Friday, June 18, 2010


We’ve had Gen-X and Gen-Y, but now we are about to have the onslaught of a generation of people who grew up with Linux and Napster and Firefox and so many other open source technologies that I wouldn’t be surprised if this generation comes to be knows as Gen-O (for "Open").

Myriad Genetics filed a Notice of Appeal on Wednesday in the suit brought against them by the ACLU challenging the validity of the BRCA1 and 2 patents. The ACLU claimed a first round victory on March 29 when a New York district court held that genes are products of nature and therefore not patentable. My friends at Choate, Hall and Stewart have a great summary of the case in last week’s GEN.

In October of 2007, Radiohead released their album, In Rainbows using a unique pricing policy: pay what you want. Fans were able to download a complete digital version of the album and only had to pay what they thought was fair.

How exactly do these things relate? And more importantly, relate to life sciences and cleantech? We are about to experience a sea change in the way technology businesses are conducted, and it will be driven by an open souce mindset. We have, for decades, operated under the model of patent protection for technological innovations, and so far it has worked quite well. Why is the US arguably the world’s foremost center of innovation? Because there has long been a clear, consistent plan for encouraging entrepreneurship through the patent system. In the case of Radiohead, it’s copyright law that applies, but it has the same net effect. That clear path is about to get a little murky.

The music industry was caught unawares when technological innovations made violation of copyright law as simple as a click of a mouse. Radiohead’s response was unique and innovative. The life sciences industry has been seeing this coming for some time. Years ago, I served on the rare disease sub-committee of the (HHS) Secretary’s Advisory Committee on Genetic Testing. Nucleic acid patents were (and still are) under attack from the likes of Mildred Cho, Deborah Leonard and John Merz who were making the case that there was no inventive step in developing a diagnostic test based on alterations of a gene. (Wanna know the truth? 1. It’s about the money. Academicians who had a side business of testing patient samples were mad that a commercial organization could block them from performing the test in their lab, despite the fact that the commercial organization had paid to license the rights to the patents from an academic center and was incurring the cost of developing, marketing and distributing the test, not to mention those of prosecuting the patents. 2. Their stated goal was to increase “access,” but that is precisely what will not happen. Patients and physicians would somehow just know that a particular test was available in someone’s lab? Quality Control and Quality Assurance is enhanced by having numerous academic labs across the country performing the assay using different standards? 3. They went after diagnostics first because the argument is reduced to triviality if you apply the same logic to therapeutics, but I’m sure it won’t be long before they start down that path. But I digress.) Now, the successor to the SACGT, the SAC on Genomics Health and Society, is arguing for exemption from infringement for certain categories of people and is taking on genomic data sharing. Heaven help us.

The Myriad case will be overturned on appeal, but it’s a shot across the bow. The nucleic acid patent hand-wringers have an accidental ally in Gen-Oers. We will continue to see attacks on nucleic acid patents, and concurrently, will see approaches similar to that taken by Radiohead in new settings, but most commonly in industries where intellectual property rights are important to de-risk investment and to foster innovation. Do I believe we will move to abolish patents or move to a system like India or China where there is a patent system but effectively no enforcement? Clearly not. The early results from Radiohead and other similar experiments (like video games offered on a pay-what-you-want basis) were not great. Most people paid something, but it was far less on average than it would have been had they sold through traditional channels. (The analyses I’ve seen don’t account for the reduced production cost when offering the product as a download, so the net to the artists may actually be better.) However, a generation of people who grew up with an open source mindset will certainly continue to challenge the existing model, and technology industries will feel the pressure the most.

Is this a bad or a good thing? It’s a little of both. In fairness, I fully agree that there are quite a number of nucleic acid patents that have no business being around. Remember all those EST patents in the late 90s? When a point mutation in a gene is found to cause a disease, it seems to me it’s a novel and perfectly patentable discovery. After the fifth or seventh or tenth point mutation in the gene is found to cause the same disease, is it truly novel and patentable? I’d argue no. However, invalidating patents based on completely novel disease gene discoveries will result in less, not more, access to commercial products, including, and very importantly, diagnostic testing.

Oh, and one last thing. Did you know that Francis Collins, who has been behind this jihad against nucleic acid patents from the beginning, is an inventor on the original patent protecting the discovery of the gene for cystic fibrosis and about 20 other patents?

I'm just sayin'

No comments: