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MIT Sues ImClone, Dispozo Over Patent Infringement

By Keith J. Winstein

SENIOR EDITOR

MIT sued ImClone Systems on May 4, alleging that the company’s recently-approved cancer drug was the product of a line of genetically-engineered cells that infringed an MIT patent. The lawsuit was filed at the request of Repligen Corp., a Waltham, Mass. pharmaceutical company that licensed MIT’s patent and will be paying for the lawsuit.

On the same day, MIT also sued Dispozo Products Inc. of Fountain Inn, SC, a manufacturer of disposable plastic plates and cutlery. That lawsuit -- filed at the request of an MIT spinoff, Trexel Inc. of Woburn, Mass. -- seeks to halt sales of a line of plastic school lunch trays that, MIT and Trexel allege, infringe four MIT patents licensed to Trexel.

The two cases bring the total number of patent lawsuits the Institute is now pursuing to seven. In addition to the ImClone and Dispozo suits, MIT is suing Hewlett-Packard, Microsoft, hard drive manufacturer Seagate Technology, British telecommunications giant Cable & Wireless, the pharmaceutical firm Eli Lilly, and several other companies.

All seven lawsuits were initiated by companies that have licensed the disputed patents from MIT. The Institute generally gives its licensees the right to force MIT to sue alleged infringers, as long as the licensee coordinates and pays for the suit.

MIT: ImClone drug comes from us

ImClone, the New York pharmaceutical company whose 2001 insider-trading scandal was at the center of Martha Stewart’s criminal conviction, received approval from the Food and Drug Administration in February to sell an artificial antibody, Erbitux. The drug is a last resort to extend the lives of sufferers of late-stage colon or rectal cancer.

Erbitux, which had essentially been in development since the early 1980s, was shown to slow tumor growth in a 2003 study. ImClone hopes the drug can be used to delay, if only by a few months, what is generally an inevitable death for late-stage colorectal cancer patients.

MIT and Repligen attack not what Erbitux does, but rather how the plaintiffs believe ImClone is manufacturing it: with a cell line created in 1990 for the government by a former MIT post-doc, who used his own patented technique.

In 1983, John Mendelsohn and Gorton Sato of the University of California at San Diego developed an antibody, known as “225,” that they believed might slow or stop tumor growth, said Mendelsohn, now the president of the M.D. Anderson Cancer Center in Houston, in an interview.

The government’s National Cancer Institute later became interested in testing the antibody on cancer in humans, Mendelsohn said. But the antibody -- engineered to be produced by mouse cells -- was only appropriate for use on mice. To be tested on humans, it first had to be converted to a “chimera” -- a combination of a human and a mouse antibody.

“That was a more innovative challenge in 1990,” Mendelsohn said. The National Cancer Institute subcontracted the work to a Massachusetts firm, Damon Biotech, he said. The company completed the task, returning a sample of the new “chimera” 225 -- today known as Erbitux -- and a line of cells genetically engineered to do nothing but spit out more Erbitux, according to the lawsuit.

In the early 1990s, ImClone became interested in running Erbitux through the Food and Drug Administration approval process, and licensed the patent on “225” from the University of California, said Mendelsohn, who has served on the board of ImClone and is generally credited as the inventor of Erbitux. Around 1993, MIT’s lawsuit says, the National Cancer Institute gave ImClone a sample of the cell line Damon had produced three years earlier. Eventually, in February 2004, the FDA approved the use of Erbitux in combination with traditional chemotherapy, and ImClone received hundreds of millions of dollars of payments from its partners who distribute the drug.

However, MIT and Repligen say that the cell line that Damon produced for the government -- the mouse cells that spit out Erbitux -- is patented. The researcher who performed the work at Damon Biotech, Stephen Gillies, used patented DNA sequences that he discovered as a postdoc at MIT, along with Professor Susumu Tonegawa, a Nobel laureate, the lawsuit says. Although Damon gave the government permission to use the cell line, it absolutely didn’t give ImClone or anybody else permission to use it, and the plaintiffs have been trying to get ImClone to pay for a license since 1996, they say.

The patent, number 4,663,281, covers the use of a kind of “enhancer” -- a sequence of DNA that can cause a cell line to spit out much more of an antibody than it otherwise would. In particular, it covers the use of “enhancers” that come from the tissue of mammals, instead of from viruses.

Gillies is now the head of a subsidiary of the pharmaceutical giant Merck, an ImClone ally that paid for the 2003 study that won Erbitux’s approval from the FDA. But in an interview, he confirmed MIT’s allegations against ImClone. “I basically was responsible for making the cell line” in 1990, he said. He did use a mammalian enhancer -- the “immunoglobulin enhancer” -- to speed up the cell line’s production of Erbitux, he said.

“I would like to see MIT get something for this technology, as long as Merck doesn’t have to pay for it,” Gillies said, with a bit of a laugh. “A lot of people avoided this patent,” he said. “They developed their own technology around it.” But as for ImClone, “I’m quite sure they’re using what we developed.”

There may be some snags for MIT and Repligen, however. For one, Gillies and Tonegawa’s patent expired on May 5, 2004, seventeen years after it was first granted. So MIT and Repligen, even if they win the lawsuit, may only be entitled to royalties from February, when ImClone started selling Erbitux, until May, when the patent expired.

On April 9, 2004, the Institute asked the United States Patent and Trademark Office to extend the life of the patent beyond its normal 17 years, arguing that the long time required for the government to approve Erbitux for sale should entitle MIT to more time on a patent that, MIT says, covers the sale of Erbitux. But the patent office effectively rejected MIT’s application in a letter on May 3, saying that only ImClone, and not an ImClone adversary like MIT, is entitled to benefit from ImClone’s several years of work at pursuing approval for Erbitux. MIT lawyers say they are considering their options.

Also, nobody other than MIT and Repligen is clear exactly what arrangement the National Cancer Institute had with Damon Biotech, its subcontractor who produced Erbitux out of the original “225” antibody. Did the NCI have permission to give Erbitux to other companies, such as ImClone? MIT and Repligen say no, absolutely not. A spokeswoman for the NCI declined to discuss the matter, citing the ongoing litigation.

Additionally, nobody really knows -- except for ImClone -- whether the company actually uses, today, the cell line that Gillies produced for the NCI back in 1990, and the company isn’t talking, except to assert its innocence. “It’s the company’s position that our manufacturing process in no way infringes upon the patent in question,” an ImClone spokesman, David Pitts, told Bloomberg News.

MIT sues over school lunch trays

In a deal gone bad, MIT and a spinoff company, Trexel, are suing Dispozo Products for patent infringement, fraud, breach of contract, and allegedly stealing Trexel’s trade secrets.

The lawsuit centers around a line of plastic school lunch trays made out of a foam material known as “Envirofoam,” which Dispozo announced in November 2003.

The dispute dates back to September 2000, when Dispozo licensed Trexel’s “MuCell” manufacturing technology for use at its factory. Dispozo complained in 2001 that Trexel’s equipment did not live up to Trexel’s claims, according to the lawsuit.

The companies mediated their dispute, and in June 2002, Trexel agreed to refund $280,000 of Dispozo’s money and pay Dispozo an extra $500,000 to settle the matter. Dispozo was to promptly return Trexel’s equipment, the lawsuit says.

Instead, MIT and Trexel allege, Dispozo held on to Trexel’s equipment for six more months -- until December 2002. During that time, Dispozo reverse-engineered Trexel’s equipment and illegally extracted Trexel’s trade secrets, the lawsuit says.

In November 2003, Dispozo announced a new line of “Envirofoam” plates and trays. MIT and Trexel allege that “Envirofoam” infringes four MIT patents on foamed materials.

The patents -- numbers 5,158,986; 5,866,053; 6,051,174; and RE 37,932 -- are credited to Professor of Mechanical Engineering Nam P. Suh ’59, Daniel F. Baldwin PhD ’94, Chul B. Park PhD ’93, and Sung W. Cha PhD ’94.

“They’re clearly infringing the patents,” said David P. Bernstein, Trexel’s the president and chief executive, in an interview. An attorney for Dispozo, Greg Morton, said the company is still investigating the matter.

Joshua C. Mandel ’05 contributed to the reporting of this story.