GENE PATENTS AND OTHER GENOMIC INVENTIONS THURSDAY, JULY 13, 2000 HOUSE OF REPRESENTATIVES, Washington, DC. The subcommittee met, pursuant to call, at 9:35 a.m., in Room Present: Representatives Howard Coble, Howard L. Berman, Staff present: Blaine Merritt, chief counsel; Chris Katopis, coun- OPENING STATEMENT OF CHAIRMAN COBLE Mr. COBLE. Good morning, ladies and gentlemen. The sub- It is well known to those who follow the work of this subcommit- This year, the efforts of researchers in the public and private sec- The intellectual property questions surrounding these efforts While Congress will not consider any additional patent legisla- the transformation of the Patent and Trademark Office into a more autonomous entity, the early publication of patent applications and expanded procedures like reexamination go into effect, the structure of our system will be greatly enhanced and more efficient. In addition, I know that the subcommittee members and I are united in the belief that the PTO deserves to retain all of its user fees. This has been a torridly hot topic on this Hill in recent days and I want to emphasize the significance of that. In fact, I will digress a minute. I was at the Patent and Trademark Office this year, Todd, you will recall, and I, in perhaps a very indelicate manner, admonished the administration and the appropriators to keep their grubby paws out of the PTO coffers. I received great applause for that statement; not normally embraced on the Hill by many, however. But this is very significant. I'm sure we will touch on that today. The diversion of fees is unfortunate, to say the least, and will result in a negative effect for the biotechnology industry due to increased patent application pendency, lessened overall patent quality, and the deprivation of resources. It is our hope that the appropriations committee and the administration will restore this badly needed money. We are very fortunate to have the benefit of talented witnesses, who are joining us this morning, to survey this exciting field and to help educate us in this process. I am now pleased to recognized the ranking member of this subcommittee, the distinguished gentleman from California, Mr. Howard Berman, for an opening statement. [The prepared statement of Mr. Coble follows:] PREPARED STATEMENT OF HON. HOWARD COBLE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH CAROLINA, AND CHAIRMAN, SUBCOMMITTEE ON COURTS AND INTELLECTUAL PROPERTY The Subcommittee will come to order. It is well-known to those who follow the work of this subcommittee that we spend a great deal of our time on issues pertaining to the Internet. Today, however, we turn our interests to another very exciting and important area of the U.S. technological leadership, the bio-technology industry, which will have an equal, if not greater, impact on our lives in the years ahead. This year, the efforts of researchers in the public and private sectors will unveil the complete map of the human genome. For the first time in human history, we will have a clearer understanding of this science for the blueprint of human life. This landmark work will make the twenty-first century the "bio-technology century." The intellectual property questions surrounding these efforts have enormous consequences that will impact all aspects of life, America's continued global technology leadership, and the course of related research. These are issues of great interest to the subcommittee members, and recent developments compel us to explore them. While Congress will not consider any additional patent legislation on this topic this year, there are two points I wish to make. The concerns about all varieties of patents prompted Congress to pass landmark legislation-the American Inventors Protection Act-last November. While our patent system is the envy of the world, as the provisions of last year's legislation-including the transformation of the PTO into a more autonomous entity, the early publication of patent applications, and expanded procedures like re-examination— go into effect, the structure of our system will be greatly enhanced and more efficient. In addition, I know that the subcommittees members and I are united in the belief that the PTO deserves to retain all of its user fees. The diversion of fees is unfortunate to say the least and will result in a negative affect for the biotechnology industry due to increased patent application pendency, lessened overall patent qual ity, and the deprivation of resources. It is our hope that the Appropriations Conference restores this badly-needed money. We are very fortunate to have the benefit of talented witnesses who are joining us this morning to survey this exciting field and help educate us in the process. I now turn to the Ranking Member, Mr. Berman, for an opening statement. Mr. BERMAN. Well, thanks very much, Mr. Chairman, for holding this hearing and for focusing us on these very important issues. In light of the rapid events, as we've seen in gene sequencing, I think it's very important that the subcommittee explore the legal and policy issues, which we're going to hear about today and it's appropriate that we do so at this time. These are very complex issues dealing in arcane areas of science and law. Actually, I think the interest in these issues reveals something_extraordinary about the times in which we live. What once was the arcane, what once was only heard and spoken of in the corridors of academia and legal institutions, is now a regular part of the public discourse. The front pages of the newspapers are regularly reporting the legal and moral issues that are raised by patenting in new areas of technology. At the same time, we are celebrating the successes of once anonymous researchers extending human knowledge at a previously unheard of pace. It is clear that the public is interested and even concerned about this intersection of intellectual property rights and science. In time, health care is going to improve dramatically as a result of the sequencing of the human genome. And without the continuing efforts of those in both the public and private sectors, the medical advances we will hope to achieve would undoubtedly take much longer to develop and some would never occur. But, there are some who are asking whether the goals of the patent system and those of science and medicine are properly balanced. Some are concerned that patent holders, public and private, will impose licensing terms on users of their inventions that will impede medical research or restrict patient access to affordable new clinical tests and therapeutic treatments. There have been a few notable cases already that suggest that this is an issue that at least warrants discussion. Some are concerned that patents have issued that may not meet the statutory requirements for patentability and they are concerned that the Patent and Trademark Office will not adequately elevate the bar to patentability in their new utility guidelines. Without question, we are looking into this at a time of substantial change, both in terms of what patent applicant seek to patent and how the PTO measures the patentability of submissions. Industry continues to make adjustments in light of what it learns about patents and licensing. The PTO is developing new guidelines and the rest of us are just beginning to understand the issues at play, but there clearly are policy questions that we need to be asking. With that said, I want to thank the witnesses for coming here today and I particularly want to thank Dr. Varmus for joining us. I look forward to the testimony. This is one of those issues thatyou know, so many of the issues we deal around here, we start with our own sort of ideological and philosophical biases and political biases and past records and it's very hard to sort of overcome those perhaps genetic redispositions. But in this-this is true for me, at least. This is an issue that's just a fascinating subject to learn about. I only try to figure out what makes the best sense to do and very possibly to do nothing, except to try to follow and learn and let people with different views articulate them, in the event that something does crystallize all of this. So, I think it's just a great time to have this hearing, Mr. Chairman, and I want to thank you again for scheduling it. Mr. COBLE. I thank the gentleman. Folks, inevitably, we're going to have votes here, as the morning progresses. So, in the interest of time, I want to restrict opening statements to Mr. Berman and me, and without objection, we will have any other member's statements entered into the record. We are pleased to be joined by Mr. Gallegly, the gentleman from California, and Mr. Delahunt, the gentleman from Massachusetts. [The prepared statement of Mr. Gallegly follows:] PREPARED STATEMENT OF HON. ELTON GALLEGLY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA Chairman Coble, I want to begin by thanking you for your tremendous leadership on patent issues and for scheduling this important hearing. Mr. Chairman, the biotechnology industry is one of the most exciting and rapidly growing industries in the world today. Biotechnology products have not only dramatically improved our quality of health care, but they have increased the possibility of discovering the root causes of diseases and developing the cures to combat these diseases. The United States intellectual property system provides the framework that makes the development of new medical or biological products possible. Patents are essential to the biotechnology companies because they allow companies to recapture the enormous cost of research and development on these products. It is imperative to the future of this industry that we ensure that this system continues to provide effective protection and promote innovation, especially in the development of new products that have the potential to provide cures to diseases such as Alzheimer's, cancer and osteoporosis. I look forward to hearing the testimony of our distinguished panel of witnesses and thank them for coming. [The prepared statement of Mr. Conyers follows:] PREPARED STATEMENT OF HON. JOHN CONYERS, JR., A REPRESENTATIVE IN We are here today because the patent protection we give for genetic material that is used to develop new drugs-known as a gene patent-has generated a great deal of controversy over the morality and nuances of granting "ownership" over biological substances. Some ask how it could be possible that people can obtain patents on genetic material, the building blocks of life. It has been a settled principle of law for twenty years now, though-most well known through the Supreme Court decision in Diamond v. Chakrabarty-that genetic material created or manipulated by humans can be patented. And it is important to recognize that it is patent protection that drives scientists to spend countless hours in laboratories and develop new drugs from gene sequences even when the odds are against them. Without the promise of patents, our drug development industry would fold, leaving many diseases and illnesses with no hope for a cure. That being said, I believe it would stifle future research for patents to be given on gene sequences that have no identified purpose. I am pleased that the PTO is developing regulations along those lines and that the drug industry and consumer groups are largely in agreement with them. In the midst of this debate, though, we must not forget about the social issues that are raised by the biotech revolution. Patents cannot and must not be used to stifle research into potential cures for diseases and illnesses. Thankfully, it is an unspoken rule among most, if not all, scientists to share information and spur biotech innovation. Second, this country is facing a crisis over the rising cost of prescription drugs. It is my hope that these recent scientific breakthroughs_will enable researchers to develop new drugs more quickly and easily, leading to lower costs for consumers. Also, many Americans are concerned that gene sequencing will lead to discrimination by employers and others against people based upon their genetic makeup-commonly known as "genetic discrimination." For instance, no job applicant would want a potential employer to know that his or her DNA indicates a likelihood of contracting cancer. Already, this country is feeling the strain of discrimination based on race, religion, ethnicity, gender, and sexual orientation, and I hope that government and industry can work together to ensure that we do not have to add another category to that list. These questions will continue to be asked for years to come because we have hit only the surface of genetic discovery. The PTO has granted patents on approximately 1,000 human genes-there are between 30,000 and 100,000 genes left to discover. In addition, scientists recently determined the sequence of all 3.2 billion letters of the human genome-in essence, the blueprint for human life. This will increase exponentially the speed of discovery of the other thousands of genes and the controversies surrounding them. I would like to thank the witnesses for coming and look forward to their testimony. Mr. COBLE: The Government witness this morning is someone who is no stranger to this subcommittee, the Honorable Todd Dickinson, who is the Undersecretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office at the Department of Commerce. Mr. Dickinson is an active member of numerous professional associations, including the American Bar Association, the American Intellectual Property Law Association, the International Trademark Association, and the Copyright Society of the United States. A native of Pennsylvania, Mr. Dickinson earned a B.S. degree in chemistry from Alleghaney College and a J.D. from the University of Pittsburgh School of Law. He is a member of the Bars of Pennsylvania, California, and Illinois, and has practiced law in the private sector. The subcommittee has copies of Mr. Dickinson's testimony, which, without objection, shall be made a part of the record. And we invite you to the podium, Mr. Dickinson. Todd, you have many titles, but I still like the ring of Commissioner. That has a very authoritative sound to it. Which of your several titles do you prefer, Todd? Mr. DICKINSON. Either one Mr. COBLE. Good to have you with us. And for the benefit of the remaining panelists who will join us subsequently, as each of you have-we'd like to restrict our oral testimony to 5 minutes. Now, that's not to say that you'll be key hauled if you go 51⁄2 minutes; but when the red light appears, that is your warning that you are running out of time. We're doing that in the interest of time, because, as I say, we're going to be interrupted, I am confident, for votes on the floor. Good to have you with us, Mr. Dickinson. STATEMENT OF TODD DICKINSON, UNDER SECRETARY OF COMMERCE FOR INTELLECTUAL PROPERTY AND DIRECTOR OF THE UNITED STATES PATENT AND TRADEMARK OFFICE, DEPARTMENT OF COMMERCE Mr. DICKINSON. Thank you, Mr. Chairman, thank you very much, and to Mr. Berman. We appreciate the opportunity to testify today, and I commend the subcommittee for holding this hearing on patents in this cutting edge area of biotechnology. I'm hopeful |