Comments of the Biotech Industry Organization


CRITICAL SYNERGY:

THE BIOTECHNOLOGY INDUSTRY

AND

INTELLECTUAL PROPERTY PROTECTION

















PRESENTATIONS OF THE

INTELLECTUAL PROPERTY COMMITTEE OF THE 

BIOTECHNOLOGY INDUSTRY ORGANIZATION

AT THE OCTOBER 17, 1994, HEARING OF 

THE U.S. PATENT AND TRADEMARK OFFICE

SAN DIEGO, CALIFORNIA











Biotechnology Industry Organization

1625 K Street, N.W., Suite 1100

Washington, D.C. 20006







Preface





	The U.S. Patent and Trademark Office (USPTO) held a hearing on 
intellectual property issues of concern to the biotechnology industry on 
October 17, 1994, in San Diego.  A copy of the Notice for the hearing is 
printed in Appendix A of this report.  This report is a compilation of 
the presentations on behalf of the Intellectual Property Committee of the 
Biotechnology Industry Organization (BIO), which represents over 540 
biotechnology companies, biotechnology research centers and others 
involved with the biotech industry1. This report outlines the 
intellectual property agenda of the biotechnology industry for the USPTO. 


	These presentations respond to the USPTO case law analysis and questions 
regarding each patent issue raised in the Notice.

	BIO is printing this compilation of the presentations so that it is 
accessible to USPTO officials and examiners, BIO members, the Secretary 
of Commerce, other officials of the Clinton Administration, members and 
staff of the House and Senate Judiciary Committees, other Members of 
Congress, voluntary health organizations, venture capitalists and 
investment bankers, and others concerned about the biotechnology 
industry.



	There is a critical synergy between the biotechnology industry and 
intellectual property protection.  Implementation of the recommendations 
in this report by the USPTO will enhance the competitiveness of the 
biotechnology industry, which depends on protection of its intellectual 
property to justify its extraordinary research expenditures.



	BIO welcomes the opportunity to work with the USPTO and other 
interested organizations and individuals to ensure that intellectual 
property protection is afforded to the inventions of the biotechnology 
industry.





Acknowledgments



	BIO wishes to acknowledge and thank Bruce Lehman, Assistant Secretary 
of Commerce and Commissioner of Patents and Trademarks, for scheduling 
the hearing and for his concern about the competitiveness of the U.S. 
biotechnology hearing.  We also wish to thank the following officials and 
staff of the USPTO: Michael Kirk, Deputy Assistant Secretary and Deputy 
Commissioner; Jeff Kushan, Attorney Advisor for the Office of Legislation 
and International Affairs; Lawrence Goffney, Assistant Commissioner for 
Patents; Barry Richman, Director, Group 18000; and Charles Warren, Deputy 
Director, Group 18000.



	This report was prepared by members of BIO's Intellectual Property 
Committee under the leadership of Chuck Ludlam, BIO's Vice President for 
Government Relations, and Allen Norris, Committee Chairman, Director of 
Patents at Sandoz Agro, Inc.  Kenneth Kero, administrative assistant in 
BIO's Government Relations Department made major contributions to the 
editing and production of this report.



	The Committee's presentations were drafted by fifty-four individuals 
working on seven Issue Teams.  These drafts were presented in oral 
testimony at the hearing in San Diego by sixteen individuals.



	BIO wishes to acknowledge the special contributions of the individuals 
who helped to draft the enclosed position papers and those who made 
presentations at the hearing in San Diego on October 17, 1994.  Their 
names, affiliations and addressed are listed below.  



	As this document represents an amalgamation of work by all of these 
individuals it must be taken as an expression of the views of various 
individuals, rather than the views of any specific individual or the 
company or clients they represent.  Each of the individuals, clients and 
companies do not necessarily subscribe to each and every position 
articulated herein.  Given the short time available to prepare these 
comments, they represent the views of the BIO Intellectual Property 
Committee, not the BIO Board of Directors or all members of BIO, and the 
views do not necessarily represent the views of all of the members of 
this Committee.







Mr. Thomas DesRosier

VP and Chief Patent Counsel

Genetics Institute

87 Cambridge Park Drive

Cambridge, MA  02140



Ms. Stacey Channing

ImmuLogic Pharmaceutical Corporation

610 Lincoln Street

Waltham, MA  02186



Ms. Darlene VanStone

ImmuLogic Pharmaceutical Corporation

610 Lincoln Street

Waltham, MA  02186



Ms. Anne Craig

ImmuLogic Pharmaceutical Corporation

610 Lincoln Street

Waltham, MA  02186





William H. Epstein, Esq.*

Assistant Patent Counsel

Hoffmann-LaRoche Inc.

340 Kingsland Street

Nutley, NJ  07110



Mr. George Johnston*

Associate Patent Counsel

Hoffmann-La Roche Inc.

340 Kingsland Street

Building 86/602D

Nutley, NJ  07110



Dr. Estelle J. Tsevdos

Manager, Biotechnology Section

American Cyanamid Company

One Cyanamid Plaza

Wayne, NJ  07470



Norman C. Dulak, Ph.D.

Director-Patents

Schering-Plough Corporation

One Giralda Farms

P.O. Box 1000

Madison, NJ  07940-1000



Dr. Paul H. Ginsburg

Assistant General Patent Counsel,

Pfizer Inc.

235 East 42nd Street

New York, NY  10017-5755



Ms. Cheryl Agris

Novo Nordisk A/S

405 Lexington Avenue

Suite 6400

New York, NY  10174



T. Andrew Culbert, Esquire

Partner

Drinker Biddle & Reath

Philadelphia National Bank Building

1345 Chestnut Street

Philadelphia, PA  19107-3496



Richard P. Burgoon, Jr.

Senior Director & Patent Counsel

Cephalon, Inc.

145 Brandywine Parkway

West Chester, PA  19380



Herbert Jervis, Esq.

Senior Patent Attorney

SmithKline Beecham Pharmaceuticals

709 Swedeland Road

P.O. Box 1539

King of Prussia, PA  19406



Thomas G. Wiseman, Esq.*

Counsel

Cushman, Darby & Cushman

1100 New York Ave., NW

Ninth Floor, East Tower

Washington, DC  20005



Dr. Michele Cimbala, Esq.

Partner

Sterne, Kessler, Goldstein & Fox

1100 New York Avenue, NW

Suite 600

Washington, DC  20005-3934



Evelyn McConathy, Esq.

Sterne, Kessler, Goldstein & Fox

1100 New York Avenue, NW

Suite 600

Washington, DC  20005-3934



Dr. Larry S. Millstein

Patent Agent

Foley & Lardner

3000 K Street, NW

Suite 500

Washington, DC  20007-5109











Mr. John P. Isacson, Jr.

Associate

Foley & Lardner

3000 K Street, NW

Suite 500

Washington, DC  20007-5109



Dr. Melvin Blecher

Counsel

Foley & Lardner

3000 K Street, NW

Suite 500

Washington, DC  20007-5109



Ms. Pat Granados

Foley & Lardner

3000 K Street, NW

Suite 500

Washington, DC  20007-5109



Richard C. Peet, Ph.D.*

Foley & Lardner

3000 K Street, NW

Suite 500

Washington, DC  20007-5109



Lisa Raines

Vice President of Government Relations

Genzyme Corporation

1020 19th Street, NW Suite 550

Washington, D.C. 20036



Mark A. Hofer, Esq.

Senior Vice President, General Counsel

Genzyme Corporation

One Kendall Square

Cambridge, MA 02139



Ms. Janet Hasak

Manager of Patent Prosecutions & Trademarks

Genentech, Inc.

460 Point San Bruno Boulevard

South San Francisco, CA 94080



Dr. Phillip Jones

Foley & Lardner

3000 K Street, NW

Suite 500

Washington, DC  20007-5109



Dr. Bernhard D. Saxe

Partner

Foley & Lardner

3000 K Street, NW

Suite 500

Washington, DC  20007-5109



Dr. William J. Scanlon*

Partner

Foley & Lardner

1 South Pinckney Street

P.O. Box 1497

Madison, WI  53701-1497



Mr. Stanley Schlosser

Foley & Lardner

3000 K Street, NW

Suite 500

Washington, DC  20007-5109



Dr. Kate Murashige*

Partner

Morrison & Foerster

2000 Pennsylvania Avenue, NW

Suite 5500

Washington, DC  20016-1812



Mr. Geoffrey M. Karny

Senior Intellectual Property Counsel

Genetic Therapy, Inc.

938 Clopper Road

Gaithersburg, MD  20878



Edward H. Gorman, Esq.

Associate General Counsel, Patents

Abbott Laboratories

Dept. 377, AP6D

Abbott Park, IL  60064-3500



Howard C. Stanley, Esq.

General Patent Counsel

Monsanto Company

800 N. Lindbergh Blvd., A3SA

St. Louis, MO  63167



Mr. Richard H. Shear

Associate General Patent Counsel

Monsanto Company

800 North Lindberg Boulevard

D1S

St. Louis, MO  63167



Mr. Daniel M. Chambers*

Patent Counsel

Viagene, Inc.

11055 Roselle Street

San Diego, CA  92121



Mr. Jerry Caulder, Ph.D.*

Chairman, President & CEO

Mycogen Corporation

4980 Carroll Canyon Road

San Diego, CA 92121



Mr. John Sanders*

Mycogen Corporation

4980 Carroll Canyon Road

San Diego, CA  92121



Mr. Carlton J. Eibl

Executive VP & General Counsel

Mycogen Corporation

4980 Carroll Canyon Road

San Diego, CA  92121



Mr. William Rastetter, Ph.D.*

President & CEO

IDEC Pharmaceuticals Corportation

11011 Torreyana Road

San Diego, CA 92121









Kenneth J. Woolcott, Esquire

Vice President

IDEC Pharmaceuticals Corporation

11011 Torreyana Road

San Diego, CA  92121



Mr. Karl Bozicevic

Fish & Richardson

2200 Sand Hill Road, Suite 100

Menlo Park, CA  94025



Ms. Laura Handley*

Weil, Gotshal & Manges

2882 Sandhill Road

Suite 280

Menlo Park, CA  94025-7022



Ms. Elizabeth F. Enayati*

Associate

Weil, Gotshal & Manges

2882 Sandhill Road

Suite 280

Menlo Park, CA  94025-7022



James Bradburne, Ph.D.

Patent Agent

Weil, Gotshal & Manges

1615 L Street, N.W.

Suite 700

Washington, DC  20036



Ms. Barbara Rae-Venter*

Weil, Gotshal & Manges

2882 Sandhill Road

Suite 280

Menlo Park, CA  94025-7022



Mr. Craig Opperman

Weil, Gotshal & Manges

2882 Sandhill Road

Suite 280

Menlo Park, CA  94025-7022





Edmund J. Fish, Esq.

Attorney

Weil, Gotshal & Manges

2882 Sandhill Road

Suite 280

Menlo Park, CA  94025-7022



Robert P. Blackburn, Esq.

Vice President Intellectual Property

Chiron Corporation

4560 Horton Street

Emeryville, CA  94062



Ms. Barbara Luther

Director, Intellectual Property

Incyte Pharmaceuticals

3330 Hillview Ave.

Palo Alto, CA  94304



Mr. Allen E. Norris

Director, Patents

Sandoz Agro, Inc.

975 California Avenue

Palo Alto, CA  94304



Mr. Timothy Gens*

Counsel

Fenwick and West

Two Palo Alto Square
Suite 800
Palo Alto, CA  94306



Mr. William E. Dickheiser

Patent Counsel

Zeneca Plant Sciences Inc.

1200 S. 47th Street

Richmond, CA  94804



Ms. Susan Perkins

Counsel

Campbell & Flores

4370 La Jolla Village Drive

Suite 700

San Diego, CA 92122



Steven M. Odre, Esq.

Vice President, Intellectual Property

Amgen, Inc.

1840 DeHavilland Drive

Thousand Oaks, CA 91320



Elizabeth Lassen, Esq.*

Vice President, Chief Patent Counsel

Calgene, Inc.

1920 Fifth Street

Suite F

Davis, CA  95616



Mr. Jon Case

Director Corporate Development

Targeted Genetics Corporation

1100 Olive Way

Suite 100

Seattle, WA  98101

	

Dr. Kenneth J. Widder*

Chairman & CEO

Molecular BioSciences

10030 Barnes Canyon Road

San Diego, CA 92121



* Made presentation at San Diego hearing      on October 17, 1994.









Introduction



Mr. Carl Feldbaum

President

The Biotechnology Industry Organization





	The biotechnology industry and the Biotechnology Industry Organization 
(BIO)  appreciates the scheduling by the U.S. Patent and Trademark Office 
of a hearing on intellectual property issues affecting our industry on 
October 17, 1994, in San Diego.



	This hearing provides our industry with an opportunity to outline a 
comprehensive presentation covering all of the principal intellectual 
property issues for biotechnology inventions and to present our 
recommendations for action.  This agenda and these recommendations were 
drafted by BIO's Intellectual Property Committee

and will be presented at the hearing by a series of witnesses and they 
are compiled and published in this report.  



	This analysis of the issues and recommendations have been developed by 
dozens of individuals at companies and law firms and their contributions 
are noted throughout this report.  One of the great strengths of the 
biotechnology industry is the exceptional service we receive from patent 
counsel.



	Intellectual property protection is critical to the competitiveness of 
our nation in general and the biotechnology industry in particular.  Our 
investors will not risk their capital to create innovative, 
state-of-the-art approaches to unique problems if meaningful patent 
protection cannot be secured.  The USPTO, therefore, plays a critical 
role in our industry's ability to fund its research into life saving and 
life enhancing products.



	The biotechnology industry and BIO look forward to working with the 
Commissioner of Patents and Trademarks, Bruce Lehman, and his staff to 
enhance the intellectual property protection afforded to the 
biotechnology industry and implement these recommendations.







								October, 1994





Table of  Contents





Preface							iii



Acknowledgments							v



Introduction							xi



Table of Contents							xiii



Economic Value of Patent Protection 

for the Biotechnology Industry					1



Statements of Biotechnology CEOs					5

	Kenneth Widder, Chairman and CEO, 

	Molecular BioSciences					5

	William Rastetter, President and CEO, 

	IDEC Pharmaceuticals Corporation				7

	

Introduction to Utility & 

	Operability Considerations				11

	

Practical Utility							25

	Executive Summary						25

	Case Law Review						26

	Question 1							42

	Question 2							46

	Question 3							49

	

Operability/Enablement						53

	Executive Summary						53

	Case Law Review						54

	Question 1							61

	Question 2							65

	Question 3							72



Nonobviousness							75

	Introduction							75

	Case Law Review						78

	Question 1							91

	Question 2							95

	Question 3							97

	Question 4							112

	Question 5							120



Implications of Legislation						123

	Pending Patent Reform Legislation				123

	Biotechnology Patent Protections Act			138

	Question 1							140

	Question 2							143

	Question 3							144

	Question 4							150

	Section 104 interferences					154



Experimental Use							157

	Case Law Review						157

	Our Concerns						159

	Recommendations						161



Plant Patent Issues							163

	Question 1							163

	Coverage of plants under utility				171
	
Conclusion and BIO Invitation					173



Appendices							175



	Appendix A							176

	Notice of Public Hearing and Request for 

	Comments on Patent Protection Issues for 

	Biotechnology Inventions, Patent and 

	Trademark Office, 59 Fed. Reg. 45267(September 1, 1994)



	Appendix B							181

	Comments Submitted on Behalf of BIO 

	Concerning Patent Harmonization Issues 

	in response to Patent and Trademark Office 

	notice, October 28, 1993 BIO Position on

	Changing to a First-to-File Patent System



	Appendix C							185

	Comments Submitted on Behalf of BIO 

	Concerning the Standard of Non-obviousness 

	for Public Hearing of Patent and Trademark 

	Office, July 20, 1994





	Appendix D							191

	1. June 27, 1994, Letter to Commissioner Lehman 

	from Carl Feldbaum and Charles Ludlam 

	Regarding Draft GATT Implementing Legislation 

Attachments: 

a) BIO Proposed Amendments to 35 USC 154 to Implement GATT

b) Length of Appeals For Biotechnology 

Patents -- CAFC

c) Examples of Biotechnology Interferences

d) BIO Position on S. 1854, the Patent Simplification Act of 1994

e) BIO Comments on "Utility" Standard



	2. August 12, 1994, Letter to Commissioner Lehman from Carl Feldbaum 
and 	Charles Ludlam Regarding Draft GATT Implementing Legislation 



	3. September 27, 1994, Letter to Ambassador Mickey Kantor and 
Commissioner 	Lehman from Carl Feldbaum and Charles Ludlam Regarding 
Final GATT 	Implementing Legislation



	Appendix E							214

	Membership of Biotechnology Industry Organization









ECONOMIC VALUE OF PATENT PROTECTION

FOR THE BIOTECHNOLOGY INDUSTRY





	It is appropriate that this agenda for intellectual property protection 
for the biotechnology industry begin with documentation for the economic 
value of patent protection for our industry.

	This report is premised on the fact that there is a critical synergy 
between intellectual property protection and the biotechnology industry.  
This fact has now been demonstrated in a just-released, sophisticated 
economic analysis of the value of  patents to the biotechnology and their 
importance in capital formation for the biotechnology industry.

	Capital formation is a critical issue for the biotechnology industry.  
In 1994 the industry lost $4.1 billion, an increase in losses of 14 
percent over 1993.  The biotechnology industry, in fact, has never had a 
profitable year and only one percent of companies are profitable.

	The biotechnology industry is one of the most research intensive 
industries in the history of civilian manufacturing, based on research 
and development on a per employee basis.  In a 1994 survey by Business 
Week, six of the top ten firms in the U.S. in terms of research 
expenditures per employee were biotechnology companies --  Biogen 
($208,724), Genentech ($117,594), Genetics Institute ($107,657), Immunex 
($92,693), Amgen ($83,302), and Chiron ($64,263)2.  On average, biotech 
firms spend $59,000 per employee on research.  The U.S. corporate average 
was $7,476 for 1993.  Ernst & Young reports that biotechnology companies 
spent $7 billion on research in 1994, a 23 percent increase over 19923.  
The research is expensive for one simple reason; we are advancing basic 
and applied science at the same time.
	The scientific research by the biotechnology industry is exceedingly 
expensive.  The Office of Technology Assessment finds that the average 
cost per new chemical entity (NCE) is $359 million4.  This survey did not 
cover the cost of developing a biotechnology drug, but analyses done by 
our industry find that the cost of developing a biotechnology drug may be 
similar.  We know that Genzyme and Amgen, two member companies of BIO, 
raised $328 and $406 million, respectively, in equity before they brought 
their first products to market.  Genentech has spent $1.6 billion on 
research and development and has four basic products on the market.

	Public financing was especially difficult for biotechnology companies 
in 1993.  The American Stock Exchange Biotechnology Index lost 32.6 
percent.  Several public biotech companies were forced to do private 
investment in public equity (PIPE) financing, deals where public 
companies sell stock to private investors at a discount to their current 
stock price.  1993 was a difficult year because in large part investors 
were scared by the de facto price controls in the Administration's health 
care plan.  They feared that some widely discussed points of health care 
reform would mean that they would not recoup their investment in a 
company that was close to bringing a product to market.  According to 
many press accounts and three BIO surveys of our companies developing 
therapies for AIDS, cancer, and other deadly and costly diseases, our 
companies are cutting back on research.  

	The biotech industry is in a critical stage of research and 
development.  There are 23 biotech medicines that have been approved for 
sale in the U.S. by the Food and Drug Administration (FDA).  Two hundred 
and seventy biotech therapeutics are in human clinical trials.  According 
to Ernst and Young, two thousand potential therapies are in early 
development stages5.  Now is the time when the biotech industry needs 
increasing amounts of capital to bring these products to market so that 
they can improve our quality of life.
	Ernst & Young reports that biotech companies, on average, have 25 months 
of capital left at their current burn rates (the rate at which capital is 
being expended.)  According to a recent report by Dr. Robert Goldberg of 
the Gordon Public Policy Center at Brandeis University, 75 percent of 
biotechnology companies have 2 or fewer years of capital left.  That 
means that a staggering 983 companies will need to go to the market in 
the next two years or face severely restricting their activities, going 
out of business, merging or selling rights to a larger firm.

	With this economic environment for the biotechnology industry in mind a 
discussion paper has just been released which specifically documents the 
vital economic importance of  intellectual property protection.  Dr. 
David Austin, a fellow at Resources for the Future (RFF) in Washington, 
D.C. recently finished a paper entitled "Estimating Patent Value and 
Rivalry Effects:  An Event Study of Biotechnology Patents."  The paper 
analyzes the value of patents, and their effect on competing companies 
and on the biotechnology industry in particular.  Dr. Austin confined the 
study to biotechnology firms because, "their research intensity is known 
to be very high; they rely heavily on patent protection; and their patent 
races tend to be extremely competitive."(Pg. 3)  Dr. Austin further 
states that since there are relatively few biotechnology products yet 
brought to the market, "companies need an effective way to signal their 
future prospects and attract investment capital.  Patents serve this 
function."(Pg. 4)

	Dr. Austin references earlier economic estimates in this field in the 
introduction to the paper.  He cites a 1984 paper by Griliches, which 
found that a successful patent is worth about $200.000.  He also cites a 
study by Pakes, 1985, which found that when a firm receives a patent it 
"indicates that events have occurred that increase the firm's market 
value by $810,000."(Pg. 2)

	The results of Dr. Austin's study indicate that there is a significant 
reaction in the stock market when certain broad types of patents issue.  
When a patent is listed in the Wall Street Journal, it positively affects 
the value of the stock for the company receiving the patent, and 
negatively affects the stock price of competitors to that company.  Dr. 
Austin defines a "significant" increase in valuation as $1.7 million on a 
company capitalized at an average of $400 million.  The report also 
indicates that there is a positive correlation between stock price, when 
a patent is filed and issued, and research and development expenditures. 
In addition, the report indicates that the granting of an important 
patent appears to raise the net value of the entire industry.  

	Dr. Austin concludes the report with a discussion of the policy 
implications of the findings.  The report states "current patent policy 
is very crude, from the standpoint of economic theory, and certainly is 
not strongly linked to the value of the patent."(Pg. 32)  If patent 
examiners were provided with better information, Dr. Austin believes 
patent examiners and judges that help determine the scope of a patent 
would be able to bring greater economic rationality into their 
decision-making.  Finally, Dr. Austin concludes the report by suggesting 
that a study of the long-term effects of rival patents is a necessary 
next step in this line research.

	It is easy to see the relationship between the capital formation 
pressures faced by the biotechnology industry and Dr. Austin's study.  
Stock prices and market value are a critical variable in the ability of a 
company to raise capital.  Patents give investors confidence and 
influence their willingness to put their capital at risk.  The shortage 
of capital in the biotechnology industry means that the protection of 
intellectual property has never been more critical for the ability of the 
industry to survive and prosper.

	BIO recommends that the United States Patent and Trademark Office 
(USPTO) examines the soon to be revised Austin discussion paper as it 
reviews the other recommendations in this report.  We do not argue that 
economic considerations are legally relevant to the implementation of the 
patent law.  However, with respect to the biotechnology industry, these 
considerations highlight the importance of the hearings and the priority 
which the USPTO should give to responding to the recommendations which 
are made here.



	

	



STATEMENTS OF BIOTECHNOLOGY CEOS



Dr. Kenneth J. Widder

Chairman & CEO

Molecular BioSciences

10030 Barnes Canyon Road

San Diego, CA 92121



	Good morning and welcome, we very much appreciate you coming to San 
Diego to hold this hearing on biotechnology industry patent issues.  I 
would like to explain why the work of the Patent and Trademark office is 
so critical to the biotech industry.  I am Kenneth J. Widder, M.D., and 
am here today to testifying on behalf of a number of organizations and 
Molecular Biosystems.  I am  President of the San Diego Biomedical 
Industry Council (BIC), a Director of the California Health Care 
Institute, member of the Environmental Committee, Greater San Diego 
Chamber of Congress, Chairman of the San Diego Technology Council, and 
serve as a member of the Governor's Council on Biotechnology. 

	Since 1983 I have been Chairman and CEO of Molecular Biosystems, Inc., 
a biomedical company that manufactures and develops a range of contrast 
agents for use with diagnostic ultrasound, Magnetic Resonance Imaging 
(MRI) and Computed Tomography (CT).  I received my medical degree from 
Northwestern University and completed my residency in Pathology at Duke 
University Medical Center.  I came to San Diego in 1981 and served as 
Associate Clinical Professor of Pathology at the University of  
California San Diego until founding Molecular Biosystems in 1981.

	Recently, Molecular Biosystems received FDA approval for Albunex, the 
first transpulmonary ultrasound contrast agent for ultrasound.  For 
years, heart patients have had to visit cardiologists to receive multiple 
tests in order to determine cardiac ailments.   Sometimes, 
catheterization is required to determine what more non-invasive tests 
could not.  Today, new technology and drugs have decreased the likelihood 
of repeat visits.  Albunex, developed by Molecular Biosystems is one of 
these latest advancements.

	When used with ultrasound imaging techniques, Albunex helps reflect 
sound waves in the blood about a hundred times better than blood alone, 
thus providing cardiologists with a brighter, clearer picture of the 
heart's inner lining.  We believe Albunex is another important patented 
innovation that may become very useful in diagnosing heart disease.

	Mark Twain called ininventors "the creators of the workd-after God."   
Connecticut Yankee at King Arthur's Court, Twain remarked that the very 
first thing he would do in his administration -- and it was on the very 
first day of it, too - was to start a patent office; "that a country 
without a patent office and good patent laws was just a crab, and 
couldn't travel any way but sideways or backwards."   Patents help 
society move forward, they advance all innovations.  Patents teach 
inventions to the public, in exchange for this teaching, inventors get 17 
years of monopoly on that invention.  If the patent system did not exist, 
the inventors would tend to keep inventions secret, and society would not 
have the benefits of many new technologies and advances.  	

	Patents can be used to put boundaries around intellectual property.  
The only right a patent holder has is to prevent others from practicing 
the invention.  No one will invest in an Idea that is not patented 
because if it is a good idea all other companies will copy it.   An 
invention that is patented is more valuable than one that's not because 
they can be sold to someone else.  Investors now view patents as tangible 
assets of a company. 

	One way a biotechnology company can raise money is through licenses 
with big Pharmaceutical companies.  These license agreements permit 
royalties to be collected during the term of the patent.  One industry 
model becoming more prevalent is the Royalty Income Trust Company (RITCO) 
where biotechnology companies have found that the marketing, development, 
manufacturing, and clinical development of a drug is too expensive, so 
they sell the rights of the patent for a royalty stream. 

	Patents are imperative to our industry, our survival depends on it,  we 
must continue to preserve the technological innovations our industry is 
creating.  One of the greatest challenges we face as an industry is the 
continued funding for the development of innovative products.  As public 
markets fluctuate as funding sources, strategic alliances become 
increasingly more important.  The only way a biotechnology company can 
get the highest value out of a strategic alliance is for the company to 
license intellectual property protected by a patent. 

	In order for our Industry to remain competitive on a global basis, we 
need to have strong intellectual property protection.  I urge you to 
listen carefully to our presentations today on patent issues raised in 
your notice.  When the PTO rejects a patent claim it can have very 
serious consequences for our industry.  It would not have been possible 
to develop Albunex without strong patent protection.

	 In addition, the Patent and Trademark Office will need to be an 
increasingly efficient department.  We feel that the current high 
turnover rate in its office effects both industry and government.  The 
high turnover rate puts in place more and more inexperienced examiners, 
diminishing the level of education of people examining our products.  
This lack of skill and your re-education of examiners hinders the 
progress of  innovations being examined.  We as an industry are very 
committed to work with you to insure a strong and effective U.S.  Patent 
and Trademark Office.  

	Thank you for providing me the time to speak on behalf of this 
industry. 



William Rastetter, Ph.D.

President & CEO

IDEC Pharmaceuticals Corporation

11011 Torreyana Road

San Diego, CA 92121



	Good morning and thank you for coming to San Diego for this meeting.  
My name is Bill  Rastetter and I am the President and CEO of IDEC 
Pharmaceuticals.  I also serve on the board of directors of San Diego's 
Biomedical Industry Council, the board of San Diego's Biocommerce 
Association or BIOCOM, the board of the California Health Care Institute, 
and on the Governor's Council on Biotechnology.  IDEC is a member of BIO.


	IDEC is one of about 150 biotech or biomedical companies in San Diego 
which collectively employ about 14,000 individuals.  The biomedical 
community in San Diego is a very cohesive and active one.  San Diego has 
embraced our industry as an important part of its economic future.  In no 
small part, the issues which will be discussed today, and our companies' 
ability to timely secure and build intellectual property portfolios will 
drive the growth of our companies.  Ultimately, growth for our companies 
will entail a transition from R&D organizations which consume capital to 
larger companies driven by cash flow from product sales.  This transition 
will truly drive economic growth in the region.

	It has been said recently by many that Health Care Reform is dead.  
Nothing could be further from the truth!  Health Care Reform is occurring 
and occurring rapidly without legislation, without direct government 
intervention.  Private sector market forces are changing the way every 
company or group of practitioners engaged in health care does business.  
It would appear that the largest pharmaceutical companies are gaining 
ground in the market place on the mid-sized companies. Companies like 
Merck and SmithKline Beecham have moved aggressively to acquire Pharmacy 
Benefit Managers as their paradigm for doing business changes.  The 
analogy might be that the hardware makers (read the drug developers) will 
now also be in the business of software (read pharmacy benefits 
management and outcomes research) to optimize how their drugs are used 
and to allow them to capture further economic value.

	But the pipelines of the large pharmaceutical companies are not as full 
as they might be.  And revenue growth is eroding with blockbuster drugs 
coming off of patent, with generic substitution, and with the broad 
pricing pressures that exist from private-sector-driven Health Care 
Reform.  Well, all of this is actually good news for the small company, 
provided that we can continue to innovate -- and provided that we can 
timely secure and build intellectual property portfolios.

	Revenue erosion and pressure on the bottom line for large "Pharma" is 
leading to cutbacks in internal R&D budgets.  Large Pharma will 
increasingly look to small companies like IDEC for late-stage, 
development products where the risk -- both technical risk and 
intellectual property risk --has been largely removed.  So, small may be 
beautiful, provided we can continue to discover and efficiently develop 
protectable, proprietary products.

	The small company in the era of Health Care Reform may well emerge as 
the predominant engine of innovation in partnership with large companies; 
the large companies will consolidate their power as the worldwide 
marketing partners.  Clearly, patent protection is paramount to the 
health of such partnerships.

	The uncertainty surrounding Health Care Reform has badly damaged the 
capital markets for biotech.  It is today impossible for small companies 
to rely routinely on the public equity markets as a source of capital.  
So, increasingly we look to large Pharma to fund R&D and to sustain us as 
viable research and development organizations until our products are 
launched and royalties and/or profit sharing arrangements begin paying 
the bills.  And it may take ten to twelve years after a company hires its 
first scientist to reach that stage!  A critical element in partnership 
due diligence is always the small company's intellectual property 
position.  Let there be no mistake, patents are very important to 
securing capital -- very important to our very viability!  And issued 
patents are far more valuable than patent applications.

	From a small company perspective, it might be good to mention a couple 
of things:

	First, the trend at the USPTO toward requiring human clinical data to 
demonstrate utility hurts the small company.  Generally, we need to find 
corporate partners to fund clinical development-- clinical development is 
very expensive.  Without a clear patent position it can be hard to get a 
partner.  Catch 22!

	Second, the "first to invent" system in the U.S. helps the small 
company.  I am glad we have not changed this element of our patent 
system.  We cannot file patent applications as efficiently or as early as 
the large companies.  We just don't have the resources.  We need to spend 
as much as we can on discovery and on development of product leads.  A 
"first to file" system would divert dollars away from R&D, curtail 
innovation, and weaken the small company.  You know this as well as I do: 
a "first to file" system would also burden the Patent Office with 
premature applications on incompletely conceived inventions.

	We had the pleasure at IDEC of hosting a group of patent examiners for 
a tour of our facility and a "teach-in" on our technology.  We told the 
examiners about our product candidates which are antibodies for the 
treatment of cancer and autoimmune disease.  We told them about our 
technology which includes gene splicing from cells taken from monkey and 
human immune systems to create antibodies for chronic therapy of 
autoimmune diseases.  We told them about our manufacturing which benefits 
from efficient host/vectors systems which drop the cost of goods to 
one-tenth of what it would be with older technology.

	At IDEC we have been very proactive about patent prosecution.  This has 
included whenever possible interviews at the Patent Office.  In addition 
to our patent counsel we believe it is essential to include the 
scientist, i.e., the inventor from the Company, in such meetings.  We 
believe these face-to-face interviews are a very useful, additional way 
of educating the examiner on the nuances of our technology.  We would 
encourage the Patent Office to grant interviews whenever possible 
--interviews are a great communication tool, and they can benefit both 
parties.

	We are eager to continue "teach-ins" and other education programs with 
the Patent Office -- I am sure that many of our San Diego companies would 
join in that effort.  A bewildering array of technologies appears at the 
Patent Office:  from hybridomas to transfected cell lines, from 
host/vector systems to homologous recombination strategies, from 
anti-sense oligonucleotides to retroviral genetherapies.  Education of 
the patent examiner -- to ensure timely, efficient and proper patent 
prosecution -- is an obligation that we will gladly share with you!

	In closing:  let there be no mistake, patent protection for all of our 
products and for our technology is essential for our survival as a small 
company.  Patents increasingly are the way we create product and 
technology value.  The know-how lead which small companies had in the 
biological sciences in the late 70s and early 80s has nearly vanished.  
Big Pharma now knows how to"do biotech."  But they still need our 
patented products, our patented technologies.

	Thank you again for coming to San Diego.  With your help we can secure 
and build patent portfolios as the foundations for economic growth in the 
region.





INTRODUCTION TO UTILITY AND OPERABILITY CONSIDERATIONS6

	The misapplication by the United States Patent and Trademark Office 
("USPTO") of the law of utility and operability is creating severe and 
unnecessary economic problems for the biotechnology industry, 
particularly for the inventors in universities and small companies.  For 
most types of inventions, the USPTO considers the invention useful enough 
to qualify for a patent if the inventor merely describes in the 
specification the invention's use(s); in the vast majority of cases, no 
data are required to prove utility.  Data are understandably required 
when the invention countermands an established law of nature (for 
example, a perpetual motion machine). Under the current approach to 
defining practical utility and operability, the USPTO appears to have 
approached the majority of biotechnology cases with the same jaundiced 
eye that it casts on perpetual motion machines or cold fusion inventions.


	For years, USPTO rules have treated pharmaceutical preparations by a 
standard different than that applied to mechanical, electrical or even 
chemical inventions.  This was perhaps understandable in the 19th and 
early 20th centuries when unscrupulous individuals obtained patents and 
sold worthless "patent" medicines to an unsuspecting public, and the 
USPTO was the only federal agency empowered to grant drug "licenses."  
Eventually the Congress enacted laws to protect the public from false 
advertising (enforced by the Federal Trade Commission) and from 
ineffective and unsafe medicines (enforced since 1962 by the Food and 
Drug Administration (FDA)).  Hence, the earlier mission of the USPTO to 
protect the public from patent medicines has been reassigned to other 
federal agencies who have the expertise necessary to determine whether a 
therapeutic modality is safe and effective.

	Similarly, the USPTO for years refused to issue patents on living 
things, gaming devices and "sin" products, based upon its interpretation 
of 35 U.S.C. Section 101.  Those prohibitions also have disappeared.  
Just as the USPTO over time recognized that it did not have the right to 
set policy by refusing to grant such patents, it is time for the USPTO to 
cease discriminating against pharmaceutical and biotechnological 
preparations and their clinical uses.

	Within the last four years, the USPTO's biotechnology examining group 
(Group 1800), as well as Group 120, have effectively raised the standard 
of utility from "Does this countermand a law of nature?" to "I would like 
to see more in vivo human data."  In many instances, examiners appear no 
longer to recognize the imperative that they must first build a case for 
no utility before reflexively assuming that the invention is without 
utility and automatically demanding that the inventor produce additional 
evidence of utility.  Examiners often (and inappropriately) cite a 1966 
Supreme Court case (Brenner v. Manson) to support rejections grounded on 
a lack of "practical utility." This is a misplaced reliance, as Brenner 
was a case in which NO USE AT ALL was given in the patent application as 
filed, and no use was provided later by the inventor by affidavit. This 
led the Court to call the invention a mere "object of research."  By 
"object of research," the court obviously meant an activity with no 
direction. Today, however, this case is being applied improperly to 
inventions for which the inventors have described many types of utility.  
The examiners are rejecting claims for proteins which can and are being 
widely used by the biomedical industry as, inter alia, diagnostic 
reagents, on the grounds that the proteins are "objects of research" and 
have no practical utility.

	As the result of this misplaced reliance on Brenner, examiners are 
making bizarre utility/operability rejections. An examiner will often 
first search the technical literature to discover reasons why the 
invention might not work.  Then, the examiner undertakes a different 
technical search and finds references that allegedly make the invention 
obvious.  The inventor is now faced with the absurd situation in which 
the examiner rejects the same claim on the grounds of both lack of 
utility and obviousness, a situation that is referred to as the 
"squeeze."

	The biotechnology examining corps and USPTO management and Board 
apparently may not understand the magnitude of the burden when they 
require clinical studies to establish practical utility.  There is a 
misunderstanding of the "real-world" of drug development and the real 
import of a USPTO demand for clinical data.  There is a misunderstanding 
of the high level of respect by skilled workers in the field for the 
value of early-stage screening in vitro data. Most telling: the FDA, the 
agency with statutory authority for regulating pharmaceuticals, 
recognizes the value and importance of in vitro and in vivo animal data 
in the early stages of the development of a therapeutic.

	The demand for clinical data and occasionally for "significant" 
clinical data by the USPTO sets an unreasonable standard and threshold 
for patentability and is particularly burdensome for universities and 
small companies with limited resources.  In the United States, before a 
single human being can receive an experimental therapy, an extensive data 
package called an Investigational New Drug Application (INA) must be 
filed with the FDA.  The INA contains extensive toxicity data from tests 
in at least one non-human animal species, performed according to Good 
Laboratory Practice regulations.  The costs associated with obtaining 
such studies from reputable contract laboratories frequently can exceed 
$1 million.  In addition, preparations to perform clinical studies, 
according to the Good Clinical Practice regulations, first requires the 
manufacture of the product according to Good Manufacturing Practice 
regulations.  The cost to scale-up and manufacture enough drug to do 
toxicology and initial clinical studies can easily cost another $1 
million.  In addition, the necessary steps to do the initial clinical 
safety study typically run over $500,000 to $1 million, which includes 
drafting and printing protocols, patient informed consents, case report 
forms and other forms; convening Institutional Review Boards; on-site 
inspection of clinical study sites; investigator fees; costs of human 
testing, etc.  Only after this investment of time and money in the human 
safety study may the new drug enter Phase II trials to test the 
effectiveness of the therapy and thus generate clinical data supporting 
utility.  A simple Phase II clinical trial for an acute therapy (for 
example, stroke) can cost several million dollars.  However, if 
SIGNIFICANT clinical data are required (as for chronic conditions like 
Alzheimer's disease, currently an incurable disease), patient testing 
costs run tens of millions of dollars (in addition to several million 
dollars for chronic animal tests and more drug supplies).  Finally, 
pivotal Phase III studies to establish efficacy of the drug in a large 
population of the targeted patient population can run into the many 
million of dollars.  University and small company inventors simply do not 
have the resources or wherewithal to do such testing even for the FDA, 
and certainly not for the USPTO.  Even large pharmaceutical companies 
will not proceed to invest millions of dollars without assurance of 
patent protection. 

	In summary, taking into account all the costs, to obtain even a minimum 
of clinical data, approximately $2-5 million is invested.  To obtain 
FDA-level clinical data of effectiveness in Phase II costs an additional 
$5-20 million.  If the USPTO asks for "significant" clinical data, an 
additional investment of  $10-20 million may be necessary.  For acute 
therapy, a minimum of $30 million need to be invested, whereas for 
chronic therapy, "significant"  clinical data likely will cost more in 
the $100 million range.  In addition, a decade may elapse from a major 
pharmaceutical discovery to "significant" clinical data!

	One may ask how universities or small companies will ever persuade 
anyone to proceed to develop their products in the face of ill-informed 
attitudes of Examiners. For example, one biotech examiner recently asked 
a patent attorney: "What is the practical utility of an isolated receptor 
protein?" Receptors are informational macromolecules within cells or on 
cell surfaces that react with, and respond to, physiological ligands or 
their pharmaceutical counterparts. A well known use of receptors is as 
reagents in diagnostic assays. Those skilled in the art, such as 
scientists at pharmaceutical and diagnostic companies, will see the same 
patent application data and consider the receptor useful enough to pay 
for a license. Hardly no practical utility!  If the USPTO continues to 
reject such patent claims, investment, progress and cures will suffer.



A. Proof of Utility and Operability

	The introduction of biopharmaceuticals into the patent field resulted 
in the shift of the next generation of pharmaceutical related 
applications from the examination groups which were experienced in 
handling utility issues to a new examination group (Group 1800) at the 
USPTO.  This, combined with the massive influx of newly-hired patent 
examiners at the USPTO to reduce the 1980's backlog of 
biotechnology-related applications, has resulted in an increase in 
utility rejections and has highlighted the need to establish a model for 
handling utility issues.





	1. The USPTO's Burden

	The examination process at the USPTO is broadly based on a 
quasi-judicial model.  The process begins with the filing of an 
application by the inventor(s). The application is then reviewed by an 
Examiner.  This review should, at least in theory, involve application of 
legally-determined and substantive standards. If the application fails to 
meet these standards, the Examiner issues a report to the inventor(s) 
listing the deficiencies in terms of claim rejections.  These 
requirements for patentability include utility, novelty, nonobviousness, 
and disclosure. The first of these includes a determination of usefulness 
or lack thereof (is the claimed utility "incredible"?). The last of these 
includes a determination of operability (is there an adequate description 
of how to use the invention?).

	In the biotechnology and pharmaceutical sciences, the Examiner is asked 
to make these determinations at an early stage of an invention's 
development. While an Examiner is not necessarily a true expert in the 
field he or she examines, he or she is considered an "expert" by the 
USPTO. (Under current USPTO Rules, one cannot depose an Examiner either 
to establish technical credentials or to obtain insight into the 
reasoning underlying their decisions). Critically, as an Examiner is 
unlikely to be a real-life "expert," the Examiner must support his or her 
claim rejections with evidence or sound scientific reasoning.

	During the examination process, two basic, yet fundamental, guidelines 
must be followed by the Examiner at the USPTO in resolving issues 
relating to the adequacy of the disclosure of utility in drug cases:

	(a) The same basic principles of patent law which apply in the field of 
chemical arts shall be applicable to drugs.

	(b) The USPTO should confine its examination of the disclosure of 
utility by applying patent law principles, recognizing that other 
agencies of the Government have been assigned the responsibility of 
assuring conformance to the standards established by statute for safety, 
efficacy, advertising, use, sale or distribution of drugs.  
	(c) There is some question amongst members of the patent bar as to 
whether these guidelines are being uniformly followed within the USPTO.

         Generally, the sworn statements made by the inventor as to the 
utility of the invention should be, but are not always, assumed to be 
valid and truthful both as to content of the specification and as to the 
scope of the claims.  This is equally true for operability and for the 
sufficiency of the teachings provided within the specification as to how 
to use the invention.  With this as a starting point, the Examiner has 
the initial burden of establishing that a person skilled in the 
technology would consider (1) the inventor's statement of use 
unbelievable or overly broad, (2) the invention clearly inoperable as 
claimed, and/or (3) the teachings provided within the specification 
clearly insufficient.

	If the Examiner meets this burden, the burden is then shifted to the 
inventor to reestablish the original presumptions accorded the 
application.  The inventor can do this by either affidavits from experts 
or placing additional evidence before the Examiner, and/or presenting 
arguments as to why the Examiner's initial findings are infirm, mistaken 
or in error.  It is incumbent upon the inventor to put any evidence into 
the record before the last rejection is made final.  After the final 
rejection, the entry of evidence is not the inventor's right but rather 
is at the discretion of the Examiner.

	In the prosecution of biotechnological applications, suitable legal 
precedents are slow to emerge and to develop relative to other 
established technologies, which places an additional burden on the 
inventors, as does the pendency reduction program at the USPTO which 
typically results in premature final action.  The petition remedy for a 
premature final action does not stay the examination deadlines or really 
help the inventor.  In essence, because obtaining a patent, and not 
creating legal precedent, is what drives our biotechnology innovators, 
taking an Examiners misplaces or incorrect reflections to the courts is 
almost always avoided, given the incredible time delay of such an 
approach.

	The disclosure of multiple utilities presents no unusual difficulties 
for most biotechnology inventions.  For example, and of benefit to 
society as a whole, many inventions from the biotechnology fields are 
applicable to both research and therapeutic settings.  The biotechnology 
Examiners are supposed to review each disclosed utility on its own 
merits.  Critical to this issue is that only one utility is required to 
support patentability of the claimed subject matter.  This is true even 
when there is a human treatment utility disclosed but only a non-human 
utility exemplified.  Under established case law, the non-human utility 
should support patentability, a fact that is frequently ignored by 
biotechnology Examiners. 



	2. Example Illustrating Approaches in Handling Utility Issues

	It is useful to provide a hypothetical example illustrating our views 
on the utility issue.  Immunoconjugates are hybrid molecules composed of 
an antibody or a binding fragment thereof coupled via a linking molecule 
(linker) to a drug.  In our hypothetical, the inventor selected (1) an 
antibody which selectively binds the conjugate to the desired tissue or 
cell, (2) a drug which has the desired biological activity, and (3) a 
linker group which attaches the drug to the antibody with minimal loss in 
activity for either molecules.  The functional groups and size of the 
linker were selected by the inventor to avoid the loss of biological 
activity of the drug and antibody molecules.

	In the present hypothetical, the immunoconjugate is a immunotoxin 
composed of known entities.  The toxin (drug) is available commercially.  
The antibody is a monoclonal antibody available commercially and known to 
be selective for a specified cancer antigen.  The linker used is also 
available commercially from a supply house and is known to be suitable 
for preparing enzyme labelled antibodies (another type of 
immunoconjugate).  The invention lies in the design of the immunotoxin 
and the development of a protocol for its use.

	The specification of the application teaches dosages, protocols and 
methods for assembly and use of the immunotoxin.  The application 
discloses previous attempts to use analogous conjugates to treat leukemia 
or alleviate symptoms.  The prior art conjugates differ in the antibody 
employed.  Neither the prior art immunoconjugates nor those of the 
inventor are in clinical trials.

	The inventor's conjugates have been tested in animal models and in 
vitro (tested in the laboratory) tests and have been found to be active.  
The immunotoxins are effective in killing cancer cells in vitro as 
measured by art recognized protocols.  The immunotoxin is also active in 
vivo (tested in animal or man) animal models.

	The claims of the application are directed to immunotoxins, methods of 
inhibiting the growth of leukemia cells using the inventive immunotoxins, 
and methods of treating leukemia in mammals.  No claim specifies therapy 
in humans although such a use is mentioned in the specification.

	Let us assume that rejection of all the claims based on Section 101 
appeared in the first Office Action on the merits.  The rationale 
presented by the Examiner was a concern with effectiveness at the cancer 
site which is based on the suspect ability of the conjugate to reach the 
site.  A noncurrent review article discussing immunoconjugates and 
enumerating the problems generally expected with immunoconjugates is 
provided with the Office Action as evidence to support the utility 
rejection.

	The Examiner's reasoning in the Office Action is that the utility 
statement as to treating leukemia provided in the specification would not 
be believed by one skilled in the art based on the concerns expressed in 
the review article.  In this hypothetical, the Examiner does not dispute 
the sufficiency of the protocols taught or enablement of the invention 
generally but merely questions operability, and hence utility, of the 
immunoconjugate. 

	If the Examiner's case rests on the assumption that one of skill in the 
art has the biases reflected in the review article and would look 
skeptically upon the utility statements as a cancer therapeutic, no prima 
facie case has been made, and this should be pointed out to the Examiner 
forcefully.  In no other art unit would an Examiner's vague concern be 
considered adequate, particularly in the light of the data in the 
application. Unfortunately, the threshold as to the evidence required to 
shift the burden to the inventor is not high for biotechnology inventions 
such as the hypothetical.  A reasonable basis for the Examiner's belief 
is all that is required.  A review or similar journal article of any 
quality or antiquity may suffice even though the progression of the art 
as a whole, and those skilled in this art, may have advanced 
substantially since the article forming the basis of the rejection was 
written -- critically, in the biotechnology field, this advancement may 
have taken place in less than a few years.

	

B. Proof Of Safety

	Related to the general issue of "practical utility" is the specific 
issue of "safety" of an invention. It has long been assumed that, in 
order to be statutorily useful, an invention must be reasonably safe in 
operation, as well as achieving its prescribed purpose. In most art 
units, issues of safety rarely arise; it is generally recognized that 
such issues are the province of OSHA, EPA, FDA or other regulatory 
agencies.

	The issue of safety has been raised most often in the USPTO in 
connection with drugs and therapeutic inventions, and this issue has been 
resolved by the federal courts which have established the following legal 
principles: 

	1.  An inventor for a patent on a drug need only show a "sufficient 
probability of safety in human therapy," which need not necessarily 
involve clinical evidence; 

	2.  A drug may be "useful" for patent law purposes even though it has 
not yet been proven to be safe for use under the FDA standards; 

	3.  The task of protecting the public from the advertising and sale of 
harmful drugs belongs to the FDA, Federal Trade Commission, and analogous 
state agencies, not to the USPTO; and 

	4.  "commercial usefulness" is not a prerequisite for a reduction to 
practice and the subsequent patentability of any of the classes of 
subject matter set forth in Section 101, much less the particular class 
of compositions called "drugs."  

	Other legal decisions from the federal courts have made these 
principles clear: the USPTO should not be determining drug safety for any 
reason, and certainly not for the purpose of determining practical 
utility.  The Board of Patent Appeals and Interferences, the PTO 
reviewing body has accepted this limitation in a 1983 decision.  The 
Board held that a relative lack of safety of an invention cannot 
establish a lack of utility in the sense of Section 101, and that the 
USPTO does not have the authority to refuse a patent because it deems the 
risk to the user to be too great.

	Unfortunately, as an indication of the problems faced by our nation's 
entrepreneurs, the USPTO does not surrender easily. The Manual of Patent 
Examining Procedure, to which Examiners strongly adhere, now states in 
paragraph 608.01(p):

	"Although absolute safety is not necessary to meet the utility 
requirements under this Section, a drug which is not sufficiently safe 
under the conditions of use for which it is said to be effective will not 
satisfy the utility requirement. Proof of safety shall be required only 
in those cases where adequate reasons can be advanced by the Examiner for 
believing that the drug is unsafe, and shall be accepted if it 
establishes a reasonable probability of safety."

From this language, it appears that the USPTO is still reserving to 
itself the possibility of determining that an invention is not safe, and 
the invention therefore without utility, despite legal mandates to the 
contrary.





C. Practical Utility vs Proof of Operability

	There should be no distinction between practical utility and proof of 
operability.  If the disclosure in a patent application satisfies the 
requirement for practical utility, then no proof of operability is 
required.  In the USPTO Notice for this hearing discussing this Section7, 
the CCPA decision in In re Jolles, 628 F.2d 1322, 1327, 206 USPQ 885 
(CCPA 1980) is cited as holding 
	When utility as a drug, medicant, and the like in human therapy is 
alleged, it is proper for the Examiner to ask for substantiating evidence 
unless one with ordinary skill in the art would accept the allegations as 
obviously correc."  206 USPQ 890



	The statement was used by the CCPA in connection with the Board opinion 
which they reversed.  On the contrary, the CAFC in Jolles, supra, held

	the character and amount of evidence needed may vary, depending upon 
whether the alleged utility appears to accord with or contravene 
established scientific principles and beliefs.



	Nowhere does Jolles decision require the presentation of substantiating 
evidence for human therapy.  In fact, the CAFC in In re Jolles, supra, 
specifically cited the decision of the CCPA in In re Gazave, 154 USPQ 92 
(CCPA 1967) where the CCPA reversed a rejection for a requirement for 
proof of therapeutic utility in humans stating

	Appellant's discovery here does not appear to us to be of such a 
'speculative', abstruse or esoteric nature that it must inherently be 
considered unbelievable, 'incredible' or 'factually misleading'.  Nor 
does operativeness appear 'unlikely' or an assertion thereof appear to 
run counter 'to what would be believed would happen by the ordinary 
person' in the art.  id. at 96 



Iizuka, supra, is that a practical utility be disclosed.  That is the 
requirement sufficient to meet 35 USC 101 and 112.  Nothing this 
statement requires proof of such utility.  Hence, it is only in the case 
where the practical utility relied upon to satisfy 35 USC 101 and 112 is 
incredible on its face that proof of operability is required.  In such 
cases, without proof of operability, the inventors have not disclosed a 
practical utility.  

	For practical utility of a therapeutic compound, all that is required 
under the existing law, is that the compound have pharmacological 
activity.  As seen from the CCPA decisions in In re Krimmel, 292 F.2d 
948, 130 USPQ 215 [CCPA, 19961]; In re Bergel, 292 F.2d 955, 130 USPQ 206 
and In re Dodson, 292 F.2d 943, the disclosure that a compound exhibits 
some pharmacological property is sufficient to satisfy utility 
requirements for this compound under this statute.  There is no 
requirement that one must demonstrate that a compound having 
pharmaceutical utility must be operable in humans for the therapy 
disclosed, much less present proof demonstrating this effectiveness.  In 
In re Anthony, 162 USPQ 594 [CCPA 1969] the drug Monase was removed due 
to toxic side effects.  The CCPA in Anthony, supra, held that even 
despite the fact that Monase could not be used for the purpose set forth 
in the patent application, this was not a sufficient reason for failing 
to meet utility requirements of patent law.  As stated by the CCPA in 
Anthony, supra, in holding that whether Monase could be administered in 
human therapy was irrelevant to the issue of satisfying the requirements 
of the patent statute for utility:

	And Congress has given the responsibility to the FDA, not to the Patent 
Office, to determine in the first instance whether drugs are sufficiently 
safe for use that they can be introduced into the commercial market under 
the conditions prescribed, recommended or suggested in the proposed 
labeling thereof. -- To put it in another way, the FDA need not 
necessarily determine that a drug is commercially useful or usable before 
it may be 'useful' in the patent law sense.  162 USPQ 594, 604



	In its discussion concerning proof of operability for human therapeutic 
inventions in the Notice, the argument relied upon appears to be 

	important ... yet others have identified important public policy 
justification for the USPTO to review operability of inventions to be 
used to treat human disorder.  A patent provides the public with high 
quality technical accurate disclosure of a new, useful and non-obvious 
invention.  However, with the imprimatur of the Federal Government, a 
patent can also effect the commercial prospects of an invention in 
question, and can raise and lower expectations of those effected with the 
illness the invention is designed to treat.



	This public policy justification for proof of operability is contrary 
to U.S. law as enunciated by the highest patent court of the United 
States, the Court of Appeals for the Federal Circuit (CAFC) and its 
predecessor court, the Court of Customs and Patent Appeals (CCPA).  To 
justify this requirement, under the present law based upon the above 
public policy argument, provides a waste of money and time since it 
throws roadblocks in the path of patenting which roadblocks can later be 
removed by costly appeals to the courts.  

	It is well settled that there is no requirement for proof of 
operability even when human therapy is alleged unless this utility is 
unbelievable on its face.  Even a cancer utility has been held to be a 
utility which is not unbelievable on its face requiring proof of 
operation.

	In Ex parte Rubin, 5 USPQ 2d 1461 (BPAI 1987) claims to a cancer 
treatment method were rejected under Section 101 and Section 112 first 
paragraph for lack of utility.  The rejection was overturned on the basis 
that since the utility asserted in the specification was credible and no 
evidence had been offered that this utility was not believable.  In so 
holding the Board said,

	"The Examiner's attention is directed to In re Langer, 503 F.2d 
1380...especially at 297 (CCPA 1974).  The Court there held: '...a 
specification which contains a disclosure of utility which corresponds in 
scope to the subject matter sought to be patented must be taken as 
sufficient to satisfy the utility requirement of 101 unless there is 
reason for one skilled in the art to question the objective truth of the 
statement of utility or its cope'.  No reason to doubt 'the objective 
truth' of the asserted utility having been advanced by the Examiner, we 
accept appellant's disclosure of utility corresponding in scope to the 
claimed subject matter." at 1462.



	Another example that there is no requirement for proof of utility, 
unless said utility is unbelievable on its face, is the decision in In re 
Isaacs and Lindenmann, 347 F.2d 887, 146 USPQ 193 [CCPA, 1965].  In this 
case, a compound was disclosed as being useful as an anti-viral agent.  
The application to comply with the utility requirements of the statute in 
that there was no demonstration that the claimed compounds had anti-viral 
properties in vivo.  While in vitro data was submitted to the USPTO, the 
CCPA specifically stated that it was even not necessary to present such 
data.  As stated by the Court in the In re Isaacs and Lindenmann case, 
supra:

	"Furthermore, even if there had been a call for in vitro test data, we 
seriously question the Examiner's discretion to make it."  146 USPQ 193, 
195.



Furthermore, in the In re Isaacs and Lindenmann case, supra, the Court 
specifically spelled out the criteria for requiring data of animals 
and/or human testing stating:

	"It is our opinion that the instant disclosure would satisfy one of 
ordinary skill in this particular art that the claimed invention 
possesses the alleged utility.  Even more to the point, however, it seems 
manifestly clear form the record that the alleged utility is not 
'incredible in the light of the knowledge of the art, or factually 
misleading.'  In such a case, it is clearly improper for the Examiner to 
make a demand for further test data, which evidence would be essentially 
redundant and would seem to serve for nothing except perhaps to unduly 
burden the inventor."  146 USPQ 193, 196.



	The Court of Appeals for the Second Circuit in Carter-Wallace v. 
Riverton 433 F.2d 1034, 167 USPQ 656 (CA 2) aff'g 304 F. Supp. 357, 164 
USPQ 73 (DC S NY), in upholding the validity of the meprobamate patent 
against the arguments that its disclosure of utility did not conform with 
requirements of U.S. law stated:

	"We hold, therefore, that under the circumstances of this case, neither 
the confidential relationship between the inventor and the Patent Office 
nor the statutory requirements that the inventor disclosed the best mode 
contemplated by him for use of the invention required a disclosure by him 
of the results of the tests on humans.



	The defendants in the Carter-Wallace v. Riverton case, supra, attacked 
the validity of the meprobamate patent on the ground that the patentee 
failed, during the prosecution of his application, to disclose to the 
U.S. USPTO the results of human testing as well as the extensive animal 
testing that he carried out with respect to the claimed compound.  In 
rejection this argument, the Court reiterated the doctrine of the CCPA in 
the Isaacs case, supra, stating:

	"Under present practice, submission of test information to the Patent 
Office in support of the claims made in an application is not required, 
unless the asserted utility of a compound is not believable on its face 
to persons skilled in the art in view of the contemporary knowledge in 
the art."  167 USPQ 656, 659.



D. Conclusion

	The inventors seeking legitimate patent rights are being thwarted by 
the USPTO's application of the law on utility and operability. This 
practice has had severe consequences for an industry that did not exist 
thirty years ago and which may not be able to continue into the next 
century unless the USPTO applies the patent law in a consistent way from 
one industry to another.





Practical Utility8

 A. Executive Summary
	While our specific concerns and points on the various patent issues 
covered in the USPTO Notice are as diverse as our membership, an overall 
concern has emerged: by not following established legal precedent as it 
applies to proof of utility under 35 U.S.C. Section 101, the USPTO is 
effectively preventing the issuance of patents to innovators and 
entrepreneurs whose endeavors have created and have driven the 
biotechnology industry.  Without the guarantee of the legitimate right to 
a patent for an invention which satisfies the statutory requirements for 
patentability, the USPTO not only ignores the Constitutional mandate to 
promote the arts and useful sciences, but unfortunately and unnecessarily 
increases the hurdles of the biotechnology industry, an industry that 
significantly impacts the economic and political landscape of our 
country, and an industry which truly represents an opportunity for our 
nation to compete in a 21st century global economy.

	With respect to Section A of the Notice, Practical Utility for 
Biotechnology Inventions, three questions have been presented by the 
USPTO.  As will be supported and discussed in detail below, we respond in 
summary fashion to these questions as follows:

	In response to Question 1, we believe that the standards governing the 
requirements for "practical utility" under 35 U.S.C. Section 101 
("Section 101") are sufficiently clear and appropriate for biotechnology 
inventions.  We believe that the issue of practical utility is one of 
mis-application of the law by the USPTO and not the clarity of the law 
established by legal precedent.  Our position is based upon an analysis 
of the relevant case law and a discussion of the types of practical 
utility rejections which are routinely made by the USPTO and which do not 
comport with established legal precedent.  Suggested approaches to 
remedying this situation include allowing the patent bar to participate 
in the discussion and education of USPTO Examiners as to the nuances of 
case law.

	In response to Question 2, we do not believe that the USPTO is 
correctly and uniformly applying the legal standards governing the 
requirements for practical utility under Section 101 for biotechnology 
inventions, particularly for inventions directed to combating human 
diseases and disorders.  This position is also supported by a review of 
the applicable case law and the mis-application of this law by the USPTO.


	In response to Question 3, we believe that the approach employed by 
forcing patent offices to establish that the claimed subject matter be 
"susceptible of industrial application" provides an advantage and a more 
realistic framework than establishing "practical utility" as now done by 
the USPTO.  This position is supported by the recognition that identical 
data which is routinely rejected by the USPTO as allegedly not 
establishing "practical utility" is routinely accepted as providing proof 
that an invention is "susceptible of industrial application" by foreign 
patent offices.

	We first present an analysis of the relevant legal decisions, from the 
seminal, but mis-applied, Supreme Court decision of Brenner v. Manson, to 
recent decisions of the USPTO's Board of Patent Appeals and Interferences 
and the Court of Appeals for the Federal Circuit.



A. Case Law Review

	The USPTO Notice for this hearing9 includes a summary of the case law 
on utility as a preface to the questions which follow.  We here respond 
to this case law summary.

	1. Introduction

	Examiners in art unit groups handling biotechnological inventions 
increasingly have rejected those inventions as lacking utility when the 
application does not disclose human clinical data (or, at a minimum, in 
vivo animal data) proving a human therapeutic use.  As discussed below, 
this USPTO examination practice brings severe economic hardship to the 
biotechnological industry.  Moreover, the rigorous USPTO utility standard 
contravenes controlling case law, as the standard used by many Examiners 
has been soundly rejected by the Court of Appeals for the Federal Circuit 
(CAFC) and its predecessor court, the Court of Customs and Patent Appeals 
(CCPA).  

	As the USPTO does not have the authority to deviate from controlling 
case law, we urge that the USPTO educate the Examiners regarding the 
utility cases discussed herein, and require that the Examiners 
scrupulously apply that law.



	2. The detrimental economic impact of the USPTO's overly stringent 
utility standard

	A patent application on a biotechnological invention today enters a 
USPTO that, as a starting presumption, doubts the utility of most of the 
field.  Even such well-known, manifestly useful reagents as characterized 
monoclonal antibodies, DNAs of defined sequence that encode proteins of 
known function, membrane preparations that contain heterologous receptor 
proteins of defined sequence and class, enzymes of defined activity, 
enzyme inhibitors, bioassays for well-defined substances, and compounds 
that have anti-viral activity, to mention just a few, are subject to this 
doubt as a matter of course.

	We must assume that those who wish to institute this approach to 
patentability, despite the statutes and precedent, believe that doubting 
the utility of any but the most dramatically effective and well proven 
fruits of inventive efforts in biotechnology is the best way to carry out 
the mission of the USPTO and to serve the public interest.  Nothing could 
be more wrong.  This policy works against the benefits that the patent 
system is designed to confer, impedes progress in the biotechnology 
industry, and fails to further the public interest.



	3. Fundamental Constitutional basis of the patent system

	Our U.S. patent system is designed to reward an inventor with an 
exploitable property right.  This right provides a great economic 
incentive to society to invest in the advancement of the useful arts.  
Indeed, the purpose of the patent system as mandated by our Constitution 
is to provide incentives to invest energy and resources in inventive 
activity.  

	The patent serves as a guarantee that the fruits of invention will 
accrue to those who engage in the inventive enterprise.  It prevents 
would-be free riders, who do not undertake the risk of failure, from 
exploiting the hard won success of inventive effort.  Thus, policies that 
encourage inventive activity further the fundamental Constitutional 
purpose of the patent system.  Policies that decrease investment and 
progress are directly contrary to that Constitutional mandate.

	In addition, the patent system advances the useful arts by encouraging 
early disclosure of hard won information, which otherwise might remain 
secret.  Early disclosure of information to the public, particularly to 
those members of the public involved in invention activity, facilitates 
further progress.  Thus, the patent system fosters the dissemination of 
information and hastens its exploitation to increase the public good.  As 
a secondary matter, therefore, policies that encourage early application 
and early issuance will likewise encourage early disclosure and will 
provide another fundamental benefit of the patent system.



	4. The economic gauntlet which the biotechnology industry must run

	Despite perceptions to the contrary, and despite the still great 
promise of the industry, biotechnology since its inception has been 
"losing" money at a stupendous rate. Venturesome investors in this 
industry often invest on the strength of a small portfolio of patent 
applications and faith in an idea and the inventors who will move it 
forward.  Such investments are far from a sure long-term bet.  The 
willingness of investors to "lend" $50 to $100 billion to the unproven 
dreams of the inventors, though they may be brilliant scientists, is a 
testament to the strength of investors' belief that if the claimed 
invention works well enough, if it is sufficiently advantageous, and if 
it achieves marketplace success, then the patent will assure a return on 
investment.  Thus, the patent system provides investors with an assurance 
that they will be rewarded for undertaking the risk of developing an as 
yet untried invention into a commodity.

	The hardest times to raise capital are at the beginning of an 
enterprise and later at the initiation of each stage of clinical trials 
(because of the substantially greater sums required to carry out human 
clinical studies).  Thus, the potential for obtaining patent protection 
early on is crucial to reassure investors at the earliest stage of 
research and development and during the riskiest points on the investment 
pathway.   The USPTO's unduly stringent utility requirement for 
biotechnological inventions makes it harder to obtain investment at these 
critical times.  It decreases investment in beginning enterprises because 
it makes it difficult or impossible to obtain early patent protection, or 
even a reasonable expectation of eventual patent protection, based on 
preliminary results.  Likewise, it decreases the incentive of investors 
to foot the bill for expensive clinical trials.  Both results are 
counterproductive.

	To the extent that early patent protection is unavailable, the risk of 
investment in biotechnology will be increased, the reward necessary to 
attract investment will be increased and investment in biotechnology will 
decrease.  This is not in keeping with the Constitutional mandate of 
promoting arts and useful sciences.



	5. The utility standard is clearly defined by controlling case law

	35 U.S.C. Section 101 requires that a patentable invention be "useful," 
a term which was clarified by the Supreme Court in Brenner v. Manson, 148 
USPQ 689 (1966).  In applying this standard, the USPTO increasingly has 
rejected applications with in vitro or even non-human mammalian in vivo 
demonstrations of pharmacological effect.  In short, the USPTO position 
seems in many cases to be that nothing less than human clinical data will 
suffice to establish utility when, in the opinion of the USPTO, the 
ultimate intended commercial use of the claimed invention is the 
treatment of humans, regardless of what is actually claimed.  However, as 
we establish below, the case law does not permit the USPTO to set such a 
rigorous standard for biotechnological inventions.  



	6. The claimed invention dictates the utility inquiry

	The USPTO is constrained to determine the utility of the claimed 
invention, not the commercial embodiment that the USPTO believes to be 
the inventor's ultimate goal.  Rather, "[i]n determining utility . . . 
the claims must first be interpreted to define the invention to be tested 
for utility."  Raytheon Co. v. Roper Corp.. 220 USPQ 592, 596 (Fed. Cir. 
1983), cert. denied, 469 U.S. 835 (1984).  Accordingly, The inventors are 
not required to prove utility for every aspect of an invention discussed 
in the application.

	Biotechnology-related inventions, as reflected in many Office Actions 
from Group 1800 (the designated group of Examiners at the USPTO who are 
primarily responsible for biotechnology inventions), seem subject to a 
very different principle of examination.  A particularly striking example 
in this regard is the current examination practice for applications that 
relate, however distantly, to therapy of disease.  Such applications 
often present one or more of four broad types of claims:  (a) claims that 
recite products per se, such as a compound with pharmacological activity; 
(b) claims that recite assays or other diagnostic or experimental tools; 
(c) claims that recite compositions comprising such compounds, such as 
"pharmaceutical" compositions, that may imply a use in treating disease; 
and (d) claims that recite a method of treating disease.

	How the utility requirement is applied depends upon the type of claim 
at issue.  In re Bundy, 209 USPQ 48, 51 (CCPA 1981).  The CAFC has held 
that claims which are not drawn to particular uses -- i.e., composition 
of matter claims and method of making claims -- require a lesser showing 
of utility.  "[E]vidence of any utility is sufficient when the count [or 
claim] does not recite any particular utility."  Id. at 743.  Accord 
Nelson v. Bowler, 206 USPQ 881, 883 (CCPA 1980), Blicke v. Treves, 112 
USPQ 472 (CCPA 1957).  

	Thus, what suffices for utility will vary from case to case, depending 
upon how the claims and specification are drafted.  Although these 
different categories of claims present very different issues of utility, 
current examining practice in Group 18000 often treats all claims, 
regardless of format, as though any discussion of therapeutic potential 
is a constructive recitation of a method of treating disease in all the 
claims.  Thus, claims that recite compounds, assays, and compositions 
frequently are judged not to have met the utility requirement of Section 
101 if the application does not demonstrate therapeutic efficacy.

	Currently, if a claim recites that it is drawn to a therapeutic use in 
humans (i.e., therapeutic methods or compositions having therapeutic 
effect), then the USPTO position is that clinical data might be required 
to prove utility.  See MPEP Section 608.01(p) (citing only Ex parte 
Timmis, 123 USPQ 581 (Bd.App. 1959)).  However, it must be emphasized 
that in vivo testing in animal models will suffice when those animal 
models are accepted by those skilled in the art.  In re Jolles, 206 USPQ 
885, 890 (CCPA 1980).  See also In re Gardner, 166 USPQ 138, 140 (CCPA 
1970) (more specific disclosure regarding dosage required because claim 
is drawn to the antidepressant activity of the compound rather than the 
compound itself).  

	In contrast, methods for uses other than human treatment and 
compositions of matter (and the related methods of making) should not 
require proof of efficacy in humans simply because of a possibly utility 
is human therapy.  To reiterate, this distinction is frequently 
overlooked by the biotechnology Examiners.



	7. Brenner v. Manson and its progeny:  "Utility" does not mean 
"therapeutic use"

	Brenner v. Manson, the Supreme Court's most recent pronouncement on the 
utility issue, involved methods of making steroid compounds which were 
similar to useful compounds for human therapy.  However, the inventor in 
Brenner had disclosed no utility in the patent application for the 
compounds.  Instead, in supporting affidavits, the inventor argued that 
the compounds were presumptively useful based on article stating that a  
homolog of the compounds was an effective tumor-inhibiting agent in mice.  
The Court deferred USPTO opinion that such a showing was insufficient to 
regardless of format, establish utility, given the article's statement 
that minor structural changes "may produce profound changes" in activity.  
Therefore, the steroid field at the time the application was filed was 
unpredictable and utility could not be predicted.  Id. at 694.  

	The Brenner Court rejected as a matter of law a variety of arguments 
that would have excused the utter lack of utility description or tests:  
that the utility standard was met by any process which "produce[d] the 
intended result" or which produced a compound that was "not detrimental 
to the public interest" or "the subject of serious scientific 
investigation."   Brenner, 148 USPQ at 694-695.  Instead the Court held 
that for the process to be useful, the end product had to be useful.  

	The Supreme Court summarized the policy rationale of the utility 
requirement thus:  "[A] patent is not a hunting license.  It is not a 
reward for the search, but compensation for its successful conclusion.  A 
patent system must be related to the world of commerce rather than to the 
realm of philosophy."  Brenner at 696.  The patent is a "quid pro quo" 
for the "benefit derived from the public from an invention with 
substantial utility."  Id. at 695.  That benefit is a "specific benefit . 
. . in currently available form."  Id.  However, these seemingly extreme 
policy statements of Brenner must be understood in light of the facts of 
that case -- that no utility whatsoever had been disclosed, in an art 
field acknowledged to be unpredictable at the time the appellants' 
application was filed.

	The CAFC restatement of Brenner requires that a patentable invention 
have a "substantial or practical utility . . . where such utility would 
not be obvious."  Cross v. Iizuka, 224 USPQ 739 (Fed. Cir. 1985).  
Practical utility "is a shorthand way of attributing "real-world" value 
to the claimed subject matter."  Nelson v. Bowler, 206 USPQ 881, 883 
(CCPA 1980).  

	The CCPA and CAFC cases since Brenner have progressively defined the 
outer limits of the utility requirement.  Immediately after Brenner, the 
CCPA applied the holding to its composition of matter claims drawn to a 
chemical intermediate which produces a final product for which no utility 
testing had been completed, and for which no utility could be inferred.  
In re Kirk, 153 USPQ 48, 56 (CCPA 1967); In re Joly, 153 USPQ 45, 47 
(CCPA 1967).  In both cases, the USPTO determination that the 
intermediates lacked utility was upheld.  

	Applications which disclose some testing to support statements of 
utility pose more difficult line-drawing questions.  However, the CCPA 
decisively drew that line far short of requiring human testing and 
therapeutic effect in Nelson v. Bowler, 206 USPQ 881 (CCPA 1980).  In 
that case, the inventor's claims were composition of matter claims drawn 
to prostaglandin derivatives.  The stated utilities of smooth muscle 
stimulation and blood pressure modulation were based upon an in vitro 
muscle assay and an in vivo rat blood pressure assay.  The results of 
those tests correlated with the results of other useful prostaglandin 
derivatives.  The USPTO Board rejected the utility showing, stating that 
the tests were "rough screens, uncorrelated with actual utility."  206 
USPQ at 883.  

	The CCPA reversed the USPTO, holding that "the board erred in not 
recognizing that tests evidencing pharmacological activity may manifest a 
practical utility even though they may not establish a specific 
therapeutic use."  Id. at 883 (emphasis added).  Further, the requisite 
benefit was provided by "knowledge of the pharmacological activity." Id.  
"Rigorous correlation [of the data] is not necessary where the test for 
pharmacological activity is reasonably indicative of the desired 
response." Id. at 883-884 (emphasis added).    	The Nelson court's 
rejection of the USPTO focus on the ultimate therapeutic use is 
consistent with earlier Supreme Court case law, which stated: 

	The word 'useful', therefore, is incorporated into the act in 
contradistinction to mischievous or immoral . . .  But if the invention 
steers wide of these objections, whether it be more or less useful is a 
circumstance very material to the interests of the patentee but of no 
importance to the public.  If it be not extensively useful, it will 
silently sink into contempt and disregard.



Lowell v. Lewis, 15 F. Cas. 1018, 1019 (No. 8568) (C.C. Mass. 1817) 
(Story, J.) (emphasis added).  See also In re Langer, 183 USPQ 288, 298 
(CCPA 1974) (full scale clinical trials in humans may be necessary to 
establish commercial usefulness but are not required to establish utility 
under Section 101).  The Nelson court's approach is also consistent with 
In re Krimmel, 130 USPQ 215 (CCPA 1961), in which the court instructed 
the USPTO to leave determinations of safety and efficacy to the FDA.  Id. 
at 220.  Thus, the FDA and the free market should determine the ultimate 
commercial value of an invention -- not the USPTO.

	In light of the above, it is very hard to see how the USPTO can use 
Nelson v. Bowler to justify rejecting on utility grounds compounds whose 
activity manifestly has been demonstrated.  Yet the biotechnology 
industry routinely sees such rejections issued in applications that 
provide incontrovertible evidence that claimed compounds possess, e.g., 
enzymatic, ligand-binding, anti-viral, or immune-stimulating activities.  
Such showings demonstrate the pharmacological activity required by Nelson 
-- no more need be shown.



	8. The utility requirement is a minimal threshold to patentability

	In line with the rationale of Lowell v. Lewis, the CAFC has clearly 
interpreted the utility requirement to be a minimal threshold.  In Carl 
Zeiss Siftung v. Renishaw plc, 20 USPQ2d 1094 (Fed. Cir. 1991), an 
infringement litigation involving automated coordinate measuring 
machines, the CAFC reversed the trial court's holding that a claim was 
invalid for lack of utility, stating:  

	The utility requirement, although an essential requisite of 
patentability, has other limits.  An invention need not be the best or 
the only way to accomplish a certain result, and need only be useful to 
some extent and in certain applications . . . 

Id. at 1100 (emphasis added).  In Tol-o-Matic, Inc. v. Proma Product-and 
Marketing Gesellschaft M.b.H., 20 USPQ2d 1332, 1338 (Fed. Cir. 1991), the 
court reversed a jury verdict that the invention lacked utility because 
the evidence at trial did not show "total incapacity."  Accord E.I. du 
Pont de Nemours & Co. v. Berkley & Co., 205 USPQ 1 (8th Cir. 1980) ("A 
small degree of utility is sufficient.").    

	Likewise, the CAFC approach in a patent prosecution context underscores 
the minimal nature of the utility requirement.  For example, the 
requirement that an inventor disclose a "stated utility,"  Cross, 224 
USPQ at 742 n. 8, only mandates that the utility of the invention be 
described with some specificity.  See Cross, 224 USPQ at 745.  The CAFC 
explicitly states that the test is a "threshold requirement."  Id.  

	The Cross court cited two cases as examples that failed to meet the 
threshold "stated utility" requirement.  In Kawai v. Metlesics, 178 USPQ 
158 (CCPA 1973), the court held that a statement that the claimed 
compounds "exhibited pharmacological effects on the nervous system" was 
inadequate to meet the utility requirement.  In In re Kirk, 153 USPQ 48 
(CCPA 1967), the court rejected the inventors' bare allegations of 
"biological activity" and "biological properties."  Presumably then, 
patent applications which provide more than such vague generalities will 
meet the minimal stated utility requirement.



	9. In vitro data clearly suffices to demonstrate practical utility

	The CAFC requires that an invention have a "practical" utility.  That 
practical utility may be based upon a variety of showings.  In Cross v. 
Iizuka, 224 USPQ 739 (Fed. Cir. 1985), the claims at issue were 
composition of matter claims drawn to imidazole derivatives which 
inhibited thromboxane synthetase, an enzyme involved in platelet 
aggregation.  The only data supporting the inventors' utility claims were 
derived from an in vitro assay.  The appellant Cross lodged several 
challenges to the utility finding.  Specifically, Cross attempted to 
shift the focus to the ultimate commercial use:

	Cross' position is that the stated purpose or the sole contemplated 
utility of the invention of Iizuka is to provide a novel class of 
compounds which provide "practical use" as "therapeutic medicines for 
diseases caused by Thromboxane A2."



id. at 743 (emphasis added).  The CAFC rebuffed this position, noting 
that a "fair reading" of the application disclosed utility in the in 
vitro microsome test milieu.  Id.

	Cross also attacked the probative value of the in vitro data:  

	Cross has contended that . . . the inhibition of thromboxane synthetase 
in human or bovine platelet microsomes is not sufficiently correlated to 
a pharmacological activity to be a practical utility.  In other words, 
Cross may be arguing that the minimum acceptable utility disclosed in an 
application claiming a compound having pharmacological activity must be 
directed to an in vivo utility in order to comply with the practical 
utility requirement of  101.



Id. at 744 (emphasis added).  The CAFC dismissed this position 
decisively, noting that in vitro testing "is the accepted practice in the 
industry."  Id. at 747.  The court elaborated:

	Moreover, in vitro results with respect to the particular 
pharmacological activity are generally predictive of in vivo test 
results, i.e., there is a reasonable correlation therebetween.  Were this 
not so, the testing procedures of the pharmaceutical industry would not 
be as they are."

Id. (emphasis added).

	Cross clearly endorses in vitro testing as probative of utility, when 
those tests are accepted by those skilled in the art.  This finding 
accords with earlier CCPA cases, which indicated that the USPTO's inquiry 
was to remain fixed upon what would be persuasive to one skilled in the 
art.  E.g., In re Jolles, 206 USPQ 885, 890 (CCPA 1980); In re Irons, 144 
USPQ 351 (CCPA 1965), In re Krimmel, 130 USPQ 215, 219 (CCPA 1961).  "In 
the final analysis, every utility question . . . must be decided on its 
own facts.  Relevant evidence is judged as a whole for its persuasiveness 
in linking observed properties to suggested uses."  Nelson v. Bowler, 206 
USPQ at 885.  It appears clear, then, that any doubt that an Examiner may 
express regarding the probative value of an in vitro assay should easily 
be overcome by an appropriate sworn declaration of one skilled in the art 
that the in vitro assay sufficed to establish the stated utility. 

	The position taken by appellant Cross -- and decisively rejected by the 
CAFC -- is the position taken by many Examiners of biotechnological 
inventions today.  However, the CAFC in Cross has made clear that such 
positions set too high a standard of utility.  Instead, the lesser 
showing of pharmaceutical activity -- by whatever experimental means 
generally acceptable to those skilled in the art -- will suffice for 
biotechnological inventions when that which is claimed is other than a 
human treatment or a composition which has a utility other than for human 
treatment, or a method of making such compositions.  The Examiners' 
persistence in reiterating positions rejected in Cross constitutes 
reversible error, adding nothing but cost and delay to the inventors' 
efforts to secure legitimate patent protection.  





	10. The USPTO's recent written decisions deviate from controlling case 
law

	Unfortunately, two recent decisions from the USPTO Board of Patent 
Appeals and Interferences demonstrate the USPTO's deviation from the CAFC 
consensus that utility is a minimal threshold and that only 
pharmacological activity need be shown.  Ex parte Maizel, 27 USPQ2d 1662 
(BPAI 1993) and Ex parte Deuel, 27 USPQ2d 1360 (BPAI 1993), were decided 
after the NIH engendered public debate regarding the utility requirement 
by seeking patent protection for cDNA sequences identified by human 
genome project researchers.  In both cases, the Board spontaneously 
raised the utility issue and stated that the inventors provided "no 
statement of use or utility" in the specification.  

	Deuel involved composition of matter claims drawn to a "purified 
prostate tissue-derived growth factor" having particular characteristics, 
including mitogenic activity.  The Board opinion noted that the inventors 
disclosed data from assays demonstrating that the claimed compound 
demonstrated "potent mitogenic activity against NRK cells."  27 USPQ2d at 
1361.  However, the Board noted that the cited references indicated that 
"the role of the growth factor in controlling cell division and 
interactions with other factors was not understood" at the time of filing 
and further that the significance of the factors was "unclear."  Id. at 
1364-65.  Another reference was quoted as suggesting that the mitogen has 
"potential to mediate some of the activities related to prostatic growth, 
development, and, perhaps hyperplasia and neoplasia."  Id. (emphasis 
added). These comments suggest that the USPTO is seeking information 
relating to the physiological mechanism of action and/or the ultimate 
therapeutic effect of the growth factor.  The USPTO does not refer to 
other potential uses for such proteins, including, e.g., making 
antibodies for screening for the protein as evidence of prostatic growth, 
or directly screening for cells which are responsive to the mitogen.  If 
such uses are supported in the specification, they should suffice to 
establish utility.

 	In Maizel, the claims were drawn to recombinant DNA encoding a 
recombinant human B-cell growth factor.  The Board opinion notes that the 
claimed growth factor "has the ability to maintain the growth of B cells 
in a culture medium."  Yet, the opinion questions whether the utility 
requirement was met because, at the time of filing, "the actual function 
of BCGF protein was unknown."  27 USPQ2d at 1668.  This objection was 
lodged despite the Board's simultaneous discussion of an obviousness 
rejection based in part on prior art disclosing the non-recombinant 
protein:  

	BCGF is described as a protein useful in bolstering the immune response 
and the knowledge of the protein would have motivated one skilled in the 
art to utilize recombinant DNA protocols to [produce recombinant 
protein].



Id. (emphasis added).  The Board's implicit conclusion -- that knowledge 
of the properties of the nonrecombinant protein can simultaneously render 
the recombinant protein obvious yet not be used by the inventors as 
evidence of utility -- seems somewhat contrary, absent some showing of 
significant sequence variation or of unexpected immune activity of the 
recombinant protein.  

	Thus, Maizel and Deuel are published examples of the current USPTO 
misinterpretation of the utility requirement.   Unfortunately, any patent 
attorney or agent working in the biotechnology area can augment these 
examples with anecdotes of Examiners refusing to accept evidence of 
pharmacological activity that is persuasive not only to those skilled in 
the art, but to those in the venture capital community which, 
commercialize such efforts. 

	Utility under 35 USC Section 101 is to be judged on a case-by-case 
basis, with no higher standard than that applied to the field of organic 
chemistry.  In chemical cases pharmaceutical utility is assumed for a 
number of molecules with a common core structure and an R group pendant 
off the core structure (where R as a substituent can be any alkyl, aryl, 
amino, etc. group), even though utility is only shown, if at all, for one 
of this family of compounds.  In fact, in many instances a mere statement 
of utility, speculated based upon structural analogy with a known 
compound which has the stated utility, is accepted as sufficient for 
organic chemicals.  In a similar way, given that sufficient utility is 
shown (or analogized) for one protein or polypeptide, pharmaceutical 
utility should be assumed for a family of proteins that share a common 
biological function or structural characteristic, for example, they bind 
to the same receptor or have a consensus sequence that is a receptor or 
antigen binding site, but that vary somewhat in their amino acid 
sequences.  	

	Alternatively, if the utility for the family of polypeptides is stated 
in the claims, the same favorable result is achieved, because if some 
structural variants encompassed by the claims turn out in fact to be 
inactive, they are not protected and neither the public nor the patent 
applicant is harmed.  The case law is clear that not all embodiments 
encompassed within a claim must be operable for the claim to be valid.  
See, e.g., Ex parte Mark, 12 USPQ2d 1904 (BPAI 1989). 

	The legal standard for utility is, and should be, the same in 
biotechnology as it is in organic chemistry because these scientific 
fields entail the same degree of predictability in extrapolating from one 
compound or protein to another.  For example, just as proteins have 
secondary and tertiary conformations that may impart some particular 
properties to the proteins, organic chemicals (e.g., small molecules) 
have stearic requirements that may impart certain properties to those 
molecules.  

	Instead of relying on Ex parte Deuel, 27 USPQ2d 1360 (BPAI 1993) for 
the standard of utility (i.e., whether the utility shown is clear), the 
Examiners are to rely on the case law relevant for utility in the organic 
chemistry field.  The law is settled that in the absence of any evidence 
or apparent reason why the claimed compounds do not possess the disclosed 
utility, the allegation of utility in the specification must be accepted 
as correct.  See, e.g., In re Kamak et al., 158 U.S.P.Q. 320 (CCPA 1968); 
In re Riat et al., 140 U.S.P.Q. 471 (CCPA 1964); Ex parte Krenzer, 199 
U.S.P.Q. 227 (POBA 1978).  

	The statements in the specification which can validly be challenged by 
the Examiner are those which are speculative [In re Eltgroth, 164 USPQ 
221 (CCPA 1970); In re Ruskin, 148 USPQ 221 (CCPA 1966)]; or abstruse, 
esoteric, incredible, or factually misleading [In re Citron, 139 USPQ 
516; 520 (CCPA 1963)]; which run counter to what would be believed to 
happen by the ordinary person [In re Pottier, 153 USPQ 407 (CCPA 1967)] 
or by those skilled in the art [In re Houghton, 167 USPQ 687 (CCPA 
1970)]; which are in a field of endeavor where little of a successful 
nature has developed or which has been the subject of much fraud [In re 
Oberweger, 47 USPQ 455 (CCPA 1940); In re Irons, 144 USPQ 35 (CCPA 
1965)]; or which are inconsistent with evidence presented by the Examiner 
[In re Corneil et al., 145 USPQ 697, 702 (CCPA 1965); In re Wooddy et 
al., 141 USPQ 518 (CCPA 1964)].  Thus, allegations in the specification 
of utility which are or border on the incredible in light of contemporary 
knowledge in the particular art must be substantiated by substantial 
evidence.  In re Ferens, 163 USPQ 609 (CCPA 1969).  Cancers are an 
example of where contemporary knowledge in the art has far advanced so 
that it is not per se incredible.  Ex parte Rubin, 5 USPQ2d 1461 (BPAI 
1987).

	The PTO has not been charged with the task of protecting the public 
against possible misuse of chemical patents.  The patent statutes do not 
give the PTO the right or duty to require proof that claimed compounds or 
other materials which are stated to be useful for pharmaceutical 
applications are safe, effective, and reliable for use with humans.  In 
re Krimmel, 130 USPQ 215 (CCPA 1961); In re Hitchings et al., 144 USPQ 
637 (CCPA 1965).    

	The requirement for clinical utility in biotechnology cases (including 
antibody technology) should be the same as that in organic chemistry 
cases, i.e., clinical utility should not be required if adequate animal 
tests are set forth upon which the reasonably skilled clinician would 
rely to decide if undertaking clinical trials would be fruitful.  In re 
Hartop et al., 135 U.S.P.Q. 419 (CCPA 1962).  In Hartop the CCPA defined 
"standard experimental animals" as "whatever animal is usually used by 
those skilled in the art to establish the particular pharmaceutical 
application in question."  Id. at 426, footnote 14.  Further, the species 
of animal to be employed for testing depends on what animal is ordinarily 
used by those skilled in the art to establish the particular utility in 
question.  In re Krimmel, 130 U.S.P.Q. 215 (CCPA 1961).  The law merely 
requires disclosure of an activity coupled with knowledge as to the use 
of the compound for that activity to satisfy 35 U.S.C. Section 101.  In 
re Bundy, 209 U.S.P.Q. 48 (CCPA 1981).  

	Indeed, inhibition of growth of a transplanted cancer strain in rats by 
an organic molecule has been held to be sufficient utility to meet the 
requirements of 35 USC Section 101 [In re Ross et al., 134 USPQ 321 (CCPA 
1962); In re Bergel et al., 130 USPQ 206 (CCPA 1961); Ex parte Westphal 
et al., 139 USPQ 378 (POBA 1962)].  Furthermore, even in vitro tests can 
raise a presumption of in vivo usefulness of the claimed compounds if 
there is a showing of a reasonable correlation between such activities.  
See, e.g., Cross et al. v. Iizuka et al., 224 U.S.P.Q. 739 (CAFC 1985); 
Ex parte Hirsch, 34 P.T.C.J. 588 (BPAI 1987).  

	The same standards as set forth above should be applied equally for 
biotechnology inventions.

	Two other recent decisions by the PTO Board, Ex parte Balzarini (1991 
Pat. App. LEXIS 37, March 1991) and Ex parte Brana (apparently 
unpublished), demonstrate why it has proven increasingly difficult to 
convince the PTO that a biotechnological invention satisfies the 
usefulness criterion of the patent laws.  In these cases, the Board of 
Appeals affirmed the rejection of patent applications claiming inventions 
useful in the treatment of AIDS and cancer, respectively, primarily 
because the in vitro or in vivo data submitted to the PTO did not 
establish that the claimed inventions were useful.

	In Balzarini, where the applicants claimed pharmaceutical compositions 
comprised of two dideoxynucleotides and their use to treat retroviral 
diseases and to inhibit replication of HIV in human cells, the Board 
agreed with the Examiner that the applicants had not presented any 
persuasive evidence establishing that their in vitro data was predictive 
of the in vivo activity of their claimed compositions as of 1987.  In 
fact, an article cited by the Examiner showed that one antiviral agent 
active against HIV in vitro proved ineffective and harmful in clinical 
trials, calling into question the value of in vitro data in selecting 
prospective AIDS therapies.  The Board stressed that the claims were not 
rejected because the utility was incredible.  In fact, the in vivo 
activity of AZT left open the possibility that other antiviral agents 
could be useful in the treatment of AIDS if shown to work in vivo.  The 
Board dismissed as irrelevant the fact that the PTO had previously 
allowed patents claiming AIDS therapies on the basis of in vitro data 
alone.  

	In Brana, the application as originally filed disclosed the in vitro 
activity of the claimed chemical compounds (diones) against unspecified 
human tumor cells.  It also referred to a reference which describes a 
computer analysis of the anti-tumor activity of structurally related 
compounds in leukemia in vivo murine assays used by the National Cancer 
Institute (NCI).  During prosecution of their application, the inventors 
in Brana submitted data to the PTO showing the in vivo activity of 
certain of their compounds in a leukemia murine assay, as well as the in 
vitro activity of other claimed compounds against human colon and 
laryngeal cancer cells.

	The Board in Brana affirmed the rejection of the Examiner on several 
bases:  the application did not disclose a specific tumor or disease 
against which the claimed compounds were shown to be useful in vivo; the 
in vivo murine screens only identified compounds potentially useful for 
clinical study and did not establish that any of those compounds worked 
clinically; the in vivo and in vitro data submitted by the applicants 
subsequent to filing could not compensate for a failure initially to 
describe a practical utility; and three prior art references called into 
question the value of murine assays relied on by the applicants.

	Brana is now on appeal to the Court of Appeals for the Federal Circuit, 
in which the applicants claim that the in vitro data included in their 
application as filed and the in vivo data for related compounds generated 
in murine assays recognized by the NCI established utility.  The PTO is 
arguing that the evidence of record established that there was no 
correlation between the murine screening test relied on by the applicants 
and the real world pharmacological activity.  The Federal Circuit heard 
oral argument in January and should render a decision sometime this year.  
Brana presents the Federal Circuit with an opportunity to stress that an 
inventor need not establish the safety and efficacy required under law by 
the FDA to market a drug.  Further, Brana is directed to organic 
chemicals, not to a biotechnology product, indicating that Group 1200 is 
starting to take the stricter stance of Group 1800 as regards utility 
rejections.



	11. Conclusion

	Both law and sound policy dictate that the USPTO re-evaluate its view 
of the utility requirement and examine biotechnology patents in 
accordance with controlling case law.  

	The underlying policies of the patent system require that USPTO 
examining practice reward the inventors as soon as possible for 
discovering and disclosing the pharmaceutical and pharmacological 
activities of compounds, as opposed to requiring proof of ultimate 
therapeutic utility which the USPTO tends to assert is the sole basis for 
patentability of potential therapeutic agents.  The decisions also 
encourage early disclosure of such discoveries to stimulate research and 
development of therapeutic agents.  The USPTO's contrary requirement of 
clinical efficacy to demonstrate utility forfeits these benefits and 
instead favors secrecy, delayed filings, prolonged term of prosecution 
and later disclosure of inventions.  

	We assert that the utility case law discussed above clearly establish a 
low evidentiary threshold for meeting the utility requirement of Section 
101.  The decisions mark a clear distinction between pharmaceutical and 
pharmacological activities and therapeutic uses, which the USPTO seeks to 
ignore.  Specifically, the USPTO should not interpret Brenner as carte 
blanche authority for requiring clinical or in vivo data for every 
biotechnological invention.  Instead, the USPTO should determine the 
stated utility of the claimed invention, and not require evidence of 
ultimate therapeutic utility in humans unless the claims specifically are 
drawn to such utility.  To do otherwise is to repeat the arguments of 
appellant Cross, which the CAFC rejected in Cross v. Iizuka.  

	As the USPTO must follow the case law set forth by the CAFC, the 
Examiners should be directed to study Nelson and Cross and to conduct 
their utility determinations accordingly.  

	The USPTO Notice for this hearing raises a number of specific questions 
concerning utility and we respond to these questions here.



B. Question 1:  Do you believe that the legal standards governing the 
requirement for identification of practical or substantial utility under 
35 U.S.C.  101, as developed by the Federal courts, are sufficiently 
clear and appropriate for biotechnological inventions?  If not please:

	(a) identify aspects of the law that you believe lack clarity or are 
inappropriate, 	citing relevant cases; and

	(b) identify changes to legal standards you believe would be desirable.


	As discussed in the previous Section, we believe that the legal 
standards established by the Federal Courts governing the requirement for 
identification of "practical utility" under 35 U.S.C. Section 101 are 
sufficiently clear and appropriate for biotechnology inventions.  We 
submit that these legal standards are well defined and require a minimum 
of proof to establish practical utility.  The concern over the utility 
requirement for patentability should not be directed to the clarity of 
the legal standards, but rather the implementation of these standards by 
the USPTO.  Thus, we view the utility issue as one of mis-application of 
the law rather than incorrect legal precedent.
	To resolve the utility issue, we propose that the patent bar be offered 
the opportunity to understand the content of the Examiners' education by 
the USPTO on such legal standards and to positively contribute to the 
content of this education.  Accordingly, we offer a practical and 
effective approach to working with the USPTO and achieving the principal 
goal of our nation's patent system: promotion of science and innovation.

	We commend the USPTO for its recent efforts to increase the number of 
qualified Examiners in the biotechnology area.  Consequently, the 
Examiners have evidenced a very positive trend in the technical 
understanding of inventions that less than two decades ago were beyond 
dreams.  The biotechnology industry is a clear bright spot for our nation 
and its competitive endeavors.  As we approach the next century, our 
patent system must continue its role of protecting innovative solutions 
to a variety of unique problems.

	The single purpose of our patent system is to promote science and 
innovation.  Accordingly, the USPTO has expressed the laudable desire to 
promote research, development and commercialization of technological 
advances in biotechnology.  On this point, the USPTO, and our nation's 
inventors, actually share common ground.  It is the choice of pathways to 
reach this common ground that creates a problem which threatens to 
undermine the recent positive trends of the USPTO and erode the faith 
that those inventors (and their investors) have in rewarding advances in 
biotechnology.

	The mis-application of these legal standards governing practical 
utility is exemplified by the Notice for this hearing authored by the 
USPTO.  The notice prominently states that the USPTO is interested in 
ensuring that the practical utility requirement is governed by standards 
that promote research, development and commercialization of technological 
advances in biotechnology.  It must be absolutely clear that this 
laudable interest is of secondary importance.  This desire does not grant 
the USPTO the right to create policy.  Of primary importance to the USPTO 
is fulfilling its Constitutional obligation to promote science and the 
useful arts by following and implementing the law decided by the Federal 
Courts and legislature.  Only when an issue is one of first impression, 
and no direction is otherwise provided by the Courts, does the USPTO have 
the right to extrapolate from the decisions otherwise rendered by the 
Courts.  By not adhering to the law as observed by the inventors and the 
patent bar, the USPTO creates confusion in the process of securing a 
patent which can lead to a variety of deleterious consequences: notably, 
the trust and security inherent in the patent system is weakened and our 
competitive opportunities as a nation are threatened.

	The Notice also raises an example of practical utility in the 
patentability of nucleotide sequences that are produced incident the 
expression of a human gene.  There is a "concern" as to whether the 
sequence or the gene must be characterized as to its physical, biological 
or physiological significance in order to establish practical utility.  
This statement misplaces the focus of the problem.  First, the USPTO must 
implement the decisions of the Federal Courts and not respond to 
perceived "concerns" by attempting to create policy.  Second, the test of 
utility promulgated by the Federal Courts is not "physical, biological or 
physiological significance."  Almost any utility satisfies the statutory 
requirements.  Third, the technical presumption in this statement that a 
sequence has no characterization as to its biological significance is not 
scientifically accurate.  There is inherent biological activity, and 
hence practical utility, in these inventions.  In its own example, the 
USPTO assumes that the only utility of a sequence or gene fragment may 
lie in the use of the fragment for the production of a protein.  This is 
in error.  Again, the legal threshold for practical utility is very low 
such that the practical utility of a gene sequence can be met when the 
inventor establishes that the discovered sequence can be used as probes 
for genetic screening, markers for specific human chromosomes, targets 
for regulation in the case of promoters or enhancing elements, or PCR 
primers for genetic fingerprinting.  Absent evidence to the contrary, 
such uses should establish practical utility.

	The Notice analogizes these policy-tainted concerns to the development 
of the chemical arts practice before the USPTO.  It is presumed that the 
patentability of intermediate compounds can depend upon an unidentified, 
yet commercially promising final product or compounds claiming 
therapeutic utility based only on findings of in vitro biological 
activity.  The Federal Courts have made clear that commercial 
significance is not the standard of utility.  Neither is in vivo 
therapeutic activity the standard of utility.  There is no reason for 
biotechnology, as exemplified by a DNA sequence, to have a different 
standard of determining utility than traditional chemistry.

	The mis-application of these legal standards is also exemplified during 
the examination of the inventions themselves.  By shifting the 
requirements determining practical utility from the statutory minimum 
threshold to a USPTO defined "real world"  application (typically in the 
form of a commercially viable invention), the USPTO has raised the 
standards from one of utility to proving efficacy.  The legal standards 
for establishing practical utility are, and should be, a low threshold.  
To equate practical utility with a complete understanding of commercial 
utility improperly raises these standards.

	In order to continue the successful momentum that the USPTO has 
recently established, the common ground between the inventors and the 
USPTO must be expanded.  We must have some fundamental agreement as to 
the choice of paths which will implement our common goal of ensuring that 
patentable inventions receive the guarantees and benefits earmarked to an 
issued patent.  We must address not only the technical expertise of the 
Examiners, but also their legal education and guidance necessary to apply 
the legal standards established by the Federal Courts to their everyday 
duties.

	We highly recommend the attainable goal of having the USPTO focus 
primarily on the implementation of the standards set forth by the Federal 
Courts and we recommend at least one option to achieve this goal.  We 
suggest that the USPTO open the initial and continuing education program 
of USPTO Examiners to the public, so that the basis of the Examiner's 
legal education is known to the public.  This should expand the common 
ground between the USPTO and the inventors by providing a consensus 
starting point for legal arguments to be applied to the facts of the 
invention under examination.  

	By allowing the public to understand the legal education foundation 
taught by the USPTO, the public, and in particular our nation's 
inventors, will have a better appreciation of the USPTO's legal views.  
Thus, if the inventors wish to deviate from the common ground, then they 
will do so knowing the probable consequence of their action, namely, the 
appeal of the Examiner's decision in order to have the Federal Courts 
rule on the practitioner's interpretation of the law or an issue of first 
impression.  

	Furthermore, there are clearly many advantages to establishing a legal 
education for the Examiners which reflects a general consensus of both 
the USPTO and the patent bar, as representatives of the inventors.  
Should fewer appeals result as a consequence, the savings in economic and 
inventive power alone justifies the effort.  Accordingly, we recommend 
allowing the patent bar to cooperate in the education of the USPTO corps 
by providing comment on the Federal Court case law.

	

C. Question 2:  Do you believe that the PTO is correctly and uniformly 
applying the legal standards governing the requirement for identification 
of practical or substantial utility under 35 U.S.C.  101 for 
biotechnological inventions?  If not, please:

	(a) identify the basis for your belief that the PTO is not correctly or 
uniformly 	applying the legal standards governing practical utility;

	(b) identify the changes you would like to see the PTO make in its 
application of 	this requirement during examination of patent 
applications; and 

	(c) discuss the implications of such changes, not only with respect to 
patent 	applicants seeking protection but also for scientific research 
and development in 	general.

	The standards for meeting the requirement for practical utility ,under 
35 U.S.C. Section 101, for biological inventions directed to materials 
for use in combatting human diseases and disorders are legal standards 
which are interpreted by the courts.  The USPTO is obligated to follow 
these decisions and especially the decisions of its reviewing court, the 
CAFC.  The USPTO is not a legislative body but is empowered only to 
administer the laws as enunciated by its reviewing court, the CAFC.  In 
their notice, the USPTO sets forth the following argument to support its 
own review of inventions for use in human therapy.  

	...important public policy justifications for the USPTO to review 
operability of inventions to be used to treat human disorders.  A patent 
provides the public with a high quality technically accurate disclosure 
of a new, useful and nonobvious invention.  However, with the imprimatur 
of the Federal Government, a patent can also effect the commercial 
prospects of the invention in question and can raise or lower 
expectations of those afflicted with the illness the invention is 
designed to treat.

While we recognize the importance of the USPTO's review of operability 
of inventions, such review must be conducted in accordance with 
established legal principles.  The USPTO has neither the right nor the 
authority to disregard the well-settled legal standards for reviewing 
utility.  Furthermore, the USPTO should heed its own advise and recognize 
that the commercial prospects of an invention can be significantly 
impaired by inappropriate USPTO action.  Delays in prosecution caused as 
a result of having to address rejections premised on mis-application of 
the law can be tremendously burdensome to biotechnology companies, many 
of which have their access to capital controlled by the value of their 
patent portfolio.

	Another basis for our belief that the USPTO is not correctly and 
uniformly applying the utility standards is that many Examiners consider 
that the practical utility standards of the U.S. statute are only 
satisfied if the material in question can be useful in human therapy.  
This is not the case.  As seen from the CCPA decisions in In re Krimmel, 
292 F.2d 948, 130 USPQ 215 [CCPA 1961], In re Bergel, 292 F.2d 955, 130 
USPQ 206, and In re Dodson, 292 F.2d 943, the disclosure that a compound 
exhibits some useful pharmacological property is sufficient to satisfy 
the utility requirements for this compound under the statutes.  As stated 
by the CCPA In re Bergel, supra, in holding that the disclosure that a 
compound inhibits transplanted tumors in rats or mice is sufficient 
utility, the CCPA stated:

	In our opinion that achievement is sufficient to satisfy the express 
language of Section 101, and is in harmony with the basic constitutional 
concept of promoting the progress of science and the useful arts. 130 
USPQ 206, 209

	The CAFC in Cross v. Iizuka, 224 USPQ 739 [CAFC 1985] and in Nelson v. 
Bolar. 206 USPQ 881 (CCPA 1980) reiterated the doctrine that is not 
necessary that a compound be therapeutically effective in man in order 
for the compound to meet the utility requirements of  U.S. patent law.  
All that is required is that the compound be shown to exhibit biological 
activity.  In reiterating the doctrine in Bergel, supra, Dodson, supra, 
the CAFC in the Cross case, supra, stated: 

	We perceive no insurmountable difficulty, under appropriate 
circumstances, in finding that the first link in the screening chain, in 
vitro testing, may establish a practical utility for the compound in 
question.  Successful in vitro testing will marshall resources and direct 
the expenditure of effort to further in vivo testing of the most potent 
compound, thereby providing an immediate benefit to the public analogous 
to the benefit provided by the showing of an in vivo utility.  (id. at 
748) (Emphasis Added)

	In Nelson v. Bolar, the CAFC specifically defined practical utility as 
follows:

	'Practical utility' is a shorthand way of attributing 'real-world' 
value to the claimed subject matter.  In other words, one skilled in the 
art can use a claimed discovery in a manner which provides some immediate 
benefit to the public.



	Knowledge of the pharmacological activity of any compound is obviously 
beneficial to the public.  It is inherently faster and easier to combat 
illnesses and alleviate symptoms when the medical profession is armed 
with an arsenal of chemicals having known pharmacological activities.  
Since it is crucial to provide researchers with an incentive to disclose 
pharmacological activities in as many compounds as possible, we conclude 
that adequate proof of any such activity constitutes a showing of 
practical utility.  206 USPQ 883

	This definition certainly does not require the USPTO to determine 
whether the material being claimed is effective and safe for human 
therapy.  All that is required to satisfy the utility requirements of the 
patent law is that material have a pharmacological activity.  No more is 
needed.



	Question 2(b): Identify changes you would like to see the USPTO make in 
its 	application of this requirement during examination of patent 
applications.

	We would like to see better education of the Examiners concerning the 
law as regards to utility and what is required to satisfy the patent 
standards.



	Question 2(c):  Discuss the implications of such changes, not only with 
respect to 	patent applications seeking protection but also for 
scientific research and 	development in general.

	When the USPTO maintains  standards of practical utility which differ 
from that of the courts, unnecessary appeals result.  This is very time 
consuming and expensive process and is especially hard on companies with 
little capitalization.   Through an examining corporation better educated 
in the principles governing practical utility, prosecution of 
applications can proceed more expeditiously.  Additionally, resources 
that currently must be devoted to overcoming rejections based on 
misapplication of the law can be used elsewhere.

	In accordance with well settled court decisions, practical utility need 
not be based upon the ultimate use of a compound as a therapeutic but can 
be based on the finding that the compound has pharmacological activity. 
The policy basis for this minimum standard  for meeting the practical 
utility requirements expressed in these court decisions is as follows:

	1. patents promote the development of therapeutic agents. Through the 
granting of patents investment is stimulated for developing patented 
compounds with therapeutic activity;

	2. investors are more likely to provide financing for development of 
therapeutic agents which have patent protection;

	3. patent protection increases dissemination of information concerning 
therapeutic agents to public; and

	4. patents accelerate the dissemination of information to clinicians 
for clinical testing which aid in developing the patented compound as a 
therapeutic agent.



D. Question 3:  Do you believe legal standards and examining practices 
in foreign systems to assess the patent eligibility of biotechnological 
invention (e.g., those governing industrial applicability and exclusions 
from patentability) provide a better framework than is available in the 
United States?  Please identify desirable and undesirable practices of 
foreign offices, particularly in the EPO and Japan.

	The utility requirement in the United States is the sole requirement 
for patentability that addresses the contribution made by the patented 
subject matter to the well-being and progress of the society as a whole, 
i.e., the invention must have "real world" value.  This standard is 
addressed in Europe and Japan by requiring that the patented subject 
matter be "susceptible of industrial application."  In addition, the 
European Patent Convention, in Article 53, excepts from patentability 
"inventions the publication or exploitation of which would be contrary to 
ordre publique or morality" and also excepts from patentability plant or 
animal varieties or essentially biological processes for production of 
plants or animals.  Japanese patent law also requires that inventions be 
useable in industry and excludes patentability for inventions liable to 
be contrary to public order, health or morals.  In neither Japan nor 
Europe are methods for treating the human body considered an industrial 
application.  However, patents may be obtained for the use of 
compositions (whether the compositions are old or new) in therapeutic 
regimens.

	It is generally considered that the standard of industrial 
applicability is a much lower hurdle than the standard of utility.  
Indeed, it is common experience that claims rejected in a case pending 
before the USPTO as lacking utility (often, however, under the guise of 
assertedly failing to provide an enabling disclosure) will be considered 
to meet the standard of being susceptible to industrial applicability 
when examined in the context of a PCT application by a U.S. Examiner 
(often the very same Examiner who has authored the utility/enablement 
rejection).  Thus, data routinely rejected in the United States are 
routinely accepted in Europe and Japan, a scenario that does not bode 
well for American the inventors in a global economy.

	The many problems in attempting to apply the standard of utility (as 
opposed to a standard of susceptibility to industrial application) are 
only exacerbated by the dictum in Brenner v. Manson, 383 U.S. 519; 148 
USPQ 689 (S. Ct. 1966) that the invention must be developed to "where 
specific benefit exists in currently available form" that benefit being 
"derived by the public."  Who is the public?  Does the public include 
that subset of the population actively engaged in research?  And what is 
"currently available form"?  Eventually, every member of the public will 
potentially benefit from the efforts of that subset engaged in research; 
is that benefit sufficiently direct that an immediate benefit to the 
research community can be considered a "currently available" benefit to 
the public?

	There is no need to answer any of these questions where a standard of 
industrial application is applied.

	This distinction can perhaps best be illustrated by an example.  Claims 
are directed to concededly new and unobvious compounds which tightly bind 
a known receptor present on a subset of white blood cells.  Since the 
cells on which the receptor appears are often useful in conducting 
research to investigate the nature of human disease, the compounds are 
clearly susceptible of industrial applicability since they can be used to 
purify these cells for a researcher to study.  The inventor further 
states that the compounds can be used to target these cells in 
therapeutic protocols.

	There is no question that if sufficient proof were offered to show that 
this latter use had therapeutic value, the public would have a currently 
available benefit.  However, showing that this is the case is quite 
difficult, and the inventor of the claimed compounds is a basic 
researcher not able personally, or through the employing research 
institution, to do the necessary animal and clinical studies that would 
provide the therapeutic parameters and proofs that seem to be required.  
On the other hand, of course, commercial entities which may have this 
capability will not be interested in pursuing the matter unless they can 
be assured that the compounds themselves are protected.  If the standard 
of industrial applicability were applied, the use of these compounds for 
purifying the relevant cells for research purposes would be adequate to 
support their patentability.  In the face of a utility requirement, the 
questions raised above now introduce a complication -- is the provision 
of compounds that are, at this moment, of interest only to the research 
community a currently available public benefit?

	In short, the standard of industrial applicability removes the value 
judgment dimension of the utility requirement.  It is easy to apply.  If 
the material can be used for something that someone is being paid to do 
it meets the standard.  Substitution of this standard for that of utility 
would have the benefit of providing clarity in the law as well as 
removing an unnecessary barrier to the progress of research in 
biotechnology.

	On the other hand, the requirement that the claimed subject matter not 
be contrary to public morals can introduce its own complications.  The 
presence of this provision in the European patent law has already caused 
considerable mischief in the form of oppositions to patents granted on 
transgenic animals.  The multiple oppositions filed with respect to these 
patents have come not from competing commercial interests but from animal 
rights groups and others with particular political agendas.  There is 
considerable concern in Europe that this provides an inappropriate 
platform for such agendas.  The recent formation by the EPO of a special 
panel whose approval will be required in addition to the decision of the 
Examining Division for the grant of a patent on a transgenic animal may 
be in response to such pressures.  It would clearly be undesirable to add 
such a provision to the statute in the United States.

	The third clear difference between U.S. and Japanese/European law is 
the exclusion from patentability of methods of treating the human body.  
The effects of this prohibition are minimized by the ability to obtain 
protection for medical use of compositions.  It will come into play only 
when the method of treatment involves manipulative steps only.  This does 
not appear to constitute a major issue at this time.

	In summary, it would be helpful to substitute for the utility 
requirement a standard of industrial applicability, but without the 
accompanying provisions which exclude from patentability inventions 
contrary to the public order.





Operability10

A. Executive Summary

	We perceive the issues surrounding the requirements for establishing 
proof of operability for human therapeutic inventions as indicative of 
the USPTO's recent trend towards legislating and setting policy for the 
biotechnology industry.  Fortunately, an era in our nation's history, 
prior to the formation of the Food and Drug Administration ("FDA") and 
during which time unscrupulous charlatans used the patent system to pawn 
patented "medicines" off onto an unsuspecting public, no longer exists.  
With the formation of the FDA and the understanding that this agency, and 
not the USPTO, is responsible for ensuring that all therapeutics must 
satisfy specific and well-defined criteria for both safety and efficacy, 
the USPTO must ignore the altruistic, yet absolutely mis-placed, desire 
to "protect" the public.  As will be delineated below, by not issuing 
legitimate patents directed to therapeutic inventions based upon a 
perceived lack of proof of operability, the USPTO participates in both 
avoiding the Constitutional mandate to promote the arts and useful 
sciences, as well as the weakening of an industry important to the 
competitive efforts of our nation.

	The USPTO notice sets forth three questions and we respond to these 
questions as follows:

	In response to Question 1, we believe that the legal standards 
governing proof of operability for inventions relating to treatment of 
human disorders under the utility requirements of 35 U.S.C. Section 101 
and under the enablement requirement of 35 U.S.C. Section 112, first 
paragraph, are sufficiently clear and appropriate.  We believe that the 
legal precedent in this area is both concise and crystalline: an 
invention which has a utility is operable, and only one objective need be 
shown in order to establish operability.

	In response to Question 2, we do not believe that the USPTO is 
correctly and uniformly applying the legal standards governing proof of 
operability during examination of patent applications claiming inventions 
for treatment of human disorders.  We believe that the USPTO has 
effectively co-opted the duties of the FDA in setting forth an unwritten 
but de facto requirement for proof of "efficacy" of a claimed 
therapeutic; anecdotal evidence describing the types of improper 
rejections routinely issued by the USPTO in the area of "operability" is 
presented.

	In response to Question 3, we believe that the legal standards and 
examining practices in foreign systems, particularly in Europe and Japan, 
often provide a better framework than is available under the current 
approach of the USPTO for assessing patentability questions related to 
operability of inventions directed to the treatment of human disorders.  
In particular, we believe that the standards in foreign systems, unlike 
those of the USPTO, are clear in their recognition that clinical data is 
not required for establishing proof of operability.

	We first present an analysis of relevant legal decisions, including the 
important Court of Customs and Patent Appeals' decision of In re Anthony 
which set the tone for judicial recognition of the different roles of the 
FDA and the USPTO.



B. Case Law Review

	The USPTO Notice for this hearing11 includes a summary of the cases law 
on operability as a preface to the questions which follow.  BIO here 
responds to this case law summary.  
	The requirement that an invention be "operable" or "useful" to be 
patentable has been part of the patent law of the United States since the 
Patent Act of 1790.  Indeed, the Constitutional grant of authority to 
Congress to legislate with respect to patents requires that the 
legislation promote progress of the "useful" arts.  The requirement is 
now embodied in Section 101 of the Patent Statute, 35 U.S.C. Section 101, 
which requires that an invention be "new and useful" to be patentable, 
and Section 112, Paragraph  1, of the Statute, 35 U.S.C. Section 112, 
paragraph 1, which requires that a patent application describe a claimed 
invention so that a person of skill in the pertinent art on the effective 
filing date of the application would know "how to use" the invention 
without need for undue experimentation.  If an invention is inoperable, 
how to use it cannot be described.

	In Mitchell v. Tilgham, 86 U.S. (19 Wall.) 287 (1873), the Supreme 
Court defined the "operability requirement" in holding that a new product 
or process, to be patentable, must be shown to be "capable of being used 
to effect the object proposed" in a patent application.

	Several courts have interpreted this "operability" standard, each court 
concluding that only one proposed object need be shown to be effective to 
satisfy the operability requirement.

	In Raytheon Co. v. Roper Corp., 220 USPQ 592 (CAFC 1983), the claimed 
invention was directed to a "common capacity" oven capable of 
conventional thermal cooking, microwave cooking, and pyrolytic 
self-cleaning. For determining whether a claimed invention had utility 
(i.e., was operable), the Court set out a two-part test: (1) interpret 
the clans to define the invention to be tested for utility; (2) determine 
whether that claim requires a means for accomplishing an unattainable 
result. The court stated "When a properly claimed invention meets at 
least one stated objective, utility under section 101 is clearly shown."  
Id. at 1598.

	In Stiftung v. Renishaw plc, 20 USPQ2d (CAFC 1991), the claimed 
invention was directed to "touch-trigger" probes used in 
coordinate-measuring machines.  The court further explained that an 
invention "need not be the best or the only way to accomplish a certain 
result, and it need only be useful to some extent and in certain 
applications." Id. at 1100.  In that case, the court reversed the trial 
court's finding of lack of utility because the court was able to find a 
utility for the claimed invention as presented.

	A rejection based on "lack of proof of therapeutic utility" of chemical 
process and composition claims was reversed by the court in In re Gazave, 
154 USPQ 92 (CCPA 1967).    The court in that case recognized that "the 
amount of evidence required depends on the facts of each individual 
case." Id. at 96.  However, the court also made it clear that the burden 
rests on the examiner to present "evidence inconsistent with the 
assertions and evidence of operativeness presented by" the applicant. Id. 
at 96.  The court stated:  

	Appellants' discovery here does not appear to us to be of such a 
speculative, abstruse or esoteric nature that it must inherently be 
considered unbelievable, incredible, or

	factually misleading.  Nor does operativeness appear unlikely or an 
assertion thereof appear to run counter to what would be believed would 
happen by the ordinary person in the art.  Id. at 96.	

	The decision in Gazave is consistent with the court's decision in In re 
Chilowsky, 109 USPQ 321 (CCPA 1956).  In Chilowsky, the court reversed 
and remanded a rejection based on operability of claims directed to a 
method and apparatus for extraction and utilization of thermal energy 
resulting from atomic decomposition of uranium.  The court stated "If the 
alleged operation seems clearly to conflict with a recognized scientific 
principle...the presumption of inoperativeness is so strong that very 
clear evidence is required to overcome it." Id. at 325.  However, the 
initial burden of demonstrating the "recognized scientific principle" was 
placed on the patent examiner and could not be sufficiently supported by 
the examiner's "mere recitation of personal experience or anecdotal 
observations."

	The admonitions of the court in the Chilowsky case apply with equal 
force to the biotechnological and human therapeutic arts:

	Applicants for patents in this field, as in all others, are entitled to 
specific information as to the grounds on which their applications are 
rejected and should not be met with anything in the nature of a blanket 
rejection based on the comparatively recent development of the art and 
the difficulty which has been experienced in producing commercial 
devices. Id. at 108.

	The Patent Office notes in the Notice of Public Hearings, 59 Federal 
Register 45267 (September 1, 1994) at 45268, that rejections of claimed 
inventions for inoperability, and therefore lack of utility under 35 
U.S.C. Section 101, often are accompanied by rejections under 35 U.S.C. 
Section 112, paragraph 1, that assert that the specification is 
non-enabling.  "Operability" is considered to be an element of the 
disclosure requirement under Section 112, Paragraph 1, because the 
inventor is required to disclose, inter alia, how to use the claimed 
invention.  

	In re Ziegler, 26 USPQ2d 1600 (CAFC 1993), concerned an application 
with an alleged effective filing date more than forty years before the 
court's decision.  In the decision, a rejection of claims directed to 
solid, plastic polypropylene "capable of being pressed into flexible 
foils and sheets" at certain temperatures was upheld.  In the case, the 
applicant attempted to sustain a claim priority under 35 U.S.C. Section 
119 from a German patent application in order to overcome a prior art 
rejection under 35 U.S.C. Section 102(e).  The court held that priority 
could not be claimed from the German application because Section 119 
requires, for such a claim, that the German application have satisfied 
the requirements of Section 112, paragraph 1, with respect to the claims 
at issue and the German application failed to do so because it failed to 
satisfy the "how to use" prong of the enablement requirement of Section 
112, paragraph 1.  This was found to be the case because no "practical 
utility" for the claimed invention was disclosed in the German 
application.  The case had a complex procedural ancestry, with important 
facts established by collateral estoppel due to earlier proceedings, and 
turns on the state of the art in the polypropylene field in the early 
1950's.  Basically, the court held that, under the facts at hand, the 
examiner had reason to assert that the claimed invention lacked utility 
and the applicant could not overcome the examiner's assertion.

	In In re Marzocchi, 169 USPQ 367 (CCPA 1971), the court reversed a 
rejection under 35 U.S.C. Section 112, paragraph 1, of claims directed to 
a technique for improving adhesion characteristics between glass fibers 
and vinyl polymer resins.   Operability was not at issue in the case, but 
a rejection based on Section 112, paragraph 1, was.  As indicated above, 
Section 112, paragraph 1, incorporates the operability requirement as a 
matter of logic and may be cited as a basis for a rejection for 
inoperability.  The case is important for the direction it provides the 
Patent Office in handling rejections under Section 112, paragraph 1.  The 
court said:

	... it is incumbent upon the Patent Office, whenever a rejection on 
this basis [35 U.S.C. Section 112, paragraph 1] is made, to explain why 
it doubts the truth or accuracy of any statement in a supporting 
disclosure and to back up assertions of its own with acceptable evidence 
or reasoning which is inconsistent with the contested statement. Id. at 
1073.

The truth and accuracy of statements in a patent application are 
presumed unless the Patent Office can establish that the statements are 
otherwise.

	The decision in Marzocchi establishes that mere allegations of 
insufficiency or statements of disbelief regarding an applicant's data 
and issuing from the Patent Office are insufficient to render the 
applicant's  "presumptively accurate" disclosure statutorily deficient.

	Further affirming the duty on the Patent Office to provide reasoned, 
technically based support for its challenges to the utility and 
disclosure requirements of a patent application, the court in In re 
Bundy, 209 USPQ 48 (CCPA 1981), stated:

	The PTO must have adequate support for its challenge to the credibility 
of applicant's statements as to utility.  Only then does the burden shift 
to [applicant] to provide rebuttal evidence. Id. at 51.
	The claims in the Bundy application were directed to a new series of 
analogs of naturally-occurring prostaglandins.  Despite the fact that 
"[no] specific examples of dosages for human use or even animal tests are 
given for the novel compounds per se," id. at 51, the court held that it 
did not consider "that one of ordinary skill in the art would not know 
how to use these novel analogs to determine the specific dosages for the 
various biological purposes." Id. at 51.  One factor mentioned by the 
court in arriving at its decision was that the claims at issue were 
directed to the compounds and not to their therapeutic use. 

	In addition, that court recognized that:

	Early filing of an application with its disclosure of novel compounds 
which possess significant therapeutic use is to be encouraged. Id. at 52.


	Such disclosure will tend to be delayed if the Patent Office, as it has 
been wont to do in recent years, routinely requires applicants for 
patents on inventions involving treatment of human disorders to produce 
late-stage clinical data to establish that the inventions are operable.

	The claimed invention at issue in In re Fouche, 169 USPQ 429 (CCPA 
1971), was a class of compounds having pharmaceutical utility due to 
their antidepressant, neuroleptic, and tranquilizing properties.  The 
court affirmed a rejection of Claim 1 under Section 112, paragraph 1, 
because the applicant failed to provide any evidence to overcome what the 
court viewed as reasonable doubts of the Patent Office that some 
compositions within a Markush group could be used for the alleged 
therapeutic purposes.  

	It has become a common practice for the Patent Office to require 
applicants to submit human clinical data to overcome rejections for 
inoperability of claims to methods of using compositions to treat human 
disorders.  In In re Langer, 183 USPQ 288 (CCPA 1974), the court held 
that clinical testing in humans would not be required to overcome a 
rejection for lack of utility based on references describing tests in 
vitro. In that case, the claims were directed to compositions and methods 
of using a new source of stannous tin for incorporation in dentifrices.  
The claims were rejected under, inter alia, Section 112, paragraph 1, for 
failing to provide clinical data and Section 101 for lack of utility.  
The examiner asserted that the compositions should be subjected to 
clinical trials for two years to establish clinical effectiveness.  The 
court stated:

	It is not proper for the Patent Office to require clinical testing in 
humans to rebut a prima facie case for lack of utility when the pertinent 
references which establish the prima facie case show in vitro tests and 
when they do not show in vivo tests employing standard experimental 
animals. Id. at 297.

	Clearly, the courts do not recognize that in all cases human clinical 
data are required to support the operability of claims to methods of 
treating human disorders.

	In In re Jolles, 206 USPQ 885 (CCPA 1980), the court reversed a 
rejection for lack of utility of claims to certain compounds and methods 
of using them to treat acute myeloblastic leukemia.  In response to the 
rejection, the applicants submitted data on testing of one of the 
involved compounds in humans and eight of the involved compounds in mice.  
The court found this evidence adequate to establish utility of the 
claimed invention.  The court noted:

	... the character and amount of evidence needed may vary, depending on 
whether the alleged utility appears to accord with or contravene 
established scientific principles and beliefs. Id. at 890.

The court specifically rejected the position of the Patent Office that 
testing in animals was not relevant to establishing utility of claims to 
compounds or methods for treating humans.

	The Court in In re Anthony, 162 USPQ 594 (CCPA 1969), addressed whether 
it is proper for the Patent office to consider the safety of the claimed 
compositions and process in human treatment.  The subject invention in 
that case was compositions and processes to treat mental depression in 
humans.  The Court clearly stated:

	And Congress has given the responsibility to the FDA, not to the Patent 
office, to determine in the first instance whether drugs are sufficiently 
safe for use that they can be introduced in the commercial market... Id. 
at 604.

	The court further stated:

	The presence of a certain degree of danger or risk attendant on the use 
of a drug does not necessarily mean that the subject matter is not useful 
within the meaning of the patent law because of that danger or risk. Id. 
at 604.

	Despite such precedent, which is further supported by the earlier cases 
of in re Krimmel, 230 USPQ 215 (CCPA 1961), and In re Sichert, 196 USPQ 
209 (CCPA 1977), the Patent Office is rejecting claims based on 
applicants' failure to present safety and efficacy data from human 
testing.

	The claims at issue in In re Hartop, 135 USPQ 419 (CCPA 1962), were to 
a stable solution of a thiobarbituric acid compounds, which were stated 
in the involved application to be important as anesthetic and hypnotic 
agents.  Once again, the court rejected a requirement imposed by the 
Patent Office for clinical tests to satisfy the utility requirement.  The 
applicant in that case had submitted animal data in support of the 
utility and enablement requirement.  Addressing the concern of proving 
the safety of using the claimed compositions in humans, absent the 
presentation of human clinical data, the court reasoned:

	... inherent in the concept of the standard experimental animal is the 
ability of one skilled in the art to make the appropriate correlations 
between the results actually observed with the animal experiments and the 
probable results in human therapy. Id. at 426.

	The Court in Hartop, as in Krimmel, acknowledged the delegation of 
public safety issues to the FDA, and not to the Patent office.

	The claims at issue in In re Malachowski. 189 USPQ 432 (CCPA 1976) were 
to compositions for treating arthritis "without limitation as to what 
kind of animal is being treat."  Although the applicant provided data on 
the effect of administering the compositions only to certain non-human 
animals, the court held that the data were sufficient to establish 
utility also for humans. The Court stated:

	Having found that the claimed composition has utility as contemplated 
in the specification, Section 101 is satisfied and it becomes unnecessary 
to decide whether it is in fact useful for the other purposes indicated 
in the specification as possibilities. (citing In re Gottlieb, 140 USPQ 
at 668.) Id. at 435.

	In a claim to a composition, only a single utility is required to meet 
the operability requirement.

	In Ex parte Balzarini, 21 USPQ2d 1892 (BPAI 1991), the Patent Office 
Board of Appeals affirmed a rejection under the utility requirement of 
claims to pharmaceutical compositions and their methods of use in 
treating retroviral diseases such as AIDS.  The Board attributed 
significant weight to evidence presented by the examiner that the state 
of the art at the time the subject application was filed indicated that 
in vitro tests were not predictive of in vivo efficacy.  There is 
significant question whether, as a matter of fact, the examiner and the 
Board properly read this evidence as it pertained to the claims at issue.  
Although the Board stated "[we] do not presume to tell appellants what 
evidence would be acceptable in rebuttal of these rejections," the Board 
did not find the declaration evidence submitted by the applicants, in 
which the Board found a number of deficiencies including lack of in vivo 
data, to be sufficient.  The Board strongly suggested that presentation 
of in vivo data of some type might be required but stressed that human 
clinical data would not necessarily be required.

	Finally, the Board in Ex parte Rubin, 5 USPQ2d 1461 (BPAI 1987) 
squarely addressed the issue of adequate evidence presented by the 
examiner in rejecting claims in the biotechnology art for lack of 
utility.  The claims were to methods of improving the effectiveness of 
interferon in the treatment of certain cancers by administering a 
tyrosinase inhibitor.  The examiner contended that the asserted utility 
was per se incredible, expressing disbelief at the applicants' statements 
regarding utility but offering no factual support for her rejection.  The 
Board, at that time, reiterated the clear mandate, as expressed 
throughout the cases outlined above, that the burden initially is on the 
examiner to provide evidence to question an applicant's statements of 
utility.  Only then can an applicant be required to submit evidence, 
beyond what is in the application, to support such utility.



C. Question 1:  Do you believe that the legal standards governing proof 
of operability for inventions relating to treatment of human disorders 
under the utility requirement of 35 U.S.C. Section 101, and under the 
enablement requirement of 35 U.S.C. Section 112, first paragraph, as 
developed and interpreted by the Federal courts, are sufficiently clear 
and appropriate?  If not, please

	(a) identify aspects of the law that you believe lack clarity or are 
inappropriate, 	citing relevant cases; and

	(b) identify any changes to these legal standards you believe would be 
desirable.

	The legal standards governing operability for inventions relating to 
treatment of human disorders under the utility requirement of 35 U.S.C. 
Section 101 and the enablement requirement of 35 U.S.C. Section 112. 
paragraph 1, as interpreted and developed by the courts, are unambiguous 
and appropriate.

	"Utility" and "operability" are the same thing.  If a claimed invention 
satisfies the utility requirement, embodied in Section 101 of the 
Statute, the invention necessarily also satisfies the operability 
requirement.  The operability requirement is part of the enablement 
requirement embodied in 

Section 112, Paragraph 1, of the Statute, merely as a matter of logic.12  
In order to be enabled by a patent application, a claimed invention must 
be operable, i.e., it must work to some extent in a use described for it 
in the application.13  "Working
to some extent in a use described ...in the application" means "having 
utility."14
	The legal standards, which govern utility/operability for inventions 
involving treatment of human disorders, which the courts have established 
and which, therefore, the Patent Office must follow, are unambiguous and 
appropriate.  The problem is not these standards.  The problem is the 
Patent Office's imposition of additional standards that are unrelated to 
the Patent Office's statutory purpose and mandate.  For more than 30 
years, the courts have consistently rejected the Patent Office's attempts 
to impose of such additional standards. 

	The Commissioner's Notice15 (hereinafter "the Notice") suggests a 
distinction, that does not exist, between "utility" and "operability" and 
then suggests that the requirement for "operability" encompasses 
requirements for patentability that the Federal courts have clearly 
rejected.   
	Initially an applicant for a patent on an invention is under no 
obligation to prove the invention's utility/operability.  It is presumed 
under the law that an invention claimed in a patent application is 
operable as described in the application.  Proof of operability of a 
claimed invention may be required from an applicant only if an examiner 
establishes, on the basis of technical information that the examiner must 
specify, that the operability of the invention as described in the 
application would have been regarded as "incredible" by the person of 
skill in the pertinent art on the effective filing date of the 
application.16  
	In the context of inventions relating to treatment of human disorders, a 
claim to a method of curing a disorder known in the pertinent art on the 
relevant date to be incurable, or a claim to a composition of matter for 
which the only use disclosed in the associated application is cure of 
such a disorder, might be properly rejected by an examiner for lack of 
utility or  inoperability.  Then, before the Patent Office would be 
required to issue a patent with the claim, the applicant could properly 
be required to provide evidence to the Patent Office to establish, to the 
satisfaction of the person of ordinary skill in the pertinent art on the 
effective filing date of the associated application,that the method or 
composition does cure the disorder.17  
	On the other hand, a claim to a method of treating a disorder known to 
be incurable, or a claim to a composition of matter for which one of the 
uses disclosed in the associated application is treatment of such a 
disorder, would not generally be properly rejected for lack of utility or 
inoperability.  This is because it is possible to treat an incurable 
disease.  Consider Grave's disease, diabetes, rheumatoid arthritis, 
multiple sclerosis, and AIDS, to name a few.  Treatment of an incurable 
disorder is not generally "incredible."  

	Proof of operability, if it need be provided, requires only 
presentation of evidence that, as of the effective filing date of the 
application at issue, would have lead a person of skill in the pertinent 
art to conclude that the claimed invention would likely be effective to 
some extent for a purpose described for the invention in the application, 
as the application would have been understood by such a person on the 
effective filing date.  When the claimed invention is a composition of 
matter said to have therapeutic utility, the test is "effectiveness to 
some extent" for any therapeutic use described in the application or 
reasonably inferable by the person of skill in the pertinent art from the 
application on its effective filing date.  When the claimed invention is 
a method of treatment of a disease, the test is "effectiveness to some 
extent" in alleviating any of the adverse effects of the disease in a 
person suffering therefrom.  Even a de minimis extent is sufficient.  

	The test is not "safety and efficacy" as required for marketing 
approval from the Food and Drug Administration.  The test is not 
"clinical efficacy."18  It is de minimis effectiveness in the eyes of the 
person of skill in the pertinent art on the effective filing date of the 
application.

	The standard for proof of operability is very low, even if an examiner 
has reason to require such proof.  The courts consistently have held that 
the standard is low.  The standard must be low, if the patent system is 
to be effective in promoting progress in the arts of treating human 
disorders.

	Neither the Statute nor the courts authorize the Patent Office to deny 
a patent on an invention involving treatment of a human disorder, whether 
under the guise of "lack of utility" or "inoperability," for reasons 
suggested at Page 45269, Column 1, of the Notice.  The Patent Office may 
not deny an applicant a patent on an invention involving treatment of a 
human disorder, even one that may be "incurable," because the applicant 
cannot provide clinical data supporting efficacy in the described 
treatment19 or because the Patent Office has some concern that the public 
might be misled by grant of the patent.  The courts settled long ago that 
clinical safety and efficacy of therapeutics, avoiding the possibility of 
a misled public, and any of a number of other worthwhile goals that might 
be appropriate to consider when new technologies arise, are not concerns 
of the Patent Office.20  These concerns are within the jurisdictions of 
other agencies, such as the Food and Drug Administration, the Department 
of Agriculture, the Environmental Protection Agency, the Securities and 
Exchange Commission and similar agencies of the several states. 
	The mandate of the Patent Office is a limited one: to grant a patent on 
an invention unless the Patent Office can establish some basis in the 
Patent Statute to not grant one.  	Now the Patent Office is thwarting the 
development and commercialization of technology for treating human 
disorders by imposing,21 under the guise of "operability," requirements 
for patentability that have no basis in the Statute and have long been 
rejected by the courts.  As a matter of law, this is improper.  As a 
matter of policy, it is a travesty.  It is delaying and preventing new 
therapeutic technologies, including many made available by modern 
biotechnology, from becoming available to the American people.  	               


 

D. Question 2:  Do you believe the PTO is correctly and uniformly 
applying the legal standards governing proof of operability under 35 
U.S.C. Section 101 and Section 112, first paragraph, during examination 
of patent applications claiming inventions for treatment of human 
disorders?  If not, please

	(a) identify specific practices that you believe are inappropriate, 
particularly with respect to evidentiary requirements to establish 
operability, effectiveness or safety of a claimed human therapeutic 
product or process;

	(b) provide or summarize examples where you believe the PTO has 
incorrectly or inappropriately imposed or maintained an evidentiary 
requirement to support operability, under either Section 101, Section 
112, or both, of an invention for use in treatment of a human disorder;

	(c) identify changes you would like to see tea PTO make in examination 
of applications claiming inventions related to treatment of human 
disorders under 35 U.S.C. Section 101 or Section 112, first paragraph; 
and

	(d) discuss the implications of such changes, not only for patent 
applicants seeking protection, but also for scientific research and 
development related to treatment of human disorders as well as the public 
health and welfare.

	We believe that the USPTO is improperly applying the legal standards 
governing proof of operability for claims directed to the treatment of 
human disorders.  Our concerns over this issue are multi-faceted, but 
generally are summarized as follows:

	1. Concerns regarding the impact of an issued patent on the 
expectations and hopes of patients should not be a factor in the 
determination of compliance with Sections 101 and 112, first paragraph.

	2. A clear demarcation between the USPTO's "operability" standard and 
the FDA's "efficacy" standard must be recognized by the USPTO.

	3. While the USPTO has acknowledged that human clinical data is not a 
requirement for compliance with Sections 101 and 112, first paragraph, 
the type of rejections which are routinely made in cases involving human 
treatments, particularly in Group 1800, establish an unwritten but de 
facto requirement for such evidence.

	The USPTO must apply the proper legal standards governing proof of 
operability of human treatment claims; our desire in assisting the USPTO 
in the proper application of these standards is geared towards a single, 
fundamental goal: maintaining our nation's competitive vitality by 
protecting entrepreneurial efforts which are directed to state of the art 
human therapeutics.

	The USPTO has raised the concern that the Federal Government's 
"imprimatur" in the form of issued patents directed to the treatment of 
human diseases can raise or lower the expectations of patients suffering 
from such diseases.  We believe that such concerns are absolutely 
misplaced in the context of patentable subject matter.  The purpose of 
the patent system is to promote science and innovation; the purpose of 
the FDA is to protect our citizens from unsafe and ineffective 
treatments.  By assuming to any degree that the issuance of a patent 
should in some fashion be tailored with the emotions of the citizenry of 
our nation in mind telegraphs the USPTO's recent trend towards reviewing 
this type of subject matter under a different standard than other 
patentable inventions.  We believe that such feelings have led to the 
avoidance of issuing patents for inventions which are in complete 
compliance with the provisions of Sections 101 and 112, first paragraph.  
Such avoidance can set in motion a myriad of devastating consequences: 
without a reasonable guarantee of the rights granted by a patent, 
financial investments necessary to fund research and development for 
state of the art treatments are jeopardized; the security in knowing that 
a patent can provide a significant period of time to recoup the financial 
outlays necessary for research, development and commercialization of such 
treatments can be vitiated; and, fundamentally, without the ability to 
protect inventions for which patents should, but do not, issue, our 
ability to compete in a global arena is severely jeopardized.

	We believe that because drug development must initially be driven by 
the deliberative and safety-oriented requirements of the FDA, it is 
essential that the USPTO understand and recognize that a clear and 
distinct demarcation exists between the legal requirements for 
establishing "operability" and the FDA's requirements for proving 
"efficacy."  We believe that in the arena of treatments for human 
disorders, the USPTO, and in particular Group 1800, has unfortunately 
blurred this distinction.  Patent Examiners are not trained to make 
determinations as to the safety or efficacy of a drug; these 
determinations fall under the province of the FDA.  The legal standards 
necessary to establish "operability" of a claimed treatment for a human 
disorder are necessarily different from the factual, statistical and 
scientific evidence necessary to establish "efficacy" of the treatment; 
to the degree that the standards for operability are unintentionally 
changed in an effort to approach proof of efficacy, our patent system is 
emasculated. 

	The issuance of a patent directed to a human therapeutic has absolutely 
no bearing on the FDA's determinations of the safety and efficacy of the 
claimed therapeutic.  Clearly, there have been numerous inventions 
directed to human therapeutics which have issued as patents but have not 
been able to satisfy the efficacy requirements of the FDA.  There is 
nothing inappropriate, inconsistent or alarming about such a situation:  
inventions which are "operable" under the standards of the USPTO may not 
be "effective" under the different standards of the FDA.  But even under 
such circumstances, society benefits: public disclosure of an invention 
in a patent may prompt others to use that invention as a starting point 
for development of a more appropriate treatment, and preventing 
commercialization of an ineffective therapeutic protects vulnerable 
members of society, i.e., those afflicted with a disease that is not 
mediated by the ineffective treatment.  By not allowing claims for human 
treatment inventions that have complied with the statutory provisions of 
patentability and which are ultimately proven to be safe and effective, 
the USPTO enables in the plundering of the bio-pharmaceutical industry by 
both foreign and domestic pirates who are not required to expend the 
capital necessary to prove the safety and efficacy of the non-patented 
therapeutic.

	While we recognize that the USPTO has properly acknowledged that human 
clinical data is not required in order to establish "operability" of 
inventions relating to the treatment of human disorders, we believe that 
the USPTO, and in particularly Group 1800, has established a de facto 
requirement for human clinical data to establish operability.

	Specifically, we view the following examples as placing an 
inappropriate burden on innovative entrepreneurs who have discovered 
creative and unique approaches to the treatment of diseases which affect 
the human condition:

	1. There are, unfortunately, some disorders and diseases for which 
there are no adequate animal models; Alzheimer's is a prime example.  
Thus, the art is forced by circumstances to rely upon in vitro testing to 
establish the causal connection between an invention and the operability 
of that invention.  Under such circumstances, comparisons between 
innovative, state of the art technologies and "similar compounds" which 
are being "marketed commercially" for the same indicated uses are by 
definition impossible.  This is particularly the case in the 
bio-pharmaceutical industry which at present can boast of only a few 
commercially marketed products.  In such circumstances, where an animal 
model for a disorder or disease does not exist, and where the art 
recognizes the importance of in vitro analysis as an indication of what 
is to be expected in humans, we submit that the invention has met the 
statutory requirements of Sections 101 and 112, first paragraph.  To not 
accept in vitro data under such circumstances is to effectively force the 
art to expend limited resources on the development of an "appropriate" 
animal model, rather than on the development of a treatment for the 
targeted disease.

	2. There are a variety of situations where the USPTO appears to avoid 
the appreciation that an animal "model" is by definition not identical to 
human patients.  In situations where in vivo animal data is provided to 
the USPTO in support of the operability of the claimed treatment, we 
believe that it is inappropriate for the USPTO to effectively raise the 
ante by asserting that despite the positive results provided in such 
data, the results are not indicative of operability in a human condition, 
the targeted disease in humans is "incurable," or treatment of the 
disease is "unbelievable on its face."  The USPTO has routinely rejected 
such inventions based upon differences in the anatomical, biological and 
circulatory systems of animal models and humans.  Egregious examples 
include the following: the USPTO has based its rejection of claims whose 
operability was supported by an animal model by referring to an article 
which promoted a different animal model, even though the article did not 
denigrate the animal model utilized by the inventor; the USPTO has 
refused to accept data directed to the operability of a vaccine because 
the animal model, which the art was also utilizing in its investigation 
of the disease, did not manifest each and every symptom of the disease in 
humans; the USPTO has refused to give weight to data evidencing the 
operability of a compound in destroying a human tumor transplanted into 
an animal model, the USPTO's rationale being that the normal course of 
cancer does not involve the intentional introduction of foreign tumor 
cells into a human.  In such circumstances, it is clear that the term 
"model" has become irrelevant to the USPTO.

	3. Declarations by experts offered to establish the operability of the 
claimed invention and/or the value of an animal model in assessing the 
operability of the invention have in many circumstances been dismissed by 
the USPTO with nothing more than an unsupported opinion by the Examiner 
that the declaration is not deemed "persuasive."  Because all such 
declarations must be signed with an acknowledgment as to the penalties 
directed to both the declarant and a patent which issues based upon false 
statements made by the declarant, most declarants think twice before 
signing a declaration which the declarant can not stand behind.  An 
Examiner's opinion that a declaration is not "persuasive" without the 
benefit of factual, scientific or legal support does not allow the 
inventor or the declarant to know what perceived deficiencies in the 
declaration must be corrected.

	4. In circumstances where a purified and isolated human protein which 
targets a particular organ or cellular population evidences a positive 
effect in an animal model having a structurally and functionally similar 
organ or cellular population, proof of operability is manifest.  Under 
such circumstances, the benefits derived in a non-human model using a 
human protein must be viewed as predictive of what will occur in humans.  
The rejection of claims directed to such an invention under Sections 101 
and 112, first paragraph, merely reinforces the notion that a de facto 
requirement for human clinical data exists at the USPTO.

	5. The utilization of inconsistent theories in rejecting human 
therapeutic claims has become so common-place that many Examiners have 
adopted a unique vernacular to describe these rejections.  Exemplary is 
the so-called "112/103 squeeze" by which the claimed therapeutic is 
rejected under Section 112, first paragraph as being "incredible" and 
under Section 103 as being "obvious."  The irony that human clinical data 
is typically the only evidence that will overcome this "squeeze," despite 
assurances that human clinical data is not required, is not lost on the 
patent bar.  "Squeeze" indeed.

	6. In situations where an inventor is fortunate enough to have secured 
human clinical data (typically in a Phase I/II FDA study in a small 
population of patients suffering from the targeted disease), questions 
raised by the USPTO as to the statistical significance of data showing a 
positive effect indicates a breach of the role of the USPTO; such 
assumptions relate to "efficacy" rather than "operability" and thus have 
no bearing on the patentability of the invention.

	7. Some enterprising Examiners have obtained a biotech (and possibly 
other art units) company's statements on file at the SEC and used those 
statements to discount patent application and declaration statements. 
These statements, which have evolved as a result of SEC statutes and 
regulations and securities case law, are intended to protect the 
"innocent investor" from the more knowing company experts and investment 
professionals. Recent securities cases spur companies to disclose even 
the remotest, least probable risks to avoid fault and not label those 
risks as remote. Therefore, SEC statements are replete with legalese 
descriptions of the risk to investors - however remote - which include 
chances such as the products may not be successful in clinical trials, 
etc.

	In contrast, the patent laws of operability and enablement require 
disclosure only sufficient for those skilled in the art who are 
presumably cognizant of probability and likelihood of the various 
statements being true. Patent specifications and declaration statements 
are not inaccurate or dishonest when they are not accompanied with 
disclosure of low-probability events. Therefore, the SEC statements are 
inappropriate to use to "disprove" the disclosure of the inventor in the 
specification or declarations later supplied by those skilled in the art. 
Biotech (and any art unit) Examiners can increase their efficiency and 
productivity by not seeking out and demanding explanations for such 
irrelevant documents. 
	Invariably, the points raised above force a knee-jerk reaction that 
such rejections, if they truly are improper, should be directed by the 
patent bar to the Board of Patent Appeals and Interferences.  However, 
given the two-to-three year period involved in the appeal process, and 
the state of limbo that the invention is placed into during this period, 
it has become a matter of necessity to refile the application after a 
Final Rejection because the refiled application will typically be 
reviewed within one year.  Refiling the case often provides another 
opportunity to attack the rejections when the application is again 
examined by the USPTO, the hope being that more data will have become 
available during the refiling period.  We view this approach as a 
necessary but clearly inefficient manner in dealing with the de facto 
requirement for human clinical data.

	We recognize that the demands and burdens placed upon the USPTO in 
examining cases directed to the treatment of human disorders is enormous, 
and we commend the efforts of the USPTO to seek, train and maintain 
qualified and experienced Examiners, particularly in Group 1800.  The 
bio-pharmaceutical industry, while less than two decades old, operates at 
a break-neck speed which limits the amount of time in which the USPTO can 
review, absorb, understand and fully appreciate technologies which were 
mere dreams and ethereal hopes 25 years ago.  Thus, we understand how the 
USPTO can at times incorrectly apply the legal standards governing proof 
of operability under Sections 101 and 112, first paragraph.  However, 
unless the USPTO properly applies these standards and allows the issuance 
of patents directed to inventions which have met the statutory 
requirements for patentability, we are gravely concerned that an industry 
vital to our nation's competitive commercial interests will continue to 
be jeopardized and eroded.



E. Question 3:  Do you believe legal standards and examining practices 
in foreign systems provide a better framework than is available in the 
United States for assessing patentability questions related to 
operability of inventions for treating human disorders?  Please identify 
desirable or undesirable practices of foreign offices, particularly the 
Japanese Patent Office and the European Patent Office, in this regard.

	We believe that legal standards and examining practices in foreign 
systems, especially Europe and Japan, often provided a better framework 
than is available in the United States for assessing patentability 
questions related to operability of inventions for treating human 
disorders.  The following is a description of standards of operability in 
Japan and Europe.  Overall European law is more favorable and, in certain 
circumstances, Japanese law is more favorable, than the standards to 
which U.S. inventors are being held.  As outlined in the introduction, we 
believe the USPTO is using an inappropriate and unnecessarily strict 
standard of operability by apparently requiring that human clinical data 
be submitted for biotechnological inventions relating to human therapy. 

European Operability

	As in the United States, European Patent Practice excludes those 
articles or processes alleged to operate in a manner clearly contrary to 
well established physical laws (EPO Guidelines Part C IV, 4.1, also Art. 
57).  However, outside of this straightforward operability exception, it 
appears European patent practice readily accepts any reasonable statement 
regarding the operation of an invention.  For example, in vitro data is 
generally sufficient to demonstrate operability of inventions in human 
therapy.  Therefore, European patent practice presumes that any 
therapeutic composition intended for a first or second medical use as may 
be claimed under European Patent Law is likely to be proven sufficient 
for its first or second medical use by way of in vitro data, animal in 
vivo data, and in some cases a believable, enabling, but "prophetic" 
description of experimental data, long before such compound is 
administered to humans.  We are aware of no European case where the 
European Patent Office has requested the filing of human in vivo data in 
order to grant a patent for a pharmaceutical compound.

	Obviously, the level of proof of operability of biotechnical 
inventions, particularly as it relates to human therapeutics, is less 
rigorous in comparison to that required by the United States patent 
system which appears to be requiring human clinical data as the only 
experimental evidence which is supportive of claims to human 
therapeutics.  The distinct commercial advantage that European 
"operability" practice provides as compared to the emerging U.S. practice 
is self-evident.



	1. Operability in Japan

	The issues of operability in Japan are governed under Japanese Patent 
law Article 29 (industrial applicability) and Article 36, Paragraph 4 
(disclosure of claimed invention) which closely correspond to 35 USC 
Section 101 and Section 112, first paragraph.  There are two distinct 
classes of human therapeutics.

	The first class relates to new chemical compounds per se with no use 
limitation although eventual use of the compounds is directed to human 
therapy.  In Japan, if the inventor is the first to discover a novel 
compound, a mere statement of the possibility of usefulness is 
sufficient.  A working example which shows that the claimed compound was 
actually prepared is necessary but experimental evidence of the use is 
not required.  If this standard were to be adopted in the US., claims 
drawn to novel compounds now being rejected in the U.S. would be allowed.


	The second class relates to pharmaceutical compositions with a use 
limitation, such as "treatment for cancer" and may be claimed as, for 
example,  "A pharmaceutical composition, for treatment of cancer, 
comprising a compound A. . ."   In these cases, the claimed use must be 
experimentally supported.  However, in vivo data is not necessarily 
required.   In vitro data is effective if the data directly supports the 
claimed use.  For example, when a claim reads "a pharmaceutical 
composition for treating cancer comprising compound A, in vitro data 
which shows that compound A kills cancer cells in a test tube is often 
enough to support the claims use.  This standard is more favorable than 
the current U.S. standard.



	2. Conclusion 

	We urge a relaxation of the present stringent interpretation of the 
standard of operability as applied to human therapeutic inventions.  A 
standard similar to Japan and, especially, Europe would enable U.S. 
inventors to compete in the world-wide market on a more level playing 
field.  In foreign countries, competitors and regulatory agencies do not 
rely on the Patent Office to determine if an invention is absolutely 
operable.  The standard of operability should be that the invention is 
enabled and it appears believable that it will operate as stated.  The 
apparent requirement of presenting human data for purposes of receiving 
patent protection should be jettisoned.  Such a requirement prevents the 
flow of human therapy inventions to the next level of research and 
ultimately to the marketplace.  Other U.S. regulatory agencies govern and 
control efficacy issues.  The benefits of encouraging research and 
investment in the highly competitive human therapy industry far outweigh 
any possible dangers associated with allowing a non-useful human therapy 
to be patented.  Without patents, open sharing of new scientific 
developments with the public is impossible.  Once a threshold of 
operability has been demonstrated, as exemplified by the acceptable and 
useful European and Japanese standards, the public should be allowed to 
determine the ultimate usefulness of an invention.  Article 1, Section 8, 
Clause 8 of the U.S. Constitution empowering Congress to grant patents 
states that the objective is to "promote the progress of science and 
useful arts."  The proposed relaxing of the stringent interpretation of 
the operability standard is totally consistent with this objective.



Nonobviousness22

	The USPTO has previously held a hearing on October 28, 1993, on 
nonobviousness and a BIO representative, William Epstein, Assistant 
Patent Counsel, Hoffmann-LaRoche, Inc., testified.  BIO's comments appear 
here in Appendix C.  These comments in this report supplement BIO's 
previous comments.



A. Introduction

	Broadly speaking, the premise of the patent system is that innovation 
is encouraged by granting inventors the right to exclude others from 
practicing their invention in exchange for teaching the world something 
that it did not know.  

	The biotechnology industry, perhaps more than any other industry in the 
United States, critically depends upon the incentives provided by the 
patent system.  In the biotechnology field, high research costs, lengthy 
and expensive development programs and lengthy regulatory review periods 
result in massive capital expenditures that must be incurred before any 
product can possibly get to market.  Moreover, for every research and 
development program that results in a product in clinical trials, 
numerous other research and development programs have been funded as 
well.  Without adequate patent protection for the fruits of the research 
and development process, the simple fact is that return on investment 
cannot be realized.

	Though, "adequate" patent protection has many facets, at least two 
items are critical: 	1. patents must issue in a timely and efficient 
manner; and

	2. the scope of claims allowed for meritorious inventions should bear a 
rational 	relationship to commercial reality.

From a practical standpoint, if the patent laws are being applied in an 
overly restrictive fashion (such that inventors cannot obtain claims of 
sufficient breadth to have any commercial impact), intended incentives 
are illusory.

	In the United States, three key statutes define the requirements for a 
patent: (a) the invention (as defined by the patent claims) must have 
been neither available to the public already, nor readily discernable 
from publicly available material (the "novelty" and "nonobviousness" 
requirements of 35 U.S.C. Sections 102 and 103, respectively); and (b) 
the patent application, as filed, must adequately teach the public about 
the invention (the "description," "enablement," and "best mode" 
requirements of 35 U.S.C. Section 112).  The USPTO must support 
rejections with evidence.

	This Section concerns the issues of nonobviousness and enablement of 
biotechnological inventions.  Currently, the patent statute does not 
impose different patentability requirements depending upon the technology 
of the invention.  Concerning nonobviousness, the Patent Act provides: 

			A patent may not be obtained ... if the differences between the 
subject matter sought to be patented and the prior art are such that the 
subject matter as a whole would have been obvious at the time the 
invention was made to a person having ordinary skill in the art to which 
said subject matter pertains.  Patentability shall not be negatived by 
the manner in which the invention as made.

35 U.S.C. Section 103 (emphasis added)

	As explained more fully in the review of the case law, numerous legal 
tests have been formulated to assist application of the statute to the 
particular invention.  Nevertheless, it is nearly universally recognized 
by the courts and patent practitioners that the nonobviousness 
requirement is one of the most difficult legal standards to apply.  It is 
difficult to determine the knowledge level of a person having ordinary 
skill in the art or even to determine what constitutes ordinary skill.  
In addition, the nonobviousness inquiry is susceptible to hindsight 
analysis; that is, instead of assessing what would have been obvious to 
one of ordinary skill in the art at the time the invention was made, the 
assessment improperly takes into account information provided by the 
inventor or others after the relevant date.  Hindsight vision being 
20/20, ingenious inventions can often look routine or simple after the 
fact.

	Further, in assessing whether an invention would have been obvious, it 
is easy to lose sight of the fact that it is the subject matter defined 
in the claims, viewed as a whole, that is assessed, not the broad 
inventive concept, not the gist of the invention, and not some different 
invention (such as, for example, a method or process when the claim 
recites a composition).  Unfortunately, as highlighted, infra, this 
latter issue is a particular problem in the context of biotechnological 
patent applications. 

	The "enablement" issue arises out of the requirement of 35 U.S.C. 
Section 112 that the specification of the patent application contain a 
description of the invention in such terms "as to enable a person skilled 
in the art to which it pertains, or with which it is most nearly 
connected, to make and use the same...." (Emphasis added.)  Although the 
enablement requirement applies with equal force to any patent application 
regardless of the technological field of the invention, enablement issues 
are more frequently raised in biotechnology.  This is so primarily 
because in certain circumstances the USPTO has taken the position that 
biotechnology is a field where results are generally unpredictable.

	Though nonobviousness and enablement are distinct requirements of the 
patent code, both inquiries are grounded in an assessment of what the 
specification (or prior art) would teach or suggest to a person of 
ordinary skill in the art.  In many instances, the critical question to 
be answered in an obviousness inquiry is whether a person of ordinary 
skill in the art would have had a "reasonable expectation of success" in 
performing an experiment suggested by the prior art.  By the same token, 
often the critical question to be addressed in an enablement inquiry is 
whether, in light of the teaching provided in the patent's specification, 
a person of skill in the art could make and use the claimed invention 
without "undue experimentation."  Thus common to both of these inquiries 
is a determination of the knowledge of one of ordinary skill in the art. 


	Though these two inquiries may not always be diametrically opposed, an 
issue of concern to many biotechnology companies is that the USPTO often 
applies these doctrines in an inconsistent manner, often even in the same 
case.  Such an inconsistent application is illogical, however, since the 
level of skill in the art presumably does not change depending upon 
whether the mythical person of ordinary skill is reading a patent 
application or some form of publication.  If the field of the invention 
is so unpredictable that an inventor is precluded from obtaining claims 
to embodiments described in detail but not specifically proven to work 
(because making and using such embodiments would require undue 
experimentation on the part of the person of ordinary skill in the art), 
then how can an invention simultaneously be obvious because the same 
skilled person would have had a reasonable expectation of success in 
making and/or using the claimed invention based upon a collection of 
elements coupled together from several publications?

	In summary, as discussed throughout our response, we believe that the 
USPTO is not properly construing and applying the statutory requirements 
for patentability.  In the area of nonobviousness, the USPTO has 
misinterpreted the law concerning the tests for patentability of 
biotechnology inventions.  In the case of both the nonobviousness and 
enablement requirements, the law is often misapplied and inconsistent 
positions are taken.  Furthermore, all too frequently biotech Patent 
Examiners fail to cite any prior art or other evidence in support of 
their conclusions, relying instead on supposition or unsupported 
assertion.

	The practical effect of the USPTO's position cannot be understated.  
The USPTO's own statistics readily demonstrate that biotechnology patent 
applications take longer on average to prosecute than applications 
directed to any other technology.  The cases that issue are often 
extremely narrow and limited to embodiments that have been actually 
tested; as a result, the claims are often of little commercial use.  This 
decreases competitiveness of research-oriented companies.  Time is money, 
and, unfortunately, far too many precious resources are being needlessly 
spent by biotechnology companies to secure protection for the results of 
their research.  At the same time, misapplication of the requirements for 
patentability effectively deprive these same companies of the full return 
due on their research investment.



B. Case Law Review

	The USPTO Notice for this hearing23 includes a summary of the case law 
on nonobviousness as a preface to the questions which follow.  We here 
respond to this case law summary.
	Neither the nonobviousness nor the enablement requirements of the patent 
law distinguish between the type of technology to which the invention is 
directed.24   Nevertheless, given the recent emergence of biotechnology, 
little guidance has been available with respect to how the law on 
obviousness and enablement would be applied to biotechnological 
inventions.  At the same time, despite a number of cases by the USPTO's 
Board of Appeals and Patent Interferences (the "Board"), few cases had 
been decided by the CAFC.

	Recently, however, a number of cases involving biotechnological 
inventions and issues of obviousness and enablement have been decided by 
the CAFC.  These cases, discussed infra, are helping to refine the 
application of law to biotechnological inventions.  While this growing 
body of decisions provides patent practitioners and the USPTO with 
helpful initial guidance, major uncertainties still exist.  Adding to the 
uncertainty are two cases decided in the past year by the Board (Ex parte 
Movva, 31 USPQ2d 1027 and Ex parte Deuel, __ USPQ2d ____, 1993 Pat. App. 
LEXIS 22 (1993)) that take a very narrow view of the CAFCs' important 
decision in In re Bell, relating to the nonobviousness of claims to 
compositions directed to isolated DNA.25  At the same time, none of the 
cases contains much discussion specifically directed to the issue of the 
level of skill in the art that is driving the obviousness (and 
enablement) inquiries (much less why that level of skill is appropriate 
in the circumstances presented).
	From the standpoint of doctrinal consistency in the area of 
biotechnological inventions, perhaps the most important statement to date 
is found in the CAFC's decision in Amgen v. Chugai, 927 F.2d 1200 (Fed. 
Cir. 1991): "A gene is a chemical compound, albeit a complex one ..."  
Though this statement may be a slight oversimplification, see, e.g., 
Storella, Amgen, Fiers and Bell:  The Federal Circuit and the 
Patentability of Genes, 13 Biotechnology Law Reporter 459 (July-August 
1994), the statement provides a framework of legal precedent from the 
chemical art that can be applied to biotechnological inventions.  This 
precedent finds application primarily in the areas of obviousness and 
enablement.



	1. Obviousness

	35 U.S.C. Section 103 provides that a patent may not be obtained if the 
differences between the subject matter sought to be patented and the 
prior art are such that the claimed subject matter as a whole would have 
been obvious to one of ordinary skill in the art at the time the 
invention was made.  Though obviousness is a question of law, Panduit 
Corp. v. Dennison Mfg. Co., 810 F.2d 1561, 1568 (Fed. Cir.), cert. 
denied, 481 U.S. 1052 (1987).  However, as explained by the Supreme 
Court, the obviousness conclusion is based upon several factual 
inquiries:  (a) the scope and content of the prior art; (b) the 
differences between the prior art and the claims at issue; (c) the level 
of ordinary skill in the art at the time the invention was made; and (d) 
objective evidence of nonobviousness (such as the commercial success of 
the invention or a long-felt, but unmet need for the invention), if any.  
Graham v. John Deere Co., 383 U.S. 1, 17-18 (1966).

	The law provides that an inventor is entitled to a patent unless the 
USPTO establishes sufficient grounds for rejection.  See 35 U.S.C. 
Section 102.  As applied to obviousness, the USPTO bears the burden of 
establishing a prima facie case that the claimed invention would have 
been obvious to one of ordinary skill at the time it was made.  In re 
Fine, 837 F.2d 1071, 1074 (Fed. Cir. 1988).  "A prima facie case is 
established when the teachings from the prior art itself would appear to 
have suggested the claimed subject matter to a person of ordinary skill 
in the art."  In re Rinehart, 531 F.2d 1048, 1051 (CCPA 1976).  An 
inventor may be entitled to a patent even if the USPTO has satisfied its 
burden of establishing a prima facie case of obviousness, however.  
Inventors may introduce evidence, such as objective evidence of 
nonobviousness or evidence that their claimed compounds showed certain 
unexpected properties, to "rebut" the prima facie case.  When the claimed 
invention is viewed as a whole in light of all the evidence, it may be 
that the claimed invention would not have been obvious to the ordinary 
practitioner at the time the invention was made despite the suggestion in 
the prior art.

	Importantly, any rejection by the USPTO must be based on objective, as 
opposed to subjective, reasons.  The USPTO's Examiner has a duty to 
present evidence and reasons in support of his rejection of the claims.  
See Ryko Mfg. Co. v. Nu-Star, Inc., 950 F.2d 714 (Fed. Cir. 1991).  As 
has been held by the Courts, "to establish a prima facie case, the USPTO 
may not rely on unsupported assertions about the level of ordinary skill 
in the art or bare conclusions that one of ordinary skill could apply 
such skill to obtain the claimed invention."   In re Sun, 31 USPQ2d 1451, 
1456 (Fed. Cir. 1994)(Mayer, J. concurring).  Nonetheless, as explained 
by the CAFC in In re Sun, an inventor may need to request an Examiner's 
affidavit requesting such citations, as provided in 37 CFR Section 
1.107(b).  In the absence of such a request, an inventor may be held to 
have waived its right to such citations by the USPTO.  Id. at 1455.

	The case law squarely holds that a proper obviousness inquiry requires, 
inter alia, consideration of two factors:  (1) whether the prior art 
would have suggested to those of ordinary skill in the art that they 
should make the claimed invention (or carry out the invention in the case 
of a claimed process); and (2) whether the prior art would have revealed 
that in making the claimed invention (or carrying out the claimed 
process), those of ordinary skill would have had a reasonable expectation 
of success.  See In re Vaeck, 947 F.2d 488, 493 (Fed. Cir. 1991); In re 
Dow, 837 F.2d 469, 473 (Fed. Cir. 1988).  Both the suggestion and the 
reasonable expectation of success must be found in the prior art.  Id.		
Despite the fact that the basic law to guide the obviousness inquiry can 
be easily recited, in practice the obviousness question is one of the 
most difficult legal standards to apply.  Two important decisions by the 
CAFC provide substantial guidance with respect to the requirements that 
the person of ordinary skill have a reasonable expectation of success and 
that the prior art suggest the claimed invention.

	In In re O'Farrell, 853 F.2d 894 (Fed. Cir. 1988), the CAFC addressed 
the reasonable expectation of success test.  In O'Farrell, the University 
of California had appealed from the rejection of claims directed to the 
method of producing proteins by readthrough translation in transformed 
bacterial hosts.  The rejection was based on an article relating to the 
transcription of heterologous genes and providing some data relating to 
the higher molecular weight of certain subsequently translated protein.  
The obviousness inquiry focused on a paragraph of the article stating, 
inter alia, that it would be "interesting" to examine the expression of a 
"normally-translated eukaryotic sequence in the plasmid" and that the 
extent of read-through translation would depend upon certain factors.

	In rejecting appellants' argument that the USPTO had relied 
impermissibly on the "obvious to try" standard (and that one of ordinary 
skill in the art would not have a reasonable expectation of success based 
upon the reference), the CAFC stated:

	The admonition that "obvious to try" is not the standard under  103 
has been directed mainly at two kinds of error.  In some cases, what 
would have been "obvious to try" would have been to vary all parameters 
or try each of numerous possible choices until one possibly arrived at a 
successful result, where the prior art gave either no indication of which 
parameters were critical or no direction as to which of many possible 
choices is likely to be successful.  In others, what was "obvious to try" 
was to explore a new technology or general approach that seemed to be a 
promising field of experimentation, where the prior art gave only general 
guidance as to the particular form of the claimed invention or how to 
achieve it.  

853 F.2d at 903 (citations omitted).

	According to the Court, neither of these situations applied to the 
instant case.  Though success was not predictable with absolute 
certainty, the Court affirmed the USPTO's determination that the cited 
references provided a reasonable expectation of success.

	Unfortunately, as further detailed infra, in many cases USPTO Examiners 
are rejecting claims to DNA sequences on obviousness grounds based upon 
information concerning the amino acid sequence of a protein and a 
reference describing at most a general cloning method (such as the use of 
probes).  Based on the Court's decision in O'Farrell, it seems that 
rather than providing a reasonable expectation of success, such general 
references only invite experimentation.

	In In re Bell, 991 F.2d 781 (Fed. Cir. 1993), the Court considered an 
obviousness rejection commonly encountered by inventors seeking 
composition claims protecting genes that they isolate.  In Bell, the 
inventors had isolated the human IGF-I and IGF-II genes and sought, inter 
alia, claims to those compositions having the DNA sequences of the 
isolated genes and certain DNA sequences that would hybridize to the 
genes.  The USPTO Board had affirmed the Examiner's rejection, holding 
that the Examiner had established a prima facie case of obviousness for 
compositions having the claimed DNA sequences in light of the known amino 
acid sequence of IGF-I, the "correspondent-link" between an amino acid 
sequence and DNA sequences (based on the redundancy of the genetic code), 
and a prior art patent describing "a general method of isolating a gene 
for which at least a short amino acid sequence of the encoded protein is 
known," based on constructing nucleic acid probes.26 
	In reversing the USPTO's decision holding that a prima facie case of 
obviousness had been established, the CAFC acknowledged that the USPTO's 
decision rested on the assumption that "just as closely related homologs, 
analogs and isomers in chemistry may create a prima facie case, the 
relationship between a nucleic acid sequence and the protein it encodes 
also makes a gene prima facie obvious over its correspondent protein." 
991 F.2d at 784.  The Court then held that the USPTO had not met its 
burden of showing that the prior art would have suggested the claimed 
sequences because the known amino acid sequence, in light of the 
degeneracy of the code, might have yielded 10(36) sequences, but would 
not have taught one of skill in the art which of those sequences 
"corresponds to the IGF gene [the claimed invention]."27
	At the same time, the Court rejected the notion that the prior art 
patent "fill[ed] the gap," i.e., when combined with the known amino acid 
sequence of IGF-I rendered the claimed sequences obvious.  The Court 
noted that, when read carefully, the reference actually taught away from 
the claimed invention because it suggested the desirability of designing 
probes based upon unique codons and IGF had no unique codons.  Id. at 
784-85.

	Finally, the Court rejected the USPTO's argument that the prior art 
reference supplied the necessary teaching because the inventor himself 
had used the method suggested by the prior art in designing the probes 
that were used to isolate the claimed gene.  Labelling the USPTO's focus 
on Bell's method "misplaced," the Court pointed out that Bell claimed 
compositions, not the method by which they are made, and cited case law 
supporting the proposition that "patentability of a product does not 
depend on its method of production."  Id. at 785 (quoting In re Thorpe, 
777 F.2d 695, 697 (Fed. Cir. 1985)). 

	This latter statement by the Court is quite important in that it is the 
differences between the "subject matter sought to be patented" and the 
prior art to which it is to be compared in the obviousness determination, 
not the method by which the invention is made that is relevant.  35 
U.S.C. Section 103.  As recognized by the Court and as supported by a 
long line of cases, whether a composition is patentable depends on 
whether the composition is known in the art or is obvious, and not 
whether the process by which the composition is made is patentable.  See 
In re Klug, 333 F.2d 905, 907 (CCPA 1964); In re Thorpe, 777 F.2d at 697; 
In re Kratz, 659 F.2d 1169 (CCPA 1979) (Claimed compound patentable 
despite the fact that the method of isolating and discovering flavor 
components of food were "unquestionably obvious"; prior art did not 
evidence some predictability that the claimed compound was a flavor 
agent).28
	Unfortunately, the decision in In re Bell appears to have done little to 
dissuade the patent office from continuing to reject claims directed to 
DNA compositions based on some partial amino acid sequence data and the 
generalized assertion that a particular prior art cloning method would 
have resulted in a reasonable expectation of isolating the claimed 
compound.  In Ex parte Movva, (31 USPQ2d 1027 (BPAI 1993) and Ex parte 
Deuel, ____ USPQ2d ____, 1993 Pat.App. LEXIS 22 (BPAI 1993), the USPTO 
again rejected claims as obvious based almost entirely on a prior art 
method to isolate the claimed compound.  In both these cases, the USPTO 
gave little latitude to the legal position taken by the CAFC in Bell, 
relying instead on the misplaced truism that obviousness inquiries are 
inherently fact intensive or, especially in Deuel, on the argument that 
the Court's holding in Bell was narrow (in that the reference cited by 
the Board had actually taught away from the claimed invention and that 
the Court did not "disparage the USPTO's theory that the amino acid 
sequence and a general method can render a gene prima facie obvious.")  
In so doing, the USPTO is failing to properly consider the statement by 
the Court that it is the claims that define the invention, not the method 
of making the claimed compositions.  Despite giving lip-service to the 
requirement for structural similarity, a careful reading of the facts in 
Deuel necessitates a conclusion that the focus of the USPTO's inquiry is 
almost solely on the cloning method.29  That focus runs directly counter 
to the CAFC's statement in Bell.
	 Perhaps even more importantly, in Deuel the USPTO seemed to lose sight 
of the fact that the prior art supplied only a partial amino acid 
sequence and only the most general information about cloning.  Apparently 
absent from the "general method" was any information about the various 
parameters that one in the art may have needed to vary if attempting to 
apply the prior art method to a particular desired gene sequence.  See In 
re O'Farrell, supra.  In fact, this case highlights one of the 
biotechnology industry's main concerns with the USPTO's position that 
such bare-bones information fully satisfies its obligation to make a 
prima facie case of obviousness.  Placing the burden on the inventors to 
prove the negative -- i.e. that the alleged method would not be expected 
to yield the claimed composition -- is nearly impossible, especially in 
light of the USPTO's consistent refusal to cite relevant experimental 
parameters.

	As regards the level of skill to be attributed to "a person of ordinary 
skill in the art" during an obviousness inquiry, very few biotechnology 
cases have focused directly on this issue.  For example, in Bell, Amgen 
and Vaeck, as well as the published cases from the USPTO Board, the 
obviousness issue has turned on what the prior art would have suggested 
to a person of ordinary skill in the art or whether that person would 
have had a reasonable expectation of success in carrying out an 
experiment, but the scientific attributes of the person of ordinary skill 
have not been elucidated.  Even in In re O'Farrell, 853 F.2d 894 (Fed. 
Cir. 1988), the case that contains the most discussion of the obviousness 
issue in the context of a biotechnology invention, specifics concerning 
the level of skill in the art are addressed solely by reference to the 
fact that "Appellants say that in 1976 those of ordinary skill in the 
arts of molecular biology and recombinant DNA technology were research 
scientists who had 'extraordinary skill in the relevant arts' and 'were 
among the brightest biologists in the world.'"

	Nonetheless, there is no apparent basis in the case law to suggest that 
the standards for determining the applicable level of skill possessed by 
the person of ordinary skill in the art of biotechnology should be any 
different than used for making that determination in other arts.  Thus, 
it is clear that the person of ordinary skill in the biotechnology field 
should be considered to be the "designer or problem solver" in the art, 
not the user of the invention.  Orthopedic Equip. Co. v. United States, 
702 F.2d 1005 (Fed. Cir. 1983); In re Grant, 377 F.2d 1019 (CCPA 1967).  
While the person of ordinary skill is presumed to be aware of all the 
pertinent prior art, she is one who thinks along the lines of 
conventional wisdom in the art and is not innovation oriented.  Standard 
Oil Co. v. American Cyanamid Co., 774 F.2d 448 (Fed. Cir. 1985).  
Consequently, the obviousness of an invention to the actual inventor is 
acknowledged to be irrelevant because inventors are acknowledged as a 
class to possess skills that set them apart from the ordinary person of 
skill.  Id.

	Though, as explained above, the cases contain very little discussion of 
the attributes possessed by the person of ordinary skill, the positions 
taken by the USPTO in In re Bell, Deuel and Movva (that a person of skill 
in the art armed with a general cloning procedure and with the knowledge 
of an amino acid sequence would have a reasonable expectation of success 
in isolating the human DNA encoding the amino acid) suggest that the 
USPTO may be applying a far higher level of skill than that actually 
possessed by the ordinary person of skill in the art.



	2. Enablement

	35 U.S.C. Section 112 requires that the specification of a patent 
contain a written description of the claimed invention and the manner of 
making and using that invention in such full and clear terms as to 
"enable" any person skilled in the art to make and use the invention.  
Though not expressly stated in the statute, the case law holds that to be 
enabling, the specification of a patent, as filed, must teach those 
skilled in the art how to make and use the full scope of the invention, 
as defined by the claims, without "undue experimentation."  In re Wright, 
999 F.2d 1557, 1561 (Fed. Cir. 1993); In re Vaeck, 947 F.2d 488, 495 
(Fed. Cir. 1991).  As noted above, the level of skill in the art should 
not change depending upon whether the mythical person of ordinary skill 
is reading a patent application or some form of publication.

	Further, the requirement that the patent teach those skilled in the art 
how to make and use the claimed invention can be satisfied in various 
ways.  The key is that the patent put the public in possession of the 
invention.  Thus, the enablement issue is judged in light of the skill in 
the art as of the date the patent application was filed, and turns on 
what the person of skill would have known and been able to make and use 
at that time, in light of the patent's specification.  A patent need not 
disclose what is well known in the art; but can provide necessary 
teachings through illustrative examples or broad terminology.  In re 
Wright, 999 F.2d 1557, 1561 (Fed. Cir. 1993); In re Marzocchi, 439 F.2d 
220, 223 (CCPA) 1971).

	Furthermore, where a written disclosure alone would not enable one 
skilled in the art to make and use the claimed invention, patent 
inventors may submit ("deposit") necessary materials in depositories 
which will distribute samples to members of the public who wish to 
practice the invention after the patent issues.  In fact, deposits have 
been held to be necessary for enablement in situations where (1) starting 
materials (for example, living cells from which the claimed cells could 
be produced) are not readily available to the public or (2) it would 
require undue experimentation to make the claimed invention from the 
publicly available starting materials.

	Like the burden on the USPTO in rejecting claims based on obviousness 
grounds, when rejecting a claim under the enablement requirement of 
Section 112, the USPTO bears the prima facie burden of setting forth a 
reasonable explanation as to why it believes that the claim is not 
adequately supported by the specification.  "This includes, of course, 
providing sufficient reasons for doubting any assertions in the 
specification."  In re Wright, 999 F.2d at 1561-62.  Moreover, if 
requested by the Inventor, the USPTO's Examiner has a duty to support his 
assertions with citations of relevant prior art.  In re Sun, 31 USPQ2d at 
1451.  If the USPTO satisfies this burden, the inventor must "provide 
suitable proofs indicating that the specification is indeed enabling."  
Id.; In re Marzocchi, 439 F.2d at 223-24.

	Two of the most difficult aspects of the test for enablement, in 
practice, relate to (1) the requirement that the specification teach the 
skilled artisan how to make and use the "full scope" of the invention and 
(2) the amount of experimentation that may be undertaken before 
experimentation becomes "undue."  As with the obviousness requirement, 
recent decisions by the Court of Appeals for the CAFC address these 
issues.

	In In re Wright, 999 F.2d 1557 (Fed. Cir. 1993), In re Goodman, 11 F.3d 
1046 (Fed. Cir. 1993), and In re Vaeck, 947 F.2d 488 (Fed. Cir. 1991), 
the Court addressed the enablement issue in the context of three 
biotechnological inventions.  In Vaeck, the invention was directed to the 
use of genetic engineering techniques for producing proteins toxic to 
mosquito larvae through the use of a chimeric gene capable of being 
expressed in Cyanobacteria cells.  The claim recited a chimeric gene 
comprising a DNA fragment encoding a promoter effective in Cyanobacteria 
and DNA fragment(s) encoding an insecticidally-active protein produced by 
a Bacillus strain.

	Seizing on the fact that the appellant's application specifically 
disclosed only two particular species of Bacillus and nine genera of 
Cyanobacteria (and a single strain of cyanobacteria as a working example 
(despite also describing the invention in generic terms)), the USPTO took 
the position that "the limited guidance in the specification, considered 
in light of the relatively high degree of unpredictability in this 
particular art, would not have enabled one of ordinary skill."  Id. at 
493 (citing In re Fischer, 427 F.2d 833 (CCPA 1970)).

	In affirming the USPTO's rejection, the Court first reviewed precedent 
holding that while the need for some experimentation by one of skill in 
the art is not fatal to the enablement inquiry, "the issue is whether the 
amount of experimentation required is undue."  Then, citing (1) the 
relatively incomplete understanding of Cyanobacteria as of the 
appellants' filing date (and appellants' failure to effectively dispute 
this assertion by the USPTO); and (2) the limited disclosure of 
particular Cyanobacteria operative in the claimed invention, the Court 
agreed that the enablement rejection was proper because no reasonable 
correlation existed between the disclosure in the application and the 
broad scope of protection sought in the claims.

	However, the Court made a point of specifically stating that it did not 
mean to "imply that patent applications in art areas currently 
denominated as 'unpredictable' must never be allowed generic claims 
encompassing more than the particular species disclosed in their 
specification."  There must be sufficient disclosure to teach one of 
ordinary skill how to make and use the invention.  According to the 
Court:  "This means that the disclosure must adequately guide the art 
worker to determine, without undue experimentation, which species among 
all those encompassed by the chemical genus possess the disclosed 
utility."30  As the Court held in In re Wands, 858 F.2d 731 (Fed.Cir. 
1988), factors to be considered in deciding whether a disclosure would 
require undue experimentation include:  (1) the quantity of 
experimentation necessary; (2) the amount of direction or guidance 
presented; (3) the presence or absence of working examples; (4) the 
nature of the invention; (5) the state of the prior art; (6) the relative 
skill of those in the art; (7) the predictability or unpredictability of 
the art; and (8) the breadth of the claims.31
	In practice, one of the most common problems being encountered by patent 
inventors is that an application is rejected on enablement grounds based 
on the blanket assertion by Examiners that the field is unpredictable and 
thus cannot support claims broader than those specifically exemplified in 
the application.  That approach is contrary to the Court's holding in 
Wright, Vaeck and Goodman.  Moreover, in many instances the rejection is 
not directed to that which is claimed, but rather is based upon the 
alleged failure of the inventor to make an actual showing of efficacy in 
humans.  This seems to be true especially in cases where the claim is to 
a composition (or method of making a composition) and one of the ultimate 
commercial uses of the composition may be human therapy.  Such a 
requirement is contrary to current law, however. See, e.g., Cross v. 
Iizuka, 753 F.2d 1040 (Fed. Cir. 1985).

	Furthermore, in many instances, enablement rejections appear to be 
based upon the subjective belief of the Examiner (contrary to the 
teaching of the specification).  At the same time, the rejections supply 
little or no reasoning for doubting the specification and contain no 
citation of prior art supporting the Examiner's statements.  This 
practice is contrary to existing law, as well.  See In re Wright, 999 
F.2d at 1561; In re Sun, 31 USPQ2d at 1451.

	Finally, another problem commonly encountered by practitioners is that 
an Examiner may take a position concerning the level of skill in the art 
concerning the combining of references and the reasonable expectation of 
success in connection with an obviousness inquiry that conflicts with the 
level of skill applied by the Examiner in the enablement inquiry.  
However, the case law specifically holds that a claimed composition would 
have been obvious under 35 U.S.C. Section 103 if the prior art would have 
placed the composition in the possession of the public.  In re Payne, 606 
F.2d 303, 314 (CCPA 1979); In re Braun, 329 F.2d 1006, 1011 (CCPA 1964).  
As recognized by the USPTO in their brief to the CAFC in the Deuel case:  
"To that end the prior art must describe the compound in such full, 
clear, concise and exact terms as to enable any person skilled in the art 
to make and use the compound."  In re Hoeksma, 399 F.2d 269, 274 (CCPA 
1968).  In fact, in Hybritech, Inc. v. Monoclonal Antibodies, Inc., 802 
F.2d 1367, 1384 (Fed. Cir. 1986), the Court reversed a district court 
holding and labelled "internally inconsistent" findings by the court that 
"the method for producing monoclonal antibodies was well known" in the 
art (in a Section 103 inquiry), while at the same time holding the patent 
deficient (for lack of an enabling disclosure) because it failed "to 
teach how to make monoclonal antibodies.

	As a result, there is precious little room to argue that a claim to a 
genus is not enabled due to the lack of disclosure of sufficient species, 
while simultaneously arguing that in light of some prior art reference 
one of skill in the art would have had a reasonable expectation of 
success in making one of the claimed species.



C. Question 1: Do you believe the legal standards governing assessment 
of the ordinary level of skill in the art for purposes of nonobviousness 
under U.S.C. 103, as developed and interpreted by the Federal courts, 
are sufficiently clear and appropriate for biotechnology inventions?  If 
not, 

	(a) identify aspects of the las that you believe lack clarity or are 
inappropriate, citing relevant cases; and 

	(b) identify any changes to these legal standards you believe would be 
desirable.

	We believe that the legal standards established by the Federal Courts 
governing assessment of the ordinary level of skill in the art for 
purposes of nonobviousness under 35 U.S.C. Section 103 are sufficiently 
clear and appropriate for biotechnology inventions.  We submit that these 
legal standards are well defined and are the same for all technologies.  
There is no reason to use a different standard in deciding whether 
biotechnology inventions are obvious.  The concern over the 
nonobviousness requirement for patentability should not be directed to 
the clarity of the legal standards, but rather the uniform implementation 
of these standards by the USPTO.  Thus, we view the nonobviousness issue 
as one of mis-application of the law rather than incorrect legal 
precedent.

	As a practical recommendation to address what we see as the 
mis-application of legal standards to the nonobviousness issue, we 
propose two-way, direct communication between the USPTO and the patent 
bar, as representatives of the inventors.  The communication is needed to 
exchange information and opinions with the goal of formulating a common 
interpretation of the legal standards established by the Federal Courts.  
The resultant common interpretation will be used as the basis for the 
legal training of Examiners.  Since the common interpretation will be 
known to both the Examiners and the patent bar, it will serve as a 
reference point for applying the nonobviousness standard to individual 
inventions under examination.  Thus, the legal standards of the Federal 
Courts will be more accurately and uniformly implemented within the 
USPTO.

	The recent efforts of the USPTO to keep pace with the rapidly advancing 
fields of biotechnology are very commendable.  The academic 
qualifications of Examiners, especially in biotechnology, have undergone 
a welcomed, dramatic improvement which bodes well for our nation and its 
competitive endeavors.  The tremendous, multi-faceted obstacles the USPTO 
has overcome to achieve these successes are well-recognized and 
appreciated by inventors and the patent bar.  The USPTO is encouraged to 
continue its efforts to develop a world-class competence in helping all 
inventors protect innovative solutions to global problems and needs.  By 
coupling examiner legal education as well as practical industrial 
information with keeping pace with rapid technological advances that the 
USPTO can truly achieve its desire to promote research, development and 
commercialization of technological advances in biotechnology.

	The communication between the biotech examiners and the patent bar is a 
way to re-discover their common ground.  Namely, that the purpose of our 
patent system is to promote science and innovation.  It is important to 
do so because the consequences of failing are costly in both capital and 
human resources.  The pool of capital for investment into biotechnology 
inventions is limited.  One of the variables which determines the size of 
that capital pool is risk.  The trust placed in the patent system by the 
inventors and their investors is one way of minimizing that risk.  If 
this trust is eroded by shrinking patent protection or by uncertainty in 
the availability or value of patent protection, risk increases and 
shrinks the capital pool.  The result is less innovation and fewer 
improved patient treatments, neither of which is good for humanity or our 
markets.

	As it appears now, the USPTO relies on the appeal process to police the 
legal standards of the Federal Courts.  This is very costly for both the 
USPTO and the inventors.  In the Notice for comments, the USPTO 
recognizes that the body of case law is growing and is helpful in giving 
direction for implementing the requirement of nonobviousness.  
Unfortunately this is a harmful, self-fulfilling prophecy.  This growing 
body of case law is being generated by the mis-application of legal 
standards which are already well-defined, albeit in different 
technological areas or factual situations.  This is similar to a drug 
company doing away with quality control and gauging the quality of its 
products on survivors (or family members) who sue.

	There are numerous cases prior to the 1966 Supreme Court decision in 
United States v. Adams et al., as well as more recent decisions, which 
define obviousness and provide guidance for applying the legal standards 
to individual inventions.  These cases are being ignored, however, in 
determining the obviousness of genetic material.  The standard of 
obviousness does not differ with technology as well-recognized three 
decades ago in In re Papesch, 137 USPQ 43, 47 (CCPA 1963):

		The problem of "obviousness" under Section 103 in determining the 
patentability of new and useful chemical compounds, or, as it is 
sometimes called, the problem of "chemical obviousness," is not really a 
problem in chemistry or pharmacology or in any other related field of 
science such as biology, biochemistry, pharmacodynamics, ecology, or 
others yet to be conceived.  It is a problem of patent law.

	Furthermore, the growing number of recent decisions by the Federal 
Courts on biotechnology patent issues is only the tip of the iceberg.  It 
represents a small fraction of Examiners' decisions that could have, 
probably should have, been appealed.  Very few inventors have the capital 
and human resources to challenge a mis-applied legal standard; first 
through the USPTO's examination, second through the Board of Appeals, and 
then into the Federal Courts.  The current implementation of legal 
standards through successive appeals saps the resources of both the USPTO 
and the inventors.  Opening communication between the USPTO and its users 
should decrease the number of appeals while more accurately applying the 
requirement of nonobviousness.

	Examples of mis-applying the legal standards governing nonobviousness 
are in the Notice for comments authored by the USPTO.  The Notice refers 
to the suggestion that the USPTO is imposing a per se rule of obviousness 
for inventions involving sequencing and expression of genes once any 
sequence information has been publicly disclosed, whether the sequence 
information takes the form of a partial amino acid sequence of a protein 
or DNA sequence information derived from the expression of the gene.  The 
USPTO asserts that it does not apply per se rules.  

	To the contrary, specific examples exist in the public record where 
Examiners have expressly stated ."..the relationship between a gene and 
the protein it encodes requires a different type of obviousness 
determination..."  The USPTO clearly changes the non-obviousness 
requirement when genetic material is involved.  The legal standards have 
been improperly simplified by focusing exclusively on the function of the 
DNA sequence as a information transfer vehicle while disregarding its 
chemical structure and the properties and characteristics resulting from 
its structures.  The patentability of a DNA sequence must include the 
properties and characteristics of its structure as it is inserted in a 
vector, the vector in a host, and the host grown to produce the desired 
protein.  It must be made absolutely clear that genetic material, and the 
other inventions of biotechnology, are to be judged by the same legal 
standards as other technologies on the issue of obviousness.

	The DNA sequence, like any other graphic chemical formula, are symbols 
which form a chemical nomenclature.  There is no scientific difference 
between "living" and "non-living" molecules.  The atoms of carbon which 
partially comprise the DNA polymer are no different than any other 
element in the periodic table.  There is no legal basis for treating DNA 
polymers differently from the polymers that comprise household plastics.

	The obviousness of a novel chemical compound in view of prior art 
compounds arises only when there is close structural similarity and 
motivation to make the novel compound.  The law is well-defined that the 
questions of chemical obviousness are decided on the basis of structure 
with all of its properties and characteristics taken into account.  A 
compound and all of its properties are inseparable; they are one and the 
same thing.

	No one would argue that certain procedures are needed as a practical 
matter in dealing with genetic material.  For example, filing the genetic 
sequence with the USPTO in a particular format.  These rules are 
procedural formalities, however, not substantive standards.  There is no 
reason for biotechnology, as exemplified by a DNA sequence, to have a 
different standard of determining obviousness than traditional chemistry.


	The Notice also refers to the USPTO practice of rejecting inventions 
drawn to monoclonal antibodies as being obvious over disclosure of the 
antigen that serves as a basis for making the antibody in view of 
conventional hybridomal technology.  The USPTO seems to require a new and 
higher legal standard which requires "unexpected difficulties" in making 
the antibody before it will find nonobviousness.  35 U.S.C., however, 
clearly allows using known process technology to make a novel compound, 
even if that compound is an antigen.  Mechanical inventions are not made 
obvious by the tool and die industry methods, nor should biotechnology be 
discriminated against.

	Of primary importance to the USPTO is fulfilling its Constitutional 
obligation to promote science and the useful arts by following and 
implementing the law decided by the Federal Courts and legislature.  By 
not adhering to the law, the USPTO weakens the trust and security placed 
in the patent system and robs our nation of competitive opportunities, 
particularly in emerging sciences like biotechnology.

	In order to continue the successful momentum that the USPTO has 
recently established, we must assure that the legal acumen of the 
Examiners rises to the same high standards.  We must address not only the 
academic expertise of the Examiners, but also their legal education and 
guidance necessary to apply the legal standards established by the 
Federal Courts to their everyday duties.

	We recommend that the USPTO focus primarily on the implementation of 
the standards set forth by the Federal Courts.  We suggest that the USPTO 
open the initial and continuing education program of USPTO Examiners to 
the public, so that the basis of the Examiner's legal education is known 
to the public.  This should provide a consensus starting point for legal 
arguments to be applied to the facts of the invention under examination.  


	There are clearly many advantages to establishing a legal education for 
the Examiners which reflects a general consensus of both the USPTO and 
the patent bar, as representatives of the inventors.  Should fewer 
appeals result as a consequence, the savings in economic and inventive 
power alone justifies the effort.  Accordingly, we recommend allowing the 
patent bar to cooperate in the education of the USPTO corps by providing 
comment on the Federal Court case law.



D. Question 2:  Do you believe the legal standards governing assessment 
of the level of skill attributable to a person "skilled in the art" in 
determinations made under 35 U.S.C.  112, first paragraph, as developed 
and interpreted by the Federal courts, are sufficiently clear and 
appropriate?  If not,

	a) identify aspects of the law that you believe lack clarity or are 
inappropriate, citing relevant cases; and	

	b) identify any changes to these legal standards you believe would be 
desirable.

	The legal standards governing assessment of the level of skill in 
determinations made under 35 U.S.C. Section 112, first paragraph (for 
simplicity "enablement") are sufficient as developed by the Federal 
courts. The law does not need clarification and no changes to this legal 
standard need be made. 

	The enablement statute, 35 U.S.C. Section 112, first paragraph, relates 
to the disclosure in a U.S. patent application of an invention.  This 
statute requires that the application discloses the manner of making and 
using the invention "so as to enable any person skilled in the art to 
which it pertains... to make and use the [the invention]...."It has been 
held that the burden of establishing that a U.S. application is not so 
enabling is on the party asserting such non-enablement.

	Many times this statute is misread as requiring a patent inventor to 
demonstrate to one skilled in the art the validity of the assertions in 
the application.  However, nothing in 35 USC 112, first paragraph, 
requires an inventor to demonstrate to one skilled in the art that the 
disclosure is enabling to make and use the invention in accordance with 
the claimed scope.  In certain cases 35 USC Section 112, first paragraph, 
has been utilized incorrectly by the USPTO to require an inventor to 
provide convincing evidence that the invention can be made and used in 
accordance with the claimed scope.  However, any such requirements are 
not in conformance with the court's interpretation of 35 USC Section 112.  
As stated by the CCPA in In re Armbruster, 185 USPQ 152 (CCPA 1975):

	Section 112 does not require that a specification convenience persons 
skilled in the art that the assertions therein are correct.  185 USPQ at 
153	

	Furthermore, nothing in 35 USC Section 112 requires an inventor to 
justify the scope of an invention to one skilled in the art by the 
presentation of specific examples.  In holding that no specific 
exemplification is needed to support a generic claim, the CCPA in In re 
Robins, 166 USPQ 552 (CCPA 1970) stated:

	Both the Examiner and the board seem to have taken the position that in 
order to 'justify,' as the Examiner said, or to 'support," as the board 
said, broad generic language in a claim, the specification must be 
equally broad in its naming, and use in examples, of representative 
compounds encompassed by claim language.  This position, however, 
misapprehends the proper function of such disclosure.  Mention of 
representative compounds encompassed by generic claim language clearly is 
not required by Section 112 or any other provision of the statute. 166 
USPQ at 555

	Therefore, it is clear from decided case law that the statute does not 
require the inventors to establish to one skilled in the art that their 
inventions can be made or used in accordance with the claimed scope.

	Rather, the burden of proof for demonstrating non-enablement is placed 
upon the party, which includes the USPTO, challenging the patentability 
of a given invention and not upon the inventor.  Therefore, to meet this 
burden of proof, the USPTO must provide acceptable evidence that the 
specification does not enable the invention to be made or used in 
accordance with the claimed scope. See In re Marzocchi, 169 USPQ 367 
(CCPA 1971).  This shifting of the burden, not the standard itself, 
appears to pose the greatest problem for the USPTO since it requires the 
USPTO to produce credible evidence to support non-enablement rejections.  
Obviously the USPTO cannot test disclosures in a laboratory.  However, 
that is no excuse for a general allegation of unpredictability when tea 
specification is to be taken to be true.

	To determine enablement based upon the individual judgments or feelings 
of an Examiner or group of Examiners, no matter how academically skilled, 
promotes disparity and creates a subjective determination.  Subjective 
determinations do not breed consistency whereas law and the requirements 
of law do.

	The inability to produce evidence to support a holding of 
non-enablement may frustrate some Examiners.  However, the question 
should not be whether Examiners believe or do not believe the evidence 
presented by the inventor but whether they have credible evidence to 
rebut the inventor's evidence and are following the standards of the 
courts.  The Examiners cannot merely interpose their own judgment as to 
the correctness of the data or assertions made by the inventor. 

	We believe that the current standard should be uniformly administered 
throughout the USPTO to ensure consistency.  The USPTO should follow the 
law on enablement as interpreted by the reviewing courts.  In short, the 
Examiners' standards for determining enablement should conform to the 
standards imposed by these courts.  In this respect, the Examiners should 
be instructed as to the law and the standards imposed by the law.  As in 
previous Sections, we therefore recommend that the USPTO open its 
education process to the public and allow the patent bar to assist in the 
education, both initial and continuing, of examiners as to the nuances of 
legal precedent.



E. Question 3: Do you believe the USPTO is correctly assessing the level 
of skill possessed by persons working in the field of biotechnology in 
determinations it makes regarding nonobviousness under 35 U.S.C. 103 and 
enablement under Section 112, first paragraph?

	In the biotechnology arts, the USPTO consistently applies an 
unrealistically high standard of skill in the evaluation of patent claims 
under the requirements of Section 103 and applies and equally 
unrealistically low standard of skill in the evaluation of patent claims 
under the requirements of Section 112. Moreover, the level of skill in 
the art, which is represented by a hypothetical skilled artisan working 
at the time the claimed invention was filed, is very often changed in the 
course of the prosecution of the same application depending upon whether 
the USPTO is making an argument with respect to nonobviousness or 
enablement.    

	Guidance as to the appropriate standards both for Section 103 and 112 
purposes are found in the case law.

    

	Question 3: (a)  Do you believe that the USPTO is properly assessing 
the level of "ordinary skill" in the art of biotechnology under 35 U.S.C. 
103? If not, please provide examples and identify specific situations 
where determinations have not been made that reflect the appropriate 
standard.

    	Proper identification of a person of ordinary skill is critical to 
the proper determination of the patentability of a given invention. The 
higher the level of skill which is applied, the more sophisticated and 
complex the combinations of prior art that are appropriate.    

	There is no doubt that the identification of a person of ordinary skill 
in the art is difficult. A class of persons must be identified who 
represent the ordinary worker in this area and the level of skill of that 
person needs to be evaluated. In biotechnology the situation is 
particularly difficult because the biotechnology industry relies upon a 
large proportion of very highly skilled researchers as well as employing 
significant numbers of less skilled laboratory technicians. The 
technology is developing rapidly and the level of ordinary skill 
continues to also change at a fast pace. Since the base technology itself 
is new, it can be difficult to determine that which is the next step as 
compared with the next inventive step. The secondary considerations of 
nonobviousness, which can greatly help to give clear perspective to the 
identity and motivation of that person of ordinary skill, are just not 
available yet.    

	There are some common factors which contribute to the improper 
assessment of the person of ordinary skill in the biotechnological arts:

	1. Failure to remember that an invention under Section 103 may not be 
obvious even 	to those of greater than ordinary skill.

	2. Failure to apply the proper legal standard to the Section 103 
analysis apart from 	the determination of what level of skill represents 
the skilled artisan.    

	3. Failure to appreciate that the hypothetical person of ordinary skill 
envisioned by 	the USPTO would require a level of interdisciplinary 
skills which may be found in the 	literature, but not representative of a 
currently recognized expertise.

	4. Failure to appreciate that the published literature only represents 
successes. The 	actual person of ordinary skill will be more cautious 
than a hypothetical person 	because of the realities of the laboratory, 
as well as the time and energy investment 	that each new experiment 
represents.    

	5. Failure to give significant weight to the review articles of those 
who are working 	in the area. When an inventor is able to provide review 
articles contemporaneous to 	an invention which lists several 
possibilities as explanation for a particular problem, 	these facts 
should not be ignored.

	For example, in one case, claims asserted to a purified preparation of 
a newly discovered protein having a particular activity were rejected 
over a publication which described a crude extract in which the physical 
characteristic for which the claimed protein is responsible could be 
observed. The cited reference failed to specifically identify the protein 
activity responsible for the characteristic, much less teach purification 
of the protein. Review articles published later than the cited 
publication were provided to the USPTO. The reviewers described several 
possible protein activities which could be responsible for the noted 
physical characteristic, and referred specifically to the cited reference 
as providing a mere suggestion of one of the possible mechanisms. The 
USPTO did not even comment on the review articles and maintained the 
obviousness rejection on the basis that "Applicants have not overcome the 
rejection by showing evidence of why one of ordinary skill in this art 
would not have purified the extracts."

     A few specific examples of inappropriate assessment of the level of 
skill in the art are provided below:    

	*Partial nucleic acid sequence rendering gene obvious.

    	In one case the Examiner rejected a claim to a specific viral 
promoter region on the basis of a primary reference which disclosed the 
encoding sequence to the virus as a whole, but which did not identify any 
portion as likely to contain a promoter, let alone inventors specific 
promoter region, and a secondary reference disclosing a promoter from a 
different virus. There was no teaching in any reference which disclosed 
or suggested a relationship between the genomes of the two viruses which 
would direct the skilled artisan to any particular region.    

     To render an invention obvious, the prior art must not only suggest 
the invention and suggest that it is reasonably likely to succeed, but 
further "both the suggestion and the expectation of success must be 
founded in the prior art, not in the inventors disclosure." In re Dow 
Chemical, 837 F.2d 469, 472 (Fed. Cir. 1988). The USPTO erred in this 
case in presuming that the skilled artisan would have found the specific 
promoter region described in the specification obvious, when in truth the 
prior art did not provide anything like the level of information that 
could make such a prediction obvious. The level of skill in the art is 
not yet so great that the artisan can tease out a promoter region from 
viewing an encoding sequence. Promoter elements remain a somewhat 
mysterious component of the art, and the skilled artisan does not pretend 
to know precisely what it is that makes a promoter a promoter, even 
within relatively well known promoter sequences. It is only when a 
particular region is expressed in a cell and shown to work that it is 
certain that the critical elements that make up a promoter have been 
properly pulled together.    

 	* Partial purification or assay for a protein in the literature 
combined with 	sequencing techniques render purified protein obvious.

	In one rejection a primary reference was cited disclosing an assay for 
an enzyme and preliminary work which identified a lipid-rich preparation 
enriched for that enzyme. The USPTO stated that this would have rendered 
the purified protein obvious in light of "established methods" for 
purifying membrane-associated enzymes, as reviewed in a secondary 
reference. What was missing was any explanation for why the skilled 
artisan would have made the particular combination. The Examiner 
attempted to transfer the burden to the Inventor, rather, to identify 
"unusual or specialized techniques beyond" the basic methods contained in 
the secondary reference.    

     While obviousness does not require absolute predictability of 
success, at least some is required. In re Whiton (CCPA 1970) 402 F.2d 
1082; In re Rinehart (CCPA 1976) 531 F.2d 1048. The  general knowledge of 
techniques for protein purification fails to suggest a specific method 
for purification, and fails to characterize any aspect of the protein 
which could be used to devise a purification method which would be 
expected to purify the protein.    

	The skilled artisan in the protein purification art requires much more 
from a disclosure, at the very least a critical purification step or a 
key characteristic of the protein before even a preliminary purification 
approach could be devised. By the CAFCs holding in In re Eli Lilly & Co., 
(Fed. Cir. 1990), a general disclosure must contain a sufficient teaching 
of how to obtain the claimed results, or assurance that particular 
results would be obtained if certain directions were pursued. The 
purification of any protein involves many steps which often must be 
practiced in a precise order and under specific conditions of time, 
temperature, volume, concentration, etc.. These steps are not 
self-evident, and will vary a great deal from protein to protein. There 
are literally infinite combinations of possible columns, gradients, gels, 
precipitants, centrifugations, all with buffers of varying pH, salt, 
concentrations of same, etc., to choose from. Until a purification has 
been accomplished, and the protein described with some certainty, there 
is little guidance as to where one would even begin.    

	Nonetheless, in many cases we have observed that the USPTO readily 
asserts that the mere knowledge of an assay for a protein is enough to 
render a purified preparation of such a protein obvious, and, in most 
cases, methods do exist for every step necessary to go from protein to 
DNA. A reference such as In re le Grice is typically cited for the 
proposition that prior art is enabling if the combination of the 
description and the knowledge of the art would put the invention into the 
possession of the skilled artisan. It would be random luck, however, for 
one to choose a purification procedure from the infinite possible 
combinations of steps, times, reagents, columns, buffers and detergents 
(and countless possible concentrations and permutations thereof) 
disclosed in a general reference to purify a particular protein.    

	In any case, this approach would seem to be a direct contradiction of 
the objection made by the Board of Appeals to the approach adopted by the 
Examiner in Ex parte Maizel. The biotech patent examiners apparently view 
this holding, though, as applying only to those cases where all six of 
the steps enumerated in Maizel are required to go from the cited 
reference to the claimed nucleic acid sequence. The real issue of a 
situation like Ex parte Maizel is not, however, the number of steps the 
Examiner must presume obvious from the prior art, nor the estimated time 
to DNA from protein, but the issue of certainty and uncertainty. The fact 
is that while the tools are available to attempt cloning given a 
description of a protein, and the prior art may provide a motivation to 
try, there is no certainty in any of these operations. The person 
ordinarily skilled in the art experiences many failures in protein  
purification.  Even given an assay, and some purifications simply prove 
to be unattainable. This is a fact of life to the person of ordinary 
skill in the art.    

	Perhaps the problem is that published descriptions of protein 
purification and cloning exclusively recite successful approaches. There 
are no reviews of failed methods and unsuccessful attempts. In reading 
published methods of cloning and protein purification it may appear that 
the person of ordinary skill finds protein purification routine once 
given a published description of an assay for a protein.    

	The skilled artisan can not extract from a description of an assay for 
a protein any particular characteristic of the protein which would assist 
the skilled artisan in its purification, such as its pI value, size, 
shape, membrane association, etc.. General methods described in a review 
contain no hint or suggestion about the necessary approach for the actual 
purification of a specific protein. The requirements of purification vary 
so much from protein to protein, that the knowledge gained from purifying 
one protein can be useless in devising a protocol to purify another. In 
fact, a detergent or other element used successfully in one protocol can 
inactivate or destroy a different target protein.    

	In yet several other instances, claims to a nucleic acid sequence 
encoding a particular protein were rejected over a combination which 
included references describing characterization or partial purification 
of the protein. When presented with evidence countering the supposed 
purification in the cited references, the USPTO has responded with 
statements such as the references would be "reasonably expected to permit 
isolation of the requisite peptide sequences," "Inventors have failed to 
show that the preparations are not pure enough to obtain useful peptide 
sequences" and "Inventors ability to reproduce the protocol is not 
probative." When faced with evidence that additional purification steps 
beyond the cited disclosures were required, the USPTO has characterized 
such additional steps as "a matter of routine in the art" even though the 
cited reference gave no indication that additional purification steps 
were in fact required.    

	Obviously, a report in the prior art of a purified protein does not 
teach, nor does it suggest, any portion of the amino acid or nucleic acid 
sequences for any synthase protein, and it is often not even clear from 
such a reference what constitutes purification, beyond the visualization 
of one or a few bands of protein on a polyacrylimide gel from a sample 
having assayable protein activity.    

	While techniques are clearly known to the skilled artisan by which a 
protein can be sequenced to yield an amino acid sequence, and by which an 
amino acid sequence can be used to obtain a clone, there are a number of 
practical reasons why such activity should not be viewed as expected to 
successfully result in a protein encoding sequence and thereby render the 
encoding  sequence obvious.    

	A suspect protein on a gel is not reliable for the purpose of obtaining 
nucleic acid sequence, first of all in the uncertainty of whether the 
particular visible protein is, in fact the suspected protein. The skilled 
artisan recognizes that the active protein in a sample may not be the 
predominant protein of the sample, and may not even be visible on such a 
gel. It may be present as a slight band easily missed or discounted, 
while a contaminant protein may be the only protein present in sufficient 
amounts as to be visible as a band. The skilled artisan is also cognizant 
of the fact that two or more similarly sized proteins may run to the same 
location on a gel, thus appearing as a single protein.    

	Also, as noted by the Board in Ex parte Maizel, purification of a 
protein from other proteins does not mean that the protein of interest is 
in a quantity, or in physical condition, which would permit amino acid 
sequencing as a matter of routine.    

	Additionally, it can be very difficult to obtain an amino acid sequence 
even give a quantity of purified protein. The person skilled in the art 
recognizes that proteins are highly variable in their response to peptide 
mapping or amino acid digestion sequencing techniques, even ignoring the 
fact that hidden or seemingly minor contamination can provide sequences 
which will lead to the cloning of the wrong sequence.    

	Finally, by the reasoning of the CAFC in In re Bell, an amino acid 
sequence should be considered a suggestion, only, of the nucleic acid 
sequence to a protein. It does not render a particular sequence obvious.    


	For these and other reasons regarding the unpredictability of the 
sequencing art, it is only when the nucleic acid sequence has been shown 
to encode the activity by expression in a host cell, or when an amino 
acid or nucleic acid sequence has been obtained showing a high degree of 
homology to a known protein having that activity, that it can be said 
with some certainty that a suspected purification as suggested by a band 
on a gel in truth corresponds to the desired protein.    

	The USPTO frequently dismisses such arguments, and months of research 
in the laboratory by a group of researchers is deemed "routine" absent 
"special considerations." Ask the skilled artisan, however, and the work 
required to obtain nucleic acid sequences from an apparently purified 
protein will be characterized as arduous and unpredictable, and such an 
artisan would be (and often are) justifiably insulted to hear such work 
dismissed as "routine."

	The purification of any protein involves many steps which often must be 
practiced in a precise order and under specific conditions of time, 
temperature, volume, concentration, etc.. These steps are not 
self-evident, and vary radically from protein  to protein. There are a 
literally infinite combinations of possible columns, gradients, gels, 
precipitants, centrifugations, all with buffers of varying pH, salt, 
buffers, concentrations of same, etc., to choose from. Until it has been 
done, and the protein described, there is little guidance as to which way 
to go.    

	Nonetheless, in many cases we have seen it argued by the USPTO that the 
mere knowledge of an assay for a protein is enough to render a purified 
preparation of such a protein obvious, and, naturally, methods do exist 
for every step necessary to go from protein to DNA.  A reference such as 
In re le Grice is typically cited for the proposition that prior art is 
enabling if the combination of the description and the knowledge of the 
art would put the invention into the possession of the skilled    

	This would seem to be a direct contradiction of the objection made by 
the Board to the approach adopted by the Patent and Trademark Office in 
Ex parte Maizel.  The USPTO apparently views this, though, as applying 
only to those cases where the six enumerated steps are present in the 
invention to go from description of protein to DNA. The real issue of a 
situation like Ex parte Maizel is not, however, the number of steps the 
Examiner must presume obvious from the prior art, nor the estimated time 
to DNA from protein, but the issue of certainty and uncertainty. The fact 
is that while the tools are available to attempt cloning given a 
description of a protein, and the prior art may provide a motivation to 
try, there is no certainty in any of these operations. The person 
ordinarily skilled in the art experiences many failures in protein 
purification even given an assay, and some purifications simply prove to 
be unattainable. This is a fact of life to the person of ordinary skill 
in the art.    

	One should not read published descriptions of successful purification 
and cloning attempts, or reviews of methods useful in the attempts, and 
presume that cloning and protein purification is a routine approach which 
the person of ordinary skill practices like falling off a log once given 
a published description of an assay for a protein. A description of an 
assay for a protein does not teach or suggest any particular 
characteristic of the protein which would assist the skilled artisan in 
its purification, such as its pI value, size, shape, membrane 
association, etc.  General methods described in a review contain no hint 
or suggestion about the necessary approach for the actual purification of 
a specific protein. The requirements of purification vary so much from 
protein to protein, that the knowledge gained from purifying one protein 
can be useless in devising a protocol to purify another, and in fact a 
detergent or other element used successfully in one protocol can 
inactivate or destroy another protein. An assay for a protein doesn't 
tell the person skilled in the art where to begin, or what steps to take.    


	The knowledge of one ordinarily skilled in the prior art available from 
general techniques for purifying proteins is simply not so great as to 
put the subject matter of a purified protein into the possession of the 
public from the report of an assay for the protein. A skilled artisan 
requires much more from a disclosure, at the very least a critical 
purification step or a key characteristic of the protein before even a 
preliminary purification approach could be devised, let alone the concept 
of an expectation of success for its ultimate purification. By the 
Federal Circuits holding in In re Eli Lilly & Co., (Fed. Cir. 1990) a 
general disclosure must contain a sufficient teaching of how to obtain 
the claimed results, or assurance that particular results would be 
obtained if certain directions were pursued.    

	Another example involves the combination of general methods for 
solubilizing membrane-associated proteins with a published assay for a 
particular protein. Among many other things, the general method taught 
techniques for isolating a protein from a protein-containing fraction, 
such as through the use of high salt concentrations and/or zwitterionic 
detergents. This reference also suggested the use of different types of 
column chromatography to further purify the solubilized protein.    

	As it turns out, high salt and a specific detergent, in particular 
concentrations and under specific circumstances as developed through 
trial and error experimentation by the inventor, to solubilize the 
protein, and then purified the protein through a combination of columns. 
The USPTO alleged that at the time the invention was made it would have 
been obvious to one of ordinary skill in the art to solubilize and purify 
the protein by the methods taught by the general reference, even though 
nothing in the general reference taught or suggested the suitability of 
any particular method for any particular protein.    

	The USPTO approach is mistaken in alleging that it would be obvious to 
utilize established methods for purifying membrane-associated enzymes 
once the assay exists and it reported, in presuming that at the time of 
the invention one ordinarily skilled in the art aware of general methods 
or approaches which could be attempted would know which combinations 
would work.    

	It truly comes down to the issue of the reasonable expectation of 
success in carrying out the claimed invention; which must be present for 
combined teachings of prior art to render the invention obvious. While 
obviousness does not require absolute predictability of success, at least 
some is required. In re Whiton (CCPA 1970) 402 F.2d 1082; In re Rinehart 
(CCPA 1976) 531 F.2d 1048. The general knowledge of techniques for 
protein purification fails to suggest a specific method for purification, 
and fails to characterize any aspect of the protein which could be used 
to devise a purification method which would be expected to purify the 
protein. Isolation and purification of membrane proteins is a difficult 
task. It would be random luck for one to choose a purification procedure 
from the infinite possible combinations of steps, times, reagents, 
columns, buffers and  detergents (and countless possible concentrations 
and permutations thereof) disclosed in a general reference to purify a 
particular protein.

	To use an analogy to another art unit, let's assume the software 
examiners refuse to grant patents on any software programs using existing 
languages -- because any consideration of known commands would be 
obvious, based on general references -- i.e. any earlier patent 
application utilizing that language.

    

	Question 3: (b) Do you believe that the USPTO is properly assessing the 
level of skill possessed by biotechnology applicants in determining 
compliance of an application with 35 U.S.C. 112 first paragraph? If not, 
please provide examples and identify specific situations where 
determinations have not been made that reflect the appropriate standard.

	35 U.S.C. Section 112, first paragraph states only that the 
specification must include a written description of the invention which 
enables any person skilled in the art to make and use the invention, and 
to set forth the best mode. With regard to the enablement aspect of 
Section 112, first paragraph, as long as a person skilled in the art can 
make and use an invention without undue experimentation, combining the 
knowledge of the prior art with the disclosure of the specification, then 
the enablement requirement of Section 112 is satisfied. Northern Telecom, 
Inc. v. Datapoint Corp., 908 F.2d 931, 943 (Fed. Cir. 1990). Furthermore, 
it is not fatal if some experimentation is needed (i.e., if the skilled 
artisan must practice only routine experimentation based on the 
disclosure, the invention is still enabled).    

	As with the determination of the skilled artisan of ordinary skill for 
Section 103 purposes, the proper identification of the person skilled in 
the art is critical to the proper determination of patentability. The 
higher the level of skill which is applied, the greater the "enabling 
power" of a given patent specification. Based upon caselaw in this area, 
the test for enablement requires that the claimed invention be practiced 
by the person skilled in the art without undue experimentation. In re 
O'Farrell, 853 F.2d 894 (Fed. Cir. 1988).    

	The identification the skilled worker for Section 112 purposes, as it 
is for Section 103 purposes described above, is also difficult. Many of 
the same considerations apply.    

	As an overall comment, there is a clear failure on the part of the 
USPTO to give the benefit of the disclosure in the specification to this 
"worker skilled in the art" when making an analysis of undue 
experimentation. For example, when an inventor has provided a previously 
unknown nucleic acid sequence in the specification, these sequences are 
put into the possession of the skilled artisan who should be presumed 
able to do with these sequences all that is possible from the knowledge 
of such a one of recombinant DNA technology and techniques that exist in 
the prior art. This is discussed in more detail below with a specific 
example.    

	Some specific examples where determinations which related to the level 
of skill in the art have not been made under the appropriate standard:

	* USPTO requires limitation to particular nucleic acid construct 
parameters such 	as size of component fragments.    

	A requirement to limit one's invention to the exact DNA construct 
tested is also commonplace. Apparently, it is the belief of Group 1800 
that once a DNA sequence encoding a protein is disclosed, that one 
skilled in the art is incapable of making any modifications to that 
sequence without undue experimentation. Likewise, in order for an 
inventor to obtain claims that would cover reasonable modifications to a 
sequence, that all such functional permutations must be actually 
described within the patent specification.    

	For example, in one case which is now on appeal, the Examiner states: 
"only one [deleted] construct comprised of [deleted] kb fragment of the 
[deleted] gene was described...there is no guidance as to what portions 
of the [deleted] gene would be effective or how long those portions 
should be in order to be effective. One of skill in the art could not 
determine which portion to use and thus could not make and use this 
invention on the basis of this disclosure without undue experimentation." 
However, it should be readily apparent that the level of skill in the art 
has included the ability to make and test modifications of gene size 
without undue experimentation.

	*USPTO requires limitation to particular host organism even when 
property 	tested is not host specific   

	Limitation to the tested host organism, even when there is no 
scientific reason to believe that there is a difference in a particular 
pathway between different organisms is commonplace. The purported "undue 
experimentation" typically results from the "unpredictability" in 
biotechnology, but without any real scientific rational for support.    

	In one situation, claims directed to an essential enzyme involved in a 
highly conserved biochemical pathway were rejected under argument that 
the claims would only enable the exemplified host and only for that 
particular host tissue of using the particular construct tested. However, 
given the fact that the enzyme itself was from a species different than 
the host tissue and had inherently worked there, it is readily clear that 
an important principle was being described to those skilled in the art. 
The USPTO has no basis to assume that the exemplified host was unique 
but, as noted above, relies upon a generalized recognition of those of 
skill in the art of the variability and unpredictability of genes in 
different species.

    

	Question 3: (c) Do you believe the USPTO should equate the knowledge 
and experience of a person "skilled in the art to which the invention 
pertains" under Section 112 to that possessed by a "person of ordinary 
skill in the art" under Section 103? Please explain the basis for your 
conclusions.    

	Section 103 refers to a person having ordinary skill in the  art to 
which said subject matter pertains, while Section 112 speaks to the 
sufficiency of the written description of the invention to enable those 
skilled in the art. An important reason to equate these concepts is it 
would be impossible to distinguish among the Section 112 and 103 artisans 
in any meaningful way.  Thus, the skilled artisan under Section 112 and 
the artisan ordinarily skilled in the art to which the invention pertains 
under Section 103 should be equated.    

	However, aside from "skilled" issues, there is one very important 
distinction written into the statute which can not be ignored. This 
distinction is, of course, that the Section 112 skilled artisan has the 
benefit of all that the inventor teaches in the specification, while the 
person having ordinary skill in the art to which said subject matter 
pertains under Section 103 is ignorant of inventor's disclosure.   

	Keeping this difference in mind between these imaginary persons is 
critically important to the proper prosecution of patentability and 
enablement issues. As noted above, in alleging obviousness for 
biotechnology patents, the USPTO takes an expansive view as to what the 
general teachings and knowledge of the prior art reveals to the person 
ordinarily skilled in the art under Section 103 regarding the specifics 
of an invention.  In many cases, Examiners seem to use the specification 
as a blueprint to select information from references. 

   	Then for enablement, the examiners discount to disclosure as and 
refuses to acknowledge that those skilled in tea art can now make great 
progress. Frequently even when the nucleic acid sequence for a protein is 
disclosed, the USPTO will object to claims encompassing very similar 
proteins from similar species. It is the skilled artisan under Section 
112, however, that has the greater knowledge, including the specifics of 
an inventor's invention and all that can be gleaned from the 
specification.    

	This imbalance in the USPTO as to what the prior art teaches the 
Section 103 and Section 112 artisan goes to the heart of the patent 
practitioners difficulty in prosecuting patent applications to 
biotechnology inventions.    

	By the Federal Circuits holding in In re Eli Lilly & Co., (Fed. Cir. 
1990) a disclosure must contain a sufficient teaching of how to obtain 
the claimed results, or assurance that particular results would be 
obtained if certain directions were pursued. How, then, could a claimed 
subject matter be simultaneously obvious and not enabled, particularly 
given the fact that the Section 112 person has the benefit of the 
specification while the Section 103 person ostensibly does not!  Yet, we 
see this combination of rejections all the time.    

	The confusion as to the level of skill seems to work against the 
inventor in each case, never in his favor of innovation. As an example, 
we frequently find that the USPTO is of the  view that the Section 112 
person of ordinary skill in the art knows less than the Section 103 
person of ordinary skill, which results in some strange positions. For 
instance, claims rejected under Section 103 as obvious in view of a 
general reference are often the same claims rejected under Section 112 as 
not enabled. This suggests an anomalous and illogical view that the 
person having ordinary skill in the art under Section 103 would have had 
an expectation of success to practice the technology from the prior art 
teachings, but once the patent specification has provided additional 
information the formerly confident person of ordinary skill under Section 
103 is converted to a skilled artisan under Section 112 who lacks the 
certainty of what to do in order to practice the invention.    

	In biotechnology practice these conflicts between the "confident" 
Section 103 person with ordinary skill and the "lost and confused" 
Section 112 skilled artisan are fairly commonplace. In one case the USPTO 
asserted that a protein having an activity for a particular substrate 
rendered a protein with specificity for a similar but different substrate 
obvious under Section 103, for the reason that once given an encoding 
sequence to the first protein the second would have been obtainable as a 
matter of routine. However, based on the additional encoding sequence 
provided in the specification and the original sequence, which taken 
together provided previously unknown conserved regions of homology, 
certain claims which embraced proteins with specificity to third related 
substrate were not enabled. According to the USPTO, the specification did 
not enable the Section 112 skilled artisan with sequences to proteins 
other than those disclosed by the specification. In other words, under 
the Section 103 rejection the second protein was asserted to be well 
within the purview of the Section 103 person of ordinary skill in the art 
based upon the first encoding sequence. However, given homologous 
sequences from the first and second encoding sequences, the cloning of a 
third related protein was viewed as beyond the skill of the Section 112 
artisan.    	In another case, the USPTO simultaneously held (1) that it 
would have been obvious under Section 103 to express a certain protein in 
any host cell to effectuate a change in a common metabolic pathway, and 
(2) that the specification only enabled the change which was exemplified, 
i.e., the claims must be limited to the expression in cells of a 
particular tissue type from a particular construct. The skilled artisan 
under Section 112 was not viewed as having sufficient information to do 
more than the specific examples of what that application taught.    

	As argued before, in the biotechnology field, the USPTO believes that 
the difference between the skilled artisan of Section 103 and the skilled 
artisan of Section 112 is that the latter knows everything that the 
former knows, and significantly more. The skilled artisan of Section 112 
has the benefit, denied the person ordinarily skilled under Section 103, 
of knowing everything about the particular invention which is disclosed 
in the specification. Thus, there should be a gap in what the two 
artisans can be expected to practice with a reasonable expectation of 
success, or with only routine experimentation, but the gap should favor 
the skilled artisan  under Section 112, i.e., the skilled artisan under 
Section 112 can do more.    

	A final example is a case involving the encoding sequence to a protein 
involved in a basic metabolic pathway and constructs for its use, where 
detailed analysis of what the metabolic effects observed upon use are not 
provided. The USPTO's rejections included a Section 112 rejection which 
claimed that absent the results it was "uncertain" whether the encoding 
sequence could effectuate a change in the metabolic pathway, as well as a 
Section 103 rejection which stated that the use of such a gene to alter 
the metabolic pathway was obvious given a report in the prior art of the 
protein. How is an inventor to respond to such a rejection?



F. Question 4:  Are there specific practices of the USPTO with regard to 
determinations under 35 U.S.C. 103 or 112 for biotechnological inventions 
that you believe are inappropriate or inconsistent with legal precedent?



	1. Overview

	The question requests parties to identify with specificity the 
practices in question, examples of the practices, reasons why the 
practices are inconsistent with legal precedent, suggestions for specific 
changes that would address these concerns, and an explanation of the 
implication of these changes.  Following these requirements, this Section 
presents specific examples of recurring rejections which based upon 
positions that are inconsistent with case law. The majority of the cases 
include illustrative quotations by an Examiner since the USPTO has stated 
that it is difficult to respond to concerns about USPTO practice 
"particularly when expressed anecdotally."  Id. at page 45270.   



	2. Specific Examples and Case Law

		(a) Obviousness Rejections That Confuse Tests of Novelty and 		
Nonobviousness

			(1) An analysis of the elements of a claim lacking consideration of 			
whether the claim as a whole would have been obvious

	This case is illustrated by a Section 103 rejection of a two-step 
method  in view of a single reference.  The following quote shows the 
USPTO's approach to analyzing the obviousness of the method claim.

		The preamble of claim 1 . . . is taught by [the reference].  Claim 
1(a), the determining step, is clearly met by figure 1 of [the 
reference].  Claim 1(b), the step of comparing [is taught by the 
reference].

Thus, the USPTO dissected a claim into various elements and  attempted 
to show that each element was taught or suggested by the cited reference.  


	This test for obviousness is erroneous as a matter of law.  For 
example, the Board of Patent Appeals and Interferences has explained 
that:

		[C]iting references which merely indicate that isolated elements 
and/or features recited in the claims are known is not a sufficient basis 
for concluding that the combination of claimed elements would have been 
obvious.  That is to say, there should be something in the prior art or a 
convincing line of reasoning . . . suggesting the desirability of 
combining the reference[s] in such a manner as to arrive at the claimed 
invention.

Ex parte Hiyamizu, 10 USPQ2d 1393, 1394 (BPAI 1988).

	Criticizing a similar obviousness analysis of a nine-step method claim, 
the CAFC stated that:

		  Of course, there is no such thing as "claim 1(a)" . . . .  There is 
claim 1 and the first step of its 9 recited steps is designated "(a)."  . 
. . [W]hat is claimed is what is defined by the claim taken as a whole, 
every claim limitation (here each step) being material.

General Foods Corp. v. Studiengesellschaft Kohle mbH, 23 USPQ2d 1839, 
1845 (Fed. Cir. 1992) (original emphasis), rehearing in banc denied, 1992 
U.S. App. LEXIS 25713 (Fed. Cir.; Oct. 5, 1992).



			(2) Claims directed to DNA molecules are treated as if they are 
presumptively anticipated

	Group 1800 has formulated a policy that a novel nucleotide sequence 
does not render a claimed DNA molecule nonobvious, regardless of whether 
the prior art would have suggested the claimed nucleotide sequence.  
Following this policy, for example, the USPTO has rejected claims that 
recite a novel DNA sequence which functions as a promoter capable of 
stimulating gene expression in a particular tissue.  In one case, the 
USPTO stated that "the fact that the claimed [tissue A specific] promoter 
has a unique nucleotide sequence does not render it non-obvious."  It was 
not relevant to the USPTO's decision that the promoter was characterized 
by a novel nucleotide sequence and that the prior art did not suggest how 
one could modify the nucleotide sequence of a known tissue A specific 
promoter to obtain the novel sequence of the claimed promoter.  In other 
words, it was irrelevant that the claimed promoter was structurally 
nonobvious.

	The USPTO has maintained the position that the recitation of a 
nucleotide sequence should have little, if any, impact on the issue of 
obviousness.  For example, one Examiner stated that "[t]he nucleotide 
sequence of any given promoter is an inherent property easily ascertained 
using standard techniques."  Moreover, the "[n]ucleotide sequence is 
irrelevant in this case" because "one [tissue A] specific promoter 
renders another obvious regardless of sequence."  This dismissal of the 
structure of the claimed promoter absolutely disregards the 
well-developed body of law regarding the obviousness of chemical 
compounds.  Apparently, Group 1800 does not believe that:

 	While the cited decisions refer to chemical compounds, rather than 
sequenced DNA, we stress that a gene is a chemical compound, albeit a 
complex one.  See Amgen Inc. v. Chugai Pharmaceutical Co., 927 F.2d 1200, 
18 USPQ2d 1016 (Fed. Cir. 1991), at 18 USPQ2d 1021.  Thus, it is manifest 
that the prior decisions involving chemical compounds are equally 
applicable to claims directed to [a DNA sequence coding for human tissue 
plasminogen activator].

Ex parte D, 27 USPQ2d 1067, 1069 (BPAI 1993). 



		(b) Rejections Based Upon the "Obvious to Try" Standard Coupled with 
Implicit Hindsight

			(1) A claimed gene is considered to be rendered obvious by the 
disclosure of the isolated protein encoded by the gene

	In one case, the Examiner rejected claims directed to DNA molecules 
encoding "enzyme A" as obvious in view of primary, secondary, and a 
tertiary reference.  The Examiner's position was (1) that the primary 
references describe purified enzyme A, (2) that the secondary references 
describe methods for determining amino acid sequences, and (3) that the 
tertiary reference describes a method for isolating a gene encoding a 
protein "for which a short amino acid sequence is known."  The Examiner 
concluded that it would have been obvious to one of ordinary skill in the 
art to have purified enzyme A, to have learned at least part of the amino 
acid sequence, and to have isolated the enzyme A gene using the method of 
the tertiary publication.

	The Examiner's analysis was flawed as a matter of fact since the 
primary reference did not teach methods for obtaining sufficiently pure 
enzyme A.  Moreover, the inventors in this case had found it necessary to 
devise a new purification step.

	In addition, the Examiner's analysis was erroneous as a matter of law 
in view of Ex parte Maizel, 27 USPQ2d 1662 (BPAI 1992), in which the 
Board reversed a Section 103 rejection of claims directed to DNA 
molecules and recombinant host cells comprising a DNA fragment encoding 
B-cell growth factor (BCGF) protein.  Here, the Examiner's position was 
that one of skill in the art could have purified BCGF protein, sequenced 
the purified BCGF protein, constructed oligonucleotide probes encoding 
portions of BCGF protein, and isolated DNA molecules encoding BCGF using 
the oligonucleotide probes.

	According to the Board, the "Examiner's position reflects the 
'obviousness [sic] to try' approach of the 'armchair' chemist."  Id. at 
page 1668.  The Board found that the BCGF protein had not been isolated 
to "sufficient purity and sufficient quantity" for amino acid analysis at 
the time that Maizel's application had been filed.  Consequently, the 
Board concluded that 

	In the absence of being able to isolate substantial quantities of the 
protein to purify, it would be virtually impossible to produce probes 
insofar as sequencing the proteins would be disrupted by the presence of 
significant portions of other proteins.

Id.  (emphasis added).

			(2) A human gene, the existence of which is unacknowledged by the 
prior art, is rendered obvious by the disclosure of a homologous rat 
gene.	

	As an illustration of this type of rejection, an Examiner rejected 
claims directed to DNA molecules encoding human "receptor A."  The 
Examiner's position was that the primary reference taught the rat 
receptor A gene, while secondary references taught methods to clone human 
homologues of various rat receptor genes.  Here, the Examiner's premise 
was that the secondary references would have suggested the existence of 
the human receptor A gene since "[t]here is no suggestion in the prior 
art or any evidence of record which would suggest that the [receptor A] 
gene, first identified in rats, would not also be present in humans."  

	In other words, the Examiner argued that the disclosure of a class of 
rat genes would have rendered obvious an unknown human gene which was 
claimed by its novel nucleotide sequence.  Clearly, the Examiner applied 
the "obvious to try" standard, since the cited references, at best, gave 
"only general guidance and is not at all specific as to the particular 
form of the claimed invention and how to achieve it."  Ex parte 
Obukowicz, 27 USPQ2d 1063, 1065 (BPAI 1992). 



		(c) Rejections Based Upon an Overt Use of Hindsight

	To support an obviousness rejection, an Examiner stated that the 
primary reference "teaches a gene encoding a rat [receptor B] which 
shares 91% nucleic acid sequence homology with the [human receptor B] 
gene of the instant invention, as demonstrated by a database sequence 
comparison."  Here, the Examiner took the inventors' teaching from the 
specification and combined this information with the teaching of the 
primary reference.  This was an improper combination, based upon 
impermissible hindsight.  Panduit Corp. v. Dennison Manufacturing Co., 1 
USPQ2d 1593, 1595 (Fed. Cir. 1987), cert. denied, 481 U.S. 1052 (1987) 
("To reach a proper conclusion under Section 103, the decision maker must 
step backward in time and into the shoes worn by that [person having 
ordinary skill in the art] when the invention was unknown and just before 
it was made").

	In another case, an Examiner decided that claims to an antiviral 
composition comprising components A and B would have been obvious.  The 
Examiner explained that: 

	One of ordinary skill seeking to inhibit virus replication would be 
motivated to combine [a variant of component A described in a cited 
reference] with other known antiviral agents, such as [component B], for 
their additive effects.  Applicant has indicated [in the application] 
that a synergistic composition results when [component A is combined with 
component B].  Thus, according to applicant, the mere combination of the 
two substituents is sufficient to achieve a state of synergy.

Again, the Examiner supported the rejection by improperly referring to a 
statement in the inventors' specification.  

	In passing, it should be noted that the Examiner compounded the error 
by disregarding the significance of the synergistic effect which is 
evidence for the nonobviousness of the claimed invention.  In re Corkill, 
226 USPQ 1005, 1009 (Fed. Cir. 1985) ("A greater than expected result is 
an evidentiary factor pertinent to the legal conclusion of obviousness") 
(citing United States v. Adams, 383 U.S. 39, 51-52 (1966)).



		(d) Rejections of Composition Claims Based Upon Prior Art Methods

	The Examiners assigned biotechnology inventions uniformly ignore 
Section 103: "Patentability shall not be negatived by the manner in which 
the invention was made."  In a typical case, an Examiner rejected 
composition claims directed to DNA molecules that stimulate gene 
expression in tissue A.  The Examiner's position was that the claimed 
invention would have been obvious in view of prior art methods.  For 
example, the Examiner stated: 

	(1) that "[i]t would have been obvious to one of ordinary skill in the 
art at the time 	the invention was made to use the method of [reference 
1] to isolate a [tissue A]-	specific promoter sequence,"  

	(2) that reference 2 "shows that the method of [reference 1] can be 
successfully 		applied to other species," and

	(3) that "[o]ne needed only to isolate a [tissue A]-specific cDNA and 
then proceed 	with standard techniques to identify the [tissue 
A]-specific promoter . . . . [which] is 	precisely what Appellants did." 


	The Examiner's reliance on prior art methods to support an obviousness 
rejection was directly contrary to case law because "the issue is the 
obviousness of the claimed compositions, not of the method by which they 
are made."  In re Bell, 26 USPQ2d 1529, 1532 (Fed. Cir. 1993).  
Techniques for purifying proteins and isolating DNA do not make those 
chemicals obvious.



		(e) Rejections Based Upon a Misunderstanding of Patentability 
Standards Under the First Paragraph of Section 112

	One recurring problem is an overzealous demand for the deposit of DNA 
molecules in satisfaction of the enablement requirement.  For example, in 
application related to a method for producing transgenic animals, the 
specification described numerous examples of well known DNA molecules 
that could be used with the claimed method.  The Examiner decided that 
the specification did not enable the claims because the inventors had not 
deposited the various illustrative well known DNA molecules. 

	Examiners are rejecting claims to hybrid plant seeds based on a 
misapplication of the written description requirement.  In one case, an 
Examiner rejected claims directed to hybrid seed under Section 112 
because "the absence of a written description of the inbred parents of 
the instant hybrid precludes the Examiner from evaluating the teaching of 
the specification."

	This  position is directly contrary to case law.  Ex parte C, 27 USPQ2d 
1492 (BPAI 1993), concerns a similar case in which an Examiner had 
rejected claims under Section 112 to a novel soybean plant, seeds 
produced from the claimed soybean plant and a method for producing the 
seeds.  Here, the Examiner's position was that the specification did not 
adequately describe the characteristics of the parent lines of the 
claimed hybrid soybean plant.  The Board reversed the Section 112 
rejection, explaining that:

	  [T]here is nothing in 35 U.S.C.  112 which supports a rejection on 
the ground that the specification does not provide enough information for 
the Examiner to formulate a search and examine the application.

Id. at page 1495 (original emphasis). 

	In another misapplication of the written description requirement, 
Examiners are demanding a disclosure of amino acid and nucleic acid 
sequences for claims directed to proteins and DNA molecules, 
respectively.  In one case, for example, claims directed to a particular 
enzyme stated that the enzyme was isolated from a specific group of 
microorganisms, was capable of degrading an identified substrate, and had 
recited physicochemical properties including pH optimum and resistance to 
degradation when incubated at a certain temperature.  Yet, the Examiner 
improperly cited Fiers v. Sugano, 25 USPQ2d 1601 (Fed. Cir. 1993), for 
the proposition that "[t]he breadth of the claims amount to a functional 
definition and absent a recitation of further details therein, do not 
provide sufficient written description of the invention."



	3. Suggestions for Changes to Address the Above-Described Concerns and 	
Implications of Such Changes

	At first blush, a mechanism for change is obvious: provide training for 
Examiners so that they (a)can appreciate the policy behind legal 
precedent, (b)are educated in case law concerning biotechnology 
inventions, and (c) are informed of current case law on a continuing 
basis.  If Examiners followed case law, the shape of patent prosecution 
for any particular case would be more predictable.  A degree of 
predictability is important for business decisions on the economics of 
filing a patent application and pursuing patent prosecution.  Effective 
training also would enhance the survivability of small start-up 
biotechnology companies.  This is so because the cost of prolonging 
prosecution due to unreasonable rejections selects for large, established 
biotechnology companies with greater monetary resources than the small 
business ventures.

	There is reason to believe, however, that a complete cure cannot be 
effected solely at the Examiner level.  After all, biotechnology 
Examiners receive guidance from their superiors in Group 18000.  One 
example of such guidance is the above-described policy regarding DNA 
molecules having a nonobvious nucleic acid sequence.  

	Assuming that Group 18000 has the authority to generate its own 
internal policies, often called "the flavor-of-the-month" by Examiners 
and practitioners, these interpretations of the patent statute should be 
aired in a public forum.  In fact, the Administrative Procedure Act 
requires that even interpretive rules must be published.  

	Last Spring, Commissioner Lehman published a note in the Official 
Gazette instructing Examiners to ignore a decision by the U.S. Court of 
Appeals for the CAFC in In re Baird, 29 USPQ 1550 (Fed. Cir. 1994).  
Apparently, the USPTO simply decided that the Court had used an improper 
standard for patentability under Section 103 in assessing the question of 
obviousness.  We believe that this incident demonstrates the need to 
clearly define the role of the USPTO in U.S. patent practice, and to 
delineate the relationship between the USPTO and its reviewing court.  
Otherwise, it may be unrealistic to expect Examiners to give the proper 
deference to case law while the Commissioner refuses to do so.  The USPTO 
has been getting sequence data for some time and Examiners need to be 
taught its proper place in patentability determinations. 



G. Question 5:  Do you believe legal standards and examining practices 
in foreign systems provide a better framework for making patentability 
determinations that depend upon the level of skill in the relevant field 
of biotechnology than is utilized in the United States?  Please identify 
desirable and undesirable practices of foreign offices, particularly the 
Japanese and the European Patent Office, in this regard.

	With one notable exception, as concerns the legal standards for making 
patentability determinations that depend upon the level of skill in the 
art, it does not appear that foreign systems provide a better legal 
framework.  The U.S. system of case law provides a comprehensive 
analytical framework for addressing issues, such as obviousness, 
enablement and the breadth of claims relative to disclosure.  Unlike the 
U.S. system, however, the foreign systems explicitly recognize that the 
level of skill in the art does not change depending upon whether the 
inquiry is one based upon an assessment of the prior art or the 
sufficiency of the disclosure in a patent application.  As explained in 
earlier Sections of this paper, such a nonvarying application of the 
skill in the art is desirable and appropriate.

	As concerns examining practices, however, foreign systems have much 
more detailed Examination guidelines, and generally more 
legally-experienced Examiners.  These factors appear to make examination 
and prosecution of biotechnology patent applications in foreign systems 
more uniform and straight-forward.

	As was explained in earlier Sections of this paper, at the heart of the 
patentability determination of obviousness and enablement is an 
assessment of the skills possessed by the person having ordinary skill in 
the art ("PHOSITA").  See J.O. Tresansky, "PHOSITA -- The Ubiquitous and 
Enigmatic Person in Patent Law," 73 J.P.O.S. 37 (1991).  This fictitious 
person is the standard by which decisions are made.  For example, an 
obvious contribution involves the performance of acts involving routine 
experimentation which a PHOSITA would have expected to succeed in light 
of contemporary knowledge.  In the case of enablement, sufficiency of 
disclosure is judged sufficient if this person can practice the 
technology falling within the description of the claims by engaging in 
routine experimentation.  In the biotechnology field, routine 
experimentation can often be labor intensive and time consuming.  These 
determinations involving PHOSITA, though objective, are information 
content dependent.  

	The Japanese Patent Office and the European Patent Offices essentially 
address the same issues involving inventiveness and enablement using 
functionally similar analytical frameworks.  In regard to the European 
Patent Office's and the British Patent Office's handling of 
inventiveness, see R.S. Crespi, "Inventiveness in Biological Chemistry:  
An International Prospective," 73 J.P.O.S. 351 (1991).  These systems, 
while they do not employ PHOSITA of U.S. law, do employ a similar fiction 
to set threshold standards by which decisions are made.  The standards of 
all the mentioned systems change with advancing technology.  The European 
and Japanese Offices do employ detailed "Examination Guidelines," which 
are updated, to facilitate examination.  These guidelines promote 
consistent decision making amongst their "Examiner" corps and educate the 
inexperienced.  The Guidelines employed by these Offices are much more 
detailed at an individual technology level than is the Manual of Patent 
Examining Procedure employed by the U.S. Office and therefore appear more 
useful. Considering the relative inexperience of U.S. Examiners in the 
biotechnology field on matters of patent law and the application of the 
law to varying factual situations, a more detailed set of Examination 
Guidelines should be given serious consideration.  The assistance of 
industry representatives should be encouraged by the USPTO in the 
formulation process.





Implications of Legislation32

	The USPTO Notice requests comments on several patent reform initiatives 
pending before the Congress.  These include the legislation to implement 
the intellectual property provisions of the GATT agreement, the 
Biotechnology Patent Protection Act and other measures.  It also raises a 
series of questions regarding a provisional application filing system, 
data bases of DNA or amino acid sequences, restriction practices, and 
examining practices.  This Section of the report outlines BIO's views on 
two pending bills, the GATT implementing legislation and Biotechnology 
Patent Protection Act and then addresses the specific questions raised by 
the USPTO Notice. 



A. Pending Patent Reform Legislation (GATT)

	1. BIO's Position on GATT Implementing Legislation

	The United States is a signatory to the new GATT agreement, including 
its intellectual property provisions.  President Clinton has submitted 
legislation to implement the agreement and these provisions under a "fast 
track" procedure and votes on the legislation are set in November or 
December.

	Prior to the introduction of this legislation all interested parties 
were invited to submit their views on draft legislation.  This process is 
routine for such legislation because under the procedures set for 
consideration of the legislation it cannot be amended once it is 
submitted. Congress would not accept these procedures if there were not a 
full opportunity to review the draft legislation prior to its 
introduction.

	On June 27, 1994, BIO communicated its views on the draft legislation 
in letters to 

Ambassador Mickey Kantor, United States Trade Representative, and Patent 
Commissioner Bruce A. Lehman.  A copy of BIO's letter to Commissioner 
Lehman is printed in Appendix D of this report.  The letter stated that, 
"As an industry with a positive balance of trade we support full and fair 
international trade.  Therefore, we welcome many features of the GATT 
Agreement, including elimination of tariffs and the stronger intellectual 
property protection provided under the Agreement on Trade Related Aspects 
of Intellectual Property Rights (TRIPS) which forms part of the GATT 
Agreement."  

	BIO then expressed "serious concerns relating to draft legislation to 
implement the agreement."  It stated its belief that "limiting the patent 
term to 20 years from filing, without adopting either a package of 
safeguards or other reforms, will seriously disadvantage our industry, 
which is particularly prone to lengthy delays between the filing of a 
patent application and subsequent issuance of the patent."

	BIO said that, "This threat to our industry can be avoided, while at 
the same time complying with GATT, by leaving the present patent terms of 
17 years from issue unchanged other than to insert language stating that 
the term will not be less than 20 years from filing."  (emphasis in 
original)  It emphasized that, "This proposal would not only be in full 
compliance with GATT but would greatly simplify the implementing 
legislation by completely avoiding all additional provisions currently 
proposed in connection with patent term extension for interference 
delays, provisional protection and the like."

	At that time BIO understood that the Administration was reluctant to 
amend the draft legislation and we, therefore, stated that "[i]n the 
event that despite our suggestions above, change to a patent term of 20 
years from filing remains in the proposed legislation, we urge[d]" that a 
series to steps be taken.  BIO proposed that the "extension provisions 
should also apply to cases involved in protracted appeals," that the 
legislation "not apply to inventions which were filed on or prior to the 
effective date even if refiled thereafter," and that the Administration 
commit in its Statement of Administrative Policy "to shorten the 
processing time of Patent Applications through the following: (i) 
increased staffing at the Patent and Trademark Office; (ii) support for 
ameliorative legislation such as the Biotechnology Patent Protection Act; 
and (iii) strict guidance to Patent Examiners on questions of utility 
particularly in the biotechnology area."  The letter included a lengthy 
analysis of BIO's views on the utility issues, views which are reflected 
in the presentations at this hearing.

	On August 12, 1994, the House and Senate patent subcommittees held a 
hearing on the GATT implementing legislation and BIO communicated these 
views to the subcommittees, Ambassador Kantor, and Commissioner Bruce A. 
Lehman.  A copy of this letter is printed in Appendix D of this report.

	Finally, on September 27, 1994, with the submission of the final 
legislation by President Clinton to the Congress, BIO wrote to Ambassador 
Kantor and Commissioner Lehman to support the legislation.  A copy of 
this letter is included in Appendix D of this report.  This letter 
reiterated BIO's support for "many features of the GATT Agreement, 
including elimination of tariffs and the stronger intellectual property 
protection provided under the Agreement on Trade Related Aspects of 
Intellectual Property Rights (TRIPS) which forms part of the GATT 
Agreement."  It referred to BIO's effort over the previous three months 
to raise "concerns relating to draft legislation to implement the 
intellectual property provisions of the agreement."  It specifically 
mentioned BIO's concern that limiting the patent term to 20 years from 
filing, without adopting a package of safeguards, could seriously 
disadvantage our industry because of lengthy delays with regard to patent 
applications for biotechnology inventions between the filing of a patent 
application and subsequent issuance of the patent.

	BIO expressed its appreciation for the fact that the Administration had 
adopted a package of safeguards, including the following:

	(a). The patent term will be extended to compensate the inventors for 
delays due to 	successful interferences, appeals to the Board of Patent 
Appeals and Interferences and 	appeals to the Federal Courts.

	(b). Special protections have been added to minimize the impact of  the 
legislation on 	pending cases.

	(c). The Administration has committed in a Statement of Administration 
Action (SAA) 	to give patent examiners explicit instructions with regard 
to utility issues in 	applications regarding biotechnology inventions.

	(d). The USPTO will hold a hearing, at an appropriate time, if it 
appears that the 	inventors for patents for biotechnology inventions are 
receiving patent terms of less 	than 17 years from the grant of the 
patent.	

	It concluded its analysis of the intellectual property provisions of 
the legislation by stating that, "These safeguards address each of the 
issues we raised with" the Administration. 	BIO is acutely aware that the 
legislation, having now been submitted, cannot now be amended.  The final 
vote in the Congress will be on the whole bill as introduced, up or down, 
without any separate vote on the pharmaceutical tariff provisions or the 
intellectual property provisions.  It is this procedural setting which 
leads BIO to support the bill as a whole on the one vote which will occur 
with respect to it.  These votes are scheduled for November 30, 1994, in 
the House and December 2, 1994, in the Senate, and BIO urges the Congress 
to pass the implementing bill.

	While BIO supports the GATT implementing legislation as a whole, we 
have not endorsed these intellectual property provisions.  We remain 
concerned that the intellectual property provisions of the legislation 
may serve to erode the patent term for biotechnology inventions.  Action 
by the USPTO on the range of recommendations outlined in this report 
would substantially reduce this concern.  BIO will be closely monitoring 
the actions of the USPTO regarding applications for biotechnology patents 
and will, in fact, request that a hearing be held, and that USPTO 
practices be changed or amendments to the implementing legislation be 
adopted, if it sees that our patent terms are being eroded.  Any such 
amendments would be completely consistent with the GATT agreement, which 
provides that the patent term must be at least 20 years, not that it must 
be a maximum of 20 years.

	In the remainder of this Section we will outline the context for this 
debate and some of our concerns about the 20 year patent term, especially 
retroactivity and third party harassment.



	2. GATT/TRIPS Agreement and BIO's Concerns

	Our U.S. patent system undeniably provides the most effective means of 
protecting intellectual property rights in the world; but, the 
recognition that we live in a global economy has made the formal, 
world-wide harmonization of patent laws a primary goal of intellectual 
property and trade negotiations.  In support of patent harmonization, BIO 
has argued that uniform procedures and standards would permit patent 
inventors to obtain foreign patent protection more quickly, more 
reliably, and more economically.  BIO's position on patent harmonization 
issues is reflected in BIO's submission to the USPTO on October 28, 
1993.33
	For many, "harmonization" has been equated with converting the U.S. 
patent system from one in which the right to claim priority to an 
invention is determined by who is the "first-to-invent," to the system 
used world-wide by the other industrialized nations, which is based upon 
who is "first-to-file" an application claiming a particular subject 
matter.  However, last January the Commerce Department unexpectedly 
issued a press release which, perhaps in response to strong opposition by 
grass-roots inventors and the academic community, stated that the U. S. 
would maintain the "first-to-invent" patent system, and would not pursue 
negotiations of a WIPO treaty harmonizing the world's patent laws at this 
time.

	The U.S. has, instead, turned to multi-national trade negotiations, 
specifically the General Agreement on Tariffs and Trade ("GATT"), to 
improve international intellectual property protection.  Originally 
designed to reduce tariffs and other trade barriers, and to toughen the 
rules against international trade violations, BIO applauds the present 
revisions to the GATT treaty which were finally concluded after years of 
negotiations and signed by Vice President Gore on April 15, 1994.  The 
U.S.-led efforts in the GATT negotiations have lead to a detailed 
proposed agreement on intellectual property entitled the "Trade-Related 
Aspects of Intellectual Property (TRIPS) which will provide minimum 
standards of intellectual property protection and equal national 
treatment.  With the support of an enforcement clause, TRIPS will 
significantly enhance the protection of U.S. inventors because each 
member nation will be required to implement both internal and border 
measures to stop the importation of infringing goods, and specific 
provisions on injunctions, damages and obtaining evidence.

	As explained above, BIO's concerns lie in the language used to 
implement the intellectual property provisions of the GATT treaty into 
U.S. law, not with the Agreement itself.  Its concern is that in the rush 
to have the GATT fast-track legislation approved could weaken patent 
protection in biotechnology, pharmaceuticals and other rapidly-advancing 
key U.S. industries.  Implementation of GATT requires only minimal 
changes to the U.S. patent term -- presently measured as 17 years from 
the date on which a patent is granted.  Yet, the bill as submitted limits 
patent term of 20-years from the filing date of the application for 
inventions in almost all fields of technology - a change that goes beyond 
the actual demands of the GATT related TRIPS provision.  We are proving 
to be very poor negotiators and trading partners if we forego what we 
negotiated.

	Article 33 of the TRIPS Agreement reads:

	The term of protection available shall not end before the expiration of 
a period of twenty years counted from the filing date.

	Perhaps the additional limitations presently suggested by the 
Administration in the GATT implementation measures is a reflection of the 
Administration's commitment to facilitate the objectives proposed in 
March 1992 by the PTO's Advisory Commission on Patent Law Reform.  The 
Commission's proposed changes to the U.S. patent system include:

	(a). conversion of the U.S. patent system from a "first-to-invent" 
system to "first-to -file" (as part of a comprehensive harmonization 
package);	

	(b). a 20-year patent term measured from the filing date of the 
earliest-filed 	application;

	(c). automatic publication of patent applications within 24 months of 
filing; and

	(d). provision for limited prior-user's rights to a later filed 
invention.

	The recent discussions by the Secretary of Commerce and by Commissioner 
Lehman with the Japanese Patent Office appear to further manifest the 
Administration's commitment to harmonization, even though such measures 
carry no legal weight.  On January 20, 1994, Commissioner Lehman signed 
an agreement with Commissioner Asou of the JPO, providing that the United 
States will introduce legislation to change the length of a patent term 
to 20 years from the date of filing of the first completed application.  
In return, Japan agreed to accept English-language patent applications 
when followed by a Japanese translation within two months, and agreed to 
allow translation corrections until the time for replying to the first 
substantive communication from the JPO.  Then, on August 16, 1994, 
Secretary Brown and Japanese Ambassador Takakazu Kuriyama signed Letters 
of Agreement in which the JPO significantly agreed to institute an 
accelerated examination process and eliminate pre-issuance third-party 
opposition proceedings.  In response, the United States PTO agreed to 
begin publishing patent applications 18 months after the filing date of 
the earliest-filed application, and to expand reexamination proceedings 
to more easily accommodate third-parties.

	The Administration and the USPTO have maintained that, under the 
present statute, the inventors have no incentive to prosecute their 
applications expeditiously.  The argument is that by changing the 
measurement of the 20-year patent term to begin on the filing date, as 
opposed to the present 17-year patent term measured from the date of 
grant, inventors will no longer be able to benefit from the extended 
period of secrecy which now attaches to each application.  Further, the 
USPTO  and the Administration have said that the proposed 20-year term 
from date of filing will reduce the incentives to "tie-up" technology 
with so-called "submarine" patent applications - meaning those 
applications that remain secret for many years before the patents are 
finally issued.  Similarly, the USPTO  and the Administration have 
maintained that automatic publication of applications at 18-months will 
facilitate the use of technology by American innovators and permit 
identification of potential patent conflicts earlier than is now 
possible.

	The proposed changes to the law have been met with broad and deep 
concern among many BIO members, especially those representing small 
companies and universities conducting research in rapidly advancing 
fields, such as biotechnology.  BIO's concern is that neither the 
"20-year from filing" term, nor the 18-month publication will adequately 
resolve the problems; and worse yet, that the changes will, in and of 
themselves, create additional conflicts and rob the inventor of his 
rights.

	As outlined above BIO has taken every opportunity to voice its concerns 
to the Administration regarding the fixed 20-year patent term.  BIO has 
argued that the 20-year term will, in reality, have the practical effect 
of significantly decreasing the effective term of many U.S. patents, 
diminishing the value of the issued patents, and providing incentive to 
competitors to instigate abusive patent procurement practices and 
harassment tactics.  Moreover, BIO has expressed concern that the 
Administration has failed to realize that in many instances an inventor 
is forced to extend the prosecution of an application for significant 
periods of time for reasons under the singular control of the USPTO.  BIO 
has suggested that in lieu of radically changing patent laws, the matter 
of "submarine" patents can be eliminated simply by eliminating delays 
within the USPTO.  We must reiterate that BIO appreciates the responses 
of the Administration to these concerns and the amendments to the draft 
legislation which have been offered which will ameliorate the impact of 
the 20 year term.

	The GATT implementation bill is now a reality.  The bill defines the 
patent term as a fixed 20-years from the date of the earliest filed 
application, with extensions for up to 5 years permitted under certain 
circumstances.  Yet, it remains to be seen whether the additional 
measures, agreed to by the Administration at BIO's request, assuming that 
the GATT implementation bill is passed into law, will succeed in 
minimizing the impact of the legislation on pending patent applications 
or in preserving the patent rights for an inventor whose application 
becomes involved in PTO-mandated delays (e.g., an appeal or interference 
proceeding); or whether, even with extension provisions, the fixed 
20-year patent term in a "first-to-invent" patent system will promote 
bad-faith competitive tactics and diminished rights.



		3.What Effect will Implementation of the GATT Provisions Have on 
Pending 	Applications?

	Upon enactment of the GATT implementation bill, the amendments set 
forth in Title V, Subsection C - Patent Provisions, will effect major 
changes in the existing patent laws.  Of particular significance for the 
present discussion are the amendments to 35 U.S.C.  154, including the 
revised patent term, which is defined as a fixed period of 20 years 
measured from the filing date of an application (as opposed to the 
present 17-year patent term measured from the date of grant).  The 
amended law will "take effect on the date that is one year after the WTO 
Agreement enters into force with respect to the United States." 
Subsection C,  534.  The new law also provides that an application filed 
after the effective date that contains a specific reference to an earlier 
application filed under Sections 120, 121, or 365(c) of title 35 would be 
entitled to the filing date of the earliest filed application.  However, 
the bill provides neither that patent applications will be examined under 
an accelerated schedule, nor that the PTO will provide a first office 
action within a fixed, expedient period from the filing date of the 
application.

	The question which must be answered, however, is:  Will the fixed 
"20-year from filing" patent term, if enacted, have the desired effect of 
placing the U.S. on a par with other industrialized nations, establishing 
certainty in the length of the patent term, and reducing the incentives 
to "tie-up" technology with "submarine" patent applications that remain 
secret for many years before the patents are issued; or, will it also 
introduce unintended changes in U.S. patent practice that would open the 
door to blatant abuse of the patent procurement system?

	BIO seriously doubts that a fixed "20-year from filing" patent term can 
be implemented without having the net effect of significantly decreasing 
the effective term of many U.S. patents, and diminishing the value of the 
subsequently issued patents.  BIO's concern is that rather than merely 
preventing the unfair extension of the life of a patent, the new fixed 
term will effectively eliminate grandfathering the present 17-year term 
(from date of issue) for any application claiming priority to an 
application which has been pending more than one year from the enactment 
of the law.  This will be true because under the new fixed term, even if 
a case was filed before the enactment of the "20-year from filing" 
statute, a continuing application (even a simple file-wrapper 
continuation) will fall under the new term of, at most, 20 years from the 
priority filing date.  It will no longer be entitled to claim the 17-year 
term from date of issue.  Similarly, all divisional applications of the 
original case would be limited to a patent term of 20 years from the 
filing date of the priority application, even if the original term of the 
application was 17-years from issuance.

	It is probably a conservative estimate to state that 50% of all 
biochemical and pharmaceutical applications currently pending before the 
Patent Office are some kind of continuation or divisional application, 
each of which may be affected by a revision of the patent term.  
Consequently, BIO foresees that applicants responsible for at least half 
of all presently pending biochemical and pharmaceutical applications will 
be deprived of some part of the 20-year patent term by the simple act of 
filing a continuing application.

	In all likelihood the resulting term for such applications will be 
significantly less than the present 17 years from issuance of the patent.  
If correct, such an action would, at best, result in a mad dash to the 
Patent Office to file all continuation applications within the six (6) 
month grace period under the old law as disclosed in  154(c)(1); or, at 
worst, the law would affect a serious and unconstitutional "taking" of 
each inventor's rights.

	The situation is clearly unfair, particularly when the need for the 
continuing application is mandated by the PTO.  Often an applicant's only 
alternative to a file-wrapper continuation (which under the new Act will 
jeopardize the grandfathered term of the parent applications) is an 
appeal.  However, often an appeal is counter-productive since the claimed 
application may not be entirely in condition for allowance, and since the 
Appeal Board typically upholds the Examiner's rejection.  Therefore, 
appeals intended only to avoid the new Act would merely overload the 
Board's already overcrowded docket for the review of cases that should 
have been resolved at the Examiner's level.

	BIO contends that it would be both unfair and unjust to cause an 
inventor who is required by an action by the PTO to file a continuation 
application, to be penalized a portion of the term of his granted patent 
simply because a new law is enacted during the pendency of his 
earlier-filed application.  Therefore, BIO proposes that provisions must 
be added to the present Act, or by subsequent amendment to the law, which 
will permit an inventor filing continuing applications (regardless of 
actual filing date) to be accorded not only benefit of the filing date of 
his or her priority application, but also the right to be considered 
under the same laws as are applied to that priority application.  In 
other words, if the priority application was filed prior to enactment of 
a "20-year from filing" law, then all subsequent applications claiming 
priority to that application should also be examined under the same 
standard, regardless of the state of the law at the time the subsequent 
application is filed.  It is BIO's recommendation that if the new law is 
to be prospective, rather than retrospective, the Commissioner of Patents 
must be permitted the ability to "grandfather" all continuing 
applications claiming priority to applications filed under the old 
"17-year from date of issue" law, regardless of the date of enactment of 
new legislation, until the invention has been fully disclosed and all 
related applications have been prosecuted.  To do less would mock equity.




	4.What Effect Will Implementation of the GATT Provisions Have on Delays 
to 	Issuance Which Are Controlled by the PTO, e.g., Interference or 
Appeal 



	proceedings?

	The GATT implementation bill, if enacted, contains several provisions 
which will extend the term of the patent beyond the designated 20 years 
from the filing date of the earliest filed application.  However, the 
extension-of-term provisions are limited to two very specialized 
circumstances: 154(b)(1) relates to interference delay or secrecy 
orders; while 154(b)(2) relates to extensions for delays due to 
appellate review.  In both cases the proposed statute very clearly states 
that the term of the patent may "in no case [be extended] more than 5 
years."

	At first glance, five years seems to be a generous extension of the 
patent term.  That is, at least, until one actually analyzes the real 
time lost to an applicant purely as a result of the Patent 
Office-controlled delays.  Therefore, the members of BIO are concerned 
that the extension-of-term provisions in the GATT implementation bill are 
simply neither broad enough nor long enough to provide an adequate 
safeguard to an applicant involved in delays controlled by the Patent 
Office.  BIO does not believe that an applicant involved in such a 
PTO-controlled delay will be adequately compensated for the lost value of 
his or her intellectual property rights; and as a result, the value of 
the subsequently granted patent will be substantially diminished.



		a. Delays Related to Interference Practice

	In highly competitive fields, such as the biotechnology, biochemistry 
and pharmaceutical industries, two or more applicants often file a patent 
application claiming essentially the same subject matter.  However, since 
only one patent can issue on a given invention, the dispute as to which 
applicant deserves the patent must be resolved.  The United States 
settles this dispute by determining who was the first to invent the 
claimed invention.  Thus, patent practice in the United States (which has 
elected to remain a first-to-invent" nation) is clearly distinguished 
from that of countries which determine priority solely on who was 
"first-to-file" the application.

	To begin with, first-to-file countries publish or "lay open" their 
patent applications, but have implemented procedural safeguards to 
prevent abuse of the early publication.  For example, countries with 
automatic early publication also have laws protecting the applicant's 
rights against copying and derivative applications filed by a competitor.  
Since the patent rights are determined by the filing date in those 
countries, it would be useless for a third party to file an application 
directed to the already published material because the second filing date 
would be after that of the original invention.  Moreover, first-to-file 
countries typically provide a fixed "opposition" period in which third 
parties may argue against the granting of a patent.

	The United States has no similar procedural safeguards to prevent third 
party harassment during patent examination.  As a result, early 
publication34 of a patent in a "first-to-invent" country that utilizes 
interference or protest proceedings, lends itself to aggressive tactical 
use by entities whose only interest may be to deny the rightful party its 
patent.  The abusive harassment of patent applicants will only increase 
if the U. S., after deciding to continue to determine priority based on 
who is "first-to-invent," enacts a law in which patent applications are 
published prior to issuance.

	In addition, the number of inter partes contests within the Patent 
Office will increase dramatically increase - creating perhaps two to four 
times as many interference proceedings as in the current practice.  Since 
half of all of the patent applications filed at the U.S. PTO are 
submitted on behalf of foreign inventors, it would appear that under the 
revised nationalistic policies of 35 U.S.C.  104 in the new law, more 
than 75% of all interferences will have at least one foreign party 
relying on priority actions conducted outside of the United States.

	Demographic studies have shown that the majority of U.S. inventors file 
as small entities, many of which are poorly funded small businesses, 
universities or independent inventors.  The majority of foreign 
inventors, on the other hand, are large entities, representing 
well-financed corporations and large manufacturing organizations.  
Therefore, under the new laws interferences will not only occur more 
often, but they will be more complex, frequently involving foreign 
proofs.

	Logically then, interference proceedings will also become more time 
consuming and expensive, requiring more time to resolve - and hence 
resulting in longer delays.  Accordingly, recognizing that the new law 
provides no measures for reducing the time lost in the inter partes 
proceeding, or even in the time required to declare an interference, BIO 
wonders how the term extension provided in the new law will compensate 
for the increased complexity of the process.

	Before an interference can be declared, the existence of the 
interfering subject matter must be recognized by the patent examiner, 
both (or all) interfering applications must be prosecuted until the 
claims are held to be allowable, and the formalities of declaring the 
interference (count formulation, initial correspondence with the involved 
parties, etc.) must all be completed.  As it is, inventors are already 
waiting almost 5 years for the formalities of declaring the interference 
to be completed.  In at least one verified recent case, a biotech 
inventor's application was held in suspended prosecution for over 4_ 
years before the interference was finally declared.  In that same case, 
an additional 1_ years were lost after the filing of the final 
preliminary motion before the administrative patent judge took up the 
matter for consideration.  In other words, we can document a typical 
situation involving only three parties in which at least six (6) years of 
uncompensated time was lost to an inventor, completely under the control 
of the Patent Office.  At least under the existing laws, the patent term 
does not begin until the patent is finally granted, but under the 
"20-year from filing" term, the clock is always ticking.  Under the new 
law, the inventor in our exemplary case would have already lost one year 
more than the extension of term provides before the interference had even 
passed the preliminary motion stage.

	BIO is concerned that the decreased life of a U.S. patent may encourage 
abusive patent procurement practices by third parties.  Under a patent 
system in which the patent term is a fixed 20 years from the filing date 
of an application, a competitor may be tempted to apply abusive tactics 
to significantly lengthen the time it takes the rightful inventor to 
procure a patent, or such a competitor may instigate an adversarial 
proceeding simply to make obtaining a patent prohibitively expensive for 
the rightful owner.  To economically or strategically "win," competitors 
acting in bad faith need not actually be found by the Board to be the 
winner of the right to claim priority in the interference.  Rather, a 
bad-faith competitor may "win" simply by blocking or delaying issuance of 
a significant patent in the industry.  

	Many small entities and/or non-profit organizations such as hospitals 
or universities do not, or cannot, bear the cost of routinely fighting an 
interference, wherein the filing of the preliminary motions alone may 
cost $50,000- $100,000.  As a result, small companies or non-profit 
entities often simply concede without fighting, thus giving up the patent 
rights to which they are truly entitled.  Similarly, a competitor may be 
able to negotiate more favorable licensing terms as a result of a forced 
settlement of the interference when the true inventor lacks the funds to 
fight a protracted inter partes proceeding.
	BIO recognizes that in the end, theoretically, justice will prevail and 
the copyist will not be permitted the right to claim a derivative 
invention.  However, in our competitive economy, even losing an 
interference is effectively a "win" if it significantly diminishes the 
term of the patent eventually granted to the rightfully inventor.  By 
comparison, such unscrupulous competitors would be less liable to use 
unfair tactics if they could not shorten the proper applicant's term of 
patent grant.

	Clearly then, if the GATT implementation provisions are enacted, 
interference proceedings will have to be revolutionized.  Of course, the 
demise of interference practice has been a long-term goal of foreign 
inventors and those who advocate converting the U.S. to a "first-to-file" 
system.  Commentators have suggested relying on some type of 
reexamination practice or adopting European-type formal opposition 
proceedings in the U.S. to determine priority in the absence of a 
workable interference process.  Others have proposed applying such 
determinations only after the patent has been granted, and then tagging 
the interfering claims, as is done in Europe, until such time as the 
issue is resolved.  But in reality, BIO does not believe that any of the 
stop-gap proposals will work effectively in a "first-to-invent" country.  
Thus, it would appear that if Congress chooses to adopt the fixed term 
set forth in the GATT implementation bill, particularly if the PTO also 
begins the proposed automatic publication of applications at 18 months 
after filing, the U.S. will have begun its march down an inevitable road 
to first-to-file.



		b. Delays Related to Appellate Review

	The inventor who must defend his or her application before the 
appellate branch of the Board of Patent Appeals and Interferences will 
suffer almost as great a loss as one involved in an interference 
proceeding.  As previously shown, the implementation of a fixed 20-year 
patent term measured from the filing date of the application will 
effectively destroy continuation practice.  As a result, absent a 
file-wrapper continuation to permit further communication with the 
Examiner on the merits, an applicant's only alternative will be to appeal 
the Examiner's decision to the Board.  Theoretically, unless the 
application is actually in condition for allowance, the Appeal Board will 
take on the role of the Examiner, sending the case back into prosecution 
until each issue has been resolved.

	However, it is BIO's view that the Appeal Board is not designed to 
serve such a purpose.  The members of the Appeal Board, although 
individually qualified in a variety of technologies, will in all 
likelihood not collectively approach the level of understanding that the 
Examiner would have of the technology.  Moreover, with less input from 
the Examiner, the cases brought before the Board will be far more complex 
and time-consuming.  Finally, the number of appeals will increase 
dramatically, overburdening the Board and further delaying the time 
before a case can be heard.

	However, under the new law, the clock will always be ticking.  Each 
delay by the PTO will take away a fragment of the inventor's patent 
rights. 

	Will the 5-year extension of term provided in the implementation Act 
compensate the applicant for the time lost by the PTO-controlled delays?  
BIO is concerned that it will not.

	The Patent Office publishes the date of the oldest ex parte appeal 
awaiting assignment to a panel and the oldest one awaiting the setting of 
a hearing.  As published in the October 4, 1994 issue of the Official 
Gazette, the oldest ex parte appeal in the chemical discipline has been 
awaiting assignment to a panel for a decision without a hearing since 
October 20, 1992, while one awaiting the setting of a hearing has been on 
hold since January 22, 1993.  Presumably, these cases are not atypical, 
or the PTO would not be publishing the information as representative.  
Even so, the more than two (2) years lost while awaiting assignment for 
consideration is not the total time lost.  By the time the hearing or 
panel decision occurs and post-hearing events have been concluded, the 
applicant will have lost a considerable portion of his or her patent 
term.  Furthermore, the time involved in the appeal proceeding may, under 
the new system, at best, only place the application back in ex parte 
prosecution.

	It remains to be seen whether an applicant's rights would be preserved 
by the extension of term provision in the GATT implementation bill.  
However, in BIO's view it would be doubtful if applicants are no longer 
able to continue their applications to resolve issues in dispute.  
Unfortunately, the GATT implementation bill cannot be revised, but if 
passed into law it could later be amended.  Therefore, before the bill 
becomes law, BIO proposes carefully examining the devastating effect that 
the fixed term will have on continuation practice if the term of every 
continuing application is measured from the filing date of the earliest 
filed application, and the consequent effect such a proposal will have on 
appellate practice within the PTO, ultimately costing the inventor 
valuable lost time as his or her application drifts into competitive 
obsolescence.  On the other hand, if the GATT implementation bill becomes 
the new law, BIO will diligently monitor the effect of the fixed patent 
term on biotech applications delayed within the Patent Office by appeal 
procedures.  If we find that an inventor has received less than the 
presently mandated 17 years from the date on which the patent finally 
issues, BIO will seek a hearing to rectify the law and to restore the 
right of every inventor to the justifiable term of his or her invention.

	Despite these concerns about the 20 year term, BIO urges the Congress 
to adopt the implementing legislation and send it to the President for 
his signature.



B. The Biotechnology Patent Protection Act

	1. The Problem

	Present U.S. laws do not protect the creative and scientific genius of 
inventors who use biotechnology to produce important new health care, 
agriculture, and waste clean-up inventions.  There are two problems:

	(a)The U.S. Patent and Trademark Office (PTO) often refuses to issue 
biotechnology process patents, citing In re Durden, 763 F.2d 1406 (CAFC 
1985).  The Durden decision has been highly criticized by legal experts 
and in subsequent decisions by the same appellate court that issued it.  
In addition, the PTO has conceded in House and Senate testimony that it 
is unable to reconcile Durden with conflicting decisions by the same 
court.

	(b)Under U.S. law, the holder of a U.S. patent on an intermediate 
product, such as genetically engineered host cell, is powerless to 
prevent a foreign company from using the patented invention overseas and 
then exporting the product to the U.S. to compete with the patentee's 
product.  This loophole in our patent law permits unfair competition by 
foreign competitors of U.S. patentees.

	To a substantial extent, these problems represent two sides of the same 
coin.  If Durden were legislatively overruled, then the inventor of a 
genetically engineered host cell could obtain a corresponding process 
patent that could be enforced at the border against foreign-based 
infringement under the Process Patent Amendments Act of 1988. 

	Alternatively, if products made abroad using U.S.-patented intermediate 
products, such as host cells, could be stopped at the border in the same 
way as are products made from U.S.-patented processes, then overruling 
Durden would be less critical because effective and equivalent patent 
protection would be available for intermediate products.



	2. Possible Solutions

	The Senate and the House have taken somewhat different approaches to 
addressing this issue.

	The House approach has been to overrule Durden with respect to any 
process that uses a novel and nonobvious "composition of matter."  This 
approach recognizes that while Durden may affect the biotechnology 
industry most  severely, it is in fact a generic problem for other 
industries as well, such as the traditional pharmaceutical industry.  The 
House approach therefore avoids industry-specific patent legislation, 
although the limitation to compositions of matter is intended to exclude 
application to the computer and software industries.  It has passed the 
House once, in 1994.  

	The Senate approach has been to overrule Durden only with respect to 
biotechnology processes, and to also create border enforcement for 
U.S.-patented host cells.  This approach has the advantage of directing 
the benefits of the legislation to the biotechnology industry, thereby 
mooting objections by the chemical industry.  It has passed the Senate in 
various forms three times, in 1992, 1993, and 1994. 



	However, the definition of "biotechnological processes" contained in 
the Senate bill appears to be too narrow to apply to all biotechnologies 
in use either today or in the future.  For example, the most recent 
definition does not appear to include genetically engineering an organism 
either to promote overexpression of an endogenous nucleotide sequence or 
to inhibit expression of such a sequence. 



	3. Biotechnology Industry Position

	Either the House or Senate approaches would be acceptable to most 
biotechnology companies.  However, many in the biotechnology industry 
prefer the House approach because it ensures that all biotechnologies, 
present and future, will benefit from the overrule of Durden.  The House 
approach is also more consist with the law in Europe and Japan and would 
further the goals of international patent harmonization.  Vague and, in 
our opinion, unjustifiable objections by the chemical industry have 
impeded enactment of this approach.

 

	4. PTO Position

	The biotechnology industry is grateful for the PTO's support for 
legislation to overrule Durden.  We also appreciate its flexibility on 
how to achieve this result.  We appreciate and generally agree with PTO's 
preference for a generic solution and commend its willingness to help 
develop an appropriate industry-specific approach if the generic approach 
encounters unalterable opposition from other industries.    

 	The biotechnology industry urges the PTO to maintain its support for 
legislation to prevent unfair foreign competition in the 104th Congress.



C. Question 1:  Do you believe there are procedural steps that the USPTO 
could do to facilitate use of a provisional application filing system by 
biotechnology applicants, particularly with respect to filing of DNA or 
amino acid sequence information?"

	As an introduction, a brief comment on the philosophy of the 
provisional patent application may be appropriate.

	Traditionally, countries other than the U.S. (all of which are 
first-to-file systems),  the disclosure requirements for a provisional 
application are slightly less stringent than those for filing a later 
"complete" application with claims.  The aim of the provisional 
application is to give the inventor an early filing date but, at the same 
time, also allow for further development of the invention.  The result 
being that when the complete application is filed and later published, it 
provides the public with a complete teaching of the invention.



	1. Benefits for Applicants

	An advantage is that the provisional application can be filed without 
claims.  In many instances, the preparation of claims can delay the 
filing of the application by as much as a few months.  This would not be 
the case if a provisional patent is filed.

	Although the U.S. is a first-to-invent system, the rest of the world is 
a first-to-file system.  The provisional application system may encourage 
U.S. inventors to get applications on file as soon as possible, thereby 
obtaining an earlier filing date which is effective in the first-to-file 
patent systems of the rest of the world.

	U.S. inventors are already familiar with some aspects of the 
provisional system.  In many respects, the provisional system parallels 
the U.S. C-I-P procedure.  Claims which are based on matter in the 
earlier (provisional) application get the filing date of the earlier 
application and claims based on matter which is new in the later (C-I-P 
or Complete) application get the later filing date.  The transition to 
the provisional patent system should, therefore, not be too disruptive.

	Furthermore, companies which have foreign R & D operations (and file 
foreign applications before filing in the U.S.) and practitioners who 
have non-U.S. based clients have already had to deal with questions which 
may arise from a patent system and its application as a basis for 
claiming priority under Section 112.  If a foreign application is filed 
with such less disclosure and a subsequent Convention application is 
filed in the U.S., such U.S. filing may present disclosure issues when 
viewed in the light of Section 112.

	Accordingly, the provisional filing system is, at least in part, 
already familiar to the biotech industry.



	2. Potential Conflicts

	A potential conflict arises in connection with disclosure requirements.  
In some countries where the provisional patent system operates, the 
disclosure requirements are not as stringent for the provisional as for 
the complete application.  This facilitates the filing of applications 
with less disclosure, in order to obtain a filing date.  The proposed 
legislation, however, requires that the provisional application should 
have disclosure which meets the requirements of 35 U.S.C. Section 112, as 
it should so as to satisfy U.S. statutory requirements.

	There is, therefor, a tension between the basic philosophy of the 
provisional application as applied in some countries, (i.e., obtaining an 
early filing date by describing the concept of the invention and then 
following up with a complete application which provides the more detailed 
description) and the current requirements of Section 112 as currently 
official to U.S. patent applications.



	3. Procedural Steps for Facilitating Provisional Filings

	The USPTO should, therefore, provide clear guidelines as to how an 
Examiner (of a subsequent complete application) is to evaluate the 
provisional application in terms of whether or not it will meet the 
requirements of Section 112 and, accordingly, provide fair basis for a 
subsequent complete application.  It is suggested a provisional 
application be treated in exactly the same way as a "convention" 
application in how it is evaluated, except for the absence of claims. 

	Clearly, provisional applications will serve for a basis to claim 
rights under 35 U.S.C. Section 119.  If the  provisional application is 
to have the same function as a basic foreign application on which a 
Convention Priority is based under Section 119, then the law which 
applies to these cases should be applicable to provisional applications.  
This is because it would be unfair for a provisional application 
providing a basis for a claim of priority under 35 U.S.C. Section 119 to 
be required to meet a higher or lower standard than a foreign patent 
application on which a claim for priority under the same Section is 
based.

	As has been proposed by others, the provisional patent application 
should have a lower fee structure than a conventional application to 
encourage its early use by many innovators.  The proposed split between 
large and small entity should also be maintained.  

	As to whether or not the inventor should be required to file a DNA or 
amino acid sequence listing, it is recommended that this not be a 
requirement, provided the provisional specifications otherwise meet the 
section 112 requirements.  This should, however only be so if full 
compliance with Section 112, as applied by the USPTO for current U.S. 
filings, is not required.



D. Question 2:  The USPTO is spending in excess of $2 million to obtain 
the special computer capability for storing and searching DNA sequence 
information.  Do you believe this cost should be recovered from all 
patent applicants, or only applicants who file applications which require 
use of these special facilities?

	The cost for establishing a computerized storage and retrieval system 
for nucleotide and amino acid sequence data should be borne by the USPTO 
through all patent inventors.  It would be unfair for this cost to be 
recovered only through inventors ("biotech inventors") who file 
applications which incorporate the sequence information.

	First, the benefits of a uniform DNA sequence storing and searching 
facility extend beyond biotech inventors to the public.  As noted in the 
final USPTO rules regarding patent sequencing: 

	... the diversity and complexity of nucleotide and amino acid sequence 
result in searching and analysis difficulties both within the USPTO and 
outside the USPTO, decreased accuracy of search and reproduction, and 
increased cost.  (55 F.R. 18230 May 1, 1990)

	Biotech researchers benefit by improved dissemination of sequence data 
in electronic form.  The USPTO saves money by establishing a consistency 
in symbols and formatting so that it can more efficiently make a proper 
evaluation of the patentability of an invention claimed in the 
application.  USPTO funds are saved by using the stored sequence 
information when printing the patent and thus avoiding the need to re-key 
information upon patent printing.  The computer capability assists the 
USPTO in fulfilling its USPTO's international obligations to exchange 
published sequence data in electronic form with the Japanese Patent 
Office and the European Patent Office under the Trilateral Sequence 
Exchange Project.  Since the benefits of the facility extend far beyond 
biotech patent inventors, it would be unfair to saddle the additional 
cost only on such inventors.

	Second, we believe that it would be contrary to USPTO precedent to 
focus on one industry such as biotechnology for payment of what amounts 
to a surcharge on a USPTO computer storing and searching system.  In 
certain aspects, the development of a  computer readable sequencing 
information system is similar to development of a computer readable 
mechanical drawings system.  In the late 1980's as part of the Automated 
Patent System (APS), the USPTO developed a computer searching system 
which included storage of mechanical drawings in electronic form.  As 
part of the system, special graphic monitors were installed to access the 
drawings.  Establishing the APS system involved considerabe expense.  The 
costs, however, were not recharged to the inventors who filed cases 
containing drawings.  We believe it would have been inappropriate to have 
singled out the mechanical inventors to pay for the much needed system.  
Similarly, biotech inventors should not have to pay for establishing the 
sequence facility.  

	Finally, instead of requesting a surcharge on biotech inventors, we 
believe that the interest of the USPTO would be better served by Congress 
providing full appropriation to the USPTO of all fees the USPTO collects.  
At present, a percentage of the fees collected by the USPTO are not 
appropriated to the USPTO for its use.  We note with concern the increase 
in the amount of funding being withheld each fiscal year from the USPTO 
during Congressional appropriations.  For research oriented companies 
represented by BIO, the acquisition of enforceable patent protection is 
essential to protecting their innovations.  Diversion of USPTO user fees 
retard the USPTO enhancing its efforts to issue enforceable U.S. patents 
by negatively affecting the patent Examiners' ability to timely and 
effectively examine the patent applications.   Funding reductions also 
make it difficult for the USPTO to sponsor new automated systems such as 
the computer searching of sequences.  Return to the USPTO of all the 
monies collected would more than offset any cost incurred on account of 
the sequencing facilities.



E. Question 3:  Please identify changes, if any, to current restriction 
practices that you believe would be appropriate in a patent system that 
provides for automatic publication of applications and a 20-year patent 
term measured from filing...

	a. Please indicate requirements or measures that would be appropriate 
for the 	USPTO to impose on patent applicants to enable it to examine 
multiple 	patentably distinct inventions in a single application.

	Restriction "may" be required if two or more "independent and distinct" 
inventions are claimed in one application.35  If required, the inventor 
must now refile at least one additional application with claims directed 
to the inventions that were "restricted" from prosecution of the first 
application. 

	1. The Problem
	Restriction practice is an aspect of patent prosecution in which the 
Examiner has vast discretion in deciding whether or not to restrict the 
claims, and in how to restrict them. While the inventor has the 
opportunity to traverse and rebut the restriction requirement, in the 
vast majority of cases, this is simply pro forma. Therefore, while at 
these hearings the USPTO specifically asks for suggestions regarding 
"requirements or measure that would be appropriate for the USPTO to 
impose on patent applicants ...," is it appropriate to also provide 
suggestions for the USPTO to impose on itself in this regard.



	2. 35 U.S.C. Section 121 Allows the Examination of Separate and 
Distinct 	Inventions in the Same Application

	35 U.S.C. Section 121 does not mandate issuance of a restriction 
requirement even if the inventions are separate and distinct. 35 U.S.C. 
Section 121 states that restriction may be required, not that restriction  
must be required. 

	From the plain language of 35 U.S.C. Section 121 quoted above, it is 
clear that neither independence alone nor distinctness alone is 
sufficient to ground a proper restriction requirement.  Indeed, use of 
the conjunctive "and" rather than the disjunctive "or" renders any other 
conclusion illogical and contrary to accepted principles of statutory 
construction.

	The term "independent" means "not dependent."36  There must be no 
disclosed relationship between the subjects, that is, they must be 
unconnected in design, operation or effect.  For example, species under a 
genus that are not usable together as disclosed, or, a process and 
apparatus incapable of being used in practicing the process, are 
independent inventions.

	The term "distinct" means that two or more subjects as disclosed are 
related, but they are capable of separate manufacture, use or sale as 
claimed, and they are patentable over each other.37 For example, a 
process and the product made by the process are distinct inventions.

	3. Current Examination Guidelines Allow for the Examination of Separate 
and 	Distinct Inventions in the Same Application

	Even if the claims include two independent and distinct inventions, 
USPTO practice as set forth in the Manual of Patent Examining Procedure 
(MPEP) requires that search and examination of the entire application 
must impose a serious burden on the Examiner before a proper requirement 
for restriction may be made.38  Thus, current USPTO practice encourages 
examination of the entire application even though it may include claims 
to two distinct or independent inventions, when such search and 
examination can be made without serious burden to the Examiner. 



	4. Recommendations Concerning Changes that the USPTO Can Make

	In a patent system that provides for a 20-year patent term measured 
from filing, it will be vital that the USPTO not unnecessarily delay 
prosecution due to improper restriction requirements that force an 
inventor to refile the same specification and start administrative 
proceeding anew, in queue and behind all applications that came in prior 
to the filing of the divisional application.

	Assuming that the patent term is changed to one that is only 20 years 
from the filing date of the earliest priority document, we recommend that 
the USPTO implement the following action plan:

	(a)	Divisional applications that are filed as a result of a restriction 
requirement should be made "special," all throughout prosecution and 
appeal, without need of a petition on the part of the inventor. The 
expedited handling and review that the application receives by being made 
special is necessary to recover time lost due to the refiling of the 
application as a result of the restriction requirement, and the 
administrative processing of the divisional application at the USPTO.

	(b)	The criteria currently used by Examiners to issue restriction 
requirements must be reevaluated. By following the wording of the statute 
and the USPTO guidelines that are currently in place, restriction 
requirements would be minimized to only those that were necessary. That 
is, a restriction requirement would only be issued when claims were 
directed to two or more inventions that were separate and distinct, and 
the search of all groups involved an undue burden on the part of the 
Examiner. 

	(c)	The decision as to whether or not to issue a restriction 
requirement should be made extremely early in the processing stages, 
preferably within three months after filing. Most preferably, the 
restriction requirement should accompany the Notice to File Missing 
Parts. 

	(d)	The decision as to whether or not to issue a restriction 
requirement should be made be an Examiner who is a "special program" 
Examiner, and not the Examiner who will receive the "points" for 
examining the application. Only then can an impartial review be 
guaranteed.

Alternatively to option (d):

	(e)	Assuming the Examiner who issues the restriction requirement is the 
same Examiner who provides the substantive review of the merits of the 
application, the Examiner should be awarded extra points for examining 
separate and distinct inventions in the same application. 

	(f)	Upon receiving a restriction requirement, the inventor should be 
given the option of maintaining all claims together upon payment of a fee 
as discussed below, or restricting them out. This would encourage 
examination of the entire application on the merits.



	5. Requirements or Measures That Would be Appropriate for the USPTO to 	
Impose on Patent Applicants

	In international patent practice, a restriction requirement is called a 
"lack of unity" objection. Patent Cooperation Treaty (PCT) inventors that 
receive a lack of unity of invention have the option of paying a small 
extra fee in order to have additional groups searched and examined by the 
Examiner in the instant application. The USPTO should implement a similar 
procedure. This would not only be consistent with harmonization but would 
also encourage economy of time, prosecution, and paper handling at the 
USPTO.

	Currently, the corresponding provisions for originally filed U.S., 
non-PCT-filed applications are different from those applied to PCT-filed 
applications.  The PTO is to require restriction of non-PCT filed 
applications if two or more independent and distinct inventions are 
claimed in one application.  Common PTO practice, however, is to consider 
restriction appropriate where two joined inventions are either 
independent or distinct, despite the presence of the word "and" in 35 USC 
Section 121 and 37 C.F.R. Section 1.141.  In contrast, the provision on 
restriction practice for PCT-filed applications is contained in PCT Rule 
13, which permits the inclusion in a single application of one or more 
inventions, provided that the inventions are so linked as to form a 
single general inventive concept.  This single general inventive concept 
requirement is met if there is a technical relationship among those 
inventions involving one or more of the same or corresponding special 
technical features.

	For biotechnology inventions not filed through the PCT, the current 
restriction practice may entail the filing of five or more divisional 
applications when a new gene encoding a new protein is discovered.  For 
example, the PTO would typically make at least a six-way restriction 
requirement as follows: (1) the new protein, (2) the new gene encoding 
the protein, along with vectors and host cells containing the new gene, 
(3) an antibody binding to the protein, (4) a method of making the 
protein, (5) a method of using the protein, and (6) a method of using the 
antibody.  This application could even have more groups of inventions if 
there were more than one use of the protein claimed.

	The optimal situation for the patent applicant would be to have the PTO 
curtail restriction.  Thus, examination of all originally submitted 
claims would be conducted in one application, rather than requiring that 
multiple divisional applications be filed quickly enough after a 
restriction requirement for them to issue with a "full" patent term left.  
Another advantage is to negative the current PTO practice which 
discriminates against applicants who do not file their U.S. applications 
through the more expensive PCT procedure (this affects mostly U.S. 
inventors and inventors who are not in a reciprocal PCT country).  A 
further benefit resulting from allowing the prosecution of an entire 
application to proceed simultaneously is that the disclosures of 
multiple, patentable inventions would issue simultaneously, and therefore 
become available to the public simultaneously, rather than becoming 
submarine patents.  Further, it eliminates the dilemma of applicants 
having to choose between abandoning certain aspects of their invention or 
incurring the costs of multiple applications, which is a real hardship 
for a fledgling biotechnology company.

	The most prevalent anticipated concern against such revision is 
perceived detriments to the PTO if Examiners were required to examine 
multiple inventions in a single application for the cost of the original 
filing fee--the PTO would lose additional filing fees from the divisional 
applications and Examiners would face additional burdens.  However, 
currently the applicant can now choose the PCT route and not have to file 
divisional applications, so the Examiners are burdened already in many 
instances.  Perhaps the PTO could develop a fee schedule to obtain more 
fees for applications with multiple inventions.

	After weighing all of the above factors, the AIPLA Chemical Practice 
Committee has proposed and recommended that the first paragraph of 35 USC 
Section 121 be amended and a new second paragraph be added to permit the 
inclusion in a single application of more than one invention, provided 
that the inventions are linked by a general technical feature.  The 
proposed amendments are (added material is underlined and deleted 
materials are in brackets):

		If two or more inventions that are both independent and distinct 
[inventions] are claimed in one application, the Commissioner may require 
the application to be restricted to one of the inventions.  If [the other 
invention] any of those inventions is made the subject of a divisional 
application which complies with the requirements of section 120 of this 
title it shall be entitled to the benefit of the filing date of the 
original application.

		

		Inventions shall not be considered independent and distinct for 
purposes of the first paragraph of this section where the inventions are 
so linked as to form a single inventive concept, due to the presence of a 
technical relationship among the inventions involving one or more of the 
same or related technical features that distinguish each of the claimed 
inventions, considered as a whole, from the prior art.



	6. Summary

	Restriction practice is one area in which efficiency of operation is 
under the control of the USPTO more than it is under the control of the 
inventor. Current guidelines already encourage the complete examination 
of applications. We encourage the USPTO to reevaluate internal 
restriction practice by the Examiners. We also encourage the USPTO to 
consider implementing a search and examination fee structure for the 
examination of all claims in a single application, similar to that used 
by the Patent Cooperation Treaty.



E. Question 4:  Please identify changes to other aspects of USPTO 
examining practices or operations that could be made in implementing a 
20-year patent term, provisional application filing, or 18-month 
publication that you believe would be desirable or beneficial for the 
biotechnology industry.  If possible, please comment on procedures in 
foreign systems that you believe would be desirable for the U.S. to adopt 
in implementing these changes.
	We are concerned about the impact of the twenty year patent term on 
biotechnology applications. Biotechnology is a relatively new industry. 
However, the biotechnology industry is our nation's only hope for 
urgently needed critical solutions to problems of a biological nature - 
from agriculture to health care. Thus, the biotechnology industry plays a 
critical role in all of our lives, and it is in our nation's best 
interest to foster growth of this industry within the limits of our laws.


	Growth of an industry is often closely tied to patent protection for 
the underlying technology. The critical biotechnological solutions 
discussed above are often the basis of a patent application in the USPTO. 
The efforts and resources that the USPTO has expended in providing 
biotechnology inventions with highly skilled Examiners, who have a depth 
of scientific training and expertise, is a credit to our government. 

	However, when patent protection for a worthy invention is delayed, or 
worse, the invention abandoned, not only does the potential patentee 
lose, but also the consumer and the country loses. As the United States 
moves closer to a patent term that is grounded solely in the 
application's filing date, discussion about unnecessary delay in the 
prosecution and issuance of deserving biotechnology patents thus commands 
a heightened concern.

	Therefore, we believe that prosecution of many biotechnology 
applications in front of the USPTO is often needlessly prolonged for 
reasons that are not under the control of the inventor. This delay in 
prosecution and issuance results in a cloud on the property rights that 
prevents owners of many worthy biotechnology inventions from obtaining 
the funding they need to develop the invention for the market. In many 
cases, many inventions are simply abandoned. 

	As an example of such unnecessary delay, we note the recent standard 
that the USPTO has seemed to set for the inventor in order to satisfy 
proof of utility of inventions that might be used in human treatments. In 
the opinion of many member of the biotechnology industry, the USPTO 
Examiners have not only been unnecessarily requiring human data per se, 
but also, in addition, have been requiring data similar to that needed to 
pass an FDA review. The cost of obtaining such data is simply out of the 
reach of many small concerns in this industry, and funding is generally 
not forthcoming absent patent protection.

	We believe the utility standards set by the USPTO biotechnology team 
are appropriate or simply too high for a decision on patentability per se 
- a decision that should only look to (1) whether there is an invention 
and (2) whether the inventor deserves legal rights in this invention, and 
not to whether the invention is ready to market. We applaud the USPTO's 
efforts to address these concerns as reflected in the recent Statement of 
Administrative Action (SAA).  However, as detailed above, we believe this 
statement must be revised.

	However, as another example, in the experience of the biotechnology 
industry, the USPTO still attempts to distinguish CAFC decisions that are 
"on point," without giving such decisions the interpretation they 
deserve. We point to USPTO interpretation of Federal Circuit decisions on 
obviousness, such as those having to do with the obviousness of a DNA 
invention,39 or the obviousness of a method of using a patentable DNA to 
express the encoded protein.40   Accordingly, claims are rejected for 
reasons inconsistent with the case law, and prosecution is needlessly 
delayed. With a patent term that runs only from the application's filing 
date, appealing settled issues for each case would result in lost years 
from the patent term for these inventions, and an unfair hardship to the 
patentee.

	In another example, we point to unnecessary piecemeal prosecution as 
unnecessarily delaying issuance. Often an Examiner's supervisor will not 
closely review an application until the Examiner presents it as a 
possible allowance. However, very often, the Examiner's supervisor finds 
a "new" rejection, and prosecution is reopened on that issue, sometimes 
after the same issue has already been argued.  Such piecemeal prosecution 
violates PTO rules (37 C.F.R. Section 1.105).  With a patent term that 
runs only from the application's filing date, piecemeal prosecution must 
be eliminated.  Supervisory Examiners must be given the time and credit 
to work closely with each application, with the emphasis being on the 
completeness of the first Office Action on the merits. 

	Therefore, while we applaud the USPTO's interest in desiring to play an 
active role in focussing patent law in the biotechnology arena, 
nevertheless, we are certain that the USPTO is sympathetic to the fact 
that the proposed change in the patent term will significantly increase 
the burden on the USPTO to conduct its review of biotechnology 
applications in an expeditious way. Under 35 U.S.C. Section 6, the 
statutory rights of the inventor are paramount in drawing priorities 
between the Commissioner as administrator and the inventor as beneficiary 
of his statutory rights.

	Therefore, to minimize the impact of such a change in the patent term, 
we recommend that the USPTO adopt an action plan that would ensure that 
biotechnology patent applications would be properly reviewed in a manner 
similar to that for other industries, a manner that would not effectively 
reduce the 20 year patent term of patents in the biotechnology industry 
to one significantly less than that provided by the current standard of 
17 years from issue, due to factors outside the inventor's control.  Our 
recommendations for such an action plan follow.

	1. We encourage USPTO efforts to commit itself to the highest standards 
in training Examiners to know and apply patent law. Respect for the 
authority of the different branches of government is the heart of our 
government. When the patent term runs only from the date of filing, it is 
crucial that the inventor's term not be compromised by the inventor 
having to reargue settled case law. 
	2. We encourage USPTO efforts to commit itself to the highest standards 
in the quality of the examination of biotechnology applications. When the 
patent term runs only from the date of filing, it is crucial that the 
inventor's term not be compromised by the inventor having to train the 
Examiner.

	3. We encourage the USPTO to take measures to ensure that supervisory 
Examiners have sufficient time to work closely with everyone they 
supervise in every application, and especially early in the review 
process. Such close supervision by our experienced supervisory 
professionals is critical if the USPTO is to eliminate piecemeal 
prosecution and unnecessary rejections and if the USPTO is to expedite 
allowance in a timely manner. 

	4. We encourage the USPTO to take measures to ensure that all Examiners 
are given sufficient time to review an application. Biotechnology 
applications are among the most complex. Their review should not be 
compromised because of a time limit at the examining level.  However, if 
the advise given earlier is followed all biotech Examiners will handle 
their case load as efficiently as other art units.

	5. We encourage the USPTO to take measures to ensure caseloads are 
evenly distributed among the examining groups, and that Examiners get 
proper time and credit for "coming up to speed" on any case that is 
transferred to them. Currently, Examiners receive no time credit for 
reviewing the file history of a case that has been transferred to them. 
This only encourages the Examiner to maintain the previous rejections, no 
matter what the merits of the inventor's arguments are.  Transfer to 
several Examiners is not infrequent.  As having a case transferred to a 
new Examiner is not something under the inventor's control, the inventor 
should not be penalized by unnecessary rounds of prosecution and the new 
Examiner should receive credit for the time spent in review.

	6. We encourage the USPTO's effort to further reevaluate the "point" 
system used to grade Examiners. Currently, Examiners receive points for, 
inter alia, a first Office Action on the merits, an allowance and an 
abandonment. We  recommend that the point system be eliminated 
altogether. At a minimum, Examiners should not receive points for the 
abandonment of a case that they were handling, or for a first Office 
Action in a file wrapper continuation as to do so only encourages the 
Examiner to prolong prosecution.

	7. We  recommend that in any case that is refiled as a file-wrapper 
continuation after a final rejection, or in which prosecution is reopened 
after allowance by the USPTO, the inventors be allowed to petition that 
this case be assigned to a special examining group where it will be 
reviewed and handled by a group of the USPTO's most experienced, primary 
Examiners, none of whom are under the point system, in a manner that will 
expedite review.

	The twenty year patent term will place a great burden on the USPTO to 
enforce strict guidelines concerning examination and high standards 
concerning the quality of the examination. We are pleased to provide 
recommendations for the USPTO's consideration in this regard.



F. Section 104 Interference

	1. Background

	U.S. Patent law currently only provides for proof of U.S. (or NAFTA 
country) based inventorship.  In interference procedures (35 U.S.C. 
Section 104) provision is made for proof of inventorship only from a 
NAFTA country.  Similarly, in swearing behind a reference (37 C.F.R. 
1.131) only proof of U.S. based inventorship is admitted from the U.S.

	These provisions are directly in conflict with TRIPS Article 27 which 
provides that a country's patent laws must not discriminate as to place 
of inventorship.  Accordingly, proposals are currently afoot to amend at 
least 35 U.S.C. Section 104.  Senate bills 1854 and 2368 are good 
examples of this.  



	2. Implementation Issues

	Firstly, it appears that 37 C.F.R. 1.131 should be amended to make 
allowance for inventorship beyond the borders of the U.S.

	Secondly, once 37 C.F.R. 1.131 is amended, USPTO procedures must be set 
up to procedures under which non-domestic inventors can "swear behind" in 
terms of Rule 131.  For example, must the required affidavit/declaration 
(Rule 131(a)) be made before a notary (or equivalent) or before  U.S. 
consulate?  Also, if an inventor attaches documentary proof of 
inventorship (in terms of Rule 131(b)) in a non-English form, what if 
any, translation will be required?

	Thirdly, once 35 U.S.C. Section 104 is amended as proposed, how is 
interference going to be dealt with?  As it is, interference is a very 
lengthy process - with proof of inventorship only U.S. based.  How is the 
USPTO proposing to deal with this, particularly in  the light of a 
20-year patent term?  If interferences are going to become lengthier (as 
they could easily become) the patent inventor's rights will be severely 
limited.

	Fourthly and finally, the amendment proposed to 35 U.S.C. Section 104 
by S2368 provides:

	To the extent that any information in a NAFTA country or a WTO Member 
country concerning knowledge, use, or other activity relevant to proving 
or disproving a date of invention has not been made available for use in 
a proceeding in the Office, a court, or any other competent authority to 
the same extent as such information could be made available in the United 
States, the Commissioner, court, or such other authority shall draw 
appropriate inferences, or take other action permitted by statute, rule, 
or regulation, in favor of the party that requested the information in 
the proceeding.



37 C.F.R. and the MPEP should contain concise guidelines regarding how 
accusations of the "not-making available" information should be brought 
to the attention of the Commissioner, how this can be remedied and what 
guidelines the Commissioner will use in drawing inferences.





Experimental Use41

	BIO draws its membership from a diverse range of companies in the field 
of biotechnology and from allied industries.  Our organization includes 
research-based agricultural and human-health-care-related companies, as 
well as manufacturers of biotechnical research tools.  All three of these 
sectors have an interest in promoting strong, enforceable patent 
protection for their proprietary technologies.  We  support the present 
judicially established experimental use defense but cannot come to a 
consensus on expanding the defense by legislative efforts.  Since it is 
not always easy to separate permitted research "experiments" from actual 
commercial use, We  recommend that the matter be left to the courts to be 
decided on a case-by-case basis.  A short discussion of the case law in 
this area will provide a background for the concerns of each of the 
Biotechnology sectors.



A. Case Law Review

	The USPTO Notice for this hearing42 includes a summary of the case law 
on utility as a preface to the questions which follow.  We  here respond 
to this case law summary.

	A primary objective of the U.S. patent system is to promote innovation 
by rewarding inventors with a limited exclusive property right in 
exchange for a full, public disclosure of the details of their 
inventions.  Under this system, Congress has provided to the patent 
holder the right to exclude others from "use" of a patented invention.  
Since Congress never defined the term "use," its meaning has become a 
matter of judicial interpretation.  Faced with adjudicating subsequent 
disputes between patent holders and alleged infringers, the courts 
established the "experimental use" defense, originating with the case of 
Whittemore v. Cutter, 29 F. Cas. 1120 (C.C.D. Mass. 1813)(No. 17,600), in 
which Justice Story stated ."..it could never have been the intention of 
the legislature to punish a man who constructed ...a machine merely for 
philosophical experiments."  See also Robinson, "The Law of Patents for 
Useful Inventions," Section 898 (1890) (Experimental use defense as 
applicable to "gratification of scientific tastes," "curiosity," and 
"amusement.")

	In the more recent case, Roche Products, Inc. v. Bolar Pharmaceutical 
Co. , 221 USPQ 937 (Fed. Cir. 1984), the CAFC considered the experimental 
use defense (Jordan P. Karp, Experimental Use as Patent Infringement:  
The Impropriety of a Broad Exemption, 100 Yale L. J. 2169,2174 (1991)).  
Bolar, a generic drug manufacturer, tested and formulated a drug patented 
by Roche for the purpose of submitting an application to the U.S. Food 
and Drug Administration for approval to market the drug as soon as the 
patent expired.  Bolar conceded that its intended use of the drug did not 
fall within the "traditional limits" of the experimental use defense as 
established by the courts.  The CAFC concluded that ."..unlicensed 
experiments conducted with a view to the adaption of the patented 
invention to the experimenter's business is a violation of the right of 
the patentee to exclude others from using his patented invention." 221 
USPQ at 863.  In the Bolar case, the CAFC declined to apply the 
experimental use defense under the facts of the case.  

	Partly in response to the Roche v. Bolar decision, Congress passed the 
Drug Price Competition and Patent Term Restoration Act of 1984 
("Waxman/Hatch Act").  The Waxman/Hatch Act overruled the Bolar decision 
in part by establishing a new and separate exemption from infringement of 
patent rights.  An infringement suit could no longer be filed on the 
basis that the alleged infringer was making, using or selling a patented 
invention:  

	...solely for uses reasonably related to the development and submission 
of information under a Federal law which regulates the manufacture, use 
or sale of drugs.  35 USC Section 271(e)(1).

The stated purpose of Section 271(e)(1) was to permit generic 
pharmaceutical manufacturers to conduct bioequivalence studies with a 
patented drug during the term of the patent for purposes of filing an 
Abbreviated New Drug Application.  The language of the Act, including the 
Section 271(e)(1) exemption, represents a careful balancing of the 
interests of the generic-based and research-based pharmaceutical 
industries.  

	Nowhere in the Waxman/Hatch Act or in the language of Section 271(e)(1) 
did Congress attempt to narrow the scope of the judiciary in reviewing 
the applicability of the experimental use defense.  This fact is 
acknowledged in the Department of Commerce's and its Patent and Trademark 
Office's joint December 27, 1993, solicitation of public comment (58 Fed. 
Reg. 68395), on the experimental use defense: 

	other than limited provisions allowing for testing of patented 
pharmaceutical products for purposes of regulatory approval (e.g., 
Section 271(e)(1) of Title 35, USC), existing law does not provide a 
general, statutory defense against a charge of infringement for 
experimental use of patented technology.  



B. Our Concerns

	1. Biopharmaceutical Company Sector.  

	The first published legal decision interpreting 35 USC Section 
271(e)(1) arose from a lawsuit involving a biopharmaceutical product (Ned 
A. Israelsen, An Examination of 35 USC Section 271(e) and the 
Experimental Use Exception to Patent Infringement, 16 AIPLA Q. J. 457, 
465 (1988-1989)).  In Scripps Clinic and Research Foundation v. 
Genentech, Inc., 231 USPQ 978 (N.D. Cal. 1986) and 666 F. Supp. 1379, 3 
USPQ2d 1481 (N.D. Cal. 1987), modified, 678 F. Supp. 1429, 6 USPQ2d 1429 
(1988), aff'd. on other grounds 18 USPQ2d 1001 (Fed. Cir. 1991), 
Genentech contended that its testing of Factor VIII:C, used in treating 
hemophiliacs, was excusable because such use was "reasonably related" to 
an FDA application and thus exempted from infringement under Section 
271(e)(1).  The District Court for the Northern District of California 
interpreted the legislative history for the Section and statutory 
language to mean that the only permitted exempted use was limited testing 
to establish bioequivalency. Id.

	The 35 USC Section 271(e)(1) defense failed in a second case involving 
Factor VII:C, Scripps Clinic and Research Foundation v. Baxter Travenol 
Laboratories, Inc.  7 USPQ2d 1562 (D. Del. 1988).  According to the 
Scripps v. Baxter court, the Scripps v. Genentech judge interpreted 
Section 271(e)(1) to cover activities that were "solely related" to FDA 
marketing approval, but did not consider activities that were "reasonably 
related" to FDA marketing approval.  

	Either via the traditional experimental use defense of the Whittemore 
case or under Section 271(e)(1), organizations will attempt to conduct 
activities that may be perceived differently as falling within or outside 
of these exemptions.  This situation will without question lead to 
increased infringement disputes.  However, among BIO's membership are 
companies who easily could appear on either side of such cases, making it 
difficult for our organization to come to a consensus on the issue of 
expanding the experimental use defense through legislative efforts.



	2. Research Tools Manufacturer Sector

	During the last 20 years, there has been an explosion in the 
availability of patented technology for the research market.  These 
include reagents, instruments and methods.  Active licensing programs 
have emerged where many universities and federally funded laboratories, 
as well as for-profit corporations, have become active in granting rights 
to commercial entities for the development, use or sale of their 
proprietary research tools.  These tools include genetic probes, 
monoclonal antibodies and specific reagents such as those involved in PCR 
(polymerase chain reaction) technology.  

	The research literature is now filled with papers based on the use of 
these patented technologies.  As with many newly available, highly 
specialized commodities, the cost of these new reagents, instruments and 
methods has raised concerns among some end-users, particularly 
researchers at academic institutions and in small businesses.  
Pre-biotechnology-revolution academic tradition frowned upon the 
patenting of research tools.  However, under the American system of free 
enterprise, the high cost of developing and manufacturing many of these 
proprietary tools logically suggests that patent holders are entitled to 
recoup their expenses and receive a profit from their special 
technologies.  If the making and using of research tools be exempt from 
infringement under a legislatively broadened statutory experimental use 
defense, these companies are concerned that they might be deprived of 
sales or licenses of their patented technologies.  As a result, they 
believe there would be less financial incentive to invest in further 
innovations in this important area of research.  lt should be noted, 
however, that in the view of many potential users of this technology, 
appropriate compensation to the patent holder under a license should be 
limited to a lump sum payment of moderate amount and not a royalty on 
sales of a product which results from the use of such technology.  

	Some also believe that a "due process" issue would arise if Congress 
were to legislate away the enforcement of patented technology beyond that 
presently permitted by the courts.  They conclude that the issue of 
taking property from the research technology patent holders without just 
compensation surely needs to be carefully considered before legislation 
is proposed.

	Within BIO's diverse membership, all economic points of view are 
represented, and it thus remains difficult to come to a consensus with 
regard to a legislative expansion of the experimental use defense.  



	3. Agricultural Biotechnology Sector

	In Ex parte Hibberd, the PTO Board of Appeals and Interferences held 
that plants are eligible for utility patent protection under 35 USC 
Section 101 in addition to the protection afforded under the Plant Patent 
Act or the Plant Variety Protection Act if the utility patent is 
appropriately enabled by a publicly available deposit of seeds.  227 USPQ 
443 (POBAI 1985).  Since that ruling, numerous genetically engineered 
plants have been protected by utility patents, which can provide broader 
and stronger protection of the intellectual property rights of the 
inventors than can plant or design patents.

	Various entities ranging from agricultural research stations, 
not-for-profit institutes and for-profit organizations may wish to 
"experiment" with patented genes through traditional breeding techniques.  
In the view of many members, the decision as to whether such 
"experiments" should be considered an infringing act should be made based 
upon case law.  To that end, they believe the decision in the Roche v. 
Bolar case, supra, to be instructive.  Accordingly, whether the activity 
is excused or not should be dependent upon whether the "unlicensed 
experiments [were] conducted with a view to the adaption of the patented 
invention to the experimenter's business."  Clearly, such a decision must 
be made on a case-by-case basis.  Thus, many BIO companies in this 
sector, are not in favor of expanding the experimental use defense 
through legislative efforts, but suggest leaving the issue to the courts.




C. Recommendations

	The experimental use defense presents different potential concerns for 
the three sectors of BIO's membership.  Further, within each sector, 
significant numbers of BIO's member companies do not agree on the 
desirability of additional legislation in this area.  However, common 
across the three sectors is the fact that the issues presented above all 
relate to matters that become actionable only after a patent is issued.

	While we commend the USPTO for taking an active role in legislative 
endeavors involving the Office's procedures, we note that infringement is 
a post-patent issuance enforcement matter.  Enforcement matters are the 
purview of the courts, where offended parties may bring suits to be 
decided on their individual facts.  By statute, the USPTO's 
responsibilities involve pre-patent issuance matters, as well as certain 
very limited special items such a reexamination and reissuance.

	We  therefore recommend that the USPTO concentrate its efforts in the 
area of biotechnology toward the other pre-issuance procedural questions 
raised in the rest of this submission and leave the courts to resolve 
experimental use 

issues on a case by case basis.



Plant Patent Issues43

A. Question 1:  Do you believe that the Plant Patent Act should be 
amended to permit a holder of United States plant patent to exercise 
exclusive rights with respect to parts of a protected plant, such as 
material harvested from the plant?
	1. Executive Summary
	Plant patent infringement has an adverse impact on research and 
development and the general economic health of the United States plant 
biotechnology industry.  Particularly serious is the unauthorized import 
into United States of plant parts, produced by asexually propagating 
outside of this country plant varieties protected by a United States 
plant patent.  Even though a court would likely find that the 
unauthorized import of plant parts constitutes infringement under current 
law, the PPA should be amended to explicitly provide that the plant 
patent grant includes the right to exclude others from unauthorized sale 
or use of any part of the asexually reproduced plant variety.44  The 
proposed amendment to the PPA would reduce the need for unnecessary and 
costly litigation.  In addition, the proposed amendment to the PPA would 
provide clear uniformity in the laws related to the scope of protection 
available under the PPA for asexually propagated plant varieties, under 
the Plant Variety Protection Act (PVPA) for sexually propagated plant 
varieties and under the utility patent statute for both asexually and 
sexually propagated plants.



	2. Introduction

		(a) The Purpose of the Plant Patent Act

	Since 1930, American plant breeders, American agriculture and the 
American public have benefitted from the stimulus to innovation in the 
plant sciences provided by the PPA.  Reports of the House and Senate 
Committees that accompanied legislation enacting the PPA state that the 
purpose of the PPA was to stimulate invention in the agricultural sector 
by providing plant breeders with patent protection equivalent to that 
available to inventors in industry.45  The Report of the House Committee 
contains the statement by Thomas A. Edison that "[n]othing that Congress 
could do to help farming would be of greater value and permanence than to 
give to the plant breeder the same status as the mechanical and chemical 
inventors now have through the patent law."46  
	Mr. Edison's prediction that patent protection for the inventions of the 
plant breeder would stimulate and foster innovation and investment in 
agriculture was accurate.  For example, the Economic Research Service 
(ERS) of the United States Department of Agriculture estimated that cash 
receipts in this country in 1993 for nursery and greenhouse crops alone 
equaled $9 billion, nearly eleven percent of all farm crop cash receipts 
in this country.47  As a result, this agricultural sector is the sixth 
largest among all commodity groups.  It is even larger than such crops as 
wheat, cotton and tobacco in terms of farm crop cash receipts.48   
	The plant patent system is not only utilized by plant breeders for the 
protection of new varieties created for the ornamental plant industry, 
but is also used to protect new varieties of trees and plants producing 
fruits, nuts, berries and other important crops.  The vitality of the 
plant patent system is evidenced by the large number of applications 
issued by the USPTO each year.  For example, more than 400 plant patents 
issued in 1993.49
	The drafters of the PPA recognized the difficulties related to 
compliance with the patent statutes with respect to written description 
and enablement of claims for plant varieties, and provided that a plant 
patent shall not be declared invalid "if the description is as complete 
as is reasonably possible."50  However, the plant patent is limited "in 
formal terms" to a single claim drawn to "the plant shown and 
described."51

		(b) The Plant Patent Grant
	The plant patent grant is "the right to exclude others from asexually 
reproducing the plant or selling or using the plant so reproduced."52  
The plant may be invented or discovered (so long as it is found in a 
cultivated state), and must be asexually reproduced by the inventor, in 
order to secure plant patent protection.53  In addition, the plant must 
be distinct from other plants of the same species.  New varieties include 
"cultivated spores, mutants, hybrids and newly found seedlings . . . ."54  

	The meaning of "plant" in the PPA can be gleaned from its legislative 
history and court decisions.  In reviewing the legislative history of the 
PPA, a court stated that the word "plant" should be interpreted in the 
"common language of the people" and went on to cite with approval the 
definition of a plant in Webster's New International Dictionary as "1. A 
young tree, shrub, or herb, planted or ready to plant; slip, cutting, or 
sapling . . .."55   The court also cited the House of Representatives 
Committee on Patents' statement that the PPA was intended to cover "a 
valuable new variety of fruit or other plant . . . ." (emphasis in 
original).56  The legislative history of the PPA evidences that Congress 
intended to encourage agricultural development and in doing so, include 
plant parts within the purview of the PPA.

	The court held that sale of cuttings would be considered an 
infringement.57  The court stated in Yoder Bros. that 
	it was not necessary to prove that the cuttings actually matured into 
flowered plants to show infringement. . . we think Section 163 is plain 
in its statement that a patentee may exclude others from asexually 
reproducing, selling or using the plant.  The negative inference to be 
drawn from this is that commission of one of those acts would constitute 
infringement.58
Accordingly, the court in Yoder Bros. found that asexual reproduction, or 
selling, or using, the plant or plant part, irrespective of whether the 
plant part had matured into a plant, constitutes infringement.

	3. Plant patent infringement has an adverse impact on research and 
development and the economic health of plant biotechnology
	The USPTO has noted that "growers reproduce and use, outside the United 
States, plants subject to a U.S. plant patent, and subsequently import 
products harvested from such plants, to the detriment of the U.S. plant 
patent owner."59  When competing in the market against lawfully produced 
plants, these imported products have a decided competitive advantage 
because the importer has not invested in the research necessary to 
develop the plant variety.  In contrast, the breeder must sell the 
product at a price that recoups those research costs.  Furthermore, the 
importer benefits from the breeder's promotional and advertising efforts.  
The income lost by American plant breeders due to patent infringement 
inhibits investment in plant research and development programs which are 
the foundation of a strong horticultural industry.

	The adverse consequences of patent infringement are particularly 
apparent in the cut flower industry.  Attached is Appendix I showing the 
dramatic decrease since 1971 in the number of United States growers 
engaged in the production of carnations, mums (standard), pompons and 
roses (hybrid tea), and the corresponding increase in the percentage of 
the United States market for these same plant products controlled by 
importers.60  A significant percentage of market share loss is due to the 
adverse impact of patent infringement on the domestic industry.  For 
example, a single domestic rose breeder estimated lost royalty receipts 
in 1993 in excess of $1.5 million dollars as a result of unauthorized 
import of patented products produced in five Latin American countries.61

	 4.  Unauthorized import into the United States of plant parts produced 
outside this country by asexually propagating plants protected by Untied 
States plant patent likely constitutes infringement under current law 
	The PPA enables a plant breeder to obtain a patent allowing the breeder 
to prohibit asexual reproduction of plant varieties, and the sale or use 
of those plant varieties so reproduced.  Without the patent owner's 
authorization, no one may asexually reproduce patented plant varieties in 
the United States.  The unauthorized multiplication of a patented plant 
variety, even when the plant is lawfully acquired, is an infringement.  
Moreover, the sale of the plant variety obtained by such multiplication 
also is an infringement.  To enforce patent rights, the patent owner may 
sue an unauthorized propagator.  If the seller of the plants multiplied 
without authority of the patent owner is someone other than the 
propagator, the seller may also be sued for infringement.

	Although a court has never decided the issue, it is likely to hold that 
unauthorized importation of plant parts, derived from a plant variety 
protected by United States plant patent, directly infringes the patent.  
The legislative history of the PPA indicates that Congress intended to 
include plant parts within the purview of the PPA.  The court has held 
that "patentee may exclude others from asexually reproducing, selling or 
using the plant" and that it is "not necessary to prove that the cuttings 
actually matured into flowered plants to show infringement."62  
Accordingly, a court is likely to find that use of plant parts in this 
country that are derived from a plant variety protected by United States 
plant patent, but asexually propagated outside the United States, 
infringes the plant patent. 
	This result is particularly reasonable in light of advances in plant 
biotechnology that make it frequently possible to regenerate a plant by 
means of tissue culture from very small amounts of tissue taken from 
different parts of the whole plant.  For example, stem tissue of certain 
cut flowers can be placed in tissue culture and used as a source of 
germplasm from which the whole plant can be regenerated.  In this case, 
the cut flower is equivalent to the cutting found to be infringing in 
Yoder Bros.63  
	There is no actionable infringement of a patent for a machine based 
simply on the use or sale of the product made by the machine.64  For 
infringement to occur under these circumstances, the product must be 
separately patentable.  Plant parts, however, are not equivalent to the 
products of machines.  Frequently, the patentability and economic value 
of the plant variety depends on the distinctive characteristics of the 
plant part.  The plant part should not be viewed as a product of the 
plant because the vegetative cells of the plant part contain genetic 
material that is identical to the vegetative cells of the whole plant.  
In addition, the plant part can frequently be either rooted or tissue 
cultured to obtain a whole plant that is identical to the original plant 
from which the plant part was derived.  Sale or use of the plant part 
taken from a plant protected by plant patent is therefore infringing.

	The plant patent claim is fundamentally a process claim because, absent 
asexual propagation of the protected variety, there can be no 
infringement.  A court has noted that:

	asexual reproduction is the heart of the present plant patent system: 
the whole key to the "invention" of a new plant is the discovery of new 
traits plus the foresight and appreciation to take the step of asexual 
reproduction.65
In 1988 Congress passed the Process Patent Amendments Act (PPAA) that 
impose liability for infringement upon anyone who imports into the United 
States, or sells or uses within the United States "a product which is 
made by a process patented in the United States."66  Products that are 
"materially changed by subsequent processes" or products that become "a 
trivial and nonessential component of another product" are exempted by 
the statute.67  As summarized by Senator Grassley of the Senate Judiciary 
Subcommittee on Patents, Copyrights and Trademarks, the new infringement 
provisions were intended to remedy the following:

	There, of course, is something very inherently unfair about U.S. 
research-based industries pouring resources into a product or a process 
patent and then having that product or process pirated abroad and shipped 
back into this country for sale.  The applicant, of course, is required 
to disclose his or her process patent, and it is available in the Patent 
Office just like some recipe in a cookbook for all to see.68
	The PPAA was intended to remedy the type of unfair trade practices 
currently encountered under the PPA.  Foreign competitors rely upon the 
research investment and ingenuity of United States companies and plant 
breeders for creation of new varieties.  These foreign competitors then 
practice the patented process, asexually propagating the protected 
variety outside of this country, and then import plant parts produced by 
this process into the United States.  It is therefore likely that a court 
would find this activity to infringe a plant patent under the PPAA.

	

	5. The Plant Patent Act should be amended to explicitly provide that 
the plant patent grant includes the right to exclude others from selling 
and using any part of the asexually reproduced plant

	Although a court would likely find that unauthorized import into the 
United States of plant parts, produced outside this country by asexually 
propagating plant varieties protected by a United States plant patent, 
constitutes infringement under current law, the PPA should be amended to 
explicitly provide that the plant patent grant includes the right to 
exclude others from unauthorized sale or use of any part of the asexually 
reproduced plant variety.  The amendment could be achieved by revising 35 
U.S.C. Section 163 of the PPA to read:

	"In the case of a plant patent, the grant shall be of the right to 
exclude others from reproducing the plant or selling or using the plant 
so reproduced, or any part thereof."

This amendment would make explicit the Congressional intent in enacting 
the PPA as well as reduce the need for companies in the United States to 
engage in costly litigation to combat patent infringement by foreign 
competitors.

	The proposed amendment to the PPA would also provide clear uniformity 
in the laws related to the scope of protection available under the PPA 
for asexually propagated plant varieties, under the Plant Variety 
Protection Act (PVPA) for sexually propagated plant varieties and under 
the utility patent statute for both asexually and sexually propagated 
plants.69  The International Convention for the Protection of New 
Varieties of Plants (UPOV), as revised March 19, 1991 and signed by the 
United States in October 1991, requires member countries to accord rights 
to breeders of new varieties and member countries are required to protect 
the products of protected varieties.  Specifically, the UPOV Convention 
provides the plant breeder with the right to prohibit others from 
selling, importing, or exporting harvested material, including cut 
flowers and ornamental plant parts, obtained from protected plant 
varieties without the breeder's authorization.  

	The United States has signed, but not yet ratified, the revised 
Convention.  The President signed into law on October 6, 1994, amendments 
to the PVPA.  These amendments to the PVPA provide, in part, that 
unauthorized use of harvested material obtained from propagating material 
of a variety protected by PVPA certificate constitutes infringement.  The 
PPA need not be amended for the United States to ratify and be bound by 
the 1991 Convention.  Accordingly, a separate legislative initiative is 
necessary to provide domestic plant breeders of asexually reproduced 
varieties with the same explicit protections under the PPA as will be 
afforded plant breeders of sexually reproduced varieties under the PVPA.



B. Coverage of Plants under Utility

	The "AgBiotech" Industry depends heavily on the utility patent system 
for intellectual property protection.  It is conservatively estimated 
that AgBiotech research and development costs in the US exceed of $100 
million  per year.  The exclusivity afforded by utility patent protection 
is a reward that will stimulate AgBiotech research and development in the 
future.  Utility patent protection peacefully coexists with the Plant 
Patent Act (35 USC 161 et seq) and the Plant Variety Protection Act (7 
USC 2321 et seq).

	The private sector is uniquely postured to comment upon the critical 
role of utility patents in the AgBiotech field.  New biotechnology 
products for agriculture, as with therapeutics, usually require 
staggering research and development investments in both time and money.  
Additionally, stringent regulatory review currently presents unique 
challenges to the AgBiotech industry resulting once again in expenditures 
of significant amounts of time and money.  Without utility patent 
protection and its resulting exclusivity, there is little hope for  
recovery to the AgBiotech investor of the substantial costs of discovery 
and development.  The AgBiotech industry desperately depends on utility 
patent protection to maintain its 'critical mass' from both  investor and 
science perspectives. If there is no money to fund projects, products 
will never be developed.   The Agbiotech Industry is distinctively 
different from the Human Health Biotech industry that flourished in the 
lab, the marketplace and on Wall Street in the 1980's.  The AgBiotech 
industry as a general rule cannot command the profit margins seen in the 
Human Health industry and because of this utility patent protection is 
all the more important. A strong utility patent portfolio is the 
lifeblood of a successful AgBiotech company. 

	Some practitioners are concerned that the new amendments to the PVPA 
will result in the USPTO relinquishing  their jurisdiction of 'plant 
inventions' to the USDA under the PVPA.  This will not occur for several 
reasons.  First, the PVPA and the Plant Patent Act (PPA) do not expressly 
or impliedly exclude utility patent protection.  Nothing in the 
legislative histories of either of these plant related laws indicate that 
utility patent protection under 35 USC 101 would be restricted in any 
manner whatsoever.  Ex parte Hibberd, 227 USPQ 443-447.  Second, 
protection under the PVPA and PPA is limited to narrow compositions, 
i.e., varieties.  To take the position that AgBiotech inventions fall 
exclusively under the PPA or the PVPA would preclude protection of 
generic inventions, process inventions and intermediate compositions, all 
of which could otherwise be claimed in a utility patent.  Additionally, 
just because there is overlap between utility patent protection and other 
federal laws does not mean that there are irreconcilable conflicts 
between them.  For example, overlap occurs between the copyright statute 
and the design patent statute, although both types of protection are 
available under certain circumstances. See In re Yardley, 181 USPQ 331, 
(CCPA 1974).

	Patents, therefore, are the stimulus and the incentive for AgBiotech 
research.   We have already witnessed the remarkable impact of 
biotechnology on human health care.  What it can offer to agriculture is 
equally exciting!  However, to have the greatest impact it is imperative 
that a strong utility patent law be available.   



CONCLUSION AND BIO INVITATION



	BIO again states its appreciation to Commissioner Lehman and his staff 
for scheduling this hearing on biotechnology intellectual property 
issues.  The hearing could not be more important or timely.  We are 
encouraged by the interest this demonstrates in the intellectual property 
protection the biotechnolgy industry needs to remain competitive in 
international markets.  

	Our Intellectual Property Committee has presented the analysis and 
recommendations in this report in the belief that they are consistent 
with the applicable law and do no more than urge the USPTO to bring its 
practices into line with this law.

	BIO urges the Commissioner and his staff to review this analysis and 
recommendations over the next six months and we invite Commissioner 
Lehman and his staff to meet with representatives of BIO next April to 
outline the actions he and his staff have taken, and will take, in 
response to them.

	We recommend that the Examiners in Group 180 be given copies of this 
report to review as part of their legal education and that these issues 
be explored in depth through the Biotechnology Institute.

	We are optimistic that this hearing will lead to reforms at the USPTO 
which will enhance the intellectual property protection afforced to 
biotechnology inventions. 

	BIO welcomes comments on the analysis and recommendations in this 
report from all interested parties.  Such comments should be directed to 
Chuck Ludlam, Vice President for Government Relations, Biotechnology 
Industry Organization, 1625 K Street, N.W., Washington, D.C. 20006.





1 See membership list in Appendix E.
	 1 Peter Coy et al, "What's the Word in the Lab?  Collaborate," Business 
Week, (June 27,1994), 78-103.



	2 Ernst & Young, Biotech 95 Reform, Restructure, Renewal, The Ernst & 
Young Ninth Annual Report on the Biotechnology Industry IX (1994).







	3 U.S. Congress, Office of Technology Assessment, Pharmaceutical R&D:  
Costs, Risks and Rewards, OTA-H-522 (Washington, DC:  U.S. Government 
Printing Office, February 1993).







	4 Ernst & Young, Biotech 94 Long Term Value Short Term Hurdles, Eighth 
Annual Report on the Biotech Industry  28-31 (1993).







6 BIO acknowledges the special contributions of Melvin Blecher, Barbara 
Luther and Thomas Wiseman in drafting this Section of the report.

7 See Appendix A.
8 BIO acknowledges the special contribution of Jon Case, Laura Handley, 
Janet Hasak, Rick Shear, Thomas Wiseman, Timothy Gens, Rick Burgoon, Paul 
Ginsburg, Dan Chamber , Melvin Blecher, Barbara Luther, Larry Millstein, 
Norm Dulak, Edmund Fish, Kate Murashige, John Sanders, Howard Stanley, 
Bill Epstein, Carl Bozicevic, John Isacson, Bob Blackburn, and Jim 
Bradburne in drafting this Section of the report.
9 See Appendix A.
10 BIO acknowledges the special contribution of Cheryl Agris, Bill 
Epstein, Jon Case, Thomas Wiseman, Timothy Gens, Rick Burgoon, Paul 
Ginsberg, Geoff Karny, William Scanlon, Melvin Blecher, Barbara Luther, 
Larry Millstein, Pat Granadas, Stacey Channing, Darlene Vanstone, Anne 
Craig, Edmund Fish, Carl Eibl, John Sanders, Howard Stanley, George 
Johnston, and Elizabeth Enayati in drafting this Section of the report.

11 See Appendix A.
12 The enablement requirement is that a patent applicant, in order to 
obtain a patent claim on an invention, must provide in the associated 
application a description of the claimed invention that would allow, on 
the effective filing date of the application, a person of skill in the 
art pertaining to the invention to make and use the invention without 
need for undue experimentation.  As a matter of logic, it is impossible 
to provide a description of how to use an invention which has no utility.


13 A claimed invention can be operable and not enabled by the associated 
application.  The Commissioner's Notice, 59 Federal Register 45267 
(September 1, 1994) (hereinafter "Notice") does not raise the issue of 
enablement, other than as a premise for the operability requirement, 
Notice at 45268 - 45269, and with respect to "level of skill in the art," 
Notice at 45269 - 45270.



     14 For an invention to be patentable, at least one of the uses 
described for it in an application must be a "practical" use.  Brenner v. 
Manson, 383 U.S. 519 (1966).  A use to treat a human disorder is a 
practical use.
     15 59 Federal Register 45267 (September 1, 1994) at 45268 - 45269.

     16 In re Marzocchi, 439 F.2d 220, 169 USPQ 367 (CCPA 1971); In re 
Gazave, 379 F.2d 973, 154 USPQ 92 (CCPA 1967); In re Isaacs, 347 F.2d 
887, 146 USPQ 193 (CCPA 1965); Ex parte Rubin, 5 USPQ2d 1461 (BPAI 1987).  
See also In re Bundy, 209 USPQ 48 (CCPA 1981)  and In re Chilkowsky, 229 
F.2d 457, 108 USPQ 321 (CCPA 1956).  With regard to the pertinent date 
being the effective filing date of the application at issue, see In re 
Hogan, 559 F.2d 595, 194 USPQ 527 (CCPA 1977).     
     17 There is no authority to suggest that the "person of skill in the 
pertinent art on the effective filing date of the associated application" 
in this context is the Commissioner of the Food and Drug Administration 
acting in his official capacity relating to approval of drugs for 
marketing.  The nature of the evidence required to establish operability 
in such a case depends on the facts of the case, including what is 
understood by the person of skill in the pertinent art on the relevant 
date.  There is no per se rule that clinical evidence of operability in 
effecting a cure is required.  In some cases, in vitro data might be 
sufficient. 

     18 In re Malachowski, 530 F.2d 1402, 189 USPQ 432 (CCPA 1976); In 
re Langer, 503 F.2d 1380; 183 USPQ 288 (CCPA 1974); In re Anthony, 414 
F.2d 1383, 162 USPQ 594 (CCPA 1969); In re Hartop, 311 F.2d 249, 135 USPQ 
419 (CCPA 1962); In re Krimmel, 130 USPQ 215 (CCPA 1961).
     19 Except in a rare instance where the examiner can establish that 
the person of skill in the pertinent art, as of the effective filing date 
of the application at issue, would require evidence of clinical efficacy 
before believing that the described treatment would likely have de 
minimis effectiveness.

     20 Note 7, supra.
     21 And apparently also contemplating continuing to impose. See 
Notice at Page 45269, Column 1.
     22 BIO acknowledges the special contribution of Thomas Wiseman, 
Richard Peet, Bill Epstein, Timothy Gens, Paul Ginsberg, Phillip Jones, 
Michele Cimbala, Edmund Fish, Carl Eibl, John Sanders, George Johnston, 
Howard Stanley, Barbara Rae-Venter, Dan Chambers, Herb Jervis, Darlene 
Vanstone, Anne Craig, Bill Dickheiser and Rick Shear in drafting this 
Section of the report.

     23 See Appendix A.
     24 Legislation has been pending in Congress, however, that would add 
to 35 U.S.C. Section 103 a specific provision relating to the 
patentability of biotechnology inventions involving "method of making" 
claims, where the process used would have been obvious to one of ordinary 
skill in the art.  This would effectively overrule In re Durden, 763 F.2d 
1406 (Fed.Cir. 1985), a case that has been broadly applied by the USPTO.  
This legislation was not adopted prior to the recent adjournment of the 
Congress.  

     25 Furthermore, with respect to In re Baird, 29 USPQ2d 1550 
(Fed.Cir. 1994), a more recent CAFC case citing In re Bell, the USPTO 
recently announced that they would refuse to apply the case allegedly 
because it conflicted with other applicable precedent.  See 1161 Official 
Gazette of the U.S. Patent and Trademark Office 314 (April 19, 1994). Is 
this a situation where the tail "wags" the dog?  the USPTO is supposed to 
follow.  We know of no authority that allows the USPTO to determine if 
judicial decisions are in "conflict" with each other.

     26 Ironically, though it asserted that the prior art patent 
described a general method that could be used by one of skill in the art 
to isolate a gene when a portion of the amino acid sequence of the 
encoded protein is known, the USPTO had rejected claims by the inventor 
of the prior art patent to broad claims to genes isolated using the 
method when that patent was being prosecuted.  

     27 The Court did not completely preclude the possibility that the 
gene could be rendered obvious by amino acid sequence data, however. 
"This is not to say that a gene is never rendered obvious when the amino 
acid sequence of its coded protein is known.  Bell concedes that in a 
case in which a known amino acid sequence is specified exclusively by 
unique codons, the gene might have been obvious."  Id.

     28 In its brief to the CAFC on the issue (and as it raised in 
conjunction with the appeal of Ex parte Deuel recently), the USPTO has 
cited cases where the court refers to the method that was used to make 
claimed compositions and argued that based on a partial or complete amino 
acid sequence and an allegedly known method of cloning that a claimed 
sequence would have been obvious despite the lack of structurally similar 
compounds.  In every case cited by the USPTO, however, there has been at 
least one structurally similar compound.  In no case has a rejection been 
upheld in the absence of a comparable prior art compound.  

     29 For example, in Deuel there was only a partial amino acid 
sequence in the prior art (as opposed to the full sequence found in 
Bell), and like Bell, in Deuel there were dependent claims that included 
only a subset of the possible sequences.
     30 The Court made a similar point in In re Wright, 999 F.2d 1557 
(Fed. Cir. 1993).  In Wright, the claims read on vaccines against all 
pathogenic RNA viruses (including AIDS viruses, leukemia viruses and 
sarcoma viruses, based upon general descriptions and a single working 
example to the production of vaccines based on the isolation and cloning 
of the envelope A gene region from Prague Avian Sarcoma Virus.  In 
affirming the rejection on enablement grounds, the Court pointed out 
that: (1) the claims required the composition to be a vaccine (which, 
based on the specification, required an immunoprotective (as opposed to a 
mere antigenic) response in the host; and (2) as of the filing date of 
the application one of skill in the art would not have reasonably 
believed that all living organisms could be immunized against infections 
by pathogenic RNA viruses based on the disclosure in the patent 
application. 

     31 These same principles were applied by the CAFC in In re Goodman, 
11 F.3d 1046 (Fed. Cir. 1993).  In Goodman, the Court affirmed the 
USPTO's rejection of claims directed to methods of producing mammalian 
peptides in plant cells, where the specification of the patent 
application contained "a single example of producing gamma-interferon in 
the dicotyledonous species, tobacco,"  Id. at 1050.  According to the 
Court, the specification did not contain sufficient information to enable 
the broad scope of the claim (which covered, [f]or instance, production 
of peptides in monocotyledonous plants."  Id.  The Court noted that 
production of peptides in such plants involved "extensive problems," and 
pointed to an article by the inventor as evidence of such problems.  Id. 
at 1051.

     32 BIO acknowledges the special contribution of Chuck Ludlam, Allen 
Norris, Andy Culbert, George Johnston, Bill Epstein, Timothy Gens, Paul 
Ginsberg, Bernard D. Saxe, Dan Chambers, Michele Cimbala, Evelyn 
McConathy, Edmund Fish, Kate Murashige, Craig Opperman, and Rich Shear in 
drafting this Section of the report.
     33 See Appendix B of this report.
     34 The proposed amendments to the statute defining patent term do 
not address the automatic early publication of a patent application prior 
to issuance.  However, the PTO will clearly continue to press for this 
provision to implement the U.S./Japanese agreement of August 1994.  If 
implemented, the measure provides for the automatic publication at 18 
months from the earliest priority date of all patent applications, 
including later-filed continuation applications, filed after January 1, 
1996.

     35  35 U.S.C. Section 121; 37 C.F.R. Section 1.141.
     36 MPEP 802.01.
     37 MPEP 802.01.
     38 MPEP 803
     39 In re Bell, 991 F.2d 781, 26 U.S.P.Q.2d 1529 (Fed. Cir. 1993)

     40 In re Durden, 763 F.2d 1406, 226 U.S.P.Q. 359 (Fed. Cir. 1985)
     41 BIO acknowledges the special contribution of George Johnston, 
Timothy Gens, Paul Ginsberg, Geoff Karny, Edmund Fish, Kate Murashige, 
Estelle Tsevdos, and Ken Woolcott in drafting this Section of the report.

     42 See Appendix A.
     43 BIO acknowledges the special contribution of Allen Norris, 
Timothy Gens, Richard Peet, William Scanlon, Stanley Schlosser, Edmund 
Fish, Carl Eibl, John Sanders, Barb Luther, Rick Burgoon, and Jim 
Bradburne in drafting this Section of the report.

     44  59 Fed. Reg. 45267.  The USPTO stated in its Notice (for this 
hearing see Appendix A) that "a plant patent affords its holder only the 
right to exclude others from sexually reproducing the plant or using the 
plant so reproduced.  As such, protection afforded by a plant patent does 
not extend to parts of the protected plant, such as harvested material 
(e.g. table fruit, cut flowers, etc.)" Id. at 45271.  This statement 
contains a factual error and the legal conclusion is unsupported.  The 
PPA grant is "the right to exclude others from asexually reproducing the 
plant or selling or using the plant so reproduced."  35 U.S.C. Section 
163.  In addition, it is for a court of competent jurisdiction, not the 
USPTO, to determine what constitutes infringement under the PPA.  For 
example, no court has rendered a decision as to whether unauthorized 
import of plant parts is infringing but, for the reasons outlined herein, 
it is likely that a court would find such unauthorized imports infringing 
under current United States law. 

     45  "The purpose of the bill is to afford agriculture, so far as 
practicable, the same opportunity to participate in the benefits of the 
patent system as has been given industry, and thus assist in placing 
agriculture on a basis of economic equality with industry.  The bill will 
remove the existing discrimination between plant developers and 
industrial applicants.  To these ends the bill provides that any person 
who invents or discovers a new and distinct variety of plant shall be 
given by patent an exclusive right to propagate the plant by asexual 
reproduction; that is by grafting, budding, cuttings, layering, division, 
and the like, but not by seeds."  (emphasis in original)  S. Rep. No. 
315, 71st Cong., 2d Sess. (1930).

     46  H.R. Rep. No. 1129, 71st Cong., 2d Sess. (1930).
     47  Mr. Craig J. Regelbrugge, Director of Regulatory Affairs and 
Grower Services, American Association of Nurserymen, kindly provided this 
data.

     48  Id.
     49  Id.
     50  35 U.S.C. Section 162.
     51  Id.
     52  35 U.S.C. Section 163.
     53  35 U.S.C. Section 161.
     54  Id.
     55  In re Arzberger, 112 F.2d 834, 837 (Ct. Cust. and Pat. App. 
1940).  In this case, the court addressed the question of whether 
bacteria were plants within the meaning of the PPA and concluded that 
they were not.
     56  Id. at 837.
     57  Yoder Bros., Inc. v. California-Florida Plant Corp., 537 F.2d 
1347 (5th Cir. 1970).
     58  Id. at 295.

     59  59 Fed. Reg. 45271.
     60  Mr. William Carlson of the Floral Trade Council kindly provided 
this data.
     61  Mr. Craig J. Regelbrugge, Director of Regulatory Affairs and 
Grower Services, American Association of Nurserymen, kindly provided this 
data.
     62  Yoder Bros., Inc. v. California-Florida Plant Corp., 537 F.2d 
1347 (5th Cir. 1970).
     63  Id.
     64  Amgen Inc. v. U.S. Int'l Trade Comm'n, 902 F.2d 1532, 14 USPQ2d 
1734 (Fed. Cir. 1990).
     65  Yoder Bros., Inc. v. California-Florida Plant Corp., 537 F.2d 
1347 (5th Cir. 1970).

     66  35 U.S.C. Section 271(g).
     67  Id.
     68  Process Patent Legislation: Hearing on S. 568, S. 573, and S. 
635 Before Subcomm. on Patents, Copyrights and Trademarks of the Senate 
Comm. on the Judiciary, 100th Cong., 1st Sess. 4 (1987).
     69  The USPTO Board of Patent Appeals and Interferences made the 
administrative decision that plants produced by either sexual or asexual 
reproduction and plant parts (including seeds and tissue cultures) are 
protectable under 35 U.S.C. Section 101.  Ex parte Hibberd 227 USPQ 443 
(USPTO Bd. Pat. & Int'f. 1985).  Even in view of the Hibberd decision, 
however, the PPA continues to be critically important for the protection 
of new asexually reproduced plant varieties for which satisfaction of the 
more stringent written description and enablement requirements under 35 
U.S.C. Section 101 would be impossible.

??







 



 

























APPENDICES





Appendix A: 



	Notice of Public Hearing and Request for Comments on Patent Protection 
Issues for 	Biotechnology Inventions, Patent and Trademark Office, 59 
Fed. Reg. 45267 	(September 1, 1994)



Appendix B:



	Comments Submitted on Behalf of BIO Concerning Patent Harmonization 
Issues in 	response to Patent and Trademark Office notice, October 28, 
1993

		BIO Position on Changing to a First-to-File Patent System



Appendix C: 



	Comments Submitted on Behalf of BIO Concerning the Standard of 
Non-obviousness 	for Public Hearing of Patent and Trademark Office, July 
20, 1994



Appendix D:



	1. June 27, 1994, Letter to Commissioner Lehman from Carl Feldbaum and 
Charles 	Ludlam Regarding Draft GATT Implementing Legislation 

		Attachments: BIO Proposed Amendments to 35 USC 154 to Implement GATT

		Length of Appeals For Biotechnology Patents -- CAFC

		Examples of Biotechnology Interferences

		BIO Position on S. 1854, the Patent Simplification Act of 1994

		BIO Comments on "Utility" Standard



	2. August 12, 1994, Letter to Commissioner Lehman from Carl Feldbaum 
and 	Charles Ludlam Regarding Draft GATT Implementing Legislation 



	3. September 27, 1994, Letter to Ambassador Mickey Kantor and 
Commissioner 	Lehman from Carl Feldbaum and Charles Ludlam Regarding 
Final GATT 	Implementing Legislation



Appendix E:



	Membership of Biotechnology Industry Organization 





			October 28, 1993



The Honorable Bruce A. Lehman

Commissioner of Patents and Trademarks

Box 4

Patent and Trademark Office

Washington, DC  20231



Dear Commissioner Lehman:



	The Biotechnology Industry Organization (BIO) hereby submits the 
attached comment in support of changing to a first-to-file system 
provided that the listed reforms are made in the patent systems of all 
parties to a corresponding harmonization treaty.



	The gist of the comment is that the U.S. should not give up 
first-to-invent unless at least these listed reforms are adopted.  We 
would require that measures offering adequate and effective means of 
protecting intellectual property rights are secured in the same 
international agreement.  



	Additionally, in developing the balanced package, our member companies 
have identified the following issues as important to consider:

	

	a. a requirement that to receive a filing date under the first-to-file 
system, a priority application must provide a "written description of the 
invention, and the manner and process of making and using it...", as 
identified under 35 USC 112.



	b. sensitivity to the extreme controversy over the "prior user rights"  
issue.  Eventhough prior user rights were proposed to accommodate some of 
the concerns expressed regarding abandonment of the first-to-invent 
system, at their 	worst, they would be tantamount to a compulsory license 
which would not be in 	the best interest of U.S. industry.  



	We very much appreciate this opportunity to comment on the issues.  We 
look forward to assisting the Administration in negotiating a 
harmonization treaty that is consistent with the interest of America's 
biotechnology companies. 







The Honorable Bruce A. Lehman

Page Two

October 28, 1993



	BIO represents over 500 large and small biotech companies who together 
conduct nearly 85% of the biotech research done in this country.  The 
organization is the result of a recently completed merger between the 
Industrial Biotechnology Association and the Association of Biotechnology 
Companies.  Attached is a list of our member companies.





		Sincerely,







	Chuck Ludlam	Carl B. Feldbaum

	Vice President,	President

   	   Government Relations





BIO Position on Changing to a First-to-File Patent System



International efforts to harmonize patent laws among member states of 
the Paris Convention have led to the development of a draft patent 
harmonization treaty that would require the U.S. to change from a 
first-to-invent to a first-to-file patent system.



BIO would only support adoption of a first-to-file system as part of a 
balanced package that would require changes in the patent laws of other 
countries.  Among these changes are:



 elimination of patentable subject matter exclusions (i.e., making 
patent protection equally available for all fields of technology 
including genetically engineered plants and animals);



 prompt examination and issuance procedures for patent applications;



 elimination of procedures, such as pre-grant opposition actions, that 
delay patent grant once examination is complete;



 an adequate minimum patent term from filing (e.g., 20 years), with 
provisions for patent term restoration;



 a scope of protection that extends sufficiently beyond the literal 
scope of claims so as to assure equitable protection (i.e., one similar 
to the U.S. doctrine of equivalents);



 the strictest of limits on the granting of compulsory licenses to 
private parties;



 inclusion of a one-year "grace period" for publications; and 



 elimination of other provisions in foreign laws that are 
discriminatory and incompatible with strong and effective protection of 
intellectual property rights in all countries.



The proposed change of U.S. law to a first-to-file system is significant 
and is not





 without controversy in the United States.  Nevertheless, BIO believes 
that a harmonization package along the lines above would remove some of 
the costs, uncertainties and complexities in current U.S. practice, as 
well as make foreign patent systems more accessible and equitable to U.S. 
inventors.





								COMMENTS SUBMITTED ON BEHALF OF THE

	BIOTECHNOLOGY INDUSTRY ORGANIZATION

	CONCERNING THE STANDARD OF NON-OBVIOUSNESS

	July 20, 1994 Public Hearing



	These comments are submitted on behalf of the Biotechnology Industry 
Organization (also known as "BIO"), the largest biotechnology industry 
organization in the United States with over 500 members. This is BIO's 
official response to the PTO Notice which appeared in the April 29, 1994 
issue of the Federal Register (59 FR 22152).



	BIO applauds the PTO for reviewing the question of the standard of 
obviousness and how it is applied by the courts and by the PTO.  Such a 
hearing as set up by the PTO and the comments which may be elicited 
thereby can only aid the PTO in reviewing this issue and in relating it 
to their function in serving the public.



	SUMMARY



	BIO does not support any change to the present standard of obviousness.  
We believe that the present U.S. standard of patentability, which 
includes obviousness, is one of the highest in the world and is a legal 
standard set by U.S. statutes and the courts in interpreting these 
statutes.  Under the present statutes, it is the court, not the PTO, that 
sets the level of non-obviousness for patentability determinations. 



	Under these statutes, the burden of proof for demonstrating 
non-obviousness is, upon the party which includes the PTO, challenging 
the patentability of a given invention and not upon the inventor.  
Therefore, to meet this burden of proof, the PTO must provide acceptable 
evidence.  It appears that this, not the level of the standard of 
obviousness, poses the greatest problem for the PTO since it requires the 
PTO to produce credible evidence to support obviousness rejections based 
upon a combination of references and to rebut the presentation by 
applicants of evidence of secondary considerations.  The presentation of 
such positive evidence to maintain and support an obviousness rejection, 
many times is beyond the resources of the PTO since the PTO does not





have the power, manpower or capacity to provide such evidence. 



	We agree that in order for the PTO to determine whether an invention is 
unobviousness is through the presentation of acceptable evidence.  To 
determine obviousness upon the individual judgments or feelings of an 
examiner, group of examiners or even a judge, no matter how highly 
skilled, promotes disparity and makes this a subjective determination.  
Subjective determinations do not breed consistency whereas law and the 
requirements of law do.



	Placing the burden of proof for demonstrating obviousness on the party, 
including the PTO, challenging patentability has a positive impact on the 
biotechnology industry.  The biotechnology industry is an industry in its 
infancy and is made up of and includes many small companies trying to 
obtain investment capital to develop their technology and inventions.  
The issuance of patents is an important aspect in obtaining investment 
capital for the small companies so that they can develop the drugs 
discovered during the early stages of their creation to produce important 
commercial therapeutic products.  Competition is not well served if these 
biotechnology companies do not get sufficient funding to survive and 
provide effective competition.   The issuance of patents provides great 
incentive for obtaining investment capital and for the survival of this 
industry.





	RESPONSES TO QUESTIONS RAISED BY PTO



	The following is BIO's  response to each of the  questions raised by 
the PTO in the Notice:



1. Is a more rigorous standard of non-obviousness needed?



	No, the present U.S. standard of patentability, including 
non-obviousness, is one of the highest in the world.  No other court 
reviews issues related to the patent application itself, the quality of 
the disclosure and prosecution and raises such issues as 
misrepresentation, failure to cite references, conduct of the prosecution 
before the PTO, fraud in its procurement as well as whether the 
application discloses the best mode known to the inventor.  It is these 
factors which raise the standards for enforceability and patentability of 
the U.S. patent.  While many of these issues cannot be determined in the 
PTO, these are the standards set by the courts for determining not only 
non-obviousness but also determining whether a U.S. patent has been 
validly issued.  That these issues are determined through inter partes 
litigation does not lower the U.S. standards for patentability, which 
includes non-obviousness.



	The obviousness standard has been held by the U.S. Supreme Court to be 
a legal determination.  As such, these standards are set by U.S. statutes 
and courts in interpreting these statutes.  Other than recommending 
legislation, the PTO has no function with regard to setting the standard 
of obviousness but is only obligated to apply these standards.  In 
applying these standards, the PTO has the obligation to following the 
decisions of its reviewing court which is the Federal Circuit.



2. How should the standard be defined?



	The obviousness standard of patentability is defined by the statute as 
applied by the courts.  Under the U.S. patent law 35 USC 102:



	A person shall be entitled to a patent unless ---



Under the statute, the burden of proof for demonstrating obviousness and 
unpatentability is upon the person challenging the patentability of a 
given invention and not upon the inventor.  Under this statute, the 
burden is placed upon the PTO to set forth by acceptable evidence that 
the claimed invention is obvious.  As seen from the present statute, the 
PTO has the burden of establishing and maintaining any case of prima 
facie obviousness to support a prior art rejection under 35 USC 103.  To 
meet this burden of proof, the Patent Office must produce credible 
evidence to support its holding of obviousness.



	In constructing and maintaining a 35 USC 103 obviousness rejection, PTO 
has practical difficulty meeting this burden.  It appears that this 
notice is directed to this difficulty.  The nature of a proceeding in the 
PTO is an ex parte proceeding between an applicant and the examiner.  In 
many cases, the PTO may not have the capability necessary to rebut an 
applicant's case.  In this respect, the PTO is not a testing laboratory 
nor does it have many of the usual means such as independent testing, 
discovery and depositions, etc. necessary to rebut statements made by the 
applicants.  In addition, the PTO is not equipped to take on this burden 
with its associated expenses.



	The burden of proving obviousness, as imposed by the statutes, is more 
effectively addressed by the courts.  The PTO proceedings set the stage 
for many of the issues to be resolved during subsequent litigation.  One 
of the key issues for defining the standard of non-obviousness, as set 
forth by the Supreme Court in Graham v. John Deere & Co., is the level of 
ordinary skill in the pertinent art.  This issue must be addressed by a 
person challenging the patent who presents evidence as to the particular 
level of ordinary skill in the given case.  This is an issue that is 
relatively difficult for the PTO to establish in a case by case basis.  
Whether or not the standard of non-obviousness set by the courts is too 
low or too high may not be the main issue.  Perhaps it is the inability 
of the PTO to determine non-obviousness based upon their present 
capability to perform this function which is best carried out by the 
Federal Courts through litigation.



3. Should the current standard of non-obviousness be administered 
differently?



	We believe that the current standard should be uniformly administered 
throughout the PTO to ensure consistency.  In this respect, we feel that 
the examiners should be instructed as to the law and what are the 
limitations of their functions.  The inability to produce evidence to 
support a holding of obviousness may frustrate some examiners.  However, 
the question should not be whether examiners believe or don't believe the 
evidence presented by the applicant but whether they have credible 
evidence to rebut such evidence.  The examiners cannot merely interpose 
their own judgment as to the correctness of the data or assertions made 
by the applicant. 



4. Is the standard of non-obviousness applied differently among 
different examining groups within the PTO question?



	We believe yes, especially since in the PTO many times obviousness is 
determined by the examiner's judgment as to their scientific belief and 
upon whether applicants have proven unobviousness to their satisfaction.  
As set forth in many decisions, applicant does not have to prove that any 
of the assertions made in this patent application are correct.  The 
question of obviousness is determined by evidence and by meeting various 
burdens of proof concerning this evidence.  The determination of 
obviousness cannot be made upon the individual judgment or feelings of an 
examiner, group of examiners, even a judge.  It must be based upon the 
evidence as presented by the parties and their respective burdens of 
proof.  To allow this determination to be based upon individual judgment, 
opinions and feelings does not result in standardization but rather 
promotes disparity based upon a given examiner or group of examiners.



5. Should the standard of non-obviousness vary according to the field of 
technology involved?



	We believe no.  Non-obviousness should be a legal determination based 
upon law and the evidence presented.  This determination should not be 
based upon belief or judgment of an examiner or group of examiners.



6. What role should secondary considerations such as commercial success, 
unexpected results, etc. play when determining the non-obviousness of an 
invention



	When a declaration presenting evidence of secondary consideration is 
presented, this should, under the usual set of circumstances be given 
great weight, unless the examiner rebuts the evidence presented in this 
declaration by presenting positive, rebuttal evidence.  Generally, it is 
difficult for the PTO to present such rebuttal evidence since the PTO is 
not equipped to do so.



	Affidavits and declarations presenting evidence of secondary 
consideration can best be challenged not by the PTO but by a third party 
in a litigation.  Interested parties have the facilities, data and 
experts necessary to rebut the statements made or evidence presented in 
these declarations.  The use of declarations in obtaining an allowance in 
the PTO presents a target for such third parties in later challenging the 
validity of this patent.  Therefore, it is in the courts, not in the PTO, 
where the most effective rebuttal takes place.



7. Whether motivation should be used for a combination of references in 
order to constitute a prima facie case of obviousness?



	Yes.  The test of a motivation as applied by the courts should be used 
to determine whether a prima facie case of obviousness exists.  Most 
inventions are made from elements existing in the prior art.  Without the 
test of motivation, nothing would be patentable.  Motivation, as stated 
by the CAFC in In re Vaeck, 20 USPQ 2d 1438, requires that the prior art 
suggest, 



	1)	to one skilled in the art the combination; and

	2)	whether the prior art would suggest to one skilled in the art a 
reasonable expectation of success; with 

	3)	"both the suggestion and the reasonable expectation of success ... 
found in the prior art, not in the applicant's disclosure".



	This makes the issue of motivation for proper combination of references 
an objective test depending upon the disclosure of the prior art.  To 
make motivation or the ability to combine references based upon the 
judgment of the examiner without the disclosure in the prior art as to a 
basis for such combination and the suggestion of success achieved by such 
a combination would delegate the determination of this issue to 
subjective judgment.  Subjective judgment does not breed consistency.



8. Is the ordinary skilled in the art being interpreted and applied 
correctly and if not, what changes are needed?



	We feel that this issue has been addressed before and in order to apply 
consistency, the law as set down in the statutes and interpreted by the 
courts should be the correct standard for determining ordinary level of 
skill.  Subjective judgment of an examiner or group of examiners does not 
bring consistency.



9. Should obviousness determinations be subject to re Novo review on 
appeal with the CAFC?



	We believe that under the statutes, the question of obviousness is a 
legal determination which should be reviewed by the courts.  It is the 
courts which set the standard to be applied by the PTO in examining 
patents.  It is this standard which provides predictability.  In 
determining patentability and what constitutes patentable subject matter, 
predictability is extremely important.



	We also wish to deal with certain of the issues which were presented in 
the Notice concerning the impact of standards of non-obviousness on 
promoting industrial and technological progress in the United States.



10. Whether a stricter standard of non-obviousness would help or hinder 
industrial and technological progress?



	We believe that the present standard of non-obviousness as defined by 
the statutes and the courts, if administered will help U.S. industrial 
and technological progress.  By setting standards of patentability 
independent of the courts will at best benefit only the strongest and 
largest technological companies.  Well financed companies are in the best 
position to appeal decisions which do not adhere to the standards set by 
the courts.  In the long run, a well financed large organization who is 
willing to fight such a decision, will prevail since they are best able 
to persist and bear the expenses of appeals to the court.  However, small 
technology companies which have capitalization problems or they are 
looking for investors, will have a difficult time to obtain investment 
and financing of expensive appeals for overturning decisions not in 
accordance with the decision of the reviewing court.  Such a policy, at 
best, promotes non-competitiveness and emphasizes the inability of small 
technical research organizations to compete effectively with larger 
organizations who are able to easily afford the expenses of appeals.



	In addition, the standard which allows a patent to be granted "unless" 
and places the burden of proof of unobviousness on the party challenging 
the patentability which includes the PTO, has a positive impact on this 
industrial and technological progress.  The existence of issued patents 
is often a necessary precedent for small technology companies obtaining 
investments and the substantial resources needed to finance further 
research, development and testing of the patented subject matter prior to 
commercialization.  Therefore, the issuance of patents is an important in 
obtaining investment capital for small companies to provide increased 
competition and the development of new and important technology.



	The problems with regard to non-uniform standards and delay of patents 
has been effected in the area of biotechnology which is an emerging 
industry in the United States.  The issuance of patents to small 
biotechnology companies has been a key component in raising the necessary 
capital to finance the biotechnology start-up companies and to enable 
them to develop earlier discoveries.  Without this financing which can be 
achieved through the early issuances of U.S. patents, biotechnology 
companies cannot survive and the drugs discovered during early stages of 
their creation cannot be brought to commercial market.  Without this 
financing, jobs are not created and life saving drugs are not developed.  
The public interest is not well served if these potential new drugs do 
not become available.  Furthermore, competition is not well served if 
these biotechnology companies cannot get sufficient funding to survive 
and provide effective competition.



	We believe the PTO has a corps of examiners who have a level of 
technological competence higher than it has ever been.  By training these 
examiners as to the legal aspects of patent prosecution and their 
function in examining patent applications as prescribed by law, the U.S. 
would have a patent examining corps and procedures second to none.





							June 27, 1994



The Honorable Bruce Lehman

Assistant Commerce Secretary and 

     Commissioner of Patents

Washington, D.C. 20231



RE: GATT-TRIPS/S. 1854/HR 4505





Dear Commissioner Lehman:

 

	We are writing on behalf of the Biotechnology Industry Organization 
(BIO), the trade association which represents the interests of 525 
members active in biotechnology, concerning the General Agreement on 
Tariff and Trade (GATT) Agreement and legislation to implement the 
agreement.  



	As an industry with a positive balance of trade we support full and 
fair international trade.  Therefore, we welcome many features of the 
GATT Agreement, including elimination of tariffs and the stronger 
intellectual property protection provided under the Agreement on Trade 
Related Aspects of Intellectual Property Rights (TRIPS) which forms part 
of the GATT Agreement.  



	We do, however, have serious concerns relating to draft legislation to 
implement the agreement.  Specifically, we believe that limiting the 
patent term to 20 years from filing, without adopting either a package of 
safeguards or other reforms, will seriously disadvantage our industry, 
which is particularly prone to lengthy delays between the filing of a 
patent application and subsequent issuance of the patent.



	This threat to our industry can be avoided, while at the same time 
complying with GATT, by leaving the present patent terms of 17 years from 
issue unchanged other than to insert language stating that the term will 
not be less than 20 years from filing, extending 35 USC 104 to all GATT 
(WTO) countries and, incidental to this, but apparently overlooked when 
implementing NAFTA, amending 35 USC 102(g) in a similar manner.  We 
attach two proposals for such





amendment to 35 USC 154.  This proposal would not only be in full 
compliance with GATT but would greatly simplify the implementing 
legislation by completely avoiding all additional provisions currently 
proposed in connection with patent term extension for interference 
delays, provisional protection and the like.



	In the event that despite our suggestions above, change to a patent 
term of 20 years from filing remains in the proposed legislation, we urge 
the following three steps be taken:



	 The extension provisions should also apply to cases involved in 
protracted appeals.	The Administration's attempt to deal with the 
potential inequities of moving to a patent term of 20 years from filing 
by permitting patent term extension for patents involved in 
interferences, while welcome, does not go far enough and should apply to 
protracted appeals.  Without this change the effect in many cases of a 20 
year term would be to cut back on the current effective length of the 
patent terms available to biotechnology inventors.



	 The amendments should not apply to inventions which were filed on or 
prior to the effective date even if refiled thereafter.



	 The Administration should commit in a Statement of Administrative 
Policy to shorten the processing time of Patent Applications through the 
following: (i) increased staffing at the Patent and Trademark Office; 
(ii) support for ameliorative legislation such as the Biotechnology 
Patent Protection Act; and (iii) strict guidance to Patent Examiners on 
questions of utility particularly in the biotechnology area.  This latter 
issue is discussed in the attached outline of our concerns regarding the 
utility issue.



	Finally, we are concerned with the fact that the TRIPS Agreement 
contains provisions which are subject to abuse, namely exclusion of 
certain inventions in the biotech area from protection and lengthy delays 
in implementation because of which we need to maintain options for 
bilateral action.  We, therefore, support efforts to preserve the 
vitality and viability of special section 301 to address these two 
deficiencies.



	We have analyzed the two bills which have been introduced to implement 
the Agreement.  This letter is accompanied by a detailed commentary 
regarding S. 1854, which sets out the problems with this particular bill.  
Similar concerns arise with regard to H.R. 4505, which we understand to 
be virtually identical to the Administration's draft GATT implementing 
proposal on this issue. 



	Our concern about these bills is based on our experience with the 
patent law as it applies to the biotechnology industry, which is outlined 
here.



(A) Delays in the prosecution to allowance and issuance of applications



	(a) Prosecution



		(i) Utility Current patent office practice places demands upon 
Applicants to provide clinical data in support of inventions claiming 
therapeutic activity which form the major part of inventions in the 
biotechnology area.  Whether or not this requirement is correct, and we 
believe it is not as outlined in the attached paper,  generation of these 
data is inordinately time consuming because of regulatory and safety 
requirements and requires a major commitment of resources.



		(ii) Scope In a new field such as biotechnology where there is scant 
binding legal precedent both the Patent Office and Applicants require 
much to and fro communications as well as guidance from higher 
authorities to determine patentable claim breadth.



		(iii) Appeals Because of the requirements of (i) and (ii) Appeals to 
the Board of Patent Appeals and Interferences (BOPAI) and higher yet to 
the Court of Appeals of the Federal Circuit (CAFC) are frequently 
inevitable and all the more likely for more significant or important 
inventions.  In such cases delays of 10 years from filing are not 
uncommon (see attached examples).



		(iv) Interferences The relative incidence of interferences in the area 
of biotechnology inventions is exceptionally high, and the interferences 
themselves are frequently unusually complicated and/or adversarial 
(=little willingness to settle), requiring 8 to 10 years to final 
resolution (see attached examples).  Additionally, these protracted 
interferences typically involve pioneer inventions and it would be 
demonstrably unfair to penalize an inventor with a shorter effective 
patent term because of the dilatory tactics of a competitor.



	Each of these four factors, especially if combined, would lead to 
excessively lengthy patent prosecution and shortened effective patent 
life if a 20 year from filing term is introduced.



(B) Continuing Applications and retroactivity.



	The proportion of applications refiled as continuing applications is 
disproportionately high in the biotechnology area.  This is usually the 
result of either a need to generate clinical data and/or the 
oft-encountered practice of patent examiners finally rejecting 
applications but indicating they will allow cases if they are refiled 
with restricted scope.  This latter is a temptation which is economically 
hard to resist for many of our members who rely on patent portfolios to 
attract investments.



	As currently worded these bills could rob inventions made and 
prosecuted under law and practice prevailing prior to its enactment of a 
significant period of patent life even if Applicants were forced to file 
a continuation application after the effective date of the legislation to 
preserve their rights.  We have attached data on the length of appeals 
for biotechnology patents and examples of interferences.



	In proposing a de minimis approach to the implementing legislation BIO 
is not reversing its position on harmonization issues where we favor a 
patent term of 20 years from filing and early publication as part of a 
balanced package.  BIO is also sympathetic to the problem of submarine 
patents apparently encountered by some other industries.  We have doubts, 
however, whether a patent term of 20 years from filing effectively 
eliminates submarine patents other than those issuing on applications 
having pendencies of 20 years or more.  Finally, our proposal would not 
in anyway compromise the recent understanding between the USPTO and the 
JPO.



	We urge that these measures be considered, of all their ramifications 
and careful fine tuning to avoid dealing an unnecessary blow to at least 
one sector of US industry which relies heavily on effective patent 
protection for its competitiveness and ultimately, survival.



	We will be happy to meet, discuss and work with you and your staff to 
implement GATT/TRIPS in a way which minimizes the risk of unintended 
effect and at the same time to work expeditiously towards other desirable 
reforms.  We also would be interested in proposing an agenda of 
administrative actions which could be taken by the Administration.



	We very much appreciate this opportunity to offer BIO's view on this 
legislation and look forward to working with you on this critical issue.



							Sincerely,







	Charles E. Ludlam				Carl B. Feldbaum

	Vice President for				President

	Government Relations

					



Enclosures:

	BIO Proposed amendments to 35 USC 154 to Implement Gatt

	Length of Appeals for Biotechnology Patents and Examples of 
Interferences

	BIO Position on S. 1854, The Patent Simplification Act of 1994

	BIO Comments on Patent and Trademark Office "Utility" Standard





	BIO PROPOSED AMENDMENTS TO 35 USC 154 TO IMPLEMENT GATT

	(Based on text of H.R. 4505)



	* 35 USC 154 (based on H.R. 4505)



	"Every patent shall contain a short title of the invention and a grant 
to the patentee, his heirs or assigns, of the right to exclude others 
from making, using or selling the invention throughout the United States 
and, if the invention is a process, of the right to exclude others from 
using or selling throughout the United States, or importing into the 
United States, products made by that process, referring to the 
specification for the particulars thereof.  Subject to the payment of 
fees as provided for in this title, such grant shall be for a term 
beginning on the date on which the patent issues and ending seventeen 
years therefrom except that said term shall not be less than twenty years 
from the date on which the application for the patent was filed in the 
United States or, if the application contains a specific reference to an 
earlier filed application or applications under sections 120, 121 or 
365(c) of this title, from the date on which the earliest such 
application that supports the claims was filed.  Priority under sections 
119, 365(a) or 365(b) of this title shall not be taken into account in 
determining the term of a patent.  A copy of the specification and 
drawings shall be annexed to the patent and be a part thereof."



	* 35 USC 154 (based on existing law)



	"Every patent shall contain a short title of the invention and a grant 
to the patentee, his heirs or assigns, for the term of seventeen years, 
subject to a minimum term of twenty years from the date on which the 
application was filed in the United States or the earliest effective 
filing date under sections 120, 121 or 365(c), and subject to the payment 
of fees as provided for in this title, of the right to exclude others 
from making, using, or selling the invention throughout the United States 
and ,if the invention is a process, of the right to exclude others from 
using or selling throughout the United States, or importing into the 
United States, products made by that process, referring to the 
specification for the particulars thereof.  A copy of the specification 
and drawings shall be annexed to the patent and be a part thereof.



	Note: Each of these amendments would require minimal conforming changes 
and would make unnecessary the proposed changes to and additions of (i) 
Section 154(b), and (ii) Sections 41(a) (i) (c) and 111 (b)(1), (2) and 
(3).



	LENGTH OF APPEALS FOR BIOTECHNOLOGY PATENTS - CAFC





	Average Pendency ca. 10 years



	4_ years In re Vaeck 20 USPQ 2d 1438 (CAFC)

	8 years In re Goodman 29 USPQ 2d 2010 (CAFC)

	10 years In re Wright 27 USPQ 2d 1510 (CAFC)

	13 years Fiers v. Sugano 25 USPQ 2d 1601 (CAFC)

	14 years In re Bell 26 USPQ 2d 1529 (CAFC)





	EXAMPLES OF BIOTECH INTERFERENCES



	(a) Interference originally declared between multiple parties.  The 
Administrative Patent Judge (APJ, formerly Examiner-in-Chief-EIC) 
indicated when rendering an interlocutory decision that without 
settlement the interference could last at least 11 years.  At that time 
the application was some eight years old.  The junior and thus likely 
losing party was already on the market and had every incentive to delay 
the interference and not to settle.  Under the new law this invention 
would be lucky to enjoy one year of effective life with a possible 5 year 
extension.  Although interferences are relatively rare those involving 
important inventions usually last a long time.  The situation will become 
even worse if GATT is implemented like NAFTA by making 35 USC 104 
international or possibly repealing it altogether.  The prospect of 
"tactical" interferences is alarming.



	(b) Another biotechnology based company has 20 declared interferences 
with the furthest progressed of those contested (=not settled)  which 
comprise more than half of the total  pending now for 10 years and not 
expected to be decided within the PTO for another two years.  This 
decision is then subject to the loser's right of appeal to the district 
court (2-3 years for final decision) and then the CAFC!  As with the 
first example effective life could be reduced to little or none.

	(c) Chief Counsel of yet another of our member companies has had more 
interferences declared in the first few years with that company than in 
twenty years with a major pharmaceutical company.



	BIO POSITION ON S. 1854, THE PATENT SIMPLIFICATION ACT OF 1994





S. 1854, The Patent Simplification Act of 1994,

	(1) requires publication of patent applications 18 months after the 
filing date of the earliest priority document;

	(2) changes the patent term to 20 years from the earliest priority 
date;

	(3) restricts the length of time during which an applicant can claim 
priority; and 

	(4) does not grandfather continuing applications under the old patent 
law. 



	This proposal, if enacted, would create a stream of unintended effects 
on U.S. patent law that would open the door to blatant abuse of the 
patent system. BIO strongly opposes each of the above as currently 
provided for in S. 1854.



I. PUBLICATION AND "FIRST TO INVENT" ARE NOT COMPATIBLE PRACTICES



	A. The United States is a first to invent country.  



	In highly competitive biotechnology research, it is common that two or 
more applicants will file a patent application on the same invention. 
However, only one patent can issue on that invention. Therefore, the 
dispute as to which applicant deserves the patent must be resolved.



	The United States settles this dispute by determining who was the first 
to invent the claimed invention.  The United States is thus termed a 
"first to invent" country. Most other countries are "first to file" 
countries.  In a "first to file" country, the earliest filing date wins 
the patent.



	B. Procedural Safeguards are Present in Countries that Publish 
Applications that are not Present in the United States



	First to file countries publish or "lay open" their patent 
applications.  First to file countries have procedural safeguards in 
place to prevent abuse of the knowledge learned from such publication. 



	The most obvious safeguard in a first to file country is that an 
applicant's patent rights cannot be compromised if a competitor copies 
and files a second application on that subject matter. Since the patent 
rights are determined by the filing date, it would be useless for a third 
party to file an application directed to published matter because the 
filing date of the application of that third party would be after that of 
the deserving applicant.



	Another safeguard that some first to file countries have is a 
post-grant opposition practice such as that under the European Patent 
Convention. Third parties are given a certain time period in which to 
oppose the granting of a patent or lose the right to oppose.



	The United States has no similar procedural safeguards to prevent third 
party harassment during patent examination. If the United States were to 
publish patent applications, the United States would stand alone in 
intellectual property law in being a first to invent country that 
publishes. As shown below, the two practices, first to invent and 
publication, are not compatible.



	C. Bad Faith Attempts to Provoke Interference Proceedings will Increase 
due to Publication and will Harm Many Rightful Applicants



	An "interference" is the proceeding by which the U.S. Patent and 
Trademark Office determines which applicant was first to invent the 
claimed invention. In a first to invent country like the United States, 
once an application publishes, a competitor would be able to copy the 
applicant's invention, file the competitor's own application and attempt 
to force the rightful applicant into an interference proceeding so that 
the USPTO can decide who invented first. This problem is not solved by 
making published patent applications absolute novelty destroying art (the 
proposed amendments to 35 U.S.C. 102(e), as discussed below). Further, 
as discussed below, this problem is not solved by delaying publication 
until 18 months after the priority date; in fact, it is made worse as it 
relates to CIP practice.



	D. Applicants will Lose Their One Year Grace Period for Filing an 
Application in the United States if the Relevant Publication is that of a 
Patent Application



	The Act proposes to amend 35 U.S.C.  102(e) to add a new section, 35 
U.S.C.  102(e)(1); this provision would recite that the applicant is 
entitled to a patent unless:



		the invention was described in ... a published patent application....



	The proposed amendment to 35 U.S.C.  102(e) would eliminate the one 
year grace period provided for by 35 U.S.C.  102(b) for an applicant who 
was facing a patent application that published before the applicant's 
filing date.



	Currently, Applicants have one year from a disclosure to file their own 
application.  This is provided by 35 U.S.C.  102(b) which states, in 
part:



		A person shall be entitled to a patent unless the invention was ... 
described in a printed publication in this or a foreign country ..., more 
than one year prior to the date of the application for patent in the 
United States.



	The effect of 102(e)(1) is to eliminate the one year grace period 
provided by 102(b) when the art is a published patent application 
anywhere in the world. Thus, an applicant would be effectively placed 
under a first-to-file standard, because publication of a third party 
application prior to  the applicant's filing date would be an absolute 
bar to novelty. The proposed amendment to 35 U.S.C. 102(e) does not 
allow the applicant to show that the applicant invented the invention 
prior to the filing date of a different party who published prior to an 
applicant's filing. 



	E. A Competitor Can Use the Disclosure of the Applicant so as to Deny 
the True Inventor a Patent



	The new Act raises published patent applications to a level that is an 
absolute bar to novelty. Because of this, under this Act, a highly 
aggressive competitor can use a disclosure of the application as a tool 
to deny the true inventor a patent. For example, a scientist who presents 
a public disclosure at a meeting risks the real possibility that a 
competitor may file an application on the scientist's invention that 
would publish before the filing of the scientist's application. 



	In fact, this could be easily achieved by the competitor asserting a 
priority date of 18 months or earlier. The application would publish 
immediately. It is important to note that there is no substantive 
determination of whether an applicant deserves a priority date prior to 
the application publishing. The simple fact that the competitor's 
application published prior to the scientist's filing date would destroy 
patentability of the scientist's invention. The competitor can then 
abandon the application. The immediate effect of such abuse possibilities 
would be a stifling of the free flow of scientific exchange.



	F. Continuation-in-part Applications Would be Especially Compromised as 
All New Material Would Publish Less Than 18 Months After Filing



	S. 1854 proposes to add a new section, 35 U.S.C. 100(e), that would 
define the term "filing date" to mean:



		the earliest of the actual filing date or any priority date claimed by 
the applicant under section 119, 120 or 365.



S. 1854 also proposes to publish applications 18 months after their 
priority date. 



	The United States is now unique in that the applicant is able to file 
applications that are continuation-in-part (CIP) applications, wherein 
some claims may deserve the priority date and some claims may be directed 
to the new matter that was introduced for the first time in the CIP 
application. Especially in biotechnology, CIP practice is common, as the 
research progresses upon which the invention is based.  



	However, under S. 1854, the CIP application would be published 
immediately if the claim to priority was greater than 18 months. If the 
CIP application was filed at less than 18 months after the claim to 
priority, the time to publication would be proportionately less. All new 
matter in the CIP application would be published at the same time as the 
old matter, even though the new matter had not been on file for 18 
months. Such immediate disclosure in rapidly breaking fields would only 
exacerbate unnecessary patent prosecution harassment.



	In addition, under current interference rules, new matter that is 
published soon after filing (such as in a CIP application) will be that 
matter which is most likely to be drawn into such an interference 
proceeding. Under S. 1854, such new matter will publish soon after, or 
immediately upon filing and be the most susceptible to attack.



II. THE PATENT TERM FOR U.S. PATENTS WILL EFFECTIVELY DECREASE, NOT 
INCREASE, DUE TO THE LONG PROSECUTION TIME IN THE UNITED STATES



	The Act would change the patent term to one that runs from a filing 
date rather than from the date that the patent actually issues. The 
language of the Act could provide two or more terms for an issued patent 
if that patent was a continuation in part application. In a 
continuation-in-part application, different claims may have different 
priorities, as the actual filing dates of the claimed subject matter can 
differ. The language of the Act should be amended to clarify that the 
term runs from the earliest priority date of any of the claimed 
inventions in that patent.



	No patent will ever have a term of twenty years.  Note that it may take 
two years before a patent application is even examined in an art unit.  A 
very small handful of patents may actually have a term of eighteen years.  
The majority of patents would have a term of seventeen years or shorter.  
In biotechnology, even without an interference or appeal, it is not 
unusual that a patent will not issue until 5-10 years after filing.  
Continuation of the USPTO's policy on utility and enablement would 
further add to prosecution delays.  



	The practical result of enactment of the Patent Simplification Act will 
be a significant decrease in the term of the effective life of many U.S. 
patents.



	A. Establishing a Patent Term Based on a Filing Date Provides 
Incentives to Competitors to Interfere with and Delay Issuance



	If third parties are allowed to read patent applications in a first to 
invent country, attempts to provoke interferences, rightfully or wrongly, 
will soar. A competitor who acts in bad faith to copy an application and 
provoke an interference does not have to win the interference to "win." 
Rather, such bad-faith competitor "wins" if it simply delays issuance of 
the patent or if it is able to negotiate more favorable licensing terms 
as a result of a forced  settlement of the interference when the other 
party lacks the funds to fight. These problems will only be exacerbated 
in the most highly competitive biotechnology areas.



	It should also be emphasized that merely trying to provoke an 
interference will delay issuance of a patent - often for six months or 
longer.  In at least one recent instance, attempts to provoke an 
interference suspended prosecution of an application for 4 1/2 years 
after the claims were found to be allowable - and that was not even 
counting the time spent in the interference proceeding itself.



	B. Even Attempts to Provoke Interferences, or the Filing of Formal 
Protests, Deserving or Not, Achieve the Goal of a Competitor Who Desires 
to Delay Issuance of a Patent



	Interference proceedings are very expensive. Many small companies 
and/or non-profit entities such as hospitals or universities do not or 
cannot bear the cost of routinely fighting an interference. The filing of 
the preliminary motions alone, with all of the arguments for attacking 
why the opposing party does not deserve a patent on its application, may 
cost $50,000- $100,000 in a typical application. Discovery and 
depositions would add even more to the cost of the interference. 



	As a result, such small companies and/or non-profit entities often 
simply concede without fighting. By conceding, the applicant gives up all 
patent rights to the interfering subject matter, even if they properly 
deserved such rights.  



	In the alternative to provoking an interference, a competitor could 
file an official protest at any time that the application is pending. By 
delaying the filing such official protest until the application is near 
allowance, the competitor again achieves his goal of delaying issuance of 
the applicant's patent.



	This decreased life of US patents will be the most obvious result of a 
system that encourages abusive patent procurement practices by third 
parties.  The harassment tactics discussed above would all significantly 
lengthen the amount of time and the cost required to procure a patent. 



	For example, in one instance, the Administrative Patent Judge (APJ) 
indicated when rendering an interlocutory decision that, without 
settlement, the interference could last at least 11 years. At that time, 
the application was some eight years old. The junior party and thus 
likely losing party was already on the market and had every incentive to 
delay the interference and not to settle. Under the new law, this 
invention would be lucky to enjoy even one year of effective life with a 
possible five year extension. 



	Although interferences are relatively rare, those involving important 
inventions usually last a long time. The situation will become even worse 
if GATT is implemented like NAFTA by making 35 U.S.C.  104 international 
or possibly repealing it altogether. The prospect of "tactical" 
interferences is alarming.



	Third parties would be less liable to use such tactics if they did not 
shorten the proper applicant's term of patent grant.  For example, a 
compromise such as a patent term of 20 years from the earliest priority 
document or 17 years from the date of issue, whichever is longer, would 
dissuade abusive third party tactics that had a sole purpose of eating 
into the length of a patent term. This compromise proposal would be 
adequate to satisfy GATT/TRIPS on patent term which must "not end" before 
20 years from filing (see Senator DeConcini's introductory comments on 
this point). 



III. PROVISIONAL PROTECTION AFTER PUBLICATION IS NOT STRONG ENOUGH 



	The provisional protection offered to patent applicants by this Act is 
not strong enough. Compensation is calculated on a "reasonable royalty" 
basis only; this is essentially a compulsory license. However, only 
strong economical deterrents will prevent abuse of the knowledge gained 
by publication.



	If an infringement is found under the claims both as published and as 
issued, regardless of actual knowledge of the published application, then 
at a minimum, actual or even enhanced damages, including lost profits and 
attorney fees should be awarded if there is to be an effective deterrent.	




IV. CONTINUING APPLICATIONS FILED FROM CURRENTLY PENDING APPLICATIONS 
ARE NOT GRANDFATHERED



	S. 1854 would require that all new filings be placed under the terms of 
the Act. This creates a retroactive definition of patent law for 
continuing applications of currently pending subject matter, thus 
significantly disrupting the U.S. patent system.



	The Act proposes to add a new section, 35 U.S.C.  100(e), that would 
define term "filing date" to mean:



		the earliest of the actual filing date or any priority date claimed by 
the applicant under section 119, 120 or 365.



	This definition of filing date defeats the purpose of proposed SEC. 3 
which recites:



		The provisions of this Act and the amendments made by this Act shall 
take effect 90 days after the date of the enactment of this 



	Act and shall apply only to applications filed on and after such 
effective date.



	The proposed definition of "filing date" defeats the purpose of 
grandfathering presently-filed applications because, in many instances, 
an applicant is forced to refile an application as a continuing 
application for reasons that are only under the control of the USPTO. 
Upon refiling, the subject matter that should have been grandfathered 
under the old patent statutes would now come under this Act, defeating 
the purpose of proposed SEC. 3, above.



	Patent Office statistics reveal that as high as 53% of all applications 
in the Group 1800 (the group that examines biotechnology applications) 
represent some kind of continuing application (Report of Committee 103 
(Relations With PTO) By Gabriel P. Katoma, IPL Newsletter 12:9 (1994)). A 
"continuing" application is just that - it is an application directed to 
subject matter that is being "continued" under a new application number 
(for any of a variety of reasons), while claiming priority to at least 
one parent application. 



	Accordingly it can be expected that at the time that this Act takes 
effect, 50% of the applications in Group 1800 that are already filed will 
be refiled as a file wrapper continuation or other form of continuation 
or divisional application. 



	For example, one very common type of continuing application is a "file 
wrapper continuation" (FWC) application in which, for a new filing fee, 
the application is given a new filing date; prosecution continues where 
it left off prior to the filing of the FWC application request.  This 
effectively extends the applicant's ability to prosecute the originally 
filed application.



	Under the new Act, although a pending application would be 
grandfathered under the new rules, upon the filing of an FWC application, 
the same subject matter that was grandfathered would lose its 
grandfathered status and now be under this Act. Since the applicant often 
does not have a choice but to file a continuing application, this is 
highly unfair. To avoid the provisions of the new Act, the applicant's 
only choice would be to appeal the final rejections to the Board.  This 
would greatly swamp the appellate level reviews with cases that could 
have been resolved at the patent examining level.



	The definition of "filing date" thus contradicts the intent of having 
this Act apply only to the subject matter of applications filed on and 
after the effective date of this Act because continuing applications of 
currently pending applications would not be grandfathered, and continuing 
applications contain subject matter that was on file prior to the Act's 
effective date.



V. APPLICANT'S OWN PATENT PUBLICATION, EVEN IF PUBLISHED LESS THAN A 
YEAR FROM APPLICANT'S FILING DATE ON A RELATED APPLICATION, WOULD BE ART 
AGAINST THE RELATED APPLICATION 



	It is not clear whether 35 U.S.C.  102(e) as amended refers to 
published patent applications in the US or anywhere in the world. The 
other sections of this statute refer to "this country" or "a foreign 
country" for clarity.



	As currently written, the publication of the applicant's own 
application would be art against the applicant immediately upon its 
publication, without any grace period such as that currently allowed an 
inventor with respect to his own publications.  Current 35 U.S.C.  
102(a) states, in part:



		A person shall be entitled to a patent unless the invention was ... 
described in a printed publication in this ... country, before the 
invention thereof by the applicant for patent.



	The proposed amendment to 35 U.S.C.  102(e) would make the publication 
of the applicant's own patent application novelty destroying art, as 
against all subsequently filed related applications. Such publication 
would also be available for any other purpose, including 35 U.S.C.  103. 
This is contrary to the intent of 35 U.S.C.  102(a).



	Even current 35 U.S.C.  102(e) has language that excluded the 
applicant as it recites that patentability is lost only if "...the 
invention was described in a patent granted on an application for patent 
by another filed in the United States before the invention thereof by the 
applicant for patent." However, under the proposed amendment, the 
applicant would be provided no opportunity to remove the applicant's own 
work as art against the same applicant.



VI. THE LOSS OF THE ABILITY TO CLAIM PRIORITY AFTER FIFTEEN MONTHS FROM 
THE EARLIEST PRIORITY DATE IS UNDULY HARSH, ESPECIALLY FOR CONTINUING 
APPLICATIONS WHEN THE PATENT APPLICANT HAS ALREADY PUBLISHED 



	Currently in the United States, the application can be amended at any 
time to correct or to claim priority.  Under the Patent Simplification 
Act, this option would not be available greater than fifteen months after 
the earliest priority date.  In continuing and CIP applications filed 
greater than 15 months from the priority date, the applicant would be 
under an undue burden to correctly specify priority or else lose it; even 
simple administrative errors could not be corrected. It is not clear if 
the reason for this is simply to set a publication date, or if the 
reasons for this proposal is to prevent people from delaying publication 
until 18 months from the filing date of the latest filed specification.  




	A proposal that would be more fair would be to simply publish all 
specifications a certain time after their filing date (no matter what the 
priority date) and to continue to allow amendments to priority at any 
time throughout prosecution or in reissue.  Especially if the provisions 
concerning publication are not present in the final version of the Act, 
there is no reason to set a 15 month deadline for claiming priority.



	In addition, even if publication provisions are retained, once a 
specification of a parent application has published, it is moot whether 
it is republished as a result of filing a continuation application (such 
as a divisional application or a file wrapper continuation, each of which 
use the identical specification as that of the published parent). Indeed, 
it would be better not to clog up the literature with several 
publications of the same document. It would be appropriate to provide 
that once the application has published, the applicant may amend priority 
at any time on continuing applications that have the same specification.



VII. IT IS UNCLEAR WHAT EFFECT THE PATENT TERM RESTORATION ACT WOULD 
PLAY IN THE PATENT SIMPLIFICATION ACT 



	The very purpose of the Patent Term Extension Act, protection against 
erosion of patent terms due to long clinical trials and testing, is 
directly contrary to the Patent Simplification Act.  Most seriously, S. 
1854 fails to harmonize with 35 U.S.C.  156, which provides for 
extension to compensate for delays after issuance. At a minimum, the bill 
should make it clear that it does not put a cap on the term extensions 
available under  156. 



VIII. PUBLICATION WOULD COMPROMISE THE TIME OF REVIEW OF APPLICATIONS 
FOR SECURITY CONCERNS



	Patent applications that are filed in the U.S. Patent and Trademark 
Office must be reviewed and those that are directed to inventions that 
are related to national security properly identified. If necessary, the 
application is placed under a Secrecy Order. The Secrecy Order applies to 
the subject matter of the invention and restricts the disclosure or 
publication of the invention in any form.



	It necessarily takes some period of time to evaluate applications in 
this regard. Review is generally complete within six months after filing. 
Note that CIP applications whose priority application(s) were not placed 
under a secrecy order must still be reviewed for new matter and a 
decision made as to whether the new matter requires a Secrecy Order. 
However, as explained above, any application having a priority date 
earlier than 18 months from its filing date would require immediate 
publication. S. 1854 would thus require expedited security interest and 
foreign filing license review of all applications requiring immediate or 
imminent publication, thus potentially compromising the normal review 
period for an adequate review of these most sensitive matters. 



IX. SUMMARY



	In summary, patent publication in a country that utilizes interference 
and protest proceedings lends itself to aggressive tactical use by 
entities whose only interest is to deny a rightful party its patent. The 
abusive harassment of patent applicants will only increase if the United 
States publishes patent applications prior to issuance. Amendments to 35 
U.S.C.  102(e) and restrictions on the time for claiming priority will 
not prevent such abuse, and will add a new category of absolute novelty 
destroying art which cannot be reconciled with the U.S. "first to invent" 
policy.





	BIO COMMENTS ON "UTILITY" STANDARD





	35 USC  101 requires that an invention must have "utility" to be 
patentable.  A series of federal court decisions over the last 30 years 
have established a rather liberal view of utility for chemicals which 
find utility as pharmaceuticals.  These decisions give the PTO rather 
broad discretion in how they go about applying the utility standard.  
Where the PTO draws the line for utility for the products of the U.S. 
biotechnology industry can have a significant effect on that industry's 
global competitiveness.  Of equal or greater concern is that if the level 
of utility is set too high, potentially life-saving products targeted at 
intractable diseases may never be developed.



	The biotechnology revolution is in its second decade.  While large, 
multinational pharmaceutical companies have invested heavily in this 
technology, the breakthroughs, as well has the high risk research which 
leads to such breakthroughs, continue to flow from the small U.S. 
biotechnology companies (and, to a lesser extent, U.S. universities).  
The majority of this research is funded by high risk capital investment, 
which can only be generated if there is patent protection available for 
the resulting products of that research.  Basic inventions which are made 
at universities can usually only be developed in the private sector.  
Because such development requires substantial development, the private 
sector will usually only invest in those university inventions that are 
protectable by patents.  



	American is at the forefront of biotechnology research.  However, 
biotechnology patent practitioners have noted a trend in the PTO's 
position on utility for biotechnology products which, if not reversed, 
will have a devastating impact on the ability of U.S. biotechnology 
companies and universities to achieve any effective protection for the 
fruits of their research.  If the utility standard is raised too high 
with the consequence of no or limited patent protection for the high risk 
biotechnology research, not only will future funding of such research dry 
up, currently identified promising biotechnology products may be dropped. 	




	The cost today of taking a new drug or vaccine through clinical trials 
to FDA approval is enormous, typically running into several hundred 
million dollars.  Such expenses are typically beyond the initial or 
"seed"  funding resources of biotech companies.  Usually, such companies 
must fund the clinical trials of a new product by partnering with large 
pharmaceutical companies or raising additional equity investments (e.g., 
specific limited partnerships).  Those type of funding arrangements will 
not be possible if the biotechnology companies do not have a proprietary 
position on the product to undergo development.  



	Ironically, the absence of patent protection will not just prevent the 
innovative biotech company or university from receiving just 
compensation.  The lack of effective patent protection will kill the 
development of the drug or vaccine by anyone.  The first company to seek 
approval of a new drug can be expected to spend more than ten times what 
subsequent "generic" companies will spend in obtaining FDA approval.  No 
company will be inclined to take the enormous financial risk of clinical 
trials for initial approval in the absence of  effective patent 
protection.  



	The decisions of the CCPA (e.g., Nelson v. Bowley, 206 USPQ 881 (CCPA 
1980)) and the Federal Circuit (e.g., Cross v. Iizuka, 224 USPQ 739 (Fed. 
Cir. 1985)) have interpreted the utility requirement for pharmaceuticals 
as necessitating only the establishment of a pharmaceutical activity for 
a compound to meet the utility requirement of 35 USC  101.  Both courts 
have rejected the need to establish a specific therapeutic use.  



	Contrary to the application of the utility requirement in the context 
of pharmaceutical inventions by the CCPA and Federal Circuit, the PTO 
Board of Patent Appeals and Interferences has issued a series of decision 
affirming the rejections of examiners for lack of utility or 
utility/enablement even though the record clearly shows that the claimed 
compounds have pharmaceutical activity.  (See, e.g., Ex parte Aggarwal, 
23 USPQ2nd 1334 (Bd. Pat. App. & Int'f 1992), Ex parte Sudilovsky, 21 
USPQ2nd 1702 (Bd. Pat. App. & Int'f 1992), Ex parte Kranz, 19 USPQ2nd 
1216 (Bd. Pat. App. & Int'f 1991), Ex parte Balzarini 21 USPQ2nd 1892 
(Bd. Pat. App. & Int'f 1991)).  



	The effect of these decisions as applied by the examining corps is to 
raise the level of utility far beyond that contemplated by the federal 
courts.  In many instances, examiners are now requiring a demonstration 
of clinical efficacy/commercial utility in order to overcome utility 
rejections.  The cost and time of generating such data in humans in the 
United States in incompatible with the expeditious prosecution of patent 
applications as well as the financial resources of small biotechnology 
companies and universities.  Nor can these types of applicants afford to 
maintain applications pending through the filing of a series of 
continuations while seeking funding to carry out the clinical research 
often demand by examiners.  



	Fortunately, the U.S Food and Drug Administration does not allow hasty 
experimental trials in humans.  Gone are the days when one would contact 
the local prison for "volunteers".  That is not the case in other 
countries.  For example, there are a number of Asian countries where 
there is a economic policy to develop a local biotechnology industry.  
These government subsidized biotech concerns are filing patent 
applications on "me too" biotechnology products.  When these applicants 
are faced with a utility rejection demanding human data, such applicants 
can often readily generate such data.  U.S. applicants are thereby 
significantly disadvantaged.



	The utility standard as set by the PTO disproportionately impacts the 
biotechnology products relative to the more traditional pharmaceutical 
products.  This is because the typical target of the U.S. biotechnology 
industry is a serious disease for which there is no effective treatment.  
As just one example, Chiron, one BIO member company, is pursuing 
treatments or vaccines for such diseases as ALS, cancer, HIV, hepatitis, 
herpes and insulin-resistant diabetes, rather than medical problems for 
which treatments already exist.  



	For these difficult medical problems targeted by the U.S. biotechnology 
industry, the PTO has raised the de facto burden of proving utility even 
higher.  The PTO has taken the position that in order to rely on anything 
less than human clinical data, one must demonstrate that the in vivo or 
in vitro model correlates to the ultimate therapeutic application of the 
product.  Such diseases usually have relatively poor or no animal models.  
Since no effective treatment of any kind exists, no correlation has been 
established between ultimate clinical efficacy and any of the in vitro or 
in vivo models which do exist.  Even though applicants are usually able 
to demonstrate pharmacological/immunological activity for their claimed 
product, often in a model they have had to invent themselves, they are 
being denied patents based on a failure to show utility.  



	The problem of utility is not confined strictly to rejections under 35 
USC  101.  In some areas, applicants are able to demonstrate that at 
least one species within a claimed genus has utility.  In such instances, 
it is common to see 35 USC  112, first paragraph, rejections for lack of 
enablement where the rational is actually a failure to establish utility 
for the remainder of the scope of the claim.  The same, often impossible, 
burden of demonstrating utility is applied to all of the embodiments of a 
claim in such rejection.  Claims are rejected even though (1) the claims 
are functionally limited to embodiments possessing utility, and (2) the 
applicant presents evidence demonstrating that the identification of 
species possessing the desired pharmacological or immunological activity 
can be accomplished by a routine screening protocol.  The result of such 
industry is a serejections is the granting of claims which can be readily 
avoided by third parties who are employing the technology disclosed by 
the applicant.  Patents of such narrow scope are of equal disincentive to 
the funding and development of biotechnology inventions.



	There are utility rejections which are at best wasteful of the PTO's 
and our resources, and at worse frustrating our attempts to bring new 
products to market.  Examiners continue to approach the question of 
utility as if they were part of an FDA advisory panel.  We have been 
engaged in endless debates regarding the design of animal model studies 
and the predictive value of in vitro tests.  In the diagnostics area, we 
have seen utility/enablement rejections which require us to demonstrate 
that every embodiment of a claimed diagnostic method performs at a level 
100% accuracy, a standard not even attained by commercial tests.



	In the vaccine area, the experiences of Chiron are illustrative of the 
failure of current PTO policy on utility to take into account the reality 
of the development of a biotechnology vaccine.  Chiron first identified 
and made its lead candidate HIV vaccine and filed patent applications in 
the 1984-85 time frame.  It took approximately six to eight years for 
Chiron to generate the preclinical data it felt necessary to justify to 
the FDA the first human clinical experiments.  Even animal model data was 
very late in coming due to the fact that the only model which exists is 
the chimpanzee, an endangered species.  The availability of such animals 
is limited not only because of expense, but also politics.  Very early 
on, however, Chiron demonstrated the pharmacological activity of its 
vaccine candidates by showing that they generated antibodies which slowed 
or stopped infection of cells in vitro.  The decision of the board in Ex 
parte Balzarini would suggest that this data of Chiron's is not 
sufficient to establish utility.  It may be many years before Chiron 
could possibly meet the standards set in Balzarini.  Yet Chiron, in 
reliance on the patent system to protect its research investment, has 
freely published its candidate vaccines and the results of its 
preclinical and clinical investigations.  We believe that the sharing of 
this information has benefitted others generally in the pursuit of a 
prevention or treatment of this terrible disease.



	More recently, Chiron made an extremely important invention relative to 
the safety of the U.S. blood supply; the discovery of the hepatitis C 
virus.  This virus accounted for significantly more disease via blood 
transfusion than HIV.  Chiron's discovery and development of an effective 
diagnostic test has virtually eliminated threat of this disease to 
patients receiving transfusions.  (Before Chiron's invention, there was a 
5-10% risk to surgical patients who were transfused.)  These diagnostic 
tests, however, have also shown that hepatitis C is prevalent in patients 
who have never had a transfusion or other blood products.  It appears 
that the only way that these other routes of infection can be stopped is 
through effective vaccination. 



	Chiron has taken a lead in the development of such a vaccine, having 
already demonstrated protection in a chimpanzee (again, the only animal 
model).  We estimate that pursing this vaccine through clinical trials 
will require the investment of several hundred million dollars.  If 
effective patent protection is denied because of utility, I will be 
forced to advise Chiron to seriously reassess the wisdom of that 
investment.  If they felt that the investment was still justified, 
however, I would caution them to publish nothing of consequence with 
respect to the development of that vaccine.  The tragedy of such advice 
is that it would mean that contrary to its constitutional purposes, the 
US patent law was being applied in a manner which was retarding the 
progress of useful medical science.





							August 12, 1994



The Honorable Bruce A. Lehman

Assistant Secretary of Commerce

	and Commissioner of Patents

	and Trademarks
Washington, D.C. 20231



Dear Bruce:



	BIO, a trade association representing over 540 firms in biotechnology, 
strongly supports the GATT Agreement.  We welcome the improved trade 
regime and lower tariffs.  We also support the improved intellectual 
property protection offered by the TRIPS Agreement.  We are writing to 
express our views on the legislation and administrative action to 
implement this Agreement.



	As an industry we have benefitted from strong and stable patent 
protection in the United States.  Thus, we have expressed trepidation 
about changes in the length and calculation of patent term contained in 
the GATT implementing bill.  Specifically, we have been concerned that by 
moving from a 17 year patent term from issuance to a 20 year term from 
filing, rather than simply guaranteeing a minimum of 20 years from 
filing, we could see an erosion of patent term for biotechnology 
inventions.  This concern arises from perceived delays in the prosecution 
of ex parte claims in the Patent and Trademark Office, delays from 
interferences and appeals, and unduly harsh transition provisions.  For 
this reason we have supported a patent term which starts from the first 
filing date of a patent application but is no less than seventeen years 
from the date the patent issues.



	We applaud and welcome the commitment of the Administration to address 
some of these concerns.  We understand that the Administration is 
committed to ensuring the speedy and fair processing of biotechnology 
derived applications and ensuring that this legislation will not, in 
fact, erode the patent terms of these industries.  This commitment has 
been or will be made concrete in the following ways: (1) support for 
legislation (H.R. 4307) to clarify the law in the area of process patent 
protection; (2) provision of adequate resources in the examining corps 
for biotechnology; (3) transmittal of clear instructions to the examiners 
on





the legal question of utility in the area of requiring clinical trials 
for certain categories of diseases; and (4) review of delays in 
prosecution, appeals, or interferences to assist in avoiding problems and 
delays.



	In addition, we understand that the Administration is committed to 
including in the GATT implementing legislation provisions that provide 
patent applicants with extensions of patent term when they have 
experienced delays due to interferences and for appeals to the CAFC.  We 
appreciate the inclusion of these provision.  We have sought as desirable 
and support further ameliorative changes in this area offered by Congress 
or the Administration relating to extensions for appeals to the Board of 
Patent Appeals and Interferences, to transition provisions which permit 
current patent term rules to apply to all continuation and divisional 
applications regardless of when they are filed which make specific 
reference to an application filed prior to the effective date of the 
legislation, and to expansion of the maximum permissible term of any 
extension.  With regard to extensions we note that patent term extensions 
for regulatory delay in the European Community are measured from the 
commencement of the 20 year term, not the date of grant.



	We look forward to working with you to review the implementation of the 
legislation to ensure that it does not cause any unintended erosion of 
our industry's patent terms.  We want to work with you on additional 
measures, including legislation, if they are necessary to address any 
problems which may arise with respect to the patent term issue in the 
future.  We will also work with you and the Administration to achieve the 
goals of comprehensive, balanced international patent harmonization, to 
support the Biotechnology Patent Institute, and to participate in other 
cooperative efforts to enhance the value of intellectual property.



	We are impressed with the leadership you are providing and your 
understanding of the importance of the biotechnology industry to the 
competitiveness of the United States and to patients, farmers, and 
consumers who want and need our inventions.  We look forward to 
facilitating and participating in a long-term, constructive dialogue with 
you on a wide range of issues and programs.



	Thank you again for your support of the American biotechnology industry 
and your actions with respect to our concerns.





								Sincerely,







	Charles E. Ludlam					Carl B. Feldbaum

	Vice President for					President

	Government Relations





					September 27, 1994



Ambassador Mickey Kantor

United States Trade Representative

600 17th Street, N.W. - 209 Winder Building

Washington, D.C. 20500



The Honorable Bruce Lehman

Commissioner of Patents and Trademarks

902 Crystal Park 2

Arlington, VA 22202





RE: GATT-TRIPS IMPLEMENTING LEGISLATION





Dear Ambassador Kantor and Commissioner Lehman:

 

	We are writing on behalf of the Biotechnology Industry Organization 
(BIO), the trade association which represents the interests of 540 
members active in biotechnology, to support the legislation to implement 
the General Agreement on Tariff and Trade (GATT) agreement.  We are 
writing today to all Members of the Congress to urge them to vote in 
favor of the legislation.  We understand that our members are doing the 
same. 



	As an industry with a positive balance of trade we support full and 
fair international trade.  Therefore, we welcome many features of the 
GATT Agreement, including elimination of tariffs and the stronger 
intellectual property protection provided under the Agreement on Trade 
Related Aspects of Intellectual Property Rights (TRIPS) which forms part 
of the GATT Agreement.  



	During the past several months we have raised concerns relating to 
draft legislation to implement the intellectual property provisions of 
the agreement.  Specifically, we have been concerned that limiting the 
patent term to 20 years from filing, without adopting a package of 
safeguards, could seriously disadvantage our industry because of lengthy 
delays with regard to patent





applications for biotechnology inventions between the filing of a patent 
application and subsequent issuance of the patent.



	We are pleased that the Administration has, in fact, adopted a package 
of safeguards, including the following:



	* The patent term will be extended to compensate applicants for delays 
due to successful interferences, appeals to the Board of Patent Appeals 
and Interferences and appeals to the Federal Courts.



	* Special protections have been added to minimize the impact of  the 
legislation on pending cases..



	* The Administration has committed in a Statement of Administration 
Action (SAA) to give patent examiners explicit instructions with regard 
to utility issues in applications regarding biotechnology inventions.



	* A hearing will be held by the Patent and Trademark Office, at an 
appropriate time, if it appears that applicants for patents for 
biotechnology inventions are receiving patent terms of less than 17 years 
from the grant of the patent.

	

	These safeguards address each of the issues we raised with your 
offices.  We very much appreciate the Administration's consideration of 
these concerns and your advocacy for these amendments to the draft 
legislation. 



	At every point during the discussion of this legislation we have made 
it clear to the Administration, Members of Congress and their staff, and 
other groups with whom we have worked that we strongly support the GATT 
agreement and its implementation.  We are reiterating that support with 
this letter today.



	We look forward to working with you to enhancing the markets for 
biotechnology products and the intellectual property protection afforded 
to patent applications for biotech inventions.  Again, thank you for your 
assistance on these critical issues.





							Sincerely,







	Charles E. Ludlam				Carl B. Feldbaum

	Vice President for				President

	Government Relations



CC. 535 Members of Congress