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 capital investors that these patents existed and that it would be impossible to obtain funding from them," she says.
One notes that the significance, and potential impact on research, of the WARF/Thomson patents was known in the embryonic stem cell before Proposition 71 was passed. However, it is apparent that the PRESENCE of patents in the area may not have been known to all academic workers, even though the significance of the work should have been, because a paper by Thomson was submitted to PNAS just a few days after the basic patent application was filed.
The Technology Review article also states:
Universities generally allow other institutions to use patented technologies without special permission. WARF, however, requires universities to get a license to do embryonic stem cell research. "None of us understand why we need a license...Why is this technology any different?" says one technology-transfer official.
WARF officials emphasize that they have made licenses broadly available. "We have given 54 different research groups in California royalty-free licenses," says WARF's Cohn. "Those academic researchers can patent anything they find and publish anything they find without any oversight from us." WARF does not disclose specific details of licenses.
But license requirements could still impact early research and development. "A number of institutions have not been able to reach terms with WARF for licenses," says Kenneth Taymor, an attorney with the Stanford Program on Stem Cells in Society. "That suggests that in this research area, it's making impediments."
The license for the University of California, for example, permits scientists to use only a small number of embryonic stem cell lines. And the license granted to the Howard Hughes Medical Institute, a nonprofit medical research organization that funds scientists across the nation, prohibits scientists from accepting funding from or collaborating with commercial companies unless the company has a commercial license from WARF. (Some companies have chosen not to take a license because of the cost.) That could make it difficult for academics to partner with companies to develop their discoveries into products or therapies.
This inability to gain industry investments is of particular concern in the embryonic stem cell field. Since federal funding is limited (due to restrictions mandated by President Bush in 2001), experts predict that much early-stage stem cell research that usually would take place at universities will need to be done by biotech companies.
Licensing costs could also hinder scientists who want to start their own biotech companies. "I think there has been a lot of concern from investors about funding startup companies because of uncertainty over WARF patent coverage," says Warren.
The Technology Review article does not mention the Supreme Court cases of Merck v. Integra (scope of research safe harbor under 35 USC 271(e)(1)) or Florida Prepaid Postsecondary (issues concerning litigation against STATES who are accused patent infringers).
The article obliquely refers to the Cohen/Boyer patents: "This is not unlike in the heyday of DNA, when Stanford had seminal foundational patents [on recombinant DNA] that interested parties needed to access to further the science," says Todd Lorenz, chair of Life Sciences and Health Care, at the law firm Dorsey & Whitney LLP. Stanford allowed other universities to use the technology without special permission, but charged private companies a licensing fee. The article fails to mention these patents antedated the Bayh-Dole Act. Further, the Bayh-Dole Act preceded the Hatch-Waxman Act, which introduced 35 USC 271(e)(1). Thus, the legal landscape mentioned in the article has been long passed by.
The article suggests some uncertainty in the status of negotiations between WARF and CIRM:
It's unclear how the California situation will unfold. Nicole Pagano, a spokeswoman for the California Institute for Regenerative Medicine [CIRM], the agency overseeing Prop 71 funds, said talks are underway. Yet Andy Cohn, a spokesman for WARF, says it is not formally negotiating with California and does not have plans to in the near future.
**A post was submitted to the Technology Review on 24 April 2006:
The text --These patents, which are now owned by the Wisconsin Alumni Research Foundation (WARF), apply to all current lines of embryonic stem cells -- scientists who wish to do research on such cells, even if they derive their own lines, must acquire a license from the Wisconsin foundation.-- might be reconsidered.
Given that state agencies, such as California's CIRM, are doing research for the purpose of obtaining a treatment for which FDA approval will be required, the activities of such agencies are likely to be insulated from infringement by the safe harbor of 35 USC 271(e)(1), as broadly interpreted in the recent Supreme court case of Merck v. Integra.
This point has been published in the academic literature, 88 JPTOS 239 (March 2006).
Separately, for the particular situation wherein a state agency is an accused infringer, the case will likely be heard in state court, not federal court, per Florida Prepaid Postsecondary.