A Revolution in R&D

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ogy—to discover new drugs. Broadly speaking, the
drugs that emerged were much indebted to
serendipity. Research strategy consisted mainly of
choosing which therapeutic areas to investigate, and
discovery efforts focused on individual drug targets.
Development provided even fewer strategic choices:
a promising compound emerging from chemistry
would be tested on animals and humans in large
and inefficient trials (inefficient because there was
no means of identifying in advance likely responders
or nonresponders). With the rise of genomics,
there have come new technologies, new approaches,
new information, and new ways of thinking about
INTELLECTUAL PROPERTY—LOST AND FOUND
Gene patent applications are flourishing: in 2000
alone, more than 20,000 were submitted to the
United States Patent and Trademark Office. Despite
the large number of applications, two central questions
have yet to be answered. What exactly can be
patented? And what rights does a patent actually
confer on its holder?
For a gene or gene fragment (an expressed sequence
tag, or EST) to secure a patent, its “utility” has to be
established. In January 2001, the United States
Patent and Trademark Office issued Utility Examination
Guidelines to clarify the standard used. (That
in itself was encouraging to those in favor of gene
patenting, reinforcing the view that genetic material
can indeed be patented.) Following on the interim
guidelines released in 1999, the new guidelines
advise patent seekers to provide at least one “specific,
substantial, and credible” use for the gene or
gene fragment in question. This restatement effectively
fixes the height of the hurdle for applicants
and disqualifies undersubstantiated applications
from the outset. Some uncertainty remains, however:
whether it is necessary when presenting evidence
of utility to understand the actual biological
function of the genetic material, and whether gene
research and development. These have brought
with them a new opportunity, or imperative, to turn
research to competitive advantage.
So companies now have weighty strategic issues to
address. At the corporate level, the question is how
much to invest, given the current environment. For
R&D leadership, the question tends to be where to
focus those investments—in what therapy areas, on
what target classes, and so on—as well as which
technologies to adopt and how to adopt them (inhouse
or externally, for example), and how to mitigate
the associated risks.
fragments, as distinct from full-length genes, are eligible
for a patent.
If getting a patent approved seems daunting, all the
more so is enforcing it, or sheltering confidently in
its protective embrace. The strength of protection
afforded by a gene patent is still a developing legal
issue. One recent court decision, though, clearly
marks a setback for patent holders—Festo Corp. v
Shoketsu Kinzoku Kogyo Kabushiki, decided by the
federal circuit court in November 2000. It appears
to weaken many patents by precluding a broad interpretation
of most patent claims; it does so by virtually
excluding the “doctrine of equivalents.” This is a
doctrine that generally allows extension of a patent’s
claim beyond its literal language, so that a would-be
infringer who makes trivial changes to the patented
product is not thereby exempt from the patent’s constraints.
According to the Festo ruling, if the language
of the legal claim diverges from that of the
patent itself, the doctrine no longer applies. Many
patents now look very narrow and vulnerable, and
companies will have to plan their patent submissions
even more carefully in the future. Or hope for
a change of fortune: the U.S. Supreme Court is
expected to review Festo in the 2001–2002 term.