Threat to Technology Transfer Averted

August 25, 1997
Media Contact: Gary Stephenson
Phone: (410)955-5384
E-mail:gstephen@welchlink.welch.jhu.edu

A move that could have ended almost two decades of spectacular successes based on university and private-sector partnerships has been averted.

You can thank the National Institutes of Health. Because of its recent decision to deny a request by a company called CellPro to grant the firm so-called march-in rights to patents based on government-funded research, universities, biotechnology companies -- and many cancer patients -- are breathing a collective sigh of relief. The furor around the CellPro threat, however, indicates that it's time to pay closer attention to the good that has come from a 1980 Act of Congress.

The Bayh-Dole Act is widely regarded as one of the most important contributions to technology transfer. By providing an incentive for nonprofit research institutions to market their innovations and for industry to make high-risk investments, the Act revolutionized industry-academic partnerships. Prior to Bayh-Dole, discoveries languished on the shelf. Fewer than 250 patents were issued to universities annually. But since the 1980 Act, nearly 1,600 patents are issued to universities each year, including lifesaving therapeutics for patients. Today, university technology transfer adds more than $21 billion to the economy and supports 180,000 jobs.

This remarkable record of success could have been gravely imperiled by a CellPro victory. The controversial move by the company to petition the NIH grew out of a legal dispute over patents governing stem cell selection owned by Johns Hopkins University and licensed to Baxter Healthcare Corporation and Becton Dickinson. In March 1997, after it was found guilty in federal court of willfully infringing on the Hopkins stem cell selection patents, CellPro asked the NIH to exercise an obscure provision of the Bayh-Dole Act that allows the government to "march-in" and grant a compulsory license under privately owned patents under certain limited conditions.

But many experts say the issue really at stake got lost in the ensuing fierce legal and media war. It was not, as CellPro tried to position itself, a fight between a David and Goliath, but rather a fight over the future of biotech research and transfer in this country.

Many experts recognized the danger. Congressmen and senators wrote to Harold Varmus, M.D., NIH director, imploring him not to intervene on behalf on CellPro. Added to these were letters from numerous research institutions and biotechnology companies fearful that exercise of "march-in" rights on behalf of a willful patent infringer would have had a devastating impact on the future of technology transfer.

Ultimately, truth and rationality won out over innuendo and rhetoric. But the case raises serious issues: How vulnerable or fragile are the new relationships between business and academia? Even though CellPro lost in its attempt to override the federal courts, will its actions nevertheless have a chilling effect on future industry-university partnerships?

If you are interested in pursing this story, please call me at 410-955-5384.


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