University of California Cries "Thief!" on Genia Patents

As I noted in my last post, the University of California has filed suit against Genia claiming that Genia co-founder Roger Chen misappropriated intellectual property from UC Santa Cruz and the laboratory of Mark Akeson (filings include a bunch of  other well-known nanopore scientists, including David Deamer and Dan Branton).  While the filings are mostly dry, they are enlivened occasionally by such colorful language as "evasive tactics", "aided and abetted" and "stonewalled".  Goaded by Mick Watson, I've dug into the court filings and some of the patents (and obtaining those filings apparently cost me some real money, perhaps approaching $1.0e01 dollars).

UC's filing makes a series of claims.  Roger Chen was a graduate student working in Mark Akeson's lab on nanopore technology and made a number of inventions.  Chen signed the standard document committing him to turning over to UCSC any inventions, but also committing UC to compensate him for any patentable inventions according to standard provisions.  Appropriate filings were made concerning many of these inventions and patent applications were filed.  But Chen then left the university and co-founded Genia. having already started a pattern of failing to respond to university requests for patent-related documents.  Chen later tried to disavow his inventorship at UCSC and was completely uncooperative while Genia filed very similar patents.  Chen's laboratory notebooks also proved missing   Chen's lack of cooperation also led the university to abandon patents.  UC is claiming ownership of Genia's patents in question, wants a declaration that Chen and his UC colleagues are the true inventors for these patents (and that Chen's co-inventor should be evicted from the patents, since he couldn't have truly been an inventor having never been at UCSC) and that all the financial gains that Genia and Chen received from the purchase of Genia by Roche should be handed over to UC.

Since the case was just filed, we don't know Chen's rejoinder.  A number of pieces of evidence would appear to be difficult for Chen to rebut.  In particular, there are several inventions of direct relevance to Genia for which paperwork was filed at UC listing Chen as an inventor, and these were filed when he was still at UCSC.  Worse for Chen, his signature is on these documents.  The Genia patents UC is claiming are spread out over a number of years, but the first one (as shown below

I've summarized U.C.'s  timeline below.  Please note again I have no legal training and am a bit lazy; I have sometimes summarized or paraphrased to the best of my ability.  I've tried to hyperlink some useful documents.  If some of the patent documents come up in German, my apologies; I discovered a bit late that a URL I kept editing was pointing to the Swiss Google Patents site.  Also, I have just used inventors' surnames to keep things simpler; this is not intended to slight.  I've probably not been fastidious with quote marks; I'll confess that up front.  And as you may have noted, I use UC to mean the Regents of the University of California and UCSC for University of California Santa Cruz, but I'm probably not 100% consistent in that either.  Please treat this list as a set of notes made by me and open to criticism and not my creative work.

• 2005-10-?? Chen enrolls in Ph.D. program at UCSC
• 2006-04-13  conception date for "Method for manufacture of very large scale arrays of independently addressable nanopores"
• 2006-09-15 Chen executes University of California’s State Oath of Allegiance, Patent Policy,and Patent Acknowledgment
• 2007-01-17 Date identified in a Record of Invention for Chen & Akeson as the date of conception & date of first written record of "Methods to limit enzyme activity to one molecule or complex using a nanopore"
• 2007-04-02 First written record of invention for "Method for manufacture of very large scale arrays of independently addressable nanopores"
• 2007-04-04 UC files U.S. provisional application 60/921,787 "Methods to limit enzyme activity to one molecule or complex using a nanopore". Chen, Akeson & Benner listed as inventors/  This application is later abandoned.
• 2007-04-11 Akeson witnesses Chen Record of Invention for "Method for manufacture of very large scale arrays of independently addressable nanopores"
• 2007-05-18 Disclosure filed with UC identifying Chen as co-inventor for "Nanopore-coupled sequencing by synthesis"
• 2007-05-21 UC files U.S. provisional application 60/931,115 "Methods for sequencing polynucleotides by synthesis using a nanopore.  Chen, Akeson, Abu-Shumays, Benner & Deamer listed as inventors. This application is later abandoned.
• 2007-09-04 UC files U.S. provisional application 60/967,539 "Method for manufacture of very large scale arrays of independently addressable nanopores and methods for their use". Chen is sole inventor.  This application is later abandoned.
• 2007-11-?? Nature Nanotechnology paper publishes with Chen as co-author, "Sequence-specific detection of individual DNA polymerase complexes in real time using a nanopore"
• 2008-01-??  Chen leaves UCSC. obtaining a M.S. degree
• 2008-04-04 UC files U.S. application 12/080,684 "Compositions, devices, systems and methods for using a nanopore"  Chen, Akeson, Deamer, Benner, Dunbar, Wilson, Lieberman, Abu-Shumays &  Hurt listed as inventors.  This application is later abandoned
• 2008-04-04 UC files U.S. PCT application PCT/US2008/004467 "Compositions, devices, systems and methods for using a nanopore. Chen, Akeson, Deamer, Benner, Dunbar, Wilson, Lieberman, Abu-Shumays, Hurt and Branton listed as inventors.  This application is later abandoned
• 2009-10-02 UC files U.S. application 12/450,633 "Compositions, devices, systems and methods for using a nanopore". Akeson, Deamer, Dunbar, Wilson & Lieberman listed as inventors
• 2009-"early" U.C. begins a series of unsuccessful attempts to get Chen to execute a declaration on the 12/080,684 and PCT/US2008/004467 filings.
• 2009-03-?? Chen co-founds Genia Technologies
• 2010-02-08 Genia files U.S. provisional patent 12/659,604 "Systems and methods for characterizing a molecule"  Chen & Davis inventors. 
• 2012-09-15 Genia files U.S. provisional patent 13/620,973 "Systems and methods for characterizing a molecule" Chen & Davis inventors
• 2012-12-04 Genia application 12/658,604 publishes as U.S. patent 8,324,914
• 2013-05-13 Genia files U.S. provisional patent 13/893,142 "Systems and methods for characterizing a molecule" Chen & Davis inventors
• 2013-06-11 Genia application 13/620,973 publishes as  U.S. patent 8,461,854
• 2013-10-17 UC files U.S. application 14/056,636 "Compositions, devices, systems and methods for using a nanopore". Chen, Akeson, Deamer, Dunbar & Wilson listed as inventors
• 2014-01-14 UC asks Chen to execute Inventor's Oath or Declaration on 14/056,636 as well as 60/921,787, 60/931,115, 60/967,539, 12/080,684, 14/056,636, and PCT/US2008/004467
• 2014-01-22 Chen requests copy of claims in active UC filings in which he is listed as inventor. 
• 2014-??-?? UC responds to Chen's request
• 2014-03-04 UC sends letter to Chen, repeating earlier requests
• 2014-03-05 Chen sends letter to UC denying being an inventor for the filings in question
• 2014-06-02 Roche acquires Genia Technologies for $125M
• 2014-06-10 UC files U.S. application 14/300,453.  UC had learned of Genia's patent 8,461,854 and this filing repeats claims from Genia's patent.  UC claims in the filing that Deamer, Dunbar, Wilson and Chen are the true inventors of these claims
• 2014-08-18 UC asks Chen to clarify if he would execute inventors' declarations and assignments to 14/056,636 and 14/300,453. UC also requests copies of Chen's UC notebooks, which are missing.  UC states that should Chen not respond, then this would be indication of refusal to sign and they would effectively sign for him based on his oath to UC (34 U.S.C. 15(d) is the appropriate bit of law)
• 2014-10-14 Genia files U.S. provisional patent 14/513,642 "Systems and methods for characterizing a molecule" Chen & Davis inventors
• 2015-05-26 Genia application 13/893,142 publishes as U.S. Patent 9,041,420
• 2015-09-?? UC receives letter from Chen's counsel "requesting additional information regarding the University's factual and legal basis for believing that Chen was an inventor, and documentation evidencing Chen's obligation to assign patent rights to the University"
• 2015-09-30 (apparent typo in document, stated as 2014): UC responds to Chen's counsel's letter
• 2015-10-21 UC files patent application 14/919,315 "Compositions, devices, systems and methods for using a nanopore"  Akeson, Deamer, Dunbar, Chen and Wilson listed as inventors
• 2016-02-?? Chen sends letter to UC saying 'he would not sign documents that "falsely purport to name him as an inventor of the subject matter claimed in such applications"
• 2016-03-24 Genia files U.S. provisional patent 15/079,322 "Systems and methods for characterizing a molecule" Chen & Davis inventors
• 2016-03-31 UC files patent application 15/087,734 "Compositions, devices, systems and methods for using a nanopore.  Akeson, Deamer, Dunbar, Chen & Wilson listed as inventors
• 2016-05-?? Chen sends UC similar letter to 2016-02 letter
• 2016-05-23 UC files patent application 15/162,225 "Compositions, devices, systems and methods for using a nanopore"  Akeson, Deamer & Chen listed as inventors
• 2016-06-28 Genia application 14/513,642 publishes as U.S. Patent 9,377,437
• 2016-12-29 U.C. files suit against Chen and Genia

So what does UC want the court to grant?

1. The inventorship of the Genia patents in question be corrected, with the UC inventors added, Chen's inventorship made clear and Randy Davis removed.  
2. Declaration that UC is the true owner of all of the Genia patents, since they were filed on inventions actually made at UCSC.
3. That Chen be declared in breach of his contract with UC, and therefore all his financial gains from the Genia patents, including from the sale of Genia to Roche, be transferred to UC.  Furthermore, that by his conduct Chen has waived all rights to UC patents, and therefore is not owed any royalties on them.
4. Chen be found to have breached an implied covenant of good faith and fair dealing, resulting in damages awarded to UC
5. Chen be found to have committed conversion.  Per Wikipedia, conversion is "a voluntary act by one person inconsistent with the ownership rights of another".  UC alleges that Genia "aided and abetted Chen's acts of conversion".  Since Chen is a co-founder of Genia, UC is alleging that Genia inherently knew of the improper nature of the patent filings. Genia should therefore also hand over funds received from the acquisition.
6. Further language around the acquisition payment being (in UC's claim) rightfully UC's. The term "constructive trust" is used here also, which apparently is a trust formed to hold assets while awaiting a court decision on those assets ownership.   UC is also claiming rights to any further milestone payments to Genia per the Roche acquisition agreement.
7. UC also demands that Chen return "all of his materials from the UCSC Laboratory, including his notebooks"

Hokay, that's plenty of law for me.  I don't have any plans to hang out a Robison & Shih Tzu, Specialists in Patent Law sign; I'm done with formal schooling.

Again, all we have seen is UC's side of the story.  It would seem pretty damning, with plenty of documentation held by UC supporting the idea that Chen was an inventor, plus the rather implausible idea that he worked on nanopores at UCSC with absolutely no inventions, but then rapidly invented many concepts once he jumped to Genia.  That seemed to be Chen's defense before this went to court, but from a laymen's perspective it seems very weak.  Another defense in these cases, per Wikipedia, is if UC either misrepresented their position (which seems unlikely) or failed to attempt to enforce their rights, which clearly isn't the case. It will be interesting to see what defense Chen, Genia and Roche throw in place.

What are the implications of even a partial UC victory?  I originally took the line of thinking that UC would be purely avaricious and would want the Genia technology pushed to market so that UC can snag those milestones plus additional royalties.  UC would truly have Roche over a barrel, since any one of the patents would seem to be required for the Genia technology to be commercialized.  So UC could demand a stiff royalty rate, though always recognizing that Roche could just walk away if UC gets too greedy.

But then I thought of a possible nuclear scenario that would truly sink Genia.  The Akeson group at UCSC has worked closely with Oxford Nanopore and has licensed patents to them.  What if the UC patent filings in question have already been exclusively licensed to Oxford?  Then UC would collect their damages, but be completely unable to negotiate new licenses with Roche/Genia even if they wanted to.  I don't know how to test that possibility (though perhaps Dr. Watson can find something in the filings from the Illumina and PacBio cases against Oxford), but I don't believe it is an outlandish one. Even the possibility of licensing UC's own patents exclusively to Oxford (or yet another nanopore company) would be a serious cudgel for UC to use in negotiations with Roche.
 
Given the stakes, it would be surprising if Roche just rolls over, particularly if my nuclear scenario is in play.  Roche just gave up on their partnership with Pacific Biosciences in favor of going forward with Genia only; even having the Genia technology tied up in court is a serious spanner in their works. Which is the counterargument for why Roche might try to settle quickly; without a settlement the whole platform is under a cloud.

Let this also be a reminder to all the students and university employees with a touch of entrepreneur to them.  Check what you've signed, and check also on any implied obligations. I don't remember signing anything at Harvard, but I always assumed Harvard had rights to my ideas.  Your lab notebooks do not belong to you!  Plenty of companies have been successfully founded by not trying to pull an end run around University intellectual property rights; don't succumb to the temptation to evade these. The Courts have yet to rule in this case, but even if Roger Chen should win I really doubt the nuisance, distraction and reputational damage were worth the cold cash.