) (“A gene is a chemical compound, albeit a complex one . . . .”). Like any other chemical entity, isolated and purified DNA molecules can be patented as compositions of matter if they meet all other requirements defined in the patent statute.
2 For explanations of the scientific concepts discussed in this brief, amicus refers the court to Defendants’ Rule 56.2 Statement of Material Facts, and to the Factual Background section of the Brief for Amicus Curiae Biotechnology Industry Organization. 3 For simplicity we focus on isolated DNA molecules, but most of the statements herein apply equally to patent claims involving RNA.
2 A5593 Case 1:09-cv-04515-RWS Document 190 Filed 12/31/2009 Page 12 of 35
B. Isolated DNA Molecules Claimed in “Gene” Patents Are Not Found In Nature
Plaintiffs argue that isolated DNA molecules are not patentable subject matter because
they are “products of nature.” (ACLU Br. at 20-26.) Isolated DNA molecules, however, are
not found in nature. They are made by scientists, and their chemical composition is significantly different from DNA existing in genes inside a living organism. The molecules defined by the claims require substantial human intervention to prepare them. (E.g., U.S. Patent
No. 5,709,999, col. 9 line 44-col. 17 line 13 (outlining laboratory techniques for isolating,
sequencing, and comparing DNA).) These molecules have properties and characteristics which
differ in kind from genes in the body. They can be used for innovative purposes that genes
found in nature cannot (for example, as diagnostic reagents). To paraphrase In re Bergy, 596
F.2d 952, 972 (C.C.P.A. 1979), the claimed isolated DNA molecules are “a product of a
[scientist] and not a product of nature.” Simply put, without the inventors, the claimed isolated
DNA molecules would not exist.
A gene is defined in a leading textbook as a “[r]egion of DNA that controls a discrete
hereditary characteristic, usually corresponding to a single protein or RNA. This definition
includes the entire functional unit, encompassing coding DNA sequences, noncoding regulatory
DNA sequences, and introns.” (Alberts at G-10 (Ex.2).) In contrast, a cDNA is a “DNA
molecule made as a copy of mRNA and therefore lacking the introns that are present in genomic
DNA.” (Alberts at G-6) Therefore, a cDNA is not a gene and does not exist in nature, as
plaintiffs admit. (ACLU Br. at 5; ACLU S.M.F. ¶¶ 62-63; D. Mason ¶ 29.) Indeed, none of the
DNA in a cDNA molecule is from the body–it was made in a laboratory. Most of the BRCA
claims involve cDNA molecules, or short segments of cDNA molecules, none of which exist in
nature.
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In addition to not being found in nature, isolated DNA molecules may be chemically
modified differently than genomic DNA in the body and these differences may further affect
their function. 4 Plaintiffs repeatedly assert that cDNA is “functionally” or “informationally” the same as DNA in a gene. (E.g., ACLU Br. at 11, 12.) Those arguments are efforts to gloss over
the admitted fact that the claimed cDNA molecules are chemically different from DNA in a
gene, and are not found in nature. (ACLU S.M.F at ¶ 62 (“Complementary DNA does not exist
in the body . . .”); ACLU Br. at 46 (“there are certain structural differences, such as removal of
the regions that are not used in creating the protein. . .).) Similarly, the plaintiffs’ anthropomorphic references to DNA such as “created by nature” (e.g., ACLU S.M.F. at ¶¶ 81,
93; ACLU Br. at 9) should not obscure the fact that the claimed isolated DNA molecules are novel chemicals made by human endeavor.
C. Isolated DNA Has Different Functions (Uses) Than DNA in Genes
Isolated DNA molecules are not, in fact, functionally identical to a gene in the body. For example, many isolated DNA molecules lack promoter regions or regulatory control sequences, some of which are found in introns (non-coding regions missing in cDNA). DNA sequences within introns can regulate the amount of protein produced from a gene or determine which
version of a protein is produced. (See, e.g., Guang-Ji Wang et al., Gene Variants in Noncoding
Regions and Their Possible Consequences, PHARMACOGENOMICS, Mar. 2006, at 203, 205 (2006)
4 For example, the DNA of genes in the body may be methylated (see Myriad S.M.F. at ¶¶ 12, 35.) to various extents and this affects the expression of these genes (and ultimately how much protein is made). (See, e.g., Guang-Ji Wang et al., Gene Variants in Noncoding Regions and Their Possible Consequences, PHARMACOGENOMICS, Mar. 2006, at 203, 205 (2006) (Ex. 3).) For example, in normal ovary cells, BRCA2 is methylated in a way that keeps expression of the gene (and protein levels) low. (Kelvin Y.K. Chan et al., Epigenetic Factors Controlling the BRCA1 and BRCA2 Genes in Sporadic Ovarian Cancer, 62 CANCER RES. 4151, 4151 (2002) (Ex. 4).) In cancerous cells, BRCA2 becomes less methylated, resulting in too much BRCA2 protein being made. Id. at 4151, 4155. Isolated DNA (particularly cDNA that has undergone rounds of copying) is not methylated like genomic DNA.
4 A5595 Case 1:09-cv-04515-RWS Document 190 Filed 12/31/2009 Page 14 of 35
(Ex. 3).) For example, the BRCA1 gene contains regulatory elements in intron 1 that help
orchestrate the proper amount of protein produced. (Ting-Chung Suen & Paul E. Goss,
Identification of a Novel Transcriptional Repressor Element Located in the First Intron of the
Human BRCA1 Gene, 20 ONCOGENE 440, 440 (2001) (Ex. 5).) Isolated cDNA molecules
lacking these elements certainly cannot “function identically” to a gene in the body.
Furthermore, small DNA molecules such as those in claim 6 of the ’282 patent, claiming
an isolated DNA having at least 15 nucleotides of the cDNA of BRCA1, do not exist in nature
and most do not code for any protein (only a string of amino acids, if anything at all) and
therefore cannot function identically to a gene in the body.5 However, they are useful as
chemical reagents, research tools, and as diagnostic and biological probes.
Finally, isolated DNA molecules can have new uses for research, diagnosis, discovery of therapeutics, clinical studies, and manufacture of proteins in microorganisms. A leading textbook describes cDNA as “[u]sed to determine the amino acid sequence of a protein by DNA sequencing or to make the protein in large quantities by cloning followed by expression.”
(Alberts at G-6 (Ex. 2).) Isolated and copied DNA molecules can be sequenced for diagnosis.
Isolated human DNA molecules can be copied and cloned into plasmids to produce proteins in entirely different species, such as yeast or bacteria. Isolated DNA molecules can be used in gene therapy. DNA in genes inside the body simply cannot directly be used in these ways.
5 This fact is reflected in plaintiffs’ admission that “a partial amino acid sequence can─and usually does─function much differently than the complete sequence from which it is taken.” (ACLU Br. at 11.)
5 A5596 Case 1:09-cv-04515-RWS Document 190 Filed 12/31/2009 Page 15 of 35
D. The “Information,” “Code,” or “Function” of Isolated DNA Molecules Is Irrelevant to Whether They Are Excluded from 35 U.S.C. § 101 as “Products of Nature”
While admitting that the isolated DNA molecules claimed in patents are not chemically identical to the DNA in genes, plaintiffs argue that this “does not matter” because the molecules have the same “function” and “information” as DNA in genes and thus fall into the “product of nature” exception to patentability. (E.g., ACLU Br. at 4-5, 20; ACLU S.M.F. ¶¶ 64-65.). But what is interesting and exciting to scientists in their research is quite different from what is required by the patent law. Claims to “isolated DNA molecules” are not claims to
“information,” “code,” or “function.” While such biological properties of an isolated DNA molecule may be relevant to issues of utility, anticipation under § 102, and nonobviousness under § 103, it is irrelevant to whether the molecule is patentable subject matter under § 101.
The PTO has recognized this key distinction between “descriptive information” and patentable
DNA molecules, stating that “[w]hile descriptive sequence information alone is not patentable subject matter, a new and useful purified and isolated DNA compound described by the sequence is eligible for patenting, subject to satisfying the other criteria for patentability.” PTO
Utility Guidelines, 66 Fed. Reg. 1092, 1093 (Jan. 5, 2001).
E. Isolated DNA Molecules Are Not “Manifestations of Laws of Nature”
Plaintiffs argue that “[t]he gene’s instructions to the body are laws of nature. Because the gene sequence claims embody a law of nature, they encompass natural phenomena and cannot be patentable subject matter under section 101.” (ACLU Br. at 27.) But this is irrelevant because claims to isolated DNA molecules do not claim “the gene’s instructions to the body,” or any law of nature. The composition claims at issue cover artificially isolated DNA molecules, not “the genes themselves” or “all of the information for all of its uses.” (ACLU Br. at 28.)
6 A5597 Case 1:09-cv-04515-RWS Document 190 Filed 12/31/2009 Page 16 of 35
F. Cases Cited by Plaintiffs Regarding the Unpatentability of a “Law of Nature” Are Not Relevant Here6
In O’Reilly v. Morse, 56 U.S. (15 How.) 62 (1853), the Supreme Court invalidated a
claim to any use of electromagnetism to send signals over distance. Contrary to the plaintiffs’
characterization of Morse, (ACLU Br. at 27), that claim was not invalidated because it was
directed to a law of nature. The Court invalidated the claim because it was not supported by the
description in Morse’s patent (a failure of what is now called the “written description
requirement” of § 112). The Court noted that “[i]n fine [Morse] claims an exclusive right to use
a manner and process which he has not described and indeed had not invented, and therefore could not describe when he obtained his patent.” Morse, 56 U.S. at 113; see also id. at 120
(“[H]e claims what he has not described in the manner required by law.”). The Court,
therefore, held that the claim fails the written description requirement (“he claims what he has
not described”), not that it is drawn to unpatentable subject matter (i.e., he claims a law of
nature). The Federal Circuit has repeatedly explained that Morse is a case about written
description, not § 101. See Ariad Pharm., Inc. v. Eli Lilly and Co., 560 F.3d 1366, 1371 (Fed.
Cir. 2009) (citing Morse as supporting a separate written description requirement to ensure the
inventors have actually invented or conceived of claimed subject matter).7
Other cases cited by plaintiffs for the proposition that laws of nature are not patentable
(Gottschalk v. Benson, 409 U.S. 63 (1972), Parker v. Flook, 437 U.S. 584 (1978), Diamond v.
Diehr, 450 U.S. 175 (1981), and Nippon Elec. Glass Co.v. Sheldon, 539 F. Supp. 542 (S.D.N.Y.
6 The alleged statement of “facts” about the cases cited by plaintiffs at ACLU S.M.F. ¶¶ 114-124 are not facts at all, but rather legal opinions of a declarant who is not a lawyer and is admittedly not qualified to give legal opinions. (D. Jackson ¶ 6.) 7 See also Carnegie Mellon Univ. v. Hoffmann-La Roche, Inc., 541 F.3d 1115, 1122 (Fed. Cir. 2008) (same holding); LizardTech, Inc. v. Earth Res. Mapping, Inc., 424 F.3d 1336, 1345 (Fed. Cir. 2005) (same holding); Univ. of Rochester v. G.D. Searle & Co., 358 F.3d 916, 929 n.9 (Fed. Cir. 2004) (same holding).
7 A5598 Case 1:09-cv-04515-RWS Document 190 Filed 12/31/2009 Page 17 of 35
1982) are inapposite because claims to isolated DNA molecules are not directed to a law of
nature, an idea, a phenomenon of nature, an equation, or a mathematical formula. Claims to
isolated DNA molecules fall in none of those exceptions to § 101. They are directed to novel,
man-made chemical reagents.
G. PTO Guidelines Expressly Authorize Patenting Isolated DNA Molecules Because They Are Not Natural Products
In its 2001 Utility Examination Guidelines, the PTO confirmed that isolated and purified
DNA molecules can be patented. The PTO distinguished these molecules from natural products,
stating that an “isolated and purified DNA molecule that has the same sequence as a naturally
occurring gene is eligible for a patent because (1) an excised gene is eligible for a patent as a composition of matter or as an article of manufacture because that DNA molecule does not occur in that isolated form in nature, or (2) synthetic DNA preparations are eligible for patents
because their purified state is different from the naturally occurring compound.” PTO Utility
Guidelines, 66 Fed. Reg. at 1093. The PTO thus equates isolated DNA molecules not with
products of nature, but with man-made chemical compositions, stating that “[l]ike other chemical
compounds, DNA molecules are eligible for patents when isolated from their natural state and
purified or when synthesized in a laboratory from chemical starting materials.” Id.8
The PTO also endorsed the patentability of isolated DNA molecules by addressing what
written description would be adequate to claim such molecules in its Guidelines for Examination
of Patent Applications Under the 35 U.S.C. 112, ¶ 1, “Written Description” Requirement, 66
Fed. Reg. 1099, 1108 n.13 (Jan. 5, 2001). For example, a claim to “[a] gene comprising SEQ ID
NO:1” may have inadequate written description because it would not clearly disclose whether
8 Virtually every other industrialized nation also permit patenting of these isolated DNA molecules. (Myriad Br. at 29 n.10)
8 A5599 Case 1:09-cv-04515-RWS Document 190 Filed 12/31/2009 Page 18 of 35
“the claim as a whole covers . . . specific structures such as a promoter, a coding region, or other elements.” Id. The PTO recognizes that isolated DNA molecules differ from genes in nature
based on the presence or lack of such structures. The Federal Circuit has endorsed the PTO
Guidelines as “an accurate description of the law by the agency responsible for examining patent
applications, and thus persuasive authority.” See Carnegie Mellon University v. Hoffmann-La
Roche Inc., 541 F.3d 1115, 1124 (Fed. Cir. 2008).
III. CONGRESS HAS ACTED TO SPECIFICALLY FACILITATE “GENE PATENTS”
A. Rather Than Forbidding Patents Involving Isolated DNA Molecules, Congress Has Acted to Facilitate Such Patents
The PTO has granted thousands of patents claiming isolated DNA sequences and their use, and the courts have upheld those patents. In addition, the PTO has granted and the courts
have upheld many patents on other chemicals found in nature when isolated and purified. See
section IV.B. This court should not change these almost universally accepted interpretations of
the patent statute without a clear and certain signal from Congress. See Deepsouth Packing Co.,
Inc. v. Laitram Corp., 406 U.S. 518, 531 (1972). In both Warner-Jenkinson Co., Inc. v. Hilton
Davis Chem. Co., 520 U.S. 17, 28 (1997), and Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki
Co., 535 U.S. 722, 739 (2002), the Supreme Court explicitly admonished that courts should not
upset the settled expectations of the patent community. If the law should be changed, it should
be done by Congress.
Congress has the Constitutional power to modify the patent law. Congress has amended
the patent statute several times since the major codification of the Patent Act in 1952, and has
had opportunities to change the current law regarding eligibility for patents. Instead of
eliminating “gene patents,” Congress has amended the patent law several times to facilitate
obtaining such patents and to enhance their enforceability.
9 A5600 Case 1:09-cv-04515-RWS Document 196 Filed 01/06/2010 Page 1 of 5
IN THE UNITED STATES DISTRICT COURT IN AND FOR THE SOUTHERN DISTRICT OF NEW YORK
ASSOCIATION FOR MOLECULAR CASE NO. 09-CV-4515 (RWS) PATHOLOGY, et al.,
Plaintiffs,
v.
UNITED STATES PATENT AND TRADEMARK OFFICE, et al.,
Defendants.
MEMORANDUM IN SUPPORT OF MOTION FOR LEAVE TO FILE BRIEF AMICI CURIAE
Proposed Amici Curiae BayBio, Celera Corporation, The Coalition for 21st Century Medicine, Genomic Health, Inc., QIAGEN, N.V., Target Discovery, and XDx, Inc. submit this memorandum of law in support of their motion to leave to file a brief amici curiae. Amici Curiae seek leave to file their proposed brief amici curiae, submitted concurrently herewith, in order to assist the Court in understanding many of the important and complex issues concerning the patentability of human DNA sequences.
I. INTRODUCTION AND INTERESTS OF PROPOSED AMICI CURIAE Personalized medicine is universally acknowledged to hold enormous potential for treating diseases, improving the quality of patients’ lives, decreasing health care costs by identifying patients most likely to benefit from particular therapies, and streamlining the drug discovery and development process. Molecular diagnostics allow patients to be classified into sub-categories based on correlations between genetic biomarkers and clinically useful disease characteristics, and to monitor the ongoing response to treatment. This evolving technology has
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already delivered tremendous results for individual patients, and current research efforts and clinical trials promise significant future improvement in health care. Molecular diagnostic companies are typically small and rely on private investment capital to sustain them through the lengthy and expensive research, development, and commercialization process. Also, there are increasing pressures from collaborative organizations to share ownership of any realized inventions in exchange for allowing access to the clinical samples and data necessary to validate these diagnostic correlations. For these reasons, most personalized medicine companies are highly dependent on their ability to protect their diagnostic tests through patents. One of the Amici Curiae, Genomic Health Inc., is committed to improving the quality of cancer treatment decisions through genomics-based clinical laboratory services. Genomic Health currently offers an assay, which predicts the likelihood that a patient with early-stage, ER+ breast cancer will experience a recurrence within 10 years and whether that patient will benefit from adding chemotherapy to his/her hormonal therapy. Genomic Health has received multiple patents covering the methods and systems used to provide this valuable genomic information and is committed to making this assay available to patients and encouraging independent research in the area of oncology. Amicus Curiae Celera Corporation is a manufacturer of diagnostic products that include DNA sequence-based products used in genetic testing. Celera has entered into agreements with the patent owners for non-exclusive licenses to the relevant patents, has obtained FDA clearance to commercialize a diagnostic product utilizing the patented DNA sequence-based technologies, and has become the worldwide leader of such cystic fibrosis testing products. Thus, these licensing arrangements have provided Celera access to critical DNA sequence-based patents for commercial development, and Celera’s product has made cystic fibrosis testing widely available. It is the general public that has benefited because of the availability of this genetic testing. Amicus Curiae QIAGEN, founded in 1984, is a leading provider of innovative sample and assay technologies and products which are considered standard for use in molecular
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IN THE UNITED STATES DISTRICT COURT IN AND FOR THE SOUTHERN DISTRICT OF NEW YORK
ASSOCIATION FOR MOLECULAR CASE NO. 09-CV-4515 (RWS) PATHOLOGY, et al.,
Plaintiffs,
v.
UNITED STATES PATENT AND TRADEMARK OFFICE, et al.,
Defendants.
BRIEF FOR AMICI CURIAE
(BayBio, Celera Corporation, The Coalition for 21st Century Medicine, Genomic Health, Inc., QIAGEN, N.V., Target Discovery, Inc., and XDx, Inc.)
IN SUPPORT OF DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT
Of Counsel: Counsel of Record for Amici Curiae:
William G. Gaede, III Obiamaka P. Madubuko Andrew A. Kumamoto MCDERMOTT WILL & EMERY LLP MCDERMOTT WILL & EMERY LLP 340 Madison Avenue 275 Middlefield Road, Suite 100 New York, NY 10173-1922 Menlo Park, CA 94025 Telephone: (212) 547-5400 [email protected] Facsimile: (212) 547-5444 [email protected] [email protected]
January 6, 2010
MPK 160020-7.009900.0021 1/6/10 A5679 Case 1:09-cv-04515-RWS Document 197 Filed 01/06/2010 Page 22 of 44
pick up this slack because they lack the know-how, resources and regulatory expertise necessary to bring such innovations to market.
III. PATENT EXCLUSIVITY IS REQUIRED FOR INVESTMENT TO COMMERCIALIZE PERSONALIZED MEDICINE Rather than seeking relief for the specific alleged actions by defendant Myriad, Plaintiffs are asking this Court to rule on the constitutionality of DNA sequence patents (erroneously identified by Plaintiffs as a patent on the gene itself as it exists in nature) and associated method claims, as well as the authority of the U.S. Patent and Trademark Office (USPTO) to exercise its discretion in this area. This Court should be keenly aware that such a finding could negatively impact the diagnostic industry, as well as the therapeutic industry that also relies, in part, upon DNA sequence patents to protect its products. Without patent exclusivity, diagnostic companies would struggle to attract the investment necessary to drive future research, and innovation in this area would contract. Thus, Plaintiffs’ requested relief not only threatens to drive diagnostic companies out of business, which would negatively impact the U.S. economy, but would actually reduce patient access to the power of molecular information and information about who would benefit from future therapies.
A. THE PROMISE OF PERSONALIZED MEDICINE Personalized medicine refers to the tailoring of medical treatment to the individualized characteristics of each patient. Such individual characteristics are determined by diagnostic testing, often genetic testing of an individual’s DNA sample. Personalized medicine allows physicians and patients to make treatment decisions based on biological markers, including gene-based DNA sequences and their variations, that signal the presence or risk of developing a disease, the likelihood that the patient will respond to particular therapies, and the expected patient outcome. Diagnostic correlations used to identify the most effective treatment options for an individual patient are critical to personalized medicine. The use of diagnostic correlations to select the optimal therapy for an individual patient translates to improved and more cost-efficient health care for all. There are two important issues in selecting a treatment: efficacy and risk of side effects. For example, in treating selected diseases, commercial drugs
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work only in 30-60 % of the target population.3 Further, most drugs and biological therapeutics have undesirable side effects, some of which can be predicted based on a patient’s drug metabolism genetic signature. Published estimates show that approximately 5.3% of hospital admissions are associated with adverse drug reactions (ADRs).4 Access to a patient’s genetic information may help physicians to determine whether a patient will respond to a particular therapy, and whether the risk of disease for that patient justifies the expense and burden of particular therapy. This information has the potential to increase patient adherence to treatment regimens and decrease costs and failure rates of drug clinical trials by focusing on appropriate sub-classifications of patients. It is no wonder, then, that the FDA has recognized and encouraged the development of personalized medicine pharmacogenetic information, and nearly every major pharmaceutical project is incorporating information on genetic variation and its effects on the safety and effectiveness of the candidate drug.5 The importance of supporting the further development of personalized medicine has also been recognized by the President’s Council of Advisors on Science and Technology (2008 Report on Priorities for Personalized Medicine)6, the U.S. Dept. of Health & Human Services (Personalized Health Care Initiative), the Legislature (Genomics and Personalized Medicine Act of 2006, S. 3822, 109th Cong. (2006) Obama),7 and rules and comments put forth by many other professional, state and federal health care organizations. In her written testimony during Senate
confirmation hearings, HHS Secretary Kathleen Sebelius made the following statement:
3 See, e.g., B. Spear, et al., Clinical Application of Pharmacogenetics, 7 TRENDS MOL. MED. 201 (2001) (Declaration of William G. Gaede, III (Gaede Decl.), Ex. 1, filed in support hereof). 4 C. Kongkaew, et al., Hospital Admissions Associated with Adverse Drug Reactions: A Systematic Review of Prospective Observational Studies, 42 THE ANNALS OF PHARMACOTHERAPY 1017 (2008) (Gaede Decl., Ex. 2.). 5 See, e.g., U.S. Dept. of Health and Human Servs. and U.S. Food and Drug Admin., Guidance for Industry on Pharmacogenomic Data Submissions (March 2005) (Gaede Decl., Ex. 3); U.S. Dept. of Health and Human Servs. and U.S. Food and Drug Admin., Drug-Diagnostic Co- Development Concept Paper (2005) (Gaede Decl., Ex.4); 21 C.F.R. § 201.57. 6 Gaede Decl., Ex. 5. 7 Gaede Decl., Ex. 6.
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As a result of these contributions to improvement in the quality of care, personalized medicine represents a key strategy on healthcare reform. The potential application of this new knowledge, especially when supported through the use of health information technology in the patient care setting, presents the opportunity for transformational change.8 In sum, personalized medicine offers a model for efficient and high quality health care. Diagnostic companies that offer these tools are dedicated to working with federal agencies, physicians, patients, and payers to make the much-awaited transformation of healthcare possible.
B. R&D TO IDENTIFY GENES, THEIR USEFUL SEQUENCES, GENETIC VARIATIONS, AND THEIR DISEASE CORRELATION IS COSTLY The biotechnology industry in the United States has grown enormously over the years. In the United States, there are over 1,452 biotechnology companies that provide medical therapies and diagnostics, agriculture, and industrial processes. Approximately 20% of these are publicly traded, generating revenues in excess of $60 billion and employing approximately 9 million people. Biotech is one of the most research-intensive industries in the world, with U.S. public companies spending more that $27 billion to develop new products. In the health care sector, the biotechnology industry has more than 370 therapeutic products currently in clinical trials being studied to treat more than 200 diseases. Given the long and expensive research, development, and commercialization cycles, and relatively limited resources of most personalized medicine companies, the patent system is essential to protect and foster innovation that, in turn, attracts financial investors. Although Plaintiffs allege injuries only with respect to the unique patent portfolio and business model of defendant Myriad, the remedies sought by Plaintiffs could potentially cause investors to question the stability of an industry that, like many others, is founded on the limited exclusivity of patented technology. It is particularly troublesome that Plaintiffs are seeking such an outcome without a full trial on the unique facts and implications underpinning their novel legal theories. In short, Plaintiffs are seeking to punish defendant Myriad for asserting its unique patent portfolio to allegedly “preclude all research into genes known to correlate with an increased risk
8 Opening Statement of Kathleen Sebelius, Senate Committee on Finance (April 2, 2009) (Gaede Decl., Ex. 7).
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of breast and/or ovarian cancer.”9 However, by attacking the very foundation of DNA sequence patents, Plaintiffs have raised what should be a simple patent dispute into a high-stakes fight that could result in the loss of future diagnostic R&D and a bleak outlook for patients and the health care system.
C. ACADEMIC AND GOVERNMENT RESEARCH ESTABLISHES THAT A STRONG PATENT SYSTEM IS A NECESSARY CONDITION TO FOSTER RESEARCH AND DEVELOPMENT THAT BENEFITS PATIENTS Considerable academic and government research supports the benefits of a strong patent system to fostering innovative research and development that, in turn, fosters human longevity. Indeed, amicus American Medical Association has endorsed the concept of DNA sequence patents as advancing the development of therapies. American Medical Association
Ethics Opinion 2.105 (2007)10 states, in part:
A patent grants the holder the right, for a limited amount of time, to prevent others from commercializing his or her inventions. At the same time, the patent system is designed to foster information sharing. Full disclosure of the invention-- enabling another trained in the art to replicate it--is necessary to obtain a patent. Patenting is also thought to encourage private investment into research. Arguments have been made that the patenting of human genomic material sets a troubling precedent for the ownership or commodification of human life. DNA sequences, however, are not tantamount to human life, and it is unclear where and whether qualities uniquely human are found in genetic material. Genetic research holds great potential for achieving new medical therapies. It remains unclear what role patenting will play in ensuring such development. At this time the Council concludes that granting patent protection should not hinder the goal of developing new beneficial technology and offers the following guidelines . . . . Academic research has established a connection between strong research and development and the cost savings and benefit to human longevity:
9 In actuality Myriad has “consistently encouraged, promoted and subsidized research on the BRCA genes . . . Myriad has provided BRCA1 and BRCA2 cDNA clones free to researchers at over 30 research institutions, and conducted collaborative research with more than 440 scientists all over the world . . . [m]ore than 18,000 scientists have . . . published more than 7,000 papers on the genes since Myriad’s publication of the genes. (Critchfield Decl., ¶ 65.) 10 Gaede Decl., Ex. 8.
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• The adoption of innovative new drugs is associated with substantial cost savings in
medical care. (BARFIELD & CALFEE, BIOTECHNOLOGY AND THE PATENT SYSTEM (2007).)11
• Investment and innovation in drugs that offer significant improvements in the treatment, diagnosis or prevention of disease has also had a positive impact on longevity and economic growth. (Frank R. Lichtenberg, Pharmaceutical
Knowledge-Capital Accumulation and Longevity, in MEASURING CAPITAL IN A NEW
12 ECONOMY (Carol Corrado, John Haltiwanger, and Dan Sichel, eds., 2002).) For example, new drugs arising from pharmaceutical innovation have played a role in the roughly 60% decline in heart disease mortality since the 1960’s, and the declining
disability rates in the elderly. (BARFIELD & CALFEE, BIOTECHNOLOGY AND THE
13 PATENT SYSTEM (2007).) This same longevity benefit is not found with drugs that are imitative (me-toos) rather than innovative. (Frank R. Lichtenberg,
Pharmaceutical Knowledge-Capital Accumulation and Longevity, MEASURING
CAPITAL IN A NEW ECONOMY (Carol Corrado, John Haltiwanger, and Dan Sichel, eds., 2002).)14 The biotechnology industry incurs significant upfront research and development costs for innovative products that can only be recouped by patent protected drugs and diagnostics. Consider:
• Top selling drugs typically have large profit margins because the incremental cost of goods associated with an additional output of production is low. “The industry’s high R&D spending and relatively low manufacturing costs create a cost structure similar to that of, for example, the software industry. Both industries have high fixed costs (for research and development) and low variable costs (to put a software application
11 Gaede Decl., Ex. 9 at p. 5. 12 Gaede Decl., Ex. 10 at p. 26. 13 Gaede Decl., Ex. 9 at p. 5. 14 Gaede Decl., Ex. 10 at p. 26.
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onto a CD-ROM or to produce a bottle of prescription medicine). Consequently, prices in those industries are usually much higher than the cost of providing an additional unit of product, because revenue from sales of the product must ultimately
cover those fixed costs.” (CONGRESSIONAL BUDGET OFFICE, RESEARCH AND
15 DEVELOPMENT IN THE PHARMACEUTICAL INDUSTRY (2006).) This is equally true for diagnostics where there is considerable up front investment.
• “Investors believe that in order for the biotechnology sector to succeed, it is critical that biotechnology firms be able to obtain and enforce strong patents. Biotechnology companies, particularly those that have yet to put a product on the market, must rely
on substantial investment funding in order to survive.” (CLAUDE BARFIELD & JOHN
16 E. CALFEE, BIOTECHNOLOGY AND THE PATENT SYSTEM (2007).) A strong patent system correlates with a higher level of research and development. Consider:
• Strong patent protection correlates with the amount of R&D investment, and weak patent laws engender poor investment (without the jobs and economic prosperity which results from this R&D investment). (Henry Grabowski, Patents, Innovation
17 and Access to New Pharmaceuticals, 5(4) J. INT’L ECON. LAW 849, 854 (2002).)
• Internationally, the strength of intellectual property protection is positively and significantly associated with R&D. The countries that provided stronger protection tend to have a larger proportions of their GDP devoted to R&D activities. (Sunil
Kanwar & Robert E. Evenson, Does Intellectual Property Protection Spur Technological Change? (Economic Growth Center Yale University, Discussion Paper No. 831, 2001) available at http://www.econ.yale.edu/~egcenter/research.htm.)18
• Japan strengthened its patent laws in 1977. Following this change in law, the pharmaceutical industry in Japan “evolved from an imitative entity to an innovative
15 Gaede Decl., Ex. 11 at p. 4. 16 Gaede Decl., Ex. 9 at p. 30. 17 Gaede Decl., Ex. 13 at pp. 853-854. 18 Gaede Decl., Ex. 12 at p. 22.
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one.” (Henry Grabowski, Patents, Innovation and Access to New Pharmaceuticals,
19 5(4) J. INT’L ECON. LAW 849, 854 (2002).) The Congressional Budget Office has cautioned against reducing expectation of profits in the biotechnology industry as that will dampen research and development.
• “. . . changes in price levels also affect firms’ expectation about profits. Thus, higher real drug prices may increase the value of completing existing projects more quickly and encourage companies to undertake more new research than they would otherwise. Both effects involve increased R&D spending and thus greater R&D intensity. Analysts generally view that connection as having clear implications for efforts to reduce industry prices and profits, in that such interventions would dampen R&D
investment.” (CONGRESSIONAL BUDGET OFFICE, RESEARCH AND DEVELOPMENT IN
20 THE PHARMACEUTICAL INDUSTRY (2006).)
• “Economists broadly agree that a reduction in [drug] profits would cause private-
sector investment in drug R&D to grow more slowly or to decline.” (CONGRESSIONAL
BUDGET OFFICE, RESEARCH AND DEVELOPMENT IN THE PHARMACEUTICAL INDUSTRY (2006).)21
• Moreover, a recent GAO study found that only 4-6 of the top 100 drugs used by the Department of Defense were developed using government money. Thus, to the extent arguments are raised that government can step in to develop new therapeutics and
diagnostics, the objective data is to the contrary: the system relies heavily on private
research and development. (UNITED STATES GENERAL ACCOUNTING OFFICE,
TECHNOLOGY TRANSFER AGENCIES’ RIGHTS TO FEDERALLY SPONSORED BIOMEDICAL
22 INNOVATIONS (GAO-03-536 2003).)
19 Gaede Decl., Ex. 13. 20 Gaede Decl., Ex. 11 at p. 10. 21 Id. at p. 45. 22 Gaede Decl., Ex. 14 at p. 8.
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Collectively, the foregoing establishes that the current patent system promotes the introduction of innovative products and services resulting from high research and development spending incurred by private industry that has reduced health care costs and promoted longevity.
IV. ISOLATED DNA SEQUENCES AND METHODS FOR USING THEM ARE PATENTABLE SUBJECT MATTER WITHIN THE CONTEXT OF A PATENT SYSTEM THAT CAREFULLY SCRUTINIZES AND REWARDS PATENTS FOR INVENTIONS CONSISTENT WITH THE CONSTITUTIONAL GRANT Patents serve the economic purpose of promoting the “progress of science and useful arts by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” U.S. Const. Art. I, § 8, cl. 8. The time-restricted exclusive right allows the inventor the potential to recover the risk and cost of research, development, regulatory approval and marketing for the patented invention by excluding others from making, using or selling the same invention. In return, the public receives the benefit of a published document – a patent that teaches how to make and use the technology upon expiration of the patent – that would not be available to the public if withheld, e.g., as a trade secret. In most instances the patent application is published prior to grant of the application. If a patent is not granted on a published application either because the inventor abandons the application or the invention is not deemed patent-worthy by the USPTO or later by the U.S. courts, the technology remains in the public domain.
A. SECTION 101 PROVIDES A BROAD SCOPE OF PATENTABLE SUBJECT MATTER THAT REFLECTS THE HAND OF MAN The United States patent statute codified in Title 35 of the United States Code, is based on a constitutional grant of power to Congress. Section 101’s language itself is quite broad, viz. “[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.” The Supreme Court affirmed an expansive view of Section 101 when it upheld genetically engineered bacteria as patentable. Diamond v. Chakrabarty, 447 U.S. 303 (1980). That finding was based on broad meanings of the statutory terms “manufacture” and “compositions of matter.” Chakrabarty, 447 U.S. at 308.
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35 U.S.C. § 101 ensures that patents to products derived from natural sources such as DNA or the diagnostic or therapeutic use of DNA are distinguishable from the product of nature itself. In Chakrabarty the Supreme Court held that an invention that embraces living matter is not per se unpatentable. Limits, however, are imposed on patents that cover products derived from natural sources. “The test set down by the Supreme Court and implemented by the USPTO for patentable subject matter in this area is whether the subject matter sought to be patented is the result of human intervention.” U .S. Patent & Trademark Office, Manual of Patent Examining Procedure (MPEP) § 2105 (8th ed. 2001) (emphasis added). Thus, patents are not issued to human genes or any other product derived from nature as they exist in the human body. Instead, patents are only issued to inventions after the natural product has been removed from the body by a process of isolation or purification, and identification of structure and utility. All life science inventions include or coincide with one or more laws of nature. Therefore, if mere inclusion or reliance upon such things would render an invention unpatentable, there could be no medical patents. For this reason, courts have made it clear that, although fundamental principles themselves are not patentable, useful applications of the principles are, so long as the use is specific enough not to “pre-empt” other applications of the principle. See Mackay Radio & Tel. Co. v. Radio Corp. of Am., 306 U.S. 86, 94 (1939); Diamond v. Diehr, 450 U.S. 175, 187 (1981). In other words, an invention which is a “nonnaturally occurring manufacture or composition of matter-a product of human ingenuity ‘having a distinctive name, character, [and] use’” is patentable. Chakrabarty, 447 U.S. at 309- 310. For example, the Federal Circuit recently held that claims utilizing correlations of natural processes in a series of specific steps that are patent-eligible do not pre-empt a fundamental principle, and are therefore patentable. Prometheus Labs., Inc. v. Mayo Collaborative Servs., 581 F.3d 1336 (Fed. Cir. 2009). Specifically, method of treatment steps involving chemical or physical transformation of physical objects or substances are per se patentable, although “every
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transformation of physical matter in the body can be described as occurring according to natural
processes and natural law.”23 Prometheus, 581 F. 3d. at 1346. In sum, it is the application of human ingenuity, or “the hand of man,” that is necessary to achieve patentable subject matter for health care inventions that are inherently intertwined with natural laws. Chakrabarty, 447 U.S. at 309. In the case of genetic materials, it is the identification and isolation of a DNA sequence of interest, and association of that sequence to clinically useful disease characteristics, that rise above what exists in nature and renders such inventions patentable. This is consistent with a long line of cases supporting the proposition that natural substances are patentable when they are purified and isolated, and the resulting product has utility. Kuehmsted v. Farbenfabriken of Elberfield, 179 F. 701 (7th Cir. 1910) (salicylic acid patentable if isolated into a pure and therapeutically useful product); Merck & Co. v. Olin Mathieson Chemical Corp., 253 F.2d 156 (4th Cir. 1958) (purified vitamin B12 patentable because therapeutically useful). Based on these principles, the USPTO has issued patents for a variety of newly identified gene-based nucleic acid sequences, proteins, and polypeptides that are claimed in a form that differentiates them from naturally occurring substances. Moreover, the MPEP explicitly requires the rejection of any claim whose interpretation as a whole could encompass a human being as an attempt to patent an invention directed to nonstatutory subject matter. MPEP § 2105.
B. COUNTERBALANCED AGAINST A BROAD SCOPE OF PATENTABLE SUBJECT MATTER ARE A NUMBER OF STATUTORY CONDITION PRECEDENTS THAT ENSURE ONLY INVENTIONS PROPERLY DISCLOSED TO THE PUBLIC ARE GRANTED A PATENT While patentable subject matter has been quite properly viewed expansively consistent with the constitutional grant, Congress enacted a careful statutory scheme to ensure that only truly new and innovative inventions properly conceived of and disclosed to the public are awarded a patent. The conditions precedent to the grant of a patent are set forth primarily in 35 U.S.C. §§ 101-103 and 112. Congress delegated its responsibility to the USPTO to determine
23 In Prometheus, the Federal Circuit also dismissed Justice Breyer’s Metabolite dissent, upon which Plaintiffs rely to support their Motion for Summary Judgment, as “not controlling law.” Prometheus, 581 F. 3d. 1346 n3.
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EXHIBIT
5
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Priorities for Personalized Medicine
Report of the President’s Council of Advisors on Science and Technology September 2008
★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ A5812 Case 1:09-cv-04515-RWS Document 197-7 Filed 01/06/2010 Page 3 of 65
EXECUTIVE OFFICE OF THE PRESIDENT OFFICE OF SCIENCE AND TECHNOLOGY POLICY WASHINGTON, D.C. 20502
September 15, 2008
President George W. Bush The White House Washington, D.C. 20502
Dear Mr. President: We are pleased to send you the report, Priorities for Personalized Medicine, prepared by your Council of Advisors on Science and Technology (PCAST). This report presents the scientific background of personalized medicine, its potential to improve health care and the obstacles standing in the way of its progress. The Council believes that the convergence of scientific opportunity and public health need represented by personalized medicine warrants significant public and private sector action to realize the development of a promising class of new medical products. In conducting this extensive study PCAST examined eight major policy areas, engaging an extensive and diverse set of individuals and groups. PCAST ultimately identified three areas – technology and tools, regulation, and reimbursement – for its policy recommendations. In order to develop technology and tools that will allow for the advancement of personalized medicine, PCAST recommends that the Federal government develop a strategic, long-term plan that coordinates public and private sector efforts to advance research and development relevant to personalized medicine. To stimulate and facilitate modernization of the regulatory process impacting personalized medicine, transparent, systematic, and iterative approaches should be utilized in the regulation of personalized medicine technologies and tools. PCAST also recommends that efforts to achieve cost-containment objectives for health care should not arbitrarily obstruct the adoption of innovative personalized medicine products. Finally, PCAST found that an office should be established within the Department of Health and Human Services to specifically coordinate their activities related to personalized medicine.
PCAST hopes that this report in its entirety helps lay a foundation for realizing important health care benefits from genomics-based molecular diagnostics, while providing a balanced assessment of the promise and current limitations of personalized medicine more broadly.
Sincerely,
John H. Marburger, III E. Floyd Kvamme Co-Chair Co-Chair
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September 15, 2008
The Honorable John H. Marburger, III Director, Office of Science and Technology Policy Executive Office of the President Washington, DC 20502 Mr. E. Floyd Kvamme Co-Chair, President’s Council of Advisors on Science and Technology Washington, DC 20502
Dear Jack and Floyd: I am delighted to transmit to you PCAST’s report, Priorities for Personalized Medicine, which was recently completed by our Subcommittee on Personalized Medicine. PCAST commenced its study on personalized medicine in January 2007 with the ambitious goal of assessing eight major policy areas, including: technology/tools, regulation, reimbursement, information technology, intellectual property, privacy, physician and patient education, and economics. More than 110 individuals provided briefings to PCAST and its subcommittee at nine meetings and workshops, a series of phone calls and by written submissions. We were very pleased at the high level of interest in this subject as described by these individuals, who represented academic institutions, medical diagnostic, direct to consumer, service and imaging companies, biotechnology and related tools companies, pharmaceutical and information technology companies, insurance companies and providers, patient advocates, venture capital firms, trade and professional associations and government agencies. I presented our preliminary recommendations at the April 2008 PCAST Meeting, where we all noted the assortment of Federal agencies with involvement in and/or oversight of emerging personalized medicine products and services. As important, we also recognized the broad range of levels at which policy recommendations might be directed in our communication with the President. These observations and experiences are not uncommon for health care and we were not spared the dilemma of how best to prioritize our study conclusions. As a result, the subcommittee narrowed the focus of the report into areas we considered the most pressing and timely: technology/tools, regulation and reimbursement. We also feel the U.S. Department of Health & Human Services (HHS) could be most effective in assuring progress for continued innovation in this field through a more formalized coordination office.
It is important to point out that we did not choose to detail in our report policy recommendations in five areas we studied, which still remain key components to the long term development and success of personalized medicine. Our reasons for this decision relate to the timing of progress and work in each, involving: significant ongoing government activity (information technology and privacy), the early stage of personalized medicine product development (physician and patient education and economics) and the need for more comprehensive policy recommendations extending beyond the scope of our study of personalized medicine (intellectual property and privacy). With particular respect to intellectual property, discussion of Congressional attempts at patent reform has been underway for several years and certain policy issues dominate the current, critical dialogue in this area – with differing views from a range of key industries. We encourage a separate, future PCAST subcommittee to examine the outstanding intellectual property issues across all domains and prepare a report addressing these issues. Several observations have served to peak our attention in the course of this study on personalized medicine. First, we have been impressed with the efforts of Secretary Leavitt and his staff in supporting
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advancements in this field throughout different agencies in HHS. The Secretary’s leadership has accelerated the rate at which such technological developments historically permeate policy discussions and decisions – though there is also understandable concern this progress might slow or end with an upcoming change in administration. Second, first generation personalized medicine products are giving us a vision of even broader possible applications. Not only do they have the potential to expedite drug testing and approval, which has slowed significantly in this decade (in a backdrop of increasing development expense), they promise to improve the quality of patient care. Finally, there is also widespread appreciation that, if we begin to address the quality and delivery of patient care, we might eventually harness rising health care costs. The rapidly increasing number of enrollees in the Federal Medicare insurance program will keep the health care debate focused on costs for many years to come. While there are many aspects of personalized medicine that require significant additional study, this field is developing specialized tools and accelerating the use of others that offer the means to answer many questions in this debate. I feel the President’s support of, and the long standing efforts by Secretary Leavitt in facilitating the development of, personalized medicine have contributed greatly to early progress in this field. At the same time, I hope this study contributes a broader understanding and recognition of the future opportunities that may arise from personalized medicine – but ones that will only emerge with a continuation of current favorable policies in this area.
Sincerely,
M. Kathleen Behrens Chair Subcommittee on Personalized Medicine
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President’s Council of Advisors on Science and Technology
Chairs John H. Marburger, III E. Floyd Kvamme Co-Chair and Director Co-Chair and Partner Office of Science and Technology Policy Kleiner Perkins Caufield & Byers
Members
F. Duane Ackerman Michael S. Dell Former Chairman and CEO Chairman of the Board BellSouth Corporation Dell Inc.
Paul M. Anderson Nance K. Dicciani Chairman of the Board Former President and CEO Spectra Energy Corporation Honeywell Specialty Materials
Charles J. Arntzen Raul J. Fernandez Regents’ Professor and CEO Florence Ely Nelson Presidential Chair ObjectVideo The Biodesign Institute Arizona State University Marye Anne Fox Chancellor Norman R. Augustine University of California, San Diego Former Chairman and CEO Lockheed Martin Corporation Martha Gilliland Senior Fellow Carol Bartz Council for Aid to Education Executive Chairman of the Board Autodesk, Inc. Ralph Gomory Former President M. Kathleen Behrens Alfred P. Sloan Foundation General Partner RS& Co. Venture Partners IV, L.P. Bernadine Healy Health Editor and Columnist Erich Bloch U.S. News and World Report Director The Washington Advisory Group Robert J. Herbold Former Executive Vice President Robert A. Brown Microsoft Corporation President Boston University Richard H. Herman Chancellor G. Wayne Clough University of Illinois at Urbana-Champaign Secretary Smithsonian Institution Martin J. Jischke President Emeritus Purdue University
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Fred Kavli George Scalise Founder and Chairman President Kavli Foundation Semiconductor Industry Association
Bobbie Kilberg Stratton D. Sclavos President Chairman of the Board, President, Northern Virginia Technology Council and CEO VeriSign
Walter E. Massey John Brooks Slaughter President Emeritus President and CEO Morehouse College The National Action Council for Minorities in Engineering E. Kenneth Nwabueze CEO Joseph M. Tucci SageMetrics Chairman, President, and CEO EMC Corporation Steven G. Papermaster Chairman Charles M. Vest Powershift Ventures President National Academy of Engineering Luis M. Proenza President Robert E. Witt University of Akron President University of Alabama Daniel A. Reed Director of Scalable and Multicore Tadataka Yamada Computing Strategy President, Global Health Program Microsoft Corporation Bill and Melinda Gates Foundation
Executive Director Scott J. Steele
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Subcommittee on Personalized Medicine
Chair M. Kathleen Behrens General Partner RS&Co. Venture Partners IV, L.P.
Members Paul M. Anderson Bernadine Healy Chairman of the Board Health Editor and Columnist Spectra Energy Corporation U.S. News and World Report
Charles J. Arntzen Martin J. Jischke Regents’ Professor and President Emeritus Florence Ely Nelson Presidential Chair Purdue University The Biodesign Institute Arizona State University Steven G. Papermaster Chairman Robert A. Brown Powershift Ventures President Boston University Luis M. Proenza President G. Wayne Clough University of Akron Secretary Smithsonian Institution Daniel A. Reed Director of Scalable and Multicore Nance K. Dicciani Computing Strategy Former President and CEO Microsoft Corporation Honeywell Specialty Materials Joseph M. Tucci Marye Anne Fox Chairman, President, and CEO Chancellor EMC Corporation University of California, San Diego Tadataka Yamada Martha Gilliland President, Global Health Program Senior Fellow Bill and Melinda Gates Foundation Council for Aid to Education
OSTP Staff Liaison Jane Silverthorne Scott J. Steele
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Table of Contents
Executive Summary...... 1 I. Introduction...... 7 II. Landscape of Personalized Medicine...... 11 III. PCAST Deliberations ...... 17 IV. Focus of Report...... 19 V. Technology and Tools...... 25 VI. Regulation...... 37 VII. Coverage and Reimbursement...... 45 VIII. HHS Coordination ...... 49 Appendix A. PCAST Personalized Medicine Meetings and Presenters...... 51
Appendix B. Examples of Personalized Medicine Applications Currently on the Market ...... 55 Appendix C. Technology and Tools Glossary...... 57 Appendix D. Genomic Technologies...... 59
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Executive Summary
“Personalized medicine” refers to the tailoring of medical treatment to the individual characteristics of each patient. It does not literally mean the creation of drugs or medical devices that are unique to a patient, but rather the ability to classify individuals into subpopulations that differ in their susceptibility to a particular disease or their response to a specific treatment. Preventive or therapeutic interventions can then be concentrated on those who will benefit, sparing expense and side effects for those who will not. The principle of adjusting treatment to specific patient characteristics has, of course, always been the goal of physicians. However, recent rapid advances in genomics and molecular biology are beginning to reveal a large number of possible new, genome-related, molecular markers for the presence of disease, susceptibility to disease, or differential response to treatment. Such markers can serve as the basis of new genomics-based diagnostic tests for identifying and/or confirming disease, assessing an individual’s risk of disease, identifying patients who will benefit from particular interventions, or tailoring dosing regimens to individual variations in metabolic response. These new diagnostics can also pave the way for development of new therapeutics specifically targeted at the physiological consequences of the genetic defect(s) associated with a patient’s disease. The current high level of interest in personalized medicine from a policy perspective is attributable not only to the promise of improved patient care and disease prevention, but also to the potential for personalized medicine to positively impact two other important trends – the increasing cost of health care and the decreasing rate of new medical product development. The ability to distinguish in advance those patients who will benefit from a given treatment and those who are likely to suffer important adverse effects could result in meaningful cost savings for the overall health care system. Moreover, the ability to stratify patients by disease susceptibility or likely response to treatment could also reduce the size, duration, and cost of clinical trials, thus facilitating the development of new treatments, diagnostics, and prevention strategies. The President’s Council of Advisors on Science and Technology (PCAST) believes that the convergence of scientific and clinical opportunity and public health need represented by personalized medicine warrants significant public and private sector action to facilitate the development and introduction into clinical practice of this promising class of new medical products. In developing recommendations for such action, PCAST considered eight major policy areas – technology/tools, regulation, reimbursement, information technology, intellectual property, privacy, physician and patient education, and economics. To understand the impact of these policy areas on the development of personalized medicine, PCAST solicited input from a broad range of stakeholders representing academic institutions, medical diagnostics and imaging companies, biotechnology and pharmaceutical companies, insurance companies, patient providers and advocates, venture capital firms, trade and professional associations, and government agencies. Based on these deliberations, PCAST determined that specific policy actions in the realm of genomics-based molecular diagnostics had the greatest potential to accelerate progress in personalized medicine. This does not mean that PCAST discounts the importance of parallel developments in genomics-linked therapeutics; rather, PCAST has concluded that, at present, the pace of change is most rapid, and the policy hurdles are greatest, in the realm of diagnostics. With regard to genomics-based molecular diagnostics, PCAST further identified three areas – technology/tools, regulation, and reimbursement –for its policy recommendations. This prioritization reflects the critical importance of defined policy actions in each of these areas to near-term progress in the development and introduction of these important health care innovations. Accordingly, PCAST has focused its recommendations on these areas. The other policy areas, while still very important over the long term to the success of new genomics-based molecular diagnostics, were deemed less urgent within the context of the present report because of significant ongoing government activity (information technology and privacy), the early stage of personalized medicine product development (physician and patient education and economics) or the need for more comprehensive policy recommendations extending beyond the scope of personalized medicine (intellectual property and privacy). With particular respect to intellectual property, PCAST strongly recommends the convening of a separate PCAST
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subcommittee to examine the outstanding intellectual property issues across all domains and prepare a report addressing these issues. Finally, because the three policy areas on which PCAST is focusing its recommendations are under the purview of the Department of Health and Human Services (HHS), PCAST concluded that HHS should establish a Personalized Medicine Coordination Office. This report presents the scientific and clinical background of personalized medicine, its potential to improve health care, and the obstacles standing in the way of its progress. It reviews the landscape of personalized medicine by describing the diagnostic tools involved, the clinical domains affected, and the requirements for implementation in clinical practice. The report also explains the rationale for focusing on the three priority areas of technology/tools, regulation, and reimbursement and provides a brief review of the issues facing the remaining five policy areas. The report discusses in detail the technical background, policy issues, and challenges affecting each of the three priority areas and provides specific recommendations for each area. Challenges and Policy Recommendations Priority Area 1: Technology and Tools Challenges Despite the promise of genomics-based molecular diagnostics to advance personalized medicine, significant challenges remain in validating the genomic/clinical correlations required to advance these products into clinical use. While an increasing number of candidate genetic markers are being discovered, clinical validation of these markers has proceeded at a slow pace. To correct this imbalance between discovery and validation, public and private sector research will need to be coordinated and prioritized more effectively, and the tools required for validation studies will need to be strengthened. Public/private sector coordination is necessary because the validation of genetic correlations with disease – the key element of translational research in this area – shares many of the attributes of the “development” side of research and development (R&D). Historically, development has been the purview of industry rather than of government-supported academic science, which has instead focused on discovery research. However, because the validation of genomic correlations with disease is a new, expensive, and high risk R&D area, industry may not be willing to make a substantial investment until a clearer path to validation is developed through the use of public funds. Therefore, in order to move genomic discoveries to practical application, public investment in the translational research necessary to validate genomic/clinical correlations must be increased and also coordinated with industry investment. Clinical and population studies to validate genomic correlations with disease and disease outcomes will also require significant investment in the development of three key translational research tools. The first tool includes collections of high quality biological specimens accompanied by comprehensive disease annotation. The second tool encompasses study designs addressing biomarker standardization and incorporating the sophisticated statistical methods necessary for demonstrating the clinical validity and utility of genomic profiles. The third tool represents large population cohorts for longitudinal health and disease studies. Without the development of these tools, personalized medicine is unlikely to advance beyond the stage of promising discoveries. Policy Recommendations 1. The Federal government should develop a strategic, long-term plan that coordinates public and private sector efforts to advance research and development relevant to personalized medicine. • The Federal government, through the leadership of HHS, should join with the private sector to create a public/private sector “Personalized Medicine R&D Roadmap” for coordinating discovery and translational research in personalized medicine. • The National Institutes of Health (NIH) and other agencies such as the Departments of Energy and Defense should evaluate the proper balance of government funding for discovery versus translational research relevant to personalized medicine.
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• Under HHS leadership, NIH should develop a coordinated process to identify and prioritize diseases and common therapies that would benefit from the application of genomics-based molecular diagnostics. 2. The Federal government should make critical investments in the enabling tools and resources essential to moving beyond genomic discoveries to personalized medicine products and services of patient and public benefit. • NIH should lead, stimulate, and coordinate public and private sector efforts to develop an integrated nationwide network of standardized biospecimen repositories to support research in personalized medicine. • NIH should develop a funding program for academic/industry collaborative projects addressing biomarker standardization, statistical methods, and other aspects of study design necessary for validating the clinical utility of molecular diagnostics based on genomic correlations with disease characteristics. • NIH should develop a large population cohort for investigating genetic and environmental health impacts by enrolling and following over time a large, representative sample of the U.S. population. Priority Area 2: Regulation Challenges The Food and Drug Administration (FDA) has made considerable progress in defining its approach to the regulation of genomics-based molecular diagnostics. Nevertheless, FDA guidance remains ambiguous or incomplete in several important areas, including: • Criteria that define risk for products, including diagnostic tests, where information is the key result • Standards for study design and product performance with regard to regulatory review of new diagnostic products • Coordination of potentially redundant requirements between FDA and the Centers for Medicare and Medicaid Services (CMS), operating under the authority of the Clinical Laboratory Improvement Amendments legislation • Regulatory approach to co-development of diagnostics and therapeutics • Criteria and procedures for adjusting therapeutic product labeling to incorporate use of diagnostics • Regulatory approach to information technology-based clinical decision support systems Progress to date on the Critical Path Initiative launched by FDA in 2004, which was intended to stimulate and facilitate modernization of the development path for drugs and devices, has been slow in part because of inadequate funding. Furthermore, the private sector’s interaction with the FDA with regard to regulatory policy needs to be more proactive and constructive. Policy Recommendations 3. FDA should implement a more transparent, systematic, and iterative approach to the regulation of genomics-based molecular diagnostics. • In its final guidance on in vitro diagnostic multivariate index assay (IVDMIA) tests, FDA should clarify its definition of risk in light of the intended IVDMIA use, provide illustrative examples distinguishing products that will be subject to full premarket approval review from those that will not, and provide adequate transition time for any new requirements. • FDA and CMS should identify potential overlap and redundancy in their oversight of laboratory- developed tests, eliminate redundant requirements, and issue guidance to clarify the relationship between their respective requirements. Executive Summary ✩3 A5822 Case 1:09-cv-04515-RWS Document 197-7 Filed 01/06/2010 Page 13 of 65
• FDA should finalize its draft concept paper on drug-diagnostic co-development and provide clarity with regard to requirements and standards. • FDA should clarify the criteria and procedures for determining when labeling of a therapeutic product will incorporate information on related diagnostic tests, as well as establish the circumstances under which such tests will be either recommended or required. • FDA should issue guidance concerning the regulation of automated clinical decision support systems. • FDA should enhance communication with affected constituencies by issuing more frequent and timely Requests for Information and draft guidance. 4. The FDA Critical Path Initiative should be adequately funded to support its envisioned research efforts that are critical to the progress of personalized medicine. • Priority projects should include the use of biomarkers to facilitate product development and regulatory review and the development of standards for clinical trial design and biostatistical analysis for validation of genomics-based molecular diagnostics. • Congress should fund the Reagan-Udall Foundation and its board membership should be expanded to include representatives from the venture capital community and small companies involved in genomics-based diagnostic development. 5. Industry should adopt a proactive and constructive role as FDA seeks to identify and fulfill its regulatory responsibilities related to personalized medicine. • Industry should respond in a substantive and positive way to Requests for Information and draft guidance documents, including submission of alternative approaches, and inform FDA of emerging issues that require policy development. • Test developers should take advantage of existing FDA procedures for advance consultation to achieve a timely and shared understanding of the hurdles to regulatory approval. • Industry should provide FDA with annual projections of the number and type of products in the development pipeline based on emerging or rapidly evolving technologies. • Industry should convene meetings of trade and professional associations to anticipate regulatory issues that are likely to arise with new technological developments and provide FDA timely alerts concerning such emerging issues. Priority Area 3: Reimbursement Challenges There are three key challenges to achieving cost-containment objectives for health care without arbitrarily obstructing the adoption of innovative genomics-based molecular diagnostics. The first challenge is that reimbursement of genomics-based molecular diagnostic tests as low-margin commodity items – as is common practice for laboratory diagnostics – will reduce the likelihood that such products will be developed by industry. The second challenge is the need to develop standards for the evidence that CMS and other payors will require to validate the benefits of these tests in real-world settings. The third challenge involves the procedural hurdles associated with coding systems, bundled payment systems, and complex billing procedures and requirements that can especially impact reimbursement for innovative molecular diagnostics.
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Policy Recommendation 6. Public and private payors should determine coverage policies and payment rates for genomics-based molecular diagnostics in light of their overall impact on patient care, as demonstrated by evidence from clinical trials and other well-designed empirical studies. • Public and private payors should reimburse for genomics-based molecular diagnostics commensurate with the clinical benefits provided and should collaborate with test developers to establish new, more flexible coding approaches for reimbursement. • Public and private payors should collaborate to expand “coverage with evidence development” programs that extend coverage and reimbursement while a product is being investigated for appropriate use and effectiveness. • Public and private payors should collaborate in the development of standards for clinical trial designs that would be accepted as providing evidence sufficient for coverage decisions. HHS Coordination Challenges As the three priority areas on which PCAST is focusing its recommendations come under the purview of HHS, more systematic coordination of activity across HHS is necessary to make the most effective use of limited resources. Policy Recommendation 7. HHS should establish a Personalized Medicine Coordination Office within the Office of the Secretary of HHS to coordinate all activities relevant to personalized medicine. • The coordination office should be charged with coordination of all HHS activities relative to personalized medicine in order to facilitate progress while ensuring that personalized medicine products meet the highest standards of safety, efficacy, and clinical utility. • The coordination office should be responsible for monitoring the progress of personalized medicine and, as new innovations or challenges develop, for ensuring that all HHS agencies work together to address emerging needs.
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I. Introduction
“Personalized medicine” refers to the tailoring of medical treatment to the specific characteristics of each patient. In an operational sense, however, personalized medicine does not literally mean the creation of drugs or medical devices that are unique to a patient.1 Rather, it involves the ability to classify individuals into subpopulations that are uniquely or disproportionately susceptible to a particular disease or responsive to a specific treatment. Preventive or therapeutic interventions can then be concentrated on those who will benefit, sparing expense and side effects for those who will not. The principle of adjusting treatment to the specific characteristics of the patient is not new; it has always been the goal of physicians. However, rapid advances in genomics and molecular biology, including most prominently the sequencing of the human genome, promise to vastly increase physicians’ ability to stratify patients in clinically useful ways. A key product of these scientific advances has been the identification of an array of possible new genome-related molecular markers for disease susceptibility or for specific variants of disease that are especially responsive to particular treatments. These markers can include the presence or expression2 of particular gene variants, patterns of gene variants or their expression, specific proteins, or variant forms of proteins. Such markers can form the basis of new genomics-based diagnostic tests for assessing individuals’ risk of disease, identifying patients who will benefit from particular interventions, or tailoring medication doses to accommodate individual variation in metabolic response.3 In addition to genomics-based diagnostics, another key component of personalized medicine is the expanding group of targeted therapies designed to counteract the specific physiologic mechanisms by which genetic alterations lead to particular forms of disease. Because these therapies are targeted at the consequences of defects in single genes, they are most useful in cases where a single genetic defect defines the disease (e.g., Factor VIII in hemophilia and bcr-abl – targeted by the drug Gleevec® [imatinib mesylate] – in chronic myeloid leukemia). Historically, such therapies have been developed using classical genetic or physiologic characterization and not the recent advances in genomic technologies. However, as genomic technologies identify new markers of disease, new targeted therapies can be developed that are specifically linked to the use of a genomics-based diagnostic test for identifying appropriate patients. These scientific advances have occurred against the backdrop of two important trends in U.S. health care that have focused intense interest on the promise of personalized medicine. The first trend is the ever-increasing cost of health care. As the “baby boom” generation approaches retirement age and increases its demands on the health care system, any respite from cost pressures seems remote. While many health care cost reduction strategies will require difficult choices concerning access to or quality of care, personalized medicine – the use of improved diagnostic tests to better match patients to treatments – seems to offer the prospect of combining improved patient outcomes with reduced costs.
1 There are exceptions to this rule in the area of immunotherapy, for example, patient-specific cancer vaccines that are created using the patient’s own tumor cells or autologous stem cell transplants. 2 Gene expression refers to the process by which cells convert genetic information contained in DNA into the proteins that are responsible for the structure and function of all living cells and tissues. 3 Over the years, many diagnostic tests have become available to detect the genetic abnormalities associated with a wide range of rare inherited disorders. The GeneTests Web site (http://www.genetests.org/, accessed July 17, 2008), funded by the National Library of Medicine and the National Human Genome Research Institute, provides a comprehensive, annotated database of such tests. The new technologies, however, promise to extend the power of genomic analysis to a broader range of more common and/or late-onset diseases with wider public health impact.
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The scope for such savings may be broad. Physicians have long observed substantial variation in patient response to treatments for different cancers as well as for such common conditions as hypertension, heart failure, depression, high cholesterol, and asthma. Finding the best medication for a given patient often involves trial and error; sometimes a physician may exhaust all possibilities without finding an option that is effective. The ability to distinguish in advance those patients who will benefit from those who will incur cost and suffer side effects without gaining benefit could both reduce costs and improve quality of care. The second trend relates to the development of new treatments. The rate at which new drugs and devices are submitted to the Food and Drug Administration (FDA) and approved for marketing has not kept pace with the accelerating progress in biomedical discovery research. This is due in part to the continually increasing cost, complexity, and duration of the research and development (R&D) needed to bring a new product to market,4 a trend that is likely to be exacerbated by increased attention to safety in the wake of the Vioxx® episode.5 Mindful of the enormous public investment in biomedical research, many patient advocacy groups are demanding increased attention to clinical impacts and patient benefit.6 Within the scientific community, there is growing awareness that “the enormous resources being put into biomedical research, and the huge strides made in understanding disease mechanisms, are not resulting in commensurate gains in new treatments, diagnostics and prevention.”7 The core capability of personalized medicine – the ability to stratify patients by disease susceptibility or likely response to treatment – can also be applied in the design of clinical trials to reduce their size, duration, and cost. In some cases, new knowledge about factors influencing patient response can even “rescue” drugs that benefit specific populations but whose effects are lost in the statistical noise when the drugs are tested in unselected populations dominated by nonresponders. Thus, personalized medicine may also be part of the solution to the “pipeline” problem for drugs and medical devices. This compelling convergence of public health need and scientific opportunity has raised personalized medicine to the top of the public policy agenda. Under the leadership of Secretary Michael Leavitt, the Department of Health and Human Services (HHS) has identified personalized medicine as a priority and supported a wide range of initiatives to stimulate progress in the field.8 The Secretary’s Advisory Committee on Genetics, Health, and Society (SACGHS) has recently released two major reports addressing key aspects of personalized medicine.9 The Institute of Medicine has created a Roundtable on Translating Genomic-Based Research for Health10 which recently released a summary report from its December 4, 2007, Workshop on the Diffusion and Use of Genomic Innovations in Health and Medicine.11 The Personalized Medicine Coalition has been organized as an independent, not-for-profit, cross- sector education and advocacy group.12 Conferences on personalized medicine sponsored by academic research centers, investment firms, and others have proliferated as researchers and policymakers in government, academia, and industry seek to understand the implications of genomic science for health care.
4 The Pursuit of High Performance through Research and Development: Understanding Pharmaceutical Research and Development Cost Drivers, prepared by Accenture for the Pharmaceutical Research and Manufacturers of America, 2007; accessed June 24, 2008 at http://www.phrma.org/files/Accenture%20R&D%20Report-2007.pdf. 5 See Vioxx® (rofecoxib) Information Center, http://www.merck.com/newsroom/vioxx/ and Vioxx (rofecoxib) Questions and Answers, http://www.fda.gov/CDER/DRUG/infopage/vioxx/vioxxQA.htm, both accessed August 9, 2008. 6 See, for example, the overview and mission statement for the organization FasterCures, accessed June 24, 2008 at http:// www.fastercures.org/about/. 7 Butler D, “Crossing the Valley of Death,” Nature 2008 Jun 12;453(7197):840-2. 8 http://www.hhs.gov/myhealthcare/, accessed June 24, 2008. 9 U.S. System of Oversight of Genetic Testing: A Response to the Charge of the Secretary of Health and Human Services, Report of the Secretary’s Advisory Committee on Genetics, Health, and Society, April 2008, accessed June 24, 2008 at http://www4. od.nih.gov/oba/SACGHS/reports/SACGHS_oversight_report.pdf; Realizing the Potential of Pharmacogenomics: Opportunities and Challenges, Report of the Secretary’s Advisory Committee on Genetics, Health, and Society, May 2008, accessed June 24, 2008 at http://www4.od.nih.gov/oba/SACGHS/reports/SACGHS_PGx_Report.pdf. 10 http://www.iom.edu/CMS/3740/44443.aspx, accessed June 24, 2008. 11 http://www.nap.edu/catalog.php?record_id=12148, accessed June 24, 2008. 12 http://www.personalizedmedicinecoalition.org/, accessed June 24, 2008.
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Appendix B lists several applications of genomics-based diagnostics (often with linked therapeutics) that have reached the market, establishing proof of concept. At the very least, many more such advances that benefit specific groups of patients can be expected. More optimistic observers envision a future in which the strategy of genomics-tailored treatment is so powerful and broadly useful that it fundamentally transforms clinical practice, leading to a new, qualitatively different, more cost-effective era of truly personalized medicine. Whether such a vision is realistic remains to be seen. But even under the most conservative scenarios for progress in personalized medicine, the benefit in improved health and reduction in human suffering will be great. However, realization of the benefits of personalized medicine is threatened by an array of obstacles. These obstacles include: • Methodological and logistical challenges in validating apparent correlations between genetic markers and disease, which are being generated at an accelerating rate through the latest genomic technologies • Regulatory and reimbursement systems that were not designed to accommodate complex genomics-based diagnostics that have the power to sway high-stakes medical decisions • Absence of the electronic medical record-linked decision support tools needed to effectively integrate the results of genomics-based diagnostic tests into routine clinical practice • Intellectual property laws and practices that may present barriers to investment in genomics-based diagnostics • Privacy concerns that may limit patient acceptance of genomics-based diagnostics • Education of patients and physicians on the proper use and limitations of new genomics-based diagnostics The purpose of this report is to present the recommendations of The President’s Council of Advisors on Science and Technology (PCAST) for overcoming these obstacles. This report differs from the many other recent reports on personalized medicine in two important ways. The first relates to PCAST’s distinctive role, which is to advise the President concerning the private sector’s perspective on key science and technology issues. In analyzing personalized medicine, PCAST has taken a comprehensive view of the innovation ecosystem, and makes recommendations for both government and private action. Second, rather than issue a lengthy list of recommendations addressing every facet of personalized medicine, PCAST has chosen to identify areas that it considers the most important obstacles to progress today, and to focus a limited number of recommendations on these priority areas. To provide context and make the discussion more concrete, Section II briefly outlines the range of personalized medicine products and tools that are beginning to impact clinical practice today or are likely to do so in the foreseeable future, and summarizes the likely clinical focus of personalized medicine in the near term. Section III describes the process through which PCAST assessed the status of personalized medicine and the relative importance of the obstacles to its progress, while Section IV delineates the subset of these obstacles that PCAST has identified as priorities for immediate action. The remaining sections (Sections V-VIII) explain in detail each of these prioritized issues and present PCAST’s recommendations.
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II. Landscape of Personalized Medicine
Introduction The goal of personalized medicine is to reduce the burden of disease by targeting prevention or treatment more effectively. Its strategy is to sort patients into narrower diagnostic categories that correlate more strongly with the efficacy of specific therapies or preventive measures. Its key enabling technologies are advances in genomics and molecular biology that offer the potential to radically improve our ability to characterize susceptibility to disease and to treatment effects. Diagnostic Tools The vision of clinical practice transformed by personalized medicine encompasses a wide range of diagnostic tools. Some address diagnosis per se, some are used to guide treatment, and some identify the need for prevention. Most are aimed at physicians, but some may be marketed directly to consumers. Several products are on the market today (see Appendix B) and many more are in the development pipeline, while new concepts ripe for development are continually emerging from discovery research. Molecular Diagnostics In vitro molecular diagnostics are laboratory tests that can be used on blood, tissue, or other biological samples to identify the presence of specific molecular biomarkers. Today, much attention is focused on genes and their protein products as biomarkers. These may be assessed by measuring either the presence of a gene or protein variant or its level of expression or activity. However, other products of human physiology including lipids, carbohydrates, and other metabolic intermediates and end-products can also serve as biomarkers. Molecular diagnostics can be used in a variety of ways to inform personalized medicine:
• Assess the likely efficacy of specific therapeutic agents in specific patients. An example is the use of the Oncotype DX® test in patients with newly diagnosed, early stage invasive breast cancer to quantify the risk of systemic recurrence and assess the value of chemotherapy.13
• Identify patients who may suffer disproportionately severe adverse effects from a given treatment or dosage. One example is tests for genetic variation in the activity of an enzyme called thiopurine methyltransferase (TPMT), which affects the level of bone marrow toxicity experienced by patients receiving purine drugs for acute lymphocytic leukemia, renal transplant rejection, and severe active rheumatoid arthritis.14 Another example is a test to detect a gene variant that elevates the risk for white blood cell depletion from Camptosar® (irinotecan), an agent used in the treatment of colorectal cancer.15 Notably, as this report was being completed, FDA issued an alert and announced forthcoming changes in labeling for the anti- HIV agent abacavir. Patients with the HLA-B*5701 allele who take abacavir are at significantly higher risk for serious and sometimes fatal hypersensitivity reactions; this allele can be detected by genetic tests already on the market.16 The ability to identify patients who are likely to suffer disproportionate adverse effects may also be of value in designing clinical trials to “rescue” agents which have failed due to toxicity. Several examples of this category of molecular diagnostic are already on the market (see Appendix B).
13 http://www.genomichealth.com/oncotype/, accessed April 24, 2008. 14 AZASAN prescribing information, http://www.salix.com/assets/pdf/prescribe_info/azasanpi.pdf, accessed April 24, 2008. 15 http://www.twt.com/clinical/ivd/ugt1a1.html, accessed May 21, 2008. 16 Information for Healthcare Professionals – Abacavir (marketed as Ziagen) and Abacavir-containing medications, http://www. fda.gov/cder/drug/InfoSheets/HCP/abacavirHCP.htm, accessed August 9, 2008.
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• Determine optimal dosages for drugs whose therapeutic effect is known to vary widely. For example, warfarin anticoagulation therapy is routinely dosed through trial and error. A number of tests for genetic markers that correlate with warfarin metabolism and are believed to be important in patient dosing are already on the market, and additional markers are under investigation.
• Assess the extent or progression of disease. Molecular diagnostics have the potential to provide more accurate and timely information on disease prognosis or treatment effectiveness than the imaging and pathology methods currently used for this purpose, though future diagnostic approaches may integrate all of these methods.
• Examine surrogate measures for clinical outcomes. Researchers are investigating whether biomarker-based molecular diagnostics can provide reliable proxies for longterm outcomes such as relapse or survival. Such tests could be used to shorten the length and expense of clinical trials.
• Identify patients who can benefit from specific preventive measures. To have a meaningful clinical impact, such diagnostics would have to identify individuals who have a substantially elevated risk of a specific condition for which a well-defined intervention is available that is affordable and tolerable within the patient’s lifestyle. Products or services in this category may be marketed directly to consumers, as well as to health care providers. Personal Genomes and Genetic Profiles Rapid advances in the technology and reduction in the cost of DNA sequencing are likely to make complete personal genomic sequences widely available at an affordable cost, perhaps even within the next decade. In fact, whole-genome sequencing has recently become commercially available, albeit at a price – $350,000 – that all but a handful of consumers will find prohibitive.17 However, speculation about the potential impact of the low-cost “$1,000 genome” often overlooks two critical points. First, human illness is a consequence not solely of genetic inheritance, but also of its interaction with environment and behavior. Second, the limiting factor in clinical application of genomic information will be not the availability of patients’ genomes, but rather the lack of robust, clinically validated correlations between genomic markers or profiles and specific clinical phenomena such as susceptibility to disease or to the effects of a particular treatment. Visions of the personal genome as a uniquely powerful diagnostic tool or as a substitute for many existing diagnostic and risk assessment techniques are premature. In addition to whole-genome sequencing, a number of companies have begun to utilize large numbers of known markers to offer genetic profiles directly to consumers.18 As with personal genomes, the predictive value and clinical utility of these genetic profiles is unproven and remains the focus of considerable skepticism and controversy. Direct-to-consumer marketing of such profiles, or of well-validated markers for specific inherited disorders, raises significant scientific, legal, and ethical issues that are both complex and beyond the scope of this report. Linked Diagnostics and Therapeutics Genomics-based diagnostics also have the potential to lead to development of new drugs or biologic agents that are targeted to the genetic or physiologic defect identified by the diagnostic. The best known example is already on the market: the use of HER2 tests to guide use of the drug Herceptin® (trastuzumab) by identifying those breast cancer patients whose tumors over-express the HER2 gene.19 Such linkages may be established via coordinated development of the agent and the test, through development of a relevant test after an agent has reached the market, or (in principle, but rarely in current practice) through the development of a new agent for which an already-marketed diagnostic can serve as a differentiator.
17 http://www.knome.com/Recent%20News/tabid/58420/Default.aspx, accessed April 24, 2008. 18 See, for example, 23andMe (http://www.23andme.com/) and Navigenics (http://www.navigenics.com/). Both accessed April 24, 2008. 19 http://www.herceptin.com/herceptin/professional/testing/important.jsp, accessed April 24th, 2008.
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By identifying patients who are most likely to benefit from a therapeutic agent, linked diagnostics may offer the collateral benefit of enabling the design of smaller, faster, and less expensive clinical trials for those agents with a higher likelihood of success. The development of new linked diagnostics may also make it possible to “rescue” agents that have shown little apparent efficacy in large trials of unselected patient populations. Clinical Domains Today, most applications of innovative genomics-based diagnostics are utilized for cancer. Research on the genetic mutations that lead to loss of normal growth control in tumor cells has identified a range of targets that may be accessible to pharmacologic intervention, and whose presence can be detected using molecular assays for the presence or expression of a variant gene or its protein product. Because of the life-or-death nature of cancer treatment decisions and the high cost of cancer care, the use of relatively expensive tests can often be justified. High-stakes, high-cost conditions in other clinical domains are also likely candidates for commercialization of innovative molecular diagnostics in the near term. Two examples already on the market are the AlloMap® molecular expression test,20 which provides noninvasive monitoring of patient risk for acute cellular rejection following cardiac transplantation, and the Trofile™ HIV tropism assay,21 which is used to identify patients who may benefit from the novel anti-HIV drug Selzentry™ (maraviroc). Common conditions managed in primary care practice are often influenced by multiple genes, in ways that are not yet well understood. The rapidly-evolving field of warfarin pharmacogenomics exemplifies some of the challenges that will be faced in implementing personalized medicine for such conditions.22 There is strong evidence that the extensive variation in warfarin metabolism can be explained largely by a mix of genetic and clinical factors, so that in principle an algorithm based on these factors should be able to help clinicians arrive at optimal dosing sooner and with a reduced risk of bleeding incidents. Several tests are already on the market that allow assessment of some, but not all, of the genetics-related risks associated with warfarin dosing. However, physicians generally remain reluctant to use them for several reasons. Robust algorithms for translating genomic test results into initial and/or subsequent dosing are not widely available and will likely change as additional genetic factors are identified and the relative contributions of each are determined. In many practice settings, lengthy turnaround times mean that test results are unavailable for timely initiation of therapy. Patients who have their initial dosage adjusted in light of such tests still require ongoing monitoring to assure that bleeding time remains within an acceptable range, so there is little or no net reduction in physician burden. Finally, as yet there is no firm evidence that optimizing initial dosage will ultimately reduce bleeding events, and thus it is not yet known whether any important clinical benefit will be gained. Despite a promising theoretical case for the benefits of pharamacogenomics-based patient management, realization of these benefits in practice for common conditions affected by multiple genes will be a complex process that will depend on substantial investment in clinical research well beyond the initial demonstration of gene-disease correlations. For such conditions, widespread adoption of pharmacogenomic diagnostics is likely to be some years away. Clinical Decision Support To date, few genomics-based diagnostic tests have reached the market, and these few products have been targeted primarily at clinical specialists and subspecialists who have been able to assimilate them into practice without special measures. However, if the number of innovative personalized medicine diagnostics and linked diagnostic- therapeutic combinations reaching the market increases substantially, widespread adoption of these products and
20 http://www.allomap.com, accessed April 24, 2008. 21 http://www.trofileassay.com, accessed April 24, 2008. 22 Check W, “Too fast or too slow on PGx testing? ” CAP Today Feature Story, March 2008, College of American Pathologists, http://www.cap.org/apps/portlets/contentViewer/show.do?printFriendly=true&contentReference=cap_today%2Fcover_ stories%2F0308_TooFastOrSlow.html, accessed April 24, 2008. II. Landscape of Personalized Medicine ✩13 A5830 Case 1:09-cv-04515-RWS Document 197-7 Filed 01/06/2010 Page 21 of 65
services – especially in general practice settings – may depend on the availability of IT-based clinical decision support systems that are integrated with electronic medical records and can be accessed as part of routine practice workflows. Such systems draw on the information present in the medical record to give the physician patient- and situation-specific information on the diagnostics and therapeutics relevant to the patient’s care. Medical Technology Innovation Pathway Genomics-based diagnostics, as well as therapeutics targeted at the physiologic consequences of genetic variation in disease, must traverse a complex pathway to move from a fundamental discovery in basic biomedical science to a product or service that is available in routine clinical practice. These steps are presented in simplified and idealized form in the Medical Technology Innovation Pathway, shown in Figure 1. Although the pathway is a simplified representation, it helps to clarify key features of the innovation process that are central to understanding the policy issues addressed in this report. These features include: • The complex interactions between government, academia, and industry that are required to bring a new biomedical technology to fruition • The continual assessment of needs, opportunities, and the opportunity cost of alternative investments conducted by government and industry as they evaluate how to spend scarce resources most productively • The role of government funded discovery and translational research in continually reseeding the development pathway with essential technologies and tools • The challenging, nonroutine nature of the “development” phase of the R&D process for medical products • The important hurdles to market access for new products or services posed by regulatory and coverage/ reimbursement processes • The provisional nature of market access, as the regulatory and reimbursement status of marketed products may be subject to revision in light of ongoing surveillance and research As is reflected in the pathway diagram, private sector investment decisions take into account scientific and technological considerations, along with market conditions and intellectual property, regulatory, and reimbursement hurdles that are expected to apply to a given product. This assessment considers not only those factors that are narrowly relevant to a particular product, but also overall trends in intellectual property, regulatory, and reimbursement policy that are relevant to a biomedical product class, such as genomics-based molecular diagnostics. Intellectual property, regulatory, or reimbursement policies can be barriers to investment not only when they raise well-defined hurdles to product development, but also in situations where a lack of clear policy or clear communication of intended policy changes raises substantial concern that new hurdles will be imposed. Because all of these factors are considered at the outset, an unfavorable assessment of the investment climate for a product – or, indeed, for an entire class of products – can mean that no investment in that product or class will be forthcoming at all.
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Figure 1. Medical Technology Innovation Pathway
Medical Technology Innovation Pathway
Unmet clinical need
Government assesses opportunities Discovery in discovery and translational research research, gaps in public and private R&D
Venture capital or established Discoveries with company assesses markets, IP, potential product or competition, regulation, service applications reimbursement, available capital, opportunity cost
Translational research in government, academia New business initiative or and/or industry company startup
Product development Pilot manufacturing in industry capability
Early phase clinical trials
Late phase Production clinical trials manufacturing capacity
Regulatory submission, definition of approved scope of marketing
Coverage/ reimbursement
Post-market surveillance Postmarketing Product differentiation/extension research
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III. PCAST Deliberations
PCAST initiated its study in January 2007, having identified eight major policy areas to consider and evaluate: • Technology/Tools • Regulation • Reimbursement • Information Technology • Intellectual Property • Privacy • Physician and Patient Education • Economics Numerous public presentations, private subcommittee meetings and workshops, and telephone interviews were conducted to learn the views of a broad range of stakeholders and provide subject matter expertise to PCAST on these eight topics. More than 110 individuals provided briefings, interviews, or presentations. The following major events were held involving the participants, as listed in Appendix A: • Public presentations at PCAST meetings on January 9, 2007; April 24, 2007; September 11, 2007; and January 8, 2008, by academic and industry researchers, clinicians, industry executives, venture capitalists, and representatives of government agencies, as well as trade, professional, and patient associations. • Presentations at Personalized Medicine Subcommittee meetings on April 25, 2007; September 12, 2007; and January 9, 2008; by representatives of government agencies as well as trade and professional associations representing the biotechnology, pharmaceutical, clinical laboratory services, and venture capital industries. • Subcommittee workshop on July 24, 2007; to obtain input on intellectual property, technology/tool development, and regulation/reimbursement issues from intellectual property lawyers and representatives from the molecular diagnostics industry and venture capital community. • Subcommittee workshop on November 28, 2007; to obtain input on information technology, electronic medical records, reimbursement, economics, and the impact of personalized medicine on development of pharmaceuticals and medical diagnostics from representatives of pharmaceutical, diagnostics, and health insurance companies as well as experts in pharmacoeconomics, reimbursement, and health information technology. In addition to these major forums, the PCAST subcommittee conducted telephone interviews with many additional individuals from academic institutions, medical diagnostic, direct to customer, service and imaging companies, biotechnology and related tools companies, pharmaceutical and information technology companies, insurance companies and providers, patient advocates, venture capital firms, trade and professional associations, and government agencies.
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IV. Focus of Report
PCAST concluded that the essential driver for the expanding promise of personalized medicine is the development and application of genomics-based molecular diagnostics. Molecular assays have been in use for decades as diagnostics. For example, measurement of the level of activity of a single protein molecule, Factor VIII, has long been a molecular diagnostic for the underlying genetic defect in hemophilia, while a test for the mutant bcr-abl gene associated with the “Philadelphia chromosome” that is characteristic of chronic myeloid leukemia is used as a molecular diagnostic for the disease. Development of these molecular diagnostics and many others based on single-gene defects did not depend on modern genomic technologies. The Factor VIII deficiency in hemophilia was discovered by classic protein analysis, while identification of the bcr-abl mutation was guided by the fact that it is a DNA translocation which can be identified through classic cytogenetic analysis. However, these classical approaches to molecular diagnostics development are only truly useful and practical for diseases in which a single-gene defect results in an easily observable phenomenon such as activity of a specific protein in blood or other bodily fluid or the appearance of a gross chromosomal aberration. Unfortunately, most human diseases, as well as the human physiological response to therapy, result from a variety of different genes acting in concert. Dissecting the complex metabolic pathways involved and identifying the responsible proteins and genes for even a single disease requires large expenditures and decades of research, with results still often elusive due to the complexities of human in vivo experimental manipulation. Genomics-based molecular diagnostics offer the possibility of correlating genetic profiles with disease occurrence, disease outcome, response to therapy, adverse events, and other factors, without the need to fully understand the underlying biological mechanisms – the specific genes that are involved, the impact of the genes on physiology, and the way they function in concert. Genetic profiles will also be instrumental in identifying known genes or gene variants that correlate with various disease outcomes, as well as in identifying genetic regions correlated with outcome that can be investigated for previously unknown genes. Genetic profiles will thus facilitate the development of new single gene or protein tests as well as new therapies that target the consequences of specific genetic alterations. Because of the extraordinary potential of genomics-based molecular diagnostics to accelerate progress in personalized medicine, this PCAST report focuses primarily on the policy actions required to facilitate the development and introduction into practice of this important health care innovation. Moreover, after analyzing each of the policy areas described in the previous section, the PCAST Personalized Medicine Subcommittee prioritized three of these areas – technology/tools, regulation, and reimbursement – as the focus of its strategic policy recommendations. PCAST based this prioritization on three factors. The first factor was the magnitude of the obstacles that these areas present to the near-term development and introduction into practice of genomics- based molecular diagnostics. The second factor was the degree to which the obstacles presented, and the solutions thereto, were specific to personalized medicine and not necessarily to health care overall. The third factor was the degree to which the obstacles could be addressed by defined near-term policy actions. In focusing on genomics-based molecular diagnostics, PCAST does not mean to discount the importance of the parallel developments in genomics-linked therapeutics. At present, however, the pace of change is most rapid, and the technological, regulatory, and reimbursement hurdles to progress are greatest, in the realm of diagnostics. Technology and Tools The first critical obstacle to realizing the potential of genomics-based molecular diagnostics concerns the challenges encountered in validating the genetic/clinical correlations identified through discovery research. Accelerating progress in validation requires the development of critical enabling technologies, tools, resources, and standardized methodological approaches, as well as increased investment in and prioritization of validation studies. Because of the scope and high-risk nature of this work, and the fact that the ultimate goal is the development of diagnostic tests introduced into commerce, a joint public/private sector approach appeared to PCAST as the most appropriate to address these challenges. IV. Focus of Report ✩19 A5834 Case 1:09-cv-04515-RWS Document 197-7 Filed 01/06/2010 Page 25 of 65
Regulation The second critical challenge concerns the regulatory system for laboratory diagnostics. Historically, laboratory diagnostics have been evaluated for regulatory approval solely on their ability to measure accurately the parameter of interest (i.e., analytic validity). The clinical meaning of the test result was either entirely obvious (e.g., a positive Hepatitis C test means that a patient has Hepatitis C) or was determined by the clinician in combination with other factors (e.g. the combined use of cholesterol tests, blood pressure, stress tests, and family history to determine whether a patient should be treated to prevent cardiovascular disease). In contrast, the result of a genomics-based molecular diagnostic test may not be transparent, yet may still directly determine how a patient is treated. Accordingly, the test must not only accurately measure the genetic profile (analytic validity), but the profile must also be correlated with clinical outcome in a series of robust and reproducible clinical studies (clinical validity). This is true whether the ultimate commercial diagnostic is a genomic profile or one or more specific gene or protein tests derived from the results provided by the profile. Therefore, genomics-based molecular diagnostics need a regulatory regime that considers both analytical and clinical validity. Such a regime will require diagnostic developers to adapt to a regulatory approval pathway for diagnostics that may look more like that for pharmaceuticals. The challenge is to implement such a new regulatory approach without placing unnecessary or uncertain burdens on product development. Reimbursement The third critical challenge is insurance coverage and reimbursement, which must provide adequate compensation for the cost and time required to establish both analytic and clinical validity. Traditionally, laboratory diagnostics have been reimbursed based on commodity pricing of simple laboratory procedures. However, genomics-based molecular diagnostics not only involve more expensive laboratory and data analysis procedures, but also must bear the development cost for establishing clinical validation; this cost is analogous to the clinical trial costs associated with pharmaceutical product development. Therefore, a value-based coverage and reimbursement approach for these products, similar to that used for high-value pharmaceuticals, must be developed or such products may never reach patients. In addition, because reimbursement for high-value products must be driven by true clinical benefit for the covered population, criteria for demonstrating both clinical utility and validity must be developed and standardized. These criteria can then be used to guide both product development and reimbursement decisions. Despite the focus of this report on the three challenges outlined above, the other policy areas considered by the subcommittee are clearly still relevant over the long term to the successful development and introduction into practice of genomics-based molecular diagnostics. Each of these areas is discussed briefly below. Information Technology Health care information technology tools, including electronic medical records, personal medical records, and clinical decision support systems will be essential enablers for the development and widespread use of genomics- based molecular diagnostics. Fully interoperable, standardized electronic medical records allow data to be readily aggregated and analyzed across multiple records. Not only will this allow physicians to have a full picture of a patient’s medical history, but it may also serve as an invaluable platform for research into the correlation of genomic markers with clinical phenomena. Clinical decision support tools integrated with medical records are essential to allow physicians easy access to new patient-appropriate diagnostic tests as well as to automated resources for the interpretation of test results. Many previous policy recommendations have addressed the development of these tools, and both the public and private sector continue to make extensive efforts to address this need. In April 2004, the President issued an Executive Order creating the Office of the National Coordinator for Health Information Technology (ONC) within HHS. The Executive Order charged ONC with providing leadership for the development and national implementation of an interoperable health information technology infrastructure and also with achieving the goal of widespread adoption of interoperable electronic health records by 2014. The ONC strategy is to collaborate with the private, nonprofit and non-Federal public sectors and incentivize investment
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by those stakeholders through Federal laws, procurement contracts, conditions of doing business with the Federal Government, and reimbursement. In September 2005, HHS Secretary Leavitt established the American Health Information Community (AHIC) within ONC as a Federal advisory committee to provide input and recommendations from the private and nonprofit sectors regarding the development of interoperable electronic medical records with appropriate privacy and security protections. AHIC has conducted extensive deliberations to develop recommendations regarding policy, technical, business, and social issues across several domains and has identified several clinical functions that should be prioritized for standards definition and electronic implementation. The ultimate goal is to facilitate the emergence of a shared, interoperable, electronic Nationwide Health Information Network which all health care providers could access. AHIC is expected to be transitioned into a sustainable public-private collaboration based in the private sector by the end of 2008. In addition to these Federal coordination efforts, the private sector is actively engaged in developing and implementing both electronic medical records and electronic clinical decision support systems linked to such records. Integrated health care systems such as the Veterans Health Administration and Kaiser Permanente as well as major hospitals and regional medical networks have made considerable progress in implementing electronic medical record systems. However, the overall rate of adoption of electronic medical records and decision support tools remains low, in part because of the very low rate of adoption in the small group or independent physician practices that comprise the majority of practices in this country today. Recent direct-to-consumer electronic medical record product offerings by large internet-based information companies may begin to provide alternative routes for direct patient access to the creation and use of such records. PCAST endorses and strongly encourages continued support of the important coordination and standard-setting efforts of ONC and AHIC, as well as the ongoing efforts in the private sector. Because these efforts are at an early stage, it is difficult to determine if they will address all of the important obstacles. However, until the current efforts are more fully implemented and their success can be assessed, PCAST concluded that it should not recommend additional policy actions at this time. Intellectual Property The ability to obtain strong intellectual property protection through patents has been, and will continue to be, essential for pharmaceutical and biotechnology companies to make the large, high-risk R&D investments required to develop novel medical products, including genomics-based molecular diagnostics. Unfortunately, several recent events have threatened the stability of intellectual property protection in the biosciences. Recent Supreme Court cases have made the nonobviousness standard more stringent, shed doubt on the potential to patent diagnostic correlations, expanded the activities covered by the research and development exemption, and made obtaining injunctive relief for patent infringement more difficult. The proposed Patent Reform Act of 2007 has opened a contentious debate among stakeholders from different industries concerning the impact of several elements of the Act, including the post-grant review and apportionment of damages provisions. These provisions could reduce the confidence of developers and investors in the strength of granted patents, which could be especially detrimental for the development of innovative medical products. Conversely, the opportunity to present countervailing arguments and evidence outside of litigation provided by the post-grant review provisions could reduce fears that specific molecular diagnostic products would infringe broad gene-related patents. In August 2007, the U.S. Patent and Trademark Office published rule changes that placed new limitations on the number and nature of claims and also placed requirements on divisional and continuation applications that will likely front-load patent costs and force filing decisions before all the supporting data can be obtained. In November 2007, a Federal district court, in response to an industry lawsuit, temporarily enjoined the implementation of these rule changes. In April 2008, the court granted a summary judgment in favor of the industry challenge on the grounds that the proposed rules were “substantive in nature” and therefore the Patent Office had exceeded its rule-making authority. The challenges posed by these major intellectual property law changes urgently require a comprehensive, cross- industry analysis. The issues are enormously complex and apply not only to genomics-based molecular diagnostics
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and other personalized medicine products such as targeted therapeutics and single-gene or protein tests, but to all innovative biomedical products and products of other industries as well.
Therefore, PCAST strongly recommends that a separate PCAST subcommittee be convened to address these patent law issues across all domains and issue a report devoted exclusively to these issues. To attempt to address these complex and broadly applicable issues as only one aspect of a report focused specifically on personalized medicine would not do them justice and would obscure their overall importance. Privacy PCAST applauds the recent passage and signature into law of the Genetic Information Non-Discrimination Act of 2008 (GINA).23 GINA is expected to alleviate many of the privacy concerns that have made many patients unwilling to have genomics-based molecular diagnostic or other genetic tests performed. However, even with the passage of GINA, certain privacy issues remain of concern to the public. The first issue is the fact that detailed genetic information has the potential to uniquely identify an individual even if the data are not linked to obvious identifiers such as name, address, or social security number. As a practical matter, however, the use of genomic sequences to identify individuals would require access to a database that connects data to individuals. The relevant policy issue is the establishment and maintenance of adequate database security and controls on data use – a problem that applies to all sensitive patient data, not just to genomic sequences. The second issue is that the potential for an unintended release of genetic information that violates patient privacy is greater if the information is stored in large interoperable electronic databases that are widely available to the research and clinical community as opposed to paper records held by individual sites. Technologies and procedures for encryption, password protection, audit trails, and transaction-specific access codes are important tools for establishing and maintaining the necessary data controls. Many security breaches, however, arise not from limitations of the technology but from improper use or malicious evasion of data controls. Achieving data security in a large organization is as much a management issue as a technical one; the challenges involved are considerable, and are beyond the scope of this study. The third issue is that methods must be established to enable essential research on the correlation of genetic signatures with disease while preserving individual privacy. To advance personalized medicine, it will be important for researchers to be able to test stored patient specimens for new genetic characteristics that may be correlated with their clinical outcomes. Because the specific genetic tests to be performed may not be known at the time the sample is collected, it will be essential to have an informed consent process that authorizes testing of de- identified samples for genetic characteristics not anticipated at the time of collection. Such an informed consent process is included in the PCAST recommendation with regard to biospecimen repositories in the Technology and Tools section of this report. Given the passage of GINA and the fact that other privacy concerns are either addressed by policy recommendations elsewhere in this report or are complex topics that warrant detailed analysis in their own right, no additional privacy-specific policy recommendations appear warranted at this time. Physician and Patient Education The education of physicians on the proper interpretation and use of data provided by genomics-based molecular diagnostic tests will be essential for the effective introduction of these diagnostic innovations into practice. Education will require not only effective clinical decision support tools, but also the inclusion of these topics into medical school and continuing medical education curricula. However, because these new diagnostic tests are only just beginning to be introduced and most of them are focused on specialty practices such as oncology and HIV treatment, the medical education experts contacted by PCAST did not yet view this area as a high priority.
23 Public Law 110-233.
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Based on this input, PCAST determined that no specific policy actions on physician education were warranted until the number of genomics-based diagnostic tests driving personalized medicine had increased. Nevertheless, current medical education practices devote little attention to new genetic and molecular technologies despite their potentially broad impact on medical practice. Nonspecialist physicians run a risk of partial disenfranchisement should the pace of translation of these discoveries continue to accelerate and should consumers play a more active role in educating themselves on these topics. Patients and the public also need carefully positioned, realistic, and easily understood information about both the potential and the limitations of personalized medicine in general, and about genomics-based molecular diagnostics in particular. The patient advocacy community represents a strong and valuable player in this arena and PCAST supports and encourages their efforts. The National Institutes of Health (NIH), as leader of the Federal biomedical research establishment, is also very important to these education efforts as are several professional medical associations. Because of the ongoing activities of these various groups, PCAST does not believe additional broad policy actions to facilitate widespread patient education are necessary until such time as more tests are reaching the end of the development pipeline. Nevertheless, PCAST hopes that this report in its entirety helps lay a foundation for a vital educational outreach effort to the public on the realistic promise and limitations of these new diagnostic tests and of personalized medicine overall. Economics Finally, PCAST considered the economic perspective on personalized medicine. As with other areas of medical technology, medium- to long-term progress will depend on the economic viability of individual personalized medicine products brought to market. Each of the priority issues considered in detail in this report – the research activities required to validate genomics-based diagnostics, the regulatory process, and coverage and reimbursement policy – will have a strong impact on the cost of bringing new products to market and the likely financial return once marketing approval has been granted. In turn, these parameters will determine the attractiveness of personalized medicine to the investor community. Economists have published a variety of theoretical economic analyses and models relevant to personalized medicine, several of which were presented to PCAST. These studies were helpful in illuminating the factors that will affect economic viability for individual personalized medicine products and the overall cost impact on health care. However, given personalized medicine’s early state of development and the corresponding lack of empirical data on R&D costs, product pricing, and the clinical and economic impact of real-world use, specific conclusions that might inform public policy at the national level are difficult to draw from these models. However, PCAST encourages ongoing activities in both the private sector and Federal agencies to identify and assess economic factors that provide potential incentives and disincentives for personalized medicine products and services. Such analyses will become increasingly important as more products reach the market and related individual and societal benefits are evaluated. Otherwise, no specific policy actions with regard to the economics of personalized medicine are recommended at this time.
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V. Technology and Tools24
Background Human genetic variation is what makes “personalization” of disease treatment and prevention both necessary and possible. Over the last decade, the revolution in genomic technologies has vastly increased our ability to analyze this variation, resulting in an ever-increasing number of powerful new tools for elucidating the genetics of complex diseases and traits.25 Emerging genomics capabilities – especially the rapidly increasing power of technologies for gene sequencing and for the measurement of gene expression – are often identified as a key driver of personalized medicine. Yet many existing personalized medicine applications were created using less sophisticated approaches to measuring gene expression or are tests that measure the protein products of genes or other “downstream” physiologic phenomena rather than the genes themselves. For example, the significance of HER2 in breast cancer was first identified using a combination of HER2 protein assays and older methods for analyzing gene expression, and protein assays remain important in the clinical use of Herceptin® (trastuzumab). Differences in metabolism of purine drugs are known to be caused by genetic variation in the TPMT gene, but clinically this is measured by assaying the activity of the TPMT protein. Finally, the recently-introduced Trofile assay for targeting use of the novel anti-HIV agent Selzentry™ (maraviroc) is based on synthetic “pseudoviruses” that measure the ability of a patient’s HIV strain to infect cells with different receptor types. Although the construction of the pseudoviruses was dependent on advanced techniques of molecular biology, the test itself does not detect genomic variants. The power of the new genomic technologies is that they provide the opportunity to correlate genetic variation with disease phenomena without the need to understand any of the physiological processes or proteins involved. Therefore, tests that directly measure genes or gene expression are beginning to complement previous tests, while some new personalized medicine diagnostics are solely gene-based. Moreover, genomic approaches can complement other techniques of molecular and cellular biology in developing new diagnostic tests based on proteins, single genes, or other attributes. Finally, genomic analyses of human genetic variation at the population level will likely facilitate the identification of new diagnostic markers and potentially new targets for therapy as well. This section briefly describes several important genomic technologies and the critical technical approaches and resources needed to translate these breakthroughs into clinical benefit. Genomic Technologies and Analytical Tools26 Genomic technologies are central to the promise of personalized medicine. Current technologies include genome sequencing, analysis of genetic variation resulting from single nucleotide polymorphisms (SNPs) or changes in DNA structure, and gene expression analysis through microarrays. Moreover, new technologies are continuing to emerge rapidly. Sequencing of the human genome provided the essential springboard for the revolution in genomics and genomic technologies. To date, sequencing has indicated that much of human genetic variation is concentrated in approximately 10 million of the 3 billion human DNA base pairs. Therefore, it has been more cost-effective to correlate genetic variation with disease based on those 10 million sites showing variation – which are often associated with SNPs – rather than to attempt to sequence and analyze the entire genome for each individual. A complementary technology – microarrays – allows the measurement of thousands of SNPs or the expression level
24 Appendix C provides a glossary of terms used in this section. 25 Pennisi E, “Breakthrough of the Year: Human Genetic Variation,” Science 2007 Dec 21;318(5858):1842-1843. 26 Appendix D provides additional explanatory detail on genomic technologies and analytical tools.
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of thousands of genes on a high density silicon wafer. Microarrays thus make possible not only comprehensive SNP analysis but also efficient measurement of the degree to which genetic variation is manifested in the level of the proteins produced. At present, personal genome sequencing is not yet cost-effective as a tool for analyzing the correlation of genetics with disease. However, the cost of next-generation sequencing methods is decreasing rapidly while their quality and capability are improving. Application of these new approaches to sequencing of individual genomes has already revealed an unexpected degree of sequence variation associated with the insertion, deletion, or rearrangement of DNA sequences, some of which is associated with disease.27 Based on the importance of these structural changes and the advances in sequencing technology, it is possible that sequencing of individual genomes will become the standard and routine level of analysis for DNA variation.
“A rapid pace of development, coupled with the quantitative and dynamic range aspects of next-generation sequencing technologies, are rapidly impacting the course of fundamental sequencing-based biological inquiry” – a noted researcher and leader in the field of sequencing technologies. This evolving technology landscape is discussed further in Appendix D.
Genome Sequencing In 1988, Congress provided funding to NIH and the Department of Energy to undertake the Human Genome Project to explore the potential of fully sequencing the human genome. Advances in technology, including the development of detailed genetic and physical maps and better, cheaper, and faster technologies for handling and sequencing DNA, were key to accelerating progress.28 A draft sequence covering more than 90% of the 3 billion human base pairs was completed in 2000,29 and a full sequence was completed in 2003, at a total cost of about $3 billion.30 These sequences, as well as the sequence published by Celera,31 were mixtures of the sequences from a number of different individuals.32 This composite approach was chosen to protect privacy and to ensure that the reference sequence captured at least part of the sequence variation that was already known to exist. Once the reference sequences were complete, several next-generation sequencing technologies were developed, supported in part by the Human Genome Technology Program of the National Human Genome Research Institute. These technologies allowed individual genomes to be sequenced in a more efficient and cost-effective manner. For example, the genome sequence of Nobel Laureate James Watson, which was announced in 2007, was completed in two months at a cost of less than $1 million.33
27 Pennisi E, “Breakthrough of the Year: Human Genetic Variation,” Science 2007 Dec 21;318(5858):1842-1843. 28 Collins FS. “Contemplating the End of the Beginning.” Genome Res 2001 May;11(5)641-3. 29 Lander ES, Linton LM, Birren B, et al. “Initial Sequencing and Analysis of the Human Genome,” Nature 2001 Feb 15;409: 860-921. 30 Collins FS, Green ED, Guttmacher AE, Guyer MS. “A Vision for the Future of Genomics Research,” Nature 2003 Apr 24;422: 835-47. 31 Venter JC, Adams MD, Myers EW, et al. “The Sequence of the Human Genome,” Science 2001 Feb 16;291:1304-51. 32 The Human Genome Project sequence was based on twelve individuals, including males and females to capture both X and Y chromosomes, while the Celera human genome sequence was a composite of sequences from five people representing European, African, American (North, Central and South), and Asian ancestries. 33 Wheeler DA, Srinivasan M, Egolm M, et al., “The complete genome of an individual by massively parallel DNA sequencing,” Nature 2008 Apr 17;452:872-6.
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Based on the continued rapid pace of development for these technologies, in January 2008 an international consortium, including the National Human Genome Research Institute, the Wellcome Trust Sanger Institute and the Beijing Genomics Institute, announced plans to sequence the genomes of at least 1,000 individuals from around the world to capture medically relevant variation.34 This “1,000 Genomes Project” is intended to capture a wide range of “genetic signatures” that distinguish populations and their specific health issues.35 In the private sector, Knome, in partnership with the Beijing Genomics Institute, began in the fall of 2007 to offer whole genome sequencing and analysis services for individuals at a starting price of $350,000.36 Knome’s clients retain full ownership of their sequences, and may share all or part of their genomes with researchers and other medical professionals. The genome sequences of two individuals have been reported to be in progress.37 Moreover, the X PRIZE Foundation has established a new milestone by offering a $10 million prize for the first team that can sequence 100 human genomes within 10 days or less, with good completeness and accuracy and at a recurring cost of no more than $10,000 per genome.38 Six groups have already entered the competition.39 Many expect the goal of a “$1,000 genome” to be achieved in the near future. Moreover, complete individual genome sequences are beginning to emerge as a laboratory tool for assessing the correlation of genetic characteristics with disease, and such sequences may eventually become a diagnostic tool in the clinic. Single Nucleotide Polymorphisms Genome sequencing initially revealed that less than 1% of the human genome represents sites where there is significant variation across individuals. If a given single base pair variant of this type appears in at least 1% of the population, it is known as an SNP. An estimated 9-10 million common SNPs exist in human genomes.40 In 2000, the Human Genome Project began collaborating with the SNP Consortium, a public-private partnership of ten large pharmaceutical companies and the Wellcome Trust (see box), to identify SNPs across the human genome and particularly in the coding regions of known genes. By 2001, 1.8 million SNPs had been identified and released into the public domain.41 Although in theory all common human SNPs could be identified and analyzed for correlation with disease, at present this is not cost-effective. An alternative is to identify regions of the genome, termed haplotypes, which contain multiple SNPs that are often inherited together. To that end, the International HapMap Project was launched in 2002 with the goal of identifying at least one common SNP for every 5,000 bases in the sequences of 270 individuals from four geographically diverse populations. By 2007 approximately 3.1 million SNPs were mapped, yielding a density of one SNP per 1,000 bases and capturing an estimated 25-35% of the common SNPs in the human genome.42 Because each haplotype can be uniquely identified by these “tag SNPs,” an individual’s haplotype profile can be determined by identifying which “tag SNPs” are present in their DNA. These haplotypes currently provide a more efficient and cost-effective method for conducting population-level studies of the association of genes with disease than does mapping of individual SNPs.
34 NIH News: International Consortium Announces the 1000 Genomes Project, http://www.genome.gov/pfv. cfm?pageID=26524516, accessed July 18, 2008. 35 http://www.1000genomes.org/page.php?page=home, accessed July 20, 2008. 36 http://www.knome.com/, accessed April 24, 2008. 37 Harmon A., “Gene Map Becomes a Luxury Item,” New York Times, March 4, 2008. http://www.nytimes.com/2008/03/04/ health/research/04geno.html?_r=1&adxnnl=1&oref=slogin&adxnnlx=1216581433-lpw1XDZ/e04GtTZRaMweQA, accessed July 20, 2008. 38 http://www.xprize.org/genomics/archon-x-prize-for-genomics/prize-overview, accessed June 30, 2008. 39 Pollock A, “The Race to Read Genomes on a Shoestring, Relatively Speaking:, Washington Post, February 9, 2008. 40 The International HapMap Consortium, “A Second-Generation Human Haplotype Map of Over 3.1 Million SNPs.” Nature 2007 Oct 18;449(7164):851-61. 41 http://www.ornl.gov/sci/techresources/Human_Genome/faq/snps.shtml, accessed June 30, 2008. 42 The International HapMap Consortium, “A Second-Generation Human Haplotype Map of Over 3.1 Million SNPs.” Nature 2007 Oct 18;449(7164):851-61. V. Technology and Tools ✩27 A5841 Case 1:09-cv-04515-RWS Document 197-7 Filed 01/06/2010 Page 32 of 65
Currently, DNA SNP microarrays are being used for analyzing SNP variation in genome-wide association studies and by some of the personal genome services. However, rapidly emerging sequence-based approaches may prove to be a more powerful and cost-effective alternative to microarrays.
THE SNP CONSORTIUM The SNP Consortium was established in April 1999 as a public-private partnership to produce a public resource of human SNPs. The consortium involves the pharmaceutical companies listed below and the Wellcome Trust. The international member companies committed at least $30 million to the project and the Wellcome Trust an additional $14 million. Pharmaceutical Company Partners APBiotech, Inc. (part of General Electric Company) AstraZeneca PLC Bayer AG Bristol-Myers Squibb Company F. Hoffmann-La Roche Ltd GlaxoSmithKline PLC International Business Machines Corp. Motorola, Inc. Novartis AG Pfizer Inc. G.D. Searle & Company (is part of Pfizer Inc.) SmithKline Beecham PLC (is part of GlaxoSmithKline PLC)
DNA Structural Variation Analysis of genomic variation resulting from structural changes in DNA, including insertions, deletions, and rearrangements, has been facilitated by the ability to sequence individual genomes. These changes, which can involve from a few to thousands of bases, can increase or decrease the copy number of a particular gene, delete it altogether, or alter or eliminate its functionality (including disrupting critical regulatory elements) and thus could have profound effects. For example, it has been estimated that in some populations, copy number variation may account for as much as 20% of the difference in gene expression across individuals.43 This class of genetic variation could thus form the basis of important new diagnostic tools. Expression Microarrays The development of the DNA microarray in the late 1980s revolutionized the ways in which gene expression could be measured, allowing researchers to assay the expression of thousands of genes in parallel instead of one or a few genes at a time. Rapid advances in technology led to commercial, high-density arrays of DNA probes on silicon wafers, commonly called “chips.” These chips can be used in the laboratory to query thousands of expression signatures for correlations with disease. When specific correlations are identified and validated, microarray chips containing appropriate sets of DNA probes can also serve as the basis for diagnostic tests suitable for use in the clinic.
43 Pennisi E, “Breakthrough of the Year: Human Genetic Variation,” Science 2007 Dec 21;318(5858):1842-1843.
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Correlating Genomic and Clinical Information In order to translate advances in genomic knowledge into human health benefits, one must be able to link genetic variations with the risk of disease or with disease outcomes such as progression, response to therapy, or adverse events. To that end, there has been significant activity over the last several years in three critical areas – genome- wide association studies, development of molecular diagnostics (including in vitro diagnostic multivariate index assays or IVDMIAs), and biospecimen banking. Genome-Wide Association Studies Genome-wide association studies offer the potential to greatly increase the number of genomic markers that are identified as correlates of disease, and to provide new approaches for initial validation of such correlations. In these studies, a statistical approach is used to link SNPs or haplotypes, and also potentially other types of sequence variation, with disease occurrence in a population. In the most extensive such study reported to date, the Wellcome Trust analyzed samples from 2,000 individuals for each of seven diseases (for a total of 14,000 cases) against a common set of 3,000 control samples. In June 2007, they reported the statistically significant association of 24 independent genetic regions with the various diseases.44 However, in their report the authors raised several cautionary notes about genome-wide association studies. First was the paramount importance of quality control, because small variations in DNA concentration, sampling procedures, and other factors can obscure true associations. Second, they highlighted the critical importance of statistical rigor in the selection of candidate SNPs for further rounds of analysis. Either a too lenient or a too stringent approach can lead to misinterpretation of results. Third, they demonstrated that large sample sizes are required to generate meaningful data, because the number of regions identified would have dropped dramatically if only 1,000 cases of each disease and 1,000 controls had been used. In fact, they recommended that even larger sample sizes be used in the future and that separate studies on the same trait be combined for greater reliability. One such combination study reported in August 200745 confirmed one of the regions identified by the Wellcome study as associated with cardiovascular disease. However, analysis of the combined data sets did not confirm several other regions and also identified four new regions not identified in either study alone. Both reports stressed that such initial studies generate a wealth of preliminary data that must be validated in independent studies of comparable size. Both also conclude that much more work is needed to provide a basis for clinically-useful prediction of disease. Molecular Diagnostics The ability to generate genetic profiles using microarrays and sequence-based approaches promises to expand greatly the utility of genetic tests in clinical medicine. This is because human diseases resulting from a single genetic alteration are rare. Most common diseases including cancer, cardiovascular disease, and diabetes result from a variety of genetic changes acting in concert. Moreover, the exact combination of genetic factors resulting in a specific disease often varies among individuals. To address this complexity, many companies and academic groups are developing complex molecular diagnostics (including IVDMIA tests based on microarrays) with the goal of establishing correlations between a specific pattern of genetic modification and/or gene expression and disease outcomes such as progression, response to therapy, or adverse reactions. In some cases, these correlations and their predictive value are strong enough that the tests can have clinical utility even in the absence of a full understanding of the effects of and interactions among the component genes.
44 The Wellcome Trust Case Control Consortium, “Genome-Wide Association Study of 14,000 Cases of Seven Common Diseases and 3,000 Shared Controls,” Nature 2007 Jun 7;447(7145):661-78. 45 Samani, NJ, Erdmann J, Hall AS et al. “Genomewide Association Analysis of Coronary Artery Disease,” New Engl J Med 2007 Aug 2;357(5):443-53.
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As with genome-wide association studies, there are many pitfalls in establishing robust and reliable disease correlations for genomic profiling tests.46, 47 Reproducible sample collection and processing is essential to avoid artifacts in gene expression patterns due to cell population subtypes or effects of processing on the apparent levels of expression. Standards for the measurement, analysis, and reporting of biomarker data are essential to allow data to be compared across different studies and different laboratories and reduce duplication in defining assay methods and data requirements. Complicated statistical methodologies are required because probing the expression of 10,000 or more genes can lead to spurious correlations simply by chance. Moreover, these studies require not only large sample sizes but also validation using independent sample sets. Biospecimen Banks Biospecimen banks are repositories that collect, store, process, and distribute biological materials and the data associated with them. The biological materials collected by these repositories typically include DNA, cells, tissues, and blood, though other biological samples may also be collected for specialized purposes. In most instances, the specimens are associated (annotated) with medical and demographic information and sometimes lifestyle and environmental information as well. Banks can be established in several different formats and serve different purposes.
Longitudinal population cohort banks contain samples collected over time from a defined group of individuals who are representative of a population but not necessarily a disease. These banks can be used to study the natural occurrence and progression of disease and to validate whether proposed genetic risk factors have a real-world impact on the disease in that population. Examples of such longitudinal banks include those associated with the Framingham Heart Study,48 a group of banks containing over 800,000 specimens collected from 13 different U.S. cohort studies49 and the various national biobanks currently being established including the Swedish National Biobanks program,50 the UK Biobank,51 bancoADN (Spain),52 and CARTaGENE (Canada).53
Clinical case/control banks contain samples from studies in which a population group with a particular disease is compared to a demographically similar group that does not suffer from the disease. The Wellcome Trust Case Control Consortium samples represent the largest of such banks although several smaller studies have been conducted for specific diseases. These banks are primarily useful for identifying and validating specific genetic loci that are associated with a disease. However, they can be converted into a case/control longitudinal cohort bank by continuing to follow both the disease and control populations over time. This conversion allows chronic disease profiles to be identified against a background of normal variation and also allows the correlation of specific genetic loci with disease progression, mortality, and response to therapy.
Disease-specific biospecimen banks differ from the above-described banks in that they include only specimens from patients with a specific disease and are continually expanded by the addition of specimens from new patients. These banks are most typical in the area of cancer where clinically and demographically annotated tumor tissue banks have been established for decades, using specimens drawn primarily from patients involved in cancer clinical trials. Banks of this type were instrumental for the studies validating the ability of the 21-gene Oncotype DX® test to predict distant recurrence and the benefit of chemotherapy in hormone-treated, estrogen-receptor positive
46 Simon R, Radmacher MD, Dobbin K, McShane LM. “Pitfalls in the Use of DNA Microarray Data for Diagnostic and Prognostic Classification,” J Natl Cancer Inst 2003 Jan 1;95(1):14-8. 47 Ransohoff DF. “Rules of Evidence for Cancer Molecular-Marker Discovery and Validation,” Nat Rev Cancer 2004 Apr;4(4): 309-14. 48 http://www.nhlbi.nih.gov/about/framingham/index.html, accessed July 20, 2008. 49 Willett WC, Blot WJ, Colditz GA et al. “Merging and Emerging Cohorts: Not Worth the Wait,” Nature 2007 Jan 18;445(7125):257-8. 50 http://www.biobanks.se, accessed June 30, 2008. 51 http://www.ukbiobank.ac.uk/, accessed June 30, 2008. 52 http://www.bancoadn.org/en/home.htm, accessed June 30, 2008. 53 http://www.cartagene.qc.ca/accueil/index.asp?l=e, accessed June 30, 2008.
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breast cancer.54 However, many of these historical banks suffer from incomplete clinical annotation; inconsistent quality due to nonstandardized sample collection, processing, and storage; and lack of informed consent for further genetic research studies. Moreover, unlike samples from population studies, which can be collected repeatedly over time, tumor specimens have a finite volume and therefore are eventually depleted. Regardless of the purposes for which a bank is established, their utility depends on standardized collection, processing, and storage of the biological specimens as well as on efficient mechanisms for sharing samples and information across the biomedical research community. Based on these considerations, and recognizing that the lack of standardized, high-quality biospecimens is a significant roadblock to progress in cancer research, the National Cancer Institute (NCI) established the Office of Biorepositories and Biospecimen Research (OBBR) to guide, coordinate and develop the institute’s biospecimen resources and capabilities.55 OBBR is developing and implementing standards for specimen collection, processing, and storage and promotes specimen and data sharing to facilitate high-throughout genomic and proteomic studies.56 In addition, the NCI has established a series of awards to the Clinical Trials Cooperative Groups to ensure that high-quality standardized biospecimens are collected from NCI-supported Phase III cancer clinical trials and made available to the research community. On the international front, the Organization for Economic Cooperation and Development (OECD) began a study in 2001 which led to the June 2007 publication of the OECD Best Practices Guidelines for Biological Resource Centres.57 Challenges Despite tremendous excitement about the potential value of molecular biomarkers such as SNPs and microarray expression profiles as genetic disease signatures on which to base improved diagnosis, therapy, and prevention, this potential has largely gone unfulfilled. While an increasing number of candidate biomarkers are being identified, development of these biomarkers into diagnostic tests with clinical utility has proceeded at a slow pace. Bottlenecks in validation are the most important constraint on progress. Validation must occur on two levels. The first level is confirmation that the correlation initially observed, whether through a genomics-based population study or a study based on biospecimens, is indeed real rather than a statistical artifact. This level of validation is achieved by repeating the preliminary analysis on an independent population or biospecimen sample set. The second level of validation is to confirm that use of a diagnostic test based on the correlation actually results in improved clinical outcomes for patients. This definitive validation requires a prospective clinical trial. Correcting the current imbalance between discovery of candidate biomarkers and validation of their clinical utility will require addressing two overarching challenges. The first is more effective coordination and prioritization of public and private-sector validation research, and the second is improvement of the tools used for validation studies. Coordination and Prioritization of Public/Private Investment Without the large government and private investment over the last decade in the development and application of genomic technologies, modern, genetically-based personalized medicine would not be possible. However, these technologies are now mature, and although there are certainly advances still to be made, the real challenge is to fund research that reaches beyond the ability to discover genetic signatures that may be associated with disease to the validation of those associations as a basis for development of new diagnostics, therapeutics, and preventive
54 Paik S, Shak S, Tang G, et al. “A Multigene Assay to Predict Recurrence of Tamoxifen-Treated, Node-Negative Breast Cancer,” New Engl J Med 2004 Dec 30;351:2817-26; Paik S, Tang G, Shak S et al. “Gene Expression and Benefit of Chemotherapy in Women with Node-Negative, Estrogen Receptor-Positive Breast Cancer,” J Clin Oncol 2006 Aug 10;24:3726-34. 55 http://biospecimens.cancer.gov/biospecimen/about/index.asp, accessed June 30, 2008. 56 http://biospecimens.cancer.gov/global/pdfs/NCI_Best_Practices_060507.pdf, accessed June 30, 2008. 57 http://www.oecd.org/document/36/0,3343,en_2649_34537_38777060_1_1_1_1,00.html, accessed July 18, 2008.
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strategies. Validation studies are part of the general area of biomedical research often termed “translational research,” which has many of the attributes of the development side of R&D. As a result, it has been historically the purview of industry rather than of government-supported academic science, which focuses on discovery. However, because validation of genomic correlations with disease remains both expensive and high-risk, industry may not be willing to invest substantially until a clearer path to validation has been developed and a larger number of success stories achieved through the use of public funds. Therefore, to realize the benefit of public investment in genomic technologies, public investment in translational research to validate these correlations must be increased and coordinated with investment from industry to move genomic discoveries to practical application. This will require a reevaluation of the proper balance of public investment in genomic discovery versus translation of those discoveries into patient and public benefit and the development of new ways to prioritize and coordinate public/private funding. Development of Key Translational Tools To realize the promise of genomic technologies for the advance of personalized medicine, significant investment will be required in the development of three key translational research tools: (a) disease-specific biospecimen banks for correlating genetic variation with disease outcomes and response to therapy; (b) development of study designs addressing biomarker standardization and incorporating sophisticated statistical methods for demonstrating the clinical validity and utility of genomic profiles; and (c) population cohorts and associated biospecimen repositories for longitudinal health and disease studies. Disease-Specific Biospecimen Banks Correlation of specific patterns of gene modification or expression with disease outcomes requires large numbers of samples from patients with a specific disease which have been collected, processed, and stored under standard conditions with comprehensive clinical annotation and follow up. Independent, equally large specimen sets are required for validating those correlations. To be most useful, the banks should include samples collected from a wide range of patients in both academic and community settings, be continually replenished with samples from new patients, be readily accessible to researchers for a wide range of studies under appropriate review and approval processes, and be fully consented by the donors for use in genetic research studies. Study Design The need to analyze large, comprehensive genomic data sets in order to identify and validate genes that have a statistically significant correlation with complex disease traits presents significant challenges for study design. Many of the necessary standards for the measurement, analysis, and reporting of biomarker data have not yet been developed, while existing standards have been implemented inconsistently. In addition, the required statistical methods are more sophisticated than would typically be necessary in a clinical trial. The absence of necessary standards and the cost and high risk of these studies may deter industry from investing in the development of products based on genetic correlations until robust study designs incorporating adequate biomarker standardization and the necessary statistical methods are developed and tested through publicly sponsored studies. Population Cohorts and Biospecimen Banks Validation of correlations discovered through genome-wide association studies requires biospecimen samples from large population cohorts with full medical, demographic, familial, lifestyle, and occupational annotation. To meet this need, it has been proposed that a broadly representative national cohort of several hundred thousand North Americans be established.58 Such a bank is envisioned to have comprehensive disease and environmental annotation; standardized sample collection, processing, and storage; and full informed consent for genetic studies. It would thus be the U.S. equivalent of banks being developed in other countries59. Because this cohort bank will
58 Collins, FS, Manolio, TA. “Merging and Emerging Cohorts: Necessary but not Sufficient,” Nature 2007 Jan 18;445(7125):259. 59 See footnotes 50-53.
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be expensive to develop and likely not available for use for a decade, it has also been proposed that banks from existing large cohort studies should be pooled and made available for use in near-term studies.60 However, such a pooled bank would not be as representative of the U.S. population and its utility may be hampered by nonstandard data collection. Policy Recommendations PCAST makes the following policy recommendations with regard to Technology and Tools for personalized medicine. Recommendation 1. The Federal government should develop a strategic, long-term plan that coordinates public and private sector efforts to advance research and development relevant to personalized medicine. Recommendation 1a. Create a public/private sector “roadmap” for coordinating discovery and translational research in personalized medicine. The Federal government, through the leadership of HHS, should join with the private sector to create a coordinated “Personalized Medicine R&D Roadmap” for translating discoveries made through advances in genomic technologies into diagnostics, therapeutics, and preventive strategies that impact human health. This roadmap will involve three key elements. The first key element is to identify key resources and tools in need of development and determine which are best developed by the private sector, by the public sector, and by private/public collaboration. For example, because of their fundamental importance in identifying and validating genomic correlations, population and case/control cohorts and their associated biospecimen banks, as well as disease-specific banks, should be developed with public and foundation funding. In contrast, advances in high-throughput diagnostic chip technology should be the responsibility of the private sector. The second key element is the identification of activities that should be undertaken by academic scientists with government or foundation support, those that should be pursued by industry, and those that are best done through academic-industry-government-foundation collaborations. It is generally accepted that the public and not- for-profit sectors have primary responsibility for the support of discovery science, which in the case of personalized medicine is the discovery of candidate genomic biomarkers that appear to correlate with disease. In contrast, once the correlation between a genomic profile and a disease or disease outcome has been validated, development and definitive clinical testing of a new diagnostic test or genomic-tailored therapy based on that correlation is primarily the realm of industry. However, the appropriate balance of public/private activity in conducting the translational research required to validate the correlation of biomarkers with disease is less clear, and thus requires careful attention by both public and private stakeholders. The third key element is the establishment of public/private partnerships to support key discovery and translational research endeavors that are essential to the development of personalized medicine products and services but that are not uniquely directed at a specific commercial product. An example is the government- industry consortium proposed by the NCI Translational Research Working Group61 to fund an integrated national network of biospecimen repositories for cancer research served by a common infrastructure similar to the National Biospecimen Network Blueprint concept62 piloted by NCI.
60 Willett WC, Blot WJ, Colditz GA et al. “Merging and Emerging Cohorts: Not Worth the Wait,” Nature 2007 Jan 18;445(7125):257-8. 61 http://www.cancer.gov/aboutnci/trwg/finalreport.pdf, accessed July 18, 2008. 62 http://biospecimens.cancer.gov/nbn/blueprint.asp.
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Recommendation 1b. Evaluate the allocation of government funding to discovery versus translational research relevant to personalized medicine. NIH and other agencies such as the Departments of Energy and Defense should evaluate their allocation of resources to basic genomic discovery research relative to the research necessary to translate genomic findings into new products and services. Such an evaluation is necessary to manage allocation of scarce government resources to assure that while important genomic discoveries continue to be made, those with the highest probability of meaningful impact on human health are translated from the laboratory to clinical testing where the correlation of genetic signatures with disease can be validated. Arriving at an appropriate allocation of funding between discovery and translation will require a reliable method for identifying promising discoveries that are in need of translational investment and an approach for identifying ongoing projects that are aimed at translating genomic discoveries toward clinical validation. If the scale of translational effort is such that discoveries are accumulating with little hope of moving forward in a timely fashion, then a re-allocation of funds from discovery to translation must be considered. This allocation is likely to vary over time as available opportunities in discovery and in translation evolve.
Recommendation 1c. Identify national priorities for development of molecular diagnostics. Under HHS leadership, NIH should develop a coordinated process to identify and prioritize diseases and common therapies that would benefit from the application of molecular diagnostics, taking into account both scientific opportunities and public health needs. Development projects aimed at these prioritized opportunities would provide an avenue for establishing requirements and best practices for the sample sizes, study designs, and statistical methodologies necessary to validate genetic correlations with disease and disease outcomes. Although such projects could be undertaken solely by industry, collaborations between academia, industry, and government, such as the TAILORx trial, might be the most efficient approach for these prioritized demonstration projects. To that end, NIH should consider establishing a new award mechanism specifically to fund academic/ industry collaborative projects addressing these prioritized opportunities. The awards would ideally require active participation and cofunding of the research by the industry partner. HHS should also consider establishing a “Science Prize” and an expedited FDA review process for successful projects. Recommendation 2. The Federal government should make critical near-term investments in the enabling tools and resources essential to moving beyond genomic discoveries to personalized medicine products and services of patient and public benefit. Recommendation 2a. Create an integrated, national network of standardized biospecimen repositories. NIH should lead, stimulate, and coordinate public and private sector efforts to develop an integrated nationwide network of standardized biospecimen repositories to support research in personalized medicine. This network should encompass specimens from large population cohorts and case/control studies on specific diseases as well as disease-specific banks and should include banks funded by government, foundations, and industry. Such a national network will require both a comprehensive database of available samples and a transparent review process for granting access to specimens based on scientific merit and clinical potential of the studies proposed. NIH should promote and facilitate the establishment and implementation of standards for collection, processing, storage, clinical annotation, and distribution of samples by the network, building on ongoing efforts such as the First Generation Biorepository Guidelines issued by the NCI OBBR. NIH should also continue its efforts led by the NCI to develop a standard, informed consent template that will allow continued collection of data from specimen donors (e.g. epidemiological and outcomes data) beyond the date of sample collection and authorize testing of samples for genetic and other characteristics not anticipated at the time of collection.
Recommendation 2b. Develop study designs incorporating adequate biomarker standardization and statistical methods sufficient for validating the clinical utility of molecular diagnostics. NIH should develop a funding program for academic/industry collaborative projects addressing biomarker standardization, statistical methods and other aspects of study design necessary for validating the clinical utility of molecular diagnostics based on genomic correlations with disease characteristics. The goal of such
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projects would be fourfold: (a) to develop standards for the measurement, analysis, and reporting of biomarker data, (b) to define appropriate statistical methods for analyzing complex genetic correlations, (c) to define other study design parameters required to establish clinical validity and utility, and (d) to test these study designs on specific, real-world validation challenges. If standard approaches can be developed and shown to be successful, this would reduce the uncertainty of product development and encourage further industry investment in this emerging class of products.
Recommendation 2c. Develop a large population cohort for investigating genetic and environmental health impacts.
NIH should develop a program that enrolls and follows over time a large, representative sample of the U.S. population. Participants would provide family and medical histories, lifestyle and environmental information, and biospecimens fully consented for future research. Participants would also agree to periodic followup at which time new medical, lifestyle, and environmental information and biospecimens would be collected. This program would provide a comprehensive, high quality population resource that would not only enable investigators to identify potential genomic correlations with disease but also be of sufficient size to provide independent population sets for validating the correlations. Because of the size and long-term nature of such an endeavor, consideration should be given to establishing a consortium of government, industry, and philanthropic partners to fund the program through the Foundation for the National Institutes of Health. The goal should be to create an endowment that will assure stable funding across administrations and financial cycles.
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VI. Regulation
Background Regulation of in vitro diagnostics in the United States is split between two agencies – the FDA, operating under its authority to regulate medical devices, and the Centers for Medicare and Medicaid Services (CMS), operating under the authority of the Clinical Laboratory Improvement Amendments of 1988 (CLIA). Unfortunately, these long- established regulatory systems are ill-equipped to deal with complex, high-value tests that draw on cutting-edge genomics technology to directly inform high stakes clinical decisions. Role of FDA FDA regulation of medical devices addresses the inherent safety and efficacy of the device as well as quality control in manufacturing the device. Depending on the risk attributed to a particular product, FDA’s initial evaluation of new medical devices (including in vitro diagnostic tests) for safety and efficacy may be limited to verification of substantial equivalence to an existing (“predicate”) device or may extend to an extensive premarket approval (PMA) process. The PMA process is required for devices that are considered “high risk”, which is defined by the FDA as those that support or sustain human life, are of substantial importance in preventing impairment of health, or which present a potential, unreasonable, risk of illness or injury.63 Although this principle of risk-based classification is well-established, the application to in vitro diagnostic tests, where the purpose of the product is to provide information to the physician rather than to treat the patient directly, has been less clear. Many of the challenges involved in defining risk for in vitro diagnostic tests (when categorized as devices) are analogous to those raised by certain types of medical software, such as expert systems or clinical decision support programs. In both cases, the output is information for the clinician rather than a treatment applied directly to the patient. In preparation for a workshop on software policy convened by FDA and the National Library of Medicine in 1996, FDA held discussions with a variety of medical organizations and other professional and industry sources to identify criteria that might be useful for developing measures of risk for the information generated by medical software.64 It is noteworthy that as of this writing, in mid-2008, FDA still has not resolved either the definition of risk applicable to information generated by medical software, nor arrived at a clear policy regarding its regulation of such software.65 Regulation of in vitro diagnostic tests has been further complicated by the fact that the tests may be implemented in two different ways: as preassembled kits sold to clinical laboratories by manufacturers, or as laboratory- developed tests (LDTs or “home brew” tests) performed by individual clinical laboratories from available reagents and other ingredients, for use exclusively in that laboratory. FDA considers both preassembled kits and LDTs to be medical devices subject to its jurisdiction. In the face of pressing demands on its limited resources, FDA has exercised “enforcement discretion” (i.e., it has chosen not to exert its regulatory authority) with respect to a large group of LDTs deemed low risk. This practice is expected to change based upon FDA’s Draft Guidance on IVDMIAs issued July 26, 2007.66 However, just as for medical software that generates information as its product, FDA has not yet issued an operational definition of risk
63 [PMA] Overview, http://www.fda.gov/cdrh/devadvice/pma/, accessed May 14, 2008. 64 Food And Drug Administration & National Library of Medicine, Software Policy Workshop, September 3 and 4, 1996; summary notes accessed June 26, 2008 at http://www.netreach.net/~wmanning/fdaswsem.htm. 65 While this report focuses on personalized medicine, PCAST notes with concern the potentially broad impacts across biomedical research of FDA’s failure to clarify its regulatory approach to software. 66 “Draft Guidance for Industry, Clinical Laboratories, and FDA Staff: In Vitro Diagnostic Multivariate Index Assays” Draft guidance provided by the Food and Drug Administration, accessed September 1, 2008 at http://www.fda.gov/cdrh/oivd/ guidance/1610.pdf . VI. Regulation ✩37 A5850 Case 1:09-cv-04515-RWS Document 197-7 Filed 01/06/2010 Page 41 of 65
that would provide an unambiguous guide to the likely risk classification of new genomics-based in vitro diagnostic tests. In addition, FDA has not provided an unambiguous statement of the scientific evidence that would be regarded as “providing a reasonable assurance that the device is safe and effective for its intended use or uses” for those tests deemed high-risk and thus subject to the full regulatory review of the PMA process. FDA’s exercise, over a period of many years, of enforcement discretion with respect to LDTs has had consequences for diagnostics development strategies. Test developers have adopted market entry strategies that rely on implementation of innovative molecular diagnostics as LDTs rather than as kits, thus gaining market access with a relatively low regulatory burden. Role of CMS/CLIA By Federal statute, a clinical laboratory may not receive specimens derived from the human body for laboratory examination unless the lab is certified as complying with the performance standards embodied in CLIA regulations. CLIA addresses personnel qualifications, quality control standards, documentation, and validation, imposing requirements that vary with the complexity of the test and its procedures. For most tests classified as “high- complexity,” requirements include periodic proficiency testing, with details governed by the specialty and subspecialty to which a given test belongs (e.g., microbiology/bacteriology or diagnostic immunology/syphilis serology). For tests in areas in which a formal CLIA specialty with associated proficiency requirements does not exist, laboratories are expected to exercise their own judgment in maintaining quality assurance and quality control programs that are “adequate and appropriate for the validity and reliability of the laboratory examinations.” Relationship between FDA and CLIA Regulation Assessment of new products prior to marketing is a core function of FDA regulation of medical devices. By contrast, CLIA is fundamentally a quality control system. It focuses on the proper implementation of well-established proce- dures and is not designed to cope efficiently with innovations that do not fit within existing specialty boundaries. For the most part, FDA and CLIA play complementary roles. However, FDA’s oversight of quality control in the manufacture of both preassembled test kits and, as expected based upon July 2007 Draft Guidance, LDTs poten- tially imposes redundant requirements on the production of LDTs in laboratories subject to CLIA oversight. FDA has announced its intent to issue guidance to assist laboratories in meeting these requirements, and has invited input on coordination of FDA and CLIA requirements. FDA’s Response to Emerging Genomics-Based Molecular Diagnostics FDA has achieved three noteworthy milestones in regulation of in vitro diagnostic tests based on emerging genomics technologies, including a concept paper on drug-diagnostic codevelopment,67 a draft guidance on IVDMIAs,68 and a guidance on voluntary pharmacogenomic data submissions.69 In particular, the guidance on pharmacogenomic data submissions clearly defined FDA’s intended use of such data and their status relative to the regulatory process. Among the other benefits of such voluntary submissions, FDA has noted that they provide “an opportunity for sponsors to impact FDA’s thinking and help build consensus around future pharmacogenomic standards, policies, and guidance.”70 The FDA’s process of issuing draft guidance on IVDMIAs stimulated extensive dialog both within the private sector and between the private sector and FDA. Recognizing the promise of genomics for the development of
67 Drug-Diagnostic Co-Development Concept Paper (draft), Food and Drug Administration, April 2005, http://www.fda.gov/cder/ genomics/pharmacoconceptfn.pdf, accessed May 14, 2008. 68 Draft Guidance for Industry, Clinical Laboratories, and FDA StaffL In vitro Diagnostic Multivariate Index Assays, Food and Drug Administration, .July 26, 2007, http://www.fda.gov/cdrh/oivd/guidance/1610.pdf, accessed May 14, 2008. 69 Guidance for Industry: Pharmacogenomic Data Submissions, Food and Drug Administration, March 2005, http://www.fda.gov/ cber/gdlns/pharmdtasub.pdf, accessed May 14, 2008. 70 Genomics at FDA: Voluntary Genomics Data Submission (VGDS), http://www.fda.gov/cder/genomics/VGDS.htm, accessed May 14, 2008.
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innovative diagnostic tests, scientists and investors have created many new ventures aimed at developing and commercializing a wide range of tests based on IVDMIAs and invested substantial resources in these ventures. Based on FDA’s longstanding decision to exercise enforcement discretion with respect to LDTs, many developers have already launched or have planned to implement new IVDMIA diagnostic tests as LDTs rather than as manufactured kits. Thus, a number of business plans were based on a path to market via laboratory-based implementation and CLIA regulation, rather than the path of a PMA submission to FDA, which is perceived to be riskier and more costly. The IVDMIA draft guidance changed the IVDMIA development picture in two key respects. First, it implied a substantially increased overall regulatory burden. The increase would arise largely from hurdles imposed by FDA with respect to clinical efficacy such as new requirements for prospective clinical trials, but also in part from the imposition by FDA of quality system requirements for test manufacture that appeared to be duplicative of regulations already imposed on those labs performing LDTs under CLIA. Second, residual ambiguity in the FDA’s definitions of an IVDMIA and of risk left considerable uncertainty about the agency’s likely response to specific new products in or planned for development. For developers, the expected effect of these changes was increased cost, time, and risk for bringing a new product to market, effectively raising the hurdle for market access and putting in question the viability of the entire sector as a target for investment. Ongoing discussions between the private sector and FDA concerning its draft guidance on IVDMIAs have sought to clarify the remaining definitional ambiguities as well as to resolve apparent overlaps between FDA and CLIA requirements to more effectively meet the objective of preserving patient safety while not imposing unnecessarily burdensome regulation on these innovative diagnostic products. In addition, these discussions have provided the opportunity for the private sector to apprise FDA of the extent of product development activity in this area, underlining the importance of achieving clarity on regulatory policy while providing a basis for FDA to project likely demands on its resources. Molecular Diagnostics Linked to Therapeutic Products A diagnostic test that differentiates patients according to their likely response to a therapeutic agent defines the clinical utility of the agent, and thus has implications for labeling of the therapeutic product. When the diagnostic test and the therapeutic agent are being developed at the same time, coordination of the two development and regulatory processes may reduce cost and at the same time achieve more timely access to market for both products. However, such coordination may also pose methodological challenges. When clinical studies are used to obtain information simultaneously on the clinical utility of both the diagnostic test and the therapeutic agent, special care is required in study design to assure that the results are statistically valid. In addition, regulatory review will engage more than one of the FDA’s divisions, the Center for Devices and Radiological Health for the diagnostic and the Center for Drug Evaluation and Research or the Center for Biologics Evaluation and Research for the therapeutic agent. Depending on the way in which the two products will be marketed, the FDA Office of Combination Products may be involved as well. When different companies are developing the products, as is the case with all linked diagnostics brought to market to date as well as many that are currently in development, the situation is especially complicated. The commercial interests of the two parties will likely be very different, and FDA decisions about the exact wording of product labeling may have broader implications. The interests of the therapeutic developer will generally be best served by competition that increases the availability and reduces the cost of the linked diagnostic. On the other hand, the interests of the diagnostic developer are generally best served by labeling that recommends or requires the use of the specific diagnostic product and thereby sustains pricing power. Thus, the economics of the therapeutic and diagnostic products as well as the cost and timing of bringing competing diagnostics to market is affected by whether the FDA identifies a related diagnostic product in the therapeutic product’s label by brand name or simply by generic type. In addition, the therapeutic product developer may be concerned about product approval being delayed or approved indications circumscribed because of the actions of the diagnostic company. Approved labeling for drugs that are already marketed may also be revised to reflect emerging knowledge from new diagnostic tests. The resulting more effective use of existing drugs is an important part of the promise of personalized medicine. As with diagnostic and therapeutic products that are codeveloped, the key challenges in such relabeling are associated with the diagnostic test and its validation. In August 2007, as a result of emerging VI. 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knowledge on the role of genetic factors in the metabolism of warfarin, FDA revised the approved product label to include background information about two genetic factors, for which tests are now available, that may affect a patient’s response to the drug. However, FDA did not change the indications for the drug or recommend that physicians test routinely for these factors before prescribing warfarin. Such a label change is unlikely until a prospective clinical trial has verified that routine use of the tests delivers measurable and meaningful clinical benefits. On the other hand, in July 2008, FDA issued an alert and announced a forthcoming change in product labeling to recommend that all patients who are being considered for treatment with the anti-HIV agent abacavir be screened using one of the available genetic tests for the HLA-B*5701 allele. In this case, FDA judged that two clinical studies provided compelling evidence of the clinical benefit of such screening.71 The Critical Path Initiative The number of innovative drugs, biologics, and medical devices submitted for FDA approval in recent years has not kept pace with the accelerating progress in fundamental science. Many observers in both the public and private sector believe that this gap is evidence that the development path for drugs and devices has become increasingly challenging, inefficient, and costly. Responding to this concern, FDA launched the Critical Path Initiative in 2004 as “FDA’s effort to stimulate and facilitate a national effort to modernize the scientific process through which a potential human drug, biological product, or medical device is transformed from a discovery or ‘proof of concept’ into a medical product.” As noted by FDA, “the goal of the Critical Path Initiative is to bring new scientific discoveries – in fields such as genomics and proteomics, tissue engineering, imaging, and bioinformatics – to bear on product development, to improve the accuracy of the tests we use to predict the safety and efficacy of investigational medical products.”72 Innovative biomarker tests, including genomics-based molecular diagnostics, have been identified as a key focus of the Critical Path. As described above, these tests offer promise in several respects: • They may make it possible to identify patient subpopulations that are more likely to respond to a new treatment, thus enabling smaller, faster, and less expensive clinical trials. • They may facilitate earlier identification and more effective management of safety or toxicity issues. • It may be possible to use tests for certain biomarkers as surrogate measures that predict the effectiveness of a treatment well before the outcome of interest (e.g., improved survival) can be observed directly. Use of such surrogate measures could enable faster clinical trials and shorten the time to market for new drugs. The Critical Path Initiative is being implemented through a series of workshops, standard-setting activities, and targeted research projects that are often conducted in collaboration with academia and industry. However, to date, progress on the Critical Path has been slow, in part because of inadequate funding. Creation of the Reagan-Udall Foundation under the Food and Drug Administration Amendments Act of 2007 is intended to advance the Critical Path Initiative, though initial funding and operational launch of the foundation has been slowed by an unresolved political dispute within Congress. The FDA and Clinical Decision Support Over the long term, widespread adoption of genomics-based diagnostics may be affected by whether and, if so, how computer-based clinical decision support systems are regulated as medical devices by the FDA. A heavy- handed regulatory approach could severely inhibit both their initial development and manufacturers’ ability to keep pace with rapidly changing clinical knowledge, thus serving as a disincentive to investment. In turn, delays in the development of clinical decision support systems could slow the adoption of many personalized medicine products.
71 Information for Healthcare Professionals – Abacavir (marketed as Ziagen) and Abacavir-containing medications, http://www. fda.gov/cder/drug/InfoSheets/HCP/abacavirHCP.htm, accessed August 9, 2008. 72 Critical Path: Frequently Asked Questions, http://www.fda.gov/oc/initiatives/criticalpath/faq2.html, accessed July 18, 2008.
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Challenges Timely and effective adaptation to technological change can be a major challenge for regulatory agencies, which are typically short of resources to meet their existing responsibilities. But the application of outdated regulatory approaches can impede innovation by inappropriately delaying or denying access to market, harming manufacturers and patients by denying access to beneficial new technologies. On the other hand, regulatory standards and procedures that fail to address new hazards may subject patients to risk that is disproportionate to the benefit of the product or service. Finally, inadequate public understanding of the risk/benefit tradeoffs are inherent in all medical products; unrealistic expectations for absolute product safety can severely complicate the political environment in which the regulatory system must function. Although achieving the appropriate regulatory balance for emerging medical technologies is not easy, it is essential if the nation is to realize the benefits of its investments in biomedical research. The FDA has made considerable progress in defining its approach to the regulation of in vitro diagnostic products based on emerging genomic technologies. Nevertheless, FDA guidance remains ambiguous or incomplete in several important areas: • The criteria that define risk for products where information is the key result or output from use of the product • Risk classification of new diagnostics for regulatory purposes • Standards for PMA review of new medical devices, including standards for study design and conduct and standards for product performance73 • Reconciliation of potentially redundant requirements between FDA and CLIA • The regulatory approach to codevelopment of diagnostics and therapeutics • Standards and approaches for adjusting therapeutic product labeling to incorporate use of diagnostics • FDA’s regulatory approach to IT-based clinical decision support systems • Timely guidance on emerging innovative technologies relevant to in vitro diagnostics Policy Recommendations Recommendation 3. FDA should implement a more transparent, systematic, and iterative approach to the regulation of genomics-based molecular diagnostics. • IVDMIA. In finalizing its IVDMIA guidance, FDA should further clarify its definition of risk, defining specific risk criteria for IVDMIAs in light of their intended uses and providing illustrative examples distinguishing products that will be subject to full PMA review from those that will not. At the same time, such guidance should allow an adequate transition time for existing product manufacturers, as well as those currently developing new products in the midst of regulatory change.
• Coordination of FDA and CLIA requirements. FDA and CMS should identify in a timely manner all aspects of overlap and potential redundancy in their oversight of LDTs and issue guidance to clarify the relationship between their respective requirements and eliminate redundant requirements.
73 In its overview of in vitro diagnostics regulation, FDA cites three limitations to its review of PMA applications: lack of a “gold standard” against which to judge performance, the potential for bias in the collection of safety and efficacy data due to problems in study design or conduct, and the fact that “it can be challenging to determine the minimum performance required for approval.” http://www.fda.gov/cdrh/oivd/regulatory-overview.html, accessed April 1, 2008.
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• Co-development. FDA should further develop its draft concept paper on drug-diagnostic co-development into a definitive guidance on the topic, reflecting the principles of clarity in requirements and standards and transparency in regulatory procedures. In particular, wherever it is scientifically reasonable, FDA should specify standard approaches to study design that will be considered appropriate for particular types of co-developed products, while accommodating alternative approaches if justified.
• Labeling of therapeutic products. FDA should clarify its criteria and procedures for determining when the labeling of a therapeutic product will be changed to incorporate information on related diagnostic tests and its criteria for determining how that information will be used – when it will be incorporated purely as background information, as for example in the recently-updated labeling for warfarin;74 when it will be used to recommend specific action by physicians, as in the forthcoming revised labeling for abacavir,75 and when it will become part of the product indication, as for example in the labeling for Herceptin® (trastuzumab).76
• Clinical decision support. FDA should specify its intended approach to the regulation of automated clinical decision support systems, restricting its oversight to those aspects of performance and safety that specifically arise from the use of hardware and software (e.g., identifying and preventing failure modes that arise from particular technical approaches). As is well-established practice, responsibility for clinical content should rest with the professional bodies that create the content.
• More systematic interaction and guidance. In gathering information for regulatory policy development, FDA should enhance communication with affected constituencies by issuing more frequent and timely Requests for Information and draft guidance documents. In consultation with government, academic, and industry scientists, FDA should issue frequently updated guidance documents addressing regulatory issues relevant to genomics-based molecular diagnostics, including risk classification and standards for clinical study design and for analytic and clinical validity that must be met for product approval and for labeling changes. Recommendation 4. The FDA Critical Path Initiative should be adequately funded to support its envisioned research efforts that are critical to the progress of personalized medicine. • Projects that should be prioritized include research and development on the use of biomarkers to facilitate product development and regulatory review and the development of standards for clinical trial design and biostatistical analysis in the validation of innovative molecular diagnostics. • In support of the Critical Path Initiative, launch of the Reagan-Udall Foundation should proceed, with the envisioned funding from Congress. Foundation board membership should be expanded to assure representation from the venture capital community, to gain access to broad knowledge of innovation in the private sector, and to engage smaller companies that are involved in genomics-based diagnostic development. Recommendation 5. Industry should adopt a proactive and constructive role as FDA seeks to identify and fulfill its regulatory responsibilities related to personalized medicine. • Industry should respond in a substantive and positive way to RFIs and draft guidance documents, in particular, where appropriate, submitting carefully considered alternative approaches rather than primarily registering objections. In addition, industry should proactively inform FDA of emerging issues where dialogue will be essential to inform policy development. • To achieve a timely, shared understanding of the hurdles to regulatory approval, test developers should take advantage of existing FDA procedures for consultation in advance of initial regulatory submission.
74 New Labeling Information for Warfarin (Marketed as Coumadin), http://www.fda.gov/cder/drug/infopage/warfarin/default. htm, accessed August 10, 2008. 75 Information for Healthcare Professionals – Abacavir (marketed as Ziagen) and Abacavir-containing medications, http://www. fda.gov/cder/drug/InfoSheets/HCP/abacavirHCP.htm, accessed August 9, 2008. 76 Herceptin Prescribing Information, revision date May 2008, http://www.gene.com/gene/products/information/pdf/herceptin- prescribing.pdf, accessed August 10, 2008.
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• For emerging or rapidly evolving technologies with broad application, industry should provide annual projections of the number and type of products in the development pipeline to assist FDA in planning for timely and appropriate policy development and regulatory review. • Industry should convene trade and professional association meetings to anticipate and alert FDA concerning regulatory issues that are likely to arise with new technological developments.
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VII. Coverage and Reimbursement
Background Regulatory approval of genomics-based, molecular diagnostic products is necessary but not sufficient for the economic viability of such products. Equally important are decisions by government and private insurance payors about whether to accept a new test as eligible for payment (coverage), and if so, how much to pay for it (reimbursement). One might imagine that the relationship between regulatory approval and reimbursement should be simple: regulatory approval certifies that a new product is safe and clinically useful, so payors should, as a matter of course, extend coverage to products that gain regulatory approval. The reality, however, is far more complex. Health Insurance in the United States In the United States, payment for health care comes from a variety of sources. In 2005, private insurance accounted for 35% of national health expenditures, Medicare (national health insurance for the elderly and disabled) for 17%, Medicaid (state health insurance for low income individuals and for children) for 16%, individual out-of-pocket expenditures for 13%, other public programs (including the Department of Veterans Affairs, Department of Defense, Indian Health Service, and others) for 13%, and other private sources for 7%.77 Each of these categories, in turn, represents a variety of individual payors, each with its own policy with respect to coverage and reimbursement. Private insurance is increasingly dominated by a group of large national and regional managed care organizations. Medicare, which is administered by CMS, encompasses both a traditional fee-for-service insurance plan that continues to be the choice of most beneficiaries, as well as a range of managed care plans. Medicaid is administered at the state level, with each state program having its own coverage and reimbursement policy. Because of its large beneficiary population and because its rulings are often perceived as setting standards of care, CMS plays an especially important role. However, CMS is concerned only with those innovations that are relevant to the Medicare population, which consists of people aged 65 and older, patients younger than 65 with certain disabilities, and people of all ages with end-stage renal disease. Thus, certain innovations that are of potentially great importance to younger populations may be of limited or no interest to CMS. In addition, for the most part Medicare does not pay for testing and care to prevent disease. Coverage Decisions In principle, both public and private payors reimburse for products and services that are judged “reasonable and necessary” in the context of the patient’s condition and medical community standards. Conversely, payors typically refuse to cover products and services that are considered “investigational.” In practice, payors have become increasingly skeptical in assessing innovations and more rigorous in analyzing the relevant evidence. This is especially so when the anticipated economic impact is substantial, when the product or service represents a new class and thus might be viewed both as more challenging to evaluate and as establishing a precedent for future coverage decisions, or when the product or service is viewed as especially controversial. Marketing approval by the relevant authority (typically FDA) is necessary but may not be sufficient for payors to cover a new product. Payors have several concerns.
77 “The Nation’s Health Dollar, Calendar Year 2005: Where It Came From,” exhibit prepared by Center for Medicare and Medicaid Services, accessed September 1, 2008 at http://www.cms.hhs.gov/NationalHealthExpendData/downloads/PieChartSources Expenditures2005.pdf.
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• Robustness of the Evidence Supporting Safety and Efficacy. This is a special concern with respect to genomics-based in vitro diagnostics. Development of a genomic marker or set of genomic markers as a diagnostic test typically arises from the observation of an apparent correlation between the presence of those markers and the occurrence of some disease state. Without professional training in biostatistics, it is difficult to appreciate the complexity and subtlety of the statistical analyses required to validate such correlations. Factors that complicate the analysis include inherent limitations or quality control issues in the biochemical assays themselves, ambiguities in definition of the disease state, complexities of the underlying physiologic relationships between individual genes and disease states,78 and the challenges of finding independent populations and/or biospecimen samples that can be used to rigorously validate a correlation. Because of these complexities, apparent correlations may prove illusory on more rigorous analysis. Payors face the risk that tests that reach the market primarily on the basis of analytical validity and with limited evidence of clinical validity may prove to be ineffective in clinical use. Such tests could consume resources unproductively or even place patients at risk of inappropriate care and/or adverse outcomes.
• Generalizability of the Evidence Supporting Efficacy and Safety. Data derived from narrowly defined, tightly controlled study populations in analytic validation studies and clinical trials is not always representative of the results that will be achieved with typical patients in real-world settings. Treatments or diagnostic procedures that seem promising in clinical trials may prove to be less effective in routine practice.
• Appropriate Use. Where available evidence does not clearly define criteria for appropriate use, it can be difficult to specify coverage criteria in such a way as to prevent widespread, cost-ineffective use in patients who will not benefit. Diagnostic tests, especially those based on blood samples or on noninvasive imaging, are widely perceived as imposing relatively little risk to a patient as compared to therapeutic interventions. In fact, this is not always true – even a blood draw poses some risk, and false-positive results from diagnostic tests may result in inappropriate treatment or require additional and more-invasive diagnostic tests to clarify the patient’s situation. Payors are concerned that many physicians have a tendency to order diagnostic tests too freely, without sufficient consideration of their necessity and value in managing the patient’s condition. The consequence of these concerns is that payors want to see more extensive data on diagnostic tests than is required to gain FDA approval in order to validate their benefits in real-world practice settings. For example, as of this writing, neither Aetna nor Cigna covers either the Roche AmpliChip® CYP450 genotyping test or the Invader UGT1A1 molecular assay, despite their marketing approval by FDA. Both payors consider both tests to be, in Aetna’s words, “experimental and investigational because the clinical value…has not been established.”79 The gold standard for evidence is considered to be prospective, controlled studies that document not only analytic validity (i.e., that the test measures what it claims to measure) but also improvement in patient outcomes (i.e., increased therapeutic efficacy and/or reduced adverse effects) with the use of a new test. However, payors may also accept indirect evidence – for example, a combination of evidence demonstrating the analytic validity of a test and independent evidence linking the measured biomarker to clinical outcomes – if the overall pattern of such evidence is strong and consistent. A further complication is that, especially early in the life of a new product or service, coverage decisions may vary by payor and geography. For historical reasons, Medicare uses regional contractors to administer its
78 On this point, see “New Findings Challenge Established Views on Human Genome: ENCODE Research Consortium Uncovers Surprises Related to Organization and Function of Human Genetic Blueprint,” accessed July 2, 2007 at http://www.genome. gov/25521554. 79 Aetna Clinical Policy Bulletin number 0715, Pharmacogenetic Testing, last review 04/25/2008, accessed June 26, 2008 at http://www.aetna.com/cpb/medical/data/700_799/0715.html; CIGNA HealthCare Coverage Position number 0381, Drug Metabolizing Enzyme Genotyping Systems, revised 6/15/2008, accessed June 26, 2008 at http://www.cigna.com/ customer_care/healthcare_professional/coverage_positions/medical/mm_0381_coveragepositioncriteria_AmpliChip.pdf.
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payment process. These contractors also have the primary responsibility for establishing coverage policy through local coverage determination, and regional variations in coverage policy may occur. In certain cases, Medicare deems it appropriate to develop a national coverage determination (NCD). The NCD process can be initiated by CMS analysts or in response to requests received from manufacturers, beneficiaries, or other parties. Private payor policies vary as well. Guidance issued by central technology assessment bodies may be binding or only advisory, depending on the organizational context. Coverage decisions may also vary across insurance products, for example as different companies that sponsor health plans for their employees negotiate different tradeoffs between cost and scope of coverage. As the text of this report was being finalized, CMS announced that it was considering opening an NCD process for pharmacogenetic testing in 2009,80 and opened a public comment period on the topic of pharmacogenomic testing for warfarin response.81 Reimbursement Laboratory-based in vitro diagnostic tests have traditionally been treated as commodities, to be reimbursed at low and ever-decreasing prices.82 The coding systems used to submit claims for reimbursement assume a nearly static world in which most test innovation involves minor changes in well-established methods. Payments for a new test are typically determined in one of two ways. Most commonly, a new test is determined, via a process known as “cross-walking,” to be similar to either an existing test, a mix of existing tests, or a portion of an existing test. Payment will be set at an “appropriate” percentage of the payments for the corresponding existing tests. On occasion, payment is established via “gap-filling,” in which insurers set a price in light of the perceived analytic complexity of a test. Because of the intense focus on analogy to existing tests and on cost as a basis for pricing, “there is little reward for creating additional value (either in a clinical or an economic sense) and hence little incentive to create the evidence to support value creation.”83 Diagnostic tests that are commonly used on an inpatient basis may also be bundled with other products and services under payment systems such as Medicare’s Diagnosis-Related Groups (DRGs). DRGs are designed to incentivize cost-effective provision of hospital care. However, in the short run, before payment rates have been adjusted to reflect changes in technology and practice, DRGs have the effect of pitting emerging technologies against existing approaches in a zero-sum game. Challenges Ideally, the reimbursement system should facilitate cost-containment without arbitrarily obstructing the adoption of innovations that deliver substantial value. There are three key challenges to achieving this ideal for genomics- based molecular diagnostics: reimbursement rates, evidence development, and procedural hurdles. Reimbursement Rates Reimbursement of genomics-based molecular diagnostic tests as low-margin commodity items radically reduces the likelihood that the economic return from development of an innovative test will justify the required investment. Evidence Development The low margins characteristic of reimbursement for in vitro diagnostics also make it difficult or impossible to conduct the elaborate clinical trial programs taken for granted in the development of new pharmaceuticals.
80 Potential NCD Topics, http://www.cms.hhs.gov/mcd/ncpc_view_document.asp?id=19, accessed August 10, 2008. 81 NCA Tracking Sheet for Pharmacogenomic Testing for Warfarin Response (CAG-00400N), http://www.cms.hhs.gov/mcd/ viewtrackingsheet.asp?id=224, accessed August 10, 2008. 82 Wolman DM, Kalfoglu AL, LeRoy L, eds., Medicare Laboratory Payment Policy: Now and in the Future, Committee on Medicare Payment Methodology for Clinical Laboratory Services, Institute of Medicine, 2000. 83 Ramsey SD, Veenstra DL, Garrison LP Jr., et al., “Toward Evidence-based Assessment for Coverage and Reimbursement of Laboratory-based Diagnostic and Genetic Tests,” Am J Manag Care. 2006 Apr;12(4):197-202. VII. Coverage and Reimbursement ✩47 A5859 Case 1:09-cv-04515-RWS Document 197-7 Filed 01/06/2010 Page 50 of 65
Even to the extent that funds are available, some companies that are developing innovative molecular diagnostics may be unfamiliar with payors’ evidence requirements and may invest available resources less than optimally, designing studies exclusively around the demands of regulatory approval and neglecting the broader evidence required by payors. Moreover, there is no broad program of government-funded clinical trials of molecular diagnostics comparable to the NIH-funded clinical trials of new therapeutics that complement industry-funded studies and extend the knowledge base in essential ways. More clinical trials such as the TAILORx study of Oncotype DX®, coordinated by the Eastern Cooperative Oncology Group and funded by the National Cancer Institute,84 and the Genotype Guided Dosing of Warfarin Clinical Trial, coordinated by the University of Pennsylvania and sponsored by the National Heart, Lung and Blood Institute,85 are needed. Although systematic reviews such as those conducted by the Evidence-based Practice Centers program86 of the Agency for Healthcare Research and Quality (AHRQ) and the Evaluation of Genomic Applications in Practice and Prevention program87 of the Centers for Disease Control and Prevention (CDC) play a valuable role, these reviews cannot reach definitive results in the absence of sufficient original data generated by clinical trials. As a result, the evidence base for these new products is frequently inadequate to address the full range of payor questions and concerns. Procedural Hurdles Procedural hurdles unrelated to the clinical merits of a product can be substantial barriers to effective market access. Such hurdles include coding systems and bundled payment systems that are not designed to adapt in a timely way to advances in diagnostic technology and complex billing procedures and requirements that obstruct the optimal provision of innovative molecular diagnostics. Policy Recommendation Recommendation 6. Public and private payors should determine coverage policies and payment rates for genomics-based molecular diagnostics in light of their overall impact on patient care, as demonstrated by evidence from clinical trials and other well-designed empirical studies. Reimbursement. Public and private payors should reimburse for molecular diagnostics at levels commensurate with the clinical benefits that these tests provide, as established through well-designed clinical studies. Test developers and payors should collaborate to revise the existing coding system for laboratory diagnostics or establish new, more flexible coding approaches better able to respond to innovation.
Coverage with Evidence Development. Where the available evidence is inadequate to inform coverage and reimbursement decisions, public and private payors should collaborate to expand the use of “coverage with evidence development” programs. In such programs, coverage and reimbursement are extended on a limited basis for use of the product in well-designed studies that will provide evidence on the appropriate use and effectiveness of the product in relevant patient populations.
Standards for Clinical Trial Design. Public and private payors should collaborate in the development of standards for clinical trial designs that would be accepted as providing evidence sufficient for coverage decisions. The major national payors should establish voluntary, formal procedures for consultation with test developers to achieve a timely, shared understanding of what the hurdles for coverage and reimbursement will be in specific cases.
84 Understanding PACCT-1: TAILORx, study brochure, Eastern Cooperative Oncology Group, accessed June 26, 2008 at http://ecog.dfci.harvard.edu/general/gendocs/tailorx_brochure.pdf. 85 http://rt5.cceb.med.upenn.edu/warfdcc/WARF-1.html, accessed June 28, 2008. 86 http://www.ahrq.gov/clinic/epcix.htm, accessed June 28, 2008. 87 http://www.egappreviews.org/, accessed June 26, 2008.
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VIII. HHS Coordination
Background As described previously, PCAST considers the primary and most immediate challenges to personalized medicine to be three-fold: research investment in validation of genetic/clinical correlations, restructuring of the regulatory system to effectively accommodate molecular diagnostics, and assuring adequate and appropriate coverage and reimbursement for the resulting products. Primary government responsibility for meeting these challenges, which includes implementing PCAST’s recommendations, will lie within a single cabinet-level department, HHS.88 HHS agencies play the lead roles in funding biomedical research through NIH, regulating drugs and medical devices through FDA, managing the largest public health insurance program, Medicare, including making decisions on coverage and reimbursement for medical products and services through CMS, and creating and analyzing the evidence base informing appropriate clinical use of new methods of diagnosis and treatment through AHRQ and CDC. In addition, through the ONC, HHS plays a major role in spurring and shaping the development of standards for information technology in health care. Reflecting the centrality of HHS in the implementation of personalized medicine, HHS Secretary Michael Leavitt has made building a strong foundation for personalized health care one of the highest HHS priorities and acknowledges the need for coordination across HHS to accomplish this goal.89 Challenges Under the leadership of Secretary Leavitt and thanks to the extraordinary efforts of Dr. Gregory Downing, program director for the HHS Personalized Health Care Initiative, HHS has made great strides toward defining the scope of personalized medicine activities across and beyond HHS agencies and encouraging a range of information- gathering, standard-setting, and coordination efforts. With these essential efforts as a foundation, HHS faces the challenge of developing a more systematic coordination activity that will be able to sustain the necessary institutional focus over time and across changing administrations. Coordination is necessary to address several goals. The first goal is to assure, wherever possible, that HHS agencies take adequate account of the impact on personalized medicine when developing and implementing policies to fulfill their respective missions. The second goal is to assure that HHS agencies have the best current scientific and clinical knowledge available when devising policies and activities that relate to personalized medicine. The third goal is to assure that HHS agencies understand the full range of stakeholder perspectives on personalized medicine and its medical, ethical, legal, and social impacts. The fourth goal is to assure that HHS agencies do not work at cross purposes through the issuance of inconsistent guidelines or conflicting regulations. The fifth and final goal is to make the most effective use of limited resources by avoiding duplication of effort and, where appropriate, by implementing initiatives through cross-agency collaboration. Policy Recommendation Recommendation 7. HHS should establish a Personalized Medicine Coordination Office (PMCO) within the Office of the HHS Secretary to coordinate all activities relevant to personalized medicine. The coordination office would be charged with coordination of all HHS activities relative to personalized medicine in order to facilitate progress while ensuring that personalized medicine products meet the highest standards of safety, efficacy, and clinical utility. At the direction of the Secretary, the office would be responsible for identifying
88 Other government agencies, such as the Department of Defense, Department of Veterans Affairs, and Department of Energy, may also play a valuable role in related research and/or implementation activities. 89 Personalized Health Care: Opportunities, Pathways, Resources, DHHS Report, September 2007. VIII. HHS Coordination ✩49 A5861 Case 1:09-cv-04515-RWS Document 197-7 Filed 01/06/2010 Page 52 of 65
priority areas for cross-agency coordination and collaboration, managing the necessary cross-agency activities in those areas, and working with affected agencies to implement specific recommendations concerning personalized medicine made by PCAST or other advisory groups. Important areas for coordination that are related to the research, regulatory, and reimbursement obstacles identified by PCAST as key barriers to progress in personalized medicine include: • Coordination between NIH and FDA to identify, prioritize, and address challenges in translational research on genomics-based diagnostics that impact both product development and regulation, including many focus areas of the FDA Critical Path Initiative • Coordination between CMS, FDA, AHRQ, and CDC to assure that the best available data are brought to bear in assessing new personalized medicine products for coverage and reimbursement, without violating necessary strictures on FDA sharing of proprietary information • Coordination between CMS, AHRQ, and CDC to identify and prioritize gaps in the evidence base concerning outcomes and cost-effectiveness of genomics-based diagnostics and to develop research or consensus- development initiatives to address those gaps • Coordination between FDA and CMS in rationalizing regulation of laboratory-developed tests • Coordination between FDA and CMS in educating and consulting with developers of personalized medicine products concerning evidence requirements for reimbursement and regulatory purposes, to facilitate development of more cost-effective clinical trial programs for new products • Coordination between ONC, FDA, and AHRQ to assure that FDA’s regulatory approach to IT-based clinical decision support systems is evidence-based and appropriately targeted The PMCO would also be responsible for monitoring the progress of personalized medicine and, as new innovations or challenges develop, ensuring that all HHS agencies work together to address emerging needs and take emerging knowledge into account in their respective activities related to personalized medicine. In that regard, PCAST recommends that the PMCO be responsible for assuring that key areas of policy concern in personalized medicine are brought to the attention of the Secretary’s Advisory Committee on Genetics, Health and Society (SACGHS). The PMCO would also be responsible for ensuring that SACGHS findings and recommendations inform HHS policy-making on personalized medicine. Moreover, when the SACGHS charter is reviewed for renewal in September 2008, consideration should be given to adjusting the committee’s charter to strengthen its role as an advisor to HHS on the wide range of issues raised by personalized medicine.
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Appendix A. PCAST Personalized Medicine Meetings and Presenters
January 9, 2007 PCAST Meeting • Alex Azar II, U.S. Department of Health and Human Services • Dr. Raju Kucherlapati, Harvard Medical School-Partners Healthcare Center for Genetics and Genomics • Dr. Elizabeth Nabel, National Heart, Lung and Blood Institute • Dr. Janet Warrington, Affymetrix, Inc. April 24, 2007 PCAST Meeting • Dr. Elaine Mardis, Washington University • Michael Goldberg, Mohr Davidow Ventures • Dr. Randy Scott, Genomic Health, Inc. • Dr. Jeremy Berg, National Institute of General Medical Sciences April 25, 2007 PCAST Personalized Medicine Subcommittee Meeting • Timothy O’Leary, Veterans Health Administration, U.S. Department of Veterans Affairs • Linda Fischetti, Veterans Health Administration, U.S. Department of Veterans Affairs • Gail Belles, Veterans Health Administration, U.S. Department of Veterans Affairs • Dr. Greg Downing, U.S. Department of Health and Human Services • Dr. Janet Woodcock, U.S. Food and Drug Administration • John LeGuyader, United States Patent and Trademark Office July 24, 2007 PCAST Personalized Medicine Subcommittee, Special Meeting • Vern Norviel, Wilson Sonsini Goodrich & Rosati • John Barton, Stanford Law School • Bob Blackburn, DNAlex • Barbara Caulfield, Affymetrix, Inc. • Larry Respess, Nanogen, Inc. • Michael Shuster, Fenwick & West LLP • Dr. Mickey Urdea, Tethys Bioscience, Inc. • Dr. Michael Hunkapiller, Alloy Ventures, Inc. • Dr. Richard Janeczko, Luminex Corporation • Dr. Steve Shak, Genomic Health, Inc. Appendix A: Meetings and Presenters ✩51 A5863 Case 1:09-cv-04515-RWS Document 197-7 Filed 01/06/2010 Page 54 of 65
• Sue Siegel, Mohr Davidow Ventures • Dr. Bill Young, Monogram Biosciences • Dr. Howard Birndorf, Nanogen, Inc. • Dr. Bill Hagstrom, Riley Genomics, Inc. • Dr. Tom White, Celera Diagnostics • Brook Byers, KPCB • Michael Goldberg, Mohr Davidow Ventures • Dr. Fred Cohen, TPG September 11, 2007 PCAST Meeting • Dr. Michael Caldwell, Marshfield Clinic • Gino Santini, Eli Lilly and Company • Dr. Mark McClellan, The Brookings Institution • Dr. Francis Collins, National Human Genome Research Institute September 12, 2007 PCAST Personalized Medicine Subcommittee Meeting • Dr. Gregory Downing, U.S. Department of Health and Human Services • Dr. Gurvaneet Randhawa, Agency for Healthcare Research and Quality • Dr. Robert Kolodner, U.S. Department of Health and Human Services • Dr. Barry Straube, Centers for Medicare and Medicaid Services November 28, 2007 PCAST Personalized Medicine Subcommittee, Special Meeting • Dr. Nadine Cohen, Johnson and Johnson Pharmaceutical Research and Development, L.L.C. • Dr. Finley Austin, F. Hoffmann-La Roche Ltd • Dr. Patrice Milos, Helicos Biosciences Corporation • Dr. Stephen Teutsch, Merck & Co., Inc. • Dr. Brian Spear, Abbott Laboratories • Dr. Hakan Sakul, Pfizer Inc. • Dr. Jean Paul Gagnon, Sanofi-Aventis U.S. LLC • Dr. Stephen Ryan, AstraZeneca • Dr. Myla Lai-Goldman, Laboratory Corporation of America • David Browning, Phillips Healthcare • Dr. Joseph Jacobs, Abbott Laboratories • Dr. John Dunne, BD Biosciences • Dr. Beryl Crossley, Quest Diagnostics Incorporated
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• Dr. Werner Kroll, Novartis Vaccines and Diagnostics, Inc. • Dr. Walter Koch, Roche Diagnostics • John Juhasz, Siemens AG • Dr. Gene Cartwright, General Electric Company • Nick Littlefield, Foley Hoag LLP • Gail Javitt, Genetics & Public Policy Center • Dr. Paul Billings, Signature Genomic Laboratories, LLC • Dr. John Glaser, Partners Healthcare System, Inc. • Dr. Mark Hoffman, Cerner Corporation • Dr. Charles Kennedy, WellPoint, Inc. • Michael Svinte, IBM Corporation • Dr. Jonathan Perlin, HCA Inc. • James Tosone, Pfizer Inc. • Dr. James Mault, Microsoft • Rick Carlson, University of Washington • Dr. Philip Carney, Kaiser Permanente • Dr. Lewis Sandy, UnitedHealth Group • Russell Teagarden, Medco Health Solutions, Inc. • Dr. Bruce Quinn, Electronic Data Systems Corporation • Dr. Eric Faulkner, RTI Health Solutions • Dr. Ernst Berndt, Massachusetts Institute of Technology • Dr. Henry Grabowski, Duke University • Dr. Tomas Philipson, University of Chicago • Dr. Kathryn Phillips, University of California, San Francisco • Mark Trusheim, Massachusetts Institute of Technology January 8, 2008 PCAST Meeting • Dr. Ralph Snyderman, Duke University and Proventys, Inc. • Sharon Terry, Genetic Alliance, Inc. • Amy DuRoss, Navigenics, Inc. • Dr. Lawrence Lesko, U.S. Food and Drug Administration January 9, 2008 PCAST Personalized Medicine Subcommittee Meeting • Chris Colwell, Biotechnology Industry Organization • Randy Burkholder, Pharmaceutical Research and Manufacturers of America Appendix A: Meetings and Presenters ✩53 A5865 Case 1:09-cv-04515-RWS Document 197-7 Filed 01/06/2010 Page 56 of 65
• Edward Abrahams, Personalized Medicine Coalition • Kelly Slone, National Venture Capital Association • David Mongillo, American Clinical Laboratory Association • Khatereh Calleja, Advanced Medical Technology Association April 8, 2008 PCAST Meeting • Mara Aspinall, Genzyme Corporation • Dr. Muin Khoury, Centers for Disease Control and Preventio
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Appendix B. Examples of Personalized Medicine Applications Currently on the Market
Product Company Technology / Test Type Disease / Application HER2/neu tests several Two types of test are Determine eligibility of available: immunohis- breast cancer patients for tochemical tests measuring treatment with Herceptin® expression of the HER2/neu (trastuzumab) protein (phenotype) and FISH tests measuring amplification of the HER2/ neu gene (genotype) Trofile™ assay Monogram Uses cultured cell lines to Determine eligibility of HIV Biosciences assess the interaction of the patients for treatment with patient’s HIV-1 strain with Selzentry™ (maraviroc) different cell-surface receptors (phenotype) TPMT assays several Two types of test are Set dose of thiopurine drugs available, measuring the to maximize therapeutic presence of TPMT gene efficacy while minimiz- variants (genotype) or the ing bone marrow toxicity level of TPMT enzyme activ- in diseases such as acute ity (phenotype) lymphocytic leukemia, inflammatory bowel disease, and severe active rheumatoid arthritis Invader® UGT1A1 assay Third Wave Uses PCR to measure Set dose of irinotecan in Technologies presence of UGT1A1*28 gene colorectal cancer patients variant (genotype) to maximize therapeutic efficacy while minimizing side effects of diarrhea and reduced white blood cell count AlloMap® test XDx Uses quantitative PCR to Identify heart transplant measure expression of 20 patients at low risk for genes, algorithm to convert acute cellular rejection, may results to quantitative allow reduced use of biopsy composite score for monitoring and/or more (multivariate genotype array) precise tailoring of immuno- suppressive regimen Oncotype DX® Genomic Health Uses quantitative PCR to Quantifies the risk of measure expression of 21 systemic recurrence and genes, algorithm to convert assesses the value of results to quantitative chemotherapy in patients composite score (multivari- with newly diagnosed, early ate genotype array) stage invasive breast cancer
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Antiretroviral drug many Wide variety of both Assess presence of drug- resistance tests genotypic and phenotypic resistant HIV strains to tests commercially available enable selection of effective antiretroviral regimen AmpliChip® CYP450 test Roche Diagnostics Uses PCR amplification and Inform dosing decisions for DNA microarray technologies a range of drugs that are to assess presence CYP2D6 metabolized to differing and CYP2C19 gene variants extents by variants of the CYP2D6 or CYP2C19 isoenzymes Warfarin metabolism many Variety of kit and laboratory Inform warfarin dosing tests implementations to assess decisions in patients presence of CYP2C9 and requiring anticoagulation VKORC1 gene variants therapy HLA B*5701 test many LDTs Generally use PCR Identify HIV patients amplification and sequence- likely to suffer severe hyper- specific oligonucleotide sensitivity reaction to the probes to assess presence of antiretroviral drug abacavir B*5701 allele
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Appendix C. Technology and Tools Glossary
Base pair: A pair of complementary bases on a double-stranded segment of DNA. Biobank: See Biospecimen Bank Biospecimen Bank: A storage repository for biospecimens. Also known as a Biobank. Biospecimen: A sample of materials such as tissues, cells, nucleic acids, or proteins derived from humans, animals, or plants. Human biospecimens may also be stored with relevant medical information and written consent governing the use of the materials.
Cohort: A group of people that shares a common characteristic or experience within a defined period. Control: A scientific sample or measurement used as a standard for comparison. Genetic region: A segment of DNA corresponding to a region of a genome with known or hypothetical genetic activity.
Genetic variation: Variation in the DNA sequence between members of a population or species. Variation may be at the level of changes at a single base pair to changes in whole genetic segments as a result of rearrangement, duplication, or deletion.
Genome annotation: The identification of positions of features such as genes and regulatory elements on a genome sequence.
Genome sequencing: The process of decoding the linear sequence of bases in a segment of DNA. Genome: An organism’s genetic material. The human genome is the DNA contained with the 24 chromosomes, totaling about 3 billion base pairs.
Genome-wide association study (GWAS): A study that identifies markers across genomes to find genetic variation associated with a disease or condition.
Genomics: The study of genomes, including such features as the sequence of bases, the content and locations of genes, regulatory sequences, and nongenic sequences.
Haplotype: A set of variants of closely-linked genetic loci that tend to be inherited together. HapMap: A map of haplotypes spanning a whole genome. In vitro diagnostic multivariate index assay (IVDMIA): Test systems that employ data, derived in part from one or more in vitro assays, and an algorithm that usually, but not necessarily, runs on software to generate a result that diagnoses a disease or condition, or is used in the cure, mitigation, treatment, or prevention of disease.
Laboratory-developed test (LDT): Sometimes referred to as “home brew” tests, these tests are assembled by individual clinical laboratories from available reagents and other ingredients for use exclusively in that laboratory.
Longitudinal study: A research study that collects repeated observations of the same items over a long period of time.
Marker: See molecular marker Microarray: A spotted grid of DNA, protein, or tissue samples attached to a solid support such as a glass slide or silicon wafer permitting simultaneous analysis of all of the samples.
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Molecular marker: A native substance such as a protein or DNA sequence associated with a particular physiological state. DNA markers can identify a specific segment of DNA within a larger sample.
Premarket approval (PMA): A regulatory process required for devices that are considered “high risk,” which is defined by the FDA as those that support or sustain human life, are of substantial importance in preventing impairment of health, or which present a potential, unreasonable, risk of illness or injury. A company is required to submit information to the FDA that documents the safety and effectiveness of the device.
Proteome: The entire complement of proteins and associated modifications produced by an organism. Proteomics: Large-scale studies of protein collections or proteomes with regard to structure and function. Single nucleotide polymorphism (SNP): DNA sequence variations caused by single base changes at a given position in a genome.
Translational research: The movement of basic scientific discoveries arising from laboratory, clinical, or population studies into clinical applications.
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Appendix D. Genomic Technologies
This Appendix provides additional explanatory detail on the technological advances that form the foundation of genomic technologies. For readers interested in more information about the history of the Human Genome Project, the National Human Genome Research Institute has produced an online education kit entitled, “Understanding the Human Genome”90 and additional resources related to the history of the Human Genome Project are available through a DOE Web site.91 The Human Genome Project – a Reference Genome The human genome sequence announced in 2003 captured the sequences represented by the roughly 20 individuals who provided the DNA samples. This initial composite sequence from a small number of individuals is referred to as a “reference sequence.” A reference sequence is a valuable framework for understanding what is shared among individuals and can form the basis for many discoveries about gene structure and function. However, there is substantial genomic variation within the human population, including single nucleotide variations as well as deletions, insertions, and rearrangements within DNA, which was not captured in the reference sequence. Because this individual variation within the genome influences individual phenotypes, including susceptibility to disease and response to treatment, understanding these phenotypes requires analysis of each person’s own individual genome sequence. For such personal genome sequencing to be performed routinely, new sequencing technologies are needed that are faster and cheaper than those used to establish the reference sequence. Capturing Genetic Variation Sequencing of the human reference genome and comparison of the sequence patterns among individuals has made it clear that the genomes of any two individuals are more than 99% identical. However, the small portion that differs is expected to provide insight into individual differences in susceptibility to disease, response to drugs, and reaction to environmental factors. In December 2007, Science magazine called human genetic variation the breakthrough of the year92 in recognition of the advances made in understanding individual variation in human genome sequences and the impact this will have on elucidating the genetics of complex diseases and traits. In a collection of individuals, sequence variation may result in several versions – also called “alleles” – of a particular gene, each differing by one or a few nucleotides. Single nucleotide positions in the human genome in which variation exists across many individuals are known as single nucleotide polymorphisms or SNPs, a specific type of allele. SNPs can occur both within and outside of genes, both of which can affect gene function. SNPs occur in the population at frequencies ranging from very common to essentially unique (occurring in a single individual). The relationship between SNP frequency and disease is not currently understood. It has been estimated that approximately 15 million common SNPs exist in human populations.93 SNPs are not the only variation important to understanding disease. Increasingly, the new sequencing technologies as well as array-based techniques are detecting larger variations called “structural variation” or “copy number variation.” These are regions where genomes can differ by large stretches of sequence. For example, a stretch of DNA sequence may be present in one genome but not another (an insertion/deletion); or it may be in a different location or arrangement (rearrangements, inversions). Structural variation can involve stretches of DNA sequence that range in size between a few base pairs to millions of base pairs. Individual (apparently normal) genomes can
90 http://www.genome.gov/25019879, accessed August 30, 2008. 91 http://www.ornl.gov/sci/techresources/Human_Genome/project/hgp.shtml, accessed August 30, 2008. 92 Pennisi, E. (2007) Breakthrough of the Year: Human Genetic Variation. Science 318: 1842-1843. 93 Science (2007) 318, 1842-1843.
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even differ by the presence or absence of entire genes. Structural variation has also been linked to disease, for example schizophrenia.94 Scientists are just beginning to characterize the extent and significance of structural genetic variation.95, 96 Individual genetic variation can be assessed in two basic ways: microarray-based genotyping and genome sequencing. If a set of relevant variants that exist within the human genome are already known (for example, the database of existing, known SNPs), a technique called microarray hybridization today provides a fast, low- cost means of assessing them in an individual’s genome. This is known as “genotyping,” or assessment of the version (allele) that exists at multiple locations in an individual’s genome. Microarrays contain a closely-packed grid of short DNA sequences attached to a solid support such as a silicon wafer. These “chips” can be used to analyze a collection of DNA sequences for allele or SNP variation at specific locations.97 Affymetrix, Illumina, and Perlegen market microarray products for this purpose, including arrays containing more than 900,000 SNPs. For example, the Affymetrix GeneChip 500 Mapping Array Set was used in the Wellcome Trust Case Control Consortium genome-wide association study of 14,000 cases of seven common diseases and 3,000 shared controls published in June 2007.98 Manufacturers are now emphasizing inclusion of “tag SNPs,” which identify regions of the genome (termed haplotypes), which contain multiple SNPs that are often inherited together, rather than simply increasing the overall number of SNPs represented. New sequence-based approaches to SNP profiling are also commercially available and in development.99 Microarrays are also being used for genotyping by companies offering personal genome services.100 23andMe, which was founded in 2007, launched its Web-based Personal Genome Service™ in January 2008, genotyping saliva DNA using the Illumina HumanHap550+ BeadChip.101 Navigenics, which was also founded in 2007, genotypes saliva DNA using the Affymetrix Genome-Wide Human SNP Array 6.0® and Clinical Laboratory Improvement Amendments (CLIA) laboratory facilities.102 A third company, deCODEme, a subsidiary of deCODE Genetics in Iceland, also offers genotyping services in a CLIA laboratory using DNA derived from buccal swabs. deCODEme uses the Illumina Human 1M BeadChip which was developed in collaboration with deCODE Genetics, and contains more than 1 million SNPs per chip. Although chip-based genotyping is rapid and cheap, it has the significant disadvantage of only detecting variations that are already known to exist in the human population. These are usually variations that exist at relatively high frequency and therefore have been detected by sequencing and placed in a public database so that they can be engineered into the genotyping chips. While such variation may be implicated in a specific disorder, much more commonly the SNP or other variation is simply correlated with a disease state. The actual variation causing the phenotype is in fact just physically nearby the one that can be assayed by genotyping. In addition to microarray-based genotyping, genome sequencing can detect any variation in an individual, including ones not previously seen and reported. Sequencing can thus be used for discovery of new variations. A complete catalog of human variation that can be used as a basis for the design of all possible genotyping assays has not yet been developed. In addition, we do not yet understand the basis for variation in individual phenotypes such as disease susceptibility. If the most significant diseases or predispositions are caused by rare variants (even rare variants in genes already implicated in disease), sequencing may be the only option for detecting them. As sequencing costs drop, the use of sequencing to obtain more information about an individual’s genetic variation
94 http://www.nih.gov/news/research_matters/april2008/04072008schizophrenia.htm, accessed August 30, 2008. 95 The Human Genome Structural Variation Working Group, Completing the map of human genetic variation. Nature 447: 161-165. 96 Kidd et al. (2008) Mapping and Sequencing of Structural Variation from Eight Human Genomes. Nature 453: 56-64. 97 http://biobasics.gc.ca/english/View.asp?x=737, accessed August 30, 2008. 98 The Wellcome Trust Case Control Consortium (2007) Nature 447, 661-678. 99 Dove, A (2007) From Morgan to Microarrays: gene mapping hits the big time. Science 318, 473-478. 100 http://www.nytimes.com/2007/11/17/us/17genome.html, accessed August 30, 2008. 101 https://www.23andme.com/more/process/, accessed August 30, 2008. 102 http://www.navigenics.com/, accessed August 30, 2008.
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will be increasingly desirable. If costs drop far enough, whole genome sequencing may supersede microarray- based approaches for assessing genotypes. In the meantime, new variation discoveries afforded by sequencing will continue to feed into the design of new microarrays. Next Generation Sequencing Technologies/Personal Genomes The National Human Genome Research Institute Genome Technology Program supports technology development aimed at reducing genome sequencing costs. This program was the result of two concept papers,103 discussed at the National Advisory Council for Human Genome Research in May 2003. The initial goal was to sequence a mammal- sized genome (roughly 3 billion base pairs) for $100,000 but the long-term goal was a genome sequence cost of $1,000.104 Beginning in 2004, awards totaling $99 million105 were made by the Genome Technology Program106 to support technology development in both academic and industrial settings, as well as transfer of technologies from developers to users. Sequencing technology advances supported, in part, through this program have led to the development of new sequencing chemistries and the commercial release of several next generation sequencing machines. The 454 Life Sciences Genome Sequencer FLX™,107 the Illumina Genome Analyzer,108 the Applied Biosystems SOLiD System™,109 and the Helicos™ HeliScope Genetic Analysis System110 are already on the market and other sequencing technologies are close to commercialization. These new sequencing machines represent the first wave of new technologies that could provide rapid access to whole genome sequence information from an individual at low cost. In general, the new sequencing platforms in their initial implementation are between two- and ten-fold more efficient at producing data than the Applied Biosystems 3730xl DNA Analyzer that was used to produce the reference genome sequence. However, the quality of the data is different – for example, the 3730 routinely produced individual sequences (or “reads”) of up to 900 base pairs in length – such long reads can be assembled readily into sequences of many millions of base pairs. The new platforms produce much shorter individual reads – from 35 to 400 base pairs. In addition, variability in sequence quality exists depending on the technology used.111 Much work remains to understand how best to exploit this new type of data for all uses. However, short reads are relatively easy to use for understanding human variation. Because of the availability of a high quality human genome reference sequence as a basis for comparison with an individual genome, it is possible to use the new technology platforms to obtain sequence from an individual genome very efficiently. Less work and shorter reads are required to make the comparison and find individual variation than would be required to sequence an entirely new reference genome for each individual. This is because the short reads can readily be aligned to their proper place using the reference sequence and compared with the reference to detect differences. Decreasing sequencing costs have allowed more ambitious scientific projects to be conceived and undertaken. For example, the National Human Genome Research Institute has initiated two new programs, the Medical Sequencing Program112 and the Tumor Sequencing Project,113 which are using next-generation machines to sequence targeted regions (chosen because they have been implicated in the disease) of the genomes of many individuals with known conditions. In addition to finding individual variation that can be related to specific disorders, these projects will develop approaches for analyzing the data and managing associated ethical issues.
103 http://www.genome.gov/Pages/Education/Sequencing_technology_concepts_for_Council_discussion1.pdf, accessed August 30, 2008. 104 http://www.sciencemag.org/cgi/content/full/311/5767/1544, accessed August 30, 2008. 105 http://www.genome.gov/Pages/About/OD/ReportsPublications/June2008_SchlossHoL.pdf, accessed August 30, 2008. 106 http://www.genome.gov/10000368, accessed August 30, 2008. 107 http://www.454.com/, accessed August 30, 2008. 108 http://www.illumina.com/pages.ilmn?ID=204, accessed August 30, 2008. 109 http://marketing.appliedbiosystems.com/mk/get/SOLID_KNOWLEDGE_LANDING, accessed August 30, 2008. 110 http://www.helicosbio.com/Products/HelicostradeGeneticAnalysisSystem/tabid/140/Default.aspx, accessed August 30, 2008. 111 http://www.pubmedcentral.nih.gov/articlerender.fcgi?artid=1779559, accessed August 30, 2008. 112 http://www.genome.gov/15014882, accessed August 30, 2008. 113 http://www.genome.gov/19517442, accessed August 30, 2008. Appendix D: Genomic Technologies ✩61 A5873 Case 1:09-cv-04515-RWS Document 197-7 Filed 01/06/2010 Page 64 of 65
The 1,000 Genomes Project – conducted by an international consortium and described in the Technology and Tools chapter of this report – aims to compile a more comprehensive catalog of human variation (seeking rare SNPs and structural variants) for general use in medical genetics studies. This project will test the capabilities of the new platforms even more – one pilot project is testing the ability of the new platforms to sequence all of the genes from over 1,000 individuals, and another aims to test the ability to obtain information about sequence variation over the entire genome of 1,000 individuals. Three sequencing companies, 454 Life Sciences, Applied Biosystems, and Illumina Inc., have joined the project to provide additional sequencing capacity and to test their technologies on hundreds of human DNA samples.114 These technological innovations have already enabled sequencing of the first individual human genomes. As described on page 32 of this report, the sequence of Nobel Laureate James Watson was completed in June 2007 by Baylor College of Medicine in partnership with 454 Life Sciences in two months at a cost of less than $1 million.115 The sequence was presented to him on a DVD and deposited in a public database. This contrasts with the public Human Genome Project, which cost $3 billion (including technology development) and took about 13 years. In addition, individuals can now purchase their own genome sequences from Knome, a commercial company (see the Technology and Tools chapter of this report). Other Applications Although the most prominent application of sequencing technologies is to understand genomic variation in health and disease, the new technology platforms can be used for other applications that may become increasingly important, and which raise similar ethical, legal, social, and policy issues. Two examples are below. First, the new platforms can be used to precisely detect changes in the level of expression of all genes that are active in any tissue by sequencing DNA copies made from messenger RNA. As costs decrease, this will be possible to do for individual patients. This will be used for diagnosis and prognosis of disease, and to monitor responses to treatment. Genome-wide expression analysis can also be done using a chip-based approach, but this is rapidly being replaced by next generation sequencing, which is cheaper for this specific application and provides better data quality. Second, the new sequencing technologies can be adapted to detect epigenetic changes. These are chemical modifications to DNA bases that do not entail actual changes of DNA sequence, but that affect the function of an individual DNA sequence by changing the structure of the DNA, and/or by changing how proteins bind to DNA. Epigenetic changes are known to be important for normal development and disease. There are several efforts underway to catalog human epigenetic variation and epigenomics was one of two new NIH Roadmap Initiatives for 2008.116 The Future Both sequencing and microarray technologies are changing rapidly and will continue to do so over the next few years. For detecting known variation, genotyping assays now cost on the order of $1,000. As more basic knowledge is built up about the relationship between genome sequence and disease, genotyping approaches will become more powerful and increasingly used in routine medical settings to determine patient predispositions to disease and response to drug treatment. Even so, because of its capacity to uncover all variation, sequencing will always be the last word in understanding individual variation. The $1,000 genome sequence is not yet a reality but appears to be increasingly feasible within the next 10 years. The current “next generation” technologies will probably enable sequencing of a whole human genome at a cost of less than $100,000 within the next three years. The next step in the evolution of new sequencing technologies will
114 http://www.1000genomes.org/bcms/1000_genomes/Documents/Sequencing%20Companies%20Join%201000%20Ge- nome%20Project.pdf, accessed August 30, 2008. 115 http://www.bcm.edu/news/packages/watson_genome.cfm, accessed August 30, 2008. 116 Pennisi, E. (2008) Are Epigeneticists Ready for Big Science? Science 319: 1177.
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likely allow sequencing of long, continuous, stretches of single DNA molecules, overcoming the limitations of short “reads,” and improving data quality. As sequencing costs decrease, it will be possible to contemplate new types of clinical application and basic research of direct relevance to human health. The ability to address new types of research question is likely to enable rapid advance of the entire biomedical research enterprise. For example, the Human Microbiome Project seeks to understand the many billions of bacteria and other microorganisms that live in or on healthy humans, and which are known to have an effect on our health. A complete understanding of these microbes requires sequencing their genomes (it is the only way we know to even detect their presence), which cannot be done without abundant, cheap sequencing capacity. As the technologies move forward, we will increasingly be able to detect and understand all changes in our DNA, including those occurring during development, during aging, as a result of environmental exposures, and as a cause or result of disease processes.
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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ------x ASSOCIATION FOR MOLECULAR PATHOLOGY; AMERICAN COLLEGE OF MEDICAL GENETICS; AMERICAN SOCIETY FOR CLINICAL PATHOLOGY; COLLEGE OF AMERICAN PATHOLOGISTS; HAIG KAZAZIAN, MD; ARUPA GANGULY, PhD; WENDY CHUNG, MD, PhD; HARRY OSTRER, MD; DAVID LEDBETTER, PhD; STEPHEN WARREN, PhD; ELLEN MATLOFF, M.S., ELSA REICH, M.S.; BREAST CANCER ACTION; BOSTON WOMEN’S HEALTH BOOK COLLECTIVE; LISBETH CERIANI; 09 Civ. 4515 (RWS) RUNI LIMARY; GENAE GIRARD; PATRICE FORTUNE; VICKY THOMASON; KATHLEEN RAKER,
Plaintiffs, ECF Case
v.
UNITED STATES PATENT AND TRADEMARK DECLARATION OF OFFICE; MYRIAD GENETICS; LORRIS BETZ, EMANUEL ROGER BOYER, JACK BRITTAIN, ARNOLD B. PETRICOIN, Ph.D. COMBE, RAYMOND GESTELAND, JAMES U. JENSEN, JOHN KENDALL MORRIS, THOMAS PARKS, DAVID W. PERSHING, and MICHAEL K. YOUNG, in their official capacity as Directors of the University of Utah Research Foundation,
Defendants. ------x
I, Emanual Petricoin, declare under penalty of perjury as follows:
1. Since 2005, I have served as a Professor in the College of Sciences at George
Mason University. During this time, I have served as Co-Director of the Center for Applied
Proteomics and Molecular Medicine. From 2006-2007, I was Chair of the Department of
Molecular and Microbiology at George Mason University. My qualifications, publications and
experience are described in my curriculum vitae attached hereto as Exhibit 1 (“Ex. 1”).
2. In 1985, I received a B.S., and in 1990, I received a Ph.D. in Microbiology from
the University of Maryland at College Park. Subsequently, I was a National Research Council
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10. I have been asked to review the above-identified documents and provide my
opinion as to whether the description of the technology claimed in the Myriad Genetics’ patents
and implicated in this litigation, is accurately set forth in Plaintiffs’ SJM and Dr. Sulston’s
Declaration.
I. Isolated DNA Is Not A Product Of Nature And Has Unique Properties Not Found Associated With Naturally-Occurring Nucleotide Sequences
11. I disagree with the assertion in Plaintiffs’ SJM that the Myriad Genetics’ patents
“seek to patent natural (“wild type”) human genes, mutations in those genes caused by nature
. . . .” Plaintiffs’ SJM, 1. Furthermore, Dr. Sulston misconstrues the claims of the Myriad
Genetics’ patents when he broadly asserts that “[g]enes and human genetic sequences are not
inventions. They are naturally occurring.” Sulston Decl. ¶10. To the contrary, the Myriad
Genetics’ patent claims are directed to isolated genes and genetic sequences which are not found
in nature. Isolated genes and genetic sequences have a different chemical structure and unique
properties not associated with naturally-occurring chromosomally located nucleotide sequences.
12. The Myriad Genetics’ patents provide a scientifically acceptable definition of the
terms “isolated DNA” and “isolated DNA molecule.” The patents define “isolated DNA” or
“isolated DNA molecule” as that “which has been removed from its naturally occurring
environment, and includes recombinant or cloned DNA isolates and chemically synthesized
analogs or analogs biologically synthesized by heterologous systems.” See, for example, the
’282 patent, col. 19:14-18 and the ’492 patent, col. 18:1-5.
13. Genes and human genetic sequences are comprised of DNA. The term DNA is an
acronym for a chemical compound which is also known as deoxyribonucleic acid. DNA
comprises repeating units known as nucleotides. These nucleotides each contain one of four
different bases known as adenine or “A,” thymine or “T,” guanine or “G,” and cytosine or “C.”
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The bases are linked together by a sugar-phosphate backbone to form a single-stranded or
double-stranded polymer.
14. The human genome comprises about 3 billion nucleotides organized into 23
chromosome pairs. Each chromosome comprises DNA and protein. The DNA found in the
chromosomes contains two complementary polymers or strands of nucleotides that form a double
helix. The complementary strands form because A associates with T and C associates with G.
About 1.5% of the nucleotides in the human genome are organized into genes. A gene is the
basic unit of heredity in all living organisms. Most genes in the human genome comprise a
nucleotide sequence on one strand of the double helix that codes for a protein. When the gene is
active or expressed, the nucleotide sequence is transcribed into messenger RNA (mRNA). DNA
and RNA are different chemical compounds. RNA is an acronym for ribonucleic acid. The
mRNA may then be then translated into protein. mRNA and protein are responsible for
development and functioning of each cell that makes up a living organism.
15. The regulation of gene expression, and the production of mRNA and protein, is
complex. The regulation of gene expression may involve nucleotide sequences within the gene
and outside the gene. For example, a human gene may include introns, and genomic BRCA1
and BRCA2 genes for example, contain introns. An intron is a DNA region that may not be
translated into protein. The human gene may be transcribed into precursor mRNA (pre-mRNA)
and then introns are removed from the pre-mRNA by a process called splicing. The process of
splicing produces an mRNA that differs both chemically and structurally from the (complement
of the?) DNA that codes for it. Furthermore, the splicing of a pre-mRNA may be regulated such
that different mRNAs and proteins may be produced from the same gene.
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16. Gene expression may be controlled in many other ways. As noted above,
chromosomes comprise DNA and protein. The protein/DNA complex is called chromatin. The
structure of the chromatin regulates access to genes of molecules required for transcription and
gene expression. Furthermore, the DNA may be methylated. During the process of DNA
methylation an enzyme adds methyl groups to certain nucleotides in the DNA. The presence or
absence of methyl groups attached to nucleotides can affect gene transcription.
17. As noted above, the Myriad Genetics’ patents define the terms “isolated DNA”
and “isolated DNA molecule” as DNA that “has been removed from its naturally occurring
environment, and includes recombinant or cloned DNA isolates and chemically synthesized
analogs or analogs biologically synthesized by heterologous systems.” See, for example, the
’282 patent, col. 19:14-18 and the ’492 patent, col. 18:1-5. In the context of patent claims to
isolated DNA comprising the BRCA1 and BRCA2 genes, the isolated DNA has a very different
structure from that which occurs naturally. The isolated sequences are no longer located on a
human chromosome and therefore are not necessarily assembled in the native chromatin
structure.
18. The environment of a DNA molecule dictates both its structure and its function.
For example, DNA can be influenced by factors within its naturally-occurring environment that
affect expression of DNA, such as methylation which may epigenetically silence a gene. When
obtaining DNA from its naturally occurring environment, these factors no longer influence the
isolated DNA. Accordingly, the isolated DNA may not be methylated, or have a very different
pattern of methylation than the naturally-occurring gene. Thus, contrary to Dr. Sulston’s
assertions, a genetic sequence is not just the biological information itself, and a genetic sequence
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in one medium is a different chemical compound than a genetic sequence in a different medium.
Sulston Decl. ¶16.
19. If the isolated DNA is a complementary DNA (cDNA), it may have a very
different nucleotide sequence than the corresponding and naturally-occurring DNA. A cDNA is
produced as a complementary copy of an mRNA. As discussed above, a mature mRNA may be
produced by splicing and removing introns from the pre-mRNA. Consequently, cDNA may
have fewer nucleotides than the gene to which it corresponds. It is my understanding that both
the BRCA1 and BRCA2 genes contain introns. Consequently, the isolated BRCA1 cDNA
claimed in claim 2 of the ’282 patent, a nucleotide sequence which does not contain introns, has
a different nucleotide sequence than the naturally-occurring BRCA1 gene. Likewise, the isolated
BRCA2 cDNA claimed in claim 2 of the ’492 patent, a nucleotide sequence which does not
contain introns, has a different nucleotide sequence than the naturally-occurring BRCA2 gene.
Accordingly, several of the recited DNA sequences in the Myriad patents do not include introns
that are present in genes naturally occurring in cells, nor additional endogenous regulatory
sequences.
20. Isolated DNA, by definition, cannot act independently of human intervention. In
other words, without the hand of man, an isolated DNA sequence has no function or use.
21. Isolated DNA has unique properties and uses that are not associated with
naturally-occurring DNA. I could enumerate a vast number of these unique properties and uses
but I will provide three important examples. Unlike naturally-occurring DNA, isolated DNA
may be used as a primer for synthesis of DNA in the polymerase chain reaction (PCR). PCR is
an enzymatic technique used to make millions of copies of a target DNA sequence. A critical
step in PCR is annealing of a primer to the target DNA sequence. A primer is a short fragment
7 WASH_6671868.3 WASH_6684699.2 A6769 Case 1:09-cv-04515-RWS Document 203 Filed 01/11/2010 Page 8 of 16
of an isolated nucleic acid sequence that contains a nucleotide sequence complementary to the
target DNA sequence or part of it and therefore the primer will anneal or attach to the target
DNA. Once the primer is annealed to the target DNA sequence, an enzyme is used to make a
copy of the target DNA. As PCR progresses, the DNA produced is itself used as a target DNA,
resulting in selection and repeated amplification of the target DNA. The Myriad Genetics’
patents contemplate using isolated DNA sequences from the BRCA1 and BRCA2 genes to
amplify and analyze these genes to determine if a patient carries one or more mutations
associated with breast and/or ovarian cancer. See, for example, the ’282 patent at col. 28, ln. 9-
39 and the ’492 patent, col. 27, ln. 11-43.
22. Unlike naturally-occurring DNA, isolated DNA can be used to produce large
quantities of a protein coded by the DNA. Production of large quantities of a protein may be
very important if the protein can be used as a pharmaceutical, such as human growth hormone, or
as substrate for research and development of therapies for treatment of malfunctioning protein.
Isolated DNA can be cloned into a plasmid. A plasmid is an extra-chromosomal DNA molecule
that is separate from chromosomal DNA and is capable of replicating independently of
chromosomal DNA. In bacteria, for example, hundreds of copies of a plasmid may be present.
By cloning an isolated DNA into a plasmid, and inserting that plasmid into a bacterium,
thousand of copies of a gene can be produced, resulting in production of large quantities of the
protein encoded by that gene. Furthermore, the isolated and cloned human DNA may be
expressed in the absence of some or all of the mechanisms that normally control its expression in
the human body. Consequently, the isolated and cloned DNA can be made to express much
larger quantities of mRNA and protein than would normally occur in the human body. Prior to
production of human growth hormone through cloning of isolated DNA, this protein was
8 WASH_6671868.3 WASH_6684699.2 A6770 Case 1:09-cv-04515-RWS Document 203 Filed 01/11/2010 Page 9 of 16
extracted from the pituitary glands of cadavers and therefore there was a very limited supply of
growth hormone for treatment of human disorders. The Myriad Genetics’ patents contemplate
cloning of isolated DNA comprising the BRCA1 and BRCA2 genes for production of large
quantities of the proteins encoded by these genes. See, for example, the ’282 patent at col. 62, ln.
5-33 and the ’492 patent, col. 48, ln. 48-67.
23. Isolated DNA can also be used in a vector system to create a transgenic animal,
i.e., an animal having a deliberate man-made modification in its genome. Transgenic animals
have many uses, such as in agriculture and medicine. For example, a mouse expressing a human
gene of interest can be created by preparing a transgenic construct containing an appropriate
promoter (regulatory sequence) and the human gene (e.g., isolated DNA sequence) to be studied.
The resulting transgenic animal can be used to study the regulation of the gene, as well as the
effect of over- or underexpression of the gene. Accordingly, isolated DNA enables the function
of a particular gene to be explored, which is something not possible with DNA in its naturally-
occurring environment .
24. Thus, isolated and genomic DNA are distinct for at least the following reasons:
(1) isolated DNA is different in size and composition from a corresponding gene contained in a
chromosome in a body; (2) isolated DNA is not regulated by its natural environment; it is in a
medium that is different from that of genomic DNA; (3) isolated DNA has unique properties and
uses that are not associated with naturally-occurring DNA and because of these unique
properties, isolated DNA can be used to perform different, additional functions that would not
occur naturally; and (4) introns, which, amongst other functions, may regulate the timing of
transcription of genomic DNA, contain enhancer sequences for normal gene expression, or just
facilitate their own removal, may be absent in cDNA.
9 WASH_6671868.3 WASH_6684699.2 A6771 Case 1:09-cv-04515-RWS Document 203 Filed 01/11/2010 Page 10 of 16
II. The Human Body Does Not Have A Means Of Isolating DNA And Therefore Scientists Had To Skillfully Undertake This Task
25. Contrary to the contention in Plaintiffs’ SJM on page 25, citing Jackson ¶¶ 26-29
and Mason ¶¶ 11-12, the human body does not have a mechanism for isolating genes. More
specifically, Plaintiffs contend on page 25 of their SJM that “the human body does possess a
natural process for isolating and purifying genes Jackson ¶¶ 26-29 and Mason ¶¶ 11-12.” This
statement, however, is scientifically inaccurate.
26. The Jackson and Mason declarations contend that the process of gene expression
is analogous to isolating DNA. Gene expression, however, involves the production of mRNA
through the process of transcription and the production of protein through the process of
translation. These processes occur in the naturally-occurring environment of the cell. At no time
during either of the process of transcription or translation is DNA “removed from its naturally
occurring environment” as “isolated DNA” is defined in the Myriad patents. See, for example,
the ’282 patent, col. 19:14-18 and the ’492 patent , col. 18:1-5.
27. While a human body does transcribe a gene into mRNA, which is then translated
into a protein, the human body does not isolate or purify an “isolated DNA”. Genes naturally
exist on two strands of DNA in chromosomes, where a single strand remains intact during
cellular processes, such as transcription or DNA replication. Genes exist on chromosomes as
DNA transcription units, which contain the sequence that is transcribed (the coding sequence), as
well as regulatory sequences that exist upstream and downstream the coding sequence, such as
promoters, transcription factors (e.g., enhancers) and termination sequences. Thus, “isolated
DNA” only comes about from human intervention.
28. Furthermore, Dr. Mason compares cDNA, which does not naturally exist in the
body, with mRNA, which does exist in the body, and implies that they are similar because both
10 WASH_6671868.3 WASH_6684699.2 A6772 Case 1:09-cv-04515-RWS Document 203 Filed 01/11/2010 Page 11 of 16
cDNA and mRNA do not contain introns and the letter order of cDNA is just the mirror of
mRNA. See Mason Decl. ¶ 29. The fact of the matter is, however, that cDNA and mRNA are
very different; they are two different chemical entities, with different chemical compositions, and
assume different structures because of the inherent differences in helical conformation. Indeed,
mRNA can assume different tertiary and quaternary structures, forming structures such as
hairpin loops. Also, cDNA is a DNA cognate/derivative, while mRNA is a RNA
cognate/derivative. Thus, one cannot compare the cDNA with mRNA and conclude, as Dr.
Mason has done, that “even though the structure of cDNA does not exist in precisely the same
form in the body, for literally all practical and information-based purposes it is identical to that in
the body.” Mason Decl. ¶ 32.
29. Also, according to the Mason declaration, patent claims directed to cDNA should
be rejected because “cDNA is essentially equivalent to the DNA, and was found using
established methods.” Mason Decl. ¶33. This, however, is scientifically incorrect. cDNA and
DNA differ not only in the absence of introns and the presence of a poly-T tail in the cDNA, but
cDNA also is not isolated from the same microenvironment as the native chromosomal sequence,
is not subjected to the same modification system (e.g. methylation) and thus cDNA is inherently
a different molecular entity then DNA. These differences are not insubstantial.
30. Furthermore, the isolation of the BRCA1 and BRCA2 genes and corresponding
nucleotide sequences claimed in the Myriad Genetics’ patents required skillful and inventive
enterprise. When the work was begun, the inventors did not know which of the 3 billion
nucleotide sequences in the human genome comprised the BRCA1 and BRCA2 genes. As a result
of the inventive work of the Myriad inventors, we now know that the longest form of a BRCA
gene has about 80,000 nucleotides. A gene comprised of 80,000 nucleotides represents about
11 WASH_6671868.3 WASH_6684699.2 A6773 Case 1:09-cv-04515-RWS Document 203 Filed 01/11/2010 Page 12 of 16
0.003% of the human genome, an infinitesimally small portion of the total number of nucleotides
in the human genome.
31. The Myriad Genetics’ inventors had to use highly sophisticated genetic and
molecular techniques to identify and isolate the BRCA genes that pre-dispose women to breast
and/or ovarian cancer. The inventors identified populations of women in which pre-disposition
for breast and/or ovarian cancer was present. The inventors then identified molecular markers
that co-segregated with pre-disposition for breast and/or ovarian cancer. With considerable skill
and inventiveness, both the BRCA1 and BRCA2 genes were isolated, and mutations in those
genes that pre-dispose carriers of those mutations to breast cancer were identified. The Myriad
Genetics’ patents claim the isolated DNA from the BRCA1 and BRCA2 genes and methods of
using those genes for diagnosis and treatment of cancer. The claimed methods of diagnosis and
treatment would not have become available to women but for the isolation of the claimed non-
naturally-occurring DNA.
32. Additionally, the Jackson declaration suggests that isolated and purified genes do
not compare to purified adrenaline because “[the genes in the patents] do not have an entirely
new function, whereas purified adrenaline’s function is enabled by human intervention.”
Jackson Decl. ¶31. Dr. Jackson’s reasoning, however, is incorrect. Although adrenaline could
not be taken safely before human intervention, adrenaline still had a function in the body
irrespective of human intervention. Similarly, the BRCA1 and BRCA2 genes could not have been
isolated from the body before human intervention. Moreover, although the BRCA1 and BRCA2
genes have use within the body, isolated BRCA1 and BRCA2 genes (not found in nature) have
entirely new uses (like purified adrenaline, as compared to adrenaline in the body).
III. DNA Is A Chemical Molecule And Like All Chemical Molecules it Contains Information
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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ------x ASSOCIATION FOR MOLECULAR PATHOLOGY; AMERICAN COLLEGE OF MEDICAL GENETICS; AMERICAN SOCIETY FOR CLINICAL PATHOLOGY; COLLEGE OF AMERICAN PATHOLOGISTS; HAIG KAZAZIAN, MD; ARUPA GANGULY, PhD; WENDY CHUNG, MD, PhD; HARRY OSTRER, MD; DAVID LEDBETTER, PhD; STEPHEN WARREN, PhD; ELLEN MATLOFF, M.S., ELSA REICH, M.S.; BREAST CANCER ACTION; BOSTON WOMEN’S HEALTH BOOK COLLECTIVE; LISBETH CERIANI; 09 Civ. 4515 (RWS) RUNI LIMARY; GENAE GIRARD; PATRICE FORTUNE; VICKY THOMASON; KATHLEEN RAKER,
Plaintiffs, ECF Case
v.
UNITED STATES PATENT AND TRADEMARK DECLARATION OF OFFICE; MYRIAD GENETICS; LORRIS BETZ, EMANUEL ROGER BOYER, JACK BRITTAIN, ARNOLD B. PETRICOIN, Ph.D. COMBE, RAYMOND GESTELAND, JAMES U. JENSEN, JOHN KENDALL MORRIS, THOMAS PARKS, DAVID W. PERSHING, and MICHAEL K. YOUNG, in their official capacity as Directors of the University of Utah Research Foundation,
Defendants. ------x
I, Emanual Petricoin, declare under penalty of perjury as follows:
1. Since 2005, I have served as a Professor in the College of Sciences at George
Mason University. During this time, I have served as Co-Director of the Center for Applied
Proteomics and Molecular Medicine. From 2006-2007, I was Chair of the Department of
Molecular and Microbiology at George Mason University. My qualifications, publications and
experience are described in my curriculum vitae attached hereto as Exhibit 1 (“Ex. 1”).
2. In 1985, I received a B.S., and in 1990, I received a Ph.D. in Microbiology from
the University of Maryland at College Park. Subsequently, I was a National Research Council
WASH_6671868.3 WASH_6684699.2 A6837 Case 1:09-cv-04515-RWS Document 215 Filed 01/15/2010 Page 12 of 16
0.003% of the human genome, an infinitesimally small portion of the total number of nucleotides
in the human genome.
31. The Myriad Genetics’ inventors had to use highly sophisticated genetic and
molecular techniques to identify and isolate the BRCA genes that pre-dispose women to breast
and/or ovarian cancer. The inventors identified populations of women in which pre-disposition
for breast and/or ovarian cancer was present. The inventors then identified molecular markers
that co-segregated with pre-disposition for breast and/or ovarian cancer. With considerable skill
and inventiveness, both the BRCA1 and BRCA2 genes were isolated, and mutations in those
genes that pre-dispose carriers of those mutations to breast cancer were identified. The Myriad
Genetics’ patents claim the isolated DNA from the BRCA1 and BRCA2 genes and methods of
using those genes for diagnosis and treatment of cancer. The claimed methods of diagnosis and
treatment would not have become available to women but for the isolation of the claimed non-
naturally-occurring DNA.
32. Additionally, the Jackson declaration suggests that isolated and purified genes do
not compare to purified adrenaline because “[the genes in the patents] do not have an entirely
new function, whereas purified adrenaline’s function is enabled by human intervention.”
Jackson Decl. ¶31. Dr. Jackson’s reasoning, however, is incorrect. Although adrenaline could
not be taken safely before human intervention, adrenaline still had a function in the body
irrespective of human intervention. Similarly, the BRCA1 and BRCA2 genes could not have been
isolated from the body before human intervention. Moreover, although the BRCA1 and BRCA2
genes have use within the body, isolated BRCA1 and BRCA2 genes (not found in nature) have
entirely new uses (like purified adrenaline, as compared to adrenaline in the body).
III. DNA Is A Chemical Molecule And Like All Chemical Molecules it Contains Information
12 WASH_6671868.3 WASH_6684699.2 A6848 Case 1:09-cv-04515-RWS Document 219 Filed 01/20/2010 Page 1 of 58
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ------x ASSOCIATION FOR MOLECULAR PATHOLOGY; AMERICAN COLLEGE OF MEDICAL GENETICS; AMERICAN SOCIETY FOR CLINICAL PATHOLOGY; COLLEGE OF AMERICAN PATHOLOGISTS; HAIG KAZAZIAN, MD; ARUPA GANGULY, PhD; WENDY CHUNG, MD, PhD; HARRY OSTRER, MD; DAVID LEDBETTER, PhD; STEPHEN WARREN, PhD; ELLEN MATLOFF, M.S.; ELSA REICH, M.S.; BREAST CANCER ACTION; BOSTON WOMEN’S HEALTH BOOK COLLECTIVE; LISBETH CERIANI; RUNI LIMARY; GENAE GIRARD; PATRICE FORTUNE; 09 Civ. 4515 (RWS) VICKY THOMASON; KATHLEEN RAKER,
Plaintiffs, ECF Case v.
UNITED STATES PATENT AND TRADEMARK OFFICE; MYRIAD GENETICS; LORRIS BETZ, ROGER BOYER, JACK BRITTAIN, ARNOLD B. COMBE, RAYMOND GESTELAND, JAMES U. JENSEN, JOHN KENDALL MORRIS, THOMAS PARKS, DAVID W. PERSHING, and MICHAEL K. YOUNG, in their official capacity as Directors of the University of Utah Research Foundation,
Defendants. ------x
MEMORANDUM OF LAW (1) IN FURTHER SUPPORT OF PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT AGAINST ALL DEFENDANTS AND (2) IN OPPOSITION TO THE MYRIAD DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND (3) IN OPPOSITION TO DEFENDANT UNITED STATES PATENT AND TRADEMARK OFFICE’S MOTION FOR JUDGMENT ON THE PLEADINGS
Daniel B. Ravicher Christopher A. Hansen Sabrina Y. Hassan Sandra S. Park Public Patent Foundation (PUBPAT) Lenora M. Lapidus Benjamin N. Cardozo School of Law Aden Fine 55 Fifth Avenue, Suite 928 American Civil Liberties Union Foundation New York, NY 10003 125 Broad Street – 18th Floor (212) 790-0442 New York, NY 10004 (212) 549-2606
A6886 Case 1:09-cv-04515-RWS Document 219 Filed 01/20/2010 Page 22 of 58
challenged here) and thus appear to recognize that probes are distinct from the full isolated
BRCA DNA sequences as claimed in their primary claims.
With respect to defendants’ claims that DNA has functions that “isolated” DNA does not,
it is inaccurate to say that “isolated” DNA cannot be used to create proteins. Nussbaum D. ¶¶
30, 35. See also Kay D. ¶ 163. Defendants claim that isolated DNA that codes for the BRCA genes is distinct from “native” DNA because it does not contain any of the regulatory sequences and proteins that are involved in determining the expression of the BRCA gene. Here, they confuse a gene with the machinery that regulates gene expression. Nussbaum D. ¶ 35.
Defendants agree that a gene can be defined as a unit of heredity that carries the information necessary to pass a trait or function from one generation to the next. Kay D. ¶ 142. That unit of heredity is composed of a segment of DNA and not the chromatin or other regulatory proteins.
In the process of reproduction, it is the DNA – and only the DNA – that is responsible for the transmission of traits from one generation to the next. Nussbaum D. ¶ 29.
Classic experiments demonstrated that isolated DNA, once introduced into other cells and incorporated into chromosomes, would perform the very same function as it did while in the body. Nussbaum D. ¶¶ 30-34. The physical embodiment of a gene is DNA and the information contained within that gene is comprised of the arrangement of the bases in the DNA. This is the same whether DNA is inside the cell or isolated in a test-tube. Nussbaum D. ¶¶ 35-39.
3. Isolated DNA with the introns removed and/or cDNA
Defendants do not distinguish any of their claims by asserting that they consist solely of
DNA with the introns removed or cDNA (cDNA, or “complementary DNA” is a form of DNA that does not include the introns, the regions that do not code for proteins). The claims must,
15 A6907 Case 1:09-cv-04515-RWS Document 219 Filed 01/20/2010 Page 23 of 58
therefore, not be so limited.15 The practice of genetic testing confirms this, given that routine
methods of genetic testing uses DNA, not cDNA. Klein D. ¶ 35. If all of Myriad’s claims
encompass DNA that includes the introns, the Court need not consider the patentability of DNA
with the introns removed and/or cDNA. Regardless, even if some claims are limited in this way, they are unpatentable subject matter.
Defendants first assert that cDNA never appears in the body. Kay D. ¶¶ 161-172.
Whether cDNA appears only in the body is legally irrelevant to the question of whether it constitutes natural phenomena. Factually, the assertion is incorrect, for cDNAs do occur
naturally in the human genome in the form of “processed pseudogenes” – double-stranded DNA
sequences in the human genome that are substantially homologous, or similar, to the nucleic acid
sequence of a processed mRNA. Nussbaum D. ¶ 42; Mason Supp. D. ¶ 18. A portion of the
BRCA1 cDNA does appear in the body, made entirely without human intervention. Mason
Supp. D. ¶ 18.
The key question is whether cDNA has markedly different characteristics from natural
phenomena. It does not. cDNA is generated because of its complementary, biologically-
determined relationship to naturally-occurring mRNA. Mason Supp. D. ¶ 18; Mason D. ¶¶ 28-
29. Both DNA and cDNA are described by the same series of nucleotide bases. These bases are
the same chemical structure in both DNA – whether “isolated” or not – and cDNA; thymine (T)
in cDNA is the same as thymine in DNA. Mason D. ¶ 29. The exonic (protein-coding)
sequences of cDNA are the same as those of “native” DNA, whether “isolated” or not.
Nussbaum D. ¶¶ 41-42. To confirm this, one could compare what is listed as a cDNA sequence
in the ‘282 patent, SEQ ID NO:1, to Figure 10A of the ‘282 patent, which lists the BRCA1 DNA
15 One of the amici, BIO, does argue that some of the claims are limited to pure cDNA. Amicus BIO Br. 16. That purported claim construction is wrong and has not been adopted by the USPTO or the patentholder. Thus, the claim construction of this amicus and other amici who argue alternative constructions should be ignored.
16 A6908 Case 1:09-cv-04515-RWS Document 219 Filed 01/20/2010 Page 26 of 58
the other claims, though not as explicit, could also cover small segments of “isolated” DNA.16
First, defendants’ emphasis on the use of their patented composition as a primer makes no sense if the composition does not include small segments of DNA. Myriad Br. 8. Second, Kay notes that the composition claims use the term “encode for” or “code for.” Kay D. ¶ 20. Thus, claim 1 of the ’282 patent is for “isolated DNA coding for a BRCA ….” As Kay notes, “coding for” means it can be used to create mRNA and/or a polypeptide “or a fragment thereof.” Kay D. ¶ 20.
Thus, defendants seem to claim any “isolated” DNA that can create even a fragment of a BRCA polypeptide or a fragment of mRNA.
If the defendants’ claims all include very short segments of “isolated” DNA (or comparing very short segments of a DNA sequence), then it is difficult to overemphasize the sweeping nature of the claims. A careful, scientifically valid analysis done by Thomas Kepler and his co-authors of one of the claims being challenged in this case, claim 5 of patent ’282, makes this clear. Cook-Deegan Ex. 2; Kepler Ex. 2. Claim 5 covers “an isolated DNA having at least 15 nucleotides of the DNA of claim 1.” While claim 1 is defined as an isolated DNA coding for a polypeptide having an amino acid sequence of 1,863 amino acids (or 5,589 nucleotides), ’282 patent, SEQ ID No:2, claim 5 is limited to DNA of as few as 15 nucleotides.
The Kepler study took each 15-nucleotide sequence found within the BRCA1 gene, which is located on chromosome 17, and attempted to determine whether that exact sequence can be found elsewhere in the human genome. Cook-Deegan Ex. 2; Kepler Ex. 2. They limited their inquiry to only one of the 23 human chromosomes (chromosome 1) and found that a 15- nucleotide sequence from the BRCA1 gene was found 340,000 times on chromosome 1. This
16 Defendants carefully never discuss that question, but hint that their claims do not cover fragments. Myriad Br. 16-17. See also Leonard D. ¶ 48; Grody D. ¶ 28 (a person skilled in the art would conclude that the patents generally define the entire gene and not segments thereof). While plaintiffs argue that these claims cover natural phenomena when they exclude fragments, the claims are even broader in scope if they do cover fragments.
19 A6911 Case 1:09-cv-04515-RWS Document 220 Filed 01/20/2010 Page 1 of 14
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ------x ASSOCIATION FOR MOLECULAR PATHOLOGY; AMERICAN COLLEGE OF MEDICAL GENETICS; AMERICAN SOCIETY FOR CLINICAL PATHOLOGY; COLLEGE OF AMERICAN PATHOLOGISTS; HAIG KAZAZIAN, MD; ARUPA GANGULY, PhD; WENDY CHUNG, MD, PhD; HARRY OSTRER, MD; DAVID LEDBETTER, PhD; STEPHEN WARREN, PhD; ELLEN MATLOFF, M.S.; ELSA REICH, M.S.; BREAST CANCER ACTION; BOSTON WOMEN’S HEALTH BOOK COLLECTIVE; LISBETH CERIANI; RUNI LIMARY; GENAE GIRARD; PATRICE FORTUNE; 09 Civ. 4515 (RWS) VICKY THOMASON; KATHLEEN RAKER,
Plaintiffs, ECF Case v.
UNITED STATES PATENT AND TRADEMARK OFFICE; MYRIAD GENETICS; LORRIS BETZ, ROGER BOYER, JACK BRITTAIN, ARNOLD B. COMBE, RAYMOND GESTELAND, JAMES U. JENSEN, JOHN KENDALL MORRIS, THOMAS PARKS, DAVID W. PERSHING, and MICHAEL K. YOUNG, in their official capacity as Directors of the University of Utah Research Foundation,
Defendants. ------x
PLAINTIFFS’ COUNTERSTATEMENT TO THE MYRIAD DEFENDANTS’ RULE 56.1 STATEMENT OF MATERIAL FACTS
Pursuant to the Federal Rules of Civil Procedure and Local Civil Rule 56.1, Plaintiffs in
the above-captioned action hereby respond and submit this Counterstatement to the Myriad
Defendants’1 Local Rule 56.1 Statement of Material Facts, without admitting that any of
Defendants’ statements are material:
1 “Myriad Defendants” refer to defendants Myriad Genetics and the directors of the University of Utah Research Foundation, sued herein in their official capacity.
A6944 Case 1:09-cv-04515-RWS Document 220 Filed 01/20/2010 Page 4 of 14
sequence. Further, note that DNA occurs in the body without being subject to methylation. Same
response as paragraph 10; Mason Supp. ¶ 22.
13. The body does not have a mechanism for isolating genes. Kay ¶ 143. Schlessinger ¶ 11; Linck ¶ 52.
Plaintiffs’ response: Admit subject to the response to paragraph 9.
14. An “isolated DNA” or “isolated DNA molecule” is DNA that has been extracted from the cell and excised from the chromosome, or chemically synthesized. Kay ¶¶ 17, 137.
Plaintiffs’ response: This fact is purely a definition of the term “isolated.” Deny that it
is consistent with the definition in the patents. See the patents.2 Deny “synthesized” DNA, such
as primers made using chemical reactions or biochemical procedures, are isolated from “native”
DNA. Nussbaum ¶ 13.
15. An isolated DNA is made by the hand of the scientist. Kay ¶¶ 17, 137.
Plaintiffs’ response: Deny. Sulston ¶¶ 10-27; Leonard ¶ 15; Mason ¶¶ 23, 33; Love ¶
10; Chung ¶¶ 10, 25; Ostrer ¶ 14; Ledbetter ¶ 27; Mason Supp. ¶ 18-23; Nussbaum ¶¶ 17-42;
Klein ¶¶ 26-37.
16. To isolate DNA molecules from the body, the entire genome must be extracted from tissues or cells of the body and the chromosomal proteins must be removed. Kay ¶ 133.
Plaintiffs’ response: This fact is purely a definition of the term “isolated.” Deny that it is consistent with the definition in the patents. See the patents. Admit that in order to sequence
DNA from the body, these steps must be taken.
17. To isolate a specific gene of interest, relevant DNA fragments must be excised from the genome. Kay ¶ 133.
Plaintiffs’ response: This fact is purely a definition of the term “isolated.” Deny that it is consistent with the definition in the patents. See the patents. Definition appears to be
2 All references herein to “the patents” refer to the patents challenged in this action: U.S. Patent No. 5,747,282, U.S. Patent No. 5,837,492, U.S. Patent No. 5,693,473, U.S. Patent No. 5,709,999, U.S. Patent No. 5,710,001, U.S. Patent No. 5,753,441, and U.S. Patent No. 6,033,857.
4 A6947 Case 1:09-cv-04515-RWS Document 221 Filed 01/20/2010 Page 1 of 19
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
ASSOCIATION FOR MOLECULAR ) PATHOLOGY; AMERICAN COLLEGE OF ) Civil Action No. 09-4515 (RWS) MEDICAL GENETICS; AMERICAN SOCIETY ) FOR CLINICAL PATHOLOGY; COLLEGE OF ) ECF Case AMERICAN PATHOLOGISTS; HAIG ) KAZAZIAN, MD; ARUPA GANGULY, PhD; ) DECLARATION OF WENDY CHUNG, MD, PhD; HARRY OSTRER, ) ROBERT L. NUSSBAUM, M.D. MD; DAVID LEDBETTER, PhD; STEPHEN ) WARREN, PhD; ELLEN MATLOFF, M.S.; ) ELSA REICH, M.S.; BREAST CANCER ) ACTION; BOSTON WOMEN’S HEALTH ) BOOK COLLECTIVE; LISBETH CERIANI; ) RUNI LIMARY; GENAE GIRARD; PATRICE ) FORTUNE; VICKY THOMASON; KATHLEEN ) RAKER, ) ) Plaintiffs, ) v. ) ) UNITED STATES PATENT AND ) TRADEMARK OFFICE; MYRIAD GENETICS; ) LORRIS BETZ, ROGER BOYER, JACK ) BRITTAIN, ARNOLD B. COMBE, RAYMOND ) GESTELAND, JAMES U. JENSEN, JOHN ) KENDALL MORRIS, THOMAS PARKS, ) DAVID W. PERSHING, and MICHAEL K. ) YOUNG, in their official capacity as Directors of ) the University of Utah Research Foundation, ) ) Defendants ) ______)
I, Robert L. Nussbaum, declare under penalty of perjury that the following is true and correct:
1. I offer my opinion herein on the science of genetics and the biology of
DNA, including methods for its extraction and isolation. My opinion is based on the facts or
1
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data cited in this declaration, and on my own original research. A true and correct copy of my
Curriculum Vitae is attached hereto as an Exhibit.
2. My qualifications as an expert are as follows. I received my A.B. cum laude in Applied Mathematics from Harvard College in 1971. I received my M.D. Medicine from Harvard Medical School in 1975.
3. I currently serve at the University of California, San Francisco (UCSF) as a tenured Professor of Medicine In Residence, as a Professor of Neurology (Joint Appointment), and as the Holly Smith Distinguished Professor of Science and Medicine. I am Chief of the
Division of Medical Genetics in the UCSF Department of Medicine, and Executive Committee
Member of the UCSF Institute for Human Genetics. Since 2006, I have served as Consultant in
Genetics at UCSF Medical Center as well as Faculty in the Biomedical Sciences Graduate Group at UCSF. Since 2008 I have been the Director of the Cancer Risk Program of the Diller Family
Comprehensive Cancer Center at UCSF, which provides clinical care and genetic counseling for families with hereditary cancer syndromes and the Director of the Program in Cardiovascular
Genetics of the Heart and Vascular Center of the UCSF Medical Center.
4. Prior to my current appointments at UCSF, I was Assistant Professor of
Medicine at Baylor College of Medicine from 1981 to 1984. Later, at the University of
Pennsylvania School of Medicine (Primary), I was Assistant Professor of Human Genetics from
1984 to 1989, Associate Professor of Human Genetics from 1989 to 1993, and Professor of
Genetics from 1993-1994, as well as an Associate Investigator of the Howard Hughes Medical
Institute. From 1994 to 2006 I was a Principal Investigator and Chief of the Genetic Disease
Research Branch in the Intramural Research Program of the National Human Genome Research
Institute.
2
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reactions or biochemical procedures.
14. I would like to clarify that some of the “isolated DNA” covered by the patent claim -- a DNA segment of interest from a natural source (as opposed to synthetic DNA) – results from a process that occurs in two steps: (1) extracting the DNA away from other non-
DNA substances including the proteins that make up the “chromatin” in which DNA is packaged, and (2) separating the segment of human DNA with the sequence of interest away from the rest of the genomic DNA. These two steps are functionally distinct.
15. When DNA is obtained from a natural source, extraction of cellular DNA is a routine biochemical procedure in which all the DNA in a sample of cells or tissue is separated away from other non-DNA substances including the proteins that make up the
“chromatin” in which DNA is packaged. Extraction is a chemical process that takes advantage of the chemical properties of DNA (such as its solubility in various liquids) and does not discriminate between one segment of DNA containing a sequence of interest from other segments containing other sequences. With extraction, there is no separation of a particular DNA segment of interest away from the rest of cellular DNA.
16. Separating a DNA segment containing a sequence of interest away from the rest of the DNA relies on the sequence. Although separation may be accomplished by biochemical methods, such as excising that segment or amplifying it by PCR, it is also possible to use biological methods to separate the DNA containing a gene away from other genes without extracting it. Random pieces of DNA can be transferred into non-human cells or microorganisms and the subset of the cells or microorganisms that have acquired a novel property as a result of having taken up the segment of interest containing specific information encoded in the DNA sequence within that segment can be identified and isolated as pure colonies. In this way, the
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DNA segment containing a sequence of interest of human DNA in an individual colony of bacteria or cells is in fact separated away from all the other human DNA of the original cell from which the DNA had been obtained, even though it has not been extracted away from bacterial proteins or separated from bacterial DNA.
“ISOLATED” DNA IS NOT MAN-MADE OR STRUCTURALLY DISTINCT FROM
DNA IN ITS NATURAL STATE IN THE CELL
17. Isolating a DNA segment of interest therefore depends on extraction of cellular DNA and separation of the DNA segment of interest away from other genomic DNA.
This distinction is important when assessing the validity of the claim Dr. Kay makes in paragraph 137 of his declaration:
“The isolated DNAs are excised, extracted or synthetic chemical compounds made by the hands of molecular biologist, not by nature. They are structurally distinct from any substance found in the human body—indeed, in all of nature.”
18. To the contrary, I would argue that isolated DNA is not made by the hands of a molecular biologist, but is instead simply extracted from the chromatin. Moreover, when isolating a DNA segment of interest, neither extracting total cellular DNA nor separating a particular DNA segment away from the rest of DNA produces a substance that is “structurally distinct from any substance found in the human body”. Instead, an isolated DNA segment, as
DNA, is not significantly different from the same segment of DNA in the cellular DNA from which it was derived.
19. With regards to the extraction step, Dr. Kay has confused chromatin and
DNA. The structural difference he points to between DNA in a cell and DNA isolated from a cell are actually differences between chromatin and DNA, not between the DNA in a cell and the
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DNA isolated from a cell.
20. Any differences between isolated DNA and DNA in chromatin are actually “epigenetic” changes (note, they are not “genetic”), which means they are superimposed upon genes and not part of a gene itself. The one epigenetic modification of DNA that is not part of chromatin, the modification of DNA by the covalent attachment of methyl groups to the cytosine ring, is preserved in genomic DNA after it is extracted and so does not distinguish the
DNA in a cell from the DNA extracted from a cell.
21. DNA swathed in proteins as a component of chromatin inside a cell is not structurally different from DNA after it has been extracted away from other cellular substances, including chromatin. By analogy, the element gold is still gold whether it is a streak of metal embedded in low grade ore or is a nugget that has been extracted away from the silicates in which it is embedded. Thus, with regards to the extraction step required to do what the
Defendants claim is to “isolate” a segment of DNA from natural sources, I reject the argument that this “isolated” DNA is “structurally different” from natural DNA.
22. With regards to the separation step, once total DNA has been extracted from a cell, the isolation of any particular segment of interest occurs on the basis of the particular sequence of DNA bases it contains. It is the DNA sequence that distinguishes the segment being isolated from all the other segments of genomic DNA from which it is being separated.
Fundamentally, then, a segment of extracted DNA can be separated from the rest of the genomic
DNA because it contains genetic information of interest, e.g. it contains the information that comprises a gene. The very same sequence of bases in the DNA that allows scientists to distinguish one segment of extracted DNA and makes that segment of interest is also contained in the DNA when it is in its natural state in the cell.
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23. Therefore, with regards to the isolation of a DNA segment of interest from natural sources, such as a cell, the claim that “isolated DNAs …. are structurally distinct from any substance found in the human body—indeed, in all of nature” is incorrect on two grounds.
First, in extracting cellular DNA, the structural distinction claimed by Dr. Kay is between chromatin and DNA, not between extracted DNA and cellular DNA. Second, isolating a segment of DNA of interest by separating it from the rest of the extracted genomic DNA depends on the sequence of DNA bases that is present in both the isolated segment and the natural segment in the cell. Thus, “isolated DNA”, meaning DNA that has been extracted away from other cellular components and then separated from the rest of the DNA in the cell, is not made by the hand of the scientist; it is extracted away from chromatin and then separated from the rest of the genomic
DNA based on its sequence of bases and/or the information the bases contain. A segment of isolated DNA is no more a product of the hand of man than is the gold that has been extracted from other minerals based on its natural, and not man-made, physical and chemical characteristics.
AN “ISOLATED” GENE IS NOT STRUCTURALLY AND FUNCTIONALLY DISTINCT
FROM GENES IN NATURE
24. “Gene” is a term that came into use long before it was known what genes were made of. A gene was defined as a unit of heredity that carries the information necessary to pass whatever trait or function the gene is responsible for from one generation to the next. Thus,
I agree with Dr. Kay’s heredity-based definition of a gene in paragraph 142 of his declaration, where he states:
“Historically, the term “gene” has been used to describe the unit that is responsible for the inheritance of a discrete trait, such as the color of peas in a peapod.”
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25. Although Dr. Kay uses the term “historically”, this definition is still as valid as any other up to the present day. With progress in molecular genetics, however, genes can now also be defined in molecular terms. Dr. Kay writes in paragraph 143 of his Declaration:
“In molecular terms, a gene is an aggregate of several segments of a chromosome (emphasis added). Some segments regulate the activity of the gene. From other segments, various types of RNA are produced”. This molecular definition of a gene is ambiguous. When speaking of “several segments of a chromosome”, does Dr. Kay mean that a gene is an aggregate of several segments of the DNA in a chromosome, some of which regulate the activity of the gene, such as promoter or enhancer elements within the DNA, and others which contain the triplet code? Or, is he saying a gene is an aggregate of several segments of the chromatin that make up a chromosome and that a gene also includes the epigenetic modifications, such as methylation or proteins that are involved in regulating the gene? Furthermore, when a gene is regulated by a protein such as a transcription factor or a regulatory non-coding RNA encoded by a separate, distinct gene on that chromosome,
Dr. Kay’s definition would then include the DNA sequence of that second gene as part of the first gene, thereby converting two distinct genes into one. Dr. Kay goes on in paragraph 173 to draw a major distinction between isolated DNAs and the naturally occurring genes in the cell.
“Isolated DNAs are structurally and functionally distinct from any DNA found in nature. The isolated BRCA1 and BRCA2 DNA molecules claimed in the BRCA1 and BRCA2 patents are likewise extracted, purified, or synthetic, and are structurally distinct from any substance found in the human body, or elsewhere in nature. For example, native DNAs are physically connected to DNA regulatory sequences and proteins that determine which DNA sequences are expressed, how and where they expressed, and their level of expression. In contrast, the claimed isolated BRCA1 and BRCA2 DNAs are not associated with these regulators and do not contain this information.”
26. Taking the definition of a gene as a unit of heredity that carries the information necessary to pass a trait or function from one generation to the next, the correct view is that a gene such as BRCA1 or BRCA2 is composed of a segment of DNA in a chromosome and
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not the chromatin or other regulatory proteins.
27. In claiming a patent on isolated DNA sequences that contain the information that comprises the BRCA1 or BRCA2 gene, the Defendants have attempted to patent a naturally occurring entity, a gene, basing their claim on alleged and, at best, highly irrelevant differences between the naturally occurring gene and the isolated DNA sequences. That this is the correct interpretation of the coverage of their patent claim is supported by a number of important biological facts, explained as follows.
28. During reproduction, DNA is unpackaged, stripped of chromatin proteins and other epigenetic modification such as some or all of the cytosine methylation, partially or substantially remethylated and repackaged into chromatin as it is passed through the germ line from one generation to the next. Although these modifications are more striking in the production of sperm compared to ova, they occur in both parents. Most importantly, they make clear that it is indeed the DNA that constitutes a gene because the proteins and other epigenetic modifications that surround DNA in chromatin are substantially changed every generation while it is the DNA that remains constant (save for rare spontaneous mutation) and is responsible for passing along the genetic information.
29. With the one notable exception of genomic imprinting, it is DNA -- and only DNA, and the information in it -- that is responsible for the transmission of traits from one generation to the next and, therefore, constitutes the genes. Since neither BRCA1 nor BRCA2 has been shown to undergo imprinting, the BRCA1 and BRCA2 genes are also wholly contained in the DNA, whether in chromatin or in an isolated state without epigenetic modification. The DNA containing the BRCA1 or BRCA2 genes are responsible for how a trait determined by either the
BRCA1 and BRCA2 genes is passed on from one generation to the next.
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30. Second, there are cell culture experiments that show that genomic DNA can transmit a trait, regardless of whether it is isolated or present inside the cell in chromatin.
There are two classic experiments, one published 65 years ago, the other 27 years ago, that prove that DNA is the essence of genes.
31. In the first experiment, isolated DNA was shown to contain all the genetic information necessary to change a non-pathogenic living bacterial organism into a pathogenic bacterium. Certain strains of the bacteria Streptococcus pneumoniae are distinguished by whether the surface of their cell wall, the capsule, is “smooth” or “rough” when observed under the microscope. These two different cell walls correlate with how disease-producing the bacteria are: the smooth bacteria cause rapid death when injected into mice, bacteria with the rough capsule do not. In 1944, Avery, MacLeod and McCarty reported that DNA extracted from a sample of a killed pathogenic smooth strain of the bacteria S. pneumoniae was able to change a rough non-pathogenic strain into a smooth pathogenic strain by the process known as transformation, the introduction of DNA or RNA into a cell (Avery OT, MacLoed CM and
McCarty M Studies on the Chemical Nature of the Substance Inducing Transformation of
Pneumococcal Types, J. Exp. Med. 79:137, 1944). DNA from a sample of killed pathogenic smooth S. pneumoniae was extracted away from the non-DNA substances of the bacteria to a level of purity of 99.98%. The extracted DNA was dissolved in growth medium into which a non-pathogenic strain of S. pneumoniae were inoculated and grown. In these cultures, live smooth, pathogenic bacteria appeared because they were “transformed” by the extracted DNA.
These originally rough bacteria were permanently changed to smooth and passed on their smooth character to all subsequent offspring. Thus, all the genetic information necessary to change the genes of a non-pathogenic living bacterial organism into those of a pathogenic bacterium was
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present in the extracted DNA.
32. In the second set of experiments, extracted whole genomic DNA was shown to contain all the genetic information necessary to change a non-cancerous cell into a cancerous cell. One characteristic of cancer cells in culture is that they lose “contact inhibition”.
Contact inhibition is a phenomenon in which non-cancer cells growing in a petri dish will continue to divide and the new daughter cells will form attachments to the surface of the dish and spread out on the surface, until they touch other cells in the culture. Upon touching other cells, non-cancerous cells stop dividing and become quiescent. Contact inhibition is an important characteristic of non-cancerous cells. Many cancer cells in culture lose their contact inhibition and continue to divide even after touching other cells, lose their firm attachment to the petri dish surface, and pile up one on top of the other, thereby creating mounds of poorly attached cells.
33. In 1982, three laboratories independently reported that isolated genomic
DNA from a cancer cell could convert cultured mouse fibroblast cells that were non-cancerous and showed contact inhibition, into cancerous cells that had lost contact inhibition. (Shih, C. &
Weinberg, R. A. Isolation of a transforming sequence from a human bladder sarcoma cell line.
Cell 29, 161–169, 1982; Goldfarb, M., Shimizu, K., Perucho, M. & Wigler, M. Isolation and preliminary characterization of a human transforming gene from T24 bladder carcinoma cells.
Nature 296, 404–409, 1982); Pulciani, S. et al. Oncogenes in human tumor cell lines: molecular cloning of a transforming gene from human bladder carcinoma cells. Proc. Natl Acad. Sci. USA
79, 2845–2849, 1982). In these three experiments, genomic DNA was extracted away from the rest of the cellular constituents of cells that had been derived from human cancers. The extracted
DNA was applied to cultures of non-cancerous mouse fibroblast cells under conditions that encouraged the cells to take up the naked DNA. A small amount of the human DNA made its
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way into the nucleus of these non-cancerous cells and became incorporated into their chromosomes. The cell cultures were then watched over time. Small areas of heaped-up transformed cells developed on a lawn of otherwise non-transformed contact-inhibited mouse cells. These areas of heaped up cells were isolated, grown up, and DNA was again extracted from these cells. Most of this DNA in fact was made up of mouse cell DNA with a small proportion that was human in origin. The extracted DNA was reapplied to another lawn of non- transformed mouse cells, which again took up this genomic DNA and once again developed small foci of heaped-up cancerous cells on a lawn of otherwise non-cancerous contact-inhibited mouse cells. These foci could again be isolated, grown, and the DNA extracted and re-applied to a new lawn of untransformed cells. This approach of repeated serial transformation of the mouse cells by total genomic DNA extracted from transformed foci led to the discovery that a particular segment of human DNA was responsible for causing the non-cancerous mouse cells to become cancerous and lose contact inhibition. The serial transformation with extracted total cellular
DNA in effect separated the human gene responsible for transformation away from the rest of the human DNA. This DNA was found to contain the human ras (H-Ras) oncogene.
34. These experiments with bacteria and cultured mouse cells clearly demonstrate that the same information in the DNA responsible for the smooth capsule or the cancerous behavior of cultured human bladder cancer cells when inside the organism is present in DNA extracted from that organism.
35. The physical embodiment of a gene is DNA and the information contained within that gene is comprised of the arrangement of the bases in the DNA. That is the same whether the DNA is inside the cell or isolated in a test-tube. To claim otherwise is to confuse a gene with the machinery that regulates how that gene is expressed. Thus, I reject the claim that
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the genes represented by isolated DNAs that are the focus of this patent are “structurally and functionally distinct” in any significant way from the genes in DNA found in nature.
THE PRIMARY PURPOSE OF ISOLATING DNA IS TO MAKE AN INFERENCE
ABOUT THE DNA IN A PERSON’S BODY
36. In paragraphs 138 and 139 of his Declaration, Dr. Kay argues that isolated
DNA:
“…acquires new properties not shared by its native counterpart…. Native DNA does not have the chemical, structural, functional properties that make isolated DNA so useful to the molecular biologist. Native DNA cannot be used as molecular tools, such as probes and primers, and cannot be used to detect mutations. Nor can it be used in sequencing reactions to determine the structure of a DNA molecule.”
37. The argument that the isolated DNA can be put to uses that the native
DNA cannot forms important underpinning to the arguments the Defendants make in their
“Memorandum of law (1) in support of their motion for summary judgment and (2) in opposition to plaintiffs’ motion for summary judgment” in which they refer to the case of Parke-Davis &
Co. v. H.K. Mulford Co. concerning the patentability of a purified natural product, in this case, adrenaline, and quote Judge Hand who stated:
“even if [the adrenaline] were merely an extracted product without change, there is no rule that such products are not patentable. [The Patentee] was the first to make [adrenaline] available for any use by removing it from the other gland-tissue in which it was found, and, while it is of course possible logically to call this a purification of the principle, it became for every practical purpose a new thing commercially and therapeutically. That was a good ground for a patent.”
Once again referring to the analogy of gold mining, trace amounts of gold embedded in gangue rock cannot be used for making jewelry or for applications in electronics, the way purified gold can be used. Nonetheless, gold embedded in gangue rock is still gold and is not transmuted into some other novel substance by virtue of its being extracted and used in ways the gold in ore
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cannot be used.
39. There is also an important distinction between the case of the purification of adrenaline for commercial or therapeutic use and the isolation of DNA containing the BRCA1/2 genes for sequencing. The isolation of adrenaline provided a substance that was itself useful for injection into any patient. In contrast, being able to sequence isolated DNA in a test tube in order to find mutations in that isolated BRCA1/2 gene is by itself of no particular value. The true value only comes from inferring that any mutation found in the isolated material is also present in the
DNA of the person from whom the DNA was isolated. This observation underscores that the clinical value of obtaining the sequence and finding a mutation in an isolated segment of a
BRCA1 or BRCA2 gene relies on the fact that the physical embodiment of a gene is DNA and the information contained within that gene is comprised of the arrangement of the bases in the DNA, whether the DNA is inside the cell of a particular individual or isolated from that individual and placed in a test-tube.
40. Dr. Kay’s argument that “isolated” genomic DNA segments can be used as probes and primers is also mistaken. An isolated genomic DNA segment is too large and cannot be used as a “primer” in any practical applications. Primers are short chains of nucleotides, often approximately 20 basepairs in length but may range up to 100 base pairs in length, that are complementary to a region in the DNA. They are ordinarily used as an anchor point on which DNA synthesis can be initiated by extending the primer, such as in PCR reactions to replicate a segment of DNA. Primers are manufactured; they are not extracted from native DNA. Probes are pieces of DNA or RNA corresponding to a gene or sequence of interest.
Probes are labeled either radioactively or with some other detectable molecule, are made single- stranded if they were originally double stranded, and then allowed to form stable base pairing (A
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with T or U, G with C) with a “target”, which is commonly a fragment of DNA or RNA that is complementary to the probe and has been fixed to a solid substrate (such as a membrane or plastic). While it is possible that a segment of genomic DNA the size of a gene such as BRCA1 or BRCA2 could be used as a probe, it is never used in this way for any clinical applications.
THE EXONIC SEQUENCES IN cDNA ARE THE SAME AS THOSE OF THE EXONS
OF NATIVE DNA AND cDNAS OCCURRING NATURALLY IN THE HUMAN BODY
41. With regards to cDNA, Dr. Kay states in paragraph 154 of his Declaration
“Thus, contrary to Dr. Leonard’s statement that “the coding effect of a cDNA is the same as that of the original DNA from which it was originally derived despite having a shorter sequence,” alternative splicing can give rise to many different mRNAs from the same native DNA molecule (see Leonard, ¶75). cDNAs can be prepared from mRNAs as discussed below. However, the cDNA captures that one mRNA from which it was synthesized and not all other splice variants that result from that one gene.”
Dr. Kay is correct that more than one type of mRNA, and therefore more than one cDNA, can be made from a single genomic copy of a gene due to alternative splicing. However, it remains true that the exonic sequences present in a cDNA, which are a reflection of which exons were retained in the mRNA after splicing of the primary transcript, are present in the same order as are the exons in the genomic copy of the gene. There may be differences between cDNAs due to gaps or insertions representing exons that were spliced out or retained respectively in some mRNAs and not in others, but there are no inversions or swapping of positions of exon sequence between different cDNAs.
42. In paragraph 164 of his Declaration, Dr. Kay states that
“an isolated cDNA molecule is an artificial construct that does not exist in the body and hence is structurally and functionally different from both native DNA and RNA.” On the contrary, it has been known for decades that cDNAs in the form of “processed pseudogenes” are natural products and exist in the cells of the body. Processed pseudogenes are
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double-stranded DNA sequences in the human genome that resulted from the same biochemical process, RNA-templated DNA synthesis (reverse transcription) presumably carried out in our evolutionary past by viruses containing a reverse transcriptase enzyme. These naturally occurring cDNAs were inserted randomly into the human genome and passed down through the generations to the present day. Processed pseudogenes contain largely the same bases, in the same order, as the cDNA made from the mRNA derived from transcription of a gene.
Alignments of a cDNA made from the mRNA of a gene and a processed pseudogene of that gene can be identical over 80-90% of the length of the molecule. Like cDNAs made artificially in a test tube, processed pseudogenes can include segments of the polyA tail, but not the 5’ cap, that are typically present in mRNA. For example, my coworkers and I reported in 1984 that 14 cDNA copies of the argininosuccinate synthetase gene exist in the human genome, distributed on 12 different human chromosomes (Su TS, Nussbaum RL, Airhart S, Ledbetter DH, Mohandas T,
O'Brien WE, Beaudet AL Human chromosomal assignments for 14 argininosuccinate synthetase pseudogenes: cloned DNAs as reagents for cytogenetic analysis. Am J Hum Genet. 1984
Sep;36(5):954-64). Thirteen of these pseudogenes contain >80% of the sequence present in the complete mRNA and, over this shared region, more than 85% of the bases are identical. Attached as an Exhibit is a diagram showing just one of the argininosuccinate synthetase pseudogenes that aligns with 80% of the cDNA of argininosuccinate synthetase mRNA (NM_000050.4 in
Genbank at NCBI) with over 90% identity of the nucleotides between the cDNA and the pseudogene.
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EXHIBIT 2
A7013 Case 1:09-cv-04515-RWS Document 221-3 Filed 01/20/2010 Page 2 of 2 A7014
Alignment showing 93.4% identical bases between nucleotides 255-1827 (top line of the alignment, in italics) of the argininosuccinate synthase cDNA sequence inferred from its naturally occurring 1,863 base mRNA (Genbank reference NM_000050) and a processed pseudogene on human chromosome 5 (bottom line of alignments in roman).
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UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
ASSOCIATION FOR MOLECULAR ) PATHOLOGY; AMERICAN COLLEGE OF ) Civil Action No. 09-4515 (RWS) MEDICAL GENETICS; AMERICAN SOCIETY ) FOR CLINICAL PATHOLOGY; COLLEGE OF ) ECF Case AMERICAN PATHOLOGISTS; HAIG ) KAZAZIAN, MD; ARUPA GANGULY, PhD; ) DECLARATION OF WENDY CHUNG, MD, PhD; HARRY OSTRER, ) FIONA E. MURRAY, Ph.D. MD; DAVID LEDBETTER, PhD; STEPHEN ) WARREN, PhD; ELLEN MATLOFF, M.S.; ) ELSA REICH, M.S.; BREAST CANCER ) ACTION; BOSTON WOMEN’S HEALTH ) BOOK COLLECTIVE; LISBETH CERIANI; ) RUNI LIMARY; GENAE GIRARD; PATRICE ) FORTUNE; VICKY THOMASON; KATHLEEN ) RAKER, ) ) Plaintiffs, ) v. ) ) UNITED STATES PATENT AND ) TRADEMARK OFFICE; MYRIAD GENETICS; ) LORRIS BETZ, ROGER BOYER, JACK ) BRITTAIN, ARNOLD B. COMBE, RAYMOND ) GESTELAND, JAMES U. JENSEN, JOHN ) KENDALL MORRIS, THOMAS PARKS, ) DAVID W. PERSHING, and MICHAEL K. ) YOUNG, in their official capacity as Directors of ) the University of Utah Research Foundation, ) ) Defendants ) ______)
I, FIONA E. MURRAY, Ph.D., certify under penalty of perjury that the following is true and correct: 1. I am an Associate Professor of Management of Technological Innovation and
Entrepreneurship at the Massachusetts Institute of Technology (MIT) as well as an
Affiliated Professor in the Harvard-MIT Division of Health Science and Technology.
2. I submit this declaration in support of Plaintiffs in the above-captioned case.
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18. Our results also showed that patent scope and strength had a modest, but statistically
significant, impact on the degree to which a gene patent grant had a negative impact on
follow-on publications.
19. Our results additionally showed that the negative effect of patents on follow-on public
knowledge production is greatest for genes closely linked to human diseases. While we
would expect that gene papers on disease-related genes would be more highly cited, our
methodology allowed us to distinguish between this “levels” effect and the effect of a
gene patents grant on annual citations. Only disease genes listed in the Online Mendelian
Inheritance in Man (OMIM) database were found to have a significant 8% reduction in
forward citations. In looking only at cancer genes, the effect was even more pronounced:
the sample of proven cancer genes sees a negative impact of 11% as compared with 4%
in the non-cancer sample.
CONCLUSION
20. Based on my expertise in studying the effects of gene patents on the stream of public
knowledge and in particular on the results of the 2009 empirical study described above, it
is my opinion that the Myriad patents at issue in the instant lawsuit are likely to have
negatively impacted the accumulation of public knowledge of the BRCA1 and BRCA2
genes by between 5 and 10%. The negative impact of the patents at issue is exacerbated
by the fact that Myriad Genetics is an assignee from the private sector, the patents in
question are exceedingly broad, and the genes at issue are cancer genes.
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Metastasizing patent claims on BRCA1 Thomas B. Kepler1, Colin Crossman2, Robert Cook-Deegan3
1Department of Biostatistics and Bioinformatics, Duke University, Durham NC 27705 2762 Ninth St. #591, Durham NC 27705 3Institute for Genome Science and Policy and Sanford Institute, Duke University, Durham NC 27705
In 1998, the US Patent and Trademark Office granted Mark H. Skolnick and ten of his collaborators a patent on the human gene BRCA1 (US Patent 5,747,282). Mutations in BRCA1 confer a substantial risk for breast and ovarian cancers, with a cumulative risk of incidence by age 70 of 69% (breast) and 39% (ovarian) (1). Genetic tests to screen for these mutations in the United States are available exclusively through Myriad Genetics, an assignee of the patent. Women with a family history of breast and ovarian cancer may, through this genetic test, determine whether they carry one of the high-risk alleles, and if so, decide whether to take prophylactic action, generally surgical removal of breasts, ovaries or both.
Human gene patents are controversial (2); BRCA1 patents are currently the subject of litigation (3). This particular patent is the first one named in a complaint filed by the American Civil Liberties Union and is now moving swiftly toward resolution. A hearing in the Southern district federal court of New York took place September 30, 2009, before Judge Robert W. Sweet (4). On November 2, he released an 88-page decision to continue the case (5).
The patent itself is complex and makes several different claims. One of these claims seemed to us particularly broad, so we investigated it, doing simple calculations to estimate its reach, and testing our findings by direct analysis of the extent of its reach within parts of the human genome. We find that, through this claim, the patent extends to portions of most genes in the human genome and likely to most genes in nature as well.
The patent first makes claim 1, to “An isolated DNA coding for a BRCA1 polypeptide, said polypeptide having the amino acid sequence set forth in SEQ ID NO:2.” SEQ ID NO:2 is the 1863-residue amino acid sequence for the protein encoded by the BRCA1 gene. The patent further claims “5. An isolated DNA having at least 15 nucleotides of the DNA of claim 1.” Note that the claim in one is for DNA coding for the polypeptide, not for any specific gene. There are, of course, many polynucleotides that would encode the BRCA1 polypeptide. Claim 5, then, is a claim on any 15-mer oligonucleotide found in any such sequence. We estimate that the human genome contains over one million oligonucleotides covered by this claim, and that most human genes contain at least one and usually several oligonucleotides covered by the claim.
To estimate the breadth of this claim, one can perform a short computation. Accounting for bias in the usage of amino acids as reported, for example, in (6), the usage-weighted geometric mean codon degeneracy per amino acid is 3.107. Therefore, the mean number of 15-mers encoding a polypeptide of length 5 chosen at random from a vertebrate proteome is 3.1075, about 290. There are 5,575 15-mers in BRCA1, so, if we consider all of the nucleotide sequences that encode the BCRA1 protein, there are about 1.6×106 15-mers embodied by the claim. There are 415 = 1.07×109 different 15-mers altogether, so the probability that a 15-mer chosen at random will be covered by the claim is p = 1.6×106 / 1.07×109 =
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0.0015. A typical human gene (before RNA editing) contains 10,000 bases, so, if human genes were random strings of nucleotides, one would expect a human gene to contain an average of 15 15-mers claimed under the patent.
But human genes are not random strings, so we counted the number of claimed 15-mers in a representative sample of the human genome to test the breadth of claim 5 empirically. We examined chromosome 1 (NCBI build 37.1), and counted only a subset of claimed 15-mers. The reason for counting only a subset is that there are three amino acids (serine, leucine, and arginine) that have 6-fold degeneracy. If we neglect two of the six synonymous codons for each of these amino acids, each degenerate 15-mer can be represented as a single string of 15 letters, with degenerate positions encoded by the extended IUPAC nucleotide alphabet. This representation permits a many-fold reduction in computing time that will slightly understate the degree of redundancy and breadth of claim 5.
Examining only this subset, we find over 340,000 matches of claimed 15-mers to the 250 million base
pairs of chromosome 1, for an empirical hit rate of pemp = 0.00136 per 15-mer, close to our theoretical expectation. Using this conservative estimate, we expect about 14 infringing sequences per human gene. The claims being discussed are structural, and do not restrict acts of infringement to particular uses or contexts, but should, in theory, give the patent-holders exclusive rights to make, use, sell, or import the claimed 15-mers in the United States, including use in research, diagnosis or other domains. These claims are not, for example, restricted to sequences actually derived from a BRCA1 sequence, or from human chromosome 17 (where BRCA1 is located), or only those 15-mers that are unique to BRCA1, or for use only in the context of risk assessment, diagnosis, treatment or research on inherited risk of breast and ovarian cancer. That is, anyone making an “isolated” DNA that includes any one of the 15 base-pair sequences in the United States for any purpose would be infringing US patent 5,747,282.
To test the practical significance of claim 5, we examined the 713 entries in GenBank that represent complete coding sequences for human mRNAs deposited in 1994 (the year before the patent application was filed); 568 of these 713 mRNAs (79 percent) contain at least one BRCA1-derived 15-mer using the restricted codon table. Note that these mRNA sequences are shorter than typical genes, with a median length of 1902 nucleotides.
These findings suggest that there were already many sequences in GenBank covered by claim 5 at the time the patent application was filed.
The particular strategy for claiming DNA sequences exemplified by claim 5 is quite broad. The patent examination manual stipulates that claims use “the broadest reasonable meaning of the words in their ordinary usage as they would be understood by one of ordinary skill in the art, taking into account whatever enlightenment by way of definitions or otherwise that may be afforded by the written description contained in applicant's specification (7).” Lines 14-4 of, column 24 in the patent define “substantial homology or similarity” as “nucleotide sequence identity in at least about 60% of the nucleotide bases,” and defines “selective hybridization” “when there is at least about 55% homology over a stretch of at least about 14 nucleotides.” These definitions explain why 15-mers were chosen, but do not alter the plain meaning of any of the terms in claim 5. Our experimental sequence comparisons also meet these definitions.
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Once granted, patent claims are valid until and unless they are challenged. BRCA patents were cited in enforcement letters that Myriad Genetics sent to other laboratories to cease genetic testing for BRCA mutations (8,9).
It is worth noting that a 1991 patent application for Expressed Sequence Tags was rejected on several grounds, including the fact that claimed 15-mer oligonucleotides were found in existing DNA sequences. This finding that 15-mers had sequence identity to many genes was published, and so publicly known by the end of 1992 (10). That particular patent application was abandoned by NIH in 1994. Examiner James Martinell estimated that to examine the reach of the oligonucleotide claims in that patent would have taken until 2035 because of the computational time required to search for matches in over 700,000 15- mers claimed, roughly half the number granted in claim 5 of US Patent 5,747,282. Although still computationally intensive, such sequence comparisons can clearly can be done much more rapidly now. The reason this was not done by a different examiner for US Patent 5,747,282 when it was being examined between 1995 and 1998 is not clear.
The judgment in this case is likely to have impact on the practice of biomedicine and the pursuit of research. The enormously improved capability to examine the reach of partially ambiguous claims should provide important guidance along the way.
1. Antoniou A, Pharoah PDP, Narod S, Risch HA, Eyfjord JE, et al. (2003) Average Risks of Breast and Ovarian Cancer Associated with BRCA1 or BRCA2 Mutations Detected in Case Series Unselected for Family History: A Combined Analysis of 22 Studies. Am J Hum Gen 72: 1117- 1130. 2. Paradise J, Andrews L, Holbrook T (2005) INTELLECTUAL PROPERTY: Patents on Human Genes: An Analysis of Scope and Claims. Science 307: 1566-1567. 3. Association for Molecular Pathology, et al., v. United States Patent and Trademark Office, et al., No. 09-CV-4515 (RWS) (S.D.N.Y. filed May 12, 2009) (plaintiffs' complaint). 4. Association for Molecular Pathology, et al., v. United States Patent and Trademark Office, et al., No. 09-CV-4515 (RWS) (S.D.N.Y. August 27, 2009) (order setting date for hearing of plaintiffs' motion for summary judgment and jurisdictional discovery). 5. Association for Molecular Pathology, et al., v. United States Patent and Trademark Office, et al., No. 09-CV-4515 (RWS) (S.D.N.Y. November 2, 2009) (opinion stating the suit will continue, keeping all defendants and setting dates for motions and for a December 11, 2009, oral hearing). 6. King JL, Jukes TH (1969) Non-Darwinian Evolution. Science 164: 788-798. 7. US Patent and Trademark Office, Manual of Patent Examining Procedure, Section 2111. 8. R. Cook-Deegan et al., Impact of Patents and Licensing Practices on Access to Genetic Testing for Inherited Susceptibility to Cancer: Comparing Breast and Ovarian Cancers to Colon Cancers (Case study commissioned by the Secretary's Advisory Committee on Genetics, Health, and Society, 2009; http://oba.od.nih.gov/oba/SACGHS/Appendix%201%20SACGHS%20Patents%20Consultation%20Draft %20Compendium%20of%20Case%20Studies.pdf). 9. E. R. Gold, J. Carbone, Myriad Genetics: In the Eye of the Policy Storm (International Expert Group on Biotechnology, Innovation and Intellectual Property, 2008; http://www.theinnovationpartnership.org/data/ieg/documents/cases/TIP_Myriad_Report.pdf).
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UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
ASSOCIATION FOR MOLECULAR PATHOLOGY, et al., 10'9 Civ. 15I5 (RWS) Plaintiffs, v. MZCUS
UNITED STATES PATENT AND TRADEMARK OFFICE, et al., Defendants. 1 PLEASE TAKE NOTICE that proposed Amicus Curiae, Kevin E. Noonan, pro se shall move this Court, before the honorable Robert W. Sweet, United States District Judge, at the
United States Courthouse, 500 Pearl Street, New York, NY, at a date and time to be determined by the Court, for leave to file a brief amicus curiae.
Submitted contemporaneously herewith are: (I) a Memorandum of Law in Support of this Motion for Leave to File a proposed brief amicus curiae; and (2) the proposed amicus curiae brief and exhibits. /7 Dated: January 15,2010
Kevin E. Noonan -- -- McDonnell Boehnen Hulbert & Berghoff L.L.P. 300 South Wacker Drive Chicago, IL 60606 (312) 913-0001 Noonanfi3mbhb.com
Amicus Curiaepro se.
1.1 USXSDNY I I DOCUMENT ELECl'RONICALLY FlLED 11
A7316 Although Plaintiffs’ claim otherwise, one skilled in the art could design around the isolated gene and diagnostic claims. The essence of the invention is that certain mutations in BRCA1/2 cause a predisposition to breast cancer. These mutations, however, are merely a proxy for deficient protein activity. Therefore, it is entirely possible for another breast cancer prognostic test to be developed (e.g., a protein, metabolite or functional test) that would determine the functional activity of the BRCA1/2 proteins without infringing the isolated gene or diagnostic claims. Such tests would not only circumvent those patents but would very likely yield a better assay to predict the predisposition to the disease since it does not depend on understanding the role of each gene mutation – a principal complaint of the Plaintiffs. Test of this type are currently being developed.10
In conclusion, the claims are not fundamental in nature, are sufficiently limited in scope to satisfy the patent eligibility requirements of 35 U.S.C. § 101, and promote the progress of science and the useful arts by encouraging others to design around the claimed inventions.
III. THE ISOLATED GENES CLAIMED ARE MANUFACTURED BY MAN AND RESULT IN CHEMICAL STRUCTURES WITH DIFFERENT PHYSICALLY PROPERTIES
Plaintiffs incorrectly state that the isolated DNA claimed in the patents is a product
of nature that is not patent eligible under 35 U.S.C. § 101. The DNA claimed in the
patents is limited to that which has been manipulated in the laboratory. Upon isolation
10 While by no means exhaustive, the court should consider ongoing research into functional assays that may circumvent the patents at issue. See, e.g., Sergey Kuznetsov, Mouse Embryonic Stem Cell-based Functional Assay to Evaluate Mutations in BRCA2, Nature Medicine 14, 875– 81 (Jul. 6 2008).
9 A7332 or manufacture, it no longer has properties that are critical to its function in the human
cell. To be covered by the claims, a scientist with specialized skills known in the art
must remove the DNA from the tissue environment and alter it in such a way that it can
no longer perform the function it once had. Instead, the DNA acquires a utility that it
did not previously possess: the ability to be screened in a diagnostic assay and
transformed into information that is useful in treatment decisions. Consequently, the
isolated genes are not products of nature, but transformed articles of manufacture that
are patent eligible under current United States law.
A. The Isolated Genes Claimed are Not a Product of Nature Because they are Physically Different Structures with Different Chemical Properties Than Their Counterparts in Nature.
The isolated BRCA1/2 genes claimed are not the same products present in the human cell. The isolated genes claimed are physically different chemical structures with different chemical properties than their counterpart in nature. In fact, if the isolated genes claimed (e.g., SEQ ID NO:1 of the ‘282 patent) where placed back into the human cell at precisely the same location, it would not function as the natural gene found in nature.11
Moreover, Plaintiffs’ statement that cDNA and RNA are nearly identical and that cDNA “simply mirrors the RNA structure in the body” and that the “structural differences are irrelevant to the function of the gene in the body or in the lab” is incorrect.
These two molecules are not mirror images.12 First, the chemical composition of DNA
11 It is beyond the scope of this brief but multiple chemical modification take place in a human cell (e.g., alternative splicing) that necessitate regions not found in, for example, cDNAs. 12 Even if they were simply mirror images, Plaintiffs’ argument is incorrect in the context of chemistry. Molecules that are mirror images (stereoisomers) don’t function as equivalents. For this reason the FDA often requires that certain pharmaceutical drugs only contain one stereoisomer – the other stereoisomer is frequently not active or is toxic.
10 A7333 and RNA is different. DNA is a deoxyribose (i.e., does not contain an oxygen molecule that is present in RNA) and DNA contains the nucleotide thymidine (C10H14N2O5) while
RNA contains uracil (C4H4N2O2). Second, DNA and RNA have many different properties and certainly have different functions in nature and in a laboratory. A sample of the differences between RNA and a cDNA is illustrated below:
Chemical and Physical Characteristic cDNA RNA Directly translate to protein no yes Easily degraded no yes Chemical structure includes thymidine includes uracil Found in nature no yes Easily transferred to foreign cell yes no Easily recombined with other nucleic acids yes no
A useful analogy to the scientific process that occurs in the human body is the relationship between words, sentences and paragraphs. If one isolates a sentence from a paragraph and randomly removes two-thirds of the words (i.e., analogous to a cDNA covered in SEQ ID NO:1), it cannot be said to be the same as the original sentence. Not only does the sentence itself convey a different meaning due to the missing words, it also loses context with the words in the remaining paragraph (i.e., analogous to the human genome). Arguing, that both sentences are composed of words, and that the individual words have the same meaning regardless of their context is not a fair representation of the biological consequences that necessarily flow from the man-made changes imposed.
B. The Isolated Genes Claimed are Articles of Manufacture under 35 U.S.C. § 101.
Not only are the isolated genes claimed in the patents not a product of nature, these molecules are articles of manufacture. 35 U.S.C. §101. The isolated BRCA1/2 genes claimed are not simply the same products present in the human cell minus other cellular
11 A7334 components. The isolated genes must undergo multiple laboratory procedures that materially transform its chemical structure and properties. The word “isolated” includes
“recombinant or cloned DNA isolates and chemically synthesized analogs or analogs biologically synthesized by heterologous systems.” U.S. Patent No. 5,693,473 col.19 l.12–15 (filed Jun. 7, 1995). (emphasis added). The words “recombinant”, “cloned”,
“chemically synthesized” and “analogs biologically synthesized” are all man-made activities that result in a different chemical structure.
Of course, as with any article of manufacture, the starting material used to create the composition of matter are products of nature. However, the isolated genes claimed are no more a law or product of nature than a computer chip can be said to be a product of nature simply because it is made of silicone. The isolated genes (e.g., SEQ ID 1) claimed in the patents are manufactured in the laboratory using techniques that cannot13, and do not, occur in a human cell. Therefore, they represent patent eligible subject matter.
IV. CLAIMS COVERING A METHOD OF DIAGNOSING A PREDISPOSITION TO DISEASE MEET THE BILSKI TRANSFORMATION TEST AND ARE PATENT ELIGIBLE UNDER 35 U.S.C. §101
The Federal Circuit recently established a new test for patent eligible material under
35 U.S.C. §101 requiring that the invention be a “machine or transformation”. In re
Bilski, 545 F. 3d 943 (Fed. Cir. 2008). Unless or until the Supreme Court reverses this holding, it is currently the law on patent eligible material and, therefore, the standard which must be applied.
13 For example, to the best of author’s knowledge human cells do not have a chemical capability to make a cDNA from an RNA. The enzymes required for the conversion are isolated from retroviruses such as the human immunodeficiency virus (HIV).
12 A7335 Case 1:09-cv-04515-RWS Document 235 Filed 01/25/2010 Page 1 of 5
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK .-
ASSOCIATION FOR MOLECULAR PATHOLOGY, et al., Plaintiffs, v. I 09 Civ. 4515 (RWS) MOTION FOR LEAVE TO FILE BRIEF AMICUS CURL4E UNITED STATES PATENT AND TRADEMARK OFFICE, et a]., I Defendants 1
Proposed Amicus Curiae, Professor Kenneth Chahine, submits this memorandum of law in support of his motion for leave to file a brief amicus curiae.
Dr. Kenneth G. Chahine $0 m 4 Visiting Professor ofLaw BioLaw Project S.J. Quinney College of Law University of Utah 332 South 1400 East Salt Lake City, UT 841 12-0730 2 &^. /I http://www.law.utah.edu~
A7339 Case 1:09-cv-04515-RWS Document 235 Filed 01/25/2010 Page 2 of 5
1. CONFLICT OF INTEREST
While I reside in Utah and am a professor of law at the University of Utah, 1 do not have a conflict of interest. Moreover, none of the University of Utah-affiliated
Defendants, the University of Utah General Counsel, or any of the other Defendants were consulted or allowed to review the contents of this brief.
I have no financial interest in Myriad Genetics.
1 consult with biotechnology companies and currently advise one genetic diagnostic start-up company.
11. INTRODUCTION AND INTERESTS OF PROPOSED AMICUS CURIAE
1 am a patent attorney admitted to practice in the State of Utah and in the U.S.
Patent and Trademark Oflice. 1 also have a Ph.D. in biological chemistry from the
University of Michigan. 1 have taught Intellectual Property and Transactional Law at the
University of Utah College of Law.
1 have had an interest in gene and protein patents for over a decade. I have numerous publications in the area of gene patents, including Chahine, K.G., Defining the
Proper Scope of Gene and Diagnostic Patents: Going Beyond the Laws and Product of
Nature to Determine Patent Eligibility, (submitted for publication); Chahine, K.G.,
"Building the proper foundation for genomic based patents," ~VatureBiotechnology, 16:
683-684 (1998); Chahine, K.G., "Enabling DNA and Protein Claims: Why Claiming
Biological Equivalents Encourages Innovation," Americun Intellectual Proper@ Law
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