for the district of delaware human genome sciences, inc...

YCST01:10757558.1 900002.0011

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF DELAWARE

HUMAN GENOME SCIENCES, INC.,

Plaintiff,

v.

GENENTECH, INC.,

Defendant.

))))))))))))))

C.A. No. ____________________

DEMAND FOR JURY TRIAL

COMPLAINT FOR COMPENSATORY AND EXEMPLARY DAMAGES,INJUNCTIVE RELIEF, AND DECLARATORY JUDGMENT

Plaintiff Human Genome Sciences, Inc. (“HGS”), by and through its undersigned

counsel, hereby files this Complaint against Genentech, Inc. (“Genentech”). As set forth in

greater detail below, HGS brings claims against Genentech under sections 1 and 2 of the

Sherman Act and for common law and statutory unfair competition, violation of the Lanham Act,

tortious interference with prospective business opportunity, and civil conspiracy.

NATURE OF THE CASE

1. This case relates fundamentally to a collusive and anti-competitive scheme

between Genentech and Celltech R&D Ltd. (“Celltech”) to create by agreement and enforce a

29-year patent monopoly over what Genentech claims is the “fundamental technology” for the

artificial synthesis of potentially life-saving therapeutic antibodies, allegedly embodied in U.S.

Patent No. 6,331,415 (the “Cabilly II patent”). Genentech’s scheme has had its intended effect of

decreasing innovation in both the upstream technology market and the downstream product

market, decreasing production in the downstream market, increasing the cost to HGS and other

Case 1:11-cv-00156-UNA Document 1 Filed 02/18/11 of 65 PageID #: 1

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competitors in delivering life-saving drugs, and, ultimately, increasing the cost to consumers in

obtaining those vital treatments.

2. As one of the Cabilly II inventors—a Genentech employee—put it nearly a

decade ago, “Genentech gets seventeen years protection of work that was done twenty years

ago,” a result that is “absolutely ludicrous” and “has nothing to do with fairness.” See

http://content.cdlib.org/view?docId=hb0n39n481&brand=calisphere&doc.view=entire_text.

Genentech’s assessment of its own conduct is absolutely right.

3. In behavior directly tied to and in furtherance of this “ludicrous” and unfair

scheme, Genentech has engaged in a massive, years-long conspiracy to monopolize and restrain

trade in the market and commit fraud on the District Court for the Northern District of California,

on the U.S. Patent and Trademark Office (“PTO”), on competitors and customers in the market,

and on the public—by entering into a collusive agreement (the “Agreement”) to sacrifice U.S.

Patent No. 4,816,397 (the “Boss” patent) in favor of the Cabilly II patent and preserve the Cabilly

II patent to maintain a monopoly that runs through 2018.

4. Because of its fraud, Genentech now purportedly has the power to exclude

all competitors from the technology market for an allegedly fundamental technology for

producing monoclonal antibody therapeutics using recombinant DNA techniques, including,

according to Genentech, the process for producing an immunoglobulin or an immunologically

functional immunoglobulin fragment in a single host cell that is purportedly covered by the

claims of the Cabilly II patent. Genentech has exercised this power through numerous actual and

threatened sham claims against competitors attempting to enter or sell products in various

downstream product markets, including threatening sham claims against HGS specifically in

connection with its attempt to enter the downstream product market for monoclonal antibody

therapeutics for the treatment of active systemic lupus erythematosus (“Lupus”).


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5. The history leading up to and including Genentech’s collusive and fraudulent

behavior and sham claims is both straightforward and remarkable in its duration and scope:

• March 1983: The Boss inventors file the initial Boss patent application in the United Kingdom, and later file a counterpart application in the United States.

• April 1983: The Cabilly inventors file the initial Cabilly patent application.

• 1988: The Cabilly inventors file a continuation application (Cabilly II).

• 1989: The PTO issues the Cabilly I and Boss patents, and Genentech then amends the Cabilly II application to add claims copied from the Boss patent.

• 1991: The PTO initiates an interference proceeding between the Cabilly II and Boss patents.

• 1998: The PTO awards priority to Boss—which had the earlier filing date—and Genentech files a civil action in the District Court appealing the PTO’s decision. Celltech submits sworn expert testimony that the Cabilly II patent is invalid for lack of enablement because the refolding experiments disclosed in Cabilly II do not work.

• 2000: After nine years of litigation before the PTO and courts, Genentech supposedly “discovers” an earlier draft patent application from 1983 that allegedly predates the Boss application. This draft application did not and could not cure the enablement deficiencies identified by Celltech’s expert.

• March 2001: Genentech enters into the collusive Agreement whereby it agrees with Celltech to sacrifice the Boss patent in favor of the Cabilly II patent, which would have a term 12 years longer than Boss. In return, Genentech agrees to pay Celltech for its lost royalties under the Boss patent and a share of the royalties collected under the Cabilly II patent. Genentech and Celltech then fraudulently secure an Order from the District Court directing the PTO to revoke the Boss patent and to issue the Cabilly II patent without further review.

• July 2001: The PTO revokes Boss and resumes examination of Cabilly II, but focuses the new patent examiner only on certain references submitted after the interference was initiated in 1991.

• December 2001: Following a cursory examination—and as a direct result of Genentech’s fraudulent conduct, including concealing key pieces of evidence until it was effectively too late for the new examiner to review them—the PTO issues the Cabilly II patent, with a new term that does not expire until 2018.


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• 2001-present: Genentech continues paying Celltech—and, following its acquisition by UCB, S.A. (“UCB”) in 2004, UCB—millions of dollars in royalties, despite the PTO’s revocation of the Boss patent in 2001, and itself procures royalties estimated at over a billion dollars from other would-be competitors in the downstream product market, through repeated sham claims or threats alleging infringement of a patent that should never have issued and that Genentech knows is invalid and unenforceable.

• 2011: As part of Genentech’s sham claims, Genentech threatens to sue HGS in the Central District of California for the alleged infringement of Cabilly II, including threatening to enjoin HGS from making or selling the product accused of infringement.

6. Genentech has used its fraudulent, decade-plus monopoly created by the

Cabilly II patent to dominate the technology market for monoclonal antibody therapeutics made

from artificial or recombinant DNA. In addition to successfully excluding or obtaining licenses

from virtually all competitors seeking to compete in various downstream product markets,

Genentech also owns three bestselling antibody therapeutics.

7. This Complaint describes in greater detail each of the key events in the

scheme to monopolize set out above, beginning with the origins of Genentech and Celltech’s

dispute and culminating with the collusive Agreement and Genentech’s fraud on the District Court,

its fraud on the PTO, and it collusive, anti-competitive, and illegal behavior ever since. The

Complaint also provides additional background on HGS, the HGS product that Genentech has

accused of infringing the Cabilly II patent, the relevant technology and downstream product

markets for purposes of this litigation, and the specific and myriad ways in which Genentech has

violated federal and state antitrust laws and related state statutory and common law prohibitions.

THE PARTIES

8. HGS is a corporation duly organized and existing under the laws of the State

of Delaware, with its principal place of business at 14200 Shady Grove Road, Rockville,

Maryland 20850.


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9. Genentech is a corporation duly organized and existing under the laws of the

State of Delaware, with its principal place of business in South San Francisco, California.

Genentech is a co-assignee of the Cabilly II patent.

JURISDICTION AND VENUE

10. This is an action for compensatory and exemplary damages, injunctive

relief, and declaratory judgment arising out of violations of the antitrust laws of the United States

and related federal and state law claims. This Court has subject matter jurisdiction pursuant to

28 U.S.C. §§ 1331 and 1337 and 15 U.S.C. § 25. This Court has jurisdiction over the state law

claims asserted hereunder pursuant to 28 U.S.C. § 1367. HGS also seeks damages and injunctive

relief for the violations of the antitrust laws set forth herein under Sections 4 and 16 of the

Clayton Act, 15 U.S.C. §§ 15 and 26.

11. This Court has personal jurisdiction over Genentech based on its

incorporation in Delaware, as well as, upon information and belief, (1) Genentech’s sales and

offers for sale of antibody therapeutics and other drugs in this District; (2) its licensing of the

Cabilly II patent and other intellectual property to companies doing business in this District; and

(3) its restraint of trade, conspiracy to monopolize, and monopolization of the relevant

technology market, which has damaged competitors who are in the technology market in this

District and/or who are doing business in various downstream markets in this District.

12. Venue is proper in this district pursuant to 28 U.S.C. §§ 1391(b) and (c) and

15 U.S.C. §§ 15 and 22. HGS and Genentech are both incorporated in, and both do business in,

the State of Delaware.


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ORIGINS OF GENENTECH’S COLLUSIVE AND FRAUDULENT CONDUCT

1983: Celltech Files Its First Boss Patent Application, and Genentech Files Its FirstCabilly Patent Application

13. On March 25, 1983, Michael Boss, John Kenton, John Emtage, and Clive

Wood filed their initial application for the Boss patent in the United Kingdom (the “British

Patent Application”), presumptively entitling the Boss patent to priority on that date.

14. On April 8, 1983—two weeks after the British Patent Application for Boss—

Shmuel Cabilly, Herbert L. Heyneker, William E. Holmes, Arthur D. Riggs, and Ronald B. Wetzel

filed U.S. Patent Application No. 06/483,457 (the “Cabilly I application”). Messrs. Heyneker,

Holmes, and Wetzel were affiliated with Genentech, and Genentech was a co-assignee of the

Cabilly I application.

1988: Genentech Files Its Cabilly II Application

15. On June 10, 1988, Genentech filed U.S. Patent Application No. 07/205,419

(the “Cabilly II application”), as a continuation to the Cabilly I application.

1989: The PTO Issues Cabilly I and Boss

16. Based on the Cabilly I application, on March 28, 1989, the PTO issued U.S.

Patent No. 4,816,567 (the “Cabilly I patent”), with Genentech as a co-assignee. The same day,

the PTO issued the Boss patent, which arose from the March 25, 1983 British Patent Application

and was assigned to Celltech.

17. Seeking to claim the invention of the Boss patent as its own, Genentech then

amended its Cabilly II application by copying claims from the Boss patent.

1991: The PTO Initiates Interference Proceedings

18. Because Genentech had copied the claims of the Boss patent into its Cabilly

II application, on February 28, 1991, the PTO declared a patent interference, Interference No.

102,572, to determine who had priority—i.e., who had invented first.


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19. The Boss patentees were the “senior” party in the interference proceedings,

i.e., the party that the PTO had presumed to be the first inventor at the outset of the interference

proceeding.

20. Celltech argued that the interference fell “under the doctrine of conception

and simultaneous reduction to practice, because of the unpredictability of the technology.”

According to the Boss patentees, it therefore would not be sufficient for the Cabilly applicants to

show conception alone before the Boss patent was filed.

21. Genentech disagreed, arguing that it would be sufficient to establish a

complete conception of the subject matter of the claimed invention by showing evidence of

“inventor” testimony regarding nothing more than a strategy for ultimate reduction to practice,

by constructing a bacterial strain containing both heavy and light chain genes for co-expression

of an immunoglobulin molecule.

1998: The PTO Awards Priority to Boss

22. The PTO agreed with Celltech, and, on August 13, 1998—after a seven-year

interference proceeding—the PTO awarded priority to Boss. See Cabilly v. Boss, 55 U.S.P.Q.2d

1238 (B.P.A.I. Aug. 13, 1998).

23. In its ruling, the PTO stated explicitly that “[w]e agree with Boss et al. that

on the record before us, this case is one where conception and reduction to practice must be

concurrent.”

24. The PTO concluded that Genentech had failed to establish conception or

reduction to practice of the claimed inventions prior to March 25, 1983, the filing date of the

Boss patent. According to the PTO, “there is no evidence that immunoglobulins, multiple chain

proteins, had been produced by recombinant DNA techniques from a single host cell prior to

March 25, 1983.” Moreover, the PTO found that “the evidence indicates that Cabilly et al. had


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but a hope or wish to produce active antibodies in bacteria; and, there is no supporting evidence

to establish the development of the means to accomplish that result or evidence of a disclosure to

a third party of complete conception.” (Emphasis added.) The PTO therefore determined that

“Cabilly et al. were unable to establish conception until Cabilly et al. reduced the invention to

practice through a successful experiment.” (Emphasis added.)

1998: Genentech Files a Civil Action and Mysteriously Discovers “New” Evidence

25. Faced with its loss before the PTO, on October 9, 1998, Genentech

commenced a civil action, Genentech, Inc. v. Celltech R & D Ltd., Case No C98-3926, in the

United States District Court for the Northern District of California (the “District Court”) pursuant

to 35 U.S.C. § 146, to appeal the decision of the PTO awarding priority of invention to Boss.

26. The District Court action lasted more than two years and included extensive

depositions, document productions, and expert disclosures.

27. Roughly nine years into the dispute—and approximately seventeen years after

the alleged invention—in early 2000, Shmuel Cabilly, the lead Cabilly Applicant, claimed to have

found for the very first time a draft patent application dated February 25, 1983 (the “Draft Cabilly

II application”) in his files in Israel.

28. According to Genentech, this document established that the Cabilly

applicants had actually invented the technology 30 days before the date accorded to the Boss

patent, based on the filing date for Boss’s March 25, 1983 British Patent Application.

29. Taking full advantage of this late and supremely suspicious unearthing of

supposedly critical evidence, Genentech moved for summary judgment that it was entitled to

priority of invention over Celltech.


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30. Genentech argued that, because the Draft Cabilly II application contained

every element of the claimed invention, and was dated earlier than the Boss priority date of March

25, 1983, Genentech should be awarded priority of invention.

31. Celltech responded by demonstrating that the Draft Cabilly II application fell

short of satisfying the legal requirements for “conception,” in that it did not set forth each and

every element of the invention. In fact, as discussed further below, the Draft Cabilly II

application had a section heading entitled “Reconstitution [refolding] of Antibody from

Recombinant K and Gamma Chains,” for which the corresponding section body was left blank.

Therefore, the Draft Cabilly II application—which formed the basis of Genentech’s claim to

priority in the District Court action—had absolutely no teaching on a critical part of the purported

invention, and one necessary to enable the invention. Celltech also pointed out that Genentech

had changed its basic theory of conception and reduction to practice from what it had asserted

before the PTO.

32. In return, Genentech then placed Celltech’s own priority date in jeopardy:

Genentech argued that the Draft Cabilly II application contained at least as much detail as

Celltech’s own March 25, 1983 British Patent Application, and moved for summary judgment that

Celltech was not entitled to the March 25, 1983 priority date, because of defects in the British

Patent Application.

33. Recognizing that both Genentech and Celltech were now at risk of losing

their respective claimed priority dates—and thereby potentially having both sides’ patents

invalidated—Genentech hatched a scheme to collude and ensure that both sides retained the direct

benefits of a monopoly that would last nearly three decades.


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MARCH 2001: GENENTECH ENTERS INTO THE COLLUSIVE AGREEMENT AND DEFRAUDS THE DISTRICT COURT AND THE PTO

34. Upon information and belief, in early 2001, Genentech and Celltech entered

into the collusive settlement Agreement. The Agreement in no way reflected who was actually the

first to invent, and did not represent a good-faith effort to settle the dispute. To the contrary,

Genentech entered into the Agreement for the specific purpose of defrauding the District Court and

the PTO in to issuing an invalid patent; effectively extending the life of the patent monopoly by

more than a decade; and restraining trade in, conspiring to monopolize, and monopolizing the

market for fundamental technology for producing monoclonal antibody therapeutics using

recombinant DNA techniques.

35. Indeed, despite overwhelming evidence that Boss was entitled to priority—

and even though Celltech had already won the seven-year-long interference proceedings in the

PTO, defeated summary judgment in the District Court, and secured a lucrative royalty stream

based on the Boss patent that would have lasted another 5 years—Celltech inexplicably conceded

priority. The enormous value of the Boss patent to Celltech was not hypothetical; in Celltech’s

Interim report for the six months ended June 30, 2001 alone, for example, it reported royalty

payments of 10.3 million pounds for 2000 and 16.5 million pounds for 2001. See

http://www.prnewswire.co.uk/cgi/news/release?id=73251. Thus, based on the figures reported

for 2001, Celltech was ostensibly sacrificing an estimated royalty stream of at least 80 million

pounds through the remaining life of the Boss patent (and likely much more, given the growing

importance of antibody therapeutics in the market).

36. Neither Genentech nor Celltech informed the District Court that both

Genentech and Celltech had, during the course of both the interference proceedings and the

District Court proceedings, developed evidence that wholly undermined any suggestion that

Genentech could be entitled to priority.


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37. Indeed, Celltech had previously argued explicitly to the PTO that a strategy

or plan for producing antibodies in the manner described in the Draft Cabilly II application was

insufficient to support a finding of priority.

38. In addition, Celltech’s expert, Dennis Burton, had stated unambiguously that

the critical refolding procedures set forth in the Cabilly II patent do not work. As discussed

further below, Celltech’s expert affirmed that “Genentech’s purported ‘conception’ lacked a

critical component: the Genentech inventors never came up with a workable method for

producing ‘an Ig [immunoglobulin] molecule or an immunologically functional Ig fragment’ as the

[interference] Count requires,” and Celltech noted explicitly that it had “presented expert

testimony . . . showing that Genentech’s [final] patent application and laboratory notebooks are

completely devoid of a workable conception because of this failing. In particular, Genentech

lacked a method for combining (‘refolding’) the recombinantly expressed heavy and light chain

proteins into a functional molecule.”

39. Dr. Burton similarly stated in his expert report that “[e]xpression of the heavy

and light chains from cotransformed E. Coli host cells as described in Genentech’s patent

application does not produce correctly folded Ig molecules or immunologically functional Ig

fragments . . . . [A]s of March 25, 1983, a scientist of ordinary skill in the art would not, without

extensive experimentation, have been able to arrive at refolding conditions capable of generating

an immunologically functional protein. Indeed, even after extensive experimentation, proper

folding conditions may not have been possible to find. Genentech never determined such

refolding conditions.”

40. Genentech did not disagree with the assessment of Celltech’s expert. To the

contrary, while conceding that the Draft Cabilly II application contained the “same” level of detail

as Celltech’s March 25, 1983 British Patent Application, Genentech simultaneously asserted that


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the “British Application was ‘not sufficient’ to teach one of ordinary skill how to make and use

the invention, because . . . the ‘[f]olding of an immunoglobulin is a difficult problem,’” and that,

as a matter of law, Celltech therefore was “not entitled to a priority date based on its [March] 25,

1983 British application” (emphasis added)—a position Genentech supported by reference to

Celltech’s expert, Dr. Burton.

41. Moreover, in earlier proceedings before the European Patent Office (EP-B-

0120694 (84301996.9), discussed further below), several opponents of a European version of the

Boss application had likewise argued that the patent should be revoked based on a “failure to

appreciate and to solve the folding and assembly problem.” See, e.g., Declaration of Lars

Abrahmsen, Ph.D., submitted on behalf of opponent Pharmacia AB (May 1996) at 2. In the same

declaration, the expert declarant described “Celltech’s and Genentech’s efforts” to produce a

functional antibody in a bacterial cell, and equated the Boss patent’s failure with the Cabilly

patent’s failure, stating likewise that “Genentech did not produce functional antibody in a bacterial

cell.” Id. (emphasis added).

42. In addition, Genentech had previously argued that the Boss patentees were

not entitled to priority based on their British Patent Application because it did not show

production of a functional immunoglobulin (light and heavy chains) in a single host cell, since

such functional immunoglobulin was obtained only outside the cell after extraction and

reconstitution of the chains—a flaw identical to one in the Draft Cabilly II application itself.

43. Finally, Genentech has asserted to this day that the Cabilly II patent covers

not only in vitro assembly of immunoglobulins, but in vivo assembly, a proposition that rests

entirely on the observation in the specification that in vivo assembly “might be possible in a

microorganism.” Cabilly II Patent at 12:52-54 (emphasis added). The Cabilly II application did

not contain any information regarding how actually to achieve in vivo assembly of two


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immunoglobulin chains in one cell. Claim 9—the lone Cabilly II patent claim that expressly

recites in vivo assembly—is part of the issued claim set only because it was copied from the Boss

patent, and only Boss disclosed an actual working example of in vivo assembly in a

microorganism (a yeast cell). Boss Patent at 23:26-29. Despite an early plan to “try to get” in

vivo assembly through additional experimentation, the Cabilly II patentees had, in fact, never

produced an assembled immunoglobulin molecule in a host cell before the Cabilly II application

was filed on April 8, 1983.

44. Thus, Celltech’s (and Genentech’s) evidence demonstrated that, not only

was Cabilly II not entitled to priority—because, among other things, the Cabilly inventors could

not overcome the refolding problem at the time of alleged conception—but the Cabilly II patent

was invalid for lack of enablement and inadequate written description.

45. Genentech’s subsequent decision to seek an Order directing the immediate

issuance of the Cabilly II patent, with no further review by the PTO—despite knowing that the

application was unpatentable or, at the very least, that Celltech had presented compelling

evidence it was unpatentable—was fraudulent and, upon information and belief, carried out with

the specific purpose of ensuring issuance of a patent that would not have issued following any

meaningful scrutiny by the PTO.

46. The reason Genentech and Celltech suddenly reversed course and colluded

to engage in this fraud was simple: Genentech would make more than a billion dollars in

royalties due to the improperly extended patent term, and Genentech would then compensate

Celltech (and, following its acquisition, UCB) for the royalties it would have received under the

Boss patent, plus a share of the Cabilly II royalties for the remaining term of that patent. Indeed,

a UCB press release disclosed very clearly that “UCB will be compensated by Genentech in terms

of income from sales of products which would have been covered by the Boss patent.”


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47. Upon information and belief, Celltech and UCB have received many

millions of dollars in payments under this provision, even though the Boss patent was officially

revoked by the PTO in 2001. These “reverse payments” by Genentech long after the Boss patent

was revoked constitute a violation of the antitrust laws in and of themselves. But that was not all

Celltech and UCB got out of the agreement to defraud the District Court and PTO: they also

“secured preferential access for its development programs” to the Cabilly II patent for the duration

of its life—an enormous advantage over their competitors in the field.

48. On March 6, 2001, Genentech and Celltech then took the next step in their

conspiracy to defraud the District Court and the PTO: they filed a document in the District Court

entitled “Notice of Settlement and Joint Request for Entry of Settlement Instruments,” and

lodged a proposed order (the “Order”) purportedly resolving their dispute. The proposed Order

contained as a purported “finding” the fraudulent and demonstrably false assertion that Genentech

had won the priority dispute, on the ground that the Draft Cabilly II application constituted

evidence of conception prior to the Boss patent.

49. Genentech and Celltech’s proposed Order also intentionally failed to address

the fact that Genentech still had not demonstrated actual reduction to practice, despite the PTO’s

requirement that Genentech show actual and concurrent conception and reduction to practice to

establish priority, and the evidence adduced during the District Court action confirming that

Genentech could not in fact do so.

50. In addition to failing to disclose the evidence demonstrating that Celltech

was entitled to priority, and that Genentech had taken fundamentally inconsistent positions

regarding the way in which it could show conception and reduction to practice (as well as

violating the PTO’s express finding that Genentech was required to show concurrent conception


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and reduction to practice), Genentech also concealed from the District Court evidence

demonstrating that the Cabilly II patent was invalid and unenforceable.

51. As set out above, Celltech’s expert, Dr. Burton, had provided a sworn

statement establishing that the Cabilly II inventors were unable to meet the refolding requirement

essential to their invention, demonstrating that the application was unpatentable for

non-enablement and lack of utility. As discussed further below, Genentech also perpetrated fraud

on the District Court and the public by concealing the fact that the Cabilly II application was

unpatentable for the independent reasons that, among other things, (1) the Cabilly II inventors

had failed to disclose the best mode of the invention in a variety of ways, and the inventors had

also failed to disclose that the examples and experimental results disclosed in the patent, which

were written in the past tense, had not in fact been performed by the Cabilly II inventors in the

manner described in the patent; (2) Genentech had taken fundamentally inconsistent positions

regarding a key prior art reference by Valle, et al., distinguishing it before the PTO because it

taught the use of mRNA, rather than DNA, but then later terming the very same distinction

“trivial” in opposing the Boss application before the European PTO; and (3) Genentech had not

yet disclosed to the PTO numerous other key prior art references, including references assigned

to Stanford University and by Axel, et al., that explicitly disclosed the used of DNA and that

would have rendered the Cabilly II application unpatentable. Genentech further concealed from

the District Court that it intended to bury these and other invalidating materials by hiding them

among hundreds of other prior art references—in addition to eleven bankers’ boxes of other

materials—that Genentech planned to dump on the PTO at the last minute following

procurement of the fraudulent Order.

52. In light of the Order Genentech and Celltech would then promptly ask the

District Court to sign—directing the PTO to issue the Cabilly II patent without any further


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scrutiny—Genentech’s fraudulent failure to disclose these myriad additional material facts to the

District Court was clearly designed to ensure that the Cabilly II application would escape any

meaningful examination, even though, upon information and belief, Genentech knew at this

point that the Cabilly II application did not contain patentable subject matter for at least the

reasons set out above.

53. On March 16, 2001, the District Court signed without substantive change

Genentech and Celltech’s carefully crafted Order, directing the PTO to (a) “vacate the PTO’s

decision in Cabilly, et al. v. Boss et al., Patent Interference No. 102,572”; (b) “revoke and vacate

United States Patent No. 4,816,397, issued March 28, 1989 to Boss, et al.”; and (c) “grant and

issue to Genentech’s Inventors (with Genentech as the assignee), with the issue date being the

same as the date of revocation of United States Patent No. 4,816,397 [the Boss patent].”

(Emphasis added.)

54. This last requirement effectuated the central purpose of Genentech’s scheme

to defraud the District Court and the PTO: to ensure that it could monopolize the technology at

issue for a total of 29 years under U.S. patent law in the form of the Cabilly II patent. Instead of

expiring in 2006, as the Boss patent would have if not revoked, the Cabilly II patent now

extended to 2018.

55. In furtherance of its scheme to defraud the PTO, upon information and belief,

Genentech also failed to file the collusive Agreement with the PTO, or failed to do so in a timely

fashion. On July 10, 2001, Genentech filed a notice of “Transmittal and Filing of Agreements

Under 35 USC 135(c),” but only included certain agreements from the 1991-1993 time frame,

which long pre-dated the collusive Agreement. Moreover, in the PTO’s July 25, 2001 Order, the

PTO stated that, “if there is a settlement agreement, attention is directed to 35 USC 135(c)”


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(emphasis added), further suggesting that the PTO had yet to receive the collusive Agreement that

formed the basis for the District Court settlement.

56. Genentech’s failure to file (or failure to timely file) the settlement Agreement

with the PTO prevented HGS and the public from learning the exact terms of the Agreement, and

further deceived the PTO regarding the nature of Genentech’s and Celltech’s collusive Agreement

and the basis upon which Genentech had procured the fraudulent Order directing the PTO to issue

the Cabilly II patent without any further review. Thus, Genentech’s failure properly to disclose

the Agreement to the PTO was just another part of its scheme to secure issuance of the patent with

minimal scrutiny.

57. Under 35 U.S.C. § 135(c), any agreement to settle a patent interference must

be filed with the PTO before the interference terminates, because, as explained by the Senate

Report related to this legislation, “[i]nterference proceedings may be terminated in a manner

hostile to the public interest by using patent interference settlement agreements as a means of

restricting competition,” and “[t]o make such a practice more difficult the bill requires the filing

of such agreements” in the PTO. Indeed, the public interest in mitigating anticompetitive patent

interference settlements is so strong that failure to provide a copy of any settlement agreement to

the PTO under 35 U.S.C. § 135(c) before the interference terminates “shall render permanently

unenforceable such agreement or understanding and any patent of such parties involved in the

interference or any patent subsequently issued on any application of such parties so involved.”

(Emphasis added.)

58. Because, upon information and belief, Genentech failed to comply with this

requirement, both the Agreement and, by definition, the Cabilly II patent itself are unenforceable

under 35 U.S.C. § 135(c).


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JULY 2001: GENENTECH DEFRAUDS THE PTO TO ENSURE ISSUANCE OF THE CABILLY II PATENT WITH AN EXTENDED 17-YEAR TERM

59. In response to the District Court’s Order, the PTO revoked the Boss patent in

2001. However, despite Genentech’s best efforts, the PTO refused to issue the Cabilly II patent

without further examination, noting that the administrative review process had not yet been

completed. The PTO also expressed other concerns, including noting that the Agreement

effectively created a 29-year patent and that Celltech had seemingly surrendered arguments

supporting its right to priority. Nevertheless, the PTO assigned a new examiner to review the

Cabilly II application.

60. When Genentech’s attempt to secure issuance of the patent with no further

review by the PTO failed, Genentech then turned to a back-up plan: engaging in a massive fraud

on the PTO to ensure that the patent would issue over the minimal review the PTO ultimately did

provide.

61. Though the PTO refused to issue the patent on the basis of Genentech and

Celltech’s collusive Order alone, its examination was, in the end, cursory. This was not surprising.

Since the PTO had issued identical claims in the Boss patent in 1989 (with a purportedly later date

of invention), it had no reason to believe that the claims in the Cabilly II application were

unpatentable. It also had received an Order from the District Court to issue the patent forthwith,

without any additional review. And the only direction that the PTO board had given the new

examiner—who, upon information and belief, had no familiarity with the application or its

history—was to consider certain discrete references that Genentech had submitted after the

interference proceedings began in 1991.

62. But Genentech did not take any chances. Instead, to preserve its central goal

of achieving a 29-year patent, Genentech engaged in at least three separate layers of fraud to


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affirmatively misrepresent, and fraudulently omit, material facts that would have resulted in a

finding of unpatentability.

63. First, as set out in greater detail above, by the time the new examiner

reviewed the Cabilly II application in 2001, Genentech and the Cabilly II inventors were aware of

substantial evidence developed during the District Court proceeding that the invention was not

enabled and lacked utility. Celltech’s expert had made clear that Genentech’s alleged conception

lacked the essential element of a workable method for accomplishing the required refolding,

Genentech had fully adopted the findings of Celltech’s expert, and earlier proceedings before the

European Patent Office had likewise demonstrated that the Cabilly II applicants did not enable this

fundamental aspect of their invention. The inability of the inventors to perform either the required

“refolding” in vitro or to obtain in vivo assembly was thus a material fact that would have led to a

finding of unpatentability by the new examiner.

64. But Genentech’s prosecuting attorney, Sharon E. Crane, on behalf of and

working at the direction of Genentech, did not focus the new examiner on these serious non-

enablement or non-utility issues relating to the refolding of a functional antibody or in vivo

assembly. As a result, there is no evidence the new examiner ever considered any of these issues.

65. And although Genentech did provide the examiner with copies of materials

from the District Court action (such as Dr. Burton’s expert report) and certain other documents

from the opposition to the Boss patent before the EPO (such as the Abrahmsen Declaration

discussed above), it did so in a manner intentionally and fraudulently designed to ensure that the

examiner would have no chance to look at them. In fact, Ms. Crane dumped some eleven bankers’

boxes of pleadings, deposition transcripts, exhibits, affidavits, expert reports, and other materials

on the PTO—on the very same day the examiner advised Genentech in an interview that he would

allow the claims to issue, and just one day before the examiner issued the Notice of Allowability


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for the patent. Genentech never advised the new examiner of the significant patentability issues

that had been exposed during the District Court proceedings, knowing that it would be both

physically impossible for him to uncover these facts in the limited time remaining before the

patent would issue and unlikely as a practical matter that he would have any motivation to look

for them.

66. The evidence of non-enablement and lack of utility that Genentech failed to

disclose would have been material, because Genentech’s inconsistent arguments and Celltech’s

admission that the Genentech disclosure was not enabled would have led to a determination by

the PTO that all claims of the Cabilly II application were not enabled and lacked utility, and

therefore that the invention was unpatentable. In addition, these materials were not cumulative

of other information considered by the examiner, because the testimony of Celltech’s expert, Dr.

Burton, and the parties’ concessions during the District Court action introduced new evidence

showing that the invention was not enabled, as well as a virtual admission that the invention was

not enabled by the very party—Genentech—who was now prosecuting the Cabilly II application.

67. As evidenced by Ms. Crane’s knowledge of the substantial issues as to

patentability raised in the District Court proceeding, Genentech’s intentional dumping of these

massive materials on the PTO at the last minute, and the other misconduct set out above, it is

clear that Ms. Crane failed to disclose or highlight this material information with the intent to

deceive the PTO.

68. Second, Genentech also pursued its fundamental goal of securing a 29-year

patent grant by fraudulently deceiving the PTO regarding a variety of specific prior art references.

69. In one instance, Genentech fraudulently and in bad faith took fundamentally

inconsistent positions regarding a key reference, Valle et al., Anti-ovalbumin monoclonal

antibodies interact with their antigen in internal membranes of Xenopus oocytes, 300 Nature 71


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(1982) (“Valle”). In a filing before the PTO in 1991, Genentech attorney Max D. Hensley had

represented that the Valle article was not invalidating prior art with respect to Genentech’s

application, because “[w]ork of this sort is readily distinguishable from the instant claims in that

the oocytes are not transformed with DNA, but instead are used to transiently express mRNA

preparations.” (Emphasis added.)

70. But in challenging the European Boss application discussed above—which

was substantially identical to the Boss application filed in the U.S.—Genentech attorney John

David Brown took the exact opposite position, advocating that Valle was invalidating prior art. In

fact, before the EPO, Genentech trivialized the distinction between mRNA (messenger RNA),

which was used in the Valle article, and DNA, which was claimed in the European Boss

application: “[i]n view of the broad implications evidenced by the Abstract, the fact that the

actual experiment was performed with microinjected mRNAs is not relevant. In any event,

because the messenger RNA carries the information from DNAto the ribosomal sites of protein

synthesis, it is functionally equivalent to DNA.” Genentech’s April 19, 1994 Notice of

Opposition at 17 (emphasis added). When prosecution of the Cabilly II application resumed

before the new examiner following issuance of Genentech’s fraudulent Order from the District

Court, however, Ms. Crane failed to inform the examiner of Genentech’s inconsistent positions,

or that Genentech was aware that its earlier attempts to distinguish Valle had been specious.

71. This failure to correct Genentech’s earlier misstatement regarding Valle was

material because it would have led the PTO to reject all claims of the Cabilly II patent absent the

(false) mRNA distinction. Compare, e.g., Valle reference at Abstract, 71, 73-74 with Cabilly II

patent at 28:35-30:51 (claims 1-36); see also Genentech’s Notice of Opposition at 16-17

(explaining manner in which Valle similarly rendered key claims of the Boss application

unpatentable before the European Patent Office).


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72. As evidenced by Genentech’s fundamentally and knowingly inconsistent

statements to different patent offices and the other extensive misconduct set out above, it is clear

that Ms. Crane failed to disclose this material information with the intent to deceive the PTO.

73. Similarly, Genentech furthered its conspiracy to secure 12 more years of

patent protection when Ms. Crane dumped on the new examiner more than 350 prior art

references, in addition to the eleven bankers’ boxes discussed above. Strikingly, in one

Information Disclosure Statement dated September 13, 2001 alone, Ms. Crane dumped more than

275 references on the examiner. This burying of key references was in addition to Genentech’s

hiding of the substantial evidence of non-enablement and lack of utility set out above, including

the key expert testimony, filings, and discovery on non-enablement from the District Court

proceedings.

74. Ms. Crane, acting on behalf and working at the direction of Genentech, failed

to comply with Genentech’s obligation, under section 2400(13) of the Manual of Patent Examining

Procedure, to “highlight those documents which have been specifically brought to the applicants

attention and/or are known to be of most significance.” To the contrary, Genentech never alerted

the PTO to any particular reference, purposely hiding the most relevant documents with the

knowledge that the new examiner could not, and would not, ever look at them.

75. The dumping of these voluminous and dense prior art references in a single

Information Disclosure Statement—just before the notice of allowance of the patent on October

5, 2001—had the specific and intended effect of burying multiple material pieces of prior art,

including, for example, Stanford University’s European Patent Application, EPO No. 0,044,722

(the “Stanford application”).

76. The Stanford application would have been material because it teaches the

production of recombinant antibodies in bacterial host cells by use of DNA encoding the heavy


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and light chains of an antibody—a procedure substantially identical to the one disclosed in the

Cabilly II application—and specifically teaches the use of DNA, precisely as is claimed in the

Cabilly II patent. Compare, e.g., Stanford application at 9-11 with Cabilly II patent at 28:35-

30:51 (claims 1-36). The Stanford reference was also material because it obviated the basis on

which Genentech had originally distinguished Valle and similar references before the PTO—the

use of DNA versus mRNA—and thus supplied the alleged critical missing link from those

references (at least according to Genentech’s earlier arguments to the PTO). In addition,

Stanford would not have been cumulative of Valle and other previously disclosed references for

at least this very reason: it disclosed an element allegedly missing from the other art, the use of

DNA. Disclosing the Stanford application would have led the examiner to reject all claims of the

Cabilly II patent.

77. Based on Ms. Crane’s burying of this reference in hundreds of other

documents shortly before the patent issued and Genentech’s related, inconsistent arguments in

connection with the Valle reference—as well as the burying of other key documents relating to

non-enablement and lack of utility and the extensive other misconduct set out above—it is clear

that Ms. Crane failed to disclose this material information with the intent to deceive the PTO.

78. In addition to the fraudulent misrepresentations and omissions set out above,

Genentech also furthered its scheme unlawfully to procure and prolong the life of the Cabilly II

patent when Ms. Crane and the Cabilly II inventors failed to disclose several key references to

the new examiner at all: U.S. Patent No. 4,399,216 (the “‘216 Patent”), U.S. Patent No.

4,634,665 (the “‘665 Patent”), and U.S. Patent No. 5,179,017 (the “‘017 Patent”) (collectively,

the “Axel Patents”).

79. Upon information and belief, Ms. Crane and other counsel for Genentech

such as R. Danny Huntington knew of the existence and significance of the ‘216 Patent and ‘665


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Patent, because, among other things, Genentech had already paid some seventy million dollars

in royalties on account of these patents. See, e.g., Genentech, Inc. v. The Trustees of Columbia

University of the City of New York, Civ. No. 03-1603 (N.D. Cal. 2003); In re Columbia

University Patent Litigation, MDL No. 1592 (D. Mass. 2004). Similarly, upon information and

belief, Genentech prosecuting attorneys such as Ms. Crane and Mr. Huntington knew of the

existence of the ‘017 Patent based on the significant royalties Genentech was paying on its

predecessor patents, and because Genentech had also previously secured a license for “certain”

other “patent applications” that involved the Axel disclosure.

80. The Axel Patents would have been material because they disclose a process

for inserting DNA into cells to produce proteinaceous materials, and at least the first such patent

(the ‘216 Patent) also expressly claims the generation of a recombinant antibody molecule

through the transformation of a cell with DNA, compare, e.g., ‘216 Patent at Abstract; ‘665

Patent at Abstract; ‘017 Patent at Abstract with Cabilly II patent at 28:35-30:51 (claims 1-36),

obviating Genentech’s original alleged basis for distinguishing key references such as Valle. And

the Axel Patents would not have been cumulative of other references like Valle for at least this

reason: they expressly disclosed the use of DNA. Disclosure of these material references would

have led the PTO to reject all of the claims of the Cabilly II application.

81. Ms. Crane’s knowing failure to disclose these references at all, Genentech’s

and its counsel’s intimate familiarity with the references due to its substantial prior royalty

payments and litigation on them, and the other extensive misconduct set out above again make

clear that Ms. Crane failed to disclose this material information with the intent to deceive the

PTO.

82. Third and finally, Genentech furthered its common goal of fraudulently

obtaining and extending its monopoly when Ms. Crane and the Cabilly inventors failed to either


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disclose or highlight to the new examiner, the District Court, or the Patent Board of Interferences

and Patent Appeals: (1) the fact the Cabilly II patent does not disclose the best mode—known at

the time the inventors filed their application—with which to practice the claimed invention (2)

the fact that the examples and experimental results disclosed in the patent, which were written in

the past tense, had not been performed by the Cabilly inventors in the manner described in the

patent, despite each inventor’s sworn declaration that “all statements made [in the application] of

my own knowledge are true and that all statements made upon information and belief are

believed to be true,” Declaration for Patent Application, April 1983, at 1-2; and (3) the fact that

inventor declarations submitted to the Board of Interferences and Patent Appeals during the

interference, and to the new patent examiner following the interference, contained material

omissions and affirmative mischaracterizations of the experimental conditions employed by the

Cabilly inventors to generate the results ultimately reported in the Cabilly II patent. See, e.g.,

July 22, 1986 Wetzel Declaration, Exs. 1-3; Oct. 28, 1991 Wetzel Declaration ¶¶ 10-11; Oct 27,

1991 Perry Declaration ¶ 13; March 20, 1997 Heyneker Declaration ¶ 4.

83. More specifically, Genentech, its prosecuting attorneys Ms. Crane and Mr.

Huntington, and the Cabilly II inventors knew that the patent failed to disclose that, to achieve

optimal results—and the results reported in the patent—the inventors were required to, among

other things, (1) use serum albumin; (2) substantially dilute the samples; (3) use 1mM EDTA

(Ethylene diamine tetra-acetic acid); (4) perform their experiments at a substantially higher

temperature, and for a substantially longer period of time, than the conditions disclosed in the

patent, and/or as described in detail in the inventors’ notebooks and other relevant

documentation; and (5) employ steps with respect to dialysis that were different from anything

disclosed in the patent, and/or as described in detail in the inventors’ notebooks and other

relevant documentation. Compare, e.g., Cabilly II patent at 25:30-62 with July 22, 1986 Wetzel


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Declaration, Exs. 1-3; Oct. 28, 1991 Wetzel Declaration ¶¶ 10-11; Oct 27, 1991 Perry

Declaration ¶ 13; March 20, 1997 Heyneker Declaration ¶ 4.

84. Moreover, rather than cure this omission, the inventor declarations

submitted by Genentech prosecuting attorney R. Danny Huntington during the interference, and

by Ms. Crane to the new patent examiner following the interference, failed to bring these

additional facts to the PTO’s and the District Court’s attention; to the contrary, these submissions

tacitly confirmed Genentech’s and the inventors’ prior (false) representations that the Cabilly II

patent disclosed the best mode for practicing the invention, and the manner in which the

inventors had actually achieved the results described in the patent. See, e.g., Oct. 28, 1991

Wetzel Declaration ¶¶ 10-11; Oct 27, 1991 Perry Declaration ¶ 13; March 20, 1997 Heyneker

Declaration ¶ 4. Upon information and belief, the inventors subjectively believed that the best

mode of the invention was the one described in their notebooks, not the one submitted to the

PTO for ultimate disclosure to the public. There is no disclosure of the requisite conditions in

the patent that would be sufficient for a person of skill in the art to practice the invention using

the best mode known to the inventors at the time the application was filed.

85. Upon information and belief, Genentech, Ms. Crane, Mr. Huntington, and

the Cabilly II inventors knew very well that the patent did not disclose the best mode for the

claimed invention, and that the examples and experimental results disclosed in the patent, which

were written in the past tense, had not in fact been performed by the Cabilly inventors in the

manner described in the patent. Genentech and its prosecuting attorneys, e.g., Mr. Hensley, Mr.

Huntington, and Ms. Crane—as well as the Cabilly II inventors themselves—participated in the

decade-long proceedings before the PTO and District Court, and were therefore intimately

familiar with the inventor notebooks and other relevant facts produced in the District Court

action demonstrating that the best mode for practicing the invention—as well as the experimental


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conditions actually used to generate the data reported in the patent—had never been disclosed in

the patent itself.

86. Ms. Crane’s and the inventors’ concealment was material because it would

have led the PTO to reject all of the claims of the Cabilly II application for its failure to disclose

the best mode used to practice the invention, and for its false depiction of the manner in which

the inventors had purportedly achieved the results described in the patent. Moreover, this

evidence would not have been cumulative of other information previously provided to the PTO,

because, upon information and belief, the failure to disclose the best mode known to the

inventors at the time they filed their application had not previously been presented to the PTO.

87. Genentech’s, Ms. Crane’s, and the inventors’ failure to reveal this

information to the PTO, despite their intimate familiarity with the relevant inventor notebooks

and other pertinent information and the inventors’ own sworn statements in connection with their

original application and subsequent proceedings—and in combination with the extensive other

misconduct set out above—make it clear that Ms. Crane and the inventors failed to disclose this

material information with the intent to deceive the PTO.

88. Upon information and belief, most of the facts set out above detailing

Genentech’s scheme, as well as its specific and extensive fraudulent conduct before the District

Court and the PTO, have never been addressed in any detailed substantive manner, in any forum.

89. For example, Ms. Crane’s and the inventors’ concealment of (1) the

patent’s failure to disclose the best mode for practicing the invention; (2) the fact that the

examples and experimental results disclosed in the patent, which were written in the past tense,

had not been performed by the Cabilly II inventors in the manner described in the patent; and (3)

the fact that the inventor declarations submitted during the interference, and to the new patent

examiner following the interference, contained material omissions and affirmative


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mischaracterizations of the experimental conditions employed by the Cabilly inventors to

generate the results reported in the patent have, upon information and belief, not been raised

before in any meaningful fashion.

90. Similarly, while the Valle, Axel, and Stanford references were considered

by the PTO during subsequent reexamination proceedings (as discussed further below), upon

information and belief, those references were considered in the context of the requester’s claim

that the Cabilly II patent was invalid for obviousness-type double patenting and related double

patenting allegations. Upon information and belief, the PTO during reexamination therefore did

not consider these references in the context of Genentech’s myriad other fraudulent

misrepresentations and failures to disclose set out above (for example, the fraudulent failure by

Ms. Crane to disclose that Genentech had long since abandoned its earlier specious attempt to

distinguish the Valle reference), and certainly did not consider the information provided in the

context of other patentability issues such as non-enablement and failure to disclose best mode.

As a result, and due to Genentech’s efforts to further its scheme, the PTO does not appear to

have performed any meaningful examination of the overwhelming invalidity case presented by

the prior art as a whole, much less the serious non-enablement, non-utility, and best mode defects

in the Cabilly II patent application.

91. Even if the PTO during reexamination had considered all of the defects in

the Cabilly II patent, moreover, those disclosures would not as a matter of law cure Genentech’s,

it’s prosecuting attorneys Ms. Crane’s and Mr. Huntington’s, and the named inventors’ earlier

fraudulent conduct.


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DECEMBER 2001: THE PTO ISSUES THE CABILLY II PATENT BECAUSE OF GENENTECH’S FRAUD, AND GENETECH CASHES IN

92. Genentech’s plan worked. As a direct result of Genentech’s fraud on the

PTO, and in furtherance of its conspiracy unlawfully to procure and extend the life of its

monopoly through issuance of the Cabilly II patent, the patent issued on December 18, 2001.

93. Not surprisingly, and just as Genentech had intended, the new examiner did

not perform any meaningful review of the Cabilly II patent application. To the contrary, in

providing the “reasons for allowance” for the patent, the new examiner relied first and foremost

upon the very fraudulent Orders engineered by Genentech and Celltech: “Upon consideration of

U.S.C. § 146 in Genentech, Inc. v. Celltech Therapeutics, Ltd. . . . and the subsequent final Order

After District Court Judgment by the Board of Interferences, dated 7/25/01; the pending claims

are deemed free of the prior art,” and, “[a]ccordingly, the pending claims are deemed allowable.”

October 5, 2001 Notice of Allowability at 2 (emphasis added). The examiner thus made very

clear that he was issuing the patent in primary or total reliance on the Orders of the District Court

and the Board of Interferences, not his own meaningful, independent review of the Cabilly II

application’s patentability.

94. The Cabilly II patent is entitled “Methods of Producing Immunoglobulins,

Vectors and Transformed Host Cells for Use Therein” and lists Genentech as co-assignee. The

patent purports to cover “processes for producing an immunoglobulin or an immunologically

functional immunoglobulin fragment . . . in a single [host] cell” and, according to a Genentech

press release, allegedly relates to “fundamental methods and compositions used to produce

antibodies by recombinant DNA technology.” See http://www.gene.com/gene/news/press-

releases/display.do?method=detail&id=4696 (December 18, 2001). Genentech falsely and

misleadingly represented in the same press release—issued on the very same day the Cabilly II

patent was granted—that, “[e]arlier this year, following a court-ordered mediation that resulted in


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an agreement between Genentech and Celltech to settle the priority dispute, the court determined

that Genentech was entitled as a matter of law to priority over Celltech, and accordingly, that

Genentech should be awarded the patent on the invention,” and that, “[f]ollowing that

determination, the Patent Office again independently examined Genentech’s patent application

and concluded that the patent should issue.” Id. (emphasis added).

95. If Genentech’s scheme to defraud the District Court and the PTO into

issuing the Cabilly II patent had not succeeded, the Boss patent would have expired in 2006, and

the Cabilly II patent would never have issued at all. The public and HGS would thus have been

free to use the claimed inventions no later than 2006. Instead, Genentech has succeeded in

collusively and fraudulently extending its monopolistic power over the market by restraining

trade and fixing prices until 2018—approximately 35 years after the initial 1983 patent

application for this technology, and roughly 12 years after the date on which the Boss patent

would have expired if not for Genentech’s fraud.

96. In 2005, while Genentech was enjoying the fruits of this now years-long

fraudulent, collusive, and anticompetitive scheme, the PTO granted two separate requests to

reexamine the Cabilly II patent, on July 7, 2005 and January 23, 2006. Following obviousness-

type double patenting rejections and a handful of amendments by Genentech (and without

examining the serious non-enablement, best mode, and other issues set out above) the PTO then

issued an Ex Parte Reexamination Certificate for the Cabilly II patent on May 19, 2009—the

culmination of Genentech’s unlawful scheme to obtain and extend the patent protection for its

purported “invention” by more than a decade, and thereby to retrain trade in and exercise

complete control over the market for potentially life-saving antibodies such as HGS’s

BENLYSTA® product, described in greater detail below.


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HGS DEVELOPS BENLYSTA® (BELIMUMAB)

97. At the same time Genentech was spending years defrauding the District

Court and the PTO to secure patent protection far beyond the statutory grant, HGS was

established with a mission to discover, develop, manufacture, and market innovative drugs that

serve patients with unmet medical needs. HGS is a commercially focused biopharmaceutical

company advancing toward the market with a product called BENLYSTA® and several other

product candidates in early-stage development.

98. BENLYSTA® is a recombinantly engineered monoclonal antibody

therapeutic for the treatment of autoantibody-positive patients with Lupus. If approved by the

United States Food and Drug Association (“FDA”), BENLYSTA® would be the first new

approved drug for the treatment of patients with Lupus in more than fifty years.

99. BENLYSTA® (belimumab) targets the B-lymphocyte stimulator (“BLyS”),

a naturally occurring protein, which is involved in the mediation of immunological responses and

autoimmune diseases, including Lupus. BENLYSTA® is the first in a new class of drugs called

BLyS-specific inhibitors, i.e., molecules that inhibit the biological activity of BLyS. HGS

discovered BLyS in 1996 and published a scientific article describing its activity in the journal

Science in July 1999. Following that discovery, HGS initiated a program to develop human

monoclonal antibodies that would specifically recognize and inhibit the biological activity of

BLyS.

100. Lupus is a debilitating and chronic autoimmune disease wherein the immune

system creates antibodies that attack an individual’s own cells, causing inflammation. That

inflammation in turn leads to tissue and organ damage, affecting the heart, kidneys, lungs, brain,

blood, skin, and/or joints. According to a 2008 study for the National Arthritis Data Workgroup,

322,000 Americans have a definite or probable Lupus diagnosis. The Lupus Foundation of


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America’s estimates are significantly higher, with up to 1.5 million people in the U.S. and close

to 5 million people worldwide diagnosed as having some form of active systemic lupus

erythematosus.

101. HGS has expended substantial resources researching and developing a

therapeutic antibody treatment for patients suffering from Lupus. Since 2002, HGS has been

pursuing clinical development of BENLYSTA®, including, among other things, four separate

studies on patients with Lupus: a phase I study enrolling 70 patients (2002-2003); a phase II

study enrolling 449 patients (2003 to 2006); and two phase III studies—BLISS-52 and BLISS-

76—enrolling a combined total of 1684 patients (2007-2010). HGS is also conducting several

long-term continuation trials of BENLYSTA®. The Phase III data showed that BENLYSTA®,

plus standard of care, achieved a clinically and statistically significant improvement in patient

response rate compared with placebo plus standard of care.

102. On June 9, 2010, following many years of research and development, HGS

submitted a Biologics License Application (or “BLA”) to the FDA seeking to market

BENLYSTA® with an indication for the treatment of autoantibody-positive patients with active

systemic lupus erythematosus. Upon approval, HGS intends to market and sell BENLYSTA® in

this District and throughout the United States.

103. On August 19, 2010, the FDA granted the BENLYSTA® BLA “Priority

Review” status. According to the FDA, “[a] Priority Review designation is given to drugs that

offer major advances in treatment, or provide a treatment where no adequate therapy exists.

Priority Review means that the time it takes FDA to review a new drug application is reduced.

The goal for completing a Priority Review is six months.” See “Fast Track, Accelerated

Approval and Priority Review: Accelerating Availability of New Drugs for Patients with Serious

Diseases,”


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http://www.fda.gov/forconsumers/byaudience/forpatientadvocates/speedingaccesstoimportantne

wtherapies/ucm128291.htm.

104. On November 16, 2010, the FDA Arthritis Advisory Committee voted 13 to

2 to recommend approval of BENLYSTA® for the treatment of autoantibody-positive patients

with active systemic lupus erythematosus receiving standard therapy. The FDA assigned

BENLYSTA® a Prescription Drug User Fee Act (“PDUFA”) target date of December 9, 2010

for completion of its review of the BENLYSTA® BLA, and, on December 3, 2010, the FDA

extended the BENLYSTA® PDUFA date to March 10, 2011. On or by March 10, 2011,

therefore, HGS expects a decision from the FDA concerning HGS’s BENLYSTA® BLA.

105. In addition to the enormous resources HGS has committed to developing

BENLYSTA® and securing regulatory approval, HGS has also developed three state-of-the-art,

good manufacturing practices-compliant development and manufacturing facilities, which total

approximately 520,000 square feet and offer both small-scale and large-scale production.

Through these facilities, HGS is able to produce and purify multiple protein and antibody drugs.

106. HGS has sufficient manufacturing capacity to launch BENLYSTA® should

it be approved by the FDA, and to supply commercial quantities of BENLYSTA® for the first 2-

3 years following launch. Since July 2005, HGS has initiated over 50 bulk drug product batches

to support clinical development and the commercial launch of BENLYSTA®.

107. Over the last several years, HGS has also hired and trained a dedicated

production team made up of manufacturing, quality, process development, and engineering

associates to support the production requirements of clinical development and commercial

launch of BENLYSTA®. In the last 18 months alone, HGS has hired over 60 employees to

support the production of BENLYSTA®, and HGS has additionally expended considerable

effort expanding its internal facilities and infrastructure to support BENLYSTA®, including


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upgrading its Information Technology systems, data management capability, and accounting,

finance, and human resources infrastructure.

108. Since 2009, HGS has undergone several inspections and audits by

regulatory agencies, including by the FDA and the European Medicines Agency, to evaluate the

compliance and readiness of its facilities and personnel as part of the required regulatory review

of the submitted BENLYSTA® marketing applications. HGS has invested significant resources

preparing for these inspections and audits.

109. In all, HGS has thus expended enormous revenues preparing to launch and

commercialize BENLYSTA®. Between 1999 and 2010, HGS invested approximately $700

million dollars in the research and development of BENLYSTA®.

110. HGS has additionally expended considerable effort and money hiring and

training marketing, sales, and medical affairs teams in anticipation of launching BENLYSTA®.

111. Since 2008, HGS has hired 103 employees to support the sales and

marketing of BENLYSTA®, and 19 employees to support the BENLYSTA medical affairs

group. In addition, HGS intends to hire over 40 employees to support the sales and marketing of

BENLYSTA® throughout Europe by the end of 2011.

112. As HGS’s President and Chief Executive Officer, H. Thomas Watkins,

announced at a 2011 J.P. Morgan Conference, HGS is “fully committed to achieving the full

therapeutic and commercial potential of BENLYSTA® by developing it for other B-cell

mediated diseases where patients need new therapeutic options and strong scientific evidence

supports therapeutic potential and commercial viability.” In attempting to meet that goal, “HGS

has systematically hired and carefully trained a specialized commercial team that we believe is

second to none in their experience and familiarity with rheumatology, biologics and infused


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products. We are ready to hit the ground running . . . following FDA approval of

BENLYSTA®.”

113. In 2010 alone, HGS spent approximately $45 million dollars to establish its

BENLYSTA® sales, marketing, and medical affairs teams. In 2011, HGS anticipates spending

approximately $80 million to support its BENLYSTA® sales and marketing teams.

114. HGS also has the financial wherewithal and commercial agreements in place

to enter the market for BENLYSTA®, should its BLA be approved by the FDA. In 2006, HGS

entered into an agreement with GlaxoSmithKline LLC (“GSK”) for the co-development and

commercialization of BENLYSTA®. Under the agreement, HGS and GSK will share Phase 3

and 4 development costs, sales and marketing expenses, and profits equally.

115. Finally, in the second half of 2009, HGS received $812.9 million in net

proceeds from two public offerings of common stock, bringing its cash and investments at year-

end 2009 to $1.2 billion.

THE ANTICOMPETITIVE EFFECTS OF GENENTECH’S COLLUSIVEAND FRAUDULENT CONDUCT

116. HGS’s potential entry into the market now faces a stumbling block:

Genentech’s fraudulently obtained Cabilly II patent and threats to enforce that patent against

BENLYSTA®.

117. In fact, as a direct result of Genentech’s fraudulent and anticompetitive

behavior, Genentech now maintains that all developers of recombinant antibody therapeutics must

either take a license from Genentech to commercialize their products, or stay out of the relevant

downstream product market altogether.

118. Upon information and belief, Genentech has already obtained royalties

estimated at over a billion dollars from the biopharmaceutical industry based on licenses for the

Cabilly II patent. By 2005, Cabilly II patent license revenues were estimated at $220 to $300


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million a year, and annual royalties that Genentech booked on the Cabilly II patent were

announced to be $256 million in 2007 alone and $298 million in royalties in 2008 alone,

according to Genentech’s Form 10K filings. Thus, upon information and belief, in the last five

years alone, Genentech has already received approximately $200-300 million in annual royalties

on the inventions claimed in the Boss patent—or an estimated $1-$1.5 billion in the aggregate.

119. Similarly, Celltech (and now UCB) has realized enormous value from its

collusive Agreement to sacrifice the Boss patent, in exchange for a longer term on the identical

claims in the Cabilly II Patent. According to its 2001 Annual Report (prior to Celltech’s

acquisition by UCB), “the royalty stream arising from the sale of antibody products covered by

the Boss patent is important to Celltech, consequently . . . [t]he settlement with Genentech

involves the payment of compensation to Celltech in terms of income from sales of products

which would otherwise have been covered under the Boss patent. Importantly, Celltech has also

secured preferential access for its development programmes to the Cabilly patent, which covers

the production of a broad range of antibody or antibody fragment products, for its 17 year life.”

120. The collusive Agreement has thus profoundly and fundamentally altered the

competitive landscape in the technology market for fundamental recombinant DNA technology

for producing monoclonal antibody therapeutics. Before the Agreement, Celltech had granted its

competitors broad access to this technology by liberally licensing the Boss patent. More

importantly, the Boss patent, had it not been revoked as part of the anti-competitive scheme,

would have expired in 2006 and its fundamental technology now been dedicated to the public.

Instead, any competitor now wishing to introduce a product in the downstream market through

2018 must pay a toll extracted by Genentech as a result of the collusive Agreement and

Genentech’s fraudulent conduct before the District Court and the PTO—or stay out of the market

altogether.


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INJURY TO HGS AND TO COMPETITION GENERALLY FROMGENENTECH’S ANTICOMPETITIVE SCHEME

121. HGS has been injured in a variety of ways by Genentech’s fraudulent and

collusive scheme to restrain trade in and monopolize the market for this technology. First,

HGS—like all of the other competitors in this field—has been damaged in the form of decreased

incentive to innovate in the technology market itself, because Genentech has used the Cabilly II

patent unlawfully to procure and extended its monopoly over this technology until 2018.

122. Second, Genentech has threatened to exclude HGS altogether from the

downstream product market for monoclonal antibody therapeutics for the treatment of Lupus,

upon FDA approval of HGS’s BLA for BENLYSTA®. Should HGS be unable to pay the

royalties Genentech has demanded for the use of this technology—a necessary input, according

to Genentech, for HGS’s product sales in the downstream market—or should Genentech refuse to

offer a license altogether, HGS will purportedly be barred from entering this market at all.

123. Third, even if HGS is able to enter the downstream product market, it has

been harmed in the form of increased costs in connection with its sales of BENLYSTA® in the

market, upon approval by the FDA. Genentech’s royalty demands will increase the cost of

production for HGS to compete in that market and, as a result, decrease the quantity of

BENLYSTA® that HGS is able to sell and/or increase costs for the ultimate downstream

consumers of this life-saving technology.

124. Fourth, HGS has also been damaged in the form of decreased incentive to

innovate in the downstream market. Because Genentech has made competition in this industry

exorbitantly expensive, it has made both the specific product market in which HGS intends to

compete—therapeutics with an indication for the treatment of Lupus—and all of the other

downstream product markets that depend on the use of this purportedly fundamental recombinant

DNA technology a substantially less attractive investment. Because of Genentech’s threatened


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sham claims and royalty demands, the motivation for HGS and other competitors to invest

hundreds of millions of dollars in additional life-saving research and development has thus been

dramatically reduced.

125. Genentech’s threat to enforce its monopoly power over the relevant

technology market is not an idle one. In fact, Genentech has already asserted numerous sham

patent infringement claims under the Cabilly II patent against companies who make and sell

antibody therapeutics produced using recombinant methods allegedly similar to the methods

used by HGS to make BENLYSTA®. See, e.g., MedImmune Inc. v. Genentech, Inc., Case No.

03-cv-02567 (C.D. Cal.); Centocor, Inc. v. Genentech, Inc., Case No. 08-cv-03573 (C.D. Cal.);

Glaxo Group Ltd. v. Genentech, Inc., Case No. 2:10-cv-02764 (C.D. Cal.).

126. Genentech has also threatened to assert sham claims against HGS

specifically. In a pending litigation pertaining to a different antibody therapeutic, Arzerra™—

which is produced, manufactured, and sold by Glaxo Group Limited, GlaxoSmithKline LLC, and

Genmab A/S—Genentech has alleged explicitly that BENLYSTA® infringes the Cabilly II

patent. See Glaxo Group Ltd. v. Genentech, Inc., Case No. 2:10-cv-02764 (C.D. Cal.). In its

Opening Brief on Claim Construction filed in early January 2011, Genentech stated expressly

that “Genentech and City of Hope intend shortly to ask the Court for leave to add infringement

allegations against a new GSK product, BENLYSTA® (belimumab), a recombinantly

engineered monoclonal antibody for the treatment of lupus . . . . The process used to make

BENLYSTA® is similar to that for Arzerra, except that it uses two vectors instead of one (and

thus will implicate claims 18 and 20).” Glaxo Group Ltd. v. Genentech, Inc., Case No. 2:10-cv-

02764 (C.D. Cal.), Docket No. 83 at n.4.

127. On January 28, 2011, in the same case, Genentech then formally filed a

motion for leave to file an amended Answer and Counterclaims to add HGS as a defendant and


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accuse BENLYSTA® of infringement. Id., Docket No. 85. And in its proposed amended

Answer and Counterclaims adding HGS, Genentech explicitly seeks injunctive relief with respect

to BENLYSTA®, making clear that Genentech is threatening to exclude HGS from the market.

Id., Docket No. 85-1 ¶ 118. On February 14, 2011, the district court denied Genentech’s motion

to amend, explicitly deferring to the judgment of this Court in determining whether HGS’s

declaratory judgment claims with respect to Cabilly II should be heard in Delaware or California.

128. More generally, Genentech has made no secret of the fact that it believes it

now has the right effectively to exclude all competitors from this market if it so chooses. In

2002, Sean Johnston, then Genentech’s Vice President of Intellectual Property and now

Genentech’s Senior Vice President and General Counsel, stated explicitly that “[t]he recently

issued [Cabilly II] patent broadly covers the co-expression of immunoglobulin heavy and light

chain genes in a single host cell . . . . We do not believe that the claims are limited by type of

antibody (murine, humanized, or human) or by host cell type.” Genentech Awarded Critical

Antibody Patent, Nature Biotechnology, vol. 20, p. 108 (Feb. 2002) (emphasis added). In

another pending litigation, Genentech has stated even more bluntly that the manufacturing

methods claimed in the Cabilly II patent are “the backbone of recombinant antibody production

in the biotech industry.” Centocor, Inc. v. Genentech, Inc., Case No. 2:08-cv-03573 (C.D. Cal.)

(Opening Brief on Claim Construction, March 24, 2009) (emphasis added).

129. Genentech has also made repeated public statements reconfirming that it

will pursue an aggressive litigation policy to protect its technology, as well as to shield its own

antibody therapeutic products from competition. For example, in its 2009 Form 10-K,

Genentech stated that “[i]ntellectual property protection of our products is crucial to our

business. Loss of effective intellectual property protection could result in lost sales to competing

products and loss of royalty payments (for example, royalty income associated with the Cabilly


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patent) from licensees . . . . We plan to continue to build upon and defend our intellectual

property position.” (Emphasis added.)

130. Later in the same filing, Genentech again reiterated that “[w]e have in the

past been, are currently, and may in the future be involved in material litigation and other legal

proceedings related to our proprietary rights, such as the Cabilly patent litigation and

reexamination . . . .” (Emphasis added.)

131. Nor have the Cabilly inventors themselves made any pretense of the fact

that Genentech achieved this monopolistic position by manipulating the patent system in a

“ludicrous” and fundamentally unfair fashion, effectively to secure issuance of a 29-year patent.

Indeed, in a 2002 interview, one of the Cabilly II inventors associated with Genentech—Dr.

Heyneker—was very open about this fact:

[Interviewer]: It is in a way an advantage to have a delay in the patent issuing?

Heyneker: Yes, but I am now on thin ice. For instance, the Cabilly patent was issued, which work was done in my lab . . . . The work was done in ’82 or ’83. This patent issued in 2002, and the clock started ticking then. Genentech gets seventeen years protection of work that was done twenty years ago. I think that it is absolutely ludicrous, but that is the way it is. It has nothing to do with fairness—it is a tactic. The longer you can delay it, the longer Genentech has protection . . . .

[Interviewer]: I thought that you were implying that Genentech was also playing politics here?

Heyneker: Possibly, if you can delay issuance by having a continuation in part or by bringing new evidence—It is not my field, but there are a lot of ways you can keep a patent going. If there is an interference, you have to overcome the interference. That takes years and years. There’s no hurry on either side. The result can be that indeed a patent issues twenty years after the fact. (Emphasis added.)

132. Genentech’s fraudulent, “ludicrous,” and “unfair” procurement of the Cabilly

II patent has thus damaged HGS through, among other things, (1) its decreased incentive to

innovate in the technology market; (2) Genentech’s effort to exclude HGS from the downstream


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product market altogether upon approval of its BLA for BENLYSTA® (3) HGS’s decreased

production and/or increased cost of production to compete in this market; and (4) its decreased

incentive to innovate in the downstream market. Indeed, even if HGS is not excluded from the

downstream product market entirely, it will still be forced to compete in that market at

exponentially greater cost; to litigate and potentially settle—at great expense—sham litigation such

as that threatened by Genentech in the Central District of California, as well as to incur substantial

additional expenses litigating the action for declaratory judgment that HGS was required to file to

clarify its rights in light of Genentech’s threatened lawsuit; and/or to enter into a license agreement

with Genentech to protect its investments in several critically important products in various stages

of pre-clinical and clinical trials, including BENLYSTA®. Upon information and belief,

Genentech has threatened these sham claims against HGS and other competitors in the market

without any objectively reasonable belief—or any subjective belief—that the Cabilly II patent is

valid, enforceable, and/or infringed.

THE RELEVANT UPSTREAM AND DOWNSTREAM MARKETS

Relevant Upstream (Technology) Market, Lack of Substitutes, and Barriers to Entry

133. The relevant upstream (technology) market for the purposes of this litigation

is the market for fundamental recombinant DNA technology for producing monoclonal antibody

therapeutics, including the process for producing an immunoglobulin or an immunologically

functional immunoglobulin fragment in a single host cell that is purportedly covered by the

claims of the Cabilly II patent. As set out above, Genentech has enormous or complete market

power in this field, because of the fraudulently obtained and extended Cabilly II patent.

Genentech has threatened to exclude HGS and all other competitors from the technology

market—and thereby substantially diminished the incentive for competitors to innovate in that

market—through the unlawfully obtained and prolonged Cabilly II Patent.


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134. If, and only if, the Cabilly II patent is construed as broadly as Genentech

advocates—and HGS will vigorously oppose, and expects to defeat, Genentech’s attempt to secure

such a broad reading of the patent—then, upon information and belief, there are no known

substitutes for the allegedly fundamental recombinant DNA technology for producing monoclonal

antibody therapeutics over which Genentech has exercised its monopoly, because, under

Genentech’s broad interpretation of the patent, there are no commercially viable design-arounds of

which HGS is aware.

135. There are barriers to entry into the technology market defined above,

including, but not limited to, Genentech’s monopoly through its fraudulently obtained and

extended Cabilly II patent, the royalties it charges for any use of that technology, and, at

Genentech’s sole discretion (according to Genentech), its ability to exclude any competitor it

wishes from that market.

Relevant Downstream (Product) Market, Lack of Substitutes, and Barriers to Entry

136. The relevant downstream (product) market for purposes of this litigation is

the market for the sale of monoclonal antibody therapeutics with an indication for the treatment of

Lupus. As set out above, Genentech has threatened to exclude HGS altogether from that market;

to increase HGS’s production costs and/or to decrease its production through demands for

substantial royalties; and, ultimately, thereby to increase the costs to downstream consumers of

BENLYSTA® who need these life-saving treatments.

137. As set out above, if, and only if, the Cabilly II patent is construed as broadly

as Genentech advocates, then, upon information and belief, there are no known substitutes for

monoclonal antibody therapeutics using recombinant DNA techniques with an indication for the

treatment of Lupus. Lupus patients cannot turn to other drugs or treatments. In addition, as set

out above, BENLYSTA® would be the first new approved drug for the treatment of Lupus in


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more than 50 years, and, to HGS’s knowledge, there are no other drugs for the treatment of Lupus

in the marketplace employing any technology other than monoclonal antibody therapeutics using

recombinant DNA techniques.

138. There are barriers to entry into the downstream product market defined above,

including, but not limited to, Genentech’s monopoly through its fraudulently obtained and

extended Cabilly II patent; the royalties it charges for any use of that technology in the downstream

market; and, at Genentech’s sole discretion (according to Genentech), its ability to exclude any

competitor it wishes from the downstream market.

Relevant Geographic Market

139. The relevant geographic market for the purposes of this litigation is thus the

entire United States.

FIRST CAUSE OF ACTION VIOLATION OF SECTION I OF THE SHERMAN ACT (RESTRAINT OF TRADE)

140. HGS incorporates the allegations of paragraphs 1 through 139 as if fully set

forth herein.

141. Genentech controlled and/or had knowledge of the prosecution of the Cabilly

II application, and is therefore accountable for the material and fraudulent misstatements and

omissions the inventors and Genentech prosecuting attorneys made with the intent to deceive the

PTO and the District Court.

142. During examination of the Cabilly II application before a new examiner

following Genentech’s collusive Agreement, and while under a duty of candor to the PTO,

Genentech, by way of prosecuting attorneys such as Sharon Crane and R. Danny Huntington and

the Cabilly II inventors themselves, defrauded the PTO in a variety of ways, including, among

other things, (1) fraudulently failing to disclose material and potentially fatal non-enablement and

not-utility defects in the patent, see ¶¶ 63-67, supra; (2) fraudulently failing to correct the earlier,


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clearly false statements Genentech prosecuting attorney Max Hensley had made regarding the

material Valle reference, see ¶¶ 68-72, supra; (3) dumping hundreds of references on the new

examiner at the last minute, without identifying especially relevant and material prior art such as

the Stanford reference and key expert testimony and other litigation materials relating to material

issues such as non-enablement and lack of utility, see ¶¶ 73-77, supra; (4) fraudulently failing to

disclose the material Axel references at all, despite Genentech’s and its counsel’s intimate

familiarity with those references due to Genentech’s own substantial royalty payments and

litigation on those patents, see ¶¶ 78-81, supra; and (5) fraudulently concealing the material fact

that the patent was invalid for its failure to disclose the best mode used to practice the invention,

and because the examples and experimental results disclosed in the patent, which were written in

the past tense, had not in fact been performed by the Cabilly inventors in the manner described in

the patent. See ¶¶ 82-87, supra.

143. All of these fraudulent acts served the common purpose of Genentech’s

scheme to ensure that the Cabilly II patent would issue—despite obvious and known defects that

would have rendered it unpatentable—with an additional 17-year term. When Genentech failed in

its attempt first to convince the PTO not to examine the Cabilly II application at all, Genentech

simply turned to open misrepresentations and material omissions to rig the system and guarantee

issuance of the new patent.

144. Genentech, by way of prosecuting attorneys such as Sharon Crane and R.

Danny Huntington and the Cabilly II inventors, made these misstatements and/or omissions

fraudulently and with the intent to deceive the patent examiner.

145. The intent to deceive on the part of the prosecuting attorneys such as Sharon

Crane and R. Danny Huntington and the Cabilly II inventors is apparent from all of the facts set

out above, including, among other things, (1) the collusive and fraudulent Order Genentech


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procured from the District Court, as well as its fraudulent concealment of basic facts

demonstrating that Celltech was entitled to priority and that the Cabilly II application was

unpatentable; (2) Genentech’s initial attempt to secure issuance of the Cabilly II patent without

any meaningful review by the PTO whatsoever and its failure (or failure timely) to disclose the

collusive settlement Agreement to the PTO; (3) Genentech’s attempt to dump hundreds of

documents on the PTO at the last minute to avoid any meaningful scrutiny, without pointing the

PTO to key documents such as the Stanford reference, litigation and EPO materials

demonstrating that the patent was non-enabled and lacked utility, and other critical documents;

(4) Genentech’s failure to disclose to the PTO, or to focus the PTO on, the substantial questions

regarding non-enablement and non-utility that it had just spent years litigating with Celltech in

the District Court action; (5) Genentech’s failure to correct its earlier specious attempt to

distinguish the Valle reference before the PTO, or to disclose to the PTO or focus the PTO on its

later diametrically opposite statements about Valle before the EPO; (6) Genentech’s failure to

disclose the Axel references, despite knowing about them and, upon information and belief,

having already paid tens of millions of dollars to license them; (7) Genentech’s failure to

disclose the best mode for the claimed invention and that the examples and experimental results

disclosed in the patent, which were written in the past tense, had not in fact been performed by

the Cabilly inventors in the fashion described in the patent; and (8) Genentech’s overall scheme

to defraud the District Court, secure issuance of a 29-year patent, and thereby unlawfully restrain

trade in and monopolize the relevant market.

146. The examiner justifiably relied upon these fraudulent misstatements and/or

material omissions in issuing the patent, based on, among other things, (1) the Order from the

District Court directing the PTO to issue the Cabilly II patent forthwith and without further

scrutiny; (2) the Order from the PTO Board to the new examiner focusing him only on certain


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discrete references disclosed after the interference was instituted in 1991; and (3) the fact that all

apparent barriers to patentability had been removed once the Boss patent was revoked. All of

these elements provided the new examiner—who, upon information and belief, knew nothing at

all about the Cabilly II application or its history—with no reason to suspect that there were any

additional defects in the Cabilly II application.

147. Each of these references and other documents or information was material,

and, indeed, but for these misrepresentations and/or deliberate and material omissions, the patent

never would have issued, because the new examiner would have become aware that the patent

was not enabled and lacked utility; was anticipated and/or rendered obvious by the material art

Genentech had concealed or misrepresented, either standing alone or in combination with other

references (many of which themselves Genentech had extensively concealed or fundamentally

misrepresented to the PTO); and did not disclose the best mode used to practice the invention or

that the examples and experimental results disclosed in the patent, which were written in the past

tense, had not actually been performed by the Cabilly inventors in the fashion described in the

patent.

148. The conduct set out above constitutes Walker Process fraud, patent misuse,

and sham litigation.

149. In addition to its sham litigation in securing a fraudulent Order for the

purpose of restraining trade in and monopolizing the relevant technology market, Genentech has

also made sham claims by threatening to pursue frivolous litigation against HGS, including

formally (and unsuccessfully) seeking to add HGS in another action pending in the Central

District of California.

150. Genentech’s threatened patent claims rest on the Cabilly II patent, which

was secured by fraud before the PTO and which is therefore invalid and unenforceable. Despite


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knowing that it had made material and fraudulent misrepresentations and material omissions

before the PTO, and that the patent is therefore invalid and unenforceable, Genentech has

nonetheless threatened frivolously to assert it against HGS in the Central District of California—

claims based on an invalid and unenforceable patent that no reasonable litigant could believe is

valid, enforceable, and/or infringed by HGS.

151. Upon information and belief, Genentech has threatened this litigation not for

any legitimate litigation purpose, but for the subjective and bad-faith purpose of diminishing

HGS’s incentive to innovate in the technology and downstream product markets, excluding HGS

from the downstream market altogether upon approval of HGS’s BLA for BENLYSTA®,

decreasing production of BENLYSTA® in the downstream market and/or increasing HGS’s

costs of production, and/or increasing the cost to the ultimate downstream consumers to purchase

this life-saving drug.

152. Upon information and belief, Genentech has also frivolously asserted or

threatened to assert the Cabilly II patent against other competitors or potential competitors in

various downstream markets, for the subjective and bad-faith purpose of excluding those

competitors from—or imposing on them exorbitant costs from competing in—those markets.

153. Upon information and belief, Genentech knew or should have known in

each of those litigations or threatened litigations that the Cabilly II patent was invalid,

unenforceable, and/or not infringed for all of the reasons set out above.

154. Genentech is not entitled to Noerr-Pennington or any other protection or

immunity with respect to the collusive settlement Agreement; Genentech’s scheme to restrain

trade in and monopolize the relevant technology market and related downstream product

markets; and the other misconduct set out above. Even if any protection or immunity

purportedly applied here, however, any such protection would be vitiated for each of the


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following separate and independent reasons: (1) Genentech’s fraud before the PTO and the

District Court; (2) its procurement of an effectively 29-year patent that far exceeded the statutory

term for the purpose of monopolizing the relevant market; and (3) Genentech’s repeated sham

litigation in connection with the Cabilly II patent.

155. Genentech conspired to reach the collusive Agreement that ultimately led to

the improper issuance of the extended Cabilly II patent, the illicit reverse payments to Celltech

(and now to UCB), Genentech’s extensive fraud before the PTO and the District Court, and its

years-long campaign of sham litigation thereafter to protect the fruits of its collusion.

156. Upon information and belief, Genentech entered into the collusive Agreement

with the bad-faith intent to restrain trade in and monopolize the relevant technology market; to

defraud the District Court and the PTO; and to engage in sham litigation or threatened sham

litigation against all other competitors in the relevant downstream product markets, with

anticompetitive effects.


advocates, there are no known substitutes for the relevant technology, including, upon

information and belief, no known design-arounds for the Cabilly II patent. There are barriers to

entry into the relevant technology and downstream product markets, including, but not limited to,

Genentech’s monopoly through its fraudulently obtained and extended Cabilly II patent; the

royalty rates it charges for any use of that technology in the relevant downstream market; and, at


wishes from that market.

158. In addition, Genentech and Celltech entered into the collusive Agreement

not to compete in the technology market, thereby affording Genentech complete control over,

and restraining trade in, that market. Absent that collusive and illegal Agreement not to


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compete, Celltech’s patent would have expired in 2006, and HGS and other competitors would

now be able to enter their respective downstream product markets free from the fear of sham

litigation and substantial royalty demands. Celltech (and now UCB) received a portion of the

monopoly rent as a result of its Agreement not to compete in the technology market, to centralize

all licensing of the relevant technology in Genentech, and then to have Genentech make reverse

royalty payments to Celltech pursuant to the collusive Agreement. Genentech’s overarching and

concerted actions constitute a restraint of trade and are illegal.

159. Genentech’s misconduct has had a direct effect on interstate trade and

commerce. In addition, because Genentech’s collusion had the effect of raising the price for

competitors to obtain a license to the relevant technology and to compete in the relevant

downstream product market (as well as raising the price for the ultimate downstream consumers

who need these life-saving treatments); had no legitimate justification; and lacked any redeeming

competitive purpose, it is considered unlawful without any further analysis of its reasonableness,

economic justification, or any other factors.

160. As set out above, Genentech’s misconduct has harmed HGS through, among

other things, (1) HGS’s diminished incentive to innovate in the relevant technology market; (2) its

threatened exclusion from the downstream product market altogether; (3) its decreased production

in the downstream product market and/or its increased cost of production in the downstream

market; and/or (4) its diminished incentive to innovate in the downstream market. HGS has also

been harmed through, among other things, the purported requirement that HGS make substantial

royalty payments for any use of the technology purportedly covered by the Cabilly II patent; the

cost of investigating and/or defending against Genentech’s sham claims, as well as the cost of

instituting a declaratory judgment action to determine HGS’s rights in anticipation of

Genentech’s threatened sham lawsuit; and/or the extensive diversion of HGS’s time, resources,


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and attention from its vital pursuit of regulatory approval for BENLYSTA® before the FDA.

Genentech’s misconduct has additionally harmed competitors in other relevant downstream

markets through those competitors’ diminished incentive to innovate, decreased production,

and/or increased costs of production. And, ultimately, Genentech’s conduct has likewise harmed

the downstream customers themselves in each of those product markets who must pay higher

prices to obtain these vital treatments.

161. Genentech’s unlawful contract, combination, and/or conspiracy has no

legitimate business objective and is a per se violation of Section 1 of the Sherman Act, 15 U.S.C.

§ 1, et seq.

162. Genentech’s unlawful contract, combination, and/or conspiracy unreasonably

restrains competition in the market and thus violates Section 1 of the Sherman Act under the Rule

of Reason.

163. Genentech is liable under Section 1 of the Sherman Act to HGS for damages

in an amount to be proven at trial, which damages should be trebled under 15 U.S.C. § 15(a), plus

interest, costs, and expenses, including attorneys’ fees.

164. HGS further seeks an injunction against any enforcement or attempted

enforcement of the Cabilly II patent by Genentech or any related conduct in violation of section

1 of the Sherman Act.

SECOND CAUSE OF ACTIONSECTION 2 OF THE SHERMAN ACT (CONSPIRACY TO MONOPOLIZE)


forth herein.

166. Genentech is not entitled to Noerr-Pennington or any other protection or

immunity with respect to the collusive settlement Agreement; Genentech’s scheme to restrain

trade in and monopolize the relevant technology market and related downstream product


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markets; and the other misconduct set out above. Even if any protection or immunity

purportedly applied here, however, any such protection would be vitiated for each of the

following separate and independent reasons: (1) Genentech’s fraud before the PTO and the

District Court; (2) its procurement of an effectively 29-year patent that far exceeded the statutory

term for the purpose of monopolizing the relevant market; and (3) Genentech’s repeated sham

litigation in connection with the Cabilly II patent.

167. Genentech has conspired to monopolize in the relevant technology market

through the collusive settlement Agreement and the other misconduct set out above. Genentech

has carried out a variety of overt acts in furtherance of that conspiracy, including, among other

things, (1) using the Agreement to procure issuance of the invalid and unenforceable Cabilly II

patent for an additional 17-year term; (2) centralizing all licensing in the relevant technology

market in Genentech and then having Genentech make reverse royalty payments to Celltech (and

now to UCB); (3) restraining trade in the market; (4) engaging in fraud before the PTO and the

District Court; and (5) conducting a years-long and ongoing campaign of sham litigation

thereafter. Genentech’s conspiracy to monopolize had a dangerous probability of success, as

demonstrated by Genentech’s exclusive or near-exclusive control over the licensing of

technology in the relevant market and over competitors’ ability to sell products in the relevant

downstream product markets.

168. Upon information and belief, Genentech entered into the Agreement with the

specific intent to restrain trade in, and to secure a monopoly over, the relevant technology market,

in the form of exclusive rights to the allegedly fundamental technology embodied in the Cabilly II

patent, and Genentech then defrauded the District Court and the PTO and engaged in the pattern

of sham litigation that followed with the specific intent to secure and preserve such a monopoly.


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royalties it charges for any use of that technology in the relevant downstream market; and, at


wishes from that product market.

170. Genentech’s misconduct has had a direct effect on interstate trade or

commerce.






been harmed through, among other things, the purported requirement that it make substantial










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172. Genentech’s unlawful conspiracy violates Section 2 of the Sherman Act, 15

U.S.C. § 2, et seq.



interest, costs, and expenses, including attorney fees.


enforcement of the Cabilly II patent by Genentech or any related conduct in violation of section

2 of the Sherman Act.

THIRD CAUSE OF ACTIONSECTION 2 OF THE SHERMAN ACT (MONOPOLIZATION)


forth herein.

176. Genentech has monopolized the relevant technology market through the

misconduct set out above. Genentech has unilaterally achieved its monopoly through, among other

things, (1) using the collusive settlement Agreement to procure issuance of the invalid and

unenforceable Cabilly II patent for an additional 17-year term; (2) centralizing all licensing in the

relevant technology market in Genentech and then having Genentech make reverse royalty

payments to Celltech (and now to UCB); (3) restraining trade in the market; (4) engaging in

fraud before the PTO and the District Court; and (5) conducting a years-long and ongoing

campaign of sham litigation thereafter.

177. Genentech has monopoly power in the relevant technology market, as

defined above.


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178. Genentech willfully and fraudulently acquired and/or maintained its

dominance in the relevant technology market through anticompetitive means, including, but not

limited to, (1) its fraudulent procurement of the Cabilly II Patent for an additional 17-year term

through its extensive fraud on the PTO and the District Court; (2) its subsequent campaign of

sham litigation; (3) the centralization in Genentech of all licensing for technology in the market;

and (4) Genentech’s subsequent reverse royalty payments to Celltech (and now to UCB).

Genentech’s misconduct has had a direct effect on interstate trade or commerce.






been harmed through, among other things, the purported requirement that it make substantial












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royalties it charges for any use of that technology in the relevant downstream market; and, at


wishes from that product market.



interest, costs and expenses, including attorneys’ fees.

182. HGS further seeks an injunction to prohibit Genentech from any additional

enforcement or attempted enforcement of the Cabilly II Patent in connection with its

monopolization of the market defined above.

FOURTH CAUSE OF ACTIONCOMMON LAW UNFAIR COMPETITION


forth herein.

184. Genentech has engaged in unfair competition under Delaware law by

entering into the collusive Agreement, fraudulently securing issuance of the invalid and

unenforceable Cabilly II patent with an unlawfully extended term, making reverse payments to

Celltech (and now UCB), conspiring to restrain trade in and to monopolize the relevant

technology market, and then threatening to assert invalid and/or unenforceable patent claims

against HGS. Genentech’s unfair competition threatens to exclude HGS from competing in and

making sales of BENLYSTA® in the downstream product market in Delaware, upon approval


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by the FDA of HGS’s BLA for BENLYSTA®, or to make HGS’s competition in the product

market in Delaware prohibitively expensive.

185. Upon information and belief, Genentech has engaged in this unfair

competition with the subjective and bad-faith purpose of excluding HGS from the downstream

product market in Delaware, and/or of making HGS’s participation in that market exorbitantly

expensive.

186. HGS has a reasonable expectancy of entering into a variety of valid business

relationships in the downstream product market in Delaware in connection with its development

and ultimate sales of BENLYSTA®, including, but not limited to, making substantial sales of

BENLYSTA® to customers in the market in Delaware, upon approval by the FDA of HGS’s

BLA for BENLYSTA®; continuing the business arrangements described above with companies

such as GSK, and entering into new business arrangements with those companies for the

marketing and sale of BENLYSTA® in Delaware; and entering into additional, similar

agreements for the marketing and sale of BENLYSTA® in Delaware.

187. Genentech has wrongfully interfered with these business relationships and

reasonably expected business relationships by, among other things described in greater detail

above, entering into the collusive Agreement, fraudulently securing issuance of the invalid and

unenforceable Cabilly II patent with an unlawfully extended term, subsequently making reverse

payments to Celltech (and now to UCB), conspiring to restrain trade in and monopolize the

relevant technology market, and then threatening to assert invalid and/or unenforceable patent

claims against HGS.

188. Genentech’s misconduct has interfered with HGS’s business relationships

and reasonably expected business relationships and damaged HGS by, among other things,

threatening to exclude HGS from the downstream product market in Delaware; making


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participation in that market in Delaware exorbitantly expensive; and/or requiring HGS to engage

in corrective advertising or other measures to correct Genentech’s false and/or misleading

statements regarding the Cabilly II patent.

189. HGS seeks damages resulting from Genentech’s common law unfair

competition under Delaware law in an amount to be proven at trial, as well as costs, expenses,

and attorneys’ fees and interest thereon.


enforcement of the Cabilly II patent by Genentech or any related conduct in violation of

Delaware’s common law prohibition against unfair competition.

FIFTH CAUSE OF ACTIONSTATUTORY UNFAIR COMPETITION


forth herein.

192. Genentech has engaged in statutory unfair competition under 6 Del. C.

§ 2532 by, among other things described in greater detail above, entering into the collusive

Agreement, fraudulently securing issuance of the invalid and unenforceable Cabilly II patent

with an unlawfully extended term, subsequently making reverse payments to Celltech (and now

to UCB), conspiring to restrain trade in and monopolize the relevant technology market, and then

threatening to assert invalid and/or unenforceable patent claims against HGS. Genentech’s

statutory unfair competition has included a variety of false and/or misleading statements to HGS

and other competitors in the field in connection with Genentech earnings calls, press releases,

financial filings, and other public statements regarding the validity, enforceability, and/or alleged

infringement of the Cabilly II patent and Genentech’s scheme to enter into the collusive

Agreement, make reverse payments to Celltech (and now UCB) in connection with the Cabilly II

patent, and restrain trade in and monopolize the relevant market. See, e.g., supra ¶¶ 94, 128.


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193. Upon information and belief, Genentech has engaged in this statutory unfair

competition under Delaware law with the subjective and bad-faith purpose of preventing HGS

from making sales of BENLYSTA® in Delaware, upon approval by the FDA of HGS’s BLA for

BENLYSTA®, and/or of making HGS’s participation in that market exorbitantly expensive.

194. Genentech’s misrepresentations create a likelihood of confusion or

misunderstanding.

195. Genentech’s misconduct violates at least subparts (5), (7), (8), and (12) of 6

Del. C. § 2532, prohibiting, among other things, false or misleading representations regarding the

approval or quality of goods or services; using false or misleading statements to disparage the

goods, services, or business of another competitor in the market; and/or engaging in any other

conduct that similarly creates a likelihood of confusion or misunderstanding.



threatening to exclude HGS from the downstream product market in Delaware altogether;

making participation in that market exorbitantly expensive; and/or requiring HGS to engage in

corrective advertising or other measures to correct Genentech’s false and/or misleading


197. HGS seeks damages resulting from Genentech’s statutory unfair

competition under Delaware law in an amount to be proven at trial, as well as costs, expenses,

and attorneys’ fees and interest thereon.

198. HGS further seeks an injunction to prohibit Genentech from any further

violations of 6 Del. C. § 2532 in connection with the Cabilly II patent.


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SIXTH CAUSE OF ACTIONVIOLATION OF THE LANHAM ACT


forth herein.

200. Genentech has violated section 43 the Lanham Act, 15 U.S.C. § 1125, by,

among other things, making false and/or misleading representations in a variety of earnings calls,

press releases, financial filings, and other public statements regarding the validity, enforceability,

and/or alleged infringement of the Cabilly II patent and Genentech’s scheme to enter into the

collusive Agreement, make reverse payments to Celltech (and now to UCB) in connection with

the Cabilly II patent, and restrain trade in and monopolize the relevant market. See, e.g., supra

¶¶ 94, 128.

201. Genentech’s misstatements have actually deceived and/or have a tendency

to deceive a substantial portion of their intended audience.

202. Genentech’s deception is material in that it is likely to influence the

purchasing decisions of customers or prospective customers of HGS and other competitors in the

field, by falsely or misleadingly suggesting (1) that the patent is valid, enforceable, and/or

infringed by HGS; (2) that HGS and other competitors may be barred from selling products in

the relevant downstream markets; and/or (3) that any such sales may lead to the infringement of

a valid and enforceable patent by customers of HGS and other competitors in the field.

Genentech’s deception is also likely to influence the purchasing decisions of customers or

prospective customers of HGS and other competitors in the field, by falsely or misleadingly

concealing or misrepresenting Genentech’s collusion to secure the fraudulent Order, make

reverse payments to Celltech (and now UCB), and restrain trade in and monopolize the market.

Genentech’s misstatements also relate to an inherent characteristic of HGS’s product—the false


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or misleading allegation that BENLYSTA® infringes a valid and enforceable patent—and are

material for this independent reason as well.

203. The advertised goods affected by Genentech’s deception would be sold

throughout the United States and therefore travel in interstate commerce.

204. Genentech’s deception has caused and is likely to cause harm to HGS by,

among other things, threatening to exclude HGS from the downstream product market in

Delaware altogether; making participation in that market exorbitantly expensive; and/or

requiring HGS to engage in corrective advertising or other measures to correct Genentech’s false

and/or misleading statements regarding the Cabilly II patent.

205. HGS seeks damages, disgorgement, and other compensatory damages and

equitable relief resulting from Genentech’s violation of the Lanham Act in an amount to be

proven at trial, as well as costs, expenses, and attorneys’ fees and interest thereon.

206. HGS further seeks injunctive relief to prevent and/or correct Genentech’s

false and/or misleading statements.

SEVENTH CAUSE OF ACTIONTORTIOUS INTERFERENCE WITH PROSPECTIVE BUSINESS OPPORTUNITY


forth herein.

208. Genentech’s misconduct constitutes interference with HGS’s valid business

relationships and/or reasonably expected business relationships under Delaware law, including

its relationships and potential relationships with business partners such as GSK in connection

with the marketing and sale of BENLYSTA® in the downstream product market in Delaware,

upon approval by the FDA of HGS’s BLA for BENLYSTA®, as well as its business

relationships and/or reasonably expected business relationships with future customers of

BENLYSTA® in Delaware.


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209. Upon information and belief, Genentech had knowledge of HGS’s business

relationships and/or reasonably expected business relationships, as indicated by, among other

things, Genentech’s recent statements in connection with its threatened litigation against HGS in

the Central District of California and in the motion to dismiss Genentech filed in this Court,

including statements directly referencing HGS’s business relationships and/or reasonably

business relationships with companies like GSK and future customers of BENLYSTA®.

210. Upon information and belief, Genentech intentionally interfered with HGS’s

business relationships and/or reasonably expected relationships for the subjective and bad-faith

purpose of excluding HGS from the downstream product market in Delaware, or of making its

participation in that market exorbitantly expensive. Genentech’s misconduct has threatened to

cause the termination of one or more of HGS’s business relationships or expected relationships,

including its reasonably expected relationships with future customers of BENLYSTA® if HGS

is unable to sell BENLYSTA® in the market in Delaware upon approval by the FDA, or if the

sale of BENLYSTA® in the market in Delaware becomes prohibitively expensive.



threatening to exclude HGS from the downstream product market in Delaware altogether;

making participation in that market exorbitantly expensive; and/or requiring HGS to engage in

corrective advertising or other measures to correct Genentech’s false and/or misleading


212. HGS seeks damages resulting from Genentech’s intentional interference

with HGS’s business relationships and/or expected business relationships under Delaware law in

an amount to be proven at trial, as well as costs, expenses, and attorneys’ fees and interest

thereon.


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Delaware’s common law prohibition against interference with prospective business

opportunities.

EIGHTH CAUSE OF ACTIONCIVIL CONSPIRACY


forth herein.

215. Genentech engaged in civil conspiracy under Delaware law by, among other

things set out in greater detail above, (1) unlawfully conspiring with Celltech to enter into the

collusive settlement Agreement to monopolize and restrain trade in the technology market

described above; (2) securing a defective Order from the District Court instructing the PTO to

issue an invalid and unenforceable patent for an additional 17-year term, without any further

scrutiny by anyone and despite knowledge that the invention was unpatentable; (3) engaging in

repeated fraud before the PTO and the District Court to secure issuance of the invalid and

unenforceable Cabilly II patent; and (4) then threatening to exclude HGS from the downstream

product market in Delaware through a pattern of sham litigation.

216. Genentech has engaged in a variety of unlawful acts in furtherance of its

civil conspiracy with Celltech (and now UCB), including, among other things set out in greater

detail above, (1) committing fraud before the District Court and the PTO; (2) violating the

antitrust laws; (3) engaging in sham litigation; (4) making repeated false and/or misleading

statements regarding the Cabilly II patent and the products or potential products of HGS and

other competitors that will be sold in Delaware; and (5) engaging in statutory and common law

unfair competition and interference with the business relationships and expected business

relationships of HGS in the downstream product market in Delaware. Upon information and


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belief, Genentech has engaged in these acts with the express and bad-faith purpose of excluding

HGS from the downstream product market in Delaware; facilitating or attempting to facilitate the

procurement of substantial royalty payments to Genentech in connection with product sales in

Delaware on an invalid and unenforceable patent; and/or making participation in the downstream

market in Delaware exorbitantly expensive.

217. HGS has been harmed by Genentech’s civil conspiracy through, among

other things, (1) HGS’s diminished incentive to innovate in the upstream and downstream

markets; (2) the threatened exclusion of HGS from the downstream product market in Delaware

altogether; (3) its decreased production in the downstream product market and/or its increased

cost of production in the downstream market, upon approval by the FDA of HGS’s BLA for

BENLYSTA®; (4) the cost of investigating and/or defending against Genentech’s threatened

litigation, including, among other things, instituting a declaratory judgment action in Delaware to

clarify its rights in light of Genentech’s threatened sham claims; and/or (5) the diversion of

extensive and valuable time, resources, and attention from HGS’s pursuit of regulatory approval

before the FDA.

218. HGS seeks damages resulting from Genentech’s civil conspiracy under

Delaware law in an amount to be proven at trial, as well as costs, expenses, and attorneys’ fees

and interest thereon.



Delaware’s common law prohibition against civil conspiracy.

DEMAND FOR JURY TRIAL

220. Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, HGS

demands a trial by jury of all issues so triable.


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PRAYER FOR RELIEF

WHEREFORE, HGS requests that judgment be entered in favor of HGS and

against Genentech, as follows:

a. Declaring that the conduct set out above violates Section 1 of the Sherman Act;

b. Declaring that the conduct set out above violates Section 2 of the Sherman Act;

c. Declaring that the conduct set out above constitutes statutory and common law

unfair competition under Delaware law, a violation of the Lanham Act,

interference with prospective business opportunity under Delaware law, and civil

conspiracy under Delaware law;

d. Enjoining Genentech from any further enforcement or attempted enforcement

against HGS of the Cabilly II patent;

e. Enjoining Genentech from continuing its violations of the federal antitrust laws

detailed herein, pursuant to Section 16 of the Clayton Act, 15 U.S.C. § 26;

f. Awarding HGS actual and exemplary damages resulting from Genentech’s

violations of the Sherman Act, statutory and common law unfair competition

under Delaware law, violation of the Lanham Act, interference with prospective

business opportunity under Delaware law, and/or civil conspiracy under Delaware

law, including, without limitation, treble damages under 15 U.S.C. § 15(a) and

such other exemplary damages as are available at law, and including but not

limited to those available on account of Genentech’s oppression, fraud, or malice;

g. Awarding HGS its costs and attorneys’ fees and expenses; and

h. Awarding HGS such other relief as the Court may deem just, equitable, and

proper.


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Of Counsel:

Henry B. GutmanAimee H. GoldsteinNoah M. LeibowitzSIMPSON THACHER & BARTLETT LLP425 Lexington AvenueNew York, New York 10017Telephone: (212) 455-2000

Harrison J. Frahn IVSIMPSON THACHER & BARTLETT LLP2550 Hanover Street Palo Alto, CA 94304 Telephone: (650) 251-5000

Arman Y. OrucSIMPSON THACHER & BARTLETT LLP1155 F Street, N.W. Washington, D.C., 20004Telephone: (202) 636-5500

Dated: February 18, 2011

YOUNG CONAWAY STARGATT & TAYLOR, LLP

/s/ Monté T. SquireAdam W. Poff (No. 3990)Monté T. Squire (No. 4764)The Brandywine Building100 West Street, 17th FloorWilmington, DE 19899-0391(302) [email protected]@ycst.com

Attorneys for Plaintiff Human Genome Sciences, Inc.


for the district of delaware human genome sciences, inc...

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