Columbia Seeks 15-Month Extension On Its Cotransformation Patent as Matter of Fairness.

Business Editors

NEW YORK--(BUSINESS WIRE)--May 19, 2000

Columbia University is seeking a 15-month patent extension that would allow the university to continue to collect a 1% royalty on drugs developed through its cotransfirmation patent. Columbia's efforts concern a technicality in the Hatch-Waxman Act that does not allow the extension of patents that were not subject to FDA review and approval.

University officials believe this extension, if granted, would not have an adverse effect on consumers. They are not asking for a Congressional appropriation. The university has requested that Sen. Judd Gregg introduce an amendment to Hatch-Waxman that would allow the university to request a patent extension. Sen. Gregg is a member of two key Senate committees: the Appropriations Committee, which has jurisdiction over the Patents and Trademarks Office, and the Health, Education, Labor and Pension Committee, which is the committee that previously dealt with the Hatch-Waxman Act.

Columbia expects that a patent extension, if granted, would be for approximately 15 months, and would result in an additional $70 to $100 million in additional revenue, which would then, by law, be used for research and education.

Background

The request to make the Columbia patent eligible for a possible 15-month extension is based on the following facts:

In 1983 Columbia University was assigned a patent derived from a basic scientific research project, for a process called "cotransformation," which created specific new proteins used to develop new drugs that could not be produced prior to the cotransformation process. Columbia grants a license to any pharmaceutical company that requests one.

These drugs have been used to treat:

 - Heart and stroke problems
 - Breast cancer
 - Cystic fibrosis
 - Anemia
 - Multiple sclerosis
 - Rheumatoid arthritis
 - Infertility
 - Hemophilia

The pharmaceutical companies that have developed drugs based on the Columbia's technology have had cumulative sales of more than $28 billion. By the estimate of one Columbia economist, the tax revenue on these sales is at least 11 times the federal investment in the original research project. And Columbia has received $280 million in patent revenue, which, by law, Columbia has plowed back into research and education. (Columbia collects no royalty on drug sales to federal agencies such as the Veterans Administration.)

Scientific research is expensive, difficult to fund and financially risky. To encourage universities and small businesses to bring the results of research to the market in the form of new technologies and pharmaceutical products, the federal government, through the Bayh-Dole Act, granted them the right, through patents, to transfer research results to the market for the public benefit. Additionally, the Hatch-Waxman Act of 1984 allows patent holders to request partial restoration of a patent due to the time lost during the FDA approval process.

Because the drugs developed through the cotransformation patent, and not the patent itself, were subject to FDA review, the Hatch-Waxman Act does not enable Columbia to request an extension of the cotransformation patent. But royalty revenue to Columbia was delayed by the FDA review, and therefore, Columbia believes that it, too, is entitled to a patent extension.

The university is NOT seeking to extend its patent through an act of Congress, but rather has asked Sen. Gregg to seek legislation that would allow it to request a patent extension. Because Columbia's patent expires in August, the university needs an immediate legislative remedy.

Columbia expects that a patent extension, if granted, would be for approximately 15 months, and would result in an additional $70 to $100 million in additional revenue. Although Columbia has a large annual budget and endowment, almost all of that money is tied to supporting the education and medical care the university and its health care center provide along with specifically funded research projects. The revenue from the contransformation patent is especially important because it will be used as research seed money, allowing world-class researchers to pursue research that may ultimately lead to new developments that would benefit the public.