Industry-supported Changes in IP Rules Face August Action

The California stem cell industry has scored a preliminary victory in modifying state rules that it said would hamper private investment in embryonic stem cell research.

The Intellectual Property Task Force for CIRM last week approved the modifications in previously ratified regulations. The recommendation now goes to the CIRM Oversight Committee Aug. 2, where it is likely to receive positive action, although not without continued opposition from watchdog groups.

During consideration earlier this year of IP rules for nonprofit institutions, Oversight Committee members had indicated support for the widest possible dissemination of basic research.

Sandy Kleffman of the Contra Costa Times reported:

"To accomplish that goal, (CIRM) adopted a preliminary policy requiring that companies provide university scientists and others engaged in noncommercial research with access to state-funded inventions and research tools free of charge.

"The goal was to avoid having stem cell researchers subjected to lawsuits from companies complaining they were infringing on a patent.

"But a host of biotech leaders wrote to complain about this policy, arguing that it would cause venture capital firms to balk at getting involved.

"'Under those circumstances, we believe no private funding will be used to license the invention and none of the energy of the commercial market will be made available to enhance, manufacture, advertise, disseminate or support it,' wrote Greg Lucier, chairman and CEO of Invitrogen Corp.

"Task force Chairman Ed Penhoet said he agreed to eliminate the provision, even though he supports it, because many researchers and companies already share such discoveries with others. But the stem cell agency will revisit the issue if a problem develops, he added."

Jim Downing of The Sacramento Bee reported that biotech firms argued that the old rule

"would deprive them of revenue from their primary customers -- other California stem-cell researchers -- and remove the incentive for investment. Joydeep Goswami, vice president of Carlsbad-based Invitrogen Corp., said the rules of the market would keep innovations developed by the private sector at a fair price.

"'It's not in our interest to not make tools available,' he said."

Downing also quoted John M. Simpson, stem cell project director for the Foundation for Taxpayer and Consumer Rights.

"I'm disappointed that they haven't been able to understand the importance of maintaining a payback to all the Californians who are coming up with this money."

Simpson is likely renew his pitch at the Aug. 2 meeting, perhaps with the support of other organizations.