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Federal Stem Cell funding approved – which states to benefit?

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Monday, President Obama signed an executive order intended to foster stem-cell research, reversing the policies of the previous administration that limited research to existing stem-cell lines. Further Congressional action will be necessary to remove all federal restrictions on embryonic stem cell research, and recent scientific developments have made research on other types of stem cells more productive. Nevertheless, many commentators see this development as an indicator of a sea-change in scientific-political attitudes in the Executive branch, and expect that U.S. embryonic stem cell research is about to expand significantly.

One area of significant speculation seems to be the effect changes in federal funding policies will have on individual states. As Hilary Libka discussed in a recent MTTLR Blog post, some states have developed their own funding regimes for human embryonic stem cell research. Commentators seem to think that states with existing infrastructure may be particularly well-situated to put federal funds to good use. Although Michigan is not one of the states with an independent funding regime, Michigan voters relaxed state restrictions on embryonic stem cell research via a Constitutional referendum in November, and the state may be posed to take a leadership role in future developments. Researchers at the University of Michigan and Wayne State University announced Monday that they have research projects ready to get under way.

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March 10th, 2009 at 6:33 pm

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State-Funded Stem Cell Research and Benefit Sharing

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by: Hilary J. Libka, Associate Editor, MTTLR

Stem Cell Petri Dish
by Hilary Libka.

Individual US states have been setting their own policies regarding human embryonic stem (hES) cell research – due to both the increased application of private and state money to hES cell research, and the federal government’s failure to change or expand its regulations and funding for this controversial science. While the majority of states restrict research on embryos, at least twelve states have now implemented public funding schemes for some type of stem cell research, and eight states permit or even channel funds specifically to hES cell research.1 The states have organized funding through bond sales, the Tobacco Master Settlement Agreement, executive expenditures, and legislative appropriations.2 Depending on the state and award, the funds are either directed toward particular research projects or infrastructure development at public and private institutions as well as non-profit and for-profit organizations.3

Public funding of stem cell research presents policy controversies that extend far beyond the science. Each state that participates must develop oversight for its investment and consider the potential outcomes of accelerating the market. One imminent issue that must be resolved is how the state should benefit from any intellectual property (IP) that may result from the funding.

The federal Bayh-Dole Act is one model states could look to for managing IP. The Act gives US universities, small businesses, and non-profit organizations the right to inventions developed through research funded by the federal government.4 The government keeps a nonexclusive license to the invention (among several other rights), but no royalties are collected.5 The biotech industry is pushing for this model at the state level.6 On the other end of the spectrum, consumer advocates argue for a public ownership model, where the state would retain the rights to any patents resulting from public funding.7 As a state that has been struggling with IP agreements, California is an important starting place to understand the complexities of benefit sharing in the realm of stem cell research funding.

Case Study: California

In November 2004, California became the largest source of funding for stem cell research in the world when voters passed Proposition 71 (a.k.a. the California Stem Cell Research and Cures Bond Act).8 The petition-driven initiative authorized the state to sell $3 billion in general obligation bond funds to be disbursed to in-state researchers over ten years.9 Up to $350 million may be paid out annually, and the funding is guaranteed by the state, which pays the principal and interest costs with bond sales for the first five years of the program, then with state income taxes and sales tax.10 Proposition 71 was incorporated as a politically-insulated state constitutional amendment: modifications are only possible with an unlikely 70% legislative majority and the governor’s signature.11 High expectations are attached to the initiative, which was sold to voters on two points: (1) “Cures for California” and (2) economic benefits, such as IP revenues, reduced health care costs (state welfare programs and government employee benefits), and additional research activity (more jobs and taxable income).12
Proposition 71 established the California Institute for Regenerative Medicine (CIRM), a state oversight agency, to disburse funds to research organizations.13 CIRM is also charged with regulating state-funded stem cell research activities.14 This includes:

[E]stablish[ing] standards that require that all grants and loan awards be subject to intellectual property agreements that balance the opportunity of the State of California to benefit from the patents, royalties, and licenses that result from basic research, therapy development, and clinical trials with the need to assure that essential medical research is not unreasonably hindered by the intellectual property agreements.15

Although this provision stresses that California should benefit from resulting technologies, it fails to specify how the benefit sharing should take place. The generality is especially striking given the tendency of the legislation to delineate CIRM elements narrowly (sometimes too narrowly, as with the composition of the governing board and working groups, none of which included any legal experts).16 Initial uncertainty and qualms about transparency and accountability have slowed the process of developing IP standards.
Early lawsuits tried to overturn Proposition 71 by claiming CIRM was unconstitutional; complaints focused on CIRM’s validity as a public agency and its members’ affiliations with patient advocacy groups, biotech companies, and research institutions.17 A $150 million loan to CIRM from the governor kept the program afloat while the initial legal issues were resolved,18 but these “built-in conflicts of interest” continue to plague operations. Both pro- and anti-hES cell research advocates have raised ethical concerns, and in 2008, the state Controller audited CIRM’s grant approval process.19

Most recently and against steep odds, the state legislature successfully passed Senate Bill 1565, which called for a study of the governance structure of the program by the independent Milton Marks “Little Hoover” Commission on California State Government Organization and Economy.20 SB 1565 also would have forced a ceiling on the price of drugs resulting from CIRM-funded research and required a plan from funded organizations that would make the drugs accessible to uninsured Californians.21 Although Governor Schwarzenegger vetoed the bill because of its restrictions on CIRM’s authority to adopt IP standards, the oversight commission has announced it will still proceed with its investigation.22

In March 2008, after two years of research and debate, the CIRM governing board finally approved IP standards for the funding program.23 Like the Bayh-Dole model, nonprofit organizations receiving public funds may retain their patents and must share net revenues with individual inventors.24 But unlike the Bayh-Dole model, after a threshold amount of revenues and in proportion to CIRM’s support, the organization must pay 25% of its share to the state’s General Fund; the rest may only be used to support scientific research or education.25 Meanwhile, for-profit organizations also keep their patents, but the state gets 25% of royalties on licenses after a threshold amount as well as a fraction (2-5% unless a blockbuster drug, which generates more than $250 million of revenue annually) of the revenues from any products commercialized by the organizations.26 Furthermore, for-profit organizations must sell products at low prices to California’s discount prescription drug program.27

And yet, even with these new explicit standards, the uncertainty persists. CIRM’s agenda for its latest IP meeting included, "Consideration of draft amendments to consolidate non-profit and for-profit intellectual property regulations and begin formal process of adoption."28 CIRM has also been considering additional in-state discounts, and Californians, especially the state legislature, will continue considering CIRM. Although the state has been successful in attracting biotechnology,29 “[CIRM] is still an unknown quantity, and that spooks the biotech industry.”30 Several company executives and investors have been echoing the concerns of one general counsel: “We will take CIRM money last. We don’t want to be in a position where, years from now, we are actually forced to sell [our products] in California at a loss.”31

Moving Forward

The sheer dollar value of California’s funding continues to attract the stem cell industry despite uncertainty regarding public access requirements and other forms of benefit sharing. What about states thinking of or already implementing smaller stem cell research funds? Can they afford to promise a program that will “pay for itself,” followed by years of figuring out how to “pay back the taxpayers”?32

IP revenues and restrictions are great selling points to taxpayers but terrible incentives for industry. The program is useless if it fails to attract participants. When it comes to access issues, which consumers should receive a discount? If beneficiaries of government programs and the uninsured are covered for new medical treatments, is that fair to the insured taxpayer whose insurance may not cover the treatment and whose rates will probably go up regardless of coverage? By what time do you have to start paying taxes in California to get the benefit of a new drug—before development, before clinical trials? Do you have to pay taxes to the state or even be a California resident? Medical tourism may benefit the state, but being the capital of social welfare probably will not.

As more states consider implementing public funds for stem cell research, the benefit sharing issues are going to be critical for collecting and maintaining public and industry confidence. Maybe the question California made a mistake in postponing when it passed Proposition 71 was not how, but whether the state should force benefit sharing at all. State stem cell research funding programs still have much to offer in terms of economic advantages and future medical breakthroughs, even if the state does not directly share in IP revenues. States should attempt to quantify and communicate expected revenues. Because funding states cannot foresee research outcomes (both treatments and revenues), it’s not an accurate measure to ask taxpayers how much they would pay to eliminate spinal cord injuries, cancer, or one of many other suggested targets. However, some taxpayers are interested in taking a shot at these cures, and it’s possible that the total value of the research to taxpayers may be much greater than any state’s investment.


1 California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, New York, and Wisconsin fund hES cell research. Meanwhile, Indiana, North Carolina, Ohio, and Virginia only fund adult stem cell research. See National Conference of State Legislatures, Stem Cell Research, Jan. 2008.
2 Id.
3 Id.
4 35 U.S.C. §§ 200-212 (1980).
5 Id.
6 Joe Mullin, Stem Cell Gold Rush, IP Law & Bus., June 2008.
7 Id.
8 CIRM, About CIRM, (last visited October 20, 2008).
9 Legislative Analyst’s Office, Proposition 71: Stem Cell Research. Funding. Bonds. Initiative Constitutional Amendment and Statute., July 2004.
10 Id.
11 Jesse Reynolds & Marcy Darnovsky, Center for Genetics & Society, The California Stem Cell Program at One Year: A Progress Report 7 (2006).
12 Ralph Brave, Stem-cell Wonderland, Sacramento News & Rev., Oct. 20, 2005 (“Cures for California” was the name of the Proposition 71 campaign); Legislative Analyst’s Office, supra note 7.
13 Id.
14 Id.
15 State of California, Text of Proposed Laws: Proposition 71, (last visited October 20, 2008).
16 Lori P. Knowles, State-sponsored Human Stem Cell Research: Regulatory Approaches and Standard Setting, 21 (2006).
17 Judge Rules Suits Challenging Stem Cell Agency Have No Merit, N.Y.Times, Apr. 22, 2006.
18 Christine Vestal, Stem Cell Wars Rage in State Capitols, Stateline.org, July 20, 2006.
19 Op-Ed, Stem Cell Housecleaning, L.A. Times, Dec. 12, 2007.
20 S.B. 1565, 2007-08, Reg. Sess. (Cal. 2008).
21 Id.
22 Governor Vetoes California Stem Cell Bill, Sacramento Bus. J., Sept. 29, 2008.
23 Mullin, supra note 4.
24 17 Cal. Code of Regs. § 100308 (2008).
25 Id.
26 17 Cal. Code of Regs. § 100408 (2008).
27 17 Cal. Code of Regs. § 100407 (2008).
28 IP Task Force Subcommittee, Agenda for October 29, 2008.
29 Office of the Governor, Governor Celebrates California Innovation and Research at 2008 Biotechnology Industry Organization Conference, June 18, 2008 (citing 3,000 new companies, $4.3 billion in venture capital—nearly half of what is invested nationwide, and $73 billion in estimated annual revenues).
30 Mullin, supra note 4.
31 Id.
32 Reynolds & Darnovsky, supra note 9, at 9 (suggesting that the Proposition 71 campaign was misleading).

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December 1st, 2008 at 2:23 pm

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The Large Hadron Collider: The Right to Not Be Destroyed in a Black Hole

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by: Ashley Tan, Associate Editor, MTTLR

I. Suing to Save the World

Image In the soul of the great machine by Simon Bisson.
Used under a Creative Commons BY-NC-ND 2.0 license.

Has the Large Hadron Collider destroyed the world yet? A tongue-in-cheek website suggests not.1 The European Organization for Nuclear Research (CERN), which is responsible for constructing and operating the Large Hadron Collider (LHC), insists that fears about LHC-generated catastrophes are wholly without scientific foundation.2 However, a group called the Citizens Against The Large Hadron Collider, established by nuclear physicist and former U.S. nuclear safety officer Walter L. Wagner3, not only argues that the LHC poses a significant danger of destroying the Earth, but has gone so far as to file in a U.S. district court in Hawaii to enjoin the LHC from proceeding to full operating capacity.4 Another group, led by German chemist and university professor Otto Rössler, tried to file a similar injunction with the European Court of Human Rights.5 Scientists associated with the LHC have received death threats6, hackers have broken into the LHC’s computers7, and in India, a sixteen-year-old girl reportedly committed suicide out of fear after watching a television program about the LHC’s danger to the earth.8 Hollywood frequently raises the specter of wayward science giving birth to a global disaster, but rarely does it venture to the courtroom for a solution in such cases. Will the real world prove more creative?

II. What Is the Large Hadron Collider and Why Do People Fear It?

The LHC is a particle accelerator, whose name derives from the fact that it is large—built in a ring shape under the countryside near Geneva, Switzerland, it has a radius of 27 kilometers (16.8 miles)—and that it accelerates hadron particles—better known to laymen as protons or ions—and engineers the collision of these particles.9 These collisions will occur at higher energies that are concentrated more densely than has ever been possible via man-made intervention before.10 By monitoring the results of the collisions, CERN scientists hope to recreate the conditions of the universe that existed a fraction of a second after the Big Bang, and to prove or disprove elements of the Standard Model, which is the currently-reigning theory for explaining why the laws of physics in our universe operate the way that they do.11 On these statements, everyone can agree.

Less agreed-upon is whether the LHC could also prove correct certain theories about microscopic black holes, magnetic monopoles and “strangelets” by creating them.12 A microscopic black hole is exactly what it sounds like: a tiny version of the black hole formed by the collapse of a dying star.13 According to the Citizens Against the LHC, the LHC could create such micro black holes at a rate of one per second, and if they accumulated, they would eventually suck the entire Earth into them.14 A magnetic monopole is a hypothetical particle that carries only one magnetic charge or “pole,” compared to the everyday magnet that always has a north and a south pole, and if they do exist, then theoretically, immediately upon creation they would begin to catalyze the decay of known particles like protons in an uncontrollable reaction similar to that of a nuclear bomb.15 And a strangelet is another hypothetical particle that, if it does exist and is created by the LHC, theoretically could trigger an unstoppable fusion reaction that would transform the whole planet into a gigantic strangelet.16

III. Judging a Potential Global Catastrophe

All three of the above scenarios would presumably end life as we know it if they came to pass, but CERN and most physicists believe that the probability of the LHC creating such scenarios is so infinitesimal as to be nonexistent.17 In particular, CERN argues that cosmic rays have entered the Earth every day for billions of years and while on Earth, have collided at far higher energies than the LHC will be able to produce without ever having resulted in a planet-wide catastrophe.18 Nevertheless, the Citizens Against the LHC, as represented by Spanish science writer Luís Sancho, have urged a U.S. district court in Hawaii to enjoin the LHC from full
operation.19

The main allegations made by Sancho: 1) the U.S. government has failed to carry out an environmental impact study of the LHC under the National Environmental Policy Act (NEPA), including a period for review and comments by the public; and 2) the U.S. government has failed to follow the risk-management requirements of the European Union’s “Precautionary Principle.”20 The U.S. government has responded by questioning whether Sancho has standing to submit the case, whether a U.S. district court has jurisdiction over the subject matter and whether the case is moot due to the statute of limitations.21 On the matter of standing, it argues that Sancho has not alleged a “credible injury” that is personal to him, given that the main substance of his claim is that the European-based LHC may trigger an event that would have to destroy the entire world to affect him.22 On the matter of jurisdiction, the U.S. government argues that the LHC is the responsibility of CERN, which is an international, non-governmental body in which the U.S. government plays no significant, active part.23 Alternatively, on the matter of mootness, the U.S. government holds that any duty of oversight would have arisen in 1997 or 1998, when the National Science Foundation and the U.S. Department of Justice “committed” to the LHC project, and that such a duty has already expired.24 Either way, the federal government argues it has no duty under the National Environmental Policy Act to conduct environmental-impact studies of the LHC, as that act only applies to federal agencies and CERN is not a federal agency.25

IV. The Timeline for Averting Planetary Destruction

At a combined hearing for the U.S. government’s motions to dismiss and for summary judgment, Chief Judge Helen Gillmor seemed sympathetic to the government’s arguments for lack of jurisdiction and of standing.26 She ruled without permitting further argument that any allegations based on the Precautionary Principle of the EU would not be heard for lack of jurisdiction, as the underlying EU law had not been incorporated into U.S. domestic law.27 However, after chiding both parties at length for committing numerous procedural errors, Judge Gillmor allowed them to continue filing documents with the proviso that each new filing must be with a leave of court to file.28

On Sept. 26, 2008, Judge Gillmor heard the federal government’s motion to dismiss and granted it on the grounds that since the U.S.’s participation in the LHC project did not amount to a “major federal action” under NEPA, the court lacked subject matter jurisdiction to hear the suit.29 The U.S.’s funding to CERN for the LHC constituted a relatively insignificant fraction of the total funding–$531 million out of an estimated $8 billion—and the U.S. also lacks control over the LHC, as its agreement with CERN only grants it non-voting “observer” status.30 Given the lack of subject matter jurisdiction, Judge Gillmor declined to reach the issues of standing and mootness.31 While she noted that the suit is rooted in a “disagreement among scientists” that is of concern to a wider audience, Judge Gillmor was of the opinion that such “policy objections” were better addressed through the political process.32 So ends the legal action in the U.S. against the LHC, it would appear.

A suit in the European Court of Human Rights for an injunction against the LHC was summarily rejected without an official ruling.33 But the Court is allowing the suit to proceed to judgment on the merits of a possible violation to the rights to life and to private family life, as guaranteed under the European Convention of Human Rights.34 In the meantime, the LHC has suffered several technical setbacks that will prevent full operation, and consequently those controversial particle collisions, for several months.35 It remains to be seen whether the European Court of Human Rights will evaluate the merits of the suit against the LHC, or whether CERN can fix the LHC in time to render that suit moot by virtue of operation without global destruction.

Editor’s Note: A number of commenters have raised concerns about the scientific qualifications of individuals involved in bringing these lawsuits. While we believe those qualifications are less relevant to the procedural legal issues discussed within the post, we wish to acknowledge the concerns. All qualifications as reported in this post are taken from the sworn affidavits of the parties involved. Certainly, if a case such as these were allowed to proceed to analysis on the merits, the qualifications of any scientific experts involved would be a serious issue.


1. Has the Large Hadron Collider Destroyed the World Yet? (last visited Oct. 17, 2008)
2. Press Release, CERN, CERN Reiterates Safety of LHC on Eve of First Beam (Sept. 5, 2008).
3. Citizens Against the Large Hadron Collider Legal Room (last visited Sept. 27, 2008).
4. Compl., 10-11, March 14, 2008.
5. Richard Gray, Legal bid to stop CERN atom smasher from ‘destroying the world,’ The Daily Telegraph, Sept. 9, 2008.
6. Cgh, Large Hadron Collider: The Controversial Search for the God Particle, Spiegel Online International, Sept. 9, 2008.
7. Roger Highfield, Hackers attack Large Hadron Collider, The Daily Telegraph, Sept. 12, 2008.
8. Girl suicide ‘over Big Bang fear,’ BBC.com, Sept. 11, 2008.
9. CERN, LHC: The Guide, 15, 20. [hereinafter LHC: The Guide];
CERN, LHC Geographical Situation.
10. LHC: The Guide, supra note 8 at 3-4, 12, 21.
11. Id. at 6, 11, 22-25.
12. CERN, The Safety of the LHC. (last visited Sept. 19, 2008) [hereinafter
Safety of the LHC]; Compl. 3-5.
13. Safety of the LHC, supra note 12.
14. Compl. 4; Wagner Aff., 6, March 14, 2008.
15. Compl. 4.
16. Id.
17. Safety of the LHC, supra note 12; LHC Safety Assessment Group, Review of the Safety of LHC Collisions, 35 J. of Physics G: Nuclear and Particle Physics 115004, 115005-06 (2008).
18. LHC Safety Assessment Group, supra note 17 at 115006-08.
19. Compl., 10-11.
20. Id. at 6-10. For the EU, the Precautionary Principle provides a framework for deciding when governmental intervention to prevent harm to the environment or to the health of living things. Communication from the Commission on the Precautionary Principle, at 13-15, COM (2000) 1 final (Feb. 2, 2000).
21. Combined Mot. to Dismiss and Mot. for Summ. J. Hr’g Tr. 12, 29, Sept. 2, 2008.
22. Id. at 25-27.
23. Id. at 10, 15-17.
24. Id. at 12-14.
25. Id. at 12-17.
26. Id. at 4-5, 23.
27. Id. at 4-5.
28. Id. at 2-11, 29-30.
29. Sancho v. U.S. Dep’t of Energy, No. 08-00136 HG KSC, 2008 WL 4370009, at *10 (D. Haw. Sept. 26, 2008). A copy of the ruling is available at: Alan Boyle, Doomsday lawsuit dismissed, MSNBC Cosmic Log, Sept. 26, 2008.
30. Id. at *7-10
31. Id. at *11.
32. Id. (“‘Neither the language nor the history of NEPA suggests that it was intended to give citizens a general opportunity to air their policy objections to proposed federal actions. The political process, and not NEPA, provides the appropriate forum in which to air policy disagreements.’” (citing Metro. Edison Co. v. People Against Nuclear Energy, 460 U.S. 766, 777 (1983))).
33. Gray, supra note 5.
34. Id.
35. Press Release, CERN, LHC Re-Start Scheduled for 2009 (Sept. 23, 2008).

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October 17th, 2008 at 9:19 pm

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