244 • Impacts of Applied Genetics— Micro-Organisms, Plants, and Animals 
that such patents are crucial to the development 
of the industry, while others have stated their 
preference for trade secrecy. 
Genentech’s friend-of-the-court brief filed in 
the Chakrabarty case stated, ‘The patent incen- 
tive did, and doubtless elsewhere it will, prove 
to be an important if not indispensible factor in 
attracting private support for life-giving re- 
search. Genentech bas also supported in- 
creased patent protection because, to attract 
top scientists to the company, it had to give 
assurances that they would be able to publish 
freely.’^ This severely curtails any reliance on 
trade secrets. 
The rationale behind the contrary position is 
based on the belief that the industry is moving 
so quickly that today’s frontrunner is not nec- 
essarily tomorrow’s, and that unique knowledge 
translates into competitive advantage. Thus, in a 
strategy similar to that of the advanced micro- 
electronics industry, firms may prefer to rely 
on trade secrets even for patentable inventions, 
coupled with an intense marketing effort once 
an invention has reached the commercial stage. 
The idea is to get the jump on competitors and 
to stay in front.*"* 
The uncertainty about whether micro-orga- 
nisms could be patented before the Supreme 
Court's decision does not appear to have hin- 
dered the development of the industry. Clearly, 
companies did not have any difficulty raising 
capital— e.g., before the decision, Cetus Corp. 
had a paper value of $250 million without hold- 
ing a single patent on a genetically engineered 
organism. Moreover, products such as insulin, 
human growth hormone, and interferon were 
being made, albeit in small quantities, by un- 
patented, genetically modified organisms. (See 
ch. 4.) 
Before the decision, companies relied either 
entirely on trade secrecy for protection, or on a 
combination of patents on the microbiological 
process and the product and trade secret pro- 
tection of the mico-organism itself. Considering 
‘^Brief for Genentech as Amicus Curiae, p. 3. 
“Thomas Kiley, V'ice President and General Coun.sel for 
Genentech, personal communication, Apr. 15, 1980. 
'“Dickson, op cit., p. 128. 
the existence of such protection, the question is 
what the actual advantages are to patenting the 
micro-organisms as well. 
One advantage results from the ahilitv of a 
living organism to reproduce itself. Dexeloping 
a new microbe for a specific purpose, such as 
the production of human insulin, can be a long, 
difficult, and costly procedure. Yet once it is 
developed, it reproduces endlessly, and any- 
body acquiring a culture would ha\ e the benefit 
of the development process at little or no cost 
unless the organism were patented. 
Often, a company is able to keep the microbe 
a trade secret, since only the product is sold. 
However, where the microbe is the product- 
such as with Chakrabarty’s oil-eating bacteri- 
um-patenting the organism is the best means 
of protection. Moreox er, even when a microbe 
itself can be kept under lock and key, a com- 
pany desiring to patent the process in which it is 
used must place a sample culture in a |)ublic 
repository to meet the enahlenuMit rc(|uire- 
ment. 
A conijjetitor could legally obtain the mif'ro- 
organism. If the competitor \\(M'e to use* it to 
make the product for commercial purposes, the 
company might suspect infi'ingement but ba\c 
difficulty proving it, especially when the prod- 
uct is not patented. The infringing actixily 
would take place entirely xvithin the confines of 
the competitor’s plant. M(M’(? suspicion is not suf- 
ficient legal grounds foi’ ins[)ccting the com- 
petitor’s plant for exidiMice of infringement 
when the unpatented product could theoret- 
ically be made by many different methods 
besides the one patented. * 
A second, but less (certain, adxantage pro- 
vided by patenting the micro-organism is that 
even uses and products of the organism not dis- 
covered by the inx cMitor xvould be pi-oleeled in- 
directly. That is, xx’hik? nexv u.ses and products 
could be patented by their inx entors, those |).it- 
ents would be "dominated" by tin* micro-orga- 
nism patent. Royalties xxoiild haxc to be paid 
'Some would ;msucr this assei lion In vin imk lli.il a lawMiil 
could he slarled even on the hasis ol litlle ex ideiu e the -iiim*; ■ ■an 
|)anv would r('ly on Ihe di.scoxnx ptocos xxhnli i> IiImm.iI .mil 
XX ide-raiif'inf', lo prox Ide anx' exisliiif; ex idem e ol inti in8''ini'ot 
