Team:Manchester/HP/Intellectual Property
Intellectual Property
Executive Summary
1. Investigated intellectual property rights from experts to determine whether granted patents associated with our project will have any influence on the execution of our project in real life
2. Gained an understanding of patents in the biotechnology sector and used past case studies to evaluate the consequence and ethics of patents on research in synthetic biology
3. Discussed intellectual property rights in the context of the iGEM competition and the BioBrick Foundation with Dr. Linda Kahl
4. Explored the benefits of patents for start-up companies and evaluated the feasibility of patenting our project
5. Consolidated our knowledge of intellectual property rights and our own patent situation which influenced the development of our business plan
Aim
Intellectual Property is a topic that has been covered by a number of iGEM teams in the past. As the paper that we based our project on cited a granted patent, we wanted to explore intellectual property situation in more detail to determine how this may influence our project.
The relevant patent application, titled “Accumulation of metabolic products in bacterial compartments” (WO 2013045562 A1), covers the method of accumulating a high molecular weight product (such as polyphosphate) in a bacterial microcompartment within the bacterial cytoplasm. This includes the expression of (any) heterologous bacterial microcompartment and the fusion of an enzyme with the microcompartment localization signal peptide that is capable of targeting the enzyme within the microcompartment. It also includes the method where the microcompartment prevents endogenous enzymes from coming into contact with the high molecular weight compound. In essence, this patent covers the basic foundational method of our project which expresses Eut microcompartments and fuses PPK to a localization signal in order to store and accumulate a chain of polyphosphate from being degraded by PPX.
There were a lot of questions that we initially had in mind. First of all, would this patent limit our freedom to operate on the project? Secondly, if we were to commercialize and expand our iGEM project into a real business, what would this patent entail? Lastly, how does the distribution of BioBricks and the iGEM competition abide by patent laws?
In order to find answers to these questions, we consulted experts in the field. We contacted Dr Rick Watson from the University of Manchester Intellectual Property office and Dr Linda Kahl from the BioBricks Foundation. Through e-mail exchanges and a phone call discussion, the case of intellectual property became much clearer which directly impacted the development of our business plan and consequently shaped our experimental ideas.
Scroll down to the bottom section to see how we integrated these insights into our project.
General Information on Patents
The World Intellectual Property Organization (WIPO) Intellectual Property Handbook: Policy, Law and Use defines a patent as “a document, issued, upon application, by a government office (or a regional office acting for several countries), which describes an invention and creates a legal situation in which the patented invention can normally only be exploited (manufactured, used, sold, imported) with the authorization of the owner of the patent”.
Patent laws have been a concerning topic in synthetic biology, especially in regards to patented technology that can be considered as ‘foundational’ in the field. For example, patent US5914891 held by Stanford University claims “the use of a computer system to simulate the operation of a biochemical network”. Patent US6774222 held by the US Department of Health and Human Services claims the use of “any nucleic-acid-binding protein and any nucleic acid to set up data storage as well as certain types of logic gates that perform basic Boolean algebra”. Patents such as these are foundational to the field of synthetic biology and broad enough that it covers a wide range of applications. The consequence of this is the possibility that it may inhibit research and slow down growth in the industry, which is evident from other industries of the twentieth century (Merges & Nelson, 1990). In fact, studies on scientific publications that are linked to patented inventions in biomedicine and human genomics has suggested that patent rights have slowed down innovation and research in these areas (Konig et al., 2015).
While a patent gives the owner the right to prevent others from making, using, and practicing the patented invention, it does not give the owner the right to practice their own invention. To elaborate, if one builds upon a technology that was patented (through modification or improvement) and obtains the patent for this modification/improvement, it does not mean that one can practice their invention, as the technology is built upon another patented technology. Permission must, therefore, be obtained from the previous patent holders (in the form of a license).
In biotechnology, new inventions that are patented are often modified and improved for various purposes. In addition, various new applications of the invention can also be patented. The biggest example of such invention today is the new gene-editing tool CRISPR-Cas9. There has been a lot of media attention on the patent battle of CRISPR-Cas9 between UC Berkeley and the Broad Institute to determine who is the first inventor that would gain the rights to use the technology. The new gene-editing tool has gained a lot of interest from various industries and the patent value is estimated by Forbes to be around $100-265 million dollars (Sherkow, 2017). As of 28 March 2017, the United States Patent and Trademark Office (USPTO) has issued 55 patents associated with the use of CRISPR-Cas9 while the European Patent Office (EPO) has issued 21 patents (McGuire, 2017). While owners of these patents have the right to prohibit others from practicing their invention, they themselves do not have the right to practice their own invention. They would need a license from the first inventor of the tool to gain the right on using the technology for the application that they patented. Hence, this is why the Broad Institute and UC Berkeley are determined to win the patent battle because whoever wins would be entitled to the royalties and licenses that the patent will provide.
The example of patents described above brings up the question on whether technology should or should not be patented and the ethics of doing so:
Is it ethical to patent a technology for monetary purpose when that said technology could be used in research that can save millions of lives?
Taking into the scope of our project, there is a broad patent application (WO2011017458A1) on the expression of heterologous microcompartments in bacteria. Microcompartments have been an interesting research topic for its possible application as a bioreactor. While a niche research area, there is a possibility that microcompartments could be a foundational tool to be used for redirecting biochemical reactions in the future. Scientists have been able to produce ethanol within microcompartments and the paper that we based our project on has also shown that it is able to store polyphosphate chains (Lawrence et al., 2014). There could potentially be numerous other applications that have not yet been discovered or tested. Broad patents on microcompartments, therefore, could slow down any possible industrial application of this protein shell from being exploited.
However, a patent only grants a limited period of exclusivity (usually 20 years) over a certain territory, for example, the EU. Holding a patent in that territory also allows one to stop products created outside from being imported inside those territories. The time period of exclusivity granted by a patent can expire early if the holder does not pay the maintenance fee.
To address the issue of exclusivity that patent grants, iGEM and the BioBricks Foundation have been adopting open-source approaches for synthetic biology. The BioBricks Foundation especially develops an IP framework for its BioBrick®™ parts to be used as a “free-to-use legal tool that allows individuals, companies, and institutions to make their standardized biological parts free for others to use” through the BioBrick Public Agreement (https://biobricks.org/bpa/). It is, however, arguable whether open-source schemes are effective in promoting “better” innovations or simply just “cheaper” alternatives. Nonetheless, open-source approaches are evident to foster innovation that are driven by societal benefit and not merely by market profitability alone, as seen in the number of projects that iGEM teams have created over the past years (Konig et al., 2015).
Patents usually begin as an application to the inventor’s home territory. As time progresses, the inventor may decide to convert the application into a patent cooperation treaty (PCT) application through organizations such as the World Intellectual Property Organization (WIPO). This allows the application to be considered in other territories as well. The PCT may then be further converted to a series of National Phase applications in the main territories of interest. These territories usually represent the biggest market opportunities for the invention.
This explains why the patent we were interested in is listed under different numbers. Each number refers to a different jurisdiction, the European Patent Office (EPO) and the United States Patent and Trademark Office (USPTO). It is interesting to note that other associated patents that we found are only registered in the US and occasionally the EU as well. The reason is because the US and EU are the two biggest opportunity for biotechnology startups that may use the patented technology.
In the field of synthetic biology, the US and the EU dominates the number of synthetic biology startups in the globe, evident from a survey by Cambridge Consultants (Yan-Kay et al, 2016). In addition to the rich history of biological research in these two geographical areas, the number of research centers and government support for synthetic biology is also prevalent. The UK alone, for example, have over £60 million support from the government which includes 7 research centres, and a startup accelerator (SynBiCite) dedicated to support the growth of synthetic biology (UK Government 2013). Thus, it is expected that most biotechnology patents would be filed within these two areas.
The patent associated with our project has been granted in the US and is still currently under examination in the EU. It is important to note that a patent application is not the same as a granted patent. There exists a great uncertainty on what the patent covers and whether or not it will be relevant to our project.
“If the application is yet to be examined, you do not yet know with any certainty which of the claims have been granted “as is” or which may need to be modified prior to being granted. You also may not know for certain if your process or intended uses will be eventually covered by their patent at all.”
- Dr. Rick Watson advising us on our patent situation
[E-mail exchange with the iGEM Team on 10/07/2017]
However, since the patent has already been granted in the US, we can assume that there would not be any major changes to the claims made by the patent. Therefore, unless the patent is rejected by some means, it can be assumed that in our case, the commercialization of our project would likely be infringing the patent. Thus, it may be more beneficial for us to seek other international markets where the patent does not cover.
Patenting an Invention
Previous iGEM teams may have considered filing a patent for their project idea. This is especially important for teams that are thinking beyond the competition and want to produce a spin-out company, as exemplified by CustoMem, a startup company by a former iGEM Team (Imperial 2014). Yet, filing a patent can be an extensive, expensive and complicated process.
Within the UK, it takes an average approximation of 5 years for a successful patent to be granted. There is a patent application fee of £230-£280 depending on whether one applies online or through post as well as a renewal fee after the first five years. The renewal fee starts at £70 and increases incrementally every following year. The total cost of renewing a patent for the maximum 20 years is £4550. Therefore, the total cost for the publication and full renewal of a single patent is £4780-£4830. All this information can be found within the UK government website at www.gov.uk/patent-your-invention/.
For start-ups, it is unlikely that a patent will provide any license revenues. In addition, start-ups may also be interested to file additional patents for the different application of their technology which adds more cost. So why patent?
A recent study that sampled 34,215 first-time patent applications filed by US startups has shown evidence that startups with granted patents have 55% higher employment growth and 80% higher sales growth in the following 5 years. These benefits were the result of secure funding from venture capitalists which are 47% more likely to invest in startups with granted patents within three years (Farre-Mensa et al., 2017).
“A patent grant also more than doubles the odds of the startup raising funding from public investors through an IPO.”
- Farre-Mensa et al., 2017 (Literature)
Investors will have increased confidence in investing in a company if a patent application is underway, as it prevents other competitors from reproducing the company’s invention. It also gives investors certainty that they will not be liable for any licensing fees in the future. However, certain criteria must need to be fulfilled to be eligible for a patent.
To file for a patent, the invention must be useful, novel and inventive. In other words, the invention must have an ‘inventive step’ that is not obvious enough to those that are skilled in the field. Also, any details that would allow replication must not be disclosed to the public before filing. This is especially relevant to iGEM teams, as this means that any invention disclosed in the wiki/presentation during the Jamboree would generally no longer be eligible for a patent. Hence, it is crucial for iGEM teams that are thinking beyond the competition to consider which areas of the project should be disclosed.
In the US, however, there is a one-year grace period where the invention can be patented after public disclosure as stated under the AIA 35 U.S.C. 102(b)(1A):
“(1) - A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if - (A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor…”
In an NYU Law Review, Jordan S. Joachim (2015) highlights the justifications and advantages of this grace period. He argues that the grace period spurs innovation and benefits society as it allows researchers to gain up-to-date technical information from prompt disclosure. This is evident in the number of innovative solutions that iGEM teams have made in the past; some of which have been published in reputable scientific journals. It also allows the inventors time to perfect their patent application, thus producing better quality disclosure. In addition, it allows inventors time to “determine the economic value of a patent prior to patenting by marketing or selling the invention”. This is perhaps the most relevant to iGEM teams that are in the process of starting a company as it allows them to conduct more market research before deciding on whether or not to patent.
Thus, iGEM teams would still be eligible to patent their project in the US within one-year after public disclosure. It is important to note that the date of public disclosure would be prior to the Giant Jamboree since details of the project would be documented in the wiki and available for the public beforehand. In addition, all prior art (previous and associated patents) must be considered when deciding whether an invention is eligible to be patented.
iGEM and the BioBricks Foundation
One of the most important questions that we had in mind was whether we are infringing the patent associated with our project. We explored this question further by reading the BioBrick Public Agreement found within the BioBrick Foundation website. We learned that the User Agreement allows those who sign the User Agreement to utilize all parts submitted under the Contributor Agreement, but does not allow any Contributor to assert any existing or future intellectual property rights to any of the parts submitted. Users are permitted to commercialize products made from the parts as long as they credit the Contributor, if requested, in all related public displays, such as packaging and publications. In addition, it protects users against patent infringement claims from those who sign the Contributor Agreement only. However, it does not protect users from any third-party claims.
“We’ll build a whole community, and because everyone is working together as a community, we’ll get tons and tons of sequences so that the likelihood of an infringement happening gets smaller and smaller over time.”
- Dr. Linda Kahl on the BioBrick Public Agreement
[Interviewed by the iGEM Team on 29/07/2017]
What does this mean for iGEM teams?
In many EU countries, there is an exemption which allows research to continue using a patented technology. This exemption, however, can depend on whether the research is done on the patented technology or done with the patented technology and varies between countries within the EU. In the UK, this exemption is under Section 60(5) in the Manual of Patent Practice by the Intellectual Property Office which states:
“An act which, apart from this subsection, would constitute an infringement of a patent for an invention shall not do so if: (a) it is done privately and for purposes which are not commercial; (b) it is done for experimental purposes relating to the subject-matter of the invention...”
It is important to define what it is meant by ‘experimental purposes’ because such ‘experimental purposes’ may yet have a commercial end in view which would violate subsection (a). In the court case Monsanto Co. v. Stauffer Chemical Co. and Another [1985] RPC 515, the court decided that experiments that are done for the purpose of discovering something new, testing a hypothesis or testing different conditions on something which is known to work in a specific condition would still be regarded as ‘experimental purposes’. On the other hand, trials that are carried out to demonstrate a working product to a third party or to gather information to satisfy a third party that the product works as its maker claims would not be regarded as ‘experimental purposes’. Third parties could be customers or a regulatory body that assess the safety of such products (Reports of Patent, Design and Trade Mark Cases, 1985).
Within the scope of iGEM, teams in the UK would not be infringing any patents associated with their project as it would not be for any commercial purposes. However, teams that are willing to start a company would have to be very careful in their project choice because, if the experiments associated with their project do not fall under ‘experimental purposes’ in subsection (b), it would violate the exemption of subsection (a).
For us, although we are thinking of the commercial aspects of our project through our business plan, we are not aiming to start a business. The experiments that we do in the lab are for the sole purpose of proving that our project would work as intended in forming microcompartments, which is the Gold medal criteria requirement, but not necessarily to convince or satisfy any third parties. If we were to convince or satisfy any third parties, we would have to provide experimental data on the amount of phosphate that our technology can store and accumulate and the amount of time it takes. Due to the time constraints, we would not be able to assemble both the PPK and the Eut microcompartment into one system, much less provide experimental data on the amount of phosphate it can store and accumulate from wastewater. See our experimental page for more details!
Unfortunately, this is not true for the US, where a patent holder may pursue legal action against those who do research based on their patented invention. Thus, it may be possible that iGEM teams based in the US or the iGEM competition as a whole are liable for a patent infringement lawsuit. However, we also learned from Dr. Kahl that it is extremely unlikely for anyone to mount legal action against iGEM, as it can cost millions of dollars to pursue a patent infringement lawsuit.
“If anybody really wants to rigorously sue iGEM, they would declare bankruptcy and go out of business because nobody has that kind of money.”
- Dr. Linda Kahl
[Interviewed by the iGEM Team on 29/07/2017]
In the 2015 edition of the annual Report of the Economic Survey by the American Intellectual Property Law Association, the average cost of pursuing a patent infringement lawsuit is reported to be at least $600,000 for a claim that could be worth less than $1 million, while a claim that is worth $1-10 million costs at least $2 million in average. Thus, anyone pursuing legal action against iGEM would have to consider if there are millions of dollars or more worth of damages to be gained. Are the patent owners losing profit? Was there a reasonable royalty that should have been paid? What are the damages?
Integrating into our project
Patenting our Project
Since the application of our project is already covered by the patent cited in the scientific publication, we realized that patenting our project would serve little purpose since we would still need a license from the original inventor. The patent covers broad claims on accumulating any metabolites in microcompartments as well as the fusion of any localization tags to the enzyme of interest. We are using a Pdu tag for an Eut microcompartment which is new but the broad claims of the patent would still cover this novelty. It may be possible to argue for a patent if certain circumstances and conditions are fulfilled:
- If our project was specific enough in its application to distinguish it from the existing patent i.e. [A patent regarding the use of
- If we do not disclose the ‘inventive step’ in the iGEM wiki/presentation
- If our iGEM wiki/presentation cannot be considered as revealing prior art (evidence that the invention is already known)
In addition, we would have to address the financial viability of patenting our project as it takes around £4500 to file for a single patent. Firstly, would the patent only cover a very narrow scope of protection? If so, would it be easy for competitors to ‘get around’ the patent without infringing it by producing a similar system with slightly altered components? In other words, is patenting the invention really worth it?
Considering these questions would be an important step in the implementation of our project. As the patent also covers a broad range of bacterial species, it would still fall under the claims even if we were to change to a more robust organism. Since the patent covers our basic foundational technology, it is unlikely that any advantages can be gained from the patent. In addition, we would still need permission to gain access and to practice our invention. Therefore, there may be little point in spending thousands of pounds on applying for a single patent. The only use of a patent would perhaps to secure funding and gain venture capital investment.
A possible new application that might be patentable would be one of our ideas of using this technology to take up phosphorus from detergents in washing machines. We would place the bacteria in cartridges at the end of the drainage system so that phosphorus can be claimed from the waste liquid in washing machines. This way, phosphorus can be claimed before it reaches the sewage system in wastewater treatment plants. However, implementing this idea would require the use of a bacteria and PPK that can withstand higher temperatures. We may also need to design a reaction pathway that would allow the bacteria to break down the phosphorus compound in detergent into inorganic phosphate to be accumulated. This whole system may possibly be viable to patent but the emphasis would not be on the use of microcompartments. We have tried to explore the viability of this application in our experiments. See our experimental page to find out more!
Commercializing our Project
In the event that we want to commercialize our project in the future, we would have to consider all prior art associated with our project to avoid any patent infringement. We have compiled a list of associated patents that can be seen in the file below:
Intellectual Property Prior Art
The patent that covers the application of our project has been granted in the US and is under examination in the EU. If we were to commercialize our project in these areas we would have to ask permission (buy a license) from both the patent holders of the cited patent and associated patents (prior art) that our project also covers, compiled in the file above. As said before, this brings uncertainty on the claims held by the EU patent. However, since it has already been granted in the US, it is unlikely that the patent will have any major changes to its claims, if granted. In addition, to gain a license in the US may require a huge sum of money since we would have to pay royalty to the inventors. The royalty cost will depend on the negotiation and agreement between the two parties and there are different approaches that can be taken. One approach could be a share of profit between the selling of the licensed product.
Taking both of these into consideration, we decided that it would be better to consider potential markets in other countries outside of the EU and US in our business plan. Since all prior art patent applications have only been made in the US and EU, we would have more freedom to operate in those other countries.
See our Entrepreneurship page to see how these considerations influenced our Business Plan.
References
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