Royalties suit against Harvard moves ahead

A judge decided last month that key pieces of a lawsuit filed by a former Harvard University grad student against the prestigious school over patent royalty distributions will proceed to trial.

The $10 million suit was filed in 2013 by Mark G. Charest, who had previously worked as a grad student in the lab of Harvard chemistry professor Andrew G. Myers and who had helped develop a new synthetic route to tetracycline antibiotics. Charest alleges that he was coerced and threatened into accepting low royalty payments for his work on the antibiotics and that after he protested his poor treatment, he was denied a fair appeals process.

On Feb. 16, judge Douglas P. Woodlock of the U.S. District court in Massachusetts issued an opinion addressing Harvard’s motion to dismiss the lawsuit. Woodlock dismissed a number of items, including Charest’s claims about the initial royalty distributions being too low. Myers was also dismissed as a defendant.

Still to be addressed, says Woodlock’s strongly-worded opinion, are allegations against Harvard, in which Harvard failed to offer Charest a proper appeals process and withheld royalty payments after Charest’s appeal.

Brian D. O’Reilly, a partner at Epstein, Drangel LLP, who is representing Charest, says he and his client plan to take the case to trial in the next year.

“We are pleased that five of seven claims have been dismissed at this early stage of the case,” says Harvard spokesman David Cameron. “We look forward to presenting evidence to defeat the two remaining claims in the next phases of litigation.”

Charest, now a health care investor at Boston-based Tekla Capital Management, worked in Myers’s lab until 2004.

The tetracycline synthesis he helped develop, which produced compounds that are potentially effective against antibiotic-resistant bacteria, was patented in 2005, and Charest was lead author on the resulting Science paper (2005, DOI: 10.1126/science.1109755). Harvard licensed the patent to the company Tetraphase Pharmaceuticals, which Myers founded in 2006.

The university ordered the distribution of 50% of royalties to Myers and the rest divided among the other group members, with 18.75% eventually allotted to Charest.

In 2010, this patent was combined with a second patent on a different project not involving Charest, diminishing Charest’s royalties further. Charest again protested and alleges that the university responded by lowering his royalty share and withholding royalty payments.

Intellectual property experts tell C&EN that it’s rare for a student to take on a behemoth university, citing the power imbalance between students and their professors and institutions, especially when millions of dollars are at stake.

“The situation at Harvard is not unusual, but the lawsuit is,” says Thomas G. Wiseman, an intellectual property attorney with a chemistry background, at Smith, Gambrell & Russell.

Although Shihong Nicolaou, intellectual property manager at the University of California, San Diego, also says she finds the suit unusual, she believes that Charest’s position is “extremely weak.”

Given the accusations, money, and documentation, “this lawsuit could turn uglier for all concerned, even if it’s just reputational,” says Kendrew H. Colton, an intellectual property attorney specializing in chemistry with Fitch, Even, Tabin & Flannery, who is also on C&EN’s advisory board.

“We are hopeful this case will wake university administrators up to potential misalignment between their mission and values and the culture and practices within their technology transfer offices,” Charest says.