The 2020 European financial services outlook
For all financial services practitioners, 2020 will be a year of dynamic developments.
Huge advances are being made in the livestock breeding and production sector as a result of the leaps and bounds being made in the field of genomics. Innovation in the genomics field is enabling stakeholders in the livestock breeding sector to more precisely and quickly breed (and also genetically engineer) animals with desired characteristics in relation to traits such as mature weight, growth rate, carcass quality, calving ease and milk yield and composition. These advances parallel what is happening in the human medical field in areas such as precision medicine.
In the livestock breeding sector, we have seen the sector move from traditional breeding programs using progeny testing to determine the estimated breeding values to genomic selection and gene editing. These advances mean that breeding programs which previously took a number of years to yield results have been transformed by these new technologies resulting in increased and more rapid returns in the livestock sector. For example, Meat & Livestock Australia estimates that its sheep and beef genetics and genomics program has resulted in economic benefits to the value of A$2.88 billion for the Australian sheep meat industry and A$2.3 billion for the southern beef industry between 2001/2002 and 2011/2012.
Genomic innovation in the livestock sector is being conducted both separately and collaboratively by private companies engaged in the livestock breeding sector, livestock industry associations, universities, private research institutes and government agencies. An example of the collaborative approach is Livestock Gentec, based at the University of Alberta, Canada. The stated aim of Livestock Gentec is to bring the commercial benefits of genomics to the Canadian livestock industry. We at Norton Rose Fulbright have a particular interest in Livestock Gentec as one of Livestock Gentec’s current research programs is exploring the different applications of genomics in particular in relation to issues such as the management of in-breeding through genomic mate allocation, using a breed of cows, the Hays Converter, the founding herd having been gifted to the University of Alberta by former Canadian Senator and current Norton Rose Fulbright Canada lawyer, Dan Hays.
What is abundantly clear is that players in the livestock breeding sector are making significant investments in genomic innovation with the aim of reaping even larger returns from their breeding programs. So, how are stakeholders protecting their investment in genomic innovation? What legal issues do you need to be alive to? Here we focus on how intellectual property (IP) can be and is being used to protect stakeholders’ investments and also achieve a return on these investments. We do this by considering the following three interrelated and key issues we believe you need to be alive to when considering how to implement an IP strategy
But above all, we urge you to think globally when developing your IP strategy. And, by that we mean to develop an IP strategy that will protect your genomic innovation in all your major markets.
A breeding program can be broken down into a number of components. These components include the methods and processes utilized in the program, the genomic material produced or applied in the program and the progeny resulting from the program.
It is important to consider what will be your IP strategy for each of these components, both individually and holistically. Developing an IP strategy for each component as well as the program as whole will ensure that your IP provides you with the maximum protection as well as placing you in the best position possible to monetize and so gain a return on your investment in your breeding program.
The question of what aspects of your breeding program you should seek to cover in your IP strategy cannot be considered in a vacuum. It must be considered in the context of whether, and if so, how, IP can be used to protect each of these components and also be used to generate revenue.
This leads us to the second question of what form of IP should be deployed in relation to each component of the breeding program as well as the breeding program as a whole. IP comes in a number of different forms, including patents, confidential information and copyright, each with their pros and cons. For example, using a confidential information strategy means you seek to protect your genomic innovation through keeping it “secret”. However, using a confidential information strategy does not prevent someone else from later and independently developing the same genomic innovation. On the other hand, a patenting strategy gives you a statutory monopoly over your genomic innovation for the patent term. So you can then rely on your patent rights to prevent others using the genomic innovation the subject of your patent.
A foundation consideration here is which forms of IP are available to you, and this may differ from country to country – so think globally. For example, the position on the patentability of biological materials and methods utilizing these materials differs from country to country, so it is vital that you are alive to this issue.
In Australia, the High Court (which is the equivalent of the US Supreme Court) has ruled that genes per se are not patentable in the Australian Myriad case ( HCA 35). The Myriad litigation played out globally. In Australia, the High Court was asked to consider whether claims directed to the isolated nucleic acid sequences coding for the BRCA1 mutant polypeptide were patentable. The High Court unanimously held that such claims were not patentable. The High Court found that, despite the formulation of the claimed invention as a class of product, in substance the claims were to information embodied in arrangements of nucleotides. The information was not made by human action, it was discerned. An “invention” as recognized by the Australian Patents Act is something which involves “making”. It must be brought about by human action. The requirement in each claim that the sequence in the isolate bear specified mutations or polymorphisms was a characteristic of the human being from whom the nucleic acid was isolated. According to the High Court, it had nothing to do with the person who isolated the nucleic acid bearing the mutant sequence.
The High Court, however, left open the question of whether other types of genomic inventions, such as methods which use or apply genomic material, are patentable. This question has very recently been answered in the livestock breeding context in the Australian Federal Court decision of Meat & Livestock Australia Limited v Cargill  FCA 51. Here, the Court held patent claims directed to a specified method of identifying a bovine trait from a nucleic acid sample are patentable.
The Australian position on the patentability of biological materials and methods utilizing these materials is in contrast to the US position on these issues. In the field of human medical diagnostics, US Courts have considered the patentability of biological materials and methods utilizing these materials in a series of cases including Mayo Collaborative Services v Prometheus Laboratories, Inc., 132 S.Ct. 1289 (2012), Association for Molecular Pathology v Myriad Genetics, Inc., 133 S.Ct. 2107, (2013) and Ariosa Diagnostics, Inc. v Sequenom, Inc., 788 F.3d 1371 (Fed. Cir. 2015). The net outcome of these cases is that in the US both biological materials as well as methods utilising biological materials or biological markers are not patentable.
Who will own the IP? As we have already mentioned, genomic innovation in the livestock sector is being conducted both separately and collaboratively by private companies engaged in the livestock breeding sector, livestock industry associations, universities, private research institutes and government agencies.
So, who will own the IP? It is important to get this right from the outset, so that it is clear who owns the IP in Norton Rose Fulbright – April 2018 09 Genomic innovation in livestock breeding – what is your intellectual property strategy? the genomic innovation, and most importantly who has the right to use and financially benefit from the use of that IP.
The recent US case of North American Deer Registry Inc v DNA Solutions Inc (No. 4:2017cv00062 – Document 43 (E.D. Tex. 2017)) illustrates clearly the value in genomic innovation and the critical importance of who owns the IP in the information which forms the basis of that genomic innovation, and so has the right to use that information for financial benefit. In this case, the Court noted that “[t]he deer breeding industry is a potentially lucrative industry with single straws of buck semen selling for US$5,000 to US$20,000 on average, and ranging all the way up to US$1 million to purchase the entire buck”.
The case involved the North American Deer Registry (NADR) which had hired DNA Solutions Inc (DNAS) to host its registry. Under the contract
Following termination of the contract, however, DNAS advertised that it had a database of over 230,000 deer genetic profiles and could offer comparisons and lineages for particular types of deer in North America. DNAS argued that it was permitted to use this information as it owned the database. The Court, however, disagreed, finding that the definition of NADR Information in the contract meant that DNAS was not allowed to keep any of the DNArelated information that had been presented to the Court. The Court further found that NADR’s member list, deer genetic information and deer lineages were its trade secrets, and that NADR had taken significant steps to keep its biological materials, genetic information, genotype analysis data and membership directory secret. These steps were “memorialized” in their successive contracts with DNAS.
NADR was therefore able to obtain a preliminary injunction to prevent DNAS misusing the confidential information obtained by DNAS pursuant to their contract with NADR, pending the outcome of a final arbitration between the parties
Stakeholders in the livestock breeding sector are using, and should be using, IP to protect and generate revenue from their investment in genomic innovation. This article has considered three issues which need to be at the forefront of your thinking when planning your IP strategy. In doing so, you will be able to maximize the protection afforded by your IP strategy as well as the revenue that can be generated.
The authors would like to acknowledge the invaluable contribution of Anthony Brzoska, Norton Rose Fulbright Australia clerk, who conducted background research on the science underlying the legal issues discussed in this article.
For all financial services practitioners, 2020 will be a year of dynamic developments.
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