Agency’s aggressive patent management protects public, professors

Paulanne Chelf recalls that near the end of a meeting in late 1994, the researcher warned her what was coming. The man, then not yet 40 years old, came to the offices of the Wisconsin Alumni Research Foundation, where Chelf works as an intellectual-property manager, to discuss patenting some new techniques he’d invented in his laboratory.

It was at the end of the meeting that James Thomson looked at Pauline Chelf and said, matter-of-factly, “You know, this is going to be really big someday.”

At the time, Chelf didn’t think much about the prediction. Thomson was still three years away from his historic work isolating human embryonic stem cells. In 1994, when Chelf was assigned to handle his patent case, he had accomplished the feat only in monkeys. Chelf had met with enough investigators to know that they sometimes got caught up in the optimism of their professions.

“Everybody thinks that their invention is the greatest thing that ever happened,” she says.

If Chelf has learned to temper the enthusiasm of UW–Madison inventors, however, she has also learned to bank on their abilities — a formula that has rarely failed her employer, which has been patenting and licensing UW research for more than 75 years. Today, WARF has one of the most envied file cabinets in science, with about 1,700 active patents — including not one but two patents resulting from Thomson’s stem-cell work.

Since its founding by nine UW alumni in 1925, the nonprofit foundation has operated mostly below the radar, fulfilling its mission of protecting and commercializing the fruits of UW research with little fanfare. Now, with the stem-cell spotlight focused on WARF, a few national media have taken to calling the agency, somewhat ignominiously, the “800-pound gorilla” of stem-cell research.

The label is ironic, considering that stem cells are far from a ripe banana in the intellectual-property jungle. If there is a gorilla in the mist, it’s WARF’s formidable endowment, built from a long list of patenting successes. Income from that fund is dedicated to enhancing UW–Madison research, and over the years, it has paid out more than $620 million. While WARF money makes up only about 5 percent of the university’s total research budget, administrators regard it as the gear that drives the bigger wheels.

“We consider it our margin of excellence,” says Martin Cadwallader, interim dean of the Graduate School.

John Jenkins and David Cronon, authors of the official history of UW–Madison, go even further, writing, “WARF is arguably the single most important reason why the University of Wisconsin emerged as one of the nation’s great research universities in the second half of the twentieth century.”

WARF’s work begins at the moment after “Eureka!” As Chelf, a former microbiologist, says, “When you break out the champagne in your laboratory — that’s a good time to call us.” In about six cases out of 10, WARF decides to go after patent rights. Patents are almost never approved when they’re first filed, and the negotiations can take years to resolve.

Patents essentially give their holders the right to operate as a government-protected monopoly for a designated period of time, usually 20 years from when a patent application is filed. It’s a tradeoff: You, as the inventor, have to publicly disclose what you’ve done and how you did it, and in return, the government gives you a window of time to control your invention. Without your active enforcement, your patent isn’t worth much. It doesn’t legally include you in business related to your work — but it gives you the right to exclude others. It’s up to you to take advantage of the protection, by developing an invention yourself, or cutting deals with companies that will.

To move research into the public sphere, WARF turns to its deal-makers. Even before the patent is in hand, licensing managers work out agreements with companies that want to use or sell the work. Typically, a company agrees to pay royalties to WARF for the right to commercialize the invention. Last year, the foundation signed more than 100 such agreements, which could end up returning millions in income. Some of WARF’s most lucrative patents over the years — which include vitamin D fortification techniques, magnetic resource imaging technology, and the rat poison Warfarin — have been veritable gold mines during their active lives.

But Carl Gulbrandsen, WARF’s managing director, says the foundation shouldn’t be judged by the depth of its revenue stream alone. He says an equally important mission is to facilitate the flow of research from idea to finished product — to help it along its way to becoming a product or service that people need. WARF’s stem-cell patents, he says, are a good example. While many have voiced concern that the patents put WARF in a position to control the research, Gulbrandsen sees the patents as a way to assure that stem-cell research won’t be dictated by a small number of labs.

“One reason we have filed patent applications in some areas is to ensure that researchers here have freedom to operate,” he says. “It takes the fun out of your research if somebody else owns it, and particularly if someone else can direct what you can do with it. If industry is going to own all the technology, and we’re beholden to them to have rights to do the research, industry is going to set the agenda. If academia owns the technology, then academia can use it the way it wants to.”

Compared to the often snail-like pace of academic publishing, the patent process can look comparatively swift. Animal Science Professor Mark Cook recalls that he once discussed an invention with a reporter, not realizing that the patent application hadn’t been filed. Such a disclosure starts the clock on U.S. patents and could invalidate patent claims entirely in some countries. “I called WARF and said, “You’ve got until the evening news to get it done.’ They got it filed by 5 o’clock,” Cook says. “WARF can move very quickly if it needs to.”

A version of this story originally appeared in On Wisconsin, the university alumni magazine.