CRISPR Patent Dispute: Lessons from the past and an eye to the future

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1 CRISPR Patent Dispute: Lessons from the past and an eye to the future ASAWARI CHURI Trainee Patent Attorney, Pinsent Masons, London Innovation takes place, to a large extent, by an incremental process where new inventions are evolutionary improvements of a pre-existing technology. Occasionally, however, a new disruptive technology appears that changes the field forever. The world of biotechnology is currently experiencing such an upheaval brought about by a disruptor a new gene editing technology known as CRISPR. The enormous potential of the technology appears to be matched by the controversy surrounding the question of who owns it. At the root of the controversy are two warring groups, with each group seeking ownership of the patents covering CRISPR. This is not the first time an invention revolutionising genetics has caused such a furore in the patent world. Some have compared the impact CRISPR is making to the one made by PCR (polymerase chain reaction), another technology that similarly revolutionised biotechnology in the 1990s. This article attempts to give an overview of the patent dispute and to consider how it may play out in the future in light of the lessons from the past. CRISPR: The Technology Before CRISPR was developed, a number of gene editing technologies were available (based on zinc finger nucleases, transcription activator-like effector (TALE) nucleases and meganucleases). However, each of these techniques has CHURI : CRISPR PATENT DISPUTE: LESSONS FROM THE PAST AND AN EYE TO THE FUTURE : VOL 16 ISSUE 1 BSLR 5 several drawbacks, not least being the complexity and expense of designing these nucleases to target specific sites within the genome. CRISPR, on the other hand, is an almost universally applicable tool capable of being customised easily, quickly and economically. With different research groups working simultaneously to further characterise and refine CRISPR, it is no wonder that the groups are jockeying for control of the technology. The resulting dispute over ownership of the associated patents is currently under consideration in various courts and patent offices across the globe. CRISPR (clustered regularly interspaced short palindromic repeats) is a naturally occurring collection of short, repeating nucleotide sequences. These sequences are found in many bacterial genomes, where they are known to play a role in antiviral defence. The sequences are separated by spacer sequences which correspond to sequences found in various viral genomes. In bacteria, in response to a viral threat, the spacer sequences are transcribed to RNA. The RNA forms a RNA-protein complex with a bacterial enzyme known as Cas (CRISPR-associated). The entire CRISPR/Cas complex is frequently referred to as CRISPR and this is the convention followed in this article. Although there are many different types of Cas enzymes, most of our understanding of CRISPR is based on one specific Cas enzyme, Cas9, found in the organism Streptococcus pyogenes. The RNA in the CRISPR/Cas9 complex binds to the corresponding sequence in the invading viral genome. Once bound, the Cas enzyme cuts the DNA at that site and thus disables the virus. First discovered in the late 1980s by Japanese scientists, the potential to use CRISPR as a programmable gene editing tool was only realised around the start of the current decade. It was found that by changing the sequence of the RNA in the complex, the entire complex could be customised to target virtually any part of a genome containing a corresponding sequence. Although it is beyond the scope of the present article to assess the contribution of each scientist to the development of the technology, it is generally accepted that the first public disclosure of the CRISPR/Cas9 complex in targeted gene editing was made in a collaborative paper published by the University of California, University of Vienna and Umeå University, Sweden. 1 1) Jinek et al., Science 337, 17 August 2012.

2 6 VOL 16 ISSUE 1 BSLR : CHURI : CRISPR PATENT DISPUTE: LESSONS FROM THE PAST AND AN EYE TO THE FUTURE Although the older gene editing technologies can in theory do everything that CRISPR can, in practice this has not been found to be the case. The older techniques are expensive, complex, time-consuming (taking months if not years) and prone to repeated failure. On the other hand, CRISPR can be performed by someone with basic molecular biology skills (although a professional lab would still be required) and within a matter of days or weeks on a modest budget. Thanks to CRISPR, targeted gene editing has thus become an achievable reality. Already CRISPR has transformed a number of fields such as medicine and agriculture. It has made possible not only the treatment but also prevention of diseases caused by genetic aberrations. For example, it has shown promise in treating diseases such as sickle cell anaemia, Duchenne muscular dystrophy, haemophilia, β-thalassemia and cystic fibrosis. CRISPR has also opened up the field of genetic modification of plants and animals as never before. Agricultural giants such as DuPont and Monsanto are taking genetic engineering in crops to the next level with drought-tolerant and insect-resistant plants already in the pipeline. CRISPR has also found application in pest control. CRISPR has made possible the use of gene drive systems which can be used to spread specific genetic alterations through insect populations. Recent studies have demonstrated functional CRISPR-based gene drives in mosquitoes which have been designed to interfere with their ability to transmit diseases such as malaria. The potential applications, and the corresponding commercial value, of CRISPR are staggering, with market valuations estimating the technology in the billions. 2 Whoever owns the intellectual property underpinning CRISPR will be well placed to enjoy a substantial part of this lucrative market. The Patent Dispute Prior to publication of the Jinek paper (referenced above), the University of California (along with the University of Vienna and Umeå University) filed a patent application covering the technology and its use in gene editing. The applicants are collectively referred to here as UC. UC is the first party in the ongoing dispute over ownership of the technology. Soon after, the Broad Institute (partnered with MIT and Harvard) filed a series of patent applications covering the technology more narrowly, namely the application of the CRISPR/Cas9 complex in editing mammalian genomes. Further, in a strategic move, Broad paid an additional fee to have their applications fast tracked at the US Patent Office. This decision by Broad meant that its patents, although filed after the UC application, were granted first, while UC is still awaiting a decision on the fate of its application. The Broad Institute is the second party in the dispute. In many jurisdictions, it is a condition of grant that a patent application discloses the invention in sufficient detail so as to enable an appropriately skilled person to reproduce the invention without undue burden. Although the UC application shows that the CRISPR/Cas9 complex is capable of editing genes in prokaryotic (that is, bacterial) cells, it does not include data demonstrating use of the complex in eukaryotic cells. Such data are, however, included in the later-filed Broad application. Some believe these data are important, given the high degree of complexity of eukaryotic cells in comparison to prokaryotic cells. This is, however, by no means the majority opinion. On the one hand, it has been suggested that Jennifer Doudna and the other inventors in the earliest UC patent application created the recipe for the technology that Feng Zhang and the other inventors named in the Broad patents simply followed without any inventive input. On the other hand, it has been argued that the teaching in the UC application was more akin to an ancient alchemical recipe for making gold many had tried alternative approaches and failed, so why would this be any different? According to this point of view, surely the person who proves that the recipe actually works deserves the credit? Unsurprisingly, UC have taken the position that their patent application makes it obvious that the CRISPR/Cas9 complex would work in eukaryotic cells. Accordingly, the Broad patents should be invalidated as the techniques that they cover are not inventive in light of the disclosure made by UC in the Jinek paper. Broad has argued that the skilled person would not be able to make the invention work in eukaryotic cells simply by reading the UC patent application and therefore the UC application is insufficient and their own patents are not obvious. 2) van Erp et al., Current Opinion in Virology vol 12 (2015).

3 CHURI : CRISPR PATENT DISPUTE: LESSONS FROM THE PAST AND AN EYE TO THE FUTURE : VOL 16 ISSUE 1 BSLR 7 These arguments are being presented in patent offices in many jurisdictions including the United States and Europe. In the United States, both the Broad and UC patent applications were filed under the old US patent law which awarded patents under a first-to-invent system rather than a first-to-file system common in most other jurisdictions. (The US patent law adopted the first-to-file system in March 2013.) The US Patent and Trademark Office (USPTO) has awarded a number of patents to the Broad Institute. Challenges in respect of these have been brought by UC in a procedure known as interference proceedings which aim to determine who invented CRISPR first. Recently, Broad has succeeded in convincing the USPTO that CRISPR/Cas9 should not be compared with existing gene editing techniques such as zinc finger nucleases or TALE nucleases because, unlike CRISPR/Cas9 which is naturally active only in prokaryotes, the other two were known to be naturally active in eukaryotic systems. Instead, Broad argued, CRISPR/Cas9 should be compared with other purely prokaryotic-based regulatory systems such as riboswitches, ribozymes and Group II introns, none of which have been particularly successful in eukaryotic cells. If these have not worked in eukaryotes, why would the skilled person expect that CRISPR would? In Europe, the European Patent Office (EPO) has granted a number of key CRISPR patents to the Broad Institute. A number of parties (including UC) have opposed the Broad patents, so it remains to be seen how many survive unscathed. Recently, the EPO issued a communication informing its intention to grant a patent to UC. It is likely that, once granted, this patent will also be opposed by other parties. Other UC applications are still undergoing examination. Lessons from History Back in the 1990s, the patent dispute surrounding the PCR technology made quite an impact on the field of biotechnology. PCR is a technique that allows exponential amplification of any DNA segment. In addition to amplification, PCR allows for rapid identification of the source of the DNA. Accordingly, it is routinely used in the identification of microorganisms involved in infection or contamination. Because it can be used to analyse extremely small amounts of genetic material, PCR has also been used in forensic science. It has now become one of the most commonly used techniques in molecular biology. Prior to the invention of PCR, amplification of DNA was a painstaking laborious, inefficient and expensive process. The technique was devised in 1985 by Kary Mullis (who was awarded the Nobel Prize for his efforts) while employed by Cetus Corporation and further refined over the years. The subsequent discovery of the enzyme Taq polymerase automated the process, simplifying it even further. Simply to illustrate the difference PCR made to the DNA amplification process, imagine having to manually trawl through a 1000-page book to locate a single word and compare it with the ease with which the same task can be performed using a word processor. Unsurprisingly, PCR became an instant success with researchers and is estimated to have generated revenues of over US$2 billion for various rights holders by Rights to the invention were the subject of a bitter patent dispute known as the PCR/Taq war. So are there any lessons that we can learn from the PCR/Taq patent war? If so, can any of them be applied to the current CRISPR dispute? The higher the stakes, the uglier the fight Like the current patent dispute surrounding CRISPR, PCR/Taq patent wars lasted years. The key patents covering the technology, first owned by Cetus Corporation, were taken over by Roche. Challenges to the patents were filed by Promega who in some instances were successful in getting certain patents revoked. However, the patent situation quickly became extremely complex with higher courts reversing some of those decisions on appeal. Promega s key attack was based on the premise that the patents were invalid because they were obtained by fraud. They argued, successfully in some instances, that the inventors were dishonest about the data they generated in support of the patent applications. We are seeing similar allegations of impropriety made against both parties in the CRISPR dispute. The early stages of development of the technology were amicable enough with both groups collaborating to further research in the field. In 3) Fore et al., Journal of Biomedical Discovery and Collaboration 1:7 (2006).

4 8 VOL 16 ISSUE 1 BSLR : CHURI : CRISPR PATENT DISPUTE: LESSONS FROM THE PAST AND AN EYE TO THE FUTURE fact, Zhang and Doudna were both founding members of Editas, the company spun out by the Broad Institute to commercialise the technology. However, it has been reported 4 that once the Broad Institute patents were granted, Doudna left the company and established Caribou Biosciences to exploit the technology. That was the end of collaboration and the beginning of a much more contentious relationship between the two groups. In support of their challenge to the Broad patents at the USPTO, UC have filed an from an ex-member of the Broad lab which, UC allege, confirms that the Broad inventors only managed to make the invention work once they had read the Jinek paper (which, as mentioned above, was authored by researchers from UC). Meanwhile, the director of Broad Institute published a controversial opinion piece on the history of CRISPR 5 in which he has arguably downplayed Jennifer Doudna s contribution to the development of CRISPR. It is unusual to see academic institutions engage in such conduct but given the high stakes involved, we may see still more. Development of truly revolutionary technology does not appear to be hampered by an uncertain patent landscape The convenience afforded by PCR meant that both academic and industry researchers were extremely keen to use it. Although Roche initially considered suing academic researchers using the technology without a licence, they later reversed the stance and offered reasonable licences for non-commercial use. This allowed research and development of the technology to continue within academic groups while Roche and Promega battled over the patents. While PCR was, and still is, primarily a research tool, CRISPR has many direct commercial applications. This may be the reason why, despite the considerable uncertainty regarding the ownership of the CRISPR technology, a number of highprofile companies have thrown their weight behind UC or the Broad Institute. Alliances have formed early on with Caribou Biosciences having secured agreements with Novartis and DuPont, and the Broad Institute with GE Healthcare and Monsanto, to name a few. A number of companies have licensing deals with some of the other key players in the field. For example, CRISPR Therapeutics, founded by Emmanuel Charpentier, another inventor named in the UC patent applications, has signed agreements with Bayer and Vertex Pharmaceuticals. R&D is therefore continuing regardless of the patent situation. Reach-through royalties could be of concern Cetus Corporation considered seeking reach-through royalties, which meant that licensees of PCR would have had to pay Cetus royalties on any marketable product created using PCR. After much criticism from industry, Roche (who by then had acquired the technology) offered more reasonable licensing terms. Some of the CRISPR patents with more generalised claims could potentially raise similar concerns. As was seen in the case of PCR, it is unlikely that third parties would be willing to accept licensing terms that are deemed harsh or unfair. It may all end in settlement In 2005 Roche and Promega finally decided to end the PCR/Taq dispute by way of a confidential settlement of all cases worldwide. Given the number of high-profile backers that each team in the CRISPR dispute has managed to secure, both sides appear to be financially well-equipped to pursue the dispute for years. However, no one likes uncertainty and this is especially true in a commercial context. It would therefore not be surprising if the two teams resolved their differences out of court (and most likely out of the public eye). Looking Forward As mentioned above, a settlement between the parties could end the dispute quickly and with certainty for both parties. However, in the event that neither party is amenable to settlement, a number of outcomes are possible. Here, we consider some of the possibilities. 4) 5) Lander, Cell 164, 14 January 2016.

5 CHURI : CRISPR PATENT DISPUTE: LESSONS FROM THE PAST AND AN EYE TO THE FUTURE : VOL 16 ISSUE 1 BSLR 9 Success may come at a price The actions we have seen to date demonstrate that each party is willing to embark upon high-stakes patent disputes internationally. One potential outcome is that each party succeeds in invalidating (or at least casting a considerable shadow over the validity of) the other s key patents relating to the CRISPR technology. Such mutually assured destruction of the parties respective patent portfolios would mean that the key players will lose control of which companies can enter the market. While the removal of patent shackles would be welcomed by some, for example those who wish to have unfettered access to the technology, for those companies (and their investors) affiliated with Broad or UC that have spent significant time and effort developing the technology, such an outcome would be most unwelcome. Further, the loss of patent protection could make companies less inclined to invest in developing CRISPR further and thus a loss of patent protection could mean that the full potential of the technology may remain untapped. Future discoveries may render the dispute moot The technology is still in its infancy and continues to be refined and improved. It is possible that future discoveries or improvements could supersede the CRISPR/Cas9 complex in utility, thereby making the patents in dispute redundant. Some of the older key patents being contested are, in some aspects, fairly narrow in scope most appear to cover CRISPR/Cas9 specifically. If someone manages to work around the patents, for example by using a Cas enzyme other than Cas9, then these patents will not pose a barrier to their activities. Recently, a number of new Cas enzymes have been identified (for example, Cpf1). The use of such enzymes would fall outside the scope of some of the older patents. Of course, these new enzymes will undoubtedly be protected by new patents, but those patents could then themselves be the subject of further disputes. CRISPR may itself be replaced by alternative genome editing technologies. In this regard, NgAgo, a DNA-guided endonuclease, has shown some promise and is under investigation. There may not be one clear winner Due to differences in patent laws across the globe, different parties may end up with patents in different jurisdictions. For instance, although the majority of the UC patent applications are still undergoing examination in Europe, two of the key patents have already been granted in the United Kingdom. On the other hand, as mentioned earlier, Broad has secured a number of patents in Europe. China, which is a serious contender in the race to further develop CRISPR, has not granted patents to either of the two parties. However, patents covering CRISPR applications have been awarded to a number of Chinese applicants. Patent applications filed by other research groups may also be relevant. Less high-profile applications include those filed by Toolgen 6 and Sigma Aldrich, 7 both of which describe the use of CRISPR in editing mammalian cells and were filed before the Broad patents (but after the UC patents). In the United States, one of the Toolgen patent applications was rejected on the basis that it failed to describe the invention. However, equivalent applications in Korea and Australia have been granted. Thus, this chequered patent landscape could lead to different groups having monopoly positions in different parts of the world. This could necessitate further collaborations if access to different markets is sought. Strings attached? Although it appears that the dispute over ownership of CRISPR may continue for some time, investment in, and results derived from, the technology indicate that the tremendous potential of the technology is no longer in question. However, ethical issues surrounding certain applications such as making inheritable modifications to DNA and the creation of novel life forms with specific traits have not yet been fully explored. 6) US 61/717324, 23 October ) US 61/734256, 6 December 2012.

6 10 VOL 16 ISSUE 1 BSLR : CHURI : CRISPR PATENT DISPUTE: LESSONS FROM THE PAST AND AN EYE TO THE FUTURE As with any powerful technology, regulatory oversight is likely to be necessary for CRISPR. The ease with which the technology can be employed may make its control more challenging than usual. Ultimately, any victor in the patent disputes may find itself having to protect the ethical interests in the technology and essentially be obliged to act as a gatekeeper of its application. Thus, despite the obvious commercial attraction of prevailing in the ongoing patent battles, the requirements of having to play such a role are likely to be unattractive to companies engaged in the development of CRISPR tools, as this could introduce a legal and reputational risk to those entities. Licensing could be complicated Although both UC and Broad have licensing agreements in place with third parties, there are a number of issues to consider in this aspect. Most of the Broad and UC patents and patent applications have multiple applicants. Due to differences in the rights of co-applicants/co-owners in different territories, this could add an additional layer of complexity to an already complicated situation. For example, under US patent law, each patent owner has the right to grant licences without the consent of co-owners. In contrast, under UK law, a co-owner must seek consent of the other co-owners in order to do so. Such a situation could necessitate the formulation of bespoke licensing strategies in different territories. As mentioned earlier, reach-through royalties could be of concern. Another area of contention may be the issue of reach-through claims (that is, claims to future inventions based on currently disclosed inventions). The inclusion of such claims in the patents could mean that third parties may be forced to obtain licences to patents they had not previously considered relevant. One potential outcome, which could simplify licensing while respecting the patent rights of multiple parties, would be the formation of a patent pool where patent holders come to an agreement to license one or more of their patents to one another or to third parties through a centralised licensing mechanism. Such patent pools, which are common in the technology sector, could make access to key patents easier. Conclusion Currently, there is no end in sight to the dispute regarding the ownership and validity of the key patents protecting CRISPR. Given that the major parties appear to be well funded, and considering the number of parties who have or are likely to stake a claim to the CRISPR technology, it appears likely that this battle will rage on for some time. While Broad has scored some early wins as it has obtained grant of key patents in the United States and Europe, the situation could change in future if UC (or any of the other parties with relevant IP in the area) succeed in securing robust patent coverage of the CRISPR technology and/or if the Broad patents are successfully invalidated. We have seen from the PCR/Taq patent war that such complex and high-value disputes can be resolved via settlement, and this would be attractive to the parties for the numerous reasons discussed in this article. However, unlike the PCR/Taq dispute, there are many more actual and potential challengers who could stake a claim to CRISPR. Any settlement that would conclusively draw a line under the dispute is unlikely to be straightforward and may take many years to conclude. Thus, in the short term, there appears to be little prospect of any ceasefire, let alone a truce in the CRISPR patent war, which continues to rumble on.