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WARF's Stem Cell Patents and Tensions between Public and Private Sector Approaches to Research

Published online by Cambridge University Press:  01 January 2021

John M. Golden
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Extract

While society debates whether and how to use public funds to support work on human embryonic stem cells (hESCs), many scientific groups and businesses debate a different question — the extent to which patents that cover such stem cells should be permitted to limit or to tax their research. The Wisconsin Alumni Research Foundation (WARF), a non-profit foundation that manages intellectual property generated by researchers at the University of Wisconsin at Madison, owns three patents that have been at the heart of the latter controversy. The story of WARF’s patents and the controversy they have fostered highlights not only continuing tensions between proprietary and nonproprietary approaches to developing science and technology, but also an at least partly reassuring capacity of public and private sectors to deal with those tensions in a way that can render them substantially manageable, and frequently more manageable as a technology matures.

Type
Symposium
Information
Journal of Law, Medicine & Ethics , Volume 38 , Issue 2 , Summer 2010 , pp. 314 - 331
Copyright
Copyright © American Society of Law, Medicine and Ethics 2010

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References

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See Kintisch, E., “Groups Challenge Key Stem Cell Patents,” Science 313, no. 5785 (2006): 281, at 281 (2006) (quoting criticism of WARF's “licensing terms” by Professor Douglas Melton of Harvard University).CrossRefGoogle Scholar
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Id. (reporting a WARF attorney's statement that “the CIRM demand amounted to a commercialization of the research,” and that WARF might “seek license fees and payments from the commercial partners of [CIRM] grantees”); see also Check, E., “Patenting the Obvious?” Nature 447, no. 7140 (2007): 16–17, at 16 (reporting that, in March 2006, “a WARF official told a conference of biotechnology entrepreneurs that WARF expected the CIRM to pay it licence fees and royalties”).Google Scholar
Holden, C., “… And Sought,” Science 314, no. 5796 (2006): 35, at 35. WARF's public pursuit of licensing fees from a California government agency was peculiarly ill-timed given that news of the WARF-California standoff came at about the same time that the Supreme Court's hearing of oral arguments in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006), was focusing much attention, fairly or unfairly, on the presumptively scurrilous behavior of “patent trolls” – a term often conceived as encompassing any patent holder who does not itself work to produce commercial embodiments of its invention, but instead seeks to exploit its patent rights through licensing. See Golden, J. M., “‘Patent Trolls’ and Patent Remedies,” Texas Law Review 85, no. 7 (2007): 2111–2161, at 2112 (describing one definition of “patent trolls”). As an entity separate from the University of Wisconsin, WARF could not claim to be anything but an entity formed to manage, to own, and to enforce intellectual property rights. It was thus particularly liable to be stamped with the stigmatizing “troll” label, an undesirable position to be in at a time when a plurality of Supreme Court justices was being moved to respond to an alleged plague of patent licensing companies. See eBay, 547 U.S. at 396 (Kennedy, J., concurring) (expressing concern about the development of an industry “in which firms use patents not as a basis for producing and selling goods but, instead, primarily for obtaining licensing fees”). WARF's bargaining position with prospective licensees was presumably further weakened by the relatively swift move of district courts, in the wake of the Supreme Court's decision in eBay, toward a position of consistently denying injunctions against infringement when patent holders do not compete in product or service markets with the adjudged infringer. See Golden, , “‘Patent Trolls,’” supra, at 2113 (describing post-eBay district courts as “hav[ing] consistently denied permanent injunctions in cases where… the infringer and patent holder were not competitors”). But cf. Commonwealth Sci. & Indus. Research Organisation v. Buffalo Tech. Inc., 492 F. Supp. 2d 600, 601 (E.D. Tex. 2007) (subsequently granting a permanent injunction that had been requested by “the principal scientific research organization of the Australian Federal Government”), vacated on other grounds, 542 F.3d 1363 (Fed. Cir. 2008).CrossRefGoogle Scholar
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WARF denied that the reexaminations inspired the adoption of new policies, asserting instead that the changes resulted from a review, done in consultation with NIH scientists, that had begun several months beforehand. Wahlberg, David, “Certain Fees for Stem Cells Waived: WARF Won't Charge for Non-Commercial Research,” Wisconsin State Journal, January 23, 2007, at A1 (reporting statements by Andy Cohn of WARF).Google Scholar
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Cf. Golden, , supra note 32 (“In an area of high technological and economic contingency, there is an especially great likelihood that ['private parties or government actors who operate on a finer scale than a high-level policymaker'] will have a greater capacity, due to better knowledge or sheer force of numbers, to identify or to devise optimal or closer-to-optimal approaches to meting out shares of technological value.”).Google Scholar
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Rebecca Eisenberg and Arti Rai have noted how downside effects of the interplay between public sector and private sector research efforts might also run in the opposite direction because, for example, “aggressive versions of a public domain approach [to research or the development of inputs to research] may undermine the types of small firms that tend to provide specialized research inputs.” Eisenberg, R. S. and Rai, A.K., “Harnessing and Sharing the Benefits of State-Sponsored Research: Intellectual Property Rights and Data Sharing in California's Stem Cell Initiative,” Berkeley Technology Law Journal 21, no. 3 (2006): 1187–1213, at 1202. But given historical restrictions on public funding of stem cell research, such a phenomenon does not appear implicated in the story of WARF's basic stem cell patents.Google Scholar
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See Holden, and Vogel, , supra note 139, at 560 (2008) (“Research teams around the world are now adding [induced pluripotent stem] cells to their repertoire.”); Korobkin, , supra note 65, at 55 (“The California Institute for Regenerative Medicine, charged with distributing 3 billion dollars in state taxpayer funding of stem cell research, is currently funding both research paths.”).Google Scholar
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Cf. Rai, , supra note 130, at 132 (contending that “the historical record makes it clear that collective exchange norms with respect to patents emerge only with difficulty”).Google Scholar
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Cf. Hayden, E. C., “Stem-Cell Patents Confirmed,” Nature News, March 17, 2008, available at <http://www.nature.com/news/2008/080317/full/452265b.html> (last visited April 27, 2010) (reporting that “Ken Taymor, head of the University of California's Berkeley Center for Law, Business and the Economy, says the re-examination has been a boon for WARF, in part because it has diverted attention from WARF's attempts to bolster its patent positions” with “downstream” patents).Google Scholar
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