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Wednesday, November 25, 2020

Transparency in revenue sharing of joint patent- case from Washington University and University of Wisconsin–Madison

Work of researchers at Washington University and University of Wisconsin-Medison results in U.S. Patent Nos. 5,246,925. Wisconsin Alumni Research Foundation (WARF) helps UW-Madison’s research enterprise by patenting inventions from university researchers, licensing the technologies to companies for commercialization. Washington University and WARF’s medical research partnership began in the 1990s. The two agreed that two-thirds of their shared patent’s revenues would go to WARF and one-third to Washington University. WARF then took the joint patent to Abbott Laboratories, a pharmaceutical company that launched the kidney dialysis drug known as Zemplar the same year it signed a licensing agreement with WARF.

Abbot successfully sued several generic product manufacturers by defending patents 5,246,925 , 5,587,497 and 6,136,799. Since the drug launched in 1998, it has generated about $6.1 billion in total sales revenue for Abbott. Over the duration of the patent’s life, which expired in 2015, Washington University received a little over $1 million while WARF received $426.5 million. 

When checks worth just a few hundred dollars began arriving at Washington University in the early 2000s, officials in St. Louis started pressing WARF for an explanation of the financial distribution. When  Washington University employee asked for a copy of the agreement WARF struck with Abbott, it was reported WARF cited non-existent confidentiality provisions preventing her from sharing documents with Washington University.

Aggrieved, Washington University in St. Louis sued WARF, in 2013  and court ruled in favour of Washington University, finding that WARF had misled its research partner about the patent’s true financial value and kept 99% of the patent’s royalties to itself. WARF contended it was fair distribution as bundle of patents were assigned to ABBOT.

References:

https://patents.google.com/patent/US5246925A/en

https://madison.com/wsj/news/local/education/university/uw-madisons-patent-licensing-arm-must-pay-at-least-32-million-to-ex-research-partner/article_2917cae0-8a84-56be-b7d9-6192377fd480.html

https://www.fr.com/files/Uploads/attachments/memoranda/Delaware%20Cases/julythroughdecember2009/Abbott%20Laboratories,%20et%20al.%20v.%20Teva%20Parenteral%20Medicines,%20Inc.,%20et%20al.pdf

https://techtransfercentral.com/2020/11/24/warf-must-pay-at-least-32m-to-former-research-partner-washington-u-in-patent-dispute/


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