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A shift in strategy on witnesses was the key to a California cancer research center’s winning a retrial and about $500 million in damages from biotechnology giant Genentech, lawyers say. A Los Angeles County Superior Court jury most recently awarded the City of Hope National Medical Center $200 million in punitive damages against Genentech. Two weeks earlier, the jury had awarded City of Hope $300.1 million in compensatory damages. Last October, the first trial in the case ended in a hung jury, with a 7-5 margin leaning toward Genentech. In the second trial, said Morgan Chu of Los Angeles’ Irell & Manella, lead attorney for City of Hope, “we were more aggressive in attacking the credibility of Genentech’s witnesses. “We decided to call a number of witnesses and cross-examine them,” said Chu, whose co-counsel was David Gindler of Irell & Manella. “It made a tremendous difference in how the case unfolded.” For example, he said, the plaintiffs called as a witness Thomas Kiley, the first general counsel of Genentech, who had testified at the first trial but this time was questioned much more closely. Chu said that Kiley “recovered his memory” of a meeting in November 1986 in which he told City of Hope how Genentech interpreted their contract. In the first trial, Chu said, Kiley testified that he never discussed the interpretation of the contract with anyone at City of Hope. City of Hope, located in Duarte, Calif., accused South San Francisco-based Genentech of breach of contract and fiduciary duty. It maintained that Genentech failed to pay royalties on human insulin and human growth hormone, developed and manufactured at City of Hope, under a 1976 agreement. City of Hope National Medical Center v. Genentech, No. BC215152. Among other witnesses, Chu called Thomas Perkins, Genentech’s ex-board chairman, who did not testify during the first trial, and Gary Loeb, an in-house lawyer for Genentech. “Calling Genentech witnesses as adverse witnesses allowed us to argue to the jury … the credibility of Genentech’s positions and witnesses — and their credibility stunk,” Chu claimed. Genentech said it will appeal. Its attorney, Susan Harriman of San Francisco’s Keker & Van Nest, who tried the case with Robert Van Nest, cited another switch in strategy by Chu and City of Hope. “In the first trial, the jurors spent a lot of time on the contract, looking at key provisions and how you can read them both ways,” she said. “City of Hope emphasized breach of fiduciary duty more in the second trial.” But Harriman felt the contract itself was the key piece of evidence in both trials. “It’s fair to say the appeal will be on contract interpretation,” she said. Glenn Krinsky, general counsel for the City of Hope, said he thought his side had won the first trial “but every jury has a different dynamic.” Even when “a mistrial was declared, I knew we had put on a strong case,” he said. “And we put on an even stronger case in the second trial.” In another Genentech case, U.S. District Judge William Shubb in Sacramento, Calif., ruled in a series of pretrial motions on June 25 that a leading breast-cancer drug from Genentech infringes on a patent held by a rival firm, Chiron of Emeryville, Calif. The drug, Herceptin, is one of Genentech’s most lucrative, having brought in almost $350 million in 2001. The full civil case is scheduled to be tried in August. Chiron v. Genentech, No. CIV-S1252-WBFGGH.

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