Commission report on development and implications of patent law in the field of biotechnology and genetic engineering (link)

July 18, 2005

Brussels, 15 Jul 2005

REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT
Development and implications of patent law in the field of biotechnology and genetic engineering
(SEC(2005) 943)
Full Text

INTRODUCTION

This is the second report pursuant to Article 16c of the Directive 98/44/EC 1 of the European Parliament and of the Council of 6 July 1998 on the legal protection of biotechnological inventions and bears the title "Developments and implications of patent law in the field of biotechnology and genetic engineering" (hereinafter the "second 16c Report").

Its purpose is to set out the key events which have occurred since publication of the first 16c Report2, and to comment on two issues identified in the latter: the scope of patents on sequences or partial sequences of genes which have been isolated from the human body; and the patentability of human stem cells and cell lines obtained from them. The Commission's analysis is based on the Commission staff working paper SEC(2005)943.

1. LATEST DEVELOPMENTS IN THE FIELD OF BIOTECHNOLOGICAL INVENTIONS

1.1. State of progress with transposition of Directive 98/44

As of June 2005, 21 Member States of the European Union had notified the Commission of the instruments implementing the Directive. Legal proceedings for failure to transmit transposition measures were initiated in 2003 before the Court of Justice against the countries which had not transposed the Directive3. Infraction procedures have been opened in December 2004 against two new Member States which have not completed the transposition of the Directive4.

1.2. Group of Experts

As announced in the first 16c report, a Group of Experts has been set up, its remit being to advise the Commission on the preparation of future 16c Reports through the examination of important issues relating to biotechnological inventions. The Group comprises specialists in patent law and highly qualified persons in the field of biotechnologies5. .

COM(2002) 545 final, http:///europa.e u.int/eur-lex/en/com/rpt/ 2002/com2002_0545en01.pdf http:///euro pa.eu.int/rapid/pressReleases Action.do?reference=IP/03/991 Lithuania and Latvia. http:///euro pa.eu.int/rapid/pressReleases Action.do?reference=IP/03/1

1.3. Community action on cross-licences

The first 16c Report indicated that the provisions of Article 12 of the Directive and Article 29 of Regulation 2100/94 on Community plant variety rights6 were not compatible with each other and that Article 29 of the Regulation should be amended.

Accordingly, on 11 December 2003, the Commission presented a draft Regulation amending Regulation 2100/94 on Community plant variety rights7. The draft was adopted by the Council on 29 April 20048. The provisions of the Regulation and the Directive are now mutually compatible.

2. ANALYSIS OF ISSUES RAISED IN THE FIRST REPORT

It was stated in the conclusions of the first 16c Report that the Commission should revisit two questions:

· the scope to be attributed to patents on partial sequences or sequences of genes which have been isolated from the human body; · the patentability of human pluripotent embryonic stem cells and stem cell lines obtained from them.

The following analysis is based on the articles and recitals of the Directive, but also, inter alia, on preparatory work and the decision of the Court of Justice of 9 October 20019, in which the Court rejected an application for annulment of the Directive. In line with the intention stated in the first 16c Report, the analysis also takes account of the contributions made by the informal Group of Experts mentioned under 1.2.

2.1. Scope of patents on gene sequences

The issue to be reviewed according to the first report under Article 16c is the question of whether patents on gene sequences (DNA sequences) should be allowed according to the classical model of patent claim, whereby a first inventor can claim an invention which covers possible future uses of that sequence, or whether the patent should be restricted so that only the specific use disclosed in the patent application can be claimed ("purpose-bound protection").

On examination of the detailed provisions of the Directive, it can be seen that Articles 8, 9, 10 and 11 make up Chapter 2 of the Directive which is entitled "Scope of protection". However none of these articles addresses the concept of a restricted scope of protection relating to the specific use identified for the gene sequence concerned. Indeed Articles 8 and 9 establish that the protection conferred by a patent extends to any biological material obtained from the claimed product or in which the claimed product is incorporated and the same genetic

Council Regulation (EC) N° 2100/94 of July 1994 on Community plant variety rights, COM(2003) 456 final. The draft Regulation can be consulted on the Council's web site: http:///register. consilium.eu.int/pdf/en/ 03/st14/st14215.en03.pdf Council Regulation (EC) N° 873/2004 of 29 April 2004 amending Regulation (EC) N° 2100/94 on Community plant variety rights, OJ L 162, 30.4.2004, p. 38. Judgement of the Court of Justice, 9 October 2001, Case C-377/98, Kingdom of the Netherlands supported by Italian Republic and by Kingdom of Norway v. European Parliament and Council of the European Union, supported by Commission of the European Communities. information expresses its function. This might be seen as arguing for a broad scope of protection rather than a restricted one, subject of course to the exclusion under Article 5(1) of claims to the human body in its entirety.

On the other hand, it might be thought from Article 5(3) and Recitals 23 and 25 that the

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