If the patents on human embryonic stem cells held by a Wisconsin foundation do as well as its vitamin D patents, it could make millions, if not billions, for the University of Wisconsin.
Those patents, as well as hundreds of others held by the Wisconsin Alumni Research Foundation (WARF), have become a bonanza. Since 1927, they have earned $1.65 billion in license fees, royalties and investments.
WARF, an affiliate of the university, has become the envy of the academic world. It has given the University of Wisconsin $650 million since it began and now provides the university $35 million to $38 million a year from a billion-dollar fund.
That financial success could be dwarfed, however, if stem cell research produces the new treatments and cures for Alzheimer's disease, Parkinson's, heart disease, paralysis, diabetes and other disorders that proponents hope will come about.
Stem cells exploded on the scene in 1998 when University of Wisconsin developmental biologist James Thomson invented a way to derive them from discarded human embryos. Their great promise is their ability to make all of the cell types of the human body, more than 200 of them.
WARF has come to dominate human embryonic stem cells because of a broad patent issued on the cells themselves as well as the process for deriving them.
Nicholas Seay, a Madison, Wis., lawyer who helped write the stem cell patent, said the patent is ironclad. Even if someone came up with a totally different way of making human stem cells, they would still fall under WARF's patent, he said.
Money earned from patents is split three ways: 20 percent goes to the inventor, 15 percent to the scientist's department, and the rest to WARF to invest and distribute to the university.
Of the estimated 64 human stem cell lines around the world that the Bush administration said would be eligible for federal research dollars, only the five Wisconsin lines have been documented.
If they are viable, the foundation patent, according to Seay, probably covers the other lines. WiCell Research Institute, set up by the foundation to distribute the cell lines, has sold $5,000 vials of the cells to 30 investigators so far and has applications from 100 more.
Because the potential for profits and discoveries is so high, the foundation patents are likely to be challenged. Also, no other country has granted the foundation a patent for the stem cells.
Scientists in the field chafe at being beholden to the foundation, and at the idea that such a fundamental part of the human makeup can be patented and possibly restricted.
"The only way to go in this area is to allow scientists unlimited access to these cell lines," said Robert Goldman, chief of cell and molecular biology at Northwestern University.
"There should be no restrictions, no tied hands, no reporting to the University of Wisconsin, no worries about patent infringement. I think it's terrible the way the whole thing has worked out," he said.
The controversial practice of patenting genes and other body materials came about through congressional action. Congress's intent was to rush biomedical discoveries into the marketplace by giving investors protection from competitors.
As a result, nearly every research university in the country has followed Wisconsin's lead in setting up agencies to patent discoveries from its scientists.
"Universities are continuing to patent heavily," said Karen Hersey, who oversees patenting at the Massachusetts Institute of Technology. "From our perspective, it continues to boom."
"WARF became the 800-pound gorilla in human embryonic stem cells because Professor Thomson made the invention and they now have the patents on it," she said.
WARF is the oldest and most successful foundation set up to turn university research into patents and income.
The foundation has also been a major source of funds for new university buildings, including dormitories to accommodate the flood of returning GIs after World War II. It just signed on with the state to pay half of a $150 million remake of the university's biotech facilities.
The foundation also played a major role in helping Wisconsin become a world-class research center by pouring millions into research long before American universities began their dependence on the National Institutes of Health for money. Today, Wisconsin gets half a billion dollars annually in federal research money.
Even though the foundation gives the university $1 for every $14 it gets from the government, the foundation's money can be used wherever it will do the most good, and that gives the university a big advantage in recruiting top scientists and doing cutting-edge research, said University of Wisconsin spokesman Terry Devitt.
WARF was founded in 1925 by Harry Steenbock, a University of Wisconsin biochemist who a year before had discovered how to use ultraviolet light to put vitamin D in milk, bread and cereal. At that time, there was a widespread deficiency of the vitamin in diets, and rickets was rampant in the United States and around the world.
Vitamin D is essential for healthy bone growth. Steenbock knew his discovery could help a lot of people, but he didn't want it misused, as he had seen happen to the discoveries of other Wisconsin scientists.
So he and eight other University of Wisconsin alumni pitched in $100 apiece to set up WARF to administer the vitamin D patent. He was granted a patent on his invention in 1927, and within 10 years the royalties mounted to $17 million.
Other blockbuster patents came along. In the 1940s, warfarin, the world's most popular rat poison, was discovered and patented by Wisconsin's Karl Paul Link. Trying to find out why cows were bleeding to death after eating spoiled sweet clover, Link discovered a powerful anti-coagulant.
Under the name Coumadin, the anti-coagulant also is used to keep people with heart disease and other disorders from developing deadly blood clots.
Among WARF's more recent patents is one issued to Rick Amasino, a biochemist who discovered a gene that tells plants to die at the end of a season. By tweaking the gene, Amasino can make the plant live longer and be more fruitful. China has licensed the patent to increase the yield of rice.
Research on stem cells is expected to lead to a flurry of discoveries of genes and proteins involved in cellular development, and more patents for WARF.
"We'll find discoveries that are important and commercially viable," said Carl Gulbrandsen, WARF's managing director. "We'll be looking for that. We expect that Wisconsin is going to be a major center for embryonic stem cell research."