BYU v. Pfizer: BYU professor stakes a claim against a drug giant.

• Author: Stewart, Heather
• Position: CASE PROFILES

In 2006, Brigham Young University and Professor Daniel Simmons filed suit against the drug giant Pfizer. 'The legal dispute was big in the sense that it potentially involved billions of dollars--and it also had ramifications for how companies deal with electronic document retention and discovery.

The lawsuit stemmed from the early '90s, when Simmons discovered the gene and enzyme Cox 2. BYU and Simmons entered into a contractual partnership with Monsanto to develop an anti-inflammatory drug that would inhibit the Cox 2 enzyme, providing longterm relief from the pain and inflammation associated with arthritis and other chronic conditions, without the gastrointestinal side effects of traditional pain relievers.

According to attorney Mark Bettilyon of Ray Quinney & Nebeker, who represented BYU and Simmons, Monsanto agreed to protect the intellectual property and include Simmons on any patents. Under the agreement, BYU was to receive royalties from drug sales. Monsanto was eventually absorbed into Pfizer, which took over the contract. "Years later, Dr. Simmons realized he had been misled by Pfizer," says Bettilyon.

Pfizer disagreed that there had been any breach of contract and claimed Simmons' contributions were not important--that it was its own independent discoveries that ultimately led to the development of the drug, explains Bettilyon.

The drug, Celebrex, has become hugely profitable for Pfizer--the plaintiffs requested 15 percent of Pfizer's revenue from the drug, or $9.7 billion. Additionally, the court could have awarded billions more in punitive damages. The parties settled a few weeks before the case was scheduled to go to trial in 2012. Although neither party disclosed the terms of the settlement, in regulatory filings Pfizer reported a $450 million charge against earnings to settle the dispute.

"BYU is very happy with the settlement," says Bettilyon, who cannot discuss the specific details of the settlement. "It will have a very positive impact on the university." He notes the university...