Notable IP Disputes about Student and Faculty Inventions

In 2008 IP Advocate founder Renee Kaswan asked a simple question, "Was the aggressive litigation she experienced when her academic discovery, Restasis®, suddenly became lucrative - unique, rare, or common - to the experiences of other academic inventors?"

Before debating what/who is responsible for university IP litigation, it is necessary to substantiate that there is a litany of conflicts between academic inventors and Universities. Therefore as supporting documentation to the Inventor Bill of Rights debate held at the Association of University Technology Managers (AUTM) 2010 Annual Conference, Dr. Kaswan compiled the following list of illustrative lawsuits and printed them for distribution at the AUTM 2010 conference. The list was intercepted by members of the AUTM board of directors and its distribution was prohibited.

Undeniably, litigation absorbs researchers' time, energy and resources, and is therefore a counterproductive factor in innovation translation. Decisions to perform and disclose patentable research to the host university are inevitably affected by researchers' perception of litigation risks. The Stanford Intellectual Property Litigation Clearinghouse (IPLC) an empirical legal database of over 100,000 US Intellectual property lawsuits was assembled and launched in Dec. 2008. A comprehensive search of the IPLC database is warranted to quantify and qualify the burden of litigation risks universities and academic inventors encumber related to their participation in commercially viable research.

What follows is a rudimentary list and overview of academic IP disputes, enough hopefully to justify a thorough scholarly evaluation. Thoughtful evaluation should lead to public policy revisions that will mitigate against the heretofore silent toll that this litigation imparts on our innovation economy and academic community.

We invite you to contribute your knowledge and thoughts on these lawsuits. Our new 'Insert Tool' allows you to comment on any of the cases or other contributors' opinions.

U.S. v. Dubilier (1933) - Although this precedent-setting case is over 75 years old, it is still relevant today. Dubilier established that employers only have rights in an employee invention 'if' the employee was specifically 'hired to invent' as opposed to hired to perform research.

Simmons v. Caltech (1936) - Caltech's technology transfer policies have set the bar for academic IP commercialization. But eighty years ago, this benchmark case tarnished Caltech's name and established long term policies affecting universities across the country. At the time, Caltech chose not to disburse royalties from graduate student Simmons' invention to his research laboratory as promised. When Simmons objected, they summarily fired him. The Court eventually sided with Simmons and awarded all the royalties to the student inventor.

Speck v. North Carolina Dairy Foundation (1981) - After two faculty researchers invented "sweet acidophilus" milk, they brought it to University of North Carolina's attention as a potentially patentable innovation. Although it was not patentable, it was trademarked and UNC licensed it through the Dairy Foundation. UNC earned significant royalties. Although UNC's practice was to pay 15% of royalties on patentable inventions, they chose to ignore the faculty patent committee recommendations to compensate the inventor for the trademarked invention, and UNC elected not to share royalties with the inventors. The court affirmed UNC's decision.

Yale v. Fenn (1983) - Yale University declined to pursue a patent on the Mass Spectrometer invented and disclosed by Professor John Fenn. Initially Yale waived IP rights back to Fenn. Subsequently, Fenn pursued a patent and license on his own, and, was awarded the Nobel Prize for Chemistry for his invention. A dispute arose over what Fenn did or did not disclose in timely fashion to Yale. Over the past 30 years, Yale prevailed in multiple civil charges waged against Fenn. Stubbornly, Fenn at 93 and in fragile health, continues to appeal the rulings that denied his IP rights to his Nobel Laureate invention.

State of Florida v. Taborsky (1989) - Chemistry student Taborsky disputed that his patented invention was subject to a sponsored research contract. The University of South Florida elected to prosecute the student researcher on criminal charges of stealing his own lab notebooks. Taborsky spent 6 years imprisoned, including chain gang duty. Public outrage led to a gubernatorial pardon but Taborsky declined the pardon because it was contingent on assignment of his patents to USF.

University Penn v. Kligman (1990) - University of Penn sued faculty inventor Kligman for IP rights related to discovery of Retin A which Kligman had assigned to Johnson and Johnson. The case was settled confidentially.

Platzer v. Sloan-Kettering (MSKCC)(1992) - Dr. Platzer and four others invented Colony Stimulating Factor and assigned their patents to Sloan-Kettering who negotiated a $50 million up-front balloon payment from Amgen but awarded the professors only 1% of the income. Platzer asserted that the Bayh-Dole Act ensures the share of royalties earmarked for inventors should be no less than 15% of royalties, but the court ruled in favor of Sloan-Kettering saying that the Bayh-Dole Act did not imply a private right to inventors to seek a particular share of royalties.

Singer v. Regents of the University of California (1993) - Singer co-invented pathbreaking MRI research at UC Berkeley. UC Berkeley and UC SF diverted royalty revenue into research revenue to evade paying royalties to the inventors. The court initially found for UC, but on appeal a jury ruled the inventors were entitled to the full royalties due in accordance with UC's intellectual property policy.

University of Illinois v. Andreessen (1994) - The web revolution began at the University of Illinois with the first graphics based browser, Mosaic, but few are aware of its history. The open source code which spawned both Netscape and Internet Explorer was created by graduate students using open source code. The university sued the students for trademark infringement in an attempt to capture royalties even though the source code was available for free on the web. The developers offered the university shares in the newly launched Netscape which would have netted UL over $8 million. Instead, the university chose a prolonged legal battle which was settled for $2.7 million, bankrupted Netscape, allowed Microsoft Explorer to capture the browser market and left University of Illinois out of the legacy of the innovation.

Rutgers v. AAUP American Federation of Teachers (1996) - Rutgers revised its intellectual property policy to the detriment of faculty inventors, reduced royalty compensation to both the inventor and their department, and retracted other IP rights from faculty. The revised policy was to be applied retroactively. When the AAUP argued that the policy should have been negotiated with faculty, Rutgers sued to continue implementing the revised policy. The court ruled that only the royalty rates must be negotiated with faculty, but allowed Rutgers to unilaterally change all other intellectual property terms retroactively.

University of West Virginia v. VanVoorhies (1997) - VanVoorhies co-invented a type of helical antenna while he was a graduate student at the University of West Virginia; it was patented and assigned to the school. A dispute arose over whether or not his post graduate inventions were also owned by UWV as continuations of his student work. The court ruled that the latter invention belonged to UWV because it was conceived while VanVoorhies was a student at UWV.

Shaw v. Regents of the University of California (1997) - Shaw was hired in 1986 under a 50:50 royalty division IP policy. UC subsequently reduced its inventor's royalty share to 25% and attempted to apply the reduction to Shaw's laboratory's share of royalties on their proprietary strawberry hybrids. Shaw sued the UC system to enforce his original contract, and prevailed in California state supreme court.

Chou v. University of Chicago (2001) - Dr. Chou, a postdoctoral student at the University of Chicago co-discovered a vaccine for the herpes virus, then her supervisor, Dr. Roizman concealed and excluded her from his patent application. Chou sued for correction of inventorship, fraudulent concealment and related charges. The state court ruled she had no standing to sue because she was required by her employment contract to assign her rights to the University but the Federal Circuit reversed that decision because she had a pecuniary interest to 25% as an inventor under the policy.

Madey v. Duke University (2002) - Duke recruited Madey to develop a world class laser technology laboratory and run it as its director. Duke fired Madey, but continued to use two of his lasers which were patented prior to his employment at Duke. Duke claimed it was operating under the "experimental use" exception. Madey sued the university for patent infringement. The Federal Circuit Court of Appeals found for Madey and the Supreme Court refused to hear an appeal from Duke.

Du Pont v. Okuley (2003) - Okuley worked on a Du Pont sponsored project at Washington State University with poor experimental results. Later, while at Ohio State University, his research succeeded in identifying FAD2 gene to affect fatty acid ratios in plants. Du Pont claimed ownership rights to the innovation made at Ohio. The two universities had differing IP policies; eventually Ohio State abandoned its claims. Washington State then sided with its corporate sponsor leaving Okuley to fend for himself against Du Pont. The court ruled in favor of Du Pont in its claims for sole ownership of the patent on his research.

Kaswan v. University of Georgia and Allergan (2003) - Kaswan invented Restasis® while at University of Georgia, and negotiated a license with Allergan. Licensee Allergan then induced UGA to secretly monetize the license on Restasis converting over $220 million in royalty obligation back to itself. UGA preemptively sued Kaswan for 'Trademark infringement' to prevent her from disrupting the monetization event while simultaneously withholding her share of royalty income. Kaswan defeated the trademark claims but UGA and Allergan won a summary judgment on the monetization. UGARF repetitively postponed the appeal, effectively exhausting Kaswan's resources; the dispute was settled out of court in 2010 when UGARF paid Kaswan her inventor's share of the monetized license.

Genentech et al v. Columbia (2003) - Columbia earned $790 million in licensing revenues over a 17 year period for a method to introduce DNA into bacteria to synthesize proteins (the Axel patent). Near the end of the patent life, Columbia filed a secret patent "continuation" application to extend the income stream and avoid the invention moving into the public domain. A patent was granted two years after the original Axel patent expired and in 2002, the university notified its prior licensors that it expected to continue to receive royalty payments. Outraged, Genentech and other biotechnology companies sued Columbia to invalidate the "submarine" patent and to force the school to "play by the rules". The licensors defeated Columbia in court.

University of Pittsburgh v. Townsend (2004) - The co-inventor of the combined MRI-CT scanner, the PET scan, was recruited to the University of Pittsburgh to develop and test the original PET clinical facility. The combined scanner was conceived prior to Dr. Townsend's employment at Pitt and he disclosed to the university that he had assigned his interests with his co-inventor to a previous sponsor, nonetheless, when it became apparent the invention was lucrative, Pitt sued Townsend, his co-inventor, and the sponsoring company for fraud and other claims. The inventors prevailed in court after a prolonged legal battle.

Purdue v. Badylak (2005) - Badylak, a Purdue professor, was sponsored by Cook Biotech to study the use of small intestine as a skin graft; meanwhile at Harvard, another researcher, Spievack was working with bladder tissue as a donor graft material for a start up company, Acell. The two researchers met and discussed their work, but never collaborated. Each made patentable, distinct discoveries. Cooke accused Badylak and Spievack of inducing Acell to infringe Cook's patents. Badylak was abruptly fired by Purdue. The inventors were vindicated in court, but because of injunctions against their research programs, years of progress were lost.

Stanford v. Roche (2005) - Stanford researcher Holodniy signed Stanford's IP agreement that stated that he would "agree to assign" any inventions to the school. While working off-site at Cetus (later purchased by Roche), Holodniy signed a non-disclosure agreement that stated he agreed "to hereby assign" any invention that may come from his work at Cetus. He developed the HIV test in question, based in part on his work at Cetus, but assigned his patent rights to Stanford. Roche used the HIV test without a license from Stanford; Stanford sued for patent infringement and lost based upon the current vs future assignment terms in the two relevant contracts. Significantly, Stanford argued that the NIH funded research was subject to Bayh-Dole regulation, which they claimed automatically assigns invention ownership to the host University. The CAFC court disagreed and found that "Bayh-Dole does not automatically void… the inventor's rights in government funded inventions." AUTM filed an Amicus brief refuting this construal of the Bayh- Dole Act in Stanford's pending Supreme court appeal.

Stern v. Columbia (2005) - Graduate student researcher sues Columbia to be added to breakthrough glaucoma drug Xalatan patent. Court cannot substantiate his co-inventor status because faculty supervisor destroyed his notebooks.

University of Missouri v. Suppes (2008) - The University of Missouri declined to patent Suppes' green energy inventions or to waive rights back to the inventor. Suppes filed patent applications on his research and pursued commercialization of it through a start-up he founded. UM demanded Suppes assign his patent applications to UM. Suppes attempted to appeal to the University dispute resolution process, but the university circumvented their own in house dispute resolution process in order to pursue litigation. The case is currently unresolved.

U. of Western Australia v. Gray (2008) - The university claimed that by reason of his employment with them, it was entitled to rights in Dr. Gray's cancer related research, inventions and related patents. The court ruled that faculty UWA's regulations could not validly appropriate employee's property rights, and that an express 'duty to perform research' was not synonymous with a 'duty to invent.'