Diagnostic Kits/Paper

Are patents clogging the pipeline: The effects of intellectual property on commercialization and access to genetic diagnostics
(A Summary Paper of our Research to date)
By Carolina Rossini, Andrew Clearwater, and Mackenzie Cowell

Last Draft: December 3, 2009

Introduction

Description of the GDx Market

Defining Genetic Diagnostics

from Educational_Materials#Field_Definition

Brief History of GDx and Related Technology

• chemical patents at turn of century (see Palombi's work)

Overview of IP Landscape

from Overview_of_Economics_of_Intellectual_Property_in_Kits see overview]

Forces affecting the GDx Industry

Intellectual Property

Proposed Alternative Protection Schemes

• Patent Pools
• Patent Clearing Houses

Licensing

• Licensing Approaches

Van Overwalle defines four licensing approaches (Geertrui Van Overwalle et al., 2005) First, access to the genetic sequences is free but commercial test kits require a royalty. Second, the license for the commercial test kit to labs is set at a price that makes access to the genetic sequences more expensive. Third, an exclusive license is given to laboratories in a way that limits access. Lastly, there are open licenses which allow improvements to the patent to be shared as a way to facilitating cooperative invention (ie. Biological Innovation for Open Society). Given these options presented by Van Overwalle, there were several trends in licensing behavior that are important to the development of genetic diagnostic tests. The likelihood of granting a license for patented DNA sequences was found to be similar for firms and nonprofits but nonprofits were far more likely to grant exclusive licenses. This use of exclusive licensing demands further study to find out if the use of these licenses is justified or merely a default practice with little substantive justification. (Henry, M. et al. 2002) Next, it is important to consider that changes in patent ownership and licensing complexities can have measurable effect on the development and performance of genetic testing. (Merz, J.F. et al., 2002) A industry trend towards greater complexity has not been shown but Merz demonstrates a case where the transaction costs due to changes in patent ownership and licensing reduced innovation and research for that area of genetic diagnostic tests.

Licensing behavior varies by entity. The study conducted by Henry et. al found that for profit and non-profit entities approach patent and licenses differently: (Henry, M.R. et. al., 2003)

               + Patenting Behavior
                     # For profits more often file patent applications for all new technologies and then deciding what to pursue based on commercial interest.
                     # Non-profits were more selective about when to apply for a patent. 
               + Licensing Behavior
                     # For both entities, licensing was most often used as a method of commercialization. Licensing for research was very infrequent.
                     # One important difference found was that nonprofits were more than twice as likely to license exclusively as compared to for-profit companies. 

• Compulsory Licensing
• Licensing Behavior

Existing and Evolving GDx Models

Commercialization of Basic Research

• Licensing of research to existing GDx company
• Licensing of research to new GDx start-up
• Usage of research in public domain by existing GDx company? (multiplex kits?)

Paths to Market

• ASRs
• Kits
• DTC