University Patents, Inc. v. Kligman

Albert Kligman (defendant) was a dermatologist, a tenured professor at the University of Pennsylvania (the university) (plaintiff), and a consultant to private laboratories and companies, including Johnson & Johnson (J&J) (defendant). In 1966, the university adopted a patent policy that declared generally that any invention or discovery resulting from work carried out during the university’s time or at the university’s expense was the property of the university. Under the policy, faculty were expected to enter into a patent agreement assigning their interests in patent applications to the university. The written procedures that implemented the patent policy varied over time, but by 1973, the policy applied to all the university’s staff and required disclosure of inventions. The patent policy and other related policies appeared in university handbooks, which also contained assignment and invention-disclosure forms. The extent of enforcement of the policies was mixed. In the 1960s, Kligman discovered an anti-acne treatment based on a derivative of Vitamin A. J&J was interested in obtaining rights to the invention. Kligman made the discovery while treating prison inmates, largely during his personal time. Kligman informed the university that he had made the discovery on his time and at his expense and that it was likely not patentable. The university accepted Kligman’s representation and did not require any assignment of rights. J&J later patented the invention, and Kligman donated his portion of royalties to the university. Thereafter, Kligman developed another Vitamin A-derivative anti-aging treatment using some university funds, facilities, or resources. Kligman and J&J patented and licensed the second invention. The university, through University Patents, Inc. (UPI) (plaintiff) sued Kligman and J&J to recover royalties on the second invention. The university relied on its patent policy and handbooks to establish an implied contract to assign. Kligman moved for summary judgment, arguing that there was no enforceable agreement to assign.