MIT Technology Review’s concern about CIRM’s WARF patent rights claim on stem cells is misguided

On April 24, an article in MIT Technology Review portrayed the immediate concern over the Wisconsin/WARF/Thomson patents on stem cells as how patents will affect basic academic research, which, in turn, could affect the development of stem cell-based tools and therapies.

The article mentioned a possible move by the state of California to ensure cooperation between researchers from different states. The California CIRM Oversight Committee recently announced that any California researchers who develop patented discoveries using California state funds must share their patents with other state researchers. CIRM’s Ed Penhoet was quoted: “We hope WARF reciprocates.” Of course, one problem is that WARF currently has patents related to embryonic stem cells and CIRM does not. In addition, it would be necessary to know the details of what is being shared. Is the sharing only relevant to use by researchers at academic institutions, or does it extend to companies created by those researchers? One of the main selling points to voters in states like California and New Jersey was that state-funded research would recoup the money spent through patent royalties. If everyone gets a free license, such a recovery is unlikely to happen.

The article goes through the world of patent use among different patent-holding universities. Universities generally allow other institutions to use proprietary technologies without special permission. The litigated case of Madey v. Duke University is an exception to this general rule, although it was a patent-holding professor who sued a university. In addition, WARF requires universities to obtain a license to conduct embryonic stem cell research. “None of us understand why we need a license… Why is this technology any different?” says a technology transfer official. WARF’s license to the University of California, for example, allows scientists to use only a small number of embryonic stem cell lines. And licensed to the Howard Hughes Medical Institute, a nonprofit medical research organization that funds scientists across the country, prohibits scientists from accepting funding or collaborating with commercial companies unless the company has a business license from WARF.

The article features an interesting quote from Jeanne Loring, who is the author of an article criticizing WARF’s patent royalty lawsuit. [311 Science 1716 (2006)]: Jeanne Loring, a scientist at the Burnham Institute for Medical Research in La Jolla, CA, started a short-lived embryonic stem cell company several years ago. “I learned from venture capitalists that these patents existed and that it would be impossible to get funding from them,” she says. This quote is significant for at least two reasons. First, one sees that VCs were aware of the Thomson/WARF patents and saw them as an impediment to VC investment in the field. So, in terms of small research entities refusing CIRM money over disputes over patent royalty rights, one suspects that these small entities do NOT have venture capital funds as a viable alternative. I suspect that the length of time before payout is a separate deciding factor when it comes to VC funding; nothing here looks ready for commercialization seven years from now, a typical VC benchmark. Second, in the Bayh-Dole world, it’s a bit scary that a professor/entrepreneur doesn’t know the relevant patents of a Bayh-Dole grantee. Plus, it’s also scary that CIRM apparently didn’t anticipate the WARF game, the flaw in which is kind of hard to fathom since the basic patent was issued years ago.

The basic WARF/Thomson patent is US 5,843,780 (issued December 1, 1998 to James A. Thomson, based on application 591246 filed January 18, 1996; application was a continuation-in-part of US application US Serial No. 08/376,327 filed January 20, 1995. Obtained with federal NIH funding and therefore represents a patent obtained through the auspices of the Bayh-Dole Act True separately that Thomson, a few days after filing his basic patent application, submitted a document to the Proceedings of the National Academy of Sciences, which appeared as 92 PNAS 7844 (1995).His effort to patent did not impede his efforts for rapid public disclosure .

Kenneth Taymor, an attorney with the Stanford Program on Stem Cells in Society, is quoted in the article: “The more WARF presses for its rights, the more the investigation will be affected and the more likely it is to be moved abroad.” This bogeyman will not hunt. In a different variant, the investigation would be moved abroad after the Bush restriction in 2001.

Taymor and the article’s author, Emily Singer, simply fail to mention the role that 35 USC 271(e)(1) is going to play in embryonic stem cell research. Embryonic stem cell-derived therapies will need FDA approval. Work done to comply with FDA requirements is insulated from infringement liability through the safe harbor of 271(e)(1), as broadly interpreted by the US Supreme Court in Merck v. Integra.

The issues discussed in this article are related to those mentioned in Ebert, Lawrence. (2006, April 13). Will Wisconsin patents block embryonic stem cell research? EzineArticles. Retrieved April 24, 2006 from http://ezinearticles.com/?id=178431 and Ebert, Lawrence. (2006, April 12). Very off base Los Angeles Times article on stem cell issues. EzineArticles. Retrieved April 24, 2006 from http://ezinearticles.com/?Los-Angeles-Times-Article-Way-Off-Base-on-Stem-Cell-Issues&id=178050.