Saturday, July 22, 2006

Schwarzenegger tells Genest to loan CIRM up to $150 million

The National Review blog notes: On Thursday morning [July 20, 2006], the governor sent a letter to state Finance Director Mike Genest asking him to loan up to $150 million to the stem cell agency [CIRM] from the state's general fund. The money is to be repaid with interest when lawsuits challenging the constitutionality of the California program are resolved. If the stem cell agency is declared constitutional, it can issue bonds to finance its work.

The article points out the complexity in California's proposed stem cell research created by the presence of the WARF/Thomson patents on stem cells (including US 5,843,780 and 6,200,806). The article included an excerpt from an article in the Wall Street Journal:

The state of California was pulled into the patent battle after voters there approved a ballot measure in 2004 that will fund as much as $300 million of research each year for 10 years, at a total cost to state taxpayers of as much as $6 billion. Mr. Simpson's taxpayer group is one of several that pressured the new state agency, the California Institute for Regenerative Medicine, to seek a return to taxpayers on its investment.

The agency is proposing to take 25% of the revenue that universities generate from patenting discoveries made with the stem-cell funds. In March, Ms. Donley said that WARF would consider any such move a "commercial" use of its patents and demand a cut of the state's take. Edward Penhoet, vice chairman of the California stem-cell agency's oversight board, calls WARF's argument "unprecedented," and the parties haven't reached any agreement.

Mr. Simpson says it was those discussions that led him to decide the patent is "damaging the taxpayers of California" and to start organizing the re-examination request being undertaken today.

The National Review blog does not point to the irony in the California group challenging Wisconsin's WARF for enforcing patents, when California's CIRM is positioning itself to do the same thing (i.e., gain royalties by enforcing patents).

The National Review does state:

What's been lost in the discussion on stem cell research is the economic component of the debate. These are for profit entities that are lining up for state and Federal money. We need to remember that. I wonder if Democrats would feel differently if the money dedicated for embryonic stem cell research was framed as inevitably a tax break for big pharma?

As a general matter, it's a bit more complex. "Not for profit" entities are lining up for state and Federal money, and then aligning themselves with "for profit" entities through the Bayh-Dole Act (and whatever variant thereof California and other states may develop). The incentive for the alignment comes through the presence of patents.


The Jackson News-Tribune states:

"It's absolutely absurd that one person or organization could own the rights to life itself," said John Simpson, stem cell project director of the Foundation for Taxpayer and Consumer Rights [FTCR], based in California.


Neither the National Review nor many of the newspapers covering the story have noted that the irony that Wisconsin's WARF has licensed the patents to Geron, a Menlo Park, California company.


Of the FTCR/PubPat challenge to Thomson's 5,843,780 and 6,200,806 as being anticipated by earlier work (US 5,166,065 of Williams), one notes Williams in the '065 patent did NOT report the creation of hESC but rather stated that LIF could be used to keep (hypothetical) hESC from differentiating. If it were so obvious that LIF could do the trick, one is puzzled by the fact that neither Williams nor anyone else was able (prior to the time of Thomson's discovery) to use LIF to create a stable hESC line. As to the anticipation argument made by PubPat, it is likely that PubPat will be the one caught with its hand in the cookie jar, because this dog won't hunt.


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