The nature of biological inquiry and the norms of behavior in the scientific community have changed in the wake of the Human Genome Project (HGP) and the birth of proteomics. Complementing the traditional hypothesis-driven study of single genes or proteins is the option of studying many genes or proteins simultaneously. This sea change has occurred while both universities and industry have been aggressively seeking and defending intellectual property protection for discoveries, many of them well upstream of commercial application. Thus the potential for a “perfect storm” exists, in which future discoveries in genomics and proteomics that would benefit the public health and well-being could be thwarted by an increasingly complex intellectual property regime.

In light of this changing environment, the National Institutes of Health (NIH) asked the National Academy of Sciences to study the granting and licensing of intellectual property rights on discoveries relating to genetics and proteomics and the effects of these practices on research and innovation. Specifically, NIH asked the National Academy to study and report on:

  1. trends in the number and nature of U.S.-issued patents granted for technologies related to genomics and proteomics;
  2. standards that the U.S. Patent and Trademark Office (USPTO) and other patent offices (specifically in Europe and Japan) are applying in acting on these applications;
  3. the effects of patenting genomic and proteomic inventions and/or licensing practices for inventions on research and innovation; and
  4. steps that NIH and others might take to ensure the productivity of research and innovation involving genes and proteins.

Under the auspices of NAS's Science, Technology, and Economic Policy Board and Committee on Science, Technology, and Law, a study committee was formed in response to this charge. The committee reviewed the literature in the field, held several public sessions that included presentations by experts and stakeholders, and conducted a survey of how biomedical research scientists acquire, use, and experience intellectual property practices. Based on these sources of information, the committee drew conclusions and made recommendations in three broad areas that aim to ensure that the public investment in genomics and proteomics results in optimal public benefit:

  • improving and facilitating best practices and norms in the conduct of genomics and proteomic research:
  • adapting the patent system to the rapidly changing fields of genomics and proteomics; and
  • facilitating research access to patented inventions through licensing and shielding from liability for infringement.

The committee was not asked to and did not directly address issues in the acquisition and management of and access to intellectual property involving plants and animals. Clearly, differences in the scale and diversity of research and in the distribution of patent ownership between agricultural and human biotechnology exist, and these variations may merit separate study. Nevertheless, there has been comparable progress in plant molecular biology. Gene-based diagnostics also are important for monitoring crop and farm animal diseases. All of these have been subjects of patenting in the same manner as human DNA sequences, genes, and proteins. The committee suggests that, when these similarities warrant, it may be appropriate to apply to animal and plant biotechnology comparable policies and principles to those that it recommends for biomedical research and development.


The committee found that the number of projects abandoned or delayed as a result of difficulties in technology access is reported to be small, as is the number of occasions in which investigators revise their protocols to avoid intellectual property issues or in which they pay high costs to obtain intellectual property. Thus, for the time being, it appears that access to patented inventions or information inputs into biomedical research rarely imposes a significant burden for biomedical researchers. For a number of reasons, however, the committee concluded that the patent landscape, which already is becoming complicated in areas such as gene expression and protein-protein interactions, could become considerably more complex and burdensome over time.

There are several reasons to be cautious about the future. The lack of substantial evidence for a patent thicket or a patent-blocking problem is associated with a general lack of awareness or concern among academic investigators about existing intellectual property. That could change dramatically and possibly even abruptly under two circumstances. First, institutions, as they become aware that they may enjoy no protection from legal liability,1 may become more concerned about their potential patent infringement liability and take more active steps to raise researchers' awareness or even to try to regulate their behavior. The latter could be both burdensome on research and largely ineffective because of the autonomy of academic researchers and their ignorance—or at best uncertainty—about what intellectual property laws apply in what circumstances. Alternatively, patent holders, aware that universities are not especially shielded by law from patent infringement liability, could take more active steps to assert their competing patents. This may not lead to more patent suits against universities or between companies—indeed, established companies usually are reluctant to pursue litigation against research universities—but it could involve more demands for licensing fees, grant-back rights, and other terms that are burdensome to research. Certainly, some holders of gene-based diagnostic patents currently are active in asserting their intellectual property rights.

Finally, as scientists increasingly use the high-throughput tools of genomics and proteomics to study the properties of many genes or proteins simultaneously, the burden on the investigator to obtain rights to the intellectual property could become insupportable.

Perhaps most importantly, the results of the survey conducted with the support of the committee revealed substantial evidence of a more immediate and potentially remediable burden on research—private as well as public—stemming from difficulties in accessing proprietary research materials, whether patented or unpatented. The committee found that impediments to the exchange of biomedical research materials remain prevalent and may be increasing.

Several steps may be taken to anticipate and prevent the emergence of an increasingly problematic environment for research in genomics in the near future and for proteomics further out, as more knowledge is created, more patent applications are filed, and more restrictions might be placed on the availability of and access to information and resources.


Many of the potential problems looming in the realm of genomics, proteomics, and intellectual property can be avoided if scientists and their institutions, whether public or private, follow the best practices already articulated by the National Institutes of Health (NIH), the National Research Council (NRC), and others. U.S. science has flourished because of its general openness and the sharing of data and research resources. This is not to suggest that legitimate proprietary interests in science do not exist, but rather is intended to highlight the argument that whenever possible, sharing is in the best interest of all science, both basic and applied. Several measures can be taken to facilitate the free exchange of materials and data.

Foster Free Exchange of Data, Information, and Materials

From the inception of the HGP, public and commercial funders of these activities have emphasized that, in order to reap the maximum benefit to the public health, data should be freely available in the public domain. In addition, the NRC has repeatedly emphasized the need for sharing data. The council's 2003 report Sharing Publication-Related Data and Materials endorsed the uniform principle for sharing integral data and materials expeditiously:

Community standards for sharing publication-related data and materials should flow from the general principle that the publication of scientific information is intended to move science forward. More specifically, the act of publishing is a quid pro quo in which authors receive credit and acknowledgement in exchange for disclosure of their scientific findings. An author's obligation is not only to release data and materials to enable others to verify or replicate published findings but also to provide them in a form on which other scientists can build with further research. All members of the scientific community—whether working in academia, government, or a commercial enterprise—have equal responsibility for upholding community standards as participants in the publication system, and all should be equally able to derive benefits from it (NRC, 2003, p. 4).

Nucleic acid sequences provide the fundamental starting point for describing and understanding the structure, function, and development of genetically diverse organisms. For almost 20 years, GenBank, the European Molecular Biology Laboratory, and the DNA Data Bank of Japan have collaborated to create nucleic acid sequence data banks. These data banks are invaluable to researchers but they face insufficiencies and gaps as fewer data deposits are made because of proprietary interests.

The genomics and proteomics communities, in general, have honored these calls for data sharing, especially in the large-scale projects such as the HGP itself, the Expressed Sequence Tag (EST) project, and the SNP Consortium. Some practices, however, do not conform to these norms. Private industry consistently retains some portion of its protein structure information in proprietary databases, effectively withholding from the scientific community a large and important dataset that could facilitate basic and applied research in structural biology. However, once structures are no longer commercially important, their availability in the public domain would be very useful for academic research. In addition, defensive patenting of three-dimensional structures of drug targets has the potential to interfere with drug discovery. Structural biology data in published patent applications and issued patents are presented in such a form that they are not readily incorporated into the Protein Data Bank (PDB) for the benefit of the larger scientific community. Furthermore, academic scientists are sometimes driven by competitive pressures to withhold both information and materials.

Eventually, large-scale structural genomics efforts will dominate the production of new structures. Full disclosure of structures without patenting could serve to preempt much of the defensive patenting currently sought by industry and substantially improve the environment for all of science. The committee commends NIH for its effective use of provisions in Requests for Proposals for projects involving the development of resources for the public domain that require that grant applicants include in their proposals an explanation of their plans for the sharing and dissemination of research results. Although NIH does not currently collect and analyze data on grantee behavior, it has the ability and the authority to elicit good behavior among grantees and contractors and should exercise that authority wherever possible.

Recommendation 1:

NIH should continue to encourage the free exchange of materials and data. NIH should monitor the actions of grantees and contractors with regard to data and material sharing and, if necessary, require grantees and contractors to comply with their approved intellectual property and data sharing plans.

However, it should be noted that investigators have the right and even the obligation to retain materials and data until they are confident of their validity and have reported their results in publication. The quality of science and the value of the public data must be upheld even while meeting the goal of sharing materials and data.

Recommendation 2:

The committee supports NIH in its efforts to adapt and extend the “Bermuda Rules” to structural biology data generated by NIH-funded centers for large-scale structural genomics efforts and thereby make data promptly and freely available in a database via the PDB.

Although in principle the coordinate data that are in patent applications could be put into the PDB, both the content and format of these patent applications are not suitable for incorporation into the repository. The PDB has established standard formats for electronically archiving the coordinate, experimental, and meta data. Recently USPTO proposed that these data be sent in electronic form as part of relevant patent applications. The Worldwide PDB, an international organization responsible for all PDB data, endorsed this proposal and further stipulated that the standard formats be required. This would ensure that the data would be efficiently and properly archived and be made freely available.

Recommendation 3:

The PDB should work with USPTO, the European Patent Office (EPO), and the Japanese Patent Office (JPO) to establish mechanisms for the efficient transfer of structural biology data in published patent applications and issued patents to the PDB for the benefit of the larger scientific community. To the extent feasible within commercial constraints, all researchers, including those in the private sector, should be encouraged to submit their sequence data to GenBank, the DNA Databank of Japan, or the European Molecular Biology Laboratory and to submit their protein structure data to the PDB.

Foster Responsible Patenting and Licensing Strategies

In 1999, NIH issued Principles and Guidelines for Recipients of NIH Research Grants and Contracts on Obtaining and Disseminating Biomedical Research Resources (64 FR 72090).2 These aspirational principles were issued by NIH to provide guidance and direction to NIH-funded institutions in order to balance the need to protect intellectual property rights with the need to broadly disseminate new discoveries. They recognize that licensing policies and practices are extremely important determinants of the effects of patents on upstream technologies on the conduct of follow-on research. The principles apply to all NIH-funded entities and address biomedical materials, which are broadly defined to include cell lines, monoclonal antibodies, reagents, animal models, combinatorial chemistry libraries, clones and cloning tools, databases, and software (under some circumstances).3

The principles were developed in response to complaints from researchers that restrictive terms in material transfer agreements (MTAs) were impeding the sharing of research resources. These restrictions came both from industry sponsors and from research institutions. In the Principles and Guidelines, NIH urges recipient institutions to adopt policies and procedures to encourage the exchange of research tools by minimizing administrative impediments, ensuring timely disclosure of research findings, ensuring appropriate implementation of the Bayh-Dole Act, and ensuring the dissemination of research resources developed with NIH funds.

Consistent with its ongoing interest in facilitating broad access to government-sponsored research results, NIH in 2004 issued Best Practices for the Licensing of Genomic Inventions. This document aims to maximize the public benefit whenever technologies owned or funded by the Public Heath Service are transferred to the commercial sector. In this document, NIH recommends that “whenever possible, non-exclusive licensing should be pursued as a best practice. A non-exclusive licensing approach favors and facilitates making broad enabling technologies and research uses of inventions widely available and accessible to the scientific community.” The document goes on to say that “exclusive licenses should be appropriately tailored to ensure expeditious development of as many aspects of the technology as possible.” The policy distinguishes between diagnostic and therapeutic applications and cautions against exclusive licensing practices in some areas. For example, the document states that “patent claims to gene sequences could be licensed exclusively in a limited field of use drawn to development of antisense molecules in therapeutic protocols. Independent of such exclusive consideration, the same intellectual property rights could be licensed nonexclusively for diagnostic testing or as a research probe to study gene expression under varying physiological conditions.”4

The committee endorses these NIH policies, in particular the principles that patent recipients should analyze whether further research, development, and private investment are needed to realize the usefulness of their research results and that proprietary or exclusive means of dissemination should be pursued only when there is a compelling need. Also, whenever possible, licenses should be limited to relatively narrow and specific commercial application rather than as blanket exclusive licenses for uses that cannot be anticipated at the moment.

Recommendation 4:

The committee endorses NIH's Principles and Guidelines for Recipients of NIH Research Grants and Contracts on Obtaining and Disseminating Biomedical Research Resources and Best Practices for the Licensing of Genomic Inventions. Through its Guide for Grants and Contracts, NIH should require that recipients of all research grant and career development award mechanisms, cooperative agreements, contracts, institutional and Individual National Research Service Awards, as well as NIH intramural research studies, adhere to and comply with these guidance documents. Other funding organizations (such as other federal agencies, nonprofit and for-profit sponsors) should adopt similar guidelines.

These principles can and should be followed by other funding agencies. In addition, they should be followed consistently for gene patents and licenses, and they should be applied to proteomics research to discourage inappropriate patenting and licensing practices. For example, the committee believes that it would be consistent with the NIH guidelines to discourage grantees and contractors from patenting three-dimensional macromolecular structures. For the sake of clarity, the committee does not believe that NIH grantees and contractors should be discouraged from patenting biological macromolecules that have been shown to have clear therapeutic value in their own right. The committee recognizes the value of patents when follow-on private investment adds social value by bringing products and services to market, and while this is to be commended, licensing should be done in ways that permit continued research and avoid logjams, undue royalty stacking, and anti-commons problems.

Because NIH issued these policies as guidance documents, grantees and contractors are not required to comply with them. Nor are researchers and research institutions not funded by NIH under any obligation to comply. The committee believes that NIH should continue to encourage adherence to these guidelines and best practices by the extramural community. However, in circumstances in which grantees are found to be ignoring the guidelines and thereby inhibiting innovation, the committee believes that NIH should use its authority to make adherence to the guidelines a condition of a future grant or contract award. By placing the responsibility with the applicant, NIH can state a position relative to its overall goal, but not generate endless pages of detailed policies and procedures. This is an evolving area where flexibility is important. If the goal is normative behavior, some process must be in place to make institutions and investigators examine their own behavior and articulate how they will behave in the broad context of agreed-upon goals. If those positions are widely shared, as in the grant application process, they will help to develop consensus about acceptable or desirable behavior. If there is flexibility in how institutions can approach these issues, then the entire field will reap the benefit of creative approaches.

In addition, NIH and the broader research community should encourage, wherever possible, voluntary compliance with the intent of these policy documents. There are many precedents for voluntary compliance with such standards by industry, dating back to the voluntary submission of research protocols involving recombinant DNA, and more recently, gene transfer studies, to NIH's Recombinant DNA Advisory Committee for review.

Furthermore, the committee's research found that most institutions report that they reserve rights for their own investigators to use a patented technology even though it is licensed exclusively to a commercial entity. An increasingly common university practice in recent years is to reserve such rights for investigators at other nonprofit institutions, but this often is subject to the patent holder's case-by-case approval. The committee commends and endorses this practice, which could be applied to other organizations, as appropriate.

Recommendation 5:

Universities should adopt the emerging practice of retaining in their license agreements the authority to disseminate their research materials to other research institutions and to permit those institutions to use patented technology in their nonprofit activities.

In addition, to support the dissemination of biological research materials to the scientific research community, institutions use Material Transfer Agreements (MTAs) in handling the exchange of research materials with the research community. MTAs are intended to protect the institution's ownership interest in the research material and contain provisions regarding the distribution and use of the research material. However, in the committee's opinion, the use and complexity of these agreements have become burdensome and overly restrictive. Institutions should promote the exchange of material and data while protecting legitimate intellectual property interests.

Recommendation 6:

In cases in which agreements are needed for the exchange of research materials and/or data among nonprofit institutions, researchers and their institutions should recognize restrictions and aim to simplify and standardize the exchange process. Agreements such as the Simple Letter Agreement for the Transfer of Materials or the Uniform Biological Material Transfer Agreement (UBMTA) can facilitate streamlined exchanges. In addition, NIH should adapt the UBMTA to create a similar standardized agreement for the exchange of data. Industry is encouraged to adopt similar exchange practices.


To obtain a patent an applicant must claim an invention that falls within patent-eligible subject matter. The invention must be new, useful, and nonobvious in light of the prior art. The patent application must satisfy certain disclosure requirements, including a written description of the invention, an enabling disclosure that allows a person of ordinary skill in the field to make and use the invention without undue experimentation, and disclosure of the best mode contemplated by the inventor of carrying out the invention. The exclusion of abstract ideas from patent protection traditionally has been more important for information technology than for biotechnology, but some genomics and proteomics research has the potential to confuse or even to blur the boundaries between abstract ideas and applications.

The fields of genomics and proteomics are dependent on rapidly changing technology and complex theory. Understanding biological processes through the association of genetic variation with individual phenotypic differences and through structural analyses will involve a variety of methods (global medical sequencing and population genetics in the first and X-ray crystallography and nuclear magnetic resonance [NMR] spectroscopy in the second). These methods will raise many new challenges for USPTO and the courts.

The challenge of these types of innovations clearly was illustrated in the 1990s when the scientific community was in intense discussions with USPTO about the value of ESTs. It will be increasingly important for patent examiners to be current with scientific and clinical developments in the field.

Recommendation 7:

USPTO should create a regular, formal mechanism, such as a chartered advisory committee or a regularly scheduled forum, comprising leading scientists in relevant emerging fields, to inform examiners about new developments and research directions in their field. NIH and other relevant federal research agencies should assist USPTO in identifying experts to participate in these consultations.

USPTO is to be commended for the development of its Customer Partnership Program for biotechnological patent applications. The committee urges USPTO to expand the use of input from the scientific community to improve the understanding of the office and its examiners of complex and rapidly evolving technologies, such as genomics and proteomics, with both human health and agricultural applications. The proposed committee should follow the Federal Advisory Committee Act requirements for open meetings and advance notification of meetings.


As described in Chapter 3, the In re Bell decision is illustrative of the application to genomics of the requirements for nonobviousness. In that case, USPTO argued that a defined gene sequence was obvious from prior art, including the sequence of the encoded protein and a general method of cloning. The inventor argued that the prior art relied upon by USPTO did not suggest all of the modifications to the cited cloning technique that would make it operative and that USPTO had, without supporting evidence, deemed such modifications within the ordinary skill of the field.

In Bell and then In re Deuel the court held that—as of the time the invention was made—a gene is just another type of chemical compound, and the issue for nonobviousness is the structure (that is, sequence) of the gene. Unless the sequence is predictable from the prior art, the gene is nonobvious. In these two cases, the court refused to see that there is a known relationship between a gene and the protein it encodes.

The National Academies' 2004 report, A Patent System for the 21st Century, observed that advances in proteomics have shown that the relationship between DNA sequence and protein sequence is predictable, but the relationship to the structure of the protein is not. The report noted that newly disclosed protein structures might satisfy the nonobviousness standard more easily than newly disclosed DNA molecules, given that the fine details of the three-dimensional structures cannot be deduced accurately from either the protein or DNA sequence. On the other hand, as more proteomic information becomes publicly available through large-scale projects, the ability to predict the structure based on the amino acid sequence of a protein and the ease with which the structure is obtained will dramatically improve. Nonobviousness determinations require that one look to the prior art and assess whether a person of ordinary skills could replicate the invention, whether such a person would be motivated to do so, and whether he or she would have a reasonable chance of success.

The previous National Academies' committee recommended that the Federal Circuit abandon the rule announced in Bell and Deuel that, essentially, prevents the consideration of the technical difficulty faced in obtaining pre-existing genetic sequences. The National Academies sought an approach similar to that of other industrialized countries when examining the obviousness of gene-sequence-related inventions: Each case should be analyzed at least in part by looking at the technical difficulty a skilled artisan would have faced at the time the invention was discovered.

Recommendation 8:

In determining nonobviousness in the context of genomic and proteomic inventions, USPTO and the courts should avoid rules of nonobviousness that base allowances on the absence of structurally similar molecules and instead should evaluate obviousness by considering whether the prior art indicates that a scientist of ordinary skill would have been motivated to make the invention with a reasonable expectation of success at the time the invention was made.

NIH should partner with other organizations (e.g., the Federal Judicial Center) to develop venues for educating judges about advances and new developments in the areas of genomics and proteomics.

Utility Standard

The Supreme Court articulated a strict utility standard in its 1966 decision in Brenner v. Manson, requiring that a patent applicant show that the invention has “specific benefit in currently available form.” The court justified this strict approach by noting that “a patent is not a hunting license. It is not a reward for the search, but compensation for its successful conclusion.” But the standard has not been applied in a consistent fashion. Some believe more recent decisions of the Federal Circuit have been less strict about the utility requirement, particularly as applied to biopharmaceutical inventions.

The 2002 report on a trilateral comparative study by the EPO, the JPO, and USPTO (2002 trilateral report) considers the patentability of claims related to the three-dimensional structure of proteins under the laws administered by each of those offices. Each of the three concluded that hypothetical claims to computer models of proteins generated with atomic coordinates, data arrays comprising the atomic coordinates of proteins, computer-readable storage medium encoded with the atomic coordinates, and databases encoded with candidate compounds that had been electronically screened against the atomic coordinates of proteins were not patent eligible. The analysis by USPTO emphasized that each of these hypothetical claims was “nonfunctional descriptive material” and therefore “an abstract idea.”

Understanding how genetic variation leads to individual variation in humans is one of the great scientific challenges of the twenty-first century. The path forward will inevitably involve an increasingly broad survey of genetic variation across the genome and establishing the causal relationship of certain regions and ultimately genes with particular traits. Indeed, technology already is in development that would allow complete cataloging of an individual's genetic code at affordable costs. As these technologies are implemented, diagnostics will move from a focus on single genes to a search of all genes.

If it is determined to be essential to allowing research to proceed and medical practice to advance in the coming years, those who are discovering associations between sequence variants and traits should eschew patents. Failing that, the best practices established by NIH and the broader scientific community should be followed. USPTO should require high standards for utility as mandated by existing Supreme Court precedent.

Although the views of USPTO and its foreign counterparts are of enormous practical importance in determining what receives a patent, neither the USPTO guidelines nor the 2002 trilateral report has the status of binding legal authority. As discussed in Chapter 3, the utility standard has proven difficult to administer in a consistent fashion. The committee believes this problem should be addressed.

The committee endorses the USPTO utility and written description guidelines and commends the office for adopting them. The committee also commends the process of input from the scientific community that led to their adoption and modification. Ongoing dialogues of this sort, and as recommended above, should form the basis for continually adapting the guidelines as the underlying science moves forward. However, the scientific community also must bear some responsibility for interpreting the guidelines.

Recommendation 9:

Principal Investigators and their institutions contemplating intellectual property protection should be familiar with the USPTO utility guidelines and should avoid seeking patents on hypothetical proteins, random single nucleotide polymorphisms and haplotypes, and proteins that have only research, as opposed to therapeutic, diagnostic, or preventive, functions.

A move toward a higher standard by the scientific community, USPTO, and the courts would be consistent with the 2001 USPTO guidelines initially adopted to limit patenting of ESTs. Those guidelines recently have been upheld by the Court of Appeals for the Federal Circuit (In re Fisher). The committee believes that such guidelines have had a beneficial effect and USPTO should ensure that they are applied to proteomic inventions.


Experimental Use Exemption

Academic scientists commonly assume that their research is shielded by law from intellectual property infringement liability (NRC, 1997). However, in Madey v. Duke University, the Federal Circuit rejected the experimental use defense in the context of academic research, declaring the noncommercial character of the research to be irrelevant to its analysis of the case. The court found that research that is part of the “legitimate business” of the university is not protected “regardless of commercial implications” or lack thereof.5 The implications of this decision are not yet clear, although it would appear that researchers and their institutions will have to pay much closer attention to the intellectual property issues involved in their current and future work especially when that work is driven by commercial considerations. Given the nature of much university research—that is, investigator initiated, highly decentralized, and uncoordinated—the implementation of an administrative structure that would deal prospectively with intellectual property issues in a manner similar to due diligence precautions in the private sector could impose burdensome administrative costs and strongly influence choices of academic research directions. At the same time, it is doubtful that such an apparatus could be effective in a university context. The ongoing “research exception” litigation is indicative that many aspects of the law governing patent rights to research tools are not settled.

The committee believes that there should be a statutory exemption from infringement for experimentation on a patented invention.

Recommendation 10:

Congress should consider exempting research “on” inventions from patent infringement liability. The exemption should state that making or using a patented invention should not be considered infringement if done to discern or to discover:

  1. the validity of the patent and scope of afforded protection;
  2. the features, properties, or inherent characteristics or advantages of the invention;
  3. novel methods of making or using the patented invention; or
  4. novel alternatives, improvements, or substitutes.

Further making or using the invention in activities incidental to preparation for commercialization of noninfringing alternatives also should be considered noninfringing. Nevertheless, a statutory research exemption should be limited to these circumstances and not be unbounded. In particular, it should not extend to unauthorized use of research tools for their intended purpose, in other words, to research “with” patented inventions. Accordingly, our recommendation would not address the circumstances of the Madey case, which clearly entailed research “with” the patented laser; but it would shield some types of biomedical research involving patented subject matter.

Patent Pooling

A patent pool is an agreement between two or more patent owners to license one or more of their patents to one another or third parties.6 A 2000 white paper issued by USPTO promoted their use, stating:

The use of patent pools in the biotechnology field could serve the interests of the public and private industry, a win-win situation. The public would be served by having ready access with streamlined licensing conditions to a greater amount of proprietary subject matter. Patent holders would be served by greater access to licenses of proprietary subject matter of other patent holders, the generation of affordable pre-packaged patent “stacks” that could be easily licensed, and an additional revenue source for inventions that might not otherwise be developed. The end result is that patent pools, especially in the biotechnology area, can provide for greater innovation, parallel research and development, removal of patent bottlenecks, and faster product development (USPTO, 2000, p. 11).

The committee agrees that patent pooling is an approach that might address some issues of access to patented upstream technology and its possible applications to biomedical research and development and that it should be studied.

Recommendation 11:

NIH should undertake a study of potential university, government, and industry arrangements for the pooling and cross-licensing of genomic and proteomic patents, as well as research tools.

Such proposed sharing arrangements are being pursued in agricultural biotechnology by the Public Intellectual Property Resource for Agriculture and the Biological Innovation for Open Society initiative in different ways. One issue that may be important in the lucrative health field is the willingness of academic scientists to have their inventions pooled if that would reduce or threaten their receipt of the share of royalties as typically are provided by universities.

Ensuring the Public's Health

Although the committee was unable to find any evidence of systematic failure of the licensing system, a few cases of restrictive or refusals to license practices by some companies have generated controversy and disapproval because of the potential adverse effects on public health. Through the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), some other countries, such as Belgium and Canada, retain the right to issue compulsory licenses if there is a public health imperative. In the United States, courts have used their equitable powers to deny injunctive relief in cases where health and safety are in issue.7

Although this option is rarely used and difficult to implement, the threat that a court might decline to enforce a patent by enjoining its infringement may be enough to spur patent holders to license on reasonable terms (OECD, 2002). It always should be a last resort, when all else fails, and when protection of the public health cannot be achieved by any other means.

Recommendation 12:

Courts should continue to decline to enjoin patent infringement in those extraordinary situations in which the restricted availability of genomic or proteomic inventions threatens the public health or sound medical practice. Recognition that there is no absolute right to injunctive relief is consistent with U.S. law and with the Agreement in Trade-Related Aspects of Intellectual Property Rights (the TRIPS Agreement).

Gene-Based Diagnostic Testing

Absent special circumstances, such as when the costs of development are high, the licensing of genomic and proteomic tools should be broad so that they ensure patient access and the opportunity to improve upon the method. The committee recognizes that diagnostic tests will sometimes involve such special circumstances and that there is a need to license more exclusively when the costs of test development or diffusion require the substantial investment of private capital. It is likely that with continued advancements in human genomics and the recognition of ever more statistical correlations between mutations in multiple genes and clinical phenotypes, opportunities for engaging in such restrictive practices will continue to multiply. Nevertheless, licenses on genomic- or proteomic-based diagnostic tests, when inventing around the test is not possible, should create reasonable access for patients, allow competitive perfection of the test, not interfere with noncommercial applications of the test in Institutional Review Board (IRB)-approved clinical research, and ensure compliance with regulatory requirements such as permitting quality verification. To ensure a reasonable return on investment, the license may require that the licensee first be given the opportunity to furnish the materials or services required.

The committee recognizes that exclusivity is commonly required to secure the large amounts of investment capital that are needed to establish testing capability on an industrial scale. On the other hand, the exclusive practice of any medical procedure or clinical diagnostic test is an important issue for the medical profession and raises important questions of public health and science policy. For example, the performance of a gene-based clinical test in an academic setting often generates rich databases of newly detected genetic variations that can be correlated with an array of clinical phenotypes. Such admixed medical practice and research provides important new information about the mutational repertory of specific disease-linked genes, as well as the phenotypic correlations that provide new insights into disease mechanisms and identify potential new targets for therapeutic intervention. In instances of the exclusive patenting or licensing of a test, such correlations will only occur if the data derived from the test are made freely available to the clinicians treating the patients. Thus, clinical research in the United States always has been intertwined with the practice of medicine by physician investigators in academic medical institutions, and historically, overages obtained from medical practice have been a significant source for investment and operating funds in clinical research.

Furthermore, the practice of gene-based diagnostic tests by academic laboratories on the large and heterogeneous patient populations of the academic medical center generates rich databases of newly detected genetic variations that can be correlated with an array of clinical phenotypes. Such admixed medical practice and research provides important new information about the mutational repertory of specific disease-linked genes, as well as the phenotypic correlations that provide new insights into disease mechanisms and identify potential new targets for therapeutic intervention. Such research is a hallmark of academic medical practice and historically has made enormous contributions to the advancement of medical knowledge and public health.

It also is the case that health professionals, the biopharmaceutical industries, and the public are anticipating eagerly a new era of “individualized medicine” and the application of pharmacogenomics to guide the drug development process and tailor therapeutic interventions to individuals and populations based on known genetic factors predictive of drug efficacy and safety. For industry to exploit this promising potentiality, the development and practice of precise, gene-based diagnostic tests to identify the candidate populations for both drug testing and marketing will be required. The development of new genetic tests will be linked intimately as never before to drug development, testing, and marketing.

Given the rapid development of gene-based diagnostic testing and its increasingly critical role in the practice of medicine, the committee identified a variety of concerns that it believes should be considered in licensing practices on genomic- or proteomic-based diagnostic tests, where inventing around the test may not be possible, including:

  • access for patients;
  • allowing competitive perfection of the tests;
  • facilitating IRB-approved clinical research in academic medical centers regardless of funding sources;
  • facilitating professional education and training;
  • permitting independent validation of test results; and
  • ensuring regulatory compliance.

Although the committee discussed all of the above concerns at length, it was especially concerned with independent validation of genomic- or proteomic-based test results. Certain members of the medical and academic community noted that, where patent owners may control access to genomic- or proteomic-based diagnostic tests, the patent owners may not allow others to use the patented technologies to validate the results of particular clinical tests. The committee agreed that this may present a problem and encourages patent owners to consider entering into licenses that will permit others to use the patented technologies for the purpose of independently confirming the results of a diagnostic test.

Recommendation 13:

Owners of patents that control access to genomic- or proteomic-based diagnostic tests should establish procedures that provide for independent verification of test results. Congress should consider whether it is in the interest of the public's health to create an exemption to patent infringement liability to deal with situations where patent owners decline to allow independent verification of their tests.



The situation for state institutions is more complex and may provide state institutions with greater protection. Under the 11th Amendment states enjoy immunity from suits in federal courts for monetary damages absent either their express consent or a legitimate congressional grant of the power to sue in federal court. Although a state can be enjoined from continuing to infringe, Congress only can abrogate 11th Amendment immunity if it is remedying a failure by the states to provide adequate compensation for unauthorized past usage, in this case, the failure to provide legitimate protection of rights through the state's courts. To be deemed adequate the state courts must, however, provide both due process for petitioners and the possibility of redress.


A copy of the complete principles can be obtained at the NIH Web site at


The guidelines were issued following recommendations made to the NIH Advisory Committee to the Director by a special subcommittee chaired by Rebecca Eisenberg.


On April 11, 2005, NIH published the final notice, after receipt of public comments, at


Madey v. Duke University, 307 F.3d 1351 (Fed.Cir. 2002).


See, e.g., Roche Products, Inc. v. Bolar Pharmaceuticals Co., 733 F.2d 858, 866 (Fed. Cir. 1984);Vitamin Technologists, Inc. v. Wisc. Alumni Res. Found., 146 F.2d 941, 956 (9th Cir. 1945); City of Milwaukee v. Activated Sludge, Inc., 69 F.2d 577, 593 (7th Cir. 1934).