David,
The concern whether INCY's patents on human genetic sequences and partial sequences are valid and enforceable, expressed on this thread, has finally provoked me to start reading the applicable bits of patent law, including the judicial opinions, PTO statements, and academic and other commentary. I am a lawyer, although not a patent lawyer (i.e., a nonspecialist like the Federal district judges and the Supreme Court judges who may eventually have to decide this question), and am long INCY.
I will eventually post in greater detail on the patent issue, but here are a few preliminary observations (to provoke comment?) and some useful links.
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.
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 (I believe) 44 patents on EST partial gene sequences.
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.]
I will post with a less superficial legal analysis after I've done some more serious reading in the patent law decisions and regulations.
For anyone else who wants to plow this field, here are some links:
An article on "The Patenting of DNA" from the 1 May 1998 Science, Vol. 280, p. 689:
sciencemag.org (Thanks, Rocketman.)
Another article, "Can Patents Deter Innovation? The Anticommons in Biomedical Research" in the same issue of Science: sciencemag.org
Both articles have citations to a number of judicial decisions concerning DNA patents.
Some discussion in response to those two articles:
sciencemag.org
Cornell Law School has a site on patent law: law.cornell.edu , with useful links, including one to Supreme Court patent cases: supct.law.cornell.edu
And here are some 1993 and 1995 conference papers, with contributions from scientists and lawyers:
fplc.edu
Stuart H. Whitman recently contributed a couple of useful links to the thread:
Message 8170340
--RCM
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