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The power of an attorney to shape the future of biotechnology

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An excellent example of how a lawyer can change society and the world is found right here in San Diego. Attorneys, working along with scientists and entrepreneurs, played a key role in starting the biotech revolution.

Larry Respess is such an attorney. He helped establish San Diego as home to one of the largest biotechnology industries in the United States and the world. Of course, it could not have happened without the scientists. But, even the greatest inventive ideas need money, patents for commercial development, and protection from well-financed copiers. Without the patents and the likelihood that those patents could be enforced, there would have been far fewer scientist, entrepreneurs and venture capitalists who would take the risk to start a fledgling biotechnology company.

The biotechnology revolution began in the early '80s when attorneys fought for and convinced the Supreme Court that patentable subject matter included biotechnology. Diamond v. Chakrabarty, 447 U.S. 303 (U.S. 1980).

Six weeks later, San Diego attorney Larry Respess filed and prosecuted the application, which later became Hybritech’s 4,376,110 patent entitled: “Immunometric assays using monoclonal antibodies,” which issued March 8, 1983.

Respess, a former partner at the premier IP boutique, Lyon & Lyon, was no stranger to biotechnology. He had earned a Ph.D. in chemistry at M.I.T. and was involved in writing the applications for the patents that launched Genentech as the first blockbuster biotechnology company. In fact, his connection with the Genentech startup team, including venture capitalist, Brook Byers, resulted in Respess working for Hybritech.

Howard Birndorf hired Respess as general counsel for Hybritech.

“I knew patents were going to be the key to our success at Hybritech and that Larry Respess was the person to make it happen,” Birndorf said.

Birndorf has since started many biotech companies. In fact, the New York Times has called him “The Johnny Appleseed of Biotechnology.” In doing so, he has almost always relied on the counsel of Respess to insure that strong patent protection was in place. Today they work together at Nanogen where Birndorf is the CEO and Respess is the general counsel.

Respess knew that the Hybritech product, monoclonal antibodies used for diagnosing major diseases, would be copied by major pharmaceutical companies who could drive the tiny Hybritech out of business. He thus developed a patenting and patent enforcement strategy to protect the Hybritech invention.

The first step in carrying out his plan was to obtain a patent on the use of emerging technology, monoclonal antibodies, to diagnose disease. He then created a licensing strategy that resulted in many of the largest companies in the country taking a license from Hybritech. Finally, for those who would not take a license, he devised a litigation strategy aimed at getting the Hybritech patent validated on appeal to the Federal Circuit, the court newly created to hear all patent appeals.

Although the trial court held the Hybritech patent invalid, Respess forged ahead with his strategy, which he anticipated would not be vindicated until the case reached the appellate court. The Federal Circuit reversed the District Court and for the first time held a biotechnology patent to be infringed. Hybritech Inc. v. Monoclonal Antibodies Inc., 802 F.2d 1367 (Fed. Cir. 1986). In doing so, the Federal Circuit took a page from the Respess playbook and ruled that the patent was valid because the substitution of monoclonal antibodies for polyclonal antibodies had lead to unexpected advances in medical diagnosis.

This is the only case I have ever been involved in where the client came with a game plan, not only for winning, but for creating new law. All I had to do was follow the script in order to change biotechnology patent law.

Testimony for the importance of patents and patent attorneys comes from Ted Green, a Renaissance man who is both an inventor and a venture capitalist. He was an inventor on the Hybritech patent and CEO of Hybritech. He also founded Amylin Pharmaceuticals (Nasdaq: AMLN) and is an inventor on one of Amylin’s first patents.

In reflecting on the Hybritech experience, Green stated, “If people had lost confidence in the patent system, venture capital would have dried up completely. Fortunately, with the Hybritech patent, we established that biotechnology inventions could be patented and that the courts would enforce them, thus protecting the huge investments necessary to bring biotechnology inventions to market.

“If venture capitalists didn’t make investments, new medicines would not exist.” “Patents are fundamental,” Green added.

Birndorf recalls early skepticism about the value of Hybritech’s patent position. When asked about the impact of the successful defense of that patent, he thought for a moment and then mused, “Our success helped open the funding tap of Big Pharma. Before that we had been courted mostly by Japanese companies. But after that, the doors of the corporate development departments at major pharmaceutical companies were open to us. I think that has been one of the most, if not the most profound impacts on biotech. It helped us survive after launch with venture money and early IPO money until we were able to put products on the market.”

Brook Byers, a principal in the venture capital firm of Kleiner Perkins Caufield and Byers reflected on Hybritech, his first biotechnology company, stating, “Intellectual property is the foundation of the biotech industry. Using that foundation, it takes a team to build a successful company. I have sought out and worked with the very best intellectual property lawyers over the years because I have such concern regarding a solid patent foundation for my companies. Larry Respess, in my mind, is the Godfather of the biotechnology legal profession. He was instrumental in opening the door for venture funding of biotechnology.”

This was the first biotechnology patent held valid and infringed and showed the world that biotechnology intellectual property could indeed be protected and enforced. It vindicated the analysis by Respess when he joined Hybritech that the Hybritech technology could be protected by patents. The case was the pinnacle of Hybritech’s success and provided an inspiration to other start-up biotechnology companies.

As Respess said, “I like to think that Hybritech’s success in obtaining and enforcing its patents gave those [biotechnology] companies the conviction that they could patent their inventions and protect them from the giant pharmaceutical companies.”

Hybritech proved to be an incredible environment for biotechnology talent with more than 50 San Diego biotechnology companies founded by former Hybritech employees including Gen-Probe (Nasdaq: GPR), Idec Pharmaceuticals (now Biogen Idec), Ligand Pharmaceuticals (Nasdaq: LGND), Biosite (Nasdaq: BSTE), and Nanogen (Nasdaq: NGEN).

Attorney Respess helped change San Diego from a sleepy, small community of biotechnology and patent firms into the powerhouse it is today. One attorney truly can make a difference.

Olson is a Partner and Fortner is an Associate in the San Diego office of Paul, Hastings, Janofsky & Walker LLP

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