LA Times discusses patent royalty demands made by WARF on CIRM

Both CaliforniaStemCellReport and IPBiz discussed the demands made by WARF upon CIRM as to patent royalties for stem cell patents assigned to WARF. On April 12, 2006, the Los Angeles Times reported on the matter. Two important patents controlled by WARF are as follows:

US 5,843,780 (issued 1 Dec 1998 to James A. Thomson, based on application 591246 filed 18 Jan 1996; the application was a continuation-in-part of U.S. application Ser. No. 08/376,327 filed Jan. 20, 1995. This invention was made with United States government support awarded by NIH NCRR Grant No. RR00167. The United States government has certain rights in this invention.

First claim:

A purified preparation of primate embryonic stem cells which (i) is capable of proliferation in an in vitro culture for over one year, (ii) maintains a karyotype in which all the chromosomes characteristic of the primate species are present and not noticeably altered through prolonged culture, (iii) maintains the potential to differentiate into derivatives of endoderm, mesoderm, and ectoderm tissues throughout the culture, and (iv) will not differentiate when cultured on a fibroblast feeder layer.

Ninth claim:

A method of isolating a primate embryonic stem cell line, comprising the steps of:

(a) isolating a primate blastocyst;

(b) isolating cells from the inner cell mass of the blastocyst of (a);

(c) plating the inner cell mass cells on embryonic fibroblasts, wherein inner cell mass-derived cells masses are formed;

(d) dissociating the mass into dissociated cells;

(e) replating the dissociated cells on embryonic feeder cells;

(f) selecting colonies with compact morphologies and cells with high nucleus to cytoplasm ratios and prominent nucleoli; and

(g) culturing the cells of the selected colonies.

As of April 12, 2006, this patent has been cited by 26 US patents, including:

6,090,622 (Human embryonic pluripotent germ cells by John D. Gearhart)

6,200,806 ( Primate embryonic stem cells )

**
US 6,200,806 ( Primate embryonic stem cells to Thomson) This application is a divisional of U.S. Ser. No. 08/591,246 which was filed on Jan. 18, 1996, issued as U.S. Pat. No. 5,843,780, Dec. 1, 1998 and is a continuation-in-part of U.S. Ser. No. 08/376,327 which was filed on Jan. 20, 1995, abandoned.

First claim:

A purified preparation of pluripotent human embryonic stem cells which (i) will proliferate in an in vitro culture for over one year, (ii) maintains a karyotype in which the chromosomes are euploid and not altered through prolonged culture, (iii) maintains the potential to differentiate to derivatives of endoderm, mesoderm, and ectoderm tissues throughout the culture, and (iv) is inhibited from differentiation when cultured on a fibroblast feeder layer.


As of April 12, 2006, this patent has been cited by 14 US patents.

The Los Angeles Times (Jennifer Washburn, B13) reports on 12 April 2006:

[CIRM] faces an entirely new and potentially even more worrisome challenge arising from two powerful patents -- patents No. 5,843,780 and No. 6,200,806, to be exact -- which cover all human embryonic stem cells and the method by which they're made.

(...)

Jeanne Loring, an embryologist at the Burnham Institute in La Jolla,
is one of many scientists who worry about the effect of this monopoly. In
1999, Loring tried to launch a company to work with stem cells, but the firm quickly
collapsed when it couldn't raise the $100,000 in upfront fees the
Wisconsin foundation charged. The foundation's commercial contracts also
typically include an annual maintenance fee of $40,000 -- a steep hurdle for any young company.

(...)
California doesn't have a lot of room to maneuver. The Foundation
for Taxpayer and Consumer Rights, based in Santa Monica, has urged
California's stem cell agency to challenge the Wisconsin patents.

(...)
If one examiner rejects an application, the applicant can file a "continuation" with another until it gets approved. This is precisely what happened with the Wisconsin stem cell patents.

**UPDATE. 28 April 2006 -->

In an April 27 editorial titled "Let the science begin," the Los Angeles Times jumps from the Alameda County Superior Court decision upholding the constitutionality of Proposition 71 to then discuss and oppose Senate Bill 401 of Deborah Ortiz on the basis that CIRM should be given the chance to work out its rules and begin its important research before the Legislature starts micromanaging every aspect of its work. The overall gist of the editorial, consistent with the title, is "we've had enough of this legal stuff; let's get going on the science." The problem with this is that the legal stuff is going to impact the science, whether or not the Los Angeles thinks that to be a just result.

Somewhere in the middle of the editorial is a statement that bears scrutiny:

It may have taken more protest and rancor than it should have to get the governing committee to make its dealings transparent, ensure that any future treatments are accessible to the state's poor and provide the public with a fair share of profits made from medical discoveries. But in recent months, the agency has addressed these concerns. It also has adopted top-notch standards for research ethics and the protection of potential egg donors.

One would think that the issue of patent royalties arising from patents generated through Proposition 71 was a done deal. It isn't. Furthermore, the issue of having to pay patent royalties to third parties, such as Wisconsin's WARF, in order to conduct stem cell research at all has not been addressed.

The basic objectives of Proposition 71 are not even clear. In the last month, Ed Penhoet chair of the IP Task Force of CIRM, has said

"What are we really attempting to do? Are we trying to drive therapies as rapidly as possible? Are we trying to stimulate business in California? Do we want to grow small companies? There (is) a whole set of potentially conflicting aims."


The Los Angeles Times recognizes that treatments are not around the corner: Even if research started tomorrow, any stem cell treatments are years away, which makes the legal delay that much more frustrating. A problem is that the Times has not connected the dots to appreciate how this delay impacts the concept of "a fair share of profits made from medical discoveries."

The Los Angeles Times has not recognized that California researchers, merely to get started in research, may have to infringe upon the patent rights of others. In the worse of all possible hypothetical worlds, wherein such activity is not excused by a research exemption, such patent holders might get an injunction against researchers in California. The potential impact of such a measure was seen in the RIM case concerning BlackBerries and is being investigated in the eBay case now before the U.S. Supreme Court.

To be helpful to Proposition 71, the Los Angeles Times needs to get a fuller grasp of "where" CIRM currently is and "what issues" it needs to resolve, especially in the intellectual property area.