Intellectual Property Rights and Research Tools in Molecular Biology

Summary of a Workshop Held at the National Academy of Sciences, February 15–16, 1996

National Research Council

NATIONAL ACADEMY PRESS
Washington, D.C.
1997



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Intellectual Property Rights and Research Tools in Molecular Biology: Summary of a Workshop Held at the National Academy of Sciences, February 15–16, 1996 Intellectual Property Rights and Research Tools in Molecular Biology Summary of a Workshop Held at the National Academy of Sciences, February 15–16, 1996 National Research Council NATIONAL ACADEMY PRESS Washington, D.C. 1997

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Intellectual Property Rights and Research Tools in Molecular Biology: Summary of a Workshop Held at the National Academy of Sciences, February 15–16, 1996 NATIONAL ACADEMY PRESS 2101 Constitution Ave., N.W. Washington, D.C. 20418 NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance. This report has been reviewed by a group other than the authors according to procedures approved by a Report Review Committee consisting of members of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Bruce Alberts is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. William A. Wulf is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Kenneth I. Shine is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Bruce Alberts and Dr. Robert M. White are chairman and vice chairman, respectively, of the National Research Council. This study was sponsored by the National Research Council Basic Science Fund. International Standard Book Number 0-309-05748-5 Additional copies are available from: National Academy Press, 2101 Constitution Ave, NW, Box 285, Washington, DC 20055 800-624-6242; 202-334-3313 (in the Washington Metropolitan Area) http://www.nap.edu Copyright 1997 by the National Academy of Sciences. All rights reserved. Printed in the United States of America

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Intellectual Property Rights and Research Tools in Molecular Biology: Summary of a Workshop Held at the National Academy of Sciences, February 15–16, 1996 COMMITTEE ON INTELLECTUAL PROPERTY RIGHTS AND RESEARCH TOOLS IN MOLECULAR BIOLOGY REBECCA EISENBERG, (Chair), University of Michigan Law School, Ann Arbor, Michigan WILLIAM R. BRINKLEY, Baylor College of Medicine, Houston, Texas WILLIAM T. COMER, SIBIA, La Jolla, California BARBARA J. MAZUR, E.I. du Pont de Nemours & Company, Wilmington, Delaware LITA L. NELSEN, Massachusetts Institute of Technology, Cambridge, Massachusetts GERALD M. RUBIN, University of California, Berkeley, California SIDNEY G. WINTER JR., Wharton School of Business, Philadelphia, Pennsylvania National Research Council Staff JANET E. JOY, Study Director ROBIN SCHOEN, Staff Officer NORMAN GROSSBLATT, Editor JEFFREY PECK, Project Assistant

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Intellectual Property Rights and Research Tools in Molecular Biology: Summary of a Workshop Held at the National Academy of Sciences, February 15–16, 1996 BOARD ON BIOLOGY MICHAEL T. CLEGG (Chair), University of California, Riverside, California JOHN C. AVISE, University of Georgia, Athens, Georgia DAVID EISENBERG, University of California, Los Angeles, California GERALD D. FISCHBACH, Harvard Medical School, Cambridge, Massachusetts DAVID J. GALAS, Darwin Molecular Corporation, Bothell, Washington DAVID V. GOEDDEL, Tularik, Inc., South San Francisco, California ARTURO GOMEZ-POMPA, University of California, Riverside, California COREY S. GOODMAN, University of California, Berkeley, California BRUCE R. LEVIN, Emory University, Atlanta, Georgia OLGA F. LINARES, Smithsonian Tropical Research Institute, Miami, Florida ELLIOTT M. MEYEROWITZ, California Institute of Technology, Pasadena, California ROBERT T. PAINE, University of Washington, Seattle Washington DANIEL SIMBERLOFF, Florida State University, Tallahassee, Florida ROBERT R. SOKAL, State University of New York, Stony Brook, New York SHIRLEY M. TILGHMAN, Princeton University, Princeton, New Jersey Staff ERIC A. FISCHER, Director, Board On Biology

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Intellectual Property Rights and Research Tools in Molecular Biology: Summary of a Workshop Held at the National Academy of Sciences, February 15–16, 1996 BOARD ON HEALTH SCIENCES POLICY JOHN D. STOBO (Chair), Johns Hopkins University School of Medicine BARUCH S. BLUMBERG, Fox Chase Cancer Center ENRIQUETA C. BOND, The Burroughs Wellcome Fund C. THOMAS CASKEY, Merck & Co., Inc. DAVID R. CHALLONER, University of Florida DEBORAH COTTON, Harvard Medical School MARK R. CULLEN, Yale University School of Medicine RUTH R. FADEN, Johns Hopkins School of Hygiene and Public Health ADA SUE HINSHAW, University of Michigan THOMAS INUI, Harvard Medical School RICHARD J. JOHNS, Johns Hopkins University School of Medicine JUDITH H. LAROSA, Tulane University School of Public Health and Tropical Medicine ROBERT I. LEVY, Wyeth-Ayerst Research BERNARD LO, University of California, San Francisco School of Medicine RICHARD A. MERRILL, University of Virginia School of Law GLORIA ELIZABETH SARTO, University of New Mexico School of Medicine FLOSSIE WONG-STAAL, University of California, San Diego JAMES H. WYCHE, Brown University Institute of Medicine Staff VALERIE P. SETLOW, Director, Division of Health Sciences Policy

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Intellectual Property Rights and Research Tools in Molecular Biology: Summary of a Workshop Held at the National Academy of Sciences, February 15–16, 1996 VIRTUAL COMMISSION ON INTELLECTUAL PROPERTY RIGHTS JOHN D. STOBO (Chair), Johns Hopkins University School of Medicine, Baltimore, Maryland SHIRLEY M. TILGHMAN, Princeton University, Princeton, New Jersey MICHAEL T. CLEGG, University of California, Riverside, California GERALD D. FISCHBACH, Harvard Medical School, Boston, Massachusetts WILLIAM HUBBARD JR., Hickory Corners, Michigan MARY LAKE POLAN, Stanford University School of Medicine, Stanford, California National Research Council Staff PAUL GILMAN, Executive Director SOLVEIG PADILLA, Administrative Assistant

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Intellectual Property Rights and Research Tools in Molecular Biology: Summary of a Workshop Held at the National Academy of Sciences, February 15–16, 1996 Preface Although controversy over intellectual property has been a recurring phenomenon in research science, the terms of controversy have shifted in recent years as patenting has become a more familiar part of the landscape. Whereas in an earlier era we might have asked whether intellectual property is fundamentally inconsistent with the norms of research science, today we are likely to ask more nuanced questions about what sorts of research discoveries should be patented and about how proprietary research tools should be disseminated in the research community so as to preserve the benefits of intellectual property while minimizing interference with the progress of science. In March 1993, in the wake of a controversy over patent applications filed by the National Institutes of Health (NIH) on anonymous cDNA fragments (ESTs), the National Research Council's Commission on Life Sciences (CLS) and the Institute of Medicine (IOM) jointly held a workshop to discuss both specific concerns raised by the NIH patent application and broader issues arising from the patenting of discoveries in the biomedical sciences. Participants at that workshop concluded that a study on intellectual property, technology transfer, and conflict of interest in molecular biology might help resolve some of the issues. In October 1994, NIH director Harold Varmus met with the council of the National Academy of Sciences to discuss how the scientific community should respond to various constraints on the use of research tools and, in particular, to the terms set by Human Genome Sciences for access to its private EST database. In July 1995, the CLS and IOM formed the Committee on Intellectual Property and Research Tools in Molecular Biology to organize a workshop to examine the impact of intellectual property protection on the development of and access to research

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Intellectual Property Rights and Research Tools in Molecular Biology: Summary of a Workshop Held at the National Academy of Sciences, February 15–16, 1996 tools in molecular biology, with attention to the perspectives of universities, government agencies, and private firms. The workshop was held at the National Academy of Sciences on February 15–16, 1996. Over 100 people attended, coming from academic institutions, industry, and government agencies that sponsor research in molecular biology. The workshop was organized in three sessions. The first consisted of invited papers presenting legal, economic, and sociological perspectives on the topic of intellectual property protection for research tools. The second session consisted of a series of panel discussions of five case studies chosen to illustrate different strategies for managing intellectual property rights in different types of research tools. The third session consisted of presentations of different perspectives from academic institutions (representing both research scientists and technology transfer professionals), industry (representing both small biotechnology companies and major pharmaceutical companies), and government. This report summarizes the workshop sessions and examines the common themes that emerged. The variety of circumstances presented in the case studies cautions against facile generalizations about ideal practices for protection of research tools in molecular biology. Nonetheless, some themes emerged that might provide useful insights for those concerned with how best to manage intellectual property rights in research tools in molecular biology. All of the members of the organizing committee gave generously of their time in planning the workshop, identifying speakers, chairing workshop sessions, and reviewing drafts of the report. Francis Collins, director of the National Center for Human Genome Research at NIH and Maxwell Cowan, Vice President and Chief Scientific Officer of the Howard Hughes Medical Institute, met with the committee in advance of the workshop and gave extremely helpful comments and suggestions. The workshop speakers deserve special thanks for the time and thought they put into the workshop. Janet Joy provided essential staff support, both in the planning stages and in drafting the report of the workshop, with the assistance of Jeff Peck. Bob Cook-Deegan provided thoughtful guidance in shaping the final report, and Robin Schoen joined the committee in its planning meeting. Norman Grossblatt edited the proceedings. Last but by no means least, financial support for the workshop came from the National Research Council Basic Science Fund, the Academy Industry Program (AIP) of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine, and the National Institutes of Health. Rebecca S. Eisenberg, Chair

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Intellectual Property Rights and Research Tools in Molecular Biology: Summary of a Workshop Held at the National Academy of Sciences, February 15–16, 1996 Contents 1   INTRODUCTION   1 2   PATENTING RESEARCH TOOLS AND THE LAW   6     Patents as a Strategy for Protection of Intellectual Property   8     Benefits and Costs of Patents   9     Requirements for Patent Protection   10     Experimental Use Exemption   11     Research Tools in Molecular Biology   13     Patents on Research Tools   14 3   ECONOMIC THEORIES ABOUT THE COSTS AND BENEFITS OF PATENTS   17     Invention-Inducement Theory   18     Disclosure Theory   21     Development and Commercialization Theory   22     Prospect Development Theory   23     Issues in Patent Reform   25     References   27 4   ACCESS TO DATA AND INTELLECTUAL PROPERTY: SCIENTIFIC EXCHANGE IN GENOME RESEARCH   28     Sociological Dimensions of Scientific Exchange   28     Data-Stream Perspective   30     Types of Transactions: Strategic Considerations   32     Collaboration   33     The Data Stream Perspective Applied: A Schematic Example   34

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Intellectual Property Rights and Research Tools in Molecular Biology: Summary of a Workshop Held at the National Academy of Sciences, February 15–16, 1996     Intellectual Property and Openness   36     References   38 5   CASE STUDIES   40     Introduction   40     Recombinant DNA: A Patented Research Tool, Nonexclusively Licensed with Low Fees   40     PCR and Taq Polymerase: A Patented Research Tool for Which Licensing Arrangements Were Controversial   43     Protein and DNA Sequencing Instruments: Research Tools to Which Strong Patent Protection Promoted Broad Access   46     Research Tools in Drug Discovery: Intellectual Property Protection for Complex Biological Systems   48     Changes in Biotechnology Strategies   50     Expressed Sequence Tags (ESTs): Three Models for Disseminating Unpatented Research Tools   51     The Informational Value Of ESTs Is Rudimentary   53     The Value of ESTs Could Be Reduced by Limiting Access   54     The Human Genome Is Finite   54     The Advent of DNA Sequencing Presents Important Questions About Patentability   55     References   55 6   PERSPECTIVES FROM DIFFERENT SECTORS   57     Introduction   57     University Research   58     University Administration   59     Major Pharmaceutical Company   61     Attitudes Have Greatly Changed   61     Commerce and Science: Legitimate, Yet Competing, Interests   61     Research-Use Exemption Is Practiced as Rational Forbearance   63     Why Intellectual Property Is Important in Molecular Biology   63     Small Biotechnology Company   64     Genvec's Intellectual Property   64     Role of Venture Capital   64     Issues in Partnering Biotechnology and Pharmaceutical Firms   65     Summary   66     Government   66     References   70 7   SUMMARY   71     AGENDA OF THE FEBRUARY 1996 WORKSHOP   75