American Journal of Law & Medicine

Semiconductor Chips, Genes, and Stem Cells: New Wine for New Bottles?

CONTENTS   I. INTRODUCTION  II. LIKE EARLY SEMICONDUCTORS, ISOLATED GENES, STEM CELLS,      AND RELATED BIOPRODUCTS NEED SUI GENERIS INTELLECTUAL      PROPERTY PROTECTION TO ENSURE CONTINUED INNOVATION      AND PROMOTE PROGRESS      A. Background      B. The Thompson Claim Invalidations and BRCA Challenges         Signal that Isolated Bioproducts Are One Step Away from         Falling into a "Progress Gap"         1. The Thompson Reexaminations         2. The Myriad Case III. SEMICONDUCTOR CHIP TECHNOLOGY: THE DEBATE AND      TRANSITION TO A HYBRID SUI GENERIS INTELLECTUAL      PROPERTY STATUTE      A. Background      B. The SCPA was Necessary to Bridge the "Progress Gap"         Created by Rampant Chip Piracy and the Poor Fit of         Semiconductors Within Existing Statutory Framework         1. The SCPA Fit Within the Existing Intellectual Property            Framework and Did Not Degrade Patent            or Copyright Law         2. The SCPA Contained Reasonably Clear and Satisfactory            Definitions Regarding Subject Matter and Scope            of Protection         3. The SCPA's Benefits Outweighed Its Overall Costs         4. The SCPA Ultimately Enriched the Aggregate            Public Domain            a. Evaluation of the SCPA During the               Legislative Process            b. Post-Legislative Evaluation of the Effectiveness               of the SCPA  IV. IT IS BOTH TIMELY AND NECESSARY TO EXPLORE SUI GENERIS      INTELLECTUAL PROPERTY PROTECTION FOR BASIC ISOLATED      BIOPRODUCTS      A. Background      B. A Sui Generis "Parapatent" Right for Isolated Bioproducts         Meets the First Prong of the K-R Test Because It Fits         Within the Existing Intellectual Property Framework and         Would Not Degrade Existing Patent Law      C. To Meet the Second Prong of the K-R Test, the Isolated         Bioproducts Parapatent Statute Must Include Reasonably         Clear and Satisfactory Definitions of the Scope of         Protection for All Stakeholders      D. The Third Prong of the K-R Test is Met Because a         Preliminary Cost-Benefit Analysis Indicates that the Benefits         of Parapatent Protection for Isolated Bioproducts Outweigh         the Costs      E. A Sui Generis Parapatent for Isolated Bioproducts Meets the         Fourth Prong of the K-R Test Because It Will Enrich the Public         Domain and Stimulate an International Dialogue on Alternative         Propertization Schemes for Isolated Bioproducts  V. CONCLUSION 

This Article analogizes early semiconductor technology and its surrounding economics with isolated genes, stem cells, and related bioproducts, and their surrounding economics, to make the case for sui generis (of its own class) intellectual property protection for isolated bioproducts. Just as early semiconductors failed to meet the patent social bargain requiring novelty and non-obviousness in the 1980s, isolated genes and stem cells currently fail to meet the patent bargain requirements of non-obviousness and eligible subject matter that entitle them to traditional intellectual property protection. Like early semiconductor chip designs, nevertheless, the high cost of upstream bioproduct research and development, coupled with the need to sustain continued economic growth of the biotechnology industry, mandates that Congress provide some level of exclusive rights to ensure continued funding for this research. Sui generis intellectual property protection for isolated bioproducts would preserve the incentive to continue innovation in the field. As illustrated by the semiconductor industry, however, such sui generis protection for this technology must include limitations that address the need to provide an appropriate level of public access to facilitate downstream product development and enrich the public domain.

I. INTRODUCTION

   [I]nventions in most, if not all, instances rely upon "building    blocks" long since uncovered.... (1)     Congress can be trusted to consider issues arising from    technological development and to craft appropriate solutions    conferring statutory protection on the creative product of new    technologies. (2) 

The Intellectual Property Clause of the U.S. Constitution ("IP Clause") empowers Congress to provide exclusive rights for a limited time to authors and inventors to promote the Progress of Science (i.e., creative expression) and the useful Arts (i.e., inventions). (3) The Supreme Court has interpreted "progress" to include promoting the economy as well as enhancing the overall knowledge base for the benefit of society as a whole. (4) Thus, any type of federal intellectual property protection must balance the competing interests of promoting innovation against public access and enriching the public domain. (5)

The Federal Copyright Act carries out this charge by protecting original expressions fixed in a tangible medium for the "limited" term of life of the author plus seventy years. (6) The exclusive rights granted include the right to reproduce, distribute, create derivative works, and, where applicable, publicly perform and display the protected work. (7) The originality and fixation requirements of the Copyright Act create a social bargain providing a relatively long term of exclusive rights, which is offset by a host of limitations. (8) Limitations such as fair use ensure some degree of public access during this exceptionally long term of protection. (9)

Unlike the Copyright Act, the Federal Patent Act has virtually no limitations and provides the more comprehensive right to exclude others from making, using, and selling the claimed invention. (10) The patent's much shorter term of twenty years from the filing date of the invention, however, offsets this broader range of rights. (11)

Section 101 of the Patent Act provides that "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." (12) Because society must retain access to certain "basic knowledge," section 101 excludes products and laws of nature, physical phenomena, and abstract ideas from qualifying as patentable subject matter. (13)

To earn a patent, an inventor must establish that her invention is useful, novel, and non-obvious to one of ordinary skill in the particular area of technology. In addition, the patent specification and claims must be written in a way to enable one of ordinary skill in the art to duplicate the invention upon the expiration of the patent term. (14) The threshold requirements of patent law create a social bargain that ensures that at the end of the patent term, the public will gain an invention that enriches and adds something new to the public domain. (15) The question then becomes: how do we handle inventions that do not quite meet the threshold for patentability, but nonetheless are products of significant research and development capital? Included in this category are "building block" biological materials, such as isolated human genes and stem cells.

These "upstream," or early research, materials are the building blocks for developing a host of "downstream" marketable products with specific utility. Upstream research products are viewed as "inchoate technology" because their downstream uses remain undeveloped without additional research by a broad range of scientists. (16) As upstream technology, isolated bioproducts fall into the unique position of requiring a property scheme that incentivizes innovation while simultaneously providing immediate access to this material for continued research and downstream product development. (17)

The BRCA1 and BRCA2 (18) genes currently occupy center stage in a battle to gain public access to patented isolated genes and genetic sequence data. Scientists at the University of Utah first cloned these genes after it was discovered that mutations found on the BRCA1 or BRCA2 genes were linked to various types of breast and ovarian cancer. Since breast cancer is the second leading cause of death among women in the United States, accessing the BRCA diagnostic tests is crucial for women with strong family histories of breast cancer. (19) Unfortunately, Myriad Genetics ("Myriad"), the exclusive licensee of the BRCA family of patents, charges as much as $4000 for the basic BRCA diagnostic test (20) and refuses to grant any licenses for second-opinion testing. (21) Also, Myriad's research licenses typically prevent research scientists from disclosing BRCA mutation test results to their test subjects. Myriad's monopolistic pricing and exclusionary licensing practices raise serious social and political concerns. (22)

As a result of restrictive licensing and the high cost of Myriad's BRCA diagnostic tests, (23) several scientific societies, non-profit women's organizations, research scientists, and individuals challenged the validity of the BRCA1/2 isolated gene patents in federal court. In Association for Molecular Pathology v. U.S. Patent and Trademark Office, (24) (commonly referred to as the "Myriad Case"), (25) the United States District Court for the Southern District of New York evaluated the patentability of the BRCA1/2 isolated genes and sequences. The court held that patents for the isolated DNA containing the gene sequences BRCA1/2 for detecting breast and ovarian cancer susceptibility were biologically the same as the naturally occurring DNA and thus constituted patent-ineligible "products of nature" under section 101 of the Patent Act and the Supreme Court case, Diamond v. Chakrabarty. (26) Although the United States Court of Appeals for the Federal Circuit recently reversed the district court's findings regarding most of these claims, the original plaintiffs have appealed to the Supreme Court. (27) Both parties initially requested a rehearing by the original three-judge panel but were subsequently denied. (28)

Meanwhile, human genes are not the only isolated bioproducts for which the need for greater access has driven the public to challenge the validity of issued patents. Consumer groups seeking greater public access to embryonic stem cell lines recently persuaded the U.S. Patent and Trademark Office (PTO) to reexamine and invalidate a series of claims relating to isolated embryonic stem cells and the methods for isolating these cells as obvious in light of the prior art. (29) The Wisconsin Alumni Research Foundation (WARF), assignee of this family of patents, responded by filing a request for a new prosecution (i.e., evaluation by the PTO) of the set of claims it amended during the reexamination process.

As upstream research products, stem cells are valuable due to their capability for self-renewal and differentiation into a variety of cell types. This regenerative capability of stem cells is also useful for downstream development concerning how to repair and/or replace defective tissue and organs associated with a host of diseases. (30)

No one can predict the outcome of the appeal of the Association for Molecular Pathology case or the new embryonic stem cell prosecution before the PTO. Nevertheless, the disputes over isolated gene patentability and invalidation of the WARF embryonic stem cell patents provide motivation to evaluate whether isolated bioproducts are properly placed within the patent intellectual property regime. In addition to current subject matter and non-obviousness problems, scholars have raised antitrust, utility, morality, (31) and the need for greater access as grounds for excluding isolated bioproducts and other upstream bioproducts from the Patent Act. (32)

Removing these products from the patent regime, however, may prove disastrous to society. The biotechnology (33) industry relies on bioresearch patent portfolios to attract venture capital, generate licensing revenue, and cover the cost of continued isolated bioproduct research and development. (34) Arguably, a lack of corporate funding will stall this research because federal funding is insufficient to bridge any resulting gap. (35) This, in turn, will stall economic growth and future development of much needed downstream bioproducts with specific utility. (36)

So, if isolated bioproducts are not patentable, is this one of the rare occasions for Congress to step in and offer some type of sui generis intellectual property protection for isolated genes, stem cells, and related bioproducts? Is it time for legislation that would strike the appropriate balance between innovation and access, despite isolated bioproducts' failure to meet the patent social bargain that requires novelty, utility, and non-obviousness? (37) Are we no longer one-size-fits-all and in need of another paradigm to meet the constitutional mandate to promote the "Progress of Science and the useful Arts?" (38) In other words, are isolated genes and stem cells a new and valuable type of intellectual property "wine" that needs a new and different type of intellectual property "bottle" for adequate protection? (39)

If so, what factors should Congress consider when evaluating whether to go beyond the patent social bargain and add an additional set of exclusive rights to promote the progress of the "useful Arts?" In the past, Congress has taken a dim view of any type of sui generis, or stand-alone, intellectual property protection beyond patent and copyright and refused to create sui generis statutes for computer programs and databases. (40) Indeed, there are only two instances of Congress providing sui generis intellectual property protection in the past 100 years. (41)

This Article makes a case for sui generis intellectual property protection for isolated genes, stem cells, and related bioproducts by analogizing how early semiconductor technology similarly warranted sui generis protection to appropriately balance access and innovation. (42) I use the term "isolated bioproducts" to describe bioproducts that have been isolated from the human body without any additional biological manipulation. Thus, isolated bioproducts that have undergone sufficient human engineering to be clearly distinguishable from their in vivo counterparts, such as complementary DNA (cDNA), are excluded from the scope of this Article. (43)

In Part II, I establish that because isolated bioproducts, such as genes or embryonic stem cells, are one step away from falling outside the scope of patent protection as either obvious in light of prior art or patent-ineligible products of nature, we must look to alternative intellectual property legislation to preserve the incentive to innovate and increase our knowledge base. As part of this discussion, I criticize the Federal Circuit's recent decision in the Myriad case. I argue that in finding isolated genes patentable subject matter under section 101, the court focused too heavily on promoting innovation and the twenty-year industry reliance on the PTO guidelines rather than on the constitutionally mandated balancing of access and innovation to promote "Progress." I conclude Part II by noting that the questionable patentability of isolated genes and stem cells provides the motivation to explore how a sui generis intellectual property statute for basic isolated bioproducts could serve as an alternate property paradigm to fill any potential "progress gap."

To provide a working analogy, Part III steps back to the 1980s and reviews how the semiconductor industry was able to persuade Congress to create sui generis intellectual property protection for semiconductor chips. The Semiconductor Chip Protection Act of 1984 (SCPA) contained a reasonable range of exclusive rights and a host of limitations which allowed greater access to semiconductors for research and development. In Part III, I outline how early semiconductor chips were a "misfit" for both the patent and copyright bargains, yet needed alternative intellectual property protection to fill the progress gap. (44)

Next, I analyze the test promulgated by Congressman Robert Kastenmeier and attorney Michael Remington ("K-R test") to substantiate why sui generis protection is the only viable mechanism to achieve the constitutional mandate of incentivizing innovation while promoting progress through increased access. (45) The four-part K-R test requires Congress to evaluate the following: (1) whether the change (new legislation) fits within the current intellectual property framework without violating existing principles or concepts; (2) whether the new interest clearly defines the scope of property rights provided; (3) whether the benefits of propertization outweigh the costs; and (4) whether the new interest enriches the public domain. I conclude Part III by analyzing how successful the SCPA was in deterring piracy and contributing to the overall growth of the semiconductor industry.

After illustrating the positive impact that the SCPA has had on the semiconductor industry, Part IV applies the sui generis analysis to isolated bioproducts. I apply the four-part K-R test to substantiate that enacting sui generis legislation for isolated bioproducts meets the exceptional standards for Congress to deviate from patent law and provide sui generis protection for this upstream technology. In Part IV, I also detail the lessons learned from the SCPA. Applying these lessons, I then outline which exclusive rights and limitations a model isolated bioproduct statute should contain to provide the "wings," or stimulus effect, of enhancing research and downstream development while enriching the public domain.

Since patent protection is a prerequisite for venture capitalists seeking to invest in genomics and regenerative medicine, I advocate adopting isolated bioproduct legislation that is more patent-like in scope than the SCPA. Yet, like the SCPA, the proposed Parapatent Act would provide a more limited term of exclusive rights. The legislation would also mirror the SCPA and include some type of limitation, such as a well-defined experimental use and/or compulsory licensing provision, which facilitates access to this technology for parallel upstream research and downstream product development.

II. LIKE EARLY SEMICONDUCTORS, ISOLATED GENES, STEM CELLS, AND RELATED BIOPRODUCTS NEED SUI GENERIS INTELLECTUAL PROPERTY PROTECTION TO ENSURE CONTINUED INNOVATION AND PROMOTE PROGRESS

   The primary objective of the intellectual property laws is not to    reward the author or inventor, but rather to secure for the public    the benefits derived from the labors of authors and inventors. (46)     Congress stands ready to promote the progress of science and the    useful arts. The citizenry and consumers of this country will not    oppose new forms of proprietary protection if the public interest    is well served. (47) 

A. BACKGROUND

Genes, the basic functional units of heredity, are comprised of DNA (deoxyribonucleic acid) sequences, which in turn code for specific proteins. (48) These proteins carry out and control the body's cellular processes, or form various structural components. (49) Twenty percent of the estimated 25,000 genes contained in the human genome are currently protected by patents. (50) Genes are useful as upstream research tools for both diagnostic and therapeutic projects. (51)

Like genes, stem cells are the basic building blocks for cell differentiation and development throughout the body. Adult stem cells are multipotent and can differentiate into other cells within a specific cell type. (52) The more powerful embryonic stem cells are pluripotent and can differentiate into any cell type in the body, except sperm and egg cells. (53) The capability of stem cells to self-renew and differentiate makes them useful research tools to develop downstream products for both regenerative and genomic medicine. (54)

Genes and stem cells are not particularly useful for bioresearch in their natural state in the human body. To effectively utilize these upstream research tools, scientists must isolate these molecules from their naturally occurring environment. (55) The isolation process typically requires the breaking of chemical bonds or other steps that result in an end product that is the biological equivalent of the naturally occurring molecule, but with a different chemical structure. (56) Because the biological function of isolated genes and stem cells remains the same as their naturally occurring counterparts, isolated genes and stem cells arguably fall outside the scope of patent law as patent-ineligible products of nature under section 101 of the Patent Act. (57) Even if one agrees, however, with the Federal Circuit that a difference in chemical structure is enough to make isolated bioproducts "markedly different" from the naturally occurring product, (58) the issue remains that much of this subject matter is either obvious in light of the prior art or lacks specific utility and is therefore unpatentable. (59)

The question then becomes: should we explore alternative sui generis intellectual property protection for patent-ineligible isolated bioproducts, like stem cells, genes, and gene sequences, to close the potential "progress gap?" A "progress gap" will exist if isolated bioproducts are patent-ineligible, (60) but an alternative propertization scheme is necessary to continue innovation.

A prerequisite for sui generis intellectual property protection is that the "progress gap" technology is already innovative--the product of significant and continuing research and development. The technology must also be part of an industry with great potential to promote "progress" by stimulating both intellectual and economic growth. Semiconductor technology met these criteria in the mid-980s, (61) and isolated bioproduct technology currently fits the bill.

Isolated bioproducts are part of the rapidly growing global biotechnology industry. In the United States, the biotechnology market is highly innovative and has experienced growth rates averaging between eight and ten percent per year for the past five years. (62) From its inception, the biotechnology industry has continued to invest heavily in research and development, although analysts predict that the sluggish global economy will lead to a decline in innovation spending for 2011. (63)

Interestingly, the stem cell and genomics markets remain bright spots for continued innovation and economic growth. Venture capital investment in genomics startups has increased twenty-three percent since 2007, reaching $261 million despite overall decline in biotech investment. (64) Similarly, analysts are projecting that the U.S. stem cell market will experience a growth rate of forty-five percent between 2011 and 2013, and by 2015, the regenerative medicine market will reach $63.8 billion. (65) Because most isolated bioproducts fall within the stem cell, regenerative medicine, and/or genomics categories, (66) it is both timely and essential to address any potential "progress gaps" or lack of intellectual property protection that could deter innovation and access to knowledge in these high-growth areas.

B. THE THOMPSON CLAIM INVALIDATIONS AND BRCA CHALLENGES SIGNAL THAT ISOLATED BIOPRODUCTS ARE ONE STEP AWAY FROM FALLING INTO A "PROGRESS GAP"

Although more than twenty percent of identified genes are currently patented, and an ever increasing number of stem cell patents exist, (67) both isolated stem cells and genes are currently the focus of distinctly different patentability battles. The battle started in the PTO, with the reexamination of a family of embryonic stem cell patents (the "Thompson patents"), (68) and continues in federal court with the current battle over the patentability of the isolated BRCA1/2 genes and gene sequences (the "Myriad patents'). (69)

1. The Thompson Reexaminations

Embryonic stem cells generate from the inner cell mass of a blastocyst. (70) Unlike adult stem cells, (71) embryonic stem cells are naturally pluripotent and capable of developing into any organ or tissue type, except sperm and egg cells. (72) The pluripotent (73) nature of embryonic or induced pluripotent stem cells makes them a preferred upstream research tool because they enable scientists to explore treatment options for a wider range of human diseases and are not as limited in their regenerative capacity as adult stem cells. (74) Unfortunately, embryonic stem cells are currently caught in a web of moral and intellectual property conflict. (75) This Article focuses on the intellectual property side of the dispute and explores patentability issues.

Dr. Tony Atala's genomic research that produced a (human) bladder from regenerated adult stem cells was unquestionably patentable as a novel, useful, and non-obvious bioproduct. (76) It is also undisputed that it took significant human and monetary capital to develop the biochemical processes necessary to isolate human embryonic stem cells. (77) Whether we should patent the isolated stem cells themselves, however, remains at the center of a hotly contested debate.

The WARF is the assignee of the three Thompson stem cell patents, which together claim the exclusive rights to all isolated human embryonic stem cells and methods for creating these stem cell lines. (78) In 2007, the Foundation for Taxpayer and Consumer Rights (FTCR) and the Public Patent Foundation ("PUBPAT"), (79) two non-profit consumer groups, jointly filed petitions for reexamination of the three WARF human embryonic stem cell patents and argued that the embryonic stem cell lines belong in the public domain because they lack novelty and are obvious in light of existing prior art. (80) Both the FTCR and PUBPAT view the Thompson patents as "outrageous, overreaching," and an attempt to gain an unlawful monopoly on preexisting research that should remain in the public domain. (81)

On March 31, 2007, the PTO agreed with the consumer groups and rendered a preliminary finding that the embryonic stem cell lines and methods disclosed in the three Thompson patents were unpatentable as both obvious and lacking novelty. (82) In response, WARF narrowed its claims in response to the PTO findings, limiting its claims to "pre-implantation embryos." (83) The response to the PTO (84) also included arguments that the lines were indeed both non-obvious and novel. On June 29, 2007, PUBPAT filed comments to WARF's response. (85)

Both sides argued that the Supreme Court case evaluating section 103 obviousness, KSR v. Teleflex, (86) supported their position. (87) WARF argued that stem cell technology fell within the "unpredictable arts" distinguished by the Court to require something other than mere hindsight knowledge to establish obviousness. PUBPAT countered that stem cell technology falls squarely within the scope of KSR and allows for more than the "rigid" teaching-suggestion-motivation test to evaluate obviousness. The patent examiner agreed with WARF and affirmed the validity of the disputed patents as amended. On appeal, the Patent Board of Appeals and Interferences (88) sided with PUBPAT and reversed the earlier validity confirmation by the examiner. As of April 29, 2010, the disputed claims are invalid and cannot be enforced by WARF. (89)

As allowed under the Patent Reexamination Rules, WARF filed a timely request to reopen prosecution on the embryonic stem cell claims that were amended during the reexamination. (90) Prosecution will be a long and protracted process, unfortunately, as it takes between eighteen and thirty-six months to prosecute patent claims before the PTO. Once the PTO makes its final decision on the patentability of the amended stem cell claims, the losing side also may appeal to the Patent Board of Appeals and Interferences and then to the Federal Circuit. (91)

The Thompson embryonic stem cell patents are not the only stem cell patents whose validity has been challenged. On February 7, 2007, as part of a patent infringement appeal, the Federal Circuit invalidated two patents relating to the processing and storing of stem cells from umbilical cord blood as obvious under section 103 of the Patent Act. (92) I posit that, as demonstrated with early semiconductor designs, the pattern of obviousness rejections and patent invalidations for isolated and other basic stem cell patents signals that sui generis legislation is necessary to bridge potential gaps in intellectual property protection for these essential research and therapeutic tools. …

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