Biogen Ordered to Pay Genentech $88 Million in Patent Royalties for Tysabri Sales

Biogen Ordered to Pay Genentech $88 Million in Patent Royalties for Tysabri Sales

Introduction

A California federal judge has ruled that Biogen owes Roche's Genentech more than $88 million in patent royalties for sales of its multiple sclerosis and Crohn's disease drug Tysabri. The dispute centered on whether Biogen owed royalties for Tysabri produced using Genentech's patents before they expired, but sold after expiration.

Factual Background

Genentech sued Biogen in 2023, claiming Biogen signed a license to its patents in 2004 in exchange for royalties on sales of licensed products. Genentech argued Biogen owed royalties for Tysabri manufactured using patented technology before the patents expired in December 2018, but sold in 2019 and beyond. Biogen earned more than $1.7 billion from global sales of Tysabri last year.

Procedural Background

A trial in July ended in a mistrial after the jury could not reach a verdict. The judge determined that Biogen owed $88.3 million more in royalties, plus an amount of interest to be determined.

Issues

1. Patent Royalties: Whether Biogen owes Genentech royalties for Tysabri produced using Genentech's patents before they expired, but sold after expiration.

2. Contract Interpretation: How to interpret the contract between Biogen and Genentech regarding royalty payments.

Contentions of the Parties

Genentech's Contentions:

• Biogen owes royalties for Tysabri manufactured using patented technology before the patents expired.
• The complexity of antibody manufacturing and potential catastrophic effects of running out of the drug led to a buildup of the product.

Biogen's Contentions:

• The contract didn't require additional payments for sales made after patent expiration.
• Genentech's interpretation of the contract is incorrect.

Reasoning & Analysis

The court considered the complexity of antibody manufacturing and the potential catastrophic effects of running out of the drug. The court determined that Biogen owed royalties for Tysabri produced using Genentech's patents before they expired, but sold after expiration.

Decision

The court ruled that Biogen owes Genentech more than $88 million in patent royalties, plus interest to be determined.

Implications

The decision highlights the importance of clear contract terms in patent licensing agreements. The decision also shows that patent holders can still benefit from royalties even after patent expiration, depending on the terms of the agreement.

Conclusion

The case emphasizes the complexity of patent disputes in the pharmaceutical industry. Biogen's spokesperson declined to comment, citing pending litigation, while Genentech's representatives did not immediately respond to requests for comment.

In this case Gentech was represented by Mr. Paul Gaffney and Mr. Luke McCloud of Williams & Connolly. Meanwhile Biogen was represented by Ms. Nisha Patel Gupta, Mr. Martin Black, Ms. Katherine Helm and Mr. Steven Engel of Dechert.