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proceedings, his or her body having served as a home for the

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That product liability or attorneys of other legal specialities will seek to involve doctors, scientists and universities in litigation because of the threat, however tenuous, from their research to a therapeutic process or product

is clear.

The threat of litigation to universities for therapies

that emerge from biotechnology apppears to be much higher than therapies that emerged from past medical research. This is

because the transfer of technology may involve, in addition to

patent rights, genetic information embodied in tangible form such

as a plasmid vector or hybridoma.

But even a "bare" patent license may not protect a patentee

from ligitation.

A patent simply gives its owner the right to

exclude and nothing more.

The rights of a company to manufacture

and sell are common law rights and are not given by a patent

license.

There have not been as yet liability suits reaching

back to the patentee, which has simply granted a licensee immunity from suit under the particular patent. However, there recently have been in legal journals hypothetical situations outlined where patentees would be brought into litigation and become potential sources of revenue for the litigant.

It may seem improbable that liability may reach back to a

licensor involved in the discovery, but not in the end

manufacture, marketing, selling and servicing of products enabled by the discovery. But I think few will bet on it.

But consider the "deeper pocket" method of who pays for

damages won in a liability judgement.

If the plaintiff can

establish even the slightest connection to the injury by a party

with deep pockets, and the party who actually caused the injury has no funds, the deep pockets party pays. And university endowments will be attractive targets.

This situation already means a university, if dealing with a

small company, must require that the company obtain higher and

higher levels of expensive insurance and to name the university

as co-insured.

And a cynical view of justice is liability litigation against corporate institutions (such as companies and

universities) is the institution is presumed guilty unless proven

innocent.

Those institutions and individuals at the research end of

the development spectrum are faceing the considerable threat of

the downside risk noted in Section 8.

And if that threat is

real, not imagined, universities and hospitals engaged in

research have the decision to make of whether or not to continue

those interactions with industry which have the potential of jeopardizing their primary functions of teaching, education and patient care. What message does society wish to give research

institutions, and in the context of this committee's current

investigations, those institutions engaged in biotechnology

research?

Perhaps this Committee, acting for society at large,

can let us know what society's message really is.

Mr. VOLKMER. Thank you very much, Mr. Reimers.
Dr. Rathmann?

STATEMENT OF DR. GEORGE RATHMANN, PRESIDENT AND CHIEF

EXECUTIVE OFFICER, AMGEN CORP., THOUSAND OAKS, CA Dr. RATHMANN. Well, echoing some of the same comments, reflecting the ideas of the leading biotechnology companies in this country and many of the scientists and many of the people who have studied the field, there is no question that today the United States enjoys a very important lead in this field. That lead has been the result of the Recombinant Advisory Committee, the funding of research by the National Institutes of Health, very strong and effective collaboration between universities and industries, and the risk-capital system that has made the investments possible to further this research and development.

I think it's safe to say that today most of these contributions that put the United States in the leadership position have been accomplished by small biotechnology companies, representing dedicated scientists and business people working effectively in that system of collaboration with universities and with risk capital provided, many times, by the public.

I think there are certainly possibilities for improving the system, but we should look very carefully at any elements that would adversely affect the momentum that has been created in the last few years that has placed the United States in the position not only for the good of the United States but probably in the position to further this science at a pace that would effectively contribute to worldwide health.

So I would be cautious about making major shifts in what's happening, because it's working very effectively, and we are very pleased to be a part of it.

Thank you.

[The prepared statement of Dr. Rathmann follows:)

The Role of Patients, Researchers, Universities

and Private Companies in the Development

and Marketing of Human Biological Products

Statements Submitted by George B. Rathmann

in conjunction with the Subcommittee

on Investigations and Oversight Hearing,

October 29, 1985

Rapid advancements in biotechnology which have been accompanied

by rapid acceleration in the development and commercialization of

advanced biotechnology have led to the perception that a major

change may be occurring in the relationship among patients,

researchers, universities and private companies.

This statement

is intended to provide information which may be helpful for the

subcommittee to understand the extent of such changes and their

impact.

University/Industry Relations--Based on the relationships which

Amgen has developed not only with professors at universities, but

with investigators at institutions and government laboratories

coupled with previous experience in major businesses in this

country, it appears that the situation today is more of an

evolution than a revolution of typical relationships in the

past.

In general, academic professionals are open, candid,

cooperative and willing to meet and talk freely about their work.

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which they have that the information will not lead directly to

competitive activities which might preempt their ongoing research.

These concerns have always been a basis for some delay in communication or formal publication until the scope of the

contribution can be established and the obvious extensions of the

discovery or observation can be completed by the investigator. More open disclosure undoubtedly occurs when there is a formal

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selective or delayed transfer of materials is determined more by

professional issues rather than economic issues.

The practice of Amgen and the general practice of most

biotechnology companies is to accept the academic system as it

stands and to acknowledge the freedom of the investigator to publish or not to publish, to disclose or not to disclose,

consistent with the policies of the institution and the practices

of the individual investigator.

Effective collaboration between

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