Fenn v. Yale University

Decision Date19 August 2003
Docket NumberNo. CIV.A.3:96CV1647 CFD.,CIV.A.3:96CV1647 CFD.
Citation283 F.Supp.2d 615
CourtU.S. District Court — District of Connecticut
PartiesJohn B. FENN, Plaintiff, v. YALE UNIVERSITY, Defendant.

Hubert J. Santos, Hope C. Seeley, Santos & Seeley, John J. O'Brien, Jr., Moller, Peck & O'Brien, Hartford, CT, Carole W. Briggs, C.W. Briggs & Associates, PC, Glastonbury, CT, for Plaintiff.

William J. Doyle, Wiggin & Dana, New Haven, CT, Sidney R. Bresnick, New York, NY, for Defendant/Counter-claimant.

John J. O'Brien, Jr., Moller, Peck & O'Brien, Hartford, CT, for Counter-defendant.


DRONEY, District Judge.

The plaintiff, John B. Fenn, brought this action against the defendant, Yale University, alleging conversion, theft, tortious interference with business relationship, and violations of the Connecticut Unfair Trade Practices Act ("CUTPA"), Conn. Gen.Stat. § 42-110a, et seq., regarding an invention and patent for that invention, which issued to him as United States Patent No. 5,130,538 ("'538 patent") on July 14, 1992.1 Yale has asserted counterclaims against Fenn, seeking an accounting and assignment of the '538 patent, as well as damages for breach of contract and fiduciary duty, fraud, negligent misrepresentation, conversion, theft, unjust enrichment, and CUTPA violations.2

The following are the findings of fact and conclusions of law determined by the Court following the bench trial:

I. Findings of Fact

A. Introduction

John B. Fenn ("Dr. Fenn") is a leading scientific expert in the field of mass spectrometry which determines the masses of atoms and molecules. Mass spectrometry has important uses in the development of medicines and the mapping of genes.3 In 1967, Dr. Fenn joined the faculty of Yale University ("Yale") as a tenured full professor. In 1987, as required by Yale's then-mandatory retirement policy, Dr. Fenn retired from his position as a full professor, but continued his work at Yale for another seven years as a "Professor Emeritus" and "Senior Research Scientist." In 1994, Dr. Fenn left Yale and became a research professor at Virginia Commonwealth University.

This case concerns a dispute between Yale and Dr. Fenn over an invention in the field of mass spectrometry which he developed while at Yale. In the following findings of fact, the Court will first address the various Yale policies that concern the inventions of its faculty members such as Dr. Fenn, then the particular policy that applied to him for this invention, then the particular invention here.

B. Yale's Patent Policy

From before Dr. Fenn joined its faculty, Yale's administrative policies have provided that patentable inventions resulting from a faculty member's research conducted at Yale belong to Yale and not the faculty member unless Yale expressly releases its interest in such inventions.4 These policies have also provided, though, that licensing royalties resulting from such inventions would be shared by Yale and the faculty member/inventor. After Dr. Fenn came to Yale in 1967, Yale made changes to its patent policy in 1975, 1984, 1988, and 1989, but these changes dealt primarily with the division of net licensing royalties between Yale and the inventor. The policy that inventions belong to Yale and not the inventor remained unchanged throughout Dr. Fenn's employment at Yale.

In 1967, when Dr. Fenn began his employment at Yale, the Faculty Handbook, dated July 1, 1966, contained provisions about Yale's patent policy with regard to inventions by its faculty members (the "1966 policy"). Pursuant to that policy, a faculty member was required to report to the university any invention resulting from "research conducted under University auspices or with the use of facilities under its control" and Yale owned the invention. The patent policy further stated that Yale did not typically keep title to patents resulting from those inventions; Yale arranged with the "Research Corporation"5 to carry out the patenting and commercializing of the inventions and to retain title to the subject patents. The policy also indicated that an inventor's share of any net royalty income from such inventions was "usually" 15%. The policy further stated that the University could abandon its interest in an invention and that in such circumstances, "the inventor is free to handle or dispose of his invention as he wishes." Dr. Fenn does not dispute that this patent policy applied to him.

On July 1, 1970, Yale prepared and distributed an updated Faculty Handbook with a section setting forth a patent policy identical to the 1966 policy. Subsequently, Dr. Fenn wrote a letter to Yale's Provost expressing his opinion that the inventor's share of royalty income provided by that patent policy was inadequate.

In 1974, the Yale Provost appointed a committee of faculty and administrators, including Dr. Fenn, to review the patent policy. The committee's work resulted in the 1975 patent policy, which increased the faculty member/inventor's share of net licensing royalties from 15% to 50%. The policy reiterated that all discoveries and inventions which result from "teaching, research, and other intellectual activity performed under University auspices" must be reported to Yale and provided that:

[t]he [Yale] Treasurer shall refer inventions to Research Corporation or make other arrangements for evaluation of them in accordance with this policy.... In addition, the inventor may propose, even though the invention is one in the patenting or licensing of which the University wishes to participate, that the patenting of the invention or the licensing of the patent shall be arranged by the inventor at the inventor's expense, and if his proposal is accepted by the University, he shall proceed in accordance with an agreement to be made between the inventor and the University providing for such patenting or licensing by the inventor. Finally, if the University decides that although patenting or licensing of an invention is not contrary to University policy or the University does not wish to participate in the patenting or licensing, the University shall release to the inventor the University's interest in the invention, and the inventor shall be free to dispose of the invention as he wishes.

The 1975 patent policy also provided that it was "subject to revocation or amendment by the [Yale] corporation at any time." Dr. Fenn concedes that he was contractually bound by this 1975 patent policy.

In the early 1980s, a committee headed by Yale Professor Clement L. Markert ("the Markert Committee") was convened and charged with the task of reviewing the 1975 patent policy, faculty research sponsored by private entities, and commercial activities of faculty members. The Committee also recognized a need to re-examine the patent policy in light of the Bayh-Dole Act's changes in federal law and a shift in responsibilities from the Research Corporation to the Yale Office of Cooperative Research.6 Dr. Fenn served on the Markert Committee.

The Markert Committee produced a "Report of the Committee on Cooperative Research, Patents, and Licensing" ("the Markert Report"), setting forth specific recommendations, including changes to Yale's 1975 patent policy. The report's recommendations were embodied in a revised draft of the Faculty Handbook and a revised draft patent policy.7 Among other things, the Markert Report recommended reducing the share of licensing royalties for faculty members set forth in its 1975 patent policy. In particular, the Markert Report provided that inventors should receive 30% of net royalty income up to $200,000 and 20% of net royalty income in excess of $200,000.8

Professor Markert presented Yale's then-president, A. Bartlett Giamatti ("President Giamatti"), with a draft of the Markert Report by letter dated November 18, 1983. In that letter, Professor Markert indicated that the report "represents a consensus of diverse views held by members of the committee." In a reply letter dated November 28, 1983, President Giamatti thanked Professor Markert for the Committee's work and informed him that the Markert Report would be circulated to the faculty for their comments. President Giamatti wrote that "[a]s I receive comments, I will share them with you and the members of the committee. Sometime early in the next semester, having taken into account the advice of the faculty, I will take, with the Provost, the report to the [Yale] Corporation. My intention is to ask the Corporation to approve as university policy those relevant portions of the report." Subsequently, President Giamatti circulated the Markert Committee Report to faculty and research scientists. Dr. Fenn received a copy of the Markert Report.

On February 29, 1984, Dr. Fenn wrote to President Giamatti concerning the Committee's Report. Dr. Fenn wrote: "In the covering letter that accompanied the draft copy of the Report of the Committee on Cooperative Research, Patents and Licensing (CCRPL), Chairman Markert indicated that the views set forth comprised a consensus of the committee membership. Lest you harbor the illusion that this consensus was unanimous I write to record one member's dissent with respect to some of those views." Dr. Fenn's letter set forth his objections to the Markert Report, particularly taking exception to the Committee's recommendation to reduce the inventor's share of royalty income through licensing.

On March 10, 1984, the Yale Corporation9 "[v]oted, to accept in principle `the Report of the Committee on Cooperative Research, Patent, and Licenses [the Markert Report].'" On March 23, 1984, President Giamatti responded to Dr. Fenn's February 29, 1984 letter in which he had objected to the Markert Report. In his letter, President Giamatti specifically told Dr. Fenn that "[t]he final draft has been approved by the Corporation in principle. The Report was modified in a few places,...

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