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Drug Trolls

When Israel-based Yeda Research & Development Co. discovered the tumor necrosis inhibitory protein, it was quick to obtain a patent. The 1987 discovery was the fruit of six years of work by researchers looking for proteins that could treat the symptoms of rheumatoid arthritis. Yeda licensed the patent to Immunex Corp., Wyeth and Amgen Inc. Those companies commercialized and marketed the protein as the blockbuster drug Enbrel, which was later approved to treat several other forms of arthritis as well as psoriasis.

But years after the companies took Enbrel to market, a limited liability investment partnership called Israel Bio-Engineering Project (IBEP) came out of the woodwork, claiming it was the rightful owner of the key patent. It sued Wyeth, Amgen and Immunex for infringement. IBEP had no involvement in the process of developing or researching the drug. It simply had funded a company that supported some of Yeda's research in exchange for ownership of any discoveries resulting from that research. However, that agreement had expired a year before Yeda's breakthrough.

Housey is a small Southfield, Mich.-based company run by three doctors. Its main asset is a patent on a screening method to search for protein inhibitors and activators. Housey sued Bayer in 2003, alleging the company was infringing that patent by screening compounds outside the U.S. and importing information derived from the screening process to do further research. While Bayer ultimately escaped liability because it only imported information and not a tangible infringing product, that hasn't stopped Housey from forcing other drug makers to take out licenses on the screening process and filing enforcement suits against those companies that didn't do so.

"A lot of patents are issued on screening methods," says Stephen B. Maebius, a partner at Foley & Lardner in Washington, D.C. "The trends are similar to those in the tech sector. Broad patents are being obtained and they may fall into the hands of companies and investors that are most interested in licensing them to other people."

But as patent trolls become more sophisticated in their exploitation of the patent system against pharmaceutical companies, the interests of the pharmaceutical sector may cross over to the side of the reformers--and if the powerful interest groups in the pharmaceutical sector and the tech sector align, that could add up to changes to the patent system.

"You may find pharmaceutical companies turning more toward wanting patent reform," Lyerla says. "They might soften their position on some of these issues when they become the targets of trolls."

staff Writer

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