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Source: The New York Herald Tribune: December 30, 1950
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Their Dispute Over Discovery of Streptomycin Is Settled

Dr. Schatz Wins Royalty Share As Streptomycin Co-Discoverer

Dr. Waksrnan Settles Suit, Will Give 25 Other Assistants Royalty Shares or Cash Bonuses


Special to the Herald Tribune

NEWARK, N. J., Dec. 29.-Dr. Selman A. Waksman, Rutgers University microbiologist, agreed today in Superior Court to share royalties with a former student whom he officially recognized as a co-discoverer of the antibiotic drug, streptomycin.

As part of the settlement of a suit brought against Dr. Waksman by his former student, Dr. Albert Schatz, of 210 Riverdale Avenue, Brooklyn, Dr. Schatz will receive 3 per cent of royalties subsequent to Oct. 1, 1950, and $150,000 for relinquishing foreign rights to the drug.

He agreed to retract charges made March 10 in his original complaint that Dr. Waksman had used "fraud and duress" to induce Dr. Schatz to assign his patent rights to the Rutgers Research and Endowment Foundation. Dr. Schatz's name appeared on the original patent application in 1945.

Dr. Waksman and the foundation, an incorporated organization not directly connected with Rutgers University, agreed to pay thirteen other graduate students a total of I per cent of net royalties, and cash bonuses to twelve assistants. Judge C. Thomas Schettino dismissed the suit following agreement on the settlement.

Dr. Schatz, thirty, who was a student at Rutgers working with Dr. Waksman from June to October in 1943, first sought 50 per cent of all royalties for his part in the discovery. The net royalties to Sept. 30, 1950, were estimated at $2,360,000. In a pre-trial examination Dr. Waksman said he had received about $350,000 in royalties, with the remainder going to the foundation.

Streptomycin, a drug obtained from a mold, has been found useful in the treatment of such diseases as tuberculosis, pneumonia, dysentery, whooping cough and syphilis, in certain forms.

Dr. Robert C. Clothier, president of Rutgers University and the foundation, said that, as heretofore, 80 per cent of the royalties will remain in the foundation for further scientific research including the work of the university's Institute of Microbiology. He explained that of the 20 per cent remaining, 10 per cent will continue to be paid to Dr. Waksman.

"The other 10 per cent," he said, "will be distributed in two ways: fourteen of those most closely concerned with the work in streptomycin will share in the royalties accruing subsequent to Oct. 1, 1950; twelve others, less directly associated with the work will receive cash bonuses."

The amount of the bonuses was not disclosed. Dr. Clothier said that Dr. Schatz will receive the-largest share of those participating in the royalty arrangement after Dr. Waxsman-.3 per cent as the payments will be figured on royalties subsequent to Oct. 1, 1950. Dr. Schatz and the others will not share in the $2,360,000 royalties accumulated up to Sept. 30, 1950.

Assigned Patents

In his statement Dr. Clothier said that Dr. Waksman and Dr. Schatz in 1946 voluntarily assigned the streptomycin patent to the foundation with a number of other patents. In his suit, Dr. Schatz had charged that he executed the assignment because of his fear that Dr. Waksman "by virtue of his power, position and influence had the means" to prevent his former student from finding work in the field in which he was trained.

Dr. Clothier said Dr. Waksman and the foundation had never disputed Dr. Schatz's claim to be a co-discoverer of the drug, but the settlement today officially recognized that claim.

The foundation said today that although Dr. Waksman announced that he was assigning the streptomycin patent to the foundation, the foundation "felt that should any financial returns result, some monetary recognition should go to Dr. Waksinan, not for any specific discovery, but for his more than thirty years of faithful service to Rutgers University which resulted in his becoming an international leader in the field of microbiology.

'It was Dr. Waksman's hope in 1946 that should any of his discoveries prove of real medical value, ownership of the patent by the Rutgers Foundation would prevent monopoly of manufacturing and thereby reduce the price to the consumer. In this respect his hopes have been fully realized. In 1946 streptomycin cost more than $25 a gram: today a gram wholesales for less than 35 cents."

Dr. Waksman Cut Share

It was pointed out that originally Dr. Waksman had been granted 20 per cent of the net royalties, but when they began to accumulate in unanticipated volume, Dr. Waksman voluntarily retested the foundation to cut his participation in half.

Dr. Schatz, a native of Norwich, Ct., is an assistant professor of biology at Brooklyn College. In 1945, he took his Doctor's Degree in microbiology at Rutgers.

Those, in addition to Dr. Waksman and Dr. Schatz, who will share in the royalties are: Dr. H. Boyd Woodruff, Westfield, N. J.; Dr. H. Christine Reilly, New York; Dr. Robert L. Starkey, New Brunswick, N. J.; Mrs. Elizabeth Bugie Gregory, Rahway, N. J.; Dr. Donald B. Johnstone, Burlington, Vt.; Dr. Donald M. Reynolds, Davis, Calif.; Dr. Dale A. Harris, Metuchen, N. J.; Dr. Harry J. Robinson, Rahway, N. J.; Dr. Otto E. Graessle, Rahway, N. J.; Dr. Frederick H. Beaudette, New Brunswick; Dr. Herbert J. Metzger, New Brunswick; Dr. H. Corwin Hinshaw, San Francisco, and Dr. William H. Feldman, Rochester, Minn.

Those who will receive bonuses are: Dr. Walton B. Geiger New Brunswick; Dr. Elizabeth S. Horning, Wilmington, Del.; Dr. Samuel R. Green, New York; Dr. Warrenn P. Iverson, Detroit; Dr. Dorothy G. Smith, Frederick, Md.; Miss Doris I. Jones, Berkeley, Calif; Miss Clara H. Wark, New Brunswick; Aldrage B. Cooper, New Brunswick; Miss Dorothy J. Randolph, Highland Park, N. J.; Mrs. Viola A. Christopher, New Brunswick! Mrs. Dorothy Parolise, New Brunswick, and Mrs. Edith Adams, Milltown, N. J.