UGA's current Intellectual Property Policy is much more expansive than the 1984 version, specifying that "during and after the term of my employment, I agree to sign any assignment, affidavit or other document that University of Georgia Research Foundation (UGARF) may require with respect to perfecting UGARF's legal rights in Intellectual Property." This language grants UGA carte blanche to the intellectual property of its faculty inventors.
Armed with the original patent agreement language, UGARF ordered Dr. Kaswan to sign patent assignment forms transferring to UGA, "for other consideration," all rights to her patents. With her university employment hanging in the balance, Dr. Kaswan had to comply. For the current generation of UGA faculty inventors, the UGA Patent Policy now in force offers even less protection. The current policy is a contract of adhesion that can be unilaterally modified by the university.
Every year, thousands of researchers sign similar patent agreements and assignments with little understanding of the future implications of this complex legal maneuver by their university. The U.S. Patent Office requires a transfer of title from inventor to assignee that directly conflicts with university intellectual property policies, which promise a shared ownership between university and inventor. However, once a patent assignment is filed with the U.S. Patent Office, ownership and discretion is vested solely in the assignee and the inventor has no legal recourse. This inconsistency could undermine the entire technology transfer system and has major public policy implications.
Attorneys for pharmaceutical giant Allergan used this loophole to lure UGARF into a secret renegotiation for future royalties on Restasis®. At Allergan's insistence, Dr. Kaswan, the inventor and leading expert on the drug, was excluded from renegotiation discussions, allowing Allergan to entice UGARF to monetize its royalty rights at a bargain basement price. UGARF unknowingly traded away hundreds of millions of dollars in future royalties Dr. Kaswan had previously negotiated with Allergan. Allergan's legal defense relied upon the text of the patent assignment agreement to claim that the inventor had no right to object, even if the deal was deemed to be unreasonable or as the judge said, "stupid".
If the patent system had allowed Dr. Kaswan to retain any rights to her invention, excluding her from renegotiation talks would not have been possible. Consequently, the university's royalty income would not have been reduced by hundreds of millions of dollars.