As WARF Updates Embryonic Stem Cell Policy To Ease License Requirements, IP Row Unfolds

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BioTech Transfer Week

The Wisconsin Alumni Research Foundation, eager to make human embryonic stem cell lines available “to as many researchers as possible,” last month changed and clarified policies that govern how it licenses the cells.

The changes, which include new guidelines for company-sponsored academic research and lab-to-lab transfer of cells, have thus far been welcomed by the hESC research community.

However, a pair of non-profit watchdog groups and a prominent stem-cell researcher maintain that the changes are inadequate, and that the patents that protect WARF‘s stem cells are invalid. As a result they have asked the US Patent and Trademark Office to re-examine the IP that covers the stem cells.

WARF doesn’t buy it. “I think that there has been a lot of misunderstanding from the beginning about our efforts to distribute the cells and to make them available to researchers,” Andy Cohn, director of government and public relations for the foundation, told BTW this week.

“From the beginning, our policy was that a researcher could get our cells for what it cost us to set up a lab and distribute those cells,” Cohn said. “And then they could patent any discovery they then made with those cells — they wouldn’t have to check with us, and they would own the patent, and there would be no restriction on publication. This is an effort by a non-profit foundation to get the cells out to as many researchers as possible,” he added.

The patents in question — US Nos. 5,843,780; 6,200,806; and 7,029,913 — are all entitled “Primate embryonic stem cells,” and pertain to specific purified preparations of primate ESCs, as well as methods for isolating the cells. The inventor on all the patents is University of Wisconsin professor James Thomson.

Last month, WARF announced three changes and clarifications to the policies governing how it licenses the cells. First, WARF created a policy allowing companies without a license to the cells to sponsor research on hESCs at academic or non-profit institutions. WARF added that companies would need a license if and when they brought the research into their laboratories.

Second, WARF has enacted policies that will enable “easier and simpler, cost-free cell transfers among researchers,” according to the statement. Finally, the foundation clarified that the California Institute for Regenerative Medicine does not require a license or agreement from WARF to fund hESC research in California.

The latter clarification coincided with an announcement by CIRM, a non-profit research institute established in early 2005, that it had approved 72 stem cell-related research grants totaling $45 million over two years to 20 academic and non-profit research centers in California.

IP Challenge

On the same day that WARF issued its statement on policy changes, the Foundation for Taxpayer Consumer Rights, a California-based consumer watchdog group, said that the changes were “a step in the right direction, but don’t go far enough.”

In fact, the FTCR, along with New York-based watchdog group Public Patent Foundation and Burnham Institute for Medical Research stem cell scientist Jeanne Loring, believe that the patents shouldn’t even exist, and have publicly stated that WARF should abandon its claims to them.

University of Wisconsin professor “James Thomson did not invent human embryonic stem cells,” Dan Ravicher, executive director of PPF, told BTW. “No matter how many people say that he did, he did not. He doesn’t deserve to have these patents, and WARF doesn’t deserve to have these patents.”

Last July, FTCR and PPF jointly asked the USPTO to re-examine WARF‘s patents, and Loring filed a statement supporting the request. Loring, who is an adjunct associate professor of stem cells and regeneration at Burnham, told BTW that the patents should not exist because there was substantial prior art.

“They followed exactly the same recipe for making mouse embryonic stem cells, which was published in 1981,” Loring said. “They only used different embryos from different species.”

Loring said that the prior art exists in the form of publications by various researchers who failed to file for their own patents at the time. “Part of the problem was that there were no patents for prior art. There were some, but not the killer patent that the patent office looks for. But there were several articles that spelled out exactly how to do this that were never mentioned in the WARF patents,” he added.

WARF disagrees. The research that led to the patents “took over 17 years, which is the strongest argument,” according to Craig Christianson, director of licensing at WARF. “The prior art that’s been suggested is cumulative — it’s not new. It’s also mouse prior art… and there is a particular factor that is necessary for mouse, and it absolutely differentiates the human cells.”

WARF‘s Cohn added that “if anybody thinks that what Dr. James Thomson discovered is not a new discovery — that if 50 other scientists weren’t trying to do the same thing — then how come everybody is so excited about it?”

Cohn also said that in addition to the multiple academic stem cell licenses WARF has granted, it has negotiated licenses with 15 companies, including Advanced Cell Technology, Aruna Biomedical, Chemicon, ES Cell, Geron, ProteoSys, Stem Cell Technologies; and Cellular Dynamics International, which was co-founded by Thomson. WARF has 11 more licensing deals in the negotiation or draft phase.

However, PPF’s Ravicher stressed that the number of successful licensing agreements WARF has executed does not justify the patents.

“Just because you pay off the mob when they come over to your store doesn’t mean they have a right to exist,” Ravicher said. “People pay a lot of money for a lot of things they shouldn’t have to. It does absolutely nothing to support the validity of the patents,” he said. “All it does is support the ability of WARF to harass people, and means that the price they’re paying is less than the risk of being harassed.”

‘Chilling’ Research?

The stem cell research community has greeted WARF‘s changes with mostly positive reviews. In a statement, James Severson, vice president of intellectual property and technology transfer at the University of Washington, said “these policy changes will facilitate further research and discovery.”

In addition, Katherine Ku, director of the office of technology licensing at Stanford University, said in a statement that Stanford was “delighted to have such a clear statement from WARF about the intellectual property implications for institutions funded by CIRM and [that] use cells from WARF.”

Burnham’s Loring told BTW that the changes are a marked improvement over previous policies.

“Even as academics, we had to pay very high licensing fess — at least high for academics,” Loring said. “Also, we couldn’t get the cells and give them to somebody else, even if they had a license. We were precluded from doing that. People share cell preparations — it’s the key to collaboration. Just because you pay off the mob when they come over to your store, doesn’t mean they have a right to exist.’

WARF told BTW that its original restrictions on sharing cells were due to a quality control issue. “We wanted [potential sub-licensers] to get higher-quality cells directly from the presidential line owners,” Christianson said. “But we certainly listened to the research requirements, and certainly worked with the NIH to change our policy to allow a no-cost, permissive cell-transfer policy, both for our materials and for other people’s materials, if the other cell line owners permit it.”

Loring also said that the policy change with the biggest potential impact is the one that allows companies to sponsor hESC-related research without themselves having a license or a royalty agreement with WARF.

“This is a huge difference, because even if a company is awash in cash, it doesn’t want to spend it on something it can’t use,” Loring said. “Since WARF held all the cards, they could pretty much name the price. And even though these are all individually negotiated, and I am not privy to the terms, I do know a number of companies that just said, ‘No way in this lifetime or anyone else’s am I going to sign a royalty agreement like that.’ It was very unappealing for companies that wanted to go beyond the very simple selling of reagents,” she added.

WARF‘s Christianson said that WARF had always allowed companies to work in collaboration with academic researchers, but that the previous policies were in place because it didn’t want rights to any data to pass from the bench top to the company.

“We didn’t know how much that might have held back corporate sponsorship of research, although I think very little,” Christianson said. The new policy, he said, “lets companies know that they can dip their toe in the water through sponsoring academic research, which would be a very visible funding source for stem cell researchers looking for funds in a constrained environment. When it comes time to bring that research into the company, or put a product on the market, at that time the company can negotiate a license with us.”

The Public Patent Foundation held firm. “WARF was chilling research and development activities,” Ravicher said. “They were doing this chilling by asserting the patents and requiring license fees and making other aggressive statements about how they would sue and expect payment from anyone doing anything with respect to hESCs.”

Cohn said that WARF always has and continues to do what it thinks is right in order to spread the wealth — within reason.

“What if a private company had made this discovery?” Cohn asked. “Do you think they would be in the business of distributing cells and announcing to the world and training people how to use their discovery? We take this responsibility very seriously and, while in no way do we claim to be perfect, we claim to be doing everything in our power to make these cells available and to have them worked on by scientists in both commercial and academic laboratories so that the treatments and cures that everybody hopes for can be made as quickly as possible,” he said.

Cause and Effect?

The patent re-examination is ongoing, and the ball is now in the USPTO‘s court, according to Dan Ravicher, executive director of New York-based watchdog group Public Patent Foundation, which is one of a group of challengers to WARF‘s stem cell patents.

He said it might take the agency anywhere from 18 months to 10 years to make a decision, and that the eventual decision will only be an initial one to which WARF will have a right to respond.

In the meantime, PPF and Foundation for Taxpayer Consumer Rights, a California-based consumer watchdog group that has also challenged the IP, believe that their actions, made months before the policy changes were announced, at least caught WARF‘s attention.

In a January statement, the groups said that “WARF clearly softened its position on the patents as a result of this challenge.”

But to WARF, the patent re-examination has nothing to do with its policy changes. The FTCR and PPF would “like to think that, but it’s just ludicrous,” Andy Cohn, director of government and public relations, told BTW. “We did this because we listened to our customers. We looked at our own procedures, did a thorough review of what was necessary, and came up with these changes.” Cohn added that the reassessment also coincided with the hiring of a new director of licensing, Craig Christianson.

In fact, last week the FTCR and PPF backed off their January statement a bit. “I don’t have any evidence for their motivation… other than their own statements,” Ravicher told BTW. “It seems quite coincidental.”

WARF was “reported to have said that [it] had been thinking about making these changes for some number of months, and if you do the calculation, it goes back exactly to the month that we filed the challenges,” he said. “It may have been purely coincidental. Who knows?”

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