World renown South Korean academic diverts patent funds to his own company

Posted on : 2018-09-09 16:12 KST Modified on : 2019-10-19 20:29 KST
Seoul National University took no action for almost a year after suspecting falsified reports
Professor Kim Jin-soo
Professor Kim Jin-soo

A former Seoul National University (SNU) professor seen as a world-class figure in his scientific field diverted hundreds of millions of dollars’ worth of global patents to a company where he was majority shareholder during his tenure.

Meanwhile, the SNU was found to have taken no action for nearly a year after drafting an internal document about a possible breach of trust accusation, announcing its plans for an audit only after the incident began receiving press coverage.

An investigation by Hankyoreh 21 on Sept. 7 and documents received from SNU by the office of Democratic Party lawmaker Park Yong-jin revealed that professor Kim Jin-soo, director of the Center for Genome Engineering at the Institute for Basic Science (IBS), submitted a falsified employee’s invention report to SNU in connection with source technology for the CRISPR/Cas9 genome editing tool developed with his colleagues during his tenure at the university in 2012–2013, while diverting related patents to his own company ToolGen.

CRISPR technology has drawn worldwide attention for its potential uses in genetically modified organism development and the treatment of intractable diseases.

ToolGen and Kim reaped large rewards from the diverted CRISPR patents. ToolGen had a value of just 2,100 won (US$1.86) per share when it was first listed in June 2014 on Konex (a market exclusively for smaller companies). But with the domestic and international registration of CRISPR patent technology in 2015–2016, the value began rising sharply. As of Sept. 7, it stood at 125,000 won (US$111) per share, with a total market capitalization of around 800 billion won (US$710 million). Kim is both ToolGen’s founder and its majority shareholder, with a 21.3 percent stake.

Kim was previously named as one of the South Korean researchers “closest to winning a Nobel Prize” in a 2016 survey of 144 key domestic researchers in basic science areas by the National Research Foundation of Korea (NRF).

CRISPR is a third-generation genetic scissors technology that uses a bacterium’s immune system to freely edit genetic information inside of cells. The leading journal Science selected the CRISPR tool developed by Kim and his colleagues as its “breakthrough of the year” in 2015.

 Director of the Center for Genome Engineering at the Institute for Basic Science (IBS) at Seoul National University (SNU). (Hankyoreh archives)
Director of the Center for Genome Engineering at the Institute for Basic Science (IBS) at Seoul National University (SNU). (Hankyoreh archives)

Development of CRISPR technology funded by National Research Foundation

The CRISPR technology developed by Kim at SNU was funded by taxpayer money. Between 2010 and 2014, his research team received 2.936 billion won (US$2.6 million) in support to complete the effort as an NRF original research project. According to the Invention Promotion Act, patents for inventions created on the job by faculty members at national and public universities or with national R&D support belong to an exclusive organization within the institution with which the researchers are affiliated.

This means that the patents for CRISPR-related technology should be owned by SNU’s R&DB Foundation. In reality, ToolGen applied for independent patents in the US, Europe, South Korea, China, Japan, and India between 2012 and 2013.

Kim also submitted a falsified employee’s invention report to SNU to ensure the patent rights would go to ToolGen. An employee’s patent report he submitted to the R&DB Foundation on Nov. 16, 2012, in connection with a key CRISPR patent (application no. 61/717,324) omits any mention of NRF support. The omission falsely implied that no taxpayer money was spent on the research. Instead, Kim listed his own private company ToolGen as having paid a hundred percent of research costs. He also included on the report two smaller research tasks carried out around 2010, which had no significant connection with the CRISPR technology development.

“There is no relationship between the research funding provided by NRF and the development of CRISPR technology,” Kim told the Hankyoreh.

But multiple sources aware of the situation in the laboratory during Kim’s tenure revealed in interviews that the content of his employee invention report to SNU was “completely false.”

“The laboratory only began researching CRISPR after the technology was first discovered in summer 2012 by [University of California, Berkeley professor] Jennifer Doudna,” one source said, adding that “all of the funding for CRISPR research [by Kim’s team] came from the NRF.”

“It will be immediately apparent if they investigate the use of research funds,” a source predicted.

ToolGen is a company in which Kim is a major shareholder. (ToolGen website)
ToolGen is a company in which Kim is a major shareholder. (ToolGen website)

SNU’s inaction following discovery of possible breach of trust

In a document last year titled “Patent Applications by Faculty Members Employed with Companies and Plan for Related Action,” SNU prepared a list of possible response measures to Kim’s patent diversion, including “filing a civil suit for the return of ownership from ToolGen and demanding damages from Professor Kim,” “requesting a patent nullification hearing according to the Patent Act,” and “filing a criminal breach of trust accusation.”

But after drafting the document, the SNU did not take any measures against Kim or ToolGen for the following year. Only after the Hankyoreh began its investigation of the case did the university ask an outside law firm to conduct an investigation in connection with the patents. It also failed to submit documents for over six months after a Daejeon Metropolitan Police Agency request for cooperation on an investigation into Kim’s patents.

“This could be construed as suggesting a conspiracy among SNU insiders,” Park Yong-jin said, adding that he planned to “inquire in detail on the issue during the October parliamentary audits and demand disciplinary action against those involved.”

By Byeon Ji-min, staff reporter

Please direct comments or questions to [english@hani.co.kr]

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