Michael Jacobs, Morrison & Foerster leaves court duing first day testimony in the Uber Waymo trial. Photo: Jason Doiy/The Recorder

Morrison & Foerster and Ashby & Geddes have engineered a nifty turnaround for Washington University in St. Louis in a licensing dispute with the University of Wisconsin.

Three years ago a Delaware federal judge had closed the courthouse doors on Washington University, saying it waited too long to demand a greater share of royalties on a pharmaceutical patent developed jointly by researchers at the two schools.

Washington University got that decision reversed by the U.S. Court of Appeals for the Third Circuit last year, and secured a $31 million judgment Monday following a March bench trial. That's about 30 times the 1 percent share of royalties the University of Wisconsin's tech transfer unit, known as WARF, had been sharing on a patent that supports AbbVie Inc.'s kidney treatment Zemplar.

“We are pleased with the court's ruling,” a spokeswoman for the university said in a written statement. “In awarding Washington University over $31 million, the court recognized WARF's failure to properly value the co-owned patent and the contributions of Washington University's researcher, and to share critical information with Washington University.”

U.S. District Judge Joseph Bataillon, who took over the case from now-retired Judge Gregory Sleet earlier this year, issued his opinion under seal because of confidential information in the licensing agreements. Bataillon is a Nebraska judge who has pitched in to help the District of Delaware with its ballooning caseload.

But the outlines of the dispute are clear from the proposed findings of fact and conclusions of law each side submitted in April.

During the 1990s, Washington University professor Eduardo Slatopolsky and University of Wisconsin-Madison professor Hector DeLuca discovered a method of administering a Vitamin D analog called paricalcitol to treat a kidney ailment called renal osteodystrophy, or RO. The two universities entered into a contract under which the Wisconsin Alumni Research Foundation would take the lead in patenting and licensing the technology, while Washington University would receive 33 percent of any resulting revenues.

WARF ultimately licensed the '815 patent and two others to AbbVie predecessor Abbott Laboratories that support its kidney drug Zemplar, and collected $428 million in royalties over 18 years. But it calculated that the '815 patent was worth only 1 percent of the revenue stream, and the two other patents—wholly owned by WARF—were worth 99 percent. After additional calculations, Washington University received just over $1 million.

Wisconsin had argued the 1 percent allocation was justified because it held the patent on the Zemplar compound, and it wasn't clear that the '815 method held much value for Abbott. But in an internal 2008 email, WARF's director of licensing sung the praises of the '815 patent, saying “the reality” is that Abbott marketed the method to a broad range of kidney patients.

Washington University argued that Wisconsin should be equitably estopped from asserting the statute of limitations because of its concealment. “Washington University learned only in discovery that WARF had ignored all relevant valuation evidence when WARF assigned the parties' '815 patent a negligible 0.968% relative value,” the university argued in a filing signed by Ashby & Geddes director John Day.

Washington University's trial team also included Morrison & Foerster partner Michael Jacobs and associates Christopher Robinson and Elizabeth Ann Patterson and Ashby & Geddes director Andrew Mayo.

WARF, which is represented by Finnegan, Henderson, Farabow, Garrett & Dunner and Morris Nichols Arsht & Tunnell, told Bataillon there was no self-dealing. Rather, Washington University was looking back “with 20-20 hindsight at a 20-year-old agreement and now contends, based on unforeseen actions by Abbott, that the original agreement was unfair and WashU is entitled to more money.”