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Caltech DNA Sequencer Patent Question
brusk writes: "An article from this Sunday's Los Angeles Times is a fascinating investigation of the background to the Caltech spinoff company that produced and sells the DNA sequencer that will be responsible for a complete draft of the human genome within a month or two. It appears that despite denials by the developers and Caltech, millions in NSF and other federal grants went into the development of the sequencer. This is supposed to give federal agencies large discounts on their purchases of sequencers and input into how the devices are marketed. This has interesting implications for the future of these for-profit spinoffs from academe. Perhaps even more significantly, the article raises questions about whether the patent application misrepresented the development process, which could invalidate the company's patent on the sequencing technology. This could shake up biotech world."
At the end of the article, you'll find a few paragraphs that talk about a professor who had apparently done crucial work on the sequencer, yet was not named as an inventor on the patent (thus depriving him of royalties and recognition).
...Asked why he had not pursued the issue of his omission from the patent, Huang said that he cared more about the science than about matters of ownership and money.
"If I opened the door for someone else to go through, that's enough. You have to decide where you get your gratification."
After reading of all the ongoing legal manuevering and spinning, this made me stop for a moment. There are still scientists out there who are dedicated to higher goals, thank god.
Excuse me if I nitpick, but it was closer to 800g + 800ug--making his cut of the pie that much bigger.
The real question is, why are these "schools" --- when viewed as v.c. funds / incubators that book profits from investment and royalty income --- why is that these "schools" are not only tax-exempt, but they actually have easy and preferred access to federal handouts in the form of NIH / NSF funds?
Because the students who actually participate in this V/C prep stuff is in the extreme minority. You're describing a class that enrolls perhaps 20 to 30 students a year (I took the class's predecessor, which didn't include writing a business plan) out of a graduating class of about 250. The majority of the students at Caltech could care less about going out and starting a business; they're more concerned with cutting edge research.
Further, having been to Caltech, it's pretty clear Dr. Hood was the exception to the rule around there--while being at Caltech, you get pretty used to being in a rather rarified research atmosphere, it's about the science, and not about making bazillions of dollars.
Caltech's undergraduates have a rather long history of counter-culture thinking, and in opposing anything that prevents the free exchange of ideas and research from taking place. "Know Ye The Truth And The Truth Shall Set Ye Free" happens to be the school motto, and most folks there swear by it.
As to skimming 75% of the royaltees--this is actually the exception of many universities who take 100% of the royaltees of any inventions that you create there as part of your student career. This is akin to a company taking 100% of the research work you create when you work there, on research they fund and they provide the facilities for. That Caltech is willing to cut you in on a percentage of the profits of an invention that was created entirely on their dime and with their facilities is actually one of the more generous deals out there.
I'm a plant biology senior at UC Berkeley and one of my professors went over patents/IP law recently, so I have some understanding of how it works. Here at Berkeley, the general license agreement works so that the University of California Regents keep all the patents that come from our research. Private corporations that fund research get to be first in line to apply for a license (exclusive or otherwise), while the Federal Government always gets a license. Furthermore, from what I understand, most licenses/patents allow ues of a technology for non-profit/academic purposes (that's not really relevant, but I thought I'd mention it).
While I'm posting, I might as well explain how patenting genes works, too. The way things are set up at the patent office now, you will not get a patent based solely on sequencing information. In order to even have a chance at a patent, you have to be able to predict the amino acid sequence of the protein the gene encodes (this isn't as easy as just reading across the sequence and matching codons [three letter 'words' in the sequence] with the corresponding amino acid -- only parts of the gene actually get transcribed into protein, the rest gets spliced out...so you have to know a bit about the gene to do this). Generally, however, people also try to get some understanding of a gene's function and operation before they apply for a patent, since this will strengthen their patent...which means maybe they can try to cover other organisms' copy of the gene in their pattern (so they could pattern a gene in, say, mice and also patent any gene that shares 70% of the sequence).
I'm not sure if I explained that terribly well, but I hope it's clear. Now I'd like to present my take on patenting in biotech. Personally, I don't believe in patents. I'm somewhat idealistic -- I'd rather nobody ever had to patent anything because everyone would be socially responsible enough to give credit when using other people's work and to make their work available in return...basically, the GPL. I'd rather we all work because we're excited about what we're doing or we recognize that a service needs to be provided. Unfortunately, that's not the kind of world we live in right now. Patents seem to be necessary in modern economies. After college, I'm going to go back home and run my own biotech company -- and I will patent my work. Not because I believe in it, but because I need to in order to protect myself. If I am open about my work, then others will take it and incorporate it into their proprietary products and my family won't eat. This is why I prefer academic environments -- it's the closest you get to the GPL, because most licenses make exception for it.
The last thing I'd like to bring up is something that I've rarely seen discussed, although it's highly relevant to biotech IP law. How will piracy develop in biotech? Many similarities can be drawn between biotech and CS, both in development and in the nature of the work...and I have no doubt that, once biotech products become more available on the market, they will be pirated. Probably not by individuals, but certainly by corporations. And while that may be illegal here, it's not in China (or a host of other countries)...and several of these countries (China in particular) have both the technological capability and the incentive to steal a product...and it is remarkably easy to do. All you need are a few cells -- you can propagate a whole population from them and then use it to study what Monsanto did and take it. If you never signed a license (or clicked one), would it be illegal? Will we have to sign some form of license agreement to shop in the GMO section at our supermarket? Or will we figure out how to encrypt genes somehow?
Sorry if I rambled, this post got somewhat out of hand....
So what, doesn't it fit in the margin of this post? Wouldn't want humanity to miss out on this, watch out for buses.
Yours WDK - WKiernan@concentric.net
Really? It only had about 30 when I took it. But this was a dozen years ago.
The point being made is that caltech is a business incubator and v.c. fund - a fund with billions in assets, research grants, and i.p. royalty streams, and a growing predilection for keeping information out of the public domain - until its demonstrated to be worthless or unexploitable.
A point with which I strongly disagree. One of the functions of any university, public or private (Caltech is private) is to educate. That some students may find a class whereby they are connected to folks at a VC fund educational no more makes Caltech a business than running a class on algaebraic systems makes Caltech an arm of the NSA.
That Caltech derives revenue from various IP royaltee streams does not mean Caltech has scraped it's roots as a university and research facility--Universities have historically derived a portion of their continuing funding through licensing IP, amongst other things. Hell, Caltech also derives a portion of it's operating revenue through it's contract with NASA where it provides the administrative overview of the Jet Propulsion Laboratory. Does that make Caltech the government as well?
Fact: Caltech faculty and students are required to pass all possibly patentable ideas through the caltech IP office before an attempt is made to publish.
Actually, no. The Office of Technology Transfer only requires notification when the facility or student believes an invention was created and wishes to have it patented. That is, OTT doesn't force all research which may contain possibly patentable ideas through it first in order to screen for possible patents--the OTT simply doesn't have the manpower to review all that research.
Evidentally you agree that caltech is a business; all we are discussing now are the details of the deal the employees get.
No, I do not. From Caltech's policies manual:
That is, employees of Caltech (facility and staff members) assign their rights as is normal for any employer, including not-for-profit organizations and others. Students assign their rights only in those circumstances where the rights clearly shoudl belong to Caltech--such as they were performing research for a research group or as part of classwork where the student used Caltech equipment and performed the work under Caltech guidance.
I was at Caltech when they decided to revise their IP policy, and was one of the students who raised a stink with the initial draft that didn't make what Caltech got the rights to clear enough.
How high do you think the student's interests are on the priority list of the i.p. office?
You clearly aren't a Caltech student or at least aren't a happy one. When I was there, Caltech's administration bent over backwards for the students--even going out of their way to help students who are financially strapped or otherwise having problems. Me, I was on the 5 year plan because I burnt out for personal reasons--and Caltech was more than happy to help.
Are students priority one in Caltech's IP office? I'm quite sure of it.
But now that you agree that caltech is in the intellectual property business, the question remains: why does it have tax free status?
Well, I actually don't agree, so your question is moot.
Why is caltech a tax sink rather than a tax source? Why can't microsoft relabel its employees as "students" or "postdocs", stop paying taxes and start applying for grants?
Because the majority of Caltech's day to day operations are in education and research. Caltech has constantly ranked as one of the highest universities in the United States in terms of educational value for the dollar in undergraduate studies. Caltech also performs cutting edge research, as all universities with gradudate programs do, much of that research published without regards to protecting IP rights.
Microsoft, on the other hand, is a for-profit corporation, which issues stock and pays dividends. Further, Microsoft provides no educational studies programs, nor does it provide any opportunities for undergraduate study or research. Microsoft is in the business of writing software, period. That they fund some research through providing grants and by hiring researchers to perform abstract research does not distract from the fact that they write software--these grants only serve the purpose of influencing the course of research done by various colleges and universities.
Caltech and other research schools are not putting publically funded research into the public domain.
And I guess all those papers that got published in a range of scholarly journals ranging from computer graphics to chemistry, nor any of the stuff done by JPL apparently counts, as it isn't real IP, as it doesn't generate revenue.
Is that your point? That it doesn't count as IP unless it was potentially a direct revenue source, at which point, it counts? And of course it counts only if the university makes money off it?
Isn't this a bit, ah, circular?
You may argue that this isn't all bad --- but to deny it is to ignore reality.
I guess I don't live in your reality, because I'm saying that you're flat out wrong. I'm sorry you don't see it.
I think that if federal money, which comes from American citizens paying federal income tax, is used for scientific research, then it is only fair that American citizens be allowed to make free use of the results.
Grants with patent restrictions are not allowed at most universities. University scholars are required to predisclose conflicts of interest. Universities OWN patent licensing rights to patents created by their employees - ie: the professors and other researchers. That is how the system currently works in academia. The patent holder(s) typically receive less than half of the patent royalties.
The bottom line is that intellectual property is viewed as being held by the INVENTOR and the licensing is controlled by the INVENTOR's EMPLOYER. That is how intellectual property is conceptualized in the US today.
That federal money was used for the research is justifiable in that 20 years from now the patents will be public domain. The federal money was used to bring new technology into our society.
Feel free to disagree, but that is the current state of things. If federally funded grants had all thjir intellectual property public domain, then ALL of the monetary incentive for invention with federal funds would be gone. And there would be a tremendous shift of research out of academia. Maybe you view that as a good thing, but I do not.
It seems to me that this is going to be a problem no matter who wins this case. I know one thing for sure: I certainly wouldn't want a private corporation owning the genetic blueprint.
The article says "the public", but I don't think this would work. It would probably be the government who actually controls this stuff. That would be okay, but I'd much rather have some kind of international organization controlling it.
In my opinion, the federal government has full rights to the machine (because of the grants). It would just be nice if the technology / information could be shared equally with the entire world.
Of course, there's always the possibility that the government may lose this case. It would really suck to have some mega-corporation controlling the future of genetic technology.
// Spunkee
First, you partially chop up the length of DNA in question using commercially available enzymes. This produces a bunch of segments of different lengths which you then label with 4 different fluorescent tags (each color is specific for one particular base -- A, C, T, or G). You then load these segments into a thin, flat gel. An electric current is applied to the gel, and DNA (being negatively charged) moves toward the positive terminal (small segments move more quickly than long ones). Each segment, on its way to the end of the gel, is illuminated by a laser and the resulting color is noted by a detector. The sequence is then reconstructed by computer based on the colors passing through the detector in a specific order.
The technique was first figured out in 1977 by Frederick Sanger (it's called the Sanger Dideoxy sequencing method). There's a similar method that works by base destruction described by Maxam and Gilbert around the same time. Big difference now is that you don't have to read the gells with their hundreds of little bands by hand anymore... and that's where the sequencers come in. Imagine sequencing the human genome by hand...
Check out http://www.ornl.gov/hgmis/faq/seqfacts.html for more information about sequencing techniques and the genome project in general.
For the gadget geeks among us: http://www.pebio.com/ga/dna/377specs.html
(Too bad there aren't any prices there... the one that we had in my old lab was over $100,000 though...)
The more disturbing trend to me is patenting the genes themselves... you can patent the camera that takes my picture, but don't patent the stuff that makes me me.
I think that if federal money, which comes from American citizens paying federal income tax, is used for scientific research, then it is only fair that American citizens be allowed to make free use of the results.
It's not like no one has ever thought of this. For years, the government retained rights to results from government-funded research. The Bayh-Dole Act of 1980(?) allowed universities to patent work arising from Federal grants. The idea was to encourage the work to be put towards practical ends, which the government was doing a lousy job of doing.
Looking back, it's been a huge success. Believe me, the benefits you've had from what the American biotech industry has done for the economy far outweigh the benefits the old system produced for taxpayers. And then there're the benefits to health.
Plus, as is the issue here, the government can demand discounts on patents they made possible.
What I'm listening to now on Pandora...
Patenting should not be allowed in this field of research. Just imagine the consequences this could have if companies start patenting the various processes that are required to map DNA sequences. This would simply "not be beneficial"(tm) for anyone but the executives of the companies involved. Let's not have companies that work for themselves, but rather to further 'our' knowledge and help us solve our worldly problems. *That* would be a good thing(tm)!
;)
BTW, do I have First post?
Of course the government wants in! "If you've ever handled a penny, they've got a copy of you DNA on file. Why do you think they keep them in circulation?"
It's a brave new world. =)
I think that if federal money, which comes from American citizens paying federal income tax, is used for scientific research, then it is only fair that American citizens be allowed to make free use of the results.
Of course, I'm sure that the issue is more complicated than that, but I think that the sentiment behind what I'm saying is a good one.
Take care,
Steve
========
Stephen C. VanDahm
I've seen this same view posted a few other times on this article..but what good's a /. account for if not to post.
The human genome project should be a totally non-commercial project. This is a field of research that affects humans a helluvalot more than a car or a truck, or a TV for that matter. We're not talking about a pill you take to get a boner, or a bigger, better plane. We're talking about the building blocks of life. I think that should be given a little forethought...at least more than "Hey...we know how to build people now. How can we make money off this?"
Oh well...i suppose this is just another type of ozone deal. We'll say fuck it untill it either starts to kill us...or we can't scrape any more cash out of the sun-burned bodies of our consumers.
viva la capitalism! - what a joke!
this post was brought to you by the national association for the advancement of owls.
FluX
After 16 years, MTV has finally completed its deevolution into the shiny things network
"It is seldom that liberty of any kind is lost all at once." -David Hume
I think there is some confusion between mapping a genome and sequencing a genome. There definately is on my part. From what I understand sequencing is a lot more complicated than mapping. If someone could explain why mapping isn't as big of a deal as sequencing, I'd appreciate it.
;)
I asked my sister, a grad student at Berkeley, what the difference was. To be honest I got lost not too far into the explanation. "It's about as different as being able to look at a map and actually being able to get from point A to point B," she told me. At that point I started asking her questions about the Beowulf cluster they are building in her lab until she was totally lost--I hate being shown up by my little sister
numb
As someone who was around the Caltech campus at the time the article describes, its important to note that Lee Hood was very atypical for a Caltech prof -- his lab was all post-docs and huge (at its peak, around 70 post-docs), this on a campus that has about 1000 undergrads and 1000 grad students, and maybe a few post-docs per group depending on the field. He was a much better fit for a big med school than he was for Caltech. Caltech ...
IMHO, this is just a specific case of business attempting to gain private benefits while socialising the negative externalities (ie public R&D). Basically R&D is high risk, as Paul Allen of Microsoft fame found out with his recently folded company. To help reduce the risk barrier, governments (supposedly representing the wider public interests) have traditionally funded broad fundamental science&technology, the well-spring from which the rest of consumer goodies spring from (computers from code-cracking, digital cameras from astronomy, etc). However, progress in this domain relies completely on a mindset devoted to honest introspection, intellectual integrity, and building on the work of others (idealistic shoulders of giants, etc). Hence the exemptions in copyright acts for review/reference, libraries, scholarly studies, etc otherwise the cost of research would just explode and we would probably have less of it.
Now, I think it is fair to say that if a person or private company spends their own hard-earned savings on R&D, they should be entitled to any and all benefits that accrue (provided there are no excessive negative social/environmental impacts). If something is funded publicly from compulsary taxes, (much like a public forum), then it should be made available to the any emember of the public. Attempting to move from one domain to the other without 'fair' compensation smacks of 'rent-seeking' behaviour (ie a public subsidy constrained by persistant below-market valuation) as all the benefits are expropriated by late stage technology developers/marketers and not the in-between debuggers/testers. If you think about it, this refers to the Intel 'point of technology inflexion' where the value/cost shifts sharply upwards. A case in point is the internet name domain registration bun-fight since once people realised the potential growth of the internet name-space, then by capturing critical nodes of the registration pathway, they are able to extract monopoly rents (ie disproportinate rewards to risks). One analogy you could use to describe this behaviour is a village letting a field lie fallow to build up its productive base only to wake up one day to find one person has fenced off the best parts and cut off the water supply. Another analogy is that people like GNU/Stallman/Postel building the basic roads (internet standards) but others coming along afterwards and embracing/extending them by errecting toll booths (you can guess who). This type of activity (while very profitable to the individual), hurts the system as a whole as it discourages people with the time/talent to play with new ideas if someone else gets all the kudos (ie OpenSource desire for 'reputation'). On the other hand, if you're a believer in private enterprise and capital accumulation, then you'd argue that it is more efficient so I suppose it does depends on whether you are a people-oriented person or capital person). Of course to shift things from the public to private sphere takes strong will and Machievallian talents, something not always appreciated by others, especially competitors.
Now what policy tools can be used to limit extreme anti-competitive behaviours (like the Geneva convention on war, you do need some *basic* guidelines to mark the playing field, uneven as it may be)? Traditional forms (or even definitions) of markets have not really evolved to handle pure intellectual goods. Part of the problem is that the US, as one of the more advanced ecnomies, has imposed its patent system (with all the systematic flaws and structured deficiencies intended to foster its early industrial economy) on the rest of the world (WTO, etc). For example, automation of business practices is a rather obvious result of computerisation, yet you have individuals attempting to gain a monopoly on entire sectors because they claim to be the first to codify it in VisualBasic or whatever (can you say Priceline?) even though the practice may already been implemented in parts/with variations/different combinations in other businesses but it wasn't worth patenting as it is something commonly done (there are only so many ways of pricing an auction). Patenting something just because it is nonobvious to the clueless is not a definition of innovation IMHO and the biggest stumbling block is sorting out the merely novel, as compared with the truely innovative is a major difficulty.
The big problem comes in that most cutting areas of science nowadays are capital-intensive (think electron microscope, think supercomputer, think synchrotron), and this is a big big problem as governments are not particularly good at allocating capital (think bureacratic infighting over budgets instead of raising bonds/selling equity). Hence you need serious funding which governments are relunctant to do when there is no "obvious" political or socio-economic payoff (e.g. perceived supercollider boondoggle, etc). Hence their encouragement of "industry involvement" and the contaiminent of research ideals (for the good of humanity etc). This can be seen in other sectors such as medicine as privatised hospitals tend to discourage (or even abandon) their teaching role as profits (as traditionally defined) is dependent on patient throughput (easy to automate/accelerate) and not quality of care (very hard to measure).
What is the solution? A lot of people would like to know. I suspect part of the problem is that our accounting system (which defines profit/loss) doesn't really measure the value of human capital properly. How does one measure the social value of a public university? More that just passing on learning (which can be obtained by reading a book), but the meeting of minds, moulding of motives, and mixing of memes? And more importantly, how do you provide technological solutions to problems which are inherently social in nature (e.g. fencing off intellectual commons due to entrepreneurial zeal without realising the unwritten rules of conduct).
LL
The only homework in the course: write a business plan and submit it to caltech's venture capital investment and technology marketing office for review. Promising plans are put on the fast track for review by VC's. Students seem to acquiesce to this plan - despite the fact that the school really doesn't do much other than add a bureacratic layer that skims 5% equity right off the top of any deal, not to mention 75% of patent royalties. But since that's the kind of contract students sign when they enroll, there's little choice.
There are numerous things that one might find questionable in this process - most notably how thoroughly screwed the "students" are - but its the way it works and its legal.
The real question is, why are these "schools" --- when viewed as v.c. funds / incubators that book profits from investment and royalty income --- why is that these "schools" are not only tax-exempt, but they actually have easy and preferred access to federal handouts in the form of NIH / NSF funds?
On the flip side, why doesn't, say, Microsoft (which, like caltech, has never paid a dividend to a shareholder) decide to start issuing PhD's and relabel its employees as "students"? Microsoft could then declare itself to be a non-profit school, stop paying taxes and start aggressively applying for NSF grants. Plus they'd be able to "hire" (enroll) people with J1 visas in addition to the H1 visas they now clamor for.
Pablo Elbow CA (/.)
While clicking the link is the story above, I got this:
You don't have permission to access /news/science/science/20000514/t000045621.html on this server.
Additionally, a 403 Forbidden error was encountered while trying to use an ErrorDocument to handle the request.
Are we looking at the /. effect? a poorly configured server? Has the admin at latimes.com blocked the slashdot.org referer in an effort to avoid being /.ed?
___
3com and Cisco were both born out of the University system (Standford I think?). They had labs on campus, had research funded and walked away with the IP. This is pretty standard practice.
Universities want to make money. Providing a lab and some funding are pretty low risk in comparison to taking on the IP and marketing it. Why bother with that when you could simply fix the grades for some football players and get into a bowl game.