Genentech drug patent is rejected

U.S. Patent and Trademark Office decision on technology for manufacturing opens way for other companies to use it

February 22, 2007|By Tricia Bishop | Tricia Bishop,Sun reporter

California's Genentech Inc. announced yesterday that a patent protecting a key drug-making process in the biotechnology industry has been rejected by the U.S. Patent and Trademark Office, opening the door for dozens of companies - including Gaithersburg-based MedImmune Inc. - to use the technology without having to pay millions in royalties.

MedImmune has long claimed the patent, known as the Cabilly II, is invalid. The company sued Genentech in a case that wound its way up to the U.S. Supreme Court, which ruled last month that the lawsuit could proceed in lower courts after having been rejected earlier.

That was a win for MedImmune, but yesterday's news could be a windfall.

Genentech said it added about $105 million to its bottom line last year from Cabilly royalties, a significant chunk of which came from Maryland's largest biotech business.

"We're obviously pleased," said MedImmune spokeswoman Jamie P. Lacey, who declined to say just how much the patent was costing her company.

Genentech spokeswoman Caroline Pecquet said that though "disappointed," executives remain "confident in the strength of [their] intellectual property" and plan to respond to the rejection during the next few months, appealing if need be.

In the meantime, companies using the Cabilly technology to make treatments such as Synagis, MedImmune's blockbuster baby drug, will have to continue paying fees until the case is settled, which could take more than two years, patent attorneys said.

The Cabilly patent covers a process used to make "monoclonal antibodies," thought important to new treatments for everything from the autoimmune disease Lupus to the intestinal inflammation of Crohn's disease.

The bulk of the Cabilly royalties come from MedImmune's Synagis, which treats respiratory ailments in infants, as well as the rheumatoid arthritis drugs Humira (made by Abbott Laboratories) and Remicade (made by Centacor Inc.), and the cancer drug Erbitux (made by ImClone).

Federal regulators re-examined the patent after two official requests to do so, one on behalf of MedImmune and another from an unnamed party.

MedImmune claims the Genentech patent was obtained through "improper collusion" with a British business and amounts to an illegal 12-year extension of the first Cabilly patent - or a double patent.

That deal "profoundly and fundamentally altered the competitive landscape in the biotechnology industry" by protecting intellectual property that was legally slated to become public last year, MedImmune argued. The Cabilly II patent wasn't set to expire until 2018.

In a nearly 70-page rejection, sent to Genentech on Friday, regulators overturned the patent on the grounds of "nonstatutory obviousness-type double patenting," which essentially means that the office agreed with MedImmune. It found that the Cabilly II patent is an improper extension of an earlier version.

While that decision is questioned on appeal, the case between Genentech and MedImmune will continue to make its way through the courts, both companies said.

It had been tossed out by a California court earlier because the judges claimed MedImmune did not meet the criteria necessary to file a lawsuit - a claim the U.S. Supreme Court rejected, remanding the case back for proper review.

tricia.bishop@baltsun.com

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