Judicial Watch Requests Court Order to Unseal NIH Royalty Payment Records for Government Scientists, Including Dr. Anthony Fauci—Seeks Details on 59,000 Compensation Payments to Government Employees

(Washington, DC) – Judicial Watch announced that it filed an post-hearing brief in a Freedom of Information Act (FOIA) lawsuit on behalf of Open the Books, urging a federal court to compel the National Institutes of Health (NIH) to release unredacted records showing royalty-related payments to government scientists, including former National Institute of Allergy and Infectious Diseases (NIAID) Director Dr. Anthony Fauci.

The October 2021 lawsuit seeks full disclosure of NIH “Inventor Award” payments—compensation issued to federal employees for taxpayer-funded inventions licensed to private companies.

Judicial Watch argues the NIH has improperly withheld these records based on speculative claims that disclosure could allow outsiders to “back-calculate” confidential royalty payments made by private industry to the government.

In a March evidentiary hearing before US District Court Judge Amit Mehta, NIH witnesses attempted to justify redactions by arguing that releasing inventor payment amounts could reveal private-sector royalty rates.

Judicial Watch contends the government’s argument is based on unrealistic hypotheticals rather than actual data:

The evidentiary hearing was Defendant’s opportunity to prove that Inventor Awards could be used to back calculate royalty amounts. Of the 59,000 instances in which NIH redacted Inventor Awards … it did not back calculate a royalty payment from a single award. Instead, it offered on direct examination what appeared to be actual examples from 1985.… It became clear on cross examination, however, that the examples were not real instances of Inventor Awards and a royalty amount … but only hypotheticals. Dr. Kirby testified on cross examination that she “made up” the numbers … She also testified that the numbers were “all arbitrary numbers that [she] selected.” … Because it was only a hypothetical based on arbitrary numbers, Dr. Kirby did not have a real-life royalty amount against which to check her work.

In its brief, Judicial Watch argues that there are too many unknowns and moving parts for anyone to reliably “work backwards” to those private payments. The system is too complicated to figure out how much private companies paid the government just by looking at what scientists were later paid – or to guess:

[National Institutes of Health] witnesses failed to establish that back calculation is possible for any of the withheld Inventor Awards. Cross examination made clear that the agency’s witnesses offered only grossly simplified hypotheticals, not actual royalty amounts back calculated from actual Inventor Awards paid to real NIH employees and withheld from Plaintiff. These hypotheticals were devoid of the many variables—known only to NIH and perhaps the relevant licensee …

Judicial Watch is asking the court to order the release of the responsive, unredacted NIH “Inventor Award” records, arguing they are being unlawfully withheld.

“Taxpayers have a right to see how money from taxpayer-funded inventions is distributed,” said Judicial Watch President Tom Fitton. “Judicial Watch and Open the Books already forced disclosure of more than $1 billion of dollars in NIH royalty payments marked to inventors, like Fauci. It is head-scratching that HHS Secretary Robert F. Kennedy Jr. would allow this stubborn and unlawful secrecy to continue about payments to Fauci and others.”

“Americans have a dual interest in the disclosure of these payments,” said Open the Books CEO John Hart.  “Every taxpayer deserves to understand how private payments may impact decision making among public scientists and agency directors. Equally important, they are patients making some of life’s most personal decisions when it comes to health care. They are entitled to understand all the financial stakes in play as they receive guidance from public health officials.”

In earlier rulings in the case, Mehta rejected the NIH’s effort to broadly shield the royalty program using employee privacy claims, writing that “federal government employees have a limited privacy interest in information concerning their compensation.”

The court also emphasized the strong public interest in disclosure, noting that transparency regarding royalty payments could help the public assess whether inventors’ financial interests in licensed technologies “could potentially bias the design, conduct, or reporting of clinical research.” Mehta further concluded that the public interest in understanding these financial arrangements is significant, particularly where government scientists involved in taxpayer-funded biomedical research may receive payments tied to the commercialization of those technologies.

Over $2.685 billion was paid to NIH institutes or scientists – of which more than $1 billion was marked for inventors – between 2010-2023 from pharmaceutical companies and other private entities licensing government-owned patents. Those payments were obtained only after Judicial Watch and Open the Books forced the NIH to release previously hidden royalty payment records through FOIA litigation.

The disclosures include royalty payments connected to inventions developed across multiple NIH institutes, including the National Institute of Allergy and Infectious Diseases (NIAID), which was led for decades by Fauci and played a central role in federally funded biomedical research.

In February, Judicial Watch filed a separate FOIA lawsuit on behalf of Open the Books seeking records concerning whether statutory limits on royalty payments to federal employees are being effectively bypassed (American Transparency v. U.S. Department of Health and Human Services (No. 1:26-cv-00432)).

That lawsuit seeks records including:

• Emails referencing royalty payments that may exceed the statutory cap
• Records concerning royalty payments placed in reserve when payments exceed statutory limits
• Internal guidance and procedures governing the NIH Public Health Service Technology Transfer Policy Manual

The records requested cover the period January 2020 through December 2025.

Federal law limits the amount individual government employee-inventors may receive in royalty payments to $150,000 per year. NIH scientists may receive royalty payments when inventions developed with taxpayer funding are licensed to private companies. These payments originate from license fees paid by pharmaceutical companies and other entities seeking to commercialize government-developed biomedical technologies.

OpenTheBooks.com, operated by American Transparency, maintains one of the largest independent databases of public-sector spending in the United States, promoting transparency by putting government spending records online for public review.

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Source: https://www.judicialwatch.org/nih-royalty-payment-records/