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Emory, UAB Stand to Benefit from Recent Patent-Dispute Decisions

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A pair of US universities has recently benefited from opinions handed down in two different biomedical patent disputes with private corporations.
 
In the first decision, handed down on July 24 by the US District Court for the Northern District of Georgia, Emory University was granted summary judgment in a patent-infringement suit it filed in 2006 against antimicrobial product manufacturer Nova Biogenetics and a former Nova corporate officer.
 
The judgment barred the now-defunct Nova and its former executive from infringing patents covering waterproof anti-microbial agents that Emory owns and has licensed to Microbe Guard, a Nova competitor.
 
In the second judgment, the US District Court for the Northern District of Alabama last week awarded the University of Alabama-Birmingham at least $11 million, to be disbursed over the next 10 years, after the school settled its patent-infringement suit against Idenix Pharmaceuticals.
 
The suit, filed last year, claimed that an Idenix founder and former UAB professor absconded with intellectual property covering nucleoside-based treatments for viral diseases that he co-developed with another UAB professor.
 
Emory v. Nova
 
In its complaint against Nova Biogenetics and Timothy Moses, former executive vice president and director of business development for the company, Emory and co-plaintiff Microbe Guard alleged that Nova was infringing three US patents assigned to Emory by either selling antimicrobial products containing water-stabilized organosilanes or methods for making or using the products.
 
The patents in question — Nos. 5,959,014; 6,221,944; and 6,632,805 — covered methods for producing a water-resistant version of an antimicrobial product then sold by Dow Corning that could potentially be used for, among other things, protecting hard surfaces from biological weapons such as bacteria and viruses.
 
According to court documents, a now-defunct company called BioShield Technologies, which Moses co-founded, inked a sponsored research agreement with Emory scientists Lanny Liebeskind and Gary Allred to develop a waterproof version of the antimicrobial, which they did. The original date of the agreement was not disclosed.
 
Under the agreement, all IP stemming from the research would be owned by Emory, and starting in 1996 the school filed for and was awarded the ‘014, ‘944, and ‘805 patents with Liebeskind and Allred listed as the sole inventors.
 
Moses and BioShield claimed that they had supplied the Emory scientists prior art that helped them make their discovery and should be listed as co-inventors. They took up the matter with an independent arbitrator, which confirmed that the Emory inventors acted alone.
 
In 2004, BioShield filed for bankruptcy and transferred its assets to Moses’ new company, Nova Biogenetics. At around the same time, Emory licensed the patents to its new corporate partner, Microbe Guard. Emory and Microbe Guard then filed the patent-infringement lawsuit against Nova and Moses.
 
In an unrelated twist, Moses was convicted of securities fraud and perjury in 2005, for which he is currently serving a prison sentence; and Nova was administratively dissolved in May of this year. The company also never responded to the motions filed by Emory and Microbe Guard, according to court documents.
 
Nevertheless, when the court granted a permanent injunction preventing Nova and Moses from infringing the Emory patents, it claimed that although the defendant is currently not selling an “offending product,” the negative effects of the plaintiffs’ potential loss “in goodwill, market share, and prestige are real,” though would be difficult to quantify solely through monetary damages, according to documents.
 
“The balance of hardships favors a permanent injunction,” the court said in its judgment. Although the defendant is currently “administratively dissolved,” an injunction gives the plaintiffs “certainty that the defendant will no longer infringe upon its patents.” The court also said that granting a permanent injunction is in the greater public interest due to proper enforcement of the patent system and the fact that the public is not losing a supplier of antimicrobial products given that Nova is dissolved.
 
Having won the injunction, Emory and Microbe Guard are not seeking monetary damages at this time, according to the judgment.
 
University of Alabama v. Idenix
 
As part of its settlement with Idenix Pharmaceuticals, the University of Alabama-Birmingham will be awarded at least $11 million in damages over the next 10 years in exchange for ending all contractual disputes and litigation matters related to patents covering the use of certain synthetic nucleotides for treating hepatitis B.
 
The patent dispute traces its roots to a collaborative research agreement signed in the early 1990s between UAB and French academic institutions Centre National de la Recherche and Universite Montpellier II to synthesize structural analogs of naturally occurring nucleosides as potential treatments for several viral diseases such as HIV, various forms of hepatitis, and herpes simplex, according to court documents.
 
Numerous US and European patents resulted from the collaboration, all of which were assigned to CNRS, Montpellier, and Idenix, which was founded by former UAB professor Jean Pierre Sommadossi.
 
According to the complaint filed by UAB against co-plaintiffs Idenix, CNRS, and Montpellier, another former UAB professor named Abdesselam Faraj conceived of the use of at least three nucleoside compounds for treating hepatitis B, demonstrated their effectiveness in laboratory and human clinical tests, and communicated his findings to Sommadossi and research partners at the French institutes.
 
UAB alleged that Sommadossi founded Novirio Pharmaceuticals, the corporate predecessor of defendant Idenix, after Faraj disclosed his invention. The suit also said that the company filed for and was awarded multiple patents in the US and Europe to protect the HBV nucleoside treatments, but did not name Faraj as an inventor.
 
In its suit, UAB wanted to see Faraj named as an inventor on the patents and sought monetary damages because Idenix has gone on to develop and market the nucleoside-based HBV medication known as telbivudine. The drug is currently marketed in Europe as Sebivo and the US as Tyzeka by Swiss pharma Novartis, which paid $255 million in 2003 to acquire a 51 percent stake in Idenix.
 
Last month, Idenix, on behalf of CNRS and Montpellier, settled with UAB in exchange for a promise by UAB to drop all matters related to the dispute.
 
According to an Idenix SEC filing, the company was to pay UABRF $4 million within five days of the execution of the settlement agreement dated July 30. In addition, it will make payments to UABRF equivalent to 20 percent of all royalty payments received by Idenix from Novartis from worldwide sales of telbivudine, subject to a set of minimum payment obligations.
Specifically, Idenix is obligated to make minimum payments of $11 million consisting of three $2 million installments on Dec. 30 in the years 2010, 2013, and 2016; and one $5 million installment in 2018. If the royalty payments made to UAB by those dates do not equal the minimum payments, Idenix is then obligated to pay UAB the difference within 30 days following each of the specified dates, according to the filing.
 
Telbivudine was approved in the US in October 2006 and in the European Union in April 2007. Full-year sales figures for Sebvio/Tyzeka have not been reported by Novartis or Idenix. Analysts’ sales expectations for the drug range from $250 million to $543 million per year by 2012.

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