USPTO Holds Public Hearing on Genetic Diagnostic Testing

On February 16, 2012, the USPTO held a public hearing on genetic diagnostic testing, permitting stakeholders to present their views relating to DNA patents, exclusive licensing, patient health and genetic testing, particularly as they relate to secondary or confirmatory genetic diagnostic testing. Notes from the hearing and speaker statements are included below. KEI's oral statement can be found here.

The agenda for this public hearing is available here; a second public hearing on this topic will be held in San Diego, CA on March 9, 2012. Some stakeholders received substantially more time to deliver their statements (Thomas Kowlaski of Vedder Price spoke for at least 45 minutes whereas Mary Williams of the American Molecular Pathology spoke for only 10 minutes). Stuart Graham, Chief Economist for USPTO, stated that stakeholders were granted the time they requested and that some stakeholders asked for longer amounts of time.
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The USPTO Panel at the public hearing (pictured above, from right to left) included Teresa Stanek Rea, Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the United States Patent and Trademark Office; Janet Gongola, Patent Reform Coordinator; Stuart Graham, Chief Economist; and George Elliott, Technology Center Director (Biotechnology).

Congresswoman Debbie Wasserman Schultz (D-FL), a breast cancer survivor, delivered opening commentary via video message. She emphasized the need of a "thoughtful remedy" in order to remove patient access barriers. The scope of the USPTO report should address the impacts of the lack of second opinion testing, the effects of second opinion testing, the effects DNA patents and exclusive licenses have on the practice of medicine, and the role of insurance companies. She noted that there are some 2400 genetic tests and that 20% of these cases have only a single lab performing the test because of exclusive rights. She emphasized the benefits for second opinion testing which can help patients make important medical decisions.

Public stakeholders were then permitted to give their statements.

Thomas Kowalski, a shareholder of Vedder Price, whose client base includes IAVI and universities, among others, argued that Section 27 of the America Invents Act was wrong attempting to "do-over" the opinion of the Federal Circuit in the American Molecular Pathology v. Myriad case. He stated that he would like to see the US harmonize its patent laws with the patent laws of other countries and claimed that Section 27 of the America Invents Act went beyond the scope of USPTO authority. He suggested that addressing the concerns raised in the Myriad case, that is that many women were denied access to BRCA1 and BRCA2 gene testing or could not receive second opinions, were better left to DHHS and FDA to address. He argued that any change to the USPTO practice of granting gene patents would result in an "unconstitutional compulsory uncompensated license." Kowalski also argued that the 2010 Secretary's Advisory Committee on Genetics, Health, and Society (SACGHS) report was inconclusive. He suggested that even in the Myriad case, there has been no outright refusal of Myriad to deal and any problems result from the "weakness and inaction" of other stakeholders in the health system. He advocated for a free market system and not one of government interference. He also claimed that no patent law issues exist and that any problems with respect to the Myriad case is better addressed through march-in rights, US government rights under 28 USC 1498 or antitrust law.

Mercedes Meyer of the American Intellectual Property Law Association delivered a similar statement to Kowalski. She stated that patents provide proper incentives and claimed that most diagnostic tests would not have been created without the incentives of the patent system. She also advocated for the existing patent system as the best way to promote progress and said that it would be a mistake to weaken patent system when no evidence exists that patents have been a problem, calling any perceived problems merely "hypothetical."

Mary Williams, Executive Director of the Association for Molecular Pathology (the lead plaintiff in the Myriad case) gave an opposing view and argued that patents on DNA discourages testing and is a disincentive to innovation. She noted that the threat of litigation produces a chilling effect and advocated for incorporation of the SACGHS recommendations in the USPTO report. She also argued that DNA patents detrimentally affect patient access, quality of testing and places an onerous burden on clinical labs.

Lori Pressman, a consultant of technology transfer who formerly worked in MIT's technology transfer office and is a current member of the Association of University Technology Managers (AUTM) gave a statement that focused largely on her experiences in technology transfer. She did not support changes to the patent system with respect to DNA patents and genetic diagnostic testing.

Hans Sauer, Associate General Counsel for Intellectual Property for Biotechnology Industry Organization (BIO) gave the next statement and argued that patents and exclusive rights are necessary in the area of genetic diagnostic testing because of the significant investments needed. Despite the evidence that identification of a gene and production of a clinical test costs significantly less than the creation and development of a drug, he still argued that the costs involved justified monopoly rights. He claimed that patents were necessary because you don't know what the final product will be when you initially receive a patent. Sauer also claimed that Section 27 of the America Invents Act is unnecessary because, based of anecdotes, he believes that patients do not ask for repetition of tests and there are no patient benefits to such repetition. He challenged USPTO to determine how often patients ask for confirmatory testing. He predicts that there is no market for secondary tests and also claimed taht barriers to access will always be higher for secondary tests. He claimed that there would be no benefit to a secondary test and that such testing would actually harm patients who would have to pay for such tests and give them "unwarranted hope." Sauer also claimed that patents do not drive up prices for genetic tests, though some studies have found otherwise. Sauer asserted that access issues revolved more around the differences between private payers and public payers and that other forces than patents were therefore at work.

Lisa Schalger of FORCE, an NGO that works with patients of hereditary breast and ovarian cancer argued that patents on DNA hinders progress and patient care. To put the issue in context, she stated that there are three-quarters of a million women with the BRCA mutation and 2.5 million are considered high risk. The patents on BRCA1 and BRCA2, she stated, have been bad for research and Myriad has impeded progress on research by failing to disclose its research of "variances of unknown significance" thereby ensuring that it will have an advantage over its competitors even after the patents expire. She highlighted the excessive costs of BRCA gene testing which has denied access to essential information about one's own genome. As one example, she stated that TRICARE, an insurer of military personnel and their dependents, no longer covers BRCA testing.

Kristin Neuman, Executive Director of Librassay, MPEG LA suggested that her organization can provide a solution to the patent thickets. She noted that Librassay could provide a web-based store for researchers to "shop" for patents on "reasonable, transparent, non-exclusive, and nondiscriminatory terms" and bundle them into customized packages for use in multiplex testing. She emphasized the need to permit nonexclusive licenses.

Ellen Jorgensen, President of Genspace, an organization involved in education stated that she was speaking on behalf of consumers. She stated that it is upsetting that exclusive rights and patents prevent persons from getting information about their own genome. She noted that CCR5 testing reagents cost only $5, though the price of the test remains very high. She stated that a person can set up a home lab for $5,000 or less and use basic, middle-school level science to look at his or her gene, but could be prevented because of patents.

Kevin Noonan, Partner of McDonnell, Boehnen Hulbert & Berghoff LLP and author of the PatentDocs website argued that little evidence exists that patents have prevented access. He suggested that the SACGHS report had a great deal of evidence but its conclusions came down contrary to the evidence presented. He claimed that the diagnostic tests are not too expensive, but that insurance companies just do not want to pay for them until prices come down. Noonan argued that tech transfer from universities has been critical and noted that Birch Bayh has statistics that 6,000 new companies have been created since the passage fo the Bayh-Dole Act. He argued that everything critical discovered at universities, whether patented or not, has been disclosed and that university-business partnerships are crucial. He suggested that there has been no evidence that genetic diagnostic testing has been problematic and that if it was, then the government could exercise its march-in rights. Noonan stated that he does not see the need for additional commercial exploitation of DNA patents. He also argued that because most gene patents will expire by the year 2020, any reform or change to this area is unnecessary. He noted skepticism as to the need and necessity for legislation in this area, calling it "premature" and "unadvised."