Modern biotechnology began in 1972 when biochemists at Stanford University spliced together DNA from two different organisms. Stanley Cohen and Herb Boyer—professors at Stanford and UC San Francisco, respectively—met the following year in a Hawaiian delicatessen to discuss how the new method, called recombinant DNA technology, could be employed to engineer living cells to make useful products. With the help of venture capitalist Robert Swanson in 1976, Boyer founded Genentech, the first biotechnology company. By 1978, Genentech was making human insulin using engineered E. coli. Until that point, insulin had required painstaking extraction from the pancreas of pigs, necessitating the deaths of 24,000 animals to make one pound of insulin; enough to treat just 750 people annually.

The race to exploit recombinant DNA technology was on. Biotech startups were incorporated, pharmaceutical firms partnered with universities, and even oil companies initiated research programs to create engineered organisms.

All these players shared a singular goal: economic gain. In the world of innovation, this typically resides in the exclusivity afforded by patent protection. But in the 1970s, it was unclear whether patents could apply to engineered organisms. The legal position that had prevailed for nearly a century was that living things, even if modified by humans, didn't meet the criteria for patent protection. As a result, inventors defaulted to seeking protection for the process of obtaining the living thing—the experimental steps required to make or discover an organism—as opposed to the organism itself.

But on June 16, 1980, the U.S. Supreme Court passed a judgment that laid the legal foundations for a nascent biotechnology industry. The proceedings were circuitous, but the question before the court cut right to the heart of the nascent field: is a living, breathing organism eligible to be patented? In the case of Diamond v. Chakrabarty, the Supreme Court ruled by a narrow margin of 5-4 that living organisms are, indeed, patentable. The hundreds of pending applications for things as far-flung as hormones that could prevent dwarfism and organisms engineered to eat specific metals would henceforth grant inventors exclusive rights over their creations.

For an industry that relies so heavily upon living organisms, the decision opened more possibilities than any other legal judgment. The case itself concerned a humble bacterium that had been biologically engineered to break down crude oil. And like many other stories of invention, it began with a scientist working after hours in an unassuming laboratory tucked away inside an industrial research center.

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Oil-Eating Microbes

Ananda M. Chakrabarty, the eponymous defendant, began his scientific career working on what he tenderly referred to as his “first love.” The object of his affection was a rod-shaped bacterium of the Pseudomonas genus. Chakrabarty was working at the Research & Development Center at General Electric Company in Schenectady, New York when he engineered a Pseudomonas strain to eat oil in 1972, but his interest in these microbes began nearly half a decade earlier while a postdoctoral fellow at the University of Illinois.

General Electric had initially hired Chakrabarty to support a team tasked with using bacteria to turn cow manure into a protein-rich source of animal feed. But the project took him away from his beloved Pseudomonas, so Chakrabarty did what any dedicated researcher would: he came into the lab after hours and on weekends to continue tinkering with his preferred microbe.

Outside the walls of General Electric’s laboratory, oil spills were becoming a growing problem. In 1967, a tanker called the SS Torrey Canyon ran aground off the coast of Cornwall, leaking over 100,000 tonnes of crude oil into the English Channel. Two years later, the blowout of an oil well leeched hundreds of thousands of gallons of oil into the water off California. As the frequency of these incidents increased, Chakrabarty noticed the dearth of options available to remove vast amounts of crude oil—basically a mixture of hydrocarbons—from the environment.

“I was getting interested in practical aspects of what you call biotechnology today,” Chakrabarty recounted later in an interview. “I was thinking a little bit about whether I could make a bug that would grow rapidly with oil.”

At the time, there were four known species of oil-degrading bacteria. But when all four were added to an oil spill at the same time, the species competed against one another instead of collectively working to reduce the amount of crude oil. To eliminate competition and increase the rate at which the hydrocarbons were metabolized, Chakrabarty attempted to combine into a single cell all the genes responsible for breaking down crude oil. Fortunately, each species carried its oil-metabolizing genes on a plasmid (a loop of DNA), rather than in the genome, which made it simpler to merge the genes.

Chakrabarty genetically cross-linked the plasmids using X-rays and then placed the newly assembled sequence into Pseudomonas putida. The engineered cells consumed oil one to two orders of magnitude faster than the combined species of bacteria. By 1972, Chakrabarty successfully engineered Pseudomonas microbes that could digest two-thirds of the hydrocarbons found in oil. “I simply shuffled genes, changing bacteria that already existed,” said Chakrabarty in an interview with People magazine.¹

Despite the ingenuity behind his invention, Chakrabarty did not initially consider filing a patent. He saw himself as a diligent researcher compelled by a desire to find useful solutions, rather than make money. But when Chakrabarty asked his boss, Arthur Bueche, for permission to present his findings at a conference in Tel Aviv, Bueche balked.

“If you think that [this finding is] real,” Bueche said, “you are not supposed to give a talk; you’re supposed to write a disclosure letter for the patent first.”

Patent Law before Diamond v. Chakrabarty

The suggestion to pursue a patent was odd because at the time Chakrabarty engineered the microbes in 1972, it had been long established that living things were not patentable. Inside courts of law, this was known as the “product-of-nature” doctrine, and it meant that naturally occurring entities could not be patented, although the methods to extract them could be.

The doctrine dates back to at least 1889, where, in Ex parte Latimer, a case concerning the patentability of a fiber extracted from needles of a pine tree, the U.S. Patent Office rejected the application because the subject matter was a “natural product.” Benton J. Hall, a lawyer-politician from Iowa and Commissioner of Patents at the time, opined that the composition of trees was “not a patentable invention, recognized by statute, any more than to find a new gem or jewel in the earth would entitle the discoverer to patent all gems which should be subsequently found.”

Another barrier to the patentability of living things, as laid out by the Latimer case, was the requirement for patent seekers to describe their inventions in as much detail as necessary for them to be uniquely identified and identically reproduced. For the first half of the twentieth century, science hadn’t advanced enough to specify the exact composition of any living organism. The structure of DNA was solved in 1953, and scientists pioneered the use of restriction enzymes, “chemical scissors” that cut DNA at specific sites, in the 1960s.

Before recombinant DNA emerged from Stanford University in the early 1970s, the manipulation of organisms was left to random mutations that arose during reproduction, or X-rays, neither of which generally produced “identical” progeny from one generation to the next. “Uniquely identified and identically reproduced” presented the technology of that time with an insurmountable hurdle.

However, it didn’t take long for economic considerations to pervade and influence patent legislation. In the early twentieth century, the United States Patent and Trademark Office commonly distributed free seeds to farmers, who took pains to develop improved varieties of crops suited to their region. Although this practice bolstered agricultural yields, no financial reward or incentive followed for those who dedicated their time and effort to new cultivars.

To correct this oversight, lawmakers and plant breeders united under the American Seed Trade Association to lobby for better legal protection of crop breeds. Congress granted limited protection to breeders under the Plant Protection Act of 1930. The protection was “limited” because the scope of the legislation extended only to the asexual reproduction of plants—by budding, grafting, rooting clippings, or dividing bulbs—that yielded genetically identical offspring. In 1970, the Plant Variety Protection Act expanded this protection to include sexually reproduced plants.

Outside the world of plant breeders, however, years of Supreme Court decisions upheld the “product-of-nature” doctrine. In the 1931 case of American Fruit Growers v. Brogdex, the court rejected a patent for an orange dipped in a borax solution to prevent the formation of mold. The Court’s rationale was that the chemically treated fruit was not a patentable subject because there was no transformation of the “natural article.”

Another case argued in front of the Supreme Court in 1948 (Funk Brothers v. Kalo Inoculant Co.) similarly vetoed the issue. An inventor named Varley Sherman Bond had devised a combination of bacteria that could fix nitrogen for a variety of crops without inhibiting each other. His effort to patent his work led the Court to invalidate his claims and hold that patents could not be issued for the discovery of a “phenomena of nature.” The Court determined Mr. Bond’s “discovery” invalid for want of invention because—as the majority opinion stated—“the qualities of these bacteria, like the heat of the sun, electricity, or the qualities of metals, are part of the storehouse of knowledge of all men.”

Patent Office to Apex Court

If General Electric had been a pharmaceutical company, it presumably would have been well-versed in the legal history of patents concerning living organisms. They would likely have limited their patent application to the process of making the oil-eating bacterium, rather than the bacterium itself. But General Electric did not normally carry out research in the life sciences, and Chakrabarty’s work marked their first intrepid steps into the field.

A company lawyer named Leo I. MaLossi, with nearly a decade of experience filing patents for things like jet engines, refrigerators, and nuclear power plants, took on Chakrabarty’s case. MaLossi was famously bullish on patents.

After all, Section 101 of the Patent Act states that “any new and useful process, machine, manufacture, or composition of matter” is eligible for a patent, and that language has remained unchanged since Thomas Jefferson first authored the legislation in 1793. Because the oil-eating bacterium was composed of chemical components, MaLossi argued, it should be considered patentable under the aegis of new “manufactures” or “compositions of matter.”

On June 7, 1972, MaLossi filed a patent for both the process Chakrabarty used to create the engineered strains and the microbe itself.

When patent-seekers file an application in America, it first passes through a basic check to ensure all necessary parts are included and appropriate fees are paid before being assigned to a patent examiner with expertise in the relevant technological area. The examiner reviews existing patents and technical publications to determine if the invention is original and innovative and then approves the application or issues a rejection, to which the applicant can respond with arguments or amendments.

In September 1973, the patent examiner accepted Chakrabarty’s claim on the process of creating the bacterium but rejected the second claim over the bacteria itself. The examiner cited the “product-of-nature” doctrine, rejecting the patent—in part—because Chakrabarty’s transfer of plasmids did not make the microbes substantially different from naturally occurring Pseudomonas.

In June 1974, MaLossi appealed to the Patent Office’s internal board on the grounds that the microbes were notproducts of nature because the bacteria had been fundamentally altered by the plasmid transfer that Chakrabarty had orchestrated. While reading the cases around the “product-of-nature” doctrine, MaLossi found nothing explicit to justify living organisms being unpatentable merely because they were alive. Rather, in his reading, the courts had historically found them to be ineligible for a patent because they were naturally occurring phenomena. MaLossi argued that Chakrabarty’s oil-eating microbes, although alive, differed significantly from naturally occurring Pseudomonas.

The board rejected MaLossi’s appeal. Although they conceded that Pseudomonas bacteria containing two or more hydrocarbon-degrading plasmids were not naturally occurring, the subject matter of the patent was still a living organism. And “[r]elying on the legislative history of the Plant Patent Act…, the terms ‘manufacture’ or ‘composition of matter’ in 35 U.S.C. 101 were not intended to cover living organisms,” the board wrote. The Patent Office also seemed wary of another risk highlighted by the patent examiner: that granting a patent for a single-celled living creature would open the floodgates for patents on multicellular organisms, too, including people.

For MaLossi and his boss at General Electric, Charles Watts, the board's ruling seemed to signify a larger opportunity to participate in crafting a new point of law. And so General Electric appealed the board’s decision to the Court of Customs and Patent Appeals. At that time, their case became entwined with a similar case filed by a pharmaceutical manufacturer called Upjohn Company regarding a patent for a purified strain of fungus. Discovered by a scientist named Malcolm Bergy, the fungus made an antibiotic that could treat bacterial infections.

Bergy’s case was heard by the Court of Customs and Patent Appeals before Chakrabarty’s. In October 1977, the court ruled in Bergy’s favor. The majority judgment stated that cultures of microorganisms were “much more akin to inanimate chemical compositions such as reactants, reagents, and catalysts than they are to horses and honeybees or raspberries and roses…In short, we think the fact that microorganisms, as distinguished from chemical compounds, are alive is a distinction without legal significance.” Because Bergy’s case bore so much similarity to Chakrabarty’s, it came as little surprise when, in March 1978, the same court ruled in General Electric’s favor.

The Court’s ruling attracted immediate attention to the then-nascent biotechnology sector. But the appeals court feared their decision could lead to a rapid influx of investment that might collapse if the Supreme Court later rescinded the ruling. The Patent Office wanted to solidify the issue sooner rather than later.

In June, though, the Supreme Court directed the patent appeals court to reevaluate the Bergy decision, referencing a patent law ruling it had made just four days prior in the case of Parker v. Flook. Flook’s case dealt with a method for updating alarm limits during a catalytic conversion process used in the petrochemical industry. The crux of the case was the question of whether a mathematical algorithm was patentable, and it was therefore unclear as to why it had any bearing on Chakrabarty’s case other than confirming that the “line between a patentable process and an unpatentable principle is not always clear.”

Arguing before the patent appeals court once again, the defendant in the case (the Patent Office) emphasized that any expansion of patent rights required Congressional approval. Since Congress had not specifically legislated for the patentability of living organisms in the patent statute, they concluded that the court should reject Bergy’s and Chakrabarty’s claims.

MaLossi crafted an innovative response to this argument, explaining the process by which Chakrabarty modified the Pseudomonas through analogies to technology that Congress was sure to be acquainted with. He argued that the oil-eating microbes had not been developed by a wholly new technique like recombinant DNA technology, but through traditional methods of recombining DNA—interbreeding different strains or hybridization—which had been applied in animal and plant breeding for centuries. MaLossi also cited the broad language employed by Congressional reports that accompanied the 1952 patent legislation, “[U]nder section 101 a person may have invented a machine or a manufacture, which may include anything under the sun that is made by man.”

In March 1979, the Court of Customs and Patent Appeals determined that it couldn’t find anything in Flook’s case that impacted the Bergy and Chakrabarty cases and upheld its previous decision that living things were not patentable. However, to prevent further confusion, the Solicitor General petitioned the Supreme Court for review of the Bergy and Chakrabarty cases once again.

The Supreme Court agreed to review both cases in October 1979. But just two months later, the Upjohn Company decided to amend their patent application, noting that their case for a molecule purified from a natural fungus was weaker than Chakrabarty’s claim. If the two cases had been linked together, Upjohn might have dragged both cases down.² With Upjohn gone, only Chakrabarty’s case remained.

In June 1980, the Supreme Court held by a 5-4 vote, that under the ambit of existing legislation, Chakrabarty had the right to patent his genetically modified strains. The majority approached the issue as a narrow one of ordinary statutory interpretation, the question hinging on whether Chakrabarty’s microbes fell within the scope of “manufacture” or “composition of matter” used in the definition of what is patentable under Section 101 of the patent legislation.

The Court held that the language used in American patent legislation indicated the lawmaker’s intent that “ingenuity should receive liberal encouragement.” The Court also found Section 101 of the patent legislation broad enough to accommodate inventions not anticipated by Congress, including microorganisms. The operative threshold for whether something could form the subject matter of a patent was whether it was “naturally occurring” or “man-made,” the majority wrote; not whether it was “inanimate” or “living.” They approvingly quoted the same clause that MaLossi had used in his appeal stating that patentable subject matter included “anything under the sun that is made by man.” Chakrabarty’s oil-eating microbes were man-made, and hence, patentable.

The minority decision, on the other hand, argued that a living organism did not meet the criteria for a patent until new laws specifically dealing with this question were enacted: “It is the role of the Congress, not this Court, to broaden or narrow the reach of the patent laws,” wrote Justice William J. Brennan, Jr., the judge who authored the dissenting opinion: “This is especially true where, as here, the composition sought to be patented uniquely implicates matters of public concern.”

Impact on the Biotechnology Industry

While the Diamond v. Chakrabarty case proved auspicious for the modern biotechnology industry, it polarized the public. A group of objectors who feared the consequences of genetic engineering issued a press release about how the decision resembled the plotline of Aldous Huxley’s dystopian novel, “Brave New World.” The New York Times editors fired back with an article that began: “Relax. In sanctioning a patent for new forms of life created in the laboratory, the Supreme Court gave no license to create a race of supermen or a strain of bacteria to spread epidemic in the world. It settled a narrow point of patent law.”

But a reactive climate often emerges after Supreme Court decisions of this magnitude. When the Court upheld Sony’s right to sell videocassette recorders despite objections from Universal and Disney, the reaction from most movie studios was panic over the losses they would incur because of the ease of copying movies. Of course, the decision ultimately benefited the movie industry because it paved the way for the lucrative home video market. This goes to show that the passage of time often fails to substantiate initial fears, whether to the Supreme Court’s approval of VCRs or GMOs.

More important than the backlash, is what Diamond v. Chakrabarty set in motion: the ability to hold intellectual property rights over a living organism. At first, these organisms were simple, such as bacteria engineered to make insulin or other molecules. But then, on April 12, 1988, Harvard University received the first patent over a multicellular organism—a furry rodent with ruby red eyes who would go down in history as the “Harvard Mouse”.³ Scientists had injected a cancer-causing gene into fertilized mouse eggs to develop a breed of genetically altered mice susceptible to the disease, creating an indispensable tool to test the effect of both cancer-fighting drugs and carcinogens.

Since the Harvard Mouse, the Patent Office has granted over a hundred patents for a menagerie of transgenic animals, including pigs engineered to excrete less phosphorus in their manure, fish designed to glow when exposed to water pollution, and a rhesus monkey engineered to make green fluorescent protein in its cells—the first transgenic primate.

It follows that Diamond v. Chakrabarty didn’t just protect a single invention but catalyzed a culture of innovation—life-saving monoclonal antibody treatments, genetically modified seeds, rapid vaccines, and even animal models used for the study of disease.

Even so, every tide ebbs. Three decades after its landmark ruling, the Supreme Court made two judgments in close succession that limited the scope of Diamond v. Chakrabarty. The first, Mayo Collaborative Services v. Prometheus Laboratories, Inc., concerned a patent over the process to determine the optimum dose of drugs used to treat various autoimmune diseases. Researchers had found that patients metabolized these drugs differently, and the method in question was formulated to precisely gauge the correct dosage for a patient based on the concentration of the metabolized drug in their blood. The Court declared that the process the researchers were attempting to patent involved the use of correlation (i.e. the concentration of the metabolized drug in the blood signifying an increase or decrease in dosage) that was, in essence, a natural phenomenon ineligible to be patented.

A year later, in 2013, in Association for Molecular Pathology v. Myriad Genetics, Inc., the Supreme Court dealt with the question of whether DNA sequences—a strand of nucleotides that encode proteins or execute functions in a cell—could be the subject matter of patents. The Court concluded that a naturally occurring DNA sequence was not patentable simply because it had been isolated from surrounding genetic material. For DNA to be eligible for a patent, it had to be manipulated.

Both of these cases illustrate the Supreme Court’s efforts to balance the incentives for innovation with the need to prevent the monopolization of natural phenomena. In the words of Justice Clarence Thomas in Myriad: “As we have recognized before, patent protection strikes a delicate balance between creating ‘incentives that lead to creation, invention, and discovery’ and ‘imped[ing] the flow of information that might permit, indeed spur, invention’.”

Ultimately, this balance seems navigable for the industry, especially those companies that are used to following the tide. Genentech filed its first patent application on July 5, 1979, and dozens more shortly after. Today, the company has nearly 20,000 patents, covering everything from antibacterial proteins to treatments for spinal muscular atrophy. And while subsequent rulings have further refined patent law within biotechnology, Diamond v. Chakrabarty remains the most foundational. Without it, says Genentech’s general counsel, Sean Johnston, “the [biotechnology] industry would never have gotten started.”

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Rhea Purohit is a writer focused on research-driven storytelling in tech.

Cite: Rhea Purohit. “The First Patented G.M.O.” Asimov Press (2024). DOI: https://doi.org/10.62211/27nr-17mw

Thanks to Rich Pell, Director of the Center for PostNatural History and author of Biological Properties, for helpful discussions.

Footnotes

1. Ultimately, Chakrabarty’s oil-eating microbes were never used to clean oil spills because General Electric didn’t think it was worth the effort to commercialize them.
2. While this might sound suspiciously altruistic, it also saved Upjohn Company the significant cost of appealing to the Supreme Court, which can cost more than a million dollars in legal fees alone.
3. Researchers from Harvard University and Genentech developed the mouse with funding support from American chemical company DuPont. It is also known as the OncoMouse.

This article was published on June 30, 2024.