Washington University moves to affirm; add interest to $31.6m WARF verdict
Catherine White
Washington University has filed a motion with the USCourt of Appeals for the Third Circuit, seeking to affirm a $31.6m ruling
against the Wisconsin Alumni Research Foundation (WARF).Lodged this week, Washington University called upon the
circuit to also add a 5% interest to the sum WARF must pay, after a federal
court found in 2018 that it had underpaid patent-licensing royalties to the university
for 20 years and ordered it to $31.6mn in compensation.“Because WARF now accepts that it breached [a 1998 agreement]
and caused $31.6m in damages, WARF owes Washington University for the entire
period of WARF’s breach,” the university asserts.The 84-page complaint adds that WARF has conceded the “breach
allowed it to retain tens of millions of dollars belonging to Washington
University”. It furthers, “Under Wisconsin law, WARF must compensate
Washington University with prejudgment interest because WARF was able to determine what it owed.
Thus, on Washington University’s cross-appeal, this court should increase the
judgment by 5% in prejudgment interest”.BackgroundSpecifically, the litigation involves a patented
invention discovered jointly by researchers associated with Washington
University and the University of Wisconsin. The researchers discovered a ground-breaking treatment
for a serious condition associated with kidney disease that avoids a dangerous
side effect. The treatment was licensed to Abbott, which commercialised
a blockbuster drug, Zemplar, based on the invention. Although Washington University took the lead in
developing the invention, the University of Wisconsin’s licensing branch, WARF,
took the lead in patenting and monetising it. WARF agreed to share licensing income, entering into an inter-institutional
agreement with Washington University in 1998. The deal specified how WARF would allocate value to the
co-owned patent if it were licensed as part of a portfolio of patents. WARF was extremely successful at licensing, raking
in
over $426.5m in royalties from Abbott on Zemplar sales.Washington University claims that WARF “had allocated,
for well over a decade”, 99.032% of the portfolio’s income to WARF-owned
patents and only 0.968% to the co-owned one.After a four-day bench trial, the district court entered
a breach of contract judgment in Washington University’s favour.“WARF concealed its breach and affirmatively misled Washington
University,” the suit states.