In a legal dispute that has gone on for ten years, The Court of Appeals for the Federal Circuit recently affirmed a judgement of US $54.1 million, plus post-judgement interest, for the University of Colorado and others against American Cyanamid Corp., a subsidiary of Wyeth. The judgement resulted from American Cyanamid's misappropriation of an idea developed by University of Colorado researchers Drs Robert Allen and Paul Seligman, who developed a formula for a prenatal vitamin called Materna that would permit increased iron absorption compared with vitamins available on the market. Allen and Seligman provided a confidential paper to American Cyanamid describing the improvement. Without informing the researchers, American Cyanamid applied for a patent that covered +the improved vitamin and copied sections of the confidential paper into their application. After obtaining the patent, the corporation successfully enforced it against generic manufacturers. The University of Colorado, including Allan and Seligman, filed a claim for unjust enrichment against American Cyanamid. The Federal Circuit reasoned that the researchers did not seek 'patent-like protection' for their idea with their unjust enrichment claim.

Instead, it was really a claim for breach of an implied-in-law contract between the researchers and American Cyanamid relating to the confidentiality of the paper. The court also found that the researchers' claim did not conflict with the purposes of the patent system as explained in a prior Supreme Court decision (Aronson versus Quick Point Pencil, 1979), in which the court held that there is a strong federal policy favouring the full and free use of ideas in the public domain. In this case, the Federal Circuit held that a state law claim for unjust enrichment was not pre-empted by federal patent law. Recovery on the claim would allow the University of Colorado to benefit from the fruits of their invention, which ultimately fostered innovation, but would not withdraw ideas from the public domain.

After deductions for contractual/licensing commitments and attorney fees, the University of Colorado stands to receive 47.5% of the judgement, after legal costs, which will be distributed in accordance with the university policy on discovery and patents. Inventors Allen and Seligman, their research laboratories, their department and the university will each receive 25% of the proceeds distributed to the university.