- Email: [email protected]
New rulings on the cetus patent for taq polymerase
Molecular Diagnosis Vol. 5 No. 1 2000
Commentary New Rulings on the Cetus Patent for Taq Polymerase In December, news quickly spread that a Cetus patent covering Taq polymerase used for PCR in research and molecular diagnostics had fallen. Why the great interest? Almost all of us in molecular diagnostics calculate our quarterly payments to Roche Molecular Systems, the current holder of the PCR and Taq patents, with a bit of disdain. Our profits are minimal at best in this healthcare economic environment with capitation and low reimbursement for services. Many of us read the announcements in hopes of reducing our costs, even though we would all agree that the PCR invention almost single-handedly brought on the growth of molecular diagnostics. I have asked representatives from Promega Corporation, which brought the lawsuit, and Roche Molecular Systems, which holds the patent, to provide our readers with some insight into the implications of the recent ruling. As you will see from the two commentaries, each has chosen to focus on different aspects of the issue. While I do not think we can put away our calculators just yet, we will all probably follow the future rulings on the PCR and Taq patents with continued interest. Debra G. B. Leonard, MD, PhD Senior Associate Editor
Promega Corporation Comments: On December 7, 1999, Judge Vaughn Walker of the Federal Court for the Northern District of California ruled that the claims of U.S. Patent No. 4,889,818 were obtained by inequitable conduct, or fraud, on the U.S. Patent and Trademark Office. Judge Walker found eight separate instances where the patent holder had intentionally withheld material information and distorted important facts in obtaining the patent. The claims of this patent included compositions of both native and recombinant Taq polymerase. Roche has indicated in other publications that loss of the '818 patent does not affect its diagnostic licensing strategy. This is simply not true. Rights to use PCR for clinical diagnostics are owned by Roche Molecular Systems and conveyed through a separate royalty-bearing license, reportedly in the range of 9% to 12% of all charges associated with any diagnostic test using PCR. This license gives the diagnostic PCR users rights to the PCR methods patents (commonly referred to as the '195 and '202 patents). However, it is reported that Roche claims diagnostics PCR users also need access to the '188 patent covering the use of thermostable enzymes in PCR. Diagnostics customers may obtain these rights either by purchasing Taq manufactured by Roche or by paying a significantly higher royalty (usually an
additional 3% of patient billings). Until now, this strategy effectively has made it cost prohibitive for diagnostic laboratories to use Taq not manufactured by Roche. It is illegal to attempt to enforce a patent that a court has found was obtained by inequitable conduct. Since the '818 patent and a closely related and similarly unenforceable patent are the only U.S. patents with composition claims describing native Taq polymerase, no one will be able to claim a monopoly to make, use, or sell this enzyme. Moreover, the December 7 ruling sets the stage for further rulings by Judge Walker of unenforceability of related patents, including those covering the recombinant Taq gene, the use of thermostable enzymes in PCR, and the PCR method itself. Judge Walker was to begin considering those arguments at a hearing on February 24 and will likely make a decision in the next few months. Even if Judge Walker declines to rule in the Roche/Promega litigation that some or all patents related to the '818 patent are unenforceable, another court in a different lawsuit could find those patents unenforceable based on the December 7 ruling. If Cetus and Roche committed one or more of the same fraudulent acts during prosecution of these other patents, they too will be held unenforceable because of fraud. For example, the same arguments concerning the fidelity and template dependence of the prior art Taq DNA polymerase purified and reported by Kaledin et al. [1], which Judge Walker declared were fraudulent in the '818 patent, were also used to obtain the '188 patent on the use of thermostable enzymes in PCR. Consequently, we believe Roche may not continue to enforce the '188 patent or other patents containing similar fraudulent statements. We believe Roche also must reconsider its current PCR licensing strategy, as it links patents in an impermissible manner. As we understand the law of patent misuse, it is illegal for a method patent owner (such as Roche, which owns the PCR and '188 patents) to require the purchase of a particular product (such as recombinant Taq) when alternative unpatented products (in this case, native Taq) are suitable for performing the method. Similarly, the method patent holder may not charge a higher price for a license to the method patent based on purchase of a product covered by an unenforceable patent or use that product to convey a license to another method patent that itself may be unenforceable. Linking in this way simply creates a barrier to purchasing that unpatented product. It also would impermissibly extend the patent monopoly. In this case, a differential royalty for diagnostic use of PCR based on the source of Taq purchased by an institution would appear to be illegal. Promega recommends that each institution obtain legal advice specific to its situation and licensing agreement with Roche. The text of the court's decision regarding the '818 patent is posted on the Promega website at http://www. promega.com under "Patent News." This site will also include the latest news regarding Judge Walker's decisions over the next few months regarding appropriate remedies for Roehe's fraud.
Commentary New Rulings on the Cetus Patent for Taq Polymerase In December, news quickly spread that a Cetus patent covering Taq polymerase used for PCR in research and molecular diagnostics had fallen. Why the great interest? Almost all of us in molecular diagnostics calculate our quarterly payments to Roche Molecular Systems, the current holder of the PCR and Taq patents, with a bit of disdain. Our profits are minimal at best in this healthcare economic environment with capitation and low reimbursement for services. Many of us read the announcements in hopes of reducing our costs, even though we would all agree that the PCR invention almost single-handedly brought on the growth of molecular diagnostics. I have asked representatives from Promega Corporation, which brought the lawsuit, and Roche Molecular Systems, which holds the patent, to provide our readers with some insight into the implications of the recent ruling. As you will see from the two commentaries, each has chosen to focus on different aspects of the issue. While I do not think we can put away our calculators just yet, we will all probably follow the future rulings on the PCR and Taq patents with continued interest. Debra G. B. Leonard, MD, PhD Senior Associate Editor
Promega Corporation Comments: On December 7, 1999, Judge Vaughn Walker of the Federal Court for the Northern District of California ruled that the claims of U.S. Patent No. 4,889,818 were obtained by inequitable conduct, or fraud, on the U.S. Patent and Trademark Office. Judge Walker found eight separate instances where the patent holder had intentionally withheld material information and distorted important facts in obtaining the patent. The claims of this patent included compositions of both native and recombinant Taq polymerase. Roche has indicated in other publications that loss of the '818 patent does not affect its diagnostic licensing strategy. This is simply not true. Rights to use PCR for clinical diagnostics are owned by Roche Molecular Systems and conveyed through a separate royalty-bearing license, reportedly in the range of 9% to 12% of all charges associated with any diagnostic test using PCR. This license gives the diagnostic PCR users rights to the PCR methods patents (commonly referred to as the '195 and '202 patents). However, it is reported that Roche claims diagnostics PCR users also need access to the '188 patent covering the use of thermostable enzymes in PCR. Diagnostics customers may obtain these rights either by purchasing Taq manufactured by Roche or by paying a significantly higher royalty (usually an
additional 3% of patient billings). Until now, this strategy effectively has made it cost prohibitive for diagnostic laboratories to use Taq not manufactured by Roche. It is illegal to attempt to enforce a patent that a court has found was obtained by inequitable conduct. Since the '818 patent and a closely related and similarly unenforceable patent are the only U.S. patents with composition claims describing native Taq polymerase, no one will be able to claim a monopoly to make, use, or sell this enzyme. Moreover, the December 7 ruling sets the stage for further rulings by Judge Walker of unenforceability of related patents, including those covering the recombinant Taq gene, the use of thermostable enzymes in PCR, and the PCR method itself. Judge Walker was to begin considering those arguments at a hearing on February 24 and will likely make a decision in the next few months. Even if Judge Walker declines to rule in the Roche/Promega litigation that some or all patents related to the '818 patent are unenforceable, another court in a different lawsuit could find those patents unenforceable based on the December 7 ruling. If Cetus and Roche committed one or more of the same fraudulent acts during prosecution of these other patents, they too will be held unenforceable because of fraud. For example, the same arguments concerning the fidelity and template dependence of the prior art Taq DNA polymerase purified and reported by Kaledin et al. [1], which Judge Walker declared were fraudulent in the '818 patent, were also used to obtain the '188 patent on the use of thermostable enzymes in PCR. Consequently, we believe Roche may not continue to enforce the '188 patent or other patents containing similar fraudulent statements. We believe Roche also must reconsider its current PCR licensing strategy, as it links patents in an impermissible manner. As we understand the law of patent misuse, it is illegal for a method patent owner (such as Roche, which owns the PCR and '188 patents) to require the purchase of a particular product (such as recombinant Taq) when alternative unpatented products (in this case, native Taq) are suitable for performing the method. Similarly, the method patent holder may not charge a higher price for a license to the method patent based on purchase of a product covered by an unenforceable patent or use that product to convey a license to another method patent that itself may be unenforceable. Linking in this way simply creates a barrier to purchasing that unpatented product. It also would impermissibly extend the patent monopoly. In this case, a differential royalty for diagnostic use of PCR based on the source of Taq purchased by an institution would appear to be illegal. Promega recommends that each institution obtain legal advice specific to its situation and licensing agreement with Roche. The text of the court's decision regarding the '818 patent is posted on the Promega website at http://www. promega.com under "Patent News." This site will also include the latest news regarding Judge Walker's decisions over the next few months regarding appropriate remedies for Roehe's fraud.