In my last article, I explored the growth of the biotechnology industry due to changes in federal law allowing universities to keep patents created from publicly funded research. It also allowed them to commercialize that research to private companies for profit. This led to a rapid increase in commercialization in these academic institutions, and was another aspect of the rise of corporatization of the university. Closer to home in New Mexico, this new policy played out in a lawsuit back in 2001 involving the University of New Mexico and two of its inventors.
The now-defunct Albuquerque Tribune did a series of articles about the case in 2001. Those who are interested can still read up on it due to the folks at archive.org where it is saved at (https://web.archive.org/web/20041019103257/http://www.abqtrib.com/cancer/).
The inventors are Galen Knight and Terence Scallen. Starting in the 1980’s they invented from an extract a compound they called Vitalethine. It stimulated the immume system so that it could kill cancer cells. A patent was filed in 1990 for Vitalethine and a similar compound, Beta-alethine, with ownership being assigned to UNM. It was reported in the journal Cancer Research that a form of vitalethine stimulated the immune system to fight off cancer in up to 90 percent of mice. Experiments were done on other animals, and it was being prepared for tests on humans.
The inventors met Floyd Taub in 1992. He was the head of Dovetail Technologies and its affiliate Lifetime Pharmaceuticals, and he expressed interest in marketing the compound. In 1994, Dovetail payed the university $20,000 for exclusive licensing rights to all the compounds from inventions by Knight and Scallen, which it would use to develop pharmaceutical products from. The same year Scallen’s lab closed due to funding, and Knight was terminated, but allowed to follow the mice study as a volunteer. Also that year the patent for vitalethine, #5,370,868, was issued.
Two years later in 1996, patent 5,578,313 is issued, and it is called beta-alethine. It includes amendments to the original submitted by the university, claiming corrections were needed. The new compound later led to the drug Beta LT, which was used in clinical tests. The changes are protested by the original inventors, Knight and Scallen, saying UNM inserted errors in the compound and essentially destroyed their work. As a result they refuse to sign over new ownership to UNM.
Under UNM policy, like other universities, UNM owns all employees patentable work and its employees must assign ownership with the university demands they do so. The ownership remains in limbo until UNM files a lawsuit in May 1999 against the inventors, seeking ownership so that it can continue to market the products to Dovetail. UNM labeled the two “renegade inventors.” UNM needed a clear title to the patents so that Dovetail can market the drugs. Knight and Scallen wanted UNM to return the patents so that they can continue working on the products. The next month, June 1999, UNM updated its intellectual property policy.
In 2000 a court ruling gave ownership of beta-alethine products to UNM. In 2001 the same judge in the case ruled against the inventors.
In the last lawsuit the inventors represented themselves in this unprecedented legal case. The lawsuite generated mounds of paperwork, six file volumes, made up of 3000 pages weighing 30 pounds. UNM spent nearly $275,000 in legal fees.
One scientist said that the beta-alethine compound was different from vitalethine, in contrast to what UNM stated.
In the end the court ruled for UNM. Knight is currently involved with his own company doing alternative medicine. Overall this case showed the money involved in commercialization of university research.
In 1998, 175 universities and institutions involved in research reported $24 billion in research spending and 11,784 invention disclosures by researchers. All of these are owned by the universities, who take ownership of patentable discoveries and share royalties with inventors once the discovery is commercialized. UNM’s policy is the most stringent, in that it claims all rights of ownership. All this was done through Science and Technology Corporation at UNM, which manages patented inventions. (https://web.archive.org/web/20041025163348/http://www.abqtrib.com/archives/cancer/060901_cancer_invent.shtml)
UNM claimed 1.1 million in royalties paid by licensees from 12 faculty inventions from 1995 to 2000. Royalties were split evenly between the inventor and the university. After the 1999 revision, the inventor gets 40 percent, STC gets 40 percent, and UNM gets 20 percent. There is even an Association of University Technology Managers. (https://web.archive.org/web/20041025165812/http://www.abqtrib.com/archives/cancer/060901_cancer_license.shtml)
The more recent statistics about commercialization are likely different. The case of Knight and Scallen show that the universities now have control over patentable inventions, getting them away from their inventors. Another example of corporatization. The amount of money involved also affects the interests of different parties in these cases too. When money is involved, other interests get sidelined.