UW group's stem cell patent upheld; Federal ruling helps in commercialization of work

Wisconsin's role in the commercialization of embryonic stem cell research has received a boost from the U.S. patent office, which rejected a challenge to a key patent held by the Wisconsin Alumni Research Foundation.

The foundation has claimed ownership of discoveries made by James Thomson since 1995. Thomson was the first person to isolate human embryonic stem cells, from which virtually all organs, cells and other body tissue arise.

His discoveries made Wisconsin a key stop on the path to commercializing any products developed from the cells.

The foundation announced Thursday that the U.S. Patent and Trademark Office has thrown out a challenge to one of three key stem cell patents. Observers say the patent office will likely do the same with challenges to the other two that have dogged the University of Wisconsin-Madison's patenting and licensing organization since they were filed by two consumer groups in October 2006.

That would put the foundation in a good position to raise its fees for future licensees, said Grady Frenchick, a patent attorney in Madison at the Whyte Hirschboeck Dudek law firm.

"It's getting bigger and better and meaner and stronger every time they do this," said Frenchick, referring to the two times the patent office has now evaluated the stem cell patents.

Frenchick said he expects the patent office to reject the other two patent challenges in the next week.

"It's a terrific decision, not just because they upheld the patent," said Carl Gulbrandsen, the foundation's managing director.

Last year, a commercialization consultant estimated that the stem cell patents could mean as much as $200 million in royalties for the research foundation. For it to generate that revenue, however, companies have to turn research into products - and that would have to happen before the foundation's patents expire in 2015.

The detailed, 82-page decision suggests the patent office considered the challenge to the patent thoroughly, which should make it a difficult decision to reverse, Gulbrandsen said.

Groups intend to appeal

The groups that filed the re-examination request - the Foundation for Taxpayer and Consumer Rights in Santa Monica, Calif., and the Public Patent Foundation in New York City - intend to appeal the decision with the patent office's board of appeals, said John Simpson, stem cell project director for the California group.

"We still believe we have a very good case here and intend to carry on," Simpson said. "These are key, overarching patents that affect the whole field, so that's one reason to stay focused on them. And you need to see it through to the end."

At the core of the groups' challenge was the assertion that any good scientist with access to embryos and funding could have done what Thomson did.

The patent office made it clear in its decision it didn't agree.

Examiner Gary L. Kunz said in the decision that Thomson's discovery was so clearly not obvious that he didn't feel the need to turn to secondary sources such as the opinions of other scientists to analyze it.

Simpson said he and his allies still disagree.

"I think it will ultimately be found to be obvious in the technical sense that applies in patents," Simpson said.

The challenge to the stem cell patents included an intense media campaign, with Simpson and his allies calling news conferences and issuing a raft of statements to make their case. They also pulled in four stem cell scientists to file declarations in support of overturning the patents: Douglas Melton and Chad Cowan of Harvard University; Alan Trounson, who recently left Monash University in Australia to run California's stem cell agency; and Jeanne Loring of the Scripps Research Institute.

The office preliminarily rejected the stem cell patents in April in its first action related to the re-examination.

In September Gulbrandsen said he found the way the groups were dealing with Thomson's work demeaning and said they ought to be embarrassed. In October, the Wisconsin foundation provided an over 1,000-page filing to the patent office.

In November, a team of scientists led by Thomson claimed another stem cell breakthrough. By genetically manipulating human skin cells, scientists at UW-Madison were able to reprogram those cells to act like embryonic stem cells without using human embryos.

On Monday, the Morgridge Institute for Research named Thomson as director of regenerative biology and its principal scientist. The appointment was widely seen as a commitment to keeping Thomson in Wisconsin.

The research foundation's first patent on Thomson's work is a 1995 patent for rights to embryonic stem cells in all primates. A 1998 patent extends those rights to human embryonic stem cells, and a 2001 patent - the one for which the challenge was thrown out - refines elements of the earlier patents.

The federal government funds only a limited amount of embryonic stem cell research because of restrictions put into place by President Bush.

The patents are good until 2015. The research foundation has 914 licensees for the patents, 23 to 25 of whom hold commercial licenses, said spokeswoman Jill Ladwig.

The patent challenge pushed WARF to change its policies so companies that sponsor research at an academic or nonprofit institution don't need a license, giving the consumer groups one victory, Simpson said. The Wisconsin foundation also modified wording in the 2001 patent so researchers working with fetal tissue or the recently developed stem cells wouldn't have to license WARF's patents, he said.

Gulbrandsen said he's confident about the two patent challenges still pending.

"I'm optimistic," he said, "but we'll wait and see."

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