Two Institutions Settle Nicotine-Patch Patent Dispute

The New Mexico Institute of Mining and Technology and the University of California have decided they’d rather settle than fight over who owns patent rights for a nicotine patch used to help people stop smoking.

The two institutions have agreed to halt their fight before the U.S. Patent and Trademark Office and to continue sharing royalties from Ciba-Geigy Corporation, which sells the Habitrol brand patch.

The two institutions had been sparring for more than a year, ever since the University of California at Los Angeles claimed that its professors -- and not a New Mexico Tech professor -- deserved the patent for the patch.

The New Mexico professor, Mark Etscorn, received his patent in 1986. The UCLA professors received theirs in 1991, but it was not as broad as Mr. Etscorn’s. The California system then tried to challenge New Mexico Tech’s patent.

Laurence H. Lattman, the president of New Mexico Tech, said mounting legal costs had driven the institutions to settle. He said the institutions had together spent more than $1-million in legal fees.

The agreement says New Mexico Tech will continue to receive a larger share of the royalties than the University of California, but Mr. Lattman said Ciba-Geigy would not allow him to discuss the terms of the deal. Mr. Lattman did say, however, that New Mexico Tech had received about $7-million from Ciba-Geigy, based on sales from November 1991 through June 1992. Mr. Etscorn also receives royalty payments. New Mexico Tech is using the money to endow scholarships.

The UC official in charge of patents would not comment on either the settlement or a separate legal action against the university system by the ALZA Corporation. ALZA manufactures another patch brand, Nicoderm, and when Ciba-Geigy sued it for patent infringement, ALZA countersued to have UC’s patent declared invalid.