GENENTECH: Settles Growth Hormone Patent Dispute With UC
Genentech Inc. has agreed to pay the University of California $200 million to settle a patent infringement lawsuit, according to sources close to the negotiations, the Los Angeles Times reports. The agreement, which has yet to be approved by the UC Board of Regents, would resolve a 10-year dispute between the two institutions over the rights to genetically engineered human hormones. The Times notes that the settlement -- one of the "largest patent infringement settlements in history" -- includes $150 million in cash and construction of a $50 million building at UCSF's Mission Bay research campus. The controversy centers around Genentech's marketing of two growth hormone drugs, Protropin and Nutropin; UC claims they were developed using basic research conducted at the university and a stolen DNA sample in which UC researchers "first isolated a large piece of the gene for human growth hormone" (Jacobs, 11/16). Former UC researcher Peter Seeburg, a co-holder of the university's patent, testified at trial that as a Genentech employee, he and his colleague "agreed to keep it secret" that they had used UC's technology in developing the hormone products. While university researchers identified a genetic pattern for a human growth hormone in 1978, Genentech purchased the DNA from the university for $2 million in 1979. The university's 1990 lawsuit against Genentech sought to recoup hundreds of millions of dollars in lost licensing fees on the drugs developed by Genentech -- which have brought about $250 million in revenue to the firm ( Sacramento Bee, 11/16). Last June, a federal jury reaffirmed UC's right to the hormone patent but deadlocked 8-1 in favor of the university on whether Genentech had actually violated that patent (King, Wall Street Journal, 11/16). District Judge Charles Legge in August ordered the two sides to enter mediation without their trial lawyers in an attempt to create a "different chemistry" that would lead to a settlement. If the settlement is approved, the five scientists who discovered the gene at UCSF would receive about $20 million each (Los Angeles Times, 11/16). San Francisco Chronicle business columnist Tom Abate said that "for Genentech, a settlement, however costly, would avoid a new trial that would rehash the embarrassing revelations that surfaced in the first go-round" (11/15). The Wall Street Journal reports that Genentech representatives declined to comment on the settlement, citing a confidentiality agreement (King, 11/17).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.