University of California Berkeley
Regional Oral History Office University of California
The Bancroft Library Berkeley, California
Program in the History of the Biological Sciences and Biotechnology
STANFORD'S OFFICE OF TECHNOLOGY LICENSING AND THE COHEN/BOYER CLONING PATENTS
Interviews Conducted by
Sally Smith Hughes, Ph.D.
Copyright 1998 by The Regents of the University of California
Since 1954 the Regional Oral History Office has been interviewing leading
participants in or well-placed witnesses to major events in the development of
Northern California, the West, and the Nation. Oral history is a method of
collecting historical information through tape-recorded interviews between a
narrator with firsthand knowledge of historically significant events and a well-
informed interviewer, with the goal of preserving substantive additions to the
historical record. The tape recording is transcribed, lightly edited for
continuity and clarity, and reviewed by the interviewee. The corrected
manuscript is indexed, bound with photographs and illustrative materials, and
placed in The Bancroft Library at the University of California, Berkeley, and in
other research collections for scholarly use. Because it is primary material,
oral history is not intended to present the final, verified, or complete
narrative of events. It is a spoken account, offered by the interviewee in
response to questioning, and as such it is reflective, partisan, deeply involved,
All uses of this manuscript are covered by a legal agreement
between The Regents of the University of California and Niels
Reimers dated May 8, 1997. The manuscript is thereby made available
for research purposes. All literary rights in the manuscript,
including the right to publish, are reserved to The Bancroft Library
of the University of California, Berkeley. No part of the
manuscript may be quoted for publication without the written
permission of the Director of The Bancroft Library of the University
of California, Berkeley.
Requests for permission to quote for publication should be
addressed to the Regional Oral History Office, 486 Library,
University of California, Berkeley 94720, and should include
identification of the specific passages to be quoted, anticipated
use of the passages, and identification of the user. The legal
agreement with Niels Reimers requires that he be notified of the
request and allowed thirty days in which to respond.
It is recommended that this oral history be cited as follows:
Niels Reimers, "Stanford's Office of
Technology Licensing and the Cohen/Boyer
Cloning Patents," an oral history
conducted in 1997 by Sally Smith Hughes,
Ph.D., Regional Oral History Office, The
Bancroft Library, University of
California, Berkeley, 1998.
Copy no. '
Reimers, Niels (b. 1933) University technology licensing officer
Stanford's Office of Technology Licensing and the Cohen/Boyer Cloning Patents.
1998, ix, 84 pp.
Pre-Stanford career in industry; establishing a technology licensing program
at Stanford University; Cohen-Boyer recombinant DNA patents: negotiating with
inventors, Stanford, and University of California, commercial potential,
royalty distribution, controversy over patenting in biology, licensing plan,
recombinant DNA controversy, National Institutes of Health role, opening
patent files to public, Chakrabarty Supreme Court case, claims by John Morrow
and Robert Helling; patenting and licensing monoclonal antibodies; Pajaro
Dunes Conference on Biotechnology, 1982; University Licensing Pool for
Technology (ULab); comments on Stanley Cohen, Herbert Boyer, and Donald
Interviewed 1997 by Sally Smith Hughes, Ph.D., for the Program in the
History of the Biological Sciences and Biotechnology, Regional Oral
History Office, The Bancroft Library, University of California,
TABLE OF CONTENTS- -Niels Reimers
SERIES HISTORY i
INTERVIEW HISTORY vi
BIOGRAPHICAL INFORMATION ix
I DIRECTOR, OFFICE OF TECHNOLOGY LICENSING, STANFORD, 1968-1996 1
Pre-Stanford Career 1
Establishing a Technology Licensing Program at Stanford 1
The Cohen-Boyer Patent on Recombinant DNA Technology 3
Learning of the Invention 3
Negotiating with Stan Cohen and the University of
Commercial Potential 4
Contacting Herbert W. Boyer 6
Negotiating the Institutional Patent Agreement 7
First Description and Anonymous Review of the Invention 9
Paul Berg's Reaction 10
Explaining the Patenting Process 12
Royalty Distribution 13
Controversy over Patenting in Biology 14
The Licensing Plan 16
Claims to Inventorship 16
Ken Imatani 18
Rejecting Genentech's Request for an Exclusive License 19
Worries about Patent Coverage 20
Cohen's Involvement 22
The Biohazards Controversy 23
National Institutes of Health 23
Honoring Cohen and Boyer 24
More on the Licensing Plan 25
Opening Patent Files to Public Scrutiny 27
Setting a Low Licensing Fee 28
The International Trade Commission 29
The Patent as a Potential Source of Income 30
Royalty Distribution 31
Threat of Regulatory Legislation 33
U.S. Patent Office 33
The Chakrabarty U.S. Supreme Court Case 34
The Patent Specification 35
Patenting and Licensing Monoclonal Antibodies 36
Closing the Cohen-Boyer Patent File 37
John Morrow's Claim 39
Stanford's Announcement of the Licensing Program 40
Pajaro Dunes Conference on Technology Transfer, 1982 41
Reimers 1 111 Ease about a Licensing Opportunity
A Possibility of Premature Disclosure
The University Licensing Pool for Technology
A Niels Reimers Curriculum Vitae 50
B "Tiger by the Tail," by Niels Reimers. Reprinted in
1987 by the American Chemical Society from CHEMTECH.
August 1987, pp. 464-471 52
C "Shaping Life in the Lab," cover reprint from Time
magazine, 1981 75
D "Tech Pioneer Reimers To Sell UCSF Discoveries," San
Francisco Chronicle, March 7, 1996 76
E "New technology management office pairs inventors with
investors," Newsbreak [UCSF campus newspaper], November
22, 1996 77
F Stanford Office of Technology Licensing web page, as of
July 20, 1998 78
G Cohen/Boyer Patent Chronology 79
BIOTECHNOLOGY SERIES HISTORY--Sally Smith Hughes, Ph.D.
Genesis of the Program in the History of the Biological Sciences and
In 1996, a long-held dream of The Bancroft Library came true with
the launching of its Program in the History of the Biological Sciences
and Biotechnology. For years, Bancroft had wished to document the
history of the biological sciences on the Berkeley campus, particularly
its contributions to the development of molecular biology. Bancroft has
strong holdings in the history of the physical sciencesthe papers of
E.O. Lawrence, Luis Alvarez, Edwin McMillan, and other campus figures in
physics and chemistry, as well as a number of related oral histories.
These materials support Berkeley's History of Science faculty, as well
as scholars from across the country and around the world.
Although Berkeley is located next to the greatest concentration of
biotechnology companies in the world, Bancroft had no coordinated
program to document the industry nor its origins in academic biology.
For a decade, the staff of the Regional Oral History Office had sought
without success to raise funds for an oral history program to record the
development of the industry in the San Francisco Bay Area. When Charles
Faulhaber arrived in 1995 as Bancroft's new director, he immediately
understood the importance of establishing a Bancroft program to capture
and preserve the collective memory and papers of university and
corporate scientists and the pioneers who created the biotechnology
industry. He too saw the importance of documenting the history of a
science and industry which influence virtually every field of the life
sciences, generate constant public interest and controversy, and raise
serious questions of public policy. Preservation of this history was
obviously vital for a proper understanding of science and business in
the late 20th century.
Bancroft was the ideal location to launch such an historical
endeavor. It offered the combination of experienced oral history and
archival personnel, and technical resources to execute a coordinated
oral history and archival program. It had an established oral history
series in the biological sciences, an archival division called the
History of Science and Technology Program, and the expertise to develop
comprehensive records management plans to safeguard the archives of
individuals and businesses making significant contributions to molecular
biology and biotechnology. All that was needed was funding.
In April 1996, the dream became reality. An anonymous donor
provided seed money for a center at the Bancroft Library for historical
research on the biological sciences and biotechnology. Thanks to this
generous gift, Bancroft has begun to build an integrated collection of
research materialsprimarily oral history transcripts, personal papers,
and archival collectionsrelated to the history of the biological
sciences and biotechnology in university and industry settings. One of
the first steps was to create a board composed of distinguished figures
in academia and industry who advise on the direction of the oral history
and archival components. The Program's initial concentration is on the
San Francisco Bay Area and northern California. But its ultimate aim is
to document the growth of molecular biology as an independent field of
the life sciences, and the subsequent revolution which established
biotechnology as a key contribution of American science and industry.
UCSF Library, with its strong holdings in the biomedical sciences,
is a collaborator on the archival portion of the Program. David
Farrell, Bancroft's new curator of the History of Science and
Technology, serves as liaison. UCSF Library contributed the services of
Robin Chandler, head of UCSF Archives and Special Collections, who
carried out a survey of corporate archives at local biotechnology
companies and document collections of Berkeley and UCSF faculty in the
biomolecular sciences. The ultimate aim is to ensure that personal
papers and business archives are collected, cataloged, and made
available for scholarly research.
With the board's advice, Sally Hughes, a science historian at the
Regional Oral History Office, began lengthy interviews with Robert
Swanson, a co-founder and former CEO of Genentech in South San
Francisco; Arthur Kornberg, a Nobel laureate at Stanford; and Paul Berg,
also a Stanford Nobel laureate. A short interview was conducted with
Niels Reimers of the Stanford and UCSF technology licensing offices.
These oral histories build upon ones conducted in the early 1990s, under
UCSF or Stanford auspices, with scientists at these two universitites . '
The oral histories offer a factual, contextual, and vivid personal
history that enriches the archival collection, adding information that
is not usually present in written documents. In turn, the archival
collections support and provide depth to the oral history narrations.
Primary and Secondary Sources
This oral history program both supports and is supported by the
written documentary record. Archival materials provide necessary
information for conducting the interviews and also serve as essential
1 Hughes conducted oral histories with Herbert Boyer, William Rutter, and
Keith Yamamoto of UCSF, and with Stanley Cohen of Stanford. The first volume
of the oral history with Dr. Rutter is available at the Bancroft and UCSF
libraries; transcripts of the other interviews are currently under review by
resources for researchers using the oral histories. The oral histories
orient scholars to key issues and participants. Such orientation is
particularly useful to a researcher faced with voluminous, scattered,
and unorganized primary sources. This two-way "dialogue" between the
documents and the oral histories is essential for valid historical
Beginning with the first interviews in 1992, the interviewer has
conducted extensive documentary research in both primary and secondary
materials. She gratefully acknowledges the generosity of the scientists
who have made their personal records available to her: Paul Berg,
Stanley Cohen, Arthur Kornberg, William Rutter, Keith Yamamoto. She
also thanks the archivists at Bancroft, UCSF, and Stanford libraries,
and personnel at Chiron, Genentech, and Stanford's Office of Technology
Licensing, for assistance in using archival collections.
Oral History Process
The oral history methodology used in this program is that of the
Regional Oral History office, founded in 1954 and producer of over 1,600
oral histories. The method consists of research in primary and
secondary sources; systematic recorded interviews; transcription, light
editing by the interviewer, and review and approval by the interviewee;
library deposition of bound volumes of transcripts with table of
contents, introduction, interview history, and index; cataloging in
national on-line library networks (MELVYL, RLIN, and OCLC) ; and
publicity through ROHO news releases and announcements in scientific,
medical, and historical journals and newsletters and via the ROHO and
UCSF Library web pages.
Oral history as an historical technique has been faulted for its
reliance on the vagaries of memory, its distance from the events
discussed, and its subjectivity. All three criticisms are valid; hence
the necessity for using oral history documents in conjunction with other
sources in order to reach a reasonable historical interpretation. 1 Yet
these acknowledged weaknesses of oral history, particularly its
subjectivity, are also its strength. Often individual perspectives
provide information unobtainable through more traditional sources. Oral
history in skillful hands provides the context in which events occur--
the social, political, economic, and institutional forces which shape
the course of events. It also places a personal face on history which
not only enlivens past events but also helps to explain how individuals
affect historical developments.
1 The three criticisms leveled at oral history also apply in many
cases to other types of documentary sources.
An advantage of a series of oral histories on a given topic, in
this case molecular biology and biotechnology, is that the information
each contains is cumulative and interactive. Through individual
accounts, a series can present the complexities and interconnections of
the larger picture. Thus the whole (the series) is greater than the sum
of its parts (the individual oral histories), and should be considered
as a totality.
Although the oral history program is still in its infancy, several
themes are emerging. One is "technology transfer," the complicated
process by which scientific discovery moves from the university
laboratory to industry where it contributes to the manufacture of
commercial products. The oral histories show that this trajectory is
seldom a linear process, but rather is influenced by institutional and
personal relationships, financial and political climate, and so on.
Another theme is the importance of personality in the conduct of
science and industry. These oral histories testify to the fact that who
you are, what you have and have not achieved, whom you know, and how you
relate have repercussions for the success or failure of an enterprise,
whether scientific or commercial. Oral history is probably better than
any other methodology for documenting these personal dimensions of
history. Its vivid descriptions of personalitites and events not only
make history vital and engaging, but also contribute to an understanding
of why circumstances occurred in the manner they did.
Molecular biology and biotechnology are fields with high
scientific and commercial stakes. As one might expect, the oral
histories reveal the complex interweaving of scientific, business,
social, and personal factors shaping these fields. The expectation is
that the oral histories will serve as fertile ground for research by
present and future scholars interested in any number of different
aspects of this rich and fascinating history.
Location of the Oral Histories
Copies of the oral histories are available at the Bancroft, UCSF,
and UCLA libraries. They also may be purchased at cost through ROHO.
Sally Smith Hughes, Ph.D.
Regional Oral History Office
Program in the History of the Biological Sciences and Biotechnology
Completed Oral Histories
Arthur Kornberg, M.D., Biochemistry at Stanford, Biotechnology at DNAX, 1998
Niels Reimers, Stanford's Office of Technology Licensing and the Cohen/Boyer
Cloning Patents, 1998
William J. Rutter, Ph.D., The Department of Biochemistry and the Molecular
Approach to Biomedicine at the University of California, San Francisco,
Oral Histories in Process
Paul Berg, Ph.D.
Stanley N. Cohen, M.D.
Herbert W. Boyer, Ph.D.
Edward E. Penhoet, Ph.D.
Robert A. Swanson
Keith R. Yamamoto, Ph.D.
INTERVIEW HISTORY- -Niels Reimers
This short oral history with Niels Reimers focuses on only one,
albeit a major, aspect of his career in technology licensing at Stanford
University: his pursuit of the patenting and licensing of recombinant
DNA cloning technology devised by Stanley Cohen of Stanford and Herbert
Boyer of the University of California, San Francisco. The three patents
are basic tools of biotechnology, licensed by every company engaged in
recombinant DNA science and bringing immense royalty income to the two
The discussion begins with Reimers' arrival at Stanford in 1968 as
associate director of the Sponsored Projects Office. Soon after, he
initiated a pilot program promoting the patenting and licensing of
Stanford faculty "inventions" thought to have commercial application.
Immediately successful in increasing the university's patent income, the
program was formally established in 1969 as Stanford's Office of
Technology Licensing [OTL] , with Reimers as director. The campus had
thus acquired an efficient mechanism to facilitate "technology
transfer"--the catch phrase for the process in which information
embodied in basic science discoveries is transferred to industry for
commercial development. The essence of this process is patenting and
licensingpatenting by the U.S. Patent and Trademark Office [PTO] in
Washington, D.C., and licensing, in this case by Stanford's OTL, to
companies of the right to use the patented "technology".
Reimers tells in the oral history how he learned in the spring of
1974 that Cohen and Boyer had developed a technique for joining DNA
segments from different sources and replicating or "cloning" them in
bacteria- -recombinant DNA technology, as it came to be known. Reimers
contacted Cohen, who confirmed that the technique had commercial as well
as scientific potential. Thus began a long and arduous process, lasting
well over a decade, of attempting first to patent and then to license
the Cohen-Boyer process and products.
Reimers describes how he submitted a patent application in late
1974 shortly before the patent "bar", the one-year period after
"disclosure" or communication of the discovery, within which a patent
application must be filed according to U.S. patent law. The process was
far from straightforward. University biologists up to this point had by
and large stuck to "pure" basic research. Commercial application of
academic research was largely confined to their colleagues in
engineering, chemistry, and other applied fields. Although patenting in
medicine was not unknownthe University of Toronto's patent on insulin
is an early example--academia nonetheless approached commercialization
of discoveries in biomedicine warily and usually sought means to avoid
direct involvement. OTL's direct and aggressive management of the
patenting and licensing of DNA cloning technology was a new departure.
There were other stumbling blocks to patenting and licensing the
Cohen-Boyer work. The period between 1974 to 1980, when Reimers and
others were negotiating with the PTO to issue the first of the three
recombinant DNA patents, was a time of heightened concern about the
safety of recombinant DNA science. Paul Berg, the leading scientist in
the recombinant DNA biohazard debate, was also at Stanford and outspoken
in his belief that the university's patenting effort would undercut his
position as primary spokesman for the resumption of research under
government guidelines. For this and other reasons, Reimers and other
Stanford officials trod softly during the 1970s when the patents were
By the late 1970s, there was another problem stalling Stanford's
effort to patent the Cohen-Boyer procedure: the Supreme Court was
considering the patenting of "life forms" in the renowned Chakrabarty
case in which General Electric sought to patent an organism constructed
to metabolize oil. In view of the legal indecision regarding the
patentability of living organisms, Stanford dropped its "product" claim
--its claim on recombinant organisms and filed a patent application on
the cloning process alone. On December 2, 1980, the PTO issued the
first Cohen-Boyer patent, the so-called "process" patent.
Reimers recounts his efforts to structure a licensing program
which would encourage wide industry utilization of the new technology
and, by setting low licensing fees, discourage litigation. After 15
percent had been taken off the top to pay for Stanford's management of
the patent, potential royalties were to be split 50-50 between Stanford
and UCSF, the university affiliations of Cohen and Boyer. The
dissensions of this period and the increasing participation of Stanford
administrators, from President Donald Kennedy on down, are outlined in
the oral history. In 1984 and 1988, the PTO approved the two "product"
patents, on "lower" (prokaryotic) and "higher" (eukaryotic) organisms.
The Oral History Process
One interview, somewhat hastily arranged when I learned that
Reimers was about to retire, was conducted in his office in the UCSF
Faculty Club, where in March 1996 he established the campus's first
Office of Technology Management. Down-to-earth and friendly, he
attempted to cover a complex period of history in a short time. The
result is insightful but not comprehensive. For further research, the
interested reader is referred to the extensive records on the Cohen-
Boyer patent at Stanford's OTL. Some of these documents were used in
the course of the interview and suggest the richness of this collection,
as well as their value in getting beyond "an oft-told tale."
There is intrinsic interest in this history of major patents as
told by the man most responsible for steering them through the patenting
procedure and for creating the structure and terms of the licensing
process. His tenacity in this arduous business stemmed in part from his
gradual realization of what these patents could mean to the two
universities in income and prestige. But the oral history also suggests
a dramatic shift in philosophy as university administrators, industry
figures, and university scientists learned the value--scientif ic,
commercial, and f inancial--of discoveries in biological science.
Reimers is among those responsible for facilitating the increasingly
complex interconnections between the academic and industrial worlds.
The Regional Oral History Office was established in 1954 to
augment through tape-recorded memoirs the Library's materials on the
history of California and the West. Copies of all interviews are
available for research use in The Bancroft Library and in the UCLA
Department of Special Collections. The office is under the direction of
Willa K. Baum, Division Head, and the administrative direction of
Charles B. Faulhaber, James D. Hart Director of The Bancroft Library,
University of California, Berkeley.
Regional Oral History Office
The Bancroft Library
Sally Smith Hughes, Ph.D.
Regional Oral History Office University of California
Room 486 The Bancroft Library Berkeley, California 94720
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INTERVIEW WITH NIELS REIMERS
I DIRECTOR, OFFICE OF TECHNOLOGY LICENSING, STANFORD, 1968-1996
[Date of Interview: May 8, 1997] it 1
Hughes: Mr. Reimers, please give me a thumbnail sketch of how you ended
up at the Office of Technology Licensing [OTL] at Stanford.
Reimers: I had been in industry before then, namely at Ampex Corporation
[Redwood City, California, 1959-1962] and Philco Western
Development Laboratories [Palo Alto, California] , which became
Philco-Ford Corporation, which then became Ford Aerospace [1963-
1968] and is now Loral Corporation. I went from engineering to
become a division manager of contracts for Ford. From there I
wanted to apply my knowledge in a university setting. I
contacted Stanford and was hired by Stanford [May 1968].
Establishing a Technology Licensing Program at Stanford
Reimers: I soon found out that the business of managing grants and
contracts in a university was nowhere near as interesting as at a
company. So when a technology disclosure came by, after I had
been at Stanford a couple of months, I asked, "What do you do
with this?" And they said, "Well, you send it to the Research
Corporation, which is based in New York City. They handle
inventions for a great number of universities. Then after a few
months, they'll respond, and then you take it from there."
I looked up the income we had from Research Corporation from
'54 through '67, and it was something like $4,500. I thought we
could do a lot better licensing directly, so I proposed a
'*# This symbol indicates that a tape or tape segment has begun or
ended. A guide to the tapes follows the transcript.
technology licensing program. And I had some advice: in the
university setting, you don't just start a program; you begin a
pilot program. So I started it as a pilot program, and proposed
how the royalties would be distributed, how the financial
structure would be, and began the program later in 1968 on a
pilot basis. But I still had my responsibility in the Sponsored
Projects Office, so this was a part-time thing.
In that first partial year, the program brought in about
$55,000, and I was making thirteen or fourteen thousand at the
time. So Stanford really never had to look back. We were making
money from the beginning. And then we set the program up on a
formal basis for the next year. After I put together the plan
for it, Stanford planned to go out and hire somebody, and I could
get back to doing what they hired me for. I said, "Not a chance.
I want to do this." And I went to my boss, Ken Creighton,
Stanford's controller, who said, "Well, there's not a career path
in university administration for this sort of thing. This could
be a dead end." My response was, "If I can see my way clear to
doing something I've really enjoyed for five years, that's a
The next year I raised around seventy-five thousand in
royalty income. I thought with a growth in revenue of 50 percent
a year, we're going to really do great. But then I had the first
downturn in royalty income in the third year, down to seventy-one
thousand. But after that third year, we then increased steadily.
It's now around forty or so million dollars. I don't know the
exact number though. 1
Typically, a faculty member or a graduate student or
research staff member at Stanford sends in an invention
disclosure to begin the licensing process. When I started, the
volume was probably around twenty-two, twenty-five or so
disclosures per year. Very quickly, after we had our own campus
program, it built up to fifty-sixty, and then rose, in the last
ten or fifteen years, to about one hundred seventy- five a year.
Three or four discoveries come in every week. The office manages
the licensing of those discoveries.
'Reimers' editorial note: FY 96-97 income was $52 million.
The Cohen-Boyer Patent on Recombinant DNA TechnoloRy
Learning of the Invention
Reimers: The news director at Stanford, Bob Beyers, had a practice, and I
don't think it's done anymore. If he saw something that would be
of interest relating to the educational worldhe compiled
something called the "Educational Digest" that he circulated at
Stanford once a month or so--he would photocopy these articles he
saw in newspapers and magazines and send them around. But if he
found something specifically of interest for technology
licensing, he would immediately get that off to us. In this
case, it was an article from the New York Times, 1 not too
extensive, about this work of Stan Cohen, 2 and that's the only
name I really looked at at the time. It reported on the
publication of Stan's workthis was in May of '74--and it looked
interesting to me. Later that same day, I got a press release
from Spyros Andreopoulos, who was head of the news service at the
[Stanford University] Medical Center. It was the first tip I got
from Bob that stimulated me to investigate it.
Negotiating with Stan Cohen and the University of California
Reimers: I called up Stan, with whom I had worked before, but not in this
field. He had been in clinical pharmacology, and there he had
developed some drug interaction technology, software based. So I
had gotten to know Stan. I said, "Stan, this looks like it's
interesting and important work." And he said, "Yes." He thanked
me for that; he agreed that it was very important. "But, no
patents. This is something that's going to go out broadly." I
said, "Well, it certainly will, but if we apply for a patent on
it, there's the concern about the safety of recombinant DNA
research. Through a patent we might be able to get an exclusive
license to a company to develop a recombinant insulin and so on.
You can't get drugs developed today without some proprietary
protection, because they require an investment of a couple of
hundred million dollars for R & D. So through the mechanism of
1 Victor E. McElheny. Gene transplants seen helping farmers and
doctors. New York Times. May 20, 1974, 60:1.
2 An oral history is in progress with Stanley N. Cohen, which will
eventually be available for research at UCB and Stanford.
the license we would be able to do that sort of thing. We could
require companies to follow safety guidelines also, through the
mechanism of the license." Then I explained to him how patents
worked. Stan finally agreed to cooperate and then added,
"There's a co- inventor on this, Herb Boyer, and he will have to
agree as well." 1 said, "Fine."
At UC, the technology is controlled by the UC Systemwide
office. So I contacted Josephine Olpaka, who worked for Mark
Owens, a lawyer who was handling the UC licensing office. They
were overloaded with technology, but the program had never made
any money (over expenses).
Hughes: What do you mean overloaded by technology?
Reimers: Overloaded with technology that they didn't move. They did not
market; they'd wait for a company to come to them, instead of
taking the very proactive way that we did it at Stanford. So
this invention of Cohen and Boyer was just one more thing to do.
Herb agreed that we could go forward. That meant
negotiating with UC, so I drafted an inter-institutional
agreement. UC Systemwide did not want to take any risks, so they
wouldn't cover any patent or marketing costs. Everything would
be at Stanford's risk. I said that 15 percent off the top would
go to Stanford for managing the patent. Then Stanford could
recover its expenses, and then the balance would be divided
fifty-fifty. But if nothing ever came in in royalties, Stanford
would be out whatever they had spent on it. This was the essence
of the inter-institutional agreement that was signed. Of course,
later on the licensing proved to be successful. UC then thought
that 15 percent was an over-recovery, and I told them, "You had
Hughes: Did the New York Times article spell out the applied
possibilities of this technology?
Reimers: It talked about the potential. Stan and I disagree on this one
point, by the way. My recollection was, Stan thought that
commercial use was far out there in years. He now says he
realized then it would be a shorter period. I explained that the
patent runs seventeen years, and he thought the real big money
wouldn't come until later. He's quite right in that. But, of
course, we were able to get a fairly decent return before the
patent expired [December 1997].
Hughes: He was saying that the patent would expire in seventeen years and
there probably wouldn't be much profit in that period of time?
Reimers: Yes. But that's an area where we decided to agree to disagree.
Hughes: From the very start that was his attitude?
Reimers: No, later, when I was giving a talk on this, I had mentioned that
he didn't think that there would be any significant commercial
applications for many years. He says, no, he anticipated it
would be earlier. It probably was my interpretation of what he
said. He may have said that any significant money may not come
until the patent expires. As it turned out, we had a difficult
time in the [U.S.] Patent [and Trademark] Office, which in a
sense, turned out to be advantageous for us, because it's
seventeen years from issue.
Hughes: Well, let's go over it step by step. Did Beyers send you this
article with the idea that this might be patentable research?
Reimers: Well, no. It was a piece of technology of a Stanford professor;
Beyers would have no idea whether it was patentable or not. He
was just keeping me informed. That publication, by the way,
after I talked to Stan, led me back to a 1973 publication,
November of 1973, ' which had disclosed it before, but it didn't
get any attention at that time.
The only reason Stan's publication got attention in May of
'74 is that a reporter [Victor McElheny] from the New York Times
was going to do an article on--I forget the topic something from
a Harvard or MIT professor. The scientist said that it really
wasn't ready; he had to do some more science. And the reporter
said, "Oh, gosh, I need to have an article." The scientist said,
"Well, I think this is interesting work by Stan Cohen"--he may
have said the others [authors); I forget who was on the
publication. My focus was on Stan Cohen and Annie Chang, who
were at Stanford.
Hughes: It was [Robert B.] Helling and Boyer on the UCSF side.
1 S. N. Cohen, A. C. Y. Chang, H. W. Boyer, and R. B. Helling.
Construction of biologically functional bacterial plasmids in vitro.
Proceedings of the National Academy of Sciences 1973, 70: 3240-3244.
Reimers: That's right. Helling was on that. And that became a problem
later, which was not in the publication. 1 The reporter then
contacted Stan. So it's just by happenstance that that article
was written. Otherwise, the research may have just lain fallow
in the journal.
Before that time, the research results of people in
biochemistry and genetics and such were fertile ground for Nobel
Prizes, but not much for commercial application. In fact, when
this whole industry [biotechnology] got going, they just did not
have people in companies that had competence in the biological
sciences. So this was quite a change. And there was a great
demand for graduates in these fields at that time.
So I got UC signed up. Then I got the inventors signed up.
Well, actually I only got Stan signed up, because UC signed up
Herb. In the inter-institutional agreement, UC had to assure me
that they had Herb signed up.
Contacting Herbert W. Boyer
Hughes: After your conversation with Cohen, you had a conversation with
Can you remember the substance of that conversation?
No, I'm fuzzy about it. It could have been through the UC
Hughes: Well, you know how it might have happened. I went through the
documents at OTL, and I noticed there were notes, 2 not by you.
[interruption; Hughes hands copy of notes to Reimers.] Mr.
'Reimers' note in editing: Dr. Helling was on sabbatical from the
University of Michigan in Herb's lab. Because he was listed as an author,
the University of Michigan contacted us, maintaining he was an inventor and
that the UM was entitled to a royalty share. This was later resolvedonly
Stan and Herb were inventors.
2 BC [Bill Carpenter] to 74-43, September 18, 1974, re Dr. Herbert
Boyer (Office of Technology Licensing, Stanford, S74-43, Correspondence
1974-1979. Hereafter, OTL correspondence.)
Reimers is looking at notes taken by a Bill Carpenter, who was a
Reimers: A business school student. I made it a practice to have business
school students work with me every summer, and then part-time
during the rest of the year. It was the summer between their
first and second year of business school. And Bill was
Hughes: So he obviously had had a conversation with Boyer, which doesn't
mean that you also didn't.
Reimers: It probably is the case. It probably was Bill. And good for
Bill. I'm glad the note was in the file. But I knew that Boyer
was ready to go forward. And that's probably why I'm fuzzy about
Hughes: Was Boyer immediately ready? He didn't have Stan's hesitations?
Reimers: No, not that I recall, or even through Bill. Boyer was very
straightforward, and we went on. I don't think at that time he
had been contacted by [Robert] Swanson. 1 I don't think it was
until we started to get some publicity about the commercial
potential of recombinant DNA.
Negotiating the Institutional Patent Agreement
Reimers: So we got the inter-institutional agreement with UC worked out.
The research at Stanford had been sponsored by, I think, NIH
[National Institutes of Health], and at UC by NSF [National
Science Foundation] and the American Cancer Society. The
American Cancer Society had never released rights on an invention
before. So I contacted them and explained the situation. I said
that what I'd like to do is have it managed under our
institutional patent agreement with NIH. And I explained the
patent system and how the net returns would go back into
research. They eventually agreed.
1 According to Swanson, Boyer and he first met to discuss the
formation of a company, later named Genentech, in January 1976. See the
oral history with Robert A. Swanson in the Program in the History of the
Biological Sciences and Biotechnology Oral History Series. Hereafter, The
Bancroft Library Series.
Did every educational institution that was receiving money from
NIH have an agreement with NIH?
No, you had to negotiate an "institutional patent agreement." In
1980, I was involved with lobbying the Bayh-Dole bill through
Congress. That then gave universities automatic rights, first
option to rights, in all inventions created with government
money. But at the time of the Cohen-Boyer invention, we had to
negotiate specific agreements with each agency. So I had an
institutional patent agreement with NSF as well as NIH. But the
invention fell more in the NIH camp. NSF said we still had the
obligations to them, and we would need to report to them and so
on, but they would agree that NIH could take the lead. So that's
how it ended up.
By the time that last agreement was inked and the patent
application filed, it was one week before the patent bar. It was
late, very late. I had engaged Bert [Bertram I.) Rowland. He
was one of the few patent attorneys that had knowledge in this
field at that time.
You mean in biological science?
Yes. He had gotten his Ph.D.
very knowledgeable in that.
at the University of Washington,
Yes. What we now call biotech, biochemistry. It was filed one
week before the absolute patent bar. Because we filed after the
publication by Cohen, Boyer, et al., the only patent rights we
could seek were U.S. rights, and that application had to be filed
by November of 1974. ' So I hadn't given Rowland too much time.
There were a lot of tense times with the safety issues and so on.
1 In the U.S., inventors may file a patent claim up to one year after
public disclosure of the invention. European countries operate under a
"first-to-file" patent system.
First Description and Anonymous Review of the Invention
Hughes: The first description I saw of the very preliminary stages of a
patent application, I suppose, was written on October 18, 1974.'
It was called Plasmid Gene Transplantation Technique. Of course,
you've since changed the nomenclature.
Reimers: Well, we made it a little more descriptive.
Hughes: [hands document to Reimers] Did you write that?
Reimers: I doubt it.
Hughes: It's by Bill Carpenter, presumably. At least he's on the memo.
Reimers: Oh, it's his handwriting. 2 Yes, that was Bill.
Hughes: Apparently you sent out this preliminary description.
Reimers: We sent that to Cohen and Boyer, asking for feedback.
Hughes: Yes, but you must have also sent it to somebody else because
there was an anonymous review. 3 May I read the first paragraph?
Hughes: It says, "In response to your request for the evaluation of the
patent application entitled 'Process and Composition for
Biologically Functional DNA Chimeras' by Cohen and Boyer, I would
like to make the following comments."
The first paragraph reads:
To begin with, this technological
development very clearly has immediate
applications and probably represents one of
1 Memo, Bill Carpenter to Niels Reimers, S74-43, Gene Transplantation,
and attachment, The Plasmid Gene Transplantation Technique, October 18,
1974 (OTL, Stanford, S74-43, correspondence 1974-1979.).
2 Mr. Reimers is mistaken about the handwriting; he refers to a
marginal note penciled by the interviewer.
3 "In confidence, re: Process and composition for biologically
functional DNA chimeras--Cohen-Boyer , " July 1, 1975 (OTL correspondence
the most outstanding new developments in
molecular biology in recent years. It is a
far-reaching development and has extremely
high potential with respect to its commercial
application. If the patent is successful
there is little doubt that it represents a
potential source of considerable amount of
royalties for the Universities involved.
With respect to the feasibility of the
project, it clearly is based on sound
biological principles and does, indeed,
represent a novel development.
Do I recall who did that?
Yes, do you?
Was it common procedure to ask for a review?
My sense was that I had something that was potentially very
important, and I wanted to get feedback on it.
You don't know who the anonymous reviewer might have been,
somebody, obviously, who could appreciate the science.
Yes, here he talks about the early work. I'm trying to think who
I was close to at that time, that might have done it. I needed
to get someone fairly objective, I felt; it was probably not a
Stanford or UCSF person.
Paul Berg's Reaction
Reimers: Some emotions were involved with all of this. I remember Paul
Berg wanted to meet with me, and he was quite upset that I had
filed on this case, very upset. 1 Then he noted the work that he
and his student--Janet Mertz--had done earlier. I said,
"Everyone stands on the shoulders of the scientists that have
1 For a record of one such meeting see: John Poitras to File S74-43,
Meeting on DNA Patent, May 17, 1976, attendees: Clayton Rich, William
Massy, Robert Rosenzweig, Paul Berg, Stanley Cohen, Joshua Lederberg,
William Baxter, Peter Carpenter, John Poitras. (OIL correspondence 1974-
worked before. Had you disclosed your earlier work to me, and it
was something that could be applied..." In other words, you
can't patent just an idea; you have to have a teaching in the
patent, so you can make that insulin product, and so on.
So if Berg's research was that far along, and he had
disclosed it, then I certainly would have gone for it by applying
for a patent. As it turns out, he was probably close to doing
that, but he was working then with--
Hughes: He was working with SV40 [a simian virus].
Reimers: SV40, yes. And SV40 had some safety concerns. So, he held back.
You'd have to talk to other scientists as to whether he could
have done what Cohen and Boyer successfully did, or not. But he
didn't. And so Stan and Herb were clearly first. Stan was not
in the inner circle at Stanford, or perhaps elsewhere, because he
had been, if you recall, in clinical pharmacology. He may not
have been one of those they would have liked to have had do this.
You'd have to talk them; 1 maybe he was an interloper in the
field, or whatever. There was not universal joy in the
biochemistry establishment about what I was doing.
Hughes: Why were you convinced that this invention could be something
Reimers: I wasn't convinced. I didn't know that much about it. Because a
great excitement developed regarding this area, I maintained from
the beginning that this work of Cohen and Boyer would underlie
the whole field of biotechnology. And I repeated it and repeated
it. When I first went licensing, a lot of the companies, the
business people, didn't really understand the technology. They
had just been reading about its potential. Now, that was true of
some of the companies, not all of them. So we had to go through
a tutorial as well.
By then I had a couple of other business school students. I
saw Ken Imatani's name in your documents. Then I hired Andy
Barnes, and Andy was just super helpful. He was just graduating
from the business school, and I felt I needed somebody full-time
to help me on this. And so he agreed to work full-time. So Andy
and I developed all these documents and visuals that explained
the patent and the four royalty elements.
1 See the oral histories with Paul Berg and Arthur Kornberg in The
Bancroft Library Series.
Explaining the Patenting Process
Hughes: Let's wait a bit on that. Let me just read the last paragraph in
this review, because it brings out some of the problems that
you're going to confront as you apply for the patent.
In summary, it is my view that this is a
somewhat ill-conceived patent application
that disregards (albeit unintentionally) the
contributions of other scientists and is very
basic in its concepts and applications.
While one can argue that the University
should attempt to benefit from this
scientific achievement, I am concerned that
given the fundamental nature of the work and
the number of scientists involved, either
directly or indirectly, that this patent will
not reflect favorably on the public service
ideals of the University.
Reimers: I mentioned that biochemistry is the fertile ground for Nobel
Prizes and that sort of thing. Few biological scientists had
been involved with the commercial side. They didn't understand
the role of patents, such as the patent is an ultimate
publication. A patent provides much more information than the
typical publication. You have to, or the patent will be invalid.
You have to teach how to go forward. And it does not in any way
restrict publication. I had to work almost one on one with each
scientist to explain the system to them.
It's not like an academic publication. Yes, if you need to
explain the science, the teaching part of the application, you
would refer to work by others. But if there wasn't a teaching
element, you might not refer to other scientists' work. But in a
[scientific] publication, you have got to refer to those who came
before. The perception was that the patent was restrictive.
They didn't understand the basic principle: patents do not
inhibit research, because that's a public policy issue. The
right to patent goes back to the [U.S.] Constitution.
Hughes: What became an issue, and what to this day is an issue, is that
in certain instances scientists do hold up publications until
they can get patents filed.
Reimers: Oh, it's terrible, yes. In my career at Stanford, MIT, UC
Berkeley, and UCSF, I have never delayed publication- -not for a
year, not for a month, not for a week, not for a day, not for an
hour, not for a minute, not even a second. When people said,
"Well, if you haven't had enough time to evaluate my technology,
to decide to file a patent on it, I can hold up publication," I
would tell them, "No."
I had to be a little cynical about Art [Arthur Kornberg] and Paul
[Berg] because they got involved with DNAX , and DNAX was
sold to Schering-Plough not long after it was founded. 1 The key
asset that [Alejandro] Zaffaroni had in that sale was the tie-in
with Paul and Art and perhaps a few others. So I was just
estimating backwards of what financial piece they got out of
that, and it was much more than Stan had gotten up to that point.
In fact, Stan had initially waived his right to personal
royalties, because everybody was all over him; he didn't want to
be tarred with that brush. I think, he didn't even give his
royalties to Stanford; they went to his alma mater, which was the
University of Pennsylvania, I believe.
He graduated from the University of Pennsylvania.
Yes, so he gave them to Pennsylvania. However, later he decided,
perhaps based on what others were doing, that he would take the
When was that?
It should be in the file. Let's see, the first intern came in
when we did our first license. Was that 1980?
The process patent issued in 1980. 2 You certainly began actively
soliciting licenses in 1981, and that was when Andy Barnes was
very active. 3
1 For more on DNAX, see the oral history with Arthur Kornberg in The
Bancroft Library Series.
2 United States Patent 4,237,224, Cohen et al., December 2, 1980.
Process for producing biologically functional molecular chimeras.
3 See, for example: memo, Andy Barnes to Niels Reimers, September 1,
1981, Cohen-Boyer gene-splicing licenses (OTL correspondence 1980-1982.)
Reimers: [musing] So it was in the fall of that year, December 15, 1981,
when all that money came in. And then that year's income was
distributed the fall of the next year, the fiscal year that ran
through August 31, 1982. It probably would have been '83 or '84
that Stan decided to accept personal royalties. I said, "I'm
going to tell people, because I publicly said that you were
waiving your royalties. And if anybody said that they understood
that you waived royalties, I'm going to explain that you did, but
now you don't, and then refer them to you." He pointed out he
could still be donating them. I said, "That's fine. You deal
Hughes: Does Boyer receive personal royalties?
Reimers: No, I am told he turned them over to UCSF, to the Department of
Biochemistry. 1 I haven't seen the documents; you'd have to talk
to Herb. He made a ton of money through Genentech.
It's interesting. I don't think to this day, Stanford has
received patent disclosures from Paul or Art.
But from quite a
Controversy over Patenting in Biology
Reimers: I think it's important for scientists, if they can't aid the
process by which results of their research are delivered in a
form the public can use, they should at least not inhibit it.
And I don't think people are inhibiting the process, but it's
better if they aid the process. If Paul or anybody has come up
with something significant, a drug won't be developed unless we
can get a patent on it.
Hughes: In biology, there wasn't that long tradition of patenting that
there had been in the physical sciences.
Reimers: Yes, it's coming out more and more.
Hughes: You were probably on the first wave in biology.
1 The Department currently has a Boyer Fund which largely supports
Hughes: What complicated these issues and made people even more skittish
was the fact that the recombinant DNA controversy was almost
synchronous with the patenting attempts. And who was most
prominent at Asilomar? Paul Berg.
Reimers: Exactly. There was a conference at MIT on recombinant DNA, and
Stan--he may have given a talk earlierwas leaning against the
wall in the back of the auditorium.
Hughes: Oh, the Miles symposium [June 8-10, 1976].
Reimers: And somebody said, "What about the patent applications? We
understand, there are patents. Stan Cohen may know something
about that." Stan told me, "That was a long walk down the aisle
[to the podium]." But he says all the way along he was trying to
remember what I had said about the basics of the patent system,
and so on. And when he got up there, he essentially diffused the
situation and explained it. At that time he was probably talking
about the fact that he was not taking any personal royalties; any
monies received went back into research. 1
Hughes: Yes, but I think he also was trying to explain that patenting
would not affect academic research.
Reimers: Right. By the way, we had some disagreements as we went along,
Stan and I. It was not all peaches and cream. As a matter of
fact, Sally Hines was in my office. There was essentially just
me, Sally, John Poitras, and the [business school] students. She
or another person there said that, gosh, they were worried about
me, because Stan was raising his voice.
Hughes: Do you remember what the issues were?
Reimers: No, I honestly don't. But some of it was, he didn't quite
understand the situation. What we do is a complex mix of
business, technology, and law.
Stan was very interested in what was going on, but
maintained that he wasn't. But I put a note in the file every
single time I talked with him on the phone. You probably saw
them when you went through the files. Stan is a wonderful guy;
he's very tenacious.
1 For Cohen's viewpoint, see his oral history in progress.
The Licensing Plan
Claims to Inventorship
Hughes: Well, I want to show you a July '76 licensing plan 1 and see if it
brings back any memories. This is the first one that I saw.
Hughes: Was there a debate about the inventors being solely Cohen and
Reimers: Yes, there certainly was. And you can get that from the patent
file history; it's public. The University of Michigan was trying
to assert that Helling was a co-inventor, because he was on the
publication. Annie [Chang] wasn't a co-inventor. But based on
patent law, it was Herb and Stan. Stan had the plasmid, and Herb
had the enzyme. And they agreed to collaborate.
Hughes: How did you discount Annie?
Reimers: The patent attorney makes the decision. It was a non-issue with
Annie: she was carrying out the experiment, but she wasn't the
inventor. But the patent attorney determines that; I don't
determine that. At that time, patent law was even more stringent
than today about who is the inventor, that you don't put on
people who aren't inventors, and you don't leave off people who
Hughes: The Helling problem came later. What I'm asking is, at the time
of this licensing plan, were you discussing who should be the
Reimers: Oh, no. The inventors were determined in 1974, and this was '76.
During the patent prosecution process, after we had filed, then
there was a call from the University of Michigan. In some ways,
I didn't care a lot about that, because Boyer 's royalties would
come out of the UC half. Royalties were divided equally between
the universities, and then we would diwy ours out based on our
policy. UC would diwy theirs out based on their policy. So,
Helling, in that sense, wasn't a concern to Stanford, except for
the fact, from the patent point of view, we had to have the
1 Memo, Niels Reimers to file S74-43, Recombinant DNA Process, July
13, 1976, subject: Licensing Plan (OTL correspondence 1974-1979.)
correct inventors. So that meant it needed to be dealt with
publicly before the patent office, which it was.
By the way, a sore point for Boyer is somewhat
understandable. Stanford took 15 percent for managing the case,
and at UC, the standard practice was 15 percent off the top for
managing the case, and then you distributed. Well, UC took
another 15 percent. All they had to do was cash the checks from
Stanford, but they took another 15 percent. So if you want to
get some sharp reaction, talk to Herb about that. [laughter]
Hughes: They took 15 percent off the 50 percent that went to UC?
Hughes: Yes, that makes a difference, doesn't it?
Reimers: Big difference. I mean, you're talking big money. I got a
chance to talk to Herb about that. I didn't know that UC took
the 15 percent until I saw Herb last year, and he mentioned that
to me .
Hughes: How was the Helling claim handled?
Reimers: It was through communication with the University of Michigan, and
through the patent office by Bert Rowland. Bert Rowland took the
lead for us in that. He handled the inventor question. And as I
say, it was to the benefit of UC, well, not the benefit of UC.
In a way, it was only to the benefit of Herb Boyer, as the
"inventor's share" at UC would be divided among two people rather
than one. But the key thing was, we wanted to get the
inventorship right, and there was no negative feeling toward
Helling or the University of Michigan. Helling' s claim was
probably sort of annoying; it was disturbing things. But it got
Hughes: Resolved on the grounds that the concept had come from Boyer and
Cohen, and Helling was an implementor, rather than an inventor?
Reimers: Yes, Cohen and Boyer described under testimony just exactly what
he did, and it was determined he didn't contribute to the
invention. The thing about this business, somebody can do all
the work and not be the inventor if they're simply the hands of
Hughes: So it's the idea that is important.
Reimers: Yes. And publication co-authors may not appreciate that, because
in academic publications you put down everybody who was involved,
and of course Helling 's name was there on the paper. 1 He had
been on sabbatical from the University of Michigan during that
I pulled you away from the July '76 licensing plan,
anything you care to say about it?
Oh, I just felt I needed to write something up.
explain where to go forward.
And maybe to
Hughes: I saw some documents by Ken Imatani, who I gather was another
student from the business school?
Reimers: Yes. I still see Ken. I play golf with Ken every now and then.
I stay in touch with my students.
Hughes: He did what looked like a market analysis. 2 Was that the basis
for your discussion of the market here?
Reimers: Well, there was a lot of stuff being written at the time.
Different students had different backgrounds. Ken was more
analytical. Bill was more of a marketing type. Oh, here's the
one from Ken Imatani. Okay, he had a discussion with Herb
Boyer. 3 I asked him to talk with him about what further
development work was going on, because that would be important to
me in this. Herb at this time said that he wanted to get some
funds to support organic chemists to synthesize [DNA] molecules.
At this time, he probably had not been contacted by Swanson, is
1 S. N. Cohen, A. C. Y. Chang, H. W. Boyer, and R. B. Helling.
Construction of biologically functional bacterial plasmids in vitro.
Proceedings of the National Academy of Sciences 1973, 70: 3240-3244.
2 Memo, Ken Imatani to Niels Reimers, subject: S74-43 Industrial
Markets for Recombinant DNA Process, August 13, 1975 (OIL correspondence
3 Memo, Ken Imatani to Niels Reimers, subject: File S74-43 Discussion
with Dr Boyer for Future Development Work for Recombinant DNA Process,
August 6, 1975. (OIL correspondence 1974-1979).
Hughes: No, he hadn't.
Reimers: Ken and articles in the paper and such led to the licensing plan.
Rejecting Genentech's Request for an Exclusive License
Hughes: Genentech was founded early in 1976; it was April when the
incorporation papers were signed. Also by that time, actually
somewhat sooner, Cohen had become a scientific advisor to Cetus.
Did these commercial ties present any problems in pursuing the
Reimers: No, not for me; that was totally separate.
Hughes: Well, in the perception of those on the outside, would those ties
have been perceived as a conflict of interest? For example, one
of the companies that became most interested in this technology
early on was Genentech.
Reimers: Yes, I'll tell you about my first meeting with them.
Hughes: Yes, I'd like to hear.
Reimers: I had absolutely no problem with that. Typically, we licensed
exclusively, because most university technology is undeveloped.
And to encourage investment to develop a product, you need to
give an exclusive license. That's very typical of university
licensing. But when you've got a basic tool, such as this, you
want it to get out broadly and nonexclusively. I did early on
think that maybe we could give a field-of-use exclusive. But as
I learned more about this recombinant DNA technology, I felt that
this was something that we'd want to get out to everybody, as
broadly as possible. I wanted to get it established early on as
sort of the fundamental patent building block of the whole field.
So I was contacted by Swanson, and met with him and Tom
Kiley. Tom Kiley was an attorney with Lyon and Lyon in Los
Angeles, and it was he whom Bob was working with to develop the
company. Bob was an associate with the Kleiner & Perkins venture
capital firm at the time. When I was in San Francisco for the
meeting, I talked briefly with either Gene [Kleiner] or Tom
[Perkins], and then there was this very young-looking fellow,
Swanson, and Tom Kiley. They wanted an exclusive license for all
polypeptides. Tom gives very dramatic presentations, and he'd be
ferocious in the courtroom, as a lawyer. But I knew where I
stood, and there was no doubt in my mind of the appropriate
response. I just smiled and said, "No." I don't believe they
were optimistic Stanford would agree, but it was worth a try.
There was a meeting called "Alliance" put on by Recombinant
here in San Francisco a couple of weeks ago at the Ritz Carlton,
and there was some reminiscing about the early beginnings of the
biotechnology industry. George Rathmann, Bob Swanson, and Bill
Rutter were on a panel. I think it says so here in the program.
I was on a subsequent panel; my presentation didn't have to do
with reminiscing, but I did a little because there was interest
in the early days. I had to mention a few things that I thought
the audience might find of interest. One was an anecdote
involving a meeting with George Rathmann. The other was with
respect to Swanson, telling about that meeting where they asked
about an exclusive license to polypeptides . I talked later with
Tom Kiley, who was at the meeting as well, and Bob, and they also
reminisced about that meeting with a slightly different spin.
But they were laughing. They realized my attitude was, "Nice try
guys." And they knew that. It was friendly.
Were they at that stage worried about the future of their baby
company? To not get an exclusive license jeopardized their
future, did it not? Or, were they enough ahead of the game?
Well, what they've gained from that meeting was that the patent
would be licensed at a low royalty, because this license was
going to underlie commercial activity in the biotechnology
Worries about Patent Coverage
Reimers: By the way, in the setting of the royalty, I got one letter from
an alumnus: "You've got a patent; you can dominate everything
here. Why are you charging such a low royalty? You know
Stanford could use the money. Charge a higher royalty."
I had to smile because he obviously didn't understand the
full situation. For one thing, it was a bit flaky, whether we
could make this or not, whether we had adequate coverage in the
patent specification for prokaryotes, hosts, and eukaryotes, and
whether we could get broad patent claims. And also there was
another factor: we only had U.S. rights. As a patent gives the
right to make, use, and sell, somebody possibly could use our
process overseas, and then sell the non-infringing end product
back in the United States.
We then dealt with that issue in part through the
International Trade Commission [ITC] and part through the royalty
structure. The ITC (a U.S. government commission) is concerned
with a level playing field and fairness in cross-border trade.
If, to avoid a U.S. process patent, a company sets up a
manufacturing operation outside the U.S., the ITC can stop
importation of the resulting products to the U.S. We obtained,
and made public, a legal opinion, we could use the ITC mechanism.
The issue became moot when, after the Supreme Court's five-to-
four decision on "patenting of life,"  we obtained patent
claims to products.
In devising the licensing program, a concern was that the
genetic engineering steps of cutting and splicing DNA, and then
inserting the resulting recombinant DNA in a microorganism host,
whether prokaryotic or eukaryotic, was as far as our patents
might reach. After the insertion step, then the modified
organismthe transformant--expresses the high value protein
desired. But it is essentially nature that is carrying it
forward after the insertion step.
So it could be argued that the defensible patent coverage--!
can talk about this now since the patent expires on December 2
 --ends with the transformant . In other words, would I be
able to enforce the patent on the end product of the expressed
protein or just at the stage of the transformant?
And then I had to realize some people might make some dumb
economic moves, too. For example, a scientist might sell a
transformant for small dollars to a company. And then I might
not get the company to license the technology because of no
enforceable patent coverage for the end product, the proteins
that were being expressed by the transformant. The royalty was
established at 10 percent at the level of the transformant. It
was a factor of 20 from the transformant 10 percent to the end
protein product royalty of 1/2 percent.
After we got the first group of licenseesyou will see if
you talk with Floyd Grolle--that there have been a number of
changes in the royalty rate of subsequent licensees, all up. In
fact, I don't know what it is now- -it may be 2 percent at the end
product level rather than 1/2 percent. But most companies that
have become licensees recently are not worried about the earned
royalty rate. They just don't want to be inhibited from
practicing the technology; their sales of end product will be
long after the patents expire.
Hughes: Cohen initially said that he didn't want to be involved in the
Reimers: Is that from his notes?
Hughes: I got that from notes about a conversation with Stan. 1
Reimers: Stan said he wanted to be excluded from licensing matters; he
didn't want to be involved. In fact, as I mentioned earlier, he
had little things to say all the time.
Hughes: Also, he reversed himself. In June of 1976, he wrote to you
saying that he wished to reverse his original request to remain
uninformed about Stanford's activities in the licensing arena. 2
And it followed from that Miles symposium. Both you and Robert
Rosenzweig responded. 3
Reimers: It's my normal practice to keep inventors fully informed of our
Hughes: Robert Rosenzweig disagreed, saying it was better for Cohen to be
detached from Stanford decisions.
Reimers: I don't think Rosensweig really understood the whole complexity
of the business, but I would agree with his decision.
Hughes: Also, don't you think he was looking at it--
Reimers: He was looking at it from a PR [public relations) standpoint.
That was his role. He is a very savvy individual.
1 Unsigned penciled notes, probably by Reimers, dated April 9, 1976
(OIL correspondence 1974-1979).
2 Memo, Stanley N. Cohen to Niels Reimers, subject: DNA Cloning
Patent, June 14, 1976 (OIL correspondence 1974-1979).
3 Memo, Niels Reimers to Robert Rosenzweig, subject: Recombinant DNA,
June 18, 1976; memo, Robert M. Rosenzweig to Stanley N. Cohen, July 7, 1976
(OIL correspondence 1974-1979).
The Biohazards Controversy
Hughes: Also remember what these high profile people are dealing with.
Reimers: The whole safety issue. Oh, I can tell you about this safety
issue, which we went through for a time with NIH. Remember, I
mentioned I was going to put in the license that it was mandatory
for industry licensees to follow the NIH guidelines for
recombinant DNA research. So I put in a requirement that the
industry licensees follow the safety guidelines and submit
evidence that they were doing this to the NIH--or HEW, the
Department of Health, Education, and Welfare. The rights came
from HEW, which is now HHS [Department of Health and Human
Services]. NIH didn't want to be involved as an enforcing
agency, even though they had gotten some PR concerning safety
guidelines for industry. So we modified the license safety
clause to satisfy NIH.
Academics had to follow safety procedures--?! , P2, P3 levels
of physical containment, and levels of biological containment,
such as an enfeebled E. coli host. But industry, because it
wasn't receiving government funding, didn't at the time need to
follow safety guidelines for rDNA research. So while I had
trumpeted the fact that through the license we could require
compliance with the guidelines, NIH didn't want to be a
regulatory agency. So if you look at the license, you'll see
that it reads that industry will make efforts to follow the
safety guidelines, or something like that.
National Institutes of Health
Hughes: Right. In the summer of '76, you met with people at NIH. In
fact, you wrote in July of "76, "The recombinant DNA patent issue
is considered ' hyper- impor tant ' at NIH, with concerns about the
media, the Congress, and the public." 1
Reimers: I have a lot of old files in the basement that I thought I should
keep. When I came to Stanford, I was starting the licensing
program, and then I went back into the old files that I could
1 Memo, Niels Reimers to Robert Augsburger, subject; Recombinant DNA,
July 19, 1976 (OTL correspondnce 1974-1979).
find about the klystron patent. Other patents had been filed by
Stanford in the past, but nothing had been done with them. I
shuffled through those, and I found some of historical interest.
I took maybe half a dozen patents, max, down to where I was
on the first floor of Encina Hall, and then Encina Hall was
burned during the Vietnam conflict period. In the top part of
Encina Hall were all the administrative records, including all
the patent records, all of which were burned. So the only ones
that were left were the half dozen I had, which are pretty; they
have the purple ribbons of old patents.
Honoring Cohen and Boyer
Reimers: That reminds me: I invited Julie [Julius] Krevans, who was
chancellor at UCSF, and Don Kennedy, president of Stanford--
neither institution had recognized Herb and Stan. So I arranged
with a faculty spouse, who was a good painter, to have two
paintings made and framed of an artist's representations of DNA.
One I didn't like so well, so she made a third one for nothing,
so there were three paintings. And then I had the process patent
and the product patent framed. Then Herb and Stan signed an
agreement: if we needed those in litigation, they'd have to give
them back. So Cohen and Boyer were given two framed paintings.
Then the extra painting, which I wish I had kept, I gave to Bert
Rowland, our patent attorney. So I've got nothing, except for my
No, actually we did get this award, which probably doesn't
belong to me but to Stanford. That award is why I wrote the
Hughes: Please read the citation for the record.
Reimers: Oh, it says, "The seal of the American Chemical Society." And
it's a metal plate on a walnut plaque. "Stanford University,
University of California in recognition of their innovative
cooperative licensing of the Boyer and Cohen patent, United
States patent number A, 237,224." And in smaller letters: "ACS
1 In 1986, the American Chemical Society awarded Stanford and the
University of California its ACS Award for their "innovative cooperative
licensing of recombinant DNA technology." The paper (on the licensing of
DNA technology) which Reimers refers to is: Niels Reimers. Tiger by the
tail. Chemtech, August 1987, 464-471.
Division of Chemistry and the Law. ACS Committee on Patents and
Related Matters, 1986." The paper was written for the award,
because they wanted a paper along with that.
"Tiger by the Tail."
Yes; the journal editor gave it that title.
More on the Licensing Plan
Hughes: Getting back to the controversy that surrounded the licensing
activities: At the time, was Stanford viewed as having a conflict
of interest in pursuing the patent and at the same time being the
major locus for discussing safety issues?
Reimers: Now, that was one of the things that Paul talked to me about.
Here we are filing a patent, and here they are taking the lead in
the safety issues, and some could perceive that we at Stanford
were just trying to cement our proprietary position, while others
were required to hold back in research using recombinant DNA
technology. And so, partly as a result of that, Stanford could
have been viewed as having a conflict of interest.
Many articles began appearing in the paper about whether
doing rDNA research is the right thing to do. But also articles
about commercialization: the commercial world is going to get in
there, and they are really going to do bad things. So that's
when I recommended, and it was agreed, that we essentially go
back to the NIH, which was the government entity with which we
were working on this, and give them the opportunity to deal with
the patent rather than Stanford, if Stanford's actions were not
considered in the public interest. And Rosenzweig wrote that
letter; it's in Watson's book. 1
After the Rosenzweig letter was received at HEW, I talked
with Norm Latker [patent counsel for HEW] . He told me they were
uptight on matters about rDNA patents. At an HEW meeting on the
topic, he walked into, as he put it, "a den of scientists without
a patent understanding." He had to educate them about the patent
'James D. Watson and John Tooze. The DNA Story: A Documentary History
of Gene Cloning. San Francisco: W. H. Freeman and Co., 1981, p. 499.
system and its role in commercial development. HEW considered a
number of alternatives, including abandoning the patent
Then in the Senate hearings in 1977 on recombinant DNA
research, Teddy Kennedy got involved. By then, HEW had the
education on the role of patents and decided it would not be a
good idea to take over the patent. What message would that send
out to other HEW grantees who sought to develop the technology so
that the public could use it, if the government would march in to
take back any patent with significant commercial potential?
I listed in the article 1 what Norm told me about the
different options that HEW had been considering: dedicate the
patent to the public, don't allow it to go further, take it back,
take it back and NIH will restrict this and that. They had about
six different considerations. The final determination was, let
Stanford go for it.
Hughes: Do you know why they eventually decided on that option?
Reimers: Well, I would suspect it was because of Norm's activities
explaining the patent system, similar to what happened at
Stanford in many respects. Norm was a wonderful guy. He's very
much an advocate, in intensity, like Ralph Nader. He's very much
an advocate for not simply filing patents, but having the
technology behind that benefit the public somehow by being
developed. So he was very much a staunch supporter of
universities that would file patents and get technology
developed. The university community and the public owe a lot to
Hughes: Well, another criticism that arose in the late 1970s was that
recombinant DNA technology had already been widely adopted. In
fact, companies were founded on that basis.
Reimers: Sure, before our patent issued .
Hughes: Yes. Was that a stumbling block?
Reimers: Well, no. I typically like to be at the front end of technology
transfer. That is, we approach companies and propose we work
together in developing this technology. We'll file the patent,
we'll exercise the right to exclude others, and we'll develop it
together. Well, when you do nonexclusive licensing, in a way
Niels Reimers. Tiger by the Tail.
you're just applying a tax. But I had no shyness about that
Opening Patent Files to Public Scrutiny
Reimers: I do not like "submarine patents," as they are called. A
submarine patentee files a patent but does nothing to develop the
technology of the patent. The submarine patentee lies in wait
for companies to invest their resources at risk in developing
commercial applications. If a company achieves market success,
the submarine patent owner begins legal action against that
company. That is not technology transfer. We were not lying in
wait, but were totally open about our plans to license. In fact,
we did something that nobody in the Patent Office can remember
applicants doing before, and that was that we opened up the
patent prosecution process to public scrutiny.
To enforce this patent, I engaged the Finnegan, Henderson,
Farabow and Garrett law firm in Washington, D.C., specifically,
Don Dunner, Charlie Lipsey, and Susan Griff en. We called them
Bruno, Boris, and Brunhilde. These names were actually suggested
by Charlie, when we said a key purpose of engaging them was to be
ferocious enforcers for us should the need arise. We were
preparing for a defense of the patent, even though we had no
challenges. Also, I wanted to line up the best litigation
attorneys that I could, because later on if somebody sued us,
then we'd have to scramble for litigators. And the best law firm
might be beholden to others and not be available. In fact, we
had to get permission from SmithKline, for whom Don Dunner was a
counsel, to let us employ the Finnegan firm for this purpose. I
talked about that with Janice Williams, SmithKline 's head patent
counsel. She was very gracious to say that was okay, to tell Don
Dunner that he could accept the assignment with us.
After the law firm's review of the file history, including
the means by which we made the patent prosecution process open,
Don Dunner said that we had probably the highest presumption of
validity of patent he had ever worked with, because any company
would have to justify why they didn't bring forward any competing
art to the Patent Office. At the time, this was all open to
public scrutiny. It was in the newspapers; everybody knew about
Al Halluin, who was with Exxon then- -his strong interest in
biotech was called Halluin 1 s Hobby because Exxon was not in the
biotech businesswas hired by Cetus. Al was their patent
counsel who did the well-known PCR [polymerase chain reaction]
patent work at Cetus. Al Halluin is now with a patent law firm
here in San Francisco. Jim Watson had a conference on "Patenting
Life" back at Cold Spring Harbor. Al was there, and he listened
to me, Bert [Rowland], and some others speak. And then he wrote
a post-conference paper about how our patent application wasn't
worth anything because of this, this, and this.
Well, the beauty of it from my standpoint was we could deal
with it there in the Patent Office as we presented his paper to
the patent examiner. If he had kept quiet about these things,
then if somebody was taking action against our patent in court,
it could somehow be alleged that we were witholding that
information from the Patent Office, and it could have narrowed
the patent. So we were able to deal with it in a unemotional
setting, if you will, an objective setting rather than before a
jury. And I know that some patent attorneys, or companies, were
very upset with Al for having published his article. If he
hadn't, then they could have used the citations in Al's article
as a means to invalidate any resulting patent.
Setting a Low Licensing Fee
Reimers: By the way, we set up a licensing plan, and with the modest
royalty rates, there was no way biotech firms could not take a
license. I talked to licensing officers at several companies in
the course of promoting our licensing plan. They said if the
royalties were any higher, they would have refused to take the
license. We would have had to go through litigation to enforce
them taking the license.
Hughes: And I know you had set aside a fund to do just that.
Hughes: Which you, in the end, did not have to tap?
Reimers: I tapped it to pay for the attorneys to prepare for litigation,
but that was all we took from the fund.
The International Trade Commission
Reimers: During this process, I went back to meet with the International
Trade Commission [ITC], and Andy [Barnes] came back with me. The
International Trade Commission is set up, among other things, for
a situation where somebody would have a process patent, but only
in the United States. Then somebody could make the product over
in China, or Germany, or anywhere outside the U.S. And then they
would ship the non- infringing product back into the United
States, and they would not have infringed the U.S. patent,
because they would have used the patented process in a country
where the U.S. patent holder did not have a patent.
So the International Trade Commission was set up to deal
with that sort of thing, and it's a very quick process. They had
dealt with relatively minor technologies, and here we came along
with their ability to exclude from import to the United States an
entire industry. They got excited about it. Armed with their
support, we went to another attorney with the Finnegan firm who
had experience with the ITC; in fact, he had worked there. He
and Don Dunner then wrote an opinion that we could use ITC law to
exclude imports based on using the patented rDNA process outside
the U.S. Given we only would have U.S. rights, no license was
needed for transactions that occurred entirely outside the U.S.
Tom Kiley of Genentech told me later that Genentech followed
us into Japan. This was during the licensing process when we had
meetings with many companies. Tom said, "They had gotten the
very clear message from you guys: it's either take a license or
get your socks sued off." And those are his exact words.
Hughes: Then there was also opposition from people within the medical
Reimers: Like Paul?
Hughes: Yes; I wondered if there were others. It didn't give specifics
in this letter from [William F.] Massy to Rosenzweig in 1978. '
Reimers: Oh, I think Bill was referring to--
Hughes: To Berg.
Reimers: Stuff he had heard from me, yes.
1 Massy to Rosenzweig, subject: Recombinant DNA Patent, March 2, 1978.
(OTL correspondence 1974-1979.)
The Patent as a Potential Source of Income
Hughes: Did you use the argument that the patent was certainly a
potential and, as it turned out, actual source of income for the
Reimers: The interesting thing was the way I originally set up the royalty
structure at Stanford, which was approved after that pilot year,
and we had used it through the pilot year of 1969-70. That
formula was 15 percent of gross income deducted for managing the
program, and then we'd subtract out-of-pocket expenses to arrive
at net income. Then one-third to the inventors, one-third to
their departments (like chemistry, physics, biochemistry, etc.),
and then one-third to the university, not the school.
Hughes: So the medical school didn't benefit directly.
Reimers: No, not at the beginning. The university was the one that
invested the money for filing the patent, and so on. The
university quickly began to make money. When that money started
rolling in, then the medical school got involved. They said,
we're different than the School of Engineering or the School of
Humanities and Sciences in that we're under a general fund
ceiling. So it's really not appropriate that the university get
that third, because our tub has to stand on its own bottom.
So Don Kennedy agreed to allocating "the university's one-
third" to the school of the inventor; he didn't consult with
trustees or anybody else. I didn't have any real objection to
it. It was fine with me. The further down you push the
incentives, the greater positive results you're going to get. So
now I had the deans excited. [laughter]
Hughes: Now, this is in regards to patents in general or to this one in
Reimers: Don Kennedy changed it for all patents, with the complaint from
the medical school about this patent, because they were under a
general fund ceiling. Every university is worried about the
potential for cost of their medical school consuming the rest of
the university. So medical schools have to essentially run
themselves separately. They get a limited amount of general
Hughes: When was that?
Reimers: It was probably the year after our initial success in the
Hughes: So about 1982?
Reimers: Yes, probably.
Hughes: You mentioned that the Department of Medicine was one of the
Reimers: There was a question of which department would get "the
department's one-third." Stan was in the Department of Medicine,
plus another. The Department of Medicine includes the Division
of Clinical Pharmacology, where Stan resided. I forget, but
there were initially two departments, and then Stan was sort of
changing his departmental allegiance.
Hughes: The Department of Genetics was another one of his appointments.
Reimers: Yes. So it was Genetics and Medicine. But within Medicine, he
was in Clinical Pharmacology.
Hughes: Clinical Pharmacology got the money, so that Medicine as a whole
didn't have access to it?
Reimers: I don't recall specifics. But there was a bit of discussion on
that, and I believe the original split was modified. The
Department of Medicine is so huge. They are disproportionately
large compared to other departments of the medical school. In
fact, now that we're down at the molecular level, the old
departmental designations really don't make a lot of sense
anymore. They really ought to change the medical school
departmental organization. The Department of Medicine, I think,
should be broken into more reasonable department sizes. But
that's another story.
Hughes: One of the sore points, which persists to this day, is that
Biochemistry did not benefit from the patent. 1 Certain members
of that faculty believe that the Cohen-Boyer technology was based
1 See the oral history with Arthur Kornberg in The Bancroft Library
substantially on their work, and ergo they should be recipients
of some of the royalties.
Reimers: Well, they could have gone to the Dean of the School of Medicine
and made their case. But you know, Paul and Arthur are wonderful
people; they have gotten the Nobel Prize, and that's worth a hell
of a lot more than money. Plus, they have done very well with
The big discoveries that made lots of money came laterlike
human growth hormone, insulin, hepatitis B, and so on. If our
guys at Stanford were in that great position, they could have
been researching and filing patent applications on those
potential products and made much more money. The patent for
hepatitis B vaccine makes more than the patent for recombinant
DNA. And human growth hormone is up there too in royalties.
Well, actually, the patent for hepatitis vaccine doesn't make
more, but it makes close to it. And its income is going to
continue on after expiration of the rDNA patents.
Hughes: Because the patent isn't about to expire?
Reimers: Right. Of the University of California patents, hepatitis
vaccine is the number one royalty producer; then number two is
the check they get from Stanford every year [for royalties for
the recombinant DNA patents], then number three is human growth
hormone. UCSF has more income from its inventions than the
combined total of UC Berkeley, UCLA, UC San Diego, UC Irvine, UC
Davis, UC Riverside, UC Santa Cruz, and UC Santa Barbara.
Hughes: And it's the smallest campus.
Hughes: How do you explain that?
Reimers: For any licensing program to succeed in a big way, it has to have
a medical school, because their patents can become big hits. And
engineering; they can be the most creative people, and a lot of
companies will come out of engineering, sure. But big bucks from
patents tend to come in the medical field. And part of that is
because of the regulatory process. If patents weren't strong in
the medical field, because of the cost of getting a new drug to
market, the field would be chaotic; it wouldn't go forward. It's
1 For discussions of DNAX, a biotechnology company in Palo Alto of
which Berg and Kornberg are founders, see their oral histories in The
Bancroft Library Series.
too bad the Stanford Department of Biochemistry didn't get a
share of royalties.
Threat of Regulatory Legislation
Hughes: By 1977 and 1978, there was legislation pending to regulate
recombinant DNA research at the federal level, and in some cases,
at the state level as well. Were you taking into account this
Reimers: Yes, definitely. There was nothing I could do until we started
licensing. When you're going to license exclusively, you license
on a patent application. But if you are trying to license non-
exclusively, who's going to pay you before your patent issues?
You have to wait until your patent issues. There was really
nothing I could do about that, nor did I want to influence, nor
could I influence that.
Hughes: You mean what--
Reimers: Was going on with safety, and so on. There emerged the physical
containment, PI, P2, P3 type of facilities, and the biological
containmentthat ' s not the right term for it. For an example of
biological containment, Roy Curtiss developed an enfeebled E_^
coli at the University of Alabama. By the way, Curtiss 's strain
of E. coli was never really used. I understand it was too
enfeebled for useful experiments.
U.S. Patent Office
In 1977, according to your article, 1 the patent examiner, whose
name was Alvin Tanenholtz, told Bert Rowland that he would only
consider a process patent. Can you give me the background?
Well, it didn't end up that way, of course. Getting a patent is
a process of negotiation between the patent attorney and the
examiner. Typically, when you send in a patent application, the
Patent Office rejects it, and then it's a process of overcoming
the rejection, and getting rejected again and overcoming that
rejection, until a patent is awarded. It's rare that the
Tiger by the Tail.
examiner looks at a patent application and says, "Okay, I'm going
to issue it to you." Patent examiners get rewarded based on
disposals. A disposal is a rejection, an award, or other formal
action taken on a patent application. The Patent Office has a
huge load of work. So to spend hours and hours on a patent
application, they only get one disposal.
So what an examiner tries to do is find a bunch of
publications that seem to relate to the patent application.
(They will provide more specifics; I'm being a little cynical.)
The examiner will say, "In view of these publications, everything
you've done is anticipated, so your application is rejected."
Then they sort of define the universe. Then you as applicant go
back and you say, "This cited publication is irrevelant because
it relates to fish; this one doesn't apply for this reason," and
so on. If a citation is relevant, then we deal with it. The
exchanges with the patent examiner could have been part of my
worry about whether we'd get product claims or not. We
eventually did get product claims.
The Chakrabarty U.S. Supreme Court Case
Hughes: Because the Chakrabarty case was not settled until 1980, there
was a debate about whether you could patent an organism.
Reimers: Yes, a "life form"; that's absolutely true. There actually were
two cases. One was Upjohn, and one was G.E. [General Electric].
Upjohn backed out so that there could be focus on the G.E. patent
of [Ananda] Chakrabarty. He forced a mutation in bacteriahe
didn't use the recombinant DNA process and the bacteria then
became very efficient in eating oil.
There was a cartoon at that time, which shows a microscopic
view of organisms developed to eat oil. There was a picture of a
slide, and then there were black things all over, but they were
Newsweek or Time or another magazine had an article which
said, "Universities hold fall sale." And it showed a picture of
a carnival barker holding out a cane and pointing to spirals of
DNA stacked up behind him. People in the audience of this
cartoon were shown clamoring for the DNA, and on the side of this
crowd, people were walking away with DNA under their arms,
The Supreme Court decided, five to fourthat's pretty
close that genetically engineered organisms are handiworks of
man, not of nature, and anything made by man is patentable.
Reimers: The patent issued shortly after the Supreme Court announcement,
and a lot of people thought that our patent issued because the of
Supreme Court decision. But that was the process patent, and we
were going to get that anyway. We earlier had divided our patent
application into two, one covering process claims and the other
product claims. We were still arguing about the product patent,
and Tanenholtz was treading water until the Supreme Court made
its decision. We dealt with arguments by the examiner about
whether we should get both prokaryotic and eukaryotic organisms
patented. We had very few words in the patent application to
support getting eukaryotes, which are the higher organisms. We
had "cell," [following spoken with pause between each word:] the
--oneword "cell." And it ended up being enough for us to get
the claim to the eukaryotes.
The Patent Specification
Hughes: The document is called a disclosure?
Reimers: Specification. A patent has two primary sections. One is called
the "specification," which teaches how to practice the patented
technology. The other section covers "claims," which set the
metes and bounds within which the patent can be enforced.
Hughes: You can't go back and modify a specification?
Reimers: No, you cannot change it. You can change the claims, but you
cannot change your teachings. What you have to go do is file
another patent. But you only get the priority benefit from the
date you file the second application. U.S. laws provide the
inventor is the one first to conceive the invention. If somebody
has filed in the intervening period, you'll probably have some
difficulty getting patent claims corresponding to the
specification of your second patent application. In other
countries, the inventor is the first to file, rather than first
to invent (conceive). There are many other complexities in the
Hughes: I can imagine how difficult it must have been in 1974 to
anticipate how this process was going to develop. Wasn't there
an element of luck? For example, that the specification included
the word "cell?"
Was inclusion of the word "cell" deliberate?
sure that the patent covered eukaryotes?
You wanted to make
Well, we placed a lot of faith in Bert Rowland. I think if Bert
had had twenty- twenty hindsight, he would have asked Cohen and
Boyer, "Is there a reason why this can't apply beyond bacteria
(prokaryotes) to higher organisms, like yeast (which is a
eukaryote)?" They would have told him, yes, the gene splicing
technique does apply to any cell, to any DNA, because it doesn't
matter. So, Bert could have asked the question. But "cell" was
in there and that did it for us.
Arthur Kornberg maintains that he, and I think he includes others
in the Department of Biochemistry, didn't at the time see the
applications of this technology. 1 It wasn't until later that
they realized that they had a revolution in their midst, so to
speak. How cognizant were Berg and Kornberg, in your estimation,
say in the mid-seventies, of what actually could come from this
Well, we're talking about an industry that then didn't exist.
And it's easy with twenty-twenty hindsight to say oh, it was
obvious. But I don't think it was totally obvious. Visionaries,
like Swanson (founder of Genentech)-- He was a very young man
who saw the potential and contacted Boyer. 2
Patenting and Licensing Monoclonal Antibodies
Reimers: There was another major discovery that came along not too long
after recombinant DNA, and that was [Georges] Kohler and [Cesar]
Milstein's discovery of hybridomas. Hybridomas produce identical
1 See the oral histories with Arthur Kornberg and Paul Berg in The
Bancroft Library Series.
2 For the foundation and development of Genentech, see the oral
histories with Robert A. Swanson in The Bancroft Library Series and Herbert
W. Boyer in the UCSF Biotechnology Series.
antibodies, termed monoclonal antibodies. Prior to the Kohler-
Milstein discovery, antibodies harvested from the blood of
animals injected with an antigenic source were polyclonals, a mix
of antibodies. And they blew it there in the UK as far as
getting a basic patent on the hybridoma process. The British
Technology Group blamed it on the university, and the university
blamed it on the British Technology Group. And I don't know
where the real truth lies.
But if you look at the first publications of Milstein and
Kohler, you'll see two co-authors, Len [Leonard] Herzenberg and
Vernon Oi of Stanford. Len was a professor and Vernon was, I
believe, a Stanford graduate student with him. They brought that
technology back to Stanford. And I'll wager we were the first
ones to license monoclonal antibodies.
Hughes: Do you remember when that was?
Reimers: I would say it was probably '78 or so, but I'm not sure.
Hughes: So before the Cohen-Boyer patent issued.
Reimers: Yes. At UC, it's Boyer-Cohen. [laughter] I started calling it
Hughes: Yes, I noticed it's usually that way.
Reimers: I thought that recombinant DNA would have tremendous commercial
application. But I was just a mechanical engineer. That summer
vacation--! had about a month that yearwe were going up to
Montana. I took along Watson's Molecular Biology of the Gene of
1974, whatever the current edition was, so that I'd have some
understanding of what in the world this was all about.
In each new technology, it's a question of learning the
terminology, so you can converse with people. Not that the
invention a scientist is describing is always rocket science. I
mean they could be, but you just need to understand what the
scientists in the field are saying.
Closing the Cohen-Boyer Patent File
Hughes: You mentioned earlier in the interview that you opened up the
patent file to the public.
Reimers: And much later we closed it.
Hughes: Why did you close it?
Reimers: What did Stan say?
Hughes: I'm not sure that I even asked him.
Reimers: The public reason I think I mentioned in the article. But what
was going on then regarding the patent application was that every
time there was an office action-- Remember, I call it an office
action, but the word is rejection. And so every time there was
an office action, or rejection if you will, it would make the
papers, because people were very interested in this. And Stan
didn't like the heat. Like they could see the Helling affair in
there. This was grist for the writers. But I agreed to close
it, because we had accomplished our purpose.
Hughes: There are always personalities involved, aren't there?
Reimers: Yes. Well, Stan or Herb may perhaps find some faults with what I
did, but they've made millions. But it's possible, frankly, that
their involvement could be a factor that is inhibiting them from
getting the Nobel Prize. And that would be sad.
Hughes: The fact that they were involved with commercial--
Reimers: With a patent, yes. And when you think of who is on the Nobel
Prize committee that decides this.
Hughes: Well, it seems to me, if it were going to happen, it would have
been at the time of the Berg Nobel Prize in 1980.
Reimers: I was so glad when he got that. That's worth, in my mind, a lot
more than having your name on a patent and millions in royalties.
I was feeling bad before then, because Paul was a distinguished
scientist, and he had been very upset with the patenting process
and not being recognized. I had a discussion with him in his
office where we talked about Janet Mertz, and so on. He was
obviously not happy about things at that time. Well, he got the
Nobel Prize. That's great. And Art got it too.
Then I had to smile when DNAX was sold. I knew how much it
was capitalized for, what Zaffaroni sold it for, and you could
back in reasonably what they each made. They made a lot of
money, even though the university didn't benefit financially.
But the university has benefited tremendously from them in other
John Morrow's Claim
We mentioned Helling, but there was also a protest in 1980 from
John Morrow, who didn't want to sign a disclaimer withour first
seeing the patent application. 1 He had worked on the Xenopus
research. Is there a story to be told there?
I don't think
No. I do remember that. But it's sort of vague.
it ever amounted to anything.
Morrow had supplied the toad RNA.
To Stan, yes. When disclaimers were sent around, he refused to
sign, and also Helling refused to sign.
This was our patent attorney doing a thorough job. Because what
happens is, when you're processing a patent through the Patent
Office, and you've got sixteen authors on a publication that
describes it, and there's only one or two inventors, then the
Patent Office is going to say, "Well, look, are all those other
people inventors, too?" So to anticipate that situation, you
supply to the Patent Office disclaimers from co-authors. So
disclaimers were sent to them, because Morrow must have been a
co-author as well.
Yes, he was, on the 1974 paper. 2
But the invention goes back to '73.
The 1974 work used eukaryotic DNA. Was that not included in the
1980 process patent?
Because we filed later in '74, we would have put in all the
inventive steps that had preceded. We had a patent based largely
on that '73 publication, but not necessarily everything that we'd
claimed by the November 1974 filing date. The recombinant DNA
success was in the summer of "73, and it was reported at a summer
1 David Dickson. Inventorship dispute stalls DNA patent application.
Nature 1980, 284: 388, April 3, 1980.
2 J. F. Morrow, S. N. Cohen, A. C. Y. Chang, H. W. Boyer, H. M.
Goodman, and R. B. Helling. Replication and transcription of eukaryotic
DNA in Escherichia coli.
1974, 71: 1743-1749.
Proceedings of the National Academy of Sciences
meeting. And most of the scientists there realized how important
Hughes: Was there any fanfare when the process patent finally issued in
December of 1980?
Reimers: We may have publicized it.
Hughes: You'd been trying to get the patent issued for a long time. It
was no big deal, as far as you were concerned, when it finally
Reimers: It was a big deal. It was the Stanford-UC patent for the basic
technique in biotechnology which issued. And that was in the
newspaper. And, of course, Science and Nature were following
Stanford's Announcement of the Licensing Program
Hughes: Well, there was a Stanford news release in August 1981, and
another in November. 1
Reimers: We began doing the licensing in '81.
Hughes: I want to quote a statement, which was attributed to you, in the
November 1981 release: "[TJhere's no precedent for this sort of
program, seeking to license all companies who are using what is
essentially the basic tool needed in genetic engineering." Is it
really true that in no f ield--computers, engineering,
agriculture, or anything elsethat there ever had been such an
Reimers: I doubt it. But I'd have to ask somebody in the history of
science. No, because a discovery of commercial significance
generally would be an invention of a company, and they would want
1 On August 3, 1981, Stanford announced the recombinant DNA technology
licensing effort: Advance for release August 3, 1981, Stanford University
News Service (OIL, Stanford, S74-43, news clippings 1981-1985); "For
immediate release," Stanford University News Service, November 17, 1981
(OIL, 74-43, news clippings 1981-1985). The first sentence reads:
"Stanford's unprecedented effort to license the entire genetic engineering
industry for use of its basic scientific techniques is off to a strong
start. . "
to keep that for themselves, as long as they could get advantage
Hughes: And then the news release went on to quote Donald Kennedy: "[The
licensing effort was designed to] assist the process of
technology transfer by making sure lots of players get into the
game. This increases the probability of valuable new
applications for human science."
Reimers: It's fine that Don said that, but whether we licensed it or not,
commercialization of recombinant DNA was going forward. As I
mentioned, a nonexclusive licensing program, at its heart, is
really a tax. He's correct in that we were letting every player
in on the game. But it's not an action that made the industry
grow. I guess you could say it provided some order. It sort of
was a base line, and the industry proceeded from that point. But
from a legal point of view, or from what a patent means, or what
the license means, it didn't make the industry grow. A lot of
people don't fully understand all facets of technology licensing,
because it is, as I mentioned earlier, a complex mix of business,
technology, and law.
Hughes: You are saying that the growth of the biotech industry was not
dependent upon this patent?
Reimers: That's right. Well, you've got to turn that around; you mean the
Reimers: It was dependent on what was behind the patent, but it wasn't
dependent on the license.
Hughes: Because the technology would have happened regardless?
Reimers: Would have happened. We were just, in one sense, taxing them.
But it's always nice to say "technology transfer." [laughter]
Paiaro Dunes Conference on Technology Transfer, 1982
Hughes: Kennedy had said in a news release a few months before that he
thought scientists should consider calling an "Asilomar II"
conference dealing with the "rush to proprietary control" of
recombinant DNA research. 1 He was very concerned about the
commercialization of basic research. In 1982, he was the main
instigator of the Pajaro Dunes Conference. Do you remember that?
Don didn't involve me in that. He had some naive perceptions,
but this was something that Don got into.
The whole industry-university thing and commercialization,
did not really discuss it with people who understood the
complexities of it. I don't mean to make a big deal of it, but
it was his thing. He has a good sense for what is newsworthy,
and I don't mean to put that down. But he probably realized
intuitively that it would be important for Stanford in
particular, because it was making all this money on the license,
to talk about commercialization issues. The companies they asked
to the Pajaro Dunes conference were all big ones. They didn't
get to the little ones, which were the key playersparticularly
if there was any discussion of potential conflict situations.
Swanson was there, and Genentech was not very big. But you're
right; there were representatives from big companies. 2
And then they excluded the press.
Beyers about that.
You ought to talk to Bob
From some accounts, there was really no tangible outcome. I
mean, there wasn't a firm policy established regarding university
interactions with industry.
I don't want to say anything. It had some PR value, I think.
Kennedy was representing a fairly widespread viewpoint at that
Sure. I fought against the commercialization. Publish! Get it
out there! I was sort of an evangelist: If you don't want to
patent, don't. If you don't want to deal with industry, don't.
If you do deal with industry, that will have absolutely no impact
on your scientific career or interactions with other scientists
unless you personally choose to alter your behavior.
Dec. 6, 1980 news release.
2 For a report on and participants at the conference, see: Barbara J.
Culliton. Pajaro Dunes: The search for consensus. Science 1982, 216:155-
Reimers' 111 Ease about a Licensing Opportunity
Reimers: In fact, I got very upset with a professor, who shall remain
nameless. This could have been a very big invention, but it much
later turned out it didn't quite work. He had this particular
organism, let me just say that, and I was going to license its
use. It wasn't something everybody would want a license to, but
quite a few would. It was also going out nonexclusively, and so
I was promoting it. Then I found that he was not sharing the
organism with his scientific colleagues. And not only that, the
word that I was getting back was that it was because of patent
considerations. And that angered me, because there's no way that
he should restrict sharing his research results with other
scientists. The patent is another matter.
There are some other corners in this. They were trying to
form a company around the uses of the organism. A very prominent
figure in Silicon Valley wanted to form a company based on this
technology, and only that company could use the organism. I
remember meeting in Don Kennedy's conference room, and I said,
"This is not right. This is something we want to make broadly
available; this is a basic tool. By licensing it nonexclusively,
I can get scientists throughout the world using the technology.
Besides, if I can license the use of the organism nonexclusively,
I think it's in the public interest that I do so."
At any rate, before I began to put in all these arguments,
Don had to go off to deal with a call that he had just gotten
that Stanford apparently had a yacht, and that was in the
indirect cost base. Do you remember that? By the way, I can
explain. Stanford was not really guilty in any of this stuff,
even the yacht thing.
Don didn't hear this, and I was really worried; I was upset.
So I got together with Beyers and Spyros [Andreopoulos] , and we
had a private lunch meeting in Bob's conference room. And I
said, "This can explode. I'm not going to sit back and be
accused that I'm holding back distribution of this research
result." That night, around eleven o'clock, I got a call from
Beyers. He said, "I talked to Don. I got to him, and you've got
a meeting with him at seven tomorrow morning." So I came in
there at seven, and I told him this could be devastating.
Before Don had left the earlier meeting in his conference
room, he said, "Let's find a way to make this work." And so
everyone was leaning in that direction, except for me. So I told
Don what I had said and my feeling that this was going to
explode, and I wouldn't put up with it, and this is just not the
way to do it. He fully agreed. And then later that morning, a
press release went out that Stanford was making this organism and
licenses broadly available. [laughter] I actually got in
trouble for meeting with Don, because on my way back to my
office, and by this time it was about eight o'clock, I stopped by
Vice President Bill Massy's office. I said, "Bill, I just had a
meeting with Don and wanted to let you know about this." He was
upset that I didn't contact him first. I said, "Well, this was
eleven at night."
Hughes: When was this?
Reimers: It was probably around 1980 or so.
Reimers: I don't want to tell you too much to embarrass the inventor who
has just died. It didn't work, actually. We still were going to
pursue a patent, because the organism worked, but weakly. We
chose to offer the companies that had paid for a license their
money back. I had about seven licensees by then; four got their
money back, and three of them decided to keep their license on
the possibility a useful patent would result.
Hughes: Well, I wonder if this letter is perhaps related to that
episode. 1 It's dated November, 1980. You were writing to Kent
Peterson. I don't know who he is.
Reimers: He was my boss. I kept moving down in the organization.
[laughter] Yes, this is it--Henry Kaplan, hybridomas. It was
usually mouse-human or rat-human. Here he had a human fusion
partner. It was Zaffaroni who wanted to put together the
company, and he talked to Henry and then Don. I had no idea what
was going on. I walked in the president's conference room, and
there was Zaffaroni, there was Henry Kaplan, Don, a Stanford
lawyer, and others. Henry hadn't advised me of his company
plans. Does my memo to Peterson reflect which article I was
Hughes: Well, there's one attached.
Reimers: Yes. [reads it] I look back and I don't fault what I did.
1 Reimers to Peterson, subject: Cell Line Distribution, November 18,
1980 (OIL correspondence 1980-1982).
Hughes: I was interested in this partmay I quote it? You wrote this in
the context of the hybridoma and the recombinant DNA research- -
Reimers: Yes, in general.
Hughes: November 18, 1980 memo to Peterson:
As Stanford is perhaps the first
institution to begin filing genetic
engineering patent application and to license
hybridomas, we ... are to a degree "leading
the way" for other universities and
government policy makers. We need to be very
careful in our public and private actions
with respect to developments in these fields,
including policies of cell line distribution
and licensing so that we do not
inadvertently, in fact, restrict scientific
collaboration and deny or delay development
of benefits of this research for the public.
We must also guard against "overreaching" in
financial and other license terms.
Hughes: There it is in black and white.
Reimers: Yes, in black and white. I didn't realize I had done that. But
by that time there were layers of people between the president
and those doing the work. And I think there was sort of a loss
of touch. Don's legal advisor built up a legal office from zero
to somewhere around thirty lawyers, with a total staff of sixty
Hughes: Largely because of the patent situation?
Reimers: No, just because. Lawyers began to sit in in most important
Stanford meetings, including licensing, and actually wanted to
control us. And I resisted. They wanted to authorize all the
patent filings that we made with private patent attorneys. 1
said that adds a layer of cost that's unjustified, we had never
screwed up in any legal steps, and so we got out of it. Then
they began to off-load part of their budget on us, as they did
elsewhere, because they had to somehow pay for this large office,
and we and other Stanford offices were going to pay for it. But
to Gerhard Casper's credit, he cut the number of lawsuits way
back, down to three or four or so. How many lawyers did MIT
have? [Reimers forms a zero with his thumb and forefinger]
A Possibility of Premature Disclosure
Hughes: Well, I'm back to challenges to the validity of the patent after
it issued in 1980. The Biotechnology Newswatch in 1982 reported
that an article by Edward Ziff in the New Scientist in October
'73 might count as premature disclosure. 1 Why was this an issue
in 1982 when the process patent had already issued?
Reimers: What they're saying is that there was that summer  Gordon
conference where Boyer first disclosed what he and Stan had done.
You know there's a time lag before publication, so the
publication hadn't occurred. The Gordon conference was supposed
be an open exchange, and you're not to take advantage of someone
else's discovery, in terms of beating them to publication.
Each Gordon conference focuses on a narrow field. They're
usually held at a prep school back in New England, and it's just
an open discussion. So one of the attendees may have told
something to Ziff. But there's a question of what Ziff put in
his October article as to what is called "enablement" in patent
terms. I don't even remember this, by the way. If he mentioned
what Boyer presented at the Gordon conference, the question is
whether the Ziff article was really an enabling disclosure. If
it were, he would have screwed us. Obviously, it wasn't, or
somebody would have picked it up.
Hughes: Why was this being debated in 1982?
Reimers: I don't know if it was being debated, but they probably thought
that that meant the patent was invalid. And if it was invalid,
you can bet your boots the pharmaceutical companies that were
paying royalties would have ceased immediately.
1 Patent office suddenly withdraws second Cohen-Boyer patent. McGraw-
Hill's Biotechnology Newswatch. July 5, 1982, 1-2.
Hughes: We talked about the trips that were made in the fall of 1981 in
which you were selling the technology or explaining the
technology to companies that you thought might be interested in
Reimers: Well, Andy Barnes did most of that.
Hughes: Do you know what kind of reception he got in most cases?
Reimers: Andy is a vice president of Mycogen in San Diego; you could talk
to Andy. We also mailed out a lot of stuff. We just sent
letters out to everybody. Yes, Andy's marketing led to a career
in the biotech industry. I actually released him early because
he had a job offer he wanted to take. So I said okay, with tears
in my eyes.
The University Licensing Pool for Technology
Hughes: One last question, in 1983, Stanford and UC formed the University
Licensing Pool for Biotechnology. 1
Reimers: Oh, that was my proposal; it never went anywhere. What I was
concerned about is, here we have a unique point in the history of
technology where you've got this whole new field; you've got a
basic discovery, and all of these other patents are coming up and
being filed everywhere. So assuming they were all needed, they
would be layered. It could be chaotic for companies to develop
products because they'd have to pay Stanford; they'd [also] have
to pay this university or that, and then another technology comes
up from the university. I think I was a little over-concerned
The idea was that we would make available this pool of
technology, except for the recombinant DNA patent. My friend,
Howard Bremer at the University of Wisconsin, said, "You should
include recombinant DNA." I said, "No." You put it into a pool,
and maybe we includedoh I forget what I had--a 3 percent
royalty. And companies would get all of this pool of patents, so
it wouldn't inhibit them; they would get it nonexclusively.
1 Marjorie Sun.
A one-stop shop for gene-splicing patents. Science
For more on the Licensing Pool, see the appendix.
These would all be what I call "tool patents." A patent for an
application, such as a specific drug composition, would not be
included. Then at the end of the year, with input from the
companies, we would establish the relative contribution as to
which patents in the pool they were actually using and which ones
they weren't. The patent pool concept died for lack of my
enthusiasm and others'.
Hughes: Well, that's the end of my questions. Do you have anything more
you want to say?
Reimers: Well, there are all sorts of little things that happened along
the way. I'm pleased to see that somebody is interested; this is
great. And then to see some of the words that I wrote a long,
long time ago was kind of fun, sort of a personal retrospective.
Hughes: Well, I thank you.
TAPE GUIDE--Niels Reimers
Date of Interview: May 8, 1997
Tape 1, Side A 1
Tape 1, Side B 13
Tape 2, Side A 23
Tape 2, Side B 35
Tape 3, Side A 45
Tape 3, Side B not recorded
A Niels Reimers Curriculum Vitae 50
B "Tiger by the Tail," by Niels Reimers. Reprinted in
1987 by the American Chemical Society from CHEMTECH.
August 1987, pp. 464-471 52
"Shaping Life in the Lab," cover reprint from Time
magazine, 1981 75
"Tech Pioneer Reimers To Sell UCSF Discoveries," San
Francisco Chronicle. March 7, 1996 76
"New technology management office pairs inventors with
investors," Newsbreak [UCSF campus newspaper], November
22, 1996 77
Stanford Office of Technology Licensing web page, as of
July 20, 1998 78
Cohen/Boyer Patent Chronology 79
50 APPENDIX A
Technology Management Consultant
886 Tolman Drive, Stanford, CA 94305
BACKGROUND: Born and raised in Carmel, California, of Norwegian immigrant
parents. Educated through high school in Carmel public schools except for 1946-47,
when attended school in Norway.
1951-1956 Stanford University and Oregon State University, under a US
Navy scholarship. BS Mechanical Engineering and BA Mechanical
Engineering, Minor in Business Management.
1956-Present Various short courses.
1956-1959 US Navy. Line officer aboard the USS Bon Homme Richard, an
aircraft carrier. Radio Division Officer and Deck Division Officer.
1959-1961 Ampex Corporation, Redwood City, California. Manufacturing
coordination between final assembly and marketing at this electronics
company. Later transferred to Ampex International to coordinate
manufacturing between Redwood City and overseas manufacturing sites.
1961-1968 Ford Aerospace, Palo Alto and Newport Beach, California. Became a
Division Director of Contracts Management for this aerospace firm after
experience in scheduling engineering projects and as a contract manager.
1968-1991 Stanford University, Stanford, California. After beginning in the
research management office, founded the successful Office of Technology
Licensing at Stanford in 1969. OTL is recognized as a leader in
university technology management.
1985-86 Massachusetts Institute of Technology, Cambridge,
Massachusetts. On loan from Stanford as Director of MIT's Technology
Licensing Office, reformed existing licensing office and developed staff.
1989-90 University of California Berkeley, Berkeley, California.
Also on loan from Stanford, established UCB's campus Office of
Technology Licensing, which involved negotiating an agreement from UC
system administration (responsible for all 9 UC campuses) to permit an on-
campus licensing operation
1991-1996 Intellect Partners, Palo Alto, California. Chairman of international
technology transaction firm which pursues technology alliances and
licensing. From this position, was sought to startup a campus licensing
office at UCSF and agreed to a two year assignment.
Resume of Niels Reimers, Page 2
1996-1998 University of California San Francisco, San Francisco, California.
As Director of the Office of Technology Management, negotiated an
agreement from UC system administration to permit a campus licensing
office. As with other universities, established policies and procedures and
developed staff. The two year assignment ended February 28, 1998.
1998-Present Technology management consultant, Stanford, California. Clients
primarily universities but also advisor to industry licensing programs.
Beginning about 1975, has consulted for over 20 universities and research
institutions worldwide in the establishment of licensing offices or in
reviewing technology management practices and operations at existing
President. Licensing Executives Society, USA and Canada, 1978-79. Member
since 1970, served in other LES positions and currently a member of the
Association of University Technology Managers. Attended founding meeting and
given many presentations to the membership.
LES Award of Honor. 1996. First award to a university licensing officer. "For
his exceptional contribution to the improvement of the profession of licensing and
the transfer of technology."
Study of "Alternative Organizational Mechanisms for the Innovation of University
Research". With National Science Foundation and corporate support, undertook a
summer sabbatical in 1978, based in Norway, to compare how universities
worldwide were organized, if at all, in aiding the transfer of their research results
for societal use. (See Publications, below)
American Chemical Society. 1987. Award for creation and management of the
recombinant DNA licensing program. This program licensing program will have
returned well over $200 million in royalties by its expiration in 1998.
Editorial Board, Technology Access Report. 1989 to present
Editorial Board, Journal of Technology Management, 1992 to present.
Service on National Research Council and other national committees reviewing
Testimony before House and Senate Committees on issues such as patenting of life
forms and testimony which led to the 1980 "Bayh-Dole Bill"
Tiger by the tail
When Stanford tried to license a recombinant DNA discovery, the legal
implications and regulations of biotech were still untamed wilderness.
It all began on a balmy evening in Hawaii at a Waikiki Beach
delicatessen where Stanley Cohen of Stanford and Herbert
Boyer of the University of California at San Francisco were
excitedly engaged in a conversation. This conversation occurred
in November 1972, at the time of a United States-Japan joint
meeting on bacterial plasmids.
Herbert Boyer had been working on restriction enzymes, which
"cleave" DNA at a particular site. Meanwhile, Stanley Cohen
had been working in his laboratory on plasmid DNA. They
contemplated that, with Boyer's restriction enzymes and
Cohen's plasmid technology, it might be possible to insert
foreign DNA into a plasmid, insert that plasmid into a living
organism, and have that living organism replicate and produce
expression products as directed by the foreign genetic
information (Figure 1).
By March 1973, Cohen and Boyer achieved success in DNA
cloning. They immediately perceived the importance of their
discovery and began to prepare a publication, which appeared
in November 1973. Prior to this publication, in June 1973,
Niels Reimers, formerly the director of the Office of Technology
Licensing at Stanford University, is now a principal at Intellect Partners in Palo
Alto, California. This article is reprinted with permission from CHEMTECH,
August 1987, 17 (8), pp. 464-471.
1987, American Chemical Society
26 Niels Reimers
Boyer attended a Gordon conference at which molecular
biologists immediately recognized the incredible potential of the
discovery. Some believed that Pandora's box had been opened
and a possibility now existed that manmade organisms could
escape from a laboratory and cause unknown diseases. One
month after the Gordon conference, Maxine Singer and
Heinrich Soil sent the National Academy of Sciences a
thoughtful letter that initiated debate over the safety of
recombinant DNA research. The letter was published in Science
but aroused little public interest.
(e.g.. amino acids,
(e.g., gene sequence
(e.g.. E. Coll,
Figure 1. Gene splicing procedure
Tiger by the tail 27
Another letter to Science, published in July 1974, did get the
public's attention. This was by Nobel Laureate Paul Berg of
Stanford and 10 other scientists (including Cohen and Boyer)
who called for the National Institutes of Health (NTH) to
establish safety guidelines for recombinant DNA research and
asked scientists to observe a moratorium on certain DNA
research of unknown biological hazard pending the issuing of
those guidelines. We'll come back to the safety issue later.
In early April 1974, Vic McElheny, then a science writer for the
New York Times and now a research associate at the
Massachusetts Institute of Technology (MIT), noticed an article
regarding the represser gene. In pursuing this story, he learned
two interesting facts. One was that there had been a meeting in
Cambridge, Mass., to draft "the letter" by Paul Berg, et.al,
referred to above. The other fact was that there was a paper
about to be published in the Proceedings of the National
Academy of Sciences (PNAS), by Cohen, Boyer, and colleagues,
entitled "Replication and Transcription of Eukaryotic DNA in
Escherichia coli." Genetic information from a toad was
successfully introduced into bacteria, crossing the species
border. This work led McElheny back to the November 1973
PNAS article. McElheny's article in the New York Times on May
20, 1974, was forwarded to me that same day by Bob Byers,
campus news director at Stanford University. This was my first
knowledge of the work, and it looked like a promising licensing
opportunity. Later that day, I received a news release from
Stanford's Medical Center News Bureau, announcing the
research results and their implications.
I called Stan Cohen to discuss the potential practical
applications of this research. He acknowledged that the
discovery was of great scientific significance, but he stressed
that he did not want to have it patented and that, although
there was great potential, significant commercial application
might not occur for 20 years. After considerable discussion, he
finally agreed that a patent application could be investigated.
This investigation led me to Herb Boyer of the University of
28 Niels Reimers
California (UC) at San Francisco who, after some discussion,
agreed to cooperate on the basis of Stan Cohen's willingness.
We contacted Josephine Olpaka, of the UC Patent Office, with
the proposition that if the rights in the invention could be
straightened out, assuming Cohen and Boyer were co-inventors,
Stanford would manage the patenting and licensing of the
technology, sharing net royalties 50-50 after deduction of 15%
of gross income to Stanford for administrative costs and then
deducting out-of-pocket patent and licensing expenses.
Agreement was reached between the university and the
inventors. But there was another hurdle.
In the storm of applications
Three research sponsors were involved in the discovery: the
American Cancer Society, the National Science Foundation
(NSF), and NIH. We were not aware of a precedent where the
American Cancer Society had released any invention to any
grantee. Eventually, the American Cancer Society, NSF, and
NIH all agreed that the invention could be administered on
behalf of the public under the terms of Stanford's "institutional
patent agreement" with NIH. These administrative matters got
straightened out just in time for us to file a patent application
on Nov. 4, 1974--one week before the one-year U.S. patent bar
was to occur on the basis of the November 1973 PNAS
Remember, we learned about the discovery many months after
publication; the delay precluded our chances of getting patent
coverage in other countries. (For more information on patenting
biotechnology, see References 1 and 2,-Editor.)
In the meantime, the informal moratorium on recombinant
DNA research continued. In December 1974, scientists were
invited to an international conference to review the progress,
opportunities, potential dangers, and possible remedies
associated with the construction and introduction of engineered
Tiger by the tail 29
recombinant DNA molecules into living cells. The conference
was held at the Asilomar Conference Center on California's
Monterey Peninsula and was sponsored by NAS with funding
provided by NIH and NSF.
Throughout this period and later, a patent application covering
a 1972 work of Ananda Chakrabarty, a biologist working for the
General Electric Company (GE), was making its way through
the U.S. Patent Office. He had made a bacterium that could
break down multiple components of crude oil. He did not
engineer the bacterium through gene splicing and cloning; he
used conventional genetic manipulation techniques. It appeared
that this bacterium's appetite might have significant value for
treatment of oil spills.
GE's patent application covered claims to the method of
producing the bacteria, the bacteria combined with a carrier
material, and the bacteria themselves. The patent examiner
allowed the method and combination claims but rejected the
claims for the bacteria per se, indicating that micro-organisms
are products of nature and that as living things they are not
patentable subject matter. GE appealed. We will come back to
the progress of that case later in this chronology.
The meeting at Asilomar was well attended both by scientists
and the media. In his article in Rolling Stone, entitled The
Pandora's Box Congress," Michael Rogers summarized the
conference activities: The conference --four intense, 12-hour
days of deliberation on the ethics of genetic manipulation-
should survive in texts yet to be written, as both landmark and
watershed in the evolution of social conscience in the scientific
community." He quoted a scientist as remarking, "Nature does
not need to be legislated, but playing God does."
The moratorium was lifted, and recombinant DNA research was
resumed, but under strict self-imposed laboratory safety
guidelines. These became required of NIH grantees as a
condition of research support. The guidelines involved levels of
30 Niels Reimers
physical and biological containment. An example of biological
containment might be use of an organism that would not
survive outside of the laboratory environment.
The media and public suddenly discovered recombinant DNA.
One article about DNA cloning and its implications was titled,
"Dr. Jekyll and Mr. Hyde and Mr. Hyde and Mr. Hyde." Other
headlines included "Regulating Recombinant DNA Research:
Pulling Back from the Apocalypse," "New Strains of Life--or
Death," and "Playing God with DNA." Erwin Chargoff wrote in
Science in June 1976, "Have we the right to counteract
irreversibly, the evolutionary wisdom of millions of years, in
order to satisfy the ambition and the curiosity of a few
Into this atmosphere came the news that the basic recombinant
DNA technique had been patented, although our case was still
in the patent application stage at that time and had not yet
been made public. This occurred during a meeting at MIT in
June 1976. Patents meant corporate involvement to some who
maintained that the profit motive clearly would drive
recombinant DNA research into dangerous areas. More articles
appeared: "Genetic Manipulation to Be Patented," and
"Stanford, U. Calif. Seek Patent on Genetic Research
Getting mighty crowded
In May 1976, Stanford scientists and administrators met within
Stanford to discuss the university's policy and practices with
respect to patenting biotechnology discoveries, particularly the
recombinant DNA patent. There were concerns that patents
would interfere with scientific communication. There was also
a concern about a perception by the public that Stanford would
have a conflict of interest with respect to recombinant DNA
safety issues if it were to hold a proprietary interest in
recombinant DNA work. It was decided that the university
would open these issues for review at a national public policy
Tiger by the tail 31
level. Robert Rosenzweig, then Stanford Vice-President of
Public Affairs, wrote NIH Director Donald Fredrickson, asking
the government's views on the appropriateness of Stanford
patenting and licensing recombinant DNA discoveries.
Meetings were held within the government. Norman Latker,
then patent counsel for the Department of Health, Education,
and Welfare, told me of a July 1976 meeting at NIH where he
"walked into a den of scientists without a patent understanding."
Over and over throughout this controversy, it was necessary to
explain the patent system's role in encouraging innovation and
being the antithesis of secrecy to scientists who had had no
exposure to it. The government considered the following
Abandon the patent
Let the patent issue and require Stanford to dedicate it
to the public
Let Stanford license, but with government controls
Review all licensing arrangements
Review no licensing arrangements
Require nonexclusive licensing only
Impose no restrictions other than those already present
in the terms of Stanford's institutional patent agreement
Take title and handle any licensing
The patent issue was brought to the NIH Recombinant DNA
Advisory Committee. Fredrickson wrote to the committee to
raise the question of whether patents inhibit dissemination of
research information. This stimulated me to write to
Frederickson, conveying to him my experience: "I am not aware
32 Niels Reimers
of any economic, administrative, or physical force that will stop
or delay a dedicated scientist at a university from promptly
publishing his or her research findings, whenever he or she is
ready to do so. From a pragmatic point of view, it would be
fatal to the licensing program at this or any other university if
an administrator delayed a scientist's publication in order to
secure a patent position."
By September 1976, everyone was in the act, including Senator
Edward Kennedy. After Fredrickson's prepared testimony about
the safety issues at hearings held by Senator Kennedy, the
senator asked, "Well, what about the patents?" Frederickson
responded, noting Stanford's willingness to consider
modification of its institutional patent agreement as it related
to the recombinant DNA patent situation. He also advised that
comment on patent issues was being requested not only from
the NIH Recombinant DNA Advisory Committee but from
those who participated in the public hearings on the
recombinant DNA guidelines, as well as the public at large.
Fredrickson, in explaining the institutional patent agreement,
added that through a licensing program, corporations could be
encouraged to follow the recombinant DNA safety guidelines.
At that time, the recombinant DNA safety guidelines could only
be required of entities that accepted government research
Two years after Rosenzweig's letter, the government, through
a March 2, 1978, letter from Fredrickson, reaffirmed that it was
appropriate that universities should, in general, patent and
license recombinant DNA inventions provided that industry
licensees comply with standards set forth in the NIH guidelines
on research involving recombinant DNA molecules.
In the meantime, the public became aware of the GE patent
application on "patenting of Life." Recall, GE had appealed the
rejection of the patent examiner on the patenting of micro-
Tiger by the tail 33
organisms as products of nature. GE eventually appealed to the
Supreme Court, which agreed to hear the case.
Many articles began to appear about the commercial potential
of the technology. Genentech and other biotechnology
companies were formed. The military aspects of DNA cloning
were discussed. An article in the Los Angeles Times was
headlined, "Russ Believed Plunging Into Gene Study-New Labs
Could Lead to Development of Biological Weapons."
Finally eight years after the patent examiner's final rejection, on
June 16, 1980, the Supreme Court held five to four that a living,
manmade micro-organism is patentable subject matter. The
Supreme Court based its decision on the fact that the Congress
had used expansive terms in writing the patent laws, and
therefore, they should be given wide scope. The Court cited the
evidence that Congress intended statutory subject matter to
"include anything under the sun that is made by man."
Supreme Court Chief Justice Warren Burger, writing for the
majority, stated that "the patentee has produced a new
bacterium with markedly different characteristics from any
found in nature and one having potential for significant utility.
His discovery is not nature's handiwork, but his own;
accordingly, it is patentable subject matter under Section 101."
But let us return at this juncture to the Stanford and UC patent
application and our licensing program. The application,
originally filed on Nov. 4, 1974, covered both the process of
making and the composition for biologically functional
"chimeras." (A chimera is a mythical hybrid creature of two
species, such as man and goat.) During the course of
prosecution of the application, the patent examiner, Alvin
Tanenholtz, indicated to our patent attorney, Bertram Rowland,
that he was willing to allow process claims that described the
basic methods for producing biological transfonnants, but that
he was not willing to allow claims on the biological material per
34 Niels Reimcrs
se. The original patent application was then divided into
"product" and "process" applications.
The process patent issued on Dec. 2, 1980 (Figure 2). Note that
this occurred only six months after the Supreme Court's
decision called by some as allowing "the patenting of life." Many
perceived that issuance of the Cohen-Boyer process patent
resulted from the Supreme Court decision. However, that
decision related only to claims of our product application, which
at that time was still pending prosecution in the Patent Office.
In the period between the Supreme Court's decision and our
patent issuance, Genentech went public, experiencing a huge
public demand for its stock.
We had tried something different in the prosecution of this
patent. We reasoned that the patents, when issued, would
underlie the entire field of genetic engineering. This clearly
dictated, very early, a nonexclusive licensing strategy. And, given
that we would seek to license the entire industry, challenges to
the patents in the courts seemed certain. As a strategic move to
enhance the validity of the patents, we determined to open the
patent process to the public. (Normally, a patent application is
held confidential by the Patent Office until its issue, when the
entire prosecution history is made available for public review.)
Tiger by the tail 35
Cohen rt i.
IMI PROCESS FOR PRODUCING
ITS) Inventors: Stanlev N Cohen. Ponola Valley;
Herbrn W. Borer. Mill Valley. both
173 1 Aaaignee. Board of Trustees of the Letaml
Stanford Jr. University, Stanford.
(Ill Appl. No.: 1.021
122] Filed Jan. 4. 1979
lUUttd L'-S. Applic.non Dua
1C) I O..i..Kau<.^p.nofirt No . M9.IM . Ne. 9 1971.
which 11 a ronunuBtioa-m-ocri of Scr No U7.430.
klj* 17. 1976. atumtunrO. which is conunuauotMiw
pn ofSti. No. S70.69I. No.4. 1974.
151] hit O'
1521 U.S. Cl. 3V68: 435/172:
435.T3 ; 4JVIBS: 43V317: 435/849. 435/820:
4 35/V . 4JS/207: 260 I 1 2.5 S. 2UV27R. 435.7 12
1581 FieUofSarch 195/1. 28 N. 28 R. 1 12.
195/78.79:435/68. 172. 2S I. I8J
[56 ) Refernco Cited
U.S. PATENT DOCUMENTS
3.8:3.311. VI974 Chakrabany _ 195/28R
Morro> e< a. . Proc. Nat. Aad. So. USA. ol. 69. pp.
SS65-3J69. No. 1972.
Morro cl al.. Proc Nal. Aud. Sci. USA, rol 7 I. pp.
I74J-I747. May 1974.
HrnhficlJ cl al.. Proc Nat. Acad. So. USA. vol. 71.
pp MSScneq (1974).
Jackion ci j Proc NX. Arad. Sci. USA. oi 69. pp
2904-2909 Oci 1972
Mtru ci al.. Proc Nai. Acad. So. USA. >ol. 69. pp
J37IUSI74. Nm. 1972
Cnhen el al.. Prat Nai. Ao.l So. USA. ul 70 pp.
1295-1297. May 1973
Cohen ci al.. Proc. Nai Acad. So. USA. nl 70. pf>
3240-3244. No. 1973.
Oianf et al.. Pruc. Nai ACM). So. USA. <tul. 71. pp
1030-10)4. Apr. 1974
Ullrich ei al.. Soenee ml. I9C. pp. 1313-1119. jun
Sinf er et al.. Soeiice ol 181. p. 1114 (1973)
hakura el al.. Science ol. 198. pp. IU56-IOC3. Dec.
Komaroff et al.. Proc Nat. Add So. USA. >ol 75. pp
3727-3731. Au. I97B
Chemical anil neineenn|; Newi. p. 4. Ma* 3U 1977.
Chemtcal aiMl tiiginerrinj News. p. 6. Sep. 1 1. 1978
Pnmtry Minrt Alnn E TancnlioJtl
Aturmrj. Aftta. tr Firm Benrani I. RnUml
Method and composinoru are provided fur replication
and eipreiMOn of esorrnoui Rrtm m inicronriraiiunii
Plaimidt or vinti ON A arc cleaved 10 provide linear
DNA having bpiaWe termini to trhicri it iruened a
|ene having complementary lermini. to provide a bio
logically functional replicon with a devred phenoiypi-
cal property. The replicon it inserted into a microor-
jrannm cell by i ran* formation Itolaiton of the tramfor-
norm provulo cellt for renJicaiMwi ami evnreumn i> r
Ihc DNA molecule! preieni in ihe madified plaimitl.
The method provide! a convenient and efTioeni way to
introduce feneuc capabilily into microorgannmt for
the production of nucleic acidi anil prmeint. tuch ai
medically or commercially uteful ettsymes. which max
have direct usefulness, or may find nnresuon in the
production of druei. such ai hormones. anuUoiics. or
the like, fixation of nurofen. fermentation, unuution
of speofic feedstocks, or ihe hike
14 Claims, No Drawings
36 Niels Reimers
We announced that anyone who was aware of factors that might
affect the patent's validity was invited to make them known to
the Patent Office. The patent file history was opened to anyone
as we waived our right of secrecy. The demand for the file
history was such that at one time more than 30 requestors were
waiting to see it. Because that file then was not available to the
examiner and prosecution of the patent might have been
delayed, the Patent Office made additional copies for public
review. Any company seeking to challenge the validity of the
patents after their issue would have the burden of justifying why
they had not raised those issues with the Patent Office during
Additional factors were, indeed, brought to the Patent Office.
In October 1981, a conference on "Patenting of Life Forms,"
organized by James T. Watson, was convened at Cold Springs
Harbor Laboratories. In a postconference paper, an article by
Albert Halluin, then of Exxon, brought perhaps the most
significant new factors to the attention of the patent examiner.
We eventually closed the file in early 1983, largely because of
the speculative articles in the media that accompanied every
Patent Office action and every Stanford response. (In the
prosecution of a patent application, a series of rejections by the
patent examiner and responses by the patent attorney occur
until the patent issues, or a final rejection occurs.) By then, the
opening of the file had served its purpose. As a result of the
open process, we believe the patents will have unusually strong
presumptions of validity.
As I mentioned above, the original application was divided into
a process patent (which issued Dec. 2, 1980) and a product
patent application. The product application was again divided
into an application covering prokaryotic hosts and another
covering eukaryotic hosts. The prokaryotic product patent issued
Aug. 28, 1984. The eukaryotic patent application is still before
the Patent Office.
Tiger by the tail 37
Recombinant DNA licensing
We had to consider a number of factors in devising a licensing
strategy for an invention for which products had never been
sold and which would apply not only to many diverse
established industries, but in addition to the then newly
emerging biotechnology industry. Our objectives were to
develop a licensing program consistent with the public service
ideals of the university, to encourage the application of genetic
engineering technology for public use and benefit, to minimize
the potential for biohazardous development, and finally, to
provide a source of income for educational and research
Because the patents covered a basic process underlying many
potential uses, any license would have to be suitable for a large
number of applications, including not only companies
specializing in biotechnology but existing companies in
chemical, agricultural, pharmaceutical, mining, oil, and other
industries. We could also anticipate that small as well as large
companies and newly formed companies would utilize the
It was also necessary to recognize that only U.S. patents were
available because of prior publication. Because a patent covers
the making, using, and selling of a technology, onerous earned
royalty terms could drive a manufacturer to utilize the process
offshore, paying royalties only on sales back to the United
At the time we began our licensing effort, only the process
patent had issued. Hence a company could make the product
overseas using the patented process and sell that product in the
United States without infringing the process patent, having
utilized the process in a country where we did not have patent
protection. We decided to investigate the International Trade
Commission (ITC) as a means of addressing this potential
problem. The ITC enforces Section 337 of the Tariff Act of
38 Niels Reimers
1930, which prohibits certain unfair methods of competition and
unfair acts in the importation of articles into the United States.
Of particular interest to us were remedies available to a U.S.
manufacturer whose method patent is subject to an unlicensed
competitor who practices the patented method abroad and sells
the noninfringing product in the United States. A favorable
decision could involve exclusion orders, or cease-and-desist
orders, directed to preventing the importation of the goods
We obtained a favorable written opinion from a law firm
experienced in FTC dealings suggesting that the ITC could stop
products made overseas with recombinam DNA technology at
the U.S. border. We distributed this opinion freely to foreign
We also needed to consider that a patent grant is limited to 17
years. Because the development, testing, and regulatory
approvals could take up to 10 years or more, there was a
possibility that the patent could expire before royalty-bearing
products would reach the marketplace. We had filed a "terminal
disclaimer" with the Patent Office in 1980, when the first
process patent application issued. The terminal disclaimer
meant that regardless of how long the divisional patent
applications were prosecuted before the Patent Office, those
patents, once issued, would expire on Dec. 2, 1997, the same
date of expiration as the 1980 patent. The Patent Office often
requires terminal disclaimers to prevent an applicant seeking to
extend patent life from filing continuation applications.
For us, these factors argued for initiating a licensing program
as soon as possible. This was also considered desirable from the
standpoint of many companies, desiring some certainty both
that a license could be obtained and knowing the royalty terms
that would be factored into their financial decisions. High
earned royalties in certain cases could preclude substitution of
recombinant DNA-made products over existing products.
Tiger by the tail 39
In early August 1981, we announced the availability of licenses.
This was a significant news item, and broad media coverage
occurred. But to be even more certain that companies intending
to use recombinant DNA technology would be advised of the
license's availability, we placed paid announcements in Science
and Nature. Terms of the license announced in August were
only guaranteed for those companies signing up before Dec. 15,
1981. Hence, if a company desired certainty, it might choose to
take a license before Dec. 15 because possible future changes
to the license agreement were not divulged. However, the
general perception was that royalty terms would increase.
In designing terms of the license, we held discussions with
companies known to be practicing the technology to learn of
any "deal-breaking" terms. One license clause that took
considerable discussion related to application of the
recombinant DNA safety guidelines. Because we had neither
the desire, capability, nor the charge to become a regulatory
agency for enforcement of the guidelines, an early draft clause
provided that the NIH be involved in this role. However, the
NIH also did not wish to become a regulatory agency. The
clause that emerged from discussions with NIH and companies
required the licensee to follow the intent of the recombinant
DNA safety guidelines. It should be noted that by this time the
biotechnology industry voluntarily had agreed to follow the
A $10,000 minimum annual advance on royalties was
determined as reasonable even for small companies intending
to practice in the biotechnology marketplace. As a further
encouragement for licensees to sign up before Dec. 15, 1981, a
five-times credit on the $10,000 minimum annual advance on
royalties was offered in the original license agreement-that is,
for each $10,000 payment, the licensee would receive a $50,000
credit against future earned royalties. A company could accrue
this credit for five years or until the first calendar year in which
over $1 million of end product was sold. Because there was a
$10,000 signing fee that also received the five-times credit,
40 Niels Reimers
licensees could accumulate a credit as much as $300,000. And
most have, as a relatively small number of companies to date
have had annual recombinant DNA product sales over $1
Fixing a price tag
Determining the royalty structure took a great deal of thought.
It was necessary to consider all forms of the technology's
utilization. This included determination of classes of royalty
bases against which an earned royalty could be applied. (An
earned royalty is that royalty applied against the sale of an item
using the licensed technology.) We ended up with four
categories of royalty base:
Basic genetic product
Process improvement product
The royalty rates ranged from 10% for the basic genetic
product to 1/2% for the end product.
Basic genetic products include DNA chimeras (transformants)
and vectors. For example, the transformed organism that makes
insulin is a basic genetic product with a royalty of 10%.
Bulk products are products that will be processed further by a
manufacturer and not used or consumed by the end user. An
example of a bulk product is the disaccharide sweetener that
will be used in soft drinks and diet foods. Based on annual sales
volume, the royalty ranges from 3% down to 1%.
End product is a product for use by what we called the
"ultimate consumer," such as an insulin injection, vaccine, or
pharmaceutical. The royalty ranges from 1% to 1/2% based on
annual sales volume.
Tiger by the tail 41
Process improvement product is a material developed for or by
a manufacturer to improve an existing process. An example is
an enzyme that catalyzes a reaction. If an enzyme is genetically
engineered and improves an existing process, the royalty is 10%
of the costs savings or other economic benefit.
We specified that if a licensee sells to another licensee, the two
parties could agree among themselves as to which would pay
the royalty. Generally, the end-product producer pays. We had
determined that the relatively short sales period from August to
December would be optimum to develop interest and maintain
momentum. But this also required us to actively and vigorously
promote the license. We contacted companies throughout the
free world and, that fall, visited companies in the United States,
Europe, and Japan. We prepared exhibits (Figures 3, 4, and 5,
for examples) to explain the technology and the license
structure. At this time, many of the companies who intended to
use the promising new technology did not fully understand the
technology itself and how they would implement it.
To reduce incentives for overseas manufacture, the license
provides for a flat royalty of 1/2% on end product made in the
United States but sold outside the United States.
To reduce tinkering and to emphasize to potential licensees
that our terms were standard, the license agreement was
As licenses were signed, the signing was publicized. For many
companies, this served to notify stockholders and the public of
a company's entrance into the field of genetic engineering. As
we approached December, relatively few licensees had sent in
signed agreements. But in the final two weeks, the arrival rate
of signed license agreements increased sharply. By midnight on
Dec. 15, 1981, 73 licensees had signed up.
42 Niels Reimers
.r 1. ,. -JUT" ,~~,.
Goocrj IOKJ m i rprm
A material Intended
Products sold to
tor utirojiion by
and uaed by
UcerMe in its
or neither end.
bufc. or process
Fnai dosage torm
Anlibooy or hormone
sota to pnarme-
Dipeoiioc sold to
tor animal or
AmtfK actd sold In
burn to a heattn-
and sold m Durk
Earned royally rates
by net sales .own
10% o< cost
More iron s 10
Figurt I ucinitg preoucl daaamcauon and
Tiger by the tail 43
Figures 4 and 5
Cemcr, A incorporatts
ml f*n into *c
9'tcunuf t compan
wi.cn coots to-
(rut , r
Company A etui i*o IP lain* is tnd
ml 9n to Compaff |. WfHCft
Dor tti m ytn* into
whiett H mast p'ocuci -
A rvc***B JJ and/or
incorporates nil g*r
Company B Vftitn r*phcil*l >l
and (( as l*rbHif tubiniui*
Proem 10% ot pt
V% c* ioi'
V C***Winy A
fCompany B will MM
rcT'l'i Of US
no/or pi *}
10% pi toai
Company A pwtoutty
Py anotner meinoc
Ethyitn* o+yrot f 7
/ lor Company A f
Any and aH *myt*n ***'
praoucM by Camany A y**Ag tmptailffMni pnd oconomic
Company A uaot ttnyten* g'rto! tna
to ma automobrts anulrooxt.
Company A **** bulk vtrtyMm
ic Company B to-
io aotvvmt *nd
Comptny A i*4is orvamtm lo
Company lor U and/o* a
royally on Company la
py Compony A
Flyun 5. CanvnodUy dMfnicl
44 Niels Reimers
An article in Business Week, entitled "Universities Hold FaD
Sale," had a cartoon showing a carnival barker on a platform
with about 5-foot lengths of helical DNA stacked up behind him
and an audience of men in business suits either waving money
at the barker or walking off with the DNA helixes with smiles
on their faces.
After Dec. 15, 1981, licenses continued to be available but with
a single-times credit rather than the five-times credit on the
$10,000 minimum annual royalty. Ninety-three licenses have
been signed to date (April 1987). However, because of
acquisitions by one licensee of another and some terminations
by companies determining not to utilize recombinant DNA
technology, the number of current licensees is 81, as of April
1987. Since the end of September 1986, the new license end-
product royalty rate has been a flat 1% based on sales volume.
Products based on recombinant DNA technology are beginning
to enter the marketplace with increasing frequency. The first
commercial recombinant DNA product, human insulin, was
engineered by Genentech and is being marketed by Eli Lilly
under the trade name of Humulin. Human growth hormone,
engineered and marketed by Genentech, was approved for
public sale in the fall 1985. And quite recently, the hepatitis B
vaccine engineered by Chiron and distributed by Merck was
approved for public sale. Tissue plasminogen activator (TPA),
which is anticipated to replace urokinase and streptokinase in
the treatment of blood clots, is expected to be approved for
public sale within the next few months. We estimate the first-
year sales of TPA at $450 million. By 1997, when our patents
expire, it has been estimated that over $30 billion of sales of
genetically engineered products will have occurred.
Stanford and UC believe that the licensing program has met its
goals. The net royalties received by the universities are being
used for educational and research purposes which, in a self-
regenerative manner, may yet produce other discoveries for
public use and benefit.
Tiger by the tail 45
DNA composed of two or more sequences
derived from different origin such as .
coli and toads.
Cells that contain a membrane-enclosed
nucleus (e.g., yeast, plant, and animal
Process of making proteins from
information stored in genes.
Messenger RNA; used to transfer
information from one or more genes on
DNA to the ribosomes for subsequent
Series of genes of related function that are
transcribed into a single mRNA molecule.
Extrachromosomal, covalently closed
circular DNA molecule.
Cells that do not contain a nucleus (e.g.,
Transformants Organisms containing foreign genetic
Vector The agent used to carry foreign DNA into
a cell (e.g., a plasmid or virus).
(1) Figg, E. Anthony. CHEMTECH, May 1986, p. 277.
(2) Simmons, Edlyn S. CHEMTECH, March 1987, p. 144.
46 Niels Reimers
Chakrabarty patent for oil-consuming
bacterium denied; appeal filed by GE
Cohen and Boyer achieve first successful
Publication of letter alluding to dangers of
DNA splicing by Singer and Soil in
Publication of paper on DNA splicing by
Cohen, Chang, Boyer, and Helling in Proc.
NatL Acad. ScL USA
Publication of letter calling for NIH
guidelines for DNA splicing by Berg, et.aL,
Publication of paper by Cohen and Boyer,
et.aL, on transfer of animal DNA fragment
into E. coli plasmid in Proc. NatL Acad.
Announcement concerning transfer of
animal DNA fragment into E. coli by
Stanford News Bureau
Patent application filed by Stanford
Nov. 4, 1974
December 1974 * Asilomar Conference
Publication of Chargaff letter, warning
about DNA splicing, in Science
*The Asilomar Conference on Recombinant DNA was held February 24-27, 1975.
Tiger by the tail 47
Dec. 2, 1980
Negotiations between Stanford and NIH
patenting; Congress gets involved
NIH safety guidelines are published
NIH affirms patenting of recombinant
DNA inventions by universities
Chakrabarty's bacterium held patentable
by Supreme Court
Process patent for making molecular
chimeras issued to Stanford
Availability of licenses for use of DNA
technology announced by Stanford
Conference at Cold Spring Harbor on
patenting life forms
Product patent for prokaryote DNA issued
Editor's Note: The reader is reminded that this article was originally published
in 1987 and that changes have been made since that time. For example,
royalty rates have increased, the eukaryotic patent issued April 26, 1988, and
persons mentioned may no longer be employed at the same location.
As of August 18, 1995, Stanford had 316 corporate licensees.
The three Cohen-Boyer patents generated $27 million in royalty
revenue in Fiscal Year 94/95, and Stanford continues to sign on
Floyd Grolle, Ph.D.
Manager, License Administration
Office of Technology Licensing
San Francisco Chronicle
To Sell UCSF
By Carl T. Hall
Medical researchers at the Uni
versity of California at San Fran
cisco now have their own direct
pipeline to the biotechnology in
UCSF officials this week
named consultant Niels Reimers, a
pioneer in technology licensing, as
the first director of a new Office of
Technology Management at the
Parnassus Avenue campus. The ap
pointment was announced Tues
day by UCSF Chancellor Joseph
The new technology office will
manage the commercialization of
UCSF scientific discoveries. That
role previously was handled by a
technology-transfer office at the
University of California's system-
Three other UC campuses have
made similar moves of late, all de
signed to lower the bureaucratic
hurdles between campus research
ers and the commercial world.
"We hope to make the process
more efficient," Reimers said.
Success would mean more
profit to the university and indi
vidual faculty members at a time
when traditional resources are
drying up. Critics have argued that
an excessive commercial focus will
lead researchers to ignore pure sci
But Reimers, 62, said that uni
versities have an economic incen
tive to stick to fundamental re
search. Narrowly focused applied
science may find commercial uses
faster, but the value "doesn't last
as long in the marketplace. Basic
research is what produces the big
Reimers is best know for estab
lishing Stanford University's Of
fice of Technology Licensing.
While at Stanford, Reimers read a
New York Times article about an
intriguing gene-splicing method
developed by scientists Herbert
Boyer of UCSF and Stanley Cohen
Although Cohen and Boyer got
the patent in 1973, Reimers is cred
ited with taking the lead in com
mercializing the discovery.
The patent is said to have gen
erated more than 320 licensing
agreements and $1 billion in corpo
rate revenues. The take for the
two universities reportedly reach
ed $117 million as of last year.
"It's the seminal biotech pa
tent," said Fred Dorey, president
of the industry-backed Bay Area
Biosdence Center in Oakland. He
called Reimers "one of the true
founding figures in the field of
Besides the Stanford program,
Reimers established similar tech
nology-licensing operations at UC
Berkeley and at the Massachusetts
Institute of Technology. Most re
cently, he has been head of Intel
lect Partners, a consulting firm in
New technology management office pairs
inventors with investors
By BRAD FOSS
/f intellectual property had a place on
the Monopoly board, Parnassus
Avenue, the home of world renowned
biotechnologies and Pharmaceuticals,
would be highly coveted territory.
Consider the widespread effects of the
hepatitis-B vaccine, which since its devel
opment at UCSF in 1979 has spared thou
sands of hospital employees from
contracting the disease. The foamy sub
stance known as surfactant is another
highly acclaimed UCSF invention. It pre
vents the lungs of premature infants from
collapsing, saving thousands of babies per
year from respiratory distress syndrome,
and in many cases, an early death.
To further UCSF's commitment to
bringing innovative medical science to the
public. Chancellor Joseph Martin believes
it's necessary for UCSF to be more aggres
sive in its search for new technologies.
Toward that end, UCSF recently formed
its Office of Technology Management
(OTM), which will serve as the scientists'
advocate in the corporate world, market
ing their discoveries to prospective in
vestors. It will also assist faculty with
little prior experience in this arena to un
derstand and follow the procedures nec-
cessary for technology transfer.
"A more efficient technology manage
ment progam will not just serve UCSFs
scientists and educational programs.
Ultimately, the public will be rewarded
with creative medical technologies and
the knowledge that they, too, are winners
as benificiaries of Parnassus Avenue in
ventions," Martin says.
Delivering fresh ideas to industry as
quickly and as often as possible is essential,
says Niels Reimers, director of OTM. Tor
society's benefit, this technology has to be
translated into public products and
processes available to you and me," he says.
Reimers is most widely recognized for
marketing recombinant DNA, patented
by Herbert Boyer of UCSF and Stanley
Cohen of Stanford, enabling scientists to
cut a fragment of DNA from one source
and splice it with the DNA of another
cell. He also managed Stanford's technol
ogy licensing program for 22 years before
helping UC Berkeley establish ite licens
ing program. OTM's senior licensing offi
cers Joel Kirschbaum and Jeff Labovitz,
both scientists and businessmen, bring
decades of experience in working for uni
versities and industry.
"We are extremely fortunate to get
someone with as much experience as
Niels brings to this campus," says
Dorothy Bainton, vice chancellor of acad
emic affairs. Bainton believes the prox
imity of OTM's office at 745 Parnassus
Avenue will be a welcome convenience to
faculty. They'll be able to just walk on
over to discuss their research while it's
fresh in their minds."
Of 100 technology disclosures, which
are the scientists' descriptions of technolo
gies submitted to the University's technol
ogy managers, only 10 to 15 will be
licensed and generate income. One to
three of these products will garner more
than $100,000 annually, Reimers predicts.
Since 1994, UCSF has generated
roughly $95 million from health care
technologies licensed to industry, ac
counting for 75 percent of the entire UC
system's royalty income during that peri
od. Last year, UCSF produced more roy
alties from licensed technologies than
any other university in the world.
"A major hit, such as a recombinant DNA-
type of invention falls in a once-in-a-bfetime
category for a licensing program and a he
patitis-B or a human growth hormone dis
covery is at best a 1 -in- 1,000 technology-
disclosures category," Reimers says.
OTM needn't come away with a licensing
contract each time scientists face a poten
tial investor with a new discovery. It is
often the case, Reimers says, that meetings
with investors pay off in other ways.
Companies may give
the University a gift or
they may want to sup
port research that
they believe shows
"And, there's the
hiring of a UCSF
graduate involved in
that research, the pri
mary form of technol
ogy transfer for a university," Reimers
says. The net royalty income received by
UCSF is channeled toward education and
research in a self-regenerative manner,
resulting in further scientific discoveries
for public benefit."
More information and technology- dis
closure forms can be downloaded from
OTM's local Web page at http://itsa.ucsf.
edu/-otm/, or call 502-7537.
Welcome to Stanford's Office of Technology Licensing
The mission of Stanford University's Office of Technology Licensing (OTL) is
to promote the transfer of Stanford technology for society's use and benefit
while generating unrestricted income to support research and education
About tht Office
Sear ch the Database
Co rporste User info
u Biwsity Usir info
Comments I 1998 Stanford University. All rights reserved. | Last modified July 20, 1998.
Cohen/Boyer Patent Chronology
1972 Chakrabarty patent for nonrecombinant oil-consuming
microbe denied; GE files appeal.
3/73 Cohen and Boyer teams introduce spliced DNA from two
different plasmids into bacteria, where it replicates.
9/73 Singer and Soil publish letter in Science noting
possible danger of rDNA technology.
11/73 Cohen/Boyer recombinant plasmid paper published in
Proceedings of the National Academy of Sciences.
5/74 Cohen and Boyer publish paper in PNAS describing
replication of spliced eukaryotic DNA in bacteria.
6/24/74 Reimers memo noting phone conversation with Cohen is
first evidence in OTL documents of consideration of
patent application for rDNA technology.
7/26/74 Berg et al. letter proposes temporary moratorium on
11/4/74 Stanford/UC file first application for patent to cover
basic rDNA process and pSClOl product one week before
2/24-7/75 Asilomar conference on recombinant DNA technology
early '75 Concern by Berg & others that pursuit of patent would
be seen as conflict with research moratorium.
fall 1975 Stanford OTL begins to approach companies about
licensing rDNA technology.
spring' 76 Stanford considering exclusive license to Genentech or
6/76 NIH guidelines published.
6/76 First public disclosure of patent application, at Miles
6/16/76 Supreme Court decides manmade organisms are patentable.
7/76 NIH decides rDNA technology can be licensed.
1976 Stanford/UC file second patent application.
3/78 Stanford receives NIH permission to patent recombinant
DNA process if licensees conform to NIH rDNA
1978 Stanford/UC file third patent application.
1/4/80 Patent application filed, replacing '74, '76, & '78
6/16/80 Supreme Court decides, 5 to 4 , that raanmade organisms
12/2/80 First patent issues, process patent.
8/81 Stanford announces availability of licenses for rDNA
8/28/84 Second patent issues, product patent, on prokaryotes.
4/26/88 Third patent issues, product patent extending patent to
all cell types, prokaryote and eukaryote.
12/2/97 Process patent expires.
American Cancer Society, 7
American Chemical Society, 24-25
Ampex Corporation, 1
Andreopoulos, Spyros, 3, 43
Barnes, Andy, 11, 13, 29, 47
Bayh-Dole Act, 8
Berg, Paul, 10-11, 13, 14, 15,
25, 29, 32, 36, 38
Beyers, Robert, 3, 5, 42, 43
Biochemistry, Stanford Department
of, 31-32, 33, 36
biosafety, 8, 11, 23, 25, 33
guidelines for, 4, 23
biotechnology industry, 3, 6, 11,
20, 23, 25, 26, 32, 41-42. See
also Genentech, DNAX
Boyer, Herbert W. , 4, 5, 6-7, 9,
11, 14, 16, 17, 18, 24, 36, 38,
Bremer, Howard, 47
British Technology Group, 37
Carpenter, William, 7, 8, 9
Casper, Gerhard, 46
Cetus, 19, 28
Chakrabarty, Ananda, 34
Chakrabarty Supreme Court case,
Chang, Annie, 5, 16
Cohen, Stanley N., 3-5, 6, 7, 9,
11, 13, 14, 15, 16, 19, 22, 24,
38, 39, 46
Cohen-Boyer patents /patenting, 37
anonymous review, 9-10
controversy over, 3, 10-12,
15, 25, 29, 41-42, 46
inventors, 5-6, 16-17, 39
and NIH/HEW, 23, 25-26
Cohen-Boyer patents /patenting
prosecution process, 27-28,
patent application(s) , 8, 9
patent claims, 20-21, 35-36
patent expiration, 8, 21
process patent, 13, 21, 24,
33, 35, 39-40, 46
product patent(s), 21, 24, 33-
royalties, 5-6, 10, 11, 13-14,
16-17, 20-22, 28-32, 38
U.S. rights only, 8, 20-21
Cohen-Boyer recombinant DNA
commercial potential of, 3-
5, 10, 11, 36, 41
disclosure of, 3-4, 5, 46
Cohen-Boyer technology licensing
and biotechnology industry, 3,
11, 19, 20, 41
controversy over, 3, 10-12,
15, 25, 29, 41-42, 46
exclusive /nonexclusive license,
3, 19-20, 33, 41
agreement, 4, 6, 7, 24
licensing plan and fees, 4,
litigation fund, 28
marketing licenses, 11, 13,
21, 28, 33, 47
and recombinant DNA
controversy, 3-4, 23
royalties /royalty distribution,
5-6, 10, 11, 13-14, 16-17,
20-22, 28-32, 42.
See also Office of Technology
Cold Spring Harbor conference,
"Patenting Life," 28
biotechnology, 3, 25-26, 41-42
Creighton, Ken, 2
Curtiss, Roy, 33
DNA synthesis, 18
DNAX, 13, 32, 38
drug development, cost of, 5
drug interaction technology,
Dunner, Donald, 27, 29
Finnegan, Henderson, Farabow and
Garrett law firm, 27, 29
Ford Aerospace, 1
Genentech, 19-20, 29, 42
General Electric, 34
Gordon conference (s) , 46
Griffen, Susan, 27
Grolle, Floyd, 21
growth hormone, human, royalties
Halluin, Al, 27-28
Health, Education, and Welfare,
U.S. Department of, 23, 25-26
Helling, Robert B., 5-6, 16-18,
hepatitis B vaccine royalties, 32
Herzenberg, Leonard, 37
Hines, Sally, 15
hybridomas, 36-37, 43-46
Imatani, Ken, 11, 18-19
institutional patent agreements,
International Trade Commission,
Kaplan, Henry, 43-46
Kennedy, Donald, 24, 30, 41-42,
Kennedy, Edward (Ted), 26
Kiley, Thomas, 19-20, 29
Kleiner, Eugene, 19
Kleiner & Perkins, 19
Kohler, Georges, 36
Kornberg, Arthur, 13, 14, 32, 36,
Krevans, Julius, 24
Latker, Norman, 25-26
Lipsey, Charles, 27
Lyon & Lyon, 19
McElheny, Victor, 5-6
Massachusetts Institute of
Technology, 15, 46
Massy, William, 29, 44
Mertz, Janet, 10, 38
Milstein, Cesar, 36
Molecular Biology of the Gene, 37
monoclonal antibodies, 36-37
Morrow, John, 39
Nader, Ralph, 26
National Institutes of Health, 7-
8, 23, 25
National Science Foundation, 7-8
New York Times article on
recombinant DNA, 1974, 3, 4-5
Office of Technology Licensing,
Stanford, 1, 15
licenses, 19, 26, 43-46
foundation, 1-2, 23-24
the Kaplan case, 43-46
pilot licensing program, 2, 30
royalties /royalty distribution,
and Stanford's legal office,
Office of Technology Licensing,
See also Cohen-Boyer technology
Oi, Vernon, 37
Opalka, Josephine, 4
Owens, Mark, 4
Pajaro Dunes Conference on
Technology Transfer, 1982, 41-
"patenting of life." See
Chakrabarty Supreme Court case
and Cold Spring Harbor
patents /patent ing
Bayh-Doyle Act, 8
explaining patenting, 3-4, 7,
12, 15, 25-26, 35
patenting in biology/medicine,
14, 32, 42
technology disclosure, 1, 2,
See also Cohen-Boyer patents/
Perkins, Thomas, 19
Peterson, Kent, 44-45
Poitras, John, 15
polymerase chain reaction patent
Rathmann, George, 20
commercialization of, 26,
controversy, 15, 23, 25, 33
and licensing pool, 47-48
Research Corporation, 1
Rosenzweig, Robert, 22, 25, 29
Rowland, Bertram, 8, 16, 17, 24,
28, 33, 36, 39
Rutter, William J. , 20
Senate hearings on recombinant
DNA, 1977, 26
Stanford University, 24
business school and students,
7, 11, 15, 18
Clinical Pharmacology, 31
Department of Biochemistry,
31-32, 33, 36
Department of Genetics, 31
Department of Medicine, 31
legal office, 45-46
Medical Center news service, 3
Sponsored Projects Office, 2
and University Licensing Pool
for Technology, 47-48.
See also Office of Technology
"submarine patents," 27
Swanson, Robert, 7, 18-19, 20,
Tanenholtz, Alvin, 33, 35
technology transfer, 14, 26-27,
U.S. Patent and Trademark Office,
5, 17, 27, 28, 33-34, 38, 39
University of California
agreement, 4, 6, 7, 24
Office of Technology Transfer,
royalties from biotechnology
and University Licensing Pool
for Technology, 47-48
university-industry interactions ,
University Licensing Pool for
University of Michigan, 6n, 16,
University of Pennsylvania, 13
Watson, James, 25, 28
Williams, Janice, 27
Xenopus research, 39
Zaffaroni, Alejandro, 13, 38, 44
Ziff, Edward, 46
Sally Smith Hughes
Graduated from the University of California, Berkeley, in
1963 with an A.B. degree in zoology, and from the University
of California, San Francisco, in 1966 with an M.A. degree in
anatomy. She received a Ph.D. degree in the history of
science and medicine from the Royal Postgraduate Medical
School, University of London, in 1972.
Postgraduate Research Histologist, the Cardiovascular
Research Institute, University of California, San Francisco,
1966-1969; science historian for the History of Science and
Technology Program, The Bancroft Library, 1978-1980.
Presently Research Historian and Principal Editor on medical
and scientific topics for the Regional Oral History Office,
University of California, Berkeley. Author of The Virus: A
History of the Concept, Sally Smith Hughes is currently
interviewing and writing in the fields of AIDS and molecular
U. C BERKELEY LIBRARIES