Intellectual Property Rights and Stem Cell Research: Who Owns the Medical Breakthroughs?

Abstract

The 2004 election year provided many focus points for those interested in stem cell research and its potential outcomes. California's Proposition 71, in particular, has arguably led the way to a new era of state and local public funding of stem cell research. This article does not address the conventional ethics debates over stem cell research, but rather argues that an even more contentious battle over ownership of the revolutionary medical breakthroughs that may emerge from this research is looming on the horizon. The more we achieve the vaunted promises of stem cell research, the more a crisis will be precipitated over the ownership of its results. Further, because the research will most likely proceed under some combination of federal, state, local, non-profit and private for-profit funding, the ownership rights will be anything but clear. At the same time, the public's claim to reasonable access to any crucial life-saving medical breakthroughs that do arise from stem cell research may well force federal, state or local officials to override the usual political opposition in the U.S. to compulsory licenses.

The article proposes that state and local funding structures be set up to include variants of the federal Bayh-Dole IP rights allocation system for federally funded inventions, with explicit inter-governmental coordinating mechanisms. In addition, it suggests that de facto compulsory license powers already available to federal and state governments be exercised in very limited circumstances. Because these powers are in the form of governmental immunities they avoid one of the most contentious aspects of conventional compulsory license systems - the involuntary licensing of IP from its private owner to a competitor who can then use it in competition with that owner. The article concludes that the accepted standard for one of these powers - a government use license may be taken only to satisfy a need of "vital importance" to the government - is exactly the right test and should be adopted as the measure of when the extraordinary step of a compulsory license for government provision of a stem cell therapy should be taken.

Keywords: Stem cells, science research, research funding, technology investment, intellectual property, IP

JEL Classification: H4, H51, H72, H77, H82, I1, K11, L33, O3