The lure of biotechnology investment has finally transformed Europe from passive recipient to active provider of biotechnology. (1) For three decades, the United States appeared as the harbinger of the biotechnology industry's development, a position now gradually challenged by emerging European players. (2) Great Britain appeared as the first such player in the 1980s. (3) Germany then followed in 1995 with its BioRegio Wettbewerb, a contest for government funding to develop research centers or "biotech clusters." (4) Germany continued with the creation in 1997 of its own high technology market, Der Neuer Markt, which offers German venture capital funds a market to trade shares of biotechnology start-up companies. (5) As a result, the German biotechnology industry increased by 150 percent from 1996 to 1999. (6) In the same period, France, Italy and other European countries established Nasdaq-like financial markets which, as their U.S. counterpart, attract venture capital and promote biotechnology start-ups. (7) Further, the French government increased its investment in biotechnology research from $26 million to $260 million in the last ten years. (8) Despite such efforts to create an attractive market, total biotechnology investment in Europe reached only $579 million in 1999, less than half of the corresponding investment in the United States, but reflecting an increase of 53 percent over 1998. (9)
Such an overview helps underscore the tensions over the ethical and economic issues that accompany the growing importance of the biotechnology industry to Europe. This Comment relies on the University of Edinburgh's controversial European Patent (EP) 0695351 "Isolation, Selection and Propagation of Animal Transgenic Stem Cells," granted on December 8, 1999, to examine some of these tensions. (10) Part II presents Europe's current position on the patenting of genetically modified organisms by studying the material articles of the European Patent Convention (EPC) and the line of decisions issued by the European Patent Office (EPO) concerning plant and animal patents up to the grant of EP 0695351. Part III analyzes the source of the scandal, namely Claim 48 of EP 0695351, in terms of its significance and of the motivation of the applicant and the EPO in respectively drafting and granting such a claim: "A method of preparing a transgenic animal, said animal comprising a selectable marker capable of differential expression in (a) desired stem cells and (b) cells other than desired stem cells...." Finally, the conclusion examines the future of EP 0695351 and the most recent developments in Europe for the protection of biotechnological inventions.
II. PROTECTION FOR GENETICALLY MODIFIED PLANTS AND ANIMALS UNDER THE EPC
A. Material Articles of the EPC
Prior to 1973, a natural or legal person seeking patent rights in Europe for an invention needed to apply to each national patent office. The procedure was long, costly, and often led to an inconsistent scope of protection between the countries. (11) The EPC emerged as the solution when the then contracting states ratified its articles on October 5, 1973, (12) and it came into effect in late 1977. (13) With the preamble, the EPC states its goal: "[T]o strengthen co-operation between the States of Europe in respect of the protection of inventions, ... that such protection may be obtained in those States by a single procedure for the grant of patents and by the establishment of certain standard rules governing patents so granted." (14) The EPC thus enables a natural or legal person to submit one patent application to its granting body, (15) the EPO, which if allowed gives that person a "bundle" of national patents (16)--one patent for each of the member countries designated in the application. However, the equivalence between the European patent and the multiple national patents is illusory, because, although granted under the EPC, the patent's validity, infringement and enforceability are defined by the national courts. …