Gene patent system ain't broke, but needs fine tuning: ALRC

A report by the Australian Law Reform Commission (ALRC) following an 18-month inquiry into genetic patents has concluded that significant patent law reforms are needed to accommodate cutting-edge genetic technology.

But the 700-page report, 'Genes and Ingenuity: Gene Patents and Human Health' (ALRC 99), which was tabled in federal parliament last week, does not prescribe any radical reforms or patent system overhauls, and in fact many of its 50 recommendations are directed at the development of policies and guidelines to better handle the technology.

"The system ain't broke," said ALRC commissioner Brian Opeskin. "It's a very old system and has made some adaptations [to these new technologies], but it really needs some fine tuning."

The inquiry, which was prompted in part by an earlier inquiry into issues surrounding genetic privacy, and in part by growing concern over gene patents and the implications for research and health care, was "the debate we had to have" according to Murdoch Children's Research Institute geneticist Assoc Prof Deon Venter, who is also a director of Melbourne biotech company Genetic Technologies (ASX:GTG).

"The report points out that many of the fears expressed about the much-touted negative impacts on research and healthcare were groundless," he said.

Opeskin said the challenge for the ALRC inquiry was to find a balance between the needs of the different stakeholders affected by gene patents -- on one hand, biotechnology companies whose livelihood depends on strong IP portfolios, and on the other the research and healthcare sectors who feared that gene patents would stifle their activities and cause problems for access to high quality, cost-effective healthcare.

"We had to try to find a balance that would provide good health outcomes without destroying the patent system and innovation in Australia," he said.

Most of the concerns from the healthcare sector, he said, centred around diagnostic tests, and fears that patents would either increase the costs or make it commercially unviable to develop tests, but the sector was also concerned about longer-term effects on drug prices.

Right direction

Debra Graves, the CEO of the Royal College of Pathologists of Australasia, which has taken a stance against genetic patents in recent years, said the report was a step in the right direction.

According to Opeskin, governments and health departments needed to be more proactive about using the mechanisms within the patent system to challenge dubious patents or questionable licences, including the 'Crown use' provision, which allows the government to use patents for the public benefit if circumstances make it necessary.

"We have identified a need for better government policies to determine whether it's appropriate to use the Crown use provision," he said. "Similarly, the challenge of patents by the government or its agencies is rarely done here -- but you do see this happen in Europe and Canada."

'Experimental use' was another hot issue in the inquiry, with a lot of researchers expressing concern that gene patents would stifle their research.

"During the course of the inquiry, we heard widespread concern about the impact of the patent system on research, but it was more diffuse than specific concern," Opeskin said.

Opeskin said it needed to be made clear that research on the invention was part of the patent bargain. The ALRC has made a recommendation for a exemption that would allow researchers to perform research on the subject matter of the invention.

"We recommended a fairly narrow exemption which would put beyond doubt that researchers could perform research on an invention so they could understand it better -- even if there are commercial implications. But once it moves beyond that, it's a different matter," he said.

Fees waived

GTG's decision to accept a licence for BRCA1 testing from Myriad Genetics in 2002 caused an uproar in the genetic testing community, amid fears that it would lead to increased costs for Australian patients. But the company has since said it would not claim a licence fee for BRCA1 testing by public sector labs in Australia, nor required that all BRCA1 testing be sent to it. "GTG is bent on promoting public-private partnerships for genetic testing," Venter said. He noted that many public testing services in Australia were sending their tests to GTG to improve turnaround.

Venter, a genetics researcher who has published over 90 papers, said he did not believe that patents had hindered his ability to work on a gene, and noted that companies enjoyed many benefits from independent research.

"I've personally never been asked to pay a royalty for research on someone else's gene," he said.

The ALRC also warned that universities and research institutions needed to raise awareness of patenting issues among their researchers, and likewise, research organisations and biotech companies needed to have the skills and experience to deal with commercialisation and licensing of patented inventions.

It made quite a few recommendations for government agencies, including Biotechnology Australia, the NHMRC and the ARC, to develop and implement guidelines and policies to deal with issues of IP arising from public benefit research, technology transfer and commercialisation of IP coming from public sector research and other aspects.

Biotechnology Australia manager Paul Ross said that while the agency was currently in caretaker mode, in the lead-up to the October 9 federal election, he would envisage the agency playing a role in coordinating the government response to the report from the inquiry.

AusBiotech role

AusBiotech, the peak industry body for the industry, was also singled out in the ALRC report to come up with model agreements and guidelines for patent licences involving genetic materials and technologies, as well as other industry initiatives to facilitate licensing.

AusBiotech executive director Tony Coulepis said AusBiotech had put a considerable amount of work into its submissions to the ALRC and had put its hand up to be involved in devising solutions that could make a material benefit to the industry.

Specific reforms recommended by the ALRC include:

• Improving patent law and practice concerning the patenting of genetic materials and technologies, including through amendments to the Patents Act and changes in the practices and procedures of IP Australia, patent examiners and the courts.
• Improving patent law and practice concerning the exploitation of gene patents, including in relation to a new defence to claims of patent infringement, Crown use, and compulsory licensing of gene patents.
• Ensuring that publicly funded research, where commercialised, results in appropriate public benefit, including through the adoption of appropriate patent practices.
• Encouraging universities and other research organisations to raise the awareness of researchers about patenting issues and the commercialisation of research.
• Ensuring that Australian research organisations and biotechnology companies are adequately skilled to deal with issues concerning commercialisation and the licensing of patented inventions.
• Establishing mechanisms for monitoring the implications of gene patents for research and healthcare so that governments have the ability to intervene where gene patents are considered to have an adverse impact, either in specific cases or systemically.
• Clarifying the application of competition law to the exploitation of intellectual property rights, including patented genetic materials and technologies.
• Clarifying the scope and practical application of exceptions to copyright infringement in relation to research.

The report is available at www.alrc.gov.au/inquiries/title/alrc99/index.html