Settlement in Alleged Patent Disclosure Failures
Yale University and Dr. John Krystal have entered into a settlement agreement to pay $1,507,743.67, resolving allegations of violating the False Claims Act and common law.
These allegations primarily relate to the failure to disclose certain patents and the failure to share patent royalties with the Department of Veteran Affairs (VA) for inventions made by Dr. Krystal during his employment at both institutions. The period covered by this settlement spans from March 2006 to February 2023.
Government’s Commitment to Proper Disclosure and Compensation
Principal Deputy Assistant Attorney General Brian M. Boynton, who leads the Justice Department’s Civil Division, emphasized the importance of universities and professors properly disclosing inventions and compensating taxpayers when government resources are involved.
He highlighted the department’s commitment to ensuring fair compensation for taxpayers.
Ensuring Full Disclosure of Taxpayer-Funded Inventions
U.S. Attorney Vanessa Roberts Avery for the District of Connecticut stressed the critical need for inventions funded by taxpayer money to be promptly and fully disclosed to the government.
This settlement demonstrates the commitment to ensuring that the government is justly compensated for inventions funded by taxpayers.
VA’s Vigilance in Protecting Intellectual Property
Special Agent in Charge Christopher Algieri of the Department of Veterans Affairs Office of Inspector General’s (VA OIG) Northeast Field Office reaffirmed the VA’s commitment to ensuring that the VA is appropriately and fairly compensated for all intellectual property arising from VA-funded research projects.
He expressed gratitude to the Department of Justice for its efforts in reaching this settlement.
Dr. Krystal’s Employment and Responsibilities
At the time of the inventions in question, Dr. John Krystal held part-time positions at Yale in various capacities, including as a Professor of Psychiatry, Neuroscience, and Psychology, as well as Chair of the Department of Psychiatry in the Yale School of Medicine.
He also worked part-time as a clinical psychiatrist with research responsibilities at the VA Medical Center in West Haven, Connecticut.
Agreement Between Yale and VA on Joint Inventions
Yale and the VA had an agreement in place where they agreed to promptly and confidentially disclose “Joint Inventions” to each other.
These inventions included any future patentable discoveries involving at least one VA-compensated employee and one individual appointed at Yale.
Patent Applications and Alleged Failures
Beginning in March 2006, Dr. Krystal and co-inventors applied for patents related to intranasal ketamine for treating depression and suicidal ideation.
These patent applications allegedly acknowledged VA funding support. Three patents were issued, and Dr. Krystal assigned his interests in these patents to Yale.
Alleged Failure to Share Royalty Payments and Late Disclosure
Yale and Dr. Krystal began receiving royalty payments in February 2015 stemming from the ketamine patents.
The United States alleged that they never shared these royalties, which now exceed $3 million, with the VA. Furthermore, they did not disclose the patents to the VA until 2017.
In 2017 and subsequent years, documents were submitted to the U.S. Patent and Trademark Office, allegedly removing the acknowledgment of VA support from the patents.
Disclosure After VA Reminder and Ownership Determination
After a VA employee reminded Dr. Krystal of the obligation to disclose inventions to the VA in December 2017, he submitted the required disclosure to the VA regarding the ketamine patents.
The VA determined that it was entitled to an ownership interest in the patents, and this determination was upheld on appeal.
Settlement Terms and Resolution
The settlement announced in this case resolves allegations that from March 2006 to December 8, 2017, Yale and Dr. Krystal knowingly and improperly avoided their obligations to disclose the ketamine patents to the VA and to share royalty payments.
The settlement also addresses allegations that from December 8, 2017, to February 3, 2023, Yale and Dr. Krystal were in breach of contract and unjustly enriched by failing to share royalty payments.
Dr. Krystal’s Waiver of Rights and Future Royalty Sharing Agreement
As part of this settlement, Dr. Krystal has agreed to forego any entitlement to share in the settlement paid to the VA, as he would otherwise have as a VA employee inventor.
Simultaneously, Yale, Dr. Krystal, and the VA entered into a separate agreement to share future royalties associated with the ketamine patents and assign these patents to the VA.
Coordination and Resolution Efforts
The resolution of this matter was achieved through coordinated efforts involving the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, the U.S. Attorney’s Office for the District of Connecticut, and the VA’s Office of General Counsel.
Fraud Section Attorney Jonathan T. Thrope and Assistant U.S. Attorney Richard M. Molot for the District of Connecticut handled the case.