Life, Death, and Gatorade

J. Robert Cade, the inventor of Gatorade, died yesterday.

The Times obituary makes passing reference to the fact that the drink not only helped to revolutionize thinking about hydration and athletes, but also contributed mightily to a revolution in university thinking about ownership of faculty-developed inventions.  The drink was invented while Cade was a faculty member at the University of Florida (home of the Gators, hence the name), but the formula was not patented:

Off the field, Dr. Cade faced more complicated challenges. When he first approached university officials about marketing the drink, they declined. So he sold the formula to Stokely-Van Camp. The deal gave him and his associates a cut of the royalties. A few years later, when these reached $200,000, Florida Trend said, the university noticed.

“They told me it belonged to them and all the royalties were theirs,” Dr. Cade said. “I told them to go to hell. So they sued us.”

After a 31-month legal battle, the parties settled. The product was later sold to Quaker Oats. which merged with Pepsico, and royalties continued to flow to Dr. Cade’s group and the university. He donated some of his to the university.

A 1991 CHE article suggests that the “go to hell” attitude was only the tip of the iceberg when it comes to royalty battles; it characterized Gatorade as “something of a litigation generator.”  Rights to the drink and “variants” are administered through the “Gatorade Trust,” and the whole phenomenon has attracted not only a book but also (naturally) a blog by the book’s author.  According to a 2002 article in the Chronicle of Higher Education, the university was then collecting about $6.5 million annually in royalties.  This piece (again by the author of the book/blog) suggests that the university’s share is only 20% of the overall revenue stream.