Aust researchers' IP rights at risk in NIH grab

Australian scientists with funding from the US National Institutes of Health (NIH) are in danger of losing their rights to intellectual property resulting from their research.

In a little-publicised notice released in mid-March, the NIH said it planned to modify its policies to take control of foreign intellectual property resulting from NIH-funded research.

The planned changes have taken local scientists by surprise.

"There was no big splash about it, no one got letters about it," said WEHI's Prof Nic Nicola, who with colleague Prof Don Metcalf has held NIH funding for 20 years.

Nicola said he first heard about the policy changes in a National Institute of Allergy and Infectious Diseases newsletter sent to a colleague.

"Sound public policy dictates that benefits of NIH-funded technology must be consistent with the best interest of US citizens. Intellectual property developed with NIH funding should be managed to provide the maximum benefit to the health of those citizens," reads the NIH notice in part.

"The automatic release to foreign entities of intellectual property developed at the expense of US taxpayers could lead to a competitive disadvantage for US firms or lead to a situation where a technology with significant public health benefit is controlled by a foreign entity. Accordingly, NIH has decided to pursue policy measures that will afford the government better control over the disposition of right and title to inventions made by foreign entities under NIH funding agreements."

The planned changes would provide the US government with worldwide rights, title and interest to all IP developed by a foreign recipient of NIH funding. The developer of the IP would be able to retain rights within their own country only.

In a letter sent to the chief of the Extramural Inventions and Technology Resources Branch at the NIH's Office of Extramural Research, Nicola and Metcalf have outlined their reservations about the new policy and appealed to the NIH to reconsider.

Nicola said that the policy went against US policies enacted in the Bayh-Dole Act of 1980. Under this Act, the funding bodies including the NIH do not have the rights to funding-supported research discoveries, and do not have the authority to dictate licensing or commercialisation terms for these discoveries.

The Act was designed to facilitate the development and commercialisation of government-funded inventions by the private sector.

"The argument we made to them is that this is just an extension of the Bayh-Dole Act," Nicola said.

The letter cited Nicola and Metcalf's own research as an example of foreign research that had contributed to the US economy.

Their discovery of GM-CSF, which was originally patented in Australia, has been licensed to US companies Amgen, Immunex and Schering, and in combination with their other discovery of G-CSF generates more than $US1.5 billion per year for the US economy.

"The message here is that the US is in a dominant position to exploit medical discoveries no matter where they are made and whether there is or isn't a foreign patent in place," Nicola and Metcalf wrote in their letter.

Nicola said that it was not clear how the policy would be implemented.

One of the issues, according to Nicola, was that Australian recipients of NIH funding were not dependent on it as their sole source of funding. NIH grants to foreign researchers do not pay for any overhead costs.

"It's always partial funding," he said. "If they take the attitude that the NIH gets the rights to funding regardless of other funding partners, there is a problem. How are they going to interpret the rule and take into account other interests?"

He explained that in a project funded by several different groups, including the NIH, it would be a denial of natural justice for the US Government to claim control of the IP.

Commercial organisations might resort to litigation, he warned.

Nicola said a second issue that needed clarification was the claim that exceptions would be considered on a case-by-case basis.

Nicola said that if the policy were implemented, many Australian recipients of NIH funding would be forced to reconsider acceptance of the grants.

"In our case, we would not be able to accept grants from the NIH under those terms," he said, explaining that a large amount of the research performed by his team was commercially focussed, and driven with industry partners.

Currently, eight WEHI principle investigators hold NIH funding, with more researchers in the process of obtaining grants and others who have held NIH grants in the past.

According to a report in The Age on June 12, the NIH funded a total of about 44 research projects in Australia last year to the tune of $15 million.