Technology Transfer Pact Could Be A Model for Future Agreements

Also See: Breadth of Biodiversity After months of complaints, hundreds of scientists will finally be able to use a long-coveted recombinant technology without looking over their shoulders. On August 19, National Institutes of Health Director Harold Varmus announced an agreement with DuPont Pharmaceuticals that will enable NIH and NIH-supported researchers to use a DuPont-developed technology, called Cre-lox, without compromising the company's ability to receive the appropriate value for commercial applications. In a separate agreement with DuPont, the Jackson Laboratory, a nonprofit institution in Bar Harbor, Maine, and a designated national repository for genetically engineered mice, will be permitted to receive, breed, and distribute animals containing Cre-lox to both academic and commercial institutions. All parties contend that the agreements could serve as models for future agreements between academic and commercial research institutions. "What we've worked [out] with the NIH is a role model for how commercial institutions can put important inventions for free into the academic domain while retaining commercial rights that are reasonable," claims David Block, vice president of product planning and acquisition at DuPont. Cre-lox allows investigators to efficiently cut out or put in any size chunk of DNA into a designated sector of the genome. It's the first technology that's been proven to do so in post-mitotic cells such as liver cells. "We're told by many investigators that it surpasses many other recombinase systems in its simplicity and its efficiency," says Block. NIH investigators know the usefulness of the technique as well as any. In fact, scientists in the academic sector had been using Cre-lox free from constraints, for several years. Then about two years ago, in an effort to protect their business interests, DuPont decided to require that all those using the technology purchase licenses. Soon after, because they knew that these institutions could not pay them up front, DuPont elected to collect usage fees from universities on any products that came to market that incorporated the technology. David Einhorn Maria Freire More troubling was DuPont's request for fees from universities and NIH on products whose development involved Cre-lox somewhere along the line, but did not actually incorporate the technology--that is, they wanted so-called "reach-through" rights on all intellectual property. Aside from the extra costs allocated to NIH and universities, this policy created another potential point of contention: Business-smart biotech and pharmaceutical companies, trying to avoid paying extra fees for a Cre-lox product, might have passed the cost on to the customer--namely the patient. But the real blow for scientists came when DuPont asked that the technology not be transferred to unlicensed colleagues, and that all Cre-lox-related publications be sent to the company for review. Widespread protest triggered one concession: Publications were not subject to pre-review, but instead needed to be passed on to DuPont as soon as possible. Scientists still weren't happy. "People were waiting for these very complicated agreements to be negotiated," explains Maria Freire, director of the NIH Office of Technology Transfer. "[Scientists] could not move the material to other colleagues in the academic world or even in the for-profit world without having all these restrictions." A recent agreement will make the efficient recombinase system Cre-lox available for use in the construction of a library of recombinant mice. DuPont Pharmaceuticals, in addition to making its Cre-lox technology more accessible to NIH researchers and the Jackson Laboratory, has also licensed the technology to Lexicon Genetics Inc. in The Woodlands, Texas. As part of a technology exchange, DuPont has agreed to let Lexicon use the technology to generate tissue-specific gene knockout mice and to do gene trapping in mouse embryonic stem cells. Use of Cre-lox will advance the development of Lexicon's Omnibank™, a gene sequence database that corresponds to a library of recombinant mouse clones. "What they want to do is make a library of hundreds of thousands of mutant mice using the Cre-lox system and then basically sell it at minimal cost to academia and sell it to the commercial world," David Block, vice president of product planning and acquisition at DuPont, says of Lexicon's program. Under the terms of the agreement, Lexicon will pay royalties on the Cre-lox products they produce. DuPont will also receive an OmniBank subscription that will assist them in generating novel mouse mutants for their drug-development programs. In exchange, DuPont will pay Lexicon royalties on products developed with its database information. "The kind of sublicensing rights that we have, I think, really facilitates greater use of the technology," says Lexicon CEO Arthur Sands. "I believe that's part of the pharmaceutical goal: to get this technology in the hands of people who can use it ." Sands terms the agreement "exciting" because it will enable Lexicon to use Cre- lox in conjunction with its other intellectual property.--ER Says David Einhorn, house council for Jackson Laboratory, "It slowed up the whole process from basic research, to development of a drug or a product for the public." The dispute had some precedent: Roche Pharmaceuticals had attempted to monitor the use of the polymerase chain reaction (PCR) technique. The ensuing uproar was such that the company relented. Freire says of the Cre-lox technology, "We had a tremendous, tremendous outcry from the scientific community ... a lot of researchers were very, very unhappy." According to the terms of the recent agreement, NIH scientists can transfer the technology to researchers doing noncommercial research and to companies with notification to DuPont. There are no bars to publication, and there are no reach-through clauses to final products. In addition, DuPont gave the same terms to the more than 100 NIH-funded academic institutions that had already signed agreements for the Cre-lox technology. Block suggests that a technology such as PCR could have been handled in a similar fashion, and that, in the future, products based on newly discovered genes might also call for such an agreement. "Right now a lot of the companies are trying to get royalties on products for genes that are discovered," he notes. "What we're saying is that the commercial world ... can make transfer relatively free and easy." According to Block, commercial institutions should be able to issue rights to work on novel technologies for a license fee that does not include downstream milestones and royalties. Einhorn believes that the Jackson Laboratory-DuPont agreement is "symbolic" with respect to how companies should patent basic technologies, but he does see some room for improvement. "We hope we don't have to go through this every time," he emphasizes, noting that the agreement was three years in the making. And Freire, although pleased with the settlement, makes it clear that she does not want every company with a new technique in hand to draw up a Cre-lox type of agreement. Instead, she hopes that both academic scientists and those in the commercial sector will, in the future, gain more respect and sensitivity for each other's research and business needs. Says Freire, "If and when technology transfer is going to happen, then it has to work both ways." The full text of the NIH-DuPont agreement is available on the Internet at www.nih.gov/od/ott/cre-lox.htm. Also See: Breadth of Biodiversity

Technology Transfer Pact Could Be A Model for Future Agreements

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