Association For Molecular Pathology et al v. United States Patent and Trademark Office et al

Filing 173

DECLARATION of JOSEPH STRAUS in Support re: 61 MOTION for Summary Judgment., 152 MOTION for Summary Judgment.. Document filed by Myriad Genetics, Lorris Betz, Roger Boyer, Arnold B. Combe, Raymond Gesteland, James U. Jensen, John Kendall Morris, Thomas Parks, David W. Pershing, Michael K. Young. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E PART 1, # 6 Exhibit E Part 2, # 7 Exhibit E Part 3, # 8 Exhibit F, # 9 Exhibit G Part 1, # 10 Exhibit G Part 2, # 11 Exhibit H, # 12 Exhibit I)(Poissant, Brian)

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aware of relevant IP, four reported changing their research approach and five delayed completion of an experiment by more than 1 month. No one reported abandoning a line of research. Thus, of 381 academic scientists, even including the 10% who claimed t o be doing drug development or related downstream work, none were stopped by 1, 2* Charlene Cho,1 Wesley M. Cohen3 John P.Walsh, t h e existence of third-party patents, and eve n modifications or delays were rare, each affecting around 1% of our cholars have argued that the growing s a m p l e . In addition, 22 of the 23 number of patents on research inputs LOGISTIC REGRESSION PREDICTING RECEIVING REQUESTED MATERIAL r e s p o n d e n t s to our question about may now impede upstream, noncomcosts reported that there was no fee mercial research by creating an "anticomVariable Estimate for the patented technology, and the mons" in which rights holders may impose Scientific competition ­0.058 ± 0.029* 23rd respondent said the fee was in ex c e s s ive transaction costs or make the Academic supplier 0.007 ± 0.005 the range of $1 to $100. Thus, for the acquisition of licenses and other rights too t i m e being, access to patents on burdensome to permit the pursuit of scienMTA 0.012 ± 0.004** knowledge inputs rarely imposes a tif ically and socially worthwhile research Patented 0.005 ± 0.007 signif icant burden on academic bio(1, 2). Alternatively, owners of the rights Patent status unknown ­0.004 ± 0.004 medical research. over key upstream discoveries may restrict Drug ­2.217 ± 0.683** Our research thus suggests that follow-on research through the exercise of "law on the books" need not be the exclusivity (3, 4). The prospect of financial Values ± SEM. *P < 0.05; **P < 0.01. same as "law in action" if the law on gain from upstream research has raised the the books contravenes a community's further concern that academics are becomi n g more reluctant to share information, developing a business plan, had a startup, nor ms and interests (9, 12). Although the f i n d i n g s , or research materials (5, 6). In had a process or product in the market, or new survey did not explicitly ask respond e n t s their opinions about a research 2003, a small-sample interview study sug- had licensing income]. gested that, despite numerous patents on Although common, patents in this field e xe m p t i o n , our results suggest that inupstream discoveries, academic researchers are not typically used to restrict access to fringement remains of only slight concern. have accessed knowledge without the antic- the knowledge that biomedical scientists In contrast, research on clinical diagnostic i p a t e d frictions (7). Receiving material require. To begin with, few academic bench t e s t i n g (13, 14) suggests that when the r e q u e s t e d from other researchers could, scientists currently pay much attention to research is itself also a commercial activity, however, prove problematic (8, 9). others' patents. Only 5% (18 out of 379) patent holders are more likely to assert and T h e Madey v. Duke d e c i s i o n of 2002 regularly check for patents on knowledge clinical researchers more likely to abandon raised anew the question of the impact of inputs related to their research. Only 2% infringing activities. In addition to examining access to others' r e s e a r c h tool patents on biomedical (i.e., 8) have begun checking for patents in r e s e a r c h by clarifying that there was no the 2 years since Madey v. Duke, which sug- intellectual property, we consider the extent general research exemption shielding aca- gests little impact of the decision. Five per- to which scientists can access the tangible demic researchers from infringement liabil- cent had been made aware of intellectual research materials and data created by other ity (10). This very visible decision and con- p r o p e r t y (IP) relevant to their research labs, highlighted as another source of frict i n u i n g concerns over the impact of through a notification letter sent either to tion that may be impeding biomedical innoresearch tool patents on academic science them or their institution, which differs little vation (5, 8, 15). Indeed, concerns about prompted our current study. from the 3% who reported having received i n c r e a s i n g noncompliance with material We report findings from a survey of 414 such notification 5 years ago (prior to the transfer requests have prompted the National biomedical researchers in universities, gov- M a d e y v. Duke d e c i s i o n ) . Furthermore, I n s t i t u t e s of Health to issue guidelines ernment, and nonprofit institutions (11). In although 22% of respondents report being designed to encourage the exchange of matet h i s group of academic, biomedical n o t i f i e d by their institutions to respect rials created with federal funding (16). About 75% of our academic respondents researchers, 19% currently receive industry p a t e n t rights (versus 15%, 5 years ago), funding for their research (representing 4% such notification did not appreciably affect made at least one request for a material in of their research budget); 22% applied for a t h e likelihood of checking for patents-- t h e past 2 years. On average, academics patent in the past two years, with an average 5.9% of those receiving such instruction made about seven requests for materials to o f 0.19 patent applications per year per checked for patents versus 4.5% of those other academics and two requests to industry labs in the past 2 years. However, 19% respondent; 35% have some business activ- not receiving instruction. ity [i.e., have participated in negotiations Only 32 out of 381 respondents (8%) of our respondents report that their most over rights to their inventions, have begun b e l i eve d they conducted research in the r e c e n t request for a material was denied prior 2 years using information or knowl- (17). Moreover, noncompliance with such 1D e p a r t m e n t of Sociology, U n i ve rs i t y of Illinois at e d g e covered by someone else's patent. requests appears to be growing (see supChicago, Chicago, IL 60607 USA. 2University of Tokyo, However, even for the few who were aware p o r t i n g online text). Campbell and col3Duke University, Durham, NC 27708, Tokyo, Japan. of others' patents, those third-party patents leagues (5) reported that, among genomics a n d the National Bureau of Economic Research, d i d not have a large impact on their r e s e a r c h e r s , about 10% of requests were Cambridge, MA 02138, USA. *Author for correspondence. E-mail: jwalsh@uic .edu research. Of the 32 respondents who were d e n i e d in the 3 years, 1997­99. Fo r the

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g e n o m i c s researchers in our sample, the than 1 month. Moreover, in almost all cases, denial rate for 2003­04 was 18% (95% con- there was no immediate fee for the requested f idence interval, ±3.7%). material. However, for 8% of research input Over a 1-year period, an average of one requests, negotiating the MTA stopped the in six respondents reported that delays in research for more than 1 month. Although receiving materials from other academics M TA s do not commonly entail delays or caused at least one project they were work- impose fees, they frequently come with coni n g on to suffer a greater than 1-month ditions. MTAs, especially from industry supdelay, a substantial delay in a fast-moving p l i e r s , often include demands for reachr e s e a r c h field. Noncompliance by other through rights of some form. Of executed a c a d e m i c s with research input requests MTAs, 29% had reach-through claims, and resulted in about 1 in 14 scientists abandon- 16% provided for royalties. Twenty-six pering at least one of their projects each year. cent of MTAs imposed publication restricWe conducted two regression analyses t i o n s . Requests for drugs were the most to probe the reasons for noncompliance (see likely to yield such a restriction, with 70% of supporting online text). The first examined such agreements including some restriction w h e t h e r the respondent's most recent on publication of the research results using request was satisfied (see table, p. 2002). the transferred drug. Statistically significant predictors of nonAs a case study, we also collected data compliance included a measure of scien- from an additional 93 academic scientists tif ic competition (i.e., the number of com- who are conducting research on one of three p e t i n g labs) and whether the requested signaling proteins (CTLA-4, EGF, and NFmaterial was itself a drug. The patent status B) that are patent-intensive research areas of the requested material had no significant with enormous commercial interest, involveffect on noncompliance. A second analysis i n g large pharmaceutical f i r m s , small with other variables--particularly charac- b i o t e c h n o l o g y f i r m s , and universities. teristics of the prospective supplier--exam- These are the very conditions where issues ined predictors of the number of times the of access to IP should be evident. Although respondent failed to comply with requests the incidence of adverse consequences due (see table, this page). Here, the burden of to restricted access to IP was more manifest compliance (i.e., number of requests per here than in the random sample, it was still dollar of funding); scientific competition; infrequent (only 3% of respondents reportand commercial orientation (i.e., whether e d stopping a project in the past 2 years the respondent has engaged in any of the b e c a u s e of a patent). On the other hand, business activities listed above) increase the access to materials was even more problemlikelihood of noncompliance. Finally, the atic in these areas than in the random samnumber of respondent publications, indica- ple (18). For example, 30% of researchers tive of respondent eminence or the opportu- i n these f i e l d s did not receive their last nity cost of responding, also increases the requested material. likelihood of noncompliance. Our results offer little empirical basis for In addition to these regressions, we also claims that restricted access to IP is curasked respondents directly why they denied rently impeding biomedical research, but requests. The major self-reported reasons for t h e r e is evidence that access to material noncompliance included the cost and/or effort research inputs is restricted more often, and involved and protecting the ability to publish, individual research projects can suffer as a with commercial incentives much less promi- consequence. To the extent that any redirecnent (5, 18). We find, however, the multivari- tion of a scientist's research effort or realloate regression analysis to be more credible than the self-reported relationships NEGATIVE BINOMIAL REGRESSION for the following reasons: (i) it uses a PREDICTING NUMBER OF REFUSALS more objective measure of commercial TO SEND REQUESTED MATERIAL orientation, while controlling for the Variable Estimate effects of other variables and (ii) it is less Commercial orientation 0.010 ± 0.004* likely to be influenced by a "socially Scientific competition 0.078 ± 0.040* desirable response bias" that leads acad e m i c s to subordinate less socially Publications 0.075 ± 0.037* desirable incentives (e.g., commerce) Request burden 0.038 ± 0.019* compared with more desirable ones Budget 0.008 ± 0.042 (e.g., intellectual challenge) (19). Industry funding 0.006 ± 0.005 We also considered costs and burdens associated with material transfer Drug discovery 0.000 ± 0.007 a g r e e m e n t s (MTAs). Only 42% of Male ­0.008 ± 0.004 requests required an MTA, and only Values ± SEM. *P < 0.05; P < 0.10. 11% of requests for research inputs led to an MTA negotiation lasting more
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c a t i o n across investigators because of denied access impedes scientific progress, this is cause for concern. In contrast, if such redirection reduces duplicative research or increases the variety of projects pursued, social welfare may even increase (20, 21). In addition, it is not clear whether patent policy contributes to restricted access to materials, although the commercial activities fostered by patent policy do seem to restrict sharing, as do the burden of producing the materials and scientific competition. Scientific progress in biomedicine may b e well served by a study of the welfare impacts of restrictions on material transfers, and, if warranted, greater diligence in the monitoring and enforcement of the applicable NIH guidelines.
References and Notes
1. M. A. Heller, R. S. Eisenberg, Science 280, 698 (1998). 2. C . Shapiro, in Innovation Policy and the Economy, A. Jaffe, J. Lerner, S. Stern, Eds. (MIT Press, Cambridge, 2000), pp. 119­150. 3. R. P. Merges, R. R. Nelson, Columbia Law Rev. 90, 839 (1990). 4. S. Scotchmer, J. Econ. Perspect. 5, 29 (1991). 5. E. G. Campbell et al., JAMA 287, 473 (2002). 6. J. P. Walsh, W. Hong, Nature 422, 801 (2003). 7. J. P. Walsh, W. M. Cohen, A. Arora, Science 299, 1021 (2003). 8. R . S . E i s e n b e r g , i n Expanding the Boundaries of Intellectual Property, R. C . Dreyfuss, D. L. Zimmerman, H. First, Eds. (Oxford Univ. Press, Oxford, 2001), pp. 223­250. 9. R. Merges, Soc . Philos. Policy Found. 13, 145 (1996). 10. R. S. Eisenberg, Science 299, 1018 (2003). 11. T h i s sample represents a 40% response rate. M e t h o d o l o g i c a l details are available on Science Online. 12. R . C . E l l i c k s o n , O rd e r Without Laws ( H a r va rd Univ. Press, Cambridge, MA, 1991). 13. J. Merz, A. Kriss, D. Leonard, M. Cho, Nature 415, 577. (2002). 14. M. Cho, S. Illangasekare, M. Weaver, D. Leonard, J. Merz, J. Mol. Diagn. 5, 3 (2003). 15. N a t i o n a l Research Council, S h a r i n g PublicationRelated Data and Materials (National Academies Press, Washington, DC , 2003). 16. Depar tment of Health and Human Services, in Fed. Regist., 64, 72090 (1999). 17. T h e supplier estimate of noncompliance is much lower--about half of the consumers' estimate. One can assume that the truth lies in between these two numbers. 18. J . P. Wa l s h , C . C h o, W. M . Co h e n , Pa t e n t s , M a t e r i a l Transfers, and Access to Research Inputs in Biomedical Research: Report to the National Academy of Sciences (2005) (www.uic .edu/~jwalsh/NASReport.html). 19. S. Rynes et al., Hum. Resource Manag. 43, 381 (2004). 20. J. R. Cole, S. Cole, Science 178, 368 (1972). 21. P. Dasgupta, E. Maskin, Econ. J. 97, 581 (1987). 22. The authors acknowledge the financial support and guidance of the Committee on Intellectual Property Rights in Genomic and Protein-Related Inventions of t h e National Academies' B o a r d on Science, Te c h n o l og y, a n d Economic Policy and Program on Science, Technology and Law. The committee's final report will be published this fall.We thank E. Campbell, R. Cook-Deegan, R. Kneller, S. Merrill, P. Reid, and three referees for their comments; and M. Jiang for research assistance. Supporting Online Material www.sciencemag .org/cgi/content/full/309/5743/2002/ DC1 10.1126/science.1115813

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