The Use of Mtas to Control Commercialization of Stem Cell Diagnostics and Therapeutics

While much of the commentary on obstacles to stem cell research focuses on patents, material transfer agreements (MTAs) governed by state contract and property law present equal if not greater challenges to researchers. This Article argues that the life sciences in general, and the stem cell field in particular, are increasingly employing a lease-license model - similar to that used by the software industry - such that end users only license and/or lease both patent rights and the biological materials themselves. The absence of a sale allows owners of patents and physical biological materials to impose greater restrictions on end users than the owners could impose in the context of even a conditioned sale. At the same time, owners can often weave together their intellectual property rights and physical property rights in contracts such as MTAs to allow each type of property right to reinforce the other. However, the control afforded by such a model can be used for both positive as well as negative purposes. The Article uses the case of the control of stem cell patents and stem cell lines by Wisconsin Alumni Research Foundation (WARF) and its affiliate, the WiCell Research Institute, to illuminate this new trend in the life sciences. While the current stem cell research landscape is dominated by WARF's position, the Article offers ways that the California Institute for Regenerative Medicine (CIRM) and other public entities may use de facto research use exemptions to patent infringement to evade some of the reach of WARF's patents. The Article concludes by recommending that CIRM, and other stem cell research facilitators, initiate a comprehensive title chain plan that would govern biological materials from their original collection from donors through the materials' transfer first to non-commercial research entities and ultimately to commercialization firms. In this way, CIRM could play a role in encouraging positive uses of the lease-license model that could reduce the confusion and conflict currently surrounding the ownership, control, and use of biological materials in the life sciences