ON OCTOBER 1, 2018, the Nobel Foundation announced that year’s recipients of the Nobel Prize in Physiology or Medicine. James P. Allison and Tasuku Honjo were awarded the prize “for their discovery of cancer therapy by inhibition of negative immune regulation.” Later that day, a press conference was held at Kyoto University, where Dr. Honjo worked, to celebrate this accomplishment. Dr. Honjo opened his remarks,
I am extremely happy and honored to receive the Nobel Prize in Physiology or Medicine. I am earnestly indebted to my hardworking collaborators, students, people who supported me in various ways, and my family, who supported me for such a long time. I cannot describe how grateful I am to so many people. My extremely basic research led to the discovery of PD-1 in 1992, and the following research created the clinical application, new cancer immunotherapy. Occasionally, people come to me to say this treatment saved them from critical illness—they have recovered, thanks to me. That is when I palpably feel that my research is truly meaningful; nothing makes me happier. I am such a lucky person to receive the prize on top of this. I plan to continue research for a while myself, together with many researchers around the world, in order for the immunotherapy to save even more cancer patients. With our efforts, I expect the therapy to become more effective in the future. This Nobel Prize was given to my research that was fundamental, that then developed into clinical applications. If the fact that the prize was awarded to such research could accelerate the development of basic medical research and encourage many basic researchers, it would be more than I could ever dream of.1
The Nobel Prize was originally established with money earned from the invention of dynamite—a history that speaks to a key dilemma of scientific inquiry. On one hand, scientists are supposed to produce knowledge for its own sake—pure scientific inquiry for society. On the other hand, the most prestigious scientific award in the world only exists because of money made by a practical product generated by applied science: dynamite. In this tension between basic science and its commercialization, Dr. Honjo’s research is a scientist’s dream: it is outstanding scholarship that reveals fundamental mechanisms about the human body, and it is also useful—in fact, people come to him to tell him that his research saved their lives. PD-1 is a protein on the surface of cells that plays a role in regulating the immune system. It took more than two decades after the discovery of PD-1 for immunotherapy based on Dr. Honjo’s research to come to market in Japan and around the world. His opening remarks at the press conference placed great emphasis on the importance of basic research—and funding for it. The speech concludes by calling for more basic research and a research environment that supports it. Especially since his research had yielded a lucrative biomedical application, Dr. Honjo needed to emphasize that this application had only come about as a result of decades-long basic research about cell behavior.
The management of the boundary and the possible synergy between academic research and commercialization has become an important question for policymakers and a practical problem for university scientists. Over the past decade, only 55% of public research funding for universities in Japan has been targeted to basic research, and more and more government funding sources require researchers to articulate the potential for marketable applications of their research. Dr. Honjo’s remarks were based on a sense of urgency in an effort to counter this pressure for application. In fact, after the initial discovery of PD-1, it took many years, publications, patents, and labs in addition to Dr. Honjo’s to finally produce the medical application. He applied for a patent on PD-1 in 1995,2 and it took nearly twenty years and many additional patents for Nivolumab (trade name: Opdivo) to be marketed by Ono Pharmaceutical, a midsized Japanese pharmaceutical company.3 By 2018, more than sixty countries had approved Nivolumab for the treatment of various cancers, including metastatic melanoma and non–small cell lung cancer.
As Dr. Honjo continued on to the question-and-answer section of the press conference, he kept emphasizing the importance of focusing on the fundamental mechanisms of the human body while keeping an eye on the possibility of medical application. When a journalist asked him about “the partnership between [him] and Ono Pharmaceutical,” he expressed reservations about his relationship with the firm:
I am a scientist; I do not have a business. Partnership would refer to a relationship between firms. My relationship with Ono is that I gave Ono the license in terms of the intellectual property. [ . . . ] Regarding this research, Ono Pharmaceutical did not contribute to the research itself. That is very clear. And Ono is being licensed the patent, so I would like them to give back to the university sufficiently. By that, [I mean that] rather than me doing new research, my hope is that there will be a foundation based on reciprocation to Kyoto University and that the next generation of scholars will be encouraged, nurtured by that, creating new seeds. And that then cycles back to Japanese pharmaceuticals. I hope to create this kind of win-win relationship, and that’s what I have been asking Ono to do for a long time.4
In these comments, Dr. Honjo reveals surprising bitterness about his collaboration with industry and an attachment to a particular form of reciprocation. He makes it clear that he wants to create a foundation so that research “cycles back to Japanese pharmaceuticals” such as Ono, but he also expresses reservations about his relationship with the firm. He explicitly mentions that Ono did not contribute to the research that led to the biomedicine and suggests that Ono should contribute more to Kyoto University.
This, as it turns out, was the beginning of a lengthy series of legal battles between Dr. Honjo and Ono Pharmaceutical. At the core of this legal saga was Dr. Honjo’s conviction that when the drug became so successful, Ono should have voluntarily contributed to Kyoto University and that his original agreement with Ono offered too little compensation in light of how lucrative the drug became for the firm.5
Yet in fact, the original agreement between Dr. Honjo and Ono had explicitly precluded large monetary compensations to Dr. Honjo and made no mention of any financial obligation at all to Kyoto University. With such an agreement in place, why did Dr. Honjo and Ono end up in such protracted legal battles over Ono’s financial responsibilities? More perplexingly, why did Dr. Honjo win these battles? Where did this notion that a pharmaceutical company should “give back” to a university come from? And why was that notion not relevant when Dr. Honjo and Ono Pharmaceutical started collaborating in the 1980s?
The answer to this puzzle lies in the unique history of Japanese universities’ relationships with Japanese firms. Before the 1990s, Japanese universities collaborated with Japanese firms according to a particular routine of reciprocity. Because universities were thought to contribute to public knowledge, their interactions with industry were largely kept informal. In the late 1990s, however, this tradition began to change under the influence of the United States. In the 1980s, U.S. universities had changed the policies that governed faculty inventions and entrepreneurship to encourage explicit, formal, and aggressive commercialization of academic knowledge—especially in biotechnology. In the 1990s, Japan started to adopt similar policies and reshape how Japanese university scientists interacted with industry.
Dr. Honjo’s case illuminates both continuities and changes amid institutional transition. His patents for PD-1 are all joint patents with Ono Pharmaceutical, listing both Dr. Honjo and Ono Pharmaceutical as joint assignees. As this book will show, this was one of several possible arrangements that were quite common before the science and technology policy change that occurred between 1995 and 2005. Dr. Honjo’s remarks about Ono during his press conference implied that Ono basically free-rode on the patent. But Ono is a co-assignee of the patents, so, legally speaking, it has full rights to exercise the patents—after all, it co-owns them. Dr. Honjo and Ono Pharmaceutical have undisclosed contracts that establish compensation to Dr. Honjo as an individual, and as long as those terms are fulfilled, Dr. Honjo doesn’t have a legal right to ask Ono to contribute to Kyoto University. In the press conference, then, Dr. Honjo was sharing his personal sense that his arrangement with Ono—one he’d chosen to engage in—was unfair.
Dr. Honjo wanted to leverage his Nobel Prize to create a research fund at Kyoto University. His frustration with Ono came from the fact that the company had earned astounding levels of sales revenue—about $803 million in 2017 in Japan, licensing revenue overseas excluded—from this single medicine alone but had not yet indicated how much it would donate to the university’s research fund.6 Dr. Honjo’s position makes sense from today’s perspective, now that Japan has fully transitioned to the American model, whose formal rules assign universities the ownership of their faculty members’ inventions. It also, perhaps, made sense personally, as Dr. Honjo came to serve as the chairperson of Japan’s Council for Science and Technology, the body that directly advises the prime minister on science and technology policy. His expectations were grounded on the new logic that took root in Japanese academia as a result of new policies. According to this logic, universities own the patents to their faculty members’ inventions, and when those inventions result in marketable products, the university is to be rewarded financially for the active, formal role it has played in enhancing innovation.
Ono Pharmaceutical seems to have been surprised by Dr. Honjo’s resentment. The president of Ono said in an interview that Dr. Honjo’s criticism had been “unexpected,” that the company had paid Dr. Honjo everything that was due to him, and that they “have been helping Dr. Honjo’s research since the 1980s.” The firm, he emphasized, had continued to support Dr. Honjo despite internal pushback. Cancer immunotherapy had initially been thought too risky to gamble on, and the firm had only continued research on PD-1 because “one employee was enthusiastic about Dr. Honjo’s research.” The president continued, “Opdivo’s R&D number is 4538. In our firm, the correct number for an R&D project for a cancer drug must start with 7. He started the project with a project number that started with 4, which meant ‘R&D for other drug candidates,’ so the management did not realize [that the research was for a cancer drug]. It helped that we have a culture to tackle a challenge that nobody else is willing to.”7 The president’s account emphasized the long-standing collaboration between Ono and Dr. Honjo, the firm’s investment in his research at a time when it had been seen as a risky investment, and the central role of an employee who was so personally enthusiastic about the research that he hid its real subject matter so that Ono would continue to fund it. Setting aside the contradictory claims that Ono’s culture welcomed challenges but would have stopped funding the project if its actual subject matter had been known, the president’s account highlights passion, trust, and the company’s personal relationship with Dr. Honjo; Kyoto University isn’t even part of the story.
Again, the differences in commercialization practices over time allow us to understand the position of Ono Pharmaceutical’s president. His perspective was not unusual. Until the 1980s, Japan had no formal, systematic way for firms to collaborate with university professors. As a result, Japanese academia often interacted with firms based on an informal system called shogaku-kifu, which translates to “scholarship donations”—firms would donate money for research to a specific lab in a Japanese university and collaborate on a research project. If and when there were some inventions, the professors would let the firm take intellectual property rights on them—with the informal understanding that the firm would continue to fund the lab. This informal method of collaboration remained common into the 1990s and early 2000s. Until the late 1990s, it was very rare for universities to own the patents for faculty inventions. Dr. Honjo therefore had to rely on Ono to file and maintain intellectual property rights to his own research products. But from his perspective, Ono’s intellectual contribution had been minimal: he had simply “licensed” the patent to Ono (in reality, Ono co-owns the patents, so the use of the word “license” is not precise). In Honjo’s eyes, Ono’s collaboration with him at Kyoto University and their minimal intellectual contribution meant that, ethically, the firm owed the university some form of return.
For anyone accustomed to the current American system of university-firm collaboration and commercialization, it is perhaps easy to take Dr. Honjo’s side. Japanese firms may seem to have been exploiting university scientists, and Japan’s transition to the American-style system may seem an obvious move. And in fact, some critics have argued that Japanese firms were used to treating university scientists as free-of-charge sources of knowledge and innovation. But to understand the changes in the Japanese system and the repercussions of these changes, it is critical to see the conflict from a historical perspective. Until the 1990s, Japan’s universities weren’t supposed to be generating patentable innovations. Universities were regarded as places to “research and educate,” and activities such as innovation and patenting were considered outside the university’s official scope.8 As a result of universities’ hands-off approach to commercialization, it was fairly common for professors to give firms the patents to their inventions as late as the early 2000s. Many, if not all, professors took this arrangement for granted.
Underlying this kind of relationship with the firm was a different approach to university-firm collaborations—one that had been common in Japan before the policy changes of the late 1990s. This approach was characterized by gift-exchange-like practices and valued long-term relationships that obscured the issue of monetary compensation. When Ono’s president said, “We have been helping Dr. Honjo’s research since the 1980s,” he was evoking precisely this kind of relationship. Now that the new American-style policies have been introduced, is this old style of collaboration lost, and is Dr. Honjo the harbinger of the victory of the new approach? Or do aspects of the old system endure despite the policy changes—and if so, why? What will be the new picture of university-firm collaboration in Japanese academia, and how do scientists play a part in shaping it?
1. Tasuku Honjo, “Nobel seirigaku igakusho jyushoude Honjo Tasuku tokubetsu kyoujyu ga kaiken 1” [Specially appointed Professor Tasuku Honjo holds a meeting after the announcement that he was awarded the Nobel Prize in Physiology or Medicine 1]. ANNnewsCH, accessed November 21, 2022, https://www.youtube.com/watch?v=-3Wb0nGe1eQ. Transcribed by the author.
2. This date refers to the patent application in the U.S. He applied for a Japanese patent in 1994.
3. Marketed in 2014 under the trade name Opdivo.
4. Tasuku Honjo, interview with Prof. Tasuku Honjo. Throughout the book, bracketed ellipses indicate an omission in the interview quotes.
5. The lawsuit filed by Dr. Honjo was not directly about the contribution that Ono should give to Kyoto University for patents on PD-1. It was about Dr. Honjo’s involvement and the allegedly promised compensation for his help in Ono’s lawsuit against Merck on patent infringement related to PD-1. Dr. Honjo, however, was vocal about the purpose of this lawsuit for him: making firms properly compensate for university-firm collaboration so future researchers would be properly rewarded. In the end, Ono settled with Dr. Honjo and agreed to voluntarily donate a research fund to Kyoto University, accepting Dr. Honjo’s requests.
6. The total revenue through sales of Opdivo in Japan. Ono Yakuhin Kougyou Kabushiki Gaisha 2018.
7. See Asahi Shimbun 2018.
8. See Sapir and Kameo 2019.
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