GENENTECH: UCSF Regents Accept $200M Settlement
The regents of California's university system accepted a settlement Friday that resolves a d ecade-long patent dispute between the University of California-San Francisco and Genentech Inc., the world's second-largest biotechnology company. The Washington Post reports that under the settlement, Genentech will pay UCSF $200 million, of which $50 million is earmarked for a new research building, while the remainder is to be paid as "an unrestricted cash settlement." The deal resolves a lawsuit -- filed by UCSF in 1990 -- claiming that Genentech developed human growth hormone from research stolen from the university in 1978. Prior to the settlement, the case was scheduled for trial in federal court on Jan. 3, 2000. While Genentech Chair and CEO Arthur Levinson says that the deal is not an admission of guilt, but rather the company's strategy to "reduce the risks of a big jury settlement and put the matter to rest," the magnitude of the settlement -- one of the largest ever won in a patent dispute -- casts doubt over the reputations of several Genentech scientists. Specifically, the case pitted two Genentech scientists in a battle of one man's word against the other's. In a trial earlier this year, Genentech scientist Peter Seeburg testified that he and other company scientists, including former Genetech top scientist and National Academy of Sciences member David Goeddel, used genetic material stolen from a UCSF lab to make "critical breakthroughs" in human growth hormone research. Goeddel, however, denies participation in the "midnight raid" of the UCSF lab and claims never to have used the stolen materials in his research. Moreover, Goeddel claims that Seeburg invented his testimony of "deliberate theft and fraud" by Genentech researchers. The Post notes that with the settlement, "it's unlikely anybody will ever know for sure which man was lying on the witness stand." While some lawyers argued that the university could have received far more than the settlement's $200 million in a new trial, the regents stated that the primary goal in closing the case was to "preserve a good working relationship between UCSF and Genentech" -- the two organizations have collaborated on several occasions to advance genetic science. On Genentech's side, while the settlement exceeds the company's 1998 earnings, the company can dip into a cash balance in excess of $1 billion, to settle (Gillis, 11/20).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.