03-02-2002

TECHNOLOGY: The New Patent Puzzle

The world's first cloned cat, CC, was advertised as a prototype for the
pet-cloning market by her corporate parent, Texas-based Genetic Savings
& Clone. But she is also a prototype for a much larger market for
"animal models," or animals created for use in medical
experiments. And she is a precursor to what many researchers and biotech
entrepreneurs see as an important new arena-the cloning and use of human
embryos for specific research and commercial purposes.


Cloning technologies depend on patents for their commercialization and
growth. The U.S. Patent and Trademark Office has already begun awarding
these valuable patents for cloning techniques for many types of
"modified" animals, and for some cells grown from human stem
cells. Biotech experts predict that the patent office will eventually
grant patents for methods used in human-embryo cloning. But in the new
biotechnology, "the boundary is quite blurred" between what is
human and what is nonhuman, said Kent Cheng, a lawyer with the New
York-based law firm of Cohen, Pontani, Lieberman & Pavane, which
specializes in patent issues.


The market in animal models is already large, with one company claiming
revenue of more than $500 million a year. In 2000 alone, 25,560 ordinary
cats-plus another 1.4 million animals, not counting mice, rats, and
birds-were used in medical experiments. The cats were used principally for
research into AIDS, the human brain, and various viruses. Specially bred
disease-free cats can be sold for up to $600.


But even that is far less than the price of designer mice-mice that have
been given human genes, or carry unusual mice genes, or have particular
genes "knocked out." The price of these mice, many of which are
patented, can exceed $2,000 for a breeding pair, depending on the desires
of the buyer and the seller. There are more than 1,000 types of these
specialty mice, said Joyce Peterson, a spokeswoman for the Jackson
Laboratory in Bar Harbor, Maine. The lab develops and breeds mice and
other animals for research. Indeed, these mice are so important that the
National Institutes of Health is funding two groups, each of which is to
develop 50 new types of mouse models each year, Peterson said. Overall,
the annual U.S. market for animal models is more than $1 billion.


The technology used to clone CC allows cats to play in this specialty
market. Twenty cloned cats would produce the same quality of research data
that now requires 40 ordinary cats, said Duane Kraemer, a professor at
Texas A&M University and a principal at Genetic Savings & Clone.
And these genetically engineered cats can be patented, hindering other
companies from developing them, according to Charles Long, the company's
general manager. To clone CC, Genetic Savings & Clone paid to use
other companies' patented cloning techniques, "but we hope to change
the process so significantly that we wouldn't be bound by other patents,
and we'd have our own [genetic-engineering patents] that someone might
license," Long said. "That's the position you want to get
yourself in-to get others to pay."


That's where the Patent and Trademark Office enters the picture. Companies
can obtain patents on new animals that are "novel" and
"nonobvious," and that have substantial, credible, and
significant utility. The patent office has already awarded many patents
for modified mice, including mice that carry human genes, and mice
designed to mimic human psoriasis, Huntington's disease, cancer, and many
other ailments.


These patents can be very valuable, especially for companies that stake
years of expensive research on the prospect of winning them. For example,
Advanced Cell Technology Inc. in Worcester, Mass., holds patent No.
5,945,577, which is for the creation, via cloning, of genetically modified
nonhuman mammals. Two other companies, Geron Corp. in Menlo Park, Calif.,
and Infigen Inc. in DeForest, Wis., have protested, arguing that ACT's
patent interferes with their patent applications. In early February, the
patent office agreed to consider the dispute, but the fight over the
patenting of nonhuman mammals is only a precursor to a much more difficult
debate: To what extent can human clones be patented?


Some researchers say that cloned human "embryo models" will
provide the best-and in some cases, the only-way to study some aspects of
human biology, particularly the gradual emergence of genetic diseases and
traits.


The leading proponent of human research cloning is Irving Weissman, who
helped found a biotech company, StemCells Inc., in Palo Alto, Calif.,
which is now backed by biotech giant Amgen. He argues that stem cells from
human embryos produced by cloning can serve as valuable laboratory models
and as the foundation for the next stage in biotech's evolution. Such
models should be created and used, Weissman said, even if other
researchers use stem cells from adults to repair diseases.


"Even if we could treat one disease, or two or five or 10, with adult
stem cells that are around, I would not block research that would open up
whole fields," Weissman said. He was speaking at a February 6 Senate
Judiciary hearing chaired by Sen. Dianne Feinstein, D-Calif., who has
drafted a bill that would ban the implantation of cloned embryos in
women's uteruses. Feinstein's bill stands in opposition to legislation
pushed by Sen. Sam Brownback, R-Kan., that would ban human cloning for any
purpose. The House has already passed a comprehensive ban on human
cloning.


Weissman is well-versed in patent policy. In 1997, he sold his SyStemix
Inc. for a reported price of $570 million, netting himself $25 million.
The company's value was based on its critical patents, including a patent
for one of the earliest mouse models, called a SCID-hu mouse, which
incorporates a human immune system transplanted from an aborted fetus.
Several competing varieties of the SCID mice are now used, along with cats
and other models, to study AIDS.


According to Weissman, the patent office will be reluctant to grant a
single broad patent for all research cloning of human embryos, partly
because his discussion of the concept in public means it couldn't pass the
"novelty" test. But Weissman predicted that the patent office
will be much more likely to grant narrow patents to those who actually
create cloned human embryos with particular genetic features and then use
them to create millions of stem cells carrying those genetic features for
study by researchers. These features could include a predisposition to
breast cancer, or to Lou Gehrig's disease, for example. He asserts that it
would be in the public interest to grant patents to researchers who first
develop such "nuclear transfer models," because they provide the
best model for the study of diseases. Weissman believes that there could
be very many such patents granted, especially as scientists develop
improved versions of these models. He says that an embryo itself cannot be
patented, because it has no utility except as a source of valuable stem
cells for researchers. At least one other researcher, however, says the
embryos themselves are valuable for study.


The patent office has gone partway toward realizing Weissman's prediction.
Last September, the office granted a patent to Neuralstem Inc. in
Gaithersburg, Md., for brain cells grown from stem cells extracted from
aborted fetuses. The brain cells are sold in batches for $990 to companies
that develop and test drugs. The cells may also be used for
transplantation into patients with Parkinson's disease.


But no human-embryo-based patents should be awarded, says Peter Di Mauro,
a scientist and patent agent with the Washington-based International
Center for Technology Assessment, which opposes human cloning. Even if the
embryo-based models prove useful, he said, they violate the patent
office's rules that inventions should not be "detrimental to the
public interest." He also contends that the many other models can
provide the information scientists need.


The Patent and Trademark Office is not eager to join the debate on
granting patents for cloning human embryos. When asked for a comment, its
chief spokesman, Richard Maulsby, would say only, "The U.S. Patent
and Trademark Office does not issue patents drawn to human
beings."


The key issue will be the patent office's interpretation of patents that
involve humans and cloning, said Lila Feisee, a patent expert for the
Biotechnology Industry Organization. "The patent office won't sit
down and define 'human' ... but I do know that they do patent stem cells,
and methods of ... deriving them from cloned embryos."


But Bruce Lehman, who served as head of the patent office from to 1993 to
1998 and now heads the Washington-based International Intellectual
Property Institute, said that, on that difficult issue, "I would not
have even proposed a decision myself [because it] is something that would
go up to the President." Lehman said that the question lies "at
the heart of the 'is an embryo a person' debate," but it does not
implicate the 1973 Roe v. Wade decision legalizing abortion, principally
because there is no pregnant mother involved. But supporters of President
Bush and patent office director James Rogan, said Lehman, include those
who believe "any human embryo ... is [human] life," so "it
would be completely inconsistent for them to patent that kind of subject
matter." He added, "I'm glad I don't have to be involved in
that; the factory manufacturing of human beings is a very serious
issue."


Already, some researchers, including Michael West, the head of ACT, argue
that a cloned embryo of less than 14 days, or perhaps one that hasn't
developed a brain, is not human but is merely cellular life that can be
owned and patented. Others, including some scientists,
anti-abortion-rights advocates, and left-of-center opponents of
biotechnology, argue that human life exists from conception. "I don't
think the Supreme Court has been able to answer that question,"
Feisee said.


Political opposition may delay the award of a patent, Weissman said,
"but in the end, a judge or some judges will decide" the legal
issue. If a model is worth developing, he said, it is worth
patenting.


Neil Munro

National Journal