Building the Thermocyler. and abi/PElicensing

WSchick at aol.com WSchick at aol.com
Wed Feb 2 23:09:53 EST 2000


In a message dated 00-02-02 12:27:34 EST, AFS7 at le.ac.uk writes:

<< > But there's nothing stopping you making a thermocycler anyway.  You
 > don't *have* to use it for PCR. . .
 
 However, I think at the very least a name change from 'OpenPCR' would be
 called for :-)  And you would have to _tell_ people that they can't use
 it for PCR, thus removing the point of the exercise.  If the goal is to
 produce very cheap cyclers for schools, etc, it would be terribly unkind
 to let them violate the PCR patents without making it very clear to them
 that is what using the machine for PCR would mean.  I doubt many schools
 wouild want to take legal risks like that. >>

A lot of thermcylers were used for cyle sequencing, is why
MJ allowed you to buy a license for PCR if you felt you were going to make a 
new drug or therapeutic.  Which is why biotech firms always license all their 
PCR cyclers.

But be careful!  You can spend lots of money for uneeded licencing from 
ABI/PE.  They have bundled their own machine patents with the basic PCR 
process license from Roche.  As the Cetus machine used a refrigerator, that 
is the only type of machine covered.  The Peltier cyclers are free from this 
patent, and DON't license it.

When and if you go to PE/ABI, tell them you only want to license the Roche 
PCR process patent for $1000.  Then you're clear.   Don't pay the extra 10% 
of your PCR machine cost for useless patents that your machine doesn't use.  
This doesn't seem much, but for example, the Idaho Real Time Kinetic Cycler 
(now from Roche by the way) was sold by me for about $40,000 and had no 
connection with the Cetus ABI machine patents.  If you the user paid the 10% 
fee on thismachine, you just added $4000 to you licensing costs.

After all, there are slitherly lawyers in the licensing departments which 
will word licensing terms to scare the daylights out of you.

Ask them directly.  What is the cost for the PCR icense fee set by Roche 
(which seems fairer than the not needed 10% fee ABI tacks on to their 
contracts...

The problem with manufacturers is that they have this $1000 fee plus the 10%, 
if they were coerced into the licensing agreement which includes the fees for 
the refrigerator patents.  As the COST of a cyler has to be under $2000 
(Instrument companies generally have a COGS ratio of 50%--check their annual 
reports) so they are sold for $4000.  But where does the $1400 fee go? right 
on top,. and maybe even marked up. The $1000 fee from the Roche patent seems 
fair.  But in effect ABI has increased the price another 10% (400) over the 
basic sale price.

In fact, you ought to check ABI's cogs and if you agree that it is higher 
than the competition, buy sequencers from LiCor or Pharmacia, etc. And 
compare the prices of ABI cyclers to others, and include the license fee of 
$1000.  You'll save lots of money.  And keep the competition alive.  No ABI 
monopolies, please.

Walt Schick
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