Tech Transfer eNews Blog

Michigan State faces lawsuit alleging it defrauded licensee

By Jesse Schwartz
Published: July 17th, 2019

In a new lawsuit, two companies are alleging that Michigan State University (MSU) and the executive director of MSU Technologies committed fraud and breach of contract over a safety technology developed at the university.

Composite Innovation Group (CIG) and its subsidiary, Atomic Composites, claim that in 2013 CIG obtained a license to a technology that uses novel materials for helmets and other gear to protect soldiers and athletes, but that MSU did not take the proper steps to patent the technology. According to the lawsuit, once the companies finally took those steps on the university’s behalf, MSU terminated their agreement so that it could take over the technology.

The companies argue that MSU should not be allowed to continue reaping benefits from the work they did applying for patents, marketing and fundraising while the companies themselves get nothing. CIG and Atomic say that after they licensed the technology from MSU in 2013, they “spent millions of dollars over the next several years meeting and exceeding their contractual obligations,” including filing for multiple patents on behalf of MSU.

The companies allege that the university’s actions were part of an effort to take over the patents, hide the university’s failure to disclose the technology to the U.S. Army Research Lab that had provided research funding, and cover up the way MSU tried to defraud the companies.

According to court records, MSU first responded to the lawsuit by saying it had fulfilled a timeline requirement for patenting the technology in April 2013, but then said later that it fulfilled the requirement in 2016. That’s despite a memo the university filed in 2018 asking the federal government for an extension to fulfill that same requirement, CIG maintains.

A spokesperson for MSU said the university had received notice of the lawsuit but would not comment on pending litigation.

Source: Lansing State Journal

Posted under: Tech Transfer e-News

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