When these binders arrive loaded with genetic information, young men and women, often recent chemistry or biology PhDs, examine them against the PTO’s requirements. The examiners initially reject most submissions but subsequently accept about half after the applicant makes suggested revisions. If approved, the submitting company gets 17 to 20 years of monopoly rights to that gene, depending on how long the application process took.

The consequences of this administrative procedure should inspire awe. Consider that at least four binders have come in, or are on the way, from rival pharmaceutical companies trying to patent the gene that creates beta-secretase, the enzyme that scientists believe causes Alzheimer’s disease. Financially, the company that wins the patent battle stands to make enough money to buy Versailles. Ethically, it means a chemical structure that exists in all of us, and has evolved since life began to form in the oceans, gets entrusted to a company that probably didn’t exist when Clinton was first elected president.

The winner might share the patent with the world, recouping research costs and taking a good profit. If so, a broad choice of affordable Alzheimer’s drugs could come on the market. But the patent winner could also decide to shut down all research on beta-secretase by rival companies, universities, and public agencies. Then it could raise prices through the roof, making the drug inaccessible to most of the world, but maximizing its take from rich people willing to sell the family silver for a bottle of the pills. Public money funded much of the research that led to the discovery of beta-secretase, but neither the patent office nor any other branch of government seems to have any control over whether the patent is hoarded or shared.

Unfortunately, if prior work on Alzheimer’s is any indication, we may be in trouble. In 1999, for example, Athena Diagnostics prevented laboratories from freely using a key gene at the core of an Alzheimer’s diagnostic test and mandated that all tests be routed through Athena’s own laboratories for a fee because the company controlled the patent. Subsequently, critics suggest, overall research on the gene may have slowed since many laboratories research the same genes they test for. Athena is now owned by another drug company, Elan, currently involved in a legal struggle with the nonprofit Mayo Clinic over the clinic’s Alzheimer’s research using mice containing a human gene patented by the company.

Elan is hard at work researching beta-secretase and its prior actions suggest it might well take a hard line if it earns a patent. According to author David Shenk, who is currently writing a book on Alzheimer’s: “Elan is doing some spectacular research. But ethically, there seems to be a disconnect between its lab work and its legal agenda.” Other companies are split the same way and, no matter which one gets the beta-secretase patent, restricted access will mean a lot of people staying sick longer than they should.

We are on the cusp of a medicinal revolution, fueled by a marvelously innovative pharmaceutical industry dominated by the United States. Most drugs work either by activating or disabling specific proteins. By figuring out the genes that create our natural proteins, we move one giant step closer to designing proteins that make us live longer and expunging those that make us fall ill. Pharmaceutical companies have only developed a few gene-based drugs, and there are several deeper layers of biological complexity to mine beyond the genome. But we are learning how to play with the building blocks of life and hurtling toward the day when we have genetic tests to determine which diseases we are likely to get, as well as drugs to cure all the ones we do.

In the midst of the revolution, the only government agency helping to define the market is the PTO, but the organization’s mandate consists of little more than giving the thumbs up or thumbs down to applications. If an applicant can show that her invention meets four criteria—it’s novel, useful, non-obvious, and fully-disclosed—she gets a patent, regardless of whether she’s concocted a cure for cancer or a particularly potent cigarette, and regardless of whether she’s going to share it. As Stephen Kunin, the PTO’s deputy commissioner for patent examination policy, puts it, “our job is to call balls and strikes.” Dealing with issues of accessibility “would be way outside the purview of the agency.”

Unfortunately, the stakes are far higher than the World Series, and the key questions don’t seem to fall in anybody else’s purview. A crucial issue of public policy has been put into a legal and scientific box. That may not be the PTO’s fault, but it’s everyone’s problem. According to Arthur Caplan, who serves on the ethical advisory board to Celera, “We have this space-shuttle biotech. But its navigation system is Santa Maria level in terms of the ethics.”

Developed in the 1790s, the goal of the U.S. patent system has always been to “add the fuel of interest to the fire of genius,” as Abraham Lincoln put it. Patents give inventors the right to build fences around their inventions and make some money. As a tradeoff, inventors must show the world how they made their mousetraps, perhaps inspiring further innovation. Then, in due course, the fence gets taken down and the invention moves into the public domain.

Until 1980, there was a presumption that life forms could not be patented, but the Supreme Court reversed that in Diamond v. Chakrabarty, ruling that General Electric could patent bacteria genetically engineered to eat up oil spills. The court maintained in a 5-4 decision that “anything under the sun” is patentable so long as it meets the PTO’s four main criteria of novelty, usefulness, non-obviousness, and full disclosure.

Even accepting the court’s ruling, opponents argue that genes have always existed and patent applications on them should therefore fail the novelty test. Neil Armstrong couldn’t patent the moon, for example, even though he got there first. But there’s a legal way around that opposition: Nobody patents genes in their natural form. They’ve been removed from the body, copied, manipulated, and reassembled in a purified form with long strings of meaningless DNA removed. In the eyes of the courts and the PTO, a gene in that altered form is just another chemical compound. In 1998, then-PTO Commissioner Bruce Lehman said: “We are not patenting life. God, I suppose, has a patent on life. We are patenting technology.”

Until recently, the PTO only had to deal with a trickle of gene applicants. Now the industry is exploding. It used to take years for scientists in white lab coats to identify and isolate a gene. Now stacks of the most powerful computers on the planet do the job in just a couple of days. Consequently, the market currently resembles the scramble for Africa in the late 19th century, with rival explorers racing around trying to plant their country’s flag on every available sand dune.

The rush to patent has also been fueled by the PTO. Initially, the office was tough on genomic patent applications. As biotechnology began to boom, the office had hired a team of young scientists with advanced degrees who instinctively held patent applications to the tough standards one would hold for a peer-reviewed scientific journal, or maybe even the FDA: Is the science completely sound? Will the drug be safe? Were the research methods credible? In 1995 though, Commissioner Lehman decided to give more leeway to industry, making sure that examiners knew they were, as he put it, “the patent office, not the rejection office.”

There are about 30,000 human genes in the genome; about 1,000 have already been claimed, and an estimated 10,000-20,000 applications are pending at the PTO. Facing this onslaught, the PTO’s rules were tightened at the end of the Clinton administration: Patent applications must now show a “clear, substantial, and specific” utility for their applications. A company can no longer receive a patent simply for finding a gene that might help a virus enter cells. The company has to say which virus and which cells. That change has been universally welcomed. No company wants a new drug torpedoed because another company fortuitously patented the key gene years ago without really understanding it.

The patent office has not, however, tackled the more important issue of how companies use patents. Patenting a gene and releasing it into the public domain, as the National Institute of Health now usually does, harms no one. Some private companies, Incyte Genomics for example, have also earned reputations for allowing other companies to use their patents widely and cheaply, in no small part because money can often be made just as easily with lots of companies paying small fees to use a patent, instead of a few companies paying astronomical ones. But not everybody’s sharing. Myriad Genetics, for example, used its patent over a gene that served as an indicator of breast cancer to stop research on it at the University of Pennsylvania. Two years ago, in another well-known case, the Miami Children’s Hospital received a patent on a gene for the rare Canavan disease that it had identified in one of its patients, Jonathan Greenberg. Without informing Greenberg, the hospital set out to block free Canavan tests offered elsewhere.

Right now, the patent office is our only instrument for policing the gene industry, but the agency is unarmed and patrolling on foot. According to Nicholas Godici of the PTO: “Congress passes the law. The courts interpret the patent laws. Once the determination is made by the courts, it is our job to administer that law.” The PTO’s only wiggle room comes when a court decision, having forced the office to adjust its rules and interpretation of statutes in some particular way, allows room for adjustment in others. The recently implemented “clear, substantial, and specific” utility guidelines come, for example, out of a court case in which the University of California sued Eli Lilly for patent infringement.

The PTO also lags somewhat on science. Smart, dedicated people work there; but most folks on the cutting edge choose to sequence genes themselves rather than approve or reject other people’s work. Critics suggest that, before the recent rule changes, the patent office gave out a large number of patents on gene fragments, called Expressed Sequence Tags (ESTs), without grasping the scientific implications. According to biologist Donald Kennedy, editor-in-chief of Science magazine, “Among working scientists in the genomics area, there’s a consensus that the patent office hasn’t yet gotten it figured out.”

But the office and the courts are bound by legal, not ethical, restrictions. Indeed, examiners may even find themselves implicitly more accountable to corporate applicants since many take their knowledge of the patent office’s labyrinths and go work for industry’s higher paychecks. According to Peter DiMauro, a former examiner, a fair number of the people who work at the PTO “use it as a way station. Then they get snatched up by industry.” In addition, the PTO hosts quarterly round tables inside its headquarters with industry representatives to discuss patenting policy. The meetings are open to the public, but they serve mostly for patent examiners and executives to reason together. The PTO’s corporate plan describes these as “focus sessions with customers to determine their needs and expectations.”

Although part of the Department of Commerce, the patent office isn’t a standard government agency with numerous political appointees and brutal budget battles every year with Congress. The PTO collects all of its budget through application fees required of every submission and it was recently designated by Al Gore’s Reinventing Government program as one of the only two “performance-based” government organizations. As a result, the patent office structures its entire mission around a set of quantifiable goals—usually variations on processing applications as quickly and efficiently as possible. In fact, the PTO sees itself almost as much as a business as it does an arm of government and its corporate plan is peppered with business-school axioms. For example: “Like any other business that wants to be competitive in the 21st century marketplace, we recognize the importance of quality and customer satisfaction.”

Reinvention has helped the office win points for increased efficiency and the office has made it vastly easier to file and research patents online. To companies, patent processing is always a hassle. But the complaints sound a little quieter now than a few years ago and the PTO seems to be fulfilling its goals. There’s merit to that, but such assembly-line efficiency would be considerably more admirable if the PTO had a more-direct stake in serving the public interest.

From an industry standpoint, the problem with the current system is best understood if one thinks of upstream and downstream products. The downstream product is the actual drug sold at CVS or the genetic test conducted in a clinic. Upstream products are the test tubes, the original cell that’s torn apart to look for the genes, and the genes themselves. Traditionally, the PTO has granted mainly patents to downstream products like actual drugs. By allowing patents on upstream products like genes the legal process has been turned upside down, with two major consequences. First, anyone who develops a drug or a clinical test has to look upstream to see whether anyone else had a claim on the genes used. Second, every company has an incentive to patent as many genes as possible. No one really knows how science will change, and having genes in the bank may be useful for your own research, so your competitor can’t screw you, or so you can screw your competitor. Unsurprisingly, everyone’s suing everybody else to grab rights to potentially lucrative genes. Elan is suing the Mayo Clinic; the University of Rochester is suing Pharmacia over a gene crucial to Celebrex, a painkiller, currently one of the best-selling drugs on the market; Amgen just won a case against Transkaryotic Therapies, a much-smaller company trying to make a competitor to Epogen, Amgen’s anemia-fighting blockbuster.

From a public perspective, the problem isn’t just that tests are being stopped, like Myriad Genetics’ crackdown on breast-cancer screening, but that many tests aren’t even getting started. Jon Merz and Mildred Cho, bioethicists at the University of Pennsylvania and Stanford, recently conducted a survey of laboratory physicians and found that one in four had abandoned a clinical test that they had developed because of patents, and almost half reported that they had not developed a test for fear that, the minute they cleaned their test tubes, a patent lawyer would come knocking. In a follow-up, Merz and Cho surveyed 100 laboratories to determine how they responded when GlaxoSmithKline was granted a patent over a gene critical to a screening test for hemochromotosis. Before Glaxo even decided to enforce the patent, 25 labs made a decision never to use it and five already using it chose to drop it. Even universities have been playing hardball, sending lawyers after companies and each other. In fact, as industry loves to point out, the same universities funding ethicists like Cho and Merz are actively trying to subvert each other and swipe company patents. “There are no real good guys at this point,” says Cho.

In short, the current chaos isn’t in anyone’s interest except for lawyers, and one more dollar spent hiring lawyers to chase one another in circles is one less dollar to spend on research.

Even without the legal mess, there’s a strong moral reason for government intervention. Gene patents are different from other patents. Biotech companies are not just putting fish genes in tomatoes to make them grow in cold weather; they’re manipulating and owning parts of humans that have existed since well before the first hominoid speared his first antelope. Furthermore, all of the research, from the machines used to sequence genes to the actual structure of the genome, is based in large part on a $15-billion investment by the public in the National Institute of Health’s Human Genome Project.

Congress should be the logical higher authority to hold responsible for meeting the challenges of the biotech industry. It oversees the patent office, sets the budget, and has the authority to change the patent laws. But no one should be holding her breath. Congress has taken a hands-off approach to the industry, arguing that what the biotech industry wants is good for America. That’s not a wholly unreasonable assumption, and it certainly has created wealth for American industry—and members of Congress too. According to the Center for Responsive Politics, GlaxoSmithKline, for example, gave an average of $1,000 to each Republican on the Intellectual Property Committee while also greasing the Republican Party with more than $800,000 in soft money last year. Howard Coble, the ranking majority member on the committee, and a prime sponsor of recent industry-supported American Inventors Protection Act, received a nice $5,000 from Glaxo, along with $3,000 from Novartis.

Congress also usually moves slowly. If the House tried to overturn our gene-patenting rules, the entire genome could be patented by the time the bill waded through the swamps of committee hearings, riders, election-year politicking, and possible entanglement with the Congressional phobia of any issue remotely related to altering human life. Additionally, individual Representatives are poorly versed in the science—vastly worse than the PTO. One well-known genomics researcher recalls briefing congressmen on his work and asking where they thought the human genome was located. One-third answered correctly that it’s in every cell. One-third thought it was in their brains, and one-third thought it was in their testicles.

Despite these shortcomings, however, Congress is still the only institution that can truly change the law, and the law definitely needs changing. Three years ago, Congress gave special patent protection to surgical procedures: A pioneer can patent a new technique for operating on someone’s brain just to document that she came up with it, but she can’t prevent other doctors from using the same technique. The rules on genetic patents need not be pushed that far. Industry needs a certain amount of profit protection because the massive investments needed to find new drugs far exceed the investments needed to develop most surgical techniques.

The solution isn’t for Congress to take over the patenting process, passing rules left and right. Science has turned on the afterburners, and Congress can neither react as fast as necessary nor deal with the variation in the types of patent applications that will come as companies begin making drugs based on experiment with everything from gene fragments to protein folding patterns. But Congress can and should give PTO the authority and ability to issue conditional patents on human genes, deciding not just who should be granted patents, but how those patents should be used. The PTO understands the issues much better than Congress and can act quickly when needed; it just doesn’t have the legal ability to do much right now.

The PTO should then take one specific step in the short run—non-commercial researchers should be given unlimited rights to use genes in their work—and develop long-term standards that allow biotech companies to make reasonable profits while also protecting the public interest. The period of exclusive rights for genes should be shortened—it’s odd to give 20-year protection to a company that has existed for three years—and companies that do not develop licensing agreements with their competitors should be penalized, perhaps by having previous patents moved into the public domain. This would reduce uncertainty because companies wouldn’t have to look upstream constantly. It would also probably reduce lawsuits by moving patenting away from a winner-takes-all system where lawyers can make the difference between a billion-dollar patent and collapse.

In its present form, of course, the patent office isn’t up to the job. It doesn’t have enough money and it doesn’t have enough people with training in the scientific and licensing issues it will have to deal with. Genetic patent applications have ranged up to 400,000 pages long and the PTO needs to be able to hire more people. But the patent office is more than self-sufficient with the fees it charges for each application and it could easily grow either through increased fees, congressional appropriations, or just being allowed to keep everything it collects.

But moving the patent office to the center of the action would help in a more important way. As other agencies, from the White House to the Justice Department, have learned, the best way for the government to attract and keep talented employees is to make them feel like they truly serve the public interest—a viewpoint that would clearly increase if the PTO’s role expanded. Patent examiners leave the PTO to go work for industry not just to earn more money but because that’s where the action happens.

The patent office took a large step in a positive direction at the end of the Clinton administration, publishing a paper suggesting that the biotech industry consider pooling patents, with companies entering cross-licensing agreements sharing patents with competitors. The office couldn’t enforce the paper because Congress hasn’t granted it that power yet. But the suggestion does point out a future path. Although important issues of anti-trust need to be considered so that big players don’t use pools to squeeze out the small guys, such an approach has proved an effective way of sharing information in the electronics industry. The most recent example came when DVD manufacturers from Sony to Hitachi to Time Warner agreed to share their patents, ensuring each can comply with DVD-Video and DVD-ROM standard specifications.

Perhaps the most germane example, though, comes from 1917 when a committee chaired by Navy Assistant Secretary Franklin Roosevelt pushed the country’s airplane manufacturers to pool their patents. Previously, two companies had been hoarding patents, as some gene companies are doing today, preventing the government from building the planes it needed to fight the war. Roosevelt twisted some arms and made the public aware of the problem. With the patents pooled, we built the planes needed to win the war.

The stakes now aren’t that much different. Europe isn’t being overrun, but science is spilling into uncharted technical and moral territory. The probable benefits are awesome, but the ethical, moral, and legal issues need clear government action—starting with the PTO. Calling balls and strikes just isn’t enough anymore.

Nicholas Thompson is a contributing editor of The Washington Monthly. You can email him by clicking here or read his other articles by clicking here

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Nicholas Thompson, the CEO of The Atlantic and the former editor-in-chief of Wired, is a contributing editor of the Washington Monthly