Patents Business of Biotechnology BIT 120

Definition Patent Government grants which provide inventors with right to exclude others from practicing invention for 20 years. Sole owners, producers and sellers of product/process Stimulates invention/industry??? Date back to 1374 (Venice) Original version of US Constitution Farmers ‘own’ plant varieties

Intellectual Property Rights A. Patents B. Trade Secrets private information about procedures and formulations C. Copyrights authorship of published works D. Trademarks words or symbols that identify a product

What can be patented? Machines Processes Compositions of Matter (genetically engineered microorganisms) Asexually reproduced plants Biological Materials -Purified or Synthesized DNA, RNA, plasmids, enzymes Typically a patent can not be granted for anything that is a ‘product of nature’

Requirements Novel Useful Not Obvious Patent Application must include list of claims about invention and how it is to be used detailed description

Differences Between Countries A. Timing of Exclusive Rights Now international agreement: Patent limited to 20 years from date of filing [Takes 2-5 years to grant a patent] [1 year after a publication to apply for patent] B. tPA US approved broad application UK rejected Japan approved narrow application

Challenging a Patent A. Patent Appeals Board B. Lawsuit Thomas Edison “a patent is an invitation to a lawsuit”

Notable Patents 1971Ananda ChakrabartyOil-eating bacteria 1st organism to be patented NOT genetically engineered (No new DNA) Transformed bacteria with plasmids which contained genes responsible for breakdown of oil Controversy: U.S. Patent and Trademark Office rejected initially because “living things were not patentable

Notable Patents 1988DuPont Co.Oncomouse First patent for living animal Transgenic Mouse which contained oncogenes from other species Still Humans could not be patented!!!!! 13th Amendment of Constitution

Notable Patents 1974Cohen/BoyerRestriction Enzymes to insert foreign genes $45 million to Stanford/U Cal 1991Craig VenterIndividual Human genes (ESTs) DENIED First time request was made for legal rights of a naturally occuring product No function for these genes had been established Partially sequenced cDNAs

Notable Patents 1991Systemix, Inc.Hemapoeitic Stem cells Procedure to Isolate cells First normal, non-engineered human cells/tissue patent

Royalties Certain Percentage of All sales paid to ‘Patentee’ Licensing Agreements need to be set up

PATENT PRIORITY Given to first to invent – (not to file) – so documentation so IMPORTANT ! See handout on patents

Business of Biotechnology

Steps of Commercialization 1. Ideas 2. Scientific Development/Market Research 3. First Production Capabilities 4. Testing and Approval 5. Marketing/Final Production

Market Research Is there a market for this drug/process? What sales will be generated? Will market grow? Shrink?

Investment Capital Facilities Scientists/Expertise Equipment Money put up by venture capitalists or Funded by ‘Chemical’ division of Pharma Co. Investors ‘make’ their money by sharing in profits owning stock when company goes public

Genentech First Biotech Co. to offer shares to public 1980 $35 - $89 20 minutes