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Executive Summary

AMGEN/CHUGAI EPO DISPUTE WILL BE AFFECTED BY TRADE BILL, company attorneys agreed at the August 4 hearings of the International Trade commission. "It is everyone's position that the passage of the Trade Bill will have significant effect on this action," Amgen Counsel Cecilia Gonzalez stated. Chugai counsel Jonathan Glazier said he "reluctantly" agreed "that the new Trade Bill . . . will apply to section 337 investigations that are currently underway." Amgen and Chugai are preparing for the second round, or economic phase, of hearings, scheduled to begin in October. Upjohn, as the U.S. marketer of Chugai's erythropoietin (EPO) product, will also participate in the upcoming meeting. The new trade law would provide Amgen greater protection for their patent, the Amgen counsel asserted, because the company meets the requirements of a "domestic industry." Under the law, "an industry in the U.S. shall be considered to assume [that] there is in the U.S. a respect [for] the articles protected by the patent, copyright, [and] trademark," Gonzalez said, noting that the company fulfills the bill's requirements of: "(a) significant planning and equipment; (b) significant employment of labor or capital; [and] (c) substantial investment in exploitation including engineering, research, development or . . . licensing." Chugai attorney Glazier countered that the Japanese company does "not agree that Amgen meets the requirements of a domestic industry either under the current trade law or under the trade law as it will be." At question is whether biotech companies will come under the process patent protection of the Trade Bill since they do not constitute an industry. Chugai will also argue that Amgen is not an industry because it has not yet received FDA approval for EPO and therefore has no marketed products. Glazier admitted, however, that Chugai had lost some ground "because the new Trade Bill has removed the issues of [proof of] injury and efficiently and economically operated industry," issues on which Chugai believes it would have prevailed. Closing arguments in the august 4 ITC hearing focused on the validity of Amgen's claim to a process under its EPO patent, which Amgen said covers the transfected host cell that produces EPO. Both Chugai and ITC staff maintained that Amgen had not given sufficient "burden of proof" that a process is covered by the patent. Under the new trade law, the patentee's burden of proof may be lessened as long as the patent holder makes a "reasonable effort to determine the process actually used in the production of the product." At a hearing in June, ITC staff had opposed Amgen's patent claim of a process under section 337a of the trade law ("The Pink Sheet" June 27, p.13).

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