Contra Costa Times (California)

Three patents held by a Wisconsin alumni group may throw a bigger roadblock into stem cell research in the United States than federal funding restrictions, a leading stem cell scientist said Tuesday.

Some researchers believe the patents essentially give the Wisconsin Alumni Research Foundation rights over all human embryonic stem cell lines in the United States.

If that holds true, that means that anyone who wants to derive medical therapies or other commercial products from embryonic stem cells may have to obtain permission and pay royalties to the foundation, which is affiliated with the University of Wisconsin.

As a result, scientists are going overseas where their research can occur unfettered, said Jeanne Loring, who directs human embryonic stem cell research at the Burnham Institute for Medical Research in La Jolla, Calif.

She fears the patents will pose a serious impediment to California’s $3 billion stem cell research program, already delayed by lawsuits challenging its constitutionality.

“The patents are impeding our research,” Loring said. “They’re more important than what’s going on in the Senate right now.

“It is making scientists go overseas to do this sort of research,” she added. “It isn’t the funding that’s sending us overseas. It’s the patent issues.”

The patents are based on the work of James Thompson, a University of Wisconsin professor who was a pioneer in isolating human embryonic stem cells in 1998.

On Tuesday, two consumer groups filed challenges with the U.S. Patent and Trademark Office seeking to have the patents rescinded.

The groups maintain that the patents are overly broad and that previous work by other scientists made Thompson’s breakthroughs obvious and unpatentable.

“The debate in Washington is morally based, but what’s at stake with the patents is essentially money,” said John Simpson of the Foundation for Taxpayer and Consumer Rights, one of the groups that filed the challenge.

“The folks in Wisconsin need to get the dollar signs out of their eyes and stop impeding vital research that needs to go forward,” he said.

Joining in the challenge was the Public Patent Foundation, a nonprofit group that seeks to represent the public in the patent system.

Wisconsin officials denied their patents have a chilling effect and said they remain confident they will be upheld as valid.

“This idea that we are doing anything to slow research is ridiculous,” said Andy Cohn, spokesman for the Wisconsin Alumni Research Foundation.

Carl Gulbrandsen, managing director of the foundation, called the challenges “politically and financially motivated.”

The patents “do not inhibit research,” Gulbrandsen said in a statement. “They support and encourage it.”

He noted that the foundation has provided free licenses and stem cells to 324 research groups. The licenses enable researchers to patent and publish any discoveries they make, he added.

Stem cell scientist Loring acknowledged that she and other academic researchers can readily obtain licenses to work with stem cells.

But the problem will come, she said, when they begin to work with a private company to develop a treatment.

In March, at a biotech meeting in San Francisco, an attorney for the Wisconsin foundation indicated that it could seek to assert its patent rights and obtain licensing fees and a share of royalties when stem cell treatments are commercialized.

“Many of us have had to learn patent law as sort of a hobby because of this particular patent,” Loring said.

The Wisconsin patents are not recognized by other countries. As a result, diabetes advocates and others are funding research overseas, Simpson said.

On Tuesday, leaders of California’s stem cell agency, who oversee the $3 billion program approved by voters when they passed Proposition 71 in 2004, declined to take a stance on the dispute.

“Currently, we have no opinion on the enforceability or scope” of the patents, said Ed Penhoet, vice chair of the stem cell agency board, in a statement.

It will take about three months for the U.S. Patent and Trademark Office to decide whether to hold re-examination proceedings, said Dan Ravicher, executive director of the Public Patent Foundation.

If it does reconsider the patents, that process can take anywhere from 18 months to several years. But Ravicher said the odds are good for his group. He noted that 70 percent of the time when a re-examination occurs, patents are changed or revoked.

The controversy reveals another potential roadblock for California’s stem cell program, which voters hoped would be a way to get around federal funding restrictions and move quickly to obtain new treatments for dozens of debilitating diseases.

Two lawsuits challenging the constitutionality of the California program are awaiting a hearing in the First District Court of Appeal. They have blocked the agency’s ability to issue bonds to finance the research.

Despite all the hurdles, agency President Zach Hall said universities and other research organizations have had no problem attracting people.

“All of them are reporting very high-quality applicants,” he said. “There’s tremendous interest in people from all over the world coming to California.”

Robert Klein, who chairs the stem cell agency board, said he hopes the Court of Appeal will uphold the California program by the end of the year and the Supreme Court will decline to review the case. At that point, the agency could proceed to issue bonds.

In the meantime, Klein said he hopes to soon line up $30 million in additional financing that would enable the agency to issue another round of grants later this year.
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CALIFORNIA’S STEM CELL PROGRAM

– In 2004, California voters approved $3 billion to be distributed over 10 years. A major goal was to support research that could not receive federal money.

– But the agency has been unable to issue bonds because of two lawsuits challenging the program’s constitutionality. They await a hearing in the Court of Appeals.

– In April, thanks to private donations, the agency issued its first grants — $12 million to educate stem cell researchers at 16 institutions.

– Now some worry that three Wisconsin patents will hinder the development of medical therapies in California and throughout the nation.