<p>Arti Rai</p>

Courtesy of Duke Law School

The decades of freedom from liability for patent infringement may be over for US universities and research institutes, unless the National Research Council (NRC) gets its way. In the past, universities could use patented techniques and devices without a license, because of the so-called experimental use exemption. In other words, patents could be infringed in academic pursuits.

Action in the federal courts has closed that loophole. Instead of letting universities face claims, however, the NRC's report, "A Patent System for the 21st Century,"1 advocates a shift in liability from universities and institutes to the government, at least when private companies claim ownership rights to tools and discoveries used in federally funded research. Some experts, though, question the need for such a liability shield.

A court battle between John Madey, now at the University of Hawaii, and Duke University triggered the concern over...


One member of the NRC panel disagreed with the recommendation in a footnote to the report. Robert Blackburn, vice president and chief patent counsel for Chiron Corporation, a biotechnology company in Emeryville, Calif., and distinguished scholar at the School of Law at the University of California, Berkeley, points out that if many companies start suing the government over patent infringement, the strategy could backfire and impinge on the university research it was designed to protect. "Why would you subject the government to potential liability in every research grant when there is no compelling evidence that the problem is pervasive?" asks Blackburn. He adds that Madey v. Duke3 "has nothing to do with the real world of patents, which is the world of commerce." Private companies rarely sue universities because it makes no financial sense, he claims; patent lawsuits are time-consuming and expensive, typically costing as much as $5 million (US). "Plus, it's not the greatest PR for a company to sue a prestigious university," says Blackburn.

Furthermore, the NRC's recommendation could encourage companies to sue the federal government, says Arti Rai, a law professor at Duke University. "Even though it won't result in a flood of litigation, the government could be seen as having deeper pockets, and it wouldn't look as bad to sue the government as it would to sue a university," she says. "But it's not entirely clear, on the basis of existing information, that there is a problem."

Several ongoing studies could provide answers. The American Association for the Advancement of Science (AAAS) sent surveys to several hundred researchers to determine the effect, if any, of Madey v. Duke. "We'll see if the claims of potential infringement are on the rise or not," says Stephen Hansen, manager of the AAAS project on Science and Intellectual Property in the Public Interest.


Meanwhile, the National Institutes of Health is circulating drafts of a "best practices" guide to universities on licensing federally funded genomic discoveries, such as expressed sequence tags, haplotypes, and small interfering RNAs. The draft document was distributed in March at an annual meeting of the Association of University Technology Managers. It cautioned technology managers against "exclusive licensing practices for genomic technologies at US academic and nonprofit institutions that could have detrimental short-term and long-term effects" on healthcare products and services.

Several university technology managers criticized NIH's best-practices guidance as premature and based on anecdotal data. In response, Jack Spiegel, senior NIH adviser for technology transfer operations, responded via E-mail that the draft guidelines should be considered "replete with equivocation and qualification regarding the gray nature of these issues," and that NIH is seeking feedback from the research community.

Universities have already earned a reputation for filing patent-related lawsuits against private companies. One of the more prominent examples surrounds the NF-κβ cell-signaling pathway, a key biological trigger described in more than 5,000 scholarly papers. Harvard University, the Massachusetts Institute of Technology, and the Whitehead Institute of Biomedical Research received a patent on NF-κβ in June 2002 and licensed it exclusively to Ariad Pharmaceuticals, headquartered in Cambridge, Mass. Ariad and the three institutions then sued Eli Lilly & Co. in Indianapolis, claiming that two Lilly drugs infringe on the patent; they also approached some 50 other companies seeking royalty payments on current or future products.4

In the past, industry brought few lawsuits against research universities, but the implications can be significant. One of the most notable is the 11-year battle over the widely used DNA-replicating enzyme, Thermus aquaticus DNA polymerase, known as Taq. Swiss drug giant Roche argued that 200 scientists who had published research using Taq obtained from Promega in Madison, Wis., were patent infringers. The outcome of the case will likely determine whether researchers have to pay more or less for Taq polymerase chain-reaction products.

Industry and other patent owners are more commonly approaching universities with allegations of patent infringement and demanding that researchers obtain licenses, says Rebecca Eisenberg, a University of Michigan law professor. According to Eisenberg, most universities are averse to risk, so they are more likely to pay for a license than risk litigation. "So the fact that you don't see companies suing [universities] could mean that the companies are not willing to sue," she says, "or it could mean they didn't need to sue, because the university said okay" to a license.

Overall, the NRC's recommendation to shift patent infringement liability from universities to the government does not address the reality that universities have created their own profit centers to commercialize research, says Kathleen Madden Williams, cochair of patent and biomedical practices with Palmer & Dodge, a Boston law firm. "Patent owners don't want to sue their customers; they want to sue their competitors," she says. "Whether you sue a university depends on whether you see them as a non-paying customer or as a competitor. Those relationships are shifting."

Ted Agres tedagres@lycos.com is a freelance writer in Washington, DC.

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