In the latest skirmish in a long-running patent dispute, a federal district judge ruled this month that John B. Fenn, a Nobel laureate who taught chemistry at Yale University for many years, must pay Yale at least $1-million in damages.
The ruling, by Judge Christopher F. Droney of the U.S. District Court in Hartford, Conn., found that Mr. Fenn had privately profited from a patent that, under the terms of his contract with Yale, he was required to assign to the university. The court ordered that the patent be reassigned from Mr. Fenn to the university.
Meanwhile, the University of Massachusetts system, which alleges that two of its former faculty members have tried to profit in a similar fashion from animal-cloning inventions, is gearing up for a legal battle of its own. The Massachusetts lawsuit is unrelated to the Yale situation, but also revolves around a dispute over ownership of intellectual property and involves a prominent scientist, James M. Robl.
The Yale dispute concerns a process that Mr. Fenn invented in the late 1980s for determining the molecular weight of certain organic compounds. Mr. Fenn’s process, known as electrospray ionization, has been licensed for use by a variety of biomedical and pharmaceutical companies. In 2002 Mr. Fenn shared the Nobel Prize in Chemistry with two other scholars who had separately developed similar techniques.
Officials at Yale have charged that in his formal “invention disclosure” in 1989, Mr. Fenn lied to the university about the full potential commercial value of his invention. Mr. Fenn then received a patent under his own name in 1992, without disclosing to Yale that he had applied for such a patent. (In a deposition in 2000, Mr. Fenn was asked if he had been deceitful in order to further his own economic interests. He replied, “I was out to get it. Whether you should use the word ‘steal’ or not, I don’t know, yes. Whether you should use the word ‘steal’ or not, that’s what it looks like, yes.”)
The conflict seems to have been fueled partly by bitter feelings from an earlier argument between Mr. Fenn and the university. In 1987 Yale forced Mr. Fenn to retire from teaching at the age of 70 and stripped him of his graduate research assistants. He continued to conduct research in the university’s laboratories, and two years later invented the electrospray-ionization process.
The dispute has given rise to a complex series of lawsuits and countersuits between Yale and Mr. Fenn, who is now a research professor at Virginia Commonwealth University.
Damages Set
In 2003 Judge Droney upheld Yale’s claims that Mr. Fenn had committed breach of contract, breach of fiduciary duty, and fraud. In the ruling issued this month, he further found that Mr. Fenn had committed civil theft, and, for the first time, the judge set damages in the case.
Under a patent policy established in 1989, Yale retains right of first refusal to all patents based on inventions made by employees at the university. If the patent is licensed for commercial use, the inventors are entitled to 50 percent of the first $100,000 in patent royalties, 40 percent of the second $100,000 in royalties, and 30 percent of all royalties thereafter.
Judge Droney found that under that formula, Mr. Fenn had improperly deprived the university of $181,705 in royalties -- and that he must pay triple that amount, or $545,114, under Connecticut’s civil-theft statute. Moreover, the judge found that Mr. Fenn must reimburse the university for $492,435 in legal fees, plus any additional legal fees incurred in the case since November 2003.
In a written statement, Helaine Klasky, a spokeswoman for the university, said: “We are pleased by the result in this case and in particular by the court’s vindication of the Yale patent policy. Yale has the highest respect for Dr. Fenn as a scientist.”
Reached by telephone, Mr. Fenn said that he was not certain that he would appeal the decision, but that he was keeping his options open. “I think the opposition is on the wrong track,” he said. “But beyond that, it’s probably better if I don’t comment.”
The full text of Judge Droney’s ruling is available on the court’s Web site (http://www.ctd.uscourts.gov/opinions.htm).
Cloning-Invention Claims
In the Massachusetts case, the university has sued Mr. Robl, a former professor at the Amherst campus, and Philippe Collas, a former graduate student and adjunct assistant professor, for breach of contract, breach of duty, and other claims.
The university says that the two violated their obligations to the university by filing for ownership of patents on two inventions that they developed while working at the university.
Under university policies, inventions developed with institutional resources belong to the university, although inventors are entitled to a share of any revenues the university might make from commercializing them.
First Right of Refusal
Since 1994 the university has had an agreement with a company called Advanced Cell Technology that gives the company first rights of refusal for exclusive licenses on a range of inventions related to cloning. The university contends that the two inventions -- one disclosed to the university in 1999 and another in 2000 -- are covered by that deal.
Some of the research underlying the inventions was financed with grants from Advanced Cell to Mr. Robl’s laboratory, according to the university.
At the time, Mr. Robl was a consultant and stockholder in Advanced Cell. He is now president and chief scientific officer at Hematech LLC, a company with offices in South Dakota and Connecticut.
According to the Massachusetts lawsuit, Hematech is one of three companies now trying to profit from the cloning inventions. Mr. Robl and Mr. Collas are officers of the other two companies, Nucelotech LLC and Aurox LLC.
Through a spokeswoman, Mr. Robl declined to comment. The lawyer representing Mr. Robl and Mr. Collas could not be reached for comment.
No trial date has been set for the case, which was filed in Massachusetts state court. Both parties, however, expect the judge to set a schedule for discovery and other pretrial evidence-gathering activity as soon as March.
http://chronicle.com Section: Money & Management Volume 51, Issue 25, Page A27
