Experiment Eleven

by Peter Pringle

  Schatz was now “devoting his time to microbial physiology,” mainly with his Hydrobacteria. “A number have been isolated before, and whether the ones Schatz is watching have been described before, he doesn’t know yet. He had found two—one shaped like a rod with a tail, and one without a tail. The tailed microbe travels around and the other just floated lazily in the water. They both burn up hydrogen, just like a car burns up gas and you and I burn up carbohydrates. In all cases, the result is energy.”

  Waksman apparently saw this article. It must have been sent to him by someone in the lab, because a copy is in his Rutgers archive. He made no comment.

  ___________

  IN THE MEANTIME, Seymour Hutner, a microbiologist at the independent research unit, from Haskins Laboratories in New York City, had alerted Schatz to a vacant teaching and research position at Brooklyn College to follow his stay at van Niel’s lab. Schatz got the job—this time without Waksman’s help. But Waksman was encouraging, as always. He was “delighted indeed” to learn about Schatz’s progress and “particularly pleased” to learn of his Brooklyn appointment. “It certainly does credit to the members of the appointment committee of that institution who were able to recognize your merit for the position in question and to give you the proper appointment of Assistant Professor to which you are fully entitled.”

  13 • A Patent That Shaped the World

  ON SEPTEMBER 21, 1948, U.S. PATENT No. 2,449,866, for “streptomycin and process of preparation,” was granted to the inventors Selman Waksman and Albert Schatz. Of course, the “inventors” had already assigned their rights to the Rutgers Foundation, so they in fact owned no part of the new drug. And the four-page document, written in the dry, technical language of patent law, gave no hint of the division of labor. In case anyone should be in any doubt, however, as to which of the two inventors to attach greater importance, the first paragraph stated that streptomycin came from strains of the microorganism Actinomyces griseus, which was “first isolated from the soil and characterized by one of the present applicants, S. A. Waksman, and is described in his publication in Soil Science 8, 71, (1919).” In other words, without Waksman’s earlier discovery, the present one would not have happened.

  In reality, the Russian researcher Alexander Krainsky had been the first to identify the organism A. griseus, in 1914. And Dr. Waksman’s strain of A. griseus was not a streptomycin producer. But Waksman had made the claim in his own behalf so often now that no one complained. This was the cold war. The patent was already paying royalties—and would continue to do so for the next decade or so, until it ran out. Waksman, and his heirs after his death, were guaranteed a 20 percent share of whatever the Rutgers Foundation made from its 2.5 percent royalty. The professor would become rich as well as famous; the Rutgers Foundation coffers would be filled in a manner that the tiny college had never dreamed of. And Schatz, Waksman’s “co-inventor,” would get precisely nothing. He had not even been paid the one dollar due to him for signing over the patent to the Rutgers Foundation in 1946.

  Neither Waksman nor the foundation would notify him that the patent had been granted, a milestone in the history of medicine that would be hailed in 1961 by the New York Times Magazine as one of the “ten patents that shaped the world,” along with those for moldable plastics, gasoline, the telephone, Edison’s lamp, rockets, man-made fibers, powered flight, the vacuum tube, and atomic power.

  Waksman had no intention, either now or later, of informing Schatz; such information in the hands of his diligent but unpredictable researcher might encourage awkward questions as to where exactly the royalties were going, not to mention the provenance of his five-hundred-dollar personal checks to Schatz.

  THE STREPTOMYCIN PATENT was indeed poised to shape the future of the drug industry. There had been no patent on penicillin. In a very British manner, Alexander Fleming had never considered applying for a patent for a drug so desperately needed by humanity. Howard Florey had opposed Ernst Chain on the same grounds when Chain had suggested they should seek a patent. Even if they had applied, though, the application would have been rejected. Under British and U.S. law, patents were not awarded for products of nature, which everyone acknowledged penicillin to be. Moreover, a patent had to be applied for within a year of the discovery’s public announcement. Penicillin was announced by Fleming in 1929, but by the time it was “rediscovered” and finally produced in 1940, more than a decade had passed. It was out of time.

  However, the discovery of streptomycin demonstrated that Fleming’s penicillin was not an isolated phenomenon; there were billions of microbes lurking in the soil, the water, and the air, in sewage plants and compost piles, and even in the gullets of chickens, and any of them might provide a wonder drug. Until now, the pharmaceutical industry had operated with a poorly stocked medicine chest of fluids, ointments, snake oil, and exotic-plant extracts. None of those—morphine, quinine, digitalis, insulin, codeine, aspirin, arsenicals, nitroglycerin, and compounds of mercury—was a cure, only a palliative. In contrast, antibiotics actually cured people of deadly infectious diseases, and the streptomycin patent showed the way. It meant companies that discovered antibiotics stood to reap handsome profits. Selman Waksman, now a scientist-entrepreneur, played a crucial role.

  When Waksman first applied for patents for his antibiotics found at Rutgers, the U.S. Patent Office examiners raised the “products of nature” issue. All courts, including the Supreme Court, agreed that anything made by or found in nature—a metal, for example, or a plant, a piece of wood, or a natural dye—was in the public domain, and no inventor or discoverer could claim it as his own. However, there was no precise definition of a product of nature, and no agreed-on point at which a natural product, changed by human hands, ceased to be natural. On this key matter the courts were silent.

  Waksman had some experience with this debate, from when he worked for the Takamine Laboratory from 1918 to 1920. In 1903, Takamine had won a patent case concerning adrenaline, which was a “natural” product of adrenal glands from slaughtered sheep and cattle. The company’s success would ease the passage of patents granted to the future antibiotics industry and to today’s biotechnology companies. The company’s founder, Japanese-born Jokichi Takamine, would become known as the “pioneer of American biotechnology.”

  Back then, he licensed his adrenaline invention to America’s first drug manufacturer, Parke, Davis & Co. of Detroit. The company started producing the drug, which was written up in the media as one of the new so-called blockbuster medicines. It helped control excessive bleeding in surgery and was also used in cardiology, obstetrics, and the treatment of asthma and other allergies. (It is still used today to relieve breathing difficulties.) As the medical uses became apparent, Takamine obtained five separate new patents, including ones in Britain and Japan.

  Eight years later, another drug company, H. K. Mulford, a maker of aphrodisiacs and talcum powder and a minor enterprise compared with Parke, Davis, challenged the patent mainly on “priority” grounds. Mulford considered that it had been the first to isolate adrenaline from its natural state.

  A furious legal battle ensued, with both sides engaging in several days of technical debate. The adrenaline case was heard in New York by Judge Learned Hand, a jurist with a reputation for legal craftsmanship and clarity, who was then on the U.S. District Court for the Southern District. Judge Hand relished the complexity of the case.

  When Takamine had originally applied for a patent, the examiner had rejected his claim because he believed that no product patent was possible if the discovery was merely separated from its natural surroundings and remained unchanged. To get around this objection, Takamine changed the chemical nature of the extracted adrenaline, turning it from a salt, which is the form naturally found in the suprarenal gland, into a base.

  The secretion from the adrenal glands in situ was clearly a product of nature, but Judge Hand steered the court toward a separate and fundamental question: whether a patent could be issued on a product
of the adrenal glands that was purified for therapeutic use.

  Judge Hand declared that what Takamine had created was an important distinction; the base was an original production of Takamine’s. He was also the first to make the drug available for any use by removing it from the gland tissue in which it was found. Judge Hand wrote that it became “for every practical purpose a new thing commercially and therapeutically. That was good ground for a patent.”

  Although he had not been asked specifically about adrenaline as a product of nature, Judge Hand became well known for his ruling that purified products of nature can be patented. Waksman did not refer to his knowledge of Takamine’s patent, but it must have boosted his confidence when he came to argue the patent application for his first antibiotic, actinomycin, in 1940. The Patent Office ruled immediately that the applicants (Waksman and Boyd Woodruff) had failed “to adequately distinguish” between actinomycin and products found in nature. The patent examiner wrote, “It is expected that actinomyces will generate (in natural cultural medium) antibiotics. Products of nature are ‘old’ and the fact of their existence cannot be claimed per se.”

  Waksman was ready with a counterargument. Antibiotics are only produced in artificial nutrients on the laboratory bench, he asserted. In an amendment to the actinomycin application, he argued, “It is not uncommon for organisms, when cultivated in artificial media, to produce substances which are not [emphasis added] produced in any detectable amounts by the organism as it occurs in nature.”

  Any “lingering doubt,” he added, in legal language that clearly came from Merck’s lawyers, “should be resolved in the applicants’ favor.” Backing the application, Merck lawyers argued that the Patent Office objection was “unsupported either by the cited art or by affidavit as to facts within the knowledge of the Examiner.” The application was granted. And so was the one for Waksman’s second antibiotic, streptothricin, after Waksman made similar arguments.

  In considering the application for streptomycin, the Patent Office raised the same “product of nature” question yet again. Waksman, with two victories behind him, was more confident this time. In a much bolder assertion, he declared, “Various attempts made in our laboratory to isolate it or demonstrate its presence in the soil failed to detect it. This antibiotic is not a product of nature, but produced by particular strains of A. griseus only in cultures of given composition and under given conditions of culture as outlined in the patent application.”

  Waksman proposed his negative test—“We did not find any streptomycin in the soil”—as proof that antibiotics were not found in nature. He thereby shifted the burden of proof onto the Patent Office, which promptly surrendered. The examiner, apparently unwilling to challenge Waksman’s prestige and honors in the subject, granted the patent.

  BUT THE EXAMINER would not have had to look far for evidence to challenge Waksman’s assertion—in fact, no further than Waksman’s own book on microbe wars, first published in 1945 and reprinted in 1947.

  In a passage discussing the destruction of disease bacteria in the soil by actinomycetes, Waksman wrote, “The fact that many pathogens can grow steadily in sterilized soil but do not survive in normal soil tends to add weight to the theory of the destructive effect upon pathogens of the microbiological population in normal soil.” In other words, disease bacteria in natural soil seem to be destroyed by other bacteria, by fungi or actinomycetes that produce antibiotics.

  The Patent Office examiner could also have found evidence challenging Waksman in the work of other researchers. The key phrase in Waksman’s presentation to the Patent Office was “in our laboratory.” Waksman knew perfectly well that others had reported antibiotics in nature—in the soil. Prime among them were the Russian researchers whose work he also cited in his 1945 book.

  In 1937, one Russian researcher reported that “the antagonistic effects of actinomycetes were manifested not only in artificial media, but also in soil [emphasis added], the interrelations here being much more complex.” The antagonistic action was more intense in light (podzol) soils and was greatly reduced in heavy black earth, or chernozem soils—one of the factors apparently being the high content of organic matter in the chernozem. According to the Russian research, antibiotics were produced in nature, but at different rates, depending on the environment. To say that they were not produced in the soil was incorrect.

  Many of Waksman’s Western colleagues simply disagreed with him, but then, they were not applying for patents. In the coming years, Waksman was to hold fast to his assertion and castigate those who suggested that antibiotics were produced in the soil, albeit in minuscule quantities. At other times, Waksman’s reply to his colleagues on this matter sometimes seemed crafted for the moment. “At times, when Waksman was giving a talk, he would say that antibiotics are weapons in the struggle for existence among microorganisms. At other times he would say antibiotics only exist when you grow microorganisms in a man-made medium,” recalled one of Waksman’s graduates.

  In dropping its objection to the “product of nature” rule, the Patent Office also allowed a so-called broad patent on the product itself, streptomycin. The patent covered the chemical compound streptomycin, however it was made—by A. griseus or another microbe or synthetically in the laboratory. The Rutgers lawyers congratulated themselves. Russell Watson, the lawyer for the Rutgers Foundation, bragged about it to one company seeking a license to make streptomycin from A. griseus: “We are particularly pleased with Claim No. 13 which, as you will observe, is a product patent expressed by the single word ‘streptomycin.’” And the foundation’s patent lawyer told Watson the product claim would “prevent the importation into this country of streptomycin manufactured abroad.”

  In a separate application by Merck researchers, argued by the company’s lawyers, the Patent Office granted a patent for the method used by Merck’s chemists to extract and purify the drug. In 1945, Merck researchers had claimed a patent on “complex salts of streptomycin” and the process for preparing the drug. Merck lawyers argued that this method was patentable because the therapeutic benefits of the drug were unknown prior to its isolation, echoing Judge Learned Hand’s ruling in the Takamine case. “Thus, for the first time,” a Merck lawyer asserted, “streptomycin is available in a form which not only has valuable therapeutic properties but also can be produced, distributed, and administered in a therapeutic way.” This separate patent was also granted.

  ON SEPTEMBER 30, 1948, Waksman received a royalty check for $44,474, bringing his total so far to $187,283. In October, he sent Schatz another $500 check, which he accepted “but only as a loan.” Waksman was delighted to hear from Schatz that things were going well at the Hopkins Marine Station, and offered another check before the end of the year. The check arrived a month later—with an assignment form for the patent for South America. Waksman asked Schatz to treat the checks as “outright payments” to help him obtain advanced training in microbiology.

  Schatz signed the patent form, but this time politely returned the check, saying that his financial situation was now “quite satisfactory” and he therefore could not bring himself “to impose upon you any further.” He still had two hundred dollars from the first check, and his savings account was at eight hundred dollars. Vivian was still helping at the lab, earning about fifteen dollars a week. “We are living comfortably and are by no means stinting or denying ourselves.”

  Schatz added, “To be perfectly honest with you, I simply would not know what to do with the money if I had it, and I sincerely hope that I shall never have to spend any time attempting to solve such a problem myself.” He and Vivian were neither smokers nor drinkers, and they did not go out much. They liked seeing their friends, music, reading, canoeing, and hiking. “We value most things that cannot be purchased with money.” He thanked Waksman for his “friendship, confidence, and encouragement ... things worth more than material aspects.”

  What happened next would trigger a sudden and explosive break in their relationship.
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  Waksman replied immediately. He “regretted” that Schatz had returned the check, explaining that the Rutgers Foundation had given him “a certain sum of money” and he felt that Schatz should be compensated for assigning the streptomycin patents to the foundation. There would probably be two or three more assignments. He asked Schatz to reconsider his initial rejection of the check, as otherwise, he wrote, he would have to pay his own income tax on the money.

  Schatz was shocked. Waksman wanted him to pay income tax on funds that Waksman had been secretly receiving into his personal account from streptomycin royalties. But if the five hundred dollars was from streptomycin royalties, he was certainly entitled to it. So he decided to accept the check and argue about the tax matter later. “As to the check,” he wrote, “I will now be glad to accept it if you will be good enough to send it to me again.” He had not known the “source of the funds” and had not “wanted to be a ball and chain around your neck, nor to take funds that might be better used in your own Department at Rutgers.”

  Waksman rewrote the check and asked Schatz again to make sure to report all three checks on his income tax. He also asked for Schatz’s signature on two more patent assignments—for Canada and New Zealand. This time, he offered one hundred dollars for the New Zealand patent.

  Now Schatz was totally confused. He had assumed the checks were a gift from Waksman, and the total sum, as a gift, was not taxable. Where the money was coming from was a mystery to him.

  PART III • The Challenge

  14 • The Letter

  SCHATZ HAD ALWAYS BEEN EMBARRASSED THAT he could not explain the money side of his discovery to his colleagues, like Doris Jones, or his family, especially Uncle Joe. He had planned to ask Waksman about it before he left for California, but there had been no time for a meeting. After Waksman had sent him the second and third checks, he had written the Rutgers Foundation, but he had never received a reply.