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Yale University and one of its professors, John Krystal, will pay $1,507,743.67 as part of a settlement with the Department of Veterans Affairs after failing to let the institution know about certain patents and not sharing royalties earned on them, the US Attorney's Office for the District of Connecticut announced on Thursday, Sept. 21.
According to federal officials, in March 2006, Krystal and four co-inventors applied for numerous patents related to the use of intranasal ketamine for the treatment of depression and suicidal ideation.
At this time, Krystal had been employed part-time at Yale as a Professor of Psychiatry, Neuroscience and Psychology, and Chair of the Department of Psychiatry in the Yale School of Medicine. He had also been working with the VA as a salaried clinical psychiatrist with research responsibilities at the VA Medical Center in West Haven.
Both of Krystal's employers, Yale and the VA, had already been parties to an agreement requiring the two institutions to disclose to each other any patentable invention or discovery with co-inventors who worked or had appointments with Yale or the VA. Additionally, the VA had required all employees to disclose their inventions so the institution could see if it was entitled to ownership.
Krystal was eventually issued three patents by the US Patent and Trademark Office for his intranasal ketamine treatment discovery and began receiving royalties for these patents along with Yale in February 2015. However, federal officials alleged that these royalty payments, which totaled over $3 million, were never shared with the VA, and that Krystal did not disclose these patents to them until 2017.
When a VA employee eventually reminded Krystal of his obligation to disclose inventions to the institution, he finally submitted the required disclosure, federal officials said.
The VA then proceeded to issue a determination that it was entitled to an ownership interest in the patents, which was eventually confirmed by the National Institute of Standards and Technology despite an appeal from Krystal.
The settlement between Yale, Krystal, and the VA resolves allegations that between March 2006, when Krystal and the other co-inventors filed the first patent application, and December 2017, when Krystal disclosed the patents to the VA, Krystal knowingly avoided paying the VA its share of royalty payments, according to federal officials.
Under the terms of the settlement, Krystal agreed to forego any entitlement to his share in the amount paid to the VA, and also share future royalties from the patents with the VA.
Principal Deputy Assistant Attorney General Brian M. Boynton explained the settlement, saying, "Universities and their professors must properly disclose and share royalties on inventions they discover while working for the government."
"The department will ensure that those who benefit from government funding and resources properly compensate the taxpayers," Boynton added.
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