BIOGEN IDEC MA INC. v. TRUSTEES OF COLUMBIA UNIVERSITY

332 F.Supp.2d 286 (2004) | Cited 4 times | D. Massachusetts | August 13, 2004

MEMORANDUM AND ORDER

I. INTRODUCTION

The plaintiffs in this case are drug companies. In 1993,plaintiff Biogen Idec MA Inc. ("Biogen") licensed from theTrustees of Columbia University in the City of New York("Columbia") all patents deriving from an application thatColumbia filed in 1980 (the "Axel Patents"). In 1994, plaintiffGenzyme Corporation ("Genzyme") obtained a similar license.

Biogen believed that all but one of the patents covered by itslicense expired in 2000, and that its obligation to pay royaltiesended in the fall of 2002 when the last of the productsmanufactured before the expiration date of the patents Biogen wasusing were sold. However, after making what it represented to bethe last payment due, Biogen was informed by Columbia that a newpatent deriving from the 1980 application, U.S. Patent No.6,455,275 (the "'275 patent"), had been issued on September 24,2002. Columbia asserted that Biogen was, therefore, obligated to pay royalties for another seventeen years. A similar notice wassent to Genzyme.

Biogen, Genzyme, and the other plaintiff, Abbott BioresearchCenter, Inc. ("Abbott"), contend that the '275 patent is invalidbecause of the doctrine of non-statutory double patenting and forother reasons. They also assert that, if valid, the '275 patentis unenforceable because of prosecution laches. Therefore, theplaintiffs ceased paying royalties to Columbia under theirrespective agreements.

On July 15, 2003, the plaintiffs filed this suit againstColumbia seeking, among other things, declarations that the '275patent is both invalid and unenforceable.1 In March 2004Columbia notified Biogen and Genzyme that Columbia wasterminating their licenses as a result of their refusal to payroyalties on the '275 patent. On April 7, 2004, Biogen andGenzyme sought relief from this court by filing a Joint Motionfor Temporary Restraining Order and Preliminary Injunction (the"Motion for Preliminary Injunction"). Pursuant to the stand-stillagreement which the parties reached on April 14, 2004 that isincorporated in an April 15, 2004 Order, the parties were givenadditional time to brief the merits of the Motion for PreliminaryInjunction. Under the standstill agreement, if the court finds the Motion for PreliminaryInjunction meritorious, it would enjoin Columbia's termination ofBiogen and Genzyme's license agreements as of April 7, 2004. Ifthe court denies the Motion for Preliminary Injunction, thelicense agreements would be deemed terminated as of April 2004for Biogen and as of May 2004 for Genzyme in accordance with theprovisions of their respective agreements governing termination.

On June 22, 2004, the court heard oral argument on the Motionfor Preliminary Injunction. For the reasons explained in thisMemorandum, that motion is being denied.

In summary, the court finds that plaintiffs have, on thepresent record, made a strong showing that they are likely toprevail in proving that the '275 is invalid pursuant to thedoctrine of non-statutory double patenting and, if valid, isunenforceable because of the equitable doctrine of prosecutionlaches. This strong showing of likely success on the meritsreduces, but does not eliminate, the showing of irreparable harmthat plaintiffs must make to obtain preliminary injunctiverelief. Plaintiffs have failed to prove that they will suffer anyirreparable harm if Columbia is not preliminarily enjoined fromterminating their licenses. Therefore, the court is denying theMotion for Preliminary Injunction. The conclusion that therequest for equitable relief should be denied is reinforced bythe facts that the balance of hardships favors Columbia and thepublic interest will be served rather than injured by permittingthe licenses to be terminated.

II. FACTS AND PROCEDURAL HISTORY

The following facts are either undisputed or proven for presentpurposes.

A. Technology

In the 1970s, the National Institutes of Health ("NIH")provided funding for, among other things, research conducted byDrs. Richard Axel, Michael Wigler, and Saul Silverstein atColumbia relating to co-transformation of cells. This courtdescribed this technology as it applies to Biogen's processes andproducts in Biogen, Inc. v. Berlex Laboratories, Inc.,113 F. Supp. 2d 77 (D. Mass. 2000), aff'd in part, vacated in part andremanded, 318 F.3d 1132 (Fed. Cir. 2003).

Using recombinant DNA technology, proteins such as interferon can be produced in "host" cells which normally do not produce those proteins. Foreign DNA encoding the interferon protein is introduced into the host cell on a "DNA construct," which is also sometimes referred to as a "plasmid" or "vector." A DNA construct is an engineered piece of DNA that serves as a vehicle to facilitate transfer of a gene into the host cell. Once introduced into a eukaryotic cell, the DNA construct may integrate into the chromosome of the host cell. If stably integrated, the "gene of interest," in this case the interferon gene, can be "transcribed" into "RNA." That RNA may be "translated" into protein by the host cell. If the process is successful, progeny of the host cell will also have the gene of interest and produce the protein. The process of introducing a foreign gene into a cell is known as "transfection." The term "transform" is often used interchangeably with "transfect," although "transform" implies that the foreign DNA has been successfully incorporated in the host cell. In this Memorandum the terms "transform" and "transformation" refer to the successful introduction of foreign genes into the chromosome of a host cell. Multiple genes can be introduced into a host cell simultaneously, in a process called "co-transformation." Co-transformation is valuable because successful transformation is a rare event. Typically less than one cell in 100,000 successfully integrates a foreign gene. Thus, identification of CHO [Chinese Hamster Ovary] cells transformed with the interferon gene is both difficult and important. To facilitate detection of transformed cells, scientists can introduce a "selectable marker gene," as well as the gene of interest, into a host cell. A selectable marker gene encodes a protein required by the cell to survive in certain growth conditions. Cells lacking this marker gene are used as hosts. After transformation has been attempted, scientists place the cells in medium which is nutritionally deficient or toxic to cells which did not integrate the marker gene and, therefore, do not produce the protein it encodes. A cell which has been transformed to include the selectable marker gene will survive in this medium because the transformed cell will compensate for the nutritional deficiency or toxicity. A cell which has not been transformed will die. In essence, the cells which have been transformed to contain the selectable marker gene will live and be identifiable as transformed. When co-transformation is attempted, if the selectable marker gene has been successfully introduced, the interferon gene may have been successfully introduced as well. Thus, the marker gene facilitates the identification of cells that have been transformed to include interferon. Co-transformation can be attempted by placing two genes on a single DNA construct and introducing it into the cell. This is called "linked co-transformation," or co-transformation with a "single construct". Alternatively, co-transformation can be attempted by placing two genes on different DNA constructs, and simultaneously introducing them into the cell. This is referred to as "unlinked co-transformation" or cotransformation employing "multiple constructs". . . . . After either linked or unlinked co-transformation is accomplished, the host cell is grown in a "culture medium" in order to allow the gene of interest, in this case interferon, to be expressed as a protein. A "culture medium" is a solution that contains the nutrients required for maintenance and growth of the cell.Biogen, 113 F. Supp. 2d at 82-83 (footnotes and citationsomitted).

Biogen uses this technology to produce "AVONEX (Interferonbeta-1a), the world's leading treatment for relapsing forms ofmultiple sclerosis." Bucknum Decl. ¶ 2. "More than 120,000multiple sclerosis patients are currently being treated withAVONEX." Id. ¶ 3.

Genzyme has used this technology to "develop[] andcommercialize[] CEREZYME (imiglucerase), the only availableenzyme replacement treatment for Type 1 Gaucher disease,FABRAZYME (agalsidase beta) for the treatment of Fabry disease,and ALDURAZYME (laronidase) for treatment of MPS I(Mucopolysaccharidosis type-1)." Dupré Decl. ¶ 2.

B. The Patent Applications

On February 25, 1980, Drs. Richard Axel, Michael Wigler, andSaul Silverstein filed a patent application. This application,No. 06/124,513 (the "'513 application") resulted in the issuanceof U.S. Patent No. 4,399,216 (the "'216 patent") on August 16,1983. The '513 application is also the ancestor of several otherpatent applications that have resulted, to date, in the issuanceof three additional patents including the '275 patent.

The research that resulted in the '216 patent was funded by theNIH. On April 4, 1980, Columbia requested title to the inventionunder the then-governing regulations from the Department of Health and Human Services ("HHS"). Columbia further requestedthe right to grant an exclusive license to the patentedinvention. The NIH granted title to Columbia, but refused to giveColumbia the unrestricted right to grant an exclusive license asColumbia had requested. See Letter from Charles Miller,Assistant Sec'y for Health, HHS to Paul A. Marks, Vice Presidentfor Health Services, Columbia University 1 (February 24, 1981)(Levy Decl., Tab 28) (the "NIH Determination Letter"). Moreover,the time in which Columbia could grant anyone an exclusivelicense appears to have now expired. Id. at 5. Columbia isgenerally obligated to "use all reasonable effort to bring the[Axel Patents] to the commercial market through licensing on anon-exclusive, royalty-free or reasonable royalty basis." Id.at 4. NIH also required that "[a]ny license granted by [Columbia]. . . shall include adequate safeguards against unreasonableroyalties and repressive practices." Id. at 5.

"A later application for an independent or distinct invention,carved out of a pending application and disclosing and claimingonly subject matter disclosed in the earlier or parentapplication, is known as a divisional application or `division.'"Manual of Patent Examining Procedure ("MPEP") § 201.06. On August11, 1983, five days before the '216 patent issued, Columbia fileda divisional application, No. 06/552,408 (the "'408 application")based on the disclosure in the '513 application. Based on thisapplication, on January 6, 1987, the PTO issued U.S. Patent No. 4,634,665 (the "'665 patent"). Evidently because the subjectmatter of the '665 patent's claims was obvious in view of the'216 patent's claims, the Patent Office permitted the '665 patentto issue only after Columbia filed a "terminal disclaimer,"giving up the part of the '665 patent's term that would haveextended past the expiration date of the '216 patent, August 16,2000.

On October 3, 1986, Columbia filed another divisionalapplication, No. 06/915,273, this time based on the '408application. Columbia abandoned this application, but not beforefiling a continuation application on May 2, 1989, No. 07/346,089(the "'089 application"). "A continuation is a second applicationfor the same invention claimed in a prior nonprovisionalapplication and filed before the original prior applicationbecomes abandoned or patented." MPEP § 201.07.

Columbia abandoned the '089 application as well, after filinganother divisional application, No. 07/716,915. This applicationresulted in the issuance, on January 12, 1993, of U.S. Patent No.5,179,017 (the "'017 patent"). Once again, however, the PatentOffice allowed the claims only after Columbia filed a terminaldisclaimer limiting the term of the '017 patent to the term ofthe original '216 patent.

Several months before the '017 patent issued, on June 26, 1992,Columbia filed a continuation application. Columbia abandonedthis application after filing another continuation application onMarch 23, 1994. This application was also abandoned, but notuntil Columbia had filed another continuation application on February27, 1995. This application, too, was eventually abandoned.

On June 7, 1995, Columbia filed two more continuationapplications, Nos. 08/484,136 (the "'136 application") and08/477,159 (the "'159 application"). The June 7, 1995 filing datefor the '136 and '159 applications is very significant. OnDecember 8, 1994, Public Law No. 103-465, the Uruguay RoundAgreements Act, was enacted. Among other things, this legislationprovided that all patents that issue based on applications filedon or after June 8, 1995 — 6 months after the Act was signed intolaw — would expire twenty years from the date the application wasfiled.2 See 35 U.S.C. § 154(a)(2). The old rule wasthat patents expired seventeen years from the date of issuance.See 35 U.S.C. § 154 (1988). In order to grandfather in pendingapplications, the new law provided that all patents that issuebased on applications filed before June 8, 1995 will last untileither twenty years from the date the application was filed orseventeen years from the date the patent issues, whichever islater. See 35 U.S.C. § 154(c)(1)(A).

The '159 application is still pending, now more than nine yearsafter being filed. However, by virtue of the application beingfiled on June 7, 1995, if the '159 application results in a patent (a "'159 patent"), it will be effective for seventeenyears. If the '159 application had been filed a day later, a '159patent would either not now issue or would immediately be deemedexpired because the twenty-year period after the 1980 filing ofthe original application from which it derives ended in 2000.

The '136 application ultimately matured into the '275 patentinvolved in this litigation. It was issued on September 24, 2000.Had the '136 application been filed one day later, the '275patent too either would not have issued or would have beenimmediately deemed expired on February 25, 2000 because itsapplication date relates back to itsgreat-great-great-great-great-great-grandparent application, the1980 '513 application. However, since the '136 application was,by one day, eligible for the seventeen years from issuance term,it will not expire until September 24, 2019 — seventeen yearsafter the date on which it was issued.

Columbia owns another patent that is relevant to the Motion forPreliminary Injunction, U.S. Patent No. 5,149,636 (the "'636patent"). This patent issued on September 22, 1992 and expires onSeptember 22, 2009. The '636 patent covers an invention in thesame general field as the '216, '665, '017 and '275 Axel patents.However, it resulted from a distinct application, filed in 1987,that was a continuation of a continuation of a continuation of anapplication filed on March 15, 1982. The other applicationsrelated to the '636 patent were all abandoned.

Neither Biogen nor Genzyme practices the '636 patent. Nor has either plaintiff expressed an intention or desire to practice it.

C. The License Agreements

Columbia has entered into license agreements with all of theplaintiffs in the Columbia Multidistrict Litigation. Biogenentered into a license agreement in 1993 and Genzyme did so in1994. The Biogen and Genzyme agreements have similar terms. Theonly material difference for present purposes is that Columbiamay terminate Biogen's license agreement "upon 30 days' writtennotice to [Biogen] for [Biogen]'s material breach of" theagreement while Genzyme is subject to a sixty day terminationperiod.3 It is undisputed that failure to pay royaltiesthat are due constitutes a material breach under the licenseagreements.

The license agreements provide for a payment of $30,000 eachyear which is credited toward any royalty payments that are dueduring that year. Royalties are owed for all sales of "LicensedProducts". "`Licensed Products' means products . . . themanufacture, use or sale of which is covered by a claim ofLicensed Patent Rights which have neither expired nor been heldinvalid by a court of competent jurisdiction from which no appealhas or may be taken." License Agreement § 1(d)(i). "LicensedPatent Rights" includes the '216, '665, '017, and '275 patents aswell as the '636 patent. It also includes any new patents that issue based onapplications that relate to these patents. As described earlier,the '159 application, which relates to the original '513application that resulted in the '216 patent, is still pendingbefore the PTO. Once again, if the '159 application results in apatent being issued, that patent would not expire until seventeenyears from its issue date, because the '159 application was filedbefore June 8, 1995.

Under the license agreements, royalties are due based on salesof products manufactured during the period that the products ormanufacturing process were covered by a valid patent. Therefore,even after the '216, '665 and '017 patents expired on August 16,2000, the plaintiffs continued to make payments to Columbia asthey depleted their inventories of drugs manufactured before thepatents expired. Once those inventories were sold, the drugcompanies stopped paying royalties. For example, on September 26,2002 Biogen sent Columbia a letter confirming a wire transfer andnoting that as "Biogen has now depleted all inventories createdprior to the US patent expiration date, [t]his payment representsBiogen's final obligation to Columbia under the . . . licenseagreement." Bucknum Decl. Tab 3.

Shortly after receiving this letter, Columbia notified Biogenthat the '275 patent had issued on September 24, 2002 and,therefore, "Columbia does not agree that Biogen's payment for thesecond quarter of 2002 is its last royalty owed." Id. Tab 4;Dupré Decl. Tab 7. Similar notices were sent to Genzyme and Abbott.

After reviewing the '275 patent, Biogen and Genzyme each formeda belief that it was invalid. Therefore, while they continued tomake the $30,000 annual maintenance payments, they stopped makingroyalty payments.

D. The Lawsuit

On July 15, 2003, the plaintiffs filed a declaratory judgmentaction against Columbia seeking declarations that the '275 patentis invalid and unenforceable.

Columbia had not then terminated its license agreements withBiogen and Genzyme for failure to pay royalties. However, onMarch 9, 2004 Columbia sent letters to Biogen and Genzyme whichwould terminate their licenses in thirty and sixty daysrespectively. On April 7, 2004, just before Biogen's thirty-dayperiod expired, Biogen and Genzyme filed the Motion forPreliminary Injunction, seeking an order restraining Columbiafrom terminating their license agreements pending the outcome ofthis case.

The parties subsequently reached a stand-still agreement, whichwas incorporated into an April 15, 2004 Order. The standstillagreement and Order provide that: (1) if the court denies theMotion for Preliminary Injunction, then Columbia's termination ofBiogen and Genzyme's license agreements will be effective as ofthe expiration of the applicable termination periods; (2) if thecourt allows the Motion for Preliminary Injunction, thenColumbia's attempted termination of Biogen and Genzyme's licenseagreements will be enjoined as of April 7, 2004 and no termination will havetaken place; (3) until the court decides the Motion forPreliminary Injunction, Columbia will not (a) seek leave to amendits answer to assert infringement counterclaims against Biogen orGenzyme, (b) initiate actions against Biogen or Genzyme assertinginfringement of the '275 patent, or (c) seek injunctive reliefagainst Biogen or Genzyme to enjoin any alleged practice of theinvention claimed in the '275 patent. See April 15, 2004 Order.

Columbia filed a memorandum in opposition to the Motion forPreliminary Injunction. Biogen and Genzyme filed a reply.

The court ordered the parties to "file supplemental memorandaaddressing the propriety of an injunction that prohibits Columbiafrom terminating Biogen and Genzyme's license agreements withrespect to all rights other than the '275 patent pending theoutcome of this case, but permits Columbia to terminate thelicense agreements with respect to the '275 patent." June 11,2004 Order ¶ 6. The parties each filed a supplemental memorandum.No party questions the court's authority to enter a more narrowlytailored injunction than the one Biogen and Genzyme requested,which would prevent the termination of their licenses with regardto all of the relevant patents. See June 22, 2004 Tr. at 24.However, no party advocates a limited injunction, which wouldprevent the termination of the licenses with regard to some butnot all of those patents. Instead, Biogen, Genzyme, and Columbiaeach urge the court to adopt the positions set forth in theiroriginal filings. On June 22, 2004, the court held a hearing on the Motion forPreliminary Injunction and other motions then pending in theColumbia Multidistrict Litigation. At that hearing Columbiarepresented that it would not seek a preliminary injunction inthis case. See June 22, 2004 Tr. at 81-82, 112. Therefore,there is no threat that Biogen and Genzyme will be restrainedfrom manufacturing or distributing their respective drugs duringthe pendency of this case.4

At the June 22, 2004 hearing the court also implicitly deniedColumbia's motion to stay completely the Columbia MultidistrictLitigation, including this case, pending the reexamination of the'275 patent by the PTO that was prompted by a February 27, 2004request for ex parte examination made by the Public PatentFoundation. Rather, the court identified the contention that the'275 patent is invalid under the doctrine of non-statutory doublepatenting as one that should be able to be quickly developed anddecided in 2004, either on a motion for summary judgment or at atrial to be conducted in December 2004. Thus, the courtestablished a schedule for doing so and otherwise substantiallystayed this case. See June 23, 2004 Order. Therefore, ifplaintiffs are correct in their contention, the '275 patentshould be declared invalid because of non-statutory double-patenting before 2005.

III. ANALYSIS

A. The Applicable Standards

"[T]he general considerations underlying the grant or denial ofa preliminary injunction do not vary significantly among thecircuits. . . ." Mikohn Gaming Corp. v. Acres Gaming Corp.,165 F.3d 891, 894 (Fed. Cir. 1998). Generally, the law of the circuitin which a case is brought governs. Id. However, a court should"give dominant effect to Federal Circuit precedent insofar as itreflects considerations specific to patent issues." Id.

For the purposes of this case, there is no material differencebetween the standards for obtaining a preliminary injunction inthe First and Federal Circuits. "In the typical case, a partyseeking preliminary injunctive relief must prove: (1) asubstantial likelihood of success on the merits; (2) asignificant risk of irreparable harm if the injunction iswithheld; (3) a favorable balance of hardships; and (4) a fit(or, at least, a lack of friction) between the injunction and thepublic interest." Equal Employment Opportunity Comm'n v. AstraUSA, Inc., 94 F.3d 738, 742 (1st Cir. 1996); accordAmazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343,1350 (Fed. Cir. 2001) ("Amazon is entitled to a preliminaryinjunction if it can succeed in showing" essentially the samefour elements). "[A] movant cannot be granted a preliminaryinjunction unless it establishes both of the first two factors,i.e. likelihood of success on the merits and irreparable harm." Amazon.com, 239 F.3d at 1350.

"[W]hen the likelihood of success on the merits is great, amovant can show somewhat less in the way of irreparable harm andstill garner preliminary injunctive relief." Astra,94 F.3d at 743-44; see also Ross-Simons of Warwick, Inc. v. Baccarat,Inc., 102 F.3d 12, 19 (1st Cir. 1996); Gately v.Massachusetts, 2 F.3d 1221, 1232 (1st Cir. 1993) (irreparableharm is subject to a "sliding scale" analysis); Amazon.com,239 F.3d at 1350 ("[T]he district court must weigh and measure eachfactor against the other factors."). Nevertheless, no matter howstrong the likelihood of success, some irreparable harm in theabsence of an injunction must be proven. Astra, 94 F.3d at 743;Gately, 2 F.3d at 1232; Charlesbank Equity Fund II v. BlindsTo Go, Inc., 370 F.3d 151, 162 (1st Cir. 2004).

Therefore, "`[t]he basis of injunctive relief in the federalcourts has always been irreparable harm and inadequacy of legalremedies.'" Astra, 94 F.3d at 743 (quoting Beacon Theatres,Inc. v. Westover, 359 U.S. 500, 506-07 (1959)). "Irreparableharm" is proven if, absent an injunction, the plaintiff will"suffer[] a substantial injury that is not accurately measurableor adequately compensable by money damages." Ross-Simons,102 F.3d at 19.

"A finding of irreparable harm must be grounded on somethingmore than conjecture, surmise, or a party's unsubstantiated fearsof what the future may have in store." Charlesbank,370 F.3d at 162. "[A] preliminary injunction is not warranted by a tenuous or overly speculative forecast of anticipated harm." Ross-Simons,102 F.3d at 19; see also Narragansett Indian Tribe v.Guilbert, 934 F.2d 4, 6-7 (1st Cir. 1991); Pub. Svc. Co. v.Town of W. Newbury, 835 F.2d 380, 383 (1st Cir. 1987); Regan v.Vinick & Young (In re Rare Coin Galleries of Am.), 862 F.2d 896,902 (1st Cir. 1988). Rather, the threat of irreparable harm mustbe real and "immediate." Fundicao Tupy S.A. v. United States,841 F.2d 1101, 1102-03 (Fed. Cir. 1988); Auto. Radio Mfg. Co. v.Ford Motor Co., 390 F.2d 113, 116 (1st Cir. 1968).

B. The Likelihood of Success on the Merits

The plaintiffs have made a strong showing that they are likelyto prove that the '275 patent is invalid under the doctrine ofnonstatutory double patenting and, if valid, is unenforceablebecause of prosecution laches.

An issued patent is presumed valid and can only be proveninvalid by clear and convincing evidence. See 35 U.S.C. § 282.

[35 U.S.C. § 101] precludes more than one patent on the same invention. . . . . Section 101, however, only prohibits a second patent on subject matter identical to an earlier patent. Thus, applicants can evade this statutory requirement by drafting claims that vary slightly from the earlier patent. [Therefore, courts have] fashioned a doctrine of nonstatutory double patenting (also known as "obviousness-type" double patenting) to prevent issuance of a patent on claims that are nearly identical to claims in an earlier patent. This doctrine prevents an applicant from extending patent protection for an invention beyond the statutory term by claiming a slight variant.Geneva Pharms., Inc. v. Glaxosmithkline PLC, 349 F.3d 1373,1377-78 (Fed. Cir. 2003) (citations and footnote omitted). "Underobviousness-type double patenting, a patent is invalid when it ismerely an obvious variation of an invention disclosed and claimedin an earlier patent by the same inventor." Ga.-Pac. Corp. v.United States Gypsum Co., 195 F.3d 1322, 1326 (Fed. Cir. 1999),amended by, 204 F.3d 1359 (Fed. Cir. 2000).

The plaintiffs have presented the declaration of Harvey F.Lodish on the issue of non-statutory double patenting. Dr. Lodishis a professor at the Massachusetts Institute of Technology, andthe lead author of an important, relevant textbook, MolecularCell Biology. In his eighteen-page affidavit, Dr. Lodish employsthe legally correct criteria for proving non-statutory doublepatenting, and explains and illustrates in detail why the threeindependent claims of the '275 patent that he analyzes "are notpatentably distinct over claims of the '017 patent and areinvalid for obviousness type double patenting." Lodish Decl. ¶34.5

Columbia has not presented any evidence, or even argument, torefute Dr. Lodish's analysis. Rather, Columbia relies on thepresumption that the '275 patent is valid. Columbia also contendsthat even if Dr. Lodish's analysis of the claims he addresses is correct, there may be other independent or dependent claims thatare valid. However, Columbia has not identified the limitationsin even one claim not addressed by Dr. Lodish that would arguablymake it patentably distinct from the claims in the earlier Axelpatents. Nor has Columbia explained why the three claimscarefully analyzed by Dr. Lodish are not representative of all ofthe claims of the '275 patent.

The presumption of validity and the requirement that theinvalidity of each claim be proven by clear and convincingevidence will ultimately place a heavy burden of proof onplaintiffs. See Symbol Techs., Inc. v. Opticon, Inc.,935 F.2d 1569, 1580 (Fed. Cir. 1991). Nevertheless, the undisputedand, at this point compelling, analysis done by Dr. Lodishestablishes that plaintiffs are likely to satisfy that burden andprevail in proving that the '275 patent is invalid.

Plaintiffs have also shown that if the '275 patent is valid,they are likely to prove that it is unenforceable under theequitable doctrine of prosecution laches. Prosecution laches canrender a valid patent unenforceable. "In Symbol Technologies,Inc. v. Lemelson Medical, 277 F.3d 1361, 1368, 61 U.S.P.Q.2d1515, 1520 (Fed. Cir. 2002), in the context of an infringementcase, [the Federal Circuit] recently held that the equitabledoctrine of laches may be applied to bar enforcement of a patentthat issued after unreasonable and unexplained delay inprosecution, even though the patent applicant complied withpertinent statutes and rules." In re Bogese, 303 F.3d 1362, 1367 (Fed. Cir. 2002);see also Reiffin v. Microsoft Corp., 270 F. Supp. 2d 1132,1149-1152 (N.D. Cal. 2003). In Symbol, the court analyzed andrelied upon much earlier Supreme Court cases in which anunexplained nine-year delay and an unreasonable eight-year delayrendered the patents and claims at issue unenforceable. SeeSymbol, 277 F.3d at 1364 (discussing the "unexplained nine-yeardelay" in Woodbridge v. United States, 263 U.S. 50 (1923) andthe "unreasonable eight-year delay" in Webster Electric Co. v.Splitdorf Electric Co., 264 U.S. 463 (1924)).

The Woodbridge Court identified two substantive policies served by the doctrine of prosecution laches: (1) preventing a patent applicant from deliberately delaying the issuance of a patent the applicant "always intended to secure" solely to increase the commercial value of the patent; and (2) preventing a patent applicant from unreasonably postponing "the time when the public could enjoy the free use of [an] invention" that would otherwise have been made available to the public at a much earlier date.Reiffin, 270 F. Supp. 2d at 1150.

In the instant case, the '275 patent was issued twenty-twoyears after the application from which it derives was filed.There were several delays in the prosecution of the application.Columbia has provided no evidence, or even argument, to explainwhy it took twenty-two years to obtain the '275 patent or tojustify the delays in that process.6 The timing of itsissuance strongly suggests that Columbia deliberately delayed obtaining a patent that it alwaysintended to secure in order to make it effective just as theother Axel patents expired and thus increase its commercial valueby maximizing the period in which the public would have to payColumbia royalties for the use of the Axel patents.

Accordingly, plaintiffs have made a strong showing that theyare likely to prevail on the claim that, if valid, the '275patent is unenforceable because of prosecution laches.

C. Irreparable Harm

As described earlier, plaintiffs' strong showing that they arelikely to succeed on the merits reduces, but does not eliminate,the showing of irreparable harm that they must make to obtain apreliminary injunction. Plaintiffs allege that they will sufferseveral forms of irreparable harm if Columbia is allowed toterminate their licensing agreements. However, plaintiffs haveeither failed to prove that a particular alleged harm will occuror to prove that it will be irreparable.

Plaintiffs contend that if their licenses are terminatedColumbia will move to enjoin them from using its patents duringthe pendency of this case and that such an injunction would causethem immeasurable money damages and loss of market share, as wellas injure the health of customers who depend on plaintiffs'drugs. However, at the June 22, 2004 hearing Columbia represented thatit would not seek a preliminary injunction in this case. SeeJune 22, 2004 Tr. at 81-82, 112. The court is relying on thisrepresentation and Columbia will be bound by it. SeeAlternative Sys. Concepts, Inc. v. Synopsys, Inc., 374 F.3d 23,32-33 (1st Cir. 2004).

Plaintiffs also argue that if their license agreements areterminated because they are challenging the '275 patent they willlose the right to practice the '636 patent. This may be true.However, plaintiffs have never practiced the '636 patent. Norhave they expressed any desire or intention to do so. Therefore,any loss of the right to practice the '636 patent will not, as apractical matter, harm them at all.

Plaintiffs also assert that termination of their licenses willdeprive them of the opportunity to practice any patent that isissued in the future as a result of the pending '159 application.As explained at the June 22, 2004 hearing, this contention hasconcerned the court. In essence, termination of the licenses maycause plaintiffs to lose the right to use on advantageousfinancial terms a potential patent whose value, validity, andenforceability they cannot now fully assess because theapplication is being prosecuted in an ex parte PTOproceeding.7 In some circumstances, a "tying" arrangement that requires plaintiffs to pay royaltieson a patent they believe is invalid in order to preserve theoption to practice another patent may be something that a courtof equity should not permit. Cf. Cordis Corp. v. Medtronic,Inc., 835 F.2d 859, 864 (Fed. Cir. 1987) ("Cordis II"). Thus,the court has considered issuing a limited preliminary injunctionthat would prevent termination of plaintiffs' rights to utilizeany patent that is issued based on the '159 application. However,the prospects of such a patent issuing and of plaintiffs wantingto license rather than challenge it are too speculative tojustify even such a narrow restraint.

As described earlier, the required finding of irreparable harmcannot be based on tenuous speculation or unsubstantiated fears.See Charlesbank, 370 F.3d at 1620; Ross-Simons,102 F.3d at 19; Narragansett Indian Tribe, 934 F.2d at 6; Pub. Svc. Co.,835 F.2d at 393; In re Rare Coins, 862 F.2d at 902. Biogen andGenzyme have stated that: While plaintiffs believe that any claims issuing from [the '159] application could not be valid or enforceable, given the dilatory way in which Columbia has pursued them, plaintiffs cannot anticipate whether any claims might still issue, what those claims might be, whether Columbia might have any arguable basis for asserting that those claims were valid, and whether those claims would cover plaintiffs' products. (Plaintiffs are aware that Columbia has, during prosecution of the '159, sought claims specifically directed to beta interferon products.)Pls.' Mem. in Supp. of Mot. for Prelim. Injunction at 39. Inessence, plaintiffs describe the harm to them from a potential'159 patent as highly speculative.

In any event, the court finds that such possible harm is nowmerely a matter of conjecture. The '159 application has beenpending for nine years. It is uncertain whether it will everresult in the issuance of a patent. As required by35 U.S.C. § 290, the PTO has been informed ofthis litigation by the Clerk of this court. Upon request of aprivate party not involved in the Columbia Multidistrict Litigation,the PTO has agreed to reexamine the '275 patent. This reexaminationindicates that the PTO has determined that there is a substantialnew question of patentability — the issue of non-statutorydouble patenting. See Order Granting Request for Ex ParteReexamination, No. 90/006,953 (PTO May 10, 2004). Plaintiffs contendthat the reasons that they believe render the '275 patent invalid fornon-statutory double patenting are likely to be equallyapplicable to the '159 application.8 If this is true, thePTO should reject the application and no '159 patent shouldissue.

In any event, the court has established a schedule for resolving within five months the merits of plaintiffs'nonstatutory double patenting challenge to the '275 patent on amotion for summary judgment or at trial. See June 23, 2004Order. In Public Service Company of New Hampshire, the FirstCircuit found that "the lack of any indication that the merits ofthis case would not be decided before the critical time for the[administrative agency's] decision . . ." contributed to theconclusion that "the prospects of any irreparable damage werespeculative." See 835 F.2d at 382-85. This is also true in theinstant case.

Moreover, plaintiffs have clearly indicated that they arelikely to challenge the validity and enforceability of any '159patent that issues, rather than pay royalties on it if thelicensing agreements are not terminated. This too contributes tothe conclusion that they are not likely to be unfairly prejudicedwith regard to any '159 patent if their licenses are nowterminated.

If a '159 patent is issued and plaintiffs do, unexpectedly,want to license it, Columbia will be obligated by its 1981arrangement with NIH to grant Biogen and Genzyme licenses and notcharge them an "unreasonable royalt[y]." See NIH DeterminationLetter 5, (Levy Decl., Tab 28). At the June 22, 2004 hearing,Columbia indicated that it would do so. See June 22, 2004 Tr.at 81-82. Therefore, plaintiffs have not shown that there is arealistic risk that a '159 patent that they would like to licensewill issue, but that they will be unable to license it on terms that are reasonable, although perhaps not identical to those inthe licensing agreements being terminated.9

Plaintiffs also contend that the uncertainty and disruptionthat termination of their licenses would cause is irreparablebecause it cannot be easily measured or compensated. As support,they rely on the Federal Circuit's decision in Cordis II.However, this reliance is misplaced.

In Cordis II, the court stated that, "the trial court did notmake legal error or abuse its discretion in concluding thattermination of the license agreement would cause loss of marketshare and possible further litigation against Cordis and itscustomers for patent infringement, thereby irreparably injuringCordis." 835 F.2d at 864. The instant case is distinguishable. There is no evidence, or relevant judicial finding,10that plaintiffs will lose market share if their licenses areterminated. They make drugs that treat debilitating diseases.There is no evidence or case that indicates that doctors willalter their practice of prescribing those drugs if the licensesare terminated. Moreover, as described earlier, Columbia hasrepresented that it will not seek preliminary injunctive reliefagainst plaintiffs. There is no evidence suggesting that Columbiaintends to sue any of plaintiffs' customers. Therefore, there isnot in this case a factual basis for the findings thatconstituted the showing of irreparable harm in Cordis II.

Accordingly, plaintiffs have not satisfied the essentialrequirement of proving that they will suffer some irreparableharm if a preliminary injunction is not entered.

D. The Balance of Hardships and the Public Interest

In this case it is most appropriate to consider together thethird and fourth factors of the preliminary injunction analysis —the balance of hardships and the public interest.

Biogen stopped making royalty payments to Columbia in 2002.Genzyme has also never made any royalty payments relating to the '275 patent. If Columbia is enjoined from terminating thelicensing agreements, plaintiffs will make no royalty paymentsduring the pendency of this case. In view of the March 5, 2004decision of the Federal Circuit in Gen-Probe Inc. v. Vysis,Inc., 359 F.3d 1376 (Fed. Cir. 2004), plaintiffs contend that ifthey did pay royalties they would lose their right to challengethe validity and the enforceability of the '275 patent becausethe constitutional requirement of an "actual controversy" wouldnot be satisfied. This may be correct. In Gen-Probe, theFederal Circuit stated, in part, "that a licensee must, at aminimum, stop paying royalties (and thereby materially breach theagreement) before bringing suit to challenge the validity orscope of the licensed patent." Id. at 1381. However, theimplications of Gen-Probe for this case are essentiallyacademic. Plaintiffs stopped paying royalties long beforeGen-Probe was decided. They contend that they cannot becompelled to pay royalties. See Lear, Inc. v. Adkins,395 U.S. 653 (1969); Cordis Corp. v. Medtronic, Inc., 780 F.2d 991,995 (Fed. Cir. 1985) ("Cordis I").

In any event, in Cordis I, 780 F.2d at 995, the FederalCircuit reversed a decision preliminarily enjoining thetermination of a license agreement and ordering that royaltypayments be held in escrow pending the outcome of the case. Thereasoning of Cordis I is relevant to the instant case. Here, asin Cordis I, a preliminary injunction perpetuating thelicensing agreements would deprive the patentee of royaltiesduring the pendency of the case and limit the amount the licensees would owe if they ultimatelylose to the contractual royalty rate. However, as the FederalCircuit stated in Cordis I, "`[i]t would not be fair for theplaintiffs to be allowed simultaneously to reap all the benefitsof the licensing agreement and to deprive the licensor of all hisroyalties.'" Id. at 995 (quoting Warner-Jenkinson Co. v.Allied Chem. Corp., 567 F.2d 184, 188 (2d Cir. 1977)); seealso Gen-Probe, 359 F.3d at 1382 ("Moreover, permittingGen-Probe to pursue a lawsuit without materially breaching itslicense agreement yields undesirable results: . . . the licensorwould bear all the risk, while licensee would benefit from thelicense's effective cap on damages or royalties in the event itschallenge to the patent's scope or validity fails.").

In reaching its conclusion in Cordis I the Federal Circuitrecognized that in Lear, 395 U.S. at 670-71, the Supreme Courtemphasized "the important public interest in permitting full andfree competition in the use of ideas which are in reality a partof the public domain" that is served by permitting licensees tostop paying royalties while they challenge patents. Cordis I,780 F.2d at 995. However, as the Federal Circuit explained: This public policy statement does permit a licensee to cease payments due under a contract while challenging the validity of a patent. It does not permit the licensees to avoid facing the consequences that such an action would bring.Id.

In the instant case this means that plaintiffs need not (and in view of Gen-Probe arguably cannot) pay royalties whilechallenging the '275 patent, but that it is consistent with thepublic interest to allow Columbia to terminate their licenses.Plaintiffs will then run the risk that they may be required topay more than the present royalty rate if they do not succeed intheir challenges to the '275 patent. See 35 U.S.C. § 284("[T]he court shall award the claimant damages adequate tocompensate for the infringement, but in no event less than areasonable royalty for the use made of the invention by theinfringer, together with interest and costs as fixed by thecourt.").

Imposing this risk on plaintiffs is not an undue hardship. Nor,for the reasons described earlier, is the loss of their licensesto practice the '636 patent and any patent that may result fromthe '159 application.

As explained earlier, it has not been shown that thetermination of the licenses will disrupt the production ordistribution of plaintiffs' valuable drugs or injure doctors'willingness to prescribe them. Therefore, the public interest inpromoting health will not be harmed by the terminations.

Accordingly, the balance of hardships favor Columbia and thepublic interest will be served rather than injured by denyingplaintiffs' motion for preliminary injunction.

IV. ORDER

Accordingly, the Joint Motion of Plaintiffs Biogen Idec MA Inc.and Genzyme Corporation for a Temporary Restraining Order and a Preliminary Injunction (Docket No. 36) is hereby DENIED.

1. On April 8, 2004, the Judicial Panel on MultidistrictLitigation transferred all cases relating to the '275 patent tothis court for coordinated or consolidated pretrial proceedings.These cases are referred to collectively as the "ColumbiaMultidistrict Litigation." The instant case was filed in thisdistrict and is before this court for all purposes.

2. There are ways to extend a patent term beyond twenty years— for example, based on long delays during prosecution — but theyare not at issue in this case. See generally 35 U.S.C. § 154.

3. Although Genzyme's agreement also provides for a 30 daytermination period, "Columbia granted Genzyme 60 days to cure[its material breach] pursuant to section 5(b)(i) of the"agreement. Gindler Decl. ¶ 4.

4. Columbia also argued that if it prevails in this case itwould be in its interest to grant licenses to Biogen and Genzymerather than to restrain the production and distribution of theirdrugs. June 22, 2004 Tr. at 83. Indeed, the terms on which NIHgranted Columbia the Axel patents may require that Columbia offerto license them to Biogen and Genzyme on reasonable terms.

5. The court is not now adopting for all purposes the claimconstruction on which Dr. Lodish relies. At this point, it is notdisputed. If it is later disputed, the court will resolve thatdispute. It is uncertain whether extrinsic evidence such as Dr.Lodish's opinions on the issue of claim construction will bepermissible or appropriate to assist the court in its claimconstruction. See Vitronics Corp. v. Conceptronic, Inc.,90 F.3d 1576 (Fed. Cir. 1996).

6. "Analyzing the 2,224,379 patents that issued from 1976through 2000, two commentators found that prosecution of thesepatents `took an average of 2.47 years from the earliest claimedfiling date to issuance date.'" Pls.' Mem. in Supp. of Mot. forPrelim. Injunction at 29 n. 8 (quoting Mark A Lemley & Kimberly AMoore, "Ending Abuse of Patent Continuations," 84 B.U.L. Rev.63, 71 (2004)).

7. Although the on-going prosecution of the '159 applicationis by statute confidential, see 35 U.S.C. § 122, the PTO has onmultiple occasions, and at least as recently as May 2004,released copies of the prosecution history to third parties,including the plaintiffs. See Letter from Robert J. Spar,Director, Office of Patent Legal Administration to John P. White(July 19, 2004) (Columbia's Resp. to Pls.' Supp. Mem. (Docket No.77) Ex. A); Pl.'s Reply Mem. in Supp. of Mot. for Prelim.Injunction Tab 3. Accordingly, the plaintiffs have someinformation regarding the prosecution of the '159 application.

8. As described in footnote 7, supra, plaintiffs hadreceived the then existing prosecution history of the '159application before forming their belief that any patent thatmight emerge from that application would be invalid.

9. Moreover, in the unlikely event that the plaintiffs want tolicense and pay royalties for a new patent issuing from the '159application (or for the '636 patent), any alleged damages will bemeasurable; they will be the difference between what plaintiffswould have paid under the terminated license agreements and whatthey actually pay under the new license agreements. Thus, theharm that they will have suffered will not be "irreparable"because it will not be "a substantial injury that is notcompletely measurable or adequately compensable by moneydamages." Astra, 94 F.3d at 743. In addition, a court mighthave the authority to reinstate the plaintiffs' licenseagreements if it is alleged and proven that they were terminatedunlawfully. Cf. Narragansett Indian Tribe, 934 F.2d at 7 n. 3(discussing possibility that, at end of litigation, court could"order[] that the house be razed and the land restored"); Pub.Svc. Co., 835 F.2d at 381 ("[I]f the Company were eventually toprevail, the permit could be reinstated and the polesreinstalled."). These questions are, however, not now before thecourt.

10. It appears that the district court in Cordis II reliedat least in part on a finding regarding irreparable harm in thepacemaker industry made in another case. See Cordis Corp. v.Medtronic, Inc., 2 U.S.P.Q.2d 845, 1986 WL 15722, at *3 (D.Minn. 1986) (citing Medtronic, Inc. v. Catalyst Research Corp.,518 F. Supp. 946, 954 (D. Minn.), aff'd, 664 F.2d 660 (8th Cir.1981); Cordis II, 835 F.2d at 864.

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