Corante

About this Author
DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: derekb.lowe@gmail.com Twitter: Dereklowe

Chemistry and Drug Data: Drugbank
Emolecules
ChemSpider
Chempedia Lab
Synthetic Pages
Organic Chemistry Portal
PubChem
Not Voodoo
DailyMed
Druglib
Clinicaltrials.gov

Chemistry and Pharma Blogs:
Org Prep Daily
The Haystack
Kilomentor
A New Merck, Reviewed
Liberal Arts Chemistry
Electron Pusher
All Things Metathesis
C&E News Blogs
Chemiotics II
Chemical Space
Noel O'Blog
In Vivo Blog
Terra Sigilatta
BBSRC/Douglas Kell
ChemBark
Realizations in Biostatistics
Chemjobber
Pharmalot
ChemSpider Blog
Pharmagossip
Med-Chemist
Organic Chem - Education & Industry
Pharma Strategy Blog
No Name No Slogan
Practical Fragments
SimBioSys
The Curious Wavefunction
Natural Product Man
Fragment Literature
Chemistry World Blog
Synthetic Nature
Chemistry Blog
Synthesizing Ideas
Business|Bytes|Genes|Molecules
Eye on FDA
Chemical Forums
Depth-First
Symyx Blog
Sceptical Chymist
Lamentations on Chemistry
Computational Organic Chemistry
Mining Drugs
Henry Rzepa


Science Blogs and News:
Bad Science
The Loom
Uncertain Principles
Fierce Biotech
Blogs for Industry
Omics! Omics!
Young Female Scientist
Notional Slurry
Nobel Intent
SciTech Daily
Science Blog
FuturePundit
Aetiology
Gene Expression (I)
Gene Expression (II)
Sciencebase
Pharyngula
Adventures in Ethics and Science
Transterrestrial Musings
Slashdot Science
Cosmic Variance
Biology News Net


Medical Blogs
DB's Medical Rants
Science-Based Medicine
GruntDoc
Respectful Insolence
Diabetes Mine


Economics and Business
Marginal Revolution
The Volokh Conspiracy
Knowledge Problem


Politics / Current Events
Virginia Postrel
Instapundit
Belmont Club
Mickey Kaus


Belles Lettres
Uncouth Reflections
Arts and Letters Daily
In the Pipeline: Don't miss Derek Lowe's excellent commentary on drug discovery and the pharma industry in general at In the Pipeline

In the Pipeline

« Boehringer Ingelheim Closing Laval Site | Main | Various Links Of Stuff »

September 19, 2012

The American Chemical Society's Lawsuit Problem

Email This Entry

Posted by Derek

Since we've been talking about the ACS around here recently, I wanted to highlight a decision in a long-running court case the society has been involved in, American Chemical Society v. Leadscope. Rich Apodaca has a summary here of the earlier phases of the suit, which is now in its tenth year in the courts. Basically, three employees of Chemical Abstracts left to form their own chemical information company, and ended up with a patent on a particular variety of software that would display structure-activity and structure-property relationships. The ACS felt that this was too similar to the (discontinued) Pathfinder software they'd developed, and sued.

The ACS lost in a jury trial - in fact, they did more than just lose. The jury found that the society had competed unfairly, filing suit maliciously and defaming Leadscope in the process, and they awarded the latter company $26.5 million in damages. The ACS then lost in the Court of Appeals (and the damages were increased). So they took things all the way to the Ohio Supreme Court, and now they've lost there, too. The defamation ruling (and award) was reversed, and will be vacated by the lower court, but the finding of unfair competition stands. It looks like the society still owes $26.5 million. As this post by an IP lawyer shows, they were going all out:

As for the issue of ACS's subjective intent, the Supreme Court found ample support for the jury's finding that ACS had the intent to injure Leadscope and its founders. It noted that ACS's president had closely monitored Leadscope and had even sent out an email to then-Ohio-Governor Robert Taft to abort a visit by the governor to Leadscope's offices. ACS's former information technology director also provided damaging testimony documenting ACS's president's hostility towards Leadscope. In addition, ACS took actions or made statements that interfered with Leadscope's ability to get funding (for example, by dissuading an venture capitalist interested in investing in Leadscope by telling him that there were legal issues with Leadscope's technology) and took actions in the litigation to disrupt Leadscope's ability to get insurance coverage for the dispute.

As detailed here at ChemBark, it's not like there's been a lot of coverage about this (I've never written about it myself). These are things that every member of the ACS should at least be aware of, but it's not like the ACS is going to do that job, for obvious reasons. One of the main venues for such stories would be. . .Chemical and Engineering News, so that's not going to happen. And it's not a story that resonates much with a general newspaper/magazine readership, so what does that leave us with? Well, mentions like that Nature News article to get the word out, and the blogs to go into the details.

That ChemBark post has a whole series of questions that would be very much worth answering. How the the ACS get into this fix in the first place? Was the original suit ill-advised? How much will that $26.5 million affect the society's finances - is that a big deal, or not? How much further money went down the drain in legal fees along the way? Are there any lessons to be learned from all this, or could the same thing start happening again next month?

And beyond those immediate questions, there are the bigger ones that the ACS (and other scientific societies) should be asking. Can a single entity be (A) a publisher of a large stable of high-profile scientific journals, and (B) the curator and disseminator of the (very profitable) primary database of all the reported chemical matter in the world, and (C) the voice of its own membership, who are simultaneously paying money for access to A and B, and (D) the lobbying organization for chemistry in general, as well as (E) a scientific society dedicated to the spread of knowledge? I'm not sure that all these are possible, at the same time, for the same organization. But sites like ChemBark, and this one, and the rest of the chemical blogworld) are the only places that seem to be available to talk about these things.

Comments (33) + TrackBacks (0) | Category: Chemical News | Patents and IP


COMMENTS

1. exGlaxoid on September 19, 2012 8:41 AM writes...

Thanks for posting this, I had almost forgotten the entire debacle.

I have been wondering for years how the ACS could charge so much for some services like ACS archives and Scifinder access, yet still have to charge members so much for membership on top of that, without providing some sort of free access to the data to members.

Like many others, I am starting to really wonder the purpose of the ACS and question my membership, which was funded by work for many years, but it no longer paid for by them. While I may be odd in liking to read CEN to keep up with all things chemical, it is becoming the only benefit I get for my dues.

Permalink to Comment

2. watcher on September 19, 2012 8:55 AM writes...

ACS has lost its way. The orgnization should be supporting growth and promotion of chemically related endeavors, not fighting them. They need to be better in providing information to members at more reasonable cost, particularly as more & more do not have the same level of easy access through academic libraries or large companies which pay the inposed fees. They need to remember the organization in non-profit, and cut the compensation of those with lofty sounding titles in ACS. What do these people actually do to deserve such money anyway? They need to be less enamored by academic self-aggrandizing & get more in touch with those working in today's real world.

Permalink to Comment

3. drug_hunter on September 19, 2012 9:06 AM writes...

Within a decade it will be possible to get ~80% of the information that CAS now offers either for free or from much lower-cost providers. So, as the funds dry up, the ACS as we know it will gradually morph into a very different organization.

Permalink to Comment

4. RB Woodweird on September 19, 2012 9:08 AM writes...

It's time for chemists to organize an alternative organization, a chemists' guild, which will actually represent the interests of chemists and not necessarily the chemical industry.

Permalink to Comment

5. Alex Besogonov on September 19, 2012 9:34 AM writes...

A useful heuristic: any company suing someone over a pure software patent is sleazy. That never fails.

Permalink to Comment

6. MoMo on September 19, 2012 9:47 AM writes...

Another sign of the ACS monopoly and one that Congress should investigate.

I am with you RB Woodweird. Time to change this dinosaur of a society with one that is'nt so ominous.

Permalink to Comment

7. Anonymous on September 19, 2012 11:01 AM writes...

Two simple things are required to stop management greed at the ACS:

Take away their tax free status as a nonprofit organization which based on executive comp, they clearly are not, and

Forbid any and all copywriting of any materials produced with taxpayer-supported government funding.

This sham chemists' organization, oops, I mean monoply publisher, will go away, and we chemists can have our Society back as the greedy exec's head for greener playgrounds.

Permalink to Comment

8. Sili on September 19, 2012 11:18 AM writes...

One of the main venues for such stories would be. . .Chemical and Engineering News, so that's not going to happen. And it's not a story that resonates much with a general newspaper/magazine readership, so what does that leave us with?
http://www.rsc.org/chemistryworld/News/2010/June/24061001.asp Permalink to Comment

9. paperclip on September 19, 2012 1:18 PM writes...

How many nonprofits undertake aggressive lawsuits like this? Seriously, I don't know.

Permalink to Comment

10. John Wayne on September 19, 2012 1:46 PM writes...

It so happens that my ACS membership is up for renewal at the moment. I'm going to use how they respond to this situation to determine if I want to be a part of the organization going forward.

Permalink to Comment

11. MoMo on September 19, 2012 2:01 PM writes...

Paperclip- Only those non-profits that want to maintain a monopoly.

Permalink to Comment

12. Midas on September 19, 2012 2:24 PM writes...

This is very interesting, and it brings up a number of possibly ethically deviant if not criminal charges.

ACS is supposed to be a non-profit, but it's behaving like a private for-profit enterprise.

Question 1 : What is the ACS yearly gross revenue?

Question 2 : How much of ACS's revenue is diverted into grotesquely inflated salaries, such as the one for Madeleine Jacobs (808K!!).

QUESTION 3: Since ACS's for-profit model squeezes its own profession, I wonder why this organization is not just labeled one big scam? Why does Jacobs need a Chauffeur?

From Wikipeida-

"In 2004, when the current executive director of the ACS, Madeleine Jacobs, assumed her position, it included the use of two Cadillac cars and a chauffeur that her predecessor, John Crum, had acquired.[11] Jacobs later auctioned off the cars and let go of the chauffeur.

In 2007, Madeline Jacobs was reported to receive a salary of over $800,000 per year.[12] The salaries of the ACS executives (executive director, treasurer, and secretary) are decided by the Standing Committee on Executive Compensation which is composed of the "president, the immediate past president, the chair of the society committee on budget and finance, and two members of the society with demonstrated expertise in senior and executive staff compensation."[13]"

Permalink to Comment

13. Anonymous on September 19, 2012 3:15 PM writes...

Yep, Madeleine Jacobs makes 800K a year and tells us to do chemistry for the "honor" of it without regard for financial considerations. Her view pretty much represents the attitude of the entire ACS top brass whose salaries are comparable.

The whole organization is rotten to the core and needs to be dismantled and rebuilt.

Permalink to Comment

14. found a new society? on September 19, 2012 3:32 PM writes...

The conclusion from the ACS's behavior is that Chemists in the USA do not have a professional organization that represents their interests.

How about founding an "International Society of Chemists - US-American Subsection"? It is completely non-profit and only non-paid volunteers can have positions of responsibility. Thus, no membership fees are needed. People in the same geographic area can meet regularly to discuss science and help each other with networking.

Permalink to Comment

15. found a new society? on September 19, 2012 3:33 PM writes...

The conclusion from the ACS's behavior is that Chemists in the USA do not have a professional organization that represents their interests.

How about founding an "International Society of Chemists - US-American Subsection"? It is completely non-profit and only non-paid volunteers can have positions of responsibility. Thus, no membership fees are needed. People in the same geographic area can meet regularly to discuss science and help each other with networking.

Permalink to Comment

16. p on September 19, 2012 4:41 PM writes...

I'm fairly financially naive, but if $26.5 million doesn't hurt them, badly, then they don't seem like much of a non-profit to me.

Permalink to Comment

17. paperclip on September 19, 2012 5:13 PM writes...

@15 - I would gladly pay fees for such a society if fees helped give it the financial clout to speak up for chemists.

Permalink to Comment

18. Chemjobber on September 19, 2012 7:01 PM writes...

It would seem wise to me to use the existing power structure within ACS (i.e. ACS elections, national meetings, etc) to generate as much publicity before splitting.

Permalink to Comment

19. LR on September 19, 2012 8:47 PM writes...

The issue of ACS's non-profit status and its excessive salaries to Madeleine Jacobs and company are a legitimate concern. There is a way to complain to the IRS about this, detailed in this link:
http://www.irs.gov/pub/irs-tege/divulge_all_suspected_tax_exempt_status_abuses_to_the_irs.pdf

Apparently, private individuals can make the complaint, though from there it is up to the IRS to decide to pursue the matter.

What if the IRS heard not just from one ACS member, but from 25, or 50, or more? That would certainly get their attention, perhaps enough for IRS to take a look at ACS's finances.

Permalink to Comment

20. ScientistSailor on September 19, 2012 10:57 PM writes...

I let my membership expire when I finished grad school 10+ years ago. Until this post, I forgot there even was an ACS...

Permalink to Comment

21. Brad on September 20, 2012 12:41 AM writes...

Sounds just like the IEEE. Does anyone have a professional society that isn't run with the laser-focused profit hunger of Elsevier?

Permalink to Comment

22. Electrochemist on September 20, 2012 7:28 AM writes...

I agree completely with the criticisms of the ACS, above. I let my membership lapse several years ago.

However, it seems that there is a lack of understanding here about what constitutes a not-for-profit organization (NPO). An NPO is simply an organization that keeps its surplus revenue (after paying the bills) to fund internal programs, rather than distributing them to shareholders.

The NFL (US National Football League) is a not-for-profit organization under US Code Title 26 (501c6).

As an NPO, the ACS can bilk its membership forever and buy Madeleine Jacobs gold-plated toilets without ever running afoul of the IRS. Hence, complaining to the IRS will do no good.

If, like me, you find the ACS disgraceful, then drop your membership.

Permalink to Comment

23. londonlad on September 20, 2012 8:23 AM writes...

With a falling number of working chemists, aren't ACS/RSC/GDCh all looking at ways of keeping income up, their staff employed and so on. The ACS/CAS management do seem do do things on a larger scale though.

I think the beginning of the end is when they start to play in publishing, taking advertising revenue etc., unfortunately.

Permalink to Comment

24. Raghavan on September 20, 2012 9:21 AM writes...

It is appalling that ACS would engage in this idotic litigation without having a firm understanding of the legal postion with respect to trade secret and patent laws.

What is more appalling is the incompetent legal advice that ACS received. As a member of ACS for over 30 years, I would like to know which incompetent law firm represented ACS.

Finally, ACS Board and the President should not be engaing on personal vendetta or 'ego trip' and waste millions of dollars of membership fees.

Finally, ACS members should have the right to vote on matters that involve large sums of money. This way, there is some oversight on ACS's activities.

Permalink to Comment

25. James on September 20, 2012 9:28 AM writes...

What was Milkshake's comment the other day? "A publishing consortium disguised as a non-profit for tax purposes". That nails it.

Permalink to Comment

26. MoMo on September 20, 2012 11:06 AM writes...

I know a couple of Senators, including Kerry of Massachusetts and Cochran in MS. Kerry might be aloof as its his nature but Cochran likes science and would hopefully be appalled by this. Let me drop them a line and see about mounting an investigation on this Monopoly.

In the meantime I am dropping my membership as it expires- any other Patriots out there?

Permalink to Comment

27. Lyle Langley on September 20, 2012 11:16 AM writes...

@12, Midas:

You ask..."Why does Jacobs need a Chauffeur?"

Apparently she doesn't (form your own post)..."Jacobs later auctioned off the cars and let go of the chauffeur."

Permalink to Comment

28. Erin on September 20, 2012 1:13 PM writes...

it seems c&en does cover it:
http://cen.acs.org/articles/90/web/2012/09/Qualified-Victory-ACS.html

Permalink to Comment

29. Myma on September 20, 2012 2:58 PM writes...

Derek, you forgot
F) the ACS is professors giving other professors big-sounding awards.

Permalink to Comment

30. Another Derek on September 20, 2012 7:13 PM writes...

The last straw for me with ACS was their attempt to squash Google Scholar with a trademark and unfair competition lawsuit based on their SciFinder Scholar and logo trademark, in December 2004 (http://pubs.acs.org/cen/news/8250/8250acs.html). The litigation quietly folded in 2006 (http://news.cnet.com/2100-1025_3-6096240.html). I've never regretted leaving.

Permalink to Comment

31. cdsouthan on September 21, 2012 2:27 AM writes...

drug_hunter is right about the 80% of SF content being out there but wrong about having to wait a decade, its already here

Permalink to Comment

32. sepisp on September 21, 2012 8:13 AM writes...

I keep getting mail from ACS urging me to join. Fortunately I've been able to ignore ACS, and this gives even more reason not to join. Their hostility towards open access, up to the point of paying hundreds of thousands to lobbyists, shows that it's no longer a professional society of any sort, but a for-profit corporation. Their "membership" is like the "memberships" in various pyramid-scheme "clubs" advertised in junk mail. Fine, arrange conferences and charge for it, but don't pretend to be a nonprofit.

Permalink to Comment

33. Scientist on September 22, 2012 8:57 AM writes...

I am deeply saddened by the leaders of ACS and academics in general. Many of them are poor excuses for human beings let alone honorable people. When the primary goal of a academic is to work a graduate student as many hours has possible with the exclusion of that student from perusing the usual pursuits of life ... marriage and balanced life.........the profession has gone wrong. ACS is excluding individuals and small companies from literature access because they can not afford that access. Every other professional organization is promoting education, not restricting it to the ones with the deepest pockets. The large chemical companies are not suppose to be running the professional organization.

Permalink to Comment

POST A COMMENT




Remember Me?



EMAIL THIS ENTRY TO A FRIEND

Email this entry to:

Your email address:

Message (optional):




RELATED ENTRIES
Gitcher SF5 Groups Right Here
Changing A Broken Science System
One and Done
The Latest Protein-Protein Compounds
Professor Fukuyama's Solvent Peaks
Novartis Gets Out of RNAi
Total Synthesis in Flow
Sweet Reason Lands On Its Face