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In a blow to Europe's biotechnology industry, the European Commission said
it will allow countries to adopt different approaches in patenting
biotech-drug innovations instead of insisting on a single European standard,
July 2005 by Raoul Wootliff.

A report by the European Union's executive arm focused particularly on
stem-cell research, which the commission said was so controversial and
fast-moving that it would allow EU member countries to set their own rules
on what types of human-genetic inventions can be protected. But the fact
that the commission is allowing different interpretations raised concern in
the broader biotech industry.

Europe's biotech industry has argued a single standard is necessary to avoid
confusion that has been hindering progress in research. "The huge contrast
in the systems has created a sense of uncertainty and uncertainty kills this
industry," said Adeline Farrelly, a spokesperson for EuropaBio, the European
Association for Bioindustries.

Biotech is a key growth industry, with revenue increasing almost 20% a year,
but European companies haven't benefited from the growth as much as U.S.
rivals, industry experts say. In 2004, U.S. biotech firms received $16.9
billion (14 billion euros) in funding compared with only $3.4 billion in
Europe, according to accountants Ernst & Young.

The report follows a vote earlier this month by the European Parliament that
overwhelmingly rejected a proposed commission law creating a unified way of
patenting software across the EU. That vote effectively killed an ambitious
EU project and left companies uncertain about legal protection for their
innovations. The commission, responsible for proposing laws, said then it
wouldn't reintroduce any Europe-wide legislation and instead would allow the
present system of 25 national laws to remain in place.

In contrast, a single law giving wide scope for patenting biotech was
approved in 1998. The problem has been enforcing it. In December 2003, the
commission filed suit at the Luxembourg-based European Court of Justice
against eight countries for not adopting the legislation, saying the failure
"is considerably hampering the development of the biotech industry in
Europe."

The report yesterday said the science has changed in the seven years since
the biotech law was enacted, justifying additional restrictions. "The field
of biotechnology research is rapidly developing," Internal Market
Commissioner Charlie McCreevy said in a statement. "It is important the EU
continues to monitor developments in patent law in this complex and
sensitive area."

While the law relates to all patents in the field of biotechnology and
genetic engineering, it is embryonic-stem-cell research that has caused the
most controversy.

Some EU member countries have widely different policies toward stem-cell
research. Staunchly Catholic Ireland, Italy and Poland have banned stem-cell
research partly because of religious beliefs that harvesting stem cells,
which destroys human embryos, is equivalent to killing. But Belgium, Sweden
and the U.K. allow most kinds of stem-cell research, and in November, voters
in Switzerland allowed embryo research after the government argued the
country needed to keep pace with rival centers like the U.K. Proponents
believe embryonic stem cells could help repair crippling spinal-cord
injuries and treat an array of degenerative diseases such as Parkinson's.

The report says countries aren't obliged to allow some types of stem-cell
innovations to be patented. It focuses particularly on cells that have the
potential to develop into a human embryo, saying they "should not be
patentable on grounds of human dignity." In practice, for example, the
report could give member states the choice whether to allow inventions
derived from a cloned cell to be patented.

Under the 1998 law, an inventor is allowed to claim a patent on all possible
future uses of a particular gene sequence. But France and Germany say the
patents on any human gene should be good for only a single type of use. The
commission report says this restrictive approach is justified because the
material in question comes from the human body.

After the release of the report, some members of the European Parliament
said they believe the commission must introduce a new biotech-patent law. A
commission spokesman said that while the commission hasn't yet decided how
to proceed, he doubted agreement could be found on a single European-wide
standard. "We must take a careful approach in this area," said spokesman
Oliver Drewes. "We are taking a minimalistic approach."

[online.wsj.com]

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