Johns Hopkins Magazine -- February 2001
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Scientists at Hopkins and across the nation increasingly must wrestle with the question: Does the patent system promote innovation without inhibiting research?
S C I E N C E    &    T E C H N O L O G Y

Golden Opportunity--
or Overwhelming

By Joanne Cavanaugh Simpson
Illustration by Michael Gibbs

The mice in Professor David Borchelt's lab are prone to forget.

They are genetically engineered to do so--a breed of designer mice that carry a mutated form of a human protein, a hallmark of early-onset Alzheimer's disease.

In their short lives, these lab mice may hold the answer to drugs or other therapies that could slow or cure a disease that devastates the brain's normal architecture--an illness that leads people to forget loved ones and, eventually, how to take the steps they learned as a child. But there's a hitch: Borchelt finds he must turn away lucrative corporate research funds needed to test drug compounds on the mice.

That's because another version of these Alzheimer's-prone mice and the scientific processes that built them are patented. And any commercial product coming out of his lab might trample someone else's claim of exclusivity.

"One of the reasons you make the mice is for them to be used in testing drugs," Borchelt says from his office in Hopkins's Ross Research Building. "But if a company came to me, asked me to test a compound, and told me, 'You can have the money and can publish whatever you like, can you do it?' I have to say, 'No, I can't.' The information I generate could possibly add value to that compound."

Though Borchelt's name appears on a primary patent, claims by the drug firm Elan Pharmaceuticals and others have made one version of the mouse the target of a court battle. Any company willing to fund research might first need to license with various patent holders--a burdensome, expensive business--to avoid patent infringement issues. In the end, who owns what part of the tiny transgenic creature is in question.

"The problem is the U.S. Patent Office has issued multiple patents, but it doesn't become clear who actually owns what rights until it's fought out in courts," says Borchelt, associate professor of pathology and neuroscience at the School of Medicine.

It's not a total lockout. Borchelt can use his mice in federally funded, noncommercial projects. Yet, since pharmaceutical firms have the likely compounds and money for testing, Borchelt and others fear the patent disputes could slow down science, and even hinder cures. "There have been cases where I couldn't bring resources to the lab because of this," Borchelt says. "So, we can't get this research from bench to bedside."

Arrow-Trerotola PTD Catheter
WHAT IT IS: A mechanical device that breaks up blood clots formed when patients with end-stage renal disease undergo dialysis to filter their blood.

NAME OF INVENTOR: Scott Trerotola, former School of Medicine faculty member.

PUBLIC BENEFIT: Provides a faster, easier method ot break up clots during dialysis. Provides an alternative to invasive surgery or anti-clotting drugs that pose side effects.

MARKET STATUS: Licensed to Arrow International in the mid- 1990s and is now on the market. The invention brings in just over $500,000 annually in royalties to Hopkins.

For better or worse, universities have become big players in the patent game with all its complicated nuances. The rules are often Byzantine and the results boom-or-bust. Researchers fall into different factions: patent advocates; open source backers of the inventor-share-all variety (see Where Openness Prevails); and those in between. Cases like Borchelt's are relatively rare, researchers say, but are growing and drawing the attention of the National Academy of Sciences and its affiliated agencies. In recent symposia in San Francisco, Washington, D.C., and elsewhere, academy members and others have asked: Do patents help science or not?

Researchers are now evaluating the patent system's mark on science in commercial venues and at universities, and the National Academies expects to release a report, with recommendations, by early 2002. "The big question is: Does the patent system, as it is configured and operates, really serve the purpose of promoting innovation without inhibiting research?" says Stephen Merrill, executive director of the National Academies' Science, Technology, and Economic Policy Board. "There have been allegations that, for various reasons, it's not doing so, or that it is creating problems that need to be corrected."

The uncertainty means that universities and researchers face ethical, fiscal, and identity questions that have no easy answers. Academic involvement in the patent process is relatively new: In general, Congress has only allowed universities to hold title to federally funded patents since 1980. And academia has long endured what some call The Madonna Complex. "There is this feeling that universities are more moral or ethical than other entities," says Hopkins's John D. Gearhart, who has spoken at federal conferences on ethical issues and works in the controversial field of stem cell research. "Are universities there for the common good? What is their purpose?"

If the purpose is to get science off laboratory shelves and into medicine cabinets or doctors' offices more quickly, advocates say the patent system works best, despite the occasional problems. Others worry that as academia focuses more on product development, and aggressively seeks corporate-sponsored research, the needs of basic science will be compromised. The question of access then becomes a scientific Catch-22: A bevy of top minds can't easily test a potentially life-saving therapy if a company refuses to share the needed technology or charges exorbitant royalties. Yet what sort of access exists if an innovation can't get developed because entrepreneurs avoid investing money without intellectual property protection?

As Borchelt and others have found, pharmaceutical companies in particular want exclusive licenses to the science behind a potential drug to protect their return on the hundreds of millions of dollars they put up to test, develop, get FDA approval, and market it--a process that is long and fraught with failure. A tangle of patent claims and potential litigation only compounds the risk.

All of this leads to a philosophical predicament for scientists. "When there is industrial interest, that often pushes researchers to go even further, to enlist the intellectual help and the financial help they may need," says Gary Posner, Hopkins professor of chemistry and biology in the Krieger School of Arts & Sciences. "But there are intellectual drawbacks. As academic institutions encourage more patent protection, the university becomes more business-like. We're more end-result oriented and less fundamental-research oriented."

Historically, says Ted Poehler, Hopkins has eschewed turning inventions into commercial ventures.
There's worry about growing secrecy among scientists who balk at discussing research that might have commercial value. "Before, the university was more intellectually pristine," Posner admits. But he also notes: "The reasons are clear, the university has to be solvent."

Research universities are in the midst of this dilemma partly because the lure of patent-fueled research money is becoming too great to ignore. In FY 99, Johns Hopkins brought in $10.3 million in adjusted gross revenue from royalties and other licensing income from its innovations, according to a recent survey of universities. That's compared to the $5.5 million the university brought in just one year before and $4.7 million in FY 97. Yet research money stemming from industry overall still makes up less than 10 percent of the $1 billion in research funds Hopkins attracts annually.

And even with the greatly accelerated pursuit of patents, Hopkins is playing catch-up with other top research universities: Columbia University reported bringing in $89 million in FY 99 in adjusted gross licensing revenue. The University of California System brought in $74 million. And Yale University, more than $40 million. So, in the game of patent prospecting, the central question arises: Is the payoff worth the price?

A panning-for-gold spirit has been at the core of the patent system since it was first conceptualized. Many of the problems that universities now encounter--especially battles over intellectual property rights and concerns about monopolistic hurdles--are endemic to the centuries-old patent system itself. Historically speaking, the trail begins in Italy in 1432.

In that year, according to the U.S. Patent and Trademark Office, one of the first-known patent statutes emerged, a law of exclusivity penned in Venice to encourage innovation in the silk industry: "If somebody invented any machine or process to speed up silk making, or improve it, and if the idea was actually useful, they could have the exclusive privilege for 10 years," notes James Housel, supervisory patent examiner.

The patent game has been compared to a lottery. Only a small amount make a lot of money. In the words of the trade, "only occasionally do you get a Big Hit."
From the start, the targets of such patents were new technology, not basic science. Venetian patents were granted in 1443 for flour mills, and for dye shop stoves in 1460. By the late 1400s, the British empire had established a sort of patent system for its inventors, a practice later adopted in the New England colonies, according to the patent office. In the late 1780s, the framers of the U.S. Constitution, led by Thomas Jefferson (himself an inventor who later helped oversee the U.S. Patent Office) found the theory sound. They wrote that Congress could "promote the progress of science and useful arts by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries."

Yet the stakes for patents in science had changed dramatically by the time Scottish bacteriologist Alexander Fleming discovered penicillin in a mold-tinged dish in 1928. Fleming and other scientists were later awarded a Nobel Prize for science related to the discovery. But it was Andrew J. Moyer, an employee at the U.S. Department of Agriculture, who patented a method for producing penicillin, and drug companies that manufactured the wonder drug for wide-scale use. Some argue that Fleming maintained a scientist's purity untainted by commercial interests. Others point out that a decade-plus of underfunded research delayed development of the drug and cost lives.

Ambivalence over which road to take has continued to haunt advocates of science and progress. And patent skirmishes that have trailed new technologies, including the telegraph and television, have complicated matters further. (After all, Alexander Graham Bell and Elisha Gray showed up at the U.S. Patent Office on the same day in 1876 to lay claim to the concept of the telephone. Gray, whose technological tweaks Bell later adopted, agreed to a $100,000 settlement. Over the years, hundreds of other patent challenges have followed as incremental patents were filed on new versions of the technology, a typical element of the process. "People are still inventing telephones," said Brigid Quinn, a patent office spokeswoman.)

Dye-enhanced photocoagulation device
WHAT IT IS: A device that would allow doctors to treat age-related macular degeneration (AMD) using a laser and fluorescent dye to target and seal off abnormal blood vessels in the eye.

NAME OF INVENTOR: Robert Flower, former APL researcher

PUBLIC BENEFIT: AMD affects millions worldwide and is the leading cause of significant vision loss in Americans age 50 and older. The APL approach would help those patients with the "wet" form of AMD, which occurs when tiny blood vessels begin to grow under the central part of the retina.

MARKET STATUS: A multimillion-dollar agreement negotiated in April between APL and Akorn Inc., a specialty pharmaceutical company, gives Akorn exclusive worldwide rights to the patented method. The deal provides APL with up-front license fees, royalties on future sales of a developed device, and other revenue.

Today, patent wranglings are especially common in hot areas of university research--including computer science, robotics, materials science, biotechnology, and genetics. Pioneering research opens uncharted ethical territory for U.S. patent examiners, some of whom are criticized for too easily granting patents for discovered genes. Their decisions can have long shelf lives: exclusive rights last 20 years from the date a patent application is filed. "Universities file for patents in bleeding edge technology," says Stephen Kunin, deputy commissioner for patent policy at the U.S. Patent Office. "We are sufficiently flexible to handle new technology; we have been doing so for 210 years. When cold fusion came out, people said this is just fake science. But fake or not, we had to jump into action."

Over the decades, Hopkins has had its share of patent scandals and passionate debate. Across the campuses, and especially at the medical school, a "hands-off" and sometimes hostile view of patents reigned for years, according to Maryann Feldman, a research scientist at Hopkins's Institute for Policy Studies (IPS) and the Whiting School of Engineering. Feldman is researching a history of patents and technology transfer at Hopkins, funded by the Andrew W. Mellon Foundation.

One especially bitter struggle at Hopkins was over a sugar substitute.

In the late 1870s, visiting German research fellow Constantin Fahlberg, who was working with Hopkins chemistry professor Ira Remsen, noticed a strange sweetness to his food. He traced it back to a compound he accidentally splattered on his fingers in the lab. The substance was a coal tar derivative named benzoic sulphinide. Fahlberg and Remsen jointly published articles on the discovery, but Fahlberg eyed dollar signs where Remsen saw scientific novelty. Fahlberg later went back to Germany, found financial backing, went into manufacturing, and became rich. He named the discovery saccharin. His patents no. 319,082 and 326,281 were the first in a "patent war chest" he built to prevent competition, Feldman noted. Neither Hopkins nor Remsen was named in the patents, and so earned no royalties.

Remsen, a guiding light at the university and Hopkins's second president, came to despise Fahlberg and held little regard for commercialism in the academy, at one point saying he "would not sully his hands with industry." Remsen's views mirrored the mores of campus culture at Hopkins. "It just wasn't something people did," says Theodore Poehler, vice provost for research, who has been at Hopkins for nearly 50 years, earning his B.S. in electrical engineering in 1956. "Hopkins was a place where you would come to be an academic person and do research, and that's that. Most people here today are still here for that reason."

In past decades, scientists worldwide shunned commercial activity partly because in many areas, such as psychology, they were establishing fields of "pure science," historians have noted. Above all, academics wanted to set themselves apart from the "tinkerers" of the day--inventors like Bell and Thomas Edison. Researchers have long prided themselves on fostering the widest possible dissemination of knowledge, Feldman points out. "People felt that patents might disrupt that," she says.

Over the years, however, there's also been more than a bit of hand wringing over missed opportunities. Hopkins, after all, has made cutting-edge discovery business as usual. "There is a long list of inventions that Hopkins did not get any money from," says Poehler, also director of Hopkins's patenting and technology transfer programs. "Vitamin D, saccharin, no one here ever made a nickel off those. Commercially, they might have been like a Texas oil field."

At the School of Medicine, a dramatic increase in licensing revenue: from $2.4 million in FY 96 to $12.5 million in FY 00.

Among the many Hopkins innovations are the isolation of epinephrine (adrenalin) in 1897; the discovery of heparin in 1916, a drug still widely used to prevent blood coagulation; the development of Mercurochrome, the antiseptic, in 1919; the discovery of vitamin D and its role in preventing rickets and other diseases in 1922; and the discovery in 1948 that the drug now known as Dramamine alleviated motion sickness. These and other discoveries eventually were commercially manufactured for public use. Yet advocates of academic intellectual property would rather such revenue go into university research coffers than stockholders' wallets.

"Not to sound melodramatic, but the goal of a university is to help mankind," says Poehler, also a professor in electrical, computer, and materials science engineering. "It's fine to publish papers; that increases the body of scientific knowledge and no one is demeaning that. But if we have potentially useful things, it is incumbent on us to try to get them used. If it sits on a bookshelf, it doesn't do any good."

Hopkins's Tech Transfer Team

Photographs by Louis Rosenstock and Jay Van Rensselaer

Everything from novel cancer drugs to CD-ROMs have come through the Homewood Office of Technology Transfer headed by Nina Siegler.

At APL, where "Patents and Pizza" seminars prevail, says Wayne Swann, "we are averaging three inventions a week."

Last year at Medicine, 239 patent applications were filled and about 80 licensing agreements signed, says Nina Ossanna.

To avoid conflict of interest, says Medicine's William Tew, the idea is to manage it.

Until 20 years ago, most discoveries funded by federal dollars were owned by less-than-entrepreneurial Uncle Sam. "The government treated the research process as an industry in and of itself. As a result, very little came back to the public," says Nina Ossanna, a patent agent and director of the School of Medicine's Office of Technology Licensing. Certain agencies, such as the National Institutes of Health (NIH), in some cases allowed universities to hold title to patents, a process Congress made universal in 1980 with legislation sponsored by Senators Birch Bayh and Robert Dole.

In the name of science, the federal government under the Bayh-Dole Act retained the right to use a discovery funded by public dollars and to "march in" in cases of great public need if patent holders sat on discoveries. (The federal government has no such rights over research fully funded by corporations.) The idea was to support private-public partnerships in science. Over the years that connection has strengthened. "One recent phenomenon is the joint venture between the university and the private sector," says Kunin, of the U.S. Patent Office. "You've got the technology flow right to the private sector."

The newest, and most controversial, version of this synergy is the scientist-turned-CEO of a start-up company. In November, a report in The New England Journal of Medicine raised questions about conflict-of-interest rules at medical schools, including Hopkins, that allow investigators and research staff to own stock in commercial spin-offs of their science. Hopkins has various policies, depending on the campus, but generally researchers can own stock with certain restrictions, and arrangements are reviewed by faculty oversight groups. For instance, at the School of Medicine stocks must be put into escrow and not sold until there's no longer a conflict. William Tew, the School of Medicine's executive director of licensing and business development, says the idea is to bring everything into the "sunshine," a view shared by other Hopkins administrators. Says Tew: "Our goal is to manage conflict."

In today's technology-oriented marketplace, academic tech transfer endeavors are becoming big business. In FY 99, academic licensing spurred an estimated $41 billion of economic activity nationwide, and supported 270,900 jobs, according to the Association of University Technology Managers (AUTM). The organization conducts an annual licensing survey of universities, teaching hospitals, and nonprofit research groups. Its most recent survey shows more than 18,000 licenses were active as of 1999 among these groups, up 9 percent over the previous year. And more than 3,600 patents were issued last year--a 14 percent jump over 1998. (Before Bayh-Dole, fewer than 250 patents were issued to U.S. universities each year.)

Despite the patent numbers, only a slim portion of new discoveries draws the interest of investors, and fewer yet bring royalties to universities. The reasons are complex. Mostly there's the gap between the basic nature of academic research and the needs of industry--it's tough to get funding to find out if a concept born in the lab will actually work on a commercial scale. Companies that show initial interest move on, looking for a surer bet or technology with a faster turnaround time. Among researchers, this gap is known as "the valley of death."

Yet the singular discovery of a smaller, faster computer chip or an AIDS vaccine can mean big revenue for universities at a time when research costs are rising and competition for federal funds is increasingly tough. Florida State University has brought in more than $46 million from its patent on the anti-cancer drug Taxol, and the bulk of Columbia University's $89 million annual royalty income centers on drug patents and digital compression technology used in DVD players.

So the patent game has been compared to a lottery. The majority of innovations that do get licensed might bring in $50,000 to $100,000 over the life of the patent, and the cost of filing and maintaining a patent might range from $30,000 to $100,000. "Only a small amount make a lot of money," says Poehler, who, along with other Hopkins researchers, has developed and patented a potential plastic battery and is seeking industrial backers. "In the words of the trade, only occasionally do you get a Big Hit."

In a School of Medicine auditorium with brown carpet, brown brick walls, and an amphitheater-style array of brown metal chairs, James Housel paces.

The supervisory patent examiner is leading a lunchtime symposium in November to give Hopkins postdoctoral fellows insight into the inner workings of the U.S. Patent Office.

More than once, Housel is politely interrupted by Mario Borgnia, a fellow in the Department of Biological Chemistry. Borgnia wonders aloud whether the patent system is good for society or just a waste of money to protect an individual's rights. He prods: "What is the scientific basis for the idea that patents promote progress?"

D-Fusion Inc. software systems
WHAT IT IS: New software technology that will enhance Internet web browsing. Among other advances, the software helps search engines find recently published data, reducing the current time lag.

NAME OF INVENTORS: John Schultz, a computer science graduate student, and Jacob Green '99 (MS '00).

PUBLIC BENEFIT: Could make information, such as Web sites on recent cancer research, available more quickly and the data more complete, an issue that will become even more critical as the billions of documents on the Internet mushroom in the coming years.

MARKET STATUS: Patent applications have been filed and seed capital obtained from the state of Maryland. Schultz and Green are putting together a business plan for their start-up company D-Fusion Inc., and are negotiating with venture capital companies.

No scientific studies show patents do further progress, Housel notes. In some ways, it's more of a hunch, he says: "The United States uses a patent system and the nation has prospered. Countries that have weak or no patent systems are not developed economically."

Many of the other 40 or so postdoctoral fellows who attend are more convinced that patents are inherently positive. They line up afterward to ask Housel for jobs in the U.S. Patent Office and for tips on how to file patent applications.

Researchers and administrators here at Hopkins are finding their own niche within the patenting and licensing debate. For many, the new paradigm has personal permutations.

Hopkins President William R. Brody-- who holds a patent on an MRI design and founded a company to build and market it--has given a great deal of thought to the issue. "Patent protection takes a lot of work. And time. And money. The dirty secret is that many universities--perhaps most-- are not yet breaking even, much less making money on the proposition," Brody said in a 1999 speech at Hopkins's Montgomery County Campus, adding, "And in some instances and some industries, patent protection may in fact be an oxymoron."

In his speech, titled "From Minds to Mine Fields: Negotiating the Demilitarized Zone between Industry and Academia," Brody pointed out several areas to explore. Those include whether the university should in some cases avoid exclusivity, licensing certain scientific innovations to multiple companies to avoid the eggs-in-one-basket research dilemma. Most researchers have accepted the new commercial dynamic, but they, like Brody, are looking at ways to work within economic realities while still doing what's best for science.

Even Borchelt, despite his frustration over the fate of the Alzheimer's-prone mice, has no philosophical beef with the idea of patenting research, though he favors nonexclusive patents when possible. "There is no way around it," he says. "It's like a Pandora's Box. Once it is open you can't put it back again. You can't afford to turn your back on a research income source." (But it's still messy. Before the patent infringement suit by Elan Pharmaceuticals came to light, one strain of the mice Borchelt helped create had been licensed to Mayo Ventures, a subsidiary of the Mayo Clinic, which then licensed the mice to several top drug companies for an estimated $8 million. Borchelt later developed another version now being used in his lab. Elan lost its suit against Mayo in court last year, but has appealed.)

Interviews with various Hopkins researchers reveal a mixture of such experiences, problems, and proposed solutions--though in the constraints of a magazine article, only a few can be addressed in any detail. There does seem to be a central dichotomy: While researchers worry about potential abuses within the patent system, many are also impatient that Hopkins is not even more aggressive in marketing the inventions produced in their labs.

"Clearly there are a lot of opportunities out there," says Gary Ostrander, Hopkins associate dean for research, and a research professor in biology in the Krieger School, and in comparative medicine at the School of Medicine. "The university as a whole is just beginning to recognize that. Speaking as an investigator, the university could put more resources into the licensing side, the marketing side of patents."

As it works now, Hopkins researchers are required to disclose their inventions to the university. There are three offices staffed with tech transfer specialists to help faculty apply for patents, secure license agreements, or find venture capital to start companies. Because many innovations are in biotechnology and medical fields, the biggest resource is the Office of Technology Licensing at the School of Medicine, which now boasts a staff of 20--a 100 percent increase in the past two years. One hundred sixty inventions were disclosed to that office last year, 239 patent applications filed in the United States and abroad, and about 80 licensing agreements signed.

Breath analysis process, DxProfile
WHAT IT IS: A company has been set up to develop and commercialize a device that would allow doctors to analyze a person's breath, providing a non-invasive diagnostic test for tissue injury and disease.

NAME OF INVENTOR: Terence Risby, School of Public Health professor

PUBLIC BENEFIT: Based on Risby's research on breath analysis, certain "biomarkers" in exhaled breath could indicate tissue injury or other cellular damage in various areas of the body. Since exhaled breath can be collected from subjects of all ages, such tests would enhance population studies in public health.

MARKET STATUS: The project has received a seed grant from the School of Public Health's Technology Transfer Committee, and Risby is negotiating with corporate partners in engineering design and pharmaceutical development.

The wheels are whirling elsewhere at Hopkins. At the Applied Physics Laboratory (APL), a new office opened in summer 1999. In its first year, APL's Office of Technology Transfer recorded 143 invention disclosures. APL, which was developed as a research and development organization for government-funded projects during World War II, may be the university branch most geared to applying innovative ideas to the real world. Researchers are so savvy to the new paradigm they frequent "Patents and Pizza" education seminars and patent award ceremonies for new inventions. Thirty or 40 people were expected to attend the first one in fall 1999. More than 150 showed up. "We are getting fairly consistent with disclosures," says Wayne Swann, the proactive director of the APL office. "We are averaging three inventions a week."

At Homewood, the Office of Technology Transfer represents much of the rest of the university. Hopkins researchers annually report 50 inventions to that office, but that will likely be closer to 75 this year, a number expected to grow in the future. Some patented technologies that have come through the Homewood office include an instructional CD-ROM for the Career Transcript System developed by Arnold Packer, IPS senior fellow; and more than a dozen patents (awarded and pending) for a novel cancer drug discovered by biology professor Ru Chih Huang. Huang has formed a start-up company with Hopkins support and a substantial investment from Ang Tiong Loi, a businessman in Singapore. A primary goal: to be competitive, yet also offer drugs at an affordable price, or for free, to the poor.

University-corporate partnerships like Huang's can help get research into the marketplace faster, one of the patent system's most important benefits. A recent study of MIT shows that significant commercial sales at that university start five to eight years after a license is signed, a relatively short span in many cases, according to AUTM. At Hopkins, while some technologies take much longer, the trend is similar.

That's partly because patents give entrepreneurial incentives to inventors, the scientists who previously missed out on cash rewards for their efforts once their discovery made it to the marketplace. (In terms of licensing income, the School of Medicine's policy, for example, generally allots 35 percent of royalties to the inventor, the rest to the lab, department, school, and university. But the percentage for the inventor goes down as the revenues go up--at royalties of more than $3 million, the percentage drops to 5 percent--a point that rankles some researchers. That policy is now being reviewed.)

The focus on monetary awards is especially relevant as Hopkins seeks to lure new talent, especially younger faculty who might be tempted by high-dollar careers in commercial R & D.

Brian Bachmann, a postdoctoral fellow in Professor Craig Townsend's chemistry lab, has three patents to his name, including a new kind of antibiotic he helped patent while working on his master's degree at Southern Methodist University in Dallas. Considered a hot prospect, Bachmann has been trying to decide whether to go into corporate research or stay in academia. An assistant professor's salary of "$40,000 to $50,000 is not really good pay for all this work," he says. But patents could offer some options. "I don't think they promote science, but they do promote the scientist," he points out. "If we can't get the higher salaries, maybe this is a way to provide more incentive."

Yet other aspects of the patent system present troublesome hurdles, some of which are drawing the attention of researchers across the country. "What I've seen over time raises reasons for concern," says Gearhart, a professor of gynecology and obstetrics, physiology, and several other fields, who has a lot on the line in the patent issue--both positive and negative.

Gearhart worries that some licensing efforts can become a "barrier" to free investigation.
Gearhart first isolated what appeared to be embryonic stem cells in 1996, and confirmed his findings a year later. Stem cells hold nearly infinite promise. Because they are not yet specialized, these primordial cells can develop into any of the 200 different human cell types. They could be grown, for example, into liver tissue for transplant patients, with less risk of rejection; and the use of stem cells in a recent study was found to partially reverse paralysis in mice. Gearhart holds one patent and has several pending in stem cell technology, which also has drawn controversy because early stem cells came from aborted fetuses (with donors' consent).

Partly because of related controversy and initial difficulty in getting federal money, Gearhart secured private funding from Geron Corporation of Menlo Park, California, and the university. One ethical struggle he has faced: under his agreement with Geron, if other researchers want access to his stem cells, they generally must sign what some consider a restrictive material transfer agreement (MTA).

WHAT IT IS: A medical device containing antibodies that separate stem cells from bone marrow, allowing those healthy stem cells to be reintroduced after bone marrow transplants.

NAME OF INVENTOR: Curt Civin, director of Pediatric Oncology

PUBLIC BENEFIT: A new therapeutic avenue for cancer patients who need bone marrow transplants during chemotherapy. The reintroduced stem cells help the bone marrow recuperate faster and remain cancer-free. The process also enables doctors to use higher doses of radiation to help eradicate cancer. The device is also being looked at for use in gene therapy in cases of severe immunodeficiency.

MARKET STATUS: Licensed to Nexell, and approved by the FDA in July 1999. It is now a product marketed to oncology departments, and brings in about $335,000 in royalties to the university; these funds are split between the inventor, lab, department, and school.

"Our stuff is solely licensed through this company, so they control all the levers," Gearhart says. "People come to us and we work up MTAs. Those MTAs state that if you get anything good that is patentable, we have the right to negotiate a license. This is not something many investigators want to do. This is no longer a free kind of thing. It can be a barrier to investigators working in this area."

Yet without private funds, his work would not have easily gone forward. "The company that licenses the patent wants to protect its property," he adds. "They sign on for that conclusion. After all, these are money-making entities. They are not out there to be pro bono."

As Gearhart and others point out, deals are negotiated case by case, and it's often up to the university to name limits. The School of Medicine, for example, processes about 1,700 MTAs and confidentiality agreements a year (for new proteins, antibiotics, plasma used in genetic studies, etc.). Many simply protect the university from liability for misuse of material.

Researchers' concerns about the more burdensome MTAs prompted NIH last year to set new Guidelines on Sharing Biomedical Research Resources. Based on Bayh-Dole, the guidelines in essence say that in NIH-funded projects, a lab cannot send out material and then lay claim to inventions discovered using that material. The guidelines are not law. But NIH does control funding purse strings.

Whether industry will follow suit remains to be seen, but there's increased pressure to tear down intellectual property fences when possible. "If you give exclusivity, you narrow the research field dramatically," Borchelt points out. "Isn't it more scientifically beneficial to have more hands and more brains working on something?"

Brains need time, and hands are kept busy by funding. The patent question at Hopkins centers on these two valued commodities.

In making licensing deals with companies, for example, the university protects as sacrosanct a researcher's right to publish. But the timing can be dicey. In a competitive field, a researcher might spend a few extra weeks or months to file a patent application, and then learn a competitor is presenting a paper first. "For scientists, it is always about how you get credit for your ideas," says K. T. Ramesh, a Hopkins professor of mechanical engineering who has co-patented a novel metallic glass that could prove useful in anti-missile weaponry. "For most of us, the strongest motivation is prestige."

Filing for patents and following up on commercial opportunities also gobbles up hours that would be spent on basic research and teaching. "You immediately up the ante," says Townsend, also professor of biophysics, who holds patents in the area of bioorganic chemistry and recently licensed with a firm to patent a more cost-effective, environmentally sound method to produce antibiotics. "There is less time spent on truly deep scholarship- -reading and thinking. That's what we are here to do, but unfortunately it's at the bottom of the list."

(Licensing, in some ways, can save faculty time: If outside companies handle the licensing of newly discovered biochemical buffers or reagents, for example, faculty members don't have to take the time to send the items to other researchers.)

Yet the time crunch may be most risky for untenured faculty, who may be full of fresh ideas but less likely to pursue commercial products when they need to "publish or perish" in their 10-year gambit for tenure. Then there's the question of focus.

As Ostrander observes, "Sometimes faculty members find themselves pushed in a direction that isn't maybe their first love. They go to meetings, they put energy into product development. It's not why they get into this."

Take Andrea Prosperetti and his bubble pump.

The mechanical engineering professor led a team of Hopkins researchers to develop a tiny pump device that uses microscopic bubbles to force liquid through a tube, a novel innovation that could be used to regularly deliver drugs, such as insulin, inside a patient's body, reducing the need for shots. His solution has been called "elegant" and made a splash when it was first announced in summer 1999. Articles popped up in the Los Angeles Times, Business Week, Process Engineering, and other publications. There was hubbub over unnamed potential investors.

More than a year later, Prosperetti discusses the status of his invention. The U.S. Patent Office initially declined his application, a rather pro forma aspect of the process. He is responding to their questions. "And the interest in licensing hasn't gone anywhere yet," he adds, with a sigh. "What we have is not a gadget, it's a principle. To turn it into a gadget we need to have a manufacturing facility.

Prosperetti: "A gadget that comes out of my idea that no household could do without--that would be fun."
Photo by Michael Ciesielski
"I have been totally passive, I'm afraid," he says. "I don't want to go around to companies that say they want something they can market in six months to a year. I can only work at this part time, though I'm pretty convinced that it has financial prospects. It is a slow process."

Prosperetti also is juggling other research projects, working on grants, and preparing to publish. Yet at the same time, he'd like to see his idea come to fruition: "I have a sort of parental interest. It's like seeing a child born. A gadget that comes out of my idea that no household could do without . . . that would be fun."

Nina Siegler, director of Homewood's Office of Technology Transfer, has been helping professors navigate the patent path. Siegler says researchers could think about the commercial applications of an innovation as soon as they start checking out a hypothesis. The quality of the data needed for the patent application can mirror that required for a published paper. (An initial "provisional" patent application also can be pursued while the article is being considered by a journal, avoiding costly time delays.) Yet she knows it all takes commitment on the part of the inventor: "It has to be gratifying to see the world change as a result of their creativity," she says. "But that doesn't come for free."

Such ambition comes at a price for universities, too. While the potential revenue is great, the cost-benefit question is still being analyzed. Hopkins reported spending $3.2 million in legal fees to file and maintain patents last year, of which $1.3 million was reimbursed by licensing fees, according to the AUTM survey and Hopkins administrators.

When ideas start to hatch, other potential costs come back to the territorial squabbles characteristic of the patent system. Among other twists, states often cannot be sued by law, so state-run public universities are not as concerned about patent suits. Private research universities like Hopkins increasingly could be at a disadvantage.

In a publicized case for which the university was criticized as being heavy-handed, Hopkins in the late 1990s won a patent challenge in federal appellate court. The judge ruled that CellPro Inc., a Seattle-based company, had infringed on a patent garnered by Hopkins researcher Curt Civin on the use of antigens to pull stem cells from bone marrow for use in transplants. The court held that Hopkins was first to patent the key antigen, and thus deserved the royalties. CellPro argued that it got the technology to market first and asked the federal government to "march in" and let them go ahead, though Civin's work was in clinical testing and NIH determined there was no unmet public health need. (Hopkins's licensee paid to defend the patent in court.)

In the end, the answer to the question of whether the payoff is worth the price may be a personal one, as researchers and universities weigh the opportunities and pitfalls of patenting each new innovation. "At what level do you allow people to patent things?" Poehler asks. "What if you patented hydrogen or carbon? At some level of science, patents are inappropriate. You need to find a dividing line."

And while patent snafus apparently do clog some avenues of science, other routes to new discoveries will be opened in the process, researchers say. Meanwhile, many scientists remain philosophically torn. Yet that doesn'tprevent them from appreciating the draw of the Big Hit.

"Suppose you discover something and have a clear sense that it is worth a whole heap of millions of dollars--do you drop everything and work on that?" Prosperetti asks. "If you were working on something that would win the Nobel Prize, would you drop everything else? Of course you would and no one would blame you for that. If I could get $100 million, I'd do that I think. $100 million is a nice idea."

Joanne Cavanaugh Simpson ( is a senior writer at Johns Hopkins Magazine.