The Law That Catalyzed Nobel Prize-Winning Research At UC Berkeley

U.C. Berkeley biochemist Dr. Jennifer Doudna and her collaborator, Emmanuel Charpentier, recently won a Nobel Prize for their work on CRISPR, the revolutionary gene-editing technology that could help eradicate genetic disorders, create fossil fuel alternatives, improve crops, and improve the health of livestock.

Dr. Doudna's breakthroughs, and others, received a boost from a little-known law -- the Bayh-Dole Act.

The law induces private sector investment into R&D projects that commercialize university research. It also allows universities to retain the resulting royalties. Royalty payments earned by U.C. Berkeley reward inventors, support teaching, bolster public service, and fund research infrastructure -- such as a building that first housed Dr. Doudna's Innovative Genomics Institute -- a hotbed of research on CRISPR.

Congress passed the Bayh-Dole Act in 1980 to grant ownership of patents covering inventions its researchers discover using federal funds. Before its enactment, the federal government owned the patents. The government's process for turning those discoveries into real-life products was inefficient, and inventions languished.

Once federal grantees could own their inventions -- and receive royalty payments for licensing them -- commercialization of these discoveries soared. The legislation has enabled the private sector to commercialize thousands of products, has led to the launch of more than 13,000 startups, and has brought over 200 medicines to pharmacy shelves nationwide.

One life-changing therapy invented on a college campus -- and one that advanced the entire field of cancer therapy-- is ipilimumab, known by its brand name Yervoy. In the mid-1990s, using grant funding from the National Institutes of Health, U.C. Berkeley immunologist Dr. James Allison discovered how to program a person's immune system to combat cancer.

Thanks to Bayh-Dole, U.C. Berkeley filed patents in 1995 to protect the invention. Patents proved critical, as drug manufacturers do not invest in expensive, risky, and lengthy R&D projects without patent rights.

Still, the process of developing Yervoy was arduous because Dr. Allison's approach to battling cancer was unproven. To test whether Dr. Allison's approach would work, drug developers would need to take a giant leap of faith that "releasing the brake" in a patient's immune system would unleash its ability to seek out and destroy tumor cells.

Fortunately, in 1998, NeXstar licensed U.C. Berkeley's patents and began the drug development process. NeXstar was subsequently acquired by Gilead, which sub-licensed the rights to Medarex in 1999. Medarex humanized the antibody and attracted Bristol-Myers Squibb as a partner in 2005, which funded expensive clinical trials -- without any guarantee that they'd result in a commercially successful product -- and acquired Medarex in 2009 for $2.4 billion.

Yervoy finally won FDA approval in 2011 -- 16 years after patents were filed -- to treat metastatic melanoma, the deadliest form of skin cancer.

Dr. Allison's T-cell activating invention is now used to treat 15 types of cancer -- including Hodgkin lymphoma, colon cancer, and breast cancer. His ingenuity skyrocketed business investments in cancer immunotherapy and earned him a Nobel Prize in 2018.

Patents were necessary to attract private-sector investments by a series of companies. Universities do not have the resources, skills -- or the legal status or mandate -- to turn their researchers' ideas into consumer products.

Instead, universities protect promising discoveries by patenting them and licensing rights to the private sector, which performs the risky and challenging work of turning these discoveries into real-life treatments. In 2019 alone, America's largest biopharmaceutical companies invested $83 billion -- roughly double the NIH's entire budget -- into developing breakthrough medicines. Private investors poured billions more into small startups.

Thanks to the commercial success of Yervoy, tens of millions of dollars were reinvested into research at U.C. Berkeley to refuel the cycle of innovation.

Unfortunately, some misconceptions about Bayh-Dole could chill future private-sector interest in developing university discoveries. Some critics have suggested using Bayh-Dole's march-in rights -- which allow the government to re-license patents in rare circumstances -- to dictate the price of drugs. No drug developer will invest billions into unproven technologies if the government could intervene to limit drug prices, profits, and the return on investment. Instead, a drug developer would turn to company-funded research discoveries that are free of government pricing encumbrances. The pre-Bayh-Dole era of languishing university inventions would return.

Critics who propose using Bayh-Dole to control drug prices continue to argue their case but have not yet succeeded. To date, the NIH has rejected 10 petitions to exercise march-in rights, confirming Congress's intent.

For 40 years, Bayh-Dole has created a policy environment where scientific innovation -- kickstarted by federal research grants but overwhelmingly funded by the private sector -- can flourish. And as long as politicians don't misconstrue the law to serve a different purpose, it'll enable lifesaving breakthroughs such as those of Dr. Doudna, Dr. Allison, and many others for decades to come.

Carol Mimura is the Former Executive Director of the Office of Technology Licensing at the University of California, Berkeley and current U.C. Berkeley Assistant Vice Chancellor for Intellectual Property & Industry Research Alliances.