And according to Jim Mitchell and Matt Gipson, it also is the kind of ground-breaking discovery that can kick off long and difficult legal research.
Mitchell and Gipson are local lawyers who specialize in intellectual properties practice with Price, Heneveld, Cooper, DeWitt and Litton. Mitchell is a partner in the firm and Gipson is an associate who specializes in biotechnology.
The pair explained to the Business Journal that preserving ownership of intellectual property through patents is a rapidly growing line of work because of the explosion of discoveries in life sciences and biotechnology.
“The hottest area in research today is biotechnology,” Mitchell said.
“In the last century we looked at biological processes in gross and an entire language developed around those processes. What you now have in the biotech revolution is that we’re beginning to understand the chemistry that underlies the biological observations we made previously.
“We have the same case law as before,” he said. “The challenge now is to apply existing law to a totally new technology, and tremendously complex research.”
And the law itself sometimes presents some surprises. Mitchell explained that until about 20 years ago, it was generally accepted in the legal community that you couldn’t patent a life form.
But then along came the Chakrabarty case.
It dealt with a bioengineered bacterium that consumes oil and which, therefore, could be used to clean up oceanic oil spills.
“The issue in the litigation was that the patentee was attempting to patent a living cell, a life form. It went all the way to the U.S. Supreme Court, and the court ruled, ‘Yes, you can patent a life form.’”
Mitchell said that the court based its ruling on a combination of legal and biological research which revealed a powerful precedent: namely, that in the late nineteenth century, the U.S. Patent Office had granted a number of patents to Louis Pasteur … for yeast.
“And, of course, yeast is a life form,” Mitchell said. “So the Supreme Court settled the issue by revisiting an old issue.”
Mitchell said the Pasteur precedent contained all the ingredients of any modern biotech patent. He explained that if one engineers a gene or simply isolates it in a more or less pure form, “… and is able to describe the base pair gene, and if you can find a utility for it, you can obtain a patent on it.”
He and Gipson explained that where things start to get really complex is when one researcher patents a gene and commercial use for it, and then a second researcher comes along later and develops an entirely different use for it.
“The first researcher’s patent would cover the gene,” Gipson explained, but then he said the second researcher could obtain a patent on the gene’s new use.
“This happens all the time in the pharmaceutical industry,” Mitchell said. “ It’s a new use for an old chemical. A good example is Rogaine. It was developed, I seem to recall, as a cardio-vascular stimulant, but then Upjohn discovered that it also stimulated the growth of hair.”
Taking that same issue to genetic discoveries, if No. 2 researcher develops a new utility for a gene that No. 1 patents, then No. 2 is not infringing on No. 1’s patent.
Moreover, Gipson pointed out that No. 2 researcher who patents the new use can prevent No. 1 researcher from commercializing that secondary use.
Yet, he added, if a third party commercializes No. 2’s utility under license to No. 2, that third party also must obtain a license from No. 1, and then must pay royalties to both No. 1 and No. 2.
The source of those legal precedents, Mitchell explained, was the Great Telephone War, a long and expensive bout of litigation in the late nineteenth century between Alexander Graham Bell and Thomas Edison.
Mitchell explained that Bell patented the concept of the telephone, but Edison invented and patented an improvement that alone made it possible for Bell’s invention to have commercial utility: to become a practical telephone system.
Gipson explained that Bell and Edison finally settled their dispute by cross-licensing.
Mitchell said patent dispute litigation can be so drawn out and expensive that many area firms are willing to spend considerable amounts to avoid it. “Our clients are quite conservative about it,” he said. “They go out of their way to avoid litigation.”
“Patent litigation can involve a lot of discovery,” he added. “You’re going through every scrap of paper in the other guy’s office and every electron on every hard drive.
“Firms come to us for opinions to make sure they’re avoiding infringement,” he said. “And one important aspect of that is that if you have a well-reasoned, thorough opinion that says the other fellow’s patent is not infringed, then you at least can avoid being hit for treble damages if the court finds in the end that you were infringing.”
The two men explained that when a firm is in doubt about whether a new process might infringe on another company’s patent, the exercise of due legal diligence can take considerable time and money.
Not only is it necessary to research the patent itself, they explained, but also if the issue appears to be closely drawn, then a good deal of research also must go into scientific literature and to related legal issues.
“The work on an opinion always depends upon how close the situation is,” Mitchell said. “Usually when questions are closer it can take two to three months of study and research and can cost $10,000 to $25,000.
“And if something your firm is doing might infringe a patent, then you have to say, ‘Well, is that patent valid?’ and you can spend a lot of money searching for prior art.
“And once you’ve found the prior art,” Mitchell added, “then you may have to hire an independent third party expert to confirm that your opinion is one that also looks good to someone who has no oar in the water — a disinterested party.”
He said he and his colleagues do a lot of such opinion work. “We tell our clients how to avoid patent infringement or we tell them they can’t do what they want to do.”
Mitchell said that scientific investigators have some latitude to do pure research without fear of patent infringement.
But even pure research presents the potential of infringing on patented research tools.
By example, he cited the polymerase chain reaction (PMA), an invention which can cause a miniscule amount of DNA to replicate itself, so that it’s possible to arrive at a match with, say, a criminal suspect. PMA not only has helped resolve many criminal investigations, Mitchell said, but it also has become an extremely important tool in many forms of genetic research.
And just to give a hint of its value, PMA won a Nobel Prize for its inventor.
And the patent sold for $300 million.