A California biotechnology firm has asked the International Trade Commission to ban imports of one of the first and most promising products of genetic engineering on the grounds that a Japanese rival stole its patent.
The case, the first trade complaint involving the growing new field of biotechnology to come before the ITC, may play a significant role in determining the amount of protection U.S. trade laws will give American companies that develop pioneering techniques in genetic engineering.
Chugai Pharmaceutical Co., the Japanese company named in the suit, yesterday denied Amgen Inc.'s charges and asked the ITC for a summary determination that would stop the investigation because Chugai was not violating any of the California company's patents.
In the complaint, Amgen, one of the leaders in U.S. biotechnology research, charged that Chugai pirated its patented techniques to produce a genetically engineered hormone used to treat anemia. The product, known as erythropoietin but commonly referred to as EPO, is in the final stages of approval by the Food and Drug Administration and is expected to have a potential of at least $1 billion a year in U.S. sales.
Amgen argued that it needs the ITC ban on imports of EPO to protect the fruits of its research from what it termed "a Japanese effort to penetrate and ultimately dominate the U.S. biotechnology industry."
The ITC's decision to review the case could provide an outlet for the growing concerns among American trade specialists who saw the U.S. lead in semiconductors eroded by Japanese rivals that capitalized on research done by U.S. companies.
But it has raised questions about U.S. trade policy and what special protections are required to prevent the piracy of new technologies. The ITC has never before accepted jurisdiction in a patent dispute of this nature, and agreed to investigate the complaint on a 3 to 3 vote after staff attorneys split over whether the type of patent Amgen holds is covered by U.S. trade law. The U.S. Patent Office also is split over this question.
The problem is that Amgen's patent does not actually cover the product EPO or the process used to manufacture the hormone. Instead, as is common in the biotechnology field, it covers what are known as intermediates, or genetic tools used in the hormone's manufacture.
"We don't bring into the country the stuff that their patent is on and we don't use a process that they have any patent rights to. So they don't have a case," said John Glazier, an attorney for Dorsey & Whitney, the law firm representing Chugai, echoing the argument made by some ITC lawyers.
But Amgen's lawyers argue for an interpretation of trade law that would treat their patent as the equivalent of a process patent in more traditional manufacturing. In this they reflected a growing consensus in the biotechnology community, which maintains that its new manufacturing practices require special interpretations of existing protections against intellectual piracy.
For example, many of the products of genetic engineering, such as EPO, are proteins that occur naturally in the human body and thus cannot be patented. Instead, biotechnology firms have found it necessary to rely on patents covering the substances and techniques used in manufacturing, which historically have not been given the same degree of legal protection as the end product itself.
For some observers, the ITC decision to investigate the Amgen complaint represents a victory for the biotechnology community. "There is a trend in the commission to read these statutes a little more broadly in light of the trade deficit, pressure from Congress and the feeling that the U.S. is being victimized by foreign competitors," said Donald Dinan, a trade lawyer with Adduci, Dinan, Mastriani, Meeks and Schill in Washington.
Amgen's complaint to the ITC could lead under U.S. trade laws to a ban on imports of EPO. Amgen said it filed the complaint before either it or Chugai had FDA permission to market the product as a drug because "it would be too late" if it waits for the Japanese firm to begin selling in this country.
By that time, Amgen argued in its complaint, the effects of Chugai's actions "will be irreparable and Amgen will be precluded from reaping the benefit to which it is rightfully entitled."
Amgen's legal battles against its competitors are not confined to the ITC. Last fall when the company received a patent on EPO, it immediately filed a patent infringement suit in federal court against Chugai, and its U.S. research and development partner, Genetics Institute Inc. of Cambridge, Mass. That case would allow Amgen to collect damages from the two companies, but could not stop imports of EPO from Japan.