Patenting and licensing

Constitutional Authorization. Article I, Section 8, Clause 8 of the United States Constitution, grants Congress the power “To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” The goal was to promote public good, not private gain. As products of the Enlightenment, the founders recognized the importance of scientific progress and judged that the best way to speed progress was to encourage inventors to fully disclose their invention – a requirement for obtaining a patent – so that others could improve on the patented invention, rather than inventors keeping their inventions as “trade secrets.” Moreover, the founders recognized that to finance the development of an invention to the point where it would be useful to the public, it would likely be necessary to obtain capital from investors who expected a return on their investment. If there were no patent protection, others could wait until development was completed and only bear the manufacturing costs rather than both the development and manufacturing costs. Thus, although the founders recognized the dangers of monopolies, they sought to balance the incentive to patent against the public’s interest in obtaining products at the lowest cost by limiting the time of exclusivity. The patent system has evolved dramatically since the Constitution was written, and there are serious concerns about whether it currently is optimal for the modern technological age [22]. In addition, biotechnology, pharmaceutical, and medical device patents represent only a fraction of total patents issued, and so the patent system must balance the impact of specific policies and procedures across a wide range of industries.

For most academic investigators, the decision as to whether to patent an invention is made by the university’s technology transfer office or its equivalent. Universities differ in the criteria they use to make that decision, and in some cases, university and National Institutes of Health (NIH) policies may allow an investigator to privately apply for a patent if the university chooses to not apply. A key factor in a technology transfer office’s decision to file a patent application is whether the time-limited monopoly that a patent enables will likely incentivize a company to license the technology and invest in its further development. Such partnership is crucial for the development of technologies that require capital beyond that available in academic organizations. Without a patent, opportunities for licensing diminish greatly, which may preclude obtaining the necessary funds and partnerships to fully develop an invention into a useful product. Obtaining a patent in high-income countries is most important for economic success, and so the decisions as to whether to also apply for patents in LMICs, to receive royalties for licensing the invention to companies in LMICs, or to enforce a patent in LMICs can potentially be separated in the pursuit of global equitable access to novel agents. In fact, many of these factors may come into play during the licensing process, which is discussed below, and there are examples of universities using their patent rights to encourage pharmaceutical companies to maximize global access [Reference Ouellette23].

The Bayh-Dole Act [Reference Contreras24]. The 1980 Patent and Trademark Law Amendments Act of 1980, commonly called the Bayh-Dole Act in recognition of the two Senators who sponsored it, gave the privilege of licensing patented technology developed with federal funding to the institution receiving the federal funding. This was in response to evidence obtained at that time showing that technology invented and developed with federal funds were rarely patented or converted into products by private industry. A General Accounting Office report noted that at the time Bayh-Dole was enacted, “fewer than 5 percent of the 28,000 patents being held by federal agencies had been licensed, compared with 25 percent to 30 percent of the small number of federal patents for which the government had allowed companies to retain title to the invention [25].” The Act encouraged universities to patent and license new technologies, and it encouraged academic scientists to develop such technologies by requiring that universities share some of the proceeds from licenses with the inventor(s). It also provided for the government to retain “march-in” rights for the product or technology that was patented if “action is necessary to alleviate health or safety needs that are not reasonably satisfied by the contractor, assignee, or their licensees [Reference Cook-Deegan, Kesselheim and Sarpatwari26].” The government could then license to other companies. There has been controversy as to whether the high price of a drug would qualify as a justification for exercising “march-in” rights, and there are legal and practical complexities that have discouraged the exercise of these rights. Despite several petitions to the government to exercise these rights on specific products, the government has not yet done so on any product [Reference Cook-Deegan, Kesselheim and Sarpatwari26].

While the Act has been criticized for encouraging universities to focus on commercialization at the expense of their academic mission, it unequivocally unleashed a major wave of discoverythat has resulted in many important products, including CRISPR-Cas9 for human gene editing and the Google search engine. According to a yearly survey conducted by the Association of University Technology Managers (AUTM), in 2020, 184 US academic institutions applied for 17,738 patents and received about 8,706 [27]. In the same year, 1,117 new companies were created to commercialize university inventions. AUTM’s data from 1996 to 2020 indicate that licensed academic technologies contributed between $333 billion-$1 trillion to the gross domestic product and produced between 2.4 and 6.5-million person-years of employment [Reference Pressman, Planting, Moylan and Bond28].

Critiques of University Patenting and Licensing, Responses to the Critiques, and Suggested Alternatives. From its inception, the Bayh-Dole Act engendered criticism about the impact of commercialization of university technology on the educational and public interest missions of universities. Critics pointed to a number of examples of how exclusive university licenses restricted access to important drugs in LMICs, stimulating public concern [Reference Ouellette23,Reference Contreras24]. In response, States initiated investigations, student and faculty organized protests, and the student-led Universities Allied for Essential Medicines (UAEM) issued a 2006 manifesto that called for institutions to “promote equal access to university research” by focusing less on profit and more on human welfare [Reference Chen, Gilliland, Purcell and Kishore29,30]. This led to representatives from thirteen research-intensive institutions developing a set of guidelines the next year calling on academic institutions to prioritize their educational and public missions rather than their economic interests in licensing technology to the private sector [Reference Contreras24]. The resultant document, titled In the Public Interest: Nine Points to Consider in Licensing University Technology (9P) [31], identified key provisions for principled licensing, focusing on both academic freedom and equitable global access (Table 1). Since then, 118 universities and related entities have signed on to the document, and it has been endorsed by the National Research Council and the Association of American Universities [Reference Contreras24]. It thus enjoys widespread support.

Table 1. Provisions of In the Public Interest: Nine Points to Consider in Licensing University Technology [31]

The 9P document was followed by a 2009 Statement of Principles and Strategies for the Equitable Dissemination of Medical Technologies by AUTM and a group of academic institutions to provide “a more concrete statement of goals as well as licensing practices [32].” Among its provisions was a commitment to “to contribute to the health and well-being of populations throughout the developing world” by reducing intellectual property barriers through: 1. Not patenting in developing countries. 2. Filing and abandoning patents. 3. Patenting in developing countries when there are potential benefits, as for example, when there is a pharmaceutical manufacturing capacity in the country, or the patent would provide leverage to obtain concessions that would increase access. When patents are obtained, institutions should consider: 1. Offering licensing terms that incentivize making the technology available in developing countries; 2. Including “march-in” rights, mandatory sublicenses, or non-assert provisions; 3. Obligating licensees to meet milestones or face license reduction, conversion to non-exclusivity, or termination; and 4. Requiring tiered, subsidized, at-cost, or no-cost pricing. The 2009 statement also called for partnerships with private companies, government, and not-for profit organizations, as well as the development of “meaningful metrics” to assess the success of the initiative.

In 2023, Jorge Contreras conducted a study of the impact of the 9P on university licensing using primarily data reported by companies to the Securities and Exchange Commission [Reference Contreras24]. As a result, the data are skewed toward companies in which the license was considered “material” to the companies’ economic status. Based on 220 university technology licenses completed before and after the publication of 9P, he concluded that 9P increased the availability of the licensed technologies for education and nonprofit research, but there were few changes related to public health and global equitable access. He called for encouraging academic faculty, senior administrators, students, alumni, and other institutional stakeholders to participate in the process of developing university technology transfer policy, rather than leaving it to the technology transfer office, trustees, and the most senior institutional leadership. He also noted that the ranking metrics used by AUTM focus on commercial accomplishments, such as licensing income and startup formation rather than public benefit, and 39 of 172 universities reported in the 2017 AUTM salary survey using such metrics for incentive compensation of Technology Transfer Office personnel. AUTM does, however, also highlight non-monetary metrics, including new commercial products launched (a measure of impact), startup companies formed and those formed in the institution’s home state (measures of economic development), and number of disclosures and licenses (a measure of faculty engagement in commercial innovation).

The UAEM is student-created advocacy group that seeks to improve global health by influencing university policies nationwide. In 2006, it released its Philadelphia Consensus Statement: On University Policies for Health-Related Innovations [30]; in 2010, it released its Global Access Licensing Framework [33]; and in 2021 it released its Equitable Technology Access Framework (ETAF) [34]. The ETAF has three goals: 1. To improve global equitable access to health technologies, 2. Promote further development of health technologies, and 3. Improve transparency of health technology transfer. These goals are supported by nine principles for technology transfer offices to incorporate into their operations: 1. Social responsibility to the public, 2. Limit monopolies, 3. Retain IP rights, 4. Include step-in rights, 5. Include reach-through clauses, 6. Limit data and market exclusivities, 7. Commit to full sharing of all data and research findings, 8. Ensure full transparency of all public funding sources and amounts, and 9. Implement robust accountability and transparency mechanisms. In 2024, UAEM produced a white paper that described the history of the organization and the evolution of its advocacy efforts. It compares its ETAF to the 9P and finds the latter wanting because the 9P does “not require accountability, transparency, or limitations on the creation of predatory monopolies.” UAEM also notes that the 9P and the 2009 Statement of Principles do not address access to medications for poor people in high income countries. UAEM issued a report in 2013 that evaluated 54 major North American universities based on their investment in global-health innovations, especially neglected diseases, policies supporting global equitable access, and empowering and educating future global health leaders [Reference Guebert and Bubela3]. The University of British Columbia was the only institution to receive an overall grade of A, and Vanderbilt, Harvard, and Northwestern were the only universities to receive an A in more than one category. Institutions that had high innovations scores tended to have low scores for policies to ensure equitable global access, and vice versa [Reference Guebert and Bubela3]. In fact, the University of British Columbia does its own assessment of its licenses based on their academic and social benefit and their economic, financial, and political impact [Reference Guebert and Bubela3]. The steady increase in noncommunicable diseases as public health threats in LMICs raises the question as to whether a focus on innovation for neglected diseases in the score card is still appropriate [Reference Guebert and Bubela3]. UAEM issued another report in 2020, adding to the original criteria analyses of transparency in clinical trial results and academic medical publications, and sharing the intellectual property, knowledge, and data from their COVID-19 research in ways that ensured equitable global access [35].

In the philanthropic sphere, the Bill and Melinda Gates Foundation developed a Global Access policy in 2003 to ensure that the products of foundation-funded projects benefit the foundation’s beneficiaries, which they define as “the people most in need living in developing countries and within the USA.” The policy requires that products are disseminated promptly and broadly, and that they are “made available and accessible at an affordable price.” The grant recipient may also be required to create a “Global Access Strategy” that outlines plans for managing intellectual property and the associated rights, including manufacturing and distribution, and may require a Humanitarian License to achieve these goals.

Spurred by a faculty member’s invention to improve the diagnosis of dengue fever [Reference Mimura36], the University of California at Berkeley developed its Socially Responsible Licensing Program in 2003, which has the following goals: 1. Promote widespread availability of healthcare and technologies in the developing world, 2. Maximize societal impact and public benefit of technologies developed at Berkeley, 3. Share revenue and/or other benefits with those who collaborate with Berkeley researchers, 4. Give proper attribution to a resource/material provider or collaborator, and 5. Stimulate additional investment by others to achieve these goals [37]. One innovation of this program was to change the metrics for assessing the success of their technology transfer program. For example, while granting a royalty-free license may decrease the revenue collected by the licensing office, the office will get credit for net funding, philanthropic gifts, relationships, and campus recognition produced by the license [Reference Mimura36].

Similarly, in 2020, the University of California, Los Angeles (UCLA), began requiring licensees to provide and implement an “Affordable Access Plan” that includes a list of LMICs in which the licensee does not intend to commercialize the product, as well as plans (including strategies and timelines) to support affordable access in LMICs and non-commercialized territories. UCLA’s adoption of the Affordable Access Plan approach grew out of its discussions with the Medicines Patent Pool (MPP), a nonprofit organization developed by Unitaid, an international organization that provides financial support for the development of innovations to prevent, diagnose, and treat HIV/AIDS, tuberculosis, viral hepatitis, and malaria [38]. MPP is a hosted partnership with the World Health Organization that uses voluntary licensing and patent pooling, along with collaborations with organizations, industry, patient groups, and governments to prioritize licensing to LMICs [Reference Shadlen39]. Its creation was spurred by the World Trade Organization’s 1995 agreement on Trade-Related Aspects of Intellectual Property Rights, which required all countries to offer patents on pharmaceuticals. Among its tactics, MPP provides licenses to generic pharmaceutical companies based anywhere in the world to manufacture drugs [40,41]. MPP has been endorsed by the G7, G20, and the United Nations. As of 2023, MPP has signed 34 licenses, established partnerships with 58 manufacturers, facilitated access to 30 billion doses of treatments, and achieved savings of $1.2 billion in health care costs. Among its new goals is expanding its efforts to non-communicable diseases and maternal health. MPP also encourages transparency through hosting publicly available databases on patents on essential medicines (MedsPath), COVID vaccines (VaxPal), and long-acting therapeutics (LAPaL).

Although pharmaceutical companies can license directly to generic companies themselves, MPP licenses: 1. Generally enable more generic companies to produce drugs, thus increasing competition and lowering costs; 2. Usually involve larger territories; 3. Frequently allow exports outside of the licensed territory; and 4. Are made publicly available on the MPP website [40]. Two COVID-19 drugs, molnupiravir and nirmatrelvir were licensed to MPP by major pharmaceutical companies before their global launch and others have been licensed while still in development. The MPP model works better for small molecules than for biologics or vaccines because the latter two require more transfer of “know-how,” that is, technical details of the manufacturing process. Even with these limitations, universities could require that licensees make reasonable efforts to engage in future licensing to MPP for distribution in LMICS in lieu of direct licensing to generic companies. Similarly, nonprofit funders could adopt the same requirements and governments could incentivize pharmaceutical companies to license to MPP via a series of rewards.

Academic institutions can themselves craft licenses to achieve the same goals. For example, Rockefeller University recently completed a licensing transaction with an organization located in an LMIC for a therapeutic to treat a disease with unmet need. The focus of the license was on “dissemination” rather than “sales” of the technology; making the treatment available at-cost resulted in a royalty-free license. It is heartening that both public and private institutions are leading in developing creative approaches because the funders of each may have somewhat different expectations about their technology transfer programs, with public institutions often seen as drivers of local economic development and private institutions variably dependent on royalty income.

The “Open Science” movement has challenged the entire model of academic technology transfer, citing many negative consequences, including delays in moving technology forward because of the need for protracted negotiations with universities, diversion of student and faculty attention from scientific discovery to personal financial gain, overly aggressive university demands and expectations, licensing of inventions too early in their development, and wasting university resources because few technology transfer offices bring in enough money to cover their costs [Reference David, Esanu and Uhlir42–Reference Ali-Khan, Jean and Gold44]. The alternative is the development of collaborations among academic institutions, industry, and philanthropic institutions to speed technology development free from intellectual property constraints. One example of this model is the Canadian Structural Genomics Consortium (SGC), which is funded by major pharmaceutical companies and includes partners from government and philanthropy who collaborate with academic investigators on scientific research without retaining intellectual property rights. The SGC thus represents an open science model in precompetitive structural and chemical biology, which enables “companies and research institutions to share costs and risks associated with the large-scale efforts required to elucidate new therapeutic opportunities from underexplored areas of the human genome [Reference Morgan45].” It entered into a partnership with the Ontario Institute for Cancer Research to explore a potential novel target for treating malignancies. Based on data obtained by international partners, the target became validated. At that point, the institute developed a drug for leukemia which it patented and licensed to Celgene for a $40 million upfront payment and the potential to receive as much as $1 billion. M4K, an Open Science company focused on developing drugs for rare pediatric disorders, is committed to publicly sharing all of its data and does not file patents. It is owned by the Agora Open Trust, a Canadian charity committed to Open Science principles [Reference Gold43,46]. When companies owned by the Agora Open Trust develop a technology to the point where it is appropriate to partner with a company, instead of licensing a patent, the company gets exclusive rights to the data packages submitted to regulators [47]. The licensee must ensure that the technology is equitably accessible, but how that is achieved is not specified.

An alternative Open Science route has been championed by the Center for Vaccine Development, Texas Children’s Hospital, Baylor College of Medicine, which is Co-Directed by Drs. Peter Hotez and Maria Elen Bottazzi. The Center is committed to performing research to produce vaccines for neglected diseases in LIMCs. It tries to avoid dependance on multinational pharmaceutical companies altogether because, as shown by the COVID-19 experience, they prioritize supplying North American and European countries, charge high prices, and do not have the capacity to supply the needs of LMICs. In response, their group produced a recombinant protein vaccine made by microbial fermentation in yeast and then transferred the prototype for production by vaccine producers in India (Biological E; Corbevax; available at ∼$3.00/dose) and Indonesia (BioFarma; IndoVac) [Reference Mahoney, Hotez and Bottazzi48–Reference Hotez50]. They also published papers on each step in the vaccine development process and made them available through open access. Baylor College of Medicine offered the manufacturers nonexclusive licenses without patent protection. In addition, since vaccine production is more complex than manufacturing small molecules, they also committed to sharing their know-how and their quality control and quality assessment documents. In addition, they trained scientists from abroad on vaccine development, production, and quality control. Approximately 100 million doses of the vaccine have been administered in these two countries; however, regulatory hurdles related to the need for approval by stringent regulatory authorities have limited adoption by other LIMCs [Reference Mahoney, Hotez and Bottazzi48]. The approach taken by the Baylor group has the added advantage of supporting the development of infrastructure, skills, and know-how in LMICs, thus building the future capacity to address key health problems of specific importance to LMICs.

In a similar vein, one need not view academic licensing under Bayh-Dole and Open Science as polar opposites. For example, in the 1980s, long before the promulgation of the 9P, the author was able to obtain agreement from the technology transfer officer at the Research Foundation of the State University of New York and the licensing company Centocor to allow him to share the monoclonal antibody that reacts with the platelet integrin receptor αIIbβ3 – the parent antibody of the drug abciximab – with academic investigators for research purposes without charge and without obligations regarding future authorship or confidential sharing of the research results. Sharing the antibody yielded some of the benefits of an Open Science collaboration as the hundreds of investigators who received free antibody began publishing data in the scientific literature. The results of their studies were very important in the development of abciximab, demonstrating the benefits of such a policy [Reference Charo, Bekeart and Phillips51,Reference Simon, Xu, Ortlepp, Rogers and Rao52]. The first point in the 9P recommends that licenses include these “reservation of rights,” and Contreras found that this recommendation had the greatest uptake, with reservation of rights for research purposes for all nonprofit organizations in the academic licenses reviewed increasing from 43% before to 73% after 9P was published [Reference Contreras24]. In addition, all of the studies carried out by the author, including those conducted in collaboration with Centocor scientists, were published in the scientific literature [Reference Coller, Folts, Smith, Scudder and Jordan53–Reference Kaul, Tsai and Liu77]. Similarly, the technology transfer officer at Rockefeller University and the licensing company CeleCor allowed a similar provision in the license for the compound RUC-4 (zalunfiban), which also targets αIIbβ3, and is currently under development [Reference Kereiakes, Henry and DeMaria78–Reference Rikken, Bor and Selvarajah81]. Academic investigators have already independently published data confirming that zalunfiban does not induce a conformational change in the receptor, a key distinguishing feature of the compound [Reference Lin, Li and Xie82]. The Open Science movement has thus challenged many of the assumptions of the dominant academic model of drug and vaccine development, and so beyond its successes to-date, it is important to assess whether its principles are generalizable to a broad range of drug and vaccine development projects.

Manufacturing

The ability to manufacture drugs and biologics at low cost and in large numbers is crucial for equitable global access. There are, however, major challenges in creating a sustainable economic model for manufacturers in LMICs because of uncertain demand, the need for expensive equipment for large-scale manufacturing, and the need to comply with exacting regulatory standards. Fortunately, there is increasing capacity for vaccine manufacturing in LMICs and many manufacturers would like to expand their operations [Reference Hayman, Kumar Suri and Downham83]. It is also relatively straightforward to manufacture small molecule drugs, but vaccines and other biologics often require transfer of advanced know-how, and some manufacturing processes are complex, such as those that are used to produce mRNA vaccines in lipid nanoparticles. That is one reason that the Center for Vaccine Development, Texas Children’s Hospital, chose to make its vaccine by a yeast protein expression technology that is well known, and thus easily adopted in manufacturing facilities in LIMCs. Local production also provides jobs and enhances the skills of the local population. The need for stringent regulatory authority approval (e.g., by the US Food and Drug Administration or the European Medicines Agency) in order to sell products outside of the country in which it is manufactured – even if the product has national approval – has, however, been a major stumbling block and advocates for global access are trying to address this challenge in a number of different ways [Reference Mahoney, Hotez and Bottazzi48,Reference Hayman, Kumar Suri and Downham83]. Multinational pharmaceutical companies are also establishing manufacturing facilities in LMICs, but it is not clear how their presence will affect the ecosystem.

Contreras and Shadlen recently compared the vaccine development approach taken by the Center for Vaccine Development, Texas Children’s Hospital to that taken by Oxford University [Reference Contreras and Shadlen1]. The Oxford group initially indicated that it would offer royalty-free, nonexclusive licenses to COVID-19 technologies, but subsequently licensed its vaccine exclusively to AstraZeneca with a royalty return to Oxford [Reference Contreras and Shadlen1]. As a result, the Oxford vaccine was produced by a network of manufacturers that produced 3 billion doses, most of which were distributed in LMICs at “low cost,” compared to the 100 million doses of the Center for Vaccine Development’s vaccine. They highlighted advantages of the Oxford approach, including the faster regulatory approval of the Oxford vaccine, the transfer of know-how in addition to patent rights by Oxford, greater access to capital, and knowledge about selecting partners in global manufacturing, including a major manufacturer in India. They noted that the Oxford technology was much more complex and thus needing more transfer of know-how, but did not indicate that Center for Vaccine Development specifically selected a vaccine production method that would be easier to adopt in LMICs. They did not provide data on the pricing of the Oxford vaccine, admitting that the pricing was “opaque and inconsistent.” Moreover, they did not acknowledge that regulatory structures, which are amenable to modification, limited other countries from receiving the Center for Vaccine Development’s vaccine made in India and Indonesia, which likely resulted in many fewer doses of the vaccine being produced by the two countries. Their analysis highlights the complexity of maximizing equitable global access and indicates what governmental and nonprofit organizations need to do to match the benefits that AstraZeneca had in achieving its success in manufacturing at the enormous scale required for global distribution.