1997 Karen I. Boyd.

J.D. 1996, Boalt Hall School of Law, UC Berkeley. The author also holds a Masters degree in molecular, cellular and developmental biology from UCLA, and a Bachelors degree in environmental biology from California State University Northridge. The author served as a law clerk to the Honorable Paul R. Michel, U.S. Court of Appeals for the Federal Circuit, from 1996-97 and is currently an associate at Fish & Richardson, P.C.

1. LYNN G. ZUCKER, ET AL., INTELLECTUAL CAPITAL AND THE BIRTH OF THE U.S. BIOTECHNOLOGY ENTERPRISES 1 (Nat'l Bureau of Econ. Res. Working Paper No. 4653, 1994).

2. Biotechnology Development and Patent Law: Hearing Before the Subcomm. on Intellectual Property and Judicial Admin. of the Comm. on the Judiciary, 102d Cong. (1992) [hereinafter Hearing] (prepared statement of Bernadine Healy, director, NIH, Dept. of Health and Human Services).

3. See Stanley N. Cohen et al., Process for Producing Biologically Functional Molecular Chimeras, U.S. Patent No. 4,237,224 (1980).

4. David V. Goeddel et al., Direct Expression in Escherichia Coli of a DNA Sequence Coding for Human Growth Hormone, 281 NATURE 544, October 18, 1979.

5. See Natalie Angier, Surprising Role Found for Breast Cancer Gene, N.Y. TIMES, March 5, 1996, at C1.

6. See Scientists Discover Gene That Causes Alzheimer's in the Young, N.Y. TIMES, June 29, 1995, at A17.

7. See Natalie Angier, Scientists Discover the Gene in a Nervous System Disease, N.Y. TIMES, July 14, 1990, at A1.

8. See Harold M. Schmeck Jr., Battling the Legacy of Illness, N.Y. TIMES GOOD HEALTH MAGAZINE, Apr. 29, 1990, at 36.

9. See id.

10. Zucker, et al., supra note 1, abstract.

11. Id. at 5.

12. Id.

13. Id. at 6.

14. See id.

15. Id. at 7.

16. See id. at 11-12.

17. Id. at 11.

18. MARTIN KENNEY, BIOTECHNOLOGY: THE UNIVERSITY-INDUSTRIAL COMPLEX 133 (1986).

19. Zucker, et al., supra note 1, at 15.

20. Robert P. Merges, Uncertainty and the Standard of Patentability, 7 HIGH TECH. L.J. 1, 47 (1992).

21. This intuitive approach is based on Prof. Merges' discussion, id. at 43-55.

22. EDWIN MANSFIELD ED., MICROECONOMICS 565 (5th ed. 1985).

23. See Merges, supra note 20, at 143.

24. Variance describes how closely a collection of values is clustered around the mean value. It is defined as the average squared deviation of the observations from the mean. See DAVID T. SUZUKI ET AL., AN INTRODUCTION TO GENETIC ANALYSIS 645 (4th ed. 1989).

25. Merges, supra note 20, at 43.

26. For example, Epo, a product of Amgen, was initially intended to be used for patients undergoing dialysis. It has since been shown to be useful in treating cancer.

27. The gambling analogy breaks down somewhat since it does not take into account the adrenaline rush that people who bet $500 a hand are seeking.

28. See Lawrence M. Fisher, Biotech Counterattack on Resistant Bacteria; Small Companies Leading in Research, N.Y. TIMES, Apr. 26, 1996, at C1.

29. NATALIE ANGIER, NATURAL OBSESSIONS 28-29 (1988).

30. See Sandra H. Cuttler, Commentaries: The Food and Drug Administration's Regulation of Genetically Engineered Human Drugs, 1 J. PHARM. & L. 191, 204 (1992).

31. See Karen Goldman Herman, Issues in the Regulation of Bioengineered Food, 7 HIGH TECH. L.J. 107, 120 (1992). The BRS replaced the Biotechnology Science Coordinating Committee (BSCC), established in 1986, and has similar responsibilities to the BSCC. Id. This paper refers to both committees collectively as the BRS.

32. See Cuttler, supra note 30, at 204. OSHA's regulatory power over biotechnology is only incident to its regulatory power over all industry, so it will not be discussed in this paper.

33. See Herman, supra note 31, at 119.

34. See id.

35. See id.

36. See id. at 121. This is a hypothetical example, so the BRS has not designated a lead agency.

37. See Food, Drug, and Cosmetic Act, 21 U.S.C. 301-392 (1972).

38. One exception to this may be user fees. The FDA has recently restructured their fee system so that the agency can depend on user fees to fund itself to a greater extent. This has resulted in much higher user fees. Biotechnology companies, generally small and with limited funding, may be able to lobby for reduced user fees for companies below a particular size. This type of relief would not, however, be limited to biotechnology companies.

39. U.S. CONST. art. I, 8, cl. 8.

40. See ARTHUR R. MILLER & MICHAEL H. DAVIS, INTELLECTUAL PROPERTY IN A NUTSHELL 15 (1990).

41. See ROBERT P. MERGES, PATENT LAW AND POLICY 513 (1992).

42. Actually, patent rights are not quite a monopoly. A patent gives the patent-holder the right to prevent others from making, using, selling or importing the patented invention. It does not give the patent holder an affirmative right to practice the invention. Thus, although a drug may be patented, it must still be licensed by the FDA before it can be marketed. A patent also does not obligate the patentee to make, use, or sell the invention, nor does it obligate the patentee to license the invention. See MILLER & DAVIS, supra note 40, at 12-14.

43. See MERGES, supra note 41, at 513.

44. Hearing, supra note 2 (opening statement of William J. Hughes).

45. See C. TAYLOR & Z. SILBERSTON, THE ECONOMIC IMPACT OF THE PATENT SYSTEM: A STUDY OF THE BRITISH EXPERIENCE 252 (1973).

46. See id. at 244-45.

47. See Levin et al., Appropriating the Returns from Industrial Research and Development, 1987 BROOKINGS PAPERS ECON. ACTIVITY 783.

48. See 35 U.S.C. 101 (1984).

49. See In re Bergy, 596 F.2d 952 (C.C.P.A. 1979).

50. See 35 U.S.C. 102 (1984).

51. See MERGES, supra note 41, at 147.

52. See id.

53. See id. at 148.

54. See id. at 147.

55. "[Prior art] ... includes any relevant knowledge, acts, descriptions and patents which pertain to, but predate, [the] invention in question." BLACK'S LAW DICTIONARY 828 (Abridged 6th ed. 1991).

56. 35 U.S.C 103 (1984).

57. See NONOBVIOUSNESS-THE ULTIMATE CONDITION OF PATENTABILITY (J. Witherspoon ed. 1980).

58. See MERGES, supra note 41, at 30-31.

59. See id. at 31.

60. See id. at 32.

61. See id.

62. See id. at 9.

63. See id.

64. See id.

65. See id.

66. See id.

67. See In re Vaeck, 947 F.2d 488, 493 (Fed. Cir. 1991); In re Woodruff, 919 F.2d 1575, 1577 (Fed. Cir. 1990).

68. Less common, but not rare, is a re-examination proceeding where a third party challenges the validity of an issued patent outside of an infringement action. This is an administrative proceeding that essentially seeks a declaratory judgment of invalidity. See MERGES, supra note 41, at 32.

69. See id.

70. See id. at 9.

71. Jeremy Rifkin of the Foundation on Economic Trends, along with others such as Dr. Michael W. Fox, have consistently opposed both the patenting of genetically engineered organisms, and the underlying genetic engineering itself. These oppositions are on ethical grounds, and focus on the profanation of all life when genes are manipulated. Rifkin's views have been almost universally dismissed by the scientific community. See DR. MICHAEL W. FOX, SUPERPIGS AND WONDERCORN: THE BRAVE NEW WORLD OF BIOTECHNOLOGY ... AND WHERE IT ALL MAY LEAD 22-26 (1992).

72. See Diamond v. Chakrabarty, 447 U.S. 303 (1980).

73. The scope of patentable subject matter has always been a one-way ratchet. Once a subject matter is declared patentable, courts have not revisited the issue.

74. 51 F.3d 1560 (Fed. Cir. 1995).

75. 60 Fed. Reg. 36263 (July 14, 1995).

76. 51 F.3d at 1568.

77. 383 U.S. 1 (1966).

78. Id. at 694.

79. See id.

80. See Loctite Corp. v. Ultraseal, 781 F.2d 861, 874 (Fed. Cir. 1985).

81. See id.

82. See Lindemann Maschinenfabrik GmbH v. American Hoist & Derrick Co., 730 F.2d 1452, 1462 (Fed. Cir. 1984).

83. See, e.g., In re Fine, 837 F.2d 1071, 1075 (Fed. Cir. 1988); Merck & Co. v. Biocraft Labs., 874 F.2d 804, 807 (Fed. Cir. 1989).

84. See Novo Industri A/S v. Travenol Labs., 677 F.2d 1202, 1208 (7th Cir. 1982).

85. See In re O'Farrell, 853 F.2d 894 (Fed. Cir. 1988).

86. See Merck & Co. v. Biocraft Labs., 874 F.2d 804 (Fed. Cir. 1989).

87. Deoxyribonucleic acid. See CHRISTOPHER WILLS, THE WISDOM OF THE GENES 328 (1989).

88. Ribonucleic acid. See LARRY GONICK AND MARK WHEELIS, THE CARTOON GUIDE TO GENETICS 132 (1983).

89. EDWARD YOXEN, THE GENE BUSINESS: WHO SHOULD CONTROL BIOTECHNOLOGY? 59 (1983).

90. See WILLS, supra note 87, at 83.

91. See id. at 20.

92. See ANGIER, supra note 29, at 41

93. See id.

94. See GONICK AND WHEELIS, supra note 88, at 113.

95. See DAVID FREIFELDER, MOLECULAR BIOLOGY 224 (2d. ed. 1987).

96. See GONICK AND WHEELIS, supra note 88, at 113-14.

97. See ANGIER, supra note 29, at 71.

98. See id.

99. See SUZUKI ET AL., supra note 24, at 595. Cancer cells are "dedifferentiated" cells, which are generic. They contrast with differentiated cells, such as lung cells, liver cells, skin cells, muscle cells. Cells differentiate very early in embryonic development. Dedifferentiation is a hallmark of cancer. Id.

100. Genetic diseases, like SCIDs or Tay-Sachs, can appear in children even when the parents are unaffected because every cell actually contains two complete copies of the genome, one inherited from each parent. Usually, one copy of a gene can make enough of a protein for the child to be healthy. It is only when a child in unlucky enough to inherit a bad gene from both parents that the disease will result. There are, however, some genetic diseases where only one bad copy is enough to result in disease. Huntington's disease is a particularly insidious example of this. It is insidious because the disease does not manifest itself until a victim is in their 40s or 50s. People can therefore pass this debilitating disease onto their children without realizing it.

101. See ANGIER, supra note 29, at 142-43.

102. See YOXEN, supra note 89, at 11 (1983).

103. See id. at 90.

104. See id.

105. See id. at 91.

106. See id.

107. See id.

108. See id. at 135.

109. See id. at 146.

110. See SUZUKI ET AL., supra note 24, at 286.

111. Specifically, 351, or 2.2 x 1024.

112. See Herman, supra note 31, at 112.

113. The "Flavr-Savr" tomato, developed by Calgene in Davis, California.

114. See Herman, supra note 31, at 109-11.

115. 51 F.3d 1552 (Fed. Cir. 1995).

116. Id. at 1552.

117. Id. at 1555.

118. Id. at 1554. Note that this activity is exactly the opposite of what one would be looking for to treat cancer, where there is uncontrolled cell division. Heparin-binding growth factor may thus also be interesting to cancer researchers.

119. Id. at 1555.

120. Id.

121. Id.

122. Id.

123. 51 F.3d at 1555. There was actually some dispute as to whether the published partial amino acid sequence was for heparin-binding growth factor or not. The published sequence was of a protein found in bovine brain (not uterus, as Deuel found here) and exhibiting similar properties to heparin-binding growth factor. The Federal Circuit assumed the proteins were the same for purposes of their discussion.

124. Id.

125. Id.

126. Id.

127. Id. at 1560.

128. See, e.g., In re Jones, 919 F.2d 688, 692 (Fed. Cir. 1990) (en banc) ("[s]tructural similarity between claimed and prior art subject matter, ... where the prior art gives reason or motivation to make the claimed compositions creates a prima facie case of obviousness"), cert. denied, 500 U.S. 904 (1991); In re Grabiak, 769 F.2d 727, 731-32 (Fed. Cir. 1985) ("[T]here must be adequate support in the prior art for the ester/thioester change in structure, in order to complete the PTO's prima facie case [of obviousness].").

129. Deuel, 51 F.3d at 1559.

130. Id.

131. Id.

132. Id.

133. 16 F.3d 380 (Fed. Cir. 1994). Baird dealt with a prior art reference that disclosed a general chemical formula with many variables in it. The applicant claimed a compound that was one of the more than 100 million different possible chemicals under the prior art reference. The court held that the applicant's compound was nonobvious because it worked well and the prior art reference made no suggestion that this particular compound would work well, or even at all.

134. Id.

135. Id. The court cited In re Petering, 301 F.2d 676 (C.C.P.A. 1962), where a prior art reference disclosing a genus with 20 species was held to render obvious each of the 20 species.

136. Deuel, 51 F.3d at 1559.

137. 991 F.2d 781, 785 (Fed. Cir. 1993).

138. Id. at 783.

139. Id. at 784 (internal quotation marks omitted).

140. See MERGES, supra note 41, at 418.

141. See Merges, supra note 20, at 1.

142. 35 U.S.C. 103 (1995).

143. See Graham v. John Deere Co., 383 U.S. 1, 15 (1966) (citing the "flash of genius test" in Cuno Corp. v. Automatic Device Corp., 314 U.S. 84 (1941)).

144.. 35 U.S.C. 103 (1995).

145. 383 U.S. at 17-18.

146. Id. at 17-18.

147. 802 F.2d 1367 (Fed. Cir. 1986), cert. denied, 480 U.S. 947 (1987).

148. Id. at 1379.

149. 35 U.S.C. 103(b) (1995).

150. 51 F.3d 1552 (Fed. Cir. 1995).

151. 991 F.2d 781 (Fed. Cir. 1993).

152. Hotchkiss v. Greenwood, 52 U.S. 248 (1850).