Or at least that's what court documents filed in the New York Supreme Court in Queens on November 18 seem to allege.
When reached last week by telephone at his New Jersey number, the professor - Sanford Bolton - had yet to be served with the suit. "I absolutely feel I have done nothing wrong," Bolton told The Scientist. "I was a professor there. I published many papers. I was chairman of the department. I was well-respected."
Bolton, who is 79, retired from College of Pharmacy at St. John's University in 1994 and maintains his primary residence in a housing development in Tucson, where he serves as a visiting professor at the University of Arizona. He is the author of Pharmaceutical Statistics: Practical and Clinical Applications, soon to be in its fifth edition, and has written at least one article on statistical methods for assessing the bioequivalence of generic drugs.
This recent action is just the latest in a series of lawsuits mounted against a company Bolton co-founded, a flurry of courtroom activity that highlights the perils of technology transfer when scientific expertise is, perhaps, unmatched with business savvy. Then again, if the plaintiffs in these cases are to be believed, the players may have been too savvy for their own good.
The courtroom battles hinge on the development of so-called liquisolid technologies for difficult-to-copy water-insoluble drugs. In solid form, water-insoluble drugs dissolve poorly and erratically, and, consequently, generic manufacturers have struggled to meet the standards of therapeutic equivalence with these medications. By using liquisolid capsules, which contain liquid medications that have been absorbed by a powder and enveloped in coating particles, manufacturers can improve their dissolution profiles.
But there have been practical hang-ups to commercializing the method since early tests in the 1980s. Around 1986, Spiro Spireas, then in his early 30s, began working on liquisolid technologies during his graduate research at St John's, receiving his doctorate in 1993. In 1996, he and Bolton first filed a patent titled "Liquisolid systems and methods of preparing same," referring to both his thesis and dissertation along with his 1992 paper in Pharmaceutical Research (9: 1351-1358).
Their chief innovation seems to be developing mathematical models for formulating liquisolid compacts from solid drugs with just the right amount of absorbing powder and coating particles to maximize their ability to properly flow in an industrial setting. With the help of Robert Abrahams, a Ph.D. chemist and expert in antimicrobials who runs a Connecticut marketing consulting firm called Technology Management Network, Bolton apparently began shopping the technology around to major pharmaceutical firms.
In 1997, Bolton and Spireas incorporated Hygrosol in Delaware as president and vice president, respectively. By 1998, they had transferred their patents to the company and licensed out their technology to Philadelphia-based generic drug behemoth Mutual Pharmaceutical Company, now part of URL Pharma. In 1999, Spireas resigned from his professorship at Long Island University to become Mutual's Vice President for Research and Development, and has since filed additional patents on liquisolids.
Then, the legal challenges started stacking up. First, drugmaker AstraZeneca sued Mutual in 2000 for patent infringement when Mutual was seeking FDA approval for a knock-off of AZ's hypertension drug Plendil (Felodipine). Mutual prevailed in 2004, and sales reportedly shot up by 35% that year, from $385 million to $530 million.
In 2006, Abrahams decided he wasn't getting his fair share. He filed a lawsuit in a New Jersey federal court alleging that Hygrosol and Bolton had failed to pay him the 5% revenue he was due under a Finder's Agreement. Bolton and Spireas - along with their expert witness, Thomas Needham of the University of Rhode Island - counter that Abrahams is only due a percentage of revenue from liquisolid applications that increase bioavailability -- not those used to match generic products.
Stretching out over two years, that case is still pending settlement in the spring, and Abrahams and Needham declined to comment. Spireas, who is now C.E.O. of SigmaPharm Laboratories in Bensalem, Pennsylvania, would only say that he believed that the lawsuits were "bogus."
Last November, businessman George Kontonotas, president of New-York-based Genotec Nutritionals, filed suit against Hygrosol and Spireas in a Pennsylvania federal court, alleging that he deserved a portion of Hygrosol's profits for setting up the auspicious meeting with URL Pharma. That suit is set for a jury trial in Philadelphia in July 2009.
Now, the most recent twist: Last month, St. John's University filed their notice of complaint against Bolton, Spireas, and Hygrosol, claiming that Bolton was "contractually obligated to pay the University thirty percent of all revenues derived from certain inventions and/or intellectual property." The notice, obtained via the Courthouse News Service, puts damages at no less than $30 million dollars. It does not specify the patents at issue.
"I can tell you that there are two sides to this story," Bolton said over the phone, but he refused to elaborate beyond saying that he considered the lawsuits frivolous. "I've been advised to just hold off," he said.
It seems likely that the University's potential payout will hinge, to some degree, on the outcome of the Abrahams case. St. John's University declined to comment on the case, and Michael Keane, its lawyer at Garfunkel, Wild & Travis, did not respond to telephone messages for comment.
When informed of the lawsuits, Charles Bon, a statistician at Biostudy Solutions in Wilmington, North Carolina who has known and admired Bolton for more than 20 years said, "If you're getting sued in the pharmaceutical industry, you must be doing something right."
Brendan Borrell
mail@the-scientist.com
Related stories:
- The trouble with tech transfer [January 2007]
- The art of the tech transfer deal [July 2006]
- I'll see you in court [20th June 2005]
[Comment posted 2009-08-18 19:42:59]
From their point of view, they provided a suitable laboratory and office space for the professor (Bolton) and the graduate student (Spireas). The also provided the optimal environment for the development of this invention. As any professor will note, the Universities claim a significant 30 to 50% portion of any grant obtained by the staff, claiming that provide labs, HVAC, computers, equipment etc. for their staff and students. Bolton might have signed a contract stating what the University could claim from his inventions.
Why were they late in filing their claim? It could be that they were unaware of the success of Bolton and Spireas, and decided only after they became aware of the income generated as a result of the work performed in their facility, by their employee and tneir student.
If this were industry, the pair would have sold any and all of their patents for $1 to their employers, and obtained only praise, bonuses, promotions and salary increases.
[Comment posted 2008-12-02 13:20:07]
Second, from having dealt with marketing reps for such things, I tend to think that he is due only what he was given. I have more sympathy with the marketer though, because without him, nothing would have happened in the first place. But I would tend to think that at best the agreement has gray areas that need resolution.
However, the most important thing to understand is that if this company is a corporation with shareholders other than the original principals, then the law says that the officers of that corporation are required to protect the shareholder's interests unless that conflicts with public good. (For instance, a corporation cannot protect shareholder interests by deliberately doing things that kill or maim members of the public.) So, while they can bend a bit, if they lean too far the officers become liable to their shareholders for breach of fiduciary duty. Worth reading basic fiduciary duty law of partnerships and corporations. The officers need to screw up pretty badly though, so there is leeway.
At this point, the principals may be caught in a trap. They may not be able to give in to demands that are not clearly defined in favor of the petitioner(s) without throwing themselves open to lawsuits from shareholders. (Although they could enter into discussions with their shareholders to get approval if they are concerned.) They might be stuck with being required to be in a position where a settlement can be shown to be the lesser damage to shareholder interests.
The principals need to maintain their positions in public because any failure to do so works against them. They can talk frankly and negotiate through their attorneys. Or, they can sit down together for confidential settlement talks or mediation without their attorneys present. The best corporate officers do this sort of thing very well, and avoid legal problems. But the less skilled typically are a less versed in how to walk through the minefield, unsure of themselves, and take the most cautious road.
Last point is that the less skilled corporate officers are often victimized by attorneys whose sole motivation is to accrue legal fees. (This is one reason to get your own good in house counsel, although in-house counsels have been known to get kickbacks from representing firms.) Because of this, corporate officers may wind up in court on things that could have been avoided.