An article by Jennifer Washburn in the April 12, 2006 issue of the Los Angeles Times entitled “The legal lock on stem cells;
Two patents that cover key research areas are setting back science,” discusses patent royalty issues surrounding California’s Proposition 71/CIRM previously discussed in this ezine (“Future Bumps In The Road For State-Funding Of Stem Cell Research,” http://ezinearticles.com/?id=171034.) However, unlike the theme in the ezine, which suggested that patent royalty issues were bumps in the road which could be worked out, the Washburn article suggested that stem cell patents were themselves problematic.
Washburn wrote: “The foundation’s [WARF’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.”
Obliquely, Washburn suggests that California’s CIRM should challenge the validity of WARF’s patents: “The Foundation
for Taxpayer and Consumer Rights, based in Santa Monica, has urged California’s stem cell agency to challenge the Wisconsin patents.”
The basic WARF patent is US 5,843,780 (issued 1 Dec 1998 to James A. Thomson, based on application 591246 filed 18 Jan 1996; the application was a continuation-in-part of U.S. application Ser. No. 08/376,327 filed Jan. 20, 1995. This invention was made with United States government support awarded by NIH NCRR Grant No. RR00167. Thus, if California’s CIRM were to challenge the ‘780 patent, one would have state taxpayer money of California used to challenge a patent held by a Wisconsin agency (WARF), based on research paid by for by the federal National Institutes of Health (NIH). It is doubtful that state taxpayers in California or in Wisconsin, or federal taxpayers, would find this a useful expenditutre of money.
The previous ezine article stated: An important message to appreciate is that money from state-funding of stem cell research intended to create new horizons in medical treatment may be directed to paying off holders of already-created rights. It may well happen that there are valid patent rights in the stem cell area, and states working in the area must negotiate with the holders of those rights. Separately, the Hatch-Waxman Act created in 35 USC 271(e)(1) a safe harbor for research used to furnish information to federal agencies (such as the FDA). The Supreme Court gave this safe harbor great breadth in the case Merck v. Integra.
Separately, it is ironic for Washburn to complain that WARF is asserting its patent rights while, at the same time, CIRM will be seeking to obtain patent rights to enforce against others. Although the patent royalty distribution under Proposition 71 is muddied by federal tax issues associated with the planned use of tax exempt bonds, California voters were told that there would be income from patent royalties.
As a minor aside to the Washburn article, the two patents discussed therein, U.S. 5,843,780 and 6,200,806, were respectively a continuation-in-part and a divisional; because neither was a continuation, the remark about the applicant can file a “continuation” with another until it gets approved was inappropriate to these facts. The USPTO is currently studying changes to the “continuation” process, but even the changes, as currently proposed, would not have impacted these two applications. Discussions about the effect of repeated continuations on patent grant rate have been discussed in 4 CHI.-KENT J. INTELL. PROP. 186 (available at http://jip.kentlaw.edu); ironically, misunderstanding of the patent grant rate underlies some of the arguments about the lack of patent quality relied upon in the Washburn article.