Thursday, March 30, 2006

LA Times on patent issues with Proposition 71 on stem cells

Lee Romney begins the article: When voters overwhelmingly approved California's novel $3-billion stem cell initiative, they counted on a promise spelled out on the ballot: The state would earn back as much as $1.1 billion in royalties from scientific discoveries.

But those hypothetical profits are now looking increasingly dubious.

Romney talks about the threats from WARF:

"Theoretically, could they [WARF] close down research activity in California? Yes," said Ed Penhoet, vice chairman of the institute's oversight committee.

A spokesman for the Wisconsin Alumni Research Foundation said talks with the institute are continuing. "We feel there should be a discussion about how the University of Wisconsin gets a benefit," Andrew Cohn said.

Of concerns of private industry:

Industry's key concerns, Genentech Executive Vice President Stephen Juelsgard told the committee, are that the state will dictate how much companies can charge for new treatments; maintain the right to patent technology, if companies fail to do so; and require companies to share developments they consider proprietary. Major companies "simply wouldn't engage," Juelsgard said. "It's not a risk worth taking."


Californians "never intended a blank check for biotech," said John Simpson of the Foundation for Taxpayer and Consumer Rights. "The state should hold the patents."

State Sen. Deborah Ortiz (D-Sacramento), meanwhile, has introduced legislation that would send amendments to Proposition 71 to the ballot for a vote. Among them: a requirement that every grant or loan recipient share half [IPBiz: !!] of net licensing revenues with the state if the state shared the expense of developing or protecting the patent. The share would be 25% if the patent was developed without state help.

"We're putting money in. We should get more out," said Ortiz spokeswoman Hallye Jordan.

Very conveniently, bizzbangbuzz has a post on March 30 illustrating why venture capitalists will NOT be investing in embryonic stem cell work:

Rule No 4
Only products and services that can relieve a significant identified group of customer’s pains can generate revenue...

Rule No 5
Investors expect to exit with significant returns within six years...

Thus, the "private industry" folks have limited horizons to get money. Recall the ultimate fate of the "Dolly the Sheep" people AND patents.


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