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UW Madison Patent Arm Wins Suit Against Xenon

(CN) - The University of Wisconsin-Madison's patenting arm won a patent dispute in the 7th Circuit on Tuesday over a cholesterol-reducing enzyme licensed to Canada-based Xenon Pharmaceuticals.

University scientists, with Xenon's sponsorship, discovered the cholesterol-lowering benefits of an enzyme called Stearoyl CoA Desaturase (SCD).

The Wisconsin Alumni Research Foundation, the university's patent-management body, licensed the technology to Xenon in 2001 in exchange for a cut of the profits. Xenon and the foundation jointly own the patent rights to the enzyme.

The foundation sued after Xenon allegedly sublicensed its interest in the patented enzyme to a third party without paying the foundation its portion of the fees.

The foundation also accused the Canadian company of falsely asserting ownership over a set of therapeutic compounds developed from the patented enzyme.

A federal judge ruled that Xenon had, in fact, violated their contracts, but said the drug company owned the therapeutic compounds.

A jury awarded the foundation $1 million, and the research group settled on $300,000 to block any attempt to further reduce the award.

The Chicago-based appeals court upheld the lower court's ruling on the contract claim, but disagreed that Xenon owned the therapeutic compounds.

"Under the web of contracts at issue here, the foundation was entitled to a declaration of its ownership interest in the compounds," Judge Diane Sykes wrote for the three-judge panel.

"A subsidiary issue is whether Xenon's breach triggered the foundation's right to terminate the agreement," she added. "We conclude that the district court should not have voided the foundation's attempt to do so; the foundation was entitled to and properly terminated the agreement."

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