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In the late 1970s scientists at the University of California figured out a way to increase milk production in dairy cows. But it wasn’t until February of this year that UC was finally able to milk the patent covering the scientists’ invention. That’s when Monsanto Co. agreed to pay at least $200 million to settle a two-year-old suit over its bovine growth hormone product Posilac. But the underlying patent, for a method of producing bovine growth hormone, took more than 24 years to prosecute. “It was ridiculous,” says John Baxter, a research professor at UC-San Francisco and one of the patent’s three inventors. “I was a young man in my 30s when this started.” Baxter ran the lab that produced bovine growth hormone as well as the groundbreaking human growth hormone � one of the first biotech patents ever issued. Baxter, now 65, holds at least 10 other patents, but says he has never seen a prosecution take so long. Walter Miller, a professor of pediatrics at UC-San Francisco and the inventor who conducted most of the experiments that led to the hormone’s development, was equally frustrated. “I’ve concluded that there really is no U.S. Patent Office,” says Miller. “There is merely a series of examiners who work within that office, and the idiosyncrasies of each examiner weigh heavily on the outcome of a case.” Under the university’s patent policy, Miller, Baxter and a third inventor, Joseph Martial, are all entitled to a portion of the settlement that could be worth up several million dollars. The patent’s delay was due, in part, to the pioneering nature of the invention, says Gerald Dodson, a partner at Morrison & Foerster who represented the university. The patent was one of the first sought for a biotech product. But while other biotech applications have stagnated at the PTO, this patent’s history was far from typical. The saga began in August 1980 when UC filed the first of four separate patent applications for the invention. The rejections piled up over the course of 10 years. The patent examiner believed that previously published protein sequences made the invention obvious, says Kate Murashige, a MoFo partner in San Diego who prosecuted the patent. Murashige says she traveled to the PTO three or four times to meet with the examiner and spent about 1,000 hours on the prosecution. In 1996 � five years after an appeal to the Board of Patent Appeals and Interferences started the application process anew � the examiner finally issued his notice of allowance. The patent should have issued soon afterward. Instead, in July 1997 the PTO declared a patent interference. An Israeli company, Yeda Research and Development, claimed that it was the first to invent the process. The case settled five years later when Yeda conceded the patent to the university in return for a cut of any income from the patent. (Yeda is receiving 10 percent of the Monsanto settlement.) When UC’s patent finally issued in February 2004, the university filed suit against Monsanto, which had been selling Posilac since 1994. Monsanto brought in John Quinn and Adrian Pruetz of Quinn Emanuel Urquhart Oliver & Hedges to fight the suit, and Dodson says he expected to go to trial. He hired a prominent jury consultant and held two mock trials, both of which resulted in UC victories. “We were very confident,” says Dodson, who won a $200 million award in 1999 for UC in a patent infringement case against Genentech Inc. Monsanto signed the settlement the day before the trial was scheduled to begin. In exchange for an exclusive license for the patent, Monsanto agreed to pay the university an up-front royalty of $100 million plus royalties of 15 cents on each dose of Posilac sold to dairy producers internationally, with a minimum yearly payment of $5 million, until the patent expires in 2023.

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