Case of the Day: Warren v. Children’s Hospital Corp.

Today’s case of the day, Warren v. Children’s Hospital Corp. (D. Mass. 2023), is off the beaten path for Letters Blogatory, but I think it will be of interest to readers who deal with patent law or with technology transfer offices. I was counsel to the defendant, The Children’s Hospital Corporation, which operates Boston Children’s Hospital. Because the case is still in litigation (an appeal to the First Circuit is pending), I am not going to discuss the case in detail.

The case was brought by Luigi Warren, a former employee of the Immune Disease Institute, which later affiliated and then merged with the Hospital. Dr. Warren, with another scientist, invented a new technique for inducing cells to become pluripotent stem cells. The technique made use of mRNA to cause the cells to express the necessary proteins, rather than modifying the genome of the cells directly. This innovation eliminated the risk of oncogenesis, that is, cancer. The Hospital later licensed the patent to Moderna, which then was a promising start-up company. Hospitals and universities that do basic research aren’t in a position to commercialize their inventions, and so they generally license their patents to companies that are, or that hope to be, able to bring new drugs or therapies to market.

In order to retain talented scientists, hospitals and universities have policies under which they share some of the revenue these licenses generate with the inventors. (The Bayh-Dole Act, a 1980 law that applies to federally-funded research, requires sharing the licensing revenue with the inventors, when it applies). In today’s case, the court granted the Hospital’s motion for summary judgment on the former employee’s claim that he was entitled to the share of the proceeds that he would have received under the Immune Disease Institute policy that applied before the affiliation and merger with the hospital, rather than the Hospital’s policy that applied thereafter. It addresses questions about the nature of the policies that were at issue: are they contracts? If they are, can the institutions modify them unilaterally? And they address an interesting question about estoppel: If an employee has a legal obligation to assign his rights in a patent application to his employer, can he claim that he did so in reliance on a promise or a representation that the former policy, rather than the current policy, applied? I think it will make interesting reading, especially for those in tech transfer.

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