"Although Canada's biotech industry is a world leader, the Canadian legislative and regulatory framework required to support the Canadian biotech industry is lagging behind many of Canada's major trading partners."

Patent Act Should be Amended to Included Patentable Higher Life Forms

4 Apr 2005

• From: The Board of Directors of the London Chamber of Commerce
• As Submitted by the Federal/Provincial Affairs Committee of the London Chamber of Commerce

Resolution Title: PATENT ACT SHOULD BE AMENDED TO INCLUDE PATENTABLE HIGHER LIFE FORMS

ISSUE:

It has now been over two years since the Supreme Court of Canada held in the Harvard College vs. Canada decision that genetically altered higher life forms, such as animals and plants, are not patentable in Canada. The Supreme Court confirmed this again on May 21, 2004, in the Monsanto Canada Inc. vs. Schmeiser case. In both decisions the Supreme Court of Canada has made it clear that it is up to Parliament to deal with this issue by amending the Patent Act, if higher life form inventions are to be entitled to patent protection in Canada. (In this policy paper, “higher life forms” refers only to non-human higher life forms, such as plants and animals.)

Canada presently ranks number one in the world in biotech R&D expenditure per employee, number two in the number of biotech companies, and number three in biotech revenue generation. The Canadian biotech industry employs approximately 12,000 highly skilled employees. In 2003, R&D expenditure exceeded $868 million, the number of biotech companies was 470, and revenue exceeded $2.4 billion.

Most biotech companies are private and small to medium sized enterprises. Without patent protection, these enterprises would not be able to attract and secure long-term sustainable funding to support the seven to ten years it generally takes to research, approve and market a biotech product. Most of these enterprises rely on patents, rather than products, as their sole source of value.

Canada is the only developed country in the world where higher life forms are not patentable. In all of Canada's major trading partners, and competitors for capital investment, such as the United States, the European Union, and Japan, plants and animals are patentable.

As pointed out by the Supreme Court of Canada, patenting of higher life forms raises a number of ethical, moral and environmental issues. There is no disputing that the economic dimensions of the patent system cannot be divorced from their ethical, moral and environmental impact. However, the patent system is not the place for dealing with social and ethical concerns. This view is supported by the OECD's (Organization for Economic Co-operation and Development) Working Party on Biotechnology Report. Ethical, moral and environmental issues primarily arise from the use or exploitation of patented inventions. Excluding a higher life form from patentability on ethical or moral grounds will not prevent the inventor from using the higher life form in an unethical or immoral manner.

Decisions relating to these issues need to be addressed through direct regulation aimed at the use and exploitation of the higher life form. These types of decisions should not be addressed at the patent application stage by patent examiners whose training and experience is primarily scientific and technical in nature.

Although Canada's biotech industry is a world leader, the Canadian legislative and regulatory framework required to support the Canadian biotech industry is lagging behind many of Canada's major trading partners.

The inaction on the part of the Federal Government, in amending the Patent Act to allow for the patentability of higher life forms, is creating the perception that patent protection in Canada is more restrictive and less favourable to biotech companies than in other countries. This is further compounded by the Federal Government's inaction in addressing ethical, moral and other issues arising from patenting of higher life forms.

These issues need to be addressed in a manner that is consistent with what Canada's other trading partners are doing and in accordance with international agreements, such as the agreement on Trade-Related Aspects of Intellectual Property Rights.

The goal should be to ensure that innovation and commercialization of biotechnology are not hampered while enhancing the public's perception of, and confidence in, the biotechnology industry.

We believe that all this inaction is putting Canada at a significant competitive disadvantage when it comes to attracting capital investment. Without the capital investment, Canada's biotech industry will not be able to continue its current level of research and Canada will not be able to maintain a critical mass of biotech companies.

Furthermore, the fact that higher life forms are not patentable may also attract political attention from Canada's trading partners. Canada may be perceived as having an unfair competitive advantage by being able to free ride on the trading partners' higher life form inventions that, while protected by patents in their respective countries, can be used freely in Canada.

1. The Patent Act be amended to include genetically altered higher life forms (i.e. plants and animals) as patentable subject matter.
2. Ethical, moral and other issues should be addressed through direct regulation of the use and exploitation of biological inventions, such as higher life form inventions. These issues should not be addressed through the Patent Act.
3. As an exporting nation, and having regard to the fact that the biotechnology industry is becoming a global industry, the Federal Government should take into consideration the current policies of its major trading partners and capital investors in forging its own approach to the issues outlined in this paper.

This paper does not deal with the issues arising from the patentability and regulation of human biological material, such as genes.

Contact: Gerry Macartney, General Manager and C.E.O.

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