03 Apr WARF says it's ready for a legal challenge on stem cells
Madison, Wis. — Just in case anyone doubts that the Wisconsin Alumni Research Foundation has both the will and the resources to defend its stem cell patent, Andy Cohn would like to disabuse them of the notion. Cohn, government and public relations manager for WARF, said the foundation, armed with a $1.5 billion endowment, is prepared to take on any legal challenges to its controversial stem cell patent.
In the wake of recent events, attorneys predict a legal challenge to what they view as a restrictive patent, but WARF has made it clear the patent was drafted for the courtroom.
“WARF has the resources to defend its patent,” Cohn said. “That’s one of the reasons why we’re one of the top technology transfer offices in the country, because we have an endowment that provides for us an ability to defend patents in the court room, which is a very expensive process.”
To the discoverer goes the spoils?
WARF manages inventions by UW-Madison professors and claims United States patents on all human embryonic stem cells in the U.S., no matter where or how they are derived. This patent, which is likely to produce a windfall for the UW, was obtained by WARF after famed researcher James Thomson grew human embryonic stem cells in a laboratory.
Human embryonic stem cells are coveted because they have yet to change into specific kinds of cells that make up human organs and tissues. Researchers hope to take advantage of their undifferentiated nature to produce cells that can replace diseased cells, yielding cures for a range of maladies.
WARF’s stem cell patent is written to cover both human embryonic stem cells and the method Thomson used to derive and grow them, which means that almost everybody that wants to use stem cells first must go through WARF. In addition, the patent includes a provision that requires researchers interested in commercializing discoveries made with WARF stem cells to negotiate another license and share profits derived from the enterprise.
“The only way that there will be a court challenge,” Cohn said, “is if somebody has a successful product in the marketplace. The only time that a court challenge would come is when there is money on the table, and we have no idea when that will happen.”
Critics say the patents are so broad and restrictive that they are putting the clamps on the distribution of stem cells to researchers in private laboratories and other universities, a charge that WARF disputes. Others have taken issue with the manner in which WARF distributes the cells, and with the fees it charges for their use – $500 to academic researchers and, depending on company size, graduated fees of up to $125,000 to private labs, plus an annual maintenance fee that can reach $40,000.
As part of the fee, WARF provides extensive training to licensees because human embryonic stem cells can be difficult to work with.
Thus far, WARF has distributed stem cells to 350 academic researchers, and has entered into license agreements with 12 private research labs.
Much of the recent concern has come from California, where WARF’s claim to licensing payments from a California stem cell research institute has created considerable heartburn. California was put on notice of WARF’s determination to assert its patent rights when general counsel Elizabeth Donley, speaking at a conference in San Francisco, noted the California Institute of Regenerative Medicine requires that 25 percent of royalties that non-profit grantees receive must be returned to the state.
She said WARF therefore would demand license fees and payments on all embryonic stem cell research funded under Proposition 71, a ballot initiative overwhelmingly approved by California voters. It called for the budgeting $3 billion for stem cell research, although none of the money has been spent because of legal challenges.
In a March 22 letter to WARF, John Simpson, the stem cell project director for the Santa Monica-based Foundation for Taxpayer and Consumer Rights, noted that WARF has not demanded license fees from non-profit institutions, and discoveries resulting from taxpayer-funded research should not be considered a commercial activity.
In a subsequent interview, Simpson acknowledged that he is not an attorney, but as a lay person he feels the concept of a patent on all embryonic human stem cells seems overly broad. “I can understand a methods patent, which would patent the technique for deriving the embryonic stem cells, and perhaps the particular cells or line that was derived using that method,” he said. “But if they are derived in a different way, I don’t see how they can assert that claim.”
Cohn bristled at the suggestion that the stem cell patent is more of a roadblock to embryonic stem cell research than federal limits announced by President Bush in 2001. He said WARF has made “absolutely every effort” to move this science forward.
“Just think about what a technology transfer office or a private company would have done if they would have this patent,” he said. “They certainly wouldn’t have distributed the lines, at cost, to over 300 researchers around the world. They wouldn’t have set up a training program to train scientists who want to get into this field. Three hundred of them have gone through that training session.”
He added that academic researchers who obtain WARF cells are totally free to patent any discovery they make, and to publish their findings without consulting WARF or the WiCell Research Institute. The non-profit institute, established to advance stem cell research, will be the site of the first National Stem Cell Bank.
More about WARF:
• Morgridge gift enables phase one of Institute for Discovery
• UW-Madison third in nation in tech-transfer value
More about stem cells:
• Federal and global guidelines on stem cell research offer a level playing field
• Senior Wisconsin stem-cell researcher leaves for Connecticut
• Wisconsin leads in stem cell science, but trails in producing companies