Science Magazine

Opponents of the stem cell patents held by the Wisconsin Alumni Research Foundation (WARF) were delighted last week when the government issued a preliminary ruling rejecting the patents. Critics have long argued that they are far too broad, covering technology that was already in use to derive mouse stem cells and laying claims on all primate embryonic stem (ES) cells in the United States regardless of where they may have been derived. At the same time, patent experts caution that it could take years before the matter is resolved.

The April 2nd ruling by the U.S. Patent and Trademark Office (PTO) came in response to a “request” from two public interest groups for a reexamination of three WARF patents awarded in 1998, 2001, and 2006 (Science, 21 July 2006, p. 281). The patents assert rights over not only the methodology for cultivating primate ES cells but also, controversially, the cells themselves (ScienceNOW, April 3, 2007).

Those claims affect the activities of anyone in the United States using human ES cells for either research or commercial purposes. The ruling throws into question patents that reportedly have earned WARF $3.5 million in licensing fees over the past 5 years. But critics face long odds in battling WARF.

Grady Frenchick, a patent lawyer in Madison, Wisconsin, says the PTO initially rejects patents in 90% of reexamination requests, but only 12% of questioned patents are ultimately thrown out. The rest are affirmed in toto or with some modifications. Nonetheless, patent lawyer Cathryn Campbell of San Diego, California, says the WARF decision is more thorough and detailed “than might usually be expected.” She also says each of the three patent rejections was signed by a different examiner, suggesting that the conclusions are widely shared in the PTO.

“We’re not deluding ourselves that this isn’t a tough fight,” says WARF Managing Director Carl Gulbrandsen. If the PTO rules against WARF, WARF will go to the PTO’s Board of Patent Appeals and Interferences. If that doesn’t work, he says, it’s on to the Federal Circuit Court of Appeals in Washington, D.C. But preliminary as it is, many people are gratified by the patent decision. “Nobody wanted to do anything, but everybody seemed very, very glad that we did,” says John M. Simpson of the Foundation for Taxpayer and Consumer Rights in Santa Monica, California, which brought the request last July.

Most scientists doing basic stem cell research in academic or government labs are minimally restricted by WARF‘s current policies, which require them to pay only $500 for a batch of Wisconsin cells. But they object to the red tape involved. “Every possible collaboration… is slowed considerably by having to negotiate the WARF Material Transfer Agreements,” says George Daley of Harvard Medical School in Boston, Massachusetts. He says if the same rules were applied to mouse cells, “our research would grind to a halt.” Martin Pera of the University of Southern California in Los Angeles says that WARF‘s grip on “basic platform technology critical to the future development” of the field is bound to impede progress.

Road rage. The WARF patents have taken a toll on stem cell researchers.

For researchers working on commercial applications, WARF makes life much more difficult. WARF spokesperson Andrew Cohn says it’s “too complicated” to explain their rates, but Jonathan Auerbach of GlobalStem Inc. in Rockville, Maryland, says he’s heard of research licenses costing up to $400,000. Auerbach says many companies have also been put off by WARF‘s “reach-through” provisions, which call for royalties on any product developed using the cells. He says his company doesn’t have to deal with WARF because it has chosen instead to use human embryonal carcinoma cells and human ES cells with abnormal karyotypes that wouldn’t be covered by the patents. Mahendra Rao of Invitrogen in Carlsbad, California, says that his company — which is currently negotiating for a WARF license — and others have established outposts outside the United States, where the patents do not apply.

Robert Lanza of Advanced Cell Technology in Worcester, Massachusetts, says his company’s WARF license entails “a six-figure fee, plus an annual maintenance charge.” On top of that, “whenever a researcher asks us for some ES cells — even ES lines we derived ourselves — we are obligated to pay WARF $5000.” Product development is also hobbled. Geron Corp. in Menlo Park, California, has an exclusive license from WARF to develop treatments based on specialized cells grown from the Wisconsin lines, Lanza says, so “we would be sued if we even tried to develop insulin-producing cells to treat diabetes.”

Some users are hoping that the widespread complaints could lead WARF to soften its policies further even as the patent reexamination grinds on. In January, for example, WARF lifted the requirement that companies must obtain a license to sponsor human ES cell research at universities. It also eased cell-transfer provisions, lifting fees for transfer of cells among academic and nonprofit researchers. Some critics say both decisions were influenced by the pending patent request. WARF denies this, explaining instead that the decisions are part of “evolving policies… always in favor of increasing access.”