Consumer Watchdog – Patents hinder research on neural stem cells

A nonprofit Orange County research institute's efforts to promote research with human neural stem cells has effectively been blocked by a stem cell company's patents.

The National Human Neural Stem Cell Resource, run by Children's Hospital of Orange County Research Institute, had been providing neural stem cells to other researchers, mostly at universities and nonprofit research institutes.

Dr. Philip  H. Schwartz, managing  director of the Resource, explained that the neural stem cells are derived from CHOC patients.  From 2001 until 2007, Schwartz says he made neural stem cell lines available to about 25 researchers. The Resource charged $500 per cell line to help defray expenses. The operation, which Schwartz said is internally funded, has run up costs of about $600,000 since its inception.

In 2007 StemCells Inc. told CHOC the company holds patents covering the cells and said they wanted to discuss a license.  CHOC's legal department told the Resource not to distribute the neural stem cells even though they were for noncommercial
research.

Since then there have been another 25 requests for cells that have not been filled, Schwartz says.

This week Schwartz sent an e-mail message to researchers and others who follow stem cell issues explaining the situation. The message included a memo from Brent A. Dethlefs, director of the CHOC Research Institute  for scientists requesting neural stem cells.  It says:

"Regrettably, due to an unresolved legal issue between the Resource and the commercial entity StemCells Inc., we are unable to fulfill your request at this time."

Other cells  and tissues aren't affected by StemCell Inc.'s patent claims, he wrote.

Ken Stratton, StemCell Inc.'s  general counsel, told me that the firm holds  patents that it believes cover human neural stem cells.  He said Dethlefs' memo "misstates the situation in several important ways."

He said StemCells Inc. never asked CHOC to stop distributing cells. The company only pointed to the patents and raised the issue of a license.  Stratton said the possibility of a license is an ongoing discussion.

"We don't control them one bit," he said.

However, he declined to speculate about what action StemCells Inc. would take if CHOC decided to offer the cells without the company's blessing.

So maybe StemCells Inc. doesn't control CHOC, but it can put the fear of the U.S. patent system into its legal department and that's the same thing.

Aggressively defending its intellectual property portfolio may make business sense to StemCells Inc., but it's clearly hurting scientific research.  All Schwartz wants to do is provide cells derived from CHOC patients to academic scientists for noncommercial research.

A particular irony here is that the company's scientific founders are Irv Weissman of Stanford, Fred Gage of The Salk Institute and David J. Anderson of the California Institute of Technology.

You would have thought that with academic heavyweights like these involved with the company it would have been a no-brainer to figure out a way for Schwartz to distribute cells he has derived from CHOC patients to qualified researchers.

 The root of the problem is the Bayh-Dole act governing federally funded research. It has turned our universities into commercial entities where scientists rush to patent their discoveries rather than rush to publish and explain them.