Tech Transfer eNews Blog

WARF must pay at least $32M to former research partner Washington U in patent dispute

By Jesse Schwartz
Published: November 24th, 2020

The Wisconsin Alumni Research Foundation (WARF) must pay at least $32M to a former research partner for concealing the financial value of a shared patent, a panel of federal appeals court judges ruled late last month.

In 2013, Washington University in St. Louis (WUSTL) sued WARF, the tech transfer arm of the University of Wisconsin (UW)-Madison, over a dispute about a joint pharmaceutical patent involving the kidney dialysis drug Zemplar. In 2018, a district court judge ruled in favor of WUSTL, finding that WARF had misled the university about the patent’s true financial value and kept 99% of the royalties to itself.

In its appeal, WARF argued that the statute of limitations for breach of contract had expired before the 2013 lawsuit. But the appeals court upheld the initial ruling, citing “extensive evidence” of WARF’s concealment of the very information WUSTL needed to determine it had a valid cause to sue. The judges also described WARF’s patent valuation letter to the university as being “full of misstatements, half-truths and misdirection.”

WUSTL only became aware of WARF’s actions after Abbott and WARF sued other drug companies making generic versions of Zemplar, records show. Since the drug launched in 1998, court records show it has generated about $6.1 billion in total sales for Abbott.

It was only through suing WARF that Washington University realized its tiny share of the valuation assigned to the joint patent, according to court records. WARF bundled the patent with dozens of others, diluting the amount of money flowing to Washington University. Over the duration of the patent’s life, which expired in 2015, WUSTL received a little over $1 million while WARF received $426.5 million.

The amount WARF owes WUSTL is at least $32 million, though the figure could grow. Judges sent the parties back to the district court to determine how much is owed in interest, which could add $14.8 million to WARF’s bill.

James Surber, WUSTL’s assistant vice chancellor and associate general counsel, said the university is pleased with the appeals court’s decision, but remains disappointed by WARF’s refusal to negotiate a fair resolution that had to be resolved in court.

According to WARF spokesman Jeanan Yasiri Moe, the organization is still exploring other legal options. “WARF maintains its stance that it upheld its professional and contractual responsibilities and obligations with [Washington University] and all of the patent holders for more than 20 years,” she says. “Our history of integrity, along with our responsibility to protect [intellectual property] rights, are the driving forces behind any legal action.”

Source: Wisconsin State Journal

Posted under: Tech Transfer e-News

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