Last week's landmark Supreme Court decision that permits scientists to patent new life forms created in the laboratory probably will give a psychological boost to the infant genetic engineering industry, but otherwise will have little effect on developments in the fast-growing, high technology field.
"This industry is where the semi-conductor industry was 25 years ago," said Robert F. Johnston, chairman of the Bethesda-based Genex Corp., one of a handful of small, private technology companies specializing in genetic engineering.
Patents were of little relevance to the semi-conductor industry, he said, because technology changed so fast that the proprietary advantages a patent grants seldom could be enjoyed by the companies.
Nevertheless, experts agree, the private companies like Genex, as well as the giant companies like DuPont and G.D. Searle, that do genetic engineering (recombinant DNA) research will file many patent claims in the hopes of obtaining a patent granting them some absolute advantage that will have great monetary rewards.
"One thing is sure: our legal fees will be going up," said Genex's Johnston.
Industry sources estimate that between 100 and 200 patent applications have been filed by companies engaged in genetic engineering -- which tinkers with bacterial genes to make those bacteria produce what scientists want them to such as insulin or human Interferon, the ani-viral substance found in human beings that holds promise in fighting some forms of cancer.
Genetic engineering may well produce substances of use to the oil industry, the chemical industry and agriculture as well as the drug industry.
Although companies have spent millions of dollars in recombinant DNA research -- most of it in the last four or five years -- not a penny of profit has yet been earned by the industry because no commercial product has yet been made.
Several companies, however, are reportedly on the verge of making commercially viable products. Genetech Corp., of California, is reportedly near producing insulin in large quantities -- although it will need Food and Drug Administration approval, a process that will take many months. National Distillers is close to perfecting a technique for making alcohol without the need for fermentation, according to Thom Brown, director of research for the brokerage firm Butcher and Singer.
Calvert Crary, who specializes in analyzing litigation for the brokerage firm Bear, Stearns Inc., said the promise of obtaining patents may convince companies to boost their overall research budgets in the genetic engineering area, in hopes of latching onto a patent that will result in large monetary rewards.
But while Johnston of Genex agrees there will be many patent applications by his firm and others, the ease with which genetic engineers will be able to circumvent patents by using similar but not identical processes to make similar but not identical products and the speed with which the state of art will change makes it unlikely that patents will have much value.
"The Supreme Court decision is exciting on the surface. But while patents may be granted, their value willbe negligible," said Ron Nordman, who specializes in genetic engineering companies for Bache Halsey Stuart Shields Inc.
There is one glaring exception, however, Nordman said. Stanford University, where the pioneering work was done that led to the creation of the gene-splicing industry, (formally called recombinant DNA technology,) has applied for a patent over the whole process that permits scientists to tinker with bacterial genes and make those bacteria produce substances such as insulin or the anti-viral agent Interferon.
If Stanford were granted such a patent, he said, conceivably the whole gene-splicing industry would have to obtain licenses from the West Coast University. Stanford has said it has no intention of impeding the growth of the industry although it would enforce certain minimum safety conditions on its licenses.
Presently genetic engineering firms voluntarily observe guidelines set down by the National Institutes of Health.
Crary said the Supreme Court decision does not answer many questions about what new life forms are entitled to be patented.
While the court decision has scientists and firms in the so-called genetic engineering industry buzzing, the decision did not concern a case involving recombinant DNA -- deoxyribonucleic acid, the protein that carries genetic information -- technology. The General Electric Co. scientist that created a new form of oil-eating bacteria from four different bacterial strains, used a technique akin to plant hybridization.
Many of the products from recombinant DNA technology are already patentable anyway. Interferon, for example, is an organic compound and organic compounds are eligible for patent protection.