In 2004, Tercica, a licensee under a Genentech patent for a growth hormone, filed suit against Insmed in the U.K. alleging infringement of EP patent No. 571,417, or the ‘417 patent. The ‘417 patent has claims directed to particular uses of a combination of IGFBP-3 and IGF-1. In the complaint, Tercica asked the court for an injunction to restrain allegedly infringing activity, for a declaration that the ‘417 patent is valid and infringed, for an order requiring the delivery or destruction of allegedly infringing articles and materials and for an inquiry into possible economic damages.

In addition, Genentech and Tercica sued Insmed for infringement of U.S. Patent Nos., 5,187,151 (‘151 patent) and 6,331,414 (‘414 patent) in the U.S. District Court for the Northern District of California. These patents are directed to certain methods of using rhIGF-1/rhIGFBP-3 and methods of producing rhIGF-1, respectively.

On February 16, 2005, Tercica filed an amended complaint, adding an infringement allegation against Insmed with respect to U.S. Patent No. 5,528,287, or the ‘287 patent. The claims of the ‘287 patent are directed to DNA encoding BP53 (i.e. IGFBP-3) and recombinant constructs, transformed host cells and methods for using the same. Genentech and Tercica claimed that the production or use of IPLEX, a complex of rhIGF-1/rhIGFBP-3, would infringe these patents and that the infringement was willful.

The court found that Insmed Incorporated and Insmed Therapeutic Proteins, Inc. infringed the ‘287 patent; willfully infringed the ‘151 patent; and upheld the validity of the ‘414 patent. Tercica exclusively licensed these patents in April 2002 for use in its manufacture and sale of, among other things, Increlex. Prior to the trial, the Court had ruled that Insmed’s process for making the IGF-1 in IPLEX literally infringes three claims of the ‘414 Patent, and Insmed had stipulated that it infringes on three additional claims.

The jury verdict ordered Insmed to pay $7.5 million and 15% royalties for damages pertaining to IPLEX past sales of up to $100 million, and 20% royalties for IPLEX past sales greater than $100 million.

Genentech and Tercica have now resolved their litigation against Insmed in both the US and the UK in a settlement of the patent infringement and unfair business practices suits brought against Insmed.

In parallel, the companies announced that they have entered a license and development agreement in order to end the dispute, while Tercica and Genentech have waived the damages awarded by the jury in the US patent infringement litigation.

Under the terms of the settlement, Insmed will no longer provide Iplex to patients with severe Primary IGF-1 deficiency and other short stature indications and will withdraw its Iplex marketing application in the EU. Insmed will have freedom regarding manufacture, development and commercialisation of the drug for certain non-short stature indications, subject to opt-in rights and royalty provisions for Tercica and Genentech, the companies said.

Furthermore, the parties will form a joint-development committee to guide the development and commercialization of Iplex in non-Tercica/Genentech indications.  The Settlement, License and Development Agreement is in effect until the later of 2018 or the expiration of any subsequent Tercica/Genentech issued patents that cover IPLEX or its indications.

See the earlier note on the UK case here.

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