Wisconsin Alumni Research Foundation

Protecting a Legacy, Building a Profession: The Institutional Patent Agreements of 1968 and 1973

Hector DeLuca and Howard Bremer in 1990 with a group of Japanese scientists
Hector DeLuca (center left) and Howard Bremer (center right) in 1990 with a group of Japanese scientists. Following the passage of the Bayh-Dole Act in 1980, WARF built a strong market in Japan for a new generation of vitamin D patents.

Sometime around 1964, Managing Director Ward Ross told WARF Patent Counsel Howard Bremer that the foundation’s licensing team, including Bremer himself, might soon be out of a job. Over the prior two years, patentable inventions on campus had slowed to a trickle. If the trend continued, WARF’s patenting and licensing might dry up altogether.

From that point forward, Bremer set out on a 15-year odyssey to revive WARF’s licensing program. Beyond saving his job and those of his colleagues, he hoped to maintain the core mission that had defined the foundation’s legacy since the days of Harry Steenbock.

By drawing on his expertise as WARF’s in-house attorney, his background in corporate patent law and his degree from the University of Wisconsin Law School, Bremer soon pinpointed the problem. Prevailing government policy at the time set no de minimis on intellectual property. In layman’s terms, that meant that funding agencies like the National Institutes of Health, the National Science Foundation or the Atomic Energy Commission owned the patenting rights on any invention funded with as little as one penny of federal money.

That rule posed a prohibitive barrier against university patenting by the mid-1960s. To compete with Soviet science, the federal government had flooded universities with research dollars over the prior two decades. Invention disclosures dropped off at WARF because most UW researchers, like scientists across the country, had easy access to government funds.1 Thanks to the lack of a de minimis regulation, neither they nor the university owned the rights to any of the resulting inventions.

Bremer thought academics and administrators had been shortsighted in accepting government ownership without challenge. He believed the “university sector,” as he called it, should leverage its power as an engine of economic growth to press for better terms.2

But accomplishing that goal proved more complicated than it seemed. Instead of one funding source, research grants poured in from a range of agencies across multiple cabinet departments. By Bremer’s count, as many as 26 different sets of regulations governed federal research funding.

Needless to say, he needed help navigating the bureaucratic maze. Although Ward Ross and the WARF trustees supported Bremer’s efforts, they had their hands full administering the warfarin patents and tangling with the IRS.3 4 The foundation’s director of licensing offered help where he could, but he, too, devoted most of his time to maintaining WARF’s relationships with its existing licensees.

With his colleagues tied down by other business, Bremer turned to the UW president for help. The president assigned William H. Young, a political science professor and able budget negotiator, to represent the university’s patent interests.

Beginning in 1965, Bremer and Young traveled back and forth to Washington, D.C. In the midst of a sea of indifference and hostility, they found Norman Latker, the patent counsel for the National Institutes of Health (NIH). Latker believed that, compared to universities and small businesses, the federal government lacked both the capacity and the competency to develop scientific inventions for wide public benefit.

Realizing they shared a common goal, Latker advised Bremer and Young to concentrate on securing Institutional Patent Agreements (IPAs). These contracts would not change federal patenting policy overall. Instead, each individual IPA would give the University of Wisconsin, and by extension WARF, a waiver to patent any inventions funded by one particular federal agency.5

In other words, Bremer, Young and Latker targeted their efforts on the more achievable task of negotiating with a single government bureaucracy. And yet, even within this limited scope, negotiations dragged on for three more years.

Then, one day in 1968, help arrived from an unexpected but welcome source. Biochemistry professor Hector DeLuca stopped by Howard Bremer’s office in the basement of the old WARF building. The two men had never met before, but DeLuca had heard a lot about WARF and the benefits of patenting from his graduate adviser, Harry Steenbock.

WARF’s founding inventor had passed away on Christmas Day in 1967 but his last student, DeLuca, continued the Steenbock laboratory’s work on vitamin D. In fact, the younger scientist determined that the human body metabolizes the sunshine vitamin and turns it into a hormone. That discovery would ultimately enable DeLuca and his team not only to explain how vitamin D works but to isolate the hormone itself down to the molecular level. Over the following decades, DeLuca would become WARF’s most prolific inventor with more than 2,000 domestic and international patents and more than $500 million in royalties.6

But before any of that could happen, WARF had to figure out a way to file the first patent. By 1968, DeLuca had isolated an intermediate to the vitamin D hormone, known as 25-hydroxycholecalciferol. Bremer knew right away that as a new chemical compound it would make for a strong patent application. However, the experiments, as with so many others, had been funded in part by federal money.

With the first IPA still pending, Bremer worked with Latker to find a quicker solution. They figured out that under one narrow paragraph in the federal code – Title 45, Subtitle A, Section 8.2(b), to be exact – the Assistant Secretary of the Department of Health, Education and Welfare could allow a single invention to be “assigned to a competent organization for development and administration.”7

Latker secured the so-called 8.2(b) exception for DeLuca’s inventions and WARF moved ahead with patent applications. That began a long, fruitful relationship between the WARF patent counsel and Steenbock’s protégé. Over the next two decades, DeLuca taught Bremer about biochemistry and Bremer taught DeLuca about patent law. Together they made an effective tag team in front of the patent office, at Congressional committees and in the boardrooms of potential licensees.8

Several months after filing for patents on the new vitamin D science, NIH granted an IPA for University of Wisconsin research. A few years later, in 1973, Bremer and Young completed a similar agreement with the National Science Foundation.

After that, momentum gathered in favor of their cause. Patent administrators from across the country, several of whom had been pursuing IPAs of their own, banded together to lobby Congress to change the law.

Finally, in 1978 Bremer and Latker, along with Ralph Davis from Purdue’s patent office and a congressional staffer named Joseph Allen, arranged a meeting with Indiana Senator Birch Bayh. They all agreed that the hodgepodge system of IPAs and 8.2(b)s needed to be reformed.

With the help of Kansas Senator Bob Dole, Bayh took the language that Bremer, Young and Latker had drafted in their IPAs and pasted much of it into a Congressional bill. The resulting Bayh-Dole Act of 1980 established a national standard for patenting that enabled all universities and small businesses to retain patenting rights on federally funded research.

In the years following Bayh-Dole, the number of technology transfer offices at universities expanded from around 30 to more than 300. As a result, not only did university patenting increase, but the percentage of patents that spawned commercial products jumped from around 4 percent to 30 percent.9 As Latker had suspected, universities proved adept at turning basic science into public benefit.

What began with a concern about job security at WARF had led to a transformation of federal patent law that helped create thousands of new companies, jobs and innovations in public health. And from the efforts of Howard Bremer, his allies and his colleagues, a new profession of technology transfer managers had emerged.

With patenting revived and their tax-exempt status secure, WARF turned to professionalizing its own operations as the 1980s approached. For more on that story, stay tuned for our next installment.

Kevin Walters