The Licensing Conundrum: How Licensing Can Facilitate (or Impede) Access to Research Models
by Megan M. MacBride, PhD
Animal models remain essential for drug discovery, especially models that are genetically engineered. Of note, models generated using CRISPR /Cas9 gene editing involve complex licensing issues, but any genetically engineered animal model could have access challenges if licensing is not taken into consideration early on. Well-publicized lawsuits have brought many potential issues to light, demonstrating the high stakes that are often involved. Understanding the intellectual property (IP) issues associated with the use of genetically engineered models (GEMs) can help investigators avoid running afoul of licensing restrictions and ensure proper protection for all parties involved. In this article, we address IP issues and strategies to gain access to animal models, particularly GEMs.
More GEMs, Better Models, More IP Risks
The use of GEMs has risen significantly as drug discovery has grown more complex and as new genetic engineering technologies have made possible more sophisticated GEMs as well as easier GEM generation. Through techniques such as genetic deletion, genetic insertion, and humanization at the cellular or tissue level, rodent models can be modified in ways that enable researchers to address more complex questions than may be possible with standard mouse strains, with the promise of providing more translatable results. The increase in biologic drug discovery has fueled even greater use of GEMs, since a GEM with a humanized target protein allows investigators to study the human drug, as opposed to conducting preclinical studies with a surrogate.
As the number of GEMs and their use has risen, the issues associated with sharing these models across institutions have grown more complicated. Unlike the standard, off-the-shelf rodent strains that once served as the primary tools for preclinical research, GEMs typically require substantial time and costs to develop.
Understandably, the organizations that fund a GEM’s development have a strong vested interest in recouping those costs, for example, by distributing the model to other organizations, including licensing to for-profit entities. When a GEM is critical for the discovery or development of a blockbuster drug, the revenue potential from licensing can be significant, raising the stakes even higher. The current research outsourcing trend further complicates matters, since there are often multiple parties involved in the use of a GEM.
Take Proactive Measures
Whether developing or using a GEM, it is critical to ascertain whether proper due diligence on IP matters has been done along the way, especially if the model comprises material from multiple sources. If every party involved in a GEM’s development has conducted its due diligence and ensured the necessary IP protection is in place, there is nothing to worry about. Unfortunately, that does not always happen.
The use of GEMs that originate in academic or government institutions can present unforeseen issues particular to those institutions. When GEMs used in academic settings are not intended for commercial distribution, the models and associated materials are often shared between institutions under simple material transfer agreements (MTAs, see below for more detail). However, it is increasingly common for academic institutions to engage in research sponsored by a for-profit entity that eventually makes its way into commercial application. If such research involves a GEM, the institution must ensure it has the right to use the GEM in research that potentially benefits a for-profit entity.
How a GEM is used also can impact the degree to which IP issues prove problematic. Generally, the closer the model gets to the therapeutic itself, the greater the risk of IP disputes, in part due to the tremendous revenue potential involved. The higher the licensing value, the tighter the restrictions and the greater the risk of IP controversy. Biologic drugs represent a very visible example of this reality.
While most GEMs are used in basic research, they are also increasingly used to produce human monoclonal antibodies that can serve as new biologic drugs or to identify antibody or T cell receptor fragments which can be further engineered into a therapeutic. When it comes to development and use of the requisite model, however, the path is not always straightforward.
For example, an investigator may obtain a model with the intent to produce a human monoclonal antibody, then identify a sequence from the antibody that is ultimately used in the development of a chimeric antigen receptor (CAR)-T cell therapy. Before the CAR-T cell therapy can be approved and brought to market, the institution that developed it must be certain it has IP rights to all the materials involved. Otherwise, it’s possible another party may claim “reach-through” rights to the drug derived from the model. Even if the material involved isn’t protected by a patent, there is risk of liability if it is used in a manner inconsistent with the restrictions under which it was transferred as well as potentially invalidating or precluding future claims due to premature disclosure, intended or not. See the Examples for cases that encountered related issues.
The potential for such disputes became apparent when several high-profile lawsuits were filed in connection with biologics. In one of the most publicized cases, Regeneron Pharmaceuticals filed suit against Ablexis, alleging the company infringed on a Regeneron patented technology used to develop a GEM that produces part-human and part-mouse antibodies, which can be employed to develop biologic therapeutics. Though the case was settled1 (when it was determined Ablexis had designed its model to avoid patent infringement) and the Regeneron patent rendered unenforceable (when Regeneron was found guilty of misconduct during patent prosecution), the point had been made: When using a GEM, improper attention to IP issues can have consequences – time, money, resources, and opportunity costs.1
Given that immunotherapy presents tremendous potential to transform cancer treatment, it is not surprising that IP disputes have arisen in this arena as well. In one such case, investigators at St. Jude Children’s Research Hospital developed a DNA construct for a chimeric T cell receptor and shared it with the University of Pennsylvania. Though the agreement only permitted Penn preclinical use of the material, Penn researchers developed a new vector that incorporated the St. Jude DNA sequence, then licensed CAR-T therapy technology based on the vector to Novartis. Concurrently, St. Jude leveraged the DNA construct to develop and patent its own CAR-T technology, which it licensed to Juno Therapeutics. Novartis and Juno filed suit against each other, and eventually Novartis settled with Juno2 to the tune of $12 million in upfront fees, plus milestone payments and royalties.2
The Agreement is Key
Various types of transfer and use agreements may be negotiated when acquiring a genetically engineered animal research model. Understanding the rights afforded by the agreement is critical to avoiding IP issues down the road.
Material Transfer Agreement (MTA)
MTAs are often used when transferring animal models or other biological materials (such as cell lines or antibodies) between nonprofit institutions, although sometimes the term MTA is used loosely to refer to any usage agreement. An MTA usually specifies that:
- the material cannot be used in humans;
- is only for internal non-for-profit research;
- is restricted to the recipient researcher named in the agreement;
- cannot be distributed by the recipient without the provider’s written consent.
In some cases, the MTA may also:
- carry an expiration date (after which time, the material must be destroyed);
- specify terms related to authorship of publications using the material;
- specify terms related to distribution of modifications the recipient makes to the material;
- grant back rights to such modified
Keep in mind: The contribution to the agreement by the investigator who will use the material may be only to provide use cases to specify field of use. If this investigator isn’t directly involved in the MTA process, however, he/she may unintentionally violate the agreement simply by failing to realize it is specific to a particular research application or forgetting that it carries an expiration date and may require renewal. Those negotiating the agreement may consider providing a summary of the terms and conditions of the agreement with the investigator, meeting with the investigator, and offering in-house refreshers on responsibilities related to research agreements.
In contrast, a license agreement is typically used when transferring usage rights to a commercial organization, and it usually involves an upfront fee and/or annual maintenance fees. A signed, written license agreement may take weeks or even months to negotiate, review, and execute, which can impact a project’s timelines.
Certain commercial GEM vendors make use of something called a label license, which is more akin to the licensing involved when purchasing off-the-shelf software applications: The terms are considered accepted upon purchase, with no signature or additional fee required, which speeds the model acquisition process.
The Complications of CRISPR
Various genetic modification technologies have been used over the course of time to generate GEMs. Many of those technologies have long since expired, but that does not mean a model developed using the technology is free of restrictions, as noted earlier. Many models developed using genetic modification technology could involve IP issues; the new technology most often associated with IP risks is CRISPR/Cas9.
CRISPR can be used for a variety of in vivo genetic modifications, including developing gene knockouts, introducing conditional alleles, and inserting point mutations or foreign DNA segments. Because CRISPR doesn’t require the same labor-intensive steps as embryonic stem cell targeting, it enables GEMs to be developed on a faster timeline and typically at a lower cost, making it an increasingly popular choice. Because CRISPR technology has been patented by multiple organizations, however, its use raises unique IP issues.
Dr. Jennifer Doudna and Dr. Emmanuelle Charpentier had worked on developing the CRISPR/Cas9 technology independently, then joined forces on their investigative work and together applied for a patent with the United States Patent and Trademark Office (USPTO) in May 2012. The patent cites Doudna (Berkeley, CA), Martin Jinek (Berkeley, CA), Emmanuelle Charpentier (Braunschweig, DE), and Krzysztof Chylinski (Vienna, AT) as inventors, and The Regents of the University of California, The University of Vienna, and Emmanuelle Charpentier as the applicants.
Concurrently, Dr. Feng Zhang was conducting CRISPR work on eukaryotic cells at the Massachusetts Institute of Technology and The Broad Institute. The Broad filed a patent in December 2012 listing Zhang as the inventor, but because the Broad applied for an accelerated examination, the institute was able to obtain the first CRISPR patent (in April 2014), ahead of UC Berkeley. Though the Broad’s patent covers CRISPR use in eukaryotic cells only, UC Berkeley claimed the Broad’s patent was too similar to its earlier application. An appeals board ruled in favor of the Broad, stating that each invention was patentable on its own. UC Berkeley’s subsequent appeal of the decision failed, and it received its own CRISPR patent in June 2018, covering gene editing outside of bacterial and archaeal cells.
The inventors of the CRISPR technology have since formed companies with the purpose of licensing it to commercial organizations. To date, three companies (CRISPR Therapeutics, Intellia Therapeutics, and Editas Medicine) are permitted to license CRISPR to organizations developing human therapeutics, while two others (ERS Genomics and Caribou Biosciences) can only license the technology to those not using CRISPR for direct human therapeutics (as shown in Figure 1).
An investigator planning to acquire a model generated using CRISPR should ensure the proper licenses have been procured by the organization generating the model. In some cases, model generation companies obtain licenses that cover both the UC Berkeley patented technology and the Broad Institute patented technology. Though the Broad specifically grants use of its CRISPR technology to nonprofit institutions without requiring a license, due to the complexities reviewed earlier– including the potential for a nonprofit’s work to make its way into the commercial market – investigators working in any setting could run into IP issues when using a CRISPR-generated model.
As CRISPR technology evolves, it is anticipated that more CRISPR patents will emerge, requiring investigators and model providers to stay abreast of the latest developments and ensure that models generated using the technology are protected appropriately.
Though GEMs can present IP issues, it is relatively easy to conduct the due diligence necessary to acquire and use them without concern. The primary considerations are knowing where the material came from and how the recipient organization plans to use it.
Before acquiring a GEM from any source, it is vital to determine where and how the model was developed, whether any of the associated materials originated from third parties, the technologies used in generating the model, and whether those technologies are patented or otherwise restricted in use. For example, some GEMs may be covered by one or more patents – whether a patent on the model itself, the specific genetic modification involved, the methods used in the model, or the technology used to generate it. In many cases, patent holders may be separate entities from the institution which generated the materials.
It is common for patent holders to allow a nonprofit institution to use materials or technologies for non-commercial use without requiring a license, though it usually prohibits the sale, transfer or licensing of materials covered by the patent or generated using the patented technology. It is it up to the organization acquiring a GEM to determine whether it is restricted by patents and to ensure it has the rights to use the model as it intends. Doing so can help in assessing whether the proper licenses are in place or if additional rights must be obtained.
Regardless of the agreement type, most model use agreements prohibit transferring the material to other parties – a term that can have significant implications in the current research environment. Even if the investigator’s short- term plans are not commercial in nature, if it’s possible the material developed in the course of the research could be commercialized down the road, it’s important to ensure such use is permitted.
Additionally, while the investigator may not be involved in negotiating the terms under which the GEM is received, it’s essential to become familiar with those terms so as not to unintentionally violate them. Limitations on the type of use permitted and the length of the agreement are particularly noteworthy.
It is also wise to consider whether the organization plans to work with a contract research organization (CRO) or collaborator at some point, since many agreements expressly prohibit transferring GEMs to other parties. For instance, if an investigator intends to obtain a genetically engineered model, breed the model, then use the resulting cohort in a study that will be outsourced to a CRO, it’s possible the original agreement wouldn’t allow such usage.
Investigators in nonprofit settings who have generated GEMs using patented technologies and who wish to distribute their GEM should consider depositing the model in a repository rather than trying to arrange direct distribution. If the repository has the proper licenses, the GEM can be placed into the repository and made available for distribution to a wider group of investigators, which may even include commercial researchers.
These issues are most acute for commercial users, many of whom will preferentially source their GEMs from vendors who can provide assurance of appropriate rights for models they distribute and/or generate de novo. Because the risk can be so great, they may even choose to remake an existing model which is otherwise available from an academic source. Although this may lengthen the timeline to access a model, the assurance of critical use rights and the ability to skip sometimes-prolonged license negotiations with a university technology transfer office may make this option preferred.
Accessing the most relevant animal model for a specific application remains vital to conducting effective, translatable research. When using GEMs, simple due diligence steps can go a long way toward reducing potentially costly IP risks and facilitating access to these essential research tools.JoPM
Megan MacBride is Director, Product Marketing at Taconic Biosciences. She holds a Ph.D. in chemistry from the Pennsylvania State University and has 13 years of experience in product management across various animal model segments
Figure 1: The CRISPR IP landscape is complex, comprising multiple patent holders and various entities permitted to license the technology to commercial organizations. We show the landscape of inventors, institutions, and companies involved with claims to rights-of-use.
- Ablexis Announces Availability of the AlivaMab Mouse Technology and Set- tlement of the Litigation with Regeneron Pharmaceuticals, Inc., December 4, 2014, http://www.ablexis.com/pdfs/ablexis-news-120414.pdf
- Novartis to Pay Juno $12.25M+ to Settle CAR Patent Lawsuits, April 6, 2015, https://www.genecom/topics/translational-medicine/novartis-to- pay-juno-12-25m-to-settle-car-patent-lawsuits/81251117/