KRS July Final Jour.09. - Association of Biotechnology and Pharmacy

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Current Trends in Biotechnology and Pharmacy Vol. 3 (3) 225 - 240, July 2009. ISSN 0973-8916 technique of modern molecular biology, is the founding technology of the biotechnology industry (19). In 1976, Genentech became the first company to be based on this new technology and the first of the wave of biotechnology companies, which in fifteen years has grown from one to over 2000. The first patent application was filed by Stanford University in November 1974 in the midst of much soul-searching on the part of the scientific community. Stanley Cohen and Herbert Boyer, who developed the technique together at Stanford and the University of California, San Francisco (UCSF), respectively, were initially hesitant to file the patent. Several years of discussion involving the National Institutes of Health (NIH) and Congress followed. By 1978, NIH decided to support the patenting of recombinant DNA inventions by universities; in December 1980, the process patent for making molecular chimeras was issued. The product patent for prokaryotic DNA was issued in 1984. The patents were jointly awarded to Stanford and UCSF and shared with Herbert Boyer and Stanley Cohen. The first licensee signed agreements with Stanford on December 15, 1981. As of February 13, 1995, licensing agreements had generated $139 million in royalties, which have shown an exponential increase in value since their beginning. In 1990-1995 alone, the licensing fees earned $102 million. This case has three key elements. First, the technology was inexpensive and easy to use from a purely technical standpoint and there were only minimal impediments to widespread dissemination. Second, there were no alternative technologies. Third, the technology was critical and of broad importance to research in molecular biology. The technology was developed in universities through publicly funded research. The strategy used to protect the value of the 236 intellectual property was to make licenses inexpensive and attach minimal riders. The tremendous volume of sales made the patent very lucrative. Every molecular biologist uses this technology. However, not all inventions are as universally critical. Only a few university patents in the life sciences, such as warfarin and Vitamin D, have been even nearly as profitable as the Cohen-Boyer patent. Clearly, had this technology not been so pivotal for molecular biology or had an equally useful technology been available, the licenses would not have been sold so widely and the decision to license the technology might have met with more resistance. The Cohen-Boyer patent is considered by many to be the classic model of technology transfer envisaged by supporters of the Bayh- Dole Act, which was intended to stimulate transfer of university-developed technology into the commercial sector. Ironically, it presents a different model of technology than that presumed by advocates of the Bayh-Dole act. The biotechnology boom that followed the widespread dissemination of recombinant DNA techniques transformed the way universities manage intellectual property. It also fundamentally changed the financial environment and culture of biological research. The decision to negotiate nonexclusive, rather than exclusive, licenses was critical to the industry. If the technology had been licensed exclusively to one company and the entire recombinant DNA industry had been controlled by one company, the industry might never have developed. Alternatively, major pharmaceutical firms might have been motivated to commit their resources to challenging the validity of the patent. PCR and Taq polymerases Polymerase chain reaction (PCR) technology presents an interesting counterpoint Firoz et al
Current Trends in Biotechnology and Pharmacy Vol. 3 (3) 225 - 240, July 2009. ISSN 0973-8916 to the Cohen-Boyer technology. Both are widely used innovations seen by many as critical for research in molecular biology. However, the licensing strategies for the two technologies have been quite different, and they were developed in different contexts. PCR allows the specific and rapid amplification of targeted DNA or RNA sequences. Taq polymerase is the heat-stable DNA polymerase enzyme used in the amplification. PCR technology has had a profound impact on basic research not only because it makes many research tasks more efficient, in time and direct cost, but also because it has made feasible some experimental approaches that were not possible before the development of PCR. PCR allows the previously impossible analysis of genes in biological samples, such as assays of gene expression in individual cells, in specimens from ancient organisms, or in minute quantities of blood in forensic analysis. In less than a decade, PCR has become a standard technique in almost every molecular biology laboratory, and its versatility as a research tool continues to expand. In 1989, Science chose Taq polymerase for its first “Molecule of The Year” award. Kary Mullis was the primary inventor of PCR, which he did when he worked at the Cetus Corporation. He won a Nobel Prize for his contributions merely 8 years after the first paper was published in 1985 (20), which attests to its immediate and widely recognized impact. Whereas recombinant DNA technology resulted from collaboration between university researchers whose immediate goal was to insert foreign genes into bacteria to study basic processes of gene replication, PCR was invented in a corporate environment with a specific application in mind—to improve diagnostics for human genetics. No one anticipated that it would 237 so quickly become such a critical tool with such broad utility for basic research. Molecular biology underwent considerable change during the decade between the development of recombinant DNA and PCR technologies. The biotechnology industry emerged, laws governing intellectual property changed, there was a substantial increase in university-industry-government alliances, and university patenting in the life sciences increased tenfold. There was virtually no controversy over whether such an important research tool should be patented and no quarrel with the principle of charging licensing fees to researchers. The controversy has been primarily over the amount of the royalty fees. Cetus Corporation sold the PCR patent to Hoffman-LaRoche for $300 million in 1991. In setting the licensing terms for research use of PCR, Roche found itself in a very different position from Stanford with respect to the Cohen- Boyer patent. First, it was a business, selling products for use in the technology. That made it possible to provide rights to use the technology with the purchase of the products, rather than under direct license agreements, such as Stanford’s. This product-license policy was instituted by Cetus, the original owner of the PCR patents. An initial proposal to the scientific community by the president of Cetus for reachthrough royalties—royalties on secondgeneration products derived through use of PCR—was met with strong criticism. Ellen Daniell, director of licensing at Roche Molecular Systems, noted that the dismay caused by the proposal has continued to influence the scientific community’s impression of Roche’s policy. Roche’s licensing fees have met with cries of foul play from some scientists who claim that public welfare is jeopardized by Roche’s goals. Nevertheless, most scientists recognize that Patenting in Biotechnology
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KRS July Final Jour.09. - Association of Biotechnology and Pharmacy

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