The human body is a serious business. Last February, two competing teams of scientists revealed the human genome, a three billion-letter genetic code of a representative human.

It was the genetic blueprint for human life, one that could help develop "personalised" new medical treatments. One of the teams could hear the sound of cash registers ringing.

In this case, the US-based company Celera Genomics' plans to sell its human genome data to biotechnology businesses around the world were undermined by their publicly funded rival's decision to provide the same data free. Tens of thousands of scientists accessed the Human Genome Project's online archives, while fewer than 50 organisations were said to have subscribed to Celera's private database.

But "genomics" has become a fast-expanding branch of the biotechnology industry, with high long-term commercial expectations. At most major pharmaceutical companies, more and more products in development or at the testing stage involve the use of this genetic data, according to Dr Pat Vaughan, chief scientific officer at HiberGen, the Republic's first genomics company.

"It is a very exciting area," he says.

HiberGen uses its patented technology, SNaPIT, to scan the human genome and locate genes that make people susceptible to particular diseases. It also searches for combinations of genes that will predict how well a person will respond to a given drug treatment. HiberGen can then use these genes to form licensing agreements with other pharmaceutical and biotechnology companies who use the data to develop new drugs and medical tests.

At the heart of this research is patent protection. Patents reward innovation. They give companies or individuals exclusive rights to produce, use and sell an invention that can be applied in industry, usually for 20 years. Rival firms cannot exploit a patented invention without the patent-holder's consent.

Under patent law, pharmaceutical companies can become the effective "owner" of human genes.

The human body cannot be patented, according to a European Union Directive on legal protection for inventors of biotechnology products, but elements isolated from it may be patentable.

A GeneWatch UK study last year showed that patents had already been applied for on 127,000 gene sequences. Genzyme, a US biotechnology company planning to locate an Irish subsidiary in Waterford, had filed more than 8,000 applications.

"The intellectual property system will always follow industrial development," says Dr Michael Sharp, head of Intellectual Property at Enterprise Ireland. "Before, the idea was that you couldn't patent a living organism. Christian Barnard was the first person to perform a heart transplant but he couldn't patent a heart transplant."

That was in 1967. Today, patenting bits of the human body - our genetic code - has "become a grey area", Dr Sharp says. "It is an ethical debate as well as a technology debate."

The debate on gene patenting centres on whether identifying gene sequences is an invention that can be patented or simply a discovery. Campaigners have warned that granting patents on genes could lead to exclusive control over new treatments and medicines falling into the wrong hands.

Earlier this week, GeneWatch UK revealed that the Corixa Corporation, a US biotechnology company, had granted Japan Tobacco a three-year exclusive licence to develop and sell vaccine products aimed at preventing and treating lung cancer in North America and other countries. The vaccines will be based on Corixa's sequencing of human genes from lung cancer cells.

"Giving a tobacco company exclusive rights to lung cancer vaccines is like putting Dracula in charge of a blood bank," GeneWatch UK deputy director Dr Helen Wallace said in a statement. "Cancer research must not be controlled by companies who make cancer-causing products. Patents on genes make immoral deals like this one more likely and more damaging."

Patents on genes may also block medical research. Myriad Genetics patented two genes linked to hereditary breast cancer in the US in 1999 and was granted the European rights earlier this year. The company now has a global monopoly on the test for hereditary breast cancer and can prevent other companies from developing faster, cheaper or more reliable tests to detect the genes.

"It is a small proportion of breast cancers that are hereditary but it is obviously very important," says Dr Pat Vaughan at HiberGen. "The specific gene mutations that Myriad Genetics found allows for a test to be done that detects the risk, so there is a specific use for the genes. If the genes are identified as disease markers, that is inventive, and it is important for a company to protect their investment.

"The main problem with patents on genes is when companies take out very vague applications. They don't know what the gene does," Dr Vaughan adds.

Campaigners against gene patenting have argued that these applications should be turned down as they do not involve an "inventive step".

To be eligible for a patent, an invention must involve an inventive step and it must be new: if the invention is made public in any way before the date of filing for a patent application, then it has no "novelty" value and patent rights cannot be granted. This is one reason why large corporations have acted like "gene squatters", rushing to apply for patents in the hope that it will later be discovered that the gene sequence has a commercial value.

But for smaller enterprises, the novelty requirement means applying for a patent can be a costly, hit-and-miss process.

"Because it must be novel, most people would have to file before they even test the product on the market or before the project has even developed into a company yet. They will then have to wait two or three years before the patent is granted," Dr Sharp says.

The delay and the risk factor can cause "acute problems" for start-up companies during their most vulnerable phase. Enterprise Ireland is currently funding about 50 projects under its Intellectual Property Assistance Scheme to "help companies bridge the gap", according to Dr Sharp.

HiberGen is one company that has successfully bridged the gap between university research project and start-up biotechnology company, having started life at University College Cork.

Work on the SNaPIT technology was patented in 1995 and co-funded by BioResearch Ireland, the national agency responsible for creating commercial opportunities from biotechnology research.

"The support money from Enterprise Ireland is very good but the vast majority of funding still comes from venture capitalists," says Dr Vaughan.

"It is definitely an expense to file a patent but it is absolutely vital for biotechnology companies to have a good intellectual property portfolio."