>> the gene patent issue <<
There is a (mostly inactive) SI thread re biotechnology patents: Subject 27298
>> at least INCY has a business model with or without the patents... <<
INCY has a tremendous business model quite apart from the uncertain value of its patents. See: Message 8446046 and the discussion following.
In that old post, I said some things that I think are still entirely or largely true about INCY [additional comments today, in brackets]:
"First, INCY's right to future royalties for drugs developed by its big pharma partners with INCY IP and reagents doesn't depend on the validity of its patents. Instead, INCY has a contract right to those royalties, not a right based on patent. A ruling by the Supreme Court that DNA sequences are not patentable [pretty unlikely, I think] would hurt INCY in a number of ways, but would not seriously curtail the royalty stream based on prior contracts." [These contract rights arise, under INCY's master agreements with its pharma customers, whenever the customer wants not only the info in INCY's databases but also a sample of the gene; the customer orders this from INCY's "clone-by-phone" site in St. Louis, and gets it by FedEx. The recent WSJ article gave the number of these at above 30,000 - i.e., 30,000 chances at a 1 - 5% royalty on a drug developed by the pharma as a result of INCY's services. The WSJ quoted Astra-Zeneca as saying about 50% of its pipeline derives from INCY sources. Someone want to put a value on this contingent stream of royalties?]
"Similarly, INCY's current main business of selling, on multi-year multi-million dollar contracts (1) access to the proprietary databases INCY has amassed and continues to expand, and (2) the right to use INCY's software to manipulate both INCY's and other (public) databases, doesn't particularly depend on its patents. Instead, it depends primarily on having better software and a useful set of databases. (Rocketman, please set me straight if I've got any of this wrong.)"
"Third, the Patent and Trademark Office apparently has no doubts about the patentability of genetic sequences, either whole genes or part-gene sequences - they have issued a large number of patents on such sequences, in 1996 issued detailed guidelines for applications for such patents, and November issued the first of (I believe) 44 patents on EST partial gene sequences." [The Blair/Clinton statement of yesterday effectively reaffirmed the validity of the current system of patents. They don't have the power to change it in any event, and the President didn't say anything remotely like: "Tomorrow we will send to the
Congress a bill abolishing gene patents." Quite the opposite.]
"Fourthly, the Court of Appeals for the Federal Circuit (the "CAFC") also appears to have no doubt as to the validity of such patents. It has ruled on various disputes concerning DNA patents without any serious question of the patentability of genetic sequences - the cases I've seen so far deal with other technical questions under the patent law, such as adequacy of description or priority of invention, but not the overarching question whether a genetic sequence is patentable (although it should be noted the parties to these cases had no incentive to challenge such patentability and raise the issue before the court). [The CAFC is the intermediate level appellate court (i.e., above the district courts and appealable only to the U.S. Supreme Court) which handles appeals in all patent cases - specialist judges, not "generalists" like the district courts or the Supreme Court.]"
(The post also has a number of useful links to various patent and biotech patent materials.) |
