Wharton Employee Sues Penn Over Million-Dollar Invention

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In 1993, Paul Ratnaraj, an information systems specialist at Wharton, helped to create a major database tool that made business research much easier. Called Wharton Research Data Services (WRDS), it simplified the collection and research of financial data. The system currently houses more than 200 terabytes of searchable data in sectors like accounting, finance and banking, according to the Wharton website, and is used by 30,000 clients in 33 countries.

Twenty-two years later, Ratnaraj is suing the Trustees of the University of Pennsylvania for royalties for his role in creating WRDS. Ratnaraj claims in court documents filed in the U.S. District Court for the Eastern District of Pennsylvania that Penn has a policy that entitles him and three other co-inventors to royalties of 30 percent if the technology has been licensed to third-party entities.

The complaint identifies Stanford University, Goldman Sachs and the Securities and Exchange Commission as subscribers. It claims that WRDS has 374 subscribers paying approximately $40,000 annually — with sales expected to exceed $160 million.

In the complaint, Ratnaraj claims that, before WRDS, faculty and doctoral students were “spending up to 40 percent of their time programming, writing database queries and reformatting data so that they could use it for analysis.” He says the invention of WRDS saved them all serious time.

Ratnaraj is the lead plaintiff for three other inventors: Gerry McCartney, Steve Crispi and Jalal Akhavein.

The U.S. patent office lists Ratnaraj, McCartney, Crispi and Akhavein as inventors (along with another person named Son To). The Trustees of the University of Pennsylvania are listed as the assignee. It was filed on May 29, 1998.

In a motion to dismiss the case filed on May 18th, Penn says that Ratnaraj is “hoping to cash in on the success of WRDS” and argues that “computer software is protected by federal copyright law.” It also argues that Ratnaraj’s claim of royalties is not valid because there was no contract between the two parties.

Ratnaraj, who still works at Wharton as director of advanced initiatives, could not be reached for comment. His attorney, Bryan Lentz of Bochetto & Lentz in Philadelphia, said: “We stand by the allegations in the complaint. We have no further comment.”

Eric Kraeutler, from Morgan Lewis & Bockius is representing the Penn Trustees. He declined to comment.