Monday, July 31, 2006

More rhetoric in the WARF v. CIRM battle over stem cell patents

Terri Somers in the Union-Tribune: In Wisconsin lurks a force that scientists say is strangling embryonic stem cell research far more than any federal funding restrictions.

Scientists charge that WARF's greed in controlling the patents is thwarting potentially life-saving research. [IPBiz: note that TIME magazine did NOT include this issue in its July 30 coverage. The first two WARF patents are US 5,843,780 and 6,200,806.]

As a result, many U.S.-based scientists are looking for opportunities to take their work abroad. Two studies out of Princeton University show that U.S. stem cell scientists, compared to researchers in other fields, are disproportionately considering leaving the country. Patent concerns and access to the essential cells were among the reasons cited. [IPBiz note: the Princeton study showed stem cell scientists got more offers than other biologists, but did not comment on how they were considering the offers.]

Under the [WARF] patents, a researcher in the United States who uses embryonic stem cells in any way must pay a licensing fee to WARF, the university's licensing arm. [IPBiz: what happened to 35 USC 271(e)(1) and Merck v. Integra?]

“Outside of the (U.S.) government, the No. 1 hindrance to stem cell research is the WARF patents because of how they try to enforce their licenses,” said Mahendra Rao, the former head of the National Institutes of Health's stem cell efforts. [IPBiz: it looks like Rao places the Bush funding policy as the most significant problem, in contrast to Loring.]

Rao quit that coveted position last year and took a job with Carlsbad-based Invitrogen, an international biotechnology company. In his new job, Rao can work on embryonic stem cell projects at Invitrogen's offices around the globe. That includes an office in Asia, where the company recently moved a portion of its embryonic stem cell program, said company spokesman Greg Geissman. [IPBiz: moving the location of one's research does not avoid the problem of infringement when the product is brought into the U.S.]

Rao's concern about WARF has been echoed by the current stem cell chief at the NIH and by the chief scientific officer at the science-funding Juvenile Diabetes Research Foundation and intellectual property lawyers across the country.

The critics say they don't oppose patents, just the degree to which the foundation wants to profit from those it controls. [IPBiz: disputes about the AMOUNT of patent royalties are well-known. See the Wright Brothers.]

“If a company can't afford our $25,000 yearly fee, then it cannot afford the growth factors it needs to grow the cells,” Donley said.

That's a flawed argument, said Cathryn Campbell, an intellectual property lawyer with Needle and Rosenberg in San Diego.

“It's about how to maximize the value of this technology and how much this license should cost,” Campbell said. “Even $25,000 is a lot for the kind of biotech company that will likely be doing this research.”

Reach-through royalty issue -->

“We are not opposed to patents. We respect them and see their value,” Goswami said. The company typically pays for licenses on 40 patents a year, he said.

But WARF has what he called “a reach-through royalty clause, where they say anything you've invented remotely by using human embryonic stem cells will now have a royalty obligation back to WARF.”

For example, if Invitrogen uses embryonic stem cells early in the development of a tool for drug discovery but the production of the tool doesn't involve stem cells, WARF would still want royalties on the tool, he said.

WARF also wants companies with licenses to pay royalties on products they sell in foreign markets that don't honor the patents, Goswami said. That would give an advantage to companies overseas, which can develop the same tools without owing money to WARF.

Royalties under Proposition 71:

Recently, the California institute's [CIRM's] board decided that if a grant-receiving organization made a discovery with Proposition 71 dollars that could be patented and sold, a portion of the profits would be returned to the taxpayers.

The board debated this policy at length, because it was looking for a balance between getting a return on the investment of taxpayers and not hindering scientific development.

WARF has decided it is entitled to a cut of the state's royalties.


An editorial from the Wisconsin State Journal on July 29, 2006 entitled Dear California: Nuts to you!:

To hear the folks in California tell it, the single biggest roadblock to the development of life-saving medical treatments based on stem-cell science is -- Wisconsin.

But the California group has not stopped there [re-exam request of PubPat and FTCR]. It has also launched an attack against WARF in the court of public opinion, charging that:

"The folks in Wisconsin need to get the dollar signs out of their eyes and stop impeding vital research."

Furthermore, the group has tried to discredit Thomson, claiming that his discoveries were so "obvious" that he did not deserve any patents.

Well. Those are some serious grievances.

The Patent Office will deal with the legal merits of the Californians' complaint. But how should Wisconsin respond to the more personal attacks on its university and its star scientist? [IPBiz: this is sounding like the initial defense of Hwang Woo-Suk in South Korea.]

Let's begin with: What a load of bunk!

Attempting to discredit Thomson is like saddling up a mouse for a cross-country ride: You're not going to get far.

Thomson earned his patents by directing the first group of scientists to isolate human embryonic stem cells and keep them alive in an unchanged state. His achievement was widely praised as the breakthrough that created the possibility of using embryonic stem cells to treat disease and save lives.

Time magazine put Thomson on its cover in 2001 with the caption "the man who brought you stem cells," and in the article inside the magazine asked "Who says there are no Einsteins anymore?"

The conflict with the California group occurred only because California wants to use WARF's patented discoveries not only for research but also for commercial development.

California has a state plan to invest $3 billion in embryonic stem-cell research. As part of that plan, the California Institute for Regenerative Medicine wants to use Wisconsin's patented stem cell lines and methodology -- for free -- to create commercial developments, which the institute expects to patent, earning money from royalties and fees.

Follow the California logic: Wisconsin should be prohibited from making money from its patents, but California should be allowed to use the Wisconsin stem cells and methods to get its own patents, from which it will make money.

It's sort of like playing basketball against a team that declares: Our baskets count; yours don't.

Patent disputes are common and often resolved through negotiation. It would be a good idea in this case for California to come to the bargaining table with a reasonable offer to pay up for Wisconsin's patented stem cells and methods.

It would also be a good idea for the Californians to drop the anti-Wisconsin rhetoric. The facts are on our side.


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