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Robert Blackburn’s initial impression of in-house patent lawyers was not positive. The first one he met spent his “entire career drafting and prosecuting applications for a certain class of chemical compounds,” he says. The work seemed beyond boring. But as he discovered when he joined Chiron Corp. in 1989, even the fruits of boring work can be quite valuable. As the new chief IP counsel for the biotech company based in Emeryville, Calif., Blackburn found a trove of patents in the file drawer. In 1987, after five years of research, Chiron’s scientists discovered the hepatitis C virus; Chiron’s lawyers secured more than 100 patents relating to it in 20 countries. But before Blackburn’s arrival, the company had not aggressively defended its IP portfolio. So Blackburn searched for a strategy to dominate the testing landscape — only a huge market share, his business-side partners thought, would make economic sense for the company. He built a litigation team that would fulfill his grand vision. Chiron attacked first in England in 1992. The company sued 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 the fall of 1993 — it was the first biotech patent ever affirmed by the 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. Murex also agreed to withdraw any opposition procedures against Chiron’s patents. Blackburn hired Robin Jacob, who is now the chief judge of the U.K.’s patent court, to argue the case for Chiron. Afterward, says Blackburn, “We really had to do very few other actions in Europe on this patent.” Blackburn’s work, however, was not done. When a new generation of hepatitis C testing came out, Blackburn went back to court and won a key settlement in 1999 with Gilead Science Inc. As part of the settlement, Chiron picked up rights to Gilead’s hepatitis C research, which complemented Chiron’s work in that area. There is still ongoing litigation in the case against Gilead’s two co-defendants, Agouron Pharmaceuticals and Vertex Pharmaceuticals. Chiron has pursued similar strategies with other patents. In 2000 the company settled an infringement suit with Hoffman-LaRoche Ltd. over a method of testing using nucleic-acid technology. Chiron received more than $100 million in the settlement. At each step in its litigation and licensing battles, Chiron was criticized by competitors and policy advocates as a company that put profits above public health. Blackburn disagrees, saying that his hepatitis C licensing activities are “a rather wonderful coming together of business and public health interests.” Innovation can be profitable. Blackburn and his staff of eight lawyers are a major profit center at the company. 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 gross revenue. Victoria Slind-Flor is IP Worldwide ‘s West Coast editor.

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