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The ivory tower has never completely isolated scholars from the grubbiness of life on earth. For decades sports teams, federal research grants, and museums all have brought cash through university gates. Even so, academics could see walls separating their pursuits from those of the practical world. Last year a single blow leveled those walls. In October 2002 a three-judge panel of the U.S. Court of Appeals for the Federal Circuit ruled in Madey v. Duke that university scientists can be sued if they infringe a patent while conducting research. The ruling came as a surprise to many university researchers and their lawyers, who believed that an almost-200-year-old experimental-use exemption protected them from suits. As long as they were conducting research in the name of science — not profits — professors and doctoral students thought they were free to use patented tools. Since then, nervous university officials have been warning that corporate lawyers, emboldened by the decision, could halt campus research and curb technological progress. These initial cries from campuses signal the beginning of a tumultuous relationship between universities and high technology businesses. Now attorneys on both sides are reconsidering their negotiating tactics for intellectual property deals. Anticipating trouble, academic organizations are asking members to report instances of companies playing hardball over basic science patents — data they soon may use to lobby Congress for protection against infringement suits. University scientists are worried that they may now have to seek permission from, or pay fees to, companies before conducting research. As companies start to flex their muscle, campus scientists may have to promise to share research results with a limited group of scientists under a company’s control. They may even have to stop their research efforts entirely. “Scientists are such an amazing subgroup of our society. If we were to try to harness or rein them in, say don’t look over there or don’t look over there, it would hurt us all,” says Kathleen Denis, Rockefeller University’s associate vice president for technology transfer. John Madey, the physicist who initiated the suit against Duke University, is himself an academic. He ran a laser laboratory at Duke for several years. During that time, lab researchers used a laser that Madey had invented and patented before he arrived at the school. After a falling out with the administration, Madey left for the University of Hawaii, but Duke researchers continued to use his laser. Madey sued for infringement. Duke argued in court that it was exempt from infringement charges because its scientists used Madey’s laser for instructional and noncommercial research. While the judges agreed that a person running experiments “for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry” is indeed free to infringe patents, they said that most university research goes beyond carefree investigation. When professors make breakthroughs, noted the judges, they commonly earn grants, attract other faculty, and otherwise achieve the school’s “legitimate business objectives.” Scientific research in academia is no longer independent or idle enough to merit special dispensation from the law, the judges said, rejecting Duke’s argument. Duke’s lawyers had used a judge’s opinion from 1813 to justify an exemption, but they couldn’t escape a law passed in 1980. That year, legislators passed the Bayh-Dole Act to ensure that taxpayer-funded research would breed actual products for taxpayers. The law requires federal grantees to license discoveries if possible. Schools have taken the bait. In 2001, for example, 198 universities garnered a total of $1.1 billion from licensing technologies, according to the Association of University Technology Managers, a group of licensing officials. As universities increasingly partner with companies, third parties have sued them for infringing patents with greater frequency. But the litigation has tended to be isolated and nonthreatening. Last year, for instance, after one biotechnology company sued the Scripps Research Institute and its drug company partner, Merck KGaA, the court let Scripps off the hook. The reason: the experimental-use exemption. Many companies don’t want to generate bad publicity by suing a supposedly altruistic institution. But schools shouldn’t count on industry’s goodwill, cautions Stephen Merrill, coeditor of a three-year assessment of the patent system by the National Academy of Sciences that is being published this fall. “[Schools] are getting greedy” in the pursuit of intellectual property, he says. “I think some of [businesses'] inhibitions will drop the more aggressive they become.” In recent months companies have accused universities of illegitimately seeking patent extensions and using their intellectual property to block access to medicine. This summer Genentech Inc., and four other leading biotech companies asked a federal court to throw out a patent granted in 2002 to Columbia University. The companies accused the university of misleading the patent office into giving it a patent that was essentially identical to those that, during the past two decades, have earned the school $300 million in fees. Separately, a Harvard University-affiliated hospital, the Massachusetts Eye and Ear Institute, is in a patent and contract dispute with one of its commercial partners, QLT Inc., over an eye medication that has earned $274 million. The Duke decision has caught not just the attention of companies that perceive universities to be competitors. Companies already working on research with university scientists, and the many that hope to start such collaborations, also are reassessing the terms of their relationships to campuses. Corporations have signed “reach-through” licenses with schools. Conventionally, these contracts give a company freedom to use breakthroughs that a school laboratory may develop. In the aftermath of the Duke decision, companies are sure to demand more. Even before the decision, companies already had begun to push universities harder. Purportedly friendly companies, for instance, now ask schools for complete ownership of professors’ breakthroughs, says Karen Hersey, a patent lawyer for the Massachusetts Institute of Technology. More companies also want to approve professors’ publication of results, she says. And some, such as E.I. du Pont de Nemours & Co., want to know exactly who is conducting research with their tools, and what they are researching. Professors may resent these intrusions, as the tools they use are often simple do-it-yourself laboratory techniques, rather than elaborate devices like lasers. Given the stakes, however, professors may now agree to negotiate more and experiment less. “Researchers don’t want to be indentured servants for the companies,” says Hersey. University scientists will still come up with plenty of breakthroughs on their own, of course, without any contracts hanging over their heads. But, thanks to the Duke case, taxpayers may suffer a delay in seeing many of these breakthroughs, too. Companies that want to license such inventions now will want assurance that the university scientists didn’t infringe any research tool patents in the process, says Stephen Maebius, a Foley & Lardner lawyer who works with high-tech companies. Product development may be set back six months because of increased checking for contamination by patents. University administrators have their own narrow concern: a source of income they’ve come to count on will be squeezed. Internally, the Duke decision could raise administrative costs; Duke itself has already asked its academic departments to report any use of patented technologies in research, says a spokesman. Meanwhile, thanks to the increased risk of litigation, potential licensees will be lowering their offers to universities. “Certainly, the terms will be discounted,” says Maebius. The whine around campus right now: Congress should restore our research exemption. A collection of academic organizations in August began surveying 225 universities to see whether tech transfer officials are seeing an epidemic of demand letters from companies, and whether or not they affect fundamental science tools. Twenty years of university technology transfer has shown that university-industry deals often pay off for the public. In the aftermath of the Duke decision, companies have plenty of incentive to control research on campus and fewer obstacles to restrain them. The universities’ best option is to cry wolf to Congress, but they’re unlikely to receive help as long as they seem to be as hungry as one.

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