Richard Lloyd

The end of June was the deadline to submit patents for inclusion in a potential new pool, organised by MPEG LA, that will focus on the CRISPR/Cas9 gene editing technology. MPEG LA is the administrator behind the wildly successful MPEG-2 video compression pool that launched 20 years ago.

Among those to submit their IP for possible inclusion in the pool was the Broad Institute, the research organisation that has been one of the CRISPR/Cas9 pioneers. Broad co-owns 22 relevant US and European assets along with MIT, Harvard and The Rockefeller University, and its decision to get involved is something of a coup for MPEG LA.

We don’t know who else has submitted IP (Broad chose to make a public statement) and when I spoke with MPEG LA head Larry Horn and his colleague Kristin Neuman this week they weren’t giving anything away. However, Horn did admit that he is encouraged by the response and that he thinks there is a future for a CRISPR pool.

Broad’s pioneering gene editing work is perhaps best known because of a long-running spat between it and the University of California, Berkeley over who owns some of the fundamental IP behind CRISPR/Cas9. That was settled via an interference proceeding at the USPTO and while neither side won a knockout victory, Broad was seen by most as the winner on points.

Despite the success of signing up Broad, the call for submissions is only the first hurdle for MPEG LA and its partner patent owners to negotiate. The rights in question still need to be vetted, MPEG LA has to determine if it has sufficient IP in the pool and a pricing structure, which balances the interests of the owners in making a decent return with ensuring that there is widespread adoption of the technology, must be thrashed out. Horn forecasts that it will be at least nine months before any pool is officially launched.

That CRISPR/Cas9 is going to shake up large parts of the life sciences sector seems assured, as does the fact that the relevant patent universe is going to significantly expand from its current level of around 100 worldwide grants. Neuman, MPEG LA’s executive director of biotechnology licensing, estimates that there are between 600 and 800 patent families currently going through the application process around the world.

In contrast to most of the other technologies that MPEG LA has formed pools around, the CRISPR/Cas9 technology is still at a relatively embryonic stage. “The big if is the technology itself,” says Neuman. “It is possibly not as mature as some of the other technologies that have been backed up by a patent pool so it still needs to be proven a bit; but it is tremendously exciting because it has worked to this point and it is so easy work with - and it’s being taken up all over the world.”

Despite being at an early stage, Neuman insists that there has been enough market interest to suggest a pool could work. “Based on our experience of putting together pools in consumer electronics, and also given the experience we had five or six years ago creating a gene patent licensing pool for personalised medicine, we began to see the same market pressures surrounding CRISPR,” she comments. “We also had people enquiring whether we could do anything in the field to make licensing more efficient.”  

As Neuman indicates, while MPEG LA maybe best known for pools in the tech space this isn’t its first foray into life sciences (although that pool has been badly hampered by recent changes to the law around patent eligible subject matter). However, there are some key differences between a possible CRISPR pool and the type of licensing platform that MPEG LA typically puts together.

For one thing there isn’t an agreed standard as with the likes of MPEG-2; and given its possible applicability to a range of sectors, any pool might actually be a series of mini, specialised pools. For instance, one might include patents that read on agricultural applications of the technology, while others might focus on human medical conditions and diagnostics. Each might have some common IP but not necessarily all of the same patents.   

“Biotech is very different to what we’re accustomed to in consumer electronics because it normally doesn’t have standards at all,” says Horn. “What we’re doing here is looking at the essential and other important claims that make for a valuable licence.” So, essentially, MPEG LA is gleaning a standard from the available IP.

 “The nice thing about CRISPR is that it does lend itself to some of the same elements that would make for a good standard because of the way the technology has to be used and for what purpose,” Horn added.

Another key difference in comparison with many high tech sectors is that most players in the biotech space, particularly in human therapeutics, are not used to non-exclusive licences. They are far more accustomed to licensing their IP on an exclusive basis where there may be more certainty on the kind of return a licensor is going to make. This gives them some guarantee that they’re going to recoup their R&D investment and ultimately turn a profit. “People need to be convinced that they can do as well or better in a non-exclusive mode and that it’s the best option they have because frankly this is a hot area,” Horn remarks.

The challenges in creating a CRISPR pool are daunting. Typically no pool starts life with all of or even the vast majority of the relevant IP; and while getting the Broad Institute on board is a very significant step, it’s vital that other key patent owners can be convinced. Beyond the Broad, Neuman points to the University of Vilnius, South Korea’s Toolgen and MiliporeSigma as other owners of foundational IP - although it’s not clear if they have submitted their patents to MPEG LA.

There are also existing agreements to deal with, as the likes of UC Berkeley have already licensed some of their relevant IP. “They are an issue,” admits Horn. “But at the end of the day there may be a false sense of security about exclusivity if you need multiple licences anyway from a variety of people. What does exclusivity mean if it doesn’t give you the right to do what you want to do? In that case it’s not exclusive.”

For Neuman, the existing licences are not a showstopper; instead, they’re something work through. “There’s no reason some of them can’t ride alongside what we’re doing depending on what the field of use is for the pool, at least initially,” he explains.

So does a CRISPR pool have a shot? One long-time adviser to pools points to some of the challenges involved, but thinks it might get off the ground. “Prior efforts in life sciences have not been successful, and there are always competition law issues that must be addressed when pools contain more than patents that are essential to a licensed standard,” comments Garrard Beeney, a partner at Sullivan & Cromwell, who was closely involved in the creation of MPEG 2 and other pools. “Having said that, the general efficiencies of pools would benefit certain life science fields and CRISPR is one of those.”

If it does get off the ground then Horn predicts it could be as big as the MPEG-2 platform: “We’re talking about all kinds of industries that could be affected by the ability to edit genes for either defects or improvements and there’s a massive number of markets waiting for that kind of technology.”

If that’s the case, remember that since 1997 there has been an estimated $5 trillion of worldwide MPEG-2 product sales. The likes of the Broad Institute could be in for a significant payday.