Nobody doubts that the Kennedy Trust for Rheumatology Research has made important contributions to the treatment of arthritis. But the London-based research center overreached by demanding more patent royalties from drugmaker and longtime licensee AbbVie Inc. (formerly Abbott Laboratories Inc.), an appeals court ruled Thursday.
In a 28-page ruling, the U.S. Court of Appeals for the Federal Circuit affirmed a decision invalidating one of the Kennedy Trust’s patents on the blockbuster arthritis drug Humira, which is sold by AbbVie. The institute had hoped to use the patent to wring royalties out of AbbVie until 2018.
The ruling is a win for AbbVie’s lawyers at Finnegan, Henderson, Farabow, Garrett & Dunner, including Michael Morin and David Frazier. Morin argued at the Federal Circuit, squaring off against Mark Perry of Gibson, Dunn & Crutcher.
Launched by a wealthy British family, the Kennedy Trust has funded arthritis research since 1965. Two of its award-winning researchers, Ravinder Maini and Marc Feldmann, are credited with discovering in the late 1980s that rheumatoid arthritis can be alleviated by inhibiting a protein called TNF. The duo began filing for U.S. patents in 1992.
In 2002, AbbVie (then Abbott) obtained regulatory approval to sell Humira, a TNF-inhibitor. To bring the drug to market, AbbVie agreed to license one of Maini and Feldmann’s patents, known as the ’766 patent.
These days, Humira generates $10 billion a year in revenue, making it one of the world’s best-selling drugs. The 2002 agreement has led Abbott to pay more than $100 million in licensing fees to the Kennedy Trust.
The licensing arrangement was set to conclude in 2012, when the ’766 patent expired. Or so AbbVie thought. In 2010, the Kennedy Trust demanded that AbbVie also license a newer patent with a 2018 expiration, known as the ’442 patent, in order to keep selling Humira.
Rather than pay up, in 2011 AbbVie moved for declaratory judgment that the patent was invalid. AbbVie argued that the Kennedy Trust was claiming a monopoly on ideas already covered by the ’766 patent.
The case climaxed in a four-day bench trial before U.S. District Judge Paul Crotty in Manhattan. Finnegan’s Morin and Frazier made the case for AbbVie, opposite lawyers for the Kennedy Trust at the IP boutique Cooper & Dunham, including John White, Norman Zivin and Robert Maldonado. Crotty sided with AbbVie in a June 2013 ruling, writing that the company had established that the ’442 patent is invalid through clear and convincing evidence.
The Kennedy Trust hoped that Perry, a leading appellate lawyer, could undo the damage at the Federal Circuit. But the panel unanimously affirmed Crotty on Thursday, writing that “Kennedy is not entitled to an extra six years of monopoly.”
Finnegan’s Morin declined to comment on the decision. Gibson Dunn’s Perry wasn’t immediately available to comment.