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When In Rome (or Wisconsin)

States supporting stem cell research are acting like, well, states.

The current stem cell patent dispute between California and Wisconsin highlights the underlying problems with relying on states to fund basic research.

States are doing an admirable job of funding stem cell research in the wake of tepid federal support. The current dispute between California and Wisconsin of patent rights, however, highlights the underlying problems with relying on states to fund basic research. States are acting like states, competing with each other for resources, scientists, and cures, which is not the best means of stimulating basic research.

California and Wisconsin, the two major state funders, are currently embroiled in a patent dispute over stem cell lines and techniques. The Wisconsin Alumni Research Foundation holds patents that cover five of the most useful federally funded stem cell lines and the methods used to derive them. WARF requires laboratories to be licensed in order to use the cells and collects royalties on commercial application. The licensing price for academic groups is minimal, but private companies are charged up to $400,000.

Researchers at the California Institute for Regenerative Medicine fear that WARF’s restrictions could slow down research in their state. The sticking point is CIRM’s requirement that universities and nonprofit institutions receiving grants pay royalties to the state on commercial applications; WARF has stated that this is a commercialization of research, meaning it may demand increased license fees and payment from commercial partners of CIRM grantees. The California-based Foundation for Taxpayer and Consumer Rights and the Public Patent Foundation, worried that research in California could be slowed by the WARF patents, challenged the patents. The U.S. Patent and Trade Office has subsequently decided to reexamine WARF’s patents.

The debate between California and Wisconsin reveals the dangers of heavy reliance on state funding for basic research. States seek a return on their investments in science, which causes them to compete with other states for businesses, scientists, and commercial applications. Just as the United States expects investments in new research to benefit the country, states fund science to see the fruits of their labor lead to economic growth in their state.

The competition between the states for stem cell resources and researchers has already begun. CIRM gives licensing preference for commercial applications of grantees’ research to California institutions. Wisconsin Gov. Jim Doyle has reached an agreement with WARF to waive licensing fees for private companies that sponsor stem cell research exclusively in his state, and has earmarked $5,000,000 to be spent on attracting stem cell researchers to Wisconsin. Every state that funds stem cell research will do what is necessary to be the first to discover a major new commercial application.

This competition is not necessarily bad. Creating incentives to bring researchers or businesses into the state creates better economic environments for companies and can speed the development of commercial applications from basic research. But this is not a way to conduct the basic research itself.

Separate state initiatives lead to debilitating competition, research overlap, uncertain funding streams, undue focus on commercially viable research, and differing regulations. Basic research requires the deep pockets, consistent funding, organized research programs, and a willingness to support long-term research that only the federal government can provide.

The same day the Patent Office announced it would be reviewing the WARF patents, the National Institutes of Health (NIH) announced the creation of a national consortium of research universities to foster collaboration in turning laboratory discoveries into medical treatments, underscoring the ability of the federal government to help researchers across the country work together.

The patent debate between California and Wisconsin highlights the importance of federal funding for basic research. State funding is designed to stimulate commercial applications of federally supported basic research, not replace federal funding. The federal funding policy needs to be updated to support research using the newest, most efficacious stem cell lines. States have been fulfilling their responsibilities to support stem cell research; now it’s time for the federal government to do the same.

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Sam Berger

Former Vice President, Democracy and Government Reform