CellPro, Inc. Petition to Invoke "March-In" Rights

August 1997

On March 3, 1997, legal representatives of CellPro, Inc. (CellPro) asked the U.S. Secretary of Health and Human Services to invoke Federal "march-in" rights under the Bayh-Dole Act of 1980 with regard to certain inventions made by Johns Hopkins University (JHU) and licensed to Baxter Health Care Corporation (Baxter). The inventions relate to stem cell technology. CellPro submitted its petition after a finding of willful infringement by the U.S. District Court for the District of Delaware.

NIH has prepared the following background information to assist the media in reporting on this matter.

1. What are the Government's "march-in" rights under Bayh-Dole?

The Bayh-Dole Act of 1980 was a patent reform effort designed to harmonize Federal patent policy and to promote the effective commercialization of government-funded research. By strengthening confidence in patent rights and providing a uniform national policy, the Act encourages universities, small businesses and private industry to invest the resources necessary to develop and commercialize inventions supported by public dollars.

Many health care products and services are brought to the market as a result of the patent and exclusive license authorities in the Bayh-Dole Act, which protect private sector investment in costly clinical development and FDA approval processes.

Under the Act, recipients of Federal funding have responsibility for the patenting and licensing new discoveries arising out of publicly funded research. However, the Act reserves certain rights for the funding agency, including "march-in." March-in allows a funding agency to require the grantee, contractor, or its licensee to grant a license on reasonable terms to a responsible applicant. The statute and its implementing regulations provide that an agency may exercise march-in if the agency finds that:

CellPro's petition was assessed under the first two criteria.

2. How did the Director of NIH make this decision? What does the decision mean?

Dr. Harold Varmus, Director of the NIH, has the delegated authority to make a march-in determination as the invention at issue was made with NIH funding. NIH evaluated whether march-in proceedings were warranted based on the statutory criteria. NIH considered the submissions of CellPro and JHU, letters from Members of Congress and the public, and other pertinent material. The Director determined that a march-in proceeding was not warranted. Neither JHU, the grantee, or Baxter, the licensee, will be required to grant a license for the disputed stem cell technology to CellPro.

3. Did the Secretary, HHS or the Director, NIH receive any public comments about the march-in petition and the technologies involved? Are the submissions of the parties available to the public?

Both the Secretary and the Director received numerous letters in support of and in opposition to the march-in petition. Comments were received from Congressional representatives, universities, patient advocacy groups, and interested members of the public. All pertinent communications to the Department were taken into account.

The materials, including the submissions of the parties, will be available for public inspection in the Freedom of Information Reading Room on the NIH campus. For more information, please call the Reading Room at (301) 496-8740 between the hours of 8:30 a.m. and 5:00 p.m. EST.

4. Is there a health threat to patients?

Both the CellPro Ceprate SC and the Baxter Isolex 300, the stem cell technologies in dispute, are currently available to patients either as licensed products or under clinical research protocols. The injunction recently issued by the federal court does not change this. Baxter has committed to ensuring that there will be no gap in patient access to stem cell technology as a result of the injunction. Should CellPro choose to withdraw its Ceprate device from any clinical sites, Baxter has committed to installing their Isolex device in its place. We intend to hold Baxter to these pledges and expect that JHU and Baxter, together, will ensure that there is no threat to patients.

NIH will continue to monitor patient access to the CellPro and Baxter devices during the period prior to approval of a comparable alternative device.

5. The FDA Biological Modifiers Advisory Committee recently met to discuss Baxter's premarketing approval application for the Isolex 300. What is the result of that meeting?

At its July 24 meeting, the Biological Modifiers Advisory Committee (BMAC) discussed Baxter's premarketing approval (PMA) application for the use of the Isolex 300 in concentrating certain stem celcl from peripheral blood to restore the bone marrow in autologous transplants. A majority of the BMAC members found that the data presented adequately illustrated that the device yields a purified cell population, allowing effective transplantation and engraftment. The FDA will take the comments of the BMAC under advisement when making its determination on Baxter's PMA.

NIH will follow FDA activities as part of its effort to monitor patient access to the CellPro and Baxter devices.