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Stanford PhD Sues School for Allegedly Breaching Gene-Modification IP Contract

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A former Stanford graduate student is suing the school for breach of contract, alleging that the school incorrectly excluded him as a co-inventor on patents related to a gene-modification technique he said he helped develop, according to court documents.
 
The lawsuit, filed this week in the US District Court for the Southern District of California, alleges that Stanford has failed to correct inventorship on US Patent Nos. 6,808,925 and 7,141,426 to include the plaintiff, Christopher Sclimenti, as a rightful inventor.
 
In addition, the complaint alleges that Stanford has since commercially benefited from licensing technologies covered by the patents, and as a result of the incorrect inventorship, has failed to pay Sclimenti his share of the profit.
 
According to Stanford’s licensing income distribution policy, any licensing revenues or royalties gained from a patented invention would be split equally among the inventor, the inventor’s academic department at Stanford, and the university as a whole.
 
According to the complaint, Sclimenti obtained his PhD from Stanford in 2002 in cancer biology and molecular genetics, working primarily in the laboratory of Michele Calos, a professor of genetics.
 
In February 2001, Stanford filed US patent application 09/788,297, entitled “Altered recombinases for genome modification,” on behalf of Sclimenti and Calos, who were named as co-inventors.
 
The suit claims that both scientists were properly named on the patent application because “they both conceived of the invention claimed.” However, the suit alleges that during subsequent prosecution through the US Patent and Trademark Office, Sclimenti’s name was removed from the patent.
 
The complaint also said that in April 2004 Stanford and Calos files US Patent Application 10/836,323 as a continuation to the ‘297 patent, with Calos named as the sole inventor.
 
In October 2004, the ‘297 application issued as the ‘925 patent to Stanford, and in November 2006 the ‘323 application issued as the ‘426 patent to the school. Calos is named as the sole inventor on both published patents. She is also named as a co-defendant on the lawsuit.
 
The lawsuit states that “because [Sclimenti] jointly conceived of the inventions claimed in the ‘925 and ‘426 patents, [he] should be added as a co-inventor on these patents.”
 

“Stanford has commercially exploited the technology covered by the ‘925 and ‘426 patents, receiving money and stock. As part of the contract between [the] plaintiff and Stanford, Stanford was obliged to pay a portion of the money and stock derived from an invention conceived of by the plaintiff.”

The complaint also alleges that Stanford has “commercially exploited the technology covered by the ‘925 and ‘426 patents, receiving money and stock. As part of the contract between [the] plaintiff and Stanford, Stanford was obliged to pay a portion of the money and stock derived from an invention conceived of by the plaintiff.”
 
To date, Stanford has not provided such payment to Sclimenti, the lawsuit alleges.
 
Sclimenti is asking the court for judgment that he is a rightful co-inventor of the pertinent patents, and that he be awarded damages for breach of contract, for costs of the lawsuit, and for “such other and further relief as the court deems just and proper,” the complaint states.
 
It is unclear why Sclimenti was removed from the ‘297 patent application. Sclimenti, who this week began employment as an attorney in the San Diego law offices of Knobbe, Martens, Olson & Bear, could not be reached for comment.
 
A spokesperson from Stanford’s Office of Technology Licensing, which oversees the school’s patent activities, told BTW that the office or the school could not comment on ongoing litigation as per school policy.
 
It is also unclear how much Stanford has commercially benefited from the technology. Manuel de la Cerra, a Carlsbad, Calif.-based intellectual property lawyer representing Sclimenti in the case, told BTW this week that he believes that the patents have been commercially licensed to more than one entity. He declined to elaborate due to the early nature of the case.
 
Under the Stanford OTL revenue-sharing policy, licensing revenues are to be split equally among the inventor, the inventor’s academic department at Stanford, and the university as a whole. Therefore, if Sclimenti were to be named as a co-inventor on the patents, he would be entitled to half of whatever Calos has received and will receive in the future.
 
In 2002, Calos co-founded Poetic Genetics to commercialize gene therapies based on the technology. Synergenics, a San Francisco-based R&D company, is currently a majority shareholder of Poetic Genetics, which operates as an independent company under Synergenics.
 
Synergenics CEO William Rutter told BTW that Poetic did license IP from Stanford University — including the ‘297 and ‘323 patent applications — with the financial backing of Synergenics. Rutter said that several groups or individuals have invested in Poetic, but that Synergenics was the most recent investor.
 
In 2006, Poetic outlicensed an IP portfolio containing the ‘297 and ‘323 patent applications to EnGene, a company based in Vancouver, BC, that is developing a gene therapy technique to restore insulin production in diabetes patients, EnGene CEO Eric Adams told BTW this week.
 
Under the terms of that agreement, EnGene obtained exclusive worldwide rights to use the IP portfolio, which covers a non-viral gene integration technology, in a site-specific manner in the genomes of existing intestinal cells as the basis for a treatment for diabetes, obesity, and gastrointestinal disease.
 
Upon achievement of specific milestones, Poetic was to receive undisclosed equity in EnGene, cash payments, and royalties from commercial sales of products incorporating the technology, according to a 2006 statement from the company.
 
Last year, Poetic also granted an exclusive, worldwide license to gene-integration technology to Pain Therapeutics for the treatment of hemophilia and for use in pain management, although it is unclear whether the pertinent patents were included in that deal (Calos has multiple patents related to the technique on which she is listed as co-inventor).
 
Under the terms of that licensing agreement, Poetic was paid an undisclosed upfront fee and is eligible to receive milestone payments totaling $4 million in the aggregate, based on clinical and regulatory progress; and a 4 percent royalty on net sales, or 6 percent if the first US sale of a licensed product occurs before Jan. 1, 2011, according to Pain Therapeutics.

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