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Is Wisconsin's stem cell standing diminished?

Madison, Wis. - The legal wheels still have some spinning to do, but suddenly the prospect of the Wisconsin Alumni Research Foundation not owning three key stem cell patents, or deriving licensing income from them, seems very real.

The decision by United States Patent and Trademark Office examiners to reject WARF's patent claims might still be overturned or modified, but for the first time since University of Wisconsin-Madison stem cell researcher James Thomson developed a method for isolating and defining human embryonic stem cells, some in Wisconsin are wondering whether the university actually has done something groundbreaking.

Republican State Rep. Stephen Nass was among the first to jab the most visible champions of the research, Gov. Jim Doyle and the university. Nass said the preliminary rejection by the patent office raises serious issues about past claims from UW-Madison officials to obtain public support and financing for stem cell research.

Nass said Doyle has proposed throwing hundreds of millions in taxpayer resources into human embryonic stem cell research at UW-Madison based on potentially questionable claims. “Officials at UW-Madison have always said this research isn't about making money, it's about determining the potential of lifesaving treatments for various diseases,” Nass said in a release. “The threat of prolonged litigation by officials at UW-Madison seems to indicate the opposite.

“It seems the priority is about money and not cures.”
With the state allocating millions of dollars for stem cell research, and with plans to build a mass of stem cell product companies, the loss of three key patents is a prospect that others don't even want to contemplate - especially given the prolonged period of legal wrangling that lies ahead.

“I'm not going to get into that kind of speculation because I am, by and large, assuming it's not going to stand,” said Mark Bugher, director of University Research Park. “I think it's premature to speculate. This is a long, long process.”

Legal maneuvers

The next step in the patent re-examination process is WARF's response to the patent examiners, and then perhaps to the patent office's Board of Patent Appeals, and then perhaps to the federal courts.

Thus far, the patent examiners have agreed with the California-based Foundation for Taxpayer and Consumer Rights and the Public Patent Foundation, the consumer organizations that filed the patent challenge.

They argued that the patents, which covered the method of deriving stem cells from embryos and the claim to stem cells, themselves, were overly broad. They also asserted that the work done by James Thomson to isolate stem cell lines was “obvious” in light of previous scientific research, which made his work unpatentable.

To be patentable, an invention must not be obvious in light of what was publicly known at the moment it was created by the inventor.

Dr. Jeanne Loring, a stem cell researcher at the Burnham Institute for Medical Research, has helped develop what so far has been an effective case against the WARF patents. Loring said embryonic stem cells were discovered not by James Thomson but by three scientists - Martin Evans, Matt Kaufman, and Gail Martin - in 1981.

If the rejection of the patent stands, Loring indicated that Wisconsin's loss would be the nation's gain. “The whole landscape will change,” she said, because scientists in the U.S. would have the same rights and freedoms to use embryonic stem cells as scientists in the rest of the world.

Critics of the WARF stem cell patents have noted that they are not recognized outside the U.S., prompting American scientists to send research dollars abroad and avoid paying royalties to WARF.

Obviously, the case

Even before the recent decision, WARF had begun to soften its stance. Following an internal review and input from researchers, WARF said it would allow industry-sponsored research at academic and non-profit institutions without a license, and allow simpler, cost-free cell transfers among researchers.

WARF has given no indication that it's ready to concede defeat, but John Simpson, stem cell project director for the Foundation for Taxpayer and Consumer Rights, suggested that WARF abandon its claims for the sake of stem cell research.

“I would encourage them at this point, if they are sincere as they said recently about wanting to promote research and have a good, free exchange of ideas, the best thing they could do is simply not assert any of those [patent] claims,” Simpson said.

WARF Managing Director Carl Gulbrandsen has made it clear that WARF is prepared to exhaust its legal options.

Factoring into the remaining legal machinations is a pending United States Supreme Court decision on whether to change the long-standing patentability standard for obviousness. Any change in the legal test for obviousness would impact the ability to procure and enforce patents.

As part of the case in question, KSR International vs. Teleflex, the nation's high court will decide whether to modify or replace the current "teaching, suggestion, or motivation" standard, which requires a patent examiner or an entity trying to invalidate a patent to find some teaching, suggestion, or motivation in the prior art (known technology) in order to sustain an obviousness rejection of a patent application.

Dan Ravicher, executive director of the Public Patent Foundation, does not believe the court will relax the standard. “I think there's a 99 percent guarantee they will raise the bar,” he said. “I think the court will make non-obviousness much harder to prove.”

Brave face?

In an attempt to reassure state residents, Gov. Doyle noted that Wisconsin currently has three other unchallenged stem cell patents, and other scientists have made discoveries that have lead to 30 additional patent applications. Doyle, who has set a goal for Wisconsin to capture 10 percent of the stem cell market by 2015, pledged to continue to aggressively invest in stem cell research.

Jim Leonhart, executive vice president of the Wisconsin Biotechnology and Medical Device Association, said Wisconsin's biotech industry would flourish no matter how the patent dispute is resolved. Leonhart said WARF has a diverse portfolio that goes well beyond stem cell research, and he noted the confidence in the legitimacy of the patents expressed by Gulbrandsen.

“Carl Gulbrandsen and his team are respected around the world,” Leonhart said. “If Carl has confidence in these patents, that does give us some comfort because they know the issues better than anyone.”

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