THE FORUM ON TECHNOLOGY & INNOVATION

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WHO OWNS THE GENOME?

HUMAN GENETICS AND INTELLECTUAL PROPERTY

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WEDNESDAY,

APRIL 26, 2001

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This transcript was produced from a tape provided by the Forum on Technology & Innovation.

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PRESENTERS . . . . . . . . . . . . . . . . . . .PAGE

Dr. J. Craig Venter . . . . . . . . . . . . . . . 4

Bruce Lehman . . . . . . . . . . . . . . . . . . .8

Prof. Lori Andrews . . . . . . . . . . . . . . . .12

QUESTION & ANSWER . . . . . . . . . . . . . . . . 17

P-R-O-C-E-E-D-I-N-G-S

MR. ROONEY: My name is Peter Rooney and I direct the Forum for Senator Rockefeller, Senator Frist, and the Council on Competitiveness. It’s my pleasure to welcome you back to another Tech Forum briefing. I think the senators have brought you a great program today. For you folks standing, we have a few seats up front here if you could force your way through the crowds and sit down-- that would be terrific.

I just want to briefing tell you about our program and our format. These briefings are made possible by generous grants from the W. K. Kellogg Foundation, the Alfred P. Sloan Foundation, the David and Lucile Packard Foundation, and the Samueli Foundation. We couldn't do it without their support and we're very grateful to them.

In your briefing packets the first item on the back page is the agenda for today's briefing. The senators will make introductions, we'll have presentations from our excellent speakers, and then the senators are going to open the floor to your questions. We have microphones. We very much prefer that you come to the microphones if you can. If you could make your way there that would be great. To our public audience, we're delighted that you're here, but please give Congressional Staff priority at the microphones. The senators are here and we're here for the Congressional staff.

The second item in your briefing packet is these green question card. For those of you who are shy go ahead and fill our your questions on these cards, hold them up, we'll pick them up from you, and Senator Rockefeller and Senator Frist will ask questions on your behalf, National Press Club Style. Finally, we have blue evaluation cards. It's the third item in your packet. We care very much about what you half to say. Please tell us what you think about what we're doing. We pay attention to your feedback and we use it to continuously improve our events. Now I will turn it over to Senator Frist.

SEN. FRIST: OK, I'm going to turn it to Sen. Rockefeller. We haven't decided-- most of you have been here before, and we run this thing informally but we do run it on time. We try to respect your time a lot. So I'm going to turn it to him to open. But, it is fun to be in this room. Most of you have been in this room at some time or another. Jay can probably give you a better history of this room, but it is quite a historic room. There's a little plaque over here that lists what this room has been about, but everything from the Titanic-- the hearings surrounding that, to Pearl Harbor-- the hearings surrounding that. John Dean, Watergate here, there's a whole list of people-- again Jay may know who-- announced their run for presidency out of this room. And one time about six months ago I went through that list and not very many of those won.

(Laughter)

But there's a whole list of about fourteen. And so I talk about all the great things about this room and people start to come up afterwards and say maybe this is a room we should not be in, especially if you're running for president of the United States. So nobody announce for presidency in this room. Jay, do you want to open up? You open up and I'll do the introductions.

SEN. ROCKEFELLER: And I don't think either of us is running, right?

SEN. FRIST: That's right.

SEN. ROCKEFELLER: Thanks very much for joining us today and again, as Peter pointed out, the first and most important thing is for you to be here, you are. The second most important thing is to listen, which you will. But by far, the most important thing is to be aggressive in your questioning either via microphone or via the green cards because otherwise these don't work. If the questions don't come from you, and you know that we always have more of a bias towards Congressional staff then we do towards trade, press, et cetera, although we don't discriminate, this is basically for congressional staff.

In any event, the biotechnology era has been supported by a very robust system of intellectual property protection. And Strong patent protection has helped to create a unique system of innovation, which has been very successful, where patient capital from the private sector funds biotechnology research and development. And that's worked well. At the same time, advances in biotechnology have sparked a very vigorous and an increasingly emotion debate regarding the patenting of certain biotech inventions, particularly gene sequences and genetically modified life forms. Some critics argue that the strong patent protection for DNA sequences, for example, is unethical, and may actually impede the delivery of new diagnostic tests and new cures for consumers, patients, et cetera. Supporters of current policy take the opposite point of view. And that is that patent protection is the only way to insure a constant flow of new technology dedicated to promoting human health and welfare. So we're very fortunate today to have three experts, whom Bill First will introduce to -- as we always try to do-- give both sides of everything. Bill and I remain neutral. And you remain aggressive.

So Bill, if you could do the introductions we can go ahead.

SEN. FRIST: Thank you Jay. Can you hear in the back? Hopefully these monitors will help out as well. This is a wonderful and beautiful room that is a working room, which is demonstrated today. But sometimes the acoustics are quite as good. That's good that you can hear. I'll introduce all three and then we will just ask them to proceed. And we've asked them to proceed with a ten-minute introduction and then we'll get into the responsiveness and the questions and answers, which we value so much.

To your right and to my left, Craig Venter is both a friend and a true pioneer in both the evolution of science and specifically the topics that we are going to be talking about today. So it's a real privilege for me to introduce the president and CEO of Celera Genomics. An innovative, creative, and pioneering biotechnology company that applied advanced computational techniques in a very unique and very creative way initially to solve the puzzle of human genetics. And ultimately, they became the first to sequence the entire human genome. If you go back and do what we in science do, and do a literatory search, you will see that he is one of the most frequently cited scientist, not just in the United States but in the world today. He has helped, through his endeavors, in a direct and indirect way to discover more then half of the human genes. In addition to his leadership role at Celera he is founder and chairman of the Institute for Genomic Research, which is a non-profit genomic institution in Rockville. And so thank you very much Craig for being with us.

Bruce Lehman, again I'll introduce all three, Bruce who is to you're left at the end of the table, is president and CEO of the International Intellectual Property Institute and president of the US Committee for the World Intellectual Property Organization. He too is a leading authority on intellectual property policy, formerly serving as US Commissioner of Patents and Trademarks. During his tenure as commissioner he greatly streamlined the patent process and developed new guidelines for patenting biotechnology inventions, ultimately paving the way, in many ways, for the explosive growth that we have seen in that arena.

Lori Andrews, to Jay's right, is director of the Institute of Science, Law, and Technology at the Chicago Kent College of Law. She is an expert on patenting and intellectual property law, and is a leading critic of the current patent system for genetic material. She has served as an advisor on genetic technology policy for the World Health Organization, the National Academy of Sciences, and the Human Genome Project at the National Institutes of Health. She's appeared on numerous shows, Nightline, 60 Minutes, and is the author of nine books, including, The Clone Age and Future Perfect: Confronting Decisions about Genetics.

Bruce and Lori, I thank both of you for being with us today. Craig, why don't you kick it off? We'll go in that order. It's probably easier, just so people can see in the back, to speak from the podium initially and then we can take questions and answers from our seats.

DR. VENTER: Well thank you senator. It's a real pleasure to be here. I thank both senators Frist and Rockefeller for their time, I know it's precious, and for their staff for arranging this hopefully exciting discussion.

I was asked to give a brief introduction to genomics so that everyone could have a common framework where we're discussing this. Most people don't realize that this is a very recent field. The first genome in history for a free-living organism is one that was determined in Rockville, Maryland and published in Science in 1995. So, before then we really didn't have a field of Genomics. We talked about it but it didn't go very far. This was developed by a new method called whole genome shotgun sequencing, that we use mathematics to reassemble the entire genome. In 1998, we formed a new company, Celera Genomics, to sequence the human genome because we didn't like the pace that the public project was going at and we needed the genome sequence to move forward the discovery of new diagnostics and therapeutics. We started the sequence of the Drosophila genome as a test project. People thought that these methods wouldn't work because they were too complicated. It was too big of a problem to solve. We had to build one of the world's largest super computers to solve this equation, and even with that it took 20,000 CPU hours to assemble the human genome. But the Drosophila genome helped prove that the methods really did work and validated the entire process that we underwent.

It took nine months for us to sequence the human genome. We selected DNA sample from 21 normal volunteers. If you watched Nova the other night, you learned that I was probably one of those. In fact, early on when the discussion about patenting the genome were taking place and some of our critics were using it as an excuse to raise federal funds for their project, that we were going to patent the genome at tie it up, I said, well if it's going to be my genome, I could probably claim that I invented it and could patent my own genome. But then I got a call from my mother. (laughter) So we had to change our tactics very quickly.

We made sure that the individuals have normal chromosomes and we made established cell lines so that we could study the DNA in the future. We chose five individuals for sequencing, three females and two males. We wanted to cover ethic diversity. Initially, this was very controversial. We had a human subjects review committee that was trying to decide, they were worried about the public abusing this information and use it for discriminations. And that is why there is some very important legislation pending on genetic discrimination that we hope passes this year. I solved it by saying, ok; we'll sequence the genome from five white males. That focuses the discussion very quickly and it was decided that in fact, it would be beneficial to have as much diversity as possible.

We sequenced the genomes from people self-described as African American, Hispanic, Chinese, and Caucasian. It took nine months to sequence the human genetic code with these new methods, and it was announced at the White House. I was told it was the first scientific announcement that ever came out of the White House.

This was published in February of this month. We were excited that the cover of Science reflected the diversity of the individuals. The biggest discovery and surprise to a lot of people was the small number of human genes. There were people predicting that there were one to two hundred thousand human genes. I told this story about, after we published the paper saying that there may be only sixty to eighty thousand genes in the early 1990's I got a call from them CEO of Human Genome Sciences, Wally Steinberg, screaming obscenities at me and I said what's wrong? I couldn't understand why he was upset if we were saying there were only 80,000 genes. He said he sold 100,000 of them to SmithKline Beecham. And so, people who view genes as commodities wanted there to be a large number. Most people wanted there to be a large number. Genes are now part of everybody's normal language. They've reached the epitome or language being in Super Bowl ads. Everybody talks about there being a gene for this and a gene for that. And if there is a gene for every trait and condition and we're hardwired, there should be a very large number. It turns out that there's a small number. We only have twice as many genes as a fruit fly. Some people were insulted by that. I got a lot of angry calls from Drosophila researchers. But we only have 26,000 genes not 140,000. Not 200,000. And I think it really helps illustrate that we're not hardwired.

The map, this is the smallest we could print it, this map behind me. It's impossible to see. I would encourage you, if you haven't seen it, to come up and look at it. This is only dealing with a few inches of it. It's ironic that the largest computation ever done in biology and medicine, that the results of that could only be displayed by printing it on paper. If we go any smaller then this chart and try to show it on a computer screen, the genes disappear smaller than single pixels. Even blowing it up, people can see that the gene density varies tremendously from one chromosome region to another. That's why the earlier estimates of genes were too high. We have huge deserts with few or no genes while other regions are absolutely packed with genes.

We sequenced the mouse genome. The mouse genome is very similar to the human genome. In fact, we've only found 300 genes in the human genome that don't appear to have a counterpart in the mouse genome. If we look at the different parts of the chromosomes, for example, this is the Downe's Syndrome region of human chromosome 21, it's the same exact genes and the same exact order on mouse chromosome 16. This is what we find throughout the human and mouse genomes. This is not the blueprint of life. This is not the book of man. This is not the secret code of God. The genetic code is part, and it's only the first stage in a very complex puzzle, that allows us to be alive. So all the concerns about patenting and other issues at this level controlling life I think are very misplaced.

Here's an actual example of human chromosome six, mouse chromosome 17. Every place you see one of these green lines, every one of these human genes is in the same order and the same genes as on the mouse chromosomes. Obviously there are important differences between humans, mice, and other species, but it's in the complex regulation of genes and in the few genes that are different, not the over 95 percent that we share.

Genetic variation, with this method that we have, we get all the variants, the genetic code from each individual we sequenced. Each of you got a set of chromosomes from your mother and from your father. They differ in about two to three million letters of genetic code from each other. But one of the key things that we found is that only 1.1 percent of the genetic code codes for proteins. So if you take 1.1 percent of the snips, that's how many would statistically occur in the proteins. But we actually found, looking at the genetic codes of these individuals that we sequenced, that there's only a few thousand that actually occur in the proteins and change the protein sequence in these individuals. If you count regulatory regions instead of millions of differences between us there are only 10,000 differences that are biologically significant between any two of us, and that has a big impact about things going forward. This has an impact on the pharmaceutical industry. We found just one receptor, just one letter in the genetic code that determines whether a drug will bind to the receptor. This is a slow graphic; it's a slow drug. It changes the structure of the receptor so that the future of FDA approval could be on the genetic code of individuals, statistically predicting whether they would respond. This drug may not do any harm, but most people don't realize that drugs work only on about thirty to fifty percent of the population.

We're now starting a whole new process based on having the genetic code, and that's determining the sequence of all the proteins. If there are 30,000 genes, there are on the order of 250,000 proteins. We have one hundred trillion cells. So the mathematicians in the group, you can multiply, take 250,000 to the one hundred trillionth power and that's the number of different combinations we have in proteins in our body. That's why we're not hardwired. These are constantly varying in real time and difficult to understand the complexes of biology.

We're trying to do this. We're measuring a million protein sequences a day to try to find out which of those proteins change with disease. We're looking for early diagnostic markers for breast cancer and colon cancer that would show whether that individual actually had cancer before it would show up on an X-ray. Both breast cancer and colon cancer have very effective treatments if they can be detected early. The effective treatment is surgery. And we have one of the world's top surgeons on this panel. We're also sequencing the proteins that are in the tumors, using these as targets for new drug development, new cancer vaccine, and therapeutic anti-body development.

So, just to close, we're now bringing together all these different approaches: population genetics, proteomics, the human genetic code, trying to build a whole new paradigm for understanding and developing new diagnostics and therapeutics. Patents are a key part in this process. We argue that patents on genes are not very significant. If you look at the number one holder of patents on genes it's the US government. And there are a few biotech companies that follow. You won't find Celera or Tiger on that list. Patents on specific proteins as they become therapeutic proteins are diagnostic markers, will be key. But one thing is absolutely certain is that nobody will invest in developing drugs or diagnostics, it takes a half a billion dollars to get a drug through development, if there's not good intellectually property protection for those actually drugs. Most genes won't be drugs. Most genes won't even participate in the pattern to develop drugs. So this rush early on to develop EST patents off the earlier methods we developed, we think, were unfounded. But solid patent protections for the few that will really have an impact are very important. With that I'll quit, thank you.

SEN. FRIST: Craig, thank you very much for outstanding background. Bruce, why don't we kick right in and get those issues going, thank you.

MR. LEHMAN: The patent system is very much identified with the United States as a country. And we were the first country in the history of the world to recognize that innovators should have a constitutional right. That is based in the Constitution of the United States. And the found brothers said that Congress had the power to promote science and progress and useful arts be securing, for a limited time to authors and inventers, the exclusive right to their respective rights and discoveries. And I want to emphasis the words exclusive rights and discoveries. It's not a product, it's a discovery, and the rights are exclusive. The limitation is on time.

The patent system go off the ground in 1789 with the first Congress and it was very important in the development of technology in the United States in the nineteenth century. And every school child knows about the McCormick Reaper, Erickson and the screw engine for ships, and of course, Thomas Edison. What they also don't realize sometimes is that were big controversies back then. Thomas Edison was involved in all kinds of patent litigation. There were all kinds of questions about whether or not we should patent some of Thomas Edison's innovations. But in hindsight, I think everyone agrees that the patent system is what caused these great inventors to get the investment capital that they needed to develop new products and to develop new industries, which pulled the United States into the economic leadership of the world, even in the nineteenth century.

Now that process continues today. The Supreme Court has held that literally anything under the sun that is made by man is subject to the patent system. The critical test is, "made by man," and we'll get into that in a little bit. In the late twentieth century, the patent incentive gave rise, just as it did in the nineteenth century for mechanical and electrical inventions, to venture capital investments in the biotechnology industry. And I think I can take, as we lawyers say, judicial notice of the fact that most of the people in this room would accept the fact that venture capital almost equals the biotechnology industry. I'm sure that when you started your country Craig that you went to a venture capitalist. I know some of your competitors did. And they would not have given you one penny did they not think that you were able to get proprietary rights over the innovations which could take many years to bring to the market.

Now today, the use of sequence technology to discover useful properties of human genes is at the very core of biotech research and development. And I want to emphasis that, "useful properties." The law governing patenting of discoveries for gene sequences isn't really any different from the law that governed in the nineteenth century, the laws that governed the discoveries of Louis Pasteur, or Thomas Edison, or Thomas Watson who gave us IBM. The law is that whoever invents or discovers any new or useful process, machine, manufacture, or composition of matter, (and that's what we're dealing with here in the gene area, composition of matter) may obtain a patent therefore. And for over one hundred years, the US has been granting patents on compositions of matter, including compositions of matter which occurred naturally in the natural environment but which have been transformed in a purified state that is isolated from nature. And early examples of that, I mentioned Louis Pasteur, was his patent on yeast free from organic germs of disease, which he patented as an article of manufacture. We also had over one hundred years ago, a patent on adrenaline. But it's the patent on purified form that just doesn't automatically occur in nature, which confers the ownership.

Patents do not confer ownership of genes, genetic information, or sequences. And I think probably one of the reasons, and I'm glad that we have a large group of people here who want to hear about patent law, but it's a double-edged sword because probably one of the reasons why we have a large group is because this is a very sexy, exciting area that everybody thinks Frankenstein horror movies are about; that somehow or another a big corporation is going to get control of human beings and that they're all going to be come a bunch of slaves. And I'm sorry to disappoint you. That's just not going to be the case because you cannot own a person. You can't really even own a gene. What you own is a discovery, which is novel and non-obvious in some aspect of that gene, the purified form of that protein, something that has not existed before. That's the test for getting a patent, and not only that. It just can't be a discovery. It has to be a discovery in which you can show substantial and credible utility; that it actually does something useful.

If an isolated and purified DNA molecule can be used to produce a useful protein, or it hybridizes near and serves as a marker for a disease gene, it is patentable. Now, those are somewhat complex words, but just think of that for a second and think of what you just heard from Dr. Venter. Obviously, if it hybridizes or serves as a marker for a disease gene, it obviously has a considerable amount of utility. It's telling us about how those diseases work, and we want that information, and we need the patents system to encourage that information to come into the marketplace so that it can be used.

Now, other inventors may discover separate uses for an isolated DNA molecule or useful protein, and this is a very important point, you know, research goes in stages. And their inventions may also be separately patentable. But the way the system works is that if your invention builds on somebody else's patent invention, then you have to get a license from them if you are going to use the underlining technology. And I know a lot of people criticize that. But that's the way the system has worked for years in may industries. A lot of you probably don't realize that when you go to buy a television or any electronic devise, that there are in most cases hundreds, and some cases thousands of patents in those devises. And in those industries, no one could function if they asserted complete exclusivity over their patents. Companies come up with new innovations and then they cross-license, or license to over companies, and that's how the technology builds. And that is what I think we're going to be seeing in this biotechnology area. Historically, in the area of pharmaceuticals, we've thought of patents as exclusivity. You get an exclusive patent on a drug. But increasingly I think you will be seeing that the patents that other people have developed will be licensed for use in new drug development. In fact, I think, that is a lot of what the original business model of Celera was all about, a licensing business model. Not to actually produce drugs or sell them but to license these discoveries to other people who then carry on the research.

Now, why have licensing? Why not just give it away for free? Well, we wouldn't have gotten the investment in the first place if we'd just given it away for free. And in fact, I think one of the interesting things that Craig Venter said was that he didn't want to wait around for the government to find the sequence to the human genome. And in our patent system, we give the first inventor the patent. So in a sense, the patent system encourages the most rapid possible development of technology because the first one to get there gets the prize. Now some people might say that's unfair, but if you try to figure out what's fair or not, if you try to say that maybe we'd just be better off to wait a few more years for someone else to come up with it, I think you'd find that even the Wisdom of Solomon wouldn't find the solutions for you.

Now, there have been a lot of criticizes of the patent system over the years and the intellectual property system. And if anything new comes along, in fact the Supreme Court over the last quarter century has issued some very important decisions on patentability. They applied the patent system to life forms in the case of Diamond v. Chakrabarty in 1980, and in 1981 they applied it to computer software in the Deere case. And in both of those cases initially there was a round of criticism that somehow or other that innovation would be stifled. In fact, one of my frequent critics, UC Berkeley law professor, Pamela Samuelson, issued in 1984 something called the Manifesto Concerning Legal Protection of Computer Programs. She said in 1984 that, if we patent computer programs the innovation in the computer industry would be brought to a screeching halt. Well, if we look at the competition for new Pentium chips and so on and so forth, and what's going on in that area I think we can see that seventeen year later there is simply on evidence to support that.

In my view, patents on discoveries involving DNA sequences are supported by the Constitution, acts of Congress as interpreted by the Supreme Court, and it's quite clear that any restrictions on patentable subject matter, and if you don't like the present system, that's what you'd have to do, would have to involve legislation basic 212 year old structure of the patent system. And I think without very serious evidence of the problem, that we should be very careful about taking such a drastic step.

SEN. FRIST: Bruce, thank you very much. We appreciate it. Lori? Everybody has their green cards and you can start filling those out. We'll be picking those up right after Lori finishes her talk. Remember you can be very specific. Identify yourself. Any topics that have come up, thank you.

PROF. ANDREWS: Well the first point that I want to make is that I love the US patent system. I think the framers of the Constitution got it right when they decided that they had to reward people to create incentives for new technologies. And we reward inventors with a twenty year monopoly that forbids anyone else for making, using, or selling their invention in order to make sure that novel, non-obvious, and useful technologies get developed that might not otherwise have been created. And the patent system is a three-way give and take between the US Patent and Trademark Office, the Congress, and the Courts. All three have active roles in insuring that the patent system is met, and that the monopoly granted is not too broad. Most often, that means that the Courts and Congress whittle back patents granted by the patents office. For example, when Samuel Morris convinced the patent office to give him a patent on all uses of electro-magnetic waves, the US Supreme Court said no, you can only patent your invention, the telegraph. The patent office and Courts in recent year have made sure that ideas and scientific principals such as E=MC2 were not patentable so that everyone would have access to them. At the same time, patents were allowed on particular inventions, nuts and bolts embodiments of those ideas. They've also made sure that the public got something back for the monopoly. They didn't allow patents on products of nature because we wouldn't be getting anything new if someone came along and patented air, for example, and charged us all to breath.

Now I think the Patent office has advocated its traditional line-drawing role by allowing patents on human genes. You're not supposed to be able to patent a product of nature or formula. Yet genes, the arrangement of the chemical letters C, A, T, G are both. Patent lawyers will say, well we're not patenting the nature gene in your body. We're patenting an isolated, purified version of it. In a previous era, genes didn't exist outside the body and labs. To me, that argument would be as if the first person to remove a human heart and processed it for transplantation, got a patent on all hearts because previously hearts didn't exist in laboratories in that form on their own.

Patenting genes runs counter to the purpose of the patent system. First, the incentive for the patent is not necessary. When biologists began the Human Genome Project they had no idea that they were going to be able to patent genes. They were in it for Nobel Prizes, academic advancement, and status. The idea of having control over uses of genes seemed absurd. Prominent genetic researchers argued against it, saying that it would get in the way of research since scientists would stop sharing their human tissue samples in preliminary findings, and that indeed, has happened. Jonathan Shestack, who is in the audience today, producer of the great movie Air Force One, raised money to fund autism research. He learned that progress was slow because certain researchers were hording patient samples. They wanted to be the first one to find the gene and gain commercially. That's why patents should not be given on the genes themselves but on the therapies created for genes so that we have a lot of people looking for those therapies. Patenting gene therapies, and particular uses like diagnostic kits for example, would be like patenting drugs.

Patenting genes can impede innovation. Some researchers have been prevented from searching for cures for genetic diseases by the gene patent holders. If I start a company to find a cure for breast cancer, I would have to negotiate not only with the holder of the BRCA 1 patent, but with all the other patent holders who had discovered and patented any of the hundreds of the other mutations in the breast cancer gene. In fact, the research vice president for the pharmaceutical giant Merck, has found that the tangle of multiple ownership rights on genes has threatened the company's ability to create new products. And even though there may be thousands of patents in my TV or my Palm Pilot, my Intel chip, I can do without those things and people can invent around them. But if someone has a patent on a breast cancer gene, my own doctor can't even look in my body for that gene without permission of the patent holder.

And tragically, some of the patients being disadvantaged are the very ones who's own genes were the basis of the patent. The patent holder can charge what ever he wants for the test and for twenty years the gene patent holder controls any use of its gene. The company holding a patent on the gene associated with Alzheimer's disease, will not let any other laboratory, except its own, perform the test. Doctors and labs across the country face a lawsuit if they try to determine if one of their patients has the genetic form of Alzheimer's, even though testing can easily be done by anyone who knows the gene sequence without using any product or device made by the patent holder.

One geneticist told me recently that he could do the breast cancer gene test for thirty to fifty dollars. Myriad, which holds the patent, charges $2580. One in four laboratories has stopped performing certain genetic tests because of patent restrictions or excessive royalty costs. Now patent holders can even limit genetic testing to people based on their religious beliefs. Mark Skolnick for example, says that he will use his patent to forbid prenatal testing for breast cancer apparently because of the controversial potential for abortion. Now whether one is ProChoice or ProLife there is agreement that the policy on the important issue of abortion on decisions between patients and doctors should not be set by a mere patent holder. The problem in patenting genes to me is similar to the problem that came once there was a widespread patenting of surgical procedures. If the Heimlich maneuver had been patented, a waiter might hesitate to save a choking diner for fear of a patent infringement suit. Responding to the concerns of the medical profession, Congress in 1996, created an exception to the patent law so that health care providers are not subject to patent infringement suits when they use a patented medical or surgical procedures. Eighty other countries already had such an exemption, and I think that the law should be modestly tweaked to exempt from patent liability those healthcare provider involved in genetic testing so that their ability to diagnose patients will not be compromised by patents on genes. And I think that patents should be allowed on the gene therapies themselves.

Now I'm finding that gene patents also undermine the scientific method. The patent examiner has to take what the applicant says is correct. There is no FDA review when a company offers a genetic test as a service. It's not like drugs. If I have a patent on a disease gene and I say that one in three people in the general population have that gene, there is no way that you can prove me wrong. I can prohibit you from testing anyone for that gene to find out the true incidence of the disease. And some holders of gene patents have apparently exaggerated the prevalence of the disease, stopped other people from doing epidemiological studies, perhaps to scare people into being tests.

Research on diagnostics itself is being impeded. Very mutations in the same gene can cause a particular disease. But companies that do not let anyone else test for their gene make it more difficult to find if there are mutations then if a lot of pathologists or labs were doing the testing. In countries where the Alzheimer's Gene and the Hemocrosis Gene were not patented, researches found previously unknown mutations. These mutations can be used to diagnose people who otherwise would not have been diagnosed. The American College of Medical Genetics and the College of American Pathologists oppose gene patents as threatening medical advancement and patient care, plus genes are products of nature they say.

The public is beginning to cry foul as well. The Chicago Tribune published a major editorial asking Congress to liberate gene data. Even the extremely pro-business Forbes Magazine has criticized the patent office for granting overly sweeping rights stymieing inventors.

A hospital holds a patent on the Canavan Disease Gene, which causes fatal brain disease in infancy. The patent holder has closed down free testing programs, limited the right to test to a few doctors, and limited the number of tests those doctors may perform. Why? It wants to sell the rights of the gene to a biotech company. So, it's actually in the patent holder's interest to keep the number of people tested low, so that there is still a large untested group of individuals when the deal is struck. This sort of deal may be good for the Nasdaq, but it's a nightmare for the families involved. Children will be born to die horrible deaths because their parents were deterred from screening.

This is particularly disturbing to one of my clients in a pro bono case who is here to day. Dan Greenberg is here with his son Joshua. He lost two children to Canavan Disease. So he contacted a geneticist, convinced him to search for the gene, raised money to do research about the gene, and tracked down families around the globe to provide tissue samples. At no point in the thirteen years of effort did the researcher hospital ever tell him that they were going to patent the gene and restrict the licensing in this way.

Now we can't lose sight of the fact that the "bio" in biotechnology, the genes and the gene patents, come from people. You've got to have the trust of those people in order to get them to give up their tissue for research to be done on diagnostics and cures, the very time of research that Craig Venter has talked about as the next step beyond the sequence. The raw material in the biotech industry isn't widgets; it's not pieces of television sets; it's pieces of my body and your body and all of our bodies. And we've just had the remarkable scientific achievement of the sequencing of the genome. And there is no doubt that the challenge laid by Craig Venter, whom I greatly admire, spurred the NIH to speed up it's timetable on it's own gene sequencing. Some have mistakenly asserted that this shows the importance of gene patenting, that Craig's project was spurred on by the possibility of gene patents. I don't see it that way. Researches for both the NIH program, and the private program were patenting genes. Francis Collins, the head of the NIH public program has a host of gene patents. The Whitehead Institute, which received tens of millions of taxpayers' dollars from NIH and the Human Genome Project, has patents on genes and even a patent on a segment of the Y chromosome. So patents on genes by private companies weren't the reason that sequencing the genome, in my mind, occurred ahead of schedule. In fact, maybe it wasn't gene patents at all that played a significant role, but another patent. Perhaps it was the patent at the heart of the Perkin-Elmer supplied Biosystems 3700, the gene sequencer. Perhaps the reason Craig got private funds to sequence the genome was that Perkin-Elmer realized that if there was a race to sequence the Genome, they could sell more sequencers to researchers, and once the genome was researched they could sell their machines to doctors and hospitals to sequence patients' genes. Now that's the sort of thing the patent system was meant to encourage. Not the ownership of basic scientific information, the letters that make up the genetic alphabet, but the creation of an invention, which in the hands of a brilliant scientist like Craig, could add to the stock of human knowledge. So thank you.

SEN. FRIST: Lori, thank you very much. And that actually, I think, sets the stage beautifully for the next thirty minutes or so as we go forward. Again, please complete your card. Put as much information on there as you're comfortable doing. We always prefer to have people to come to the microphones. And the people who come to the microphones, just because we get so many cards, that it's difficult to ask the questions. Anybody want to come to the microphone. If not, Jay, do you want to grab one on top there?

SEN. ROCKEFELLER: In your opinion (tape cut off) be patentable. One can see the utility of patenting say a cell, which would produce insulin. But where do you draw the line? Can I patent myself, (or my clone)?

SEN. FRIST: Let's turn it to the panel. Anybody can hop right in.

MR. LEHMAN: Well actually this issue came up when I was patent commissioner. Actually, a critic of the system attempted to file a patent like this. And we issued a statement saying that the answer was no. And the reason is that there is discretion on the part of the commissioner to reject certain kinds of patents on moral grounds. You know, we're not going to give terrorists patents on nuclear devises and so on and so forth. There is discretion in the system and I would say absolutely that that would fall within that discretion. And in fact, I meant to bring it with me today because in preparing for this I went over some of my materials and we issued that statement and I think that put that issue to rest for quite a period of time.

SEN. FRIST: Thank you. Lori?

PROF. ANDREWS: The reason that you can't patent human beings is because it violated the thirteenth amendment against slavery, which is part of the grounds. But you could patent, as because it falls within anything under the sun invented by man, a human embryo that had been genetically engineered to have certain traits like blue eyes, or to be taller. There would be nothing in the patent law that could prevent something like that.

SEN. FRIST:: Thank you, to the microphone.

MICHAEL WATSON (audience member): Yes, thank you. Michael Watson with the American College of Medical Genetics. I have a question, which boils down to the breadth of these patents and really the phenomenal nature of the information that is included in these patents. And it really comes to the point that we're dealing with two relatively independent industries. One is a diagnostics industry that is immediately empowered when a gene is associated with a disease because it's finding the mutations in the gene that says, that is the disease-causing gene. And that's not one that requires tremendous incentive and there's limited interest in developing diagnostic kits for genetic disease, for at least the vast majority of genetic diseases. Versus, an industry, which I think we all want to insure incentive development, which is the therapeutic side. And it's figuring out how to balance how patents are applied against these two relatively independent industries. And I'm curious as to whether you think that the approach of Gansky, which is relatively narrowly focused on the medical procedures, or the patent pools that have been proposed by the US PTO in the White Paper recently are the better approaches to try and balance out these two industries to insure access to testing.

SEN. FRIST: Good, thank you. Let's turn to Craig. He has probably the most direct experience from a practical aspect, having both participated, observed, and also having people come forward for both the diagnostic as well as the applications process.

DR. VENTER: Thank you Senator. I think you are confusing a couple of issues, and it's easy to get confused in this area where some of the early discoveries that were made were from extremely rare genetic disorders. In fact, it cost a lot of time and money to get a proper diagnostic procedure through the FDA, almost as much as it does in the case of some therapeutics. Because it's from the human genetic code doesn't mean that it has to be attributed to a genetic disease in the way that most people view genetic diseases, extremely rare disease like some of the ones that have been mentioned. Most genetic tests will give probabilities of something happening, not a yes/no answer, which is going to make them even more expensive to develop properly. I think a lot of the tests, in fact that have been referred to, have been substantially over interpreted. Measuring genetic changes in a braca one or braca two gene, in most cases, won't tell a woman whether or not she'll get breast cancer, even if she has those changes. So it's an area that is fraught with confusion. I think developing proper genetic tests, or DNA tests, or protein tests, that will tell somebody, for example, whether they have cancer, whether it would show up, as the example gave, on an x-ray, is going to be a very long-term, costly procedure to do. And there needs to be proper incentive for both. But I think, like the case with surgical procedures, there needs to be a way to insure either that the technology or that there is broad access to these.

SEN. ROCKEFELLER: All right, I will read one. I have to say that the green cards are not flowing. (Laughter) This question is not designated to any particular person. Isn't it true that a number of chemicals derived from the human body have been patented, in some cases many years ago? How are the chemicals in genes any different?

MR. LEHMAN: Well in my remarks I referred to early patents on adrenaline, for example. And what's patented is a discovery. And that is to be able to reproduce that chemical in a purified state, not the way it naturally occurs in nature. And it's that discovery that is patentable. And in fact, when you look at biotechnology, biotechnology is really an extension of chemistry. We've had patents in the chemical area for many years. And obviously, chemicals occur in nature. But the whole chemical industry, which is very patent dependent-- innovation in it is very dependant-- is based on manipulating what appears in nature, isolating compounds that appear in nature, and then being able to find a useful application for them. Remember I said that utility was a very important part of what it means to get a patent.

PROF. ANDREWS: I think that with the chemicals like adrenaline, some of the things that have been done, in terms of purification, have caused them to be patented in forms that do not exist in the human body. Where, with genes, particularly some of the genetic diagnostics, what you're patenting sometimes does coincide with things that actually do exist in the human body. And with adrenaline, you can sell a product or pill or something like that, and someone could have alternatives to it for the treatment of the particular condition. You can invent around it. You can even invent around surgical procedures by doing things differently. With respect to genetic diagnostics, keying off the code in your genetic sequence, you don't have those other choices. So the policy implications are much different.

DR. VENTER: If I could comment around it. I don't agree with Laura on this point. In fact, most genetic tests, it's not going to be that hard to engineer around them because there are so many different variants across the human population. And with genetic linkages, even variants that are close to those others that appear to be significant are not hard to engineer around. I think it's a big question whether patents with genetic sequences and genetic tests are going to be really that important or that useful in the long run.

PROF. ANDREWS: But I think Craig though, within patent law there is this doctrine of equivalents, so that if even you make a ninety percent or so change, you are still covered by it. I guess I am troubled by the fact that if Myriad can have its patent on the breast cancer gene and charge $2580 for the test, and then, I agree, the next person comes along and is patenting the 185 Deletion AG mutations. All these mutations are also being patented. Even if each one of those mutation patent holders wanted just ten dollars beyond Myriad's, these tests are getting way too expensive for the people involved.

But I also think that we can't lose sight of the point that Craig is making. It's really over hyped in terms of how much you can predict about your future health from genetic testing. And one of my concerns is that when there's such a strong incentive to get a lot of people tested, because there are patents on the genes, that we're not hearing the other side of the story on finding that it's less possible to find neutral scientists who don't have a patent on some gene to tell me whether the predictive value of a particular test is going to be that good or not.

PATRICK COYNE (audience member): In the interest of full disclosure . . .

SEN. ROCKEFELLER: Can you get a little closer to the mic.

MR. COYNE: Yes, I'm Patrick Coyne with Collier Shannon Scott here in Washington. In the interest of full disclosure I should also say that I'm the attorney that filled the application that I believe Commissioner Lehman was talking about a few minutes ago for a human/non-human chimera, which is still pending at the office. My question really relates thought to the isolated and purified genomics sequences. There are some old cases, Third Circuit and the Court of Customs and Patent Appeals holding that isolated and purified elements, for example tungsten oxide, (taking tungsten our of tungsten oxide where it occurs naturally,) uranium, (isolated an purified from it's ore uranium oxide,) would not be patentable. How did the patent office come to the distinction between the courts' holding that you can not patent isolated and purified elements, yet you can patent isolated and purified genomic sequences.

MR. LEHMAN: Well, the patent office policy, as I mentioned, really was based on its chemical practice years before. An element, of course, is quite a different mater. It's a naturally occurring part of nature. And I think that, as far as the patent office is concerned, you have to show, first of all, that there has been a discovery. This means that it's not just a flower that you picked up some place, that you've actually purified something. Two, that you can show what the specific utility is and describe that utility. And those are the grounds that the patent office uses. Now it used to be, in the old days, that the patent office would wait around for fifty years until many different courts had ruled on some of these complex questions, and there would be a lot of confusion in the system. And it's impossible in an area of rapidly technology to completely eliminate all confusion from the system, but one of the things that was mentioned in my introduction that we initiated was a process where by we issued guidelines in this area and in other areas: guidelines for patentability computer software, guidelines for patentability in the area of gene sequencing and so on. And in creating those guidelines, we didn't just sit around in a secret room and do it ourselves, we help public hears, we heard testimony from all interested parties, and then we tried to bring the law into focus, both to help applicants, to help examiners, and ultimately to help the courts interpret what we did. And, you know, I think that's about the only kind of process that you can really use. Otherwise, you have chaos. The patent system is never going to be perfect. And there are going to be many situations in which the use of the patent system may raise questions. The great nineteenth century entrepreneurs, many of whom owned patents, found that they couldn't do everything that they wanted, and that we had a Sherman Act that was enacted by Congress to restrict their anti-competitive behavior. And I think, to the extent that there are abuses in the system, we need to look at that kind of solution rather than fundamental changes in the patent office or in the patent system.

SEN. FRIST: Let's go back to the microphone, John.

JOHN SHESTACK (audience member): Hi, my name is John Shestack and I'm with the Cure Autism Now Foundation, and one of the things that we did was form a gene bank for Autism because it seems that ten year ago when money, talented geneticists, and computational power were very scarce, very strong protections made sense to encourage people to go into a field that it was important for breakthroughs to be made in. But now, when may of those things are in abundance, patent protection on genes themselves, we have found, discourages discovery for complex diseases. Because what happens is, strong patent protection makes university scientists not collaborate on sharing samples. If you have a REF disease like schizophrenia or autism with many genes of small effect, you need giant sample size. So it's been our experience that this has not actually helped this early stage of discovery. We're not taking about gene products or things down the stream. So my question is, what kind of adjustments could be made in the law, for instance, compulsory joint inventor status to make compulsory licensing part of it, to enable large sample sets to get build in a more timely fashion for these kind of diseases.

SEN. FRIST: Craig?

DR. VENTER: Let me challenge your basic assumption. Having spent a great deal of my life in the academic community, I don't think patents play much of a role in any academic scientist's thinking. And the human geneticist would horde samples regardless of whether there is a patent system because their currency is credit for making those discoveries. So very rarely have scientists been given incentive to share anything until after the discovery was made. Sometimes some of the same scientists, as Lori has indicated, have filed patents afterwards. But I don't think patents were ever the currency that they were concerned with. So blocking patents there, I don't think is the issue that will change that culture.

Do patents inhibit some uses? I'm beginning to think yes. We see a huge difference between those genes and proteins that themselves will become a therapeutic or part of a therapeutic versus those that are for targets for designing therapeutics. It's the abuses of some companies, as some of the indications have been given with diagnostics, of limiting access as a means of getting competition. I don't think that's good for the system. But once something is identified as a potential diagnostic or therapeutic, there is a tremendous investment requirement to turn that into something that benefits the public, and that will not happen without patent protection.

PROF. ANDREWS: But Craig, what about, for example-- that may be true when you're patenting something, like a gene therapy or a test kit that's commercially available. But that's not true generally about finding a genetic mutation that predisposes for a certain disease. For example, the day after the announcement of the 185 Dell EG mutations, people started testing for it. You didn't have to go through the FDA. This is the mutation in the breast cancer gene. So in that sense, you don't have this huge investment, like in drugs. Why then provide that patent protection? Why mot let every qualified lab do that test as apposed to having to pay the patent holder for example.

DR. CRAIG: One of the things, and this may be unfair, but I think that you confuse and a lot of people confuse, is what scientists can do in the terms of a clinical investigation, and what people will do in terms of getting a reimbursement or getting payment for doing those same tests. I don't feel I'm prohibited from doing any genetic test in the terms of understanding science, the cause of breast cancer, the cause of disease, and I don't know any scientist in any university that is truly inhibited from doing that. It's a very different issue when a hospital lab tries to charge for a test far beyond their costs of doing the tests, and that is impending on somebody else's invention or rights to do that. And you gave several examples where I think you confuse those issues quite dramatically. And they sound very dramatic. But I don't know any scientists, when they look at a gene or a gene test that worries about whether there is a patent on it. They just go and do the essays on it.

PROF. ANDREWS: But they're violating someone's patent doing that. And in some instances, they have been stopped.

DR. CRAIG: Maybe the gentleman to your right can talk about research exemptions. They've been interpreted in various ways. But I don't know of anybody that has actually been blocked from doing a clinical test in a research environment, not trying to get reimbursed and make money off of doing that test. And it is very important to draw the line between those two areas.

PROF. ANDREWS: Well I do, and cease and desist letters are routinely being set out to researchers to stop using particular genes at this point. And this is within the purview of the patent holder.

MR. LEHMAN: One thing I want to clarify. It's not within the purview of the patent office. I think I tried to describe to you what the Constitution and the statutory law is and some earlier questioners said that the patent office should adopt a different policy. You know the patent office operates in a statutory context. And so any changes that would be made in the system would have to be made by an act of Congress. Now a lot of people here work for Congress. I once did for myself in fact wrote some of these laws when I was counsel to the House Judiciary Committee many ears ago. Think of yourself trying to respond to some of the factual situations that Ms. Andrews has asserted. How would you go about changing a very elegant and simple system that has worked well for two hundred years to deal with those problems? Well the first thing you'd have to do was not just accept an assertion that is made in a meeting like this. You'd have to have public hearings. You'd have to really find out what the facts are. I would suggest that if you looked at the facts, you might find out that they are not quite what they are articulated by some people in a meeting like this. And secondly, even if you found that there were abused, how would you go about changing the patent system itself without undoing the whole structure of the patent law?

Generally speaking, I think we have found that where there are abuses in behavior regarding any kind of property right, whether it's an intellectual property right or a private property right, we usually enact sanctions on that behavior. We do not take away the property.

PROF. ANDREWS: Since my credibility has been challenged by that statement, I will offer to provide any staff person in this room any data that they want. But in addition, I do want to say that what staff do is important. The court quote that Bruce showed you saying that anything under the sun invented by man was patentable wasn't thought up by the court, it was thought up by a staff person in a legislative history document and then adopted by the courts. In addition, the courts themselves have a role. This issue has not squarely been faced, whether genes are patentable subject mater by courts. There has been a lot of litigation where companies have sued each other saying, if I own the mouse gene for a particular disease do I also own the human gene? So we haven't seen that issue. The issue that was up before the US Supreme Court in the Chakrabarty Case really was an invention. Scientists had done genetic engineering. They put genes together in ways that hadn't occurred in mankind before so we may see courts take this on without any change in the patent law. And as to whether we'd have to tamper very much, I can provide you with the suggestion where with the simple addition of three words to the current law dealing with surgical exceptions, you could take care of all the problems that I'm willing to document exist.

SEN. ROCKEFELLER: Interesting question here. Patenting genetic material is a given. The US Congress controls the biggest patent system in the world. The real question isn't about patenting but a different process; that of the transfer of ownership is it from an individual, a family, or a population. How can Congress regulate that both in the US and outside the US, (but by seekers of US patents)?

MR. LEHMAN: Actually, this is a very interesting question and it really is thought of less here in the United States and more when we're dealing with foreign countries, that the genetic starting material that we use sometimes as a foundation for inventions may come from some part of the ecology of a tropical country, or something like that, an indigenous group of people in the Amazon, or a plant. And a lot of people feel ripped off because scientists in the United States or from a European country goes to one of these places, extracts a certain naturally occurring genetic starting material, and then makes an invention out of it. We really do not have a system for regulating that right now at all. And if we had it, it would have to be an international system.

The UN Convention on Biodiversity does say that people have a right to control the use of their biological patrimony. But it really doesn't flush out what that right would be. And indeed, the World Intellectual Property Organization in Geneva, which is the specialized agency of the United Nations that works on these issues, is in fact looking into this very question. But I think that when they do get into the question, what they will find is that the solution is that for people who possess valuable genetic starting material, they need to be educated on how to protect themselves. And that basically means how to control access to that material. And this is an age-old problem. Often times poor people have been ripped off because they had something valuable that they didn't know about. Oil in the ground before they knew oil was valuable. Gold in the hills, before they knew it was valuable. They ended up selling it cheap. The answer is education and the answer is helping these people to learn how to control and develop access to this material so that they get a fair shake.

SEN. FRIST: Thank you. We'll go back to the microphone.

AUDREY CHAPMAN (audience member): My name is Audrey Chapman. I 'm from the American Association for the Advancement of Science. The United States is a signatory to TRIPS. The TRIPS Convention follows European patent law with an exemption for patenting if it affects or offends public order or morality. I do not find vesting discretion in particular patent examiners without any criteria to be a very satisfactory way to follow TRIPS. And it seems to me, given the ethical problems that have been sited regarding the patent system that one important way to proceed, as well as to fulfill the US obligations under TRIPS, is to try to develop some formal regulations and criteria as to what this TRIPS exemption actually entails. And of course, in the best of all worlds it would be on an international basis so that the criteria that were being applied would be the same here as in Europe.

MR. LEHMAN: I wish you could tell me how the Europeans have flushed that out because I don't think that there is a very careful or good understanding of how that exemption applies in European law, and we consider that we have the same standard here. I talked about it earlier with regard to this controversial patent. And I would say this: when it comes to things that violate public order or morality, at least when I was running the patent office and I would like to suggest in the future, that that's what we have senate confirmed political appointees to deal with. And those kind of issues should come right up to the commissioner's office and they should be dealt with as a part of the policy making process.

SEN. FRIST: Good. Lori, do you have a comment?

PROF. ANDREWS: I see an interesting thing developing in Europe now. I was recently testifying in the French Parliament. One of the members of the parliament there said, maybe the trick to all this -- since we don't like gene patents, and some of these international treaties are going to get us into the American approach of having to patent genes -- maybe what we need to do is start in Europe, a boycott on products. Have them labeled whether they involve gene patents or not. Sort of like what is going on with agriculture and genetically modified organisms. I don't think that's necessarily an appropriate way to go. But it would be interesting if their willingness to import and buy drugs has to do with whether the underlining gene involved was not patented and just the drug itself was.

SEN. FRIST: Craig?

DR. VENTER: Thank you for giving me such a lovely opening.

PROF. ANDREWS: I'm always willing to help, Craig.

DR. VENTER: I've often contended that those who want to take away gene patents that would lead to therapeutics, should go and round up all the insulin dependent diabetics and take away human insulin from them, take away erythropoietin from those. . .

PROF. ANDREWS: All those, I grant, would be patentable.

DR. VENTER: And if they're going to bane those, then they won't have erythropoietin, or GMCSF, or insulin in Europe. Those are based on gene patents and that's why those therapies are available that affect millions of lives every day in a very positive way. I don't think we want to give up those treatments as a society because someone is confused about what a chemical of DNA is and whether it's live or not life.

PROF. ANDREWS: You could still patent EPO and so forth.

MR. LEHMAN: I certainly don't think, by the way, that we should look to Europe. Europe's patent system is very chaotic. It's a mess. In fact, what's going on right now is that the European Commission is under the process of totally revising the European patent system, creating a European wide patent, and they're looking at the US as a model for doing that. I think we would be ill advised. One of the reasons that we see investments in biotechnology and pharmaceutical companies here, European companies moving their research activities here, European companies acquiring American biotech companies and American pharmaceutical companies is precisely because we have much more affective and clear patent protection here then is the case in Europe.

PROF. ANDREWS: Although, the first affective gene therapy did come out of France as apposed to the United States perhaps due to their different approach, and these mutations are going found in genes in other countries where the genes haven't been patented. So, they're not just falling by they wayside scientifically in choosing a different model.

SEN. FRIST: I'm going to come to the microphone in just one second. Let me go through three or four questions real quick and then we can keep these answers very short, just to get the information out since now we have a plethora of green cards.

Shorten the patent time. Question, given the fast pace development in biotech, the huge rewards in life without patents, and a potential good, wide distribution of genetic information that it could do for humanity. Should we decrease the number of years on patents in this area?

SEN. ROCKEFELLER: Bruce, I guess this is to you?

MR. LEHMAN: Well we don't really have a choice in that. It would require a change to the international treaties to which the United States adheres. The Paris Convention on Industrial Property, and now the TRIPS Agreement are the international treaties, which fit the US patent system and the world patent system. And under the TRIPS Agreement we have agreed that there will be a term of twenty years from filing the patents. So we would completely have to undo the TRIPS Agreement and the WTO treaty, or withdraw from that.

SEN. FRIST: Do any of the panelists advocate shortening the patent time on this.

MR. LEHMAN: Pardon?

SEN. FRIST: So none of the panelists would advocate that? Very quickly, all three panelists superficially -- this is from a Congressional office staffer -- count the same essential strategy: patent the utility not the gene. In practice, PTO is granting patents on the gene, not specific applications. How can patents on distinct therapeutic uses versus the broad anticipation of the utility from a newly discovered gene, be defined.

MR. LEHMAN: Actually, this is another case where I disagree with the assertion that we're just patenting the gene. The PTO is patenting the purified version, and you have to show a utility. You have to meet these limited tests. You just can't patent a gene per say.

DR. VENTER: Let me just comment very briefly on that. Part of the problem with just the utility is physicians, once a drug is produced and out there, are not limited in terms of what they actually proscribe it for. We give complete freedom to physicians. So you can't say that you can only use this drug for this disease and you're not allowed to do it for this disease because somebody else has to get paid for that. So physicians have complete freedom to prescribe the drug for any purpose they see fit.

SEN. FRIST: To the microphones.

AUDIENCE MEMBER: I'm one of the anonymous Congressional Staffers referred to earlier. One of the things that we've been discussing here is whether or not the patenting of genetic sequences deters future research in that area. For example, when it was discovered that the CCR5 gene that was patented by HGS in 1995 turned out to be the AIDS receptor. There was concern whether that was going to stop AIDS research because people might stumble somehow into a pathway or a therapeutic that was going to involve this receptor, and then they would have to pay a license. It seems to me, if my understanding is correct, we're in a situation where we have a large number of genes that are into he public domain and a large number of genes that are in the private domain, that have been patented. Doesn't this offer us an opportunity to test this hypothesis? In other words, over the next few years is there going to be research done and more advances on the genes that are in the public domain than there are on CCR5 and other genes that have been patented?

DR. VENTER: Every single human gene is in the public domain in the sense that the information is out there and freely available. We don't know yet how many of them have had patents applied for. Certainly it's a very large number. And the worry in the pharmaceutical industry is, by the time that the patent office finished, it will be all of them because they've essentially all been applied for in some form or another. So I don't think that experiment works.

SEN. FRIST: There are a number of questions about legislation. There are too many to go through today specifically. But let me mention that one of the thoughts behind having this tech forum is to bring ideas which are current, which you can see are highly debated, which are complex, but which we all will be making decisions on. I say that because the hearing process -- this is a compliment to that -- the formal hearings, where you just can't have this sort of dialogue. But because of so many questions on legislation, just so people will no, on the Senate side, on May 8th, the Judiciary Committee will be holding a hearing called High Technology Patents II: Genetics and Biotechnology. Just so you'll know that as a compliment to what we're talking about today.

To the microphone.

AUDIENCE MEMBER: I'm with the House Science Committee Minority Staff and I have a couple of questions specifically for Craig Venter. First of all, how many patents has Celera actually filed for? And how many preliminaries have you also filed?

DR. VENTER: I don't know the exact number. It's in the hundred. I think it's actually less then two hundred for actual human gene patents, mostly done at the request of pharmaceutical partners that we have. Provisional applications, the number was very large initially. But every one of those, I think has now lapsed. Provisional applications are only good for a twelve-month period, as I'm sure you know. Once that twelve-month period is over, so are the provisionals unless they are turned into an actual patent application. Celera has no gene patent issued. Neither does Tiger. I have one gene patent issued to my name but it's for Drosophila gene.

AUDIENCE MEMBER: And as a follow-up, I just want to clarify your viewpoint on research exemptions. So, could you describe your policy at Celera for research exemptions on any genes, or for research using any genes that Celera does get patent for?

DR. VENTER: Well, it's very clear that our main product now is information. The top universities in the US, Europe, and Japan, are right this minute and around the clock using our database to make discoveries, as are the major pharmaceutical and biotech companies around the world. They all have, whether we get a patent or anybody else does, it doesn't enter into anybody's use of that information. If we get a patent, we indicated that we would non-exclusively license it if it were a target to any of our subscribers. We're trying to encourage the other pharmaceutical companies and biotech companies to do the same with non-exclusive cross-licensing to solve this problem that we see as an accumulation of targets versus actual therapeutics. For a therapeutic target, actual genes that will lead to a therapeutic or a cancer vaccine, the only way those will get developed are if they're done exclusively.

SEN. FRIST: Let me ask each of the panelists on that particular research component just because we've heard from the clinical application, to the sharing of samples, to the research question. Let me ask each of the panelists just to comment. From a research standpoint, does the current patent law, or interpretation application of patent law right now in 2001, is it inhibiting what would otherwise be appropriate research as we open up this new field of geneomics?

MR. LEHMAN: Well this is an issue that was raised various times within the last eight years when I started being commissioner of patents and trademarks. And first of all, there is not a statutory research exemption. There isn't one. And there is probably question, should there be one? And it was one of the first questions that I remember discussing with our staff at the PTO when I became the commissioner of patents and trademarks. And just like I said earlier, when ever you're thinking about making changes in legislation, whether you're the administration proposing it to Congress, or a member or staff person working with a member of Congress and trying to figure it our, the first thing that you ask when you raise a concept like that is, is there really a problem? And certainly, in those days, in the mid 90's, I concluded that there was no problem. Now you hear the term research exemptions used and you heard Doctor Venter use it, that's because there is in fact a de facto research exemption because, in fact, patent owners don't enforce their rights, normally, in a research context.

I think that we're in a very interesting time right now though, and I think that it's more or less the business model at Celera is that now there is a business in creating research tools, some of which may be patentable. And I think that we want that business to be invested in and I think we want to have it come into being. And it is reasonable that people have to pay for it, that they have to get licenses. Even universities and hospitals have to pay for the microscopes and the Petrie dishes and everything else. If they have a research tool that is patented, then they ought to have to pay for it. And in that situation there should be no research exemption. It would be counter productive for the creation of new technology. So my view is that there certainly has not been a showing than we need to change the statutory law up until this time. But it obviously is something that Congress needs to keep an eye on, and that's why we're having hearings.

SEN. FRIST: We're going to close in about two minutes. There are some blue forms in there, if you could be filling those out, the blue evaluation forms. Let's ask Lori and Craig.

PROF. ANDREWS: I think that all of us on the panel are in agreement, thinking back to Bruce's slide about what the patent system is suppose to do, and it's suppose to promote the progress of science and the useful arts, and so our concern is getting appropriate research done. When Harold Varmus was the head of the National Institutes of Health, he actually looked into this issue and found that there was a decrease, even at the National Institutes of Health now that their researchers had patented, in the sharing of materials and so forth. There have been a number of articles published in Science about how it's changed. You used to be able to call up the lab and get a clone. And that is not so much the case now. People are not sharing materials. That's what Jonathan Shestack found for example.

SEN. FRIST: Craig?

DR. VENTER: As I said, I think that in academic research, there are no limitations other then what the researchers themselves do. I don't think that any companies limit what researchers can do with genetic material. However, I think, in the biotech and pharmaceutical industry in the terms of tying up targets does inhibit some companies from trying to develop new drugs against those targets because there is not mandatory cross-licensing or wide availability of some of the information. But I'd like to say that people are confusing a lot of issues here. The patent system is viewed as the limiting step in all of this, much in the same way that the New York Times just reported again about how ultrasound is the evil technology in China and parts of India. And when ultrasound was banned for detecting sex for the individuals for female abortions that in many cases female infanticide was resorted to.

This is not an ultrasound situation of being a problem. It's not necessarily the patents. If there are people that are abusing things, limiting things that should not be limited in medical practice, I think that needs to be changed. But I think the patent system has worked effectively for providing incentives for people to develop new treatments for disease, which I see as one of the most valuable parts of it.

SEN. ROCKEFELLER: Any comment? All right, if that be the case, then it has been a very interesting, complicated, and motivational session. As Bill indicated, you do have your evaluation forms. Those are very important to us. Those are very, very important to us. Our next briefing, while your pencil is still out, is on May 24th. It will be on Wireless Locational Privacy. And you'll be getting notices shortly, and thank you for coming. And thanks for our panelists.

(Applause)

(Whereupon, the proceedings were concluded.)