Gene patents advantage US competitors, not US companies

5. Pathogen Patents Will Advantage Other Countries Over the U.S.

When Senator Thom Tillis introduced the proposed Patent Eligibility Restoration Act in the U.S. Senate in 2022, he explained that one of the bill's principal goals was to promote [*564] "the economic and global competitiveness of the United States".140 He and others faulted judicial decisions like Myriad for "undermining American innovation and allowing foreign adversaries like China to overtake [the United States] in key technology innovations."141 Supporters of the bill have predicted that it will "rev the US innovation engine once again", warning that "[e]conomic growth, job creation, global competitiveness, public health and national security are all at risk until Congress repairs the law of patent eligibility that the Supreme Court has distorted."142 Yet, ironically, at least in the case of pathogen genomic sequences, the benefits of the proposed legislation would accrue largely to institutions in China and elsewhere.

As discussed in Part III, most infectious disease outbreaks can be traced to the transmission of pathogenic agents from animals to humans.143 A majority of these outbreaks originate in regions with extensive animal husbandry or live animal markets, where populations rely on hunting for sustenance or where habitat loss has resulted in the encroachment of wild animals into human settlements.144 Across regions with these characteristics, the precise location of a future outbreak is impossible to predict. The earlier outbreaks described in Part III have been traced, respectively, to China (SARS and H5N1), Saudi Arabia (MERS), Zaire and Congo (Ebola), and Uganda [*565] and Brazil (Zika).145 Once a pathogenic strain has infected a human population, the location(s) where its variants will emerge is also hard to predict. For example, Table 1 illustrates the documented locations of the emergence of the major variants of SARS-CoV-2:

The fact that some of these countries are low-income and do not possess large biopharmaceutical facilities does not prevent governmental and non-profit agencies in those countries from sequencing emergent pathogenic genomes. Today, genomic sequencing equipment is available around the world at a modest cost.148 In 2021, the cost of sequencing a SARS-CoV-2 [*566] genome (only 1/100,000 the size of the human genome)149 was estimated at approximately $120 - well within the reach of researchers in most countries. As a result, by mid-2021, Gambia had sequenced more SARS-CoV-2 genomes than Germany.150

Furthermore, under the World Trade Organization's Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS Agreement"),151 signatory countries must extend "national treatment" to other signatory countries with regards to the protection of intellectual property.152 This implies that applicants from any TRIPS country will be afforded the same rights to U.S. patents as applicants from the United States. Indeed, over the past several years, more U.S. patents have been issued to non-U.S. than U.S. applicants. In 2021, approximately 53% of all U.S. patents were issued to foreign applicants.153 And of the top one hundred universities obtaining U.S. patents in 2021, forty-one were based outside of the United States (with twelve in China alone).154 This situation is indicative of today's global economy, where national patents are readily available to any entity that wishes to exploit a national market.

[*567] The combination of pathogenic emergence in certain less developed countries, the availability of inexpensive genome sequencing, and national treatment of applicants under TRIPS suggests that if U.S. patents become available for pathogenic sequences, the applicants most likely to obtain these patents will be entities based outside the United States.

The SARS-CoV-2 genome was first sequenced by a team of researchers at institutions in China.155 As noted above, these researchers immediately released the viral sequence to the public GenBank database. Had patenting been an option and had the Chinese researchers elected to file a patent application in the United States, the resulting U.S. patent on the baseline sequence of SARS-CoV-2 would most likely be owned by a group of Chinese state-owned institutions. Similar results would have occurred with respect to the major SARS-CoV-2 variants, each of which was first identified and sequenced outside of the United States (see Table 1). As a result, allowing pathogen patenting, as proposed by the draft Patent Eligibility Reform Act, would likely result in patents being issued to non-U.S. applicants. Consequently, American companies and others that wished to develop diagnostics, vaccines, and other technologies dependent on those patented sequences would either be excluded from the market, required to pay excessive prices, or make other onerous commitments in exchange for licenses to practice those patents.