Sunday, May 28, 2006

Patents are extremely important, except the ones we do not like

The transcript of the April 27 meeting of the IP Task Force of California's CIRM is available, and contains the memorable line: "patents are extremely important, but except the ones we don't like." [see page 114] Although the meeting was an attempt to define an intellectual property policy for CIRM's grants, there is little discussion of intellectual property issues, and on page 114 one has the observation that it "might be useful to hear from intellectual property lawyers on this issue."

The topic of patent pools came up, and it was presented as a viable option, with examples of the aviation industry, sewing machines, and electronics. [pages 15, 22] There was a conclusion about the U.S. aviation patent pool in World War I: "and that's what led to fighter planes being built for World War I." Sorry, but there weren't any US built fighter planes used in World War I. The patent pool agreement was drafted by Benton Crisp, the attorney Henry Ford provided to Glenn Curtiss. There was only one Wright around at the time, because Wilbur had died from eating tainted seafood in Boston on a visit related to the ongoing patent litigations. Orville sold out his interests, and later there was a merger between the (former) Wright interests and those of Curtiss.

One does not find any significant discussion of intellectual property until page 104 of the 125 page report. At that point, Duane Roth points out it is absolutely necessary, extraordinarily complicated, and very, very expensive. Of potential royalties, Roth warns at page 106: "a hundred percent of nothing is nothing."

At page 119 Jeanne Loring ut in a plug for her article in the March 24, 2006 issue of Science, and at page 120 there is mention of the article by Jennifer Washburn in the Los Angeles Times.

In the entire 125 pages, there is no mention of research exemptions in patent law, including that of 35 USC 271(e)(1) as articulated in the recent Supreme Court case of Merck v. Integra.

It is hard to understand how CIRM will implement a policy on intellectual property without understanding the law of intellectual property.

In a post titled WARF: Onerous and Outrageous, californiastemcell report presents various quotes from the April 27 transcript. Of WARF, there is the text:

"For private institutions, I think it is a big disincentive because what WARF does is it looks at the size of the institution or the company that wants to license this product and wants to charge an upfront payment, which is very steep in any licensing terms, and then, of course, royalties obligations which are twofold. one, a direct royalty obligation which depends on products directly produced using stem cells, human embryonic or primate embryonic stem cells, but they also have 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. So, for instance, even if you had a treatment that was somehow brought to the market that has touched an embryonic stem cell in the United States, you will have to pay a royalty back to WARF. I think this is particularly onerous...."

**Returning to the quote in post title, see also an article in
Drug Discovery News Basically, a "good" patent is one you enforce against others, while a "bad" patent is one that is enforced against you.


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