Genentech, Tercica Awarded Damages in Patent Suit

The U.S. District Court Jury has awarded Genentech and Tercica US $ 7.5 million in damages, a 15% royalty on Iplex sales less than US $ 100 million, and 20% on sales above US $ 100 million. After an 11-day jury trial and 7 days of deliberations, the jury found that though Insmed infringed two patents, only one was willful. The court also upheld the validity of Genentech’s third patent under litigation. However, Tercica being a lead plaintiff in the litigation is expecting to recover a substantial portion of the damages. Tercica exclusively licensed disputed patents from Genentech in April 2002 for use in its manufacture and sale of, among other things, Increlex. Earlier in December 2004, Tercica and Genentech filed the patent infringement lawsuit seeking a declaratory judgment against Insmed and two of its subsidiaries, Insmed Therapeutic Proteins and Celtrix Pharmaceuticals, in the U.S. District Court for Northern District of California. Both Tercica and Genentech alleged infringement of the U.S. Patent Nos. 5,187,151 (the ‘151 patent); 5,258,287 (the ‘287 patent) and 6,331,414 (the ‘414 patent). The jury found that Insmed infringed the ‘287 patent; willfully infringed the ‘151 patent; and upheld the validity of the ‘414 patent. However, prior to trial the court has ruled that Insmed’s process for making the IGF-1 in Iplex literally infringes three claims of the ‘414 patent.