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Commission On Life Sciences

Priority Issues of Access to Research Resources

Advancement of scientific research in the life sciences is possible only with access to physical, biologic, and information resources. Such resources include plant and animal tissues, microbial cultures, monoclonal antibodies, reagents, animal models, combinatorial chemistry and DNA libraries, drug targets, clones and cloning tools, methods, laboratory equipment, databases, and software. Nearly every field of biology is experiencing problems in the transfer of research resources among members of its research community. While science continues to bring forth research resources of great potential, their dissemination often gets bogged down in issues of ownership, equity, availability, cost, appropriate use, value, and maintenance.

Many of those issues were aired on January 27-28, 1999, at the National Research Council’s conference “Finding the Path: Issues of Access to Research Resources ”. Sponsored by the Subcommittee on Biotechnology of the National Science and Technology Council’s Science Committee, the conference convened over 300 participants from academe, government, and industry to discuss research-resource issues that affect numerous scientific disciplines. The purpose of the conference was to identify common issues and to place the challenge of access to research resources in a larger frame of reference—the entire scientific enterprise, but not to reach consensus on solutions to these challenges. A summary of the conference is published under separate cover.

In March 1999, the Commission on Life Sciences met to discuss the issues further. We observed that many of the problems raised at the conference are important to the health and future of the scientific enterprise and the effective application of science. Some of the problems are not fundamentally difficult to overcome but will require the collective thought, organization, and consensus of members of the scientific disciplines affected. Others are much more difficult and will require new approaches.

At the request of Dr. Mary Clutter, Chairman of the Subcommittee on Biotechnology, the Commission has identified priorities from among the issues raised in the conference summary. Based on that document and the collective experience of the Commission in the life sciences, we believe the following issues are particularly important and require attention by the federal government, and in some cases, by various sectors of the scientific community.

  • Policies on the patenting of biological materials.

  • Material transfer agreements and licensing.

  • International material transfer.

  • Database development and use.

  • Access to data in the private sector.

This is not necessarily a comprehensive list of all the important issues of access to research resources. Indeed, all the issues raised at the January conference were important. We believe these issues are priorities because they affect research across the full spectrum of subdisciplines in the life sciences, and because they impact scientists in academe, government, and industry. International material transfer is included as a subclass of material transfer agreements with slightly different dimensions that warrant a separate discussion.

In the near term, the issues of patent policies, material transfer agreements, and access to privately held data are the most time-critical, and should be addressed sooner rather than later, because proposing and adopting solutions to them now is likely to have the greatest chance of



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Commission On Life Sciences Priority Issues of Access to Research Resources Advancement of scientific research in the life sciences is possible only with access to physical, biologic, and information resources. Such resources include plant and animal tissues, microbial cultures, monoclonal antibodies, reagents, animal models, combinatorial chemistry and DNA libraries, drug targets, clones and cloning tools, methods, laboratory equipment, databases, and software. Nearly every field of biology is experiencing problems in the transfer of research resources among members of its research community. While science continues to bring forth research resources of great potential, their dissemination often gets bogged down in issues of ownership, equity, availability, cost, appropriate use, value, and maintenance. Many of those issues were aired on January 27-28, 1999, at the National Research Council’s conference “Finding the Path: Issues of Access to Research Resources ”. Sponsored by the Subcommittee on Biotechnology of the National Science and Technology Council’s Science Committee, the conference convened over 300 participants from academe, government, and industry to discuss research-resource issues that affect numerous scientific disciplines. The purpose of the conference was to identify common issues and to place the challenge of access to research resources in a larger frame of reference—the entire scientific enterprise, but not to reach consensus on solutions to these challenges. A summary of the conference is published under separate cover. In March 1999, the Commission on Life Sciences met to discuss the issues further. We observed that many of the problems raised at the conference are important to the health and future of the scientific enterprise and the effective application of science. Some of the problems are not fundamentally difficult to overcome but will require the collective thought, organization, and consensus of members of the scientific disciplines affected. Others are much more difficult and will require new approaches. At the request of Dr. Mary Clutter, Chairman of the Subcommittee on Biotechnology, the Commission has identified priorities from among the issues raised in the conference summary. Based on that document and the collective experience of the Commission in the life sciences, we believe the following issues are particularly important and require attention by the federal government, and in some cases, by various sectors of the scientific community. Policies on the patenting of biological materials. Material transfer agreements and licensing. International material transfer. Database development and use. Access to data in the private sector. This is not necessarily a comprehensive list of all the important issues of access to research resources. Indeed, all the issues raised at the January conference were important. We believe these issues are priorities because they affect research across the full spectrum of subdisciplines in the life sciences, and because they impact scientists in academe, government, and industry. International material transfer is included as a subclass of material transfer agreements with slightly different dimensions that warrant a separate discussion. In the near term, the issues of patent policies, material transfer agreements, and access to privately held data are the most time-critical, and should be addressed sooner rather than later, because proposing and adopting solutions to them now is likely to have the greatest chance of

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success. Stakeholders involved in these problems are beginning to take actions—defensive patenting, excessive demands in exchange for access, increasing use of trade secrets—that will be difficult to reverse and that will have lasting effects on scientific progress. The life sciences are in a revolutionary period of discovery, so identifying research resources and barriers to their development and dissemination should be a continuing part of the management of our scientific enterprise in the long term. The variety of barriers —in such forms as the high cost of a single piece of equipment, a bottleneck in software distribution, and competitive secrecy—requires constant monitoring and creative response. This effort must be the shared responsibility of the federal government, the academic scientific community, and corporations. Policies on the Patenting of Biologic Materials In the relatively new, rapidly unfolding field of biotechnology, scientists and companies have envisioned future products of gene research for human health, agriculture, and many other fields. The realization of these products will depend, in part, on the accumulation of knowledge about the functioning of a genome as a whole; this collective effort is proceeding quickly in the public and private sectors. As the sequencing of the human genome and the genomes of plants and other organisms are completed, there is a danger that the intellectual property rights afforded to new genetic constructs will be so broadly drawn that future scientific investigation and commercial development will be inhibited. Since the Supreme Court opened the door to the patenting of genetically modified organisms in 1980, patenting has accelerated commercial development and complemented the progress of basic research in genetics. Recently, however, the award of broad proprietary rights to a new category of DNA sequences has had a dampening effect on academia and industry. In 1999, the first patent on an expressed sequence tag (EST) was issued. ESTs are small pieces of DNA that are part of complete, but as yet uncharacterized genes. Such gene fragments are potentially valuable research tools: they are used as probes and markers in the genomes of humans and other organisms. There is concern that the scope of the patents will be so broad as to interfere with basic research on the function of genes that are associated with a patented EST. In addition, the number of ESTs that might be eligible for patenting is potentially in the hundreds of thousands. When companies began to identify huge numbers of ESTs mechanically and to apply for patents on them, the US Patent and Trademark Office found it necessary to issue a policy to limit the number of ESTs per application to 10. The award of the first EST patent is fueling speculation about the possibility that patents will be sought on other types of genetic information, such as single-nucleotide polymorphisms (SNPs), which are variations in DNA that provide insight into the genetic basis of disease, among other things. Many research scientists, particularly those in the academic community, consider SNPs to be research tools; like ESTs, SNPs are being identified rapidly and methodically in the genome. The question of what scope of intellectual property rights protection best balances the public interest in creating, stimulating, and rewarding invention with the needs of the scientific community for access to research resources is urgent and important. When scientific material or information qualifies as the “door” through which all research must pass, its encumbrance by intellectual property rights, such as patents, has the potential to inhibit advances in a field. Moreover, applications to patent ever-smaller pieces of the genomes of a wide variety of plants and animals are pouring into the Patent and Trademark Office. If rapid progress in basic science and commercial development is to be fostered, protection of intellectual property should be carefully applied. A balance of interests is necessary between the

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stimulation of research and innovation through the open exchange of research resources and the promotion of innovation and commercialization of new technologies through patenting. Such a balance in the life-science context might or might not be consistent with the legal interpretation and implementation of existing patent law. Recommendation: An analysis of the potential effects of different types of patent protection and the breadth of patent rights on basic research and commercial interests in the life sciences should be undertaken, taking into account societal goals in granting intellectual property rights. Priority should be placed on examining options for protecting inventions that contain nucleic acid sequences, before forthcoming decisions on patents of biologics set precedents that make consideration of alternatives difficult. Material Transfer Agreements and Licensing Research scientists have a long tradition of sharing research findings and experimental materials with one another in the interests of collegiality and furthering the scientific research enterprise. However, since the 1980 enactment of the Bayh-Dole Act to foster technology transfer, nonprofit organizations like universities have been obliged to promote the utilization, commercialization, and public availability of inventions that arise from their federally funded research. As a financial incentive, they are permitted to seek and hold rights to the intellectual property embodied in inventions made with public funding. Research resources, including those described in the scientific literature, are disseminated to interested investigators or organizations through direct transfer or via a third party, usually a licensee that produces and sells the resources to others. These transfers are typically accompanied by material transfer agreements or licensing agreements that are negotiated by the technology transfer offices of the transferring and receiving institutions. As a result, what was formerly a free, open, and rapid exchange of research resources has become an often uncertain, restricted exchange that is subject to protracted negotiations. Most research resources are innovations of value for scientific investigation, and some have the potential for commercial uses beyond research. By attempting to protect an institution’s future financial and other interests in a biologic research resource, the above negotiations can hinder the pace at which the resources are available for use in research. University research faculty’s attempts to acquire materials from other academic institutions are hindered by the material transfer process, which requires agreement to assurances that are difficult to monitor in any case, and university officials have not yet resolved these issues. Faculty attempts to acquire access to resources owned by business organizations can be especially thorny, because commercial operations are bound to the interests of investors, not to the public good. Time-consuming negotiations over access to proprietary research resources are detrimental to academic research, but a private firm cannot usually accept a no-strings agreement. If industry and academe have a compelling interest in sharing their resources, a genuine effort to develop a mutually recognized and accepted set of minimum requirements could help to expedite future negotiations on research resources. Tensions that arise during the transfer of research resources can be attributed, in part, to the financial incentives provided to universities by the Bayh-Dole Act. By exercising their right to patent and license their inventions, including research resources, universities generate income for themselves and their researchers. As potential sellers of innovations in the marketplace, however, universities can be viewed as commercial competitors by the business sector—the same business sector whose research resources are sought “without strings” by federally funded, university

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investigators. The image of the university as a player in the commercial world, and therefore one with which private resources cannot be freely shared, is strengthened by the increasing number of university partnerships with individual companies that often compete with each other. Finally, as recognized in the National Institutes of Health (NIH) proposed principles and guidelines for sharing biomedical research resources, the financial incentive provided by the Bayh-Dole Act can work against its own objectives and inhibit the dissemination of research resources when universities inappropriately capitalize on the value of a resource. The guidelines note that “restrictive licensing, especially when coupled with indiscriminate use of the patent system, can be antithetical to the goals of the Bayh-Dole Act, such as where these are employed primarily for financial gain ” and add that such practices “are likely to thwart, rather than promote utilization and public availability of the invention.” The principles and guidelines proposed by NIH seem to be a constructive step in the right direction. The principles emphasize academic freedom and publication, the appropriate treatment of research tools under the Bayh-Dole Act, and the need to minimize administrative impediments to the transfer of research resources. They also exhort institutions to be mindful of potential conflicts between their obligations to NIH and to other parties that provide research resources, and to establish clear and unyielding policies on acceptable conditions for importing research resources. The guidelines provide specific examples of appropriate language for agreements that accompany the transfer of research materials into and out of universities. If implemented, they could speed the development of material transfer agreements and add certainty to the outcome of such agreements. A copy of the proposed principles and guidelines is attached as an Appendix to this report. Recommendations: All federal agencies should examine the proposed NIH principles and guidelines and participate in the development of strong and consistent policies across the federal government on acceptable terms for transferring and accepting research resources. University recipients of federal funds should develop, with input from scientific faculty and university leadership, policies for the identification, valuation, and dissemination of research resources. Business concerns should recognize their long-term interests in supporting scientific progress and work with universities to determine basic terms of agreement for sharing resources. An independent and balanced review of the extent to which the financial incentives created by the Bayh-Dole Act affect, favorably and unfavorably, the technology transfer process and the conduct of science should be carried out, taking into consideration the purpose of the Act and the different values and interests of stakeholders involved in and affected by the process. International Material Transfer At the international level, an issue of concern to scientists who study different aspects of the life sciences is the increasing difficulty of gaining access to wild materials, especially from the tropics, where most of the world’s biologic resources exist. The Convention on Biological Diversity, to which many developing countries in the tropics are signatories, recognizes the rights of nations to control access to and to participate in the use of biodiversity resources, particularly the commercial exploitation of native germplasm or local knowledge. Restrictions on exploration of, collection of, and access to information on wild resources have become common, and they affect not only the field work of US scientists, but also the work of local scientists and research

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institutions. In many nations, there is no clear differentiation between the collection of biologic materials and information for academic purposes and for commercial applications. As a result, every research project (ecologic, systematic, ethnobiologic) is treated as a potential “bioprospecting” agreement. The US government has sponsored research aimed at involving biodiversity-rich countries in the development of commercial applications derived from native resources, but its ability to negotiate access to biodiversity resources for academic research is inhibited by the fact that the United States is not a signatory to the convention. The creation of joint, basic research programs in which resources can be shared through material transfer agreements that appropriately restrict their distribution or the scope of their application is one approach to this problem. The joint development of mechanisms to document germplasm and other information so that its appropriate and legitimate use can be traced is another. Recommendation:  The federal government should seek discussion with other countries ’ science agencies to find appropriate terms, which could be applied generally, for the transfer of biodiversity materials for academic research. Database Development and Use Databases are increasingly critical as research resources, not only for geneticists and molecular biologists, but also for computational and structural biologists, chemists, ecologists, anthropologists, zoologists, botanists, crystallographers, social scientists, and people in many other disciplines. The contents of such databases are as varied as information about rare resources (such as museum and biodiversity specimens and culture collections), DNA sequences, and sensitive identifiers of human subjects. Computer-accessible databases are in increasing demand by researchers of all types. New scientific discoveries are often based on previously published findings, but data in many fields can be generated so quickly that data “mining” and reanalysis are often as important for the advancement of scientific understanding as data collection in the next experiment. In pharmacology and ecology and in academe, government, and business, the pace of advancement in the life sciences will depend in many ways on access to existing databases as much as the generation of new data. Indeed, a new and exciting field of scientific inquiry has developed: bioinformatics—the use of computers to manipulate biologic information. With software that permits investigators to query databases in flexible and creative ways, bioinformatics facilitates the rapid and expansive analysis of data. The development of bioinformatics will be a key to using databases fully in the future. If databases constitute a major leap forward in how scientific information can be viewed and analyzed, new strategies to embrace and take advantage of this power are warranted. Establishing and getting the most out of databases will require investment in the following: Their conceptual and physical development Data-quality assurance Data acquisition and maintenance The software needed to operate them. If a database is to be of maximal value, its potential uses must be reflected in its design. For example, databases need structure and consistency in the variables to be used for sorting or

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compiling. Inconsistencies in nomenclature (such as species name, symptom, and pathologic condition) make it difficult to analyze large databases that use such characteristics. Even numbers, dates, and geographic locations must be consistent in a database if its utility is to be maximized. Such structure and consistency must be incorporated into the database from the start. The data quality and quality assurance needed for a database depend on the nature of the analyses being performed. For example, trying to match billions of fragments of DNA to elucidate the human genome requires that there be very few errors in the data. But a few misidentifications of individual members of fairly common species in a regional database are likely not to affect studies of ecosystem health. To determine the most useful structure and format of a database, and to establish mechanisms for quality assurance or peer review, potential data contributors and users should be involved in database design. Often it takes a dedicated effort to obtain, via experimentation or monitoring, data with the structure and consistency required by the design of the database, so the community should determine how credit should be assigned to data contributors and whether they have any rights to the use of the data, once deposited. Similarly, rules for the appropriate use of data need to be established, especially to protect sensitive information and personal privacy related to data on human subjects. The value of a database will also be determined by the nature and extent of the data that it contains. Once a database is created, considerable effort is often needed to maintain it through curation and the addition of data, provision of user support, and the development of software updates. Finally, being able to glean knowledge from databases requires analytic software. Indeed, the field of bioinformatics involves the development of many sophisticated analytic software tools. Recommendations: Databases and the bioinformatics tools needed to analyze them offer an opportunity to gain new insights in the life-sciences and should be considered for increased government and private support. Before a database is established, data acquisition and maintenance, user support, quality assurance, and analytic software development needs should be carefully considered. Access to Data in the Private Sector Many important databases are being developed by private organizations, especially in the business sector. These databases are often held confidentially and are not available to other scientists except through individual arrangements, some of which restrict investigators’ ability to share the results of later work freely; confidentiality is intended to keep competing commercial interests from exploiting investments made in creating the data. Because of the strong tradition of federal support of the collection and distribution of basic scientific information, access to proprietary data has not been a major issue for publicly funded scientists in the past. But in fields in which scientific and commercial interests overlap, the relevance and importance of the data to new breakthroughs is increasing. Thus, there is a tension between the scientific researchers ’ need for access to databases and the private database owners’ need for confidentiality. That tension is evident in the development of DNA-sequence databases, in which both the nonprofit and business sectors have invested. For example, in agricultural research, the private sector is far ahead of the public sector in collecting DNA-sequence information about important field crops. Databases of that information could be a great asset to academic researchers studying plant physiology, growth, and resistance to disease and pests.

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Although the federal government generally seeks to make public the results of research that it sponsors, it faces a daunting decision between expensive duplication of the efforts that went into obtaining the valuable information that is already in privately held databases and paying substantial costs and acceding to the terms of access to the private data. Public funding in some fields of research is tightly constrained, so it is often questionable whether scarce funds should be used to recreate private-sector databases. Arguments to support an independent, federal database effort or to rely on private data providers should be developed for a variety of data types; scientific considerations and access must be weighed against cost and other factors, such as the effect of intellectual property rights on the material that underlies the data. Options include the outright purchase of access to the data, perhaps leveraged through a public-private database effort; the creation of public-private consortia to develop bioinformatics tools; and the establishment of incentives to share private data with the public. A mixture of approaches that depends on the values and tradeoffs identified might be proposed. Thus, the issue of how best to balance the needs for access to scientific databases and for recognition of the proprietary value of the investments that created them is important and challenging. Recommendation: Continuing discussion between the various scientific, public, and private interests on the subject of access to and use of scientific databases should be established to promote agreement on approaches that represent the best balance of interests. A candidate for an early topic for such a discussion is access to agricultural genomic data.

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Respectfully submitted by the members of the National Research Council ’s Commission on Life Sciences: MICHAEL T. CLEGG, (Chairman), University of California, Riverside, CA PAUL BERG, Stanford University, Stanford, CA FREDERICK R. ANDERSON, Cadwalader, Wickersham, & Taft, Washington, DC JOANNA BURGER, Rutgers University, Piscataway, NJ JAMES E. CLEAVER, University of California Cancer Center, San Francisco, CA DAVID EISENBERG, University of California, Los Angeles, CA JOHN L. EMMERSON, Eli Lilly and Co. (ret.) Indianapolis, IN NEAL L. FIRST, University of Wisconsin, Madison, WI DAVID J. GALAS, Keck Graduate Institute of Applied Life Sciences, Claremont, CA DAVID V. GOEDDEL, Tularik, Inc., South San Francisco, CA ARTURO GOMEZ-POMPA, University of California, Riverside, CA COREY S. GOODMAN, University of California, Berkeley, CA JON W. GORDON, Mount Sinai School of Medicine, New York, NY DAVID G. HOEL, Medical University of South Carolina, Charleston, SC BARBARA S. HULKA, University of North Carolina, Chapel Hill, NC CYNTHIA J. KENYON, University of California, San Francisco, CA BRUCE R. LEVIN, Emory University, Atlanta, GA DAVID M. LIVINGSTON, Dana-Farber Cancer Institute, Boston, MA DONALD R. MATTISON, March of Dimes, White Plains, NY ELLIOT M. MEYEROWITZ, California Institute of Technology, Pasadena, CA ROBERT T. PAINE, University of Washington, Seattle, WA RONALD R. SEDEROFF, North Carolina State University, Raleigh, NC ROBERT R. SOKAL, State University of New York, Stony Brook, NY CHARLES F. STEVENS, The Salk Institute for Biological Sciences, La Jolla, CA SHIRLEY M. TILGHMAN, Princeton University, Princeton, NJ RAYMOND L. WHITE, University of Utah, Salt Lake City, UT

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APPENDIX: SHARING BIOMEDICAL RESEARCH RESOURCES: Principles and Guidelines for Recipients of NIH Research Grants and Contracts INTRODUCTION The National Institutes of Health is dedicated to the advancement of health through science. As a public sponsor of biomedical research, NIH has a dual interest in accelerating scientific discovery and facilitating product development. In 1997, Dr. Harold Varmus, Director, NIH requested that a Working Group of the Advisory Committee to the Director look into problems encountered in the dissemination and use of unique research resources, the competing interests of intellectual property owners and research tool users, and possible NIH responses. 1 The Working Group found that intellectual property restrictions can stifle the broad dissemination of new discoveries and limit future avenues of research and product development. At the same time, reasonable restrictions on the dissemination of research tools are sometimes necessary to protect legitimate proprietary interests and to preserve incentives for commercial development. One of the recommendations of the Working Group was that NIH issue guidance to its funding recipients to assist them achieve the appropriate balance. This two-part document, consisting of Principles to set forth the fundamental concepts and Guidelines to provide specific information to patent and license professionals for implementation, represents that guidance. A copy of the full Report of the Working Group, with more detailed background information, is available at the NIH web site, www.nih.gov/welcome/forum, or from the NIH Office of the Director. 1   The term “unique research resource” is used in its broadest sense to embrace the full range of tools that scientists use in the laboratory, including cell lines, monoclonal antibodies, reagents, animal models, growth factors, combinatorial chemistry and DNA libraries, clones and cloning tools (such as PCR), methods, laboratory equipment and machines. The terms “research tools ” and “materials” are used throughout this document interchangeably with “unique research resources.” Databases and materials subject to copyright, such as software, are also research tools in many contexts. Although the information provided here may be applicable to such resources, the NIH recognizes that databases and software present unique questions which cannot be fully explored in this document. PRINCIPLES Ensure Academic Freedom and Publication Academic research freedom based upon collaboration, and the scrutiny of research findings within the scientific community, are at the heart of the scientific enterprise. Institutions that receive NIH research funding through grants or contracts (“Recipients”) have an obligation to preserve research freedom and ensure timely disclosure of their scientists’ research findings through, for example, publications and presentations at scientific meetings. Recipients are expected to avoid signing agreements that unduly limit the freedom of investigators to collaborate and publish. Reasonable restrictions on collaboration by academic researchers involved in sponsored research agreements with an industrial partner that avoid conflicting obligations to other industrial partners, are understood and accepted. Similarly, brief delays in publication may be appropriate to permit the filing of patent applications and to ensure that confidential information obtained from a sponsor or the provider of a research tool is not inadvertently disclosed. However, excessive publication delays or requirements for editorial control, approval of publications, or withholding of data all undermine the credibility of research results and are unacceptable. Ensure Appropriate Implementation of the Bayh-Dole Act When a Recipient’s research work is funded by NIH, the activity is subject to various laws and regulations, including the Bayh-Dole Act (Public Law 96-517). Generally, Recipients must maximize the use of their research findings by making them available to the research community and the public, and through their timely transfer to industry for commercialization. The right of Recipients to retain title to inventions made with NIH funds comes with the corresponding obligations to promote utilization, commercialization, and public availability of these inventions. The Bayh-Dole Act encourages Recipients to patent and license subject inventions as one

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means of fulfilling these obligations. However, the use of patents and exclusive licenses is not the only, nor in some cases the most appropriate, means of implementing the Act. Where the subject invention is useful primarily as a research tool, inappropriate licensing practices are likely to thwart rather than promote utilization, commercialization and public availability of the invention. Restrictive licensing, especially when coupled with indiscriminate use of the patent system can be antithetical to the goals of the Bayh-Dole Act, such as where these are employed primarily for financial gain. Utilization, commercialization and public availability of technologies that are useful primarily as research tools rarely require patent protection; further research, development and private investment are not needed to realize their usefulness as research tools. In such cases, the goals of the Act can be met through publication, deposit in an appropriate databank or repository, widespread non-exclusive licensing for nominal or cost-recovery fees, or any other number of dissemination techniques. In addition, commercialization and product development becomes more encumbered as the number of stakeholders laying claim to prospective revenues increases. Proprietary rights in research tools that do not require further development may function more as a tax on commercial development than as a source of rights to preserve the viability of end products and to motivate further investment. While such a tax may benefit the public by providing a financial return on the research investment, it may not always represent the appropriate valuation of a research tool and therefore serve as a disincentive to private sector use of the invention. Minimize Administrative Impediments to Academic Research Each iteration in a negotiation over the terms of a license agreement or materials transfer agreement delays the moment when a research tool may be put to use in the laboratory. Recipients should take every reasonable step to streamline the process of transferring their own research tools freely to other academic research institutions using either no formal agreement, a cover letter, the Simple Letter Agreement of the Uniform Biological Materials Transfer Agreement (UBMTA), or the UBMTA itself. Recipients should also examine and, where possible and appropriate, simplify the transfer of materials developed with NIH funds to for-profit institutions for internal use by those institutions. NIH endorses distinguishing internal use by for-profit institutions from the right to commercial development and sale or provision of services. Recipients are encouraged to transfer research tools developed with NIH funding to for-profit institutions with the fewest encumbrances possible in instances where the for-profit institution is seeking access for internal use purposes. Examples of such internal uses are research, screening, and the use of methods or devices for product development. Where they have not already done so, Recipients should develop and implement clear policies which articulate acceptable conditions for importing resources, and refuse to yield on unacceptable conditions. NIH acknowledges the concern of some for-profit organizations that the concept of purely academic research may be diluted by the close ties of some not-for-profit organizations with for-profit entities, such as research sponsors and spin-off companies in which such organizations take equity. Of concern to would-be providers is the loss of control over a proprietary research tool that, once shared with a not-for-profit Recipient for academic research, results in commercialization gains to the providers’ for-profit competitors. Recipients must be sensitive to this legitimate concern if for-profit organizations are expected to share tools freely. For-profit organizations, in turn, must minimize the encumbrances they seek to impose upon not-for-profit organizations for the academic use of their tools. Reach-through royalty or product rights, unreasonable restraints on publication and academic freedom, and improper valuation of tools impede the scientific process whether imposed by a not-for-profit or for-profit provider of research tools. While these Principles are directly applicable only to recipients of NIH funding, it is hoped that other not-for-profit and for-profit organizations will adopt similar policies and refrain from seeking unreasonable restrictions or conditions when sharing materials. Ensure Dissemination of Research Resources Developed with NIH Funds Progress in science depends upon prompt access to the unique research resources that arise from biomedical research laboratories throughout government, academia, and industry. Ideally, these new resources flow to others conducting further research, advancing science and serving as the new standard which itself will be improved upon and ultimately replaced. This is accomplished by wide distribution on a nonexclusive basis, although wide distribution on reasonable terms by an exclusive distributor may meet these

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objectives as well. When research tools are used only within one or a small number of institutions, there is a great risk that fruitful avenues of research will be neglected. Unique research resources arising from NIH funded research must be made available to the scientific research community. Recipients are expected to manage interactions with third parties that have the potential to restrict Recipients’ ability to disseminate research tools developed with NIH funds. For example, a Recipient might co-mingle NIH funds with funds from one or more third party sponsors, or import a research tool from a third party provider for use in an NIH-funded research project. Either situation may result in a Recipient incurring obligations to a third party that conflict with Recipient’s obligations to the NIH. To avoid inconsistent obligations, Recipients are encouraged to share these Principles with potential co-sponsors of research projects and third party providers of materials. SUMMARY Access to research tools is a prerequisite to continuing scientific advancement. Ensuring broad access while preserving opportunities for product development requires thoughtful, strategic implementation of the Bayh-Dole Act. The NIH urges Recipients to develop patent, license, and material sharing policies with this goal in mind, realizing both product development as well as the continuing availability of new research tools to the scientific community. GUIDELINES FOR IMPLEMENTATION The following Guidelines provide specific information to patent and license professionals at Recipient institutions for implementing the Principles on Obtaining and Disseminating Biomedical Resources. Guidelines for Disseminating Research Resources Arising Out of NIH-Funded Research Recipients must ensure that unique research resources arising from NIH funded research are made available to the scientific research community. Although some licensing of research tools to for-profit companies is necessary and appropriate, the majority of transfers, to both not-for-profit entities and for-profit entities, should be implemented under terms no more restrictive than the UBMTA. In particular, Recipients are expected to use the Simple Letter Agreement of the UBMTA (text below), or other comparable document with no more restrictive terms, to readily transfer unpatented tools developed with NIH funds to other Recipients for use in NIH funded projects. If the materials are patented (or licensed to an exclusive provider), other arrangements such as a simple license agreement may be used, but commercialization option rights, royalty reach-through, or product reach-through rights back to the provider are inappropriate. Simple Letter Agreement for Transfer of Non-Proprietary Biological Material PROVIDER Authorized Official:___________________________________ Organization:___________________________________ Address:___________________________________ RECIPIENT Authorized Official:___________________________________ Organization:___________________________________ Address:___________________________________ In response to the RECIPIENT’s request for the BIOLOGICAL MATERIAL identified as [insert description of material] the PROVIDER asks that the RECIPIENT and the RECIPIENT SCIENTIST agree to the following before the RECIPIENT receives the BIOLOGICAL MATERIAL: The above BIOLOGICAL MATERIAL is the property of the PROVIDER and is made available as a service to the research community.

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The BIOLOGICAL MATERIAL will be used for teaching and academic research purposes only. The BIOLOGICAL MATERIAL will not be further distributed to others without the PROVIDER’s written consent. The RECIPIENT shall refer any request for the BIOLOGICAL MATERIAL to the PROVIDER. To the extent supplies are available, the PROVIDER or the PROVIDER SCIENTIST agrees to make the BIOLOGICAL MATERIAL available, under a separate Simple Letter Agreement, to other scientists (at least those at nonprofit organizations or government agencies) who wish to replicate the RECIPIENT SCIENTIST’s research. The RECIPIENT agrees to acknowledge the source of the BIOLOGICAL MATERIAL in any publications reporting use of it. Any BIOLOGICAL MATERIAL delivered pursuant to this Simple Letter Agreement is understood to be experimental in nature and may have hazardous properties. The PROVIDER MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESSED OR IMPLIED. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF THE BIOLOGICAL MATERIAL WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER PROPRIETARY RIGHTS. Except to the extent prohibited by law, the RECIPIENT assumes all liability for damages which may arise from its use, storage or disposal of the BIOLOGICAL MATERIAL. The PROVIDER will not be liable to the RECIPIENT for any loss, claim or demand made by the RECIPIENT, or made against the RECIPIENT by any other party, due to or arising from the use of the MATERIAL by the RECIPIENT, except to the extent permitted by law when caused by the gross negligence or willful misconduct of the PROVIDER. The RECIPIENT agrees to use the BIOLOGICAL MATERIAL in compliance with all applicable statutes and regulations, including, for example, those relating to research involving the use of human and animal subjects or recombinant DNA. The BIOLOGICAL MATERIAL is provided at no cost, or with an optional transmittal fee solely to reimburse the PROVIDER or its preparation and distribution costs. If a fee is requested, the amount will be indicated here: [insert fee] The RECIPIENT and the RECIPIENT SCIENTIST should sign both copies of this letter and return one signed copy to the PROVIDER SCIENTIST. The PROVIDER will then forward the BIOLOGICAL MATERIAL. PROVIDER SCIENTIST Organization:___________________________________ Address:___________________________________ Name:___________________________________ Title:___________________________________ Signature:___________________________________ Date:___________________________________ RECIPIENT SCIENTIST Organization:___________________________________ Address:___________________________________ Name:___________________________________ Title:___________________________________ Signature:___________________________________ Date:___________________________________ RECIPIENT ORGANIZATION APPROVAL Authorized Official:___________________________________ Title:___________________________________ Address:___________________________________ Signature:___________________________________ Date:___________________________________ [Source: 60 FR 12771, 08 March 1995]

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Recipients must ensure that obligations to other sources of funding of projects in which NIH funds are co-mingled are consistent with the Bayh-Dole Act and NIH funding requirements. Unique research resources generated under such projects are expected to be made available to the research community. Recipients are encouraged to share these Guidelines with potential co-sponsors. Any agreements covering projects in which NIH funds will be used along with other funds are expected to contain language to address the issue of dissemination of unique research resources. Examples of possible language follow. The paragraphs are presented in a “mix and match” format: “The project covered by this agreement is supported with funding from the National Institutes of Health, which requires that unique research resources arising out of NIH-funded research be made widely available to third parties for further research. Provider agrees that upon publication, unpatented unique research resources arising out of this project may be freely redistributed.” “In the event an invention is primarily useful as a research tool, any option granted shall either be limited to a non-exclusive license or the terms of any resulting exclusive license shall include provisions that ensure that the research tool will be available to the academic research community on reasonable terms.” “Provider agrees that Recipient shall have the right to make any materials and inventions developed by Recipient in the course of the collaboration (including materials and inventions developed jointly with Provider, but not including any Provider materials (or parts thereof) or Provider sole inventions) available to other scientists at not-for-profit organizations for use in research, subject to Provider’s independent intellectual property rights.” “Subject to Recipient’s obligations to the U.S. government, including 37 CFR 401, the PHS Grants Policy Statement, and the NIH Guidelines for Obtaining and Disseminating Biomedical Research Resources, Recipient grants to Sponsor the following rights:.” Exclusive licenses for research tools should generally be avoided except in cases where the licensee undertakes to make the research tool widely available at moderate cost to researchers through unrestricted sale or the licensor retains rights to make the research tool widely available. When an exclusive license is necessary to promote investment in commercial applications of a subject invention that is also a research tool, the Recipient should ordinarily limit the exclusive license to the commercial field of use, retaining rights regarding use and distribution as a research tool. Examples of possible language include: “Research License” means a nontransferable, nonexclusive license to make and to use the Licensed Products or Licensed Processes as defined by the Licensed Patent Rights for purposes of research and not for purposes of commercial manufacture, distribution, or provision of services, or in lieu of purchase, or for developing a directly related secondary product that can be sold. Licensor reserves the right to grant such nonexclusive Research Licenses directly or to require Licensee to grant nonexclusive Research Licenses on reasonable terms. The purpose of this Research License is to encourage basic research, whether conducted at an academic or corporate facility. In order to safeguard the Licensed Patent Rights, however, Licensor shall consult with Licensee before granting to commercial entities a Research License or providing to them research samples of the materials.” “Licensor reserves the right to provide the Biological Materials and to grant licenses under Patent Rights to not-for-profit and governmental institutions for their internal research and scholarly use.” “Notwithstanding anything above to the contrary, Licensor shall retain a paid-up, nonexclusive, irrevocable license to practice, and to sublicense other not-for-profit research organizations to practice, the Patent Rights for internal research use.” “The grant of rights provided herein is subject to the rights of the United States government and limited by the right of the Licensor to use Patent Rights for its own research and educational purposes and to freely distribute Materials to not-for-profit entities for internal research purposes.” “Licensor reserves the right to supply any or all of the Biological Materials to academic research scientists, subject to limitation of use by such scientists for research purposes and restriction from further distribution.” “Licensor reserves the right to practice under the Patent Rights and to use and distribute to third parties the Tangible Property for Licensor’s own internal research purposes.”

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Guidelines for Importing Research Resources for Use in NIH-Funded Research Agreements importing materials for use in NIH funded research are expected to address the timely dissemination of research results. Recipients should not agree to significant publication delays, any interference with the full disclosure of research findings, or any undue influence on the objective reporting of research results. A delay of thirty days to allow for patent filing or review for confidential proprietary information is generally viewed as reasonable. Under the Bayh-Dole Act and its implementing regulations, agreements importing materials for use in NIH funded projects cannot require that title to resulting inventions be assigned to the provider. For this reason, definitions of “materials” that include all derivatives or all modifications are unacceptable. Conversely, it is important for providers of materials to be aware that a Recipient does not gain any ownership or interest in a provider’s material by virtue of the Recipient using the material in an NIH-funded activity. Examples of acceptable definitions for “materials” include: ““Materials” means the materials provided as specified in this document.” ““Materials” means the materials provided as specified in this document. Materials may also include Unmodified Derivatives of the materials provided, defined as substances created by the Recipient which constitute an unmodified functional subunit or product expressed by the original material, such as subclones of unmodified cell lines, purified or fractionated subsets of the original material, proteins expressed by DNA/RNA supplied by the Provider, or monoclonal antibodies secreted by a hybridoma cell line. ” ““Materials” means the materials provided as specified in this document. Materials may also include Progeny and Unmodified Derivatives of the materials provided. Progeny is an unmodified descendant from the original material, such as virus from virus, cell from cell, or organism from organism. Unmodified Derivatives are substances created by the Recipient which constitute an unmodified functional subunit or product expressed by the original material, such as subclones of unmodified cell lines, purified or fractionated subsets of the original material, proteins expressed by DNA/RNA supplied by the Provider, or monoclonal antibodies secreted by a hybridoma cell line.” ““Materials” means the material being transferred as specified in this document. Materials shall not include: (a) Modifications, or (b) other substances created by the recipient through the use of the Material which are not Modifications, Progeny, or Unmodified Derivatives. Progeny is an unmodified descendant from the Material, such as virus from virus, cell from cell, or organism from organism. Unmodified Derivatives are substances created by the Recipient which constitute an unmodified functional subunit or product expressed by the original Material, such as subclones of unmodified cell lines, purified or fractionated subsets of the original Material, proteins expressed by DNA/RNA supplied by the Provider, or monoclonal antibodies secreted by a hybridoma cell line.” [Source: Uniform Biological Materials Transfer Agreement; terms defined therein] Recipients are expected to avoid signing agreements to import research tools that are likely to restrict Recipients’ ability to promote broad dissemination of additional tools that may arise from the research. This might occur when an agreement gives a provider an exclusive license option to any new intellectual property arising out of the project. A new transgenic mouse developed during the project could fall under this license option and become unavailable to third party scientists as a result. Examples of agreements to examine include material transfer agreements (MTAs), memoranda of understanding (MOU), research or collaboration agreements, and sponsored research agreements. Recipients should consider adopting standard language to place in such agreements to address this issue. The following are examples of possible language to include in MTAs, sponsored research agreements, and other agreements that either import materials from or co-mingle funds with non-government sources. The paragraphs are presented in a “mix and match” format: “The project covered by this agreement is supported with funding from the National Institutes of Health, which requires that unique research resources arising out of NIH-funded research be made widely available to third parties for further research. Provider agrees that after publication, unpatented unique research resources arising out of this project may be freely redistributed.”

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“In the event an invention is primarily useful as a research tool, any option granted shall either be limited to a non-exclusive license or the terms of any resulting exclusive license shall include provisions which insure that the research tool will be available to the academic research community on reasonable terms.” “Provider agrees that Recipient shall have the right to make any materials and inventions developed by Recipient in the course of the collaboration (including materials and inventions developed jointly with Provider, but not including any Provider materials (or parts thereof) or Provider sole inventions) available to other scientists at not-for-profit organizations for use in research, subject to Provider’s independent intellectual property rights.” “Subject to Recipient’s obligations to the U.S. government, including 37 CFR 401, the PHS Grants Policy Statement, and the NIH Guidelines for Obtaining and Disseminating Biomedical Research Resources, Recipient grants to Sponsor the following rights:.” Agreements importing materials from for-profit entities for use in NIH funded research may provide a grant back of non-exclusive, royalty-free rights to the provider to use improvements and new uses of the material that, if patented, would infringe any patent claims held by the provider. They may also provide an option for an exclusive or non-exclusive license to new inventions arising directly from use of the material. These should be limited to circumstances where the material sought to be imported is unique, such as a patented proprietary material, and not reasonably available from any other source. A non-exclusive “grant-back” might be used, for example, to protect a for-profit entity that provides aproprietary compound from being blocked from using new uses of that compound discovered during the NIH-funded project. In providing license options, Recipients must ensure that licenses granted to providers under such options are consistent with Bayh-Dole requirements, including the preference for U.S. industry requirements and reservation of government rights under 37 C.F.R. Part 401. In determining the scope of license or option rights that are granted in advance to a provider of materials, Recipient should balance the relative value of the provider’s contribution against the value of the rights granted, cost of the research, and importance of the research results. The rights granted to providers should be limited to inventions that have been made directly through the use of the materials provided. In addition, Recipients should reserve the right to negotiate license terms that will ensure: 1) continuing availability to the research community if the new invention is a unique research resource; 2) that the provider has the technical and financial capability and commitment to bring all potential applications to the marketplace in a timely manner; and 3) that if an exclusive license is granted, the provider will provide a commercial development plan and agree to benchmarks and milestones for any fields of use granted. It is expected that agreements importing NIH-funded materials from not-for-profit entities for use in NIH funded research will not provide commercialization option rights, royalty reach-through, or product reach-through rights back to the provider. Such materials should be imported under the UBMTA, or, if the materials are patented, a simple license agreement that does not request reach-through to either future products or royalties. If the providing not-for-profit organization is constrained in sharing the material due to a pre-existing sponsored research agreement or license, NIH expects the not-for-profit provider to negotiate a suitable resolution with the private research sponsor or licensee. The co-mingling of NIH and sponsored research funds is allowed, however, Recipient is responsible for ensuring that the sponsored funds do not interfere with NIH funding requirements such as open dissemination of research tools. May 1999