As mentioned in Track I (Entry-level TTP) under Section 1.7.6 of Topic 7: Intro to IP Management and Section 1.11.2 of Topic 11: Introduction to Agreements: CDAs, MTAs, JIAs, Licenses, Tangible Property often plays an important role in Tech Transfer, and when it does the TTP must know how to manage it.
3.12.1 Introduction to Tangible Property
Tangible Property are the material things of everyday life; clothes, appliances, furniture, computers, books, watches, etc. IP is Intangible Property. In legal theory and practice, Tangible Property is termed “personal property” and is distinct from the Tangible Property of land and its fixtures—generally called “real estate.”
In the life sciences, inventions frequently involve the personal property of biological materials used in research and development. Cell lines, whole plants and animals, microbial cultures, tissues, seeds, biopsies are examples. Personal property that is biological in nature is also called “Bioproperty.” This Bioproperty is often a critical part of an invention—sometimes it’s the invention itself! Whenever Bioproperty is involved in an invention, the TTP must consider how to manage the materials practically and from a property right perspective.
The Bioproperty can and should be controlled by the owner of the invention/IP (i.e., the PSRI) to make licensing and commercialization possible. The Bioproperty owner will use personal property rules to maintain ownership and the right of possession and use. It is important for the TTP to understand the differences between the intangible property of IP —with its unique set of rights—and Bioproperty. Typically, a life science invention is a combination of IP and Bioproperty. The TTP must manage these two different types of property in different but in coordinated ways. The inexperienced TTP may not understand that a license can (and often should) include both IP and Bioproperty.
Finally, Bioproperty can have significant financial and technical value entirely independent from any associated IP. And, without the knowledge of how to manage Bioproperty, such value can be lost.
Here’s a presentation discussing more details on Tangible and Bioproperty.
3.12.2 Managing Tangible Property in an R&D/Tech Transfer Context
To both manage and control an institution’s Tangible Property in R&D and Tech Transfer and respect the ownership rights of materials that belong to another entity requires some expertise. First, the institution should have a “Tangible Research Property Policy” or a “Bioproperty Policy” that establishes this fundamental rule: all Tangible Bioproperty the institution possesses is the property of the institution, unless there is a written agreement with the owner of the property that allows the institution to possess that material. Second, this policy should require that any transfer of Bioproperty from the institution to others cannot be done unless and until an MTA (see Section 1.11.2 of Track I (Entry-level TTP), Topic 11: Introduction to Agreements: CDAs, MTAs, JIAs, Licenses) has been signed. In this way, the institution asserts ownership over all Bioproperty on its premises except for materials belonging to another party, by virtue of a written agreement by the owner.
If the institution requires that an MTA is signed prior to the transfer of materials to someone outside the institution, it preserves its ownership and control. This ownership and control will be essential if the material is part of an invention/IP. If materials have been well managed in this way, it allows the TTP to design and implement effective commercialization plans and agreements that combine IP and Bioproperty for optimal value.
More details on Bioproperty management can be found in this presentation.
3.12.3 Bailments, Material Transfer Agreements
The “bailment” is a certain kind of contract which involves tangible, personal, or Bioproperty. Bailment contracts are ubiquitous, used in all countries, in everyday life as well as business and commerce. The bailment is a written, verbal, or implied contract between the owner of Tangible Property and another, in which the owner (the “bailor”) grants the recipient (the “bailee”) the right to possess (and probably use for some defined purpose) but not own the property.
In the Tech Transfer and R&D world, Bioproperty is routinely transferred by bailment contracts called Material Transfer Agreements (MTA) (see Section 1.11.2 of Track I (Entry-level TTP), Topic 11: Introduction to Agreements: CDAs, MTAs, JIAs, Licenses). The MTA can be simple or complex. At its most basic, it grants right of possession but not ownership, defines authorized use, prohibits transfer of the property to others, and dictates how long the right of possession/use may last. Other terms and conditions can be easily tailored for any situation.
3.12.4 Licensing Tangible Property
Tangible/personal/Bioproperty can be licensed. When such property is part of an invention that is also protected by IP (patent and trade secret, for example), the TTP should integrate these two different types of property in the license. Separate definitions for the properties will be necessary, as will different sections for proper management by the Licensee.
A key difference between Bioproperty and IP is that IP automatically expires at the end of its legal life. Bioproperty rights do not expire. As a result, the License Agreement must account for this fact. One implication of this is to design the financial terms to account for expiration of some part – but not all – of the licensed property. For example, this means designing a royalty that has two components: one based on the IP (“X”), and the other based on the Bioproperty (“Y”). So, until the IP expires, the royalty is X+Y and after IP expiration, the royalty is only Y.
Other details and examples of licensing Tangible Property are provided in the presentation in Section 3.12.2 above.
3.12.5 Licensing Patient Samples: Informed Consent
Academic medical researchers frequently collect human patient samples that potentially have considerable commercial value and utility. The samples may be cell lines, frozen tissue samples, both normal tissues and diseased tissues (e.g., resected cancer samples from operations carried out to treat patients), blood samples, autopsy samples, etc. that come from patients with well-documented medical conditions, patient records, and frequently, in the post-human genome project era, from patients with well-characterized genetic profiles.
These researchers must submit a proposal to carry out the research to their institution’s Institutional Review Board (IRB) and receive the IRB’s permission.
Here’s a link to the FDA’s Frequently Asked Questions on IRBs.
As part of this process, they must also submit a proposed Informed Consent form (IC). This is a document that every participant in the study must sign before they can be enrolled.
Here’s a link to the University of Michigan’s Health Sciences and Behavioral Sciences Guide to IC.
ICs are ubiquitous in medicine these days—patients are asked to sign an IC before every medical procedure they undergo. The IC explains the benefits of the procedure to the patient and identifies the risks inherent in the procedure.
In the case of research projects involving human subjects, whether it is interventional medical research or observational behavioral research, the IC must, in addition to the benefits and risks to the participant, explain the purpose of the research and the hoped-for outcomes and benefits of the research. If the institution or the researcher stands to benefit financially from the project, it must be fully disclosed. A failure by Dr. James Wilson, a University of Pennsylvania researcher, to disclose his financial conflict of interest in a gene therapy trial that caused the death of Jesse Gelsinger had enormous ramifications for both Penn and Wilson, and set back the development of gene therapy as a mainstream medical treatment by 20 years.
If the project involves collecting biospecimens or genetic information, developing an appropriate IC is a difficult process. Ominously, the first line in the University of Michigan General Informed Consent Template linked to above says: “Do not use for collection of biospecimens or research involving genetic/genomic analyses.”
The challenge is thinking through all the possible uses for the biospecimens and genetic information so that they can be disclosed to potential participants. For instance, if a project to take excised surgical cancer tissue samples and carry out genetic analysis on them and normal cells from the margins of the surgical excision says that the samples will all be analyzed only by academic researchers in the hospital’s own lab, or in a lab at the medical school that the hospital is affiliated with, it will not be possible to subsequently allow the transfer of them to a company for further analysis. To do that would require obtaining a new consent form from the participants, a highly labor-intensive process and one that may raise suspicions and a refusal to grant an expanded permission.
Most researchers do not look much further than their immediate research project and do not think through the long-term/commercial implications of the research. Plus, as science evolves, things may become feasible that weren’t when the project started. For example, the Framingham Heart Study was started in 1948 and was initially conceived of as a 20-year long-term study. As the project proceeded, the important role of genetics began to become clear, and the project was repeatedly extended, and now, 72 years after it started, the third generation—the grandchildren of the original 5,209 enrollees—are now being examined every five years. Along the way, it became possible to create immortalized cell lines from frozen blood samples, transforming the study into a major genetic resource. Unfortunately, the ICs of many of the original cohort did not anticipate these new uses and some had died before they could be re-consented.