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As patent fights go, the Chiron Corp. vs. Genentech Inc. bout over Genentech’s breast cancer drug is on par with the Frazier-Ali match. Emeryville, Calif.-based Chiron won the first round in its infringement suit against South San Francisco, Calif.-based Genentech when a U.S. magistrate judge in Sacramento, Calif., agreed with Chiron’s interpretation of its patent claims. And while the opinion doesn’t address patent validity or infringement, it lays the groundwork for pursuing those questions in court. In another blow to Genentech, U.S. Magistrate Judge Gregory Hollows issued a separate opinion the same day, finding that Genentech willfully withheld information harmful to its case during discovery, and he recommended sanctions be imposed against the company. Hollows submitted both opinions to Sacramento Chief District Judge William Shubb, who will hold hearings on Hollows’ recommendations this month and issue an order April 22. For the two biotech heavyweights, the case is worth millions of dollars in potential royalties. Cancer drug Herceptin is one of Genentech’s top-selling products, generating sales of $346 million in 2001. It’s also one of the major success stories of the biotech industry. Chiron claims the drug, a so-called “humanized” monoclonal antibody, infringes its patent. However, Genentech says Chiron’s patent pertains solely to monoclonal antibodies produced through a traditional process, not the “humanized” form created by Genentech. Judge Hollows agreed with Chiron that the term “monoclonal antibody” includes all antibodies regardless of their origin or how they are produced. “The court rejects Genentech’s express invitation to determine that Herceptin is a different product from that claimed in the [Chiron] patent,” Hollows wrote. However, he added that it is up to a trial judge to determine whether the patent “suffers from overbroad claims” or qualifies for priority back to the mid-1980s, when the initial application was filed. Chiron submitted continuance applications to the U.S. Patent and Trademark Office to revise or add claims and was granted the disputed patent in April 2000, two years after Herceptin went on the market. “The bottom line is that in the 1980s, Cetus [which was acquired by Chiron], found the antibody to the protein present in about one-third of women with breast cancer,” said Chiron attorney Rachel Krevans, a partner at Morrison & Forester in San Francisco. “Chiron is entitled to be compensated for discovering the antibody.” Krevans said Chiron is “seeking a substantial royalty in the double digits percentage.” Genentech’s attorney, Henry Bunsow, a partner at San Francisco’s Keker & Van Nest, said Chiron has no rights to Herceptin. “Genentech succeeded where Chiron failed miserably and rather than try to compete in the marketplace by developing its own product, it gave up developing a product and asked its lawyers to tax the success of Genentech.” Bunsow said the magistrate judge misinterpreted the patent filing history. He said he plans to file an objection with Shubb. PRIOR ART Another point of contention between the two companies is whether antibodies created before Chiron’s patent was issued constitute prior art that would invalidate the patent. The prior art defense may be problematic for Genentech, however. Hollows found that the company willfully withheld information about its in-house testing of certain “Drebin/Greene” antibodies and did not respond to repeated court orders to produce the data. At issue is whether the antibodies bound to the human breast cancer antigen HER2, as described in Chiron’s patent. Herceptin also acts by attaching to the HER2 antigen. Hollows concluded that if the Drebin/Greene antibodies constitute prior art to Chiron’s patent they “arguably also constitute prior art to one or more Genentech patents concerning monoclonal antibodies. Therefore, if Genentech prevails on the defense, Genentech itself arguably may have misled the patent office” by not having disclosed the Drebin/Green antibodies as prior art. Hollows also dismissed Genentech’s claims that it had simply overlooked its in-house testing of the Drebin/Greene antibodies. “Unless Genentech now is in the business of saving our rodent cousins from breast cancer, two inferences may be drawn from [Genentech's] purchase of the Drebin/Greene intellectual property rights concerning the attachment of rat antibodies to rat cancer antigens,” Hollows wrote. “First, one can infer that Genentech was attempting to ensure, prior to May 2000, that no one could bring an interference before the PTO charging that Genentech’s antibody patents were invalid because of the Drebin/Greene prior art. Second, one can infer that Genentech wanted to be able to attack with impunity Chiron’s patents on the same basis.” In addition to proposing monetary sanctions, Hollows said the court should not consider Genentech’s prior art defense at summary judgment. Further, he said that if Genentech uses the defense at trial, or opposes Chiron’s reference to Genentech’s in-house testing of the antibodies, the jury should be told that Genentech willfully withheld the information. Monetary sanctions for discovery delays are not unusual, Krevans said, noting that both Chiron and Genentech have been awarded sanctions during this case. But while awards typically involve “good faith” disagreements over the necessity of providing documents, she said this situation was unusual in that it involved deliberately concealing evidence. Bunsow, however, said he was surprised by the proposed sanctions. “I’ve never personally seen an order like this and this case is not unlike others I have handled,” he said. “The reality is the magistrate judge interpreted our efforts in one way and I think someone else could have interpreted them another way. There was no willful conduct here.” A trial is scheduled for Aug. 8.

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