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Volume 94 Issue 11 | p. 8 | News of The Week
Issue Date: March 14, 2016 | Web Date: March 9, 2016

Royalties suit against Harvard moves ahead

Judge okays portions of lawsuit filed by former grad student to go to trial
Department: Science & Technology
News Channels: Organic SCENE
Keywords: intellectual property, tetracycline analogs, harvard, patent, lawsuit

To download a PDF of judge Woodlock’s opinion, go to http://cenm.ag/charestopinion.

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.

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The synthesis of tetracycline antibiotics is at the heart of Charest’s lawsuit.
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The synthesis of tetracycline antibiotics is at the heart of Charest’s lawsuit.

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.

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Charest
Credit: Courtesy of Mark Charest
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Charest
Credit: Courtesy of Mark Charest

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.

 
Chemical & Engineering News
ISSN 0009-2347
Copyright © American Chemical Society
Comments
Robert Buntrock (March 9, 2016 4:11 PM)
This suit shows the importance of the knowledge of patents, patenting, licensing, and other aspects of Intellectual Property law and practice, even to those in academia. Essentials of these processes and practices should be part of required course in preparation for research for both undergraduate and graduate students along with information and data retrieval.
Herbert Skovronek, Ph. D. (March 9, 2016 6:18 PM)
Obviously, I do not know the background of this Harvard dispute. Recently UCLA also made a lot of money on graduate student success and resulting patents. Many other schools do the same. In some cases, some of the monies reaped are being invested/reinvested in students or graduate students and research, but the ultimate consumer never does benefit.

Often these breakthroughs result from government (or industrial)funding in the first place (I do NOT know if that is true in these cases). Where is the payback to our government? I would like to see every grant, every graduate stipend that is govt-funded, every piece of University equipment funded by govt monies, etc. contain a clause that the gov't is a co-owner (percentage?) of all/every patent and resultant bottle of drug or chemical derived from such funding. I have long sought this arrangement in all fields. My graduate work (a long time ago) was funded by a commercial foundation and their contract did have such a clause. I still think that is fair. The government (or commercial firm) gambles, they should also share in the "winnings."
Hu Lee Bears (March 10, 2016 3:00 AM)
After browsing Judge Woodlock's opinion, I see Charest's position not too weak. The claim on Harvard's breach of contract stayed. I believe this is the core claim in complaint. As one of the biggest institutions in the world, Harvard lied and threatened to an individual when it came to money. Let alone the fairness of royalties distribution, I'd like to see more transparency in all university's technology transfer offices.
At this moment, this suit might showcase a proper inventor-university relationship for future IP transfer matters. Researchers and inventors in academia should be treated fair enough to protect both parties interest.
Keith Korthals (March 10, 2016 7:02 AM)
Universities use those recommendation letters to make sure they get what they want. They also intimidate witnesses and retaliate for reporting crimes. Publications will disappear in retailation for reporting crimes etc. This corrupt system of "needing a letter from your former boss to your new boss" needs to disappear like feudalism.
Srinivasa R DP (March 14, 2016 10:40 AM)
I agree with Korthals' comments. This is the dirty secret in majority of chemistry labs that the chemists working on the bench never get due credit for their contributions, especially in patents. Students and postdocs are the backbone of any research invention in academic labs, but, often times, they keep mum to avoid the retaliations and bad reviews. The university system needs to educate the faculty first for fairness in patent filings.
ZhuSun Yeng (June 25, 2016 2:33 AM)
The case just got settled this week.
https://www.bostonglobe.com/business/2016/06/23/harvard-settles-suit-over-royalty-payments/chmfSlcl8TI171FZ58zl1O/story.html
Jyllian Kemsley (June 27, 2016 1:01 PM)
Yes, we have a story up this morning:
Patent royalties suit against Harvard settled
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