IP challenges for the personalised medicine industry – lowering the threat to IP by collaborative practices

Part 2 of a series of articles

Personalised medicine is vaunted as having the potential to revolutionise healthcare by providing the correct medicine to the correct patients at the correct time and dose. In reality it represents a re-examination and re-classification of almost every disease known, in order to stratify patients into groups depending upon the causes of their personal condition.

For such an initiative to be a true success story, and to take full advantage of the opportunities available, it will be necessary for a vast number of academics, hospital laboratories, research institutions and companies to undertake the necessary research and development. A major focus for much of that work will be in the diagnostics field in which new biomarkers for stratifying patients and their response to therapies will be critical. The growth in the diagnostics industry in recent years has been significant, and can only be expected to continue to rise. Commercial players include the large pharma companies who aim to provide theranostic products, large biotech companies and a very large number of small and medium diagnostics companies specialising in a disease area or platform technology.

Against this background, the diagnostic industry has come under attack in recent years for the patent rights it has secured, and the way in which those rights have been employed. In my first article in this series I discussed gene claims and some of the resultant difficulties associated with claiming nucleic acids in both the USA and Europe.

Since writing Part 1, the Supreme Court of the United States (SCOTUS) has passed its judgement in the Myriad Genetics[1] case, which has dealt a further blow to the industry. Although the arguments and issues in the case were complicated and multifaceted, the outcome is surprisingly simple to paraphrase. Essentially, genomic DNA has become un-patentable in the USA, even in an isolated state, since such isolated DNA is considered as nothing more than a product of nature. By contrast, a cDNA species that does not exist in nature is patent eligible.

The impact of the decision on the genomic diagnostics industry is hard to gauge. As is often the case with decisions of higher courts, all sides involved are exploiting the inherent ambiguities in the decision and the unpredictability of future activities, and have claimed a victory to some extent. Myriad argues that, overall, its position has not been too seriously harmed, and since the decision has proceeded to sue new entrants (Gene by Gene Ltd and Ambry Genetics) into the BRCA testing market for patent infringement. On the other side, the ACLU[2] claims a moral victory at the very least, for outlawing the appropriation of our genes in their natural form.

Who is right? Has either party really won a significant victory, and what is the state of IP protection for diagnostics inventions in the US, and more broadly around the world? It is probably too early to say what impact the Myriad case, in combination with the Prometheus[3] case (see Part 1 article), will have. Other than some brief speculative thoughts provided below, this article does not really seek to answer that question.

Whatever the situation we now find ourselves in, and on the assumption that the courts have not completely emasculated the diagnostics industry, the thesis of this article is that a serious threat to the industry remains. This threat emerges not from aspects of normal commercial competition, but from the deep seated objection in the public (often as constituted into vocal pressure groups) to the practices and ethos of the diagnostics companies. With an industry still capable of using IP to support such practices the public disquiet will not diminish, unless and until the industry changes the way it uses its IP rights. The judiciary and the legislature has demonstrated its willingness to listen to the public (as indeed it should) and it cannot be assumed that continued pressure will not result in further, even more, damaging restrictions in IP protection for diagnostic inventions.

In this article I shall explore the current state of affairs, indicate why I think the threat remains, and look at the development of business practices in personalised medicine which might serve to defuse the situation.

 Where are we now?

The disenfranchisement of genomic DNA claims in the USA clearly restricts the scope of patent coverage available, and potentially renders thousands of already granted patents invalid. However, what impact will that really have on the diagnostics industry? Several factors mitigate against the impact of the decision.

Myriad – the real battle ground (an example)

Myriad’s experience provides a salutary example for other diagnostics companies, since, despite being acknowledged as providing a quality service with good turnaround time, accuracy, customer service and even price, the company has become vilified by ethical (and moral) objectors.

Although providing a convenient battle ground, the attack on Myriad’s IP position was, many believe, fuelled more by the company’s policies than a real need to change IP law. Whilst the patent rights that Myriad obtained facilitated its policies, they did not mandate them. Rather, taking advantage of its position as sole provider, the company is perceived as deliberately restricting access to BRCA testing, second opinion testing, test improvements and developments and reduced cost testing for poorer customers. Additionally, the refusal to share the vast amount of data emerging from its test results (which would serve the public in improving the ability to diagnose breast cancer susceptibility) is seen as particularly unreasonable.

Myriad believes that its IP rights and strongly held position as sole provider have incentivised it to become a world class service provider, providing the money to develop the service into what it is today, and provide reasonably priced screening to everyone. But public opinion has not looked so kindly upon the company

Whether a strong IP position allowed Myriad to dominate the market in an unacceptable way, or enabled it to provide a world beating service (or both) is perhaps not the important issue. In reality, despite the positives, the negatives have grabbed media attention, fired up by a lethal cocktail of moral and ethical indignation. The media in turn has perhaps fanned the flames of the understandable natural concerns of a population who, in normal times wouldn’t think twice about the arcane subject of intellectual property protection.

Firstly, one might assume that, in line with patents across all arts, only a very small proportion of those thousands which may now be invalid are commercially relevant. By that I mean that in reality, very few of those patents cover a commercial activity or a viable,properly developed and authorised clinical diagnostic test. An even smaller percentage of those patents will have only genomic DNA claims that cover authorised tests, and an even smaller proportion will be the proprietor’s only patent protection for the authorised tests in question.

The ‘commercially relevant’ pool of patents is probably further limited, for the sake of this argument at least, to those in which the proprietor acts in a way that has a financial or ethical impact upon the provision of diagnostic testing to patients. Whilst purely moral objectors will presumably object to gene patents regardless of the actions of the proprietor, with the exception of a few noticeable showcase issues (such as the Harvard Oncomouse cases), legal disputes based purely on moral grounds are rare, and often driven by the desire for publicity.  The explosive combination of moral objections and ethical objections experienced by Myriad (see box) resulted from the combination of the IP rights obtained, and the ways in which the IP rights were used. Such a combination can unite powerful groups with the determination to see litigation through to the highest level.

This combination of circumstances which makes a gene patent ‘commercially relevant’ (at least as demonstrated by active litigation) has proven to be relatively rare in the past, and, I suspect, will prove rare amongst the patents whose validity is called into question by the Myriad decision. Although individual cases may be brought, I do not envisage that large numbers of gene patents will be subjected to invalidity suits.

The decision, of course, serves also to limit what patent claims might be granted from now on. However, as noted in the Part 1 article, the constraints of novelty and non-obviousness (or inventive step in Europe) play a much more significant role in preventing the patenting of ‘new’ genes, in view of the vast amount of public genomic data now available.

The inventors of new genomic diagnostics must now search for other ways of protecting their intellectual property in patents. Fortunately for the industry there are other options available. In Europe the situation is relatively straight forward. Simple patent claims directed to the use of gene X in the  in vitro diagnosis of condition Y (for example) may be drafted in a way which is valid and enforceable, and provide adequate protection in most instances. Additionally, most commercial diagnostics tests require a deal of development, which in many cases will provide opportunities to claim the more detailed methods and products for carrying out the tests. IP protection in Europe for diagnostic inventions is (for the time being) reasonably comfortable.

In the USA the situation is complicated by the Prometheus decision which justifies objections against this type of claim, since the relationship between a biomarker (of any sort, not just DNA) and a disease is considered a law of nature, and therefore patent ineligible. Indeed recently, the District Court for the Northern District of California decided that a claim for a method for detecting a paternally inherited nucleic acid of foetal origin performed on a maternal serum or plasma sample from a pregnant female was patent ineligible[4]. Yet the possibilities for circumventing the Prometheus restrictions (or more charitably, for defining patent eligible subject matter that the SCOTUS would approve of) are abundant, and in a way are the stock-in-trade of US patent attorneys in this field. Many articles have been written about the types of claims that remain allowable, or might work, and to detail the options (some of which show remarkable ingenuity on the parts of the authors) is beyond the scope of this piece.

In addition, notwithstanding the difficulties of novelty and non-obviousness noted above, an inventor finding a new and non-obvious gene can still protect cDNA. This may still be difficult to design around in a world where many detection methods, at least those that are likely to be employed on a commercial scale, do use cDNA.

In conclusion, a view could be taken that the diagnostics industry can weather the storms of the SCOTUS decisions well, and in Europe and the US it is in pretty good shape when it comes to protecting its IP by patents.

However, it is this ‘good shape’ that might turn out to cause the industry its next headache.

Back to business as usual?

So, has the IP threat gone away? Is the industry back to ‘business as usual’, subject to clever lawyers conceiving new claim language and claiming cDNA instead of genomic DNA? I don’t know the answer to that question yet – I think it’s too early to say. It might be the case that despite the efforts of the lawyers, adequate protection is no longer available, and it becomes a straightforward matter to design around patent claims for genomic and other diagnostic inventions. My suspicion, however, is that that is not the case, and if I’m wrong about that I believe that such a situation would represent an imbalance in the system that is too harmful to an important industry sector to survive for long.

Assuming valuable and commercially useful protection is still available then the possibility of engaging in the type of activities that anger the ethical objectors also remains. And if that possibility remains, there is clearly a risk that one or more diagnostic company will engage in one or more such activities in their business (quite legitimately from a legal standpoint). If that happens, ethical pressure groups may be caused to wonder what exactly has been achieved with Myriad (and may even regret getting into bed with the moral objectors, since to do so may have deflected attention away from their own agenda and contributed to this outcome).

The ethical objectors have demonstrated themselves to be competent, well funded and determined, as well as persistent. If the SCOTUS decision in Myriad does not succeed in putting a stop to the types of activities that are unacceptable to them I see little prospect of them giving up and going away. So perhaps the industry will be back to business as usual – assuming ‘usual’ means the ever present risk of an evolutionary arms race in which imaginative lawyers sidestep restrictive jurisprudence or legislation only to find the pressure groups fighting back, potentially achieving yet further restrictions, with repeated cycles ad nauseum.

Such expenditure of time and money, and the associated uncertainty and controversy, is unproductive, costly, distracting and potentially extremely harmful for an industry which (cynicism aside) is aimed at improving people’s lives by providing better healthcare (undeniably an aim of the diagnostics industry, even if another aim is to make a profit in the process). It also would not serve the interests of the pressure groups. Those whose ethical agenda drives one side of the arms race (perhaps unlike those with a purely moral agenda) presumably do not really want to strike a fatal blow to the other side, since to do so would harm their own purpose of trying to obtain enhanced provision of diagnostic tests to everyone.

Is there a way to break out of this destructive pattern? Although it might be possible for some of the bigger players in the industry to ‘tough it out’, rely on their legal rights and defend themselves to the hilt, and even to win, any such victory may be hollow and forever subject to uncertainty and threat. In an industry where a high proportion of players are small companies, or academic laboratories, and where it is important to have a very large number of active players (rather than just a handful of multinationals) able to take advantage of the huge scope of opportunities available, the ongoing threat is potentially disastrous. There is a risk that one or a few larger players with deeper pockets and a scant regard for the objections of the ethical lobby could queer the pitch for everyone else.

Alternative business practices

The practices that anger the ethical objectors by no means apply to all diagnostics companies. Many are happy to follow a more open approach to business. Yet the threat of unacceptable practices, which have been branded as unethical has prompted various governmental and quasi governmental organisations to step in to try and promote self regulation.

Recognising the responsibilities of its grant recipients under the Bayh-Dole Act, the NIH has published ‘Best Practices for the Licensing of Genomic Inventions: Final Notice’ [5] in which it sets out guidelines for licensing practices of Public Health Service funded genomic research. The best practices were determined with the help of a public consultation and aim at maximising public benefit from government funded projects. A particular focus was the practical realisation of effective and accessible new healthcare treatments and services.

The guidelines stress the importance of licensing broadly whenever possible, with limited exclusivity employed only when necessary to provide adequate incentive for commercial development. Noting that intellectual property should be broadly protected, the guidance states that, as definitive commercial pathways unfold, it is possible to distinguish such embodiments which require exclusive licensing from those that would best be disseminated non-exclusively in the market-place. The guidance goes on to state that exclusive licenses should be appropriately tailored to ensure expeditious development of as many aspects of the technology as possible, and that specific indications, fields of use, and territories should be limited to be commensurate with the abilities and commitment of licensees to bring the technology to market expeditiously. Developmental milestones and benchmarks should be included to ensure that the technology is fully developed by the licensee.

In a further example of proposed self-regulation, the Organisation for Economic Co-operation and Development (OECD) (which includes among its member states much of Europe, Australia, Canada and the USA, and several other countries) has published its ‘Guidelines for the Licensing of Genetic Inventions’ [6]. Many of the stated themes and aims are very similar to those expressed by the NIH, with limitations to exclusivity carrying a central theme. For example the document proposes that license agreements should not provide the licensor with exclusive control over human genetic information (including collections of such information) derived from individuals through the use of the licensed genetic invention. Rights holders are encouraged to license genetic inventions for health applications, including diagnostic testing, on terms and conditions that seek to ensure the widest public access to, and variety of, products and services based on the inventions. There are several other recommendations which address many of the aspects of practice that the ethical objectors find unacceptable.

Further business structures have been proposed to alleviate the situation, mostly aimed at reducing the impact of sole providers, or even reducing the possibility of sole providers getting a foothold. Patent auctions, patent pools (similar to those that are commonplace in the electronics industry) and patent clearing houses (such as Librassay[7], run by MPEG LA) aim to provide bundled licensing rights to multiple patents. If pools or clearing houses can be made to work in the context of life sciences (and many commentators have their doubts about that), these structures might conveniently deal with patent thickets and multiple patent proprietors – a problem faced by the personalised medicine industry where stratification might involve testing a number of genes at once.

Many other initiatives and approaches for the management of intellectual property, with varying degrees of open innovation (up to and including open source research) have been proposed for the diagnostics industry, and were reviewed by the OECD in its document ‘Collaborative Mechanisms for Intellectual Property Management in the Life Sciences’ [8].

However, all of the above initiatives are voluntary codes or opportunities, imposing no obligations whatsoever on IP rights holders. It might be argued that a company intent on arguably unethical (or at least unreasonable) policies would be unlikely to be aligned with the aims of these approaches. What is to stop a company ruthlessly pursuing a sole provider agenda with no concessions, in an attempt to match the financially successful model of the likes of Myriad (and a handful of other providers)?

The answer might lie in the unusually demanding nature of personalised medicine research itself, which is evolving into a largely collaborative process demanding a much greater degree of open innovation than has been required in the past. The rise of the research consortia might be the industry’s saviour against attacks on its IP.

Research Consortia

As noted above, research in personalised medicine is a huge undertaking. For each and every disease there is an opportunity to delve deeper into the mechanisms that cause the symptoms and to provide a stratified range of, essentially, newly defined conditions. At the same time, new therapies will need to be developed to treat each new condition. The aspiration is that the science underlying the stratification of patients will help to direct the research to provide the new therapies.

In practice, stratification can take advantage of so called ‘big data’. The world contains a vast quantity of data obtained from multiple studies of patients around the world with the same disease conditions (as classically defined). Unlocking the potential of all that data to determine identifiable differences between those patients (in the form of biomarkers, or any other measurable parameter) is what will lead ultimately to the personalised medicine goal.

However accessing, interpreting and getting value from big data is a monumental undertaking which necessitates collaboration on a big scale. For example, the UK’s NHS has one of the largest (if not the largest) collection of patient’s health records in the world – potentially an enormously valuable source of information for stratification. The NHS is also on the ground in the provision of clinical trials at multiple centres every day of every year, generating samples from patients on a vast scale. Access to that data, and those samples, could serve to dramatically increase the rate of discovery of biomarkers. Access to academic and clinical scientists may be critical in the analysis of the data and to drive the scientific project.  Access to a commercial partner is usually essential in development of a product or service, and bringing that to the market, and of course companies can provide scientific expertise too.

As a consequence of its idiosyncrasies, personalised medicine is therefore ideally suited to (and, in practical terms, demands) collaboration in the form of consortia of academics, clinicians, hospitals and industry. Additionally, and very importantly, patient groups should also be involved, not only to guide and advise, but to lend legitimacy to the use of data and samples, and ultimately to provide approval to the whole endeavour.

Multiple consortia have sprung up around the world, many of them international or inter-continental in their make-up. In the UK, the major funding bodies (the MRC together with the Technology Strategy Board) are providing millions of pounds for durable consortia with very exacting requirements on, amongst other things, patient group involvement (to date the MRC has funded seven consortia studying COPD, Rheumatoid Arthritis, Diabetes, Hepatitis C, Gaucher’s disease and Primary Biliary Cirrhosis). The European Union (EU) funds international collaborative approaches and consortia and has provided over 1 billion Euros funding over the past 5 years or so.

Although demanding to set up, and very challenging to manage, experience shows that consortia are possible to actively research personalised medicine goals. Such an open innovation platform has some intrinsic safeguards against the emergence of sole provider companies, and can be made to be adherent to the NIH and OECD guidelines on licensing of genetic inventions. The involvement of strong and well advised patient groups may help to keep consortia aligned with such approaches for the good of the personalised industry as a whole. If the model proves to be correct for the optimal delivery of stratification, then there is also the chance that ‘go it alone’ companies intent on a sole provider strategy may be out-competed, and may start to look very outdated.

[1] Association for Molecular Pathology, et al. v. Myriad Genetics, Inc., et al.  No 12-398 (Supreme Court of the United States of America) (2013).

[2] https://www.aclu.org/free-speech-technology-and-liberty-womens-rights/association-molecular-pathology-v-myriad-genetics

[3] Mayo Collaborative Servs. v. Prometheus Labs., Inc., No. 10-1150 (Supreme Court of the United States of America) (2012).

[4] https://docs.google.com/file/d/0B9_llJGo9WK0dlNwWFF1WlVLcUE/edit?pli=1

[5] http://www.ott.nih.gov/sites/default/files/documents/pdfs/70fr18413.pdf

[6] http://www.oecd.org/sti/biotech/36198812.pdf

[7] http://www.mpegla.com/main/programs/Librassay/Pages/Intro.aspx

[8] http://www.oecd.org/sti/biotech/48665248.pdf