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Wednesday, June 27, 2001 - Page updated at 12:00 AM

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Gene patents preoccupy biotech executives, attorneys

Seattle Times business reporter

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SAN DIEGO - To listen to people in the biotech industry, the great debate over whether companies should be able to patent human genetic code is over.

Although many outsiders wonder if the industry's zealous guarding of intellectual property discourages academic research and may not be in the interest of public health, the industry is continuing its rush to stake claims on human genetic code that's considered the key to lucrative future drugs.

As protesters outside the Biotechnology Industry Organization (BIO) convention in San Diego mostly disappeared amid the sunshine and a relentless industry public-relations blitz yesterday, biotech executives and patent attorneys wrestled with crucial issues surrounding intellectual property.

Hundreds of the 15,000 attendees at the BIO gathering were attracted to sessions on crafting patents that would pay off while thwarting competitors trying to develop similar "me-too" drugs.

That struck a different tone than a year ago, when then-President Clinton and British Prime Minister Tony Blair spoke about sharing the genome code for the public good.

But biotech execs say that the public misunderstood Clinton and Blair, and that the statements didn't mean the companies were relinquishing any parts of the genome they've patented.

"It's extremely expensive to go from discovering a drug and taking it to market, sometimes as much as $700 million when you factor in all the failures," said Bruce Carter, president and chief executive of ZymoGenetics in Seattle.

"Why on Earth would someone say they'd spend $700 million if someone can come right in and copy that without doing all the hard work?"

ZymoGenetics has filed for 700 patents and has been issued 180, Carter said.

Of course, biotechs or drug companies that are lucky enough to translate those patents into products then charge steep prices to recoup their hefty investments.

Many top executives at the conference, including Immunex's Ed Fritzky, are making no apologies for the high prices they charge because the window of opportunity and patent protection lasts only about a decade. They say handling the debate over providing discounted or free drugs to poor countries is the job of world political leaders, not theirs.

In terms of gene patents, executives say their industry has flourished because companies can't steal ideas.

George Rathmann, a legendary biotech figure who founded Amgen and Icos, traced the beginning to June 1980, when the U.S. Supreme Court ruled that living organisms could be patented. Rathmann said that decision paved the way for South San Francisco-based Genentech to go public four months later on the basis of strong intellectual property rather than sales or profits.

"I have no doubt that there would be no biotech industry today without our patent system," Rathmann said.

Because of the wide latitude the courts have given biotech-patent enforcement, the industry has gone on a filing frenzy. Rathmann can point to the example of Epogen, the anemia drug. Amgen has seen its sales balloon to $1.9 billion, all while a cleverly written, broad patent has fended off competitors.

Lawyers on the panel said patents need to be crafted broadly to claim all the functions for molecules they've discovered, yet to craft applications specifically enough to withstand challenges.

James Davis, a patent attorney for Human Genome Sciences, said his company assigns a patent attorney who is often a molecular biologist to every project as a way to get specific and fast patent applications.

Henry Wixon, a patent attorney with Hale & Dorr, cautioned that the industry's glory days at the patent office may be over. A federal appeals court earlier this year narrowed the options for patent holders to claim infringement from copycats. Wixon warned that if upheld by the Supreme Court, the case could open the door to more me-too drugs.

That's a scary prospect for an industry that considers intellectual property, along with investment cash, its lifeblood. Because only about 5 percent of the 950 companies in the industry are profitable, many depend on their intellectual property to carry them until the markets decide if they succeed.

"Several years ago, patents were a subject that would put people to sleep," Carter said. "But now patents are a subject that keep us awake at night."

Luke Timmerman can be reached at 206-515-5644 or ltimmerman@seattletimes.com.

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