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For the people who has been following INSM since it was Celtrex, you know that I've been following this company for a very long time, almost a decade. It has not been an easy stock to own. So many ups and downs. First thing about a settlement is everyone has to give up something, and everyone has to get something. What did INSM give up. Well, it's given up a part of its future revenues, TRCA and DNA has the right to 50% of income and a royalty cut for DNA. INSM gave up iPlex for short stature. Yes, not happy with that part. What did INSM gain? The main thing INSM gain is the cloud of litigation and uncertain future, the MARKET HATES uncertainty above all things. Secondly, DNA and TRCA will have to cough up 50% of the expense of development cost for any indication that they want to go on in, that is no small penny. That could be literally millions if not hundreds of millions of dollars. Third, the skys the limit for Diabetes, ALS, Retinopathy of prematurity, AIDS / Chronic wasting disease, and so on so on. Am I pleased with the deal? My first reaction was "What the $@&^#@!*^$#*&!" But this is business, and I believe this settlement will give INSM the tools it needs to reach its ultimate goal of expanding the indications for iPlex therapy, which really is a revolutionary breakthrough in endocrine medicine. I'm sure, the Market's first reaction would be to sell, that is the safest knee jerk reaction. Investors don't want to get burned. But in the over all future, I think the company and therefore the stock will do well. As I've posted multiple times in the past, you have to have an iron stomach to invest in biotech. An INSM proved that once again today. Good luck to all.
As I have posted in numerous messages on Yahoo board, naked IGF-1 was used on many disease process for the last 2 decades, but dosing was always the issue. Even with twice a day injections, unbound IGF-1 would created side effects such as hypoglycemia, jaw pain, joint pain, that limited the doses. iPlex with its physiologic delivery system, allows the IGF-1 due be delievered in a more natural manner, with higher dosing potential. All the previous studies involving ALS/ Lou Gehrig's Disease were based on unbound IGF-1, and some patients did show improvement, that at one point, Chiron was making unbound IGF-1 and giving it to ALS patients on a compassionate basis, but that was discontinued. What would it mean for INSM if the Italian experiences show significant improvement in ALS patients with the newer deleivery system. This stock is WAY UNDERVALUED. Goood luck.
This is huge. iPlex can be legally used off label for ALS in America. As long as a drug is FDA approved for human use, it is can be LEGALLY USED for off label use as long as a licensed physician. Also, the physicians can also have medical legal coverage for using iPlex for ALS since 1) the Italian government is OK ing use, so it is not a crazy concept or idea 2)ALS is an terminal condition with no real effective therapy. No down side especially if it even extends life or improves quality of life.
Once again, DNA and TRCA has no patent issue with Cephalon. If INSM partners with Cephalon, and uses Cephalon's method of IGF-1 production to bind with INSM BP-3, DNA and TRCA lawsuit will be moot, and basically TRCA is OUT OF BUSINESS. Good luck. Overall an excellent day.
Think of the off label use demanded by American ALS patients when the news of this gets out. This a request by the Italian government for actual use on patients, not a study. This is very exciting news for ALS patients world wide.
Cephalon also makes its own naked IGF-1, and DNA and TRCA has no patent issues with Cephalon. INSM BP-3 can be bound with Cephalon's IGF-1 and completely make DNA/TRCA patent issue moot. Think about that one.
Genetech VS Chiron, and Reversal of Decision by Appeals Court
United States Court of Appeals for the Federal Circuit
99-1506
GENENTECH, INC.,
Plaintiff-Appellee,
v.
CHIRON CORPORATION,
Defendant-Appellant.
R. Danny Huntington, Burns, Doane, Swecker & Mathis, L.L.P., of Alexandria, Virginia, argued for plaintiff-appellee. With him on the brief were Matthew P. Blischak, Mary Ann Dillahunty, Malcolm K. McGowan, and Bruce T. Wieder. Of counsel was Eric H. Weisblatt.
Harold J. McElhinny, Morrison & Foerster LLP, of San Francisco, California, argued for defendant-appellant. With him on the brief were Rachel Krevans, and Matthew I. Kreeger. Of counsel on the brief were Robert P. Blackburn, and Joseph H. Guth, Chiron Corporation, of Emeryville, California.
Appealed from: United States District Court for the Northern District of California
Judge Claudia Wilken
United States Court of Appeals for the Federal Circuit
99-1506
GENENTECH, INC.,
Plaintiff-Appellee,
v.
CHIRON CORPORATION,
Defendant-Appellant.
________________________
DECIDED: August 4, 2000
________________________
Before SCHALL, Circuit Judge, ARCHER, Senior Circuit Judge, and BRYSON, Circuit Judge.
SCHALL, Circuit Judge.
This appeal stems from an interference between U.S. Patent Application Serial No. 06/506,078 (the "Lee application"), assigned to Genentech, Inc. ("Genentech"), and U.S. Patent Application Serial No. 06/922,199 (the "Barr application"), assigned to Chiron Corporation ("Chiron"). After the Board of Patent Appeals and Interferences ("Board") awarded priority of invention to Chiron, see Lee v. Barr, Pat. Int. No. 102,208 (July 19, 1994) (Paper No. 176) ("Genentech I"), Genentech brought an action under 35 U.S.C. § 146 in the United States District Court for the Northern District of California. The district court conducted a bench trial, and, in due course, entered judgment in favor of Genentech. See Genentech, Inc. v. Chiron Corp., No. CV 94-03334 (N.D. Cal. June 24, 1999) (Amended Judgment). Chiron appeals this judgment, challenging the factual findings and legal conclusions of the district court. We reverse. We do so because we hold that Genentech failed to establish that the inventors on the Lee application reduced their invention to practice prior to the earlier effective filing date of the Barr application. Our holding is based on the conclusion that a non-inventor’s recognition of the utility of the invention of the Lee application did not inure to the benefit of the inventors.
BACKGROUND
I.
The subject matter of the interference relates to the recombinant production of human insulin-like growth factor-I ("IGF-I"). IGF-I is a growth-promoting protein. IGF-I works by binding to IGF-I receptors, which are proteins embedded in cell membranes. Binding between IGF-I and IGF-I receptors causes a signal to be transmitted across the cell membrane. This signal activates the intracellular portion of the receptor, which triggers growth-related processes within the cell. The signal is believed to result from a change in the conformation (the three-dimensional shape) of the receptor that occurs when IGF-I binds to the receptor.
Both Genentech and Chiron wanted to use the organism Saccharomyces, commonly known as baker’s yeast, to make IGF-I recombinantly. Yeast makes and secretes a protein known as alpha-factor during its reproductive cycle. When yeast makes alpha-factor, it first makes a precursor protein that comprises a secretory leader sequence and four repeating units of processing signal sequences and alpha-factor sequences:
leader - processing signal - alpha-factor - processing signal - alpha-factor -
processing signal - alpha-factor - processing signal - alpha-factor
The leader sequence is a signal for secretion, i.e., the yeast cell recognizes this sequence and secretes the precursor protein from the cell. Each processing signal sequence in the precursor protein is a recognition site for a proteolytic enzyme—an enzyme that acts at the sequence to cleave (cut) the protein. Thus, when the yeast makes a precursor protein, the precursor is secreted from the cell and cleaved by an enzyme to yield four copies of the mature alpha-factor protein. This is called an expression-secretion system because the yeast expresses the alpha-factor DNA—it makes the precursor protein—and then secretes the protein from the cell. Expression-secretion systems are an advantageous way to make recombinant proteins because the proteins can be recovered without destroying the cells that produce them.
Genentech and Chiron sought to adapt the yeast alpha-factor DNA to make IGF-I. Specifically, they used a DNA construct comprising DNA encoding the alpha-factor secretory leader sequence and the alpha-factor processing signal sequence and DNA encoding IGF-I:
leader - processing signal - IGF-I
When yeast is transformed with this DNA, the yeast first makes a precursor protein comprising the leader sequence, the processing signal sequence and the IGF-I sequence. This protein is then processed by enzymes to cleave the leader and spacer sequences, yielding the mature IGF-I protein.
The interference count defines the invention at issue as follows:
A DNA construct comprising a sequence coding for human insulin-like growth factor-I joined in proper reading frame with Saccharomyces alpha factor secretory leader and processing signal sequences.
Genentech I, slip op. at 2. In Genentech II, we construed this count as requiring the following elements: (1) a DNA sequence coding for the yeast alpha-factor secretory leader sequence; (2) a processing signal sequence; and (3) a DNA sequence coding for IGF-I. See Genentech II, 112 F.3d at 501, 42 USPQ2d at 1613.
The construct that is alleged to support Genentech’s reduction to practice of the count has an additional DNA sequence between the DNA encoding the processing signal sequence and the DNA encoding IGF-I. See id. at 498, 42 USPQ2d at 1610. That sequence codes for a nine amino acid long collagenase cleavage site. See id. That is, it codes for an amino acid sequence that is cleaved by the enzyme collagenase. Thus, the Genentech construct has the following structure:
leader - processing signal - collagenase cleavage site - IGF-I
In Genentech II, we held that the count was broad enough to encompass this construct. See id. at 501, 42 USPQ2d at 1614.
When the Genentech construct is made and processed by the yeast cells, the leader and processing signal sequences are cleaved by the yeast enzymes, but the collagenase cleavage site sequence is not cleaved from the IGF-I sequence. Thus, the final product obtained from yeast transformed with the Genentech DNA construct is a fusion protein consisting of the collagenase cleavage site and the IGF-I sequence. Genentech intended to subject this fusion protein to further processing in order to obtain only the IGF-I sequence (the mature IGF-I protein), but its work in this regard was not successful.
II.
The Board determined the priority of invention to the count in Interference No. 102,208. Because the Barr application had an earlier effective filing date than the Lee application, Barr (Chiron) was the senior party in the interference. See 37 C.F.R. § 1.657(a). Lee (Genentech) therefore had the burden of establishing by a preponderance of the evidence that he had reduced the invention to practice prior to the effective filing date of the Barr application (the "critical date"). See id. § 1.657(b).
The Board determined that Lee had made a construct within the scope of the count. See Genentech I, slip op. at 8. As discussed above, this construct comprised DNA encoding the alpha-factor secretory leader sequence, DNA encoding the alpha-factor processing signal sequence, DNA encoding a collagenase cleavage site, and DNA encoding IGF-I. Because this construct did not result in a known compound, IGF-I, but in a novel fusion protein consisting of the collagenase cleavage site and IGF-I, the Board concluded that there could be no reduction to practice of the invention until a practical utility for the fusion protein had been established. See id. at 16. The Board found that the only contemplated utility for the fusion protein was use as a growth-promoting therapeutic agent, see id. at 17; accordingly, the Board considered whether Lee had established, prior to the critical date, that the fusion protein had growth-promoting activity. Although the Board considered several tests performed on the fusion protein, see id. at 17-18, only one, the radioreceptor assay ("RRA test"), is relevant to this appeal.
The RRA test is an in vitro assay that determines the ability of a protein to competitively bind to a receptor. The RRA test at issue here evaluated the ability of the fusion protein to bind to IGF-I receptors in a placental membrane. The test used both the fusion protein and radiolabeled mature IGF-I. The radiolabeled mature IGF-I was contacted with the placental membrane, and, after a period of time, the unbound material was washed away and the radioactivity level of the membrane-bound material was measured. Then, the fusion protein was introduced to the system and, after a period of time, unbound material was washed away and the radioactivity level of the membrane-bound material was again measured. The second radioactivity level was found to be lower than the first, indicating that the fusion protein had displaced some of the radiolabeled mature IGF-I and, therefore, that the fusion protein had bound to the IGF-I receptors specifically and competitively. The fusion protein therefore yielded "positive" results in the RRA test.
The Board determined that the positive RRA results were "not sufficient to establish biological activity with any reasonable certainty . . . . [because] the testimony of Dr. Ullrich [an inventor on the Lee application] makes clear that there was no prior art recognized correlation between the RRA assay and a specific in vivo therapeutic use." Id. at 18. The Board also cited the testimony of Dr. Rutter and Dr. Spencer, Chiron’s expert witnesses, for the proposition that a fusion protein could have a three-dimensional structure that binds to an IGF-I receptor, as indicated by positive RRA test results, but the structure might be such that the binding does not result in the desired biological response. That is, a protein could bind to an IGF-I receptor, but the resulting conformational change in the receptor might not trigger the growth-promoting signal that is triggered when IGF-I binds the receptor. Such a protein would be an IGF-I antagonist because it would interfere with the activity of IGF-I by blocking IGF-I receptors without promoting growth itself.
The Board therefore held that Lee had not established a reduction to practice of the invention prior to the critical date, and awarded priority of invention to Barr. See id. at 19, 22.
III.
Genentech challenged the Board’s decision in an action under 35 U.S.C. § 146 in the United States District Court for the Northern District of California. In that action, both Genentech and Chiron presented new evidence on the correlation between positive RRA test results and biological activity. This new evidence included live testimony from Dr. Ullrich, Dr. Hintz (a paid consultant for Genentech), and several other experts.
The court determined that Genentech had to establish three things in order to demonstrate its prior reduction to practice of the invention: (1) that its inventors had made an embodiment of the count prior to the critical date; (2) that sufficient tests had been conducted prior to the critical date to demonstrate that the invention worked for its intended purpose; and (3) that the inventors recognized, prior to the critical date, that the invention worked for its intended purpose. See Genentech, Inc. v. Chiron Corp., No. CV 94-03334, slip op. at 33 (N.D. Cal. Feb. 4, 1999) (Findings of Fact and Conclusions of Law) ("Genentech III").
The court found that Genentech had established that its inventors had made a DNA construct within the scope of the count. The court recognized that the Board had made such a finding, and noted that Chiron had failed to present any evidence demonstrating that the Board’s finding was erroneous. See id. at 34.
The court determined that the intended purpose of the invention, the DNA construct, was to transform yeast cells so that the yeast cells would "secrete a form of biologically active human IGF-I, either as the mature IGF-I protein or in a modified form such as a fusion protein." See id. at 35. The court therefore stated that to demonstrate that the invention worked for its intended purpose, Genentech had to establish that "the invention produced an IGF-I-like fusion protein" and that "the fusion protein had a practical utility, i.e., that it exhibited IGF-I biological activity." Id.
The court found that Genentech had established that the invention produced an IGF-I-like fusion protein. See id. at 37. Specifically, the court concluded that the DNA sequence of the DNA construct, the approximate molecular weight of the fusion protein, and test results demonstrating that the fusion protein bound to IGF-I antibodies and IGF-I receptors were sufficient to show that Genentech’s construct produced an IGF-I-like fusion protein. See id.
The court determined, contrary to the Board’s holding, that the practical utility of the invention had been established. The court considered the evidence of a correlation between positive RRA test results and in vivo biological activity, and concluded that, by the critical date, "[s]pecific binding in an RRA was known . . . by those skilled in the art to be reasonably correlated with the in vivo biological activity of IGF-I." Id. at 40. The court cited the testimony of Dr. Hintz, Dr. Ravtech (a paid consultant for Genentech), and Dr. Ullrich as supporting its conclusion. See id. The court recognized the Board’s concern with the RRA test—that the test did not eliminate the possibility that the fusion protein was an IGF-I antagonist—but determined that, under Fujikawa v. Wattanasin, 93 F.3d 1559, 39 USPQ2d 1895 (Fed. Cir. 1996), "test results need not absolutely prove that the compound is pharmacologically active." Genentech III, slip op. at 39 (citing Fujikawa, 93 F.3d at 1564, 39 USPQ2d at 1899). The court concluded that the tests Genentech had conducted on the fusion protein, including the RRA test, were sufficient to establish the practical utility of the fusion protein. See id.
The court initially ruled against Genentech on the third prong of its reduction to practice test, finding that Genentech had failed to prove that its inventors had recognized, prior to the critical date, that the fusion protein worked for its intended purpose. See id. at 42. The court found that two of the inventors, Dr. Ullrich and Mr. Lee, knew prior to the critical date that the fusion protein had yielded "positive" results in the RRA test. See id. at 43. The court determined, however, that there was no evidence that the inventors understood the positive RRA results to indicate that the fusion protein had pharmacological activity. See id. at 43-45. Rather, the court concluded, the evidence showed only that the inventors interpreted the results as indicating that there was an IGF-I-like substance in the material that was tested. See id.
The court reconsidered its judgment, however, and ultimately entered an amended judgment in favor of Genentech. The court determined that, although the inventors had not recognized the practical utility of the invention prior to the critical date, Dr. Hintz, the person who had conducted the RRA test, had. See Genentech, Inc. v. Chiron Corp., No. CV 94-03334 (N.D. Cal. June 22, 1999) (Order Granting Pl.’s Mot. to Amend the Court’s Conclusions of Law and J.) ("Genentech IV"). Because it was "undisputed" that Dr. Hintz "was engaged as an agent of Genentech for purposes of conducting tests on the material provided," id. at 8, the court concluded that "Dr. Hintz’s appreciation of the significance of the results of his tests . . . inures to the benefit of the Genentech inventors for purposes of establishing a reduction to practice." Id. The court therefore held that Genentech had reduced the invention to practice in October of 1982. See id. at 9.
The court considered Chiron’s evidence of conception, and determined that Chiron’s date of conception was later than Genentech’s reduction to practice. Accordingly, the court awarded priority of invention to Genentech. See id. at 22. Chiron appeals the court’s judgment in favor of Genentech. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(4)(C).
DISCUSSION
I.
Chiron challenges the district court’s judgment in favor of Genentech on several grounds. It argues first that the court should have given more deference to the Board’s finding that the positive RRA test results did not establish the practical utility of the fusion protein, and should not have substituted its judgment for that of the Board. Chiron also asserts that several of the court’s factual findings were clearly erroneous, including the finding that Genentech had made a fusion protein within the scope of the count, the finding that the Genentech inventors intended to use the fusion protein as a pharmacological agent, the finding that the Genentech inventors had established, through the positive RRA test results, that the fusion protein has growth-promoting activity, and the finding that Dr. Hintz had contemporaneously recognized that the fusion protein has growth-promoting activity. Chiron further contends that the district court committed legal error when it relied on the inventors’ uncorroborated evidence to support its conclusion that the sample that yielded the positive RRA test results fell within the scope of the count. Finally, Chiron asserts that, on the facts of this case, Dr. Hintz’s alleged recognition of the growth-promoting activity of the fusion protein should not inure to the benefit of Genentech.
II.
We note at the outset that the district court was entitled to decide de novo whether Genentech had established a practical utility for the fusion protein. The parties’ briefs were submitted before we decided Winner International Royalty Corp. v. Wang, 202 F.3d 1340, 53 USPQ2d 1580 (Fed. Cir. 2000). In Winner, we held "that the admission of live testimony on all matters before the Board in a section 146 action . . . makes a factfinder of the district court and requires a de novo trial." Id. at 1347, 53 USPQ2d at 1585. Although it does not appear that the district court here heard live testimony on all issues decided by the Board, the court did hear live testimony on the issue of whether Genentech had established a practical utility for the fusion protein. Specifically, the court heard live testimony on this issue from Dr. Ullrich, Dr. Hintz, Dr. Ravtech, Dr. Spencer, Dr. Rutter, and two other experts. Under Winner, live testimony on the issue of practical utility makes the district court a factfinder on that issue, and requires the court to decide that issue de novo. Accordingly, the district court was not required to give deference to the Board’s finding that Genentech had not established a practical utility for the fusion protein.
Although we have carefully considered the other arguments raised by Chiron, because we find the inurement issue to be dispositive, we focus our attention on that issue. "We review the district court’s factual findings for clear error and its conclusions of law de novo." Winner, 202 F.3d at 1344-45, 53 USPQ3d at 1583. We therefore will consider whether the district court’s factual finding that Dr. Hintz contemporaneously recognized the growth-promoting activity of the fusion protein was clearly erroneous and whether the court’s legal conclusion that Dr. Hintz’s recognition of the utility of the fusion protein inures to the benefit of Genentech was correct.
III.
Chiron argues that the record does not support the district court’s finding that Dr. Hintz recognized, prior to the critical date, that the fusion protein has growth-promoting activity. Specifically, Chiron emphasizes that Dr. Hintz never stated that he had recognized the growth-promoting activity of the fusion protein in 1982. Instead, Chiron asserts, he only testified that he would have interpreted positive RRA test results as indicating that the fusion protein would be expected to have pharmacological activity. Chiron contends that this testimony is merely his current opinion about what the test results would have indicated at the time, and is not evidence of his contemporaneous appreciation that the fusion protein has growth-promoting activity.
In response, Genentech argues that Dr. Hintz’s testimony indeed establishes his contemporaneous recognition of the growth-promoting activity of the fusion protein. Genentech emphasizes that Dr. Hintz had been directed to testify in the context of 1982, without reference to later developments. Genentech also cites Dr. Hintz’s testimony that he did not repeat the RRA test because he viewed the positive results as demonstrating that the fusion protein has activity. It argues that this testimony supports the court’s finding that Dr. Hintz had appreciated the growth-promoting activity of the fusion protein at that time.
The district court heard the following testimony from Dr. Hintz:
Q. Do the results of this test [the RRA test] tell anything about whether the Genentech material would be expected to have pharmacologic activity?
A. In my opinion, at that time and still, the test results indicate that it would be expected to have pharmacologic activity on the basis of its ability to bind the receptor site. For IGF specifically.
The Court. Can you explain what you mean by "pharmacologic activity"?
The Witness. That if you were to make enough of this and give it to an animal or a human . . . you could make them grow.
* * *
Q. You testified that you only did the RRA once. Is there a reason why you didn’t repeat that assay?
A. I thought that it was clear that there was activity in that Lee . . . construct . . . .
Trial Tr. at 390, 437. Dr. Hintz also testified that, in 1982, his opinion was that positive RRA test results reflected biological activity. See, e.g., id. at 410-11, 439. On this record, we cannot say that the district court’s finding that Dr. Hintz recognized the pharmacological activity of the fusion protein prior to the critical date is clearly erroneous.
Chiron argues that, even if Dr. Hintz did recognize the practical utility of the fusion protein, his recognition should not inure to the benefit of Genentech. Chiron contends that the Genentech inventors did not intend or expect the fusion protein to be tested for growth-promoting activity. It asserts that the inventors’ only interest in the fusion protein was as a precursor for the mature IGF-I protein, and that the inventors were not interested in the biological activity of the fusion protein. Accordingly, Chiron argues, the inventors only wanted Dr. Hintz to determine whether the fusion protein had been expressed and secreted by yeast, and not whether it had a practical utility.
Genentech responds that because Dr. Hintz was engaged as Genentech’s agent to test the fusion protein, his recognition of the practical utility of the fusion protein inures to Genentech’s benefit. Genentech argues that as long as the experiments that demonstrated utility were performed at the direction of the inventors, the results of those experiments inure to the benefit of the inventors. Genentech contends that the inventors submitted the samples to Dr. Hintz to test for the intended utility of the invention; therefore, Dr. Hintz’s recognition that the fusion protein would work for that purpose inures to the inventors’ benefit, and completes the reduction to practice of the invention. Alternatively, Genentech argues that the reduction to practice was complete when Dr. Hintz conveyed the positive RRA test results to Dr. Ullrich.
"In order to establish an actual reduction to practice, the inventor must prove that: (1) he constructed an embodiment . . . that met all the limitations of the interference count; and (2) he determined that the invention would work for its intended purpose." Cooper v. Goldfarb, 154 F.3d 1321, 1327, 47 USPQ2d 1896, 1901 (Fed. Cir. 1998). "When testing is necessary to establish utility, there must be recognition and appreciation that the tests were successful for reduction to practice to occur." Estee Lauder Inc. v. L’Oreal, S.A., 129 F.3d 588, 594-95, 44 USPQ2d 1610, 1615 (Fed. Cir. 1997). The district court determined that the Genentech inventors did not understand the positive RRA test results to demonstrate the practical utility of the fusion protein. See Genentech III, slip op. at 47. The court concluded that the inventors understood the positive test results to indicate that there was "a significant amount of IGF-I-like fusion protein" in the samples, Genentech III, slip op. at 42, but did not understand the results to indicate the "pharmacological activity of the fusion protein," id. at 45.
Genentech argues that Dr. Ullrich did understand from the RRA test results that the fusion protein worked for the intended purpose of the invention. In support of this argument, it cites deposition testimony of Dr. Ullrich that he knew from the positive RRA test results that the fusion protein "was very likely to be biologically active." However, Dr. Ullrich testified before the district court that he did not know in 1982 that there was a correlation between the RRA test and a specific in vivo therapeutic use, and that the RRA test was just one test "that together with other results would . . . establish the biological activity of the molecule." Trial Tr. at 191. When we consider the record as a whole, we do not find the district court’s conclusion that Dr. Ullrich had not appreciated the practical utility of the fusion protein to be clearly erroneous. We therefore must reject Genentech’s argument that its reduction to practice was complete when Dr. Hintz reported the positive RRA test results to the inventors. Accordingly, Genentech can prevail only if Dr. Hintz’s recognition of the growth-promoting activity of the fusion protein inures to its benefit.
"Inurement involves a claim by an inventor that, as a matter of law, the acts of another person should accrue to the benefit of the inventor." Cooper, 154 F.3d at 1331, 47 USPQ2d at 1904. In Estee Lauder, we suggested that the requirement that an inventor must know that the invention is useful might be satisfied when an agent of the inventor obtains such knowledge. See Estee Lauder, 129 F.3d at 593, 44 USPQ2d at 1614. However, our case law does not clearly define the circumstances under which this type of inurement may occur. We did not directly address this issue in Estee Lauder because we determined that no one had recognized the utility of Estee Lauder’s invention prior to the critical date. See id. at 595, 44 USPQ2d at 1615. In Reese v. Hurst, 211 USPQ 936, 941, 943 (CCPA 1981), our predecessor court affirmed a Board decision that a reduction to practice had occurred on the date that test results were obtained instead of on the later date when the results were conveyed to the inventor; however, the court did not explain this aspect of its decision. See Estee Lauder, 129 F.3d at 594, 44 USPQ2d at 1615 (noting that whether the invention at issue in Reese was reduced to practice on the testing date or on the date when the results were conveyed to the inventor "was entirely immaterial to the decision" because both dates were prior to the critical date, and stating that, to the extent that Reese can be read as "imposing a rule that the successful testing date is the date of reduction to practice, even when success is not known until later[,] . . . . it stands alone among our precedent"). By the same token, the court in Gunter v. Stream, 573 F.2d 77, 78, 197 USPQ 482, 483 (CCPA 1978), stated without explanation that tests conducted by fellow employees of the inventor were "proof of an actual reduction to practice which is attributable to [the inventor]," even though the inventor "took no part in th[at] phase" of development.
Two decisions of the Board illustrate when an inventor can benefit from a non-inventor’s recognition that the invention works for its intended purpose. In D’Silva v. Drabek, 214 USPQ 556 (BPAI 1981), the Board rejected the argument that the inventor had to establish that the relevant test results had been communicated to him. D’Silva had submitted a sample to the Biological Evaluation Group of his company for testing for pesticidal activity. See id. at 559. The Board reasoned that because "D’Silva had a conception of the invention . . . coupled with his expectation of insecticidal activity, the work of the Biological Evaluation Group in testing the compound inured to D’Silva’s benefit whether he knew about it or not." Id. at 563. Similarly, in De Solms v. Schoenwald, 15 USPQ2d 1507, 1509 (BPAI 1990), the Board stated that "it is unnecessary for the test results to be communicated to De Solms [the inventor] to establish a reduction to practice." The inventor had submitted a compound "for evaluation of its activity in inhibiting the carbonic anhydrase enzyme." Id. at 1509. The Board explained that because "De Solms had a conception of the invention . . . coupled with her expectation of carbonic anhydrase enzyme inhibiting activity, the work of Sondey in evaluating the compound accrued to De Solms’ benefit whether she knew about it or not." Id.
From these cases, we glean at least three requirements that must be met before a non-inventor’s recognition of the utility of an invention can inure to the benefit of the inventor. First, the inventor must have conceived of the invention. Second, the inventor must have had an expectation that the embodiment tested would work for the intended purpose of the invention. Third, the inventor must have submitted the embodiment for testing for the intended purpose of the invention. Applying these requirements to the case before us, we conclude that Dr. Hintz’s recognition of the growth-promoting activity of the fusion protein does not inure to Genentech’s benefit.
There is no evidence of record that the inventors submitted the fusion protein for testing for the intended purpose of the invention, which is promoting growth. Rather, as the district court found, when the inventors asked Dr. Hintz to test the fusion protein samples for IGF-I "activity," they were asking him to test the samples for "the presence of an IGF-I-like substance." Id. at 45. They were not, as Genentech asserts, asking him to test the sample for the intended purpose of the invention. Because the inventors did not submit the fusion protein samples to Dr. Hintz for testing for growth-promoting activity, his uncommunicated recognition that the fusion protein has that activity does not inure to their benefit. The district court therefore erred when it concluded that the Genentech inventors are entitled to the benefit of Dr. Hintz’s discovery that the fusion protein worked "in a manner . . . [the inventors] had not anticipated." Genentech IV, slip op. at 9 (emphasis added).
CONCLUSION
For the foregoing reasons, the judgment awarding priority of invention to Genentech is
REVERSED.
COSTS
Each party shall bear its own costs.
Listened to CC. Patent 287 and 151 will expire in 2010, almost moot, since appeal can drag out through 2009, these are patents for indications. The main issue is patent 414, which is valid through 2018 and pertains to E Coli fermenation of IGF-1. Now, since it has to do with production of IGF-1 component, any sales including any new indications would fall under the patent violation issue and be subject to royalty. Two ways arounds this issue, there is the appeal, also, INSM is working on different fermenation production. For example, human insulin can be fermented either by E Coli vs Yeast, ie E Lily method vs Novartis method, therefore if INSM can develop a new fermentation system, which would take 3 years minimum if you listen to CC, then the lawsuit is moot. Also, the jury truly blew it. They were 9 layman who were way over their heads. The appeals court are 3 Judges with patent experience. There are major legal precedents for reversal of jury patent decisions just due to the fact the layman are trying to understand complex subjects that they have no understanding of. Secondly, not a penny goes to TRCA during appeal. Thirdly, if INSM partners with European or Asian production houses, and sells outside US, they do not fall under US Jurisdiction, although I'm sure TRCA the lawsuit whores that they are will try to make INSM's life miserable. To use a poker term, TRCA by now means have the NUTS on this hand, and INSM has many cards that can help them out. Good luck. I think I'll accumulate more shares, if that's humanly possible for me, my wife will kill me, but I'm still long on this baby. With great risk comes great rewards. I try to avoid political statements on my posts, but its like Iraq, you have to have will, determination, knowledge, and guts of steel to accomplish things.The easy way out to quit, is cowardly, I think INSM has great potential. INSM is an investment tool, I don't love it, I don't hate, if I thought for a minute it was bad, I get out in a heart beat, but it really is still a "diamond in the rough" in my opinion. To the longs that have been posting with me for about 8 years going into our 9th year, first on AOL, then Yahoo, now on iHub, I hope this company doesn't kill us with an ulcer. Good luck.
INSMED is definitely a tough stock to own, man, Celtrix sale to INSM with dilution to Celtrix holders, INS-1 failure, reverse splits, dilutions, TRCA, and now patent issue. That being said, we have FDA approval, we have the SUPERIOR/ SAFER drug, and now this patent issue is behind us, and yes there are many cases of appeals courts reversing jury decisions on patent issue, due to the complexity that the average layman has to process. What is TRCA business model? Can it survive with a drug that no doctors would prescribe due to a competitor that is once a day and less dangerous side effects, and survive just on POTENTIAL ROYALTY? Can it survive as a business model when you have no product. How can you have an annual stock holders meeting and say " are revenue consist mainly of Royalties from INSM because no one is prescribing our medicatons?" Yes INSM has a headache, but does TRCA have a fatal business model?
Rfoable-I know that the Diabetes patent is not in dispute. Fugisawa and INSM has agreements and to improve blood glucose does not in any biological sense have to do with anabolic effect. Since TRCA has only one claim for the drug, short stature, they can't all of a sudden add additional indications for Increlex and state that was also what they had in mind when they got their patent. Any new indications is off the table so to speak, because they have to prove they knew of that indication at the time of the patent. Good luck.
Death Blow to TRCA. 1) The damage is for growth/ short stature, INSM and Fugisawa retain the patent for Diabetes Mellitus. 2) Damage is 42.5 Million, only for sales for short stature, so after TRCA gets 42.5 Million, they burn through that they will go out of business. INSM can appeal and drag this out for years without paying TRCA for years, put the money in escrow. iPlex will soon make TRCA's drug Increlex obselete, and it is obselete in my opinion. 3) For TRCA to survive, INSM must go out of business and stop selling iPlex, NOT GOING TO HAPPEN. This is actually a death blow for TRCA. 4) INSM is now free to go on its way, it has the monkey off its back. Some cases the lawyers's fee is 42.5 Million. Why do you think TRCA wants an injunction? Because without an injunction, this small victory is actually a death blow to them. Good luck.
Decisions in complex patent trials are not won or lost based on facts. In fact, both sides bring in special lawyers who have outstanding personalities (talents) usually grandfatherly types that the Juries instantly bond to. Trials are won not on technicalities but on how the lawyers representing the clients are perceived by the Jurist. A good friend of mine who is in the cooperate arena states there are many specialists lawyers brought in to be the "talent" and usually backed up the expert lawyers in that particular case, in this case the patent lawyers. Since I was not in the court room, I'm wondering how the lawyers came off. Has anyone been in the court room? I trying to get the feel of how the INSM and TRCA laywers performed. The fact that the stock has shot up with high volumes indicates the big boys think the case is going well for INSM, let's just hope and pray, when it comes to Jurys it's always a crap shoot. Good luck.
Hey guys, sorry I haven't been posting on Yahoo Board, but I can't figure that board out, they really messed it up. The old system was so simple and self explanatory. I probably won't be posting on Yahoo anymore.
Anyway, I'm still very long, I still am very long on INSM, about 80 % of my holding is in an IRA account, so I have several decades window. I'm either going to lose a lot of money, or I'm going to have a lot of money.
Hell, living thru Celtrex, the 4 to 1 reverse, the 3.4 to 1 Insmed merger dilution,living thru the "dead Mexican" posters on Yahoo Board, but I finally got to see Somatokine, or should I say iPLEX FDA approved. I still can't believe how TRCA has really created such a major pain in the ass for INSM. Unless TRCA wins in court, they have a dead business model. That is my honest opinion. They have an inferior product in my opinion in terms of twice a day use and significant riskier side effect profile. I can't believe I'm into my 9th year following this product. Another year or two isn't going to phase me. I'm still very excited, although I see some more dilutions coming, probably another 30-40 million shares, that's just my best guess. Good luck to all.
I think people are missing the point of the post. To say that SCIOS has a blockbuster drug and can't be compared to INSM is a basically a form of Tautology. It is a very easy trap to fall into and understandable. At one point, these blockbuster drugs or company were unknown and undervalued. With risk comes benefits, if you have the stomach for it. Good luck.
Johnson and Johnson bought SCIOS for 2.4 Billion dollar for Natrecor. Natrecor, like IGF-1 is a polypetide, it is a natural diuretic that the body produces in the people who develop Congestive Heart Failure. SCIOS, PPS, was all over the place, when it was a no name biotech company, then FDA approval, bad press about the drug, etc. Sounds familiar? Anyway, J&J snatched it up at 2.4 Billion dollars. Just a reference point. My horizon is very very long. I have the vast majority of my shares #*$&*()@&$#)!!! load of INSM stocks locked up in my retirement accounts, so, in 20 years when I'm ready to cash out, I'm going to have one heck of a learning experience to look back on, or I'm going to be (*$#&@*&(?!! money coming out of $^*^%#?!. I'll take my chances, since I've been following this company since the Celtrix days, and familiar with the product for nearly a decade. The Key for me was the FDA approval, the rest is just gravy. The patent issue does not really worry me because I don't think it will destroy the company. INSM is here to stay. There are always ups and downs.
One gigantic milestone with the $172K revenue, INSM is now, NO LONGER A BIOTECH COMPANY, but a genuine Pharmaceutical Company, a very small one at that, but it is a huge transitional point, that will soon be reflected in its PPS. In the long run, companies that generate revenue and income are always rewarded. Guaranteed. Good luck.
Yahoo really messed up their message board. It is a horrible format. I remember when TRCA got FDA approval first then it was the end of the world, and all the "Biotech Analyst" on Wall Street was spelling the end of INSM, giving really horrible examples why INSM would not get orphan status. WRONG. Now the doomsday people are stating the Patent Lawsuit is the end of INSM. Keep your powder dry. DNA sued Chiron, another pharm company making unbound IGF-1 and lost. TRCA HAS A WEAK CASE. The only way INSM will be damaged if the courts stopped the production and marketing of iPlex, and every day iPlex is on the market, Increlex becomes a moot issue, and they lose market share every day. I can't believe that TRCA is pushing for once a day dosing when 3 decades of dosing experience by Pharmacia, DNA, Chiron, Fugisawa, and INSM has shown that unbound IGF-1 is a twice a day drug. This is a pipe dream that TRCA is trying to sell to the biotech analyst with their high school biology degree. Wait for the revenue numbers in August, and sit tight with a horizon of a few years, and INSM will be alright. Averaging down doesn't work if the company will go out of business, but I think INSM has some fight left in the old girl. I'll take my chances, and I have a pretty long horizon. I hope to God TRCA gets its just desserts in the end. You can put enough lipstick on a pig, but.......well you get the message.DD is your own responsibility. Yes, I'm a pumper, LOL, pumping for the last 8 years,and still going strong, LOL. GOOD LUCK to all.
Very interesting studies. What really impressed me is that iPlex significantly reduced the glycemic controlled in patients with the most severe forms of insulin resistance. Granted, these were very small studies, but impressive. Dropping one HbA1C from 7.6 percent to 6.7% is very impressive. That means you are going from mean average blood glucose level of 168 mg/ dL to 141 mg/dL. That is significant. Remember, as you get lower in the control range it is more difficult to lower the glucose, an example would be that it would be easier for a batter to go from a .225 average to .275 average at midseason verses at .325 batter to go to .375. I hope you get the gist of the concept. Anyway, this means that if iPlex works for the most difficult insulin resistance cases, for the average run of the Type I or Type II diabetic with severe insulin resistance, the data one would suspect and hope would be very "interesting". This is very very EXCITING. I own a lot of INSM, about 30% of my shares are in regular stock account,and 70% are in my IRA, so my time line is over 20 years, LOL. Think, what the market cap of INSM will be in 10 or 20 years from now??. What was market cap of AMGN 25 years ago? Best of luck to you.
INSM now has greater market cap than TRCA. I think the market is operating as it should. Conservatively INSM should be valued at 500 million, minimum, for getting iPlex on the marget. That would mean current PPS share at around 5, which I think is very reasonable. I believe that TRCA does not have a very viable business model and in my humble opinions when the institutional holders realize this, they should start dumping their shares. Not going to be a pretty sight.
I really am not concerned about day to day price per share fluctuation. I am very excited about the fact that iPlex is now on the market. Huge milestone. Milestones for a biotech are getting through phase I to III studies, FDA approval, Marketing of product ( over coming production, logistics, sales force, etc), and finally revenue generation. The job of the company now is expand the market, by getting more and more indications. The revenue will start to flow in. As soon as INSM breaks the 5 per share magic barrier, institutional buyers can start really getting into the act. On the flip side, TRCA if they fall below 5 pps, some institutional holders will have to start selling. INSM is in a great position. This post is for the mature posters, not the idiot posters on Yahoo MB, but people who have experience in investing, especially biotech. This is a handicappers dream at current valuation. Good luck.
The new shares will be issued tomorrow. Now everything is in place. No more negative news. INSM had FDA approval, the cash, the production facility, I give credit to management. They have done what it takes to transition from a small obscure biotech research company to a revenue/ income producing Pharmaceutical company. After the new stocks are issued, the price pressure will be released.
I think the correct way to described it is, we were going 180 mph now we're doing about 100 mph and relatively we look like we're standing still. PPS went up 300 percent at its peak at 3.35 per share, now its still around 200% gain since 0.85 since 05 summer lows, dilution with warrant converts. This company is light years ahead of any bitoech company that has not gotten FDA approval. With FDA approval the greatest risk has been removed. This is a stock with "years" as the horizon, short term gains and loses could burn anyone.
Coinstarz, I got your email, I'm sorry I didn't reply promptly, I don't follow that company at all, so I couldn't really intelligently give any opinion. Good luck.
Can anyone tell me how many shares are outstanding and how many more shares are still be completed, now I'm totally confused, my head is spinning. RIGHT NOW, what's the shares outstanding?
Yahoo Board, people panicking already, LOL. New investors should not be in biotech. It's too comical. Nothing goes up in a straight line, don't even worry about day to day fluctuations. My question to the board is what will be the PPS after the anouncement of starting of marketing iPlex in June. My best guess is around 5.25 per share. I could be wrong, LOL, just my best finger in the wind estimate.
Up 300% from the low this summer. Currently I believe there are about 65 million shares outstanding, all the warrants have not been excercised, so the company's valuation is still around 208 Million with debt which will be converted to common shares. I still believe even at the current PPS the company is undervalued. Even in the post 2000 internet/bio bubble era, valuation for a biotech company with an FDA potential blockbuster valuation should be around 500 million. There are biotech companies with only phase II studies years away from FDA approval with valuation in 200-400 million because they are biotech analyst's darlings. Next milestone will be when iPlex is marketed early this summer. By the time revenue number start rolling in 4th quarter, I believe a fair market cap would be 500-1,000 million with full dilution at 80-100 million shares, were talking 5 dollar on the low end, 9 dollars on the high end. Just my humble opinion.
Here is a post from yahoo that seems to knowledgeable about the TRCA lawsuit.
Re: Tercica patent infringement case
by: abharploonta
Long-Term Sentiment: Strong Buy 01/04/06 06:50 pm
Msg: 50557 of 50595
You seem to be posting in the absence of any useful knowledge of the law. As an attorney with over 30 years of experience, let me assure you that Tercica cannot "file an injunction". They can file a Motion for a Temporary Injunction. That Motion is then set for an evidentiary hearing. At the evidentiary hearing the burden of proof is on Tercica to establish that it is likely that they will succeed on the merits at the more extensive trial scheduled many months into the future. Tercica must also prove that the extraordinary remedy of injunctive relief is necessary now because they would suffer "irreparable harm" if the temporary injunction is not granted. "Irreparable harm" is generally defined as a type of harm which cannot be recompensed by an award of monetary damages. Since we are talking about nothing more than corporate profits here, the "irreparable harm" element of proof will be just as daunting as the "prevail on the merits" element of proof.
The longer Tercica waits to seek an injunction once again, and the closer the matter gets to a trial date, there is no reason procedurally for the Judge to even entertain a Motion for a Temporary Injunction. Why do a mini-trial now when the full trial is docketed? Judges don't like duplication of time and effort. A Judge would not publicly say in a decision that it is stupid to file a lawsuit then wait until the case is approaching trial to seek temporary injunctive relief. He or she will probably just note that such relief can't be all that necessary or important if the Plaintiff waited so long to seek it.
It is my learned opinion that seeking temporary injunctive relief at this time would be an entirely futile endeavor.
Of course, all you are trying to do by stating otherwise is drive the price down so you can pick up some shares cheaper.
Zip: I don't believe that Atarc poster talked to anyone from INSMED, its completely out of character for the company to reveal so much information. Also, I believe the dilution will bring the shares outstanding to about 80-85 million shares not 100 million. I think that post should be taken with a grain of salt.
Lou Gehrig's Disease, ALS, could be a very important off label opportunity for INSM. Cephalon use to make naked IGF-1 avaliable for compassion use for Lou Gehrig's Disease patients but they stopped. They are actually running phase III studies for naked IGF-1 for Lou Gehrig's Disease. The criteria to get into this phase III study are pretty strict. If you have Lou Gehrig's Disease why not try iPlex when it becomes avaliable? What is the down side>? ALS is a fatal disease, iPlex is relatively safe drug. Has the word gotten out to the ALS community that there may be an FDA approved drug that maybe used off label for ALS?
Hi everybody, the Yahoo board had become completely unbearable, I think I'll email some of the regulars, and I'm hoping we can have a great board here. I've been following INSM since CTRX days, I've been following the stock for 8 years now, so by default, I've become a sort of INSM junky. I'm really excited about the recent events and I hope to learn as much as I can contribute. Best of luck to all.