In contrast to so many current political debates–climate change, abortion, health care–intellectual property law often appears to occupy a rarefied perch accessible only to patent experts, clerks and judges.  Patent policy is unnervingly complicated, with deceptively simple patent laws that are burdened with complicated webs of judicial interpretations.  It is little wonder, then, that most of us take for granted our government’s policy of granting and enforcing patents–if only as a cognitive coping strategy.  This complexity-induced apathy, by the way, suits patent lawyers just fine, and might be acceptable most of the time because, as in the case of an undersea oil-well blowout-preventer, patents may work pretty well, except when they don’t.

Patents on human DNA sequences (at least 20% of our genes are locked up) are increasingly viewed as deterrents to a new generation of genetic-diagnostic technologies, as well as to basic biomedical research itself.  That is the belief held growing number of physicians, researchers and legal experts, as well as this author.

Why do I use the word, “belief”?  Simply put, though the specifics of patent law are largely excluded from raucous public debate, the costs and benefits of patent reform are nevertheless as hypothetical, and worthy of argument, as in the cases of health-care reform, climate-change strategy or nuclear disarmament.  Proponents of the current system claim that the current patent regime is nothing less than vital to innovation.  As in any debate, those in favor of the status quo can point to experience, arguing that current technology would not have arisen without patent protection.  The apparent conservatism of this position belies the fact that our current patent regime–and any patent regime–is an artificial, legislated concept.  Defending it from alteration by claiming that it is an optimal policy is, thus, rationally unfeasible.

Some of the current momentum behind the reform of gene patent policy results from evidence that future genetic tests will be hamstrung by patents held by universities and companies–patents that give these organizations control over virtually any use of the human genes they claim.  That is the conclusion shared by a recent report from the HHS Secretary’s Advisory Committee on Genetics, Health, and Society (SACGHS).  The prediction that patents will impede progress may not, in itself, be sufficient reason to make changes to the policy.  However, the Committee points out the exceptionalism of patient care:

Indeed, in the realm of commodities or consumer electronics it may well be that dramatic harms and a profound lack of benefit should be required to compel any recommendation for change. But genetic tests affect patients’ lives and health.  Thus, the current system’s net negative effects on test development and patient access to these tests argue strongly for the narrowly tailored changes that are proposed.

These proposed changes are two-fold: (1) a diagnostic test exemption, allowing human genes to be analyzed even if they are protected from other uses (i.e. as therapeutics) by patents; and (2) a research exemption, allowing any use of patented genes in the pursuit of biomedical research.  This second exemption may come as a surprise to many, even to scientific researchers themselves.  Many scientists I’ve talked to either assume that common law (or common sense) already exempts their work from violating patents (mostly because it is unbelievable to many genetic researchers that DNA sequences could be patented in this way).  However, court decisions have decreased the research exemption to nil.  The SACGHS report argues for the clear enunciation of the legality of research on patented genes, if only to promote the rule of law.

Agree or disagree with these proposals–that is their major benefit!  They give something concrete to agree or disagree with to those citizens (especially relatively apolitical research scientists) who may have felt sidelined by the complexities of patent law debates.  Furthermore, gene patents are a natural starting point for a more general debate over patent policy because they affect anyone who intends to ever get medical care.

I’ve previously raised the possibility that, in its quest for economic revitalization, state governments are not suited to pick and choose among emergent industries to invest in, much less make the risky decision to invest in unproven technologies. Now I wonder whether some taxpayer-funded initiatives to attract high-tech jobs to Connecticut amount to anything more than glossy-sounding buzz-words thrown out by policymakers who have very little idea how to get the lagging Nutmeg State back on track.

Exhibit A for exciting-to-talk-about but dubiously significant state job-growth efforts is the Connecticut Stem Cell Research Program. The state initiative came up on Tuesday, in a discussion of the state job situation on Where We Live, WNPR’s daily Connecticut news program (disclaimer: my wife, Libby, is a producer for the show). Stem-cell jobs were one of the few items that the state politicians and economist on the show were particularly upbeat about.   Is the stem-cell program really something worthy of so much hope and attention?

First of all, no one is jumping out of their seats to say anything bad about an emergent scientific field that has enormous potential to cure many diseases. (Though I must interject that biomedicine has a history of “magic bullets” that didn’t really pan out; real advance comes from broad efforts combining many independent–and often iconoclastic–researchers and disciplines.)

In the midst of a depressing discussion of Connecticut’s daunting problems (regulatory instability, high energy costs, poor infrastructure, a 20-year slide in employment), one of the show’s guests, UConn economist Fred Carstensen, brought up the stem-cell initiative, in part because its continued funding is in question in the new, downsized state budget.  He described it as “phenomenally successful…we’ve had some extraordinarily important breakthroughs.”  He cites the fact that “we literally have had world-class researchers moving to Connecticut and looking to move to Connecticut because of our stem-cell initiative”.

Stem-cells funding may have brought a few researchers and their labs to Connecticut, and encouraged good ones that are already here to apply for more funding and, perhaps, hire a few new postdocs or technicians to perform research.  But Yale already has over 270 different labs working on biomedical science.  In 2008, it received $300 million from the NIH alone, not counting that from other major funders like the Howard Hughes Medical Institute.  UConn took in over $70 million from the NIH last year.  The total outlay of the Connecticut Stem Cell Initiative?  Ten million dollars per year.  Denise Merrill, the majority leader of the state house of representatives said that with stem cells, the state brings benefits “for a relatively small amount of money”.  The characterization of price is true, but what benefits do $10 million bring when spent on stem-cells instead of, say, transportation or inner-city education?

Proponents argue that stem-cells will become a centerpiece of some future, high-tech Connecticut economy.  However, a brief history of turbulent stem-cell politics brings this aspiration into doubt.  Connecticut began the stem-cell initiative in 2005, hoping to get a corner on the research after the Bush Administration had announced tight restrictions.  However, the Nutmeg State was not alone.  Our neighbors in Massachusetts, which considerably outranks Connecticut in the biotech sector, got in on the act, pledging $100 million over 10 years.  California voters approved a $6 billion state stem-cell initiative; unsurprisingly, perhaps, this program has been criticized for its enormous cost and lax oversight.

The problem with these programs is that they represent frenzied competitive maneuvering between states, but with dubious outcomes, especially for those that, like Connecticut, didn’t put that much on the table in the first place.  In fact, our tax dollars are already hard at work on biomedical research in a very serious way, through the NIH and other, federal, entities.  Compared with our centralized national programs, state science initiatives, on the other hand, are heavy with ambition but starved for good organization and sufficient money to fund more than a few research goals.

In hindsight, the stem-cell money appears to have been thrown at a good, celebrity-supported cause, but with uncertain prospects for Connecticut.  We absolutely need research investment to create future jobs.  I say “future”, because the short-term expense of research is not only in personnel, but in equipment, expendables, and energy, which might provide jobs where they are manufactured or generated, but that is unlikely to be Connecticut.  Why should we bet that Connecticut research dollars will stay, as future employment, in Connecticut if the research might be spun-off more efficiently in one of the big biotech regions already humming with infrastructure?

At its best we can hope that a bit of good science was supported by the CT stem-cell initiative.    At worst, the state stem-cell program is a rather pathetic talking point for politicians without the nerve to tell their constituents how poorly their state competes for jobs compared to other regions.  If policymakers want to use the state budget resources to engineer our way into the future, they should focus on the tasks that state government does best.  Oh, hold on, perhaps the Connecticut should figure out how to do the things it should be doing best first, instead of waiting for a small investment in stem cells to grow into a fresh, economic heart-transplant for the state.

• Update: John Dankosky and the folks over at Where We Live put up this post on their blog that summarizes the main discussion points in Tuesday’s “jobs” show.   The show included an interview with an official from Virginia, which leads the 37 states doing a better job than Connecticut in growing their economies, according to one survey.

In their book, Patent Failure, James Bessen and Michael J. Meurer provide a sober critique of the U.S. patent system, focusing on doctrinal and technological shifts that have fundamentally disrupted the efficiency of the rights we bestow on technological inventions.  Their conclusion: during the last decade, our patent system has broken down because it failed to operate as a transparent system of property rights for inventions.  As a result of, among other factors, the huge cost of identifying relevant, competing patents–often claiming broad, early-stage innovations–the authors argue that patents cost industry more than they deliver, especially in high-tech sectors.

Bessen, a former software executive and currently lecturing at Boston University and Meurer, a law professor at BU, base their evaluation of the modern patent system on cost-benefit estimates for inventors of different scales in different industries.  Their conclusion, that patents do not provide the clear boundaries that are necessary in a workable system of property rights, is based heavily on a comparison of different industries.  Their research indicates that one modern industry where patents are particularly efficient–in that they impose very little cost on the profits they provide–is the chemical industry, where there is very little to argue about when it comes to a specific molecule that is patented.

Though they focus on software patents as an example the deleterious effects of overly vague patent claims, they highlight biotechnology as an industry similarly fraught with bad patent practices.  They blame the legacy of the Bayh-Dole act, encouraging universities to patent basic research, as well as a reduced requirement that patents be shown to have “utility”, a legacy of sometimes-conflicting rulings by the Federal Circuit during the ’90s.  The reduced burden of demonstrating that an invention is useful, or that it has been developed beyond the discovery stage has at least two negative implications: (1) that patents on basic scientific discoveries have become overly vague and discouraging to future inventors and (2) an oft-cited “flood” of patents has overwhelmed both the patent office and the ability of inventors and firms to search for patents that might compete with their ideas or research.

From the perspective of biomedical patenting, Bessen and Meurer’s contrasting characterization of chemical-pharmaceutical patents from those in the  biotech/biologic drug industry highlights one broad confusion over drug patents.  Contrary to many claims, the apparent success of traditional chemical patents does not portend the same happy fate for patents on complex biological drugs, much less patents on gene sequences or discoveries about basic biological systems.  When patent apologists claim that patents are essential for the drug industry, their enthusiasm may be outdated.

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Book – Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators At Risk, by James Bessen and Michael J. Meurer (Princeton, 2008).

Many thanks to the Hartford Courant, our nation’s oldest continuous newspaper, for keeping up with important issues in the local tech industry. My op-ed, reviewing the perils of biotech aspirations in the Nutmeg State, appears in today’s edition.

For a preview, this quote was highlighted in the print version:

We should be wary when an industry says that needs development incentives and protections from market pressures to be viable.

In the midst of the healthcare debate, the skyrocketing cost of care–including the tens of thousands now spent on some medicines–is a constant target for complaints and solutions.  Responding to criticism of the particularly high cost of “biologic”, or biotech-based, drugs, a recent op-ed in the Hartford Courant insists that encouraging the manufacture of cheaper, generic versions of drugs is a dead end, short-sighted attempt to cut costs. According to this view, the cost of biologics justifies lengthy “data exclusivity” periods, during which time the  clinical test data generated by the original drug maker cannot be reused by generic companies:

For investors to risk the $1.4 billion it takes to bring a new medicine from concept to approved product, inventor companies must have at least 12 years of data exclusivity. Anything short of this will shortchange investors, who won’t be able to recoup their biotech investments, and will mean an end to investment in biotech.

The author of this opinion piece, Paul Pescatello, is president and CEO of Connecticut United for Research Excellence, an industry group and cheerleader for biotech in the Nutmeg State.  It’s certainly not surprising to hear an industry representative lobby against unfavorable regulations.  However, a visit to the CURE website will reveal that among its more high-profile members are the major research universities in Connecticut, both private (Yale, Trinity) and public (UConn, University of New Haven).  A number of towns (Branford, West Haven, Trumbull) and the state Department of Public Health are also on the rolls.

I understand the hopes, shared alike by local universities and municipalities, that biotech will reenergize Connecticut’s sagging industry and employment landscape.  The actual realization of a wealthy, well-educated workforce and lucrative industry may someday redeem the subsidies and other favors made to incentivize the growth of local biotech shops and drug manufacturers in CT.

However, is the dividing line between profit and public interest crossed when a lobby group that is sponsored in part by government and academia dives into a debate over healthcare and technology policy in the public forum?

Reasonable people disagree about the benefits society will reap from lengthy monopolies on biological drugs–for periods of a decade or more.  For instance, is it true that a certain, dozen-year period of drug exclusivity is required for firms to recoup their research?  After all, manufacturers of generic biological drugs will, in all likelihood, confront the same bevy of expensive safety and efficacy testing as the original producer.  In some cases, the sheer cost of reproducing the process for making a biologic treatment may make these inventions immune to the kind of generic versions that can be made of simpler, small-molecule based drugs (mainstream antibiotics and antidepressants, for instance).

In addition, the monopoly provided by government-guaranteed data exclusivity has nothing to do with the already decades-long patent protections that cover the inventions packaged into drugs.

Considering the enormous price that our society will likely pay for high-tech drugs in the coming decades, we should at least understand what kind of deal we’re getting with drug manufacturers as we negotiate the monopolies they’ll receive on the next generation of life-saving treatments.  It is in the interest of the university community, not to mention the Connecticut taxpayer, to keep industry lobbyists like CURE at arms length, at the very least, so that meaningful, two-sided debate can occur on the enormous issues of drug cost and healthcare reform.

N.B. To say that local industry groups like CURE are against the public interest is, of course, an unearned generalization.  CURE shows a promising ability to direct local industry dollars to education (and PR).  For example, check out the cool-looking BioBus, which would have satisfied both of my biggest childhood interests: (1) science and (2) large, diesel vehicles.

The Yale alumni magazine has an article in the current issue called “Company Town”,

Photo: Joe Franklin

part of a set of articles on the revitalization of the Elm City in recent years.  The article highlights Yale’s work toward establishing technology-spinoff businesses in New Haven to bring the university’s patents to market.

The “local” element of academic research patents, to be explored in yalepatents.org, clearly extends to the local economy and community.  Universities, looking for a concrete means of local economic stewardship, obviously see spinoff businesses as a source of local jobs and goodwill.  As recognized in the alumni magazine article, Yale/New Haven is a bit behind in this endeavor–clear enough to anyone with experience in Boston, RTP or the California research hubs.  The optimism is present, however, that New Haven would take the lead in recruiting modern industry to southern Connecticut.