A former University of Alabama professor is being sued by the University of Alabama System claiming that it owns his patents worth $197 million. The complaint was filed by The Board of Trustees of the University of Alabama against Nektar Therapeutics AL, Corporation, and Nektar Therapeutics in the United States District Court for the Northern District of Alabama alleges patent infringement, breach of contract license, violation of the Alabama Trade Secrets Act and unjust enrichment.

Dr. Milton Harris formed Nektar Therapeutics and developed a new inhalable insulin system. The U.S. Food and Drug Administration (FDA) has approved the inhalable formulation of recombinant human insulin [rDNA origin] powder for the treatment of adult patients with type 1 and type 2 diabetes mellitus, and conivaptan injection for the treatment of euvolemic hyponatremia in hospitalized patients. The insulin inhaler is not part of the suit.

The suit contends that because Harris was on the UA faculty from 1973 to 2000, and was covered by the university’s patent policy, his patents are owned by UA. The policy says it will be a university-owned patent if the discovery was made by UA employees and graduate students, through research paid for by the university, within an employee’s field or involving UA facilities.

Harris and another researcher developed a PEGylation technology, which was patented by UA. With PEGylation technology, polyethylene glycol (PEG) polymer chains are attached to a drug, which sustain bioavailability by protecting the drug molecules from immune responses and other clearance mechanisms. In an aqueous medium, the long, chain-like PEG molecule is heavily hydrated and in rapid motion. This motion causes the PEG to prevent the interference of other molecules. The university entered a royalty agreement with Harris for products developed out of the discovery, and Harris created Shearwater Polymers, a company bought by Nektar in 2001 for $197 million in cash and stock, to pursue manufacturing of PEG-related products.

The UA System claims that Harris, without UA’s knowledge, made a number of other discoveries related to the PEG technology in the following years and patented 28 of them. Harris was required to notify UA of any discovery related to the original PEG patent, and the lawsuit contends that the patents are “obvious derivatives” of and “equivalent” to the original PEG patent.

The lawsuit came about after Nektar informed UA last spring that it would no longer pay royalties from sales of the drug Neulasta, when Nektar informed the university that the PEG compound for Neulasta does not involve anything owned by UA

It may be necessary for the UA System to prove both ownership of the patents in question and that the products sold are covered by the patents in question.

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