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Universities generally allow other institutions to use patented technologies without special permission. WARF, however, requires universities to get a license to do embryonic stem cell research. “None of us understand why we need a license…Why is this technology any different?” says one technology-transfer official.

WARF officials emphasize that they have made licenses broadly available. “We have given 54 different research groups in California royalty-free licenses,” says WARF’s Cohn. “Those academic researchers can patent anything they find and publish anything they find without any oversight from us.” WARF does not disclose specific details of licenses.

But license requirements could still impact early research and development. “A number of institutions have not been able to reach terms with WARF for licenses,” says Kenneth Taymor, an attorney with the Stanford Program on Stem Cells in Society. “That suggests that in this research area, it’s making impediments.”

The license for the University of California, for example, permits scientists to use only a small number of embryonic stem cell lines. And the license granted to the Howard Hughes Medical Institute, a nonprofit medical research organization that funds scientists across the nation, prohibits scientists from accepting funding from or collaborating with commercial companies unless the company has a commercial license from WARF. (Some companies have chosen not to take a license because of the cost.) That could make it difficult for academics to partner with companies to develop their discoveries into products or therapies.

This inability to gain industry investments is of particular concern in the embryonic stem cell field. Since federal funding is limited (due to restrictions mandated by President Bush in 2001), experts predict that much early-stage stem cell research that usually would take place at universities will need to be done by biotech companies.

Licensing costs could also hinder scientists who want to start their own biotech companies. “I think there has been a lot of concern from investors about funding startup companies because of uncertainty over WARF patent coverage,” says Warren.

Jeanne Loring, a scientist at the Burnham Institute for Medical Research in La Jolla, CA, started a short-lived embryonic stem cell company several years ago. “I learned from venture capital investors that these patents existed and that it would be impossible to obtain funding from them,” she says.

So far, WARF has not been aggressive in enforcing its patents, says Taymor. (In principle, it could take legal action against those studying embryonic stem cells without a license.) “But as there are more dollars on the table, there is more incentive for WARF to become more aggressive,” Taymor says. “The more that WARF presses its rights, the more research will be impinged and the more likely it will move offshore.”

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