Donald S. Fredrickson, M.D. 
- 2 - 
September 17, 1976 
Therefore, we believe that all of the nonpatent needs in this area can be met 
without foregoing the benefits of the patent system and without sacrificing 
the IPA which was worked out through the patient and informed efforts of a 
number of people, particularly HEW's Patent Counsel, Norman Latker. Ihder the 
IPA, HEW has freed itself of a substantial administrative burden by permitting 
institutions to make their own licensing arrangements, while retaining adequate 
means for reasserting control over any patents which it feels are not being 
utilized in the public interest. The various options listed in your letter 
seem to be either unnecessary, harmful, or both. Options (1) and (2) would 
kill the incentive provided by a patent in order to achieve objectives which 
can be met by the less drastic methods discussed above. Option (3), while 
perhaps retaining patents, would withdraw licensing responsibility from the 
institutions, a step which would appear to be unnecessary and contrary to 
recent trends which have proved beneficial. Option (4) is also unnecessary. 
The licensing guidelines in the IPA should provide all the control HEW needs 
over the terms of the licensing, except for the recombinant research guidelines, 
which can be imposed through an amendment to the IPA. In other words, the 
licensing agreement should not have to be approved by HEW as long as it is 
within the IPA (as amended) guidelines. Finally, while exclusive licenses 
are generally necessary to create sufficient incentive for substantial invest- 
ment, it is difficult to see why, as in option (5), HEW should prevent the 
issuance of nonexclusive licenses where the institution finds such to be 
appropriate. Especially in this field, which is susceptible to such a wide 
variety of applications, exclusive licensing of. a basic patent might well be 
unwise and unnecessary. Che company cannot explore all possible applications 
which might be dominated by a basic patent. Once again, the recombinant 
guidelines can be imposed through grants or the IPA without precluding non- 
exclusive licenses. 
I trust that the above views contribute to the Department's policy regarding 
patent applications of HEW- funded inventions in the field of recombinant ENA 
research. 
Sincerely, 
Director, "Scientific Liaison 
HG:ref 
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