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Go to a Section: Lilly Loses Patent Case That Could Shake Up Drug Makers

blackenterprise.com:


In a verdict that could ripple across the pharmaceutical industry, a U.S. jury in a federal lawsuit has ruled that Eli Lilly infringed a patent covering drugs that work through one of the body's basic biological pathways.

The jury, sitting in U.S. District Court in Boston, on Thursday ordered Lilly to pay $65.2 million in back royalties to Ariad Pharmaceuticals, a biotechnology company that had licensed the patent from Harvard University and two other academic institutions. Lilly will also have to pay a 2.3 percent royalty on future U.S. sales of its osteoporosis drug Evista and its septic-shock drug Xigris.

The case has attracted attention because Ariad claims that the patent, issued in 2002, covers any drug that works by influencing the action of an important protein in the body. Some critics have said that patents covering an entire pathway in the body, as opposed to a particular drug, could hinder drug development.

Executives at Ariad have said that the patent could cover drugs with billions of dollars in annual sales and that it had sent letters offering licenses to more than 50 companies. Last week, the biotechnology giant Amgen filed a pre-emptive lawsuit against Ariad, seeking to shield its lucrative arthritis drug Enbrel from infringement charges based on the same patent.

Lilly argued in the trial that Ariad's patent covered a natural phenomenon and was therefore invalid. It also said its two drugs were under development before the protein at the heart of the Ariad patent was even discovered.

"The Ariad position is equivalent to discovering that gravity is the force that makes water run downhill and then demanding the owners of all the existing hydroelectric plants begin to pay patent royalties on their use of gravity," Lilly's general counsel, Robert Armitage, said Thursday in a statement.

Lilly said it would appeal if a request to set aside the verdict was refused by the trial judge, Rya Zobel. The U.S. Patent and Trademark Office is re-examining the validity of the patent at the request of Lilly.

Ariad's chairman and chief executive, Harvey Berger, disputed Lilly's arguments.