For better or worse, it now appears the Crispr system is an entire generic 'immune system' with many variants found across many species. It is not a singular exotic find. Though the most used variant of Cas9 was first found in the bacteria that causes strep throat, we've since found similarly effective proteins in all sorts of other organisms. Just a couple of weeks ago a few more variants of the system were published after being found in archaea through a large bioinformatics search.[1]
Some of the new CasX, and CasY proteins [2] in these alternative crispr systems are actually even smaller than the original Cas9 proteins. I'm not sure how related it is, but the land grab associated with a broad patent has come with a large exploration effort to find alternatively systems that still provide similar utility.
As these kind of synthetic biology tools come online there definitely needs to be some reanalysis of how the tools should comport with the patent system, it being ultimately for the public good. As what's being built today in synthetic biology is very much the nascent infrastructure, the comparison to the rollout of the internet is not an unfair comparison.
I think what pisses people off is the preponderance of insiders. People who buy Editas before the court results go public, but have enough inside information to deduce Broad would win the ruling. If you think it's impossible for insiders to figure out how a court ruling will go based on private proceedings, you're forgetting that they discovered CRISPR in the first place and are way savvier overall.
It doesn't matter if Broad loses an appeal. It doesn't matter if there is even a single therapy ever developed with Cas9. The stock jumped 29%. Every insider made huge money off information that wasn't public.
You can't go and investigate every trade, I'm not saying that. I'm just saying that's what pisses people off. It's not the public good part. Believe me, no one cares about the million other patents the MIT licensing office owns that won't make any money. Nobody even cares about your new invention that will take decades to develop.
They just care about the preposterous get-rich-quick scheme that is the stock market reacting to court cases.
I cleared several hundred percent off of call options on EDIT. I did so based on closely tracking the USPTO case, its filings, studying both sides of the argument, etc. The oral arguments made it overwhelmingly clear who was going to win.
You didn't need to be an insider to see the obvious outcome.
If you did nothing else but follow Jacob Sherkow's posts on Twitter, a novice investor could have taken his information lead, done some further due diligence, and come to the same conclusion.
That's Berkeley desperately attempting to respond to having been smoked at the oral arguments. Look at how the panel chose to respond to Berkeley trying to submit new evidence. The panel had already made up its mind by that point in my opinion. There were numerous things the panel could have pursued further after the first (and only) oral arguments, that they chose not to tipped their hand again.
Still don't like the odds involved in buying call options on EDIT? Ok, easy, hedge: NTLA also had call options available. To make matters even better, both CRSP and NTLA had sold down heavily leading up to the verdict (CRSP crashed by ~40% in a month). NTLA was available for $12 or $13 per share for the whole month prior to the verdict (it's IPO price was $22 or so). When an outcome is so dramatic for a stock as this verdict, if you hedge call options, the huge spike will trivially compensate for the downside on the other stocks.
A (perhaps stupid) question, are USPTO judgment dates public ahead-of-the-fact? In other words, how do you prevent being too early and your options expiring worthless?
No. That was certainly part of the risk calculation.
I sat on most of my calls for two to four months prior to the verdict, with most of them having a May expiration. So a few points:
1) I made some guesses on how long the verdict was likely to take based on history and based on how the case was going. For example, did they follow the oral arguments up with a round of interviews involving some of the prominent people involved. Sherkow I'll note nailed the verdict date almost exactly and provided his own reasoning for why he thought it would be in February.
2) At the time I purchased a lot of my calls, May was the furthest out date available. There was almost no liquidity (I purchased some of the first calls ever available on EDIT). Once I bought, I knew I'd need to commit or take a beating trying to unload them near-term. However, over the months, August calls became readily available (so one could have taken an opportunity to roll them; eg sell some calls on an upswing, which EDIT was prone to due to its very low float, wait for a drop, if one occurs then load the August calls at potentially cheaper than what you sold the May calls for).
3) I specifically began buying after EDIT's stock was, in my opinion, bottoming out. It went into the $40s almost right after the IPO, due to a hyper low float and lock-up (plus fuzzy understanding + hype about CRISPR at that point in time). It dropped for about five straight months from those highs. By October 1st it looked to be near a floor, so I began stalking it, it proceeded to double then triple bottom right before the election.
If you had timed it freakishly well, you could have gotten May 2017, $17.50 calls for around ~$1.75 ($175 per contract) right before the election. They peaked recently at $11.x.
4) By timing the stock itself moderately well on bottoming - that is, by paying what I considered to be a cheap price on a well sold down stock - I was able to buy the calls very inexpensively. Why did that matter? Part of the bet was that it wouldn't just stay on the floor for the coming months leading up to the patent verdict and hearing (NTLA for example rallied significantly at one point before crashing back down). By the time it was ~$18 / share, my calls had already appreciated considerably, giving me a convenient exit if I wanted it, or I could just pull my principle. I didn't need to hold through the verdict, I could just take a 100% return or so and walk. That angle helped to offset (if I wanted to sell some) the risk of being forced to wait it all out and watching my position potentially expire worthless.
I also did one other thing that ended up being extremely profitable. I sold some of my calls for a nice gain in the $18s before the verdict came out. Keeping in mind I had no idea it would 100% be in February. So let's say I sold some $17.50s for May 2017 at that point for a good profit. I took some of those gains (not the principle), and acquired even more calls than I had sold, but for the $17.50s calls for March, on a very heavy discount. I paid $1.25 or something for those in the weeks before the verdict. When EDIT spiked in the days following the verdict, those were worth six to eight times what I paid for them and they were purchased solely with prior profit (if I ended up being wrong and the verdict didn't come out in time for the March expiration, I only put my gain at risk on the May calls I sold to do that).
> The law’s original intent was to patent mature discoveries, things like a genetically modified crop, or biofuel-farting yeast. Over the years, however, universities started filing patents further upstream—on everything from protein structures to bits of DNA. This frenzy of molecule-grabbing can actually work counter to Bayh-Doyle, locking up promising discoveries that don’t need help getting commercialized. “Crispr totally epitomizes that,” says Michael Eisen, a Berkeley biophysicist and long-time advocate of open science. “Everybody in the universe is chomping at the bit to use it. But patents are an obstacle to that happening right now.”
I recently read "Basic Economics" by Thomas Sowell and each chapter highlighting an economic concept included examples of government policy relevant to the subject. Such as rent control, price controls in agriculture, zoning, industry licensing, etc. Almost all of them had similar unintended side effects as seen here (ie, rent controls intended to reduce rent prices resulted in a shortage of affordable housing for poor people in NYC, Toronto, etc). They almost always create an imbalance where the negative side effects largely outweigh the intended benefits.
I'm not sure leaving such highly technical debates, such as whether or not you can patent a low level protein, should be left for random courts to decide.
How do we solve such a prevalent problem? Should the legislation then become more specific to make sure it has it's intended purpose? Or would that ultimately lead to endless complexity in law? Creating loopholes and increased difficulty/cost to implement?
The easy answer that some people take is that government should largely not be involved in this type of stuff but I'm always interested in exploring alternatives. But otherwise this stuff is largely ignored outside of the usual generic complaints about regulations coming from business groups each year, yet it continues to persist as a black/white issue in politics.
CRISPR is such a critical and important technology, it'd be a shame if it was held back by unintentional interpretations of law.
I feel like the original supreme court decision that allowed the patenting of DNA needs to be overturned. The suit was brought by General Electric for an organism they didn't even use. Now the entire farming industry is radically different with companies like DuPont, Monsanto and BASF controlling the seed supplies for many major crops.
Hybrid corn changed seed forever, not GMO. I find it hard to believe anyone who claims to be familiar with the issue who does not realize that.
Furthermore, natural DNA sequence cannot be patented, full stop. There's zero ambiguity about this. Only inventions can be patented, and relevant here is the 'invention' of cDNA made from an organisms RNA that is required for many genetic techniques.
On the flip-side, I haven't heard any compelling way for Monsanto to recuperate the costs of R&D on their engineered crops. I'm sure a lot of people would be happy to see GM crops go away altogether, but I don't think that's a compelling solution.
I listed the two others too, yet you focused on the one. Why did we need them in the first place?
Prior to seed companies, seed stock was bread by farmers, universities and done in a way that was more open an accessible.
We have been in overproduction of corn, grain and rice for over a decade. They haven't saved the world from hunger. Hunger still exists and has always been a distribution problem. In 2008, the food crisis was caused because investment companies started trading in grain futures and wouldn't let go (where as a food producer invests in a grain future because they plan on buying it in x months in order to make cereal or pizza crust or whatever). There was plenty of food though. The food shortage was literally manufactured.
> any compelling way for Monsanto to recuperate the costs of R&D on their engineered crops
It wasn't a problem that needed to be solved. On the flip side, now we have all this corn and grain that needs to be sold. Sure some of that can be turned into fuel, but a lot of it is pushed out in starchier food. We're consuming so much starch and sugar that we're now in an obesity epidemic. The food industry keeps pushing out advertising so people consume more of it. It's a cycle that's not been beneficial for many people.
Plant patents [1] and Plant Variety Protection Rights [2] are totally reasonable ways they can protect their crops without blocking at the technology level with patents. Which to use depends on sexual vs asexual reproduction of the crop.
100M is an exaggeration but still I think that's fine. Enable people doing research for the benefit of others access to their stuff, but if someone is going to get rich off of it why not take a cut?
I was assuming they meant in general, not just CRSPR. $100m would be an enormous amount of money for the Broad and they license all kinds of stuff regularly
Editas acquired Cpf1 exclusivity for just $16 million upfront [1], in the form of cash plus a note. Intellia and Crispr Therapeutics, as two examples, will be able to license Cas9 from Broad for their various programs for a lot closer to $20m upfront plus royalties (so far as their therapy paths don't directly collide with Editas).
Not all commercial entities are rich. If you were a scientist who found a novel application of CRISPR and wanted to develop a product and bring it to market, you'd be effectively screwed.
Just wait for the patent to expire. Or, don't wait, build out your product, and release it the second the patent expires. If it's a good enough idea, you'll be able to find investors willing to bridge the time gap.
Editas and Broad only control the US market. It's extremely unlikely Broad will acquire such a strong position in Europe or Asia (in fact it's practically guaranteed they will not).
If you had such a stellar therapy, and you couldn't get it past Editas, you'd go to Europe and partner with any number of a dozen other entities there that would be guaranteed to be interested (such as Novartis, which owns part of NTLA).
In short, if you want to sell a product, Editas gets right of first refusal to license from Broad, and only if they refuse would the startup be able to proceed to license. If you just want to use CRISPR for in house research, you have to license it; no idea if the fees are prohibitive.
I think in Patent law benefiting the creator isn't even part of the balance (at least not directly). The purpose was to prevent trade secrets by offering temporary legal protection if the creator gives the public details about the invention.
Without patents there's a risk that the creator keeps their invention secret forever and then it's forgotten. This could still happen today, but if the invention details are ever leaked you'd have no ability to stop others from making and using it and no ability to demand money for it (though you could sue the person who leaked it, but only civilly).
I think in cases like this where it's unlikely to have been a trade secret anyway the justification that the patent is in the best interest of the public or is 'promoting the progress of science and useful arts' is harder to make. This is especially true when the research is the result of public funding (though I'm not sure that was true in this case).
I don't think that justification applies when the "invention" is in every single one of our bodies and has been around for millions of years. They were just the first to look in the right place, but someone would have found it eventually, and sooner rather than later.
They usually argue that the patent is not on the biological matter itself but the process involved in using it. This book touches a bit on this when it discusses the history of genentech and insulin synthesis. http://www.simonandschuster.com/books/The-Gene/Siddhartha-Mu...
I don't know much about patent law, but why not just allow for open use? If a person wants to use that tool in a for profit company, then they just pay royalties. Else, just let it. S.
The government determines what they would pay to make the technology open (i.e., benefits to society). This is similar to the process of determining the subsidy to develop new technology.
Government makes an offer. Submitter can accept or reject.
If rejected, the patent remains secret, but other companies have the right to independently invent the same technology.
If accepted, the patent is published. If other companies want to use the technology, they will need to buy a license from the government. Submitter has no control over who may or may not use the technology.
If only it was so simple. In a typical product there might be dozens or hundreds of patents. How do you decide who gets what royalty? that's a negotiation on a product by product basis and involves things like royalty stacking.
Is there some kind of letter to your congress person type thing that can be done for this? I would gladly sign a petition or write an email as part of a campaign to demonstrate public support for making access to crispr as open as possible.
Some of the new CasX, and CasY proteins [2] in these alternative crispr systems are actually even smaller than the original Cas9 proteins. I'm not sure how related it is, but the land grab associated with a broad patent has come with a large exploration effort to find alternatively systems that still provide similar utility.
As these kind of synthetic biology tools come online there definitely needs to be some reanalysis of how the tools should comport with the patent system, it being ultimately for the public good. As what's being built today in synthetic biology is very much the nascent infrastructure, the comparison to the rollout of the internet is not an unfair comparison.
[1] http://www.nature.com/nature/journal/v542/n7640/full/nature2...
[2] https://serotiny.bio/api/parts/10465