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A Late Addition Worth $214 Million

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Rep. Jesse Jackson Jr. got the chamber to reopen a vote Thursday on an amendment to the patent bill that would help a powerful law firm and a drug company. The amendment passed the second time around.

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At issue is MDCO’s 2000 application to maintain its patent over Angiomax. Following approval of the sale of the drug by the Food and Drug Administration in December 2000, the company had 60 days to file for a patent extension, which under the law would have precluded the sale of generic versions of the drug until 2014.

WilmerHale attorneys handling the application for MDCO technically filed the extension 61 days after the approval, and because the Patent and Trademark Office does not have authority to give applicants wiggle room in filing, the application was denied, meaning generics would hit shelves in 2010, costing MDCO an estimated $500 million to $1 billion in profits.

PTO officials have said problems with how the office interprets the deadline have rarely been an issue, noting that only a handful of extensions have been rejected in the past two and half decades because they missed the deadline.

To regain control of the patent, MDCO opened up a three-pronged offensive. It filed suit against the PTO, arguing that because the FDA used a different interpretation to calculate the 60-day permit trigger, its 61-day filing time actually fell within the PTO’s definition.

MDCO also began malpractice proceedings against WilmerHale over its handling of the patent extension, while both MDCO and WilmerHale launched an aggressive effort to pass legislation overturning the extension rejection.

Over the next several years, MDCO and WilmerHale spent millions of dollars lobbying Congress, and several ultimately unsuccessful efforts to pass the legislation were attempted.

MDCO got a major break last summer when the U.S. District Court for the Eastern District of Virginia ruled in the company’s favor, arguing that the PTO should have used the FDA’s calculation of the request period. If not appealed, the decision would have all but assured the company would be granted its extension.

But while the PTO did not appeal the decision, a generic drug manufacturer did and the case remains in limbo.

With time ticking down on the patent, MDCO and WilmerHale entered into settlement negotiations.

On Feb. 14, MDCO CEO Clive Meanwell announced a deal between the company and WilmerHale, under which the law firm was required to pay $18 million up front to cover MDCO’s past expenses. The settlement also commits WilmerHale to paying MDCO $214 million in total damages if a generic version of Angiomax is released before June 15, 2015.

In a statement announcing the deal, Meanwell made it clear that the settlement was being struck “to establish a fair and equitable resolution of this matter if the district court’s decision ultimately is not sustained.”

Significantly, MDCO and WilmerHale have maintained their relationship, and sources said they have continued to actively lobby Congress to permanently codify the district court ruling.

A spokesman for MDCO did not return a request for comment, and a spokesman for WilmerHale declined to comment. But defenders of the legislation dismissed complaints that the language is an earmark helping only two powerful businesses.

In a floor statement before Thursday’s vote, Conyers, the Judiciary Committee’s top Democrat, called the language a “bipartisan amendment” that would make a “technical — but important — revision” to federal patent law.

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