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April 6 (Bloomberg) -- The University of Kansas Center for Research won the right to claim that two of its employees should be given credit on research conducted for the National Institutes of Health that led to the cancer drug Velcade.

An arbitration panel agreed with the university’s claim that a researcher and his assistant should have been included as inventors on two patents owned by NIH and licensed to Millennium Pharmaceuticals, now part of Japanese drugmaker Takeda Pharmaceutical Co. Velcade, used to treat blood cancer, generated $623 million in sales last year for Takeda.

The NIH asked the university to develop acceptable dosage forms for compounds that would be tested in cancer and HIV patients, and to conduct studies on how best to make drugs safe and effective in the human body. The research on the Velcade compound began in 1997, according to the complaint.

The university sued NIH in 2008 for failing to give its researchers credit. The lawsuit highlights the challenges associated with government contracts in which both researchers and government employees work on a project and are co-inventors, said William Atkins of the Pillsbury law firm, which represented the university.

“The university could have had ownership rights to the intellectual property,” Atkins said. “When there is a university involved and a government employee claims co-inventorship, the law is not always clear who owns the property.”

Atkins declined to say if either of the drugmakers or NIH paid the university patent royalties as a result of the decision.

Takeda and Johnson & Johnson, which markets Velcade outside the U.S., intervened in the case as additional defendants. Both sides put the case on hold while an arbitrator resolved the dispute. The companies filed a consent judgment today saying that the Kansas researchers would be listed as co-inventors.

“NIH appreciates the careful review of this matter by the arbitration panel and we are pleased that this matter was resolved fairly and equitably,” Calvin Jackson, an NIH spokesman, said in e-mailed statement. “We look forward to developing more drugs for use in the battle against cancer.”

The case is University of Kansas Center for Research Inc. v. U.S.A., 08-cv-2565, U.S. District Court, District of Kansas (Kansas City).

To contact the reporters on this story: Susan Decker in Washington at;

To contact the editor responsible for this story: Bernard Kohn at

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