Last November, Datasci LLC and
eTrials Worldwide settled their long-running patent dispute concerning the electronic data capture (EDC) methodology employed by most of the major EDC suppliers. Datasci had previously settled patent infringement actions with Phase Forward, DataLabs (since acquired by ClinPhone), DSG, and DataTrak.
eTrials entered into a non-exclusive licensing arrangement with Datasci on a “going-forward basis,” says gastroenterologist Marc Kozam, co-inventor of the data collection and validation methodology covered by U.S. Patent Number 6,496,827 as of 2002. Media reports to the contrary, the deal stipulates both “upfront and ongoing royalty” payments, says Kozam. Precise terms were not disclosed.
James Clark, chief financial officer for eTrials, says his company paid a “one time, upfront fee” of $1.75 million related to licensing of its legacy EDC products, which covers both past and future revenues. “eTrials’ current product, EDC 2.0, is not subject to any royalty obligations.” He adds that eTrials never conceded that it infringed on Datasci’s patent, but that the settlement has brought the company “patent peace” and freedom from ongoing litigation costs.
Kozam founded Olney, MD-based Datasci with fellow gastroenterologist Louis Korman, in 2004, following an $8.5 million payout by Phase Forward.
Datasci has actually been around since the early 1990s, formerly doing business as MLK Software Services. The company has no website and no immediate plans to build one. It also has no dedicated employees, although “quite a number” work for Kozam and Korman in undisclosed ways. The co-founders are both engaged in clinical practice and “continue to invest in Datasci and develop new technology using funding from licensees.”
eTrials is Datasci’s sixth licensee. The others are Phase Forward, DataLabs, Clinical Ink, DataTrak, and Medidata. Clinical Ink, Kozam notes, approached Datasci prior to incorporating the patented methodology into its data-collection product last year.
Both DataTrak and DSG were founded before Datasci’s original 1996 patent filing. Last April, DataTrak President and CEO Jeffrey A. Green, told eCliniqua the patent infringement case has no merit. “Companies want to license our technology for a variety of reasons,” says Kozam. “The technology itself is valuable to them. One of our licensees [Phase Forward] saw its stock value triple after receiving our license.”
EDC vendors are responding to the actual -- or feared – legal pressure being exerted by Datasci, a strategy the company gives no hint of abandoning. Several new patent infringement lawsuits are “on the horizon,” says Kozam. He adds that Datasci is looking for companies who “want” to license its technology but will use legal channels if necessary.
In some cases, identifying companies violating Datasci’s patent has been a matter of “drawing inferences and contacting companies to discuss their [data collection] methods,” says Kozam. There “may be several” EDC companies that don’t infringe on the patent. “But, if so, their ways are not the best way to conduct clinical trials.”
Kozam asserts that violations have occurred knowingly. “I don’t think there is any confusion about who owns the patent. It’s a matter of public record.” The patented EDC methodology was “adopted by quite a few companies in the industry, for whatever reason, after we…filed for the patent.”