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While Genentech Inc. gained a new weapon to use in its patent battle with Chiron Corp., patent attorneys question how deadly it will be. Genentech, based in South San Francisco, Calif., announced Thursday that the U.S. Patent and Trademark Office has agreed to review whether Chiron is the legitimate owner of a patent related to the one being challenged in a trial currently under way in a Sacramento, Calif., federal courtroom. If the patent office sides with Genentech, Chiron’s patent on technology related to Genentech’s Herceptin breast cancer drug could be found invalid. The PTO’s decision to step into the dispute at this late date creates a surprising and novel twist in the litigation. Courts typically stay litigation pending the outcome of a PTO review, but since the trial is under way the dispute will be addressed concurrently in two different venues. “It’s a procedural disaster,” said Lynn Pasahow, a partner at Palo Alto, Calif.-based Fenwick & West. “You could find an awkward result if Chiron ends up paying money to Genentech and the patent office finds the patent is not valid.” Genentech requested that the PTO review the patent more than a year ago. Both sides claim to own the technology underlying Genentech’s Herceptin breast cancer drug. Chiron, based in Emeryville, Calif., is seeking $300 million in royalties on sales of the drug, which have reached nearly $1 billion since the drug came on the market in 1998. At issue in the PTO’s “interference proceeding” is who owns the so-called Drebin/Greene patent, which constitutes prior art to Chiron’s ’561 patent. The University of Pennsylvania, which licensed its patent application on the technology to Genentech, claims it is the first inventor. If the PTO agrees, the Chiron patent now being challenged in court could be invalid. “If the Drebin/Greene patent is declared to be the earlier invention, then the claims in Chiron’s ’561 patent will be cancelled because they came later,” said Henry Bunsow, a partner at San Francisco-based Keker & Van Nest who is representing Genentech. “Genentech will own the invention that Chiron claims.” U.S. District Court Judge William Shubb, of the Eastern District of California, has already weighed in on the Drebin/Greene patent. Prior to the trial he ruled that Genentech could not raise the patent as a prior art defense. As far as the trial goes, Bunsow said he believes the PTO’s review “will not have a dramatic effect one way or the other.” Bunsow said he and his colleagues have asked the judge to strike exhibits, comments and testimony relating to the PTO interference proceeding or tell the jury there has been a development in the proceeding and not to consider the issue. Alternatively, Bunsow said they’ve asked permission to call as a witness an attorney handling the interference to explain what has happened. Chiron lead counsel Harold McElhinny, a partner at San Francisco-based Morrison & Foerster, could not be reached for comment Friday. Patent litigators not involved in the case said the judge is not likely to inform the jury about the PTO’s proceedings since the agency has not come to any conclusion. While the PTO’s involvement in the dispute may not affect the trial outcome, it creates a new contest between the two biotech giants. As the court case and PTO review proceed on a parallel track, “it’s hard to predict which will reach the finish line first,” Bunsow said. Whichever side wins at trial, the case will presumably be appealed. The appeals process could be exhausted and a binding court decision issued against Genentech before the PTO makes its decision. In that event, even if the PTO finds the patent is invalid, Genentech will have had to fork over millions of dollars in royalties to Chiron. “If the money is paid and spent, so to say, we’re not going to get it back,” Bunsow said. A PTO spokesman said an interference proceeding typically takes one to two years. But one patent attorney laughed at the notion the PTO would act so quickly. “I’ve seen records where [an interference proceeding] took 11 years,” said Marc Peters, an associate at Milbank, Tweed, Hadley & McCloy. If the PTO takes one to two years on this patent, “I would be shocked, just shocked.”

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