The Perplexities of Patents

Nearly a decade ago, when the medical giant Johns Hopkins University took on a small biotech startup named CellPro in a patent infringement lawsuit, the results might have been predicted. Hopkins won, and tiny CellPro was driven out of business. But rather than simplistically casting Hopkins as the villain and CellPro as the persecuted, Robert Cook-Deegan and colleague Avital Bar-Shalom decided to cast a cool analyst's eye on the case. They sought broader lessons that might apply to the current steamy entrepreneurial climate--and they got them.

Stem Cell: new research

 Stem Cell: new research


In the analysis published in the December 2002 Milbank Quarterly, the analysts concluded that the case--in which Johns Hopkins claimed that CellPro had infringed upon its patents for a cancer treatment technology--exemplifies the complex problems arising from academic secrecy, broadly defined patents, and the lack of government oversight of commercialization of university discoveries made using federal funds.

" The secrecy that currently surrounds licensing transactions at academic research centers seems likely to come under fire, as well it should," wrote Bar-Shalom and Cook-Deegan. Bar-Shalom is currently an American Association for the Advancement of Science Risk Policy fellow; Cook-Deegan is director of Duke's Center for Genome Ethics, Law, and Policy. "In our view, terms should be public when the research underlying intellectual property involves public funds."

Such cases suggest that the 1980 Bayh-Dole Act, which promotes commercializing discoveries made using federal funds, should be amended "to ensure accountability and feedback on how inventions arising in federally funded research are licensed," they wrote. The case involving Johns Hopkins and CellPro illustrates that "patents are not an unalloyed good--they have a real downside if questions about patents covering one component of a technology can kill an entire business," the authors said in their paper. They also observed that the case emphasizes the moral distinction between commercializing biotechnology discoveries and those in other fields. "Enhancing or obstructing computer technology or automobile manufacture is one thing, quashing a firm in the business of producing a life-saving cancer drug or device quite another. Cancer therapeutics have a moral and social valence beyond that captured by business interests alone, and will be subject to an additional layer of moral (and political) analysis."

Cook-Deegan explains that he and Bar-Shalom undertook to explore the conflict between Johns Hopkins and CellPro as part of efforts of the Institute of Medicine's National Cancer Policy Board to streamline the process of developing cancer diagnostics and therapeutics. Both are former staff members of the board. The CellPro case, they decided, represented an excellent case study of the pitfalls inherent in transferring a basic cancer research discovery to the marketplace.

Basically, the case revolved around a dispute over patent rights to a technology for isolating immature cells, called stem cells, from bone marrow. Such stem cells are capable of maturing into a range of immune cells to reconstitute a destroyed immune system. Thus, such separation technology can be used as the basis for cancer treatments in which stem cells are used to restore a patient's bone-marrow-based immune system, which has been destroyed by radiation or chemotherapy.

In 1981, a Johns Hopkins scientist developed antibodies that could recognize such stem cells, enabling the cells to be isolated. Hopkins received a broad patent that the university believed covered any use of antibodies for such isolation. The antibody-based technology was ultimately licensed to Baxter Healthcare, which began to develop cell-separation instrumentation based on the technique.

Significantly, noted Bar-Shalom and Cook-Deegan, Hopkins did not make public its licensing agreements, which is entirely permissible under the Bayh-Dole Act. This secrecy, said the authors, reduced the university's credibility and complicated efforts to judge the merits of the technology and of Hopkins' position.

Meanwhile, researchers at the Fred Hutchinson Cancer Center in Seattle had developed a different antibody-based separation technique, which was the basis for the 1989 founding of the startup company CellPro. The company--unwisely, it turned out--decided that it did not need to license the Johns Hopkins technology and began to develop and clinically test its own bone-marrow reconstitution technique for use following chemotherapy for breast cancer.

In 1994, Hopkins and the companies to which it licensed its technology filed the patent infringement suit against CellPro.

Cook-Deegan says their analysis revealed a complex situation. "We ultimately didn't find that one side or the other was right, which is unpalatable for those who like clean, simple answers. But the case clearly shows that the Bayh-Dole Act could be simplified and the process made more transparent." Even though some secrecy had been the norm in academe, he says, the increase in commercialization has exacerbated the tendency.

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