Former UB administrators suing UB and SUNY Research Foundation

Two doctors who were major players during the heyday of the UB 2020 craze are now suing the State University of New York at Buffalo and the SUNY Research Foundation for attempting to steal intellectual property.

Dr. Russell Bessette, former UB associate vice president for health sciences (and executive director of the Institute for Healthcare Informatics), and Dr. David Dunn, former UB vice president for health sciences, both left UB in 2011—part of a mass exodus that included former UB president John Simpson. Dunn took a position at the University of Louisville as executive vice president for health affairs in July, and then welcomed Bessette as associate vice president for health affairs at U of L in December of that year. Like UB, the public University of Louisville has its own strategic plan, called, you guessed it, “The 2020 Plan: A blueprint for continuing on our path to national prominence.” They’ve been doing a lot of groundbreaking and construction around their medical school. Synergy, innovation, the whole bit. It’s like a parallel universe. But then, there are more than 70 universities in the US and around the globe using the “2020” moniker to label their various strategic plans.

“The use of informatics is essential to allow health care providers, health systems and health-insurance plans to work together to increase access to higher quality health care at lower cost. Dr. Bessette’s proficiency in this area will help us as we face a tumultuous time in health care and academic medicine,” Dunn was quoted as he welcomed his colleague to his new post in Kentucky.

They are now partners in a new venture called Health DataStream, Inc. (HDS), a Delaware corporation with its principal place of business located in Louisville.

The suit charges that Bessette “conceived and worked to develop certain intellectual property known as Patient Complexity Index (‘the PCIX Concept’) and Q SCORES. The PCIX Concept is a system based upon abnormal blood test values that when placed within a unique mathematical algorithm produces a time-specific ‘grade’ for the health status of the patient.”

The lawsuit describes Q SCORES as “a mathematical system that objectively measures a patient’s changing health status over time and correlates that change in health status to the cost of healthcare and treatment for that patient in order to report a ‘return on investment’ for that patient’s healthcare.”

We should all feel reassured about our healthcare system when doctors spend their time inventing things designed to measure ROI. When Jonas Salk invented the vaccine that abolished polio, he was famously asked who owned the patent. “There is no patent. Could you patent the sun?” he replied. And why would you name it Q SCORES, when that term is already widely used in marketing as a way to gauge a brand, celebrity, or television show’s popularity? But I digress.

Bessette filed a provisional patent for the PCIX Concept in July 2007, and received the patent in July 2012. In the meantime, he entered into a consulting agreement with Computer Task Group (CTG) in which he assigned his rights in and to the PCIX patent to CTG.

The suit contends that his consulting gig with CTG permitted Bessette to “work to develop and own technology beyond the scope of the PCIX patent.” From that work, Q SCORES was born and trademarked, and remained his property until he assigned it to his and Dunn’s company, HDS. Since January 2011, Bessette or HDS have “expended a substantial amount of money and effort in advertising and promoting” Q SCORES throughout the United States. In 2012, Q SCORES won an Oracle Fusion Middleware Innovation Award.

According to the lawsuit, the defendants “misappropriated/converted Dr. Bessettes’s Q SCORES unto [themselves] and exercised dominion thereover as if the misappropriated/converted Q SCORES intellectual property were part of [their] portfolio of intellectual properties. In furtherance of Defendants’ exercise of dominion and control over Dr. Bessette’s intellectual property, Defendants filed multiple patent applications in Dr. Bessette’s name but without his consent…”

Then, on November 21, 2012, Bessette received a letter known as Exhibit G in the lawsuit. In it, Bessette was being told to sign on the dotted line, transferring his inventions to the SUNY Research Foundation in exchange for one dollar. In addition, his signature would appoint UB lawyers Hodgson Russ LLP “to prosecute this application and to transact all business in the Patent and Trademark Office connected therewith.”

This type of arrangement is pretty common for researchers employed by state universities across the country. The state was paying for the research, so the state ought to profit should something of value be invented. The problem is that Bessette was not a state employee between 2006 and 2011—even though he rose to the dual titles of associate vice president for health sciences and executive director for the Institute for Healthcare Informatics at SUNY Buffalo.

How could this be? From the lawsuit: “In and around October, 2006, Dr. Bessette was hired by UB Foundation Activities, Inc., located in Buffalo (UB Foundation). On information and belief, the UB Foundation is a separate legal entity designed to support and promote the activities and programs of SUNY/Buffalo—primarily through providing advice and counsel regarding philanthropy and fund raising, managing gifts and grants on behalf of the university, developing and managing the university’s real property and providing a wide range of financial services for the university.” A screenshot from the UB Foundation website is included as Exhibit C.

I can attest to the fact that the courts have ruled the UB Foundation a separate, private entity apart from UB and SUNY—because I sued them for access to records and lost, for that very reason. Hodgson Russ representedthe UB Foundation on that one, too.

In 2000, Republican Governor George Pataki named Bessette the executive director of the New York State Division of Science, Technology and Innovation (NYSTAR). He served in that capacity until 2006, when he was hired by UB Foundation Activities “in an administrative capacity to serve as Special Advisor to the Vice President for Health Sciences”—who was then David Dunn—“and Senior Vice Provost at SUNY/Buffalo. Dr. Bessette’s duties for the UB Foundation were to provide strategic advice and counseling on and to obtain funding for SUNY/Buffalo’s bioinformatics and implementation programs and to maximize University exposure as part of SUNY/Buffalo’s 20/20 goals,” according to the court papers.

Incidentally, although my court case to compel disclosure from the UB Foundation ultimately failed, it did produce some interesting documents. On the day of the trial, Hodgson Russ lawyers sent a courier with a big box of materials to the Artvoice office. A similar box was delivered simultaneously to the home of my lawyer, Peter A. Reese. They didn’t have to do it but may have feared they might lose the case. They apparently wanted to demonstrate to the judge that the foundation had already given me everything I had asked for in my initial Freedom of Information request, so the case should be dismissed. Among the 20 pounds of documents inside that box were 34 single-spaced pages listing names and salaries paid out by the foundation. According to that list, Bessette received $175,158.59. (I’m giving you that information courtesy of Hodgson Russ—it’s not part of the Kentucky court case, which is a matter of public record.)

Exhibit D of the court papers is a redacted copy of Bessette’s W-2 form. “UB Foundation provided and paid for Dr. Bessette’s employment benefits, including but not limited to health insurance, dental and vision coverage, retirement, long term disability, flexible spending account, and an optional 403(b) Supplemental Retirement Annuity.” All this, yet he never signed an employment agreement with the UB Foundation, UB, nor the SUNY Research Foundation, the suit claims. Further, Bessette “was never a faculty member of SUNY/Buffalo and had no teaching or research assignments or duties for SUNY/BUFFALO, STOR/Buffalo and/or RF/SUNY through his work for the UB Foundation.”

STOR/Buffalo stands for the University at Buffalo Office of Science, Technology Transfer, and Economic Outreach. According to its website, it “facilitates the transfer of UB discoveries into enterprises that create value and provide products and services that benefit the public good.” UB STOR director Jeffrey A. Dunbar did not return calls for comment on this story.

In a letter dated February 19, 2013, Bessette’s lawyer, John F. Salazar, wrote to Alfonzo Cutaia of Hodgson Russ, the lawyer representing UB and the SUNY Research Foundation in their quest to claim Bessette’s intellectual property:

…your letter goes to great length citing regulatory authority related to employees and faculty members of UB and inventions made at such facilities. As we previously informed Mr. Dunbar, Dr. Bessette was never an employee of the SUNY/UB nor was he an employee of the SUNY Research Foundation or STOR. He was directly employed by UB Foundation Activities, Inc. strictly in an administrative capacity. As an administrator, Dr. Bessette never had any teaching or research assignments for the University of Buffalo. Further, activities completed by Dr. Bessette on such technology were not performed at related UB facilities or with UB equipment and were completed using his own time and his own resources. Consequently, Dr. Bessette was and is under no obligation to assign any rights in these applications to UB…

Thus, Hodgson Russ may now have to use its legal prowess to try to prove that UB Foundation Activities, Inc. is in fact not a separate, private entity distinct from UB and SUNY. Which is pretty damn funny, considering they won a case proving the exact opposite just two years ago, when I felt the public should have access to records held by the various UB Foundations. But what do they care? Billable hours are billable hours, and according to the 2010 UB Foundation Activities tax form—the most recent one publicly available—Hodgson Russ made a cool $717,737 providing legal services for UB Foundation Activities that year alone.

It’s perhaps interesting to note that under the law of the Commonwealth of Kentucky, the University of Louisville Foundation is subject to disclosure under their open records act, thanks to a lawsuit brought by the Louisville Courier-Journal newspaper. This is the case in many other states where the foundations of public universities are subject to disclosure. Colorado, Georgia, Minnesota, Nevada, and California are all examples. New York State Senate Higher Education Committee chairman Kenneth LaValle and Assembly Higher Education Committee chairwoman Deborah Glick have put forth a bill that would make this so in New York State, though lobbyists paid by the SUNY foundations continue to fight its passage.

The Bessette lawsuit was filed before the United States District Court for the Western District of Kentucky, Louisville Division, on March 15, 2013. Included in the court papers are screen shots from the STOR website which show they were offering the Q SCORES product. That webpage appears to have since vanished.

The plaintiffs are calling upon the court to make the defendants stop their unlawful and deceptive trade practices, and issue “an order requiring Defendants to account and pay over to Dr. Bessette and/or HDS all damages sustained by Dr. Bessette and/or HDS, Defendants’ profits, Plaintiffs’ attorneys’ fees, and costs, and order that the amount of damages awarded Plaintiffs be increased three times the amount thereof.”

It is unclear what mathematical algorithm was employed to arrive at that figure.

When asked for comment on this whole mess, a UB spokesperson explained that the university does not comment on pending litigation.