Text of Consumer Watchdog's Therapy Access Letter

Here is the full text of the letter by John M. Simpson, stem cell project director for Consumer Watchdog of Santa Monica, Ca., concerning the loophole proposed in CIRM IP regulations. His letter was filed today as part of the official regulatory process.

Re: Comment on “Proposed IP Regulations: Third Round”
Dear Sir or Madam,
I am writing to protest the proposed change in the definition of Exclusive Licensee contained in the third iteration of proposed IP regulations. The proposed definition,

§ 100601. Intellectual Property Regulations
- Definitions. (k), now reads:
Exclusive Licensee. Any individual or entity receiving by license directly from a Grantee, Grantee Personnel, or Collaborator all rights to make, use, sell, offer for sale and/or import in one or more fields of use or territories a CIRM-Funded Technology or a CIRM-Funded Invention.

In the earlier second iteration the comparable definition, § 100601. Intellectual Property Regulations -
Definitions. (j), read:
Exclusive Licensee. Any individual or entity receiving all rights to make, use, sell, offer for sale and/or import in one or more fields of use or territories a CIRM-Funded Technology or a CIRM-Funded Invention, whether by assignment, license, or other mechanism.

The access requirements for products developed by CIRM grantees apply only to grantees, collaborators and exclusive licensees. Under the new proposed definition an entity that purchased a company holding a license would not be obligated to meet the modest access requirements because they would not have received the “license directly from a Grantee, Grantee Personnel, or Collaborator.” Presumably a licensee could also assign rights to another entity and that entity would not be held to the access requirements, again because it would not have received the “license directly from a Grantee, Grantee Personnel, or Collaborator.”

This proposed new definition creates a tremendous loophole that potentially allows companies to escape the IP regulation’s access requirements for products developed with CIRM funds. This was never the intent of the IP task force during its thorough, deliberative process in developing the IP regulations. I cannot understand why this language has been proposed.

Could you please provide me with the written record of the public comments made on Round Two of the proposed regulations that prompted this change, which subverts the original intent of the IP regulations?

For the record, I note that the public comment period on these regulations closes at 5 pm Aug. 18, the day before the August ICOC meeting where they are already on the agenda for consideration. I am hard pressed to understand how such scheduling provides adequate time for staff to analyze any comments and provide meaningful commentary so that the board can consider the proposed regulations in a thoughtful way.

I urge you to refer these proposed regulations to the IP Task Force for discussion and thorough consideration before they come before the full ICOC. The Task Force has not met since November of 2008. Most of us who have been deeply involved in the here-to-fore exemplary public process that developed the IP regulations were under the impression that the consolidation effort was largely a technical exercise.

However, this proposed definition of Exclusive Licensee is a substantive change that fundamentally alters the IP regulations. It merits a full hearing and thoughtful discussion. Sadly it now appears that there is, for what reason I do not know, an effort to sneak this major change in policy through virtually unnoticed. If that is allowed to happen, it would be truly sad. Developing the IP policies had been one of CIRM’s most inclusive and transparent processes with all stakeholders represented at the table. This change would completely undermine all of those efforts.