CALIFORNIA’S $3-billion stem cell program has encountered repeated setbacks since it was approved by voters 17 months ago. Now it faces an entirely new and potentially even more worrisome challenge arising from two powerful patents -- patents No. 5,843,780 and No. 6,200,806, to be exact -- which cover all human embryonic stem cells and the method by which they’re made.
Patents are supposed to stimulate innovation. That’s why they exist. But it appears that these two patents, held by a foundation affiliated with the University of Wisconsin, may exert a dangerous monopoly over all future research in the field -- one that may pose an even greater long-term threat to stem cell science than the Bush administration’s federal funding ban.
Here’s the background. In mid-March, the Wisconsin Alumni Research Foundation, or WARF, announced that the state of California must sign a legal contract and pay user fees to the foundation if any state-funded scientists want to work with human embryonic stem cells of any kind. Yes, of any kind.
The foundation’s patents are based on the work of James Thompson, a University of Wisconsin professor who was the first scientist to isolate embryonic stem cells, in 1998. But the patents are so broad -- unreasonably broad -- that they cover all human embryonic stem cell lines in the U.S., not just the specific lines developed by Thompson.
Jeanne Loring, an embryologist at the Burnham Institute in La Jolla, is one of many scientists who worry about the effect of this monopoly. 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 charged. The foundation’s commercial contracts also typically include an annual maintenance fee of $40,000 -- a steep hurdle for any young company.
Andrew Cohn, a spokesperson for the foundation, says the group has gone a long way toward meeting the concerns of its critics. In response to pressure from the National Institutes of Health, it dropped the fees it charges academics from $5,000 to $500 and adopted a more flexible licensing agreement. In its standard university contract, the foundation is careful not to claim any commercial rights to inventions made by academic licensees, even though its patents would permit that.
But Kenneth Taymor, a Stanford University attorney with the Program on Stem Cells in Society, says this discrete contract language is meaningless. “If a scientist develops a research tool, a therapy or some other useful invention stemming from embryonic stem cells,” he says, “WARF can step in whenever it wants to and claim a share of the commercial rights.” This, of course, inhibits research and commercial investment -- a problem only made worse by the foundation’s close ties to Geron Corp. of Menlo Park.
In 1996, the foundation granted Geron Corp. exclusive commercial rights to many of the most valuable therapeutic uses of its human embryonic stem cells. In Taymor’s words, the license encompasses “the crown jewels of regenerative medicine,” including all the neurodegenerative diseases (Alzheimer’s, Parkinson’s, Lou Gehrig’s), as well as diabetes and heart diseases. In 2001, Douglas Melton, a Harvard scientist, publicly complained that, because of this license, anything he develops in his academic lab is owned by Geron.
This monopoly doesn’t just threaten the future of stem cell research. It also raises a fundamental question: Should the U.S. Patent Office allow the basic building blocks of science to be patented? This question goes to the heart of a recent U.S. Supreme Court case. The court is considering whether a patent should have been issued on the basic biological relationship between homocysteine (an amino acid found in human blood) and vitamin B deficiencies. After the patent was issued, its owner sued a competitor simply for stating the biological facts of the relationship in a publication.
Controversial patents like these have proliferated over the last two decades. They range from the absurd -- a patent on crust-less peanut butter and jelly sandwiches -- to the deeply troubling: a patent on the human gene responsible for hereditary breast cancer, which the owner has used to block other scientists engaged in breast cancer research and diagnostic testing.
California doesn’t have a lot of room to maneuver. The Foundation for Taxpayer and Consumer Rights, based in Santa Monica, has urged California’s stem cell agency to challenge the Wisconsin patents. But patents are not easy to reverse, even when they are clearly contrary to the public interest. That’s why Congress needs to act now to reform the U.S. patent system.
The problem is twofold. First, Congress and the courts have continually expanded the range of inventions that are eligible for intellectual property protection, as well as the duration of that protection. Second, the patent office encourages examiners to approve patents, not reject them, so many that don’t really meet the eligibility criteria slip through. If one examiner rejects an application, the applicant can file a “continuation” with another until it gets approved. This is precisely what happened with the Wisconsin stem cell patents.
It’s time to bring rigor back to the U.S. patent system and stop this rubberstamping.