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Source: Rutgers Alumni Voice: Jan. 1951
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Research Workers To Share Royalties From Streptomycin


Twenty-five research assistants, graduate students, collaborators, laboratory and office workers, and the widow of a laboratory technician were designated to share in the royalties or receive bonuses from the sale of streptomycin, lifesaving drug discovered at Rutgers in 1943 as a result of research instituted and directed by Dr. Selman A. Waksman R'lS.

The assignment of 10 per cent of the royalties to the workers who assisted in the experiments with streptomycin was stipulated December 29 in the settlement of a suit brought last March against the Rutgers Research and Endowment Foundation and Dr. Waksman by Dr. Albert Schatz R'42, one of the research assistants and co-patentee. Dr. Schatz, who received his Ph.D. from Rutgers in 1945 and is now an assistant professor of biology at Brooklyn College, asked an accounting of the royalties and recognition as codiscoverer of streptomycin.

Agreement Reached

Agreement was reached between Drs. Waksman, Schatz, and counsel that Dr. Schatz "is entitled to credit legally and scientifically as co-discoverer of streptomycin" that he would receive three per cent of the royalties from the sale of the drug from October 1, 1950, for the duration of the patent, and that a lump sum of $125,000 would be paid him for his interest in foreign patent applications on streptomycin. The terms of the settlement were approved by Judge C. Thomas Schettino R'30 of Superior Court, who then dismissed the suit.

Other researchers named to share in the royalties were H. Boyd Woodruff R'39, Ph.D. '42, H. Christine Reilly NJC'41, Ph.D. '46, Harry J. Robinson Ph.D. '43, Donald B. Johnstone M.Sc. '43, Ph.D. '48, Elizabeth Bugie Gregory NJC '42, M.Sc. '44, Donald M. Reynolds Ph. D. '48, Otto E. Graessle Ph.D. '49, Dale A. Harris Ph.D. '49, and Robert L. Starkey M.Sc. '23, Ph.D.. '24, professor and research specialist in microbiology; Doctors Fred R. Beaudette, professor and research specialist in poultry pathology, Herbert J. Metzger, associate professor of agricultural biochemistry and associate research specialist in dairy pathology, William H. Feldman, Rochester, Minn., and H. Corwin Hinshaw, San Francisco, Calif.

Those to receive cash bonuses were Elizabeth S. Horning Ph.D. '42, Doris I. Jones NJC'43, M.Sc. '45, Samuel R. Green Ph.D. '47, Dorothy G. Smith Ph.D.'47, Warren P. Iverson Ph.D. '49; Dr. Walton B. Geiger, New Bru;swick, N. J.; and Aldrage B. Cooper, senior technical assistant in microbiology, Clara H. Wark, senior technical assistant, Dorothy J. Randolph, laboratory technician, Dorothy Parohise, secretary in the department of microbiology, Viola A. Christopher, and Edith Adams, Milltown, N. J., widow of John Q. Adams, laboratory technician in the department.

Dr. Schatz Claimed

Dr. Schatz claimed that he had assigned his rights as co-patentee in 1946 to the foundation without any provision for royalties. He charged that Dr. Waksman had used "fraud and duress" to induce him to turn over his patent rights to the foundation, and asked for 50 per cent of the royalties since both his and Dr. Waksman's names appeared on the patent application. Under the stipulations of settlement, Dr. Schatz retracted his charge of fraud and duress, agreed to accept three per cent of the royalties, and receives credit for establishing and maintaining in part the Institute of Microbiology jointly with Dr. Waksman through funds derived under the patent.

In a statement issued at the time of the settlement, President Robert C. Clothier said that when the assignment of royalties was made "no one had any conception that the returns to the foundation would ever reach any sizable sum." However, up to last September 30, sales of the drug, increasingly used in the treatment of certain forms of tuberculosis, had brought the foundation $2,360,000.

Dr. Waksman was originally granted 20 per cent of any royalties by the foundation because, Dr. Clothier pointed out, the foundation felt that should any financial returns result, some monetary recognition should go to Dr. Waksman "for his more than thirty years of service to Rutgers University which resulted in his becoming an international leader in the field of microbiology." As the royalties came in unanticipated volume, Dr. Waksman requested the foundation to cut his participation in half.

Under the settlement, Dr. Waksman was to continue to receive 10 per cent of the royalties, Dr. Schatz to get three per cent, and 14 other assistants to share in varying amounts, the highest being two per cent. The distribution of the royalties to the co-discover and the other associates totaled 10 per cent.

Eighty per cent of the royalties remain under the stipulation for the work of the foundation in continuing research and for construction of a building for the Institute of Microbiology, plans for which were temporarily halted while the suit was pending.