By SCOTT SHEWFELT, Capital News Service
WASHINGTON - More patent disputes will find their way into the courts and Gaithersburg-based biotech giant MedImmune Inc., may resume its patent infringement battle with California biotech firm Genentech Inc., following a Tuesday U.S. Supreme Court decision.
The Supreme Court voted 8-1 in favor of MedImmune, overturning a lower court ruling and allowing the company to challenge the validity of a Genentech patent while it pays a licensing fee.
The decision is "about biotech, but it's about everything, too," said Max Oppenheimer, professor of pharmaceutical law and intellectual property at the University of Baltimore.
"Even Disney's licenses and the right to use their characters is suspect now," he said.
The dispute surrounds a patent on some technology used in MedImmune's Synagis, a top-selling respiratory drug for children, making up 80 percent of MedImmune's sales revenue with annual sales of $1 billion, said Kate Barrett, public relations manager for MedImmune.
In the past, the penalty for losing an infringement case was so severe, that companies would enter into licensing agreements and pay royalties even if they thought the patents were weak, said Harvey Kurzweil, co-counsel for MedImmune. The decision, he said, restores the balance, which had swung too far toward patent holders.
"This ruling makes it easier for contract disputes in general to end up in federal court," said Mike Myerson, a professor at George Washington University Law School. "They're not going to force you to bet the farm."
"Companies should be sitting around seeing how they are going to change their business model for intellectual property, if they haven't already," said Oppenheimer.
Major patent holders like General Mills, IBM and Disney receive large revenue streams from intellectual property patents. As do universities and biotech firms, which control most of the patents in the United States. Those revenues are now in jeopardy, the experts said.
Major research institutions like the University of Wisconsin, the Massachusetts Institute of Technology and Columbia University enjoy high patent revenues, said Deanna Marchetti an information officer at the Association of University Technology Managers.
In 2005, the Johns Hopkins University, another leading research institution, received more than $12 million in licensing income alone, said Dennis O'Shea a school spokesman.
The University of Baltimore does not license anything, nor does Towson University, according to spokesmen at both schools.
Universities, like companies, can now challenge patents they believe are weak because financial risk has been reduced, Myerson said.
"Despite it being a fundamental patent case between biotech companies, the real case hasn't really started," said Oppenheimer.
MedImmume has been paying Genentech royalties from the sale of Synagis, even though it feels Synagis does not infringe on Genentech's patent.
MedImmune will now wait 20 days before the Supreme Court sends its case back to the 9th Circuit Court of Appeals in California. It will then be two to three months before its legal team can meet with a status judge to determine the next step, Kurzweil said.
The validity of the patent surrounding Synagis, set to expire in 2018 will be debated. "If the patent is found to be valid, we will continue to pay royalties," said Kurzweil. "If it's not, we won't."
MedImmune employs approximately 2,500 people and markets three products Synagis, Ethyol (a cancer drug) and the influenza vaccine FluMist said Barrett.
MedImmune is also involved in a legal battle with Sun Pharmaceutical Industries, which is trying to make a generic version of Ethyol. The pre-trial is scheduled to begin in June 2007.