California's Consumer Watchdog Loses U.S. Supreme Court Challege to WARF Stem Cell Patents

The U.S. Supreme Court yesterday appeared to have put an end to a California’s group nine-year effort to overturn patents on human embryonic stem cells held by the Wisconsin Alumni Research Foundation (WARF).

The court refused to hear the case that was brought by Consumer Watchdog of Santa Monica, Ca., and Jeanne Loring, head of the stem cell program at Scripps. The court issued its decision with no comment.

An article by Lisa Shuchman in The Litigation Daily said,

“The high court's denial leaves in place a ruling last year by the U.S. Court of Appeals for the Federal Circuit, which found that Consumer Watchdog lacked standing to appeal the findings of the PTO's (Patent and Trademark Office) administrative patent review board.” 

While today’s ruling involved relatively technical legal matters, the heart of the challenge to WARF’s patents involves who profits from stem cell research along with whether its patents have or will stifle scientific research.

Royalties from WARF patents in California alone generated an estimated $200 million in 2006 for the foundation. Executives of biotech firms in California have complained that WARF’s restrictions have posed a significant barrier to private investment. 

Asked for comment, Loring said,

"This doesn't mean they believe that human cells can or cannot be patented, but only that they decided that we had not been sufficiently harmed by the patent for them to become involved.

"Even without a Supreme Court decision, we have succeeded.  WARF wanted their patents to include iPS cells as well as ES cells, but they had to narrow their claims as a result of our challenge, and they cannot claim ownership of iPSCs."  

Doing the legal lifting in the WARF challenge was Dan Ravicher, executive director of the Public Patent Foundation of New York. Shuchman carried a comment from Ravicher on yesterday’s ruling. She wrote, 

“Ravicher said Monday that the Supreme Court's decision could impact many would-be patent challengers. ‘This case could have severe consequences for other third parties that challenge patents with IPRs or the other proceedings created under the America Invents Act,’ Ravicher said. ‘Now they will have no right to appeal an adverse decision.’

“But he also said the decision wouldn't preclude individuals who can claim direct harm, such as stem cell research scientists, from challenging WARF's patent—much the same way doctors successfully challenged the Myriad patents.

“Under the America Invents Act, third parties, such as nonprofits, public interest groups and industry organizations, have the right to challenge patents at the PTAB (Patent Trial and Appeal Board). But under the Federal Circuit’s ruling that now stands, they don't have the right to appeal a PTAB decision.”

Shuchman also recounted briefly some unusual history on the federal appellate ruling that declared Consumer Watchdog had no standing to sue. A more detailed account of that hearing can be found here.

The California Stem Cell Report has asked Consumer Watchdog and WARF for comments. We will carry them when we receive them. Here is the full text of what Loring had to say.

"Being involved for nearly 9 years in the challenge of WARF's patent on human ES cells has given me a fascinating glimpse into our legal system. I hoped that the Supreme Court would decide on the patentability of human embryonic stem cells. But ultimately, the Court decided not to take our case.  This doesn't mean they believe that human cells can or cannot be patented, but only that they decided that we had not been sufficiently harmed by the patent for them to become involved. Even without a Supreme Court decision, we have succeeded.  WARF wanted their patents to include iPS cells as well as ES cells, but they had to narrow their claims as a result of our challenge, and they cannot claim ownership of iPSCs.  

"I've learned that the law is every bit as complex as scientific research, and have gained great admiration for people like our attorney, Dan Ravicher, who relentlessly pursue the question of patent ethics - what should and should not be patented in the public interest.  Dan brought the issue of patenting the human genome to the Court, and won (the Myriad Genetics case).  Working on this challenge with Dan and John Simpson (of Consumer Watchdog) has been a joy, and if they ever want my help in the future, I'd agree in a second."

WARF, Oatmeal and the Patenting of Life

The battle over the WARF patent on human embryonic stem cells caught the attention of the Los Angeles Times last week, which added some oatmeal and history to the tale.

Michael Hiltzik, a business columnist with the largest circulation newspaper in the Golden State, reported on the challenge by Consumer Watchdog of Santa Monica, Ca., Jeanne Loring, head of the stem cell program at Scripps, and the Public Patent Foundation of New York.

The trio on Friday asked the U.S. Supreme Court to intervene and affirm their right to sue(See here and here.).  Hiltzik said, 

“The group has challenged the patent on two grounds: first, that the work covered wasn't novel or original, and second, that the Supreme Court has ruled that a ‘product of nature’ can't be patented.   

“All this is happening, researchers say, because WARF (Wisconsin Alumni Research Foundation) made exceptionally broad claims for its patent rights and exercised them very aggressively. This is, in fact, WARF's business; the nonprofit foundation was formed in the 1920s to exploit a patent issued to a University of Wisconsin professor on fortifying food with vitamin D, which it promptly licensed to Quaker Oats. By 1930, the deal was producing $1,000 a day. WARF also owns the rights to the drug Warfarin, which is named after the foundation.”

Hiltzik continued,

“The foundation demanded steep licensing fees of $5,000 a year from academic researchers and as much as $400,000 from commercial firms, plus royalties from product sales. 

“Eventually this backfired. When San Diego researcher Jeanne Loring was confronted by a demand for $75,000 a year from her start-up company—‘that's a lot, when your entire budget is $75,000,’ she told me--she looked closely at the patents only to conclude that they should never have been issued. 

“The key to (Wisconsin researcher Jamie) Thomson's success, she contends, was that he was able to get his hands on human embryos at a time when other researchers could not; the techniques he used had been applied to embryos of other species and shown to be effective. ‘Had I or any other stem cell scientist been given human embryos and sufficient funding, we could have made the same accomplishment, because the science...was obvious at the time,’ Loring says in a court declaration.  

“WARF disagrees. Thomson's success, it says in its own legal filings, ‘was anything but routine....He identified the critical steps needed to generate and culture these cells....No prior art reference taught these insights.’"

'Wipe This Thing Off the Books:' More Coverage of WARF Patent Challenge

The San Diego U-T is carrying a story on today’s filing with the United States Supreme Court on the California-based challenge to the WARF patent on human embryonic stem cells.

Bradley Fikes quoted one of the parties in the matter, Jeanne Loring, head of the stem cell program at Scripps, as saying,

“We think that now embryonic stem cells really are showing their worth in clinical studies, it's very important to just wipe this thing off the books, so nobody can either shut down trials or require huge licensing fees for successful efforts.”

Here is a link to the petition to the high court, which deals with a standing to sue issue – not the heart of the dispute. Here is a link to the press release from Consumer Watchdog of Santa Monica, Ca., another party in the matter. Here is a link to the earlier story on the California Stem Cell Report.

Bloomberg Reports on the WARF hESC Patent Challenge

The California-based challenge to the WARF patents involving hESC research drew national media coverage this week on Bloomberg News.

Susan Decker of Bloomberg described the heart of the matter as a dispute over who profits from stem cell research. She wrote,

“'What we’re asking the government to do is say WARF has no right' to the patent, said Dan Ravicher, executive director Public Patent Foundation in New York, which is handling the challenge for Consumer Watchdog(of Santa Monica, Ca.) 'It’s like the government sent a check to WARF they didn’t deserve.'”

Dan Ravicher and Jeanne Loring at Post Office
when they filed the patent challenge July 17,
2006.  The photo was taken by an anonymous
 woman at the Post Office with Loring's camera. 

The challenge to the patents was filed by Consumer Watchdog and researcher Jeanne Loring of Scripps seven years ago. They contend that the patents are “too similar to earlier research” to be valid and that they hinder scientific research. They also contend that the Myriad decision by the U.S. Supreme Court that limits the right of ownership of human genes should also apply to stem cells. Ravicher successfully argued the Myriad case before the high court.

Decker said the issue is no small matter and involves major developments in medicine. She reported,

“'The next paradigm shift in medicine will be advances in cell therapy -- it’s under way,' said Jason Kolbert, senior biotechnology analyst with Maxim Group LLC in New York. He said pharmaceutical makers such as Teva Pharmaceutical Industries Ltd. (TEVA) of Petach Tikva, Israel, and Pfizer (PFE) Inc. of New York are working with stem-cell researchers on new therapies.”

Decker reported that written arguments from the U.S. Patent Office are scheduled to be delivered Jan. 17 to the federal district court of appeals in Washington, D.C.

Challenge to WARF hESC Patents Cites Recent U.S. Supreme Court Decision

Patents on human embryonic stem cells are being challenged in a new legal filing that cites the recent U.S. Supreme Court decision that barred the patenting of human genes.

The stem cell case involves the Wisconsin Alumni Research Foundation (WARF), which holds the patents on the much-heralded work performed by Jamie Thomson  at the University of Wisconsin. The lawsuit was filed by the Public Patent Foundation of New York City on behalf of Consumer Watchdog, a nonprofit group in Santa Monica, Ca. Jeanne Loring, director of the Center for Regenerative Medicine at the Scripps Research Institute, is also involved along with Alan Trounson, president of the California stem cell agency. The agency itself is not a party.

This week's filing follows the so-called Myriad decision last month by the nation's highest court which said,

“Myriad did not create anything. To be sure, it found an important and useful gene, but separating that gene from its surrounding genetic material is not an act of invention.”

This week's stem cell suit said,

"WARF did not create or alter the properties inherent in stem cells any more than Myriad created or altered the genetic information encoded in the DNA it claimed.” 

The legal filing came in an appeal of an earlier decision by the U.S. Patent Office. The Public Patent Foundation, which was a successful party in the Myriad case, did the earlier legal work on the challenge to the WARF patents as well as this week's appeal.

The appeal, prepared by Dan Ravicher, said the WARF patents have "put a severe burden on taxpayer-funded research in California.”

Trounson released a statement saying,

“We don't want to do anything that gets in the way of finding treatments for some of the biggest killers today, so we feel that all patients with all kinds of diseases deserve to have access to these kinds of cells.”

Loring was quoted in a Consumer Watchdog press release as saying,

"Human embryonic stem cells hold great promise for advancing human health, and no one has the ethical right to own them.”

John M. Simpson of Consumer Watchdog said,

 “The best course if WARF truly cares about scientific advancement would be to simply abandon these over-reaching patent claims.”

A story by Bradley Fikes in the San Diego U-T cited intellectual property attorney Lisa Haile of DLA Piper as saying,

“A successful use of the Myriad case as a precedent for throwing out the foundation’s patent would open the door to similar challenges in just about any biotech product using material derived from life.”

WARF made no immediate comment.

Other stories on the WARF challenge appeared in the Milwaukee Journal, Genomeweb and the LaCross Tribune. 

A Patent War on iPS: One Researcher's View

As the California stem cell agency pushes ever more aggressively to turn research into cures, the second largest share of its awards, in terms of numbers of grants, has gone to efforts involving induced pluripotent cells, also known as reprogrammed adult cells.

But questions do exist whether those efforts can surmount barriers that have to do with patents and ownership of the intellectual property.

UC Davis stem researcher and blogger Paul Knoepfler discussed some of the problems in a post yesterday. He wrote,

“All the talk and the slew of publications about potentially using iPS cells to develop therapies to help patients is exciting in theory, but unfortunately the reality is that it is not entirely clear if most researchers are, from a legal standpoint, even allowed to develop and commercialize iPS cell-based therapies at all.

“The patent landscape for iPS cells is complicated to put it mildly. A Google patent search for “induced pluripotent stem cells” produced almost 200,000 results.

“A search for “cellular reprogramming produced more than 1,000 results.
I’m not sure all of these results are really separate patents, but still….that’s a big complicated mess.…..

“It is no exaggeration to say there are likely dozens of institutions around the world wanting to commercialize iPS cell-based products.

“Will they all have to pay expensive licensing fees or end up in court?
…or will the patent holders voluntarily and freely allow others to commercialize iPS cell-based medical treatments?

“I don’t think so.

“This could get really messy.”

WARF hESC Patent Update: Seven Years and Challenge Still Underway

Last week UC Davis stem cell researcher Paul Knoepfler and Scripps researcher Jeanne Loring engaged in an online Q&A that touched on patents and how they can stifle research and discourage development of therapies.

Loring did not mention it in the Q&A but she is the key figure in the ongoing challenge to the WARF (Wisconsin Alumni Research Foundation) patents on human embryonic stem cells. Her effort began in 2006 but has dropped out of the news. We asked her for an update on the case.

Here is the text of what she replied,

“Dan Ravicher is the lawyer behind several big patent cases, including the recent Supreme Court case challenging human gene patenting (Myriad), and a challenge to Monsanto's restrictive enforcement of its patents on genetically modified seeds. 

“I'm lucky that he is also the lawyer working with John M. Simpson (of Consumer Watchdog) and me to challenge the WARF patents.  Currently, we are getting ready for another year of appeals and counter-appeals on the third of WARF's three patents that give them control over all human embryonic stem cells.

“This is Dan's summary of the current situation:

"'We filed challenges at the Patent Office to all three of WARF's hESC patents. During those challenges, WARF agreed to narrow all three of the patents, and they also loosened their licensing requirements. But, even though the patents were narrowed, we still think they're invalid, and thus disagree with the Patent Office's decision to re-issue them in the narrowed forms. Unfortunately, due to the age of the patents and changes in the law, we were only allowed to appeal one of the three decisions, and that appeal is now pending at the Court of Appeals in Washington. But, we expect the decision in our appeal will affect the validity of the other two patents, since they're all basically on the same technology." 

“The 'narrowing' of the patents has had an unexpected consequence.  Before the narrowing, WARF's patents would have covered iPSCs as well as hESCs. After the narrowing, they can only claim hESCs.”

In the Q&A on Knoepfler's blog, which also involved an interesting discussion of IPS research, Loring said,

“Patents on fundamental things -- genes, human embryonic stem cells, iPS cells -- allow the patent holder to have a monopoly, preventing anyone else from using whatever they’ve patented.

“Patents are supposed to stimulate investment in development.  Why, as Justice Scalia said last week, would anyone have the incentive to study a gene and, for example, develop diagnostic tests, if they couldn’t prevent everyone else from working on that gene?

“But patents also stifle competition and the advances that come from having many different groups studying the genes or cells.  One of the main reasons I returned to academia was so I could have freedom to study human ES cells without worrying about getting threatening letters from a patent holder, demanding that I either stop working on the cells or pay a steep licensing fee.

“There will inevitably be problems commercializing iPSC-based therapies and assays, because at least three institutions own patents on aspects of iPSCs.  I’m paying attention to the patent 'landscape,' but have decided to deal with those problems when they arise, and hope that the iPSC patent holders realize that the potential of these cells is too great to keep to themselves.  It would be better for all of us if the issue of stem cell patents never has to be decided in the Supreme Court.”

Patent Reform Critics Say Legislation is 'Constitutionally Infirm'

The California stem cell agency yesterday posted its analysis of federal patent legislation that pits General Mills against the National Small Business Association, Merck against the Institute of Electrical and Electronics Engineers and, in California, SangamoBioSciences against CONNECT.

On Monday, the CIRM directors' Legislative Subcommittee will take up the wide-ranging and technical legislation with an eye to endorsing or opposing it.

The analysis was written by Scott Tocher, staff counsel to CIRM Chairman Robert Klein. It said,

"CIRM’s interest in the health and productivity of the patent system in general is clearly a vital interest of the agency. CIRM’s mission requires dual goals of academic openness and the need to bring scientific advances to the public via commercialization. A robust and fair patent system will ensure that the fruit of CIRM-funded research is propelled through the development process and reaches patients."

Tocher's analysis indicates the key point of the battle over the legislation involves a matter that critics say makes the legislation "constitutionally infirm."

Tocher wrote,

"For the first time since its genesis in 1790, U.S. patent law will award patents to the first person to file for a patent rather than to the first person to arrive at an invention. All other major patent offices in the world already award patents on a first-to-file basis. Though equitable, the first-to-invent system leads to disputes that the Patent Office has been forced to resolve through complicated Interference proceedings. Under the new system, filers will still have to show possession of the invention, and will still have to establish novelty. They will not, however, face concerns that others may have arrived at the invention first and simply not have filed yet. There will no longer be Interference proceedings, and applicants will no longer be able to 'swear behind' prior art cited against them by giving evidence that, despite their later filing date, they arrived at the invention first."

Tocher continued,

"This is by far the Act's most significant change, and will likely increase the pressure for all entities to file for patent rights as soon as an invention is made. This change will also increase the risk in electing to forego patent rights in favor of maintaining an invention as a trade secret."

Tocher wrote,

"If enacted, this provision almost certainly will face a legal challenge in light of the United States Constitution’s provision that 'Congress shall have power … To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.' To the extent that a first-to-file system awards a patent in some cases not to an 'inventor' in the common understanding of that word, but to a person who is first to file, critics argue the legislation is constitutionally infirm."

Tocher listed some of the enterprises for and against the measure. Backers include General Mills and Merck. Sangamo BioSciences, a CIRM grant recipient, is also in favor. One of the opponents is CONNECT, a San Diego business development organization, whose CEO is Duane Roth, co-vice chairman of the stem cell agency.

Also posted on the CIRM agenda yesterday was an item from the California Stem Cell Report dealing with the patent legislation.

Prieto on Patent Reform

The vice chair of the CIRM Legislative Subcommittee, Francisco Prieto, has offered a brief comment on the subject of patent reform, a matter that will come before the panel on Monday.

Prieto, a Sacramento physician, said in an email last night to the California Stem Cell Report,

"I'm not sure we'll take a position, but we do want to be informed, and have a pretty serious interest. The outcome affects the ultimate result of most of the fruits of our labor: whether and how any treatments developed from CIRM funded research are able to be developed and marketed. That ultimately will decide whether any treatments or cures ever actually make it to the clinic and into patients who need them."

Meanwhile, CIRM has provided links on the meeting's agenda to the text of the complex legislation and two items offered by advocates in the fray. CIRM has yet to produce its own analysis, a rundown on the pros and cons and an explanation of how CIRM's position would make a difference in the outcome.

In a related matter, the Finance Subcommittee, three days after the meeting on patent reform, is scheduled to consider hiring a federal lobbyist, which would make the stem cell agency one of the rare state departments with its own national lobbyist.

Here is a list of the members of the Legislative Subcommittee, which is chaired by Art Torres, co-vice chair of the agency and former head of the California state Democratic Party.

hESC Patents Piece from San Diego Researchers

The foray by the California stem cell agency into the tricky and arcane world of patent reform triggered a note today from the acting director of the San Diego Consortium for Regenerative Medicine, Xuejun H. Parsons.

She pointed out that the San Diego Regenerative Medicine Institute has a short piece on its web site about the patentability of human embryonic stem cells. CIRM was created by California voters in 2004 to fund hESC research because the federal government would not, but the agency has drifted away from a sharp focus on hESC.

The web site item briefly discusses the need for patents and links to a more comprehensive article by Parsons, Yang D. Teng, Dennis A. Moore and Evan Y. Snyder. The piece  in the journal "Recent Patents on Regenerative Medicine" is a technical overview of the science linked to the patents. It may be of interest to CIRM directors as they ponder whether to take a stand in the savage fight in Congress over patent reform legislation.

The $10 Billion Patent Litigation Bill

As the directors of the $3 billion California stem cell agency this week reconsider their endorsement of an industry-backed, patent protection bill, they may want to think about some of the issues raised in an article in Monday's Wall Street Journal headlined “Why Technologists Want Fewer Patents.”

The opinion piece was written by L. Gordon Crovitz, former publisher of the Journal, and discusses the current state of patent law and intellectual property.

He wrote,

“The Patent Office now gets some 500 million applications a year, leading to litigation costs of over $10 billion a year to define who has what rights. As Judge Richard Posner has written, patents for ideas create the risk of 'enormous monopoly power (imagine if the first person to think up the auction had been able to patent it).' Studies indicate that aside from the chemical and pharmaceutical industries, the cost of litigation now exceeds the profits companies generate from licensing patents.”

Crovitz continued,

“The Supreme Court may decide that more progress would be made with narrower definitions of what is patentable. A book on the U.S. approach to patents, 'Jefferson vs. the Patent Trolls' by Jeffrey Matsuura, makes the key point that 'intellectual property rights were not goals in and of themselves, but were instead a mechanism through which society attempted to facilitate creative collaboration.'"

Some of you may recall that zealous stem cell patent protection has blocked research at Childrens Hospital of Orange County. And some have pointed to excessively tight control of IP as a main reason why nearly all biotech companies have been unprofitable for decades.

The three scientists who founded the company, Stem Cells Inc. of Palo Alto, Ca., which holds the patents in the Childrens Hospital case, have never spoken publicly on the issue, and we do not expect to hear from them.

It is unclear whether the Crovitz piece is available to non-subscribers. If you would like a copy, please email djensen@californiastemcellreport.com.

WARF Whacked Again

The latest chapter in the WARF stem cell patent saga opened today with the filing of an appeal by two consumer groups and a statement from California researcher Jeanne Loring of the Scripps Institute. She said,

"It's not just scientists that are affected by the patents. Patients and their families know that WARF’s iron-fisted control of stem cells is slowing life-saving research."

Consumer Watchdog of Santa Monica, Ca., and the Public Patent Foundation in New York City announced the filing of the appeal. The issue is not likely to be resolved for years, although John M. Simpson of Consumer Watchdog said WARF has already relaxed its licensing requirements in the wake of the patent challenge.

Simpson said,

"WARF executives were acting like arrogant bullies blinded by dollar signs. Our challenge has engendered a more co-operative stance towards the stem cell research community on their part."

Lawyer Critical of California Stem Cell Report

Patent attorney Lawrence Ebert covers considerable ground this morning in a post called "National Academy of Sciences Attacked."

Ebert has written extensively on the WARF stem cell patent issues, disputing the assertions of critics challenging the WARF patent.

Today Ebert takes on this blog(the California Stem Cell Report), the Los Angeles Times and the San Diego Union-Tribune. A sample:

"Although the californiastemcellreport is ripping into NAS, the stemcellreport is rather silent on the mediocre reporting of the San Diego Union-Tribune on past attempts of California stem cell workers to obtain broad patent coverage on embryonic stem cells and on the superficial reporting of the Los Angeles Times on the Cha duplicate publication matter."

Ebert is deeply concerned about the legal issues concerning the patents. Our perspective is somewhat broader. While certain actions -- either in the world of patents or politics -- may be legal, they are not necessarily in the best interests of society, science or business. An extreme non-science example: Racial segregation used to be the law of the land in many areas of the United States.

Ebert appears to be well-schooled in patent law. Others equally well-schooled differ with him. We are inclined to favor those who are on the side of open science rather than those who seek to lock down every piece of loose intellectual property they can find. But that is a value judgement -- not law.

Nonetheless we encourage you to read Ebert's comments. He may be right.

Baristas to Bioworld: More on WARF Ruling Impact

More coverage and commentary on the WARF patent ruling is filtering in today.

From Randall Osborne, west coast editor of Bioworld, comes this:

"'It's a big thing,' said Paul Lesko, patent attorney with SimmonsCooper in East Alton, Ill. 'Most times there will be at least an amendment, if the patent survives,' although the process could take years.

"'When it comes to a [final PTO action], I'd say a wholesale rejection is more common than anything else,' Lesko said, especially with patents that contain claims that are fewer in number, like WARF's.

From the Patent Baristas blog, Stephen Albainy-Jenei writes:

"I don’t think anyone should go out and throw a party just yet. The patent office grants over 90 percent of the requests for reexamination and many of those patents are issued with substantially the same claim(s) as before reexamination. WARF, a nonprofit group that acts as UW’s tech transfer office, will have a chance to prove the cells are novel. And, if the claims are ultimately rejected, it can still appeal or narrow the claims. This could take years to resolve."

Joff Wild, editor of Intellectual Asset Management magazine, says WARF is now on the "defensive" and adds:

"Although WARF changed its licensing policy earlier this year, 20 years worth of income from its stem cell portfolio still potentially represents a colossal amount of money."

Ruling Endangers $3.2 Million WARF Cash Stream

One commentator said that the WARF patent ruling "marks a welcome turning point in the battle against the unnecessary and unproductive privatization of mankind's quest to understand the natural universe."

Another called it a "victory for the patent law freedom fighters."

But in the Wisconsin State Journal, reporter David Wahlberg, said it could cut off the spigot that has poured $3.2 million into the Wisconsin Alumni Research Foundation. He was the only reporter to identify the cash flow from the ESC patents.

It was all part of the news coverage today of ruling by the federal Patent Office concerning WARF's ESC patents. (For coverage of the issue on Monday see the earlier items below.)

Wahlberg quoted Dan Ravicher, executive director of the Public Patent Foundation, as saying,

"Although these patents aren't dead, they have been diagnosed with severe cancer."

Ravicher's group and the Foundation for Taxpayer and Consumers Rights were the two organizations that challenged the WARF patents, which remain in place pending an appeal by WARF.

Walhberg said,

"The patents have brought in at least $3.2 million to WARF and could net much more money before they expire in 2015. Companies wanting to study the cells must buy licenses costing $75,000 to $400,000, though since January, WARF waives the fees if the research is conducted at universities or by nonprofit groups."

Merrill Goozner, writing on the Huffington Post, called the patent ruling a "turning point." Goozner, who is with the Center for Science in the Public Interest, continued,

"Discovering human embryonic stem cells, which have been around since man first walked the earth, is more like Isaac Newton discovering gravity than the Wright Brothers building the first airplane.

"The Public Patent Foundation and the California Foundation for Taxpayer and Consumer Rights, which challenged the Thompson patents, have provided a valuable service for the entire science community. Unfortunately, the PTO ruling relied on the traditional tenets of patent law. The examiners, upon reexamination, claimed the patent was obvious based on previous papers that had appeared in the literature. Obviousness and previous publication are cause for rejecting a patent application.

"WARF's top officer immediately restaked their claim on those grounds.

Goozner continued:

"Basic science that may ultimately lead to useful products should be free and open to all who would build those useful products. Its inventors should not be allowed to become toll collectors on the road to innovation. Hopefully, the PTO decision yesterday is the first step on the road back to a reasonable standard for establishing where basic science ends and commercial invention begins."

Andrew Leonard, writing on Salon.com, declared that the "patent law freedom fighters" had won.

Terri Somers of the San Diego Union Tribune quoted Cathryn Campbell, an intellectual-property lawyer with Needle and Rosenberg, as saying it is significant that the patent office went beyond the cases cited by the challengers and found two more examples of prior science in the area.

Steve Johnson of the San Jose Mercury News touched on the impact on Geron, a California stem cell company that helped finance the research. Johnson wrote:

"If the patents are rejected permanently, Geron wouldn't have to pay license fees to use the technology, said David Greenwood, Geron's executive vice president and chief financial officer. And while Geron would lose its exclusive right to the technology, the company has other stem-cell licensing rights and patents that give it an edge on other stem-cell companies, Greenwood said."

Geron's stock dropped 3.64 percent on Tuesday, closing at $7.15 in above average volume. The stock has ranged from $5.66 to $10.00 over the last 12 months.

Missing from today's coverage was the Wall Street Journal, which only carried a blog item based on the New York Times story (see the item below from Monday on that.)

Here are links to other stories: Associated Press, Ipbiz blog, Los Angeles Times, Milwaukee Journal Sentinel, Sacramento Bee. The San Francisco Chronicle carried the AP story.

Geron Statement on WARF Patent Rulings

Here is the full text of Geron's statement on the ruling on the WARF ESC patents.

"Geron Corporation (Nasdaq: GERN) supports the position of the Wisconsin Alumni Research Foundation (WARF) that  U.S. patents  covering Dr. James Thomson’s pioneering work with human embryonic stem cells were properly granted. Thomson’s success in isolating human embryonic stem cells is recognized by the scientific community as a significant breakthrough, and the scope of the patents granted to WARF is commensurate with that achievement.  Three patents issued to WARF based on Dr. Thomson’s research are being reexamined by the U.S. Patent and Trademark Office (USPTO).

"It is routine for the USPTO to grant patent re-examination requests.  Furthermore, it is common for the USPTO to issue preliminary rulings that reject patent claims, only for the USPTO to terminate re-examinations and uphold patent claims in later stages of the review and appeals process.

"As the world leader in the development of human embryonic stem cell-based therapeutics, Geron holds a broad portfolio of intellectual property rights.  This portfolio includes the WARF patents in re-examination, additional WARF patents that are not subject to the re-examination proceedings and patents exclusively licensed from the University of California and the University of Oxford.  In addition, Geron’s portfolio includes patents and patent applications filed by Geron to cover technologies developed internally by Geron scientists for the production and differentiation of embryonic stem cells."

NY Times On WARF Patent Case

The New York Times has posted a piece by Andrew Pollack on the rulings in the WARF ESC patent case.

The story generally covers much of what you have read on the California Stem Cell Report, but also says:

"It is now much more likely, however, that the patents will be narrowed or revoked, and some scientists or companies might become more confident in undertaking research that would infringe the patents."

Pollack continues:

"Companies are charged $75,000 to $400,000, depending on their size and the terms of the license.

"The Geron Corporation, which financed some of Dr. Thomson’s research, has exclusive commercial rights to heart, nerve and pancreatic cells derived from the human embryonic stem cells. So if the patents remain in effect, any company wanting to market a treatment for heart attacks, Parkinson’s disease or diabetes using human embryonic stem cells would eventually have to come to terms with Geron. "

WARF's Gulbrandsen Holds Federal Patent Advisory Post

The managing director of WARF currently sits on an advisory committee to the federal Patent and Trademark Office, which will hear WARF's appeal of an unfavorable ruling on WARF ESC patent claims.

Carl Gulbrandsen was appointed to the Patent Public Advisory Committee by the secretary of commerce in February 2005.

John M. Simpson, stem cell project director for Foundation for Taxpayer and Consumers Rights, said that Gulbrandsen should resign from the advisory committee. Simpson's group challenged the patent claims.

We have queried WARF and the Patent Office for comment.

(Editor's note: One reader suggested the first sentence of this item is ambiguous. To be perfectly clear, the committee in question is an advisory body. The patent office is the agency directly involved in the patent dispute.)

Links to WARF ESC Patent Rulings

The Foundation for Taxpayer and Consumer Rights has posted the rulings of the Patent Office on the WARF ESC patents. Here are the links:

www.consumerwatchdog.org/resources/780rejected.pdf

www.consumerwatchdog.org/resources/806rejected.pdf

www.consumerwatchdog.org/resources/913rejected.pdf

WARF Staying the Course on ESC Patents

WARF said today that it is confident that its ESC patents will ultimately be upheld despite rejection of its claims Friday by the U.S. Patent Office.

The organization released the following press release:

"With regard to the preliminary denial of the existing claims, WARF Managing Director Carl E. Gulbrandsen issued the following statement:

"'WARF has absolute confidence in the appropriateness and legitimacy of these patents. It is inconceivable to us that Dr. Thomson’s discovery, which Science Magazine heralded as one of the greatest scientific discoveries in history, would be found to not be worthy of a patent. This discovery captured the imagination of people all over the globe from every discipline.'

Gulbrandsen pointed out that the former director of the National Institutes of Health predicted the discovery would change the face of medicine.

"'We are confident that, when all of the facts are known and the process runs its course, our patents wil be upheld,' he said.

"The PTO granted the reexamination request and issued a preliminary ruling rejecting the patent claims in question, which is not at all unusual, according to Gulbrandsen, who pointed out that the patent reexamination process provides for multiple layers of review. This first rejection, for example, gives WARF the opportunity to respond directly to the examiner, a response in which WARF will vigorously defend its patent claims. That response could persuade the examiner to sustain the patents and terminate the reexaminations. If the examiner maintains the rejection, WARF could, and most probably would, appeal the examiner’s decision to the PTO Board of Patent Appeals. And, if that body fails to sustain the patents, WARF can then appeal to the courts.

"This process can take many months, or even years. But while the review is underway, all of WARF’s patents remain in place and are legally viable."