This section presents data from various studies showing that federal labs and PHS/NIH rank number one or among the top in terms of biotechnology and pharmaceutical patents, licensing activity and royalty income, and corroborates the data presented above from the Federal Bio-Technology Transfer Directory.

PHS/NIH Official Data

The NIH Data Book 1993 contains the most recent official data available regarding PHS technology transfer activities.13 This data generally matches that reported in the Directory, although PHS often reports different parameters. PHS reports receiving a total of 298 patents during the 8 year period FY1986-FY1992, while the Directory reports 311 from 1986-1992 (the Directory includes a few inventions that may not be included in PHS data, patents co-assigned to PHS and several assigned to individual PHS researchers). PHS and Directory data for patents issued in each year from 1986-1992 closely match, with the Directory presenting no more than 6 additional patents in any year in its PHS section than reported in the Data Book.

PHS reports a total of 418 licenses (license packages) granted FY1986-FY1992, with 72 granted in 1992. Of the total, 95 were exclusive licenses (23%), 319 (76%) were nonexclusive licenses and 4 were other licenses (undefined). The percentage of exclusive licenses granted (23%) closely matches that reported by the Directory (26%; based on invention licenses rather than invention packages). PHS reports a license/invention ratio of 3.3/1 based on 298 patents from FY1986-FY1992, while the Directory reports a ratio of 4.4/1 (a number expected to be higher because the Directory examines unbundled licensed inventions rather than license packages).

PHS reports $12.2 million licensing royalty income in FY1992 and a total of $51 million from FY1986-1992 with royalty income increasing in recent years. PHS licensing income is relatively insignificant compared to its total funding, e.g., FY1992 PHS licensing income was about 0.05% of intramural R&D funding and .012% of NIH FY1992 appropriations ($10.1 billion). The majority (now likely 80-90%) of PHS/NIH licensing income comes from HIV antibody test kit patents.

PHS reports 181 CRADAs initiated from FY1986-FY1992 (note, the Federal Technology Transfer Act was enacted in 1986). PHS reports 79 CRADAs were ongoing and 47 were initiated in FY1992, for a total of 126 active CRADAs in 1992. Unofficial reports from PHS indicate that the number of new and ongoing CRADAs has declined in FY1993. The Directory reports over 100 PHS CRADAs presumed active in 1993. The total number of active CRADAs in each fiscal year has decreased from a high of 146 in FY1990 to 113 in FY1991 and 126 in FY1992.

PHS reports 335 patent applications were filed in FY1992, up steadily from 87 filed in FY1986. The Directory reports 199 applications disclosed by PHS from FY1992 and 56 from FY1993-Dec. 1993 (255 total), indicating that PHS is disclosing a significant portion of its original U.S. patent applications before their foreign equivalent filings are published (usually 18 months after priority filing).

U.S. Patent and Trademark Office Studies

The Technology Assessment and Forecast (TAF) program, U.S. Patent and Trademark Office (PTO) publishes a series of quantitative analyses of U.S. patents in various technological areas.14 Data are drawn from the TAF comprehensive database of U.S. patents from 1977 through 1993. Data below are presented only from 1980-1993, the period of coverage of the Federal Bio-Technology Transfer Directory, and TAF/PTO and Directory patent data are comparable.

Patent counts obtained from the Directory are generally about 10% greater than PTO data, primarily because PTO indexes only the first listed assignee while the Directory includes patents with federal agencies/labs listed as co-assignees. Also, some patents assigned to contractors managing federal laboratories are counted in the Directory as federal patents where the federal agency/lab has reported this. TAF/PTO data generally do not reflect recent consolidations and acquisitions by pharmaceutical and biotechnology companies. These consolidations were generally taken into account in the data pesented below.

Federal Patents, 1980-1993, PTO Data

U.S. patent data below are TAF/PTO from reports covering federal and all U.S. patents.15,16 Note, organizations are presented below according to total patents received, except for the last block of federal agencies which are not in context and have been added for information only.

The federal goverment is by far the number one recipient of U.S. patents, 1980-1993, and received the most patents in 1993. The 15,000+ patents assigned to federal agencies represent about 1.25% of all patents issued during this period. PTO reports that the federal government has received about 28,000 U.S. patents since 1963. The Federal Bio-Technology Transfer Directory reports 1,197 federal patents (7.8%) in the biomedical/biotech areas during 1980-1993.

Genetic Engineering Patents, PTO Data

A recent TAF/PTO report examines U.S. genetic engineering patents--those indexed to class 935, "Genetic Engineering: Recombinant DNA Technology," or class 435 subclasses 172.1-172.3, "Mutation or Genetic Engineering."17 These classes primarily refer to patents involving descriptions of gene sequences, cloning and/or recombinant expression of genes.

The federal government is the number one recipient of genetic engineering patents. Several federal agencies, particularly PHS and USDA, rank among the top along with the world's leading biotechnology and pharmaceutical companies and biomedical research institutions. Note, not all recent industry consolidations have been taken into account above (e.g., the acquisition of Cetus Corp. by Chiron Corp. and subsequent divestment of polymerase chain reaction patents to Hoffmann-La Roche Inc.).

Genetic engineering data from the Directory are similar to TAF/PTO data. The Directory reports 101 patents indexed to the controlled index term "genes" (used much the same as PTO classes 935/435), while PTO reports 96 federal patents indexed to classes 935/435.

Note, a considerable backlog in the processing of genetic engineering patents has resulted in pendency (time between filing a patent application and granting the patent) in excess of three or four years. More genetic engineering patents are pending than have ever been issued, and this includes federal agency/lab filings (as shown above by Directory data for "rDNA/genetic engineering" and "Genes-cloned/sequenced").

Drug/Bio-Active Agent Patents, PTO Data

A recent TAF/PTO report covers drugs and biologically active agent patents--those indexed to classes 424 or 514, both entitled "Drug, Bio-Affecting and Body Treating Compositions."18

While most patents in classes 424/514 involve drugs and therapeutic uses, these also include pesticides, in vivo diagnostics, disinfectants, herbicides and other non-drug applications. Note, data for patent assignees which have now been acquired or involve subsidiary relationsips have generally been combined below (e.g., Hoffmann-La Roche Inc. has been combined with Syntex Corp. which it recently acquired; American Home Products includes Wyeth-Ayerst Labs., etc).

Although not the leading patent recipient, the federal government ranks along with many of the world's major diversified pharmaceutical and chemical companies as a leading recipient of patents in classes 424/514. Federal agencies, such as PHS/NIH, USDA, U.S. Army and DOE, also rank along with major pharmaceutical and diversified chemical companies. Most federal patents in classes 424/514 involve drugs, while many of the leading companies also hold a large number of patents in the other non-drug application areas included in classes 424/514. Considering drug patents alone, the rankings for the federal government and agencies would likely be higher (e.g., in the top 10).

Data from the Federal Bio-Technology Transfer Directory generally agree with TAF/PTO data. For example, the Directory reports 437 federal drug patents (indexed as drug/chemical technology and therapeutic usage) while PTO reports 474 federal patents indexed to classes 424/514. Similarly, the Directory reports PHS having 234 drug patents, USDA having 65 (note, the Directory does not include pesticides, herbicides and other agricultural chemicals included in classes 424/514), the Army having 67, DOE having 30, and the Navy having 20.

U.S. Biotechnology Patent Analyses

Annual analyses of U.S. biotechnology patents have been published annually in BioINVENTION (a patent abstract periodical) and issued by the Pharmaceutical Manufacturers Association (PMA, now the Pharmaceutical Research and Manufacturers Association, Washington, DC).19 Annual analyses were published in BioINVENTION from 1985-1989, and essentially these same data were issued by PMA for the years 1986-1988.

The federal government and PHS were leading recipients of biotechnology patents during the five-year period, 1985-1989, particularly patents concerning biopharmaceuticals and healthcare uses ("pharmaceutical biotechnology" patents). The federal government as a whole was the number one recipient of pharmaceutical biotechnology patents (65), topping the Univ. of California (62) and Eli Lilly & Co. (52), while PHS ranked seventh (34). The federal government as a whole was the number three recipient (23) of genetic engineering patents with biopharmaceutical/healthcare applications ("pharmaceutical genetic engineering" patents) after Genentech (30) and Cetus Corp. (27), while PHS ranked sixth (13).

A study of 1992 U.S. patents published by MicroPatent USA reported that the federal government ranked number one with 87 biotechnology patents, followed by Merck & Co. (61), Abbott Labs. (48), Boehringer Mannheim (45) and Hoechst AG (41).20 This study was based on the BIOTECH PatentSearch CD-ROM database of all U.S. biotechnology patents, 1980-1992. Biotechnology patents were selected for this database using "a sophisticated search strategy developed by MicroPatent based on input from industry experts and research professionals," to develop "the most complete and refined selection of biotechnology patents available." This search strategy combined use of U.S. patent classes and subclasses with over 40 keyword, string, word adjacency and other text search statements.

NIH Pharmaceutical Development and Licensing, SCRIP 1992 Review

The annual review of 1992 published by the pharmaceutical newsletter, SCRIP, reported:

* "The U.S. National Institutes of Health is the organization with the most drugs in R&D...But most of the active compounds will be licensed out."21

NIH was reported to be developing 77 of its own drugs and 44 drugs licensed in or obtained from others (likely involving CRADAs), for a total of 121 drugs in development with NIH involvement. NIH clearly ranks among the world's leading pharmaceutical companies in terms of pharmaceuticals inventions licensed out and under development by others, and pharmaceuticals in development internally.

These data generally agree with data reported in the Directory--an estimated 87 PHS and 71 NIH inventions having reached the clinical trials stage of development; 62 PHS and 52 NIH licensed inventions having reached the clinical trials stage of development; and 77 PHS and 59 NIH CRADAs involving clinical trials or human testing. Note, it is not clear whether the SCRIP data actually refer to PHS rather than NIH; the term "drugs" is obviously being used to include both drugs and biologics, and the number one ranking of NIH would change if recent industry consolidations were taken into account.

Federal Patenting and Licensing, 1981-1990, GAO Data

The Government Accounting Office surveyed federal patenting and licensing activities during the 10-year period FY1981-FY1990.22 This study reported that federal labs received 11,075 patents and granted 981 nonexclusive and 455 exclusive licenses (license packages) and received $37.5 million in licensing income. The percentage of exclusive licenses steadily increased during this period, from 6% in FY1981 to 41% in FY1990.

Nonexclusive licensing income from two sets of PHS/NIH inventions, covering HIV test kits and hepatitis B immune globulins, provided $22.6 million (60%) of the $37.5 million total federal licensing income from FY1981-FY1990. Federal licensing income from HIV patents is now much higher as discussed below concerning antiviral/viral patents.

PHS patent data reported by GAO are apparently wrong. GAO reports that PHS received 266 patents from FY1981-FY1990, while the Directory includes 394 PHS patents from 1981-1990. PHS official data (discussed above) show consistently higher numbers of patents/year compared to GAO (e.g., in FY1990, PHS-39, GAO-31; in FY1989, PHS-32, GAO-25), and Directory data by year closely match PHS data. It is not possible to comment about the accuracy of GAO patent data for other agencies, since the Directory includes only selected patents from agencies other than PHS, but it is disheartening that the only government study of federal patenting and licensing activities appears to be seriously flawed.

AUTM Licensing Income Survey

The Association of University Technology Managers, Inc. (AUTM) recently surveyed U.S. university and other non-profit research institutions about their FY1992 patenting and licensing activities.24 This survey includes responses from 85% of the 80 largest universities and medical research centers and includes 98 universities and 14 medical research centers.

Licensing Royalty Income ($ million), FY1992

University of California System $26.4

Stanford University $25.4

City of Hope National Medical Center $20.9

New York Blood Center $14.8

Columbia University $14.3

Michigan State University $13.3

Wisconsin Alumni Research Fund $12.5

PHS/NIH $11.9

Massachusetts Inst. of Technology $11.7

Gross licensing royalties received by the surveyed U.S. institutions were $210.0 million. U.S. universities reported receiving $172.7 million in royalties from 2,632 licenses/options. U.S. universities reported negotiating 1,387 licenses in FY1992. U.S. universities reported 1,734 new patent filings in FY1922. Note, Research Corporation Technologies which handles licensing for a number of university and research institutions reported gross royalty income of $50.3 million. Cumulatively, the surveyed organizations received 332 patents in FY1992.

PHS ranks among the top recipients of licensing royalty income among U.S. universities and non-profit research organizations. Note, PHS officially reports higher FY1992 royalty income, $12.2 million, as discussed above. PHS reported a total of 335 patent filings, 88 licenses/options executed and $4.2 million in legal fees in FY1992.

Considering only biomedical/biotech licensing income, PHS/NIH would rank even higher. Significant licensing income from the top universities likely comes from inventions outside the biomedical, biotechnology and pharmaceutical areas.

Antiviral/Virus-Related Patents, Antiviral Agents Bulletin, 1989-1993

The Antiviral Agents Bulletin is a monthly periodical specializing in antiviral drug and vaccine development.23 The Bulletin annually includes a review and indexes of U.S. antiviral and virus-related patents. The following data are derived from an internal database of U.S. patents issued during the five-year period, 1989-1993.

Fewer antiviral and virus-related patents are reported during this same time period than are presented in the Directory, because criteria for the Antiviral Agents Bulletin are more selective. For example, routine use of a virus as a recombinant vector for protein expression would be indexed in the Directory, but this patent would not be included in the Antiviral Agents Bulletin.

The federal government and PHS/NIH are the leading recipients of antiviral and virus-related patents. Over 95% (171/176) of federal HIV-related inventions belong to PHS and and 83% (146) belong to NIH. Viral/antiviral and HIV-infection dominate PHS/NIH infectious diseases technology transfer, particularly involving NIAID and NCI. Over 30 inventions and 40 CRADAs involve antiviral drugs or vaccines which have reached the clincal trial stage of development.

Antiviral/Virus-Related Patents by Sector, 1989-1993

Total HIV-Related

Total 1,560 359

U.S. Government 50 23

U.S. Corporate 667 173

Foreign Corporate 314 60

Academia/Nonprofit 306 71

Antiviral/Virus-Related Patent Recipients, 1989-1993

U.S. Government 50

PHS/NIH 36

Burroughs Wellcome Co. 36

Merck & Co. 35

Roche/Syntex 34

Bristol-Myers Squibb 33

Chiron/Cetus 30

Monsanto/Searle 29

Inst. Pasteur 21

DuPont 19

Bayer/Miles 19

Scripps Inst. 19

PHS/NIH ties with Burroughs Wellcome Co., the world's leading manufacturer and marketer of antiviral drugs, as a recipient of antiviral/virus-related patents. However, like many other corporate patents, many of these are defensive in nature (e.g., 14 Wellcome patents involve AZT formulation, particular uses, drug combinations, etc.). In contrast, many federal and PHS/NIH patents are more fundamental, e.g., involving new viruses and clones, broader drug classes and vaccine approaches.

The National Cancer Institute (NCI) was involved in the discovery of the first three drugs approved for treatment of HIV-infection--AZT (Retrovir; marketed by Burroughs Wellcome Co.; an ongoing patent dispute will eventually resolve whether PHS/NIH becomes a co-assignee of this invention); DDI (Videx; exclusively licensed by PHS/NIH to Bristol-Myers Squibb Co.); and DDC (HIVID; exclusively licensed by PHS/NIH to Hoffmann-La Roche Inc.). NCI scientists (Dr. R. Gallo, et al.) and Institut Pasteur scientists share credit for discovery of HIV, with NCI generally attributed as having first developed the cell lines and technology enabling large-scale HIV culture and the development of current HIV immunodiagnostic products.

Numerous examples of federal antiviral/virus-related inventions currently in development and on the market are discussed in a section below.