Earlier, Eli Lilly and Company lost a jury trial in the U.S. District Court of Massachusetts in the case of Ariad Pharmaceuticals et al. v. Eli Lilly and Company. The jury awarded the plaintiffs approximately $65 million in back royalties and a 2.3 percent royalty on future U.S. sales of Evista and Xigris until the patent’s expiration in 2019.

The Jury decided that U.S. Pat. No. 6,410,516, owned by Harvard, the Massachusetts Institute of Technology, and the Whitehead Institute and licensed to Ariad Pharmaceuticals, was valid and infringed by Lilly’s sale of Evista® and Xigris®.

The ‘516 patent claims methods based on the discovery of a naturally-occurring biological pathway, the NF-kappaB pathway. While Ariad contends that the patent covers all means for modulating the NF-kappaB pathway, Lilly’s contention is that it discovered the drugs in question, Evista and Xigris and disclosed their medicinal properties years before the patentees’ scientists made their discovery.

We don’t think Ariad will be spending that $65 million any time soon. This decision goes against long-standing patent practice in that one cannot get a patent that would remove known materials from the public. In addition, it has always been the case that one may patent a drug without knowing how it works.

This case begs the question of if a researcher discovers a drug without ever knowing the drug acts on a patented pathway or before the pathway is understood, does that constitute infringement? If the drug was acting on the pathway before the pathway was discovered, does the existence of the drug invalidate the patent on the pathway by rendering it not “new“? This could also give rise to an ever-increasing number of conflicting patents.

A separate bench trial with the U.S. District Court of Massachusetts was held in August based on Lilly’s contention that the patent is unenforceable and will also consider the patent’s improper coverage of natural processes.

This bench trial addresses patent validity and enforceability issues different from those considered in the jury trial. Lilly contends that the asserted claims of U.S. Pat. No. 6,410,516 are invalid for including non-statutory subject matter, for being obtained through inequitable conduct, and are unforceable due to prosecution laches.

Lilly argues, and of course Ariad disputes, that the claims cover unpatentable naturally-occurring phenomena, that Ariad withheld critical documents from the patent examiner not only to get the patent issued, but to avoid the risk of losing 13 years of patent term.

Of these, the patent term argument is probably the most compelling. In any case, particularly in light of the parallels with the Court of Appeals for the Federal Circuit decision in University of Rochester v. G. D. Searle et al., the likelihood that Ariad’s victory will survive the bench trial and the inevitable appeal(s) is quite low.

See the following court documents (these are large files so only download if you need them):

Pre-Trial Brief by Ariad Pharmaceutical.

Supplemental Pre-Trial Brief by Ariad Pharmaceutical.

Pre-Trial Brief by Eli Lilly & Co.

Motion to Supplement Trial Exhibit PTX 2 in Order to Complete the PTO Prosecution File of U.S. Patent No. 6,410,516 by Eli Lilly & Co.

Motion to Preclude a Claim Construction That is Barred by Judicial Estoppel by Eli Lilly & Co.

Opposition re Motion to Preclude a Claim Construction That is Barred by Judicial Estoppel filed by all plaintiffs.

Proposed Findings of Fact by all plaintiffs.

Response by Eli Lilly & Co. to Proposed Findings of Fact.

More on Ariad v. Lilly to come.

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