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Hen Robert Blackburn joined Chiron Corporation in 1989 as chief IP counsel, he found a cache of patents in the file drawer. Two years earlier, Chiron’s scientists had discovered the hepatitis C virus; the company’s lawyers had quietly secured more than 100 patents in 20 countries relating to the virus. But before Blackburn’s arrival at the Emeryville, California, biotech company, Chiron hadn’t aggressively exploited its IP portfolio. For one thing, the patents didn’t involve what was then its main business: making ocular implants. Chiron, however, was in flux, and was about to transform itself into a modern biotech machine. As part of that plan, the implant business was sold off to optics giant Bausch & Lomb Incorporated. Chiron went into the biotech and blood-testing business big-time. The market was huge; all blood supplied to hospitals and clinics must be screened for hepatitis and other bloodborne conditions. The business-side folks made no bones about their new commitment: Only a huge market share in these industries, they said, would make sense for the company. Blackburn, Chiron’s newly hired IP counsel, searched for a litigation strategy to back up management’s plans. He built an eight-lawyer litigation team that would defend the company’s IP trove in biotech and blood testing-and go after competitors the company thought were infringing its patents. Success in pursuing those claims would likely help fill company coffers. That wager ultimately paid off: Last year Chiron took in $99 million in licensing and royalty revenue on its hepatitis C and HIV patents. Overall, the company generated $198 million in royalty and license revenue in 2001-nearly 18 percent of its gross revenue. Being a market leader often means aggressively pursuing competitors, both current and wannabe. To that end, Blackburn went overseas to defend Chiron’s hepatitis C patents. The company attacked first in Britain in 1992, suing International Murex Technologies of Atlanta and Organon International of the Netherlands for infringing its patent on a test for the hepatitis C virus. Why litigate in Britain first? “The U.K. is not a patent-friendly jurisdiction. Competitors realize that if you survive there, you really have something,” says Blackburn. The U.K.’s patent court upheld the validity of Chiron’s patent in late 1993-it was the first biotech patent ever affirmed by that court. The parties eventually settled in 1996, with Murex making a payment to Chiron and Chiron receiving the right to use Murex’s testing technology. Blackburn’s work, however, was not done. When a new generation of hepatitis C testing came out in the late 1990s, Blackburn went back to court-this time in the U.S.-and won a key settlement in 1999 with rival Gilead Science Inc. As part of the settlement, Chiron picked up rights to Gilead’s hepatitis C research. Most recently, Blackburn was in the courtroom battling with Genentech Inc. Chiron says that Genentech’s drug, Herceptin, infringes Chiron’s patent for an antibody used to treat breast cancer. This time, however, Chiron’s tough defense was thwarted. After a short trial, a federal jury in Sacramento concluded that Chiron did not invent the technology underlying Genentech’s drug, freeing Genentech from handing over $300 million in royalties to Chiron. Many IP lawyers would settle at this point. Not Blackburn. At press time he said he would ask the judge to reconsider the jury’s verdict.

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