Chiron Stakes Out Its Territory
Jon CohenScience 1999 285: 28. (in News Focus)
When Chiron Corp. first considered joining the search for the agent that causes non-A, non-B hepatitis in the 1980s, the Emeryville, California, biotech turned to one of its scientific advisers, Harold Varmus, for his opinion. Varmus, who later became director of the National Institutes of Health, suggested that the company place its bets elsewhere because "nobody has been able to crack this problem," recalls Robert Blackburn, Chiron's chief patent attorney. But Chiron went ahead anyway, and in May 1988 it announced the discovery of what is now known as hepatitis C virus, or HCV. Blackburn tells this story to explain why Chiron is aggressively defending its HCV-related patents. The company took a huge risk in pursuing this research, he says, and "that investment would not have been made if there wasn't a patent system. This shows the patent system is working and working right."
Chiron's patents cover HCV protease.
STRUCTURE: NANHUA YAO AND PATRICIA WEBER/SPRI
Many of Chiron's competitors would beg to differ. Their activities have drawn a barrage of Chiron-initiated patent infringement lawsuits, which some researchers say are having a chilling effect on the field. Chiron has filed suit in Europe, Australia, and the United States against Murex, Organon Teknika, and Hoffmann-La Roche, charging the companies with selling HCV blood tests without paying licensing fees. Last July, it went after four companies involved in HCV drug research. Chiron also has refused to license its technologies to companies interested in developing HCV vaccines, although Chiron officials say they have recently decided to loosen the strings.
One of the highest stakes suits targets Hoffmann-La Roche and its subsidiaries. Roche markets HCV detection tests that rely on the ultrasensitive polymerase chain reaction (PCR) assay. Tom White, senior vice president of R&D at Roche Molecular Systems, says its PCR test is the "gold standard" for HCV blood screening. "If Chiron were to block this, the impact to the medical community would be highly negative," he asserts.
Roche argues that its test is covered by the rights to PCR that it acquired from Cetus, a company that Chiron subsequently purchased. "Chiron is obligated to uphold Cetus's agreement," says White, who notes that Roche negotiated for "broad" rights. Blackburn says he is "amazed" by this claim, which he calls "both desperate and laughable, and we expect it to be thrown out of court."
Roche has a second line of argument, however, colloquially known as the "Daniel Bradley" defense. Bradley collaborated with Chiron on non-A, non-B hepatitis when he worked at the Centers for Disease Control and Prevention (CDC) in Atlanta, and he has long claimed that he played an instrumental role in the discovery of HCV. U.S. government attorneys agreed, so in 1990, Chiron reached a settlement to avoid litigation: In exchange for U.S. patent rights, the company would pay Bradley $337,500 and the government $2.25 million. In 1994, however, Bradley sued Chiron, arguing that he should have been named an inventor on the patent and only signed the settlement agreement for health reasons (Science, 6 January 1995, p. 23).
Bradley lost the suit and his appeals, but in the meantime, he assigned to Roche his non-U.S. "rights" to HCV technology. Roche attorney Melinda Griffith explains that Bradley never waived those rights, and she further contends that he's an inventor, which "raises questions about the patent's validity." But Blackburn says CDC reached the 1990 settlement because its attorneys concluded that Bradley had not played an inventorship role. "That's totally bunk," retorts Brent English, Bradley's attorney. Roche and Bradley now have filed counterclaims against Chiron.
The lawsuits involving HCV drug R&D center on efforts to find drugs that block the viral protease enzyme, on which Chiron holds patents. The company, arguing that its competitors need this enzyme to screen for compounds that inhibit it, filed suit against Agouron, Gilead, and collaborators Vertex and Eli Lilly to try to force them to pay licensing fees and then royalties if one of their protease inhibitors goes to market. "This is reaching fairly deep into the R&D process," complains Charles Rice, an HCV molecular biologist at Washington University School of Medicine in St. Louis, who worries that such claims are scaring away would-be HCV drug developers. Indeed, in documents filed in court, Agouron charges Chiron with "unlawful monopolization" of the U.S. HCV protease inhibitor market and says its R&D "has been delayed and impeded."
Chiron's chief scientific officer, Lewis "Rusty" Williams, counters that his company has licensed its HCV protease technology to a half-dozen others. "There's no impediment to getting involved with this," says Williams. "The downstream payment is quite small relative to the total revenue that such a product could generate."
In its legal response to Chiron's suit, Vertex invoked a defense that many patent lawyers believe is ripe for a test case: safe harbor. The U.S. Congress in 1984 gave drug companies a "safe harbor" exemption if, in pursuit of data for the Food and Drug Administration, they tested a generic version of a patented drug before the patent expired. Does this exemption apply to all biomedical R&D? "That's one of the great unsolved mysteries of contemporary patent metaphysics, the reach of the research exemption," says patent law expert Robert Merges of the University of California, Berkeley.
The safe harbor defense outrages Blackburn. "Legally it's poppycock, and morally it would be a tragedy," he says. "If you accept that argument, then the technology has no value, because it would be impossible to infringe."