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Author: ElricSeven Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 24983  
Subject: AIDS Virus Receptor Patent and HGSI Date: 2/16/2000 9:20 PM
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In case you didn't hear, Human Genome Sciences was awarded a patent to a receptor possible crucial to the treatment of HIV. Here is the news article:

http://biz.yahoo.com/rf/000216/bf5.html

Are you back? Well, good. With all the hoopla today on the new patent, I decided to take a gander. The patent number is 6,025,154 and can be found on the US Patent and Trademark Office web site:

www.uspto.gov

Lets start with a little primer. A U.S. Patent gives the holder a right to exclude others from making, using or selling what is “claimed” in the patent. What is “claimed” is defined precisely by a set of consecutively numbered sentences that appear at the end of the patent. Appropriately enough, these sentences are called “claims.” Like a deed to land, the claims describe the “metes and bounds” of the patent owner's right to exclude. If all the elements (or subparts) of a claim describe something that is made, used or sold, that thing is infringing on the patent holder's rights.

Gene patents have been allowed since a landmark case in 1979 called Diamond v. Chakrabarty. Against the protest of many religious and other groups, the Supreme Court deemed genes to be patentable as long as they are “made by man.” In other words, one cannot patent a naturally occurring gene.

Gene patents are still hotly disputed, however, due to the fact that people are uncomfortable with the idea that the blueprint of living things can be patented. Recently, the President has publicly expressed concern that recent high volume patenting of human genes may be overly broad. The concern about overly broad protection pertains to patents that include claims to genes as a composition of matter. Once a claim to a gene as a composition of matter is awarded, anyone who makes, uses or sells that gene is an infringer. Contrast this to claims to the gene in a method, such as a method of treating cancer. A claim to the method of using a gene to treat cancer would only be infringed if someone were to make, use or sell the method using the gene to treat cancer. However, ALL methods of using the gene as a treatment (cancer, heart disease, ischemia, etc.) will infringe the gene as a composition of matter.

How can a human gene, which is natural, be patentable if it has to be “made by man?” Well, the USPTO currently considers a gene to be made by man if it has been purified. Purified is defined as separated from its natural surroundings. The rationale is that it doesn't exist in nature in this purified state and it got there through the hand of a person and is therefore “made by man.”

Where does all this lead? Well, much of HGSI's (and many othe biotech companys) value is tied up in gene patents. The pressure from the President and others to narrow claims to genes as a composition of matter can adversely affect these patents. It appears that there are two safety valves for controlling the recent mass patenting of genes. One way to cut down on the number and breadth of the patents is to mandate (legislatively or through the courts) that purification is insufficient to meet the “made by man” standard. Another, is to limit the patents to genes based on a showing of utility.

To meet the utility standard an invention must be useful. It can be useful in any way shape or form. Only one utility needs to be proved. For instance, in a patent directed to a chair one might assert that the use is as a place to sit. Someone who comes along and makes the chair, but uses it to stand on, will still be infringing. The utility standard is not too hard to meet, by the way. Usually, only throw-away or junk utilities are considered insufficient. For instance, an invention claiming a tube with a few magnets on the outside was found to lack utility despite an assertion that the taste of liquids were improved when passing through the tube. The inventor needed more solid scientific support for this utility. They didn't have it and the court declared the patent invalid, making it useless.

Apparently, many recent gene patents are submitted so quickly after finding the gene that the applicants have not carefully determined a use for the gene. Many of the applications rely on homology, or similarity, to known genes as evidence of utility. Others speculated on the future use of the gene based on this homology. Basically, it appears that not much biological experimentation is done to determine what treatments or other uses to which the gene could be applied. The Patent office is now insisting that an applicant assert a utility and that that utility must be CREDIBLE. This means that speculative utilities must be supported with more documentation and/or testing to justify patentability.

So lets summarize. Gene patents claiming the gene as a composition of matter are threatened by recent political and public reaction. These types of claims may well be ruled invalid on a wide scale. Also, the asserted utility of these inventions is being scrutinized more closely. We can estimate the possible damage to a patent by understanding 1) how many of the claims are directed to a gene as a composition of matter and 2) how detailed the support is for the asserted utility.

HGSI's patent is entitled “Polynucleotides encoding human G-protein chemokine receptor HDGNR10.” Wow, that's a mouthful. The thing to note is that it says nothing about HIV or AIDS in the title. Guess what? It says nothing about HIV or AIDS in the ENTIRE APPLICATION. Is that good or bad? Well, its tough to say. It would be better if they did disclose a possible use in the treatment of HIV because that would definitely be a utility.

On the other hand, if you recall, we only need one utility and the standard is pretty low. The application does discloses the uses of other G-proteins. Apparently there are a bunch of G proteins and they do a bunch of things. This is the homology approach to asserting a utility. They are saying “We don't know exactly what its good for, but these others that are similar do this and this and this...” Other asserted utilities include use of the gene for the detection of underexpression and overexpression of the G-protein. Still another asserted utility is in the detection of mutation in the G-protein.

It appears that the above cited utilities are not as solid as citing a cure or treatment for HIV. Evidently, though, the utilities that were cited were enough to make it past the examiner at the patent office. That the cited utilities are possibly a bit flimsy is something to consider before running out and buying the stock based on a single patent. I wonder how many of the Wise bothered to read it before throwing hard earned dollars at the company?

The patent also seems to be strongly dependent on the viability of claims to genes as a composition of matter. Of 19 claims, 15 of them are directed to the gene as a composition of matter. So the risk is definitely there that this patent could be worthless after a legislative or judicial mandate declaring composition of matter patents invalid.

So what does this all lead to? Investing in HGSI is risky. Big surprise. Do some research, make sure you are comfortable with the above issues before investing.

Just a little disclaimer. I am not a lawyer and this is certainly not legal advice. It is just a generalized discussion of a single patent and kicks around some issues regarding the patentability of genes. It is not really a complete analysis. If the issue really concerns you, hire an attorney. Also, I own stock in HGSI.


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