[Pharm-policy] the '861 AIDS test patent

[James Love]

http://www.ipo.org/InstPasteyrvCambridge7.7.99.htm
United States Court of Appeals for the Federal Circuit
98-1012,  -1013,-1041,-1265,-1276
                                                
N RE CAMBRIDGE BIOTECH CORPORATION

  -----------------
INSTITUT PASTEUR and
GENETIC SYSTEMS CORPORATION,
Plaintiffs-Appellants,
           v.
CAMBRIDGE BIOTECH CORPORATION,

This is a case involved an AIDS test that was protected by three
patents.  The court ruled that the 1 percent royalty for the 861 patent
was reasonable.  These kind of cases are relevant to the situations like
the the Thai ddI patent, where the patent in dispute is only for part of
the invention.  Jamie



"We are likewise unpersuaded by appellants' argument that the bankruptcy
court clearly erred in arriving at a 1% royalty rate. As noted
previously by the bankruptcy court, the parties did not expressly
provide for the present contingency in the 1987 Agreement, so the
bankruptcy court reasonably followed the procedure of ¶ 3 of the
agreement, which provides for calculating the royalty rate for
improvement technology in the similar situation in which a licensor
licenses both existing and improvement technology to a licensee. While
appellants correctly indicate that Genetic has paid and is paying
significant consideration in addition to the 6%, Cambridge, unlike
Genetic, is only receiving the benefit of a portion of the improvement
technology in the form of the '861 patent. Indeed, the bankruptcy court
indicated that an argument could be made that 1% is in fact too much.
See Pasteur II, slip op. at 10. Acknowledging the fact that
determination of a reasonable royalty involves some degree of
"common-sense estimation," see id., we conclude that the bankruptcy
court did not clearly err in determining that appellants were entitled
to a 1% royalty rate."


-- 
James Love, Consumer Project on Technology
v. 1.202.387.8030, fax 1.202.234.5176
love@cptech.org, http://www.cptech.org