Brussels, 10 th October 2002

All Member States must fully and swiftly implement the 1998 Directive on the legal protection of biotechnological inventions (Directive ,see ) or Europe will fall behind its competitors in this crucial sector, damaging its overall efforts to become the most competitive economy in the world. That is the main conclusion of the European Commission's first report on the implementation of the Directive. The report also addresses key provisions of the Directive, such as the potential patenting of plants and animals and the patenting of elements isolated from the human body or otherwise produced, including stem cells. The Commission will set up a group of experts in economics, law and natural sciences to examine controversial issues linked to biotechnology patenting and to help it prepare future annual reports. The report is in line with the Commission's Communication of 23 January 2002 (see ) "Life Sciences and Biotechnology - A strategy for Europe" which aims to promote biotechnology within a flexible regulatory framework and ensure consistency across policies, sectors and biotech stakeholders.

Internal Market Commissioner Frits Bolkestein said: "A clear and equitable patent regime applied consistently across the EU is crucial if we are to exploit fully the medical, environmental and economic potential of biotechnology in line with high ethical standards. Unless the 1998 Directive is properly implemented Europe's biotech sector will be working with one hand tied behind its back and will fall further and further behind. Of course, biotechnology is one of the fastest changing sectors there is and regulation needs to keep up. That's why we need to continue to revisit complex issues like stem cell patenting in future reports."

"Science and law influence each other," said Research Commissioner Philippe Busquin. "Patent law has a direct impact on research and innovation - the progress of research has an impact on patent law. There is a need for stakeholders to explore issues of a scientific and legal nature in the context of the Directive and I am sure that the consultation group of independent experts to be launched shortly, will help the Commission in this effort."

The Commission's report is the first in a series of annual Commission reports to the European Parliament and the Council, as required by article 16c of the Directive. It looks at the development and implications of patent law in the field of biotechnology and genetic engineering, and elaborates on some of the controversial issues currently under discussion at international, European and national level.

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In the conclusion, it identifies two areas of particular interest for more detailed analysis:

• the scope to be given to patents related to sequences or partial-sequences of genes isolated from the human body;

• the potential patenting of Human Stem Cells and cells lines obtained from them.

These two topics will be studied and analysed by a group of independent experts (specialising in the fields of economics, law and natural sciences), beginning in November 2002. The conclusions will be presented to the Commission for the preparation of the upcoming 2003 progress report. The purpose of the group is not to duplicate work already done by different bodies under Commission auspices in particular by the European Group on Ethics which delivered an opinion on ethical aspects of patenting inventions involving human stem cells. The group will only focus on the scientific, legal and economic aspects. The group will also help the Commission to identify priority topics to be covered in future reports. The mix of expertise within the group will ensure that all topics are dealt with, taking into account different policy aspects and the interests of all stakeholders.

Background

Directive was adopted after a 10-year debate in both the Council and the European Parliament.

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Given the considerable amount of high-risk investment that is often required in biotechnology, particularly genetic engineering, adequate patent protection is essential to encourage the investment required to create jobs and maintain the European Union's competitiveness in this crucial field.

However, the Directive explicitly excludes from patentability discoveries which extend knowledge without applying it for a new purpose. It is therefore not possible under the Directive to patent, for example, DNA sequences themselves, because they are not inventions but discoveries i.e. they existed already, discovering them extends knowledge but that knowledge has thereafter to be applied to be technically useful. The Directive follows the principle that in the biotechnology field as in others, patents can be obtained only for inventions : hence processes or products using DNA sequences can be patented if they satisfy the criteria of novelty, inventiveness and industrial applicability

The Directive also excludes from patenting on ethical grounds certain applications such as processes for cloning human beings or modifying their genetic identity, the use of human embryos for industrial purposes and processes for modifying the genetic identity of animals which may cause them suffering without substantial medical benefits.

Life sciences and biotechnology offer considerable potential in many areas, especially health care, agriculture and environmental protection.

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By 2005 the European biotechnology market could be worth over €100 billion. By 2010, global markets, including sectors where life sciences and biotechnology constitute a major portion of new technology applied, could amount to over €2,000 billion, excluding agriculture.

The full text of the Commission's report can be found at:

arket/en/indprop/invent/index.htm

and the full text of Directive EC 98/44 on the legal protection of biotechnological inventions at:

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DN: IP/02/1448 Date: 10/10/2002