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Academia (vs. Industry)

Academia and Industry, Suing Each Other

This is not the sort of academic-industry interaction I had in mind. There’s a gigantic lawsuit underway between Agios and the Abramson Institute at the University of Pennsylvania, alleging intellectual property theft. There are plenty more details at PatentBaristas:

According to the complaint filed in the US District Court Southern District Of New York, the Institute was created by an agreement between The Abramson Family Foundation and the Trustees of the University of Pennsylvania. The Foundation donated over $110 Million Dollars to the Institute with the condition that the money was to be used to explore new and different approaches to cancer treatment.
Dr. Thompson later created a for-profit corporation that he concealed from the Institute. After a name change, that entity became the Defendant Agios Pharmaceuticals, Inc. Dr. Thompson did not disclose to the Institute that at least $261 million had been obtained by Agios for what was described as its “innovative cancer metabolism research platform” – i.e., the description of Dr. Thompson’s work at the Institute. Dr. Thompson did not disclose that Agios was going to sell to Celgene Corporation an exclusive option to develop any drugs resulting from the cancer metabolism research platform.

Such are the accusations. There’s more of Thompson’s defense in this New York Times article:

Three people with knowledge of Dr. Thompson’s version of events, two of whom would speak only on condition of anonymity because of the litigation, said that the University of Pennsylvania knew about Dr. Thompson’s involvement with Agios and even discussed licensing patents to the company, though no agreement was reached.
“When you start a company like this, you want to try to dominate the field,” said Lewis C. Cantley, another founder of Agios and the director of the cancer center at the Beth Israel Deaconess Medical Center in Boston. “The goal was to get as many patents as possible, and it was frustrating that we weren’t able to get any from Penn.”
Michael J. Cleare, executive director of Penn’s Center for Technology Transfer, declined to discuss whether negotiations had been held but said, “Yes, Penn knew about Agios.”

So, as the lawyers over at PatentBaristas correctly note, this is all going to come down to what happened when. And that’s going to be determined during the discovery process – emails, meeting minutes, memos, text messages, whatever can establish who told what to whom. If there’s something definitive, the whole case could end up being dismissed (or settled) before anything close to a trial occurs – in fact, that would be my bet. But that’s assuming that something definite was transferred at all:

A crucial question, some patent law and technology transfer specialists said, could be whether Dr. Thompson provided patented technology to Agios or merely insights.
“If somebody goes out and forms a company and doesn’t take patented intellectual property — only brings knowledge, know-how, that sort of thing — we wouldn’t make any claims to it,” said Lita Nelsen, director of the technology licensing office at the Massachusetts Institute of Technology.
In its complaint, the Abramson institute does not cite any specific patents. It says Penn did not pursue the matter because Dr. Thompson had told the university that his role in Agios did not involve anything subject to the university’s patent policies. The lawsuit says the institute did not find out about Dr. Thompson’s role in Agios until late 2011.

There will probably be room to argue about what was transferred, which could get expensive. That accusation of not finding out about Agios until 2011, though, can’t be right, since he’s mentioned all over their press releases and meeting presentations at least two years before that. But no matter how this comes out, this is not the way to build trust. Not quite.

6 comments on “Academia and Industry, Suing Each Other”

  1. Binary says:

    This is the alleged theft that you know about. On the positive side at least an American company was funded with the info.
    Chinese and Indian graduate students are transferring billions of dollars of intellectual property to their homelands as we speak.
    The US taxpayer gets zilch, while the faculty could really care less. The USA is turning into a police state for the typical citizen but there seems to be no problem in handing over the lab keys to foreign spies.
    What’s being done about it? Nada.
    Cheap labor oh wow! No downside for us.

  2. biotechbaumer says:

    Seems like this case is about more than simply IP. PatentBaristas pulls out the legal agreement between Thompson and the institute where it says that even ‘non-patentable’ things like know-how, trade secrets, etc. are property of the Institute. In this case, not sure how he is going to be able to dodge this suit. Pretty much anything that came out of his lab at Penn would not be usable at Agios. But it should be noted that Thompson never worked on (or at least never published) on the two lead programs at Agios, PKM2 and IDH1/2. So at least those programs appear to be homefree…

  3. Anonymous says:

    If you squint really really hard to read between the lines of the lawsuit, you can very clearly make out the following words:
    “We donated >$100 million dollars to an institute that you controlled. You spent that money to advance your own academic career and personal wealth, and carefully maneuvered to avoid giving any of the money back to the institute in the form of royalties or licensing fees. When the money we donated ran out, you left for a different job. We think you are scum.”

  4. milkshake says:

    Even if it turns out that the Abramson family who underwrote some of his research has no legal case (and they may have) a protracted litigation can become a nasty problem for Agios, if it delays their licensing deals by creating uncertainty about the IP ownership. For example Celgene might re-consider and pull out. It may be just cheaper for Agios to pay them off. (And if Agios goes under the institute gets nothing). So I would expect few rounds of bloodcurdling posturing followed by a generous settlement.

  5. Anonymous says:

    @ 4
    Can Agios actually pay out a settlement? It’s a start up. Would Third Rock and the other Agios investors be tasked with the payment? If so, the downstream effects will be bad for the future of biotech, as the venture capital for new ventures will quickly dry up.

  6. Pope says:

    Derek,
    I wanted you to comment on the new resveratrol study revealing its potential mechanism.

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