BACKGROUND:

The primary mission of the PHS is to acquire new knowledge through the conduct and support of biomedical research to improve the health of the American people. This mission is advanced by the intramural research efforts of government-owned and-operated laboratories and by the extramural research efforts funded through grants and contracts.

Effective and accessible new healthcare treatments and services are the benefits sought from PHS-conducted and supported biomedical research. Practical realization of these benefits depends on the ability and willingness of private sector partners to commercialize new technologies arising from PHS conducted and funded research. For potential preventive, diagnostic, and therapeutic products, that willingness often hinges on the existence of patent protection in the United States and foreign countries for the technology in question.

The Bayh-Dole Act of 1980 provides a statutory mandate to PHS grantees and contractors to seek patent protection, when appropriate, on subject inventions made using government funds and to license those inventions with the goal to promote their utilization, commercialization, and public availability. Recipients of PHS grants and contracts are primarily responsible for the implementation these Bayh-Dole requirements. In 1986, Federal laboratories, including PHS research laboratories at the National Institutes of Health (NIH), Food and Drug Administration (FDA), and Centers for Disease Control and Prevention (CDC), were given a similar statutory mandate under the Federal Technology Transfer Act to ensure that new technologies developed in those laboratories are transferred to the private sector and commercialized.

PHS takes its role as steward of biomedical research very seriously and seeks to maximize the public benefit whenever PHS-owned or funded technologies are transferred to the commercial sector under the Federal Technology Transfer and Bayh-Dole Acts.It is incumbent upon PHS to exercise its stewardship responsibility by providing guidance to the recipient community. Previously, PHS issued such Principles, Guidelines, and Points for Consideration directed to Sharing Biomedical Research Resources and Developing Sponsored Research Agreements. At this time, the PHS is issuing guidance regarding Best Practices for the Licensing of Genomic Inventions. Both the intramural PHS technology transfer community as well as universities, hospitals and other non-profit PHS funding recipients should follow the recommended best practices outlined in this document.

GENOMIC TECHNOLOGIES:

The licensing of genomic technologies presents a formidable challenge for academic and government technology transfer programs. This follows from the complexities in bringing such technologies to the marketplace in a manner that maximizes the benefits to the public. Typical examples of genomic inventions include a wide array of genetic technologies and materials (cDNAs, expressed sequence tags (ESTs), haplotypes, antisense molecules, small interfering RNAs (siRNAs), full length genes and their expression products just to name a few) as well as methods and instrumentation for the sequencing of genomes, quantification of the amount of nucleic acid molecules, detection of single nucleotide polymorphisms (SNPs) and other genetic modifications. Most of the value associated with the commercial use of these technologies involves nucleic acid-based diagnostics, potential gene therapy applications and the development of new DNA and RNA-based therapeutics.

Anecdotal and empirical data is beginning to reveal a pattern of exclusive licensing practices for genomic technologies at U.S. academic and non-profit institutions that could have detrimental short-term and long-term effects on both the quantity and quality of healthcare products and services. In recent years several important disease genes and cancer susceptibility genes have been exclusively licensed to a small number of diagnostics or biopharmaceutical companies. The ability to secure a monopoly on the use of all types of diagnostic kits in all regions of the world (including platforms and formats which aren't used by the licensee and/or distribution/marketing rights in countries where the company doesn't plan to sell the product) for testing of particular mutations in a common cancer susceptibility gene is attractive for the exclusive licensee company. But such an exclusive arrangement may not be the most beneficial one for the public. Without a choice of tests, patients, physicians and hospitals must use and buy from the sole supplier. Society suffers if the test isn't as good or as available as it could be were there competitors. Absent the "freedom to operate" in the field of diagnostics, no other company would have the option to try to develop a better, cheaper and/or more accurate test. Choice among competing products is a time-tested warranty of quality.

Like other emerging technology areas, genomic inventions tend to enjoy broad patent protections. It is a challenge of the public-health-oriented technology transfer process to balance the rewards of broad intellectual property protection afforded founders of enabling genomic inventions with the benefits of fostering opportunities to those striving to improve upon those innovations.

OUTLINE OF BEST PRACTICES

I. Seek patent protection for inventions that require significant further research and development by the private sector in order to reach practical and commercial application

II. Non-exclusively license when possible

A.Background rights

B.Broad enabling technologies

C.Research uses

III. Exclusively license when necessary to encourage R&D by private industry

A. Ensure appropriate scope

1)limit fields of use
2)limit territory
3)scale to abilities of licensee
4)avoid virtual developers

B. Ensure expeditious development

1)milestones/benchmarks
2)performance-based royalty payments
3)monitor and enforce performance
4)sublicensing

C. Address public health benefits

1)protect research uses
2)seek fair return on public investment
3)recognize public health goals
4) enhance public access and availability