A. Waksman v. Schatz Case

As a scientist and professor, Waksman employed students he supervised to run experiments in the laboratory. Dr. Albert Schatz was one such student who worked closely with Waksman and was among the students who were working for Waksman when Streptomycin was discovered. He was a co-applicant with Waksman on the original application for a patent for streptomycin in 1945. Although Waksman and Schatz had designated that any royalties go to the Rutgers Research and Endowment Foundation, Schatz later sued Waksman and the Foundation to claim co-discoverer status. He alo wanted his share of the royalties. Schatz claimed he had feared it would be difficult to get a job as a microbiologist if did not designate the Foundation as the recipient of the royalties. It came to light during preparations for trial that Waksman had earned $350,000 from royalties before turning them over to the Foundation.

The lawsuit was finally settled with Schatz receiving 3 percent of the royalties from Steptomycin and $125,000 and Schatz was awarded co-discoverer status. Some royalty money also went to the other students who worked for Waksman. These students' letters to Waksman in response to receiving their checks indicate that they never expected to profit financially from their efforts.

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