659 WHY IT MIGHT BE TIME TO ELIMINATE GENOMIC PATENTS, TOGETHER WITH THE NATURAL EXTRACTS DOCTRINE SUPPORTING SUCH PATENTS ALLEN K. YU* ABSTRACT The purpose of recognizing enforceable rights in intellectual property in the United States is to “promote the progress of science and useful arts.” Given the changing landscapes of technologies, it is critical that policies and laws be continually adjusted to reflect the needs of new technologies. When the law tries to shield from—rather than confront—new technological realities, patents subvert rather than promote technological progress. This paper explores how the natural extracts doctrine, established over a century ago to allow purified compounds to be patented at a time when biochemistry was more alchemy than science, subverts rather than promotes progress in the modern biotechnological context. This paper argues that the natural extracts doctrine, together with the various isolation-based product patents—including gene product patents—that it has spawned, must be promptly abandoned or at least radically reduced in scope. Such patents not only violate the prohibition against the patenting of nature, but are also not commensurate with the underlying contributions made to the arts. In a proper patent regime, incentives given for today’s innovation should be appropriate for today's innovations, and not be given at the expense of tomorrow’s incentives. The paper concludes by offering a glimpse of what a patent system without the natural extracts doctrine might look like. It shows * Associate, Townsend, Townsend, and Crew, LLP; J.D. (2006) Harvard Law School. I would like to thank Prof. Josh Learner (Harvard Business School), Prof. Bill Lee (Wilmer Hale, LLP), and Prof. William Fisher (Harvard Law School) for teaching a class that helped to in- spire this paper. I would also like to thank Prof. Dan Cahoy and the editors of the American Business Law Journal for providing helpful insight and feedback during the submissions process. Additional thanks to the staff of IDEA for their dedication, professionalism, and hard work. Finally, I would like to thank my family for showing the understanidng and mak- ing the sacrifices necessary for me to undertake and complete this paper. Volume 47 — Number 5 660 IDEA—The Intellectual Property Law Review how a reinvigorated subject matter requirement and enablement requirement can properly incentivize innovations in biotechnology—sustainably and for the long term—without impeding the future. I. INTRODUCTION Many pundits have penned the 21st century as the century of biotech- nology.1 As science and technology play increasingly vital roles in society, laws and policies designed to promote their advancement have come under ever in- creasing scrutiny. The ever-rising stakes have also spurred increasingly heated debates over how best to incentivize innovations in biotechnology.2 U.S. patent law features a property-based system for incentivizing innovation.3 Property based intellectual property (IP) systems, however, present a double-edged sword.4 Even as patents spur innovations, they can also cause underutilization 1 John Carey et al., The Biotech Century, BUSINESSWEEK, Mar. 10, 1997, at 97, available at http://www.businessweek.com/1997/10/ b35171.htm (Nobel Prize winning chemist Robert F. Curl proclaiming that the twentieth century was “the century of physics and chemistry. But it is clear that the next century will be the century of biology.”); Kenneth I. Shine, Welcome, NAT’L RESEARCH COUNCIL,U.S.DEP’T OF ENERGY,SERVING SCI. AND SOC’Y IN THE NEW MILLENNIUM 1 (1998) (proclaiming that, whereas “the 20th century will be known as the cen- tury of physics and astronomy,” “the 21st century will be the century of the life sciences in all their ramifications”); JEREMY RIFKIN, THE BIOTECH CENTURY:HARNESSING THE GENE AND REMAKING THE WORLD 8, 15 (New York, 1998) (describing the 21st century as the “biotech century”). 2 See generally, e.g., Roberto Mazzoleni & Richard R. Nelson, The Benefits and Costs of Strong Patent Protection: A Contribution to the Current Debate, 27 RES.POL’Y 273 (1998). 3 The right to exclude others from using one’s innovation is embedded in statute. According to 35 U.S.C. § 154(a)(1), “Every patent shall contain a short title of the invention and a grant to the patentee, his heirs or assigns, of the right to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States.” According to 35 U.S.C. § 271(a), “Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States, or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.” The American patent and copyright system is traced to England’s Statute of Monopolies of 1624 and the intellectual property system of the Venetian Republic in the late fifteenth century. See BRUCE W. BUGBEE,THE GENESIS OF AMERICAN PATENT AND COPYRIGHT LAW 22–23, 39 (1967). 4 See, e.g.,FED.TRADE COMM’N, TO PROMOTE INNOVATION:THE PROPER BALANCE OF COMPETITION AND PATENT LAW AND POLICY 5–6 (2003), available at http://www.ftc.gov/os/ 2003/10/innovationrpt.pdf (noting that despite the ability to incentivize innovations, overly broad patents also “deter market entry and follow-on innovation by competitors and increase the potential for the holder of a questionable patent to suppress competition”). 47 IDEA 659 (2007) Why it Might be Time to Eliminate Genomic Patents 661 of those innovations and even potentially discourage related follow-on innova- tions.5 The impressive rise of the American biotechnology sector has been nothing short of astonishing.6 The revolution began in 1953 with the discovery of the DNA,7 creating a new biological paradigm wherein discrete units of in- heritance making up the genome of an organism8 collectively direct and regulate all biological processes of the organism.9 Since the creation of the first geneti- cally engineered organisms in 1973,10 the industry has exploded into a critical and strategic multi-billion dollar industry.11 Many have cited the availability of 5 See infra notes 230–239 and accompanying text. 6 In 2004, U.S. biotech companies marketed approximately 230 drugs, including 13 therapeu- tic antibodies; filed fifty-five FDA New Drug Applications (NDA), treating a wide variety of conditions including cancer, congestive heart failure, pain and diabetes; and raised $16.9 bil- lion in capital in the U.S. alone. Product Success and Strong Financials Drive Biotech In- dustry’s Maturation According to Ernst & Young’s 2005 Global Biotechnology Report, (2005), http://www.ey.com/global/content.nsf/US/Media_-_Release_-_06-01-05DC. 7 J. D. Watson & F. H. C. Crick, A Structure for Deoxyribose Nucleic Acid, 171 NATURE 737, 737 (1953). Equally important to the success of the industry was Stanley Cohen and Herbert Boyer’s invention of recombinant DNA technologies which allowed genes to be manipulated at the genetic level for the first time. See Stanley N. Cohen et al., Construction of Biologi- cally Functional Bacterial Plasmids in Vitro, 70 PROC.NATL.ACAD.SCI. 3240 (1973); RIFKIN, supra note 1, at 10–15. Further advancements including the discovery in 1983 of a generally applicable method for cloning genes for polypeptides, the development of com- puter controlled DNA sequencing machines in 1986, and the invention of polymerase chain reaction technology in the same year brings us to the age of modern high-throughput genetics era. See Linda J. Demaine & Aaron Xavier Fellmeth, Reinventing the Double Helix: A Novel and Nonobvious Reconceptualization of the Biotechnology Patent, 55 STAN.L.REV. 303, 306 (2002). For an overview of recent advances in DNA sequencing, see J. Craig Venter et al., The Sequence of the Human Genome, 291 SCI. 1304 (2001). 8 A genome is the total genetic information carried by a cell or organism. HARVEY LODISH ET AL., MOLECULAR CELL BIOLOGY G-9 (5th ed. 2003). Genomic patents include patents over DNA, cDNA, RNA, mRNA, SNPs, ESTs, and other genetic fragments derived from the ge- nome of an organism. 9 Despite the discovery of DNA a half a century ago, new exciting discoveries about the fun- damental roles genes play in directing biological processes continue to be made. See, e.g., Trisha Guru, A Silence That Speaks Volumes, 404 NATURE 804 (2000); R.A. Waterland & R.L. Jirtle, Transposable elements: Targets for Early Nutritional Effects on Epigenetic Gene Regulation, 23 MOL.CELL.BIOL. 5293 (2003). 10 Cohen etal., supra note 7, at 3240. 11 There are about 1500 biotech companies in the U.S. in 2002. Debbie Strickland, The Guide to Biotechnology, (Biotechnology Industry Organization, Washington, D.C.), 2007, at 2-3. The American biotech industry has a market capitalization of about $US 225 billion in 2002 on revenues of $33 billion. Id. Volume 47 — Number 5 662 IDEA—The Intellectual Property Law Review strong patents as key to U.S. success,12 allowing and incentivizing the private sector to carry out more and more of the industry’s R&D.13 Despite the impres- sive rise of the industry, there is also a general unease14 at the current explosion of patenting activity.15 As the number of applications skyrocket and the scope of 12 See Reid G. Adler, Genome Research: Fulfilling the Public’s Expectations for Knowledge and Commercialization, 257 SCI. 908, 908 (1992); Luke Foster et al., Patenting in the Bio- pharmaceutical Industry—Comparing the US with Europe, 1 DRUG PLUS INT’L 1 (Aug. 2002), available at http://scientific.thomson.com/free/ipmatters/pii/8180019/ (describing pat- ents as “the lynchpins of the biopharmaceutical industry.”); Brian A.