Will Wisconsin’s Patents Block Embryonic Stem Cell Research?

The stem cell article by Jennifer Washburn in the April 12, 2006 issue of the Los Angeles Times mentioned Jeanne Loring, an embryologist at the Burnham Institute in La Jolla: In 1999, Loring tried to launch a company to work with stem cells, but the firm quickly collapsed when it couldn’t raise the $100,000 in upfront fees the Wisconsin foundation [WARF] charged.

Washburn’s article did not mention an earlier article by Loring and co-author Cathryn Campbell, entitled “Intellectual Property and Human Embryonic Stem Cell Research,” which appeared in 311 Science 1716 on March 24, 2006. Therein, Loring and Campbell mentioned the changing royalty fees charged by WARF in response to a “memo of understanding” (MOU) with the federal funding agency. Loring/Campbell mentioned the “SBIR paradox” as to funding of small businesses, which may be a problem, but not one associated with patent law.

Both the Washburn and Loring/Campbell articles suggested that the WARF/Thomson patents would pose a long-term threat to stem cell science. Washburn noted the position of the Foundation for Taxpayer and Consumer Rights, based in Santa Monica, which urges California’s stem cell agency to challenge the Wisconsin patents. In greater detail, the Santa Monica group stated: The stem cell institute faces a threat from a foundation associated with the University of Wisconsin [WARF], which claims that it is owed licensing fees because it holds patents on all human embryonic stem cells in the United States. John M. Simpson stated: “This is an outrageous raid on the treasury of California based on over-reaching patents. No other nation in the world recognizes them. They are blocking vital research in the United States. I call on the stem cell institute to challenge the patents’ validity.”

Neither the Washburn nor Loring/Campbell articles discuss the possible research safe harbor created in the Hatch-Waxman Act and codified at 35 USC 271(e)(1). The breadth of this safe harbor was recently affirmed in the Supreme Court decision of Merck v. Integra. Neither the Washburn nor Loring/Campbell articles discuss that patent infringement suits against states and state bodies (such as California’s CIRM) are likely to be heard in state court, not federal court, according to the Supreme Court decision in Florida Prepaid Postsecondary.

Although there may be a visceral reaction to lash out against patents perceived to be overbroad, the cautionary tale of NTP v. RIM suggests that sometimes negotiation is the better path for infringement defendants. Further, Loring/Campbell mention the possibility of an interference with Plurion, although this most likely would change only the identity of the owner of controlling patents. Separately, one recalls that the Thomson patents are about creating stem cells from blastocysts; they are not about “cloning” [SCNT] technology. To date, traditional methods for stem cell separation from blastocysts have failed wherein SCNT is involved. There may be a question of enablement as to the Thomson patents for cases involving SCNT, which is where the holy grail of patient-specific stem cell lines resides.

As a general proposition, the state taxpayers underwriting efforts such as Proposition 71 have the expectation that money will be used for research, not to litigate the patent positions of prior researchers. Extrapolating further, state funding to achieve patent positions could lead to a balkanization of research, in which entities from individual states (such as California, New Jersey, Maryland, Illinois, Connecticut) are fighting one another, rather than collaborating.

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