Genentech Accused of Antitrust Conspiracy

WILMINGTON, Del. (CN) - Genentech conspired to monopolize the "fundamental technology" for producing monoclonal antibodies using recombinant DNA, using sham patent claims against competitors to block production of potentially life-saving drugs, including a treatment for lupus, Human Genome Sciences claims in a federal antitrust complaint.

"Because of its fraud, Genentech now purportedly has the power to exclude all competitors from the technology market for an allegedly fundamental technology for producing monoclonal antibody therapeutics using recombinant DNA techniques," according to the complaint.

Human Genome Sciences (HGS) claims that in March 2001 Genentech colluded with (nonparty) Celltech R&D, to sacrifice the "Boss patent" for the technology in favor of the patent for "Cabilly II," a virtually identical patent, allowing Genentech to enforce the patent for 12 years longer than the original "boss" technology, paying Celltech for its lost royalties. (The Boss patent is named for Michael Boss, first-named of the four men who applied for the patent in the United Kingdom, in 1983.)

"Genentech has used its fraudulent, decade-plus monopoly created by the Cabilly II patent to dominate the technology market for monoclonal antibody therapeutics made from artificial or recombinant DNA," according to the complaint.

Celltech "inexplicably conceded priority," says HGS, adding that Celltech reported royalty earnings for the patent of 10.3 million pounds in 2000 and 16.5 million pounds in 2001.

The logic behind the collusion is simple, HGS says: "Genentech would make more than a billion dollars in royalties due to the improperly extended patent term, and Genentech would then compensate Celltech for the royalties it would have received under the Boss patent, plus a share of the Cabilly II royalties for the remaining term of that patent."

HGS claims that at "the same time Genentech was spending years defrauding the District Court and the PTO to secure patent protection far beyond the statutory grant, HGS was established with a mission to discover, develop, manufacture, and market innovative drugs that serve patients with unmet medical needs."

HGS claims that were it not for Genentech's illegal patent, HGS' monoclonal antibody therapeutic drug Benlysta would be "the first new approved drug for the treatment of patients with Lupus in more than fifty years," if approved by the FDA.

According to the National Arthritis Data Workgroup, 322,000 Americans have a "definite or probable Lupus diagnosis," for the debilitating autoimmune disease that affects their heart, kidneys, lungs, brain, blood, skin and joints.

HGS says it spent $45 million in 2010 marketing Benlysta, and plans to spend another $80 million this year, but "Genetech now maintains that all developers of recombinant antibody therapeutics must either take a license from Genentech to commercialize their products, or stay out of the relevant downstream product market altogether."

HGS seeks damages for violations of the Sherman and Lanham Acts, and for unfair competition, interference and conspiracy. It also seeks an injunction preventing Genentech from enforcing the patent.

HGS is represented by Adam Poff with Young Conaway.

The 65-page complaint is replete with technical language. For example: "Celltech's expert, Dennis Burton, had stated unambiguously that the critical refolding procedures set forth in the Cabilly II patent do not work. As discussed further below, Celltech's expert affirmed that 'Genentech's purported "conception" lacked a critical component: the Genentech inventors never came up with a workable method for producing "an Ig [immunoglobulin] molecule or an immunologically functional Ig fragment" as the [interference] Count requires,' and Celltech noted explicitly that it had 'presented expert testimony ... showing that Genentech's [final] patent application and laboratory notebooks are completely devoid of a workable conception because of this failing. In particular, Genentech lacked a method for combining ('refolding') the recombinantly expressed heavy and light chain proteins into a functional molecule.'" (Brackets and parentheses in complaint.)

Legally, the key argument appears in paragraph 34: "Upon information and belief, in early 2001, Genentech and Celltech entered into the collusive settlement Agreement. The Agreement in no way reflected who was actually the first to invent, and did not represent a good-faith effort to settle the dispute. To the contrary, Genentech entered into the Agreement for the specific purpose of defrauding the District Court and the PTO in to issuing an invalid patent; effectively extending the life of the patent monopoly by more than a decade; and restraining trade in, conspiring to monopolize, and monopolizing the market for fundamental technology for producing monoclonal antibody therapeutics using recombinant DNA techniques."

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