UW Madison's patenting arm wins suit against Xenon

AP News
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Posted: Jan 05, 2010 2:28 PM

The University of Wisconsin-Madison's patenting arm won an appeal Tuesday in federal court against Canadian drug company Xenon.

The lawsuit brought by the Wisconsin Alumni Research Foundation dealt with how Xenon handled patent rights to an enzyme that can lower cholesterol levels in the human body.

Researchers at the university discovered the enzyme in 1999 and two years later the research foundation licensed the technology to Xenon, which partially sponsored the work. The foundation gave Xenon an exclusive license to commercialize the discovery and market any resulting products in exchange for a share of the profits.

No products have been brought to market as a result of the research, according to the 7th U.S. Circuit Court of Appeals.

The foundation filed a lawsuit in 2005 claiming that Xenon violated its contract rights by entering into a partnership with Swiss drug company Novartis without paying the required fees. The foundation learned of the agreement with Novartis from a press release, according to the court opinion.

The research foundation canceled its license agreement with Xenon in 2006.

Xenon argued it had a right to enter into the agreement with Novartis without being subject to the terms of its deal with the foundation which required payment of the fees.

U.S. District Judge Barbara Crabb ruled in 2006 that Xenon had broken its contract and awarded the foundation $300,000 in damages.

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The foundation also alleged that it, and not Xenon, owned rights to a set of therapeutic compounds that were developed from the jointly patented enzyme. The lower court ruled in favor of Xenon on that issue, but the appeals court reversed that decision Tuesday and said the foundation was the proper owner.

The appeals court also sided with the foundation on the fees issue, saying Xenon did break the contract and therefore the $300,000 awarded in damages was justified.

Foundation spokeswoman Janet Kelly had no immediate comment on the decision.

Attorneys for Xenon did not immediately return messages seeking comment.