WARF is evil

No, not Worf – the bad Klingon with the heart of gold in Star Trek: The Next Generation. I like him just fine.

I’m writing this week about WARF, the Wisconsin Alumni Research Foundation. Sounds harmless, doesn’t it? Well, unfortunately it’s not. You see, WARF holds three patents on embryonic stem cells, and they are using these patents to slow down or block research on stem cells – research that is one of the most promising avenues for curing a wide range of diseases, and even slowing the effects of aging.

Why would anyone want to hinder the progress of stem cell research? Well, there are two reasons (at least). Everyone knows that some people are morally opposed to the use of human embryonic stem cell research, but WARF doesn’t have a problem there. (Neither do I; in fact I strongly support it.) No, the second reason is simply this: money. WARF wants to impose licensing fees on anyone who wants to do embryonic stem cell research – that’s the whole purpose of their patents. WARF isn’t a research institution, it’s just a money-making foundation for the University of Wisconsin, so they’re not doing any research themselves. The patent is nothing more than a dollar-extracting device for them.

Personally, I think the whole patent system is a mess, and it should be scrapped and replaced by a system that can handle modern technology, and that gives scientists and engineers the freedom to pursue their work, rather than wasting countless hours (and dollars) on lawyers. But that’s a larger issue.

Even if I liked patents, I would oppose patents on embryonic stem cells. These are a life form, not an invention. Research is at an early stage, and patents are particularly damaging at this point in their development. One damaging effect – impossible to quantify – is that patents will discourage scientists from going into the field in the first place, because they know they might have difficulty pursuing their ideas. Scientists have already pointed out that the the WARF stem cell patents are overly broad, making it too easy for WARF to demand payments from scientists working on a wide range of new techniques.

The most recent development (in March) was that the US Patent and Trade Office (PTO) ruled in favor of WARF on 3 legal challenges to their stem cell patents. The lawsuits were filed by two citizens groups who claimed that the invention was obvious and not deserving of a patent. Last year the PTO agreed to take a look, which raised everyone’s hopes (except WARF’s), but this new ruling is a big letdown.

Scientists have complained in the past that WARF charges high fees – especially high for private companies, less so for universities) and requires them to wade through reams of paperwork (a huge waste of time) to use embryonic stem cells. See the Science article from last April in which George Daley of Harvard complains that his mouse research “would grind to a halt” if he had to deal WARF’s red tape.

I’m not surprised that the PTO ruled in WARF’s favor – after all, PTO has a selfish interest in keeping the patent system as it is. The more patents, the better (for them). The real problem, though, isn’t the legal claim – the challenge to the patents was a long shot in the first place, and I never thought they had a good chance of winning. The problem is that we allow these types of patents in the first place.

Meanwhile, WARF claims it is seeing “a small amount of commercial royalties” – as if the fact that they weren’t making much money was somehow a mitigating factor. If this is true, then why are they holding the entire research enterprise hostage for a small amount of money that they want for themselves? Obviously they are trying to distract attention from the real issue, which is that we’re allowing a private entity to prevent work on problems that could benefit all mankind. This is completely and utterly illogical; it appears that our legal system has us so tied into knots that we can’t - as a society, as a species – do what’s best for ourselves.

I’ve heard the arguments from the other side – that patents are necessary for a thriving commercial sector, especially for technology companies. I don’t buy it. The arguments just don’t hold up in today’s rapidly changing environment. Giving a person (or a corporate entity) exclusive control over an invention for 20+ years may have made sense 50 or 100 years ago, but it doesn’t today. And even if it did, it doesn’t work for stem cell technology. WARF is hampering research for their own short-term profit goals.

If the University of Wisconsin truly wants to benefit society, then it should insist that WARF license its stem cell patents for free to anyone who wants them. (WARF’s home page says that it “ensures the inventions of UW-Madison benefit humankind” – so they apparently agree with me!) If they argue that they deserve some profits, I’d point out that the U.S. government paid for the work in the first place. It’s true that U.S. law allows universities to claim ownership – and patents – on work produced on their campuses with federal support, but just because you can do something doesn’t make it okay.

WARF is evil.


  1. I'm not a big fan of patents myself, but you are conflating two entirely different issues -- whether patents are a good idea in theory vs. whether, given patents exist in the imperfect real world, should universities use them to their benefit or whether only private companies should have them.

    You don't mention that WARF exists to fund research at the University of Wisconsin -- it isn't some "private entity" out to make a buck. And why single out WARF anyway? Why it is more evil then the equivalent organizations that nearly every university has? You are hopefully aware that your own university has a office of technology commercialization? (http://www.otl.umd.edu/index.html)

    And George Daley should realize that Harvard has its version of WARF as well:

  2. Jonathan,
    You make some good points, so perhaps I need to clarify. I'm aware that there are two (actually more than two issues), and I'm taking a position on both. On your first question - whether patents are a good idea in theory - my position is no, they're not. On the second, about whether universities should use them to their benefit, my position, as I tried to make clear, is that I'm opposed to that to.

    And since you mention it, I'll be consistent about my own university - I'm well aware that U. Maryland has an office of tech transfer, and I'm opposed to their very existence. I'd like to see them shut down, and I've let people on campus know - with no effect so far. But this is a long battle and I will keep at it.

    One problem is that these organizations quickly become concerned with justifying their own existence (by making money), and lose sight of the larger mission of the University. The only good role I could see for them - which they don't fulfill - is if they filed "protective" patents, which they gave away for free. These patents serve to prevent others from locking up the invention.

    But of course, if we didn't have patents, such "protective" patents would be unnecessary.

  3. I don't necessarily like the way WARF has handled things, but I wouldn't go so far as to say patents are categorically bad.

    Why should a university(or researcher) be able to enjoy the rewards of their success? I think it slows down the pace of advancement in the field if they're enforced to aggressively, but I don't think they are necessarily a bad idea which should be abolished.

  4. The original embodiment of exclusivity by patent was bestowed by royalty - not popular with the colonists. Yet Jefferson capitulated to Adams on the issue of patent protection offering to do so with the requirement for disclosure of the details. That way, no commercial advantage could usurp the inventive advantage from a smaller entity/person.

    Patents, especially on technologies that are expensive to develop, are required for several reasons. The most important of which is the cost to develop followed by the immediate cloning of the mature technology by a competitor without any of the pre-sales investment. Without exclusivity, IBM, GE and any other juggernaut would simply crush any newcomer's technology by out gunning them. No one would develop any new technology with a significant investment requirement without a guaranteed period of exclusivity.

    Prior to academia being given the right to capitalize on its inventions, the fruits of industry-sponsored research went directly to the sponsor. Essentially just the cost of sponsoring the research resulting in potentially valuable intellectual property.

    Since academic research generates a massive number of inventions and industry can potentially derive products from them but only with capital investment, it makes sense that the university can out-license those patents (for which it paid and therefore is already invested in the technology).

    Royalties not only repay the investment but are shared with the university's other income to fund its operations. (Note that liberal arts departments share in this money, without which they would be far less well-funded.) This supports growth beyond that which is capable with existing government subsidization via grants. In addition, the productivity from sales of commercial products fuels tax dollars which filter back to academic institutions in the form of grants yet again.

    Your implication that academia exists for the betterment of the world while you simultaneously suggest that "free" inventions, which cannot be commercialized on a practical basis, is more than a little challenging.

    *Do you have any grant funding?

  5. Ah, a true defender of patents! Excellent. Let me just respond to a couple of comments from DJ:

    "Without exclusivity, IBM, GE and any other juggernaut would simply crush any newcomer's technology by out gunning them."
    This claim I've heard before - and of course it can't be proven or disproven without eliminating the system. However, there are countless inventions that have been successful without patents - or that are far more valuable if we just let everyone use them for free. Most early computer algorithms were unpatented - imagine if something as simple as sorting were patented. We'd have been unable to get the computer industry off the ground.
    Another angle of response to this claim: patents are used far more by the big guys (Microsoft, IBM, etc) than the little guys. The big guys still crush the little guys (most of the time), and frequently they use legal threats - patents - as one of their weapons. Let's take that weapon away.

    DJ also wrote:
    "Royalties not only repay the investment but are shared with the university's other income to fund its operations...This supports growth ...."
    I wish I had a nickel for every time someone in the university administration threw this canard out there. It just isn't true: a recent study showed that among U.S. universities, fewer than 5% of their technology transfer offices yielded any profit at all. The vast number are money-losers, including the one here at U. Maryland. If we just shut them down, the university would be better off. Every university seems to be hoping to hit some kind of jackpot, and the $$$ that they see apparently blind them to the reality that it's a waste of money.

    Finally, DJ asks: "Do you have any grant funding?" Yes, I have been continuously funded by NSF, NIH, and other federal agencies since 1991. I currently have multiple grants as PI and more as co-PI. And I refuse to file for patents on any of my inventions.

  6. As a scientist, you should appreciate that my defense of IP is based on rather difficult to debase logic. That you still don't want patents in light of the granularity of those arguments is odd.

    Issue 1/
    A/ Actually, it can be easily proven that without intellectual property that innovation would be reduced. When a patent is about to expire for a marketed pharmaceutical which has inherently sunk development costs, there is a massive stampede to get to be the company with first rights to sell because there is a short period of exclusivity allowed. Why is this proof? Because they are showing what they would do had there been no patent protection. In other words, if someone else develops a product, i.e. invests resources, but it has no protection, others would readily jump into that market with the exact product.

    B/ Related, when a patented product is marketed in a sector with high development costs, often the patents are challenged. Why is this proof? Because again the competition is attempting to reap the rewards of someone else's investment by destroying exclusivity.

    Issue 2/
    You contend that large companies employ IP more than small and it simply is unsupportable. The fact is that innovation and growth are far and away the realm of small companies. Small companies, universities, and individuals file for more patents collectively than the larger companies. And it is the larger companies that acquire smaller companies and/or their technologies to take advantage of their core competency - marketing and sales. Were it not for the position of exclusivity, a megalithic company would simply bring its resources to bear and wipe out any chance that the new technology would economically reward the inventor thereby completely disincentivizing him/her.

    Issue 3/
    You imply that because offices of tech transfer are not profitable that they should be abolished. If you are actually staunch about your belief that academia is supposed to altruistically give back, then economic value shouldn't even be a consideration but instead simply, as you said, allow the work to be taken forward to society as usable products.

    I refer you to the following report that explains the economic data much more clearly than your blanket indictment of OTT's as bad. Be sure to read the quote on slide 39 as it clearly addresses the point that "it's not about the money". http://www.kauffman.org/pdf/tt/Stevens_Ashley.pdf

    Also think about this: without OTT's, investigators would report novel findings to the world but they would be rarely if ever embodied in a beneficial technology due to the lack of exclusivity; and companies would simply walk away from the universities with IP free of royalties to exploit with no remuneration to anyone except themselves. This is pretty much how the Soviet government did things...looked how well that worked.

    Issue 4/
    Think about how those patents that you eschew are embodied in all of those products on your lab bench and how they ended up there to let you do your research. From thermal cycler to transgenic mice to serum-free cell culture media, IP allowed those products to give you a chance to develop new ideas...that will go into someone else's mind and lab and s/he will invent something on top of it and potentially bring a product to market that you suggest should rather never be commercialized at all to benefit anyone beyond reading about it in your latest publication.

    I'm confused.

  7. DJ;
    Very well put. Thank you for your clear and logical explanation of the benefits of patents. Please share this with your representatives in the House and Senate to hopefully educate them to the benefits of patents so they can pass patent reform legislation that is truly beneficial instead of the mess that is currently under consideration by the Senate.

    I look forward to a reply from Steven.


    PS I am one of those scientists employed by a small company and our value is very dependent upon our strong patent position and portfolio. It is also important to our ability to interact to our advantage with larger companies.

  8. DJ:
    It's interesting to hear the industry point of view, and I can see I'm not going to convince you. But we digress - I don't have space to explain all my problems with the patent system, which would probably require a long article at least.

    Back to WARF: they are trying to extract (extort!) fees from scientists interested in embryonic stem cell (ESC) research, when at best - giving them more credit than they should - U. Wisconsin scientists are a few out of many scientists working and making discoveries in this area. Other scientists have already stated publicly that WARF is making it difficult for them to continue their work. If everyone university behaved similarly, research on ESCs would grind to a halt while the lawyers argued.

    This is unconscionable. It's also foolish: all of us can benefit from rapid progress on ESCs, and the newer iPSCs (induced pluripotent stem cells), but the research is in its early stages, and patent fights are a colossal waste of time. And even worse, as I wrote in my original post, they can scare off scientists who might otherwise work in the field (talented scientists often have a choice about what problems to work on), and we'll never even know what those scientists might have done.

    WARF doesn't care about any of this - they just want to make money. WARF is not a company using ESCs itself to develop treatments. And I have to repeat what I wrote before: the research was paid for with public funds. I hope WARF eventually loses its patents, but I'm not sanguine about it.

  9. Steven,

    I'll start by suggesting you read something in case you don't get to the bottom: http://www.rieti.go.jp/en/events/bbl/05052301.html. This should help you understand some of the rationale.

    The investment by WARF in the stem cell IP estate should not be confused with the investment by the U.S. government in the research. In addition, one of the mandates of the our friends at NIH, NCI, NIMH, NSF, DOD, DOE... is to foster innovation and technologies!!! Look at the details of your grant obligations. The U.S. government requires that rights to technologies you might (but won't) develop out of your grant-funded research be automatically extended to the federal government.

    WARF is obligated to enforce its rights under the patents due to the need to prevent development of new technologies that would be good to have additional patents. Even though the original patent estate would dominate the new inventions, the new IP would be of value. This would in effect dilute the value of the Wisc. estate as interested commercialization parties would need to put additional capital into obtaining rights to the additional IP.

    Directly related to that, I will make the assumption that there has already been issued a commercial license to the Wisc. estate that requires enforcement to control this very issue. From their point of view, they don't want independent researchers to slap onerous licenses on them to practice an invention in which there has already been made a potentially significant invention.

    While I have not read the terms of WARF's stem cell research licensing agreement, I can extrapolate that that the price tag is "high". to some, that means "not free". A fee to license the technology even to academia is not unreasonable as money has been invested.

    Securing the world-wide rights to an invention will cost $250-500K plus the overhead of managing, licensing and enforcing patents, the costs of which are impossible to estimate. Since there is no guarantee of a product, profit or even a license-issue fee to WARF, they are putting significant resources at risk. According to you WARF "just wants to make money" Of course they are - they need to at least make back the money they have put into the patent estate!

    Again, it is all about protection. Patents give only the rights to make, use or sell an invention or to license permission to do the same to others. There is no vast right/left/north/south/orange/green-wing conspiracy promulgated by TTOs or even just WARF to block others from developing new technologies. It is just the normal course of business for intellectual property management to assert the rights extended from patenting an invention.

    You are correct that will not convince me that patents should be abolished, that WARF is a profit-mongering evil entity nor that TTOs should not exist.

    Having worked for the very entity that, prior to the Baye-Dole Act allowing universities to own and profit from on-campus IP, literally snatched nascent technologies from universities in exchange for paltry research grants, I can assure you that the present situation is far better for you. Oh, the patent rights they secured included such useless inventions as the laser, the liquid-fueled rocket, silver nitrate for ocular disease, platinum-containing compounds as anti-neoplastic agents, the PSA test. All of these barely paid the inventors and with few exceptions their institutions because my former employer took the IP instead of just licensing it.

    Note, I have great respect for those who remain at the bench. It's not for me as I obviously have a commercially oriented perspective. So although I almost certainly sound preacher-esque, I'm simply pointing out my belief that the system as a whole must be examined in order to fully appreciate the various driving forces at work.

    Jefferson conceded that (paraphrased), patent protection promotes innovation and prevents control of commerce from being concentrated in a very few. That this has been extended to the very entities that foster the most innovation in the world seems fairly logical as well.

    Before my hair hurts any more, I will check out of this conversation. [Note: I normally do not engage but I simply couldn't help myself this time!]

    Be well,


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