Arguments in the trial addressing the constitutionality of the California Institute for Regenerative Medicine (“CIRM”) are set to begin on Monday, February 27, 2006 in an Alameda County Courtroom. The trial is expected to last about two weeks.

According to InsideBayArea, Plaintiffs, who include the People’s Advocate, the National Tax Limitation Foundation, and the California Family Bioethics Council, will argue that the committee is unconstitutional because the group operates outside of the exclusive management control of the state, since members of the committee serve terms longer than those who appoint them–six to eight years–and cannot be removed except under extreme circumstances by the state attorney general, such as committing a felony.

InsideBayArea reports that Nicole Pagano, spokewoman for the CIRM, argued in an email that the committee is accountable by the fact that most members are appointed by elected state officials and that they are subject to an annual financial audit to be reviewed by the state controller.

Paul Elias of the Associated Press wrote in an article today titled “$3 Billion California Stem Cell Agency Fights for Life in Court” :

The future of embroynic stem cell research could be shaped in a sleepy suburban courtroom where two taxypayer groups are challenging the legality of California’s new agency dedicated to the controversial field. . . .

Even some of the agency’s harshest critics believe the institute will prevail. Recent actions such as ensuring the state will share any potential profits gleaned from state grants, show it is starting to function as a government agency.

Californians in all walks of life will be watching this trial closely to see what the fate will ultimately be of California’s CIRM. While there seems to be a consensus throughout the state that government needs to be accountable to the people on the CIRM as well as other issues, the voters who said yes to Proposition 71, which created the CIRM, are definitely starting to be concerned that the CIRM will never be the successful institution that was originally promised to California. The outcome of this trial will likely signal the fate of both the CIRM and stem cell research in California.

For more information on the Proposition 71 controversy, you should check out the California Stem Cell Report, which has been reporting on the controversy extensively. The authors promise to be in attendance at the trial and say that they will file a report at least by early evening on Monday, perhaps sooner, depending on time constraints and Internet accessibility. We look forward to hear what they have to report on tomorrow’s proceedings.

Stem Cell advocates suffered another setback yesterday, when Alameda County Superior Court Judge Bonnie Sabraw denied a motion to dismiss two lawsuits challenging the legality of the state’s stem cell institute, the California Institute of Regenerative Medicine (“CIRM”). The ruling means that funding for the CIRM will continue to be blocked into next year, and that the CIRM will have to continue to operate with only the $3 million loan from the state and a $5 million grant from the founder of Dolby Laboratories. Robert Klein, chair of the CIRM, has said that the agency has only enough money to operate until May, 2006.

As a transactional lawyer who has some familiarity with the litigation process, I wonder if five months is really enough time to resolve these suits and fund the CIRM. It would not surprise me in the least if five months from now we find ourselves watching as the CIRM closes its doors and lays off all of its employees and Proposition 71 becomes just another failed experiment. The test for California will be to see if the public will come to the CIRM’s rescue. Do Californians really believe in the concept of stem cell research enough to keep Proposition 71 alive?

In today’s San Jose Mercury News, Steve Johnson writes about where California and other states are one year after California voters approved the $3 billion stem cell initiative. According to Johnson, “[S]o far, stem-cell scientists, companies, and their supporters have little to cheer about.”

Johnson further reports:

California’s program, which was designed to get around severe federal limits on such research, has been bottled up by two lawsuits. And because of a national stem-cell backlash, only two states — Connecticut and Illinois — allocated money for stem-cell studies this year, according to the National Conference of State Legislators.

Worse for stem-cell advocates, several states — including South Dakota, Arizona and Nebraska — passed laws this year limiting stem-cell research. In other states, the issue sparked nasty battles likely to rage into next year’s legislative session.

Stem cell research, of course, is controversial because human embryos are destroyed in the process. Also at issue is a laboratory technique caled somatic cell nuclear transfer, where the nucleus of a cell is place into an egg which has already had its nucleus removed.

Advocates for stem cell research argue that this kind of research is critical because of its potential for curing such medical conditions such as Parkinson’s disease and and spinal cord injuries.

Due to the continuing controversy, however, the advancement of stem cell research continues to be thwarted. As Johnson writes:

So far, only five states have passed money for stem-cell studies, and merely a trickle of that has gotten to researchers.

The first to approve financing was Ohio. In 2003 it set aside $19.5 million, some of which already has been given to scientists. New Jersey approved $9.5 million in May 2004 and another $10.5 million this year, with $5 million due to be awarded to researchers in December.

This year, Connecticut followed suit with $100 million and Illinois set aside $10 million, although neither is expected to begin spending the money until 2006.

The biggest state program by far is California’s $3 billion stem-cell research effort, which voters approved in a November 2004 ballot initiative. But lawsuits by anti-abortion activists, who claim California’s program lacks proper state oversight and is riddled with conflicts of interest, have delayed the sale of state bonds needed to finance the effort.

When you look at this issue, you have to wonder if state-funded research is really a workable solution. If California, one of the most liberal and progressive states in the country, has difficulty getting a stem cell research program off the ground, it seems unlikely that other states could make it happen either.

Whether you oppose or support the concept of stem cell research, the fact remains that the allocation of $3 billion from a state budget is a tremendous allocation of resources, and it is inevitable that the allocation of that money will become entwined with political concerns.

So where will we be a year later on this issue? It’s not out of the question that we will be at the very same place where we are now.

In California’s November 8th Special Election, both measures on the ballot, which were of interest to the California biotech community, were defeated–Propositions 78 and 79.
The California Healthcare Institute (“CHI”), a biomedical industry advocacy group, provided this analysis of the results:

Both prescription drug initiatives lost by large margins. Prop. 78, sponsored by PhRMA and backed by Gov. Schwarzenegger and the business community, would have created a voluntary program for people with incomes up to 300 percent of the federal poverty level. It lost by 17 percentage points. Prop. 79 was sponsored by organized labor, mainly as an attack on the governor and his supporters. It would have created a prescription drug program extending to 400 percent of federal poverty level, with company participation tied to Medi-Cal. It also featured an anti-profiteering clause that would have encouraged lawsuits against manufacturers who charge “unreasonable prices.” It was defeated by 22 percentage points. At the same time, voters rejected Prop. 80, which proposed to make energy cheaper by imposing new regulations on public utilities. . . . Propositions 78 and 79 confused voters because they seemed to differ less on substance than on technicalities. Most of the more than $80 million industry spent on these initiatives went toward defeating Prop. 79. Still, in an election in which no initiative passed, and in which the governor’s support was unpersuasive, it is uncertain whether Prop. 78, on its own, could have garnered voter approval.

The defeat of Prop. 78 means that the underlying problem of access to drugs for low-income Californians awaits a solution. The Legislature is likely to revisit drug importation and various kinds of price controls in 2006.

BIOCOM, the biotech industry group which had strongly opposed Proposition 79, provided its own analysis of the special election results in its recent newsletter.

Regardless of their reasons, California voters have clearly spoken and elected to send lawmakers back to the drawing board. Californians will have to wait and see if lawmakers can come up with a better solution for dealing with providing better access to drugs for low-income Californians. As someone who moved to California from out-of-state and who has personally experienced some of the same access issues on a higher income salary, however, I cannot help but wonder if this is the kind of problem that can really be resolved by lawmakers alone. It seems to me that the problem is more complicated than that and will require more than a simple legislative fix to resolve the issue.

The U.S. House of Representatives is currently considering legislation to reform U.S. patent law. The reform bill, H.R. 2795, was introduced by Representative Lamar Smith of Texas on June 8, 2005, and is the subject of intense debate in the House.

The proposed legislation would modify existing rules on such issues as first inventor to file; the definition of prior art; assignee filing; best mode requirement; willful infringement; venue for infringement actions; the apportionment of damantges for infringement; and continuation applications. The Intellectual Property Owners Association is tracking the debate on this legislation, which is updated regularly on its website.

The Intellectual Property Section of the State Bar of California has urged its members who have input on the legislation to contact their congressional representatives. California Congressman Howard Berman is the ranking minority member of the House Subcommittee on the Courts, the Internet, and Intellectual Property, and other members of the Subcommittee from California include Adam Schiff, Elton Gallegly, Darrell Issa, Zoe Lofgren, Maxine Waters, and Linda Sanchez.

Experts are predicting that the bill will pass in some form, although it is unclear which provisions will survive the current debate.