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Patents on Medical Procedures and The Physician Profiteer

The first reported effort by an American physician to enforce a medical method patent against a colleague failed in a federal district court in Burlington, Vermont. Judge William Sessions III ruled, in the landmark case, that an eye surgeon who used a patented procedure for stitchless cataract incisions on a patient was not liable to the physician-plaintiff for infringement. The closely-watched case had prompted Congress to consider legislation that would ban or severely restrict the utility and profitability of patents on medical or surgical procedures.

Although product patents for medical devices and drugs are common, the U.S. Patent and Trademark Office only rarely granted patents for medical and surgical procedures before 1954. Since then, the agency has awarded only a limited number. Recently, however, as many as 15 medical procedures are patented every week.

Medical procedures are considered procedures for the purpose of treatment or diagnosis of a human or animal condition, whether or not the condition is medically defined as a disease. Some recent method patents include procedures for: combining drugs and vitamins to treat cancer; administering insulin; transferring surrogate embryos; determining the gender of a fetus using ultrasound equipment; grafting skin; and diagnosing and treating heart problems.

Patent Opponents

Historically, the medical profession has considered patents on medical inventions as contrary to the philanthropic nature of the physician's practice. Almost 80 foreign countries, including Canada, Britain, and most countries in Europe, currently ban medical procedure patents.

The patent system in the United States has its origins in the U.S. Constitution. The constitutionally mandated goal is to promote "the progress of science and the useful arts." Congress implemented this directive by granting a 17-year monopoly to inventors who disclose their discoveries. Although it grants a legal monopoly exempt from antitrust constraints, the patent system serves the public interest by creating economic incentives for the development and disclosure of new technology and for investment and innovation. Many new techniques would not exist without the promise of patent protection. The social and economic benefits of granting a legal monopoly, therefore, may well outweigh the costs. Alternatively, many procedures would have been developed even if a patent were not available, and the monopoly price may not be justifiable.

The American Medical Association (AMA) House of Delegates voted in 1994 to oppose the practice of medical and surgical procedure patents as unethical. The patent system, to the extent "it keeps new procedures secret for long periods of time and limits free access to information that improves patient care," according to Nancy Dickey, M.D., on behalf of the AMA Board of Trustees, conflicts with the principles of the Hippocratic Oath, which calls upon physicians to share their expertise freely and to teach their colleagues for the benefit of patients. The House of Delegates viewed the method patent trend as contrary to the medical tradition of an open exchange of information without the expectation of financial reward and expressed concern that it might have a chilling effect on medical practice and education.

Many other specialty associations, including the American Academy of Ophthalmology, have echoed similar concerns. At a Congressional hearing, Charles D. Kelman, M.D., President of the American Society of Cataract and Refractive Surgery, testified that the continued assignability of proprietary rights to medical and surgical procedures would cause doctors to "operate in secrecy, behind closed doors so that their 'methods' would not be stolen by an observer," and the use of new life-saving procedures could be denied to many doctors and their patients.

First Infringement Suit

At the front line of the recent landmark suit which created a firestorm in the medical community were two ophthalmologists who performed cataract removal surgery. In 1990, Dr. Samuel Pallin, Medical Director of the Lear Eye Clinic in Sun City, Arizona, claimed he developed, and patented, a v-shaped, self-healing incision. Three years later, Dr. Pallin sued Dr. Jack A. Singer, a Dartmouth College Assistant Professor of Ophthalmology, and Hitchcock Associates, of Randolph, Vermont, for infringement of his patent, in the first American patent infringement suit involving a medical method patent and a defendant who was a physician. Dr. Singer performed about 250 procedures each year, and allegedly taught the method to others, all without paying Dr. Pallin any royalties. Incourt, Dr. Singer countered that he began to use the procedure and wrote about it months before Dr. Pallin filed for his patent, and that other doctors were using it before him.

According to Dr. Pallin, the prospect of profits was not his primary motivation in seeking the protection of a patent. Rather, he had sought, without success, publication of his observations by a leading journal on eye surgery, and finally filed for a patent as an alternate way of securing professional credit for his work. His demand for royalties, consequently, was motivated more by a desire for recognition among his peers than for personal financial gain.

Had Dr. Pallin been successful in his claims, however, there would have been a "wealth" of recognition. About one million cataracts are removed each year, and half of that number involved this particular self-healing incision, or a similar one. Dr. Pallin concluded that a savings of approximately $17 on each operation would result from the elimination of sutures, and sought royalties of $5 for each time a surgeon used the procedure. If the court had enforced this patent, thousands of physicians could have been responsible for payment to Dr. Pallin of millions of dollars a year in royalties, provided, of course, that he could have identified them and managed to collect. In fact, some commentators estimated the additional cost to Medicare would have been $2 million a year. The order entered in the case declared parts of the patent invalid and precluded Dr. Pallin from enforcing any part of it.

Congressional Ban Pending

Last fall, Representatives Gregg Ganske, M.D. (R-Iowa), a plastic surgeon, and Ron Wyden (D-Oregon), co-sponsored a bill (H.R. 1127) which would ban medical and surgical procedure patents. Dr. Pallin's suit turned out to be the impetus for their proposal. According to Representative Ganske, such "procedures are developed for the wide-spread good of mankind; this is central to the development of modern medicine." The pending legislation would ban patents on any technique, method, or process for performing a surgical and medical therapy, or making a medical diagnosis. Product patents for medical devices or pharmaceuticals would be exempt. A similar measure (S. 1334) that would allow patents, but prevent lawsuits for infringement against other doctors is pending in the Senate.

The burgeoning biotechnology industry opposed a broad patent ban which often secures rights to new processes using biological materials. Even the U.S. Patent and Trademark Office opposes the proposed ban. Its director of legislative affairs, Richard Wilder, warns that "broad exclusions from patent protection could cause some companies not to develop these techniques."

The bill's co-sponsors claim that the measure is necessary to reverse a trend that they believe is adversely affecting the cost and quality of medical care. Advances in medical procedures, according to Representative Ganske, the physician representative elected to the House last fall, are the product of collaborative efforts that are built upon the work of others.

Advocates of method patents challenge this position. The legal protection and potential economic rewards that patents offer, they insist, can lead to efficiencies that cut costs and enhance quality. The patent attorney who represented Dr. Pallin in the Vermont suit claimed that the patent laws require applicants to disclose all relevant information related to their innovation as a condition of receiving their patent. All that information is available to the public. Physicians, on the contrary, can withhold key components of their research when they publish their results, according to the physician's lawyer.

In response to complaints that the U.S. Patent and Trademark Office has issued patents for therapeutic and diagnostic methods that fail to meet current patentability standards, the agency plans to hold hearings in May to explore ways to improve the quality of method patents and tighten the process through which they are issued.

Health Care Implications

In the final analysis, the cost to society of granting medical method patents may well outweigh the benefits. At issue in the Pallin case, the proposed legislation before Congress, and the controversy in the medical arena is the grant of patents -- not for the drugs or equipment a doctor uses -- but the actual steps he or she takes to diagnose or treat a patient. Physicians used to teach students and colleagues their procedures for free, and some still do. With an enforceable method patent, they could charge for the privilege of using them on patients, and even refuse to license the procedures or prevent others from using them at all. Congress now has the opportunity to follow the recent lead of the Vermont federal district court and reduce health care costs and increase public access to the best available health care.

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