26 September 2023AmericasMarisa Woutersen

Yale University settles royalty dispute with US government

Agreement reached over intranasal ketamine royalties and patents | Yale and a professor agree to pay $1.5m to the US government and give up royalty rights.

Yale University and one of its professors have reached a settlement with the US government concerning the sharing of royalties from patents related to the use of intranasal ketamine for the treatment of depression and suicidal ideation.

The dispute centred on whether Yale University and  John Krystal had adequately shared royalties with the  US Department of Veterans Affairs (VA) as required under various agreements and regulations.

The US government alleged that Yale and Krystal had failed to disclose certain patents to the VA and did not share the royalties generated from those patents as required by law.

In February 2003, Yale and the VA entered into a Cooperative Technology Administration Agreement (CTAA), which outlined that they should “promptly” and “in confidence” disclose “joint inventions”.

These joint inventions are defined as “any future invention or discovery, which is or may be patentable…in which at least one employee with compensation from the VA and at least one person who has an appointment with Yale is named as a co-inventor.”

VA regulations ordered that all VA employees, including Krystal, disclose any inventions they made.

Krystal and co-inventors applied for several patents related to intranasal ketamine treatment between March 2006 and February 2023, leading to the issuance of three patents, according to the settlement.

Yale entered into licence agreements with third parties for the commercialisation of the Krystal patents, leading to royalty payments.

The government alleged that Yale and Krystal knowingly avoided their obligations to disclose the patents to the VA and share royalty payments during the "False Claims Act Time-Period" and breached the CTAA during the "Common Law Time-Period."

The settlement agreement

The settlement outlined that Yale and Krystal will pay the US a total of $1,507,744, including $1,347,799.31 in restitution.

Additionally, Krystal will give up any rights to receive royalties from the Krystal patents, and the US will release Yale and Krystal from legal claims connected to certain actions that occurred during specified time periods.

Certain claims, including criminal liability and tax liability, are not released and specifically reserved by the US.

Yale and Krystal agreed not to charge "Unallowable Costs" to any contracts with the US and will identify and repay costs from previously submitted requests for payment.

Finally, all parties consented to the public disclosure of the agreement and related information.

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