Early April saw the end of a seven year legal battle between IP Advocate founder Dr. Renee Kaswan and the University of Georgia Research Foundation (UGARF) over her blockbuster invention Restasis®. Kaswan invented the dry-eye drug while at UGA and soon recognized the value of her discovery, but her years of hard work were traded for pennies on the dollar by UGA in a secret buy-down deal with pharmaceutical giant Allergan.
The deal UGARF accepted would end up costing the school over $220 million. It was a deal that gave the university a one time up-front cash disbursement, but Allergan made as a condition of this cash deal that Kaswan be kept in the dark about the arrangement.
Within a month after the buy-down was executed, UGARF went on the offense against Kaswan, filing frivolous claims in Federal court, possibly to divert the attention away from their actions while burdening the inventor with costly litigation. When the case was dismissed by summary judgment, UGARF filed another lawsuit in Superior court piling on further groundless accusations and needless legal expenses.
In a recent statement related to the settlement, UGA attorney Ed Tolley cast Kaswan as an "aggressive litigant" although it was the university who initiated litigation. The inventor defended herself successfully against UGA's charges, but the lawsuits did divert Kaswan's attention. It was not until a year later that she became aware that her landmark innovation had been sold short and filed a lawsuit against the university to regain control of her invention.
Kaswan says her negative experience of being sued by her own university is not uncommon and, if not checked, threatens the nation's ability to translate discoveries made at universities into inventions that will cure disease and improve life. The $20.2 million settlement between UGARF and Kaswan represents only her inventor's share of the disastrous buy-down agreement and may appear a suitable amount for an inventor's life's work, but is no recompense for the years of struggle she endured.
While exhausted from fending off litigation for nearly a decade, Kaswan is commited to continuing the fight for academic inventors' rights that she began over a year ago with the founding of IP Advocate so that other faculty and independent inventors can avoid this experience.
UGARF was able to successfully argue that although the deal it cut with Allergan was stupid, it was not illegal and that UGA's intellectual property policy allowed it "total authority and sole discretion" over all faculty intellectual property. The university and Allergan asserted that there was no duty to notify the inventor of the renegotiation or to exercise reasonable care or due diligence to protect the intellectual property rights or interests of its faculty.
"I fought for 20 years to patent, license, and gain FDA approval for my invention - a treatment for chronic dry eye, which can cause blindness," said Dr. Kaswan. "But once approval came, the lawyers attacked and turned what had been a cooperative relationship between university and inventor into a contentious legal battle that lasted seven years. That is not the way to inspire innovation."
Recently, working with the AUTM, Kaswan released a recommended draft of an Inventors' Bill of Rights to help ensure faculty are more fairly treated during the commercialization process. "No one will say point blank that UGA made a mistake, but they all say they'll never do this at their institution," she said. "AUTM agreed it would be proper to codify how these interactions should be managed. It's not just UGA - any university could run into the same problem. This should make the next wave of administrators more sensitive."
The $220 million UGA lost through the buy-down agreement will be much missed by UGA's Research Foundation as it faces a large decrease in licensing revenue which is expected to challenge the university's ability to fund ongoing research efforts. Another issue that remains unaddressed is exactly how UGA spent the $78 million in royalties Restasis® has brought the school. Although Bayh-Dole mandates that the university share of royalties from federally funded innovation be churned back into research and most institutions do this for all innovations, UGA keeps secret from the public, faculty and state legislature how and for what purpose it doles out royalty revenues.