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Comité consultatif canadien de la biotechnologie
Accueil Publications Recherche 2001

Patenting Life Forms: An International Comparison (disponible en anglais seulement)

Ce document est présenté dans la langue dans laquelle il a été fourni par l'auteur ou la source

Prepared For

The Canadian Biotechnology Advisory Committee Project Steering Committee on Intellectual Property and the Patenting of Higher Life Forms

By Dr. Richard Gold
February 2001

Table of Contents

  1. Executive Summary
  2. Methodology
  3. The Subject Matter of Patent Rights
  4. Patent Carve Out
  5. Establishing Patent Requirements
  6. Scope of Patent Holder’s Exclusive Rights
  7. Approaches to HLF Patenting
  8. Conclusion
  9. TRIPs Section 5: Patents
    1. Article 27
    2. Article 28
    3. Article 29
    4. Article 30
    5. Article 31

  1. Executive Summary

    In formulating Canadian policies on the patenting of higher life forms (HLFs), it is important to understand the options available in light of international treaty obligations and the options selected by our trading partners. In this document, I describe these options and the choices selected by some other biotechnology exporting and importing nations.

    The first decision that any country must make is which HLFs and related processes to include within its patent scheme. The issue of whether Canada provides patent protection on plants and animals (unlike the United States, Japan, and European Union members), is still uncertain as we await the Supreme Court of Canada to rule on the issue. Once Canada has decided which categories of HLFs and related processes are eligible to be patented, it must decide whether to exclude particular HLF inventions from patent protection to further ethical or social policy. TRIPs (the World Trade Organisation Agreement on Trade Related Aspects of Intellectual Property) lays down careful rules for countries that want to exclude otherwise patentable inventions. The majority opinion among developed countries is that inventions whose exploitation would injure public order and morality ought not to be patentable. Canada, along with the United States, follows the minority view that patent law and morality ought to be kept separate. These countries hold that moral concerns have no place within patent law itself but ought to be addressed specifically, for example, through regulation or in the criminal law.

    After Canada decides upon the list of HLFs and related processes over which it is willing to grant patents, it must establish the test that an inventor must meet to receive a patent. Because TRIPs sets out the criteria that all WTO members must use, Canada cannot impose additional requirements for HLF patents. Although there is wide agreement between the countries on the nature of inventions that are patentable, there is less consistency in the type of disclosure required to support the patent application and in the time it takes patent offices to rule on applications. According to available data, Canada is slower than most other Quad countries in reviewing biotechnology patent applications. While the speed of processing patent applications is due to many factors (including to delays caused by patent applicants) and is subject to different measuring techniques, Canadian patents may be viewed as less valuable to the inventor than U.S. patents because of the extra processing delay. This is less true with respect to pharmaceuticals since these materials face regulatory approval for human use in any event.

    Patents provide inventors with limited rights over patented inventions. Most countries allow individuals to use patented inventions for research and experimentation without infringing on the patent. The scope of the experimental use exception could have a fundamental impact on basic research using HLFs and related processes. Canada’s position on the experimental use exception is unclear as it applies to HLFs. In formulating a clear research exception, TRIPs would likely require Canada to construct substantially the same exception for HLFs as it does for all other types of invention. Some countries also require patent holders, in limited circumstances, to provide the right to use the patented invention even when the patent holder would prefer not to do so. This is done through compulsory licensing. Canada and the United States have the most restrictive policies of the Quad members with respect to compulsory licensing. The European Union is implementing a third exception to patent rights: farmer’s privilege. This privilege would permit farmers to plant seeds collected from genetically-modified plants and to cause genetically-modified animals to reproduce.

    There is a divergence of opinion among Quad members and others over the manner in which patent laws apply to HLFs and related processes. Except for Canada, which does not recognise any patents in whole plants, seeds, or animals, the differences between countries are fairly limited. Most developed countries are concerned with potential abuses of patent protection, whether for ethical reasons or for anti-competitive activity. Should Canada decide to extend patent protection over most or all HLFs and related processes, it must then make decisions about how to implement that decision in light of the requirements and limitations contained in TRIPs.

    When Canada formulates policies regarding the patenting of higher life forms, it is important to understand the options available in light of international treaty obligations and the policy choices made by other countries. In this document, I will describe these options and the policies adopted by other biotechnology exporting nations (the so-called “Quad members”) and by representative biotechnology importing nations. I will also sketch out the philosophies that underlie the different approaches.

    Patents are rights that a country grants to an inventor to prevent all other people in that country from using, selling, or copying a thing or a process (a way to make something or a way to provide a service). In order to get a patent, an inventor must demonstrate that the subject matter of the patent—the thing or process—is new, not obvious, and useful. By new, we mean that the thing or process did not exist before in the particular condition in which it is being patented and that it was never described in public, subject to a grace period in some countries (such as Canada and the United States), whether in journals, press releases, or conferences. By not obvious, we mean that the inventor had to exercise at least a minimal (sometimes quite minimal) amount of creativity. By useful, we mean that the thing or process has to have a concrete commercial use.

    The term higher life form (HLF) does not have any technical meaning within the law. Generally, we take HLFs to include animals and plants (except for microorganisms) and any process using animals or plants (again, except micro-organisms). Depending on one’s definition, we may also include parts of animals or plants (e.g. animal organs), cells or genetic information from animals or plants, or processes that use parts, cells, or genetic information.

    There are clearly ethical, social, and economic considerations to take into account when a country considers whether and to what extent it will provide patent protection over HLFs. While it is beyond the scope of this document to enumerate these considerations, it is worthwhile to discuss the levels at which Canadian policy makers can address them. First, Canada can decide to patent some or all HLFs and related processes.1 Second, Canada can carve out particular HLFs and processes from patentability on the basis of general policy, for example, health or moral considerations.2 Third, Canada can set criteria for determining whether a particular HLF or process is patentable.3 Fourth, Canada can define the particular rights that a patent holder over HLFs and related processes has to exclude others from the use, sale, or copying of those HLFs and processes.4

    In this document, I will discuss each of these levels in turn and investigate the choices made at each level by other countries. This necessitates an examination of international rules, primarily trade rules, that constrain the policy choices available to countries such as Canada. Therefore, before discussing each of the four levels listed above, it is important to describe the general international regulatory framework within which Canada and other countries must formulate their policies.

    Canada and the other Quad members (the United States, Japan, and the European Union members) are party to the World Trade Organisation (WTO) and the agreement on the Trade Related Aspects of Intellectual Property Rights (TRIPs) made under the WTO. TRIPs establishes general rules that each WTO member must follow with respect to the following issues:
    1. the subject matter of patent rights (i.e., the things and processes over which a country must provide patent protection and things and processes, such as plant and animals, over which a country has the option of providing patents);
    2. the criteria for patentability (novelty, nonobviousness, and utility);
    3. disclosure required of the patent applicant;
    4. the scope of rights that a patent holder must be given (exclusive rights to use, sell, and copy);
    5. exclusions from patentability for moral, health, and environmental reasons; and
    6. availability of compulsory licensing.

    The TRIPs Agreement is a complicated document that was the subject of much negotiation. Given that it has been subject to only one main dispute concerning its principal patent provisions, it is too early to form any conclusive view of its ultimate detailed meaning. Nevertheless, this one decision and decisions dealing with other aspects of the WTO Agreements provide us with a good indication of how TRIPs is likely to be interpreted. These interpretations cannot, however, be viewed as definitive. It is also important to remember the purpose of TRIPs: to establish consistency among countries on the protection of intellectual property rights including patents. It is therefore not surprising that it constrains the choices that countries can make with respect to patent protection.

    Canada, as well as all Quad members except for the United States, is also party to the Convention on Biological Diversity (the Convention). This Convention sets out countries’ rights to protect and exploit their biological inheritance and rights to protect traditional agricultural and health practices and knowledge. Recently, members of the Convention negotiated the Cartagena Protocol on Biosafety (the Protocol). The Convention and the Protocol in general may affect the manner in which the TRIPs exclusion of patents for environmental reasons is interpreted.

    Public Consultations

    In establishing their positions with respect to patenting HLFs, various countries, including Canada, have adopted different methods of public consultations. Some of these methods give only a snapshot of public opinion, such as opinion surveys, whereas others help develop a consensus, such as through targeted meetings or juries of citizens on issues related to HLFs. In addition to these methods, countries have established both parliamentary committees and advisory committees to help advise their governments on the best modes of dealing with HLFs. The Organisation for Economic Cooperation and Development conducted a study in 1999 of these methods. The summary provided below is derived from that study.

    In Canada, for example, the government has organised a survey, a focus group, a parliamentary committee, an advisory committee, and stakeholder consultations on biotechnology. The United States has conducted many surveys, especially on consumer attitudes toward biotechnology and has held a House of Representatives committee on genetic testing. The United Kingdom has probably done the most in the way of public consultations, having set up numerous surveys, citizen juries, consensus meetings, polls, and parliamentary committees on a variety of biotechnology-related issues, particularly in respect of genetically-modified foods and human genetic testing. Denmark, the Netherlands, and Norway have conducted consensus meetings on food and health related biotechnology. France has held citizen juries on genetically-modified foods and biotechnology as well as establishing an advisory committee on genetic screening tests and transplantation from animals. Germany has used various methods, from consensus meetings, to interviews and surveys, to examine public opinion on genetically-modified foods and biotechnology. Japan has conducted surveys on biotechnology and has held consensus meetings on gene therapy. Australia has conducted surveys and consensus meetings on genetically-modified food as well as establishing an advisory committee on genetic testing.

  2. Methodology

    In the following sections, I examine how Canada’s choices with respect to patenting HLFs compare to those of other Quad countries and selected biotechnology importing countries. To do this I draw on two principal sources of information. First, the Working Party of the Trade Committee under the Organisation for Economic Co-operation and Development (OECD) sent questionnaires to its members on their patent practices with respect to biotechnological innovations. Countries responded to detailed questions covering issues ranging from the sort of biological material and processes over which they grant patents, to patent office practices with respect to biotechnological patents. The results of this study were released in February 1999. Second, in preparation for negotiations under the WTO Agreements, the Council for Trade Related Aspects of Intellectual Property Rights sent out similar questionnaires to WTO members. Developed countries were required to respond while developing and least developed countries had the option of responding. Most of the latter countries did not respond. The Council received responses throughout 1999.

    The material collected through the two studies is not completely accurate. This is largely due to seemingly different interpretations of the many questions asked. For example, on the face of the country responses, there are clear contradictions that can only be resolved by assuming that the responding countries had different interpretations of the questions posed. While I have attempted to take these different interpretations into account and have compared answers to other primary sources, some inaccuracies remain. However, the data collected from these studies paints a useful overall view of the approaches taken by various Quad members and other countries to the issue of patenting HLFs and related processes.

  3. The Subject Matter of Patent Rights

    As described earlier, HLFs may include a wide variety of substances ranging from genetic sequences, to cells, to organs, to entire animals or plants. The first decision that any country must make in respect of patent rights in HLFs is which substances and which processes related to those substances (ways of using those substances to make something else or to provide a service) the country will include within its patent scheme.

    Of the numerous international treaties that apply to patents, TRIPs has the largest impact on Canada’s choice of whether to patent HLFs. TRIPs makes it mandatory for WTO members to grant patents over certain biological material, such as micro-organisms and micro-biological processes (processes such as fermentation that rely on the action of micro-organisms). It also requires that countries either grant patents over plants or provide an alternative system to give protection to those who create new plant breeds (e.g., a particular variety of a flower rather than flowers within the same species). Last, TRIPs provides WTO members with the option of excluding patents on animals and on certain processes related to medical diagnostics and treatment of humans or animals, such as CAT scans, surgery, or dialysis.

    As the box entitled “Patentable Subject Matter” (below) conveys, Canada provides patent protection on fewer types of HLFs than other Quad members, but includes a greater set of processes within its patent schemes than European countries. By a Federal Court of Appeal ruling in the summer of 2000, whole plants and animals are eligible for patent protection in Canada.5 The Commissioner of Patents filed leave to appeal against this decision with the Supreme Court of Canada on October 1, 2000. The question of the patentability of higher life forms in Canada remains, therefore, open.

    All Quad countries provide protection to those who develop new reproducing plant breeds through legislation. These plant breeders rights permit those individuals the exclusive right to control the commercial sale of these plants. The level of protection under this legislation is significantly narrower than that granted by a patent. For example, a farmer would normally be entitled to save the seeds from a plant that he or she purchased even if the plant was protected under plant breeders rights legislation. The same would not be true under a patent in the absence of a clear exemption (discussed below).

    There does not seem to be any inherent conflict between protecting a plant under plant breeders legislation and under patent law. That is, those countries that provide patent protection for plants also provide plant breeders rights protection for plants. The opposite is not necessarily true. Some countries oppose plant patents, preferring the plant breeders rights scheme over patent law. This is particularly true among developing nations.

    Patentable Subject Matter

    Human and Animal Material that is Subject to Patent Rights
    Country Proteins Genes Cells Animal Organs Animals Animal Varieties Human Organs
    Canada              
    United States              
    Japan              
    Europe              
    Australia              
    Hungary              
    Korea              

     

    Although the European Patent Office has issued patents over human genes and cells that are applicable in France, the French Minister of Justice stated, in June 2000, that these patents may be invalid if challenged in France.

    Plant Material that is Subject to Patent and Other Rights
    Country Proteins Genes Cells Plants Plant Varieties   Plant Breeders Rights
    Canada              
    United States              
    Japan              
    Europe              
    Australia              
    Hungary              
    Korea              

     
    Asexually reproduced plants only

    The term higher life form comprises a wide variety of materials, but their common link is that they derive from living organisms, whether plants or animals. As the term higher implies, HLFs do not include micro-organisms. They also do not include human beings since humans are not subject to ownership. In between these extremes there lies, however, a vast amount of materials ranging from strands of DNA, to cells, to organs, to entire plants and animals. In addition to the raw material falling within the definition of HLF, there are also processes that use HLFs to manufacture something or to provide some service. Some of these processes involve nothing more than allowing nature to do its work; others involve substantial human intervention.

    There are different approaches to patenting HLFs and related processes around the world. The following charts compare different approaches taken by Canada, other Quad members, and a few selected countries. The charts set out the responses given by the national governments or, in the case of Europe, by the European Patent Office.

    Processes Using Higher Life Forms
    Country Processes Without Substantial Human Intervention Animal Diagnostics Animal Therapies Gene Therapy for Animals Human Diagnostics Human Therapies Gene Therapy for Humans
    Canada              
    United States              
    Japan              
    Europe              
    Australia              
    Hungary              
    Korea              

    Please note that the boxes “Animal Diagnostics” and “Human Diagnostics” apply only to diagnostic procedures used on animals or humans directly (that is, not diagnostic methods performed outside the body). Similarly, “Gene Therapy for Animals” and “Gene Therapy for Humans” apply only to gene therapy procedures performed on animal or human bodies and includes neither the materials used in gene therapy nor processes that occur outside the body.

  4. Patent Carve Out

    Once Canada has decided which categories of HLFs and related processes are eligible to be patented, it must decide whether to exclude particular HLF inventions from the scope of patent protection in order to further ethical or social policies. Canada’s ability to take ethical and public policy considerations into account in deciding what to patent is limited by TRIPs. This is so because TRIPs sets out a standard of equality across all inventions. According to TRIPs, countries must grant patents over all categories of inventions despite the possibly different natures of the inventions. The result of this principle of equality is that, once a country decides to grant patents over a class of HLFs, it can only single out particular inventions within that class for exclusion in limited circumstances. 6

    Despite the general rule of equality between inventions, TRIPs does allow, in limited circumstances, for a country to exclude certain inventions from patentability because of the particular dangers they pose. Nevertheless, TRIPs lays down strict rules for countries wanting to exclude otherwise patentable inventions on this basis. In particular, TRIPs states that a WTO member may only exclude a particular invention from patent protection where the commercialisation of that invention must necessarily be prohibited in order to protect public order 7 or morality of that country, to prevent harm to human, animal, or plant health, or to prevent serious prejudice to the environment.

    We are to interpret all WTO Agreements, including TRIPs, in accordance with their ordinary meanings. We are to read exclusions from obligations carefully since they take away from the basic undertaking of the parties to these Agreements. 8 We may look to decisions of dispute resolution panels and the appellate body for further assistance in understanding these Agreements. 9 Using these general rules of interpretation, a country wishing to rely on the exclusions listed above in order to withhold patent protection from a particular invention involving an HLF or related process will likely have to demonstrate something along the lines of the following:
    1. that there is a definite threat to public order or morality from the sale of the invention or that the sale of the invention will lead to significant health or environmental problems;
    2. that no other measure will prevent the threat10 (for example, making the sale of the invention illegal); and
    3. that withholding the patent will help to prevent the threat.

    It is important to notice that the danger must emanate from the sale of the invention and not from the mere existence of the invention.

    A threat to public order (“ordre public”) is generally taken to mean a threat to the operation of the state and its institutions.11 Thus, the sale of nuclear technology may be considered a threat to public order. A threat to morality means a threat to generally accepted norms within society. Several states have incorporated this exclusion for a considerable time and have applied it to prevent such things as the patenting of contraceptive devices.

    In the field of biotechnology, Europe has gone further than other countries in defining the meaning of the morality exception. The European Union has, in its Directive on the legal protection of biotechnological inventions (the Directive), proscribed various activities as morally unacceptable, including processes to clone human beings, modifying germ line identity, using human embryos for commercial purposes, and modifying the genetic makeup of animals so as to cause them suffering without substantial medical benefit. The common element in all of these examples is that the activity itself, rather than the mere fact that the activity is patented, is considered immoral. To the extent that this is illustrative of the scope of the morality exception, it means that a country can only withhold a patent over an invention where the invention itself or its distribution to a large number of people is morally objectionable.

    The question of what constitutes a threat to human, animal, or plant health or to the environment is not clearly addressed in TRIPs. Decisions reached under other WTO provisions12 indicate that the threat must be based on sufficient scientific evidence rather than pure speculation.13 These provisions deal with situations in which the very activity that the country is attempting to limit through reliance on the exception may cause direct harm to human, animal, or plant life. In such circumstances, there is greater reason to provide countries with room to maneuver. The situation is quite different with TRIPs in which a country uses the exception to prevent patentability of an invention, not the use of the invention itself. The reason for this is that once an invention is found to be unpatentable, it is forever outside the scope of patent protection even if circumstances change and the invention no longer presents an ethical problem. Given this difference, previous WTO-related decisions, and the general interpretative rule that the exception should not be read broadly so as not to undermine the intent of the Agreement, one would expect that a country relying on this exception would have to do so on the basis of good scientific evidence. That is, a country would likely only be able to withhold a patent on an invention if scientific evidence supported the conclusion that the commercialisation of the invention would, in fact, harm health or the environment. A claim of harm in the absence of good scientific support would not likely be sufficient.

    It may be possible that, under the recent Cartagena Protocol on Biosafety, under the Convention on Biological Diversity, countries may be permitted to act on less than convincing scientific evidence to withhold patents over inventions claimed to harm the environment. Under the Protocol, countries have the right to prevent the import of living genetically modified organisms unless scientific evidence demonstrates that these organisms are safe. That is, under the Protocol, a country may act in the absence of proof of harm. While, in theory, this same reasoning could be applied to disputes under TRIPs it is unlikely for two reasons. First, TRIPs, being part of the WTO Agreements, is independent of the Convention on Biological Diversity and the Cartagena Protocol. In fact, the Protocol clearly states that it was not intended to override the provisions of the WTO Agreements. Second, given that TRIPs already balances the rights of patent holders against safety through fairly restrictive language,14 it is unlikely that a dispute panel will override that balance in favour of incorporating the Protocol into TRIPs.15

    The majority opinion among developed countries is that inventions whose exploitation would injure public order and morality should not be patentable. Canada, along with the United States and Australia, follows the minority view that patent law and morality are completely separate. This does not mean that issues of morality or harm to health or the environment are not important; it simply means that these countries prefer to deal with these issues outside of patent law.

    Among those countries that recognise exceptions to the general rule of patentability, most restrict those exceptions to public order and morality concerns.

    Patent Exemptions

    Once a country has decided to grant patents over a category of inventions, such as animals, plants, or human material, it may wish to exempt particular inventions from its patent scheme for moral or public policy reasons. Generally, it is up to the patent authorities in a country having these exemptions to determine whether a particular invention fits within the exception.

    World opinion is split on the wisdom of these exemptions. Their existence was an important element in the first international patent conventions. Many countries were unwilling to guarantee broad patent protection without the ability to withhold patents on inventions they believed were contrary to the social good. Other countries, the United States being the primary example, believe that morality and broad social policy (as opposed to the social policy inherent in patent law encouraging innovation and commercialisation of that innovation) should be kept separate from patent law. That is, to the extent that a particular technology gives rise to moral or social policy concerns, we should enact specific laws or regulations to deal with those concerns rather than withhold a patent.

    The accompanying chart sets out the different approaches taken by the Quad members and other selected countries with respect to the power to withhold a patent over an invention that is deemed to breach ethical or social policy.

    Patent Carve-Outs
    Country Ordre Public Morality Human Health
    Canada      
    United States      
    Japan      
    Europe      
    Australia      
    Hungary      
    Korea      

  5. Establishing Patent Requirements

    After Canada decides upon the list of HLFs and related processes over which it is willing to grant patents, it must establish the test that an inventor must meet in order to receive a patent. This has two components. First, Canada must establish the formal criteria that it will require inventors to meet before it issues a patent. Second, Canada must determine how it will apply these criteria to particular patent applications involving HLFs and related processes.

    There are two types of criteria that apply to the review of a patent application. The first are the criteria applying to the invention itself. These criteria essentially define when an innovation is worthy of patent protection. For example, just because you have created a new mousetrap does not mean that you will receive a patent over it. You will only receive a patent if the mousetrap meets the conditions set for patentability in the country. In Canada, the mousetrap would have to be new, not obvious, and useful. If the mousetrap failed to meet any of these requirements, no patent would issue. The second type of criteria are those used to evaluate the patent application itself as opposed to the invention. Simply because you have invented a new, not obvious, and useful mousetrap does not mean that you will receive a patent. You must first file a patent application that contains information about the patent in a particular form before you receive the patent.

    The difference between these two types of criteria is important. Where the invention fails to meet the requirements of patentability, no patent can ever issue. On the other hand, assuming that the invention is patentable, if the patent application does not meet the requirements set out, the inventor can remedy this problem by filing an application in proper format. In other words, the first set of criteria are substantive whereas the second set are procedural.

    As in other areas, TRIPs imposes limitations on Canada’s ability to define the substantive criteria it uses to assess whether an invention is patentable. TRIPs requires that all WTO members use the substantive criteria of novelty, non-obviousness, and utility, and only those criteria, in assessing whether a particular innovation is patentable. This means that no WTO member may impose additional or alternative criteria in assessing whether a particular invention is patentable within that country.

    In addition to circumscribing a WTO member’s ability to establish substantive criteria for patentability, TRIPs only allows countries to apply three procedural requirements for patentability. TRIPs requires that all countries oblige a patent applicant to fully disclose the invention that is sought to be patented. In addition, it permits countries to require patent applicants to disclose the best way of using the invention and to disclose other jurisdictions in which a patent application was filed over the invention.

    In formulating its policy with respect to patenting HLFs and related processes, Canada likely cannot impose additional substantive or procedural requirements on patent applicants.16 The European experience with patenting material from human sources provides an excellent example of this point. During its debates over the adoption of what came to be the Directive on the legal protection of biotechnological inventions, the European Parliament concluded that no person should be granted a patent over human-derived DNA, cell-lines, and tissue unless he or she demonstrated that he or she had received full and informed consent from the human source of that material prior to its removal from the body. The European Commission resisted this proposal, however. It felt that adding the requirement that an inventor prove that he or she had received informed consent from the source of the biological material prior to its removal was going beyond the requirements permitted under TRIPs.17 Given this, the requirement could not be added. Instead, the European Commission suggested that the Directive state, in a preamble, that inventors have a moral obligation to get informed consent, but that this moral obligation not be translated into a legal requirement.18 In the end, the European Parliament accepted this compromise. Thus, the European Union was not able to incorporate its concern over informed consent into its patent laws.

    There is consensus not only on the formal substantive requirements of patentability but, for the most part, on the application of those requirements. I say for the most part because although countries more or less agree on the tests for novelty and non-obviousness (although they may disagree in particular cases), they disagree to a greater (although still limited) extent on the utility requirement. The utility requirement is important given that many biotechnology inventions are nothing more than the isolation of naturally occurring materials.19 This is particularly true of, for example, DNA strands and whole genes. The Human Genome Project has led and continues to lead researchers to identify new genes, but often without much idea of what function those genes play. A low standard of utility would nevertheless result in patents being granted since these genes could be made or put to some industrial use, even without knowledge of its function. A higher standard would result in a patent where the inventor could, for example, point, at some level, to the function that the DNA plays within the cell.

    While, apart from the utility standard, there is wide agreement between countries on both the formal substantive requirements for patentability and the application of those requirements, there is less consistency on the procedural criterion of disclosure. As stated earlier, the basic premise of patent law is that, in return for a time-limited monopoly, the inventor must fully disclose his or her invention so that others may learn from it. While all countries agree that disclosure is required, they do not agree on how to apply that criterion.

    As the box entitled “Enablement Requirement” (below) illustrates, the majority of countries do not require that the patent application identify all particular instances of the invention that fall within the category covered by the patent description. It is enough if there is a close link between what was disclosed and the invention claimed. Overall, Canada takes a middle approach but requires a closer link than some countries between the claimed invention and the disclosure given.

    One last issue in the application of the substantive and procedural criteria for patentability is the amount of time it takes the patent office in each country to rule on a patent application after that application is filed. This usually takes place in two steps. The patent office initially reviews a patent application and indicates any problems with the application to the inventor. It is very rare that a patent office will accept the patent application as initially filed.

    An inventor will decide whether to pursue a patent in a particular country based on a number of factors, including size of market, cost of business, and delay in obtaining the patent. It is therefore important to know how long it takes, on average, for the patent office to respond to the initial patent application and how long it takes the patent office to finally dispose, one way or the other, of the patent application. This information, to the extent it is available, is provided in the following chart.

    The United States is implementing new procedures and guidelines to speed up the process of reviewing patent applications. Its goal is to finally dispose of an application within 12 months of filing. As the chart indicates, Canada takes significantly longer than most of the other Quad countries in reviewing biotechnology patent applications. While it must be acknowledged that the speed of processing patent applications is due to many factors and is subject to different measuring techniques, a Canadian patent may nevertheless be viewed as less valuable to the inventor than a U.S. patent simply on the basis of this increased delay.

    Application of Utility Criterion

    There are two principal traditions with respect to utility. Canada and the United States interpret utility to mean that the patent applicant has claimed that the invention has a credible commercial use. The United States Supreme Court stated in one case, for example, that it is not enough that the invention be useful for other researchers: the invention has to be of commercial value. The other tradition, which is prominent in Europe, is that an invention must have an industrial application. As long as someone can use the invention, it is thought to meet the industrial application standard. This may be an easier test to meet with respect to HLFs since they can generally be put to some use even if that use is for research purposes only.

    In the debates preceding the adoption of the Directive on the legal protection of biotechnological inventions, the European Parliament questioned the wisdom of permitting patents over DNA sequences with unknown function. The Directive addressed this issue somewhat ambiguously by stating that a patent application must disclose the industrial application of the DNA sequence of human origin: something that was already required by European patent law. It is unclear whether this statement was designed to increase the difficulty of the industrial application standard in Europe, although European Commission officials indicated that it may. Certainly some of the recitals to the Directive indicate that the inventor must either disclose the protein produced from the human DNA sequence or at least the function performed by that protein in order to demonstrate industrial application. It is too early to know whether the Directive will result in a more strenuous utility requirement in Europe since it only became obligatory in July 2000.

    Enablement Requirement

    TRIPs requires that inventors disclose their inventions with sufficient clarity to enable others to make the invention. Beyond this general requirement, countries are free to establish the nature and form of disclosure required. In fact, as the following chart indicates, different countries take different approaches to the enablement requirement. The greater the level of disclosure required to support the patent grant, the more strict the enablement requirement.

    In the following chart, I look at two areas in which countries apply different standards to the level of disclosure required to meet the enablement requirement. Specifically, I examine how general the description can be to support a patent grant. In the first column, I indicate whether a person can receive a patent over several different DNA sequences by describing only one related sequence. In the second column, I show whether a description of the function--what the DNA sequence does--is sufficient disclosure to support a patent grant or whether the DNA sequence itself must be described. The information used in this chart derives from the governments of the countries listed.

    Disclosure Sufficient to Support Multiple DNA Sequences
    Country Working Examples that are Similar to Claimed DNA Sequences are Sufficient Functional Descriptions of DNA Sequences are Sufficient
    Canada    
    United States    
    Japan    
    Europe    
    Australia    
    Hungary    
    Korea    

    Average Months Elapsed Between Filing and Final Ruling on Patent Application
    Country Months to Initial Action Months to Issue or Abandonment
    Canada 24.6 44.7
    United States   27
    Japan 22  
    United Kingdom   32
    Germany   24
    Hungary   56

  6. Scope of Patent Holder’s Exclusive Rights

    Once granted, a patent provides an inventor with certain rights over the patented invention. The most notable of these are the rights to exclude all others from selling or reproducing the invention in any form. These rights are not, however, without limits. All countries recognise that people can make some uses of the invention without infringing on the patent holder’s rights. For example, most countries recognise that individuals can use the patented invention for research and experimentation without infringing on the patent. These exceptions are, however, fairly narrow, especially in the United States. Some countries also provide that, under certain circumstances, a person can require the patent holder to provide him or her with the right to use the patented invention even when the patent holder would prefer not to do so. This is done through a regime of compulsory licensing. Rules surrounding compulsory licensing are extremely limited by the provisions of TRIPs. One important example of legitimate compulsory licensing under TRIPs is its availability with respect to an invention needed to use another invention that represents a significant advance on that first invention. Third, some countries have indicated that they are prepared to provide farmers with the right to use seeds harvested from a genetically-modified crop or breed genetically-modified animals on their own farms without violating the patent on the crop or animal.

    Even though the Community Patent Convention in Europe has not come into force for lack of adhesion, most European countries follow its rules with respect to the scope of researchers’ rights to use a patented invention for experimental purposes. A researcher may use a patented invention under two exemptions. The first states that individuals may use the invention for purely private and non-commercial purposes. Since much biotechnology research, even at a university or research institution, may result in the development of a commercial product, it is the second component that is more important. This second exemption holds that a researcher may use the patented invention to conduct research relating to that invention, as opposed to merely using the invention to research something else. If the German courts are indicative of European practice, the class of activities considered to be “related to” an invention is quite broad.20 According to these courts, as long as there is some logical link between the patented invention and the research, even if that research has a commercial purpose, the research falls within the experimental use exception.

    The position of the experimental use exception in the United States is far from clear.21 U.S. patent legislation does not explicitly recognise this exception. Courts have nevertheless held that research conducted for merely philosophical curiosity does not infringe upon a patent.22 This concept is not only unclear but subject to much debate. The few cases that have discussed the experimental use exception have interpreted it narrowly as applying only where the researcher has no commercial or institutional purpose in mind. Literally, the research must aim at no other purpose than the pursuit of pure knowledge. Most recognise that this test does not easily fit with current biotechnology research, which almost always has some commercial application. Contemporary American courts have yet to wrestle with this issue, is unclear how they will interpret the experimental use exception. If they follow the existing caselaw, it would be difficult to ever rely on the exception. The United States also has a narrower experimental use exception relating to testing patented generic drugs in order to gain regulatory approval prior to expiry of the patent.23

    There are two experimental use exceptions in Canada. One is quite narrow. This exception, provided in the Patent Act, is designed to permit generic pharmaceutical manufacturers to make a patented pharmaceutical in order to satisfy federal regulators that their generic pharmaceuticals meet health and safety laws. This exception was recently upheld by a trade dispute panel under the WTO.24 The second exception, like the general exception in the United States, was introduced by court decisions. The scope of this exception is unclear, but seems to permit researchers to manufacture and use patented inventions in order to experiment on and improve upon them.25 It is unclear how this experimental use exception would apply to HLFs.

    As the box, “Case Study: Experimental Use” illustrates, the scope of the experimental use exception could have a fundamental impact on basic research using HLFs and related processes. The European approach would allow researchers to freely use patented research tools–HLFs that are used to assist further research rather than being ends in themselves, such as gene sequences and cell-lines–in their research provided that this research involves improving, developing, or testing the invention. The American approach would likely prevent the free use of research tools. The Canadian approach seems to lie between that of the United States and Europe.

    If Canada chooses to clarify the nature of the experimental use exception, it would have to be mindful to construct the similar exception for HLFs as it does for all other types of invention, from mousetraps to chemical processes. This is because TRIPs requires that Canada treat different technology equally.

    Many countries impose a second limitation on the rights of patent holders. Under certain circumstances, most countries provide that an individual can be awarded a licence to use a patented invention without the approval of the patent holder. TRIPs establishes detailed rules on the grant of compulsory licences. For example, it states that a country may only grant a compulsory licence under one of three circumstances: where the licensee attempts but fails to negotiate for the use of the patented invention on reasonable commercial terms, where there exists a national emergency, or where the patent holder has been acting in an anti-competitive manner.

    While the United States has the most restrictive policies of the Quad members with respect to compulsory licensing, Canada is not far behind. In Canada, compulsory licences are only available to the government or in cases of anti-competitive activity. Most other developed countries permit compulsory licensing where a patent holder does not actively use the patent in the country or where the existence of the patent blocks the use of another patent within the country. Nevertheless, despite the existence of compulsory licences, countries uniformly report that they are rarely, if ever, granted.

    The third limitation imposed on a patent owner’s exclusivity is the so-called farmer’s privilege. It is only relevant in those countries in which plants and animals are patentable (hence, not Canada). To the extent that it is recognised, this privilege permits farmers who have grown genetically-modified crops to harvest the seeds from those crops and plant them. Similarly, under this privilege, farmers would be able to breed geneticallymodified animals. Without this exception, neither activity would be permitted. This is because the person holding the patent in the crop or animal has the exclusive right to copy or reproduce the patented invention. That is, without the farmer’s privilege, farmers would not be permitted, under patent law, to reproduce the plant or animal.

    Countries generally recognise the existence of a farmer’s privilege with respect to plants protected under plant breeders legislation. The European Union, through the Directive, has provided that the same plants currently subject to a farmer’s privilege under plant breeders legislation26 are subject to the same privilege under patent law. The European Union has also expanded on farmer’s privilege by extending it to animal varieties (a term that has not yet been defined).

    Case Study: Experimental Use

    To better understand the differences between the European, American, and Canadian experimental use exceptions, consider the following example. Company A holds a patent over a human gene that is correlated with an increased incidence of cancer. Company A licenses that gene to Company B for use in a genetic test and in developing a therapy for cancer. Company B has identified four mutations in the gene that correlate with cancer. It offers a diagnostic test to individuals at risk of cancer for a fee. Researcher C is interested in finding additional mutations in the gene. Researcher C therefore recruits individuals at risk of cancer and offers them the test in order to find other mutations. Researcher C provides this service for free. Researcher C also provides the test for Researcher D who is similarly looking for other mutations. Researcher C charges Researcher D a fee equal to Researcher C’s cost of operations.

    Under the European research exemption, Researcher C is not infringing upon Company A’s patent. In terms of Researcher C’s provision of tests to his or her own patients, Researcher C is conducting research on the patented invention, here the human gene. Researcher C’s provision of tests to Researcher D is less clear because Researcher C charges a fee and is not conducting the research him or herself, but would likely fall within the same exemption since the goal is research on the gene.

    Since Researcher C’s research will likely, at some point, result in a commercial product–a new diagnostic test or new pharmaceutical agent–Researcher C could probably not rely on the experimental use exception in the United States, even in relation to Researcher C’s own research. Although this situation has yet to be litigated, there are reports that U.S. patent owners have threatened researchers in the position of Researcher C with lawsuits if they do not cease their research.

    Given that Researcher C is trying to improve on the patent by finding new mutations in the gene, it is likely that a Canadian court would determine that Researcher C is entitled to rely on the experimental use exception in respect of his or her own research. On the other hand, since Researcher C charges Researcher D a fee for the test, Researcher C would probably not be able to rely on this exception with respect to the provision of services to Researcher D.

    Compulsory Licensing
    Country Emergency As Remedy for Anti-Competitive Behaviour Government Use in Accordance with TRIPs Available Where Non-Use by Patent Holder Available in Accordance with TRIPs Available for Other Reasons
    Canada            
    United States            
    Japan            
    United Kingdom            
    Austria            
    Australia            
    Hungary            
    Korea            

     

    Canada does not have compulsory licensing per se for this activity, but the Commissioner of Patents has the power to award a licence under s. 66(1)(a) of the Patent Act for an abuse of patent which, under s. 65(2)(c) of the Act, includes this activity.

  7. Approaches to HLF Patenting

    As the foregoing discussion illustrates, there is a divergence of opinion among Quad members and others over the manner in which patent laws apply to HLFs and related processes. Except for Canada, which does not recognise any patents in whole plants or animals, the differences between countries are fairly limited. Nevertheless, some important differences exist. These are largely in three areas: the grant of patents over biological processes, the existence of a morality exception to the grant of patents, and the uses that an individual may make of a patent without the authorisation of the patent holder.

    Overall, the patent system in the United States is the most open to inventors. The general philosophy is that anything, except for human beings themselves, is patentable, without reservation.27 The only requirement is that the inventor must fully disclose the invention so that others can use it without difficulty. Once given, the patent is almost absolute. Only the experimental use exception which, under current law, appears to be narrow, limits the scope of the patent holder’s rights.

    The rest of the developed world is less aggressive in providing patent protection. While patents over HLFs are generally available, patents over processes using those HLFs are more difficult to obtain. Most developed countries are concerned with potential abuses of patent protection, whether for ethical reasons or for anticompetitive activity. For example, European countries have a greater ability to withhold patents or to allow others to use patented inventions without authorisation.

    The differences between Europe and the United States may, however, be more theoretical than practical. In practice, Europe does not use its ability to withhold patents on moral grounds and does not grant compulsory licences. Even the fact that Europe does not grant patents over many processes involving HLFs is less material than one would otherwise think. This is because once a person has a patent over an HLF he or she can effectively prevent the use of that HLF in any process.

  8. Conclusion

    Canada diverges in several important respects from the patent practices of most other developed nations with respect to HLFs. This is due more to the absence of policy in the area than to a positive decision to diverge from the patent practices of Canada’s trading partners. In formulating its policies with respect to HLFs and related processes, Canada ought to consider not only the policies selected by other countries but the constraints imposed upon it by international agreements such as TRIPs.

  9. TRIPs Section 5: Patents

    1. Article 27

      1. Patentable Subject Matter

        Subject to the provisions of paragraphs 2 and 3, patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application. Subject to paragraph 4 of Article 65, paragraph 8 of Article 70 and paragraph 3 of this Article, patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced.

      2. Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law.

      3. Members may also exclude from patentability:
        1. diagnostic, therapeutic and surgical methods for the treatment of humans or animals;
        2. plants and animals other than microorganisms, and essentially biological processes for the production of plants or animals other than nonbiological and microbiological processes. However, Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof. The provisions of this subparagraph shall be reviewed four years after the date of entry into force of the WTO Agreement.

    2. Article 28

      Rights Conferred
      1. A patent shall confer on its owner the following exclusive rights:
        1. where the subject matter of a patent is a product, to prevent third parties not having the owner’s consent from the acts of: making, using, offering for sale, selling, or importing for these purposes that product;
        2. where the subject matter of a patent is a process, to prevent third parties not having the owner’s consent from the act of using the process, and from the acts of: using, offering for sale, selling, or importing for these purposes at least the product obtained directly by that process.
      2. Patent owners shall also have the right to assign, or transfer by succession, the patent and to conclude licensing contracts.

    3. Article 29

      Conditions on Patent Applicants
      1. Members shall require that an applicant for a patent shall disclose the invention in a manner sufficiently clear and complete for the invention to be carried out by a person skilled in the art and may require the applicant to indicate the best mode for carrying out the invention known to the inventor at the filing date or, where priority is claimed, at the priority date of the application.
      2. Members may require an applicant for a patent to provide information concerning the applicant’s corresponding foreign applications and grants.

    4. Article 30

      Exceptions to Rights Conferred

      Members may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties.

    5. Article 31

      Other Use Without Authorization of the Right Holder
      Where the law of a Member allows for other use of the subject matter of a patent without the authorization of the right holder, including use by the government or third parties authorized by the government, the following provisions shall be respected:
      1. authorization of such use shall be considered on its individual merits;
      2. such use may only be permitted if, prior to such use, the proposed user has made efforts to obtain authorization from the right holder on reasonable commercial terms and conditions and that such efforts have not been successful within a reasonable period of time. This requirement may be waived by a Member in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use. In situations of national emergency or other circumstances of extreme urgency, the right holder shall, nevertheless, be notified as soon as reasonably practicable. In the case of public non-commercial use, where the government or contractor, without making a patent search, knows or has demonstrable grounds to know that a valid patent is or will be used by or for the government, the right holder shall be informed promptly;
      3. the scope and duration of such use shall be limited to the purpose for which it was authorized, and in the case of semi-conductor technology shall only be for public non-commercial use or to remedy a practice determined after judicial or administrative process to be anti-competitive;
      4. such use shall be non-exclusive;
      5. such use shall be non-assignable, except with that part of the enterprise or goodwill which enjoys such use;
      6. any such use shall be authorized predominantly for the supply of the domestic market of the Member authorizing such use;
      7. authorization for such use shall be liable, subject to adequate protection of the legitimate interests of the persons so authorized, to be terminated if and when the circumstances which led to it cease to exist and are unlikely to recur. The competent authority shall have the authority to review, upon motivated request, the continued existence of these circumstances;
      8. the right holder shall be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization;
      9. the legal validity of any decision relating to the authorization of such use shall be subject to judicial review or other independent review by a distinct higher authority in that Member;
      10. any decision relating to the remuneration provided in respect of such use shall be subject to judicial review or other independent review by a distinct higher authority in that Member;
      11. members are not obliged to apply the conditions set forth in subparagraphs (b) and (f) where such use is permitted to remedy a practice determined after judicial or administrative process to be anti-competitive. The need to correct anti-competitive practices may be taken into account in determining the amount of remuneration in such cases. Competent authorities shall have the authority to refuse termination of authorization if and when the conditions which led to such authorization are likely to recur;
      12. where such use is authorized to permit the exploitation of a patent (“the second patent”) which cannot be exploited without infringing another patent (“the first patent”), the following additional conditions shall apply:
        1. the invention claimed in the second patent shall involve an important technical advance of considerable economic significance in relation to the invention claimed in the first patent;
        2. the owner of the first patent shall be entitled to a cross-licence on reasonable terms to use the invention claimed in the second patent; and
        3. the use authorized in respect of the first patent shall be non-assignable except with the assignment of the second patent.
  1. 1 E.R. Gold, “Biomedical Patents and Ethics: A Canadian Solution” (2000) 45 McGill L.J. 413.
  2. 2 E.R. Gold, “Making Room: Reintegrating Basic Research, Health Policy, and Ethics into Patent Law” in T.A. Caulfield & B. Williams-Jones, eds., The Commercialization of Genetic Research: Ethical, Legal, and Policy Issues (New York: Kluwer Academic/Plenum Publishers, 1999) at 63 [hereinafter “Making Room”]; B.M. Knoppers, “Status, sale and patenting of human genetic material: an international survey” (1999) 22 Nature Genetics 23.
  3. 3 Knoppers, supra note 2.
  4. 4 “Making Room” supra note 2.
  5. 5 President and Fellows of Harvard College v. Commissioner of Patents, Federal Court of Appeal, no. A-334-98, August 3, 2000.
  6. 6 Canada – Patent Protection of Pharmaceutical Products, (not yet adopted) circulated 7 March 2000, WT/DS114/R , para. 7.92.
  7. 7 The technical term for this concept is “ordre public” which, in English, translates into public order or public policy. Although international tribunals have, on occasion, given a very wide meaning to this phrase--to include anything that a government believes to be good public policy--international tribunals have given the phrase a considerably narrower interpretation with respect to international agreements touching on patents. See, for example, European Patent Office Boards of Appeal decision T356/93 (OJ EPO1995, 545). In the context of international patent conventions, “ordre public” generally means the protection of public security, the physical integrity of individuals as part of society, and the protection of the environment.
  8. 8 United States – Import Prohibition of Certain Shrimp and Shrimp Products, Adopted 6 November 1998, WT/DS58/AB/R, para. 156.
  9. 9 Japan – Taxes on Alcoholic Beverages, Adopted 1 November 1996, WT/DS8/AB/R.
  10. 10 By this, I mean no other measure that is less restrictive to patent rights. United States – Standards for Reformulated and Conventional Gasoline, Adopted 20 May 1996, WT/DS2/9
  11. 11 See supra note 7.
  12. 12 General Agreement on Tariffs and Trade, Article XX, and Agreement On The Application Of Sanitary And Phytosanitary Measures.
  13. 13 See, for example, EC Measures Concerning Meat And Meat Products (Hormones), Adopted 13 February 1998, WT/DS26/AB/R, WT/DS48/AB/R.
  14. 14 As indicated by the use of “necessary,” the lack of such words as “likely” or “probable” to modify the phrase “protect human, animal or plant life or health,” and the requirement that there be “serious” prejudice to the environment.
  15. 15 EC Measures Concerning Meat And Meat Products (Hormones), Adopted 13 February 1998, WT/DS26/AB/R, WT/DS48/AB/R.
  16. 16 Article 27 of TRIPs provides that countries must not discriminate with respect to the availability and enjoyment of patents on the basis of place of invention, field of technology, or on whether the product is imported or locally produced. The dispute resolution panel in Canada – Patent Protection of Pharmaceutical Products, WT/DS114/R, released 17 March 2000, found that discrimination between fields of technology could be either explicit in the law or as a result of differentially disadvantageous consequences of a measure. It also held, in para. 7.91, that this principle of non-discrimination applies to all aspects of the availability and enjoyment of patent rights including the exceptions to those rights. Putting this together with the meaning of available (at one’s disposal), biotechnology patents must be available on the basis of criteria substantively equal to that in other fields of technology. In para 7.92, the panel did recognise, however, that a country would not be discriminating in dealing with specific bona fide problems with particular products. This would presumably permit, for example, the deposit of biological materials rather than a written description of them. Adding additional substantive or procedural criteria for patents would seem to go well beyond this.
  17. 17 Personal interview with D. Vandergheynst of the Internal Market Directorate General (25 May 1998) Brussels, Belgium.
  18. 18 Ibid.
  19. 19 See Knoppers, supra note 2.
  20. 20 Boehringer Ingelheim International GmbH v. Dr. Rentschler Arzneimittel GmbH and others, a decision of the German Federal Supreme Court (BGH) on 11 July 1995.
  21. 21 “Making Room”, supra note 2.
  22. 22 Popenhusen v. Falke, S.D.N.Y. 1861, 19 F.Cas. 1048.
  23. 23 Roche Products, Inc. v. Bolar Pharmaceuticals Co., Fed. Cir 1984, 733 F.2d. 858.
  24. 24 Canada – Patent Protection of Pharmaceutical Products, WT/DS114/R, released 17 March 2000.
  25. 25 Micro Chemicals Ltd v. Smith Kline & French Laboratories Ltd, [1972] S.C.R. 506.
  26. 26 Regulation No. 2100/94 on Community plant variety rights [1994] O.J. L227/1.
  27. 27 Diamond v. Chakrabarty, 447 U.S. 303 (1980).
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    Création: 2005-07-13
Révision: 2005-07-13
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