SK&F 
SMITH KLINE SrfRENCH LABORATORIES 
1500 Spring Garden St.. P.O. Box 7929, Philadelphia, PA 19101 • 215-854-4000 
September 17, 1976 
cable SMITHKLINE PHILADELPHIAPA 
telex 83-4487 
Donald S. Fredrickson, M.D. 
Director 
National Institutes of Health 
Bethesda, Maryland 20014 
Dear Dr. Fredrickson: 
Dr. Alan D. Lourie, Director, Corporate Patents, SmithKline Corporation, has 
read your letter to me of September 7, 1976 and has provided the following 
views concerning the questions raised and the various options outlined. 
The basic principle underlying his comments is that the benefits of the patent 
system are just as appropriate in the field of recombinant ENA as in any other 
field and that the special problems inherent in the field can be overcome with- 
out sacrificing these benefits. In fact, the more important the field, and this 
obviously promises to be one of great significance, the more important it is 
that industry have the incentive to invest the capital to develop and bring to 
market inventions having practical application. Patent rights should not be 
viewed as an "undue" obstacle to achieving other objectives, but as one of the 
several important objectives to be considered in any contemplated policy. 
Indeed, the benefits achieved in the past by the encouragement of patent 
protection of HEW-sponsored inventions are acknowledged in your letter. 
The special problems arising out of the field of recombinant ENA research can 
be met while retaining the benefits of the patent system by the use of the 
Institutional Patent Agreement (IPA) system. The need for early dissemination 
of information can generally be met by early filing of patent applications 
before any patent-defeating disclosures occur. (You indicate that your present 
staff feels that they can accomplish this.) Where this need is so urgent as 
to render it impractical or impossible to file before the information must be 
disseminated, one can rely on the one-year grace period provided for by U. S. 
patent law and the six-month grace period provided for in Germany and Japan. 
These are the most important commercial markets and, while loss of other 
foreign patent rights would indeed be regrettable, patent protection in these 
countries should provide sufficient incentive for most U. S. companies. Okie 
must recognize that this problem would usually occur only when dealing with 
an emergency situation which required the early dissemination of information. 
The need to achieve uniformity in safety practices can perhaps be met by 
inclusion of appropriate safety guidelines as conditions for the receipt of 
any grant in this field and/or renegotiating any outstanding IPA to include 
them. The "march-in" rights possessed by HEM tinder the IPA should provide 
sufficient leverage to achieve this, although, as noted, Stanford may be 
willing to do this voluntarily. 
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