The EU Commission has published its long awaited 2nd report on the EU Biotechnology Patents Directive (Directive 98/44/EC) (1). The report deals with “Developments and implications of patent law in the field of biotechnology and genetic engineering”, and specifically investigates the issues of (i) patenting of human DNA, and (ii) patenting of human stem cells. These issues have for a long time been at the centre of a debate as to whether inventions comprising human gene sequences or human stem cells can be patented.  On both issues the Commission recommends to continue monitoring the developments, and has refrained from taking a position, judging it premature to do so at this stage. 

Implementation of Directive 98/44

The Directive entered into force in July 2000, and 21 Member States of the EU have now implemented the Directive with Italy, Luxembourg, Lithuania and Latvia still remaining. Furthermore the EEA states Norway and Iceland have implemented the Directive, and the Candidate State of Croatia. It seems that the Commission is unaware that the Candidate States of Bulgaria, Romania and Turkey have all actually implemented the Directive. Finally, the Commission does not mention that the European Patent Organisation, including France and Germany implemented the Directive as early as 1999. Thus a total of 27 States and one international patent organisation have implemented the Directive, while four EU Member States and Switzerland/Liechtenstein still are in the process.

On gene sequences

Two EU Member States, France and Germany, have in different ways limited the scope of patent protection for human gene sequences to the specific use disclosed in the patent application – generally known as “purpose bound protection”. France has outrightly banned the patenting of human gene sequences.

The remaining countries provide absolute product protection for human gene sequences that gives a scope covering possible future uses of that sequence. 

While the Commission considers that there are no objective grounds for limiting the protection relating to sequences or partial sequences of human genes, it has decided to withhold judgement on whether these Member States have correctly or incorrectly implemented the Directive and instead monitor whether there are any economic consequences arising from such divergences.

EuropaBio, the European association for bioindustries, is disappointed that the Commission has not taken a firmer stand on the deviating implementation of the Directive in respect of the patenting of human gene sequences.

“The main objective for introducing the Directive in 1988 and in 1995 was to harmonise the patent laws of the EU Member States in respect of biotechnological inventions and clarify certain aspects in this respect in order to support the internal market,” says Bo Hammer Jensen, Chair of EuropaBio’s Intellectual Property Working Group. “We have to conclude that the actual result is a situation with more disharmony than ever, and with the possibility that the four remaining states may implement the Directive in yet unknown ways.”

“Patent rights are of extreme importance in the biotech industry, especially for SMEs that often only have these rights as their most important assets.  The divergences in how certain Member States have implemented the Directive and the uncertainties about how national courts in these Member States will interpret a company’s patent may discourage investment in developing promising research into commercial products,” adds Bo Hammer Jensen. “Industry requires predictable rules across all Member States in order to attract the large R & D investments to meet societal needs.”

On embryonic stem cells

A distinction is drawn between totipotent stem cells which are capable of developing into a human being and pluripotent stem cells which are not so capable.  The Commission confirms that the Biotech Patents Directive is clear regarding totipotent cells arguing that such cells cannot be patented as each cell could develop into a human being. 

However with regard to pluripotent stem cells where cells may one day be used to treat a patient for example suffering from Alzheimer’s disease, the Directive is less certain.  The Directive allows Member States to refuse patents on ethical grounds.  Given that there are differences between Member States on the issue of embryonic stem cells, the Commission has decided not to take a position on harmonising rules on the use of pluripotent stem cells.

In the EuropaBio position on human stem cell research (3) the biotech industry considers that embryonic stem cell research must be allowed in order to advance knowledge in biomedicine and its applications in healthcare.  The industry considers that Member States and their constituencies should remain free to decide about the acceptance and applicability of embryonic stem cell research and to adopt appropriate rules.

Patents crucial to R & D investment

Patents are an essential element in an investor’s decision to back a biotech company.  “In the knowledge based economy, intellectual property is the only real form of protection to inventors and investors who invest in R & D to meet society’s needs.  It is important for Member States to provide security to those that are willing to take the investment risks to address the 10 000 plus diseases that still have no solution today,” says Johan Vanhemelrijck, EuropaBio Secretary General. “The importance of patents to develop treatments has also been recognised and understood by some patient groups who are themselves using patents to develop new treatments.”

According to Alastair Kent, Director of the Genetic Interest Group (4), a national alliance of patient organizations: “It is important that there is parity of incentives on both sides of the Atlantic, otherwise investors will place their money where there is the best protection and the most likelihood of securing a return on their investment.”

In a separate development, an EU Commission report published today reveals that the growth rate of R & D intensity (R&D expenditure as a % of GDP) has been declining in Europe since 2000 and is now close to zero.  The Commission is especially concerned about slow down in business funding of R & D. As one of Europe’s most research intensive industries, Biotechnology needs predictable patent rules to secure some of those increased investments. (5)

EuropaBio, the European Association for Bioindustries, represents almost 50 member companies operating worldwide, 8 associate organisations, 2 regions and 25 national biotechnology associations. Through our associations EuropaBio is also the voice of 1500 small and medium-sized enterprises involved in research, development, testing, manufacturing and commercialisation of biotechnology applications.

BACKGROUND

(1)  Link to EU Commission report on Directive 98/44/EC http://www.europa.eu.int/comm/internal_market/fr/indprop/invent/index.htm

(3) EuropaBio position paper on human stem cell research (October 2003)http://www.europabio.org/articles/article_254_EN.doc

(4) About the GIG
The Genetic Interest Group (GIG) is a national alliance of patient organisations with a membership of over 130 charities which support children, families and individuals affected by genetic disorders.

(5) Stagnation of R&D - Commission press release

Background

Directive 98/44/EC (The Biotechnology Patents Directive) was adopted after a long and constructive debate lasting about 10 years in both the European Council and the European Parliament.  It entered into force in 2000 but as of July 2005, four member states (Italy, Latvia, Luxembourg and Lithuania) have still to implement the Directive. 

It is important to note that only inventions which combine a natural element with a technical process, resulting in a useful application, can be patented.  A human gene sequence in itself or stem cells are not patentable inventions without the provision of a function or application that indicates the industrial applicability of the invention.

In 2002, the European Commission formed a group of experts to clarify two key topics in the Directive:

• the scope to be conferred to patents on sequences or partial sequences of genes isolated from the human body,

• and the patentability of human stem cells and of cell lines obtained from them. 

The discussions of the Expert Group were based on background papers produced by Dr. Sven Bostyn (DNA patenting) and Prof. Geertrui Van Overvalle (stem cell patenting). Dr. Bostyns paper is available at: http://www.europa.eu.int/comm/internal_market/en/indprop/invent/patentingdna.pdf

In Europe, patents are excluded if their publication or exploitation is in conflict with the ‘ordre public’ or morality.  The prohibition of making profits from the human body and its elements, as stated by Article 3 of the Charter of Fundamental Rights, is grounded on the principle of non commercialisation of the human body. It follows that under Directive 98/44/EC the human body and any stage of its development is not patentable.  This had led to concerns about whether stem cells are patentable. 

The EU Directive goes into detail to specify what is contrary to ‘ordre public’ and morality in the biotechnology sector, namely Article 6 states in particular that the following are considered to be not patentable for these reasons.

• processes for cloning human beings;

• process for modifying the germ line genetic identity of human beings;

• uses of human embryos for industrial or commercial purposes,

• processes for modifying the genetic identity of animals which are unlikely to cause them suffering without any substantial medical benefit to man or animal, and also animals resulting from such processes.

In the US, patents can be awarded on the discovery of a gene, gene sequence or partial sequence that is useful, if the use is specific, substantial and credible, whereas in Europe genes and sequences can only be patented if they are part of an invention that uses a technical process, and results in a specified useful application.