Intellectual Property Policy

A Study of Issues Relating to the Patentability of Biotechnological Subject Matter: Introduction and Overview

Chapter 1 - Introduction and Overview

As the beginning of the next millennium approaches, Canada is uniquely positioned in the world to participate in the biotechnological revolution which has taken place over the last thirty years. Developments in biotechnology have effectively stolen the spotlight of technological advance from the industrial revolution which began this century. Although the proposal for DNA structure by Watson and Crick took place in the 1950's, modern day biotechnology really began in the early 1970's when techniques for transformation of Escherichia coli; cutting and joining DNA molecules; and monitoring the cutting and joining reactions became possible. From this time forward it became possible to create recombinant DNA. With these techniques it became possible to cut a gene from the DNA of one organism, to recombine it in a test-tube with the DNA of a host organism, and to reintroduce it into a host.^{Footnote (1)}

Canada is uniquely positioned to participate in the biotechnological revolution because its industries, particularly its resource industries such as agriculture, fisheries and pulp and paper, offer enormous challenges and opportunities in connection with biotechnology.^{Footnote (2)} The potential for economic growth and development in industries with applications in biotechnology, such as in the agricultural sector, is considerable:

"It has been estimated that with hardier wheat varieties [grown in the Prairie provinces], there could be up to an eight-fold increase in the acreage of winter wheat planted. Winter wheat offers a number of advantages, related to soil conservation, as well as drought and salination problems, over spring wheat, which it would replace. The net incremental value to farmers of these advantages [brought about through genetic engineering of wheat for a hardier variety], assuming only a four-fold increase in the acreage of winter wheat, could be up to $50 million annually. The seed industry would also benefit by increased revenues of $1.5 to $2 million annually. Another example is canola, a high-value ($1.5 billion) high-quality oilseed crop where a large research effort is underway."^{Footnote (3)}

"Biotechnology" encompasses many disciplines and broadly speaking may be defined as the synergistic union of the biological life sciences and the technologically based industrial arts:

"Biotechnology is a blend of two basic concepts. The first is Biology, a very expansive field of study which encompasses all plants, animals, reptiles, amphibians (i.e., all complex, multi-organ, multi-cellular life-forms) as well as all organisms, microorganisms and unicellular entities, in other words, it is the science of life. The second is Technology and it can be defined as: "a practical or industrial art ... application of science"."^{Footnote (4)}

The products of biotechnology include such things as living micro-organisms, cell cultures, and proteins such as t-PA or insulin, and as such, "...it has been with us since the first nameless biotechnologist discovered that fermentation did interesting things to grape juice."^{Footnote (5)}

Investment in the promised "fruits" of biotechnology has been considerable. The kind of investment which has taken place in biotechnology has been, in fact, unprecedented, and arguably, so too has the rate of innovation.^{Footnote (6)} There is little disagreement among experts and observers of the biotechnology industry that strong intellectual property rights in biotechnology are of critical importance to the continued growth of the industry. Arguably, significant investment to date in biotechnology has been attributable in large part to the patent system which first officially started to allow patents for living matter such as microorganisms in 1980, but for non-viable products, since the beginning of the modern biotechnology era (circa 1972):

"Biotechnology is an evolving industry, particularly dependant on patent protection. Recent advances in the field have lead to breakthrough technology (such as gene therapy) and raised expectations. Expectations fuel investment and increased innovation; precisely what the patent system is designed to encourage."^{Footnote (7)}

However, the investment-return cycle of economy in biotechnology has been unprecedented, and, may ultimately be unsupportable: Indeed, in recent years there has been considerable reorganization within the industry as the smaller players drop out or me rge with larger biotech firms who themselves are forming alliances with pharmaceutical firms.^{Footnote (8)} Furthermore, it is not clear that patent rights will be adequate to maintain and foster continued growth in biotechnology. The production of many of the products of biotechnology rely, for the most part, on the use of what is now standard methodology. For example, it is a standard technique to splice the gene coding for a protein of interest into bacterial plasmid vectors for production of a recombinant protein.^{Footnote (9)} Such standard methodology, which was new, unobvious and patentable twenty years ago, is no longer patentable today.^{Footnote (10)} Notwithstanding the fact that jurisdictions such as the United States, Europe and Japan now allow patents to issue for almost any living entity, the rapid pace of development taking place in biotechnology appears to have created a perception that in Canada and the United States, the fast pace is exceeding the ability of the patent system to provide sufficient intellectual property rights.^{Footnote (11)} The public perception in Canada is well illustrated by the comments of the Honourable Willard Estey who had the following to say as part of his "Opening Remarks" at Wilfred Laurier's Chancellor's Symposium on International Trade:

"Canada won't allow us to patent that mouse...we need to bring our laws up to date to deal with the revolution in genetic engineering."^{Footnote (12)}

Indeed, it is appropriate to raise the question of whether the patent system is the correct vehicle with which to confer intellectual property rights.

Some very basic characteristics of the subject matter of biotechnology set biotechnology apart from all other technology and thereby highlight this issue. The first is that unlike anything else, some of the subject matter is living. This issue has been acknowledged and considered in the Canadian Patent Office ("CIPO") and as a result patents are available in Canada for unicellular organisms. However, patents are not available for higher life forms. Higher life forms are those life forms which are multicellular complex entities whose identity is characterized and identified on the basis of the multicellular composite which makes up the organism. Are higher life forms not patentable because they can't be the subject of inventions? Or is it a moral/ethical issue?

A further feature of invention in biotechnology which distinguishes it from other fields of technology, and which flows from the fact that some of the subject matter is alive is the fact that living organisms are self-replicating.^{Footnote (13)} This means that once biomatter is patented and one acquires certain types of this patented bio subject matter, mere ownership may result in the "reproduction" of the patented matter. Does this constitute an infringement under the current regime of the traditional making, selling, manufacturing of the invention, which are the sole rights of the inventor? The patent system, arguably isn't presently able to deal with this situation. How does one deal with a patented living organism which is bred by the purchaser? Can the purchaser breed the invention without infringing a patentee's rights?

A further difference arises from the fact that the subject matter of many products of biotechnology is incredibly complex, particularly where the subject-matter is a living organism. Indeed, because they have not been constructed by man, such subject matter truly is a "black box" and therefore virtually impossible to describe. Complete disclosure of an invention is a fundamental requirement in order to obtain patent protection. In all other technologies, every aspect of the elements of invention are known.^{Footnote (14)} In jurisdictions which allow for the patenting of biotechnology a concession to this fundamental requirement is made, namely, allowing for the deposit of samples of the patented subject matter. Such deposits are part of the "complete description" of the invention and the deposit is said to "supplement" the complete description.^{Footnote (15)}

A further feature of invention in biotechnology which distinguishes it from other fields of technology, and which flows from the fact that the subject matter is so complex, relates to the fundamental requirement that all patentable invention must be non-obvious. This assessment is made by a mythical "technician skilled in the art." Invention in biotechnology typically draws on a number of discrete fields of technology. This makes identification of the "skilled technician" challenging and leads to the concern that the "technician" may not be properly identified.

A further complicating factor peculiar to biotechnology, arises in respect of the fundamental requirement that all patentable invention must be new. This is a problem in biotechnology because the object of much effort in biotechnology industries is to produce synthetic versions of substances which exist in nature. If the substance exists in nature, arguably a synthetic version is not "new."

Such fundamental issues raise the following question:

If biotechnology industries are to continue to grow, do the means for acquisition, and the very nature of a bundle of patent rights for advances in the biotechnology field need to be redefined?

In providing an answer to this question it must be decided whether the patent system is the appropriate vehicle to provide rights to innovators in biotechnology. If the patent system is the correct vehicle, then it must be decided whether, and if so how much the present system needs to be adjusted to "fit" biotechnology. As already alluded to supra, it is clear that in view of the complexity of the subject matter of biotechnology, some modification of the patent system has already occurred in order to provide a "fit." If the patent system turns out to not be the right system, then what are the alternatives? It is these issues which provided the impetus for the present report.

This Report works from the premise that biotechnology and the industries it has spawned are important to Canada. Further, in order for growth and prosperity to continue in biotechnology certain rights should be provided, and these are arguably best provided by the Federal Government. From this premise this Report considers key issues concerning the patentability of biotechnological invention and makes certain recommendations based on those considerations.

In particular, the present Report provides consideration, discussion and recommendations about whether the subject matter of biotechnology can be an invention for the purposes of granting a patent. In order to provide the reader with some perspective and understanding in order to appreciate the issues involved in this analysis the Report begins by providing a background, or primer on the subject matter of biotechnology. For those who are acquainted with the basics of the technology this primer can be by-passed.

The report then examines the very essence of the concept of invention. This is a fundamental, conceptual, somewhat philosophical analysis which is provided in order to assist in appreciating the elements of invention.

With a conceptual framework in mind, the Report examines the statutory requirements for invention as found in the Patent Act of Canada. Issues challenging the analysis of, and, intimately intertwined with, the definition of invention, namely non-obviousness, novelty and utility, as they relate to biotechnology are discussed. Arising from this discussion the Report provides conclusions, and directions that should be taken by Industry Canada with respect to the definition of "invention" in the Patent Act and the standards of non-obviousness and novelty as they relate to biotechnology.

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