Wednesday, August 22, 2007

LBE posts on WisTechnology on stem cells

The following post to Wistechnology was attempted on August 22:

Of certain points made by Simpson and Still-->

Simpson: [The Bayh-Dole Act] has given ownership of any discovery to the research institution where it is made, even though taxpayers paid for the research. The institution - usually a university - patents the discovery and then licenses it to a private company and receives royalties.

LBE: Simpson's discussion of how the Bayh-Dole Act works is not entirely accurate. One can review 35 USC section 200 ff and see also

Simpson: First, when a discovery has been funded by the public, it's only fair that the public share in any profits. As an example, the recently enacted IP rules in California's landmark $6 billion stem cell research initiative provide that if there is revenue to a research institution as the result of publicly funded research, 25 percent goes back to the state.

LBE: Simpson's number of $6 billion assumes tax-exempt bonds can be issued, a reality that is far from clear. See

Problems Loom in State-Funded Stem Cell Programs,

Still: Not only does Simpson think the historic Bayh-Dole Act has been a colossal waste of time and money, even though many experts believe it unchained the innovative potential of the nation's research universities, but he doesn't understand the basics about “technology transfer” on those same campuses.

LBE: The Bayh-Dole Act has been criticized, for example, within the magazine Fortune. There have been some issues with potential misuse of university patents, such as the infringement suit brought by the University of Rochester over COX-2 inhibitors, which suit terminated at the summary judgment stage. See also

Still: Fact: With stem-cell licenses as well as all WARF licenses, non-profit researchers are provided a safe harbor to use any WARF-owned technology for academic research not only in Wisconsin but all over the world. The only thing WARF declines to do is to donate its stem cells to for-profit companies or private labs.

LBE: Neither Simpson nor Still talk about the impact of the research exemption of the Hatch-Waxman Act codified at 35 USC 271(e)(1), the relevance of which to stem cell research was discussed in 88 JPTOS 239 (2006).

Simpson rebuttal: And while many support it, many are critical. Read Jennifer Washburn's excellent book, "University, Inc. the Corporate Corruption of Higher Education" for that view. The suggestion is that the Bayh-Dole Act has led to too many patents, too far "upstream" and an over commercializing of traditional basic academic research.

LBE: On Jennifer Washburn, see Los Angeles Times Article Way Off Base on Stem Cell Issues at

Simpson rebuttal: 1. If there is an invention that results in a revenue stream, the funder - in this case, the state - should get a share as a direct payback. The exact amount is open to discussion, but needs to be known up front. Arguably, it also should be a function of the amount of public investment in the project.

LBE: One should realize that this is a sort of "deck chairs on the Titanic" concern. For example, with embryonic stem cells, the likelihood of research in the first ten years leading to a significant revenue stream is small. The more likely near-term payback is in state employment, and as to the science of stem cells, in genetic screening. See

Lawrence B. Ebert is a registered patent attorney located in central New Jersey. He holds a Ph.D. from Stanford, a J.D. from the University of Chicago, maintains a blog at, and is the author of LESSONS TO BE LEARNED FROM THE HWANG MATTER: ANALYZING INNOVATION THE RIGHT WAY, published in the Journal of the Patent & Trademark Office Society [88 JPTOS 239 (March 2006)] and PATENT QUALITY AND PATENT REFORM, 88 JPTOS 1068 (December 2006),


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