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To participate in the race, an increasing number of biotechnology companies are focusing on bioinformatics—a colossal growth industry that marries computer technology and biotechnology. In general, bioinformatics impacts gene sequencing, nucleic acid hybridization, protein structure prediction, X-ray crystallography, pharmacology, receptor–ligand modeling, and immunology. In particular, bioinformatics provides tools to transform the expanding storehouses of gene data that result from gene sequencing, gene chip technology, and gene data mining into meaningful information. Such information is expected to boost humankind’s understanding of the causes of disease.

Although a relatively modest $160 million market for bioinformatics tools such as software, hardware, and databases is expected this year, industry analysts predict a booming $2–$2.5 billion market in 5 years. In light of the potential growth of computational biology, drug research should not stay data rich and information poor for long. Bioinformatics innovations should speed up the discovery of revolutionary drugs that are effective against currently incurable genetic diseases such as cancer, Alzheimer’s disease, AIDS, and diabetes.

Consequently, bioinformatics is expected to be at the core of biology and biotechnology in the 21st century. The promise of bioinformatics lies with its tools, which include algorithms for searching, analyzing, managing, integrating, distributing, and storing biological data; and interfaces for user access, manipulation, understanding, and visualization of biological data that reside in one or more databases (i.e., the creation of a virtual database).

Although the database is a traditional tool for data storage, it has assumed a new use in bioinformatics: the profile—a characterization of specific information that facilitates data analysis. One simple example of such data analysis is the comparison between a profile of the cells of healthy brain tissue and a profile of brain tumor cells. The profile is maturing within bioinformatics and e-commerce and is one of the hottest commodities for biotechnology companies engaged in bioinformatics.

How to protect information?

To protect large investments of time and money in bioinformatics, it is imperative for researchers, management, and investors in industry to be aware of the scope of protection afforded to bioinformatics tools—the hallmark of bioinformatics—by the U.S. legal system.

The U.S. patent statute provides that “[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor.” The quid pro quo for obtaining patent protection is public disclosure of the invention in sufficient detail to enable a person skilled in the claimed subject matter (or art) to make and use the invention without undue experimentation.

In 1980, the U.S. Supreme Court acknowledged that Congress intended the scope of patent protection to extend to “anything under the sun that is made by man” (2). Despite such a broad statement, the Supreme Court identified specific categories of nonpatentable subject matter: laws of nature, natural phenomena, and abstract ideas (mathematical algorithms, formulas, or calculations). In 1981, the court elaborated that mathematical algorithms, standing alone, are merely abstract ideas and thus are not entitled to patent protection (3).

In 1994, the U.S. Court of Appeals for the Federal Circuit, which is the exclusive appellate court for patent cases, held that “the storage, use, and management of information residing in a memory” is patentable (4). In other words, although information standing alone is unpatentable, a method of organizing stored data in an apparatus, such as a computer memory, can be patented.

In 1998, the circuit court confirmed that the transformation of data by a machine through a series of mathematical calculations constitutes patentable subject matter (5). The court ruled that a practical application of an abstract idea is patentable subject matter if the machine produces “a useful, concrete, and tangible result”, such as a calculated output number. In particular, the court held that an arithmetic logic circuit configured to retrieve information from a specific file, calculate incremental changes based on specific input, allocate the results on a percentage basis, and store the output in a separate file for processing data was patentable. The court reasoned that programming a computer creates a new, patentable machine because “a general purpose computer in effect becomes a special purpose computer once it is programmed to perform particular functions pursuant to instructions from program software.”

So, in 1998, patent protection became available for apparatus claims that include a mathematical algorithm that produces “a useful, concrete, and tangible result”. Also in 1998, the court ruled that patent claims directed to doing business are patentable.

Broadening the protection

In 1999, the circuit court extended the scope of patent protection to method claims that “apply” a mathematical algorithm in a practical manner to produce “a useful, concrete, and tangible result” without preempting other uses of the algorithm (6). In that case, the court refused to distinguish method claims from apparatus claims. Thus, the court now considers the scope of patent protection to be the same regardless of the form—apparatus or method—in which a claim to a mathematical algorithm is drafted.

In other words, a method claim to an algorithm need not recite structural elements as long as the algorithm produces “a useful, concrete, and tangible result” without preempting other uses of the algorithm. A claim to an algorithm not limited to specific structural elements is, in effect, a patent on an abstract idea. Simply put, the scope of patent protection is extending closer to “anything under the sun that is made by man”.

Thus, the U.S. legal system provides a framework of intellectual property protection that justifies continued investment in private research and development in bioinformatics, which is expected to revolutionize biology. Before 1998, the availability of patent protection for many bioinformatics tools was tenuous at best because of the inability to acquire patent rights on inventions linked to algorithms. After 1998, patent law protects for the apparatus and methods that form the core of bioinformatics such as profiles; algorithms that mine, analyze, manipulate, and manage data; and user interfaces that facilitate data requests and provide understandable information.

In short, patent law now provides layers of protection for novel, useful, and nonobvious bioinformatics-related inventions. Well-crafted patent claims, which provide “the metes and bounds” of the right to exclude, create valuable intellectual capital. Such intellectual capital includes

• the generation of royalties from licenses to make, use, market, or sell the patented invention;
• protection of technology-access fees; and
• business cooperation of technology transfer.

Because disciplines such as e-commerce, finance, banking, insurance, and bioinformatics use related tools, the scope of such intellectual capital for bioinformatics-related inventions is vast.

In the past 10 years, more than 150 bioinformatics-related patents have issued (and are publicly available online). In the postgenomic era, USPTO can expect a colossal increase in filings of patent applications on bioinformatics.

Acknowledgments and disclaimer

Thanks to Samuel Burkholder, Kendrew Colton, Ann Hobbs, and Gary Tanigawa of Pillsbury Madison & Sutro LLP and Charles Cappelleri of Gen-Probe for their helpful comments. The views expressed herein are entirely the author’s own and do not necessarily represent the views of Pillsbury Madison & Sutro LLP or its clients.

References

1. Brennan, M. Chem. Eng. News 2000, 78 (27), 4–5.
2. Diamond v Chakrabarty, 447 U.S. 303 (1980).
3. Diamond v Diehr, 450 U.S. 175 (1981).
4. In re Lowry, 32 F.3d 1579 (Fed. Cir. 1994).
5. State Street Bank & Trust Co. v Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998).
6. AT&T Corp. v Excel Communications Inc., 172 F.3d 1352 (Fed. Cir. 1999).

William G. Bentz is an associate in the Intellectual Property Group of Pillsbury Madison & Sutro LLP (202-861-3584; bentz_wg@ pillsburylaw.com).