Jones foundation countersues EVMS
Published: February 8, 2005
Section: Local, page B5
Source: KATRICE HARDY
© 2005- Landmark Communications Inc.
NORFOLK - BY KATRICE HARDY THE VIRGINIAN-PILOT


NORFOLK - The bickering between Eastern Virginia Medical School and the foundation that raises money for the Jones Institute for Reproductive Medicine, t he division that birthed the nation's first "test-tube" baby, grew harsher Monday when the foundation counter sued the school.

The legal maneuver is the latest in a brawl that began a month ago when the school filed a lawsuit against the foundation over what could be as much as $20 million from patents on products developed at the Jones Institute.

The foundation believes it is owed as much as $3 million already, from a payout last September that the school received for the patent rights to Seasonale.

Seasonale is a birth-control product developed at the Jones Institute, which is a part of the school's department of obstetrics and gynecology. It was the first commercially successful invention created by EVMS in its 31-year history. Seasonale cuts women's menstrual cycles to four from 13 a year.

In September, Barr Pharmaceuticals Inc. paid EVMS $19 million for rights to Seasonale. School officials were thrilled with the payout. For years the school has struggled financially, and Seasonale was publicly touted by officials as the start of what could be a lucrative trend toward money-making products from research.

But behind the scenes, a dispute was developing.

According to a policy that the EVMS board approved in April 2000, any patent payouts from inventions like Seasonale would first be used to cover expenses incurred to commercialize the technology. Then, the money would be split between the inventor, the inventor's academic department and the school.

Under this policy, none of the money would go directly to the Jones foundation, a private group that is independent of EVMS.

But two months after the EVMS board adopted the patent policy in 2000, Edward E. Brickell, then EVMS president, agreed to a change.

A document signed by Brickell states that the foundation would be entitled to one-third of proceeds from Jones Institute inventions, up to $20 million.

After expenses, the inventor would receive one-third of the profits; the remaining two-thirds would be divided among EVMS, the school's obstetrics and gynecology department and the Jones foundation.

The Brickell policy set off a series of letters late last year between Harry T. Lester, recto r of the EVMS board, and members of the Jones foundation.

In correspondence, Lester agreed that the school would give the foundation $1.9 millio n from the Seasonale payout if it would agree to forgo future payments.

When the foundation rejected Lester's offer, EVMS sued.

Lester refused Monday to comment on the countersuit.

In previous interviews, Lester said that the school does not have the authority to give external agencies money. He said the Brickell policy was not approved by the EVMS board at the time, is not legally binding and violates the school's patent policy.

Gregory N. Stillman, t he Norfolk attorney representing the foundation, said Monday that Lester's claims are invalid.

The school has the authority to give the foundation money, as spelled out in its original charter , Stillman said. And school officials clearly believe they have the authority since they initially agreed to give the foundation money if it would forgo future payments, he said.

Stillman also said that the terms of the Brickell agreement had been followed for years as an understanding before they were put into writing.

The suit, filed in Norfolk Circuit Court, also states that the foundation is likely entitled to $3 mi llion instead of $1.9 million from Seasonale unless accounting proves that the school's expenses for the product are as high as administrators claim.

Even before the legal battle ensued, the school and foundation had been feuding for more than three years. After Dr. J. Sumner Bell succeeded Brickell as EVMS president, he unsuccessfully tried to merge the Jones foundation with the school's fund-raising arm.

Bell could not be reached by phone Monday. But in an e-mail, he wrote that "the foundation's response to our declaratory judgement action affirms our position that EVMS and the foundation have significant differences of opinion that could not be resolved through continuing dialogue."

Dr. Howard W. Jones Jr., a creator of the Jones Institute and researcher who helped conduct the nation's first in-vitro fertilization procedure, said the foundation's relationship with the school has made it difficult to raise money and keep researchers. The institute once had 20 scientists and tech nicians. Today it has four, he said.

Brickell said in an interview and through e-mails in recent weeks that the EVMS lawsuit attacks his professional competence and reputation in suggesting that he did not have the authority to enter into the agreement pledging up to $20 million to the foundation.

The policy adopted by the board spelled out that the president or board had the right to make amendments, Brickell said.

Brickell also noted that the agreement was signed by several others.


* Reach Katrice Hardy at 222-5857 or at katrice.franklin@pilotonline.com.