Biotechnology and Development Monitor, No. 36, p. 16-19.

The European Patent Directive on Biotechnology By Dan Leskien

Keywords:	Patent law; European Union (EU); Public acceptance; Human genome; Ethical aspects.
Correct citation:	Leskien, D. (1998), "The European Patent Directive on Biotechnology." Biotechnology and Development Monitor, No. 36, p. 16-19.

In May 1998 the European Parliament (EP) approved the proposal for a European Directive on the Legal Protection of Biotechnological Inventions. The Directive is the result of more than ten years of debate and struggle on the issue of patents on life forms. Whereas the biotechnology industry welcomed the EP’s decision, critics are still concerned about the appropriation of living matter.

In March 1995 the EP had rejected the Directive’s precursor mainly for the reason that in its earlier version the proposal did not exclude germ line therapies and only excluded human genes "as such" from patentability. The new Directive obviously satisfied the majority of members of the EP although it only differs slightly from the proposal voted down in 1995. The Directive entered into force on 30 July 1998 and will have to be implemented by the member states of the European Union (EU) within two years. However, on 19 October 1998 the Netherlands filed a suit at the European Court of Justice against the Directive. While the reasons for this legal action have not yet been disclosed, it is clear from the debates in the Netherlands’ Parliament that the government questions the legal basis of the Directive, the need for harmonization of European law in this field and the Directive’s compatibility with international law. As the court is not expected to decide within the next two years, this may well delay the implementation of the Directive.
A number of civil society organizations, including medical associations such as the World Medical Association, farmers, environmentalists, animal welfare and development organizations, and religious leaders rejected the Directive. Many of them argued that the patenting of life-forms is in contradiction with central and basic ethical ideas of European societies. Many pointed to the negative effects broad biotechnology patents have shown in the USA where, according to John Barton of Stanford University, "significant concentration of the industry appears to have been supported by the existence of a number of overlapping and competing broad patents."
The scientific community had no unanimous standpoint on the issue. Some researchers argued that any further development of modern biotechnology would depend on the availability of strong patent protection in this new field of technology. Others, like Klaus Zerres of the German Society for Human Genetics expressed specific concerns about patents on human genes, as these may have a negative impact on scientific exchange and the freedom of research.
Industry spokespersons welcomed EP’s decision. According to Anthony Arke, Secretary General of the European Biotechnology Industry Association (Europa-Bio), politicians have recognized the rising growth prospects in biotechnology and "a major step forward has been achieved to safeguard Europe’s competitiveness."

The European patent system
Patent protection is ensured in the EU by two different systems, neither of which is based on EU legislation: the national patent systems and the European patent system. The European patent system is based on the European Patent Convention (EPC), and the Community Patent Convention (CPC), which is an integral part of the Agreement relating to Community Patents, signed in 1989. The EPC does not create a uniform patent but provides applicants with protection in as many of the signatory states as the applicant wishes. Patent applicants may apply for a national patent to the national patent offices; alternatively, they may choose to apply for a European patent to the European Patent Office (EPO). These European patents granted by the EPO fall, once they have been granted, into a bundle of national patents whose validity and effects are determined by the national laws. Consequently, any infringement or revocation actions have to be brought before the national courts of each country for which the European patent has been granted. More importantly, due to the absence of a common court, there is the risk that the competent courts in the different member states could hand down contradictory judgements.
The CPC is intended to bring together this bundle of national protection rights and merge them into a single, unitary and autonomous, European Community Patent. However, neither the CPC nor the 1989 Agreement relating to Community Patents have yet entered into force since neither of them have been ratified by all signatory states.
The Directive, however, only aims at harmonizing the patent laws of the EU member states with regard to biotechnology. It does not create a European Community Patent, nor is it binding for the EPO. Thus, while it may lead to some harmonization of the member states’ patent laws, it will not ensure a uniform and harmonized patent granting policy of the national patent offices on the one hand, and the EPO, on the other. It may even lead to a re-nationalization of the European patent system. For certain innovations patent applicants may prefer in the future to apply for patents to the national patent offices of the EU member states rather than to the EPO.

Biotechnological innovations and the European patent system
Whether living material, such as plants or animals, or naturally-occurring substances may constitute the subject of an invention is still controversial. The Directive takes a clear position by stating explicitly that inventions which are new, involve an inventive step and are appli-cable for industrial purposes shall be patentable "even if they concern a product consisting of or containing biological material or a process by means of which biological material is produced, processed or used." It is noteworthy, however, that by stating this the Directive does not depart from the case law of most patent offices, including the EPO. Already in 1984 the EPO stated "that no general exclusion of inventions in the sphere of animated nature can be inferred from the European Patent Convention."
Also for the patentability of naturally-occurring genes, the Directive only reaffirms the long-standing practise of the EPO and most national patent offices: naturally-occurring substances are considered to be patentable inventions provided they first have to be isolated from their surroundings, have been properly characterized and, finally, are "new" in the sense of having no previously recognized existence.

Patentability of plant and animal varieties
Even though the patent requirements of the new Directive only reaffirm the current practice of most industrialized countries, the Directive creates, for the first time in European history, an explicit legal right to obtain patents for higher organisms, such as plants and animals. Moreover, the Directive departs from the EPC as currently applied by the EPO with regard to the patent exclusion for plant and animal varieties. Furthermore, it establishes a whole set of rules concerning the scope of biotechnology patents for which no comparable provisions can be found in any national patent laws or European conventions.
Under the EPC plant and animal varieties are excluded from patentability. The Technical Board of the EPO concluded in 1993, in its decision "Plant cells/ Plant Genetic Systems", that every genetically modified plant is to be considered a "plant variety" if the genetic modification is stable. Consequently, claims directed towards such transgenic plants and seeds are generally prohibited. The Directive, however, allows in fact for the patenting of exactly this sort of invention. Although, pursuant to the Directive, plant and animal varieties are in principle excluded from patentability, inventions which concern plants or animals shall be patentable if the technical feasibility of the invention is not confined to a particular plant or animal variety. More explicitly, the Directive even states that plant groupings are patentable "even if they comprise new varieties of plants." Thus, patents must not be granted for a single plant or animal variety, but may be granted if they claim more than one variety. This approach, however, appears, as one observer stated, "no more reasonable than a law which prohibits bigamy, but allows for polygamy."
Though the Directive’s understanding of "plant varieties" is certainly incompatible with the EPC, it does not violate any obligations which EU member states have under that convention. The EPC does not prevent its member states (all EU member states plus Cyprus, Liechtenstein, Monaco, and Switzerland) to grant patents for inventions which are excluded from patentability under the EPC.

The scope of biotechnology patents
The Directive, for the fist time in the history of patent law, establishes a set of rules specifically addressing the scope of biotechnology patents. These rules may, in fact, be described as the core of the Directive, since neither the member states’ patent laws nor the EPC specifically address this issue. It may be questioned, for example, whether the protection conferred by the patent on a gene should only extend to the cell into which the gene has been inserted, to the plant regenerated from this cell, or even to all the plants obtained by multiplication of the original plant. In general the Directive allows for a broad scope of biotechnology patents:

Biological material: Patents on biological material possessing specific characteristics shall extend to any biological material derived from the patented material, provided the patented material still possesses those same characteristics.
Biotechnological processes: Likewise, patents on processes that enable a biological material to be produced possessing specific characteristics shall extend to all material directly and indirectly obtained through that process. Patent protection shall also cover all biological material directly derived from that material provided that the derived material still possesses those same characteristics.
Products containing or consisting of genetic information: Finally, patents on products containing or consisting of genetic information shall extend to all material (except human beings) in which the product is incorporated and in which the genetic information is contained and performs its function.

On the other hand, the Directive provides for certain exemptions, in particular the farmers’ exemption as foreseen in the EU Council Regulation on Community Plant Variety Rights No. 2100/94. Under this exemption small-scale farmers may freely use the product of their harvest of specified plant varieties for propagation or multiplication on their own farm. Large-scale farmers shall be required to pay an equitable remuneration to the patentee. The Directive, in addition, allows the expansion of the farmers’ exemption to livestock protected by any patents; the extent and conditions of this derogation shall be determined, however, at the national level.
Although it may seem that due to this exemption the Directive will not change lives of farmers in Europe, the situation may well turn out differently. So far, the use of seeds by the farmers was limited only by Plant Breeders’ Rights (PBR). In the future, a plant variety may be subject not only to a single PBR but also to a potentially unlimited number of patents. Patents may be granted for the plant, for different genes, vectors, and the transformation process, and all these patents may even be owned by different companies. Under the Directive, an infringement of the PBR will also imply an infringement of the patent(s) relating to the same variety. A farmer suspected of having violated a PBR may thus soon be confronted not only with the breeder of the variety but also by lawsuits from a handful of biotechnology companies.
The inclusion of the farmers’ exemption into the patent law furthermore raises the question of the Directive’s compatibility with obligations resulting from the CPC. While this Convention has not yet entered into force, it is nonetheless according to the general rules of interpretation of international law, binding for those countries which have ratified it. Additionally, the CPC dos not foresee anything comparable to the farmers’ exemption as outlined in the Directive.
The Directive might, however, affect breeders even more than farmers. Although it is in the vital interest of breeders to use new varieties freely as the initial source for creating other new varieties, and although for this reason the Council Regulation on Community Plant Variety Rights provides for a so-called breeders’ exemption permitting this practice, the Directive does not include any such provision. The Directive, therefore, leaves breeders with considerable uncertainty as to whether and/or under which conditions they may use a variety for breeding purposes if the variety includes patented material or is itself subject to patent protection. This uncertainty raised serious concerns among a number of professional organizations, such as the Committee for Agricultural Organisations in the EU (COPA) and the General Committee for Agricultural Co-operation in the EU (COGEGA). In order to ensure "the maintenance of a certain number of medium-sized plant and animal breeding enterprises under competitive conditions", both organizations requested "the introduction of the ‘breeders’ privilege’ concept" into the Directive. Similarly, the International Association of Plant Breeders for the Protection of Plant Varieties (ASSINSEL) has argued, that "the protection of genetic components (...) must be limited to components themselves and not extended to the genome of the variety in its entirety." Such an extension would in fact prevent the use of the genetic base in further selection work and would suppress the breeders’ exemption.
Moreover, the Directive does not address whether, or under what conditions, patented biological material may freely be used by third parties for research purposes. Therefore it remains unclear which experimental acts in relation to patented biological material are allowable without the patentee’s authorization. This is especially regrettable because the member states’ patent laws show considerable differences regarding the scope of the research exemption. It is well known that biotechnology patents raise a number of specific and extremely difficult legal questions with regard to acts performed for research purposes.

Human genes and ethical considerations
Although the Commission’s proposal to grant patents for naturally-occurring human genes has been one of the reasons for the parliament to vote down the Directive’s earlier version in 1995, the Directive as adopted now requires the treatment of any element isolated from the human body as a patentable invention, "even if the structure of that element is identical to that of a natural element." In other words, the Directive requires member states to grant patents for naturally-occurring genes isolated from the human genome, provided they have been properly characterized and are "new" in the sense of having no previously recognized existence. However, the Directive excludes:

the human body at its various stages;
processes for cloning human beings;
processes for modifying the genetic identity of human beings in the germ line;
the use of human embryos for industrial or commercial purposes;
processes for modifying the genetic identity of animals which are likely to cause them suffering without any substantial medical benefit to humans or animals, and also animals resulting from such processes.

The Directive furthermore requires the European Commission’s Group on Ethics in Science and New Technologies to evaluate "all ethical aspects of biotechnology." This group, however, may be consulted only where biotechnology is to be evaluated at the level of basic ethical principles, including where it is consulted on patent law. Moreover, it is very clear that any common positions taken by this group are without legal effect for the actual granting of patents. Given this mandate, it remains unclear why such a group had to be established under a directive dealing with patents.

European patents on the international agenda
While the debate about the Directive’s precursor focused on the patenting of human genes and germ line therapies, this time the attention mainly centred on the ownership of genetic material and national sovereignty over genetic resources. Two so-called "anti-biopiracy provisions" were proposed by the socialist group in the EP: first, to assure the Prior Informed Consent (PIC) of the person whose genetic material is claimed by a patent; second, to make it compulsory to disclose the geographical origin of plant or animal material used in an invention. The latter proposal additionally requires that the material has been used in accordance with the legal access and export provisions of the place of origin.
Although many members of the EP had publicly stated their sympathy for these provisions, they failed to get the absolute majority required in the second reading in the EP. In the adopted version of the Directive it is only required that, when an innovation is based on biological material of plant or animal origin, the patent application "should include information on the geographical origin of such material, if known." This, however, shall be "without prejudice to the processing of patent applications or the validity of rights arising from granted patents." Furthermore, the Directive states that the person from whose body the patented material stems from "must have had an opportunity of expressing free and informed consent thereto, in accordance with national law."
While industry representatives had rejected the provisions as impractical and potentially harmful for the European biotechnology industry, the EP’s lack of support for the "anti-biopiracy provisions" disappointed many development and environmental organizations. According to Benedict Härlin from Greenpeace International, the Directive is now an open invitation to bio-piracy in developing countries. Biplab Dasgupta, a member of the Indian Parliament complained that "politicians and officials in Europe seem far more concerned about losing out to American and Japanese agri-businesses than the long term effect of such patents on developing countries."
Furthermore, many civil society organizations argued that the Directive breaches the Convention on Biological Diversity (CBD). While the CBD does not explicitly oblige patent applicants to disclose the country of origin of the material or to give evidence that the material has been acquired in accordance with the laws of that country, it does require contracting parties to ensure that patents and Intellectual Property Rights (IPR) are supportive of and do not run counter to the objectives of the CBD. One of the objectives of the Convention is the fair and equitable sharing of the benefits arising out of the utilization of genetic resources. Furthermore, under the CBD, access to genetic resources shall be subject to PIC of the country providing such resources. The EU deliberately passed up the opportunity to adjust its patent legislation to the aims of the CBD.
Dan Leskien

P.O.Box 500 952, 22709 Hamburg, Germany. E-mail Dan_Leskien@compuserve.com

Sources
J.H. Barton (1998), "The Impact of Contemporary Patent Law on Plant Biotechnology Research." In: S.A. Eberhart et.al., Global Genetic Resources: Access and Property Rights. Madison/Wisconsin, USA: Crop Science Society of America, pp. 85-97.

Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 on the legal protection of biotechnological inventions, OJ L 213/13 (30.07.1998).

European Commission (1997), Promoting innovation through patents. Green Paper on the Community patent and the patent system in Europe. Brussels, Belgium: European Commission.

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