By then, Boyer had co-founded Genentech, which was expressly looking to use recombinant DNA to make human drugs. He may have not been keen on patents initially, but he now had one foot in business with Genentech, another in academia with his professorship at UCSF. University professors co-founding biotech companies based on their research is now routine—in fact, the rival scientists behind CRISPR have at least three startups among them, depending on how you count—but it was nearly unheard of at the time. Plus, recombinant DNA research was controversial because of concerns about recombinant organisms escaping into the environment. At talks, Boyer remembered, “people were jumping up and yelling, ‘Is it true you’re patenting recombinant DNA? How can you do that?’”
The controversy also spilled out of academia. Tom Kiley, Genentech’s head counsel, recounted in an oral history: “I recall the Berkeley Barb”—a local underground paper—“at the time published a stinging attack on Boyer for having gone commercial and accompanied it with a graphic showing the intertwined serpents of the caduceus, but instead of serpents’ heads, there were fists grabbing greenbacks.”
Genentech went public in 1980 with a $35 million IPO. It was an eye-popping number for a company with still unproven technology, and the set the stage for later biotech companies. This year, two CRISPR startups had $94 million and $108 million IPOs.
Genentech tried but failed to exclusively license the Cohen-Boyer patents from Stanford and UC. The universities had decided to license the technology out non-exclusively—meaning any company could use the technology as long as they paid a modest licensing fee. This model is now considered the gold standard for biotech patents underlying such broadly applicable technologies.
Genentech ended up partnering with the pharmaceutical company Eli Lilly to make insulin, the first of Genentech’s many blockbuster drugs. Stanford and UC made their $255 million from licensing the patent to Genentech and other companies by the time it expired in 1997.
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The patent story is not always a happy one. Once it was clear how much money and prestige was tied up in these patents, Genentech became embroiled in dozens of intellectual property disputes—several of them with the University of California. Genentech had licensed the Cohen-Boyer patents, but its scientists also made new patentable breakthroughs on the road to insulin, and these patents became matters of dispute.
By now, the UC patent office was more active. The UC system had a new patent administrator, Roger Ditzel, who had come from Iowa State University and headed Monsanto’s international business development before that. Genentech, Eli Lilly, and the UCSF system became entangled in six lawsuits over the new patents for the production of insulin. The lawsuits were consolidated and it ended with the university getting nothing, except a $12 million legal bill. In another case, UCSF and Genentech got into a decades-long battle over UCSF scientists recruited to Genentech, who were accused of taking material from their university labs to the company. That one ended with $200 million settlement for UCSF.