[Federal Register Volume 69, Number 223 (Friday, November 19, 2004)]
[Notices]
[Pages 67747-67748]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-25671]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

National Institutes of Health


Best Practices for the Licensing of Genomic Inventions

AGENCY: National Institutes of Health, Public Health Service, Health 
and Human Services (HHS).

ACTION: Notice of proposed best practices for the licensing of genomic 
inventions; request for comments.

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SUMMARY: The Public Health Service's (PHS) primary mission is to 
acquire new knowledge through the conduct and support of biomedical 
research to improve the health of the American people. PHS seeks to 
maximize the public benefit whenever PHS owned or funded technologies 
are transferred to the commercial sector. These best practices for the 
licensing of government-funded genomic inventions are recommendations 
to the intramural PHS technology transfer community as well as to PHS 
funding recipients.

DATES: Comments must be received no later than January 18, 2005.

ADDRESSES: Comments on the proposed best practices must be submitted 
to: Dr. Bonny Harbinger, Office of Technology Transfer, National 
Institutes of Health, 6011 Executive Blvd., Suite 325, Rockville, 
Maryland, 20852; telephone: (301) 594-7700; e-mail: 
[email protected].

SUPPLEMENTARY INFORMATION: 

Best Practices for the Licensing of Genomic Inventions

Introduction

    The Public Health Service's (PHS) primary mission is to acquire new 
knowledge through the conduct and support of biomedical research to 
improve the health of the American people. This mission is advanced by 
the intramural research efforts of government-owned and -operated 
laboratories and by the extramural research efforts funded through 
grants and contracts. PHS seeks to maximize the public benefit whenever 
PHS owned or funded technologies are transferred to the commercial 
sector. Motivated by this goal, we offer the following best practices 
for the licensing of government-funded genomic inventions.
    Genomic inventions include a wide array of technologies and 
materials such as cDNAs; expressed sequence tags (ESTs); haplotypes; 
antisense molecules; small interfering RNAs (siRNAs); full-length genes 
and their expression products; as well as methods and instrumentation 
for the sequencing of genomes, quantification of nucleic acid 
molecules, detection of single nucleotide polymorphisms (SNPs), and 
genetic modifications. Much of the value associated with the commercial 
use of these technologies involves nucleic acid-based diagnostics, 
potential gene therapy applications, and the development of new DNA- 
and RNA-based therapeutics.

Background

    Among the benefits derived from PHS-conducted and -supported 
biomedical research are effective and accessible new healthcare 
treatments and services. Practical realization of these benefits 
depends on the ability and willingness of private sector partners to 
develop and commercialize new technologies arising from PHS conducted 
and funded research. For potential preventive, diagnostic, and 
therapeutic products, the interest of the private sector in 
commercializing new technologies often depends on the existence of 
patent protection on the technology in the United States and foreign 
countries.
    The Bayh-Dole Act of 1980 allows PHS grantees and contractors to 
seek patent protection on subject inventions made using Government 
funds and to license those inventions with the goal of promoting their 
utilization, commercialization, and public availability. Recipients of 
PHS grants and contracts have a role in implementing the requirements 
of the Bayh-Dole Act (http://s-edison.info.nih.gov/iEdison/www.iedison.gov). In 1986, Federal laboratories, including PHS research 
laboratories at the National Institutes of Health (NIH), the Food and 
Drug Administration (FDA), and the Centers for Disease Control and 
Prevention (CDC), were given a statutory mandate under the Federal 
Technology Transfer Act (Pub. L. 99-502) and Executive Order 12591 to 
ensure that new technologies developed in those laboratories were 
transferred to the private sector and commercialized.
    PHS recognizes that patenting and licensing genomic inventions 
presents formidable challenges for academic and government technology 
transfer programs because of the complexities in bringing these 
technologies to the marketplace in a way that balances the expansion of 
knowledge and direct public health benefit with the commercial needs of 
private interests.
    The following represents best practices recommendations to the 
intramural PHS technology transfer community as well as to 
universities, hospitals and other non-profit PHS funding recipients. 
These recommendations are not intended to constitute additional 
regulations, guidelines or conditions of award for any contract or 
grant, although they are consistent with existing policies set out in 
Sharing Biomedical Research Resources (http://ott.od.nih.gov/NewPages/RTguide_final.html) and Developing Sponsored Research Agreements 
(http://ott.od.nih.gov/NewPages/text-com.htm).

Patent Protection

    Like other emerging technology areas, patents directed to genomic 
inventions tend to issue with claims that are broad in scope. Public 
health-oriented technology transfer must balance the rewards of broad 
intellectual property protection afforded to founders of enabling 
genomic inventions with the benefits of fostering opportunities for 
those striving to improve upon those innovations.
    Therefore, in considering whether to seek patent protection on 
genomic inventions, institutional officials should consider whether 
significant further research and development by the private sector is 
required to bring the invention to practical and commercial 
application. Intellectual property protection should be sought when it 
is clear that private sector investment will be necessary to develop 
and make the invention widely available. By contrast, when significant 
further research and development investment is not required, such as 
with many research material and research tool technologies, best 
practices dictate that patent protection rarely should be sought.

Best Licensing Practices

    The optimal strategy to transfer and commercialize many genomic 
inventions is not always apparent at early stages of technology 
development. As an initial step in these instances, it may be prudent 
to protect the intellectual property rights to the invention. As 
definitive commercial pathways unfold, those embodiments of an 
invention requiring exclusive licensing as an incentive for commercial 
development of products or services can be distinguished from those 
that would best be disseminated non-exclusively in the marketplace.

[[Page 67748]]

    Whenever possible, non-exclusive licensing should be pursued as a 
best practice. A non-exclusive licensing approach favors and 
facilitates making broad enabling technologies and research uses of 
inventions widely available and accessible to the scientific community. 
When a genomic invention represents a component part or background to a 
commercial development, non-exclusive freedom-to-operate licensing may 
provide an appropriate and sufficient complement to existing exclusive 
intellectual property rights.
    In those cases where exclusive licensing is necessary to encourage 
research and development by private partners, best practices dictate 
that exclusive licenses should be appropriately tailored to ensure 
expeditious development of as many aspects of the technology as 
possible. Specific indications, fields of use, and territories should 
be limited to be commensurate with the abilities and commitment of 
licensees to bring the technology to market expeditiously.
    For example, patent claims to gene sequences could be licensed 
exclusively in a limited field of use drawn to development of antisense 
molecules in therapeutic protocols. Independent of such exclusive 
consideration, the same intellectual property rights could be licensed 
non-exclusively for diagnostic testing or as a research probe to study 
gene expression under varying physiological conditions.
    License agreements should be written with developmental milestones 
and benchmarks to ensure that the technology is fully developed by the 
licensee. The timely completion of milestones and benchmarks should be 
monitored and enforced. Best practices provide for modification or 
termination of licenses when progress toward commercialization is 
inadequate. Negotiated sublicensing terms and provisions optimally 
permit fair and appropriate participation of additional parties in the 
technology development process.
    Funding recipients and the intramural technology transfer community 
may find these recommendations helpful in achieving the universal goal 
of ensuring that public health consequences are considered when 
negotiating licenses for genomic technologies.
    PHS encourages licensing policies and strategies that maximize 
access, as well as commercial and research utilization of the 
technology to benefit the public health. For this reason, PHS believes 
that it is important for funding recipients and the intramural 
technology transfer community to reserve in their license agreements 
the right to use the licensed technologies for their own research and 
educational uses, and to allow other non-profit institutions to do the 
same.

Conclusion

    PHS recognizes that these recommendations generally reflect 
practices that may already be followed by most funding recipients and 
the intramural technology transfer community with regard to licensing 
of genomic and other technologies. PHS also acknowledges the need for 
flexibility in the licensing negotiation process as the requirements of 
individual license negotiations may vary and may not always be 
adaptable to these best practices.

    Dated: November 14, 2004.
Mark L. Rohrbaugh,
Director, Office of Technology Transfer, National Institutes of Health.
[FR Doc. 04-25671 Filed 11-18-04; 8:45 am]
BILLING CODE 4140-01-P