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Executive Summary

BAXTER TRAVENOL CHYMOPAPAIN PATENT INFRINGEMENT SUIT v. SMITH LABS seeks treble damages and attorneys' fees from Smith Labs for allegedly infringing Baxter's patent by marketing its Chymodiactin (chymopapain) product. In the suit, filed April 20, Baxter and its subsidiary Omnis allege that Smith Labs has infringed U.S. patent no. 3,320,131 covering chymopapain for the treatment of herniated discs. The patent is due to expire on May 16 of this year. The chymopapain patent was initially issued in 1967 to Lyman Smith, MD, who assigned the patent to Baxter Travenol with the understanding that Baxter would develop and market the drug. However, Smith later filed a lawsuit to reclaim patent rights to chymopapain, alleging that Baxter was not putting enough effort into pushing the drug through FDA. That action is "currently pending in the Circuit Court of Cook County, Illinois but has not been actively pursued by either party up to this time," Smith Labs said. The firm further asserted that it "believes it has rights under this patent pursuant to a subsequent assignment from Dr. Lyman Smith," the uncle of Smith Labs' founder W. Scott Smith, MD. In an April 23 press release announcing the patent suit, Smith Labs President Henry Kuehn said that "the possibility of this litigation has previously been disclosed by Smith Labs on numerous occasions." Kuehn added that "the company believes that it has several meritorious defenses which it intends to assert vigorously." In its annual report for FY 1983 (ended Oct. 31), Smith Labs announced that sales of Chymodiactin totaled $26 mil. in its first 10 months on the market. The compound was launched by Smith Labs in December 1982 following FDA approval the preceding November. Baxter's Discase brand of chymopapain received approval from FDA this past January after the firm filed theinitial NDA in February 1971.

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