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MIT Finishes Three Lawsuits, Initiates One During Summer

By Keith J. Winstein

NEWS EDITOR

Over the summer, MIT, Harvard University, the Whitehead Institute for Biomedical Research, and Ariad Pharmaceutical Inc. sued Eli Lilly and Co., alleging that the company’s drugs to treat osteoporosis and an infection condition known as severe sepsis infringe a newly-issued patent.

Meanwhile, three other MIT-initiated lawsuits, against Dolby Laboratories Inc., American Superconductor Corp., and Time Inc. concluded. MIT and Dolby lawyers reached a last-minute settlement at the trial in their five-year lawsuit, after jurors had reached a decision but before the verdict was read from the bench.

Patent said to cover NF-kB

MIT, Harvard, and the Whitehead are the owners of U.S. Patent No. 6,410,516, “Nuclear factors associated with transcriptional regulation,” for an invention by a group led by Institute Professor Phillip A. Sharp, former MIT Professor and current California Institute of Technology President David Baltimore ’61, and Harvard Professor Thomas Maniatis.

MIT, Harvard, and the Whitehead received the patent on June 25 of this year. The three groups and their exclusive licensee Ariad filed the infringement lawsuit that same day, seeking damages from Lilly’s allegedly infringing sale of Evista, a drug to combat osteoporosis, and Xigris, intended for patients with sepsis, or bacterial infection, leading to organ failure.

Referring to a DNA-binding protein factor studied by the research team, Ariad wrote in a press release that “Lilly scientists disclose that Evista inhibits NF-kB activity,” and “have demonstrated that Xigris inhibits NF-kB activity.”

Thus, the plaintiffs argue, Lilly has already admitted that its products infringe the patent, which Ariad says covers “methods of treating human disease by regulating NF-kB cell signaling activity.”

Lilly, however, disputes that the patent can cover all uses of the protein, arguing in a court filing that “Before Plaintiffs ever discovered NF-kB or its role in intracellular signaling, Lilly’s own patents fully described” the inventions behind its drugs, and furthermore that the patent cannot validly be as broad as the plaintiffs claim.

“Evista and Xigris are merely two drugs in a long parade of prior art medicines, agents and activities that impact the NF-kB pathway in the manner claimed by Plaintiffs,” Lilly wrote. “Thus, if Evista and Xigris infringe, as Plaintiffs argue, then Plaintiffs’ asserted claims are infringed by every U.S. citizen taking an aspirin, enjoying a glass of red wine, or adding a little spice to life with a clove of garlic!”

MIT will have little involvement

As is common in patent-infringement lawsuits initiated with MIT licensees, MIT will not be closely involved in the cases.

“When we exclusively license a patent to a company, the company really has the majority of the commercial interest in the technology,” said Karin K. Rivard, the technology licensing office’s in-house counsel.

But the patent-holder’s participation is necessary to initiate an infringement lawsuit, so “if a company in its business judgment wants to pursue an infringer, ... as a matter of course in our exclusive licensing agreements, MIT agrees up front that if it’s legally necessary, MIT will agree to become a plaintiff in litigation,” she said.

MIT, Dolby settle at last minute

At the end of April, MIT dramatically settled its five-year lawsuit against Dolby Laboratories Inc. minutes before the jury was to present the verdict it had already reached.

The 1997 lawsuit had concerned an agreement between MIT and Dolby to share profits if either’s technology were selected as part of the Federal Communications Commission’s then-upcoming standard for digital television in the United States.

Dolby’s technology was selected, partly on the basis of a crucial MIT vote cast for Dolby over MIT’s own technology. MIT alleged that Dolby breached the agreement by failing to pay MIT in response. Dolby countered that the FCC had taken too long to make a final decision, and thus the contract had expired.

After more than five years of litigation, 150 court filings, and a six-day trial before eight jurors in Boston in April, the lawsuit was settled at nearly the last minute, after the jury had already finished deliberating.

“The jury got their instructions from the judge and they departed” to deliberate at 11:15 a.m., said Robert Sullivan, a Boston attorney who represented MIT in the case. “The judge [called] the lawyers to the sidebar, and said, ‘I think you should be talking settlement.’”

“We said, ‘Okay.’ ... At about 12:25 we had agreed upon a settlement. The jury had told the judge, or the clerk, that they had a verdict coming back. Neither side wanted to know what the verdict was, because we had a settlement,” he said.

Both Dolby and MIT declined to comment on the case, although Rivard said the agreement involved “a flat fee paid out over ten years.”

“There was reluctance on the part of Dolby to settle” before the end of the trial, Rivard said.

MIT settles Tech Review lawsuit

April also saw MIT settle its trademark-infringement lawsuit against the Time Inc. unit of AOL Time Warner Inc.

MIT had alleged that Time’s magazine Fortune/CNET Technology Review infringed MIT’s trademark on its own magazine Technology Review, while Time had countered that “technology review” is a generic term that MIT had already allowed other magazines, such as Computer Technology Review, to use and trademark.

Lawyers for MIT and Time were reluctant to discuss the case, citing a confidentiality agreement that both sides described as very restrictive. Jason Kravitz, a Boston attorney who represented MIT in the case, suggested that the magazine’s change of name to Fortune/CNET Tech Review, a change that occurred in the middle of the case, may have been part of the settlement.

MIT officially loses case, but wins

In a procedurally-confusing case, MIT officially lost a patent-conflict lawsuit against the American Superconductor Corp. on May 31, but the effect of the loss was that MIT’s U.S. Patent No. 5,189,009, “Preparation of superconducting oxides and oxide-metal composites,” which had been thrown out in 2001 by the U.S. Patent and Trademark Office, was reinstated.

The case essentially involved American Superconductor and MIT jointly trying to overturn a ruling by the patent office’s Board of Patent Appeals and Interferences. The board had ruled that a patent application assigned to American Superconductor was obvious in light of an MIT-owned patent licensed to the company, and threw out the MIT-owned patent as a result.

Under federal law, the patent office may not grant patents on inventions that are considered “obvious.”

Senior Judge Edward F. Harrington of the U.S. District Court for the District of Massachusetts ruled against the board, finding that the patent application was not obvious in light of the MIT patent, and reinstated the MIT patent.

The case was also peculiar in that normally, a finding that an application is obvious in light of another patent will result in the obvious application, not the patent, being discarded. In this case, a complicated series of application re-filings created the abnormal situation in the patent law.