Patents are usually framed as economic incentives for innovation. The narrative employed by both courts and legal scholars is that researchers and research institutions seek out patents because of the right to exclude others from commercializing the innovation. But that’s not the only reason patents are sought out.  In this blog post, I discuss an additional driver for seeking out patents: power. Specifically, the power to govern other actors doing work related to a controversial new technology, by ensuring they are prohibited from behaving unethically. This is achieved through a practice called ethical licensing.[1]

Ethical Licensing Restrictions

Ethical licensing refers to the practice of a patent holder placing restrictions on what licensees can do with their patented invention, with such restrictions being based on a value judgment of certain uses of the invention being unethical. Ethical Licensing Restrictions (ELRs) come into existence when a patent holder decides to codify their value judgments about acceptable uses of technology by (i) publicly announcing their intention to impose restrictions, and (ii) including the restriction in licensing agreements.

Although ELRs are contractual provisions, their influence extends far beyond the parties to that contract: If a patent holder publicly communicates his or her intention to restrict licensing for an invention in accordance with a particular moral conviction about how said invention should be used, this can have a broader impact on the scientific community, and the markets based on that innovation. This impact is especially pronounced if the patent holder holds a patent over an invention that is a platform technology (a technological innovation forms the basis of subsequent research and development). In such cases, licensing the patented invention is necessary for any researcher doing work related to the platform technology, such that the ELRs effectively function as a form of private governance by the patent holder, that anyone and everyone engaged in work related to that technology is beholden to.

This blog post tells the story of when Duke University used ELRs in the 2000s and 2010s to prohibit predictive testing for Alzheimer’s disease. The case demonstrates how patent holders can exert a controlling influence on the market of a new technology.

The APOE Patents

Neurologist Alan Roses spearheaded a team at Duke University’s Alzheimer’s Disease Research Center that published original research in 1993 identifying an association between Apolipoprotein E-4 gene (APOE4) and the age of onset of common late-onset Alzheimer’s disease. The APOE4 gene is a variant of the APOE gene, which is now well established as having a strong correlation with late-onset Alzheimer’s disease.[2] Those carrying the APOE4 variant have a significantly increased probability of developing the disease, and it was Roses’ research that enabled the technology to genetic mutations to the APOE gene – including APOE4.

Athena Diagnostics has exclusive licenses to three APOE patents, all of which were granted to Duke University: U.S. 5508167, U.S. 5716828, and U.S. 6027896. Athena’s licensing agreement with Duke included three patents relating to APOE. By acquiring the APOE patents, Athena Diagnostics had an effective monopoly over Alzheimer’s genetic testing. Athena was fully aware that they had effective control over the market in this new technology, and set out to leverage it: By late 2005, the company reportedly claimed to be on the verge of offering ‘commercial availability of tests it says will provide the first effective diagnosis of Alzheimer’s disease’ – including testing for APOE4.[4]

Duke’s Licensing Restrictions

The events surrounding the APOE patents are unique in that we have rare insight into the motivations behind the inventor’s intentions in patenting their invention. Per Roses, in email correspondence with Skeehan et al., “the patents were sought out because of well known chicanery in publication and reviewing in academic [Alzheimer’s disease] research at the time.”.[3] Similar considerations of avoiding undesirable behavior by other researchers informed the licensing of the APOE patents. Roses (again in correspondence with Skeehan et al.) reveals that the APOE patents were licensed exclusively for the explicit purpose of ensuring that genetic testing technology was not used for predictive testing:

“Because APOE is neither necessary nor sufficient to diagnose AD, Dr Roses indicated that the intention was to use the patent license from Duke to ensure APOE testing would not be used as a presymptomatic screening test; it could only be used for patients already clinically diagnosed with dementia.”

Put differently, the APOE patents were licensed in a restrictive manner for the explicit purpose of allowing Roses and Duke to exert control over the use of this new technology platform. And in Roses’ (and Duke’s) decision-making, it was clear that they understood that including this restriction in its exclusive license with Athena would mean that other sublicensees would be similarly bound. In conclusion, Roses evidently influenced Duke to patent and license this technology to ensure that other researchers engaged in work with this technology platform would only do so in ways that aligned with Roses’ values. This effective control had implications for the market on Alzheimer’s testing. As Skeehan et al put it: “The role of patents in AD testing is thus clear in the sense that it has enabled Athena Diagnostics to consolidate the testing market in the United States.”[3] But these patents also played the additional role of suppressing another market: The market on Alzheimer’s predictive testing.

Enforcing the Ethical Licensing Restrictions

Duke has not been shy about using its power to shut down competition looking to enter into the market on Alzheimer’s predictive testing which it views to be acting contrary to their ELRs: A company called Smart Genetics, (then a sub-licensee of Athena) began offering predictive testing by way of Direct-to-Consumer (DTC) genetic risk assessments for Alzheimer’s in March of 2008. Roses learned about this offering by Smart Genetics and made sure Duke knew about it too: In communication with Duke, Roses expressed that ‘it was his understanding the license for the patents on which he is first inventor permitted APOE testing only for those with a physician’s certification of a diagnosis of dementia’.[3] Duke reportedly engaged in repeated correspondence with Smart Genetics, in which it made clear its views that the DTC testing for Alzheimer’s Smart Genetics was offering fell afoul of its ELRs on predictive testing. Smart Genetics stopped offering DTC testing, and by October of 2008 had ceased operations.

Duke continued to make clear that it is willing to enforce its rights against any firms offering commercial DTC genetic testing for Alzheimer’s in 2011 when DTC genomics company 23andMe announced it would be offering an Alzheimer’s risk report to its customers.[5] This move by 23andMe was met with some criticism, including from Duke and Roses. Reiterating his (and Duke’s) views that genetic testing for Alzheimer’s is only appropriate for diagnostic purposes, Roses had the following comment on 23andMe: “There is an active patent held by Duke University with an exclusive license to Athena — and well-defined rules to perform the test on a doctor’s signature certifying cognitive impairment.”[6] It seems not to be too presumptions to read Roses’ comments here as a warning to communicate to 23andMe and other would-be competitors that Duke’s patents gave it authority over the technology platform, and that those who did not follow the rules would have legal action taken against them.

Ultimately, developments in patent law litigation called the validity of Duke’s patents (and all patents relating to genetic testing) into question: In 2012, the Supreme Court in Mayo v. Prometheus Laboratories, Inc. ruled that in addition to natural phenomena being ineligible for patentability, methods based on natural phenomena (such as methods for testing for the presence of genes) may not be eligible for patentability. However, barring this development, it seems more than likely that Duke would have continued to use its patents to exert a governing influence over predictive testing for Alzheimer’s, and this would have made DTC testing for Alzheimer’s effectively prohibited.

Using Patents as Gavels

The story of Roses’ and Duke’s use of their patents is a story of patents being used as a gavel. Roses’ explicit motivation for seeking out the patents was to bring order to a research community he viewed as mired in misdeeds. And in Duke’s enforcement of the patents, we see their commitment to rooting out conduct they viewed as morally objectionable

What makes these actions interesting is how divorced they seem to be from the sort of economic considerations that the traditional ‘patents as an economic incentive’ narrative suggests. Duke did not enforce its patents against companies doing predictive testing (such as DTC tests) in the hopes of keeping the market to itself. Rather, it left money on the table by not going into predictive testing itself, and then also tried to stop others from doing so. All because of its view that the practice was ethically problematic.

Clearly, then, patents are a source of private power a power that can be used to exert a governing influence on the market on a nascent technology—including the power to impose their own moral values to shape what course innovation can take. Because patent holders are not subject to oversight, and are not accountable to the public, this power can be exercised in contingent and, (potentially) arbitrary ways. Should just one actor have all that power?

 

[1] Christi J. Guerrini et al., The Rise of the Ethical License, 35 Nat Biotechnol 22 (2017).

[2] Simon M. Laws et al., Expanding the Association between the APOE Gene and the Risk of Alzheimer’s Disease: Possible Roles for APOE Promoter Polymorphisms and Alterations in APOE Transcription, 84 Journal of Neurochemistry 1215, 1217 (2003)

[3] Katie Skeehan, Christopher Heaney & Robert Cook-Deegan, Impact of Gene Patents and Licensing Practices on Access to Genetic Testing for Alzheimer’s Disease, 12 Genet Med S71, 5 (2010).

[4] First test devised to diagnose Alzheimer’s, Tampa Bay Times, https://www.tampabay.com/archive/1996/03/27/first-test-devised-to-diagnose-alzheimer-s/

[5] Adding Alzheimer’s Risk Option, 23andMe Revives Questions on Utility of DTC Genomics, GenomeWeb (2011), https://www.genomeweb.com/diagnostics/adding-alzheimers-risk-option-23andme-revives-questions-utility-dtc-genomics (last visited Sep 17, 2024).

[6] Duke University Keeping an Eye on DTC Genomics Firms that Might be Infringing its APOE Patents, GenomeWeb (2011), https://www.genomeweb.com/diagnostics/duke-university-keeping-eye-dtc-genomics-firms-might-be-infringing-its-apoe-patents (last visited Mar 21, 2024).