October 1, 2006 (Vol. 26, No. 17)
Implications of Principle of Unjust Enrichment Remain Uncertain
In the late 1970s, John Moore sought treatment for hairy-cell leukemia at UCLA Medical Center. During his treatment, his attending physician, David Golde, M.D., took samples of blood, bone marrow, and other tissue from Moore. Upon Dr. Golde’s recommendation, Moore also underwent a splenectomy and returned to the Medical Center several times over the next few years for ongoing care.
Fast forward to March 1984; at this time a patent was issued, naming as inventors Dr. Golde and a UCLA researcher, Shirley Quan, and claiming a cell line derived from Moore’s tissue and its use. According to the facts stated in the court’s opinion, Dr. Golde and Dr. Quan established the cell line using T-lymphocytes derived from Moore’s spleen tissue.
The patent was assigned to the Regents of the University of California. Dr. Golde and the Regents negotiated agreements for license of the patent rights and commercial exploitation of the cell line. The agreements provided significant remuneration to the Regents, as well as Dr. Golde for these rights.
Moore v. The Regents of the University of California, et. al.
Moore sued Dr. Golde, the Regents, and the licensees on the grounds that they used cells extracted from him to engage in commercially valuable research without his permission. Moore’s complaint alleged, among other things, that Dr. Golde failed to disclose his economic interest in Moore’s tissues before obtaining consent to extract them. Moore asserted that throughout his treatment, Dr. Golde was conducting research on Moore’s cells and planning to benefit financially from the cells, and that such financial benefit was a function of Dr. Golde’s exclusive access to Moore’s cells under the doctor-patient relationship. Moore’s complaint also alleged a cause of action for conversion, a tort for interference with a person’s possessory and ownership interests in personal property.
The Supreme Court of California stated in its decision rendered in 1990 that a “person of adult years and in sound mind has the right, in the exercise of control over his own body, to determine whether or not to submit to lawful medical treatment…to be effective, [the patient’s consent] must be an informed consent.”
The court went on to state that as part of such informed consent, a physician has a fiduciary duty to disclose the physician’s personal interest in research and economic matters that are unrelated to the patient’s treatment and that may affect the physician’s medical judgment regarding such treatment. The court found that Dr. Golde had a research interest in Moore’s cells at the time he sought Moore’s consent to the splenectomy and a financial interest in the post-operative takings of Moore’s bodily substances, based on the filing of the patent application, and had breached his duty to disclose these interests to Moore.
The court, however, declined to extend the conversion tort to cover cells extracted from a patient pursuant to a medical procedure. The court stated that to establish conversion, one must show actual interference with his ownership or rights of possession and that Moore did not have any ownership interest in his cells following their removal. Accordingly, Moore could have no ownership interest in the cell line based on his cells, including patent rights.
Greenberg et al. v. Miami Children’s Hospital Research Institute et al.
In 2003, a Florida District Court revisited the issues raised in the Moore case in Greenberg et al. v. Miami Children’s Hospital Research Institute et al. In this case, a group of individuals and nonprofit institutions involved in research on Canavan disease (Greenberg group) entered into a collaboration with Reuben Matalon, M.D., and the Miami Children’s Hospital Research Institute (MCH) to identify the gene responsible for Canavan disease.
The individual members of the Greenberg group, who were parents of children afflicted with Canavan disease, collected blood and tissue samples from Canavan families and supplied these to Dr. Matalon. The group also created a database containing clinical and medical information about the families and shared the information with Dr. Matalon.
Using the samples and information provided by the Greenberg group, Dr. Matalon and his research team successfully isolated the gene responsible for Canavan disease. Dr. Matalon filed a patent application claiming the genetic sequence for the Canavan gene, which subsequently issued as a patent and was assigned to MCH. MCH thereafter instituted a program of restrictive licensing of the patent.
The Greenberg group, which had expected that the benefits of Dr. Matalon’s research would remain in the public domain to promote prevention and treatment of Canavan disease, filed suit against Dr. Matalon and MCH alleging, among other things, lack of informed consent and conversion.
The Greenberg group, relying on the Moore case, alleged that Dr. Matalon and MCH had breached the duty of informed consent when they failed to inform the Greenberg group that they intended to file a patent application and to profit from the research based on the biological samples and medical information provided by the Canavan families.
The Florida court, noting that the Moore case concerned a physician-patient relationship, whereas in this case Dr. Matalon performed only medical research and did not treat any of the Canavan patients, found no breach of the duty of informed consent.
The Greenberg group also asserted a claim for conversion on the basis that they had a property interest in the tissue and genetic information provided to Dr. Matalon. As the California court did in the Moore case, the Florida court declined to recognize a property interest in body tissues or genetic material provided for research.
However, a significant difference between the Moore and Greenberg cases was the finding by the Florida court that the Greenberg group had successfully established a claim against Dr. Matalon and MCH for unjust enrichment based on the license fees that they received under the patent.
Unjust enrichment occurs when the plaintiff confers a benefit on the defendant, which the defendant voluntarily accepts and retains, and then realizes gains from the benefit that renders it inequitable for the defendant to retain the benefit without paying for it. In Greenberg, the court found sufficient evidence to support a claim that Dr. Matalon and MCH were unjustly enriched by the economic benefits conferred by the patent rights, which were based on the biological samples and medical information provided by the Greenberg group.
The courts in the Moore and Greenberg cases agreed that donors of biological materials do not have ownership rights in their biological materials and that researchers who obtain patents on inventions derived from the biological materials (and reap economic benefits from the patents) are not liable for conversion.
However, the Greenberg case provides a legal basis on which donors could allege that researchers are unjustly enriched by licensee fees or other payments for patents based on inventions derived from their biological materials.
The Greenberg case was ultimately settled between the parties. Thus, it remains to be seen how the principle of unjust enrichment will be applied in the future by courts to claims by donors of biological materials that they should share in the benefits arising from the patenting and commercialization of their materials.
Paula C. Evans is a partner at Sonnenschein Nath and Rosenthal. Web: www.sonnenschein.com. Phone: (617) 235-6801. E-mail: firstname.lastname@example.org.