In August, CCST released its interim report on a framework for intellectual property for the California Institute for Regenerative Medicine (CIRM). The long-anticipated report has generated considerable interest and has played an important role in the ongoing discussions concerning CIRM's operations.

"I want to commend the members of the California Council on Science and Technology for their thoughtful and timely report," Assembly Member Gene Mullin said. "California is in a unique position to create an intellectual property policy that is as forward thinking as Proposition 71. This report will begin those discussions."

The intellectual property (IP) interim report, Policy Framework for Intellectual Property Derived from Stem Cell Research in California, was released in partial response to Assembly Concurrent Resolutions (ACR) 252 and 24 authored by Assembly Member Gene Mullin. ACR 252, which was chaptered in September 2004, requested that CCST conduct an analysis on how and whether to implement a set of consistent statewide IP policies.

Following the November 2004 passage of Proposition 71 (the Stem Cell Research and Cures Initiative), which allocated $3 billion over 10 years to establish CIRM, CCST also agreed to prepare an interim report tailored specifically to CIRM's needs and faster timetable.

The IP Study Group, convened by CCST to recommend intellectual property guidelines for the state, released the interim report to begin a discussion and provide policymakers with a framework for consideration in the development of policies for the handling of intellectual property developed with state funds, especially in relation to stem cell research.

"In this report our main objectives were to define the issues that needed to be addressed, in particular how to respond to heightened public expectations concerning financial returns from stem cell research," said Stephen Rockwood, co-chair of the committee which produced the report. "Independent Citizens Oversight Committee (ICOC) members and state leaders must realize that this field of research is in its very early years. In all likelihood, the development of effective therapies from CIRM-sponsored research is at least ten to twenty years away."

Overall the committee recommended that CIRM adopt an approach to managing intellectual property that would be consistent with related federal policies. As there are no other states as yet which have established a comprehensive set of IP policies, the federal model was felt to be most appropriate.

"There is considerable experience at the federal level from agencies such as the National Institutes of Health which should be useful to California," said co-chair Alan Bennett. "Fortunately, we have over twenty years of discussion and experimentation at that federal level to use as background for California in preparing its own set of policies."

These recommendations include permitting ownership of the intellectual property to reside with the grant recipients, with CIRM retaining rights to use the research, and focusing on maximizing access to the research rather than controlling prices of the ultimate products of this research.

"These issues have become controversial in part because significant public expectations of royalty revenues were created when Proposition 71 was being promoted," said Rockwood. "The considered opinion of this group is that those expectations are not realistic and not consistent with established practice at the federal level."

The interim IP report was originally structured to respond to ACR 24, which was drafted earlier this year and which requested that CCST prepare the interim report en route to completing the charge of ACR 252. However, ACR 24 continued to be amended through the summer, with the result that the interim report does not address all of the questions raised.

"We will address ACR 24 in the final report," said Rockwood. "It is our hope that the document at present may serve a useful purpose in informing and guiding what is surely just the start of a much longer discussion."

Principal recommendations:

The IP Study Group's recommendations in the interim report are consistent with general principles likely to be recommended for state-funded research in the final report to be completed later this year. These general principles assert that the IP policy:

• Is to be consistent with the Bayh-Dole Act. (This principle can play out in many ways that are of benefit to the public. In particular, ownership of IP resides with the grantee, who is required to diligently develop IP for the public. In addition, the balance of any net royalties must be used to support research and education activities.)
• Creates incentives for commerce in California from state-funded research to the greatest extent possible.
• Encourages timely publication of results to diffuse knowledge widely, and provide guidance on the kinds of data that are desired to be placed in the public domain or available under open source, Creative Commons, or other broad-use licenses, including software and special databases.
• Requires diligent development of IP into products that benefit the public.

With these general principles in mind, the IP Study Group recommends that CIRM consider policies that accomplish the following:

• Permit grantees to own IP rights from CIRM-funded research.
• Require grantees (institutions, individuals, or both) to provide a plan describing how IP will be managed for the advancement of science and benefit to California.
• Grant basic research funds without requiring grantees to commit to providing a revenue stream to the state. If, however, a revenue stream develops over time, revenues will be reinvested in research and education.
• Generally make CIRM-developed research tools widely available to other researchers.
• Require diligent efforts to develop CIRM-funded IP into therapeutics and diagnostics that can benefit the public.
• Retain within CIRM Bayh-Dole-like rights to step in if the owner of IP is not undertaking appropriate steps to transfer technology to benefit the public.
• Leave license particulars to the owner who is in the best position to judge how best to ensure that discoveries are made widely available through commercialization or otherwise.
• Reserve the right to use IP by or on behalf of CIRM.
• Establish and maintain a CIRM database to track all IP generated through CIRM funding.