1. HOW DO PATENTING AND LICENSING AFFECT RESEARCH? JOAN S. LEONARD VICE PRESIDENT AND GENERAL COUNSEL HOWARD HUGHES MEDICAL INSTITUTE The National Academies Workshop on Academic IP April 17, 2001

2. SUMMARY POINT 1 HHMI is committed to science- driven, cutting-edge research AND the translation of its discoveries into useful products and services

3. SUMMARY POINT 2 Industry’s reliance on patenting and exclusive licensing can affect the research autonomy of academic investigators who seek to use industry materials in their research

4. SUMMARY POINT 3 Patenting and licensing strategies of academic institutions may affect the research autonomy of inventors whose inventions are being commercialized

5. SUMMARY POINT 4 Maintaining a thoughtful balance between nurturing science-driven fundamental research and facilitating the translation of research results into useful products and services requires a commitment of time and resources

6. HHMI -- WHAT WE DO Largest private research philanthropy in the United States Collaborative relationships with academic research institutions Committed to basic cutting-edge research Employ investigators for renewable term appointments 350 investigators at 70 institutions

7. HHMI -- HOW WE WORK  Identify exceptionally creative scientists  Provide stable, long-term funding  Encourage innovation, risk-taking in fundamental biomedical research  Minimize non-scientific influences in the laboratory; no corporate sponsorship

8. DUAL AFFILIATIONS Investigators remain faculty members of host institution Subject to IP, COI policies of both institutions All agreements with industry subject to HHMI’s prior review and approval Coordination with host institution

9. HOW DO INDUSTRY’S PATENTING AND LICENSING AFFECT ACADEMIC RESEARCH?

10. ISSUE: MATERIALS PROVIDED BY COMPANIES When providing materials, companies must protect exclusivity of patent positions and proprietary information and retain control of development of the company’s own research programs RESULT: claim of exclusive control over recipient’s downstream research

11. HHMI MTA POLICIES No grants of ownership in research results No grants of exclusive licenses in MTA; time-limited options only Preserve freedom to publish

12. POTENTIAL HAZARDS A grant of exclusive option rights in future inventions can inhibit the scope or direction of the ongoing research program impede the investigator’s ability to distribute the fruits of research to colleagues interfere with research collaborations

13. OTHER COSTS The need to negotiate each agreement leads to Delays in research program Administrative costs

14. RESULT -- COMPROMISE Investigator obtains valuable reagent BUT May experience limitations downstream

15. HOW DOES ACADEMIC PATENTING AND LICENSING AFFECT RESEARCH?

16. ISSUE: START-UP COMPANIES Pressure to form start-up companies comes from –Academic administrators –Governments –Investigators

17. START-UP ISSUES Independence of research may be compromised if Company makes excessive claims on investigator Investigator experiences divided attention, blurring of commitments, or conflict of interest Lab may be or be perceived as extramural research facility for company

18. HHMI POLICIES: CONSULTING Investigator may not –hold more than 5% of company stock –consult for more than 36 days per year – serve on company’s board of directors – perform or direct company’s research – collaborate with or receive research funding from company –give company preferential access to HHMI research

19. HHMI POLICIES: LICENSING HHMI limits the grant of license rights in future research to the claims described in the patent application and the claims of CIPs that are directed to the subject matter specifically described in the patent application

20. BENEFITS OF POLICIES All parties must focus on policy requirements through discussion and negotiation of agreements Review and approval of agreements before consulting begins means ground rules are established in advance Investigator’s dual roles are defined and delimited

21. RESULT -- COMPROMISE Translational work by start-up can go forward BUT Investigator’s relationship to company is defined and constrained

22. CONCLUSION Patenting and licensing are essential to translate discoveries into useful products and services Patenting and licensing create incentives that can affect the autonomy and focus of academic research Maintaining a balance between the two requires investment of time and resources