Happy Birthday Biotech Directive!

Friday 27 July 2018

The Biotech Directive (Directive 98/44/EC of the European Parliament and of the Council of 6th July 1998 on the legal protection of biotechnological inventions) has just turned 20. Barbara Fleck and Meg Booth review some of the key points of the Directive and consider what role it might play in the future.

The Biotech Directive provides the legal framework for biotechnology inventions

Recognising the critical role of biotechnology and genetic engineering in a broad range of industries, the European Commission originally proposed the concept of legal protection of biotechnological inventions in the EU in 1988. The aim was to harmonise the law relating to biotechnology inventions of the EU member states. Harmonisation was seen as a way to encourage innovation and to enable European companies to compete better with US and Japanese biotech companies. However, it took a decade of negotiations to arrive at a final wording of the legislation and the European Commission adapted the Directive in 1998. The Directive was then enacted into the legislation of the EU member states, including into the UK Patents Act. Although the European Patent Office (EPO) was not bound by the Biotech Directive (the EPO is not a member state of the EU or an EU organisation), the Rules of the European Patent Convention (EPC) were amended to incorporate a number of the provisions of the Biotech Directive.

The Directive clarifies which inventions are patentable on ethical grounds and provides legal certainty to organisations in the biotech sector. Plant and animal varieties, essentially biological processes for producing plants and animals as well as the human body at the various stages of its formation and development are all considered non-patentable. Inventions may also not be patented where their commercialisation would be immoral or against public order, for example processes for cloning human beings. The Biotech Directive also sets out what can be protectable subject matter, such as inventions based on isolated constituents (e.g. gene sequences isolated from the human body).

The impact of the Directive on EPO proceedings

The rules of the EPO require the EPO to take account of the Biotech Directive 'as a supplementary means of interpretation' when considering the EPO's rules. The importance of the Directive can be seen in the EPO’s amendment of the legal provisions which govern the grant of patents by the EPO last year. Rules 27 and 28 EPC which relate to the patentability of biotech inventions were changed in June 2017 to specify that plants or animals exclusively obtained by means of an essentially biological process are not patentable.

This amendment followed a ruling in seminal cases Broccoli II (G2/13) and Tomato II (G2/12) of the Enlarged Board of Appeal at the EPO in March 2015. In these cases, claims to products obtained from an essentially biological process were considered allowable. The European Parliament found that this ruling was in potential conflict with the legal protection of plant varieties under EU plant variety right legislation. European Parliament therefore asked the European Commission to look into the patentability of products derived from essentially biological processes, taking into account the principles set out in Biotech Directive. The European Commission concluded that the EU legislator's intention when adopting the Biotech Directive was to exclude from patentability products that are obtained by means of essentially biological processes. Thus, the rulings in G2/13 and G2/12 by the EPO’s Enlarged Board of Appeal to allow claims to products obtained from an essentially biological process went contrary to the intentions of the Biotech Directive. As a result, the change to Rules 27 and 28 EPC was made.

Another example of the importance of the Biotech Directive is in the area of stem cells. This followed a landmark decision in June 2012 of the highest EU court (i.e. the Court of Justice of the European Union, CJEU) in June 2012. The decision concerned the use of human embryos and in particular the definition of the term ‘human embryo’ in Article 6(2)(c) of the Biotech Directive. Although the EPO was not bound by CJEU decision, in light of the judgement, the EPO revised its Guidelines for Examination in line with the decision.

What does the future hold- is the biotech directive fit for purpose?

The growth of the biotechnology industry has made a significant contribution to the global economy and it is estimated that the global Life Sciences industry is expected to reach over $2 trillion (gross value) by 2023. The UK Government has recognised the significance of the Life Sciences industry, which contributes £64 billion to the UK economy each year, in their report on the ‘Life Sciences Industrial Strategy’ at the end of 2017. In this report, the UK Government have pledged to underwrite research funding, currently obtained from the EU, following Brexit. A commitment to increasing Research and Development spending from 1.7% to 2.4% GDP in the next 10 years was also made. Given the importance of the industry to the UK, Europe and beyond, a legal framework that provides legal certainty for companies and investors in this sector is critical.

The Biotech Directive has not been without its critics. Technologies in this sector develop very quickly and to ensure that the Directive remains fit for purpose, the Commission set up an expert group with the mission to provide expertise, analysis and comments on the rapid evolutions in the biotechnology field. A report was issued by the Commission in 2016 focusing on plant related inventions, stem cells and nucleic acid related inventions. The experts could however not reach consensus on all topics and identified several issues which may not necessarily have been resolved entirely by the Biotech Directive and/or by CJEU case law interpreting the Directive. Nevertheless, the expert group also found that it was clear that there was little appetite for reopening negotiations on the Biotech Directive. Indeed, this was seen to be “tantamount to opening Pandora’s Box”, and the experts doubted whether new and protracted re-negotiations on the terms of the Directive would benefit the industry.

The biotechnology sector is a fast moving field and new ground braking technologies are being developed. Gene editing, in particular using CRISPR, is one example of a recent technique that has the promise of revolutionising medical research. As new inventions and even new fields emerge (such as the use of artificial intelligence and machine learning in drug discovery), the lines between traditional areas of science can become blurred. Time will tell if the development of new techniques will also present future challenges as to how patentability of such inventions can be assessed in line with the Biotech Directive.

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