(FORTUNE Magazine) – Europeans have earned a reputation as biotech trailblazers; their scientists produced the first test-tube baby, discovered the AIDS virus, and launched the science of cloning. Yet when it comes to patenting genes, they've hesitated to plant many flags. In 1998 the EU passed a directive allowing human genes to be patented. But much of Europe, which tends to view the genetic code as common property, hasn't honored what it sees as a land grab. Governments in the Netherlands and Italy are trying to overturn the law. Others, like France's and Germany's, have refused to implement it. "Many people in Europe don't believe these patents should be awarded," says Mike Stratton, a cancer geneticist at the Sanger Centre in Britain.

Now the European battle has moved across the Atlantic, embroiling a U.S. biotech darling, Myriad Genetics of Salt Lake City. In January, Myriad won a European patent giving it control of testing for mutations in BRCA1, a gene that is strongly linked to breast and ovarian cancer. Not only are European labs refusing to recognize the patent--and continuing, defiantly, to conduct their own testing--but they're also battling to get it revoked. Dutch gene-testing labs are exploring ways to block the patent in their country. And this month Paris' renowned Institut Curie is filing a legal challenge to the patent in the European Patent Office. (Their move has been supported by the French health and research ministers--the latter calling Myriad's patent an "abusive monopoly.")

At issue, European genetic testers say, is the half-decade that they have spent developing their own breast and ovarian gene tests, which they argue are cheaper than Myriad's top-of-the-line $2,680 procedure. Furthermore, they say they resent a U.S. firm's unprecedented attempt to control a gene's use in diagnostics. "We refuse to send [Myriad] DNA," says Dominique Stoppa-Lyonnet, head of clinical genetics at the Institut Curie. "I am against monopolies on genetic testing. It's not good for patients. And it's not good for the field."

The scuffle could hurt Myriad. The firm drew 42% of its first-quarter revenues from genetic testing, and the breast test--on which it holds 21 patents worldwide--is by far its biggest seller. Since the company discovered BRCA1 in 1994, it has poured tens of millions of dollars into developing the test, which can detect 800 mutations in the gene.

Gregory Critchfield, president of Myriad's genetic-testing division, argues that European labs can't just abscond with his company's intellectual property because they feel like running their own shops. "If I am a researcher that works in telecom and I want to be able to build my own cell phone, can I steal from Nokia?" he asks. And while Myriad has no current plans to enforce its European patents, he adds, it would be "very premature" to conclude that the company won't do battle for them.

Looks as if the gene map has an international border dispute on its hands.