Wednesday, August 25, 2004

Inequitable Conduct = Very Angry Licensees Invoking the False Claims Act: The Fourth Circuit Court of Appeals will decide the right of the United States to recover losses on payments made to Hoffmann-La Roche and its partner Applera Corporation on a key patent in molecular biology. The claim filed in Virginia seeks recovery of what could be hundreds of millions of dollars in wrongful payments for Taq DNA Polymerase by theGovernment to Hoffmann-La Roche and Applera. This action arose out of other litigation in which the Roche Taq patent was ruled unenforceable. The FederalCourt for the Northern District of California ruled in 1999 and reaffirmedthis past May that the patent for Taq could not be enforced against anyone because it had been obtained with a series of false material statements thatwere intentionally made to the United States Patent Office, which even included the fabrication of experimental data. Promega damage claims on its own behalf remain pending in California.

"As the Federal Court in California held, people lied to the United States Patent Office in obtaining the Taq patent," stated Randall Dimond, PromegaVice President and Chief Technical Officer. "As many in the scientific community recognize, Roche's aggressive enforcement of this patent caused hundreds of millions to be paid to Roche through government grants and other government programs, and we believe the people who paid those monies, including the government, should be paid back. We believe the False Claims Actis one important way to ensure integrity in the patent process. Wrongfully obtained patents prevent free and open competition and thus lead, as they did here, to grossly excessive pricing caused by the payment of royalties and license fees on a patent that never should have been allowed. Open competition guarantees that precious federal dollars are not needlessly squandered."

The Virginia action is based on the False Claims Act, a federal statute allowing recovery of funds improperly paid by the Government. While the case was brought by Promega on behalf of the United States, the United StatesDepartment of Justice had, as well, previously filed a Statement of Interestin the Virginia case in support of Promega. At the insistence of Hoffmann-LaRoche, the media and public have been barred from seeing the substance of the latest False Claims Act allegations.

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