19:00 15 May 02
Rachel Nowak, Melbourne, and David Concar
The medical revolution that will allow treatment to be tailored to our individual genetic make-up could cost even more than anyone thought. A small Australian biotech company has patents that it claims cover key methods of diagnosing how susceptible an individual is to particular diseases and tailoring drugs to their needs. And it is intent on cashing in on these patents.
Even before researchers had sequenced the human genome, the race had begun to identify the genetic variations that doctors could use to determine whether a particular patient is susceptible to heart disease, say, or whether a particular drug will work for them.
As companies began to apply for patents on great swathes of genetic markers for these traits, especially the tiny variations called SNPs, top institutions and pharmaceuticals companies became so concerned that they set up the SNP Consortium. Its purpose is to discover SNPs and release the data freely to keep costs low for companies, researchers and, ultimately, consumers.
But now it turns out that Genetic Technologies of Melbourne owns a slew of patents, registered in the name of GeneType of Switzerland, covering the very concept of much SNP analysis. "All [the companies] that are using non-coding SNPs are infringing our patents, knowingly or unknowingly," says the chairman of Genetic Technologies, Mervyn Jacobson.
"Voices in the wilderness"
The patents were granted in the 1990s and date back to work in the late 1980s. At that time, the human genome seemed so overwhelming that most geneticists were happy to dismiss the 97 per cent that doesn't code for genes as "junk".
But a researcher called Malcolm Simons working for GeneType showed that if you are trying to discover which gene variant or combination of genes a person, animal or plant has, the non-coding sequences close to these genes are just as useful as the coding regions themselves. "We were voices in the wilderness," says Jacobson. "Conventional wisdom was that we were wasting time and money."
The vast majority of SNPs lie in the non-coding regions of the genome, so using them to make inferences about genes will in most cases infringe the patents, Jacobson claims.
Genetic Technologies is now demanding licensing fees from any companies producing products based on this concept. Three companies have already paid up, and Genetic Technologies is currently negotiating with at least 20 more, says its lawyer, Jennifer McCallum of law firm Blakely, Sokoloff, Taylor, and Zafman in Colorado.
"We have a large list of companies, which would benefit from taking out a licence," says Jacobson. Sequenom of San Diego, for instance, which sells high-throughput SNP analysis equipment, paid $500,000 for a non-exclusive licence. And the deals are unlikely to get any cheaper. As part of the agreement with Sequenom, Genetic Technologies guaranteed that licences issued to other companies would cost more.
"Wholly destructive trend"
Some in the biotech industry think the company deserves these fees for its insight. "It's a solid invention," says Jay Lichter, a vice-president of Sequenom. "They were on top of this before anyone else had even thought of it."
But Martin Bobrow of Cambridge University, one of Britain's leading experts on medical genetics, sees it as yet another sign that biotech patents are too easy to obtain and that the rules governing what you can and can't patent urgently need tightening.
"Broad patents that lead to extraordinarily large rewards for extraordinarily little inventive input are a wholly destructive trend," says Bobrow. "This sort of patent serves to obstruct and confuse rather than to advance science and medicine." They not only make research more expensive but also generate lots of red tape, he says.
The patents on non-coding sequences are so broad they are almost certain to be challenged in the courts. So will they stand up? Some think the fact that a few companies have already entered into agreements with Genetic Technologies suggests the patents are valid. "They are smart companies. They must believe in the validity of the patent," says Joseph Dougherty, an analyst with Lehman Brothers in New York.
But Bobrow says this is not necessarily the case. Companies may prefer
to pay up rather than risk potentially huge legal fees if they do not.
And there's no doubt Genetic Technologies is prepared to go all the way.
The company has secured insurance that covers the costs of protecting its
patent if it has to go to court. Win or lose, its patents ensure the genetic
revolution will cost that little bit extra.
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