Government won't join patent lawsuit against Caltech. (Media & Technology).

Caltech's effort to retain rights to a lucrative patent received a boost when the federal government opted not to join in the nasty legal dispute over its origins.

After a 30-month investigation, the Department of Justice declined to join the suit, filed by MJ Research Inc. of Waltham, Mass., alleging that Caltech fraudulently obtained the patent for a four-color automated DNA sequencer.

MJ Research filed the case under the federal False Claims Act, but the federal investigation did not turn up enough evidence for the government to participate in the litigation. Justice Department spokesman Charles Miller said the government's refusal usually is a bad omen for a lawsuit.

"The bottom line is the vast amount of cases we decline are not successful," Miller said.

The suit, which was under seal during the Justice Department investigation, has been unsealed. A lawyer representing MJ said discovery will take place in the coming months and he hopes for a trial in U.S. District Court in the District of Columbia sometime next year.

Caltech so far has received about $50 million in royalty payments from the sequencer, which received its first patent in 1992. It is the tool used by the publicly funded Human Genome Project and Celera Genomics, a private effort with ties to Applied Biosystems Group, which holds the license to manufacture the sequencer, to map the human genome.

Jonathan D. Moreno, professor of biomedical ethics at The Center for Biomedical Ethics at University of Virginia Health System, called the device "a blockbuster."

"This could be the case of the century for biology because these machines are the ancestors of the kind of equipment that will be available for your children in doctors' offices and pharmacies to design drugs for you," Moreno said. "Once the machine is more understood, it's going to be one of the 21st century's equivalents of the light bulb or the Model T."

Moreno said he is talking with attorneys for MJ Research about serving as either a consultant or expert witness.

Question of roles

At the heart of the dispute is whether the device was invented with the help of federal grants. If it is found that it was, issues related to the ownership of its patents, access to the technology and the amount charged to the government for use of the device would be raised.

Allen Foster, a partner at Greenberg Traurig LLP representing MJ Research, argued that Caltech and Applied Biosystems Group obtained fraudulent patents, bilked the federal government by charging it royalties and violated the federal statute governing the commercialization of academic research using federal money.

Caltech officials referred all calls to its attorney, Jim Asperger, a partner at O'Melveny & Myers LLP. Asperger said the institution finds itself in the middle of a long-standing feud between MJ Research and rival biotech firm Applied Biosystems Group.

MJ Research asked the patent be invalidated so the technology would fall into the public domain, available for development without licensing and royalty costs.

It alleges that Henry Huang, at the time a post-doctoral researcher at Caltech, was intentionally left off the patent application for the sequencer. Huang's work was being funded by the federal government.

Huang said he was made aware of the issue when attorneys for MJ Research called him to make sure he was aware his name was not on the patent. He said a review of the documentation supporting the application showed it was based largely on his work.

Even if it ultimately is decided that Huang deserves credit, MJ Research would still have to prove there was intent to deceive in the patent application, an effort dealt a blow by the Justice Department's decision not to pursue the matter.

Huang, now a 52-year-old associate professor of microbiology at Washington University in St. Louis, said he considers the omission to be simple oversight. All he wants is a little credit and some royalty payments.

Uncommon challenge

MJ Research's litigation falls under the rubric of whistleblower cases brought by parties alleging a wrong. Most patent challenges come from individuals or organizations claiming that an existing patent has been violated.

Susan Griffen, an biotech patent attorney with Finnegan, Henderson, Farabow, Garrett & Dunner LLC in Washington, estimated that as many as 10,000 patent challenges are filed each year in courts across the United States. She said 80 percent or more are settled before trial.

"There has to be a reason for the suit to be presented to the court," said Griffen, who has advised Caltech on the case involving MJ Research. "The idea of someone just going out and saying to the court, 'There's something wrong with this patent; fix it,' is not at all a common event."